1. Functional Areas of Management
In order to achieve its objectives, a business unit performs several activities which may be grouped under important functional departments such as production, finance, marketing, personnel, legal and public relations.
Such functions differ from one organisation to another, but managerial functions which include planning, organising, staffing, directing and controlling are common to all the organisations.
The functions of a business such as production, finance, marketing, etc. are known as operative function.
The various functional departments of business are inter-dependent and interrelated. They continuously interact with each other to achieve their objectives.
E.g., purchase department receives materials requisitions from the production department and gets financial approvals for the purchase of materials from the finance department.
There must be proper integration of various functional areas of business to achieve its objectives. This can be achieved by the top management of the enterprise by effective planning, organisation, direction and control of the operations of functional managers.
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2. It consists of the following activities :- Designing the product
The various functional areas of management may be classified into the following categories :-
Production management : Production management is concerned with managerial functions related to the design of the production system and operation and control of production system, i.e. production planning and control.
The major responsibility of production management is transformation of inputs like materials, machinery, capital, information and energy into specified outputs as demanded by the society.
Production or operations management is the management of production function so as to produce the right goods in right quantity at the right time and at the right cost.
It consists of the following activities :-
Designing the product
Location and layout of plant and buildings
Purchase and storage of materials
Planning and control of factory operations
Repairs and maintenance of machinery and equipment
Inventory control
Quality control
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3. It comprises the following activities :-
Financial management : It is concerned with managerial activities related to procurement and utilization of funds for business purposes.
It deals with planning, organising, directing and controlling financial activities of the enterprise.
Financial activities should not be merely restricted to raising of capital, but also to other aspects of financing like assessing the needs for capital, raising sufficient funds, cost of financing, budgeting, maintaining liquidity, lending and borrowing policies and distribution of profits.
It seeks to ensure the right amount and type of funds to business at the right time and at a reasonable cost.
It comprises the following activities :-
Estimating the volume of funds required for both long term and short term needs of business.
Selecting the appropriate sources of funds
Raising the required funds at the right time
Ensuring proper utilisation and allocation of raised funds so as to maintain safety and liquidity of funds and creditworthiness and profitability of business
Marketing management : It refers to the identification of consumer’s needs and supplying them goods and services which can satisfy those wants.
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4. Planning and developing suitable products Setting appropriate prices
Marketing research to determine the needs and expectations of consumers
Planning and developing suitable products
Setting appropriate prices
Selecting the right channels of distribution
Promotional activities like advertising and salesmanship to communicate with the customers
Personal management : It is concerned with finding suitable employees, giving them training and fixing their remuneration and motivating them.
It is viewed as service function.
It basically deals with the management of human activities.
It involves planning, organising, directing and controlling the procurement, development, compensation, maintenance, etc. of the human resources in an enterprise.
It consists of the following activities :
Manpower planning
Recruitment
Selection
Training and development
Appraisal
Compensation and promotion
Employee services and benefits
Personnel records and research
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5. Coordination
Coordination is the process whereby an executive develops an orderly pattern of group effort among his subordinates and secures unity of action in the pursuit of common purpose.
It is a conscious and rational process of pulling together the different parts of an organisation and unifying them into a team to achieve predetermined goals in effective manner.
According to Henri Fayol, “To coordinate is to harmonise all the activities of a concern so as to facilitate its working and its success. In a well coordinated enterprise, each department or division works in harmony with others and is fully informed of its role in the organisation. The working schedules of various departments are constantly tuned to circumstances.”
Coordination consists of three major elements :-
Balancing : It means ensuring that enough of one thing is available to support or counter balance the other.
Timing : It involves bringing together different activities under a common time schedule so that they support and reinforce each other.
Integrating : It refers to the unification of diverse interests under a common purpose.
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6. Nature of Coordination
It is not a distinct function but the very essence of management.
It is the basic responsibility of management and it can be achieved through managerial functions. No manager can avoid this responsibility.
It does not arise spontaneously or by force. It is the result of conscious and concerted action by management. It cannot be left by chance.
The heart of coordination is the unity of purpose which involves fixing the time and manner of performing various activities.
It is a continuous or ongoing process. It is also dynamic process involving give and take.
It is required in group efforts, not in individual effort.
It is a systems concept in the sense that it regards an organisation as a system of co-operative efforts.
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7. Types of Coordination internal and external coordination :
Coordination between various departments or divisions of an organisation is known as internal coordination. On the other hand, coordination between an organisation and the externa groups (e.g., government, customers, investors, suppliers, dealers, trade unions, research institutions, competitors, etc.) is called external coordination.
Vertical and horizontal coordination :
The term vertical coordination is used when coordination is to be achieved between various links or different levels of the organisation. It is needed to ensure that all levels in the organisation act in harmony and in accordance with organisational policies and programmes. It is the function of top executives to bring about this coordination.
The term horizontal coordination is used when coordination has to be achieved between departments on the same level in the managerial hierarchy. Thus, when coordination is brought about between production department, sales department, personnel department, etc. Mutual consultation and communication help to maintain horizontal coordination.
Procedural and substantive coordination :
According to Herbert Simon, procedural coordination refers to the specification of the organisation. It is the generalized description of the behaviour and relationships of the organisation. On the contrary, substantive coordination is concerned with the content of activities in an organisation. E.g., In an automobile plant, organisation chart depicts procedural coordination while blueprints for the engine block of the car being manufactured in the plant is an aspect of substantive coordination.
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8. Coordination as the Essence of Management
Coordination is the very essence of management because the basic objective of management is to integrate and harmonise human efforts.
Coordination makes planning more effective, organisation more well-knit, staffing more realistic, directing more efficient and control more regulative.
Every managerial function is an exercise in coordination
How coordination is achieved by performing the managerial functions is explained below :
Coordination through planning : It is an exercise in coordination to the extent that it lays down the common objectives of the organisation.
The various components of planning such as policies, strategies, procedures, schedules and programmes serve as means of integrating the activities of different groups and departments.
E.g., if the Advertising Manager is to plan his advertising campaign, it would be helpful if he discuss the plan with the Production Manager, Sales Manager, Finance Manager and so on.
Coordination through organising : A sound organisation structure defines the interrelationships between different positions and work units.
It involves grouping of activities into homogeneous department.
Authority relationship and roles will not be clear without the integration of diverse activities
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9. By placing related activities in the same administrative unit, coordination will be facilitated.
In order to obtain coordination while organising, the manager must look at it both vertically and horizontally.
Poor coordination is caused by a lack of understanding of who is to perform what or due to fact that manager did not clearly delegate authority and responsibility.
Coordination through staffing : The staffing function of management involves manpower planning, employment, training, wage determination, performance appraisal, etc.
All these sub-functions are performed in such a manner that there are right persons on different jobs.
This will help in achieving coordination in assigning tasks to various individuals.
Coordination through directing : When manager directs, he also performing the function of coordination.
It is a conscious attempt to relate and integrate the human side of the enterprise with the economic and technical aspects of the enterprise so that both organisational and individual goals are accomplished.
The essence of giving orders, instructions, coaching and teaching subordinates means to coordinate their activities in such a manner that overall enterprise objective will be achieved in the most efficient way.
Manager’s expertness in effectively directing his subordinates will bring about coordination.
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10. Coordination through controlling : While performing the function of controlling, the managers comes to know whether or not current activities are in keeping with the desired activities.
Such frequent evaluation of operations helps to synchronise the efforts of the subordinates.
While controlling, the manager finds that the performance is not as planned or as directed, he should immediately take remedial action so that whatever deviations have occurred can be remedied. By doing this, he brings about coordination.
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11. Distinction between Coordination and Co-operation
It is deliberate effort by a manager.
It is orderly arrangement of group efforts to provide unity of action in the pursuit of common objectives.
It is essential where a group of people work together for a common purpose.
It is achieved through both formal informal relations.
It seeks whole hearted support of employees and departments.
It is voluntary attitude of organisational members
It denotes collective efforts of the group to accomplish a particular objective.
It is voluntary in nature. It arises out of the desire of the people to work together.
It arises out of informal relations.
Co-operation without coordination is fruitless.
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12. Need and Significance of Coordination
Unity in diversity : An organisation is chatacterised by diversity of resources, skills, activities, perceptions and viewpoints of its members. Unless unity of action is created in the midst of such diversity, organised activity will be haphazard and inefficient.
Team work
Conflicting goals
Growth in size : In a large organisation, the number of jobs and employees is also large. Communication becomes difficult due to complex organisation structure. All this makes coordination more essential.
Interdependence
Empire building : It always expect co-operation from others but they are not prepared to provide co-operation to others. Coordination is required to cope with such disruptive elements.
Synergy effect : If the efforts of employees are properly coordinated, their total accomplishment will be far greater than sum total of individual achievements. This is known as synergy effect.
specialisation
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