Business - Management the Four Major Functions

Business - Management

The Four Major Functions of Business Management

At the turn of the twentieth century, Henri Fayol, a French industrialist, outlined his theory of business management. He proposed that managers focus their responsibilities in the areas of planning, organizing, leading, and controlling.

In planning, goals are defined, strategies are established, and activities coordinated. It is a decisional role that involves entrepreneurial activities, problem solving, negotiating, and techniques in persuasion. The planning stages may be short or long-term, and may be specific in nature, focusing on a single set of tasks, or directional where planning is used to determine goals for the future. Plans can be organized into two areas of thought: strategic and operational. Strategic plans launch overall objectives for the breadth of the organization, and consider the environment in which the organization is situated. In operational planning, individual objectives rather than organizational goals are the concern, and the details of the plan are specific and focused. Planning is essential for outlining the goals and procedures of an organization, but contingency factors and the commitment to change as necessary must also be assumed. The structure of an organization, its life cycle, the environment it is in, and its future commitments can all impact the success of the planning stage.

Another function of business management is the dynamics of organizing where determinations are made about the tasks to be performed, which individuals would be responsible for completing them, how they are to be completed, the organizational structure, and where decision-making would be necessary. A division of labor would be established for departmentalization and for individual specialization. In the line of command, one person would be directed as the superior to maintain unity of perspective, with the authority and power to dictate the line of authority and the responsibilities of each member within the organization. Organizing the role, function, and power of each member within the group, and coordinating interpersonal relationships is critical to business management. Contingency factors are also relevant in organizing as changes occur in the environment and with technology. Thus, the incorporation of knowledge technology can be implemented to designate when task variability and problem analysis should be considered for organizational change.

Within the organizational structure, leading is the factor of business management necessary to motivate and direct subordinates, determine communication channels, and resolve conflicts. Leadership is the basis of interpersonal management, concerned with establishing a figurehead and performing liaison activities. Historically, past systems engaged in production-oriented theories of business leadership, then later there was a shift to an employee-oriented focus. Today, business management is concerned with incorporating each of these ideals into determining the method of leadership as both productivity and employee contributions are necessary and dependent on one another. The future will see great technological as well as knowledge-based advances in the organizational environment, which will have a changing effect on the leadership system. A successful business must be capable of changing with the times, restructuring its leadership organization and methodology as needed.