3 Functions of Management

3.1 What Are Functions of Management?

A function of management is a category of activity that every manager — chief executive or shop-floor supervisor, in business or in government, in India or in Indonesia — has to perform if the unit is to achieve its goals. Functions are the answer to the question, “What does a manager actually do all day?” The classical answer, going back to Fayol, is that managers plan, organise, command, coordinate and control (fayol1916?). The list has been extended, contracted and re-labelled by every major textbook since, but the underlying intuition has held for more than a century.

Three points are worth fixing before the list itself.

Functions are universal. They apply across levels (top, middle, supervisory), across types of organisation (private, public, not-for-profit) and across cultures. Koontz, Weihrich and Cannice call this the universality of management (koontz2020?).
Functions are sequential and continuous. Planning logically precedes organising, which precedes staffing, and so on — but the sequence is repeated over and over, not run once. Each cycle’s controlling produces the next cycle’s planning input.
Functions overlap. A manager rarely performs one function in pure form. Hiring a replacement (staffing) requires a plan for the role (planning), a place in the structure (organising), an induction (directing) and a performance review (controlling).

3.2 The Different Classifications

Different writers have grouped the functions differently. The most commonly tested classifications are summarised below.

Five Classifications of Management Functions

Author	Year	Functions	Mnemonic
Henri Fayol	1916	Planning, Organising, Commanding, Coordinating, Controlling	POCCC
Luther Gulick & Lyndall Urwick	1937	Planning, Organising, Staffing, Directing, Coordinating, Reporting, Budgeting	POSDCORB
Harold Koontz & Cyril O’Donnell	1955	Planning, Organising, Staffing, Directing, Controlling	POSDC
Stephen Robbins & Mary Coulter	2002 onwards	Planning, Organising, Leading, Controlling	POLC
George R. Terry	1968	Planning, Organising, Actuating, Controlling	POAC

The differences are mostly cosmetic — commanding, directing, leading and actuating all describe the same broad activity of getting the work done through people; coordinating is sometimes a separate function and sometimes treated as the essence of management itself. The five-function POSDC scheme of Koontz & O’Donnell remains the working spine of most introductory textbooks and is the structure followed below (koontz2020?).

flowchart LR
  P[Planning<br/>What and how] --> O[Organising<br/>Who and where]
  O --> S[Staffing<br/>With whom]
  S --> D[Directing<br/>Set work in motion]
  D --> C[Controlling<br/>Compare and correct]
  C -. Feedback .-> P
  CO[Coordinating<br/>Essence of management] --- O
  CO --- D
  style P fill:#E3F2FD,stroke:#1565C0
  style O fill:#FFF3E0,stroke:#E65100
  style S fill:#E8F5E9,stroke:#2E7D32
  style D fill:#F3E5F5,stroke:#6A1B9A
  style C fill:#FCE4EC,stroke:#AD1457
  style CO fill:#FFFDE7,stroke:#F9A825

3.3 Planning

Planning is deciding in advance what to do, how to do it, when to do it and who is to do it. It is the bridge from where the firm is to where it wants to go. Koontz calls it the primary function: every other function — organising, staffing, directing, controlling — is a derivative of the plan (koontz2020?).

3.3.1 Nature of Planning

Goal-oriented. Plans always serve an objective. A plan without an objective is busy-work.
Pervasive. Every level plans — the chief executive plans the firm’s strategy, the foreman plans tomorrow’s shift.
Forward-looking. Plans are about the future, and the future is uncertain. Planning therefore involves forecasting and a willingness to revise.
Continuous. Plans expire. As assumptions change, plans must be re-drawn.
Intellectual. Planning is mental work — it requires logical thinking, judgement and creativity.

3.3.2 Steps in the Planning Process

The Eight Steps of Planning (Koontz & O’Donnell)

#	Step	What it produces
1	Being aware of opportunities	A reading of the market, competition, strengths, weaknesses
2	Setting objectives	What is to be achieved, by when
3	Developing premises	The expected internal and external environment
4	Identifying alternatives	The possible courses of action
5	Comparing alternatives	Costs, benefits, risks of each
6	Choosing an alternative	The plan adopted
7	Formulating derivative plans	Sub-plans for departments, products, projects
8	Numerising plans (budgeting)	Translation of the plan into rupees and units

3.3.3 Types of Plans

Plans come in many forms. The most useful classification distinguishes plans by purpose and by time horizon.

Types of Plans

Type	What it covers	Example
Mission / Purpose	Why the firm exists	“To bring inspiration and innovation to every athlete”
Objectives / Goals	What the firm seeks to achieve	15 percent growth in revenue this year
Strategies	How the firm will compete	Differentiation through design
Policies	General guides to thinking	“We promote from within wherever possible”
Procedures	Sequence of steps for routine activities	Procurement procedure
Rules	Specific required actions or non-actions	“No smoking in the plant”
Programmes	Coordinated sets of plans for a project	The launch programme for a new product
Budgets	Plans expressed in numerical terms	The marketing budget for the quarter

A useful further cut is by time horizon: strategic plans (3–10 years, top management), tactical plans (1–3 years, middle management) and operational plans (under one year, supervisory management).

3.4 Organising

Once the plan is made, the manager must arrange the resources to carry it out. Organising is the function of dividing the work to be done, grouping the divided work into manageable units, defining authority and responsibility, and establishing the relationships that allow people to work together. The output of organising is a structure — the formal skeleton on which the firm hangs.

3.4.1 Process of Organising

Five Steps in Organising (Koontz & Weihrich)

#	Step	What it produces
1	Identify activities required	A list of tasks
2	Group activities	Departments, divisions, sections
3	Assign duties	Each person knows what to do
4	Delegate authority	Each person has the power needed
5	Coordinate authority and responsibility	Reporting relationships, communication channels

3.4.2 Key Concepts

Authority and responsibility. Authority is the right to act; responsibility is the obligation to perform. They must be in balance.
Delegation. Passing authority downward while retaining accountability. A manager who cannot delegate cannot scale.
Centralisation vs decentralisation. The degree to which decisions are concentrated at the top. Highly regulated firms tend to be centralised; innovative ones decentralised.
Span of control. The number of subordinates a manager directly supervises. A narrow span produces a tall structure; a wide span produces a flat one. Lockheed’s V.A. Graicunas’s 1933 formula counted the relationships a manager juggles and concluded that span should rarely exceed five or six at senior levels (gulick1937?).
Departmentation. The basis on which activities are grouped — by function, product, customer, geography, process or matrix.

Six Bases of Departmentation

Basis	Useful when	Example
Function	Stable environment, efficiency matters	Production, Marketing, Finance, HR
Product	Multiple distinct product lines	Consumer goods firm with food, personal-care, home-care divisions
Customer	Different customer groups need different handling	Retail bank with corporate, retail and SME divisions
Geography	Wide spread, regional differences	Sales regions of a national firm
Process	Specialised equipment defines the work	Foundry, machining, assembly
Matrix	Project work crossing functional lines	Engineering project teams

3.5 Staffing

Once the structure exists, it has to be filled with the right people, kept able to do the job, and developed for tomorrow’s job. Staffing is the function concerned with the human resources of the organisation. In smaller firms it is performed directly by line managers; in larger firms a specialist HR department supports it.

3.5.1 Steps in Staffing

The Staffing Cycle

#	Step	What it covers
1	Manpower planning	How many people of which skills are needed and when
2	Recruitment	Generating a pool of candidates
3	Selection	Choosing the best fit from the pool
4	Placement and induction	Putting the person in the right job and easing entry
5	Training and development	Building current and future capability
6	Performance appraisal	Measuring what was delivered
7	Compensation	Pay, benefits and incentives
8	Career planning and promotion	Movement through the firm
9	Separation	Resignation, retirement or termination handled with dignity

Drucker’s reminder anchors the function: “the most important resource of an enterprise is its people” (drucker1954?). The staffing function is taken up at depth in the next module on Human Resource Management.

3.6 Directing (Leading)

Directing — also called leading in modern texts — is the function of setting the work in motion. Plans, structures and people exist on paper after the first three functions; directing makes them move. It is the function with the highest interpersonal component, and the one in which a manager’s leadership shows.

3.6.1 Four Elements of Directing

Four Elements of Directing

Element	What it covers	Working concepts
Supervision	Day-to-day overseeing of subordinates	Span of supervision, instructions
Motivation	Energising people to put forth effort	Maslow, Herzberg, Vroom; intrinsic and extrinsic rewards
Leadership	Influencing people to follow willingly	Trait, behavioural, situational, transformational
Communication	Sharing information so all can act	Formal and informal channels, feedback, barriers

Each of the four elements has a separate, deeper treatment in the chapter on Organisational Behaviour. The point at this stage is that directing includes all four — a manager cannot direct by motivation alone or by communication alone.

3.6.2 Principles of Directing

Harmony of objectives. Aligning individual goals with organisational goals.
Unity of command. One subordinate, one supervisor — the principle Fayol fought for.
Use of informal organisation. A wise manager works with the grapevine, not against it.
Maximum individual contribution. The aim is to draw out the best each person can give.
Leadership by example. What the manager does counts more than what the manager says.

3.7 Controlling

Controlling is the function that checks whether the plan is being executed and corrects deviations (koontz2020?). It closes the management cycle and feeds the next planning round. A common misconception is that controlling is restricting; in fact, controlling is learning.

3.7.1 The Four Steps of Control

The Control Process

#	Step	What it produces
1	Establishing standards	The benchmark — output, cost, quality, time
2	Measuring actual performance	Numbers, observations, customer feedback
3	Comparing performance with standards	The deviation, with sign and size
4	Taking corrective action	Either fix the work or revise the standard

3.7.2 Types of Control by Timing

Three Types of Control (William Newman)

Type	When applied	Example
Feedforward (preventive)	Before the activity starts	Pre-flight checklist; raw material inspection
Concurrent	During the activity	Real-time monitoring of a chemical process
Feedback (post-action)	After the activity	Quarterly financial review; customer satisfaction survey

3.7.3 Characteristics of an Effective Control System

Accurate. The information used must be reliable; control on bad data is worse than no control.
Timely. Information must reach the manager soon enough to act.
Economical. The cost of control should not exceed the benefit.
Flexible. The system must accommodate changing plans and conditions.
Acceptable to those controlled. A control system seen as fair gets cooperation; one seen as punitive breeds dysfunction.
Focused on strategic points. Control by exception — flag what matters, not every small variance.

3.7.4 Common Control Tools

Budgetary control, financial ratio analysis, break-even analysis, audit (internal, external, social, management), Management Information Systems, balanced scorecard, statistical quality control and ISO standards. The tools deepen as the firm grows.

3.8 Coordinating — the Essence of Management

Mary Parker Follett called coordination “the first principle of organisation”; Koontz argued it is not a separate function but the essence of management — present in every other function. Without coordination, the work of a hundred specialists adds up to less than the work of a hundred generalists.

Mary Parker Follett’s Four Principles of Coordination

Principle	Meaning
Direct contact	Coordinate by talking directly to those involved, not through layers
Early stage	Coordinate during planning, not after the plan is fixed
Reciprocal relationship	Every part influences every other; the relationship is two-way
Continuity	Coordination is a continuous process, not a one-time event

The first three functions — planning, organising, staffing — create the conditions for coordination; directing and controlling sustain it.

3.9 Levels of Management and the Functions

All managers perform all five functions, but the mix varies by level. Top managers spend more time on planning and organising; supervisors spend more time on directing and controlling.

Time Spent on Each Function by Level

Function	Top management	Middle management	Supervisory management
Planning	Most time — strategic	Significant — tactical	Least — operational, daily
Organising	Significant — broad structure	Significant — departmental	Limited — work allocation
Staffing	Limited — succession at top	Significant — middle hires	Limited — gaps in own team
Directing	Limited — through subordinates	Significant — leading teams	Most time — face-to-face
Controlling	Significant — overall results	Significant — departmental	Most time — daily output

Robert L. Katz’s three-skill model complements this: technical skills matter most at the supervisory level, human skills across all levels, conceptual skills most at the top.

3.10 Universality of Management

The five functions apply whether the manager is running a steel mill, a hospital, a school, a temple trust or a film unit. The content of each function differs by context — the planning of a hospital is not the planning of a steel mill — but the act of planning, organising, staffing, directing and controlling is recognisable in all of them. This universality is what allows a manager to move from industry to industry, and what makes management a profession rather than a craft tied to a single trade.

The corollary — that all of management is the same in all contexts — is too strong. Industry, culture, ownership and stage of growth shape how the functions are performed. The contingency approach (chapter 2) is the antidote to over-applying universality.

3.11 Practice Questions

Eight questions to test the chapter. Each card hides the answer — click Show answer to reveal it.

Q1 The five functions of management given

The five functions of management given by Henri Fayol are:

APlanning, Organising, Staffing, Directing, Controlling

BPlanning, Organising, Commanding, Coordinating, Controlling

CPlanning, Organising, Leading, Controlling, Innovating

DPlanning, Organising, Staffing, Directing, Coordinating

Show answer

Correct answer

B. Fayol's original five — POCCC. Staffing was added later by Koontz & O'Donnell.

Q2 POSDCORB — the seven-function classification —

POSDCORB — the seven-function classification — was coined by:

AHenri Fayol

BHarold Koontz

CLuther Gulick (with Lyndall Urwick)

DPeter Drucker

Show answer

Correct answer

C. Gulick and Urwick introduced POSDCORB in Papers on the Science of Administration (1937).

Q3 Match the function with the activity

Match the function with the activity that best illustrates it:

	Function		Activity
(i)	Planning	(a)	Comparing actual sales with the budget
(ii)	Organising	(b)	Setting next year's revenue target
(iii)	Directing	(c)	Drawing up the reporting structure of a new division
(iv)	Controlling	(d)	Motivating the sales team after a poor quarter

A(i)-(b), (ii)-(c), (iii)-(d), (iv)-(a)

B(i)-(a), (ii)-(b), (iii)-(c), (iv)-(d)

C(i)-(c), (ii)-(d), (iii)-(a), (iv)-(b)

D(i)-(d), (ii)-(a), (iii)-(b), (iv)-(c)

Show answer

Correct answer

A. (i)-(b), (ii)-(c), (iii)-(d), (iv)-(a)

Q4 A pre-flight checklist that prevents the

A pre-flight checklist that prevents the aircraft from taking off with a faulty system is an example of:

AConcurrent control

BFeedback control

CFeedforward control

DReactive control

Show answer

Correct answer

C. Feedforward (or preventive) control acts before the activity, not during or after it.

Q5 "Coordination is not a separate function

"Coordination is not a separate function of management; it is the essence of management." This view is most closely associated with:

AHenri Fayol

BHarold Koontz

CF.W. Taylor

DHenry Mintzberg

Show answer

Correct answer

B. Koontz argued that coordination runs through every other function rather than standing alone.

Q6 Which of the following is not

Which of the following is not a step in the control process?

ASetting standards

BMeasuring performance

CRecruiting staff

DTaking corrective action

Show answer

Correct answer

C. Recruitment is part of staffing, not controlling.

Q7 A firm reorganises its divisions by

A firm reorganises its divisions by food, personal care and home care. The basis of departmentation used is:

AFunction

BProduct

CCustomer

DGeography

Show answer

Correct answer

B. Product departmentation groups activities by the product line they serve.

Q8 Robert Katz argued that conceptual skills

Robert Katz argued that conceptual skills become more important than technical skills as a manager:

AStays longer in the same role

BMoves to higher levels of management

CMoves to the supervisory level

DJoins a small firm

Show answer

Correct answer

B. Conceptual skills — seeing the whole and how the parts relate — matter most at the top.

Quick recall

Functions are universal, sequential-yet-continuous, and overlapping.
Five classifications to remember: Fayol (POCCC), Gulick (POSDCORB), Koontz & O’Donnell (POSDC), Robbins (POLC), Terry (POAC).
Planning steps: opportunities → objectives → premises → alternatives → comparison → choice → derivative plans → budgeting.
Plan types: mission, objectives, strategies, policies, procedures, rules, programmes, budgets; horizons: strategic / tactical / operational.
Organising process: identify activities → group → assign duties → delegate authority → coordinate. Key concepts: authority–responsibility, delegation, span of control, departmentation.
Six bases of departmentation: function, product, customer, geography, process, matrix.
Staffing cycle: manpower planning → recruitment → selection → placement → training → appraisal → compensation → career → separation.
Directing’s four elements: supervision, motivation, leadership, communication.
Control process: set standards → measure → compare → correct. Types by timing: feedforward, concurrent, feedback (Newman).
Follett’s four principles of coordination: direct contact, early stage, reciprocal relationship, continuity.
Katz’s three skills: technical (most for supervisors), human (all levels), conceptual (most for top).