Management performs several roles within an organization. Even though almost all managers perform multiple roles within an organization, some roles are performed by specific set of managers at certain levels. Before understanding the roles played by the management in an organization we must appreciate that management is the life blood of an organization. Managers get things done efficiently and effectively (mostly by others) thereby adding value to the organization. An organization without managers would have no cohesion, no purpose and no direction. It will simply collapse. Management helps in not only getting things done but also ensures that the organization works towards a common purpose and remains organized in this endeavor. Several management thinkers have dealt with this subject of role of management.
We’ll be covering the following topics in this tutorial:
Roles of Management
A study (Minztberg 1980) and other studies have shown that the roles of management can be divided into three major categories; interpersonal, informational and decisional. In fact, ten roles of management have been pointed out in the three categories but the most important has always been decision-making. The roles of management under different categories are:
- As a titular figurehead whose role is only symbolic-the person who performs this role is normally widely respected within the organization and is known for some special quality or contribution to the organization or society at large. Even though the person is a figurehead and does not enjoy a lot of actual authority and power, he/she helps to galvanize the employees to work for a greater goal. For example, Narayan Murthy, the celebrated CEO of Infosys was primarily responsible for changing Infosys from being a small IT firm to a global enterprise. When he expressed his desire to retire as CEO, the board of Infosys impressed upon him to work as their Chief Mentor. Even though this was just a titular figurehead position, a vast majority of employees continued to get inspired by his actions and word. This kind of role is often very important for continued success of an organization. Management performs this role.
- As a leader who takes responsibility of getting things done by inspiring and motivation his people-in this role, a manager works like an inspirational guru to people in his domain of influence. Normally top executives or very successful companies have played this role with elan. CEOs like Andy Grove have not only led from the front but have inspired and motivated others to give the extra bit for the company to create global enterprises. This role is sometimes performed by the management at a much junior level when managers lead by example rather than by the power and authority vested upon them. Several managers who have worked in shop floors have been known to inspire workmen and get things done by inspiring and motivating people.
- As a liaison agent who interacts with social networks for business development and other related activities-in this role the manager works like a salesperson and representative of the company, interacting with and networking with people to get more business and other related goals.
- As a control monitor who controls the organizational activities-in this role, the manager is a control master, who keeps a close tab on activities within the organization and corrects any deviations from the planned result. A manager plays this role when he is in a middle level position. He exercises his power to control the organizational system and regularly acts on feedback.
- As an information disseminator who relays information from top down and sometimes also from bottom up-the manager needs to be a good communicator to be able to achieve this. In this case the role of the manager is not only to act as post office but to ensure that the information that is being disseminated in being understood the all concerned.
- As a communicator/spokesperson who communicates with the environment-in this role the manager works like a public relations specialist for the organization and communicates to the market, buyers, sellers, regulators, etc., key issues about the organization.
- As an entrepreneur who hunts for opportunities and initiates changes-in this role the manager is the most effective. In this role the manager works by driving a particular issue and by taking up opportunities that might crop up.
- As a trouble-shooter who solves organizational problems and does mid course corrections-in this role the manager works as a control agent, who ensures that corrective action are taken at appropriate time to thwart any problems.
- As allocator of resource who decides on the quantum of resource for activities-in this role the manager decides on the quantum of resources required for completing activities under his domain.
- As a negotiator who makes deals happen for the organization-in this role the manager works as the sole representative of the organization and works with the best interests of the organization in mind.
All managers perform these roles in their regular course of work but some managers are biased towards certain roles that they perform with great elan.
Functions of Management
Management professionals and management as a profession is highly specialized: In an organization managers are required to play different roles of a leader, mentor, follower, etc. they do so under a particular domain. These functional domains are required as the tasks that management professionals execute require specialized skills that can only be honed after years of experience. MIS requires the understanding of this functional classification of management to provide meaningful information to managers. Functionally, management can be segregated into the activities that an organization needs to perform to stay afloat in business namely, finance management, marketing management, operations management and human resource management. These are the functions of management that can again be sub-classified into more specialized activities.
Functionally, management can be segregated into several compartments each with specific specializations. Normally, management is a term loosely used to identify people within an organization who have the authority and capability to take· decisions (mostly functional for middle and junior level but strategic for top level). The various functions are given briefly below. It may be worthwhile to point out that managers play their required roles under each function.
Marketing is the activity of reaching out to customers, communicating the offerings of the organization to them, selling the product or service and ensuring their satisfaction. It is the activity through which an organization can keep its ears close to the pulse of the market.
It generally encompasses the following sub-activities:
- Sale is the activity of selling products or services of a firm. It is one of the most important activities of marketing and most organizations employ the maximum number of employees within the marketing department. Normally sales function deals with the management of the channels of sales, i.e. managing wholesalers, retailers and stockiest, etc., to ensure that the product or service reaches the consumer. Some authors argue that selling is a push activity for marketing in the sense that selling normally involves a top down approach. Sales department is the department that lies at the interface between the customer and the organization. We can conceptualize the sales department as lying at the boundary between the organization system and the environment of the customers.
- Advertising is the activity of showcasing the positive aspects of a product, service, brand or company in a medium of communication like electronic or print medium to create a need among consumers. Advertising is essentially a pull activity. It creates a need among consumers and thereby increases the revenue of the organization. Sometimes advertising can also be associated with creating an image for the organization or to send a message to the consumers. It is a tool at the hands of marketers to promote their product or service. However, advertising is not targeted in the sense that the communication from the company to its consumers is not targeted to the target consumer but is sent to all consumers in general. This ‘carpet bombing’ kind of strategy is a drawback of advertising.
- Publicity is that activity that also results in greater revenue for the company. It is to ensure that positive articles get published or broadcast so that consumers are convinced of the efficacy of a product or service. Normally it is done in a way that the article or broadcast does not have any direct association with the company or brand. Like when a prominent nutrition specialist writes a positive article about a health drink by writing that it reduces cholesterol, then people reading the article may rightly infer that this is the honest opinion of the nutritionist or the publication but it may instead be promotion by the health drink company. These kinds of tools are used to create awareness and build customer base.
- Product management is the activity of managing the entire life cycle of a product. It involves managing all activities associated with the product and it assumes that the organizational structure would enable such activity.
- Customer Relationship Management (CRM) is the activity of fostering loyalty of the customer towards a brand or product or a company. It encompasses activities that result in a greater understanding and knowledge of the customer. It is the activity that enables a company to have a longer term view of customers rather than having a short-term view. The activity of CRM is based on the understanding of the customer as a person who has a long-term relationship with the organization rather than only at the time of sale.
- Market research is the activity of conducting research on the market to find out whether the strategies of the company are bearing results or for planning strategies. It involves a lot of sampling survey and is applied to all aspects of marketing activity such as to find out if an advertisement campaign has been successful or whether a class of product will have a market, etc. This activity is more prone to mathematical and statistical treatment and involves a lot of customer interaction.
- Pricing is the activity of setting the price of a product or service. It is normally a strategic decision as it is done with a view of beating competition.
- Packaging is the activity of creating suitable packages for consumers so that the consumer is able to but the product or service such that the profit of the organization is optimized.
No organization can survive without management of its finances. Finance is the function that manages the financial resource of the organization. It is responsible for management of receivables and payables, management of capital expenditure, costing and budgeting, accounting for all activities of the organization, management of taxes, etc. In short, finance is the function that helps us measure the value of the organization in monetary terms using several accounting, costing and mathematical tools. Financial management includes:
- Working capital management is the activity of managing the working capital finances of the organization. Working capital is the capital required to run the organization on a regular basis. It is used to pay for salaries and materials. It normally is in the form of a short-term debt.
- Receivables and payables management is the activity in which the receivable and payables of a company are managed. It inevitably results in the management of creditors and debtors and helps the management to take suitable decisions about both sets of people. This is a very important activity of finance and is done with due diligence.
- Budgeting is a strategic action of finance. It is the activity by which the quantum of money spent on each activity of the organization is set. This is a complex exercise and one that requires a strategic view of the organization for the future.
- Capital expenditure management is an important activity to take care of the capital expenditures of the company and make a plan for such investments. These investments are inevitably linked with the cost of capital.
- Auditing is the process of controlling the financial systems. It gives us the variations between the planned and unplanned financial decisions. It also serves as a tool for taking care of malpractices in the firm by exposing frauds within the system. It also throws up any deviation from the general rules of finance as laid down by the company. These deviations if analyzed further and found serious enough warrant attention by top management who fix responsibilities on people for such deviations and corrective action follows.
- Managing external borrowings, etc., is also an important function these days as more and more companies are borrowing from outside the country. This is a specialized task involving managing foreign exchange etc.
Every organization has an objective for existence, an offering in the form of a product or service. Management of other activities is meaningless without any offering. Operations management is the function that helps an organization to manage the various activities related to the creation of a product or service. The various activities associated with the operations management are:
- Production management is the activity of managing the production process of a firm. It involves the planning of production in different time periods, the planning of capacities, monitoring of the production process so that a control can be exercised over the production process.
- Maintenance management is the activity of managing maintenance of machines in a firm. Different companies have different maintenance policies.
- Quality management this activity is considered very important in most manufacturing and service organizations. It is the activity that measures the final output of the finished product or service against the standard. Any deviation from the standard is considered to be an aberration and corrective measures applied to rectify the same. Quality management itself has several dimensions. Statistical quality control is a form of quality management that takes a view of quality that is measurable. ‘Total Quality Management’ is the all encompassing improved view of quality management that considers duality as a comprehensive package of managerial initiatives that broadly aims at improving the quality culture of the organization.
- Project management is that activity that helps management to manage projects efficiently. It focuses on managing protect from the aspects of time and resource management. Precise mathematical techniques are used in this activity to manage projects.
- Inventory management is the activity to manage the raw materials and finished goods inventory of the company. This is an important activity as a lot of monetary resources are tied up in these areas. Also, any shortfall in the raw materials may trigger a cascading effect on production and hence, this activity is closely monitored. Vendors who supply the raw materials are carefully chosen and nurtured so that they perform their tasks with a high degree of reliability. Also, the lead times of the vendors are closely monitored and updated regularly to reflect the current status. A lot of mathematical models are used for managing this function.
Human resource management
The most precious asset of any organization are its people so, managing them well leads to growth and prosperity and mismanagement results in losses. In fact, most of management literature is about managing this precious resource. HRM consists of:
- Recruitment is the activity of selecting the right people for the right job. A selection process is used to select the right kind of people from a universe of interested people for the job/s in the organization. The recruitment activity is a regular activity in an organization as the organization, being a growing entity requires more and more people to run its business and also because people leave the organization for various reasons. This process of people leaving an organization is collectively called attrition. Recruitment is the process to neutralize the attrition effect and also to ensure that there are enough people to take care of the growth activities of the organization. It is an important activity and employs different techniques for attracting the right people for the job/s in the organization. The techniques employed are advertisement of jobs with enticing job description, salary details, etc., searching for the right people in online search engines, targeting potential employees through contacts and networks, employing consultants and agencies who have a database of the right kind of people for the job.
- Training and development is the activity that involves the development of employees in terms of skills, personality, behavior, etc., this activity is an ongoing activity within an organization as most organizations believe in continuous improvement and in order to improve constantly, one must be trained. This activity, even though a regular one is considered in some organizations as not being very important. However, most good companies take this activity very seriously as it holds the key to developing the human capital of their employees that in turn results in improved performance of the organization.
- Compensation and benefits management this activity is required to fit the compensation and benefits of employees so that the employee is satisfied in terms of salary and benefits. This is a very crucial activity as many things have to be taken into consideration in order to do justice to this kind of work. Issues like seniority, fairness, performance, etc., are very important in conducting this activity properly.
- Performance management is an activity that is a controlling activity. It is required to understand the level of performance of the employees in an organization. The lesser performing employees are normally put through a training process and the high performance employees are rewarded so that they feel good and continue to serve the organization in future with same performance.
- Separation Management is another sub function of HRM in which managers manage the separation of people from the organization. This function is exercised in cases of superannuating employees, for employees who have resigned from the services of the firm and for employees who have been for some reason terminated from their services.