The Five Functions of Management was first described by Henri Fayol in his 1916 book Administration Industrielle et Generale. The Five Functions of Management is a general theory of business administration. It argues that management is comprised of five general functions: planning, organizing, staffing, leading, and controlling.
Understanding the Five Functions of Management
The Five Functions of Management was first described by Henri Fayol in his 1916 book Administration Industrielle et Generale.
Fayol, a French mining engineer, theorized that five functions were universal to management across various organizations. Each function describes a set of principles advising managers on how they can successfully lead their subordinates. What’s more, the theory helps managers see their role as more than just supervisory in nature.
Today, the five functions are still in use and are often collectively referred to as Fayolism. Let’s take a look at each of these functions in the next section.
The Five Functions of Management
The Five Functions of Management consist of:
- Planning – according to Fayol, planning is the hardest of the five functions. Managers must plan for the future and develop appropriate strategies to meet organizational goals. Furthermore, risks must be identified with plans in place to mitigate them. Planning must also be coordinated across different levels and consider the available human and non-human resources. Fayol also stressed the importance of forecasting at daily, weekly, monthly, yearly, five-yearly, and ten-yearly intervals.
- Organizing – or the process of assembling physical, financial, and human resources. This involves the identification of necessary activities, assignment of roles and responsibilities, and the delegation of authority.
- Commanding (Directing) – successful managers communicate clearly and honestly and act in a way that reflects company values. Their decisions are based on regular audits and they are capable of motivating and encouraging employees to use initiative.
- Coordinating – the fourth function aims to create harmony between the various activities within an organization. For example, spending should be proportional to available resources, production requirements, market demand, or stock levels. Fayol argued that regular meetings were also a good way to solidify relationships between different departments or activities. Harmony is also created by hiring employees who are suitably qualified to carry out their roles.
- Controlling – is progress being made toward the goals and objectives stated in the planning phase? If not, management needs to take corrective action.
Limitations of the Five Functions of Management
Despite its obvious advantages, Fayol’s theory has some drawbacks:
- Based on anecdotal evidence – the Five Functions of Management is based on Fayol’s own experiences during his time as director of a mining company. The theory does not incorporate empirical research and its application may be limited as a result.
- Inward-focused – with no credence given to the customer, each organization is structured to meet its own needs and not the needs of the much more important end-user.
- A lack of nuance – Fayol’s theory is rather broad and rigid. Its scope does not extend to the informal, micro-interactions or relationships between managers and subordinates. In more dynamic and modern organizations, the theory may not be able to facilitate effective management.
- The Five Functions of Management is a general theory of business administration highlighting five key areas: planning, organizing, commanding, coordinating, and controlling.
- The Five Functions of Management provide a framework for effective management. The theory argues that the role of a manager is far more complex than the supervision of subordinates.
- The Five Functions of Management is broad, rigid, and may lack the nuance required for dynamic businesses. It also lacks any foundation in empirical research and does not focus on meeting the needs of the customer.
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