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LESSON 5
MANAGEMENT FUNCTIONS

Learning Objectives:
At the end of the lesson the student will be able to:
a. Define the management functions that create value for an organization;
b. Understand the relationship between leadership and motivation;
c. Identify the fundamental aspects of employee management;
d. Enumerate the major objectives of performance management; and
e. Know the difference and importance of marketing and branding.

A. MANAGEMENT AND ORGANIZATION

Management
"Management is a set of concepts relating to the roles of planning, organizing,
directing and regulating and the implementation of those concepts in the efficient and
effective use of physical, financial, human and information capital to achieve organizational
objectives." Five primary functions of management:
1. Planning
Planning is forward-looking, which decides the future of an entity.
According to Peter Drucker, "Planning is the ongoing process of making present
entrepreneurial decisions systematically and with the best possible knowledge of
their future, systematically coordinating the efforts necessary to execute those
decisions and evaluating the outcomes of those decisions against expectations
through structured and systematic input.'

2. Organizing
Organizing involves a structured authority structure and a direction and flow of that
authority in which subdivisions of work are described, organized, and coordinated in
such a way that each part relates to the other part in a united and cohesive manner
to achieve the objectives set.
According to Henry Fayol, “To organize a business is to provide it with everything
useful or it’s functioning i.e. raw material, tools, capital and personnel’s”.

3. Staffing
Staffing is the role of hiring and maintaining an adequate workforce for the company
at both the managerial and non-managerial levels. It includes the process of hiring,
educating, creating, compensating, and assessing workers and with appropriate
rewards and motivations retaining this workforce.
According to Kootz & O’Donnell, "The management feature of staffing includes
managing the structure of the company through the proper and efficient selection,
assessment and recruitment of personnel to fill the structure's planned roles."

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 4. Directing
The directing function is concerned with:
• Leadership includes giving orders and advising the subordinates on strategies
and procedures.
• Communication must be available in all directions so that the information can
be passed on and input obtained from the subordinates.
• Motivation is very critical considering that highly motivated individuals
demonstrate excellent performance with less superior guidance.
• Supervision subordinates would lead to ongoing progress reports as well as
assure superiors that the directions are being carried out appropriately. 5.
Controlling
According to Koontz & O’Donnell, "Controlling is the assessment and correction of
subordinates' performance practices to ensure that the company's priorities and
objectives are met."

The controlling function involves:

a. Establishment of standard performance.
b. Measurement of actual performance.
c. Measuring actual performance with the pre-determined standard and finding out
the deviations.
d. Taking corrective action.

B. LEADERSHIP AND MOTIVATION

What is Leadership?
A mechanism by which the executive can steer, guide, and influence other people's
actions and function towards the achievement of particular goals in a given situation.
Leadership is a manager's ability to inspire his subordinates to function with confidence
and zeal.
Leadership is the ability to affect others' behaviors.

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 According to Keith Davis, "Leadership is the ability to actively encourage others to
achieve established goals. It's the human aspect that ties a community together and
motivates it toward goals."

Importance of Leadership

1. Action initiates-Leader is an individual who starts the work by transmitting the

objectives and strategies to the subordinates from where the work begins.
2. Motivation-A leader is proving to play a motivational role in the work of the concern.
3. Providing direction- A leader must not only supervise the subordinates but also play a
leading role. Here, advice means the instruction of the subordinate.
4. Creating trust- Confidence is an essential factor that can be accomplished by
communicating the work efforts to the subordinates, clearly describing their position, and
providing them guidance for achieving the goals. effectively. It is also important to hear
about your complaints and issues from the employees.
5. Building morale- Morale denotes the desire of the workers to cooperate towards their
job and trust them and gain their trust.
6. Builds work environment- Management is bringing employees to do stuff. A productive
work environment helps to develop soundly and stably.
7. Teamwork-Coordination can be accomplished by reconciling personal and
organizational interests.

Role of a Leader

• Mandatory at all levels

• Corporate Delegate
• Combines and reconciles personal priorities with organizational
objectives;
• He pleads for help
• A philosopher, a friend, and a guide

What is Motivation?
Motivation is derived from the word 'motive' which means needs, wishes, desires, or
drives inside the individual. It's the method of motivating people to take action to achieve
their goals. In the context of the work objective the psychological factors that influence the
actions of the people may be:

• desire for money

• success
• recognition
• job-satisfaction
• teamwork

Maslow’s Need Hierarchy Model

Human action is purpose-driven. Goal-driven behavior generates motivation. It is by
inspiration that the needs can be consciously managed and answered. By understanding the
hierarchy of needs per boss, this can be appreciated. Individual desires act as a driving

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force in human behavior. But a boss needs to consider the "hierarchy of needs." Maslow
suggested “The Need Hierarchy Model’.

FIGURE 4 MASLOW'S HIERARCHY OF NEEDS

Importance of Motivation
For a company motivation is very important because it offers the following benefits:

1. Put human resources into action- To achieve the goals, every issue needs physical,
financial, and human capital.
2. Improves employee productivity-The quality of a manager or an employee does not
depend solely on his or her skills and abilities. To get the best out of his work
results, the gap between skill and willingness has to be filled which helps to
improve subordinates' results level. This results in:
a. Stepping up productivity,
b. Reducing running costs, and
c. Improving performance overall
3. Leads to achieve organizational objectives-An enterprise's goals can only be
accomplished when the following factors occur:
a. Assets use is ideally feasible,
b. The work environment is cooperative,
c. Employees are target-driven and behave deliberately,
d. Goals can be achieved when there are mutual teamwork and
collaboration and can be efficiently accomplished through
encouragement.

4. Builds a good relationship- Motivation is a significant factor that gives happiness to

the employees. This can be achieved by having an incentive package in mind and
presenting it for the good of the workforce. This may set the following things in
motion:

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 a. Incentives in monetary and non-monetary terms,
b. Promoting employee chances,
c. Disincentives of employee ineffectiveness.
5. Leads to workforce stability- Workforce stability is very critical from the perspective
of a concern's credibility and goodwill. The workers will only stay loyal to the
company when they have a sense of involvement in the management.

C. EMPLOYEE MANAGEMENT

What is Employee Management?

Employee management is a method that makes the employees work at their best
and attain their company objectives. It's a systematic process that includes everything
related to human resources such as hiring new workers, handling payroll, monitoring results,
and more.
Employee management covers three key areas:

• Acquisition – Selecting the best applicants and hiring them.

• Engagement and retention – Ensure the workers are satisfied, dedicated, and
remain as long as possible.
• Performance Management – Monitor and execute performance evaluations, help
them improve consistently, and reward hard work.

What Are the Main Aspects of Workforce Management?

During the hiring process, you have to pick the right candidates.

• Measurement. You have to determine whether an employee is meeting goals and

performs exceptionally well.
• Monitoring. You have to monitor the measurement.
• Interplay. You must communicate, ask for feedback, and interact with staff, and vice
versa.
• Reward. The workers must be compensated for excellent results.
• Discipline. When workers show bad results, you have to punish them, this may lead
to termination.
• Selection. During the recruiting process, you have to pick the right applicants.
• Measurement. You have to determine if the employee meets the objectives and has
exceptional performance.
• Monitoring. You need to monitor the measurement.
• Interplay. You must communicate, ask for feedback, and interact with staff and vice
versa.
• Reward. The workers must be compensated for outstanding performance.
• Discipline. You have to discipline workers when they show poor performance, this
may lead to termination.

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D. PRODUCTIVITY AND PERFORMANCE MANAGEMENT

What is Performance Management?

Performance management can be seen as a structured mechanism in which an
organization's overall performance can be enhanced by the performance of individuals within
a team structure. It is a means of cultivating superior performance by communicating goals,
identifying positions within the necessary structure of competence, and setting achievable
benchmarks.
Performance management, based from Armstrong and Baron (1998), is both a
strategic and an integrated approach for achieving successful results in organizations by
improved success and improving team and individual skills.
The following acts constitute a Performance Improvement system:

• Create specific job requirements and management plans for workers including main
outcome areas (KRA') and management indicators;
• Choosing the correct group of people by introducing a suitable selection method.
• Negotiate result assessment and overall efficiency criteria and performance
expectations against the predefined benchmarks;
• Continuous coaching and encouragement throughout the success delivery period;
• Defining the training and growth needs by assessing the results achieved against the
criteria set and by implementing successful performance implementation programs.
• Conduct quarterly management planning meetings and assess the success of
employees based on performance plans;
• Design appropriate incentive and reward programs to identify all workers who meet
the performance expectations by meeting the criteria set in compliance with the
performance plans.
• Supporting workers with promotional / career growth and guidance;
• Exit interviews to clarify the source of employee dissatisfaction and eventually leave

The major objectives of performance management are:

• Allowing workers to achieve higher work performance levels.

• Helping workers recognize the expertise and skills needed to do the job effectively as
this would shift their attention to executing the right task in the right direction.
• Push their attention in the right direction to accomplish the right mission.
• Improve employee efficiency by promoting employee confidence, encouragement,
and successful incentive program implementation;
• Promoting a two-way communication mechanism between supervisors and
employees to explain responsibilities and accountability requirements, to
communicate functional and organizational priorities, to provide frequent and
consistent feedback to improve employee performance and continuous coaching.
• Identifying and addressing barriers to effective success by continuous monitoring,
coaching, and development approach.

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 • Establishing a basis for strategic planning, succession planning, promotions, and
performance-based payment of several administrative decisions.
• Encouraging professional development and employee career progression by helping
them to gain the knowledge and skills they need.

Two of the main issues of an organization's performance management framework are:

• In terms of output (results achieved), outcomes, processes required to achieve

results, and also inputs (knowledge, competencies, and attitudes).
• Concerned with measuring outcomes and assessing progress in achieving targets
set.
• Defining business plans to shape a successful future in advance.
• Continuous improvement and development through the creation of a learning culture
and an open system;
• Developing a culture of trust and mutual understanding that encourages free
communication at all levels in matters such as clarifying expectations and sharing
information on the core values of an organization that binds the team together.
• Ensuring procedural fairness and accountability in the decision-making process.

An effective performance management system includes the following components:

1. Performance Planning: Performance planning is the first key component of the

method of performance management that forms the basis of performance
evaluations.
2. Performance Appraisal and Reviewing: The evaluations are typically conducted
twice a year in a company in the form of mid-reviews and annual reviews at the end
of the financial year.
3. Feedback on performance accompanied by personal therapy and performance
facilitation: in the performance improvement process, feedback and therapy are
given a lot of importance.
4. Rewarding good performance: This is a very important factor since it will decide on
an employee's job motivation. A staff member is publicly recognized for good
performance at this point and is rewarded.
5. Performance Management Plans: Fresh set of targets for an employee is being
developed at this stage and new deadlines are being given to meet those goals.

6. Potential assessment: Potential assessment forms the basis for lateral as well as
vertical employee movement. Potential assessment is conducted by incorporating
competency mapping and multiple evaluation techniques.

E. FINANCIAL PLANNING, OPERATIONS, AND ACCOUNTABILITY

What is Financial Planning?

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 Financial planning is the mechanism by which the capital needed is calculated and
its competition decided. It is the method of defining financial policies relating to an
enterprise's acquisition, expenditure, and fund administration.
Objectives of Financial Planning
Financial preparation has multiple priorities to jump on:

a. Determining capital needs-This will depend on factors such as operating and fixed
asset costs, advertising, and long-range planning expenses. Capital requirements
have to be looked at in both aspects: requirements for the short and long term.
b. Determining capital structure-The capital structure is the composition of capital, i.e.
the relative existence and proportion of capital needed in the company. This includes
judgments on the short- and long-term debt-equity ratio.
c. Framing financial policies relating to cash management, loans, borrowing, etc.
d. A finance manager ensures that to get optimum returns on investment, the scarce
financial resources are used at least cost in the best possible way.

Importance of Financial Planning

Financial planning is the practice of defining goals, strategies, practices, services,
and budgets affecting a concern's financial activities. This ensures the financial and
investment plans are efficient and sufficient. The significance can be classified as:

1. Adequate funds must be given.

2. Financial planning helps ensure a fair equilibrium between the outflow and the inflow
of funds to preserve stability.
3. Financial planning means those fund suppliers invest efficiently in financial planning
firms.
4. Financial planning helps to establish growth and expansion strategies that lead to the
long-term survival of the company.
5. Financial Planning reduces uncertainties about changing market trends that can
easily be coped with through sufficient funds.
6. Financial planning helps reduce uncertainties that can be a barrier to the company's
growth. This helps to ensure a d profitability in regards to stability.

The Role of the Finance Function in Organizational Processes

• The Finance Function and the Project Office

To survive recessionary times, contemporary organizations need to exercise cost
control. Given that many top tier companies are currently mired in low growth and
fewer situations of activity, they must control their costs as much as they can.

• The Finance Function's management of the pension fund and tax activities
The role of the finance function is in the processing of payroll, claims and the
repository of pension schemes and gratuity

• Payroll, Claims Processing, and Automation

Another role of the finance function is to process payroll and associated benefits in
time and tune with the regulatory requirements.

Role of a Financial Manager

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 - The company's financial operations are one of the company's most significant and
dynamic tasks. Therefore, a financial manager conducts all the necessary financial
tasks to take care of these tasks.
- A financial manager is a person who cares about all of the organization's essential
financial functions. The person in charge should have a farsightedness to ensure
that the funds are used most effectively. His behaviors directly impact the
Company's performance, growth, and goodwill.

Financial Manager's principal roles are as follows:

1. Raising of Funds
- To meet the business's obligation, it is important to have ample cash and liquidity.
A firm can pay funds through equity and debt. A financial manager must assess
the ratio between debt and equity.
2. Allocation of Funds
-Upon raising the funds through various channels, the next important function is to
distribute the funds. The funds should be distributed in such a way as to allow full
use of them. The following point must be considered to allocate the funds in the
best possible way.  The size of the company and its capacity to expand
• Long-term or short-term status of the properties
• The way the funds are collected
3. Profit Planning
-
Profit earning is a prime feature of any corporate enterprise. Benefit earning is
necessary for any organization's existence and sustenance.
- Benefit planning refers to a careful utilization of the company's generated benefit.
4. Understanding Capital Markets
- Business shares are traded on the stock exchange, and stocks are continually
sold and purchased. Therefore, a good understanding of the stock market is a
financial manager's essential feature.

F. MARKETING AND BRANDING

Marketing is the method of keeping prospective buyers or clients involved in goods

and services. "Process" is the main word in this definition; marketing includes investigating,
advertising, selling, and distributing the goods and services.

Types of Marketing

 Influencer Marketing- Marketing influencer focuses on exploiting individuals who

influence potential customers and orienting marketing efforts around those
individuals to bring a brand message to the wider market.
 Marketing relationship- According to the National Advertisers' Association (ANA),
the marketing relationship relates to techniques and methods for building loyalty by
segmenting customers.

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  Viral Marketing-is a marketing technique that promotes and inspires people to get a
marketing message across.
 Green Marketing – relates to the production and promotion of goods believed to be
environmentally friendly (i.e. intended to reduce harmful effects on, or enhance, the
physical environment).
 Keyword Marketing-requires putting a marketing message in front of users based
on the unique keywords and search phrases used.
 Guerilla Marketing-defines an innovative and inventive marketing technique aimed
at generating maximum results with the limited resources available.

4 P’s of Marketing

1. Product-defined as a set of attributes (features, functions, benefits, and uses) that

can be exchanged or used; typically, a mixture of tangible and intangible forms;
2. Price-is the formal ratio indicating the amount of money, goods, or services
necessary to purchase a specified amount of goods or services.
3. Place (or distribution)-refers to the act of marketing and transportation of goods to
consumers. It is often used to define the degree to which the product concerned has
market coverage.
4. Promotion – According to the National Advertisers' Association (ANA), marketing
promotion includes tactics that promote short-term purchases, influence trials and
purchase quantities, and are very measurable in volume, share, and profit.

Four Activities or Components of Marketing:

1. Creating-The process of collaborating with suppliers and clients to create value-

added offers.
2. Communicating-Broadly describing those offers and learning from customers as
well.
3. Delivery-Get those offers to the consumer in a manner that optimizes value.
4. Exchange-Trading value in respect of those offers.

What is Branding?
Branding is by definition a marketing activity where a organization produces a brand,
emblem, or design that can be recognized as belonging to the company. This helps to
recognize and differentiate a commodity from other goods and services.
Why Is Branding Important?

 Branding is utterly important to a company owing to its ultimate effect on the

company. Branding can shift the way the brand is viewed by consumers, can attract
new business, and increase brand recognition.
 The main reason why branding is important for a company is because it is how a
company gets attention and becomes recognizable to customers. The logo is one of
the important branding features, particularly given that it is the face of the business.
 Branding Increases Market Value — Branding is crucial when it comes to attracting
potential sales, and a well define brand will improve the profitability of a business by
giving the company more influence in the industry.

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  Branding attracts new buyers — A successful brand won't have trouble drumming up
the referral. Good branding usually means that customers have a favorable view of
the company and they are likely to do partnership with you because of the trust,
familiarity, and perceived reliability of having a name that they can trust. If a brand is
well-established, word of mouth would be the strongest and most effective
promotional strategy for the company.
 Increases Employee Pride and Happiness- When an employee works for a highly
branded business and is genuinely behind the brand, they will be more pleased with
their job and feel prouder of the work they do.
 Creates Business Confidence — Professional presence and well-strategized
branding can help create confidence with buyers, potential customers.
 Branding Advertisement Supports — Advertisement is another aspect of branding,
and advertising campaigns can explicitly represent the brand and its desired image.

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