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Henri Fayol's Principles of Management

Understanding historical administrative theory.

By the Mind Tools Content Team

As your career progresses, you may find you do fewer technical tasks and spend more time guiding a team or planning strategy.

While that's often a given today, in the 19th century most companies promoted the best technicians. But Henri Fayol recognized that the skills that made them good at their jobs didn't necessarily make them good managers.

Who Was Henri Fayol?

Fayol was an engineer who worked his way up to become manager of the Compagnie de Commentry-Fourchambault-Decazeville mining company in France, at the tail end of the industrial revolution. Under his watch, the struggling firm prospered.

He wrote, "When I assumed the responsibility for the restoration of Decazeville, I did not rely on my technical superiority... I relied on my ability as an organizer [and my] skill in handling men." [1]

Fayol's 14 Principles of Management identified the skills that were needed to manage well. As well as inspiring much of today's management theory, they offer tips that you can still implement in your organization. Fayol also created a list of the five primary Functions of Management , which go hand in hand with the Principles.

What Is Administrative Theory?

Fayol called managerial skills "administrative functions." In his 1916 book, "Administration Industrielle et Générale," he shared his experiences of managing a workforce.

Fayol’s book – and his 14 Principles of Management – helped to form what became known as Administrative Theory . It looks at the organization from the top down, and sets out steps for managers to get the best from employees and to run a business efficiently.

Administrative Theory is characterized by people "on the ground" who share personal experiences, improve practices, and help others to run an organization. This contrasts with the Scientific Management school led by Frederick Taylor , which experimented with how individuals work to boost productivity.

What Are Fayol's 14 Principles of Management?

It was the reality of Fayol's day-to-day managing, seeing what worked and what didn't, that informed his 14 Principles of Management. By focusing on administrative over technical skills, the Principles are some of the earliest examples of treating management as a profession. They are:

• Division of Work. Assign each employee a task that they can become proficient at. Productivity increases as employees become more skilled, assured and efficient. Today, experts still warn against multi-tasking.
• Authority. Managers must possess the authority to give orders, and recognize that with authority comes responsibility. As well as rank, Fayol argues that a manager's intelligence, experience and values should command respect.
• Discipline. Everyone should follow the rules . To help, you can make agreements between the organization and employees clear for all to see. [2]
• Unity of Command. Fayol wrote that "an employee should receive orders from one supervisor only." Otherwise, authority, discipline, order, and stability are threatened.
• Unity of Direction. Teams with the same objective should be working under the direction of one manager, using one plan. That, Fayol wrote, "is the condition essential to unity of action, coordination of strength and focusing of effort."
• Collective Interest Over Individual Interest. Individuals should pursue team interests over personal ones – including managers.
• Remuneration. Employee satisfaction depends on fair remuneration for everyone – financial and non-financial. Fayol said pay should be fair and reward "well-directed effort."
• Centralization. Balancing centralized decision making (from the top) with letting employees make decisions. Or as Fayol wrote, "A place for everyone and everyone in his place."
• Scalar Chain. Employees should know where they stand in the organization's hierarchy and who to speak to within a chain of command. Fayol suggested the now-familiar organization chart as a way for employees to see this structure clearly. [3]
• Order. Fayol wrote that, "The right man in the right place" forms an effective social order. He applied the same maxim to materials: right one, right place. Academics note that this principle pre-empted the Just in Time (JIT) strategy for efficient production. [4]
• Equity. Managers should be fair to all employees through a "combination of kindliness and justice." Only then will the team "carry out its duties with... devotion and loyalty."
• Stability of Tenure of Personnel. Organizations should minimize staff turnover and role changes to maximize efficiency. If people are secure and good at their jobs, they are happier and more productive.
• Initiative. Employees should be encouraged to develop and carry out plans for improvement. As Fayol wrote, "At all levels of the organizational ladder, zeal and energy on the part of employees are augmented by initiative."
• Esprit de Corps. Organizations should strive to promote team spirit, unity, and morale.

What are Fayol's Five Functions of Management?

While Fayol's 14 Principles look at the detail of day-to-day management, his Five Functions of Management provide the big picture of how managers should spend their time. They are:

• Planning: the need "to assess the future and make provision for it." That includes a flexible action plan that considers a firm's resources, work in progress, and future market trends.
• Organizing: laying out lines of authority and responsibility for employees. This covers recruitment and training, coordinating activities, and making employees' duties clear.
• Commanding: getting the most from people. So, managers must know their employees' skills, delegate to tap into these skill sets, and set a good example.
• Coordinating: in a well-coordinated organization, departments know their responsibilities, the needs of other teams, and their obligations to them.
• Controlling: continually checking that rules, plans and processes are working as well as they should be.

Is Fayolism Still Relevant Today?

You only have to look at the language he used to see that Fayol was writing over 100 years ago. For example, he refers to employees as "men."

But, as Daniel Wren writes, "Without the contributions of these pioneers, such as Fayol, we would probably be teaching industrial engineering, sociology, economics, or perhaps ergonomics to those who aspire to manage. To be doing so would push us back to the 19th century when technical know-how reigned supreme as a path to managerial responsibility." [5]

And if you look closer, you'll discover that many of Fayol's points are fresh and relevant. Such as:

• His Principles advocate teamwork and working together for the mutual benefit of the business.
• The Five Functions reveal the need for organizations to plan and be agile in the face of changing market conditions.
• Fayol was one of the first people to recognize that management is a continuous process.
• Before human resources management, Fayol wrote about motivating people by inspiring initiative, commanding respect through values, and ensuring that people have the time and training they need to be happy and productive at work.
• The manager who is respected for their values leads by example , makes time to get to know their employees, and gives them the training they need, sounds a lot like a modern manager. Some of these ideas may seem a bit obvious, but at the time they were groundbreaking. And the fact that they've stuck shows just how well Fayol's Principles work.

Criticism of Fayol's Principles of Management

That's not to say that everyone is a fan of Fayol's Administrative Theory. Some detractors claim that:

It's unscientific. Fayol's critics question whether you can ground a theory in the observations of one person. But Fayol stressed that he was laying a foundation for others to build on.

This is just what Luther Gulick and Lyndall Urwick did in 1937 when they used Fayol's ideas to form their POSDCORB model for working efficiently. And research shows that more modern critics of Fayol – such as Mintzberg, Kotter and Hales – in fact use many of his ideas.

It's too prescriptive. If some of Fayol's Principles look dated, there's a reason for that. Many critics argue that one set of Principles can't govern all managers. In fact, Fayol wrote that his list was "incomplete," and that the Principles were flexible and adaptable.

Today, academics have shown how Fayol's work can be updated to complement modern management theorists, such as Porter. [2]

It's cold and inhuman. Critics of historical management theories point to an emphasis on efficiency over the social and psychological needs of workers. But managing with kindness, instilling a sense of initiative, and building morale reveal a level of consideration for workers that was enlightened at the time.

Fayol highlighted the differences between managerial and technical skills. What's more, he was one of the first people to recognize that "manager" is a profession – one whose skills need to be researched, taught and developed.

Fayol's 14 Principles and Five Functions helped to form Administrative Theory. It was progressed by workers and managers alike – non-academics who shared and learned from their experiences.

[1] Fayol, H. (2013). ' Administration Industrielle et Générale (General and Industrial Management) ,' Eastford, CT: Martino Fine Books.

[2] Yoo, J-W., Lemak, David J., & Choi. Y. (2006). 'Principles of Management and Competitive Strategies: Using Fayol to Implement Porter,'  Journal of Management History . Available here .

[3] Lunenburg, F.C. & Ornstein, A. (2021). ' Educational Administration Concepts and Practices ,' New York: Sage Publishing.

[4] Fells, M.J. (2000). 'Fayol Stands the Test of Time,'  Journal of Management History (Archive) . Available here .

[5] Wren, Daniel A. (1995). 'Henri Fayol: Learning From Experience,'  Journal of Management History (Archive) . Available here .

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• Henri Fayol 14 Principles Of Management

Henri Fayol's 14 Principles of Management

Henry Fayol, also known as the Father of Modern Management Theory, gave a new perception on the concept of management. He introduced a general theory that can be applied to all levels of management and every department. He envisioned maximising managerial efficiency. Today, Fayol’s theory is practised by the management to organise and regulate the internal activities of an organisation.

The fourteen principles of management created by Henri Fayol are explained below.

1. Division of Work

Henri believed that segregating work in the workforce amongst the workers will enhance the quality of the product. Similarly, he also concluded that the division of work improves the productivity, efficiency, accuracy and speed of the workers. This principle is appropriate for both the managerial as well as a technical work level.

2. Authority and Responsibility

These are the two key aspects of management. Authority facilitates the management to work efficiently, and responsibility makes them responsible for the work done under their guidance or leadership.

3. Discipline

Without discipline, nothing can be accomplished. It is the core value for any project or any management. Good performance and sensible interrelation make the management job easy and comprehensive. Employees’ good behaviour also helps them smoothly build and progress in their professional careers.

4. Unity of Command

This means an employee should have only one boss and follow his command. If an employee has to follow more than one boss, there begins a conflict of interest and can create confusion.

5. Unity of Direction

Whoever is engaged in the same activity should have a unified goal. This means all the people working in a company should have one goal and motive which will make the work easier and achieve the set goal easily.

6. Subordination of Individual Interest

This indicates a company should work unitedly towards the interest of a company rather than personal interest. Be subordinate to the purposes of an organisation. This refers to the whole chain of command in a company.

7. Remuneration

This plays an important role in motivating the workers of a company. Remuneration can be monetary or non-monetary. Ideally, it should be according to an individual’s efforts they have put forth.

8. Centralization

In any company, the management or any authority responsible for the decision-making process should be neutral. However, this depends on the size of an organisation. Henri Fayol stressed on the point that there should be a balance between the hierarchy and division of power.

9. Scalar Chain

Fayol, on this principle, highlights that the hierarchy steps should be from the top to the lowest. This is necessary so that every employee knows their immediate senior also they should be able to contact any, if needed.

A company should maintain a well-defined work order to have a favourable work culture. The positive atmosphere in the workplace will boost more positive productivity.

All employees should be treated equally and respectfully. It’s the responsibility of a manager that no employees face discrimination.

12. Stability

An employee delivers the best if they feel secure in their job. It is the duty of the management to offer job security to their employees.

13. Initiative

The management should support and encourage the employees to take initiatives in an organisation. It will help them to increase their motivation and morale.

14. Esprit de Corps

It is the responsibility of the management to motivate their employees and be supportive of each other regularly. Developing trust and mutual understanding will lead to a positive outcome and work environment.

In conclusion, the 14 Principles of Management the pillars of any organisation. They are integral for prediction, planning, decision-making, process management, control and coordination.

Also Read :  Difference Between Fayol and Taylor’s Theories of Management

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Table of Contents

Who was henri fayol, henry fayol’s 14 principles of management, 1. division of work, 2. authority, 3. discipline, 4. unity of command, 5. unity of direction, 6. collective interest over individual interest, 7. remuneration, 8. centralization, 9. scalar chain, 12. stability of tenure of personnel, 13. initiative, 14. esprit de corps, history of the 14 principles of management, what is the importance of the 14 principles of management, criticism of fayol's principles of management, are these principles of management still relevant today, what are the 14 principles of management by henri fayol.

Reviewed and fact-checked by Sayantoni Das

Any organization that wishes to be efficient and achieve its goals needs good management . Management has four basic functions - planning, organizing, leading, and controlling, also called the POLC framework in management. Without these in place, there would be little to no structure and focus in an organization. One classic theory on the principles of management was written by Henri Fayol in his 1916 book, "Administration Industrielle et Générale”. By placing the focus on managerial skills over technical skills, these principles give us a foundation for what we call “good management”.

Check out the video below that explains Henry Fayol’s 14 principles of management.

A French mining engineer, Henri Fayol is well-renowned as the 'Father of Modern Management Theory'. Fayol worked at the French mining company Commentry-Fourchambault and Decazeville, where he started as an engineer but worked his way up to become the general manager and then the organization's director from 1888 to 1918. When Foyal took on the managerial role at the mining company, he chose to rely not on his technical skills but on his ability as an organizer and his skills at handling people. 

Widely influential in the early 20th century, Henri Foyal wrote the book on management theories and work organization, "Administration Industrielle et Générale." Henri Foyal introduced theories that could be applied to all levels of management and for any department. Organizations and managers still practice Foyal's principles of management to ensure an efficient and successful business.

Henri Foyal developed the 14 principles of management towards the tail end of the industrial revolution. It was the perfect timing too, the world had been subjected to massive changes, and new and improved working styles were the need of the moment. Therefore, Fayol's Principles of Management influence the present management theory quite significantly.

Henry Fayol’s 14 principles of management look at an organization from a top-down approach to help managers get the best from employees and run the business with ease. Let’s take a look at them and understand them in detail.

The first Henry Fayol principle of management is based on the theory that if an employee is given a specific task to do, they will become more efficient and skilled in it. This is opposed to a multi-tasking culture where an employee is given so many tasks to do at once. In order to implement this principle effectively, look at the current skill sets of each employee and assign them a task that they can become proficient at. This will help them to become more productive, skilled, and efficient in the long run.

Example: At a school, every department has a different responsibility, like academics, sports, administration, sanitation, food, beverages, etc. These responsibilities are taken care of by employees specializing in that particular department, increasing efficiency and productivity and making them specialists in their field.

This henry fayol principle of management states that a manager needs to have the necessary authority in order to ensure that his instructions are carried out by the employees. If managers did not have any authority, then they would lack the ability to get any work done. However, this authority should come along with responsibility. According to Henri Fayol, there should be a balance between authority and responsibility. If there is more authority than responsibility, the employees will get frustrated. If there is more responsibility than authority, the manager will feel frustrated.

Example: If an employee has been responsible for managing the decor department while planning an event but has no authority to make design decisions or contact the vendors to get the work done, no efficiency or productivity will be achieved.

This principle states that discipline is required for any organization to run effectively. In order to have disciplined employees, managers need to build a culture of mutual respect. There should be a set of organizational rules, philosophies, and structures in place that should be met by everyone. Bending rules or slacking should not be allowed in any organization. In order to achieve this, there is a need for good supervision and impartial judgment.

Example: Every employee must follow certain rules and regulations and keep a disciplined attitude in the workplace for smooth working and efficient results.

This principle states that that should be a clear chain of command in the organization. The employees should be clear on whose instructions to follow. According to Fayol, an employee should receive orders from only one manager. If an employee works under two or more managers, then authority, discipline, and stability are threatened. Moreover, this will cause a breakdown in management structure and cause employees to burn out.

Example: If in a company, an employee has been given a task to finish within 3 to 4 hours as ordered by their immediate superior. But the head of the department asks them to deliver the task within 1 hour. In this case, no unity of command can create confusion and pressure in the workplace.

This henry fayol principle of management states that the work to be done should be organized in such a way that employees work in harmony towards the same objective, using one plan, under the direction of one manager. For example, if you have a range of marketing activities such as advertising, budgeting, sales promotion, etc., there should be one manager using one plan for all the marketing activities. The different activities can be broken down for different sub-managers, but they should all work towards a common goal under the direction of one main person in charge of the whole thing. 

Example: Different sets of activities within a department should be managed by different managers to avoid confusion and lesser efficiency within the workflow.

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This principle states that the overall interest of the team should take precedence over personal ones. The interest of the organization should not be sabotaged by the interest of an individual. If anyone goes rogue, the organization will collapse. 

Example: While planning a team outing, the employee making the travel and stay decisions must make arrangements according to comfort and affordability, not just as per their liking.

This henry fayol principle of management states that employees should be paid fair wages for the work that they carry out. Any organization that underpays its workers will struggle to motivate and keep quality workers. This remuneration should include both financial and non-financial incentives. Also, there should be a structure in place to reward good performance to motivate employees.

Example: Any organization must be fair regarding their remuneration policies where all the employees must receive a salary worth their efforts irrespective of their gender, tenure, and other factors.

Centralization refers to the concentration of power in the hands of the authority and following a top-bottom approach to management. In decentralization, this authority is distributed to all levels of management. In a modern context, no organization can be completely centralized or decentralized. Complete centralization means that people at the bottom have no authority over their responsibilities. Similarly, complete decentralization means that there will be no superior authority to control the organization. To use this effectively today, there should be a balance of centralization and decentralization. The degree to which this balance is achieved will differ from organization to organization.

Example: Centralization is mostly common in small and medium-sized firms where the delegation of work is minimal, and the owners make most of the decisions.

A scalar chain refers to a clear chain of communication between employees and their superiors. Employees should know where they stand in the hierarchy of the organization and who to go to in a chain of command. To implement this in the workplace, Fayol suggests that there should be an organizational chart drawn out for employees to see this structure clearly.

Example: Every organization has a specific chain of authority from the highest level of superiors, like the founder or CEO, to the lowest level of subordinates following a hierarchy for maximum productivity.

This principle states that there should be an orderly placement of resources (manpower, money, materials, etc.) in the right place at the right time. This ensures the proper use of resources in a structured fashion. Misplacement of any of these resources will lead to misuse and disorder in the organization. 

Example: Employees should be given a designated space and the right tools or equipment to complete their work efficiently.

Equity is a combination of kindness and justice. This principle states that managers should use kindliness and justice towards everyone they manage. This creates loyalty and devotion among the employees towards the organization they work for.

Example: All employees, irrespective of gender, religion, race, and sexuality, must feel safe, seen, and heard and be given equal opportunities to grow and flourish in their careers within the organization.

This principle states that an organization should work to minimize staff turnover and maximize efficiency. Any new employee cannot be expected to get used to the culture of an organization right away. They need to be given enough time to settle into their jobs to become efficient. Both old and new employees should also be ensured job security because instability can lead to inefficiency. There should also be a clear and effective method to handle vacancies when they arise because it takes time and expense to train new ones.

Example: Every new employee must be given a proper induction of both the technical aspect of the company as well as the work culture and office environment for them to mingle well. Old employees should be given alum awards for completing certain tenures to boost morale.

This principle states that all employees should be encouraged to show initiative. When employees have a say as to how best they can do their job, they feel motivated and respected. Organizations should listen to the concerns of their employees and encourage them to develop and carry out plans for improvement.

Example: Taking suggestions from employees regarding their specific department can make them feel seen in an authoritative position and can give them a sense of achieving something for the team.

Esprit de Corps means “Team Spirit”. This henry fayol principle of management states that the management should strive to create unity, morale, and co-operation among the employees. Team spirit is a great source of strength in the organization. Happy and motivated employees are more likely to be productive and efficient. 

Example: While discussing the new plan of action for achieving the next month's targets, using the word 'We' instead of 'I' brings a teamwork spirit to the group.

That was all about principles of management.

Henry Fayol is known as the father of modern management theory. He was an engineer at the Compagnie de Commentry-Fourchambault-Decazeville mining company and worked his way up to become a manager during the peak of the Industrial Revolution in France. Under his watch, the struggling company prospered.

In 1916, he wrote the book, "Administration Industrielle et Générale," where he shared his experiences of managing a workforce. This laid the foundation for administrative theory and the 14 Principles of Management. By focusing on administrative over technical skills, these principles became one of the earliest examples of treating management as a true profession.

Every organization is truly successful once its employee strength has been optimized to its full potential. These 14 principles of management by Henri Foyal are still widely influential in making sound management decisions and bringing the best results for both the company as well as the employees.

Foyal's principles of management are widely credited for making the employees highly efficient and productive, in turn generating the best possible results and effortless functioning of the organization. Below are some of the most important achievements organizations have achieved by following the 14 principles of management by Henri Fayol.

1. Structure

Every company requires a structure and a flow to prosper truly. These principles of management provide a structure to the management and encourage the authoritative personnel to take charge and bring out efficiency among the employees.

2. Communication

Communication is key in every well-managed company. Effective communication is the key to achieving maximum productivity while having clarity about the end goal. Clear and effective communication is a crucial tool in managing many employees and teams and ensuring the best results.

3. Efficiency

Fayol's principles of management give a firm perspective of how important it is to have good management in place to achieve maximum efficiency while doing smart work.

Any organization is nothing without its employees. It is very important to gain the employees' trust and loyalty as they are an important cog in running the company smoothly and efficiently. Ensuring these principles of management are observed and practiced can be a huge step in gaining trust and building healthy relations with the employees.

While Henri Fayol's 14 principles of management are still significantly used by companies and organizations, there are certain criticisms around the theory. 

Fayol's school of thought, or Fayolism, is considered too rigid and can only be applicable in a formal structure. While this theory is practical in some aspects, it is argued that it is not completely useful as the employees should also be given the freedom to make decisions.

Henry Fayol’s 14 principles of management are universally accepted and continually used as a guideline for managers across the world. Though these principles of management are more than 100 years old, without them, it would push us back hundreds of years back when technical skills reigned supreme, and people lacked managerial responsibility.

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Q1. What is Fayol's theory of management?

Henri Fayol was known as the father of modern management. He gave us the famous 14 principles of management. According to him, the 5 main functions of management are Planning, Organizing, Commanding, Coordinating and Controlling. 

Q2. What are the principles of management?

Principles of management are basic activities that can help you plan, organize and control operations related to material, people, machines, methods, money and markets. They provide leadership to human efforts so that they achieve set objectives efficiently. 

Q3. Why is Henry Fayol called the father of management?

Henry Fayol is popularly known as the father of modern management as he suggested the 14 principles of management in the 20th century. His research and findings helped several enterprises scale their production and work in an efficient manner. He concentrated on the essential parts of a manager’s work in ensuring the production cycle. 

Q4. What Is the First Rule of Management?

The first rule of management is proper segregation or division of work among employees with respective strengths to fulfill those responsibilities. 

Q5. What are the characteristics of principles of management?

The basic yet important characteristics of the principles of management are planning, organizing, directing, staffing, and controlling. A manager or authority personnel must perform all these duties simultaneously.

Q6. What is the nature of the principles of management?

A principle is a universal concept for making well-informed and effective decisions and executing them efficiently. The principles of management are, by nature, a set of rules that, if followed, will help the company with great management.

Q7. What are the benefits of applying Fayol's principles of management?

There are many benefits to applying Fayol's principles of management, including:

• Increased efficiency and productivity
• Improved decision-making
• Reduced costs
• Increased employee morale
• Improved customer satisfaction
• Enhanced organizational performance

Q8. How can I apply Fayol's principles of management in my own organization?

• Start by identifying the principles that are most relevant to your organization
• Develop a plan for implementing the principles
• Communicate the principles to employees and managers
• Monitor the implementation of the principles and make adjustments as needed

Q9. What are the types of planning?

The 4 types of planning are strategic, operational, tactical, and contingency planning. 

Q10.What are the techniques of management by Henri Fayol?

Henri Fayol's techniques of management, known as the "14 Principles of Management," include division of work, authority, discipline, unity of command, unity of direction, subordination of individual interest to the general interest, remuneration, centralization, scalar chain, order, equity, stability of tenure of personnel, initiative, and esprit de corps.

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1 Introduction to Management

Learning Objectives

The purpose of this chapter is to:

1)  Give you a basic understanding of management and its importance

2)  Provide a foundation of the managerial functions of planning, organizing, leading, and controlling

Introduction to Management

Management is not a hard science.  Unlike chemistry or algebra where a right answer (often) exists, management is fluid, and subjective, and there are divergent perspectives on how to employ its principles.  But what exactly is management?  Most scholars have variations of the same definition that include a utilization of resources to achieve a goal.  Lussier (2021) defines a manager as “the individual responsible for achieving organizational objectives through efficient and effective utilization of resources” (p. 3).   The problem with this definition is that it implies that a manager has to be both efficient and effective, which eliminates the possibility of having a bad manager.  Each of us can probably contradict this definition by providing an example from our personal past.  However, this definition contains the basic elements of using resources to pursue goals.

An early management scholar, Mary P. Follett characterized management as “the art of getting things done through the efforts of other people” (Graham, 1995).   This definition implies both pursuing goals (getting things done) and utilizing resources (predominantly through people).  However, this too is missing an element, that of the organizational context.  An important consideration for understanding management is that the term organization simply refers to “a collection of people working together to achieve a common purpose” (Shermerhorn, 2013, p. 11).  This means an organization could be anything from your high school volleyball team to church or a corporation.  Including the term “organization” in the definition leaves open the possibility that management can be practiced in each of these settings, and broadens our use of the term management.  A comprehensive definition for management then, would be the pursuit of organizational goals through the use of organizational resources (Bateman & Snell, 2013).  Pursuit implies a chance of failure and organizational gives us a context.  This begs the question – how can we become effective at the pursuit of goals, or become more efficient in our use of organizational resources?  Being good at management requires an immense focus on both of these ends, and we can achieve this through the process of the planning, organizing, leading, and controlling functions of management.   These functions serve as the basis for the rest of the textbook because they are the essential tools we use to manage organizations.  Most of the context and examples for this book focus on the corporate use of management.  However, you should meet the concepts where you are in your professional or academic career – apply the principles to the context of your life, master the four functions for what you are doing now so that you can scale them to much bigger managerial endeavors later.

Management is not New

A broad understanding of management as resource utilization focused on a goal gives us a wide scope of situations and contexts in which to practice it.  For example, the Crow Indians employed a complex strategy to harvest an entire herd of buffalo by driving them off a cliff.  To funnel the herd to the lane leading up to the cliff they used a decoy (a hunter donned in a buffalo calf robe imitating a lost calf), incense to smoke them towards the lane, or rock piles to guide them to the lane (Nathan, 2018).  If we apply the basic principles of management in this context we can see these hunters used resources (rocks, incense, knowledge and tradition) to pursue a goal (procurement of food, tools, and clothing the bison afforded them).

At its core, this imperial supply chain used the same approach to achieve success th at a teenager might use in a playing video games.  If he rallys his friends after school in a game of Call of Duty to defeat their online opponents, he might also be considered a manager.  He uses his experience and knowledge of gameplay as well as weaponry within the game to pursue his goal of competitive domination.

These examples demonstrate that management is multifarious, and not at all a recent phenomenon.    Yet, when we hear the term management , most of us probably conjure an image something like that of a corporate vice president implementing a marketing strategy to meet quarterly sales goals.  The irony is that the corporate manager is utilizing the same tools as those of the native hunter, Spanish fleet admiral, and sophomore gamer.   Management is both universal and ubiquitous in that we all use variations of its elements.

The Four Functions of Management

The management process by which we pursue goals includes planning, organizing, leading, and controlling.  These are “ the how ” a manager pursues organizational goals, and are universally known as the four functions of management.  They stem from the work of a French mining administrator, Henri Fayol, who first identified management as a practice that could be improved through the use of five functions – planning, organizing, commanding, coordinating, and controlling.  Since he published his work in 1916, we have decided that leading people through motivation and incentivization works much better than telling them what to do (e.g. commanding and coordinating).  We use the term leading instead of these practices.  Chapter 2 on the history of management will provide some insights regarding this change.  Nonetheless, he gave us a place from which to start.

Even if you have never stepped foot in a corporate office, or held the title of manager at your local Dairy Queen, you have no less used the functions of management in your personal pursuits.  A relevant example would be the process by which you manage your personal budget.

Reflection:  Are you already a manager?

Think about your personal or family budget for a moment, and answer the following questions:

1) Do you have your budget written down somewhere, or in an excel spreadsheet?

2) What are your financial goals?

3) How much do you put in savings, charity, and monthly expenses?

4) Where does your money come from (a job, your parents, a hobby, your spouse)?

5) If you have a budget shortfall during the month, what do you do?

6) How do you keep track of expenses to ensure your bank account remains in the black?

If you answered yes to question #1, then you are already engaged in the management function of planning.  You know where your money is being spent.  The same holds true for your financial goals.  If you want to leave college debt free, save for a down payment on a house, or go on an unforgettable spring break trip, you have defined your organizational objective!  Where you put your money is a function of how you manage your resources.  This organizing function is presumably in line with your financial goals.  For example, if you want to save for a down payment, you need to actually allocate your resources (income) to a savings account.  Moreover, where your money comes from is also the source of your organizational resources.   A budget shortfall might require you to employ the leading function of management.  The essence of leading is motivating other people to align with your plan.  What do you do if you need to pay bills, but don’t have the money?  Perhaps you ask your parents for a loan (need to sell this idea to them), or you might need to negotiate with a co-worker to let you take on extra shifts (show them what’s in it for them in return), or it might be the reality that you need to sell something to make ends meet by selling something (in which case selling requires you to inspire someone else to see value in what you are selling).   Leading might also entail convincing someone else in your circle to get on board with your gameplan (like a spouse, or sibling).  Finally, keeping track of your expenses to ensure solvency and pace with your goals is the core of the controlling function.  Do you keep receipts and check them against your online account expenses?  Do you update your spreadsheet after your bill automatically debits from your account?  Do you get an email notifying you have a low balance and are in risk of overdraft charges?  Each of these methods are ways to monitor your progress and decide if you need to make a change (short term or long term).

If you reflect on this example of your personal budget, or you worked to achieve a personal or team goal, you will likely conclude that you are already a manager.  This wide application of managerial thinking means that if you can master its principles on your personal scale, you can then amplify its use when you need to use it on a large scale.  Get good at leading your class project, organizing your club fundraiser, or helping your team win a conference championship, and you will later be able to magnify the scale to lead a marketing department, or corporate merger, and even diplomatic negotiations as a prime minister.

Mastering the four functions will allow you to apply the function of planning on a more complex stage such as evaluating the internal and external environments of your organization.  Using this analysis you can create an effective game plan to formulate a sustainable competitive advantage.  Developing an organizing skillset will allow you to propose a structure for your team that incorporates cross functional members and ways of thinking.  It will allow you to identify and recommend resources needed to pursue your plan.  Honing your leading skillset will afford you the capability to motivate your organizational stakeholders to partake in your strategy, and force you to consider the ethical implications of your actions.   Finally, implementing effective controlling allows you to check progress towards your goals and to recommend changes if you need to get on track.

Planning is the systematic process of making decisions about goals and activities the organization will pursue (Bateman & Snell, 2013).  To make a decision about the direction of an organization, the planning phase must begin with analyzing the environment.  Without a solid understanding of the context, the manager would have no basis to provide future direction.  The context gives a manager a point of reference for improvement, opportunity, and learning from past mistakes.  For this reason, the planning function should begin with analysis.  This analysis should consider both the internal factors such as culture, values, and performance of team members as well as the external factors such as competitive environment, legal regulations, economy, technology, social values, and demographics.

The second component of planning is to use this analysis of the environment to build goals, activities, and objectives.  For a major organization this might be the vision and mission statement of the organization.  For a smaller organization this could be a year end, or season end goal.  Some consider planning that point in your day or month that you step away from your desk, and think about the direction of your organization.  This requires you to reflect on your organization’s past, and determine how that impacts the direction going forward.

            Organizing is the process of assembling and assigning the human, financial, physical, informational, and other resources needed to achieve goals (Bateman & Snell, 2013).   The core of the organizing function is leveraging the resources to align with the determined goals.  Organizing human resources means first of all attracting a labor force that can help you pursue your goal.  Within the organization, managing the human element means assigning tasks, delegating authority, determining a structure and hierarchy.  Organizing the financial resources equates to making sure your capital is being utilized to meet goals.  If an organization decides they want to have a best-in-class customer service team, they better being willing to spend the money to attract people with the disposition towards serving others, and spend money on training, or a retreat to teach the agents the skillsets they need.  Marshalling physical resources focuses on the effectiveness of where you place and how you use physical assets.  An executive chef might re-arrange a kitchen to improve process flow, food quality, or mitigate safety risks for example.  Informational resources implies a leveraging and disseminating the organization’s knowledge in meaningful ways to achieve goals.  Connecting employees to how they contribute to the financial bottom line is a way of leveraging informational resources, as is using your company’s proprietary algorithm to predict stock prices or develop new products.

Leading is stimulating high performance by members of the organization (Bateman and Snell, 2013).  This function is getting members of the organization on board with your plan.

Normally, this means connecting with direct reports or teammates on a personal level.  Understanding what drives individuals within the team allows a manager to design strategies around motivating, incentivizing, mobilizing, and arousing a desire to contribute.

Imagine for a minute, that you analyzed the conditions of the organization, you determined a game plan to pursue and even directed resources to step in that direction.  You have successfully implemented the planning and organizing functions.  In this scenario, however, you did not give consideration to how your team or organization would be involved.  Do they agree with your direction?  Did they have input in the process?  Do they feel valued as a team member?  Do they understand their role in a successful outcome?   All of these questions are answered by the degree to which a manager is engaged in the leading function.

Having personal conversations, designing a bonus structure, or giving a rousing speech might all be considered leading the organization.

Controlling

Control is installing processes to guide the team towards goals and monitoring performance towards goals and making changes to the plan as needed (Batemen & Snell, 2013).  Control does not always mean limited what the organization can do by having a hand in everything.  We might call this micro-managing, which is control in its extreme form.  Healthy control processes involve putting systems in place to make sure your organization is on track to meet the goals you established in the planning process.  Planning sets standards to compare against, and the control process is the dashboard that tells whether or not you are meeting the standard.  For example, a grocery store might set a goal of reducing shrink (that’s product lost to shoplifting, damage).  They decide that they want to reduce their shrink loss by 50%.  To achieve this plan, they will have to dedicate resources (more employees to monitor, rearrange loading dock).  You already recognize that step as the organizing function.  We then incentivize our employees by designing a bonus structure – i.e. if we collectively meet the goal, each employee shares in the savings.  If we stop there, we would have no way of knowing if we met the goal.  The control process solves this for us.  The last step in the grocery store manager’s managerial approach is to have each department head report their shrink loss at the end of the shift, and aggregate those in an excel spreadsheet.  In this way, the manager can see if the rearrangement of the loading dock has reduced the number of damaged canned goods that was happening under the old arrangement.  The manager can make changes if they see that shrink is not improving even after hiring a greeter at the entrance.

Monitoring performance is the first step in control.  After see the progress towards goals, the next step is to make changes.  In this way, the control process always leads a manager back to the planning phase of management.  There are only two outcomes to the control process.  You are making progress towards your goal, or you are digressing in your performance.  If you reach your goal, you will need to set new goals, which is the planning function.  If you are not progressing towards your goal, you need to analyze the environment and determine why not.  In this way the management functions are related and highly dependent upon each other, especially control and planning.

            To illustrate the application of the four functions of manager, consider the various contexts in Figure 1.1.   Under the personal budget, an engaged couple has decided to save for a house after getting married.  The softball coach must determine how to win a conference championship, and the corporate manager is working on a strategy to improve waning sales figures.

Figure 1.1 – The Functions of Management Applied

On the Importance of Studying Management

The purpose of this textbook is to provide you with firstly, a broad exploration of what management is – its elements and origins.  Secondly, the purpose of this textbook is to provide you with a managerial framework you can utilize to practice management at any level of complexity.  This framework emphasizes the four basic functions – planning, organizing, leading, and controlling.  Most management textbooks include a wide variety of academic terms and concepts that take focus away from these four functions.  Other textbooks will inundate the reader with descriptions of heuristics, focus on layers of management, or extraneous terms like the Shamrock organization that do not advance a practical understanding of management.  We have designed this textbook with the four functions of management at the forefront because these elements are so critical to the foundation of everything you will do in the managerial context.  This textbook provides a history of management and a chapter on ethics, but then focuses exclusively on the functions of management as the subject matter.  At the completion of this textbook, you should be able to understand, recognize, and apply these four functions of management.

The four functions of management (plan, organize, lead, and control) serve as the foundation for everything else you will study in your business education.  Mastering these tools at the most basic level, as well as the more sophisticated levels in classes you will take later, will best prepare you as a business professional (Dolechek et al, 2019).

Figure 1.2 – Management as the Foundation

Upon completion of a management principles course, you will progress towards the applications of the four functions of management in the upper level courses.  For this reason, management principles serves as a pre-requisite for most other management courses.   In marketing principles you will develop an understanding of how to analyze external conditions, and a course in information systems will help you design ways to collect more information to analyze.  This is the core of the planning function.  In human resources and organizational behavior, you will learn the dynamics of your ever-important resource of human labor, the organizing function.  In business ethics and applied management skills you work on understanding what drives people, and by association how to lead them based on that understanding.  Grasping business law and production operations will give you a deeper understanding of how to monitor progress (to meet legal compliance and to test production quality for example).  The entire discipline of accounting is a managerial function of control.  Constructing financial statements is done for the sole purpose of determining the performance of you organization so that you can make future decisions.  The capstone course of a business program is the business strategy class.  In this course, students are given an opportunity to demonstrate mastery of the four functions by including all of the functional areas of business in their decision making.

A Whale of an Example

You are the city manager of a coastal Oregon city.  On a quiet, rainy Tuesday, you walk into your office and put the coffee on.  As you take your first sip, your administrative assistant forwards you a phone call from the parks and rec manager.  “We’ve got a problem down here on the beach.  The tide just left a dead humpback whale on our beach.”  What do you do?  What. Do. You. Do??   Now, there are several options to dealing with the dead whale.  Consider the following questions:

• 1) What is your strategy for dealing with this problem? ( Plan )
• 2) What resources do you need to follow your strategy? ( Organize )
• 3) What stakeholders do you need to get on-board? ( Lead )
• 4) What steps can you take to make sure your plan is proceeding as you planned it? ( Contro l)

There are a handful of strategies we might naturally gravitate towards.  The feasibility of each strategy depends on how well you employ the functions of management.

Tow the whale back to sea – A crane, tug boat, and tow cable are needed.  Who might you need to include in this gameplan?  The coast guard might need to be involved to discuss any pertinent regulations.  A marine captain that can tell you about tides so that you can time your extraction, and insights about currents to indicate how far out you need to haul the whale once its buoyant.  Should you allow a marine biologist to provide advice on what sort of ecological impact this might have (like bring in unwanted sharks or seals).  How can you be sure the tow cable has enough tinsel strength to haul a bloated whale on a high friction surface like wet sand?   Does the crane have the capacity to move the carcass into position to be hauled?  If the whale is decaying, will the tow cable just pull through the rotten flesh?

Cut the whale up, haul it to the dump –  You will need a forklift, semi-truck, and chainsaw.  The first consideration here would be the logistics of pursuing this strategy.  You will need to find a truck with the towing capacity to haul large chunks of the carcass off the beach.  Can you ensure the weight of a loaded semi would not sink into the wet sand?  How much does a semi-loaded with a whale carcass weight?  You may also need to contact the county roads manager to determine if there are any bridges between the beach and the dump that have weight restrictions.   What sort of protective equipment would you need for the men slicing through the whale with chainsaws?  There are a few control processes that need to be put in place for this strategy to work.

Celebrate the whale – The objective of the city manager is to “deal with” the dead whale.  For most, this would mean remove it somehow.  For others, this might be a chance to celebrate the occasion, and establishing the experience in the culture and history of the town.  To celebrate the whale, the city manager can hold a competition like car dealers do to promote their cars – have contestants place their hand on the whale and the last person to withstand touching the grotesque, slimy, and malodorous creature, somehow wins a major prize.  This would require a sponsor to donate a prize (a car, a vacation) and the town can celebrate the occasion annually.  If the goal is to appease the community from the existence of the whale and its stench, celebration is one strategy to pursue that end.  You would need to include a biologist to determine if leaving the whale to decay after the festival would attract scavengers, and a water chemist to determine if a decaying whale creates toxicity problems for beach goers.

Blow it up! – The kid in most of us choose this option.  Definitely.  You might need to check with state officials to see what the protocols are on this approach.  The biggest question would be how much dynamite do you need to blow up a whale, or blow it into the ocean?  In Oregon, one stakeholder group you might contact is a mining company or the Oregon national guard.  Both of those groups have a lot of experience calculating explosive requirements.   What are the safety protocols you need in place to make sure that no one is injured?  Where will you be able to source enough explosives to achieve this goal?

Use of the four functions

Each of these scenarios contain some far-fetched elements.  But asking the right questions is paramount to turning any of these into a feasible strategy.  You first need to decide a path, then determine your resources before getting stakeholder groups on board.  For a high-risk situation like most of these solutions call for, you need to put control mechanisms in place to mitigate your risks.  If you type “Oregon’s exploding whale” you can see what has become the most-watching news broadcast of all time.  It shows you what happens when a city manager does not successfully navigate the situation using all four functions of management.

Critical Thinking Questions

How are the four functions of management related?

Which is the most important function of management?

Choose a historical event prior to the year 2000.  Analyze the leader’s use of the four functions of management during that event.

How to Answer the Critical Thinking Questions

For each of these answers you should provide three elements.

• General Answer.  Give a general response to what the question is asking, or make your argument to what the question is asking.
• Outside Resource.  Provide a quotation from a source outside of this textbook.  This can be an academic article, news story, or popular press.  This should be something that supports your argument.  Use the sandwich technique explained below and cite your source in APA in text and then a list of full text citations at the end of the homework assignment of all three sources used.
• Personal Story.  Provide a personal story that illustrates the point as well.  This should be a personal experience you had, and not a hypothetical.  Talk about a time from your personal, professional, family, or school life.   Use the sandwich technique for this as well, which is explained below.

Use the sandwich technique:

For the outside resource and the personal story you should use the sandwich technique.  Good writing is not just about how to include these materials, but about how to make them flow into what you are saying and really support your argument.  The sandwich technique allows us to do that.  It goes like this:

Step 1:  Provide a sentence that sets up your outside resource by answering who, what, when, or where this source is referring to.

Step 2:  Provide the quoted material or story.

Step 3:  Tell the reader why this is relevant to the argument you are making.

EXAMPLE :  Let me provide an example of homework expectations using the type of question you might see in a critical thinking question at the end of the chapter.  Each of the answers you provide should be this thorough.

Question:  Explain why it is important to study management.

Management is important to study because it serves as the foundation for all other areas of business.  The four functions can be used in other business areas such as accounting, marketing, operations management and human resources.   All of the areas of business need people who know how to make a plan and allocate resources.  All of the areas of business need people who know how to motivate others, and to make sure they are on track for their organization’s goals.   For this reason, improving our mastery of management will make us more effective at whichever role we are in.   A good example of this foundation comes from research conducted on accounting firms in Romania.  Wang and Huynh (2014) found that accounting managers who embraced both managerial best practices and had the technical skills needed for accounting improved the organizational outcomes of their firms.  These findings suggest that business professionals need managerial skills to supplement the day-to-day roles they have.

As I reflect on management as a foundational discipline, I remember how my high school baseball coach approached our team after a losing season.  We were not a good team because we did not have fundamentals of how to grip a baseball, how to stand in the batter’s box, or how to field a ground ball.   That next year, he taught us all of these fundamentals and we won a lot of games.  It seems to me that learning fundamentals of management can have the same impact.  Being able to execute the four functions of management allows us to get better at how we approach marketing a new product, or improving operations processes.

Wang, D., & Huynh, Q. (2014). Linkages among corporate governance, management accounting practice and organizational performance: Evidence from a Southeast Asian country. Romanian Economic and Business Review, 9(1), 63-81.

Chapter References

Aho O.W., Lloyd R.A. (2019) The Origins of Robust Supply Chain Management and Logistics in the Caribbean: Spanish Silver and Gold in the New World (1492–1700). In:

Bowden B., McMurray A. (eds) The Palgrave Handbook of Management History . Palgrave Macmillan: London, UK.

Bateman, T., & Snell, S. (2013).  M: Management (3rd ed) .  McGraw Hill / Irwin: New York, NY

Dolechek, R., Lippert, T., Vengrouskie, E. F., & Lloyd, R. A. (2019).  Solving a whale of a problem: Introducing the four functions of management in a management principles course .  International Forum of Teaching Studies, 15 (2), 29-35.

Fayol, H. (1949).  General and Industrial Management . Sir Isaac Pitman & Sons Ltd:  London, U.K.

Graham, P. (1995).  Mary Parker Follett: Prophet of Management.  Harvard Business School Press: Boston, MA.

Lussier, R. (2021).  Management Fundamentals: Concepts, Applications, Skill Development.  (9th Ed).   Sage Publications: Thousand Oaks, CA.

Nathan, R. (2018). The Grapevine Creek Buffalo Jump Complex: Interdisciplinary Research on the Crow Reservation, Montana (Doctor of Anthropology, dissertation).  Indiana University.

Shermerhorn, J. (2013).  Management (12th Ed) . Wiley and Sons: Hoboken, NJ

The Four Functions of Management Copyright © 2020 by Dr. Robert Lloyd and Dr. Wayne Aho is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License , except where otherwise noted.

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Chapter 1: Introduction to Principles of Management

1.1 Introduction to Principles of Management 1.2 Case in Point: Doing Good as a Core Business Strategy 1.3 Who Are Managers? 1.4 Leadership, Entrepreneurship, and Strategy 1.5 Planning, Organizing, Leading, and Controlling 1.6 Economic, Social, and Environmental Performance 1.7 Performance of Individuals and Groups 1.8 Your Principles of Management Survivor’s Guide

Principles of Management Copyright © 2015 by University of Minnesota is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License , except where otherwise noted.

What is Work Assignment? – Advanced Work Assignment (AWA)

Work assignment, a fundamental concept of professional realms, refers to allocating specific tasks or duties to individuals or teams within a certain timeframe.

These assignments, which can range from simple tasks to complex projects, serve as the backbone of productivity, facilitating the efficient functioning of an organization.

By clearly defining roles, responsibilities, and deadlines, work assignments ensure that each member is aware of their contribution towards the broader objectives.

This post will explain the work assignment, its scheduling, and its benefits. It will also discuss automated and advanced work assignments.

What is a Work Assignment?

A work assignment or job assignment refers to a task or set of tasks allocated to work centers , an individual, or a team within a specific timeframe. Depending on the context, it can be part of a larger project or an isolated task. 

It helps distribute the workload evenly among team members, ensuring everyone knows their responsibilities and keeping track of progress toward goals.

Automated Work Assignment

Automated assignment of work helps to reduce the stress on employees. It saves the project manager time because the auto-assignment manager does not need to remind his team about the work. The system only gives notifications to the team.

Automated work assignment is when a computer system assigns work to employees based on predefined criteria in an automatic workflow. This can include skills required for the task, availability of employees, and other factors.

The use of automated work assignments can help to improve efficiency and accuracy within an organization.

Managers can efficiently assign work to minimize downtime and maximize productivity by considering employees’ individual skills and availability.

Automated systems can also help to ensure that tasks are appropriately distributed among employees, thus avoiding potential conflicts.

The advantage of the automatic assignment is it helps to deliver the project faster by avoiding confusion and rework because the task is assigned when all the requirements are entirely available.

Advanced Work Assignment

Advanced Work Assignment (AWA) is a methodology organizations use to create and assign work tasks to employees based on their skills, abilities, and interests.

This approach can help improve employee productivity and satisfaction while reducing organizational costs. 

It can effectively engage employees in their work and maximize their potential when appropriately implemented.

One of the critical benefits of it is that it allows organizations to optimize their resources and assign work that is most suited to each employee’s skills, abilities, and interests.

This helps improve productivity by ensuring employees are matched with tasks they can complete while fostering engagement and satisfaction.

Additionally, it can help reduce organizational costs by ensuring that employees are assigned work within their abilities and do not require excessive training or support.

Despite these benefits, some potential challenges are associated with using AWA.

For example, employees may sometimes resist or feel uncomfortable with being assigned work outside their comfort zone or feel they are not allowed to develop new skills.

Additionally, accurately assessing each employee’s skills and interests can be challenging, leading to some employees being assigned work that is not well-suited.

Therefore, it is essential to carefully consider whether or not AWA is right for your organization before implementing it.

When appropriately used, Advanced Work Assignments can effectively improve employee productivity and satisfaction while reducing organizational costs.

Scheduling of Work Assignment

When you are using a computerized system to schedule work, it is essential to know that some factors affect employees’ performance before uploading the names of employees in the system.

This includes understanding how these applications operate and considering what kind of factor affects them most when deciding which option will be best suited for your business needs!

You can utilize manual assignment or auto-assignment for scheduling once you get it.

The following are some tips for scheduling the assignment.

1. Examine the type of work

It is crucial to find out the type of work. For example, some work has to be done in one department. However, some work must be divided between the different departments, and those departments must develop internal work procedures.

2. Analyze the skills of the employees

Each employee has their talent. So before scheduling the work, making one flowchart of the work process is better.

After analyzing employees’ skills, assign the work in the flowchart to the specified employees. Also, keep one backup person if the designated employee cannot perform the job.

3. Calculate the required time

Go through the flowchart and calculate the time required for each stage of the work or project to streamline the work process and complete the job efficiently.

4. Avoid the duplication of work

When you assign laborers to different fundamental processes, there will be a chance of duplicating work because all the laborers do jobs not mentioned in the flow chart.

Hence, carefully check the workflow across the organization and ensure there is no work duplication.

5. Provide a clear idea to the customer

Provide a clear idea to the customer about communication. That means informing him clearly to whom he should communicate to get information about the project and assigning a specified person.

Considering customers’ expectations is critical to set company standards. It helps to learn the market standards also. It will be achievable when you do a proper work assignment.

Important Information that Works Assignment Contains

Work assignment contains mainly these four essential pieces of information. They are

• Which task is to be done : Clearly explain to the employees which task to be taken based on priority.
• The reason for doing that task : When you assign new work to the employees before completing current work, you need to explain its reason.
• What standards should completed tasks meet: Let employees know about the evaluation of the completed job.
• All-motive directions: This means telling the employees to inform their managers about the completed task and the problems they face while doing the tasks.

Benefits of work assignment

• It is easy to track who is responsible for which work.
• It contains some information like which task to be done as per the priority, what must be the standards of the completed task, etc. It helps the assigned person to do the job efficiently.
• By assigning work to a particular team or a person, they know which work to do as per the priority and do that work efficiently to increase customer satisfaction.

What are the components of Advanced Work Assignment (AWA)?

The components of Advanced Work Assignment (AWA) are: -Work Instructional Package (WIP) -Task Guide -Performers Instructions -Standard Operating Procedure (SOP) -Work Area Layout diagram.

What is Standard Operating Procedure (SOP)?

Standard Operating Procedure (SOP) , often shortened to “the SOP,” is a standardized plan adopted by an organization for the orderly and efficient carrying out of various activities such as work, production, or services.

The SOP is a company-wide standard that includes everything from greeting coworkers in the morning to what to do if there’s a fire.

While it may appear overly restrictive at times, its goal is to minimize variation and mistakes. Every business activity has at least one best practice that can lead to success and efficiency if adhered to deliberately and consistently.

What is a Work Instructional Package (WIP)?

A Work Instructional Package (WIP) is a document that provides step-by-step instructions for performing a specific job or task. It may also include diagrams, photographs, and illustrations to help clarify the steps involved.

WIPs are generally used in manufacturing and production settings but can also be helpful in other types of workplaces.

For example, if you work in an office and need to learn how to use a new software program, your company might provide a WIP outlining the steps to install and configure the software.

The proliferation of technology has led to an increased demand for automation. Companies have found a balance between humans and machines using automated work assignment software, or AWA. Automatic job assignments can be used in many industries, from IT support to sales call centers.

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1.4: Planning, Organizing, Leading, and Controlling

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Learning Objectives

• Know the dimensions of the planning-organizing-leading-controlling (P-O-L-C) framework.
• Know the general inputs into each P-O-L-C dimension.

A manager’s primary challenge is to solve problems creatively. While drawing from a variety of academic disciplines, and to help managers respond to the challenge of creative problem solving, principles of management have long been categorized into the four major functions of planning, organizing, leading, and controlling (the P-O-L-C framework). The four functions, summarized in the P-O-L-C figure, are actually highly integrated when carried out in the day-to-day realities of running an organization. Therefore, you should not get caught up in trying to analyze and understand a complete, clear rationale for categorizing skills and practices that compose the whole of the P-O-L-C framework.

It is important to note that this framework is not without criticism. Specifically, these criticisms stem from the observation that the P-O-L-C functions might be ideal but that they do not accurately depict the day-to-day actions of actual managers. The typical day in the life of a manager at any level can be fragmented and hectic, with the constant threat of having priorities dictated by the law of the trivial many and important few (i.e., the 80/20 rule). However, the general conclusion seems to be that the P-O-L-C functions of management still provide a very useful way of classifying the activities managers engage in as they attempt to achieve organizational goals.

Figure 1.7 The P-O-L-C Framework

Planning is the function of management that involves setting objectives and determining a course of action for achieving those objectives. Planning requires that managers be aware of environmental conditions facing their organization and forecast future conditions. It also requires that managers be good decision makers.

Planning is a process consisting of several steps. The process begins with environmental scanning which simply means that planners must be aware of the critical contingencies facing their organization in terms of economic conditions, their competitors, and their customers. Planners must then attempt to forecast future conditions. These forecasts form the basis for planning.

Planners must establish objectives, which are statements of what needs to be achieved and when. Planners must then identify alternative courses of action for achieving objectives. After evaluating the various alternatives, planners must make decisions about the best courses of action for achieving objectives. They must then formulate necessary steps and ensure effective implementation of plans. Finally, planners must constantly evaluate the success of their plans and take corrective action when necessary.

There are many different types of plans and planning.

Strategic planning involves analyzing competitive opportunities and threats, as well as the strengths and weaknesses of the organization, and then determining how to position the organization to compete effectively in their environment. Strategic planning has a long time frame, often three years or more. Strategic planning generally includes the entire organization and includes formulation of objectives. Strategic planning is often based on the organization’s mission, which is its fundamental reason for existence. An organization’s top management most often conducts strategic planning.

Tactical planning is intermediate-range (one to three years) planning that is designed to develop relatively concrete and specific means to implement the strategic plan. Middle-level managers often engage in tactical planning.

Operational planning generally assumes the existence of organization-wide or subunit goals and objectives and specifies ways to achieve them. Operational planning is short-range (less than a year) planning that is designed to develop specific action steps that support the strategic and tactical plans.

Organizing is the function of management that involves developing an organizational structure and allocating human resources to ensure the accomplishment of objectives. The structure of the organization is the framework within which effort is coordinated. The structure is usually represented by an organization chart, which provides a graphic representation of the chain of command within an organization. Decisions made about the structure of an organization are generally referred to as organizational design decisions.

Organizing also involves the design of individual jobs within the organization. Decisions must be made about the duties and responsibilities of individual jobs, as well as the manner in which the duties should be carried out. Decisions made about the nature of jobs within the organization are generally called “job design” decisions.

Organizing at the level of the organization involves deciding how best to departmentalize, or cluster, jobs into departments to coordinate effort effectively. There are many different ways to departmentalize, including organizing by function, product, geography, or customer. Many larger organizations use multiple methods of departmentalization.

Organizing at the level of a particular job involves how best to design individual jobs to most effectively use human resources. Traditionally, job design was based on principles of division of labor and specialization, which assumed that the more narrow the job content, the more proficient the individual performing the job could become. However, experience has shown that it is possible for jobs to become too narrow and specialized. For example, how would you like to screw lids on jars one day after another, as you might have done many decades ago if you worked in company that made and sold jellies and jams? When this happens, negative outcomes result, including decreased job satisfaction and organizational commitment, increased absenteeism, and turnover.

Recently, many organizations have attempted to strike a balance between the need for worker specialization and the need for workers to have jobs that entail variety and autonomy. Many jobs are now designed based on such principles as empowerment, job enrichment and teamwork . For example, HUI Manufacturing, a custom sheet metal fabricator, has done away with traditional “departments” to focus on listening and responding to customer needs. From company-wide meetings to team huddles, HUI employees know and understand their customers and how HUI might service them best.

Leading involves the social and informal sources of influence that you use to inspire action taken by others. If managers are effective leaders, their subordinates will be enthusiastic about exerting effort to attain organizational objectives.

The behavioral sciences have made many contributions to understanding this function of management. Personality research and studies of job attitudes provide important information as to how managers can most effectively lead subordinates. For example, this research tells us that to become effective at leading, managers must first understand their subordinates’ personalities, values, attitudes, and emotions.

Studies of motivation and motivation theory provide important information about the ways in which workers can be energized to put forth productive effort. Studies of communication provide direction as to how managers can effectively and persuasively communicate. Studies of leadership and leadership style provide information regarding questions, such as, “What makes a manager a good leader?” and “In what situations are certain leadership styles most appropriate and effective?”

Controlling

Controlling involves ensuring that performance does not deviate from standards. Controlling consists of three steps, which include (1) establishing performance standards, (2) comparing actual performance against standards, and (3) taking corrective action when necessary. Performance standards are often stated in monetary terms such as revenue, costs, or profits but may also be stated in other terms, such as units produced, number of defective products, or levels of quality or customer service.

The measurement of performance can be done in several ways, depending on the performance standards, including financial statements, sales reports, production results, customer satisfaction, and formal performance appraisals. Managers at all levels engage in the managerial function of controlling to some degree.

The managerial function of controlling should not be confused with control in the behavioral or manipulative sense. This function does not imply that managers should attempt to control or to manipulate the personalities, values, attitudes, or emotions of their subordinates. Instead, this function of management concerns the manager’s role in taking necessary actions to ensure that the work-related activities of subordinates are consistent with and contributing toward the accomplishment of organizational and departmental objectives.

Effective controlling requires the existence of plans, since planning provides the necessary performance standards or objectives. Controlling also requires a clear understanding of where responsibility for deviations from standards lies. Two traditional control techniques are budget and performance audits. An audit involves an examination and verification of records and supporting documents. A budget audit provides information about where the organization is with respect to what was planned or budgeted for, whereas a performance audit might try to determine whether the figures reported are a reflection of actual performance. Although controlling is often thought of in terms of financial criteria, managers must also control production and operations processes, procedures for delivery of services, compliance with company policies, and many other activities within the organization.

The management functions of planning, organizing, leading, and controlling are widely considered to be the best means of describing the manager’s job, as well as the best way to classify accumulated knowledge about the study of management. Although there have been tremendous changes in the environment faced by managers and the tools used by managers to perform their roles, managers still perform these essential functions.

Key Takeaway

The principles of management can be distilled down to four critical functions. These functions are planning, organizing, leading, and controlling. This P-O-L-C framework provides useful guidance into what the ideal job of a manager should look like.

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10.1 Organizational Structures and Design

• What are mechanistic versus organic organizational structures?

First, an organizational structure is a system for accomplishing and connecting the activities that occur within a work organization. People rely on structures to know what work they should do, how their work supports or relies on other employees, and how these work activities fulfill the purpose of the organization itself.

Second, organizational design is the process of setting up organizational structures to address the needs of an organization and account for the complexity involved in accomplishing business objectives.

Next, organizational change refers to the constant shifts that occur within an organizational system—for example, as people enter or leave the organization, market conditions shift, supply sources change, or adaptations are introduced in the processes for accomplishing work. Through managed change , leaders in an organization can intentionally shape how these shifts occur over time.

Finally, organizational development (OD) is the label for a field that specializes in change management. OD specialists draw on social science to guide change processes that simultaneously help a business achieve its objectives while generating well-being for employees and sustainable benefits for society. An understanding of OD practices is essential for leaders who want to maximize the potential of their organizations over a long period of time.

Together, an understanding of these concepts can help managers know how to create and direct organizations that are positioned to successfully accomplish strategic goals and objectives. 1

To understand the role of organizational structure, consider the experience of Justin, a young manager who worked for a logistics and transportation company. Their success at leading change in the United States gave their leaders the confidence that Justin could handle a challenging assignment: organize a new supply chain and distribution system for a company in Northern Europe. Almost overnight, Justin was responsible for hiring competent people, forming them into a coherent organization, training them, and establishing the needed infrastructure for sustained success in this new market.

If you were given this assignment, what would you do? How would you organize your employees? How would you help them understand the challenge of setting up a new organization and system? These are the kinds of questions that require an understanding of organizational structure, organizational design, organizational change, and organizational development.

One of the first issues Justin will need to address deals with how they will organize the system. “The decisions about the structure of an organization are all related to the concept of organizational design. There are two fundamental forms of structure to remember when designing an organization.

To address these questions, we need to be familiar with two fundamental ways of building an organization.

The formal organization is an officially defined set of relationships, responsibilities, and connections that exist across an organization. The traditional organizational chart, as illustrated in Exhibit 10.2 , is perhaps the most common way of depicting the formal organization. The typical organization has a hierarchical form with clearly defined roles and responsibilities.

When Justin sets up the formal organization, they will need to design the administrative responsibilities and communication structures that should function within an organizational system. The formal systems describe how flow of information and resources should occur within an organization. To establish the formal organization, they will identify the essential functions that need to be part of the system, and they will hire people to fill these functions. They will then need to help employees learn their functions and how these functions should relate to one another.

The informal organization is sometimes referred to as the invisible network of interpersonal relationships that shape how people actually connect with one another to carry out their activities. The informal organization is emergent, meaning that it is formed through the common conversations and relationships that often naturally occur as people interact with one another in their day-to-day relationships. It is usually complex, impossible to control, and has the potential to significantly influence an organization’s success.

As depicted in Exhibit 10.3 , the informal organization can also be mapped, but it is usually very different than the formal organization. The chart you see in this example is called a network map, because it depicts the relationships that exist between different members of a system. Some members are more central than others, and the strength of relationships may vary between any two pairs or groups of individuals. These relationships are constantly in flux, as people interact with new individuals, current relationships evolve, and the organization itself changes over time. 2

The informal organization in Justin’s design will form as people begin interacting with one another to accomplish their work. As this occurs, people will begin connecting with one another as they make sense of their new roles and relationships. Usually, the informal organization closely mirrors the formal organization, but often it is different. People quickly learn who the key influencers are within the system, and they will begin to rely on these individuals to accomplish the work of the organization. The informal organization can either help or hinder an organization’s overall success.

In sum, the formal organization explains how an organization should function, while the informal organization is how the organizational actually functions. Formal organization will come as Justin hires and assigns people to different roles. They can influence the shape of the informal organization by giving people opportunities to build relationships as they work together. Both types of structures shape the patterns of influence, administration, and leadership that may occur through an organizational system.

As we continue our discussion of structure and design, we will next examine different ways of understanding formal structure.

Types of Formal Organizational Structures

Now, Justin will need to choose and implement an administrative system for delegating duties, establishing oversight, and reporting on performance. They will do this by designing a formal structure that defines the responsibilities and accountability that correspond to specific duties throughout an organizational system. In this section, we’ll discuss the factors that any manager should consider when designing an organizational structure.

Bureaucracy

One of the most common frameworks for thinking about these issues is called the bureaucratic model . It was developed by Max Weber, a 19th-century sociologist. Weber’s central assumption was that organizations will find efficiencies when they divide the duties of labor, allow people to specialize, and create structure for coordinating their differentiated efforts, usually within a hierarchy of responsibility. He proposed five elements of bureaucracy that serve as a foundation for determining an appropriate structure: specialization, command-and-control, span of control, centralization, and formalization. 3

Specialization

The degree to which people are organized into subunits according to their expertise is referred to as specialization —for example, human resources, finance, marketing, or manufacturing. It may also include specialization within those functions. For instance, people who work in a manufacturing facility may be well-versed in every part of a manufacturing process, or they may be organized into specialty units that focus on different parts of the manufacturing process, such as procurement, material preparation, assembly, quality control, and the like.

Command-and-Control

The next element to consider is the reporting and oversight structure of the organization. Command-and-control refers to the way in which people report to one another or connect to coordinate their efforts in accomplishing the work of the organization.

Span of Control

Another question addresses the scope of the work that any one person in the organization will be accountable for, referred to as span of control . For instance, top-level leaders are usually responsible for all of the work of their subordinates, mid-level leaders are responsible for a narrower set of responsibilities, and ground-level employees usually perform very specific tasks. Each manager in a hierarchy works within the span of control of another manager at a level of the organization.

Centralization

The next element to consider is how to manage the flows of resources and information in an organization, or its centralization . A highly centralized organization concentrates resources in only one or very few locations, or only a few individuals are authorized to make decisions about the use of resources. In contrast, a diffuse organization distributes resources more broadly throughout an organizational system along with the authority to make decisions about how to use those resources.

Formalization

The last element of bureaucracy, formalization , refers to the degree of definition in the roles that exist throughout an organization. A highly formalized system (e.g., the military) has a very defined organization, a tightly structured system, in which all of the jobs, responsibilities, and accountability structures are very clearly understood. In contrast, a loosely structured system (e.g., a small, volunteer nonprofit) relies heavily on the emergent relationships of informal organization.

Mechanistic and Organic Structures

Using the principles of bureaucracy outlined above, managers like Justin have experimented with many different structures as way to shape the formal organization and potentially to capture some of the advantages of the informal organization. Generally, the application of these principles leads to some combination of the two kinds of structures that can be seen as anchors on a continuum (see Table 10.1 ).

On one end of the continuum is mechanistic bureaucratic structure . This is a strongly hierarchical form of organizing that is designed to generate a high degree of standardization and control. Mechanistic organizations are often characterized by a highly vertical organizational structure , or a “tall” structure, due to the presence of many levels of management. A mechanistic structure tends to dictate roles and procedure through strong routines and standard operating practices.

In contrast, an organic bureaucratic structure relies on the ability of people to self-organize and make decisions without much direction such that they can adapt quickly to changing circumstances. In an organic organization, it is common to see a horizontal organizational structure , in which many individuals across the whole system are empowered to make organizational decision. An organization with a horizontal structure is also known as a flat organization because it often features only a few levels of organizational hierarchy.

The principles of bureaucracy outlined earlier can be applied in different ways, depending on the context of the organization and the managers’ objectives, to create structures that have features of either mechanistic or organic structures.

For example, the degree of specialization required in an organization depends both on the complexity of the activities the organization needs to account for and on the scale of the organization. A more organic organization may encourage employees to be both specialists and generalists so that they are more aware of opportunities for innovation within a system. A mechanistic organization may emphasize a strong degree of specialization so that essential procedures or practices are carried out with consistency and predictable precision. Thus, an organization’s overall objectives drive how specialization should be viewed. For example, an organization that produces innovation needs to be more organic, while an organization that seeks reliability needs to be more mechanistic.

Similarly, the need for a strong environment of command-and-control varies by the circumstances of each organization. An organization that has a strong command-and-control system usually requires a vertical, tall organizational administrative structure. Organizations that exist in loosely defined or ambiguous environments need to distribute decision-making authority to employees, and thus will often feature a flat organizational structure.

The span of control assigned to any specific manager is commonly used to encourage either mechanistic or organic bureaucracy. Any manager’s ability to attend to responsibilities has limits; indeed, the amount of work anyone can accomplish is finite. A manager in an organic structure usually has a broad span of control, forcing her to rely more on subordinates to make decisions. A manager in a mechanistic structure usually has a narrow span of control so that they can provide more oversight. Thus, increasing span of control for a manager tends to flatten the hierarchy while narrowing span of control tends to reinforce the hierarchy.

Centralization addresses assumptions about how an organization can best achieve efficiencies in its operations. In a mechanistic structure, it is assumed that efficiencies will occur in the system if the resources and decisions flow through in a centralized way. In an organic system, it is assumed that greater efficiencies will be seen by distributing those resources and having the resources sorted by the users of the resources. Either perspective may work, depending on the circumstances.

Finally, managers also have discretion in how tightly they choose to define the formal roles and responsibilities of individuals within an organization. Managers who want to encourage organic bureaucracy will resist the idea of writing out and tightly defining roles and responsibilities. They will encourage and empower employees to self-organize and define for themselves the roles they wish to fill. In contrast, managers who wish to encourage more mechanistic bureaucracy will use tools such as standard operating procedures (SOPs) or written policies to set expectations and exercise clear controls around those expectations for employees.

When a bureaucratic structure works well, an organization achieves an appropriate balance across all of these considerations. Employees specialize in and become highly advanced in their ability to perform specific functions while also attending to broader organizational needs. They receive sufficient guidance from managers to stay aligned with overall organizational goals. The span of control given to any one manager encourages them to provide appropriate oversight while also relying on employees to do their part. The resources and decision-making necessary to accomplish the goals of the organization are efficiently managed. There is an appropriate balance between compliance with formal policy and innovative action.

Business Structures

Aside from the considerations outlined above, organizations will often set structures according to the functional needs of the organization. A functional need refers to a feature of the organization or its environment that is necessary for organizational success. A business structure is designed to address these organizational needs. There are two common examples of functional structures illustrated here.

Product structures exist where the business organizes its employees according to product lines or lines of business. For example, employees in a car company might be organized according to the model of the vehicle that they help to support or produce. Employees in a consulting firm might be organized around a particular kind of practice that they work in or support. Where a functional structure exists, employees become highly attuned to their own line of business or their own product.

Geographic structures exist where organizations are set up to deliver a range of products within a geographic area or region. Here, the business is set up based on a territory or region. Managers of a particular unit oversee all of the operations of the business for that geographical area.

In either functional structure, the manager will oversee all the activities that correspond to that function: marketing, manufacturing, delivery, client support systems, and so forth. In some ways, a functional structure is like a smaller version of the larger organization—a smaller version of the bureaucracy that exists within the larger organization.

One common weakness of a bureaucratic structure is that people can become so focused on their own part of the organization that they fail to understand or connect with broader organizational activities. In the extreme, bureaucracy separates and alienates workers from one another. These problems can occur when different parts of an organization fail to communicate effectively with one another.

Some organizations set up a matrix structure to minimize the potential for these problems. A matrix structure describes an organization that has multiple reporting lines of authority. For example, an employee who specializes in a particular product might have both the functional reporting line and a geographic reporting line. This employee has accountability in both directions. The functional responsibility has to do with her specialty as it correlates with the strategy of the company as a whole. However, her geographic accountability is to the manager who is responsible for the region or part of the organization in which she is currently working. The challenge is that an employee may be accountable to two or more managers, and this can create conflict if those managers are not aligned. The potential benefit, however, is that employees may be more inclined to pay attention to the needs of multiple parts of the business simultaneously.

Concept Check

• What is an organizational structure?
• What are different types of organizational structures?
• What is organizational design?
• What concepts should guide decisions about how to design structures?

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