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Management Concepts - The Four Functions of Management
For any kind of organization to run smoothly, it needs to implement core management concepts. This necessitates that the four management functions - planning, organizing, directing and controlling be precisely understood. This article is aimed at providing a brief overview of the same. Any organization, whether new or old, small or big, requires certain methods, procedures and plans in place for its efficient functioning. For this to happen, they must develop and implement management concepts which help them implement their vision for the future of the organization.

➤ Planning
➤ Organizing
➤ Directing/Leading
➤ Controlling
➤ Staffing - The Fifth Function

The concept of functions of management was put forth by Henri Fayol, a management theorist from France, influential in proposing many of the management concepts in use today. Originally, he had proposed five management functions; namely, planning, organizing, commanding, coordinating and controlling. Modern texts have reduced the functions from five to four. They include planning, organizing, leading, and controlling. The four concepts of management, translated into functions lead to the creation of a cohesive organization. They can be seen here as a diagram. It is interesting to note that there is no hard and fast rule to be followed in the application of these functions, as management is a real-time decision-making system, any of these functions can be operational in conjunction with any other and also as independent entities themselves.

Four Functions



Planning is the foundation pillar of management. It is the base upon which all other areas of management are built. Planning requires administration to assess where the company presently is and where it would be in the coming years. From there, an appropriate course of action is determined and implemented to attain the company's goals and objectives.

Planning is an unending course of action. There may be sudden strategies required to be implemented during a crisis. There are external factors that constantly affect a company, both positively and negatively. Depending on the conditions, a company may have to alter its course of action regarding certain goals. This kind of preparation or arrangement is known as strategic planning.

In strategic planning, management analyzes internal and external factors that may affect the company, its objectives and goals. One of the primary tools of strategic planning is the use of SWOT Analysis, a technique that helps organizations find their strengths and weaknesses, identify areas of opportunity and take preventive measures against threats arising from both internal and external environmental factors. The SWOT matrix can be understood by dividing it's cells according to what they represent for the organization.

Internal environment stands for the factors affecting performance within the company itself, this could be both positive or negative in nature. External environment is the outside world, factors beyond the control of the organization which may affect it in positive or negative ways. Strengths are the things that the organization does well, its core competency in production, sales, innovation and so on. Weaknesses are the areas which need improvement such as a high attrition rate. Threats are the foreign variables that affect the company such as government regulations, entry of new competitors or even natural disasters.

An organization can analyze it's position in relation to its strengths and weaknessess by classifying them in the SWOT matrix. Then the planning process can incorporate the results and solutions offered in its structure, along with the necessary strategy changes required.

Swot Analysis

How Does Planning Happen?

Although in theory, planning may sound like a static one-off activity which is to be done in a particular manner and then left to fend for...
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