Functions of management

Different experts have classified functions of management. According to George & Jerry, “There are four fundamental functions of management i.e. planning, organizing, actuating and controlling”. According to Henry Fayol, “To manage is to forecast and plan, to organize, to command, & to control”. Whereas Luther Gullick has given a keyword ’POSDCORB’ where P stands for Planning, O for Organizing, S for Staffing, D for Directing, Co for Co-ordination, R for reporting & B for Budgeting. But the most widely accepted are functions of management given by KOONTZ and O’DONNEL i.e. Planning, Organizing, Staffing, Directing and Controlling.

For theoretical purposes, it may be convenient to separate the function of management but practically these functions are overlapping in nature i.e. they are highly inseparable. Each function blends into the other & each affects the performance of others.

1. Planning

   It is the basic function of management. It deals with chalking out a future course of action & deciding in advance the most appropriate course of actions for achievement of pre-determined goals. According to KOONTZ, “Planning is deciding in advance - what to do, when to do & how to do. It bridges the gap from where we are & where we want to be”. A plan is a future course of actions. It is an exercise in problem solving & decision making. Planning is determination of courses of action to achieve desired goals. Thus, planning is a systematic thinking about ways & means for accomplishment of pre-determined goals. Planning is necessary to ensure proper utilization of human & non-human resources. It is all pervasive, it is an intellectual activity and it also helps in avoiding confusion, uncertainties, risks, wastages etc.
   

2. Organizing

   It is the process of bringing together physical, financial and human resources and developing productive relationship amongst them for achievement of organizational goals. According to Henry Fayol, “To organize a business is to provide it with everything useful or its functioning i.e. raw material, tools, capital and personnel’s”. To organize a business involves determining & providing human and non-human resources to the organizational structure. Organizing as a process involves:
   
   • Identification of activities.
   • Classification of grouping of activities.
   • Assignment of duties.
   • Delegation of authority and creation of responsibility.
   • Coordinating authority and responsibility relationships.

3. Staffing

   It is the function of manning the organization structure and keeping it manned. Staffing has assumed greater importance in the recent years due to advancement of technology, increase in size of business, complexity of human behavior etc. The main purpose o staffing is to put right man on right job i.e. square pegs in square holes and round pegs in round holes. According to Kootz & O’Donell, “Managerial function of staffing involves manning the organization structure through proper and effective selection, appraisal & development of personnel to fill the roles designed un the structure”. Staffing involves:
   
   • Manpower Planning (estimating man power in terms of searching, choose the person and giving the right place).
   • Recruitment, selection & placement.
   • Training & development.
   • Remuneration.
   • Performance appraisal.
   • Promotions & transfer.

4. Directing

   It is that part of managerial function which actuates the organizational methods to work efficiently for achievement of organizational purposes. It is considered life-spark of the enterprise which sets it in motion the action of people because planning, organizing and staffing are the mere preparations for doing the work. Direction is that inert-personnel aspect of management which deals directly with influencing, guiding, supervising, motivating sub-ordinate for the achievement of organizational goals. Direction has following elements:
   
   • Supervision
   • Motivation
   • Leadership
   • Communication
   Supervision- implies overseeing the work of subordinates by their superiors. It is the act of watching & directing work & workers.
   Motivation- means inspiring, stimulating or encouraging the sub-ordinates with zeal to work. Positive, negative, monetary, non-monetary incentives may be used for this purpose.
   Leadership- may be defined as a process by which manager guides and influences the work of subordinates in desired direction.
   Communications- is the process of passing information, experience, opinion etc from one person to another. It is a bridge of understanding.
   

5. Controlling

   It implies measurement of accomplishment against the standards and correction of deviation if any to ensure achievement of organizational goals. The purpose of controlling is to ensure that everything occurs in conformities with the standards. An efficient system of control helps to predict deviations before they actually occur. According to Theo Haimann, “Controlling is the process of checking whether or not proper progress is being made towards the objectives and goals and acting if necessary, to correct any deviation”. According to Koontz & O’Donell “Controlling is the measurement & correction of performance activities of subordinates in order to make sure that the enterprise objectives and plans desired to obtain them as being accomplished”. Therefore controlling has following steps:
   
   1. Establishment of standard performance.
   2. Measurement of actual performance.
   3. Comparison of actual performance with the standards and finding out deviation if any.
   4. Corrective action.

Roles performed by managers

A manager wears many hats. Not only is a manager a team leader, but he or she is also a planner, organizer, cheerleader, coach, problem solver, and decision maker — all rolled into one. And these are just a few of a manager's roles.
In addition, managers' schedules are usually jam-packed. Whether they're busy with employee meetings, unexpected problems, or strategy sessions, managers often find little spare time on their calendars. (And that doesn't even include responding to e-mail!)
In his classic book, The Nature of Managerial Work, Henry Mintzberg describes a set of ten roles that a manager fills. These roles fall into three categories:

• Interpersonal: This role involves human interaction.
  
• Informational: This role involves the sharing and analyzing of information.
  
• Decisional: This role involves decision making.
  

Table 1 contains a more in-depth look at each category of roles that help managers carry out all five functions described in the preceding “Functions of Managers” section.

TABLE 1

Mintzberg's Set of Ten Roles

Category	Role	Activity
Informational	Monitor	Seek and receive information; scan periodicals and reports; maintain personal contact with stakeholders.
	Disseminator	Forward information to organization members via memos, reports, and phone calls.
	Spokesperson	Transmit information to outsiders via reports, memos, and speeches.
Interpersonal	Figurehead	Perform ceremonial and symbolic duties, such as greeting visitors and signing legal documents.
	Leader	Direct and motivate subordinates; counsel and communicate with subordinates.
	Liaison	Maintain information links both inside and outside organization via mail, phone calls, and meetings.
Decisional	Entrepreneur	Initiate improvement projects; identify new ideas and delegate idea responsibility to others.
	Disturbance handler	Take corrective action during disputes or crises; resolve conflicts among subordinates; adapt to environments.
	Resource allocator	Decide who gets resources; prepare budgets; set schedules and determine priorities.
	Negotiator	Represent department during negotiations of union contracts, sales, purchases, and budgets.

Features of Management

Management is the process of designing and maintaining an environment in which individuals working together in groups to accomplish selected aims efficiently.

           It connotes different meaning indifferent contexts. The concept management may be used as

Collective noun	-	Board of directors or Executive Committee
Field of study	-	A branch of knowledge including the principles, techniques, functions and problem management.
Function	-	Functions to be performed to attain the organizational objectives-planning, organizing direction, co-ordination and control

In a more important sense, management is a vital function concerned wth all aspects of the working of an enterprise. Here the management is considered as a body of knowledge consisting of several concepts, principles, techniques and theories which can be adopted in any group Endeavour.

Features of Management

The important characteristics of management as a business function are:

1. It is an art of getting things done through and with people.
2. Art and science of decision making and leadership.
3. It is a universal process for achieving results.
4. It is an profession which involves specialized training and is governed by an ethical code.
5. It coordinates human factor and physical resources for the accomplishment of group objectives.

-           by balancing and integration (or)

-           by innovation and adaptation

Importance of management study

The need and significance of management functions in the modern organizations are given below.

1. To increase the efficiency
2. to give a definite shape to management function.
3. to improve research in management.
4. to attain social goals by effective utilization of resources.

Nature of Management functions

1.              Universality     :           It has universal application in all kinds/nature and size of                                         business activities.

           

2.                  Dynamism :           This body of knowledge is going  on changing                                                    continuously with respect changes that are taking place in                                        the organizational environment.

3.                  Relativity  :           It embraces all business functions at different levels.

4.                  Regularity of

human nature :      It helps to shape the human behaviour in the work                                                    environment.

APPROACHES TO THE STUDY OF MANAGEMENT

A brief discussion about different approaches of management is given below.

Empirical approach

The empirical school of management bases its methods on a close study of past managerial experiences and management cases. As such, it is also known as case approach or management experience approach.

            According to this approach, management is considered a study of manager in practice. The intention of studying experience is to draw generalizations and to develop means to teaching experiences to other practitioners and students. Attempts are made to duplicate successful experiences while avoiding unsuccessful ones.

              This approach offers the most conventional way of acquiring skills in management, that is, learning through the experience of others. This approach also helps in classroom, situations for developing diagnostic and analytical skills in management students. Following limitations of this approach are quite obvious.

 -          This empirical approach, basing its generalizations on cases and past experiences has not contributed anything fundamental to the development of management as discipline because of obvious contradictions in various management experiences.

Human behavior approach

The human behavior approach is the outcome of the thoughts developed by behavioral scientists who look at the organization as collectivity of people. Since management involves getting things done with and through people, the study on management must revolve round human behavior. This approach can be divided into groups interpersonal behavior approach and group behavior approach. This approach suggestion how the knowledge of human behavior can be used in making people more effective in the organization.

However, this approach is not free from limitations. It is true that manage can be better placed by understanding human behavior but equating management with human behavior is untenable. There is something more than mere human relations management. Human behavior approach provides only the diagnosis for human problems but problems have to be solved by taking many more factors which are not explained by this approach.

Social system approach

Closely resembling the human behavior approach and often confused intermixed with it is the social system approach. The real pioneer of social system approach is Vilfred Pareto, a sociologist. His ideas were later developed by Chest Bernard who has really developed the concept of social systems approach management. According  to this approach, the organization is essentially a culture system composed of people who work in cooperation. As such, for achieves organization goals, a co-operative system of management can be developed only understanding the behavior of people in groups.

                  The social system approach has real significance to the practicing managers in the sense that all managers operate n a social system and the organization is likely to succeed if the demands of the society in which it operates as fully recognized. The approach, however, spreads the boundary and application of management beyond the true concept of organizations.

Social Technical systems approach

This approach believes that to solve organizational problems, it is not enough to look at the cooperative social systems alone but technical systems (methods and machines) and how it affects and is affected by social systems and a technical system. The real pattern of behavior in the organization is determined by the interaction of the two.

The major contribution of this approach is that while analyzing management problem of getting things done by people, adequate consideration should be given to technology as well as informal interactions of people. Thus any change in technology must be viewed in subsequent change in social interactions at the workplace. However, this approach is more suitable for managing the problems at the shop floor leave rather thandandling the total management problems.

Decision Theory Approach

The major emphasis of this approach is that decision making is the job of every manager. The manager is a decision maker and organization is a decision-making unit. Therefore, the basic problem in managing is to make rational decision. 

              The approach contributes to the sharpening of managerial tools specially for making suitable decisions in the organization. The approach demonstrates how managers can discharge their functions effectively. Decision-making is vital in every school of management. The vital aspect cannot be denied but management is more than mere decision making.

Management science approach

Management science approach also known as mathematical or quantitative measurement approach, visualizes management as a logical entity, the action of which can be expressed in terms of mathematical symbol relationships and measurement data.

Management science approach is a fast developing one in analyzing and understanding management. This has contributed significantly in developing orderly thinking in management which has provided exactness in management discipline. Various mathematical tools like sampling, linear programming, games theory, time series analysis, emulation, waiting line theory etc, have provided more exactness in solving managerial problems. However, it is very difficult to call it a separate school of management because it does not provide the answer for the total managerial problems, Moreover, many managerial activities are not really capable of being quantified because of involvement of human being who are governed by many irrational factors also.

Systems Approach

                This approach is of comparatively recent origin, starting late 1950, it ha assumed considerable importance in analyzing the phenomena of management. It is an integrating approach which considers management in its totality based on empirical data. The basic idea of systems approach is that any object must rely on a method of analysis involving simultaneous variations of mutually dependent variables. The implication of systems approach are given below.

                 System approach of management provides and integrated approach of managing. This considers management in its totality.

                 System approach of management provides an integrated approach of managing. This considers management in its totality.

                 System approach possesses the conceptual level of managerial analysis much higher than any other approach. It provides a framework through which organization – environment interaction can be analyzed and facilitates decision-making, since the system within which managers make decisions can be provided as a more explicit framework decision-making is easier to handle.

                 It is often suggested that system approach is too abstract to be of much use to practicing managers. It merely indicate that various parts of the organization are interrelated.

                 System approach of management lacks universality and its precepts cannot be applied to all organizations.

Contingency or situational approach

                    The basic idea of contingency approach is that there cannot be a particular management action which will be suitable for all situations. Rather, and appropriate action is one which is designed on the basis of external environment and internal states and needs. Contingency approach tries to fill this gap by suggesting what should be done in response to an event in the environment.

                    Contingency approach, on the other hand suggests an active interrelationship between the variables in a situation and the managerial actions devised. The implications of the contingency approach are given below.

                     It is the sophisticated approach to understand the increasing complexity of organizations. It emphasizes the multivariate nature of organizations and attempts tounderstand how organizations operate under varying conditions. The approach is directed towards suggesting organizational designs and managerial actins most appropriate to specific situations.

                      Inspite of the various contributions, contingency approach has not been acknowledged as a unified theory of management because it suffers from some limitations.

1.                  Inadequate Literature

Contingency approach suffers from inadequacy of literature.

2.                  Complex :

            Determination of situation in which managerial action is to be taken involves          analysis of a large number of variables with multifarious dimensions.

3.                  Reactive not Proactive:

Contingency approach is basically reactive in nature. It merely suggests what managers can do in given situation.

Operational approach

               This approach attempts to draw together the pertinent knowledge of management by relating it to the functions of managers, commonly known as management process. As such this approach is also known as management process approach. This approach views the management as a social process comprising a series of actions leading to the accomplishment of certain objectives. The significance of operations approach is given below.

1.                  Operational approach offers a broad, easy to understand conceptual framework of management. The approach includes the entire scope of management and recognizes it as a separate discipline.

2.                  This approach suggests that management is a universal phenomenon irrespective of the type of organizations or levels of an organization.

3.                  Operational approach provides useful concepts for practicing managers. It helps the managers to put their knowledge to use. It offers practical suggestions by providing classification of managerial functions at first level into planning, organizing, staffing, directing and controlling. However the operational approach has been criticized on the following grounds.

1.                  The basic tenets of operational management that is , various management functions, are not universally accepted.

2.                  Another criticism against operational approach is that various terms used in this approach are not commonly shared.

3.                  The analysis of various approaches suggests that no approach is fully free from shortcomings. However, a positive sign is emerging in the form of convergence of various approaches. The convergence is provided by operational approach as compared to any other approach.

Reasons for failure of CRM Programmes:

Too often management views CRM as an easy solution to their business problems.It is often initiatives begin and unfold the management realizes the gaps in the expectations. Some of the causes of failure are:

1. Mistaking CRM as the substitute for good marketing management:

Many marketing managers view a CRM programme as the substitute for marketing management assuming that the programme would lessen the hard work involved in marketing. They place excessive expectation on the CRM software and think the software will by itself look after their customer management tasks. No CRM programme can substitute the hard grind that marketing is all about. CRM  requires superior marketing managers and staff ,who are not only sensitive to the customers, but also willing to put in the needed work in the execution of the CRM programme.

2. Failure to appreciate the dynamic nature of marketing:

Customer’s needs and the value they perceive in various offerings are subject to change overtime. Technology and environment too keep changing, affecting the firm’s customer management strategy. When CRM programme does not take cognizance of this dynamism of marketing, it fails.

3. Preoccupation with gathering of data and neglect of its application:

Application of the insights on customers to marketing action is the core of CRM.. The usefulness of this expenditure depends entirely on the extent to the information is applied to marketing actions.

4. Inadequate appreciation of the potential of the customer database:

The firms lack adequate appreciation of the potential customer base. Their CRM programmes remain as just, PR programmes. They stop with just quarterly customer mailings or monthly customer letters. Measurements of customer satisfaction and protocols for applying the results there of for calculating  the efficacy of marketing are usually non-existent.

5. Failure to use brand intelligibly in the CRM programme:

Using brand intelligibly is the key to successful mass marketing. It is seen whenever the brand and its values are not utilized throughout the CRM process, the results are not favourable. The way customers interact with brands has been changing in recent years. Multiple channels have contributed to this. This means that in the present times, the brand must work in all the channels/media and all the levels/touch points at which the communication take place. CRM must first know how the customers consume its brand and how they relate to it. Using this knowedge,the brand’s value proposition and the various benefits it offers should be tailored to the individual customer and communicated to him in a specific way.

6. Reluctance to measure customer satisfaction precisely:

Many managers are reluctant to precisely measure the level of customer satisfaction. They also fail to set clear parameters/ metrics for this measurement. Obviously, these managers have no way of finding out whether CRM implementation has brought in benefits or not.

7. Failure to follow up the feedback from the customers:

Analysis shows that in many cases, firms painstakingly gather feedback from customers, but afterward forget about it completely. After coercing the customers to fill in any number of feedback forms, suggestion forms and survey questionnaires, they make no attempt to action the feedback or to initiate a further dialogue with them. This is worse than not gathering feedback at all.

8. Reluctance to share the data on customers with all staff:

Many firms have a protectionist approach to information. Their thinking is that information should be made available only on a ‘need to know’ basis within the organization and must be tied closely to rank. This is anti-ethical to CRM. CRM programmes believe in making all relevant information available to all those in the organization, who interact with the customer in one way or the other.

9. Ignoring the need for efficient, trained, well-motivated employees:

Happy customers are the outcome of happy and well motivated employees. And such employees bred only in great workplaces. Companies can succeed in CRM only by having efficient, well-motivated and happy employees. The challenge is often with the speed of response. The firm must resolve customer’s problem adequately and quickly. Employees with the right motivation ‘customer –first’ attitude creates a satisfied customer.

10. Some CRM programmes incur very high costs:

Running a CRM Programme, especially the creation and maintenance of an effective customer database involves significant costs. There are software costs, hardware costs, systems cost, people related costs, training and motivation costs and so on. The business must be capable of generating such revenues and profits that costs of CRM programme do not pose a problem at all. There must also be sproper control of the costs of CRM-both investment costs and operation costs. The CRM programme succeeds only when the net is positive.

11. Failure to appreciate that the scope for CRM varies over businesses:

All businesses and all customers do not lend the same scope or applying CRM. Failure to appreciate this basic fact will lead the CRM programme to failure. For example, in FMCG businesses where the end customers run into millions, and are distance from the company by several tiers of middlemen and geography, a one –to-one relationship is difficult to maintain. They may be better of with traditional mass marketing / communication strategies.

12. Failure to fit in the needed flexibility:

In some cases, CRM programmes fail as they are designed without the needed flexibility. A rigid structure will be incapable of supporting one-to-one marketing. It will not be able to respond to individual customer’s needs in specific ways.

13. Poor planning affects business goals:

Poor planning affects the company’s views of interaction with customers and increases the chances of addressing the wrong issues. Planning must be based on creating new initiatives that will make doing business better for the customer. It includes taking small steps to reach the larger goal.

14. Resistance to Change:

Remaking a company to be genuinely customer-centric is new and uncharted territory and as with anything new, there is always resistance to change. Change often forces people to regress to what they know and protect what they have always been comfortable with.

15. Commitment from senior management:

A solid and total commitment from the most senior management is a must for the CRM project work. The project must have a dedicated senior executive with the strength to sell the program throughout the organization as is champion, assuring the company’s commitment.

CRM Software Selection:

Installing a good CRM software package is the cornerstone of any customer relationship management program. Without good CRM software, gathering and storing the multitude of details gained about a customer from each interaction would be very difficult.

Small business CRM software has gone ahead in leaps bounds in recent years, with several top quality packages now available to choose from. Prior to beginning the search for good CRM software technology however, there are a few basic features you should seek in a potential CRM package:

Basic Functions: The CRM software should manage data relating to both individuals and companies and it should also provide time management features. As most businesses use Microsoft Office, including Outlook, the CRM package should offer seamless integration with MS Office and/or fax software, as the ability to compose letters, faxes and email without leaving the CRM software is vital.

Recognized CRM Software Supplier: Do your research. Make sure your proposed CRM software supplier is recognized in the industry and has a solid backing with reputable customer testimonials and reliable 24/7 technical support.

360 Degree Customer View: It is important to know which people work for the same company; who said, emailed or wrote what to whom, and when. These details need to be a single click away. Does the CRM package you are considering provide this 360-degree view?

Seamless Connectivity: These days it is becoming more and more common for a growing business and its mobile workforce to utilise networked access to a central database, to mobile phones, and to PDAs. You need to ensure your CRM software package supports all the connectivity required by your company.

Managing Campaigns: In order to optimize your business marketing dollars, tracking of marketing campaigns and measuring their performance is critical. You will need a CRM package which provides this function.

Managing Leads: If you want sales opportunities to become closed sales, tracking leads is of prime importance. Make sure you select CRM software which provides lead tracking.

Data Transfer: Unless you are starting a business from scratch, you will probably need to import information from previous software. Make sure you will be able to import directly, instead of spending hours processing the data through an intermediate stage or even worse, manually. You will also need the ability to export data in order to exchange information with businesses who might use another CRM software package.

External Support: To get the most from any CRM package, you will find tips from fellow users, industry-specific templates, plug-ins to be vital. Make sure the package you are considering is well-known and supported.

CRM gurus Dr Martha Rogers and Don Peppers say that practising good CRM means you need to develop a one-to-one learning relationship with each customer, over four stages:

• Identification
• Differentiation
• Interaction
• Interaction

It's about treating different customers differently. It requires a shift in thinking, perseverance, discipline, and very good CRM software.

It will take you many interactions with a customer to improve identification of their details. You will need many customers before you can place them in different segments and cater to their needs by segment. It may take even longer before you know enough to customise individual offerings.

So get researching, for the very best computer CRM software technology suitable to your business. Without it, you are certain to be pushing up hill in your quest to run a successful customer relationship management program.

CRM implementation:

The following are the guidelines to follow before CRM is implemented at the company.

1. Develop corporate wide CRM engagement from key shareholders: 

Many CRM projects fail because critical stakeholders are not involved in setting CRM strategy, assessing requirements and selecting options.

2. Envision the company’s CRM strategy:

CRM is more than just a software. It is also about selecting appropriate methodologies and business practices to help your business enable better relationships with customers. Set some high level customer relationship goals in areas such as increasing customer retention, speeding problem resolution, closing a higher percentage of sales etc.

3. Determine and Prioritize CRM drivers and requirements:

Priorities such include solving problems in the areas such s functional areas that are causing the most pain, cost and missed opportunity for the business, areas where employees are most or least resistant to changing business, weaknesses compared with competitors, complexity of each area that require addressing  and identifying other systems with which it needs to integrate.

4. Develop a CRM roadmap:

Develop a master plan consisting of several smaller steps and projects that will take you towards achieving the corporate CRM vision. For each step spell out key outcomes and metrics, roles and responsibilities, budgets and timeli:nes. Start with low-risk/high reward projects to build momentum and success. Make sure all key stake holders in each project are included up front in solution evaluation and implementation process toe ensure faster, higher user adoption at the end.

5. Think Integration:

Determine how, where and when CRM tools need to integrate with one another and with other applications. This includes evaluating the business processes flow, and identifying process-related customer interactions and transaction that need to be integrated.

6. Do Your Homework and create a short list:

Check out prospective vendors financial and customer references. Talk to peers who have more experience in the CRM area, search websites and pursue publications.

7. Apply the 80-20 rule in the selection process:

Compare how vendors stack up in terms of solution strengths and weaknesses. Have vendors spell out terms and conditions, through document pricing, training, methodology, milestones and metrics for successful deployment.

8. Keep everyone in the loop:

Once you have made a selection, err on the side of over communicating. Get internal evangelists involved early, and encourages inputs along the way as you roll it out. Offer flexible training options to help accommodate different schedules and learning preferences. This will also speed adoption and produce benefits more quickly.

9. Learn, Adjust and Evolve:

Develop a mechanism to monitor use, get feedback and adopt the solution as necessary to make sure its evolving with business and customer needs. Depending on the type of CRM package deployed, you can use surveys, ongoing education, user groups and other venues to stay on top of knowing how these needs are changing, as well as what types of adaptations the solution will be needed over time.