Five Functions of Management

The Five Functions of Management model was developed by Henry Fayol in the early 20th century (1916).

In fact, Fayol is considered one of the founding fathers of management theory. Before Fayol, managers had no formal training in management and thus had nowhere to turn if they wanted to improve their management skills.

Fayol recognized that with the increasing complexity of the workplace, something needed to change. He proposed that management should become more professional and that managers should share best practice.

Fayol based his work on his practical experience as the managing director of a mining company.

What is Management?

Before we can examine the functions of management lets define what management is. Management is very different to functional skills such as marketing or accounting.

Management requires a broader skill set which will vary depending on the challenges facing the organization. It involves the coordination of people and organizational resources (financial or equipment) to achieve specific organizational objectives.

The Five Principles of Management

Fayol also developed a model called the 14 Principles of Management. This model broke down into six general activities that all organizations must perform: technical, commercial, financial, security, accounting, and managerial.

Fayol developed the Five Functions of Management to describe the managerial section of the model. The model focuses on the key relationships between employees and management.

Five Functions of Management

In terms of explaining the model, it’s easiest to start with the planning step. But in practice all steps are interrelated and a manager will change focus from one step to another as needs dictate.

Let’s examine each of the five functions of management in turn:

1. Planning

The five steps begin with planning. Suppose the goal of the organization is to increase revenue by 5% in the next quarter.

The manager would begin by planning how they are going to achieve this. This planning is usually done in collaboration with the whole organization. You can learn more about planning in our article on Management by Objectives.

To achieve the goal a number of means could be employed, including hiring new sales staff, increasing advertising spend, or improving how things are currently done, amongst others.

2. Organizing

Now that the plan is in place the manager must decide how best to organize their team and the available resources to achieve the plan. Essentially, this step is about organizing the team and resources available to match the nature of the work needing to be done.

In this step, the manager will establish their organizational structure. Once this is done there might be gaps in the structure. Some of the options available to the manager in this instance include, training existing staff, recruiting new staff, or moving existing staff to new positions.

3. Commanding

Now that the plan is in place and the team is structure is in place, it’s time for the manager to assign tasks to individuals. The individuals will then perform these tasks.

The process of assigning tasks to subordinates is called delegation. You can read more about how to delegate in our Team Management articles.

It is worth noting that you should always treat employees in accordance with company policies and values. In a nutshell, a manager must command with integrity. To be successful in commanding a team the manager will also need to be able to communicate very clearly what needs to be done and their expectations.

Using their knowledge of their team, the manager creates energy, motivation to do the job, and loyalty to the team and the organization.

4. Coordinating

There is more to management than simply creating a plan and issuing commands to your team. A manager must also coordinate their team.

This coordination must exist between individuals working on tasks and also between functional departments.

Coordination is typically done via meetings to ensure that common problems are solved and that everyone in on the same page, pulling in the same direction. To learn how to run a meeting successfully, read the article How to Run a Meeting.

5. Controlling

A manager is also responsible for controlling the work in accordance with the policy of the organization.

In practice, this means that the manager must:

  • Establish baseline performance.
  • Measure actual performance and understand how it differs from the baseline. Where appropriate, these deviations should be reported to the manager’s manager.
  • Take action to correct deviations and to avoid future deviations.

Five Functions of Management Advantages

The Five Functions of Management theory has the following advantages:

  • The model gives managers a simple understanding of the duties a typical manager should perform.
  • Each of the five functions is aligned with the objectives and goals of the organization.
  • Fayol recognized that management is a social process where the manager needs to optimize an organic team to achieve the aims of the business. Management is not a set-and-forget affair.

Five Functions of Management Disadvantages

The Five Functions of Management model has the following disadvantages:

  • It omits a large part of most managers role, that of managing relationships, creative problem solving, and working to build a motivated and energized team.
  • It is based on Fayol’s own experiences in management and not on any empirical research.
  • It is very inward looking and doesn’t give any consideration to customer needs. This means organizations structured to service the needs of the organization, rather than being structured to service the needs of the customer.

Summary

The Five Functions of Management was developed by Henry Fayol in 1916, at a time when management models simply didn’t exist.

The model breaks down a managers job into five functions:

  • Planning: the manager makes a plan to achieve the objectives of the organization.
  • Organizing: the manager organizes people and resources to best achieve the plan.
  • Commanding: the manager delegates tasks to people and teams to implement the plan.
  • Coordinating: the manager coordinates people and teams to ensure the plan runs to schedule and everyone is pulling in the same direction.
  • Controlling: the manager measures performance and takes corrective action where necessary.

Despite the model being over 100 years old it still provides a basic introduction to the duties that every manager must perform.