1.3 Reading

Management – a Unifying Resource

Any organization has a role or objective. In private business that would be to produce and offer for sale a product or service, in order to maximise profit and the wealth of the shareholders. In order to do so the organization must have a structure - an interconnected system of departments and units, together with a set of operational rules and regulations governing their work. To operate these departments will need the appropriate plant and equipment and above all the personnel to operate the system. The decisions as to how this system be structured and operated, and for what purposes, are made by managers. Management is, therefore, the best seen as a unifying resource, bringing together resources (people, materials, machines and money) in order to achieve the objectives of the organization.

Management functions Four management functions can be identified. These were firstly formally set out by Fayol and are Planning, Organising, Directing, and Controlling.

Planning

This is the starting point for all management activity. It involves:

• setting clear objectives

• devising strategies to achieve those objectives

Organising

This is essential in order to achieve organisational goals. It involves:

• developing on organisation structure

• creating departments within that structure

• establishing communication networks

Directing

This may be also referred to as coordinating or motivating. It involves:

• finding and training staff for specific tasks

• ensuring they are motivated to perform those tasks

Controlling

This is essential to ensure that organisational goals are achieved. It involves:

• collecting and analysing key management information

• comparing actual with planned performance

• critically reviewing plans and organisational structure

According to Fayol these functions are common to managers at all levels within the organisation, though the emphasis placed on each activity will vary according to their position in the hierarchy.

Table 1 Functions of Management

	PLANNING	ORGANISING	DIRECTING	CONTROLLING
SENIOR MANAGEMENT	Long-term planning and policy decisions Time horizon 5-10 years Determining profit targets.	Determining the basic structure e.g. division, departments. Whether to organise by product or territory.	Provide leadership and motivation Acting as a figure head for line organisation Span of control small.	Measurement of long-term planned against actual performance. Reviewing plans and organisational structure.
MIDDLE MANAGEMENT	Development of detailed operational plans and procedures to attain organisational goals. Time horizon normally 1 year.	Delegation of work to subordinates and coordination of their work. Development of horizontal relationships.	Creating situations where subordinates are motivated to achieve organisational goals e.g. monetary incentives, job rotation, enlargement and enrichment.span of control 4-9.	Comparison of actual with budgeted results, action to prevent deviation from the budget.
SUPERVISORY MANAGEMENT	Development and implementation of short-range plans e.g. detailed shedules of work. Time horizon 1 week-1 month.	Implementation of work shedules.	Application of motivation and discipline to overcome resistance.	Ensuring that work completed is of the correct quality and on shedule.

In carrying out these functions of management, managers use three broad categories of skills:

1 Technical skills. These embody the ability to use the tools and techniques of a particular profession. Technical skills are of particular importance for supervisors.

2 Human skills. It is difficult to underestimate the importance of the human resource within the organisation. Managers have to work through and rely on their subordinates. They therefore need high levels of inter-personal skills. Human skills are important to all managers.

3 Conceptual skills. This is the intellectual ability to see and understand the whole problem. A manager needs to be able to see first, how factors in a situation are inter-related, and second, how a change in one part will affect the whole. Conceptual skills are particularly important amongst senior managers.

The organisation chart The formal organisation structure may be best represented by an organisation chart, as in Fig. 2, which represents the structure of a typical manufacturing company. This diagram indicates a number of features of organisational structures:

• The grouping of activities, on the basis of function.

• The division of labour. The degree of specialisation by function and technical skills is indicated, both between and within departments.

• The chain of command. The lines of control and responsibility are clearly shown.

• The communications channels.

Fig. 2 Organisational Chart of a Typical Manufacturing Firm

Production Director

Technical Services Manager

production workers

product development

advertising

officer

market

research

officer

There are alternative ways of representing structure in diagrammatic form, but the vertical arrangement remains the most commonly used.