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Functions of Management Essay

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Updated: Nov 24th, 2019


Management is the process in which a person or a group of people run or control things or people. Management is accomplished using the set guidelines and the limited resources that are availed to achieve the established goals and objectives. Management can be applied in organizations, homes, or other social settings. Management in an organization focuses on human resource, capital, and other resources towards the attainment of a set goal (Wren, Bedeian and Breeze, 2002, p. 907).

There are different levels of management including the top level management, middle level management, and first level or low level management. There have been various people from ancient times who have attempted to study management. Their focus has been on how the aspect of management should be employed, its functions, the impacts on the overall performance of an organization, and how it can be improved for better results and effectiveness (Pryor and Taneja, 2010, p. 590).

One of the first scholars to study management and advance its functions and principles was the Frenchman Henri Fayol. Fayol was born in 1841, and he was a director at a coal mine in France. He initially identified five functions of management. He described functions of management as those things that proper management helps to attain (McLean, 2011, p. 32).

The five initial functions were planning, controlling, leading, organizing, and staffing. However, authors of management books have combined them into four functions, which are planning, organizing, leading and controlling (Pryor and Taneja, 2010, p. 589).

In this essay, the focus is on the Commonwealth Bank of Australia, and how it employs the functions of management and the impact to the organization. The Commonwealth Bank of Australia was founded in 1911 under an Act of parliament. The bank started its business in 1912.

Its main functions are to carry out general banking services and savings for the Australian people. Currently, the bank has over 800,000 shareholders and has employed about 52,000 employees. It was owned by the Australian government until 1991 when it was listed publicly. This paper looks at each function of management, and how they have been used in the bank and the implications.

Fayol’s Four Functions of Management

Planning is the act of setting goals and objectives and coming up with ways of achieving them given the limited resources of time, human resource, and capital among others in order to meet the goals effectively. It is a futuristic act done to try and foresee how a combination of different activities instigates certain results.

It is the process that determines who does what, what resources to employ, and when to do what (Norman and Media, 2012). Planning at the Commonwealth Bank of Australia is done at the beginning of every financial year. This plan is a long term plan that sets to meet objectives of profit maximization, increase of customer base, market share, and capital base.

However, there are other short term plans that are set quarterly in order to meet the long term goals. The planning is also done at the branch level in each of the over 1000 branches of the bank (Cassidy, 2006, p. 69). All these plans are set to support the main plan of the bank. What differs is the approach and strategies that each branch employs. Different managers at different managerial levels also plan based on the people they manage. This is in regard to how they can meet the goals and objectives (McNamara, 2009, p. 65).

The unique thing about planning at the Commonwealth Bank of Australia is that this function of management involves the people that are being managed. Some of the strategies that the bank sets out in the planning stage are training of staff and other personnel. The training equips the staff to carry out tasks effectively as they try to meet goals. Another strategy used by the bank is the establishment of a follow up system. In this case, when they meet the quarterly target, they are able to plan the next target.

Organization comes after planning. It is the process by which available resources are combined and synchronized in order to meet goals and objectives. The resources combined include human resources, finance, raw materials and physical resources. Planning includes determining the proportions of each resource to be used in meeting goals. With the organization function, roles and responsibilities are clearly defined (Cassidy and Kreitner, 2009, p. 126).

At the Commonwealth Bank, organization entails identifying the activities that have to be performed with regard to certain goals such as ensuring sales are made, quality control, accounts preparation, and accounts opening among others. All these activities are then grouped into different units. The bank also combines related activities into departments. This is to ensure easy flow of information between these related units and coordination.

The bank also assigns an authority to each department so that there is a hierarchy. The top level management deals with policy formulation. They include the chief executive officer and managing director Ian Narev, the different group executives of financial services, corporate affairs, and human resource among others.

The middle level deals with the supervision of their respective departments includes branch managers while the lower level management deals with the supervision of foremen. Finally, the bank ensures a clear outline between any level of authority and the responsibility that comes with it. The management also conducts weekly meetings at different levels as part of organizing (Cassidy, 2006, p. 71).

The third function is leading, which some authors also refer to as commanding. Leadership/commanding is the process of providing guidance to the people in an organization. It involves motivating members of staff, inspiring them, and providing guidance for them. It involves influencing and providing direction for the behaviour of personnel towards achievement of goals and objectives (Mirescu and Dragomir. 2008, p. 3030).

Leadership also involves providing future visions for a group of people. Management should have goals that are clear, commitment, and relevant skills in order to implement the leadership function effectively. Effective communication is also a quality of good leadership (Breeze, 1995, p. 40). At the Commonwealth Bank leadership is key in its operations. The members of the executive council are the first group of leaders. Others include the branch managers and group leaders of the sales teams (Cassidy, 2006, p. 68).

Leadership qualities are enhanced through regular leadership workshops. The bank’s leadership emphasizes on the need to solve conflicts as soon as they arise. The bank also comes up with different incentives for different employees as it recognizes people respond differently to different motivators. Where the conduct of an employee is in question, the employee is informed of the consequences on performance. Leadership at the bank emphasizes on teamwork (Cassidy and Kreitner, 2009, p. 132).

The last of Fayol’s functions is controlling. Controlling involves ensuring all efforts of the organization and resources are directed solely at the set goals and objectives. It entails measuring actual performs to the set standards at the planning stage. At this stage, the management identifies errors or setbacks and takes appropriate action (Norman and Media, 2012). The Commonwealth Bank targets are set on a daily basis and compared all through the day.

At the end of each working day, tracking sheets are taken, and weekly statistics are evaluated. In case of any problems or delays in meeting the objectives, plans such as coaching and some role play for employees who are not performing as expected are implemented. In the case where improvement is still not seen, then a three month performance improvement plan is enforced. This is meant to improve performance of employees (Cassidy and Kreitner, 2009, p. 148). This exhibits a wholesome evaluation process by the bank.


The Commonwealth Bank applies the traditional Fayol’s functions of management. In this way, the bank enjoys the benefits of planning, organizing, leading and controlling. Through planning, the bank reduces uncertainties and risks that come with the banking industry. Planning also boosts employee morale. The bank is one of the most established banks in Australia. It has low employee turnover as the employees continue to increase each year due to good leadership and management.

Fayol’s functions of management are an important aspect of management today. His functions and principles are relevant due to their effectiveness and the results they provide. Over the years, other authors, theorists and scholars have adapted and enhanced these principles. The principles provide a detailed system of running an organization successfully.


Breeze, John D. 1995. “Henri Fayol’s centre for administrative studies.” Journal of Management History 1 (3): 37-62.

Cassidy, Carlene, and Robert Kreitner. 2009. Supervision: setting people up for success. Mason, OH: South-Western, Cengage Learning.

Cassidy, Julie. 2006. Concise corporations law. Annandale, N.S.W.: Federation Press.

McLean, Jacqueline. 2011. “Fayol – standing the test of time.” Manager: British Journal of Administrative Management. 74: 32-33.

McNamara, Daniel E. 2009. “From Fayol’s Mechanistic To Today’s Organic Functions Of Management.” American Journal of Business Education 2 (1): 63-78.

Mirescu, Cristina and Gheorghe Dragomir. 2008. “Particularities of the Managerial Functions in the Small and Middle Enterprises.” Annals of the University of Craiova, Economic Sciences Series 6 (36): 3029-3035.

Norman, Leyla and Demand Media. 2012. What Are the Four Basic Functions That Make Up the Management Process?

Pryor, Mildred Golden and Sonia Taneja. 2010. “Henri Fayol, practitioner and theoretician – revered and reviled”. Journal of Management History 16 (4): 489 – 503.

Wren, Daniel A., Arthur G. Bedeian and John D. Breeze. 2002. “The foundations of Henri Fayol’s administrative theory.” Management Decision 40 (9): 906-918.

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