Four Functions of Management: The POLC Framework
The functions of management across businesses and industries can be put into four main categories — planning, organizing, leading, and controlling. You can also understand them as the four basic functions that managers are required to accomplish. Traditionally, leading and controlling have been the more visible aspects of managerial duties. However, the first two duties of a manager are also equally important. While the POLC framework may not accurately depict all the dimensions of a manager’s role, it is still sufficient for understanding the role of managers inside business organizations. The framework is useful in terms of understanding the role of managers and the daily activities they perform to achieve organizational goals and objectives.
POLC Framework: Four Functions of Management
A lot of planning goes on daily inside organizations. Planning is considered an important preliminary step before you start a new project or set out to achieve a new target. Planning mainly involves setting objectives and then determining the course of action to achieve those objectives. Managers should remain aware of their industry environment and make forecasts based on the available data and information regarding the future of their business. However, planning is not as simple as it looks since managers need to be good decision-makers to plan successfully. While planning includes multiple steps, it begins with environmental scanning. Managers must first scan their environment to know their industry environment, the overall economic environment, the level of competition, and the needs and preferences of customers.
After gathering information on all these factors and having completed an analysis, managers must try to make forecasts based on the results. The forecasts made by the managers are the basis for planning. Objectives are statements that outline the results are to be achieved and the time frame for achieving the results. Managers need to set objectives as part of the planning process. Apart from setting the course to achieving those objectives, planners should also set alternative courses for achieving the outlined objectives. Before deciding the final course of action, managers need to consider the various courses of action and select the best course of action. After having selected the best course of action, the managers must formulate the necessary steps for implementation of the plan and also ensure that the plan is implemented effectively. As there are various types of plans, there are several types of planning as well. In business management, there are mainly three types of planning (based upon the term of the plan) which include strategic, tactical, and operational planning.
Strategic planning is the process of analyzing the strengths, weaknesses, opportunities, and threats of a company and then planning for competitive positioning and faster growth on the basis of the analysis. Most often the top management is involved in strategic planning and strategic plans have a long time frame like three to five years. The main basis of strategic planning in most cases is the mission statement of the company which explains the fundamental reason behind its existence.
Tactical planning at the organizational level supports strategic planning and is mainly conducted in order to implement the strategic plan successfully. It is intermediate-range planning and short term as compared to strategic planning.
Operational planning is short term planning and supports the first two types of plans inside the organization. It mainly focuses on developing steps and actions that can help with the successful implementation of the strategic and tactical plans. Strategic planning and tactical planning consider the longer-term objectives but operational planning focuses on the success of the first two types of plans in the shorter term. The term for operational planning is generally less than a year like monthly planning or half-yearly planning.
A firm can fully utilize its resources whether financial, operational, or human resources only if they are properly organized. Organization is the function of management that is considered with developing an organizational structure and then allocating human resources efficiently in order to accomplish the organizational objectives. The organizational structure which is generally represented through an organizational chart mostly provides the framework for coordinating efforts organization-wide.
However, the organizing function of management is not limited to just developing the organizational chart but also involves the design of the individual jobs. It also involves deciding the duties and responsibilities related to individual positions as well as how those duties are carried out. At the organizational level, organizing involves dividing the organizational operations into separate functions. Organizations run their business operations on various bases. For example, sometimes, apart from being divided into functions, business operations might be carried out on a geographical basis, or on the basis of product segments. International organizations generally use multiple bases for segmenting their operations. Many organizations also use customer segmentation for organizing their operations effectively. At the unit level or job level, organizing involves how to design jobs to allocate human resources effectively.
In today’s industry environment, managers also need to be effective leaders in order to inspire their followers to perform their tasks successfully. If managers can lead effectively, it motivates their subordinates to make efforts to achieve organizational objectives. While leaders are different from managers, some leadership is always involved in a manager’s job. It means some leadership traits in managers help them be more effective at their jobs. According to Kotter, leadership skills can be acquired and honed just like management skills.
Today’s business organization is characterized by a lot of complexity and change in which business managers cannot be successful without leadership skills. The job of a manager also involves motivating his subordinates to exert efforts so that tasks can be accomplished during the required time frame. Due to the high level of ambiguity and uncertainty in the current environment, business managers need to think and act like leaders. They need to communicate priorities in the manner that their organization can respond faster. A large amount of research has accumulated that shows that to be successful managers need to think like leaders.
Controlling is also a crucial management function that ensures that organizational performance is in line with set standards and objectives are being accomplished. There are three steps involved in controlling which include establishing the standards, comparing performance against these standards, and then taking corrective actions whenever required. At an organizational level performance standards are generally set in financial or operational terms. Performance standards may be financial like net revenue, net income, and total operating costs or non-financial like net units produced, level of product quality and level of customer service. Managers use various scales to measure performance including financial statements, sales reports, performance appraisals, results from customer satisfaction surveys. To some extent managers from all levels inside an organization are involved in the controlling function.
However, many times controlling is confused with personal control of the managers over their subordinates. Controlling does not mean manipulating employee behaviour or personality. Instead, controlling implies that managers take necessary actions to ensure that the efforts of their subordinates are consistent with the organizational and departmental objectives.
However, for effective controlling, effective planning is required. Apart from that managers also need to gain an understanding of where the root cause for deviation from standards lies. Budget audits and performance audits are two traditional controlling mechanisms. A budget audit allows you to gain an understanding of where and how the planned budget is being spent. Similarly, a performance audit allows you to understand whether the reported figures reflect the actual performance or not. While controlling is mainly thought of in financial terms, managers should also apply it to production, other operational areas, and company policies.
Even if the POLC framework has been criticized for not describing the managers’ responsibilities completely and accurately, it is widely considered to be the best framework for describing the jobs managers perform inside organizations. While the roles of managers have changed a lot with changing times, managers around the world are still expected to perform these four basic functions. The role of managers has grown a lot more complex as the ambiguity and uncertainty in the industry environment has kept growing time, the job responsibilities of managers still include these four basic functions. There are other frameworks also for understanding the functions of management including the one given by Henry Fayol.
Originally published at https://notesmatic.com on May 8, 2020.