The Functions of Management

Common to all managers are the activities of (1) planning, (2) organizing, (3) staffing, (4) supervising, and (5) control. Others often mentioned are (6) coordinating, (7) leadership, (8) decision-making, and (9) representation. These functions are to be distinguished from the normal operating functions of an enterprise, such as producing, financing, selling, fundraising, accounting, engineering, and purchasing. These latter may differ from one company to another, but the aforementioned functions of the manager are the activities which all managers must perform regardless of the industry, the level, the title, or the activity in which engaged.

Planning : Planning involves deliberate selections of objectives, programs, or projects and the policies and procedures for accomplishing them -- either for an enterprise or for a subdivision of it. Planning should always precede doing. It is a general principle of management that a group effort can be attained more efficiently if everyone concerned has been informed of the ultimate goal and how, when, and where it shall be done, and who shall do which parts of it. It is the determination of a proposed plan of action to attain a specific result. It is a technique of projecting the imagination into the future, anticipating problems and selecting procedures for circumventing them. A plan can take the form of a prospectus, a blueprint, a proclamation, a budget, or a campaign. It inevitably involves decision-making since the planner must select from amongst considered alternatives. A plan is a necessary prerequisite to order and enhances the chances of success. It insures that all employees subject to the plan are made aware of the common objective to be attained. It decides a calendar, divides up work, selects supplies, establishes priorities. It is important that plans be re-examined regularly in the light of new circumstances. What is right for one time may be wrong for another.

The past thirty years has witnessed a tremendous increase in the utilization of planning. A veritable managerial revolution has occurred during this time which is characterized by intensified use of planning devices. Plans are now made for all aspects and departments of an enterprise; and long-range planning that extends further into the future than was prevalent before, has become the hallmark of larger entities. Planning is based less on random hunch and intuition and more on conscious determination and purposeful decisions after careful weighing of available information on relevant knowledge. All managers, from chief executive to chief usher, must plan. Obviously the scope and character of the planning will differ with the level, responsibilities and authority of each manager.

Plans include those that set goals; those that promulgate general statements of policy; those that establish procedures and rules. They may be projects or programs or strategies. A budget is a plan written out in monetary terms. The major purpose of planning is to focus the attention of all involved on a common purpose so that everyone's effort is coordinated. A plan aids in accomplishing tasks efficiently, for it eliminates the principal cause of wasted time, effort and money -- people working at cross-purposes.

Coordination is the essence of good management. Synchronizing the men, materials, machines, money, markets and methods, and timing and sequential plotting of their interrelationships is fundamental to planning. One of the distinguishing characteristics of the good manager is skill in the coordination function. An early writer in the field, Mary Parker Follett, contributed certain principles concerning coordination: (1) that direct contact is the only method of achieving correct coordination. Personal communication is the most efficient method of exchanging ideas and effecting agreements. This is particularly true of horizontal coordination, which is the harmonious linking of effort between departments. Vertical coordination, which is the unification of effort within a group, is more natural and more easily achieved. (2) achieve coordination in the early stages of planning and policy making. More cooperation results from those who feel they had a hand and a say in the formulation of the course of action which they are expected to accomplish. (3) all factors in a situation are reciprocally related. Employees within the same department influence each other. The performers on the stage are affected by the actions taken by those in the scenery, costume, accounting office and public relations departments.

The supervisor can seek to effect proper coordination by group meetings, by individual attention or by written communication. The cardinal sin is to create misunderstanding. The capsulized remark that signals the failure to achieve coordination is; "Why doesn't someone tell me these things?" Coordination cannot be achieved by command; it must be learned through comprehension of goals, and a particular individual must thoroughly understand the part he is expected to play in the overall plans.

A smooth blending together of all personnel is a prime requisite for efficiency. Plans that are not readily acceptable by operating personnel are probably doomed to failure. Cooperation cannot be achieved without zeal and confidence on the part of workers.

Organization : Personnel are organized chiefly to obtain maximum coordination. Logical and well-defined organizations promote savings in energy and effort and reduce friction and frustration. The managerial function of organizing embraces the designation of departments and the personnel to carry on specific work, defining their functions and specifying the relations between departments and individuals. It should also designate the authority delegated to each manager and indicate to whom he is responsible and which individuals are responsible to him.

Experience and research have proven that a written formal organization expressed as a table or chart, preferably accompanied by a manual, produces the best results. It clarifies the relationship between individuals, outlines the bounds of authority, clearly establishes lines of authority and makes clear the areas in which each individual has freedom of action. In turn this produces full understanding of each employee's role and creates harmony. As in political life, where history has proven that there is no true freedom without laws, there can be no elimination of friction between co-workers without a clear knowledge of who is boss, who one is responsible to and for, and in what activity of the enterprise one has authority to act.

An organizational chart reveals the functions performed by each position, from whom each group obtains its authority, and the relationships between groups and individuals. Organization charts should possess certain characteristics; (1) Point out the pattern of functions, (2) indicate the channels of formal authority, (3) show to whom each person is responsible, and (4) be flexible, to that it can be modified to adapt to changing needs and personnel.

An organization chart should be supplemented by an operating manual. This manual should provide detailed descriptions of each job listed on the table of organization. It makes possible the availability of complete information on the functions, authority, responsibilities and relationships of each position, thus contributing understanding and knowledge of the requirements, limitations and relationships of each.

Don Mitchell, who has served as chief officer of General Telephone, General Time and the American Management Association has said this about job descriptions:

"Valid, written position descriptions are as vital to the successful management of a company as musical scores are the successful performance of an orchestra. In my view, a symphony orchestra is a good example in microcosm of how to organize a management team: Its members have a common goal -- to play beautiful music; it has a single leader -- the conductor; it has written position descriptions in the form of musical scores. These tell each player what to play and when.
Can you imagine an orchestra where the players are not quite sure who the leader is? Or one where each player is free to play any note he desires at any time he chooses? The result would be sheer chaos and certainly not very pleasing to the ear. Yet that is the direction some companies seem to be heading "

An organization chart facilitates the visualization of an entire organization and diagrammatically and concisely reflects the essential relationships. An operations manual with job descriptions, in addition to providing more detail than can be described on a table of organization, serves to perpetuate, as written history, the accumulation of knowledge about particular positions and how they are best prosecuted. Perhaps most importantly, management people who are forced to prepare or revise organization charts and manuals, gain an invaluable exercise in perception of the organizational structure. Frequently they are able to eliminate overlapping operations and duplications, re-emphasize slighted procedures and relationships, and re-think channels and duties in terms of available personnel. Forms and manuals (and procedural flow charts) are an invaluable aid to new managers who are seeking a quick overview of a new area of responsibility to which they have been assigned.

However, tables and diagrams and operating guides contain an inherent danger. They are difficult to keep up-to-date, particularly in dynamic, fast-growing, and expanding enterprises. Therefore they tend to perpetuate old and outworn forms and processes. Busy and innovative managers and workers will not necessarily revise their charts and manuals to correspond with new and current practices. The task of determining what changes to make, securing approval, providing copies for all interested parties, and sometimes the very onus of reducing to writing, is obstacle enough to the updating of these forms. Finally, it must be recognized that organization tables, guides and charts can never guarantee good organization. Much of the success or failure of a particular structure develops from the idiosyncrasies of its personnel, their social and informal relationships, and whether there exists any imbalance in the power of personality of managers assigned to equal levels of responsibility.

Manifestly, tables of organization give visual expression to the succeeding delegations of authority which executive have conferred on subordinates. Implied in the act of receiving authority to act and command in a given area, is the commensurate assumption of responsibility to carry out assigned tasks. However, the executive who delegates always retains his overall (ultimate) authority and consequently never can release his obligation for results in the area delegated. General principles evolved include the fact that it is best to extend the delegation of authority as close to the 'firing line' as is possible; that there should be a concept of 'unity of command' (one boss in each situation); and that an individual will accomplish most when he understands that the responsibility rests upon himself alone.

Delegation of authority is an elementary art of management. Yet many managers have not learned to practice it. It is a main cause of the failure of most managers. In order to be a good delegator, a manager must be willing to: give subordinates' ideas a chance; release decision-making power to others; allow them to learn by making mistakes; establish a feedback of information and effective controls over subordinates. Too many executives want to continue to make decisions for the positions they have left (when promoted). They know they can do the job better than the present incumbent. But, as Koontz and O'Donnell point out, there "is a kind of law of comparative managerial advantage, i.e., a manager will enhance his contribution to the firm if he concentrates on tasks that contribute most to the firm's objectives, and assigns to subordinates other tasks, even though he could accomplish the latter better himself. This is harder to practice, but failure to do so defeats the very purpose of delegation." Billy Rose had conquered at one time or another the fields of night club entertainment, lavish musical production, tin-pan alley tunesmith, feature columnist for a New York newspaper, etc. He had also early in life won a contest as 'champion speed typist of the world.' The author was negotiating a contract with Mr. Rose in his Ziegfield Theatre office when he was a vice president for Webb and Knapp, real estate developers. When asked whether he could beat his secretary who was about to type up our memorandum of agreement, he said, "Yes, but Webb and Knapp doesn't pay me a Vice-president's salary to have me type memoranda."

In every organization, the ultimate authority must rest somewhere, and there must be a clear chain of direct authority relationships from superior to subordinate throughout. This is spoken of as 'the scalar principle.' The principle of 'unity of command' states that each subordinate should report to only one superior -- that no one shall have two or more masters. One of the difficult problems of management structure is the choice between a narrow 'span of control' and a 'flat' organizational structure. Span of control refers to the number of subordinates managed by a superior. Much discussion and research has revolved around the question of the ideal number of subordinates a superior can best manage. Although there seems to be a consensus that a smaller number (like three or four), particularly at higher levels, is best, there have been just enough cases of successful organizations that had far higher spans of control to make the generalizations about ideals. It must be noted that the smaller the span, the greater the number of layers that must be woven into the management fabric. The greater the number of levels, the more effort (and money) devoted to managing. Anyone who has worked for large, complex organizations knows the frustration of waiting for communication and decision-making to flow up and then back down the long chain of command. Morale is adversely affected. Close supervision over a small span may inhibit initiative and the personal development of subordinates. Contrariwise, too large a span will invite lack of proper supervision, coordination and control. Moses solved the problem following his father-in-law's advice by:

" choosing able men out of all Israel, and made them heads over the people, rulers of thousands, rulers of hundreds, rulers of fifties and rulers of tens. And they judged the people in all seasons; the hard causes they brought unto Moses, but every small matter they judged themselves."

Moses' solution is of the pure "Line Type," i.e., the lines of authority and responsibility reach directly from Moses to his assistants, to their assistants, in turn to each level until the individual soldier-worker. Line organizations are commonly found in smaller enterprises today. The other basic type is the "functional" organization, in which supervisors are placed in charge of different activities requiring specialized knowledge. The great disadvantage of the functional type lies in the fact that 'unity of command' has been sacrificed -- and individual functions have too many supervisors. As a consequence, functional organizations are rarely encountered.

The most common type of organization is the "Line and Staff." It consists of a basic line organization supplemented by functionalized staff advisors. A staff officer is not empowered to give orders to line departments. He may only inform and recommend to his immediate supervisor, who in turn, as a line officer, may direct his subordinates should he wish to act on this information or recommendation. A staff officer, however, does have line authority over the members of his own department. For example, the Chief Counsel can only give legal advice or warning to his President; he cannot order the Company Manager to follow a particular line of action. On the other hand, the Chief Counsel gives direct orders to his own secretary and legal assistants. True staff activities involve planning, informing, counseling and recommending -- presenting ideas. Line officers have authority over personnel -- they execute.

Often committees are employed in lieu of individuals at certain points in some organizations. For example there may be a 'Fundraising' or 'Artistic' committee. Executive Committees are common in large scale business organizations today. An artistic committee might be responsible for approving all acquisitions by an art gallery or museum; of selecting plays for a theatre; or ballets for a dance company. By this means collective experience is exercised. Committees are a successful device for mixing members of all levels (thus aiding in assessment of junior staff), promoting understanding and securing cooperation. However, the disadvantages of committees obviously include the fact that members can hide behind collective action; responsibility is difficulty to fix; and that committees usually take more time to decide and action is consequently delayed. What is less obvious, but too often true, is that committees are either unduly persuaded by its strongest personalities, or end up in compromise action, which is seldom the best action.

It is often advisable for the staff function to be filled by an outside consultant. This is particularly true in smaller organizations, or where specialized advice sought cannot be satisfactorily obtained from within the firm. A performing arts institution might call on its outside auditors for tax and budget and information systemization advice; it would undoubtedly have a lawyer on retainer, and possible a casting agent. Its banker and insurance agent should be viewed as available staff counselors. A smaller firm may rely on an advertising agency for much of its merchandising know-how. It may 'job' artistic directors for particular productions, rather than employ resident directors who would be responsible for all productions, thereby benefitting from the ability to match the specific talents of each with the requirements of each job. A side benefit from such a policy might be the variation in styles introduced into the overall program of presentations that might not otherwise happen with the sameness that a resident might fall into after he has used up all his techniques.

There is definite hazard inherent in line and staff organizations. The typical situation starts with the Chief Executive hiring a staff assistant to investigate some aspect of the enterprise and to recommend modifications to existing practice. Perhaps he is to look into operations with a view of effecting cost-savings. The staff functionary while pursuing his investigation finds he does not receive the full cooperation of the line managers, and they (perhaps correctly) view any recommendation by the investigator as a criticism of their managership. In reaction to this, the staff man keeps his findings secret and presents them to his superior, who then attempts to order his line officers to make the requested changes. The proposals, if they are recognized as the staff investigator's, are greeted resentfully by the line officers and if the changes are made, they are made only grudgingly. The best course for the staff man to follow is to obtain, at the outset, as much sympathy and cooperation as is possible from the line managers, and attempt to get them to agree with his recommendations before they are presented to the chief executive, thus assuring cooperation in the execution of the proposals if they are accepted by the chief. A staff man has the onus of making the line supervisors understand that his function is to help and inform and advise, and not to undermine the authority of the operating department managers.

Basic philosophic attitudes towards organization can be found in the question of centralization versus decentralization. In a centralized organization, similar operations are concentrated under one executive. The proponents of centralization point out that it encourages uniform application of policies, permits more specializations, and expedites training -- all factors that help decrease cost.

Decentralization, being the opposite of centralization, consists of having similar activities dispersed throughout the enterprise. If all promotion and advertising were centralized in one department with one Advertising Manager, all advertising for all producing groups would be handled in the same department by the same people and the same executive would be responsible. However, under a decentralized organization structure, the dance, opera, theatre and symphony producing units would each have its own advertising and promotion personnel. The advocates of decentralization claim it increases the flexibility of operations -- each producing unit, in the example given, can custom-tailor its promotion for its own purposes -- it enables geographic displacement of physical facilities; more effective control can be exercised, in that knowledgeable supervision is closer; familiarity with the special work and problems of each group is readily acquired.

Decentralization usually requires a larger delegation of authority by the general manager. This entails risks, but there is much to be said for those who believe that individual initiative can be dampened by excessive direction and conversely, can be encouraged by judicious assignment of jobs and by leaving methods and procedures up to individual subordinates, stressing only ends and goals. Larger authority delegations require that managers must permit mistakes, even to stand back and watch them being made. This should increase morale, while at the same time put more pressure on the subordinate managers to perform. By being forced to manage, they have a better opportunity to become better managers.

Perhaps the key to the problem of centralization/decentralization lies in the quality potential of the subordinate personnel. Weak men need strong leaders. Those who have the potential for growth need challenges, opportunities and practice to learn by doing, making mistakes and learning by them. However, the degree of decentralization in practice seems to depend more on the personality and character of the manager. If he is despotic, suspicious, brooks no interference, feels no one can do the job -- any job -- as well as he can, he will resist the delegation of authority to others. Centralization is fostered by authority-hoarders.

The greatest degree of decentralization appears in companies that have grown by merger or acquisition. There is a tendency not to disturb existing organizations that have been doing well on their own. The extreme of autocratic centralization is perhaps that of Henry Ford, Sr., who insisted that every major decision in the giant Ford Motor Company be personally approved by himself. An example of exceedingly large decentralization is that of Sears, Roebuck & CO, in which short organizational lines, large spans of control and a huge delegation of authority was made to store managers and merchandising managers. This organizational bias was probably instilled into Sears by the attitude of its long-time chief executive, Robert E. Wood.

A giant corporation, as typified by General Motors, may adopt a 'federalism' approach in which each of its major subdivisions has autonomy within a framework of centralized coordinated control. The General Motors structure, which has probably contributed to its phenomenal growth and success, allows the maximum of decision making down the line, while providing much functional staff expertise for the benefit of the operating line officers. Interviews by Peter Drucker with General Motors executives produced the following consensus on the advantages claimed for this organizational philosophy:

1. Speed and lack of confusion in decision-making
   
2. Absence of conflict between top management and divisions.
   
3. A sense of fairness in dealing with executives, confidence that a job well done would be appreciated, and a lack of politics in the organization.
   
4. Informality and democracy in management.
   
5. Absence of a gap between the few top managers and the many subordinate managers in the organization.
   
6. The availability of a large reservoir of promotable managerial manpower.
   
7. Ready visibility of weak managements through the results of semi-independent and often competitive divisions.
   
8. An absence of "edict management" and the presence of thorough information and consideration of central management decisions.

Smaller organizations are limited in the amount of decentralization they can practice. Larger and more complex organizations must not adopt extreme decentralization as a panacea. Loss of control through decentralization can be fatal, for poor judgment on the part of unwise lower echelon managers can be costly. So, too, can the costs of duplication, empire-building, and lack of uniformity developing from lack of overall policy-making. More importantly, in today's society, characterized by industry wide bargaining with national unions; governmental enforcement of anti-trust laws, truth-in-lending and in advertising laws; interwoven and complex rules of taxation and labor law ad infinitum , it becomes necessary for top management to insure uniform compliance with political strictures whose breach can have serious financial consequences. The rapid introduction of computer technology has just as rapidly increased the centralization of accounting and other informational systems. The economics of electronic processing systems dictate that the maximum volume of repetitive data be programmed.

Ralph Cordiner, brilliant President of General Electric and more recently President of Columbia University, has enunciated the following principles that underlie the General Electric Company's philosophy toward decentralization:

1. Decentralization places authority to make decisions at points as near as possible to where actions take place.
   
2. Decentralization is likely to get best over-all results by getting greatest and most directly applicable knowledge and most timely understanding into play on the greatest number of decisions.
   
3. Decentralization will work if real authority is delegated, and not if details then have to be reported, or worse yet, if they have to be "checked" first.
   
4. Decentralization requires confidence that associates in decentralized positions will have the capacity to make sound decisions in the majority of cases, and such confidence starts at the executive level. Unless the President and all other officers have a deep personal conviction and an active desire to decentralize full decision-making authority and responsibility, actual decentralization will never take place. The Officers must set an example in the art of delegation.
   
5. Decentralization requires understanding that the main role of staff or services is the rendering of assistance and advice to line operators through a relatively few experienced people, so that those making decisions can themselves make them correctly.
   
6. Decentralization requires realization that the natural aggregate of many individually sound decisions will be better for the business and for the public than centrally planned and controlled decisions.
   
7. Decentralization rests on the need to have general business objectives, organization structure, relationships, policies and measurements known, understood, and followed, but realizing that definition of policies does not necessarily mean uniformity of methods of executing such policies in decentralized operations.
   
8. Decentralization can be achieved only when the higher executives realize that authority cannot, in fact, be retained by them when it has been genuinely delegated to lower echelons.
   
9. Decentralization will work only if responsibility commensurate with decision-making authority is truly accepted at all levels.
   
10. Decentralization requires personnel policies based on measured performance, enforced standards, rewards for good performance, and removal for incapacity or poor performance.
    
    

Organizations can founder on the Scylla of inordinate centralization or the Charybdis of excessive decentralization. Management must steer a course safe from both extremes. Centralization can lead to unwarranted delays while higher echelons deliberate on front-line managers' proposals; and can lead to inappropriate policies and procedures resulting from top management's remoteness and unfamiliarity with the special problems of lower levels. Decentralization might cause a production department to build or buy expensive physical properties, when, had they been aware that management had decided to abandon future productions for which these properties were usable, they would have contracted for less expensive rentals. Or contrariwise; abandonment of type-set of a successful promotion piece would have been avoided had they been aware of the fact that higher authority was considering its re-use. Decentralization can lead to hoarding of good young managers in jobs inadequate to their talents and potential, because their bosses will not release them for promotion in other departments.