Important Functions of Management

Important Functions of Management What is the meaning of nature of business? It means the type or general category of business or commerce which are describing. Mr. Steve Low is a manager who is working in Tahan Insurance Company. He has about 32 years working experience in General Insurance Industry attached with 4 International and Local General Insurance Companies. Mr. Steve Low has 2 years experience working as marketing executive, 20 years as Branch Manager and 10 years as Vice president for southern Region of Penesular Malaysia. Its product includes fire insurance, motor insurance, personal accident insurance, marine cargo insurance and more. For an example, if you buy fire insurance, it can help to cover loss or damage to the stocks and other contents such as fire, lighting and domestic explosion, aircraft, earthquake and volcanic eruption, storm, tempest, flood, explosion, impact damage(including own vehicle)bursting or overflowing of water tanks apparatus or pipes, riot, strikes and malicious damage. Why we need these services? According to Mr. Steve Low this services can provide prompt and immediate services to both our intermediates and the customers. The channels of distribution are through their intermediaries i.e. General Insurance agents, insurance brokers and direct corporate clients. The level of technologies used computer to operate the business. The organisation structure means that the way an organisation arrange people and jobs so that its work can be performed and its goal can be met. The organisation structure of insurance can be divided into three offices which is shown in the diagram below. Each organisation has different jobs and character that they need to be responsible in the things that they take part in. Employees are responsible to define what they do and report to their manager. So that, the branch offices manager will report to regional office and regional office will report to head office. The strength of the company is it has various type of insurance i.e. about 60 insurance products to offer to the market. It has strong leadership in the management level, hardworking and delicate staff to support the organisation. It also has strong channel of distribution to achieve our management goal i.e. big teams of insurance agency force and insurance brokers support and strong base of corporate client. In addition, it also provide prompt and immediate service to our intermediaries and clients i.e. we expertise our service on both policy issuing and claims settlements. Thus, the benefit is it has 24 hours and worldwide protection for accident death and permanent disablement. Furthermore it will also have medical expenses, bereavement allowance, hospital income, travel allowance, ambulance fees, cosmetic surgery resulting from accident and more. Moreover, the weakness of the companies is it high staff turnover due to stiff market competition in labor force. Planning In an organisation, planning is considered one of the most important and major functions in managing a firm. Planning establish goals and objectives to pursue in the future period. The function of planning spans all levels of management from top managers to middle managers. Top managers are involved in strategic planning which sets board, long range goals for the organisation. These goals are the basis for short range, annual operational planning during which top and middle managers determine a specific department objective that may help the organisation to make progress towards the broader, long range goals. Planning usually includes the word where, why, how and what. For example, where you want to go, why you want to go there, how you will get there, what do you need in order to get there and also how will you know if youre there or not. A good planning means good stewardship. Each success in any ventures requires careful preparation and organises planning. Without proper planning and preparation, we are about to fail in whatever we do. Besides, a good planning also helps to conserve natural resources and it will also save your efforts, time and money. Managers plan involves setting up goals and objectives, and defining the actions which is necessary to achieve the goals, in light of the situation. That is, the situation must be analyzed or understood and the appropriate goals and actions must be determined in order to take advantages of opportunities or to solve problems. Managers throughout the organization must develop goals, strategy and operational plans for their work groups that contribute to the success of the organisation as a whole. Setting goals for company helps manager to guide their team mates to obtain success. Manager does not only set goals for the employees but the goal that is set has to be explained thoroughly to the employees so that it helps the employees to understand the importance of the goals better. These goals which are set for the employees can help them to build a friendly team environment in the workplace. An effective goal setting can be a difference in between meeting a deadline for any crucial proj ect and falling short of success. Goals and objectives provide the organisations with a guarantee that can determine a course of action and further guides them in preparing for changes in the future. A goal is defined as a future state which an individual or an organisation strives to achieve. For each goal that an organisation sets, it also includes an objective. An objective is a short term vision and mission with measurable results. Without a clearly organised goals and objectives, organisations will face problems coordinating activities and forecasting future events. There are four basic functions of organisational goals which is they provide guidance and direction, motivate and inspire employees, facilitate all plannings, and help organisations to evaluate and control performances. Organisational goals not only help the organisation to plan for the future, but it informs all the employees where the organisation is going and also how it plans to go there. When employees are needed to make important and tough decisions, they can refer to the organisations goals as guidance. Goals promote planning in determining how goals will be achieved. Employees usually set a goal in order to satisfy their needs; therefore goals can motivate employees and increase job performance. Evaluation and controlling will allow the organisation to compare its actual performance to the organisation goals and then make any adjustments if necessary. Why is it important for a manager to set goals? This is because goals can affect individual performance through four mechanism s. Firstly, goals can direct actions and efforts towards goal related activities and stay away from unrelated activities. Secondly, goals energize employees. Employees will put in more effort in challenging goals compared to easy goals. Thirdly, goals can affect persistence. This is because employees exert more effort to achieve high in challenging goals. Fourthly, goals can motivate employees to make use of their exist knowledge to obtain a goal or acquire the knowledge which is needed to do a task. Goal setting attributes is one of the subjects of extensive research. Examples of the four attributes are difficulty, specificity, commitment and acceptance. There is a study which shows that there is a direct relationship in between goal specificity and employee performance. Less ambiguity is involved and higher performance is obtained when the goal is made more specific. When employees are given do your best goals, they do not have any external reference to refer in which they can measure their own performances. For example, a manager tells a sales person to do the best you can is an extremely unclear stated goal that will not increase performance. However, if a manager says increase sales by 10 percent is a much more specific and clearly stated goal that encourages high performance because the employees had all the past sales record as their reference? Goal difficulty also has a direct relationship with performance. Studies show that more difficult goals lead to higher performance s, as long as the goal which is set does not become too difficult that employees perceive them as impossible. Manager should not set any unreasonable goals for the employees because unreasonable goals frustrate rather than motivate the employees. On the other hand, a difficult but realistic goal does not only increase performance but also motivation. Research states that employees are highly motivated when the probability of obtaining a specific goal is more than fifty percent. A manager must also set individual performance objectives for the employees. Setting performance objectives per employee is an important part in management which allows organisation to achieve strategic goal by dividing it into several numbers of sub-goals. There are a few steps in individual performance objectives set by the team leader or manager which is appoint and conduct a meeting with each employees to describe his or her job and tasks, address and create a list of responsibilities for the employees, and develop adequate individual performance objectives based on the employees major functions and responsibilities. An employee asks her supervisor for feedback on a recent initiative which she developed for the department. The supervisor responds, It seems fine, but it turns out that it is not what the manager wants them to do. The supervisor meets with one of his staffs and informs her that she is behind in her work and needs to process a minimum number of items in a day, no excuses. These examples clearly illustrates situations that may arise when an organisation have not develop a performance management system. Lack of clarity in develop the staff goals, lack of alignment between employees goals and organisations goals, lack of communication on priorities, all these situations can be avoided through the effective implements of a performance management system. In the interview for our coursework, the planning process in TAHAN insurance company is their key success in their organization for achieving goals. Besides that, planning is also a blueprint of the organization goals. Planning is a step or procedure of how to achieve the objectives for the organization. On another hand, their planning also look into the main power and resources which the company have in order to distribute the job function to each individual or department to achieve goals. Lastly, planning helps them to identify who is responsible for the targeted goal to achieve. Organising What is organising? Organising is one of the four overall functions tend to include essentially everything that managers do in the management process. Organising involves determining the tasks to be done, which will do them, and how those tasks will be managed and coordinated. Managers must organise the members of their work groups and organisation so they information, resources, and tasks flow logically and efficiently through the organisation. Organising also includes defining and assigning authority and responsibility for decisions to enable tasks to be carried out effectively. Issues of organisational culture and human resource management are also related to his function. Organising is very important to a company and when it comes to business leadership, this will be one of the most important functions that process in a company. This function has been creating to help company running with a perfect condition. This can help a company to organise more perfectly and nicely. If a company without these important functions, a company will lose control and occur many problems that prevent a company increase volume of profit in the market. So, to prevent this kind of incident happen, they create this function to solve all these problems. How does a manager utilize the resource to meet the objectives? Actually, the role of a manager is very hard. He needs to ensure that all resources are aligned to business strategy. Besides that, a manager also needs to ensure that this strategy are effectively and efficiency. Responsibility is also important to a manager because this also include the line management and development of employee. These occur to make sure both achieve organisational objectives and for employee personal are growing. Managers skill can be divided by two main categories which are performance management and line management. In performance management, a manager needs to perform some additional tasks such as: organisation design, role definition, hiring employees, goal setting and delegation, planning and resource allocation, decision-making, and communication and reporting. In the organisation design, manager need to make sure that the organisation design is fit for purpose in order to support the effective execution of business strategy. In role definition, a manger must be well defined including skills, capabilities, knowledge, purpose of the role, key accountabilities, responsibilities, and experience needed to perform the role. As a manager, hiring employees is important. Manager has to be diligence to find employees by search, select, interview hire and retain suitable employees to make company earn more profit. In the goal setting and delegation, a manager must have skill to setting SMART objectives, which are Specific, Measurable, Achievable, Results-Oriented, and Time-bound. These performance objectives can bring success to a company and should be explicit, written and agreed to make sure that both parties understand what is expected and what will be a successful outcome. Planning of work and aligning is part of manager work. Manager must do it with a strategy and business priorities way to make sure that works gets done in time and perfectly. As a manager, a lot of decision-making occur. Manager must take many different decisions from different type of works and make sure all work are done it without any problem occur. If managers work facing a problem, as a manager, he or she must solve these problems to complete all works. In communication and reporting skill, manager must have a clearly communicating skill compare to other senior managers. It is because manager is always head of those workers, so as a manager, he or she must have this skill. As a manager, he or she needs to motivate their employees. This can help to motivated and engaged them to perform a well and excellent performance. A manager should organise his or her worker to feed back any comments. This can help manager to know staffs better and build a strong relationship between staffs and manager. In the development, manager must able to identifying areas of growth such as content knowledge, skills and behaviors. Besides that, manager should agreeing with employees development steps and providing the necessary support to help them. So, they will make it happen such as paying for training, giving time off or providing on-the-job training opportunities with new projects. At performance appraisals, manager must perform evaluation that should happen formally. It is because there must at least annually and regular interim appraisals such as quarterly. At performance improvement, manager must understand appropriate and then provide them training, support them, mentoring them or coaching them as needed to help employees achieve an appropriate level of performance in order to reach the goal. Besides organising, a manager also needs to have planning, leading and controlling skills. These skills are very important to a manager as well as a company. Without these skills, a company will not survive in the battle of market. Then, the company will lose to other competitors and facing bankruptcy problem. So, a company must have a good manager with good skills to archive the successful in the battle of market. Organising is a basic needed for a manager. Without these useful skills, the person cannot become a good manager because it will lead the company to failure. So, as a manager, he or she must have these skills in order to help company earn more profit. In other words, manager MUST acquire all these skills in order to become a good and skillful manager in a success company. What are the common resource utilization problems faced by a company? There are three key areas which a manager needs to focus on. These three keys are knowing , doing and measuring. There are some causes in knowing. The first cause is because the manager does not know the utilization rate for yesterday and today, much less for what will be forecast tomorrow. Second cause is the manager does not know what the percentage of billable employee is until the end of the month. In order to cure this, managers need to have real time reports which shows utilize rates and historical trend by individual or company. However, there are also some causes in doing. The causes in doing are billable employee does not have any access to schedules, that is why they cannot see changes or make updates. Therefore, the company must supply a robust mobile device for employee to allow 2 way updates and continual synchronize. Lastly, the causes in measuring are managers cannot see utilization over a period of time, by employee or company. To cure this, managers must make sure that employee reports show utilization, realization and billing against quotas. Leading As one of the four functions of the management, leading can be both extremely important and challenging. Leading is very important for a manager as a manager needs to lead the employees in the company in order to let the company become more successful in the market .A manager should also strive to become an inspiration to the rest of the employees .In this case , the employee will only follow and respect the manager . A manager that is an inspiration means that the employees will follow the manager because they believe in what the manager is doing and they will try to help the company to archive its goals .Finding ways to inspire employees is also means that coaching them and motivating them to succeed as integral parts of the company. On the other hand, the ways that a manager leads will greatly affects the employee morale within the department and company as a whole. Managers should create a climate that encourages new ideas and employee input. This will let the employees feel that they have a say in the company and they will willing to share ideas and attempt to find better ways to improve the process .For example, a good manager will reward the employees with monetary or benefits incentives if they can increase the output of the product .Another idea is a treasure box of goodies. Manager can set a goal early in the week and employees who meet the goal by the end of the week are allowed to take a prize from the treasure box. Besides that , when during the meeting , the manager should also praise the employee who are doing well in their jobs .This will let the employee become more aggressive in their job in order to let the manager to praise them more as when the manager praise them , they feel happy and also fee l proud among the other college . This can also make the other employee become more aggressive when they saw the other employee was praise by the manager as they also want the manager to praise them. Communication skill is very important between a manager and an employee. An effective leader must also have an effective communicator. If a manager does not have a good communication skill, he or she will easily have quarrel with their employees and he or she will have a bad relationship with their employees. This will affect the process of the company when a manager is selfish and do not like to communicate with the others .On the other hand, a manager that shares information and lets employees know the latest news in the company is someone that is deemed trustworthy by his or her employees. Besides that, a manager should always have a good relationship with the employees. For example, the manager can plan some activities for the employees in the company, such as family day, gathering, or party. These activities can let the relationship between the manager and the employees become better and they also know each other better .Besides that, the manager can also know more about the fam ily background of the employees. Moreover , a good and effective leader will inspire his or her employees ,which allows those employees to feel that they are making a meaningful contribution to the company .The employees will also work harder for the company and also take more ownership in their job position .This can mean happy customers and a higher level of customer service . A great leaders in an organisation will affect the employees they supervise .Besides that, they also inspire others employees in the other part of the company .This will make the whole company become more effective. Effective leadership is infectious and it should be spread to as many areas of the organisation as possible. By doing this, will result in a highly-coordinated effort to please both customer and employees. A good leader must also be understanding towards their employees .For example, when one of the employee have some personal problems and they could not come to work for a week , as a understanding manager , we must understand he or her problem and also pass his or her work to other employees . This will let the employees feel that the manager is understanding and is also a good manager .They will also be more loyalty to the company when they feel that they work for the right company. Besides being understanding, a good leader should also be caring and helpful to their employees. For example, when one of the employee family member met an accident, need a sum of money, the manager should help them to collect donation and also comfort them. This will make the employee feel that his or her boss is helpful and caring towards them .The employee will also feel grateful to the manager and also try to repay his or her kindness by doing a good job in their work. When the other employees see thi s situation, they will feel that their manager is a kind, caring and also helpful boss. A leader is also the model among the employees. He or she has to show a good example to the employees in order to let the employee to follow their steps .For example. a leader should come to work at an earlier time .When the employee saw their manager is earlier than them , they will also learn from him or her . Other than being a role model , a leader must also be responsible for what he or she and the team had committed .For example , when the employee have done wrong something , the manager have to be answerable to the management . After interviewing the manager in TAHAN insurance, we knew that the manager use motivation to lead the employees, as motivation is the key factor to drive the team member to archive maximum height in the operation. Besides that, a good manager should exercise the leader by example to the team member by showing them that they are getting a full support from their manager. To get a good relationship with the team member, the manager has to work hand in hand with the team member. On the other hand, a manager should help the employee to solve the problem that they encounter. The manager should also guide the team properly in order to meet the target of the organisation. A responsible manager should also keep a sharp eye on the companies daily operation. The manager must make sure that the company is operationing well. In addition, the manager should also exercise rewarding system to team member who did well or archive a good result in their work. By comparing the two theory and study case, we can compare the functions of the manager. In theory, manager use inspiring to lead the employee, while in study case, the manager use motivation to lead the employee. Besides that, manager becomes the role model of the employee in the theory while the manager becomes the role of example in front of the employee in the study case. Other than that, in theory, manager have to have a good relationship with the employees, while in study case, manager maintain a good relationship with their employee to ensure that they archive the organisation goals. As a conclusion, leading is very important to a manager as he or she need to lead a company with a team of employees. Besides that the manager has to have good communication and relationship with the employee. Without leading, the whole organisation will not be successful as the employees do not listen to the manager. Therefore, a manager must lead their employee well to ensure that they met the company goals and also make the company famous in the industry. Controlling In theory, controlling is one of the function of manager which it is important that this function can helps to check the errors and to take the corrective action so that deviation from standards are minimizes and stated goals of the organisation are achieved in desired manner. In management controlling can be define as the process of regulating organisational activities so that actual performance conforms to expected organisational goals. The phases of controlling are anticipating the things that could go wrong and taking preventive measures to see that they dont, monitoring or measuring performance in some way in order to compare what is actually happening with what is supposed to be happening and correcting performance problem that occur which this is the therapeutic aspect of control. Examples of controls are delegation (accountability), evaluation (performance), financial statement (budget management) performance management (observation and feedback), policies and procedures (beh avior in workplace), quality control and operation management and lastly risk, safety and liabilities. There are four important steps in controlling which is establish standards to measure performance, measure actual performance, compare performance with standards and take corrective actions. Establish of standard is the first step in controlling as a standard is a unit of measurement that can serve a reference point for evaluating results. Manager should exercise control by comparing performance to some standards and goals. There are a few type of standard which are tangible and intangible standards. Tangible standard are clear, concrete specific and generally measurable while intangible standard is relate to human characteristics which are not expressed in terms of numbers, money, physical qualities or time. It can be desirable attitude, high morale, ethics and cooperation. Tangible standard consist of four standards which is numerical standards, monetary standards, physical standards and time standards. In numerical standards, it can be expressed in numbers of item produced, absences, percentage of sales and etc. Monetary standards can be measured in terms of money which is profit margins, cost and etc. Other than physical standard can be categorized by quality, durabi lity, size, weight and other factors related to physical composition and lastly time standards can refer to the speed with the job is to be done like the project completion date. Measure actual performance is the second step as it ensures that it complies with the established standards. Most of the organisations will prepare formal reports of performance and weekly meeting to measure how the manager performs. These measurements should be related to the standards set in the first step of control process. For example, if sales growth is a target, the organisation should have a means of gathering and reporting sales data. The measure of actual performance can be done by personal observation, written or oral report about employees, automatic methods and inspection, test or samples. Comparing performance with standards is the third step as this step compares actual activities to performance standards. When the manager read the computer reports or walk through their plants, they identify whether actual performance meets, exceeds, or falls short of standards. Typically, performance reports simplify such comparison by placing the performance standards for reporting period alongside the actual performance for the same period and by computing the variance. That is the different between each actual amount and the associated standard. Taking corrective action if necessary is the final step in the control process. Adjustment, fine-tuning, and perhaps drastic action may be necessary to pull off important tasks or to maintain standard. When performance deviates from standards, managers must determine what changes, if any, are necessary and how to apply them. In the productivity and quality-centered environment, workers and manager are often empowered to evaluate their own work. After the evaluator determines the cause or causes of deviation, he or she can take the fourth step which is the corrective action. There are some few examples of corrective actions which are making a decision to retrain a new employee whose performance has not progressed as expected, shifting several employees from their normal jobs to help meet a deadline on another job, counseling an employee whose performance has recently been below the standard, reprimanding an employee for failure to adhere to safety rules and shutting down a piece of eq uipment for maintenance after defective output is traced on it. Characteristics of effective control system consist of controls need to focus on appropriate activities, controls should be timely, controls must be cost effective, control should be accurate and concise and control should be accepted by people they affect. Control needs to focus on appropriate activities mean effective controls must focus on critical factors that affect both the individuals and the organisations abilities to achieve objectives while controls should be timely can define as information needed for comparisons and control purposes need to be in managements hands in order to make effective corrective action. Delays in generating, gathering or disseminating information can prolong the occurrence and extend of deviation. Other than that control must be cost effective as this benefit of using appropriate controls should be worth their cost of installation and operation. Too much of control can be worse than too little. The key is to provide appropriate for the situation and provide saving greater that the cost involved. Moreover control should be accurate and concise as control must provide information about operations and people in sufficient quality and quantity to enable managers to make meaningful comparisons to operation standards. As with control, too much information can be as bad as too little. Lastly controls should be accepted by the people they affect as controls and their applicability to specific situations should be communicated clearly to those responsible for implementing them and to those who will be governed by them. In the interview for our coursework, the controlling in TAHAN insurance is manager should follow up closely on the daily basis on all the departments operations to ensure that they have achieve their goals, service standard and KPI (key performance indicators set by the company. Other than that, weekly marketing meeting should be conducted to monitor the marketing activities and marketing result from each marketer. To identify the problem area arises from the marketer and assist them immediately to resolve in order to achieve immediate results. Furthermore, emphasis on result orientated to all departments or individuals to achieve goals and conduct weekly product control meeting in order to improve their financial standing. By viewing both theory and the case study, we can compare one of the functions of manager which is controlling. Manager use controlling to identify the problem area arises from the marketer activities in the case study while in theory manager also use taking corrective action steps to identify the problem that happen in the organisation. Other than that, in