Management Functions: Management Study Material for CMR/MMR DGMS Examination

What is Management?

  • The organization and coordination of the activities of a business in order to achieve defined objectives.

Management is often included as a factor of production along with machines, materials, and money.

According to Peter Drucker,

  • The basic task of management includes both marketing and innovation.
  • Management consists of the interlocking functions of creating corporate policy and organizing, planning, controlling, and directing an organization's resources in order to achieve the objectives of that policy.

Management is a universal phenomenon. It is a very popular and widely used term. All organizations – business, political, cultural or social are involved in management because it is the management which helps and directs the various efforts towards a definite purpose.

It is something that directs group efforts towards the attainment of certain pre – determined goals. It is the process of working with and through others to effectively achieve the goals of the organization, by efficiently using limited resources in the changing world.

Management involves creating an internal environment: –

  • It is the management which puts into use the various factors of production.
  • Therefore, it is the responsibility of management to create such conditions which are conducive to maximum efforts so that people are able to perform their task efficiently and effectively.
  • It includes ensuring availability of raw materials, determination of wages and salaries, formulation of rules & regulations etc.

Therefore, we can say that good management includes both being effective and efficient.

  • Being effective means doing the appropriate task.
  • Being efficient means doing the task correctly, at least possible cost with minimum wastage of resources.

Five Functions of Management

Effective management and leadership involve creative problem solving, motivating employees and making sure the organization accomplishes objectives and goals.

There are five functions of management and leadership: planning, organizing, staffing, coordinating and controlling.

  • These functions separate the management process from other business functions such as marketing, accounting and finance.


The planning function of management controls all the planning that allows the organization to run smoothly.

Planning involves defining a goal and determining the most effective course of action needed to reach that goal.

Typically, planning involves flexibility, as the planner must coordinate with all levels of management and leadership in the organization.

Planning also involves knowledge of the company’s resources and the future objectives of the business.


The organizing function of leadership controls the overall structure of the company. The organizational structure is the foundation of a company; without this structure, the day-to-day operation of the business becomes difficult and unsuccessful.

Organizing involves designating tasks and responsibilities to employees with the specific skill sets needed to complete the tasks.

Organizing also involves developing the organizational structure and chain of command within the company.


The staffing function of management controls all recruitment and personnel needs of the organization.

The main purpose of staffing is

  • To hire the right people for the right jobs to achieve the objectives of the organization.

Staffing involves more than just recruitment; staffing also encompasses training and development, performance appraisals, promotions and transfers.

Without the staffing function, the business would fail because the business would not be properly staffed to meet its goals.


The coordinating function of leadership controls all the organizing, planning and staffing activities of the company and ensures all activities function together for the good of the organization.

Coordinating typically takes place in meetings and other planning sessions with the department heads of the company to ensure all departments are on the same page in terms of objectives and goals.

Coordinating involves communication, supervision and direction by management.


The controlling function of management is useful for ensuring all other functions of the organization are in place and are operating successfully.

Controlling involves establishing performance standards and monitoring the output of employees to ensure each employee’s performance meets those standards.

The controlling process often leads to the identification of situations and problems that need to be addressed by creating new performance standards.

The level of performance affects the success of all aspects of the organization.

Solve these multiple choice questions based on text: Option in bold is the answer.


1. Modern managers are:

a. action oriented.
b. able to build a sense of shared values.
c. able to manage change efficiently.
d. all of the above.

2. Planning, organizing, directing and controlling are the:

a. functions of management.
b. goals of management.
c. results of management.
d. all of the above.

3. Coordinating people and human resources to accomplish organizational goals is the process of:

a. planning.
b. directing.
c. management.
d. leadership.

4. Which of the following would be included in the "controlling function" ?

a. measuring results against corporate objectives.
b. explaining routines.
c. setting standards.
d. giving assignments

5. Specific, short-term statements detailing how to achieve an organization's goals is known as its:

a. vision.
b. mission statement.
c. objectives.
d. operational planning.

6. An outline of the fundamental purpose of an organization is called its:

a. mission statement.
b. objectives.
c. policy.
d. all of the above.

7. Strategic planning is done by:

a. top managers of the firm.
b. middle managers.
c. supervisory managers.
d. non supervisory employees.

8. Mr. X is a branch manager for a company. He is:

a. top management.
b. middle management.
c. supervisory management.
d. none of the above.

9. The most effective leader is one who:

a. makes managerial decisions without consulting others
b. works with managers and employees to make decisions
c. has the leadership style most appropriate to the situation and the employee involved.
d. none of the above

10. Empowerment is related to:

a. planning.
b. organizing.
c. directing.
d. controlling.

11. Technical skills are most important for which of the following:

a. first line managers.
b. middle managers.
c. vice president-Production.
d. top managers.

12. Motivation is related to:

a. planning.
b. controlling.
c. leading.
d. tactical decisions.

13. Supervisory management spends most of his/her time:

a. planning and controlling.
b. directing and controlling.
c. planning and organizing.
d. organizing and controlling.

14. ____________ refers to the process of developing detailed, short term strategies about what is the be done, who is to do it, and how it is to be done.

a. strategic planning
b. tactical planning
c. contingency planning
d. none of the above

15. An example of an effective standard for a control system would be:

a. deciding to hire 5 new employees.
b. renting new premises.
c. planning to increase sales of product A from 5,000 to 10,000 per month by December of next year.
d. improving the quality of production.

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