Functions of Management

ABSTRACT

When companies first decide to produce or manufacture a product, they must decide how they are going to produce it; establish manufacturing of all components, establish assembly only operation, or outsource to an offshore company. This decision would have a direct affect on the four elements of management; planning, organizing, controlling and leading. Once a company established the direction in which the management should lead, the manufacturing decision should be quite easy to formulate.

When we last left off, our entrepreneur and her partner had decided how they were going to fund their business venture by licensing the technology. The partners have lined up three companies that are willing to use the device in their products. With their device in demand, the partners now have to decide how they would like to manufacture the device. Over a business lunch, they will discuss their options of doing all in-house manufacturing, delegating the manufacturing of the smaller parts elsewhere and doing just the assembly, or outsourcing 100% of the manufacturing.

Before making a decision as important as how, where, or who is going to manufacture their products, a business has to first identify its version of the four functions of management: Planning, Organizing, Controlling, and Leading. It's important to first establish these four elements to make sure the business has a vision and does not lose track of it. It was once stated that good management contributes significantly to the successful operations of a company (Kao and Hung 2005). Let's define these elements.

Planning is developing or recognizing the company's goals and developing ways to accomplish them. Organizing is maximizing the company's resources, using them in a manner that ensures the company is run smoothly. Controlling is setting performance measurements or standards for employees. And finally, leading is influencing employees to do their jobs. Without first defining the company's vision, it would be futile to decide on a manufacturing method; the company would not be successful.

Our partners discussed the options at length along with the management functions and their financial state and decided that outsourcing 100% of the manufacturing was the best option for their company. They made this decision after evaluating the cost categories of manufacturing. According to our course media materials, manufacturing companies separate costs into direct materials, direct labor, and manufacturing overhead (2011). The partners decided that having to manage the materials, the employees and the expense of running a facility was not something they were prepared to do. They reasoned that giving another company the responsibility to make sure the product was manufactured properly was the most cost effective out of the three choices. Not having to secure