Managerial Functions: Overview, Principles, Importance, Levels, Roles, Competencies

Management is the supervision or administration of all the activities that are undertaken in a firm to earn profit. A business has access only to a limited number of resources. The utilisation of these resources in an optimum way determines the success of the enterprise in both financial and social aspects. A nowadays financially successful firms should make sure that they are also socially responsible. All these activities are spread to different branches of the organisation. The compliance of all these activities and carrying them out under a single roof is the sole aim of the management. This is done by the management team or the manager by carrying out certain managerial functions.

Let us now discuss what is meant by managerial functions.

An Overview Of Managerial Functions

Managerial functions are the different processes through which the firm carries out its work in the best possible way. these functions help the firm to achieve the desired success and attain the profit goal in the most optimum manner.

For example, let us say that an organisation has planned to expand their product line. Firstly, they must decide on what is the product that is to be introduced for the expansion. The product should have a pitching plan and estimated growth in the foreseen future. When plans about the product are made then the sources of materials are to be organised. The resources should be of good quality and should produce the desired yield. Nothing can be done without the help of labour. To make things happen accordingly the labour is organised and directed in the right way to achieve the pre-determined profit. These workings of the labour are continuously monitored and valued. Even after the product’s introduction into the market, the management continues to keep an eye on the market development of the product.

From the above example, we can broadly classify the managerial functions under 4 heads. They are discussed in detail below.

Principles Of Management

There were initially 5 principles of management introduced by Henry Fayol, the father of modern management theory. In the modern era, they are mainly classified as planning, organising, leading, and controlling. They are again classified into 14 principles of management by Henry Fayol.

We can say that they comprise all the activities that are carried out in a business right from birth of the same. It picturises the working of the business for the next foreseen future. The success of the management depends on the proper application of these principles in the situations that arise in the organisation. Planning means setting out the correct way in which a particular activity should be carried out to achieve the success that is pre-planned. There are different alternatives to achieve the determined goal. To choose the best alternative amongst the given number of alternatives they are organised according to their optimization capacity.

The employees are led on the chosen alternative by the officials in charge. They choose the correct employees and give them the actual strategy that they should work on to achieve success. They are given rewards for good performance and feedback for performance improvisation. The employees are occasionally checked on regarding their performance. They are always under the control of the management and the results are evaluated. In case of performance they set out a different plan and this process goes on again.

Thus, we can say that managerial functions undergo continuously in an organisation in a well-prescribed and professional manner.

Now we know what managerial functions exactly mean. But why is it carried on in a business organisation?

Importance Of Managerial Functions

The primary motive of managerial functions is to make the working of the organisation smooth and in effective manner. There are several aids of these functions to the organisations. Some of them are listed as follows:

  • The systematic layout of the happenings of the company:

As the activities are carried out according to the plan of the management there will be a proper idea of how things are to be done. There will be a proper plan that will act as a basis of standard for the working of the company.

  • Optimisation of resources:

From the limited resource available to the organisation. The best among them is selected and utilised according to the needs of the organisation. Managerial functions are well structured so that the organisation not only earns profit but also protects the environmental resources.

  • Uniformity of work done:

The workforce work under the control and decisions of the management. Therefore, there is a uniformity of outputs at each level of the organization. The employees will have a clear-cut idea of what they are bound to perform under the specific task given to them. As a standard is set up the employees work to achieve the standard set.

  • Feedback mechanism:

As everything is monitored and valued continuously there feedback can be obtained about the work performed. This can help in improving the performance in case any drawbacks are found in their work.

  • Achieving desired goals.

The goals are achieved faster in an organisation where managerial functions are carried out efficiently. The goal, whether it is financial or social, it is achieved in the shortest time when things are pre-planned. So in an organisation with sound managerial functions and full fledge employees, supporting goal attainment is a piece of cake.

  • Time and cost-effective:

Just like any other aspect of management managerial functions are time effective and cost-effective as the desired results can be attained in a short period with minimum wastage of resources i.e., maximisation of profit and minimisation of cost. As experts are allotted in different branches everything is carried out professionally.

These managerial functions are carried out at different levels of management.

Levels Of Management

Management can be broadly divided into 3 levels. These 3 levels are divided horizontally in a pyramid shape according to the work carried out by them. There is a flow of command in this pyramid.

Top-Level Management:

  • It consists of the superior authorities of an organisation who decides the different factors affecting the organisation.
  • It includes personals like the board of directors, chief executive of the organisation etc.
  • They are the decision-making authority of the organisation.
  • They are fewer in number as compared to the people in other levels of management.
  • They make the decision that is to be followed by the middle and lower levels of management

Middle-Level Management:

  • The organisation is divided into different sectors at this level.
  • The decisions made by the top management are carried out by the different branch heads at this level.
  • They train the employees under them to do the work efficiently.
  • They are the ones that set a practical solution to the decisions taken by the top management and design a layout to implement the plan accordingly.

Low-Level Management:

  • This level is also known as the supervisory level.
  • At this level the different sectors have sub-divisions, and the heads of these sub-divisions are given authority to the employees or workers of the organisation.
  • They are in close connection with the employees of the organisation and direct them on the best way to perform the task.
  • In this stage, they make sure that the plan developed by the top management is executed correctly.

To understand the levels correctly let us connect this concept with an example.

The CEO (top level) of a public relations company decided to expand their business. They concluded that marketing should be more emphasised to expand the business successfully. The CEO in discussion with the other members of his management level like the VP, and Chairperson concluded that expansion must take place. As a next step, he tells his subordinates about this decision. The social marketing manager (middle level) understands the assignment and plots out a plan for social media campaigns regarding the different activities that the organisation undergoes. The marketing manager makes sure that the work that is undertaken now is effectively carried out. The social media manager asks the supervisor (low-level) to ensure that the social media handles are well equipped for marketing. He also asks the junior managers to set up a team for the execution of the plan. After all this the employees work together for the expansion of the work.

Managerial Role

After analysing the managerial functions we may wonder if managerial roles and functions are the same. Managerial roles are the skills that are needed to perform the managerial functions of the organisation. We can say that a manager should be skilled to perform his role. They define the capabilities of the manager to perform the function.

A manager should have different skills to attain success in his career. What are the competencies a manager should possess to successfully execute the requirements of their position?

Management Competencies

  1. The management or the manager should be professionally skilled and educationally equipped.
  2. He should not be a leader but a motivator. He should see himself as one among his employees.
  3. He should be honest and unbiased to perform his function in a just manner.
  4. A manager is a person who is always open to thoughts and creativity and improvises things in his manner.

Every management requires different types of competencies. These are the basic competencies. There are a lot more competencies which may differ from personnel to personnel.


Managerial functions determine the goal attainment of an organisation. It is the set of processes that are well prescribed to attain profit in the future. Usually, the managerial functions are carried out in 4 stages by different levels of management who possess high skills in the particular field of their work. Thus, we can conclude that management with a well-defined managerial structure will have higher stakeholders in the market.