The Five Functions of Management
Creative Problem Solving
Our Management Excel student:
A manager who happens to manage a farm or horticultural business.
A manager challenged to make efficient use of resources.
A manager challenged with getting things done through people.
A manager who has opportunity to use of all the tools of management that any other manager uses.
A manager who has a way of life like any other manager.
Management Excel is about changing people not about changing businesses. We change people by helping them improve their management skills. Our expectation is that with these tools, they are then likely to change their businesses.
In Management Excel, we start with an assumption of the universality of management. Management is management. Management is generic. Management principles are general rather than specific to a type of firm or organization. However, management is universal only if the manager has become familiar with the specific situation in which it is applied. Production technology, customer characteristics and the culture of the industry are examples of specifics that managers need to learn to be effective in applying their generic management skills.
Management is creative problem solving. This creative problem solving is accomplished through four functions of management: planning, organizing, leading and controlling. The intended result is the use of an organization’s resources in a way that accomplishes its mission and objectives. (Figure 1.1, From Higgins, page 7)
In Management Excel, this standard definition is modified to align more closely with our teaching objectives and to communicate more clearly the content of the organizing function. Organizing is divided into organizing and staffing so that the importance of staffing in small businesses receives emphasis along side organizing. In the management literature, directing and leading are used interchangeably. (Note figure of Management Excel wheel)
Planning is the ongoing process of developing the business’ mission and objectives and determining how they will be accomplished. Planning includes both the broadest view of the organization, e.g., its mission, and the narrowest, e.g., a tactic for accomplishing a specific goal.
Organizing is establishing the internal organizational structure of the organization. The focus is on division, coordination, and control of tasks and the flow of information within the organization. It is in this function that managers distribute authority to job holders.
Staffing is filling and keeping filled with qualified people all positions in the business. Recruiting, hiring, training, evaluating and compensating are the specific activities included in the function. In the family business, staffing includes all paid and unpaid positions held by family members including the owner/operators.
Directing is influencing people’s behavior through motivation, communication, group dynamics, leadership and discipline. The purpose of directing is to channel the behavior of all personnel to accomplish the organization’s mission and objectives while simultaneously helping them accomplish their own career objectives.
Controlling is a four-step process of establishing performance standards based on the firm’s objectives, measuring and reporting actual performance, comparing the two, and taking corrective or preventive action as necessary.
Each of these functions involves creative problem solving. (Figure 4.2 from Higgins, page 118) Creative problem solving is broader than problem finding, choice making or decision making. It extends from analysis of the environment within which the business is functioning to evaluation of the outcomes from the alternative implemented.
An Important Qualification to Success
Management success is gained through accomplishment of mission and objectives. Managers fail when they do not accomplish mission and objectives. Success and failure are tied directly to the reasons for being in business, i.e., mission and objectives. However, accomplishing mission and objectives is not sufficient. Success requires both effectiveness and efficiency. Managers who accomplish their mission and objectives are said to be effective. Efficiency describes the relationship between the amount of resources used (input) and the extent to which objectives were accomplished (output). If the cost of accomplishing an objective is prohibitive, then the objective is not realistic in the context of the firm’s resources. Additional planning is necessary.
Management Excel concentrates on building management skills. There are three basic management skills: technical, human and conceptual. A technical skill is the ability to use tools, techniques, and specialized knowledge to carry out a method, process, or procedure. (Higgins, page 13) Much of the technology that farmers know and can use so well comes under this management skill. Human skills are used to build positive interpersonal relationships, solve human relations problems, build acceptance of one’s co-workers, and relate to them in a way that their behavior is consistent with the needs of the organization. Conceptual skills involve the ability to see the organization as a whole and to solve problems in a way that benefits the entire organization. (Higgins, page 15) Analytical, creative and intuitive talents make up the manager’s conceptual skills.
Introductory Management Excel programs (Managing for Success) pay little attention to technical skills. Most managers in attendance have developed these skills far beyond their human and conceptual skills. In some advanced Management Excel programs, e.g., animal nutrition and financial management, the emphasis is on integration of technical, human and conceptual skills rather than on a more traditional technical approach.
The relative importance of conceptual, human and technical skills changes as a person progresses from lower, to middle, to top management. (Figure 1.4, Higgins, page 20) Although all three management skills are important at all three levels of management, conceptual skills become relatively more important at the top level of management. The consistently high level of importance of human skills helps us understand why people problems are so often cited as a core cause of business failure.
A Guarantee of Success?
Management Excel does not and can not guarantee management success. As excited as we may be about the progress being made by some Management Excel graduates, the reality is, “Sometimes the Dragon Wins!” (Note figure.) Both factors external to the firm uncontrollable by managers and internal factors not perfectly controllable frustrate a manager’s use of her or his management skills. Nevertheless, Management Excel remains firmly grounded on the teaching of five functions of management with the conviction that these functions define well what it is a manager must do to maximize the chances of success
The Five Functions of Management