BA 11

Functional Areas of Management

MODULE 1

Introduction:
Just as different functions in the human body are performed and regulated by different organs,
different functions within a business are performed and controlled by different parts of the
business.

One of the reasons for separating business operations into functional areas is to allow each to
operate within its area of expertise, thus building efficiency and effectiveness across the business
as a whole. Functional areas in a business vary according to the nature of the market and the size
of the business. For example, manufacturing companies like Nike and Apple have significant
Research and Development (R&D) departments in order to stay in the lead in their respective
business segments. On the other hand, retail companies may have no R&D functional area per se,
but will be heavily invested in Operations areas surrounding Supply Chain Management.

In general, the key functional areas of a business are the following:

 Management
 Operations
 Marketing/Sales
 Finance
 Research and Development
Each of these functional areas is represented in the following organization chart.

WHAT IS MANAGEMENT

The purpose of management is to coordinate and organize an organization's many operations so that those actions
may contribute to the company achieving its goals. Using a company's resources most effectively and productively
is one of the most important aspects of good business management. This helps to guarantee that the organization is
both efficient and effective. Planning, organizing, directing, controlling, staffing, and managing are some of the
fundamental responsibilities of management in a commercial setting.

Through this article, we'll learn about what is management, the management meaning, its functions, and its
objectives. To learn better, you can opt for an online certification like PMP training to clear the certification exams
for project managers.
What is Management?
To define management, we need to understand the basics. Management aims to attain a goal by coordinating and
administering several responsibilities. These administrative tasks involve deciding what course of action the
company will take and managing the actions of its employees to ensure that its goals are met by making optimal use
of the resources at its disposal. Management may also refer to the hierarchy of staff employees inside a company,
particularly in terms of seniority.

You will need to hone various talents to become an efficient manager, including those in planning, communication,
organization, and leadership. You will also need to comprehensively understand the organization's goals and the
workers, sales, and other activities necessary to achieve those goals.

Objectives of Management

1. Optimize resources
Management definition puts forth an effort to make efficient use of available resources in order to generate the
greatest feasible amount of output. This aim makes it possible to improve profits by lowering the proportion of
resource expenses to earnings in the business. Accordingly, management teams implement various logistic methods
and procedures to detect and cut back on processes that result in waste and call for more resources.

2. Improvement of Efficiencies
Boosting the effectiveness of operations, production, and services leads to increased output, revenue, and profits.
Management systems observe the activities, length of time, and flow of the workplace to ascertain the procedures
that result in the most productive outputs. It's not uncommon for managers to collaborate on developing and
executing new procedures and standards with both other employees and the heads of departments.

3. To maximize profits
Management teams aim to balance increasing revenues as much as possible and creating a positive
working environment for workers. To ensure that profits are maximized, it is necessary to collaborate with various
departments and leaders, such as accountants, supervisors, and executives, to identify areas that need modifications
and adjustments. Finding costs and waste that are not essential and developing innovative processes that make
operations more effective are two of the most important tasks for managers who want to accomplish their maximum
profit goals.

4. Promote personal development

An efficient management team makes the employees' personal development and professional advancement a top
priority. Employees can gain new skills and improve their careers when options like seminars, mentoring programs,
training resources, and internal promotions are available. The growth and development of employees on a personal
level can not only assist management in accomplishing numerous goals at once. Still, they can also contribute to
the generated work's expansion, improvement, and effectiveness.

5. Maintain quality
Management teams determine the rules, protocols, and criteria that govern the manufacturing and delivery of goods
and services. One of management's most important responsibilities is ensuring that the organization consistently
meets all required quality standards. The team collaborates with other departments, supervisors, and workers to
establish, execute, and sustain quality.

6. To keep up the spirit in the workplace

An organization's culture, attitudes, and morale can influence its total output and revenues. The intrinsic drive
for employees to accomplish their work and give more effort is increased when
the workforce's morale is high. Management teams actively seek to maintain morale by putting into place efficient
authority structures, developing incentive programs, and reacting to
the comments and suggestions of staff members. In addition,maintaining excellent interactions with staff members
and demonstrating appreciation for their contributions boosts morale and encourages them to pursue
further professional development.

7. Maintaining discipline and moral

In order to achieve the organization's goals and objectives, personnel need to be able to work together in a
disciplined manner. Group effort is crucial to the organization's success, and effective teamwork is impossible
without rules and regulations. Having discipline means having an internal structure and order that fosters
genuine collaboration and support for the mission and the team or organization members. The morale of the
organization as a whole will suffer if employees are not disciplined in their actions and behaviors. In a
nutshell, the goal of organizational discipline is to establish and reinforce acceptable levels of conduct among
workers.

8. Cut down on the Risk factor

Forecasting and predicting results and changes are common responsibilities for many management professions. One
of the most important goals for managers is to minimize exposure to potential hazards and losses by careful planning
and accurate forecasting. It is possible to boost earnings and eradicate losses by cutting down on risk
elements, including safety concerns, squandered resources, and unnecessary expenditures.

9. Generate business strategies

Management teams will frequently engage in higher-level critical thinking and abstract strategy when trying to
enhance operations and revenues. Together with CEOs, other leaders, and other stakeholders, the team develops,
pitches, and implements overarching company plans or frameworks. For example, it might be helpful to establish
and restrict objectives for all personnel to work toward a shared goal if a corporate plan is created that is both
successful and consistent.

10. Workflow coordination

Productivity and efficiency are susceptible to changes brought on by an organization's workflow and its internal
structure. To establish processes, internal structures, and facility designs that are logical and efficient, management
teams may include or collaborate with logistics specialists, engineering professionals, and production professionals.
Managers may also use tools such as organization charts, flow diagrams, and process audits to evaluate and
communicate workflow operations.

11. Identify talent

The management of a business strives to locate, recruit, and retain the most qualified applicants and workers
possible. Therefore, it is possible for managers to collaborate with recruiters to determine recruiting criteria, assess
applicants, and develop recruitment offers. As a result, the entire organization benefits from knowledge,
competence, and productivity when it recruits talented and competent workers.

12. Ensure availability

Managing teams' responsibilities include handling, upkeep, and accurate forecasting of the availability of
resources, commodities, and services. To accomplish this goal, managers may project and predict the requirements of
the business or the general public and keep an eye out for problems like shortages. In addition, the management team
can prepare for and make adjustments to minimize delays in production and distribution when they can anticipate and
handle difficulties as they arise.

13. Promotion of research and development

It is also one of the very critical factors. By investing in R&D, a company may develop innovative Products and
relevant services to offer to stay relevant in a competitive market. There are many different kinds of companies;
they all need multifaceted R&D to survive in their respective fields. Precisely, businesses in the marketing,
engineering, and manufacturing sectors rely substantially on R&D. In short, to maintain a competitive edge in the
face of fierce industry competition, businesses must invest heavily in R&D. In fact, Companies that invest in R&D
are more likely to increase profits, expand their consumer base, and strengthen their brand. If a firm doesn't invest in
R&D, it may be more likely to provide subpar products, see a drop in sales, and ignore what its customers want.
Functions of Management

Now that we have understood what management is, we have to understand what the function of management is.
Every company has a structure, and having one that is effective in pushing the business ahead is critical to that firm's
organizational structure. There are front-line, middle-level, and top-level managers in any organization, from the
lowest to the highest levels of management. For example, a chief executive officer (CEO) and a board of directors
come after the senior management team. Imagine this construction as a pyramid; you will see its components much
more plainly. As you climb higher up the pyramid, you will have fewer and fewer supervisors to oversee your
operations.

At its most elemental level, management is a discipline that consists of a set of five broad functions:
Planning
Organizing
Staffing
Leading
Controlling

These functions are listed in order of increasing complexity. A corpus of practices and ideas on how to be a
successful manager includes the following five functions as part of its framework.
Management has been defined as a social activity that entails responsibility for the efficient and effective planning
and management of the functioning of an organization to achieve predetermined goals. It is a dynamic process
consisting of numerous elements and actions in various orders. These tasks should not be confused with operational
duties such as marketing, finance, and buying, amongst others. Rather, every manager, regardless of position or
standing, is responsible for carrying out these responsibilities.

When managers have a solid grasp of the functions, they can better direct their efforts toward the activities that
produce outcomes.
The following is a synopsis of the six core responsibilities of effective management (ICPM Management Content):

1. Planning
In a managerial position, you should think of planning as selecting acceptable objectives and actions to pursue,
followed by determining strategies to employ, actions to take, and resources required to attain the goals.

2. Organizing
Developing worker connections paves the way for workers to collaborate to achieve the corporate goals they share.

3. Leading
Successfully completing this duty requires articulating a vision, energizing personnel, and inspiring and motivating
others using vision, influence, persuasion, and excellent communication skills.

4. Staffing
Identifying potential candidates for employment and making final hiring decisions (within teams and departments).

5. Directing
The most important factor in this regard is directing because it is considered the course through which the managers
train, advise, and monitor employees' overall performance to reach set goals and objectives. In fact, directing is the
core of the management process. Planning, organizing, and staffing have little value if leadership functions are not
performed in a proper way. In the realm of management, the direction is defined as any effort meant to motivate
subordinates to do their duties successfully and efficiently. Hence, its value is optimum.

6. Controlling
Conduct an assessment to determine the extent to which you succeed in attaining your objectives, enhancing
performance, and acting. Install procedures that will assist you in establishing standards so that you may evaluate,
assess, and reach conclusions about your situation.

Characteristics of Management
Any business is growing rapidly over the globe under today's current management model. Any company
that doesn't effectively handle its own affairs will quickly become irrelevant in today's dynamic marketplace.
As Peter Drucker defined, management is acting to influence or bring about change in another entity. When a
business or other organization follows this procedure, its assets (both human and material) are maximized for
maximum efficiency in the pursuit of set goals.

In addition to caring for the business's owners and other stakeholders (consumers, suppliers, employees, etc.), this
fundamental management idea includes many sources of actions that signal the manager's tasks, preparing high-
volume products from very modest input, and so on.
There is a great need for management at all levels of any firm; why limit its importance to the top? Schools,
universities, corporations, and government agencies employ management to varying degrees. It's a must for any
business, for-profit or non-profit, and any industry producing physical goods.

1. Management is both Science & Art

Management may be thought of as a hybrid of art and science. It is an art in that it requires a person to be able to
manage things. In a different sense, management is a science since it develops specific rules or laws relevant to a
setting where a collection of activities is coordinated. This aspect of management makes it a scientific endeavor.

2. Management of Resource
Management may be defined as the process of activities related to the efficient use of existing resources for
production. Within the organization, "resources" can refer to various things, including men, money, materials, and
machines.

3. Management is a Continuous Process

The activities of planning, organizing, directing, and regulating the resources are the primary components of
the management process. An organization must make optimal use of its available resources, including its human
and financial assets, to advance its mission and realize its goals. In the absence of any of the other fundamental tasks
of management, the management function of just one person cannot deliver any outcomes on its own. That being
said, management is an ongoing effort.

4. Management is a Goal-oriented Process

The goals of an organization are articulated straightforwardly. Everything a manager does contributes
to accomplishing goals that were decided upon long in advance.

5. Management is Organized Work

The meaning of management may be thought of as a collection of organized actions. A group can be created in
various settings, including a public limited business and a regular club. Every organization strives to accomplish its
own unique goals. These goals can only be accomplished by working together as a group of people. In order to
accomplish what must be done, the actions of these individuals must be planned and coordinated in an organized
fashion. Without participating in any organized activities, it will be impossible to fulfill the goals.

6. Management of Operations
Land, labor, financial resources, and business owners are all components of the production factor. The
term "land" refers to any area utilized for agricultural purposes. The term "labor" refers to the paid workers of an
organization working at various levels inside the company. The term "capital" can refer to either working capital,
which can be cash, raw resources, and completed commodities, or fixed capital, which takes the shape of plant and
manufacturing facilities. Working capital is the more common term. Without this, the organization would not be
able to accomplish its aims.
It is only when the entrepreneur successfully coordinates the aims of the organization that those goals may be
accomplished. For example, in the context of one-person operations, such work can be performed by a single
individual. However, when it comes to large-scale company divisions, the management team is in charge of the
coordination work. Therefore, management is considered one of the variables contributing to productivity.

7. Management is an Activity That Serves a Purpose

A company or organization's management is focused on achieving its goals successfully. The responsibilities of
planning, organizing, staffing, leading, managing, and decision-making bring about accomplishing these goals. Every
employee has been provided with an in-depth breakdown of the organization's goals and objectives.
8. There Is a Separate Entity Called Management
Management is separate from the operational functions of the organization. The essence of the functions is "to
do," but the nature of the management is "how to get things done." To complete a job, a manager needs a certain
level of both competence and knowledge.

9. Management's Goal is to Maximize Profit

To achieve the intended outcomes, the available resources are utilized effectively. Therefore, the results should
be either the maximization of profits or an increase in profits due to the managerial economic function.

10. Decision-Making
Every day, the management team is responsible for making a variety of important choices. The process of making a
decision doesn't begin until several paths of action are available to choose from. If there is just one possible action
to take, then there is no need to decide on what to do. The performance of an organization may be directly attributed
to the caliber of decisions made by its management. The degree to which a manager makes the correct decision is
directly proportional to the organization's level of success or failure.

It's a Profession to Manage Things Management is considered to be a career for the simple reason that it contains the
characteristics of a profession. This profession is responsible for disseminating and transmitting a vast store of
information; management is no exception. In practice, the fundamental management concepts that have been defined
are utilized.

11. Application Across the Board

The concepts and procedures of management are not limited to the operations of a single sector of the economy;
rather, they are relevant to each and every sector of the economy. Moreover, the nature of an organization directly
affects how management is carried out in that organization as opposed to another.

12. The Definition of Management is "getting things done."

A manager does not actually conduct the task but is responsible for delegating it to others so it may be completed.
As defined by Knootz and O'Donnel, management is "the art of getting things done through and with people in
officially organized organizations," as the authors put it.

13. Management is a Group Activity

It is possible to describe a class as a collection of individuals that share similar qualities and work toward achieving
the same goals. For example, a society may classify individuals such as engineers and medical practitioners into the
same social category. Every single physician strives to accomplish the same things in their professional
career. Like engineers and physicians, management personnel have comparable goals when accomplishing
organizational objectives.

14. Management as a Career

These days, management is increasingly seen as a professional path that can be tailored to various areas of
specialization. For example, among the many subfields under the umbrella term "management," some of the more
common specializations are financial management, cash management, portfolio
management, marketing management, personnel management, industrial management, and business
management. As a result, the most important positions in the senior management team are filled with qualified
experts.

15. Management is the Ability to Direct and Control

A manager can guide and instruct his subordinates in executing their task and exercise control over them when
required. Without direction and control, he will fail to accomplish the company's goals if he does not effectively use
the resources at his disposal. In most cases, directing and controlling activities entail dealing with things that need
human effort.

16. Management is a Dynamic Function

The management does not remain consistent. In the rapidly evolving world of business, new strategies are
continuously being conceived and implemented by management. The management style adapts to reflect the shifting
social landscape. The dynamic nature of the commercial sector has contributed to the transformation of society.
17. Management is Needed at All Levels
At every level of an organization, there is a need for management functions to be performed. The senior executives
carry out the functions of planning, organizing, directing, controlling, and making decisions. The lower-level
supervisor is responsible for carrying out the same tasks as well.
Importance of Management

It should be obvious why management is so important, not just in the context of businesses and other organizations
but also in our personal life. The idea of management may be seen in every facet of modern life. To accomplish
something, management is the act of organizing and administering the necessary tasks.
Management is synonymous with administration in some contexts. It is also possible to say that it involves planning,
organizing, taking the lead, and making the appropriate choices. Management is necessary for businesses and other
types of organizations. Additionally, it is necessary for each of our particular lives.

In many businesses, there are several tiers of management, which help split responsibilities among the various
divisions and areas of expertise. When work is segmented into multiple management levels, a firm can expand its
workforce because there are more managers available to oversee and control the various operations inside the
business. In addition, this helps develop streamlined approval procedures and assures that different levels of
management may review each other's work before releasing a product to the general public.
Levels of Management

To understand more in-depth what is management, we have to understand the different levels of management. There
are three primary levels of management, each of which has a variety of managerial jobs. These levels include a
closer look at the specifics of each level of management, along with their responsibilities and typical job titles, as
follows:

1. Top-level management
Administrative managers, often known as top-level managers, are in charge of the overall direction of a corporation.
These managers validate that the organization is succeeding in achieving its long-term objectives and expanding at a
consistent rate. Their key objectives are often to start a prosperous business that achieves the highest possible profit
and has an outstanding reputation.
Although top-level managers have the most responsibility, power, and influence in a firm, they frequently consult
with other employees and listen to their concerns. The key responsibilities of upper-level managers include the
formulation of business strategies, the establishment of objectives, and the maintenance of relationships with other
companies.
2. Mid-level management
Mid-level managers, also known as executory managers, are responsible for carrying out the strategies devised by
upper-level management and providing direction to first-line managers and other staff. They are the connection
between the administrative level and everyone else, and these managers frequently take knowledge from top-level
managers to discuss or teach it to employees. They also serve as the bridge between the administrative level and
everyone else.
It is the responsibility of midlevel managers to run the many branches of a firm and ensure that the employees
working in each branch know the overarching objectives the organization is working toward. Executing top-level
plans, providing advice to first-line managers, and completing group performance reviews are typical
responsibilities of this position.

3. First-line management
First-line managers, also known as supervisory managers, assist the company's smallest divisions, such as particular
groups of employees or sections within a branch. They report to mid-level managers. These managers are
responsible for interpreting instructions given to them by mid-level managers to assist them in effectively directing
their teams and contributing to the organization's expansion.

First-line managers are also responsible for listening to employee complaints and discussing them with mid-
level management. Top-level management may then be informed of the issues that have been raised. In addition,
first-line managers are responsible for various responsibilities, including delegating work to their staff, ensuring that
production standards are met, and monitoring day-to-day operations.

Conclusion
There are a few tried-and-true methods to develop your management career; however, the requirements for work at
different management levels may vary from industry to industry. Before beginning employment as a first-line
manager, you should have foundational experience in your chosen sector. You may be promoted to mid-level
management and then eventually to top-level management as you acquire experience in leadership roles and learn
more about the organization.
To demonstrate that you can contribute to the smooth operation of a business at a higher level of management, you
might require extra education or specialty before you can advance in your career. KnowledgeHut online
certification might come in handy in this respect.

Frequently Asked Questions (FAQs)

1. Why is management important?
Management is important for a variety of reasons. Firstly, management ensures that the company runs smoothly and
efficiently. They plan and organize the work, set targets and deadlines, and delegate tasks to employees. Secondly,
management is responsible for ensuring that employees are productive and motivated. They set clear expectations,
provide feedback and recognition, and offer development opportunities. Finally, management is responsible for the
financial health of the company. They track income and expenditure, make investment decisions, and manage
resources effectively. Without management, a company would be chaotic and unstructured and quickly bankrupt.
Therefore, management is essential for the success of any organization.

2. What is effective management?

Management effectiveness is a term used to describe the ability of managers to make decisions that lead to desired
outcomes. An effective manager is one who can plan, organize, and execute tasks in a way that achieves the goals of
the organization. In order to be effective, management must be able to set clear objectives, develop achievable plans,
and Motivate employees to achieve results. Additionally, management must be able to adapt to changing conditions
and make decisions that minimize risk. Ultimately, management effectiveness is about achieving results through the
use of available resources. An effective manager is one who understands how to get the most out of their employees
and is able to create an environment that supports their success.

3. What does good management look like?

Good management means setting clear goals and objectives and then developing a plan to achieve them. It also
means creating a positive work environment where employees feel valued and motivated. In addition, good
management requires effective communication and team-building skills. By effectively leading and motivating
employees, managers can help ensure that a company reaches its full potential. In short, good management is
essential for any successful business.

4. Why do you study management?

You learn how to lead and inspire teams, make effective decisions, and create and implement strategies. You also
learn how to think critically and analytically, essential skills in any business setting. Moreover, management courses
can be tailored to your specific interests, whether it be human resources, marketing, or project management. By
studying management, you equip yourself with the knowledge and skills that are necessary to succeed
in today's ever-changing business landscape.