Functions of Management the Four

Functions of Management

The four dominant functions of management are planning, organizing, leading and controlling, and in the context of this paper they are applied to the operations of an oil/gas company or organization. These four essential functions of management are critical for the efficient and orderly functioning of any organization, and are even the more critical in a high process-centric business model that oil and gas companies rely on for attaining their strategic objectives.

Planning

The development of strategic plans in oil and gas organizations is directly related to the development of its core strengths and unique set of differentiated attributes as a company. For many organizations that compete in the oil and gas industries, their ability to turn supply chain processes into a competitive advantage is their most differentiated competitive advantage. The use of the Supply Chain Operations Reference (SCOR) model in the context of planning within many industries including oil and gas is an analytical construct that provides insights into how these series of processes tie into strategic planning (Razmi, Jolai, Hezarkhani, 2008). The development of strategic and tactical plans in many oil and pass companies is also built on the development of innovative new approaches to the exploration, mining or extraction, processing and selling of oil and gas-related products through distribution channels. The role of innovation in the context of the planning process is also critical for the development of long-term differentiation as well (Miles, 2007). For many oil and gas companies, strategic planning centers on the development of both existing assets and the Return on Invested Capital (ROIC) that is used as the primary measure of asset utilization. There needs to be however a balance between both existing asset utilization and the development of entirely new processes and approaches to discovering, processing, and selling oil and gas-related products. As the industry is inherently process-driven the need for managing to business process re-engineering (BPR) standards is also critical.

Organizing

The organizing function within an oil and gas company or organization needs to concentrate on both the hierarchical and structural definition of roles, responsibilities and processes that enable the many departments the organization is comprised of to attain their shared objectives. By definition the organizing function of management focuses on the structuring of both processes and working relationships to attain shared objectives and goals. The challenge many organizations have is in creating the optimal balance between structure, hierarchy and control relative to the need for agility and an organizational structure that allows for more effective use of resources to capture opportunities and growth. Organizing the many processes and functions within an organization needs to also contribute to the best possible organizational culture to ensure that objectives are attained as well. Of all functional areas of management within an oil and gas company or organization, the control aspect has to provide enough structure yet be agile enough to allow departments to work with one another toward a common objective or goal. Creating collaboration across the organization is fostered and fueled by the right balance of hierarchical organization and the adoption of agile processes and structures that enable greater collaboration as well. The concepts of chain of command, work specialization and structure, including the implicit role of authority, responsibil8ity and accountability must be kept agile if an oil and gas company is to attain its objectives in an increasingly turbulence marketplace.

Leading

Studies of change management consistently show that the ability of organizational leaders to impart a high level of process and system-level ownership to those most affected by the change is critical (Aguirre, Calderone, Jones 2004). The concept of leadership being centered on defining and executing on a clear vision for change, then backing their visions up with plans that actually lead to the goals and objectives being met are the essence of effective leadership. For any oil or gas company or organization to attain its strategic plans and objectives, it is critical that leaders strive for transparency and honesty in all their work, including the development of reporting and organizational structures as well. For leadership to attain its greatest potential there needs to be a strong shared vision across an entire organization, with each member of the organization seeing their part of the total vision being accomplished through their efforts. This ability of leaders to create a high level of ownership of the vision of their organizations is critical if lasting change is ever to be accomplished in many oil and gas companies. This ability to create a high level of internalized support for a vision, then managing its fruition and development over time, is critical for a leader to be successful in accomplishing strategic goals and objectives. Further, leaders must focus on how to manage their staffs and subordinates to bring out their best attributes or strengths as well. By being developmental and concentrating on how to bring out the innate strengths of their subordinates, leaders add immeasurable value and strength to their organizations in the process. The essence of effective leadership is in holding on to a vision while at the same time growing subordinates and associates to make the strategic goals leading to the visions' attainment more achievable.

Controlling

This is the phase of management that centers on providing feedback on the performance of both individuals and work groups relative to objectives, goals, and standards as set by leaders during the planning and leadership phases of the management phases discussed in this paper. Control can be seen as both from a coaching standpoint of continually helping associates and subordinates attain their highest levels of performance while also contributing to the growth of the organization by having its goals met at the same time.