The different authors have classified the functions of management in different ways. The major functions of management are described below:

  • Planning: Planning is the primary function of management. It is the systematic activity which determines when, how and who is going to perform a specific job. It specifies the future course of action and decides the best course of action to achieve the pre-determined goals. It involves setting the objectives and preparing the work procedure to achieve them. So, planning is thinking before doing the job. Planning is a key function as it helps to achieve efficiency and growth. So a manager’s ability to forecast the upcoming situation precisely is very crucial. Thus, forecasting is an inseparable aspect of planning.

  • Organizing: Organizing is indicated as the arrangement of the human, physical and financial resources for the execution of plans. Organizing is to manage the M4 (Man, material, machines and money) in the best possible manner in order to achieve the desired output of an organization. Planning focuses on deciding what to do and organizing focuses on how to do. 
  • Staffing: Staffing is the process of  fulfilling the vacancies by competent personnel through recruitment and selection. It includes training and development employees, their appraisal, promotion, transfer and proper remuneration. The process of staffing involves screening, recruitment, selecting, training, grooming and development and appraising.
  • Directing: Direction is the process of activating human resources to achieve the organizational objectives. It is concerned with instructing, guiding and inspiring the people in the organization for the achievement of the objective. It involves functions like supervision, motivation, leadership, and communication. It is concerned with the instructing, guiding and inspiring the people in the organization for the achievement of the objective.
  • Controlling: Controlling is the evaluation of the performance. It is ensuring whether the results are according to the pre-determined standards or not. It is the process of measuring and comparing actual results with standards and taking corrective actions if any deviation is there between standards and actual work performance.

The difference between the administration and management are as follows:

Basis of Differences Administration Management

Nature of Function

Administration is linked as thinking function

Management is taken as operating or executing function

Basic Function

Formulation of policies and determination of objectives.

Implementing the plans and policies to achieve desired goals

Area of use

Used in mostly Government, educational and social organizations

Used in mostly profit motive or business organizations

Level of Authority

Top level authority: Strategic and Policy Making and decision-making

Operating level authority: executive administrative decisions

Ability required

Requires high level of administrative ability to analyze and make decisions

Requires technical abilities to perform the actions

Status of the members

They are mostly owners who invest in the organization and gain huge profits.

They are mostly employees working under salaries and wages.

Basis of Decisions

Social norms and values, Government policies, public opinions are basis to make decisions

Values and opinions of managers and meetings are the bases of decisions

Major function

Planning and Organizing

Directing, Leading and controlling


Importance of management

In today’s world, Management is essential in every organization. Management is one of the key reason for modernization and industrialization. Some of the major importance of management are:

  1. Successful Operation: An organization can successfully run only if it has a good management mechanism. A good management helps to maintain a unity of direction to all its actions. Under effective management, an organization can operate its activities smoothly without facing disturbance like a strike, lock-out, conflicts and lack of resources.
  1. Co-ordination: An organization needs a large number of people working in various departments. So Management makes a good co-ordination among all the departments which directs them towards the success of the business or attainment of organizational goals. Management co-ordinates between man, machine, money, and material for better results.
  1. Optimum utilization of resources: An organization can gain maximum profit if there is an efficient use of the raw materials and human resources. Management applies its various principle techniques and tools to ensure their optimum utilization.
  1. Minimization of cost: One of the most important aspects of management is cost efficiency. The cost of the operation of the organization reduces the profit or revenue which hampers the performance of the organization. So, the cost of production of goods and services can be minimized by the effective and efficient management.
  1. Personality development: Management involves not just performing activities but also grooming the skills and personality of workers. Management manages many seminars, workshops educational meetings etc. which are held in order to make the workers more competent and capable. 
  1. Fulfillment of Social and Economic needs: Any organization is run for earning a profit and providing services to the general people. An organization is socially as well as economically liable to the society and government. Thus, Management helps the organization to meet all these needs of the society.
  1. Development and growth: An organization’s basic long-term need are development and expansion. If management fails to cope with the changing environment, the organization will be collapsed. Thus, the expansion and growth of business depend upon the sound management.


Hence, these are the importance/significance of Management. Besides these other objectives of management are encouraging innovation, improvement of a lifestyle of workers, developing a brand or image of an organization, improving relations with others etc.