The Functions of Management and Principles of Managemen - Essay Example

?Fayol’s four functions in relation to Australian Rio Tinto Introduction Henry Fayol developed several functions of management and principles of management. According to Fayol, the functions of management entail planning, organizing, commanding, coordinating and controlling1. Fayol asserted that the functions of management are universal and all managers must perform them in the course of their work regardless of the size of the organisation or the nature of the industry. Fayol also outlined fourteen principles of management that guide the managers in executing the above functions. The principles used by the management include division of work, and authority in the organisation2. Division of work is the specialization that increases the output of each individual employee. Authority enables the management to give orders to the subordinates. Unity of command and unity of function are also essential in the management functions. Remuneration principle asserts that employees should receive fair wages, with stability of tenure in their employment contract. Other principles of management outlined by Fayol include the scalar chain whereby the communication flows from the top management to the subordinates and order principle that asserts that all people and materials should be at the appropriate place in the right time3. Accordingly, the team spirit and imitativeness of employees is critical in promoting creativity in work4. Planning According to Fayol, one of the core functions of management is planning. This function entails deciding the future organizational goals and preparing plans of achieving the goals. Planning involves determining a future course of action and taking adequate steps of achieving the pre-determined goal5. Rio Tinto is a multinational company that has a presence in Australia. Through several mergers and acquisitions, the company has expanded to become one of the leading mining companies engaged in the mining of aluminum, uranium, coal, copper and iron ore. The Management of Rio Tinto has to prepare different types of plans. For instance, there are weekly plans, monthly plans, operational plans, tactical plans and strategic business plans. At the corporate level, the company prepares long term plans that extend more than ten years. The strategic plans include the diversification of operations and long term commitment to expanding operations in different continents. The company also prepares yearly plans that entail the expected profits and costs of operations during the year. The tactical plans of the company mainly focus of functions such as mine prospecting and exploration. Tactical plans are prepared for each department such as employee recruitment and remuneration plans, financial plans, and mining department plans. The operational plans are mainly prepared by the first level managers and outline the activities and accountabilities of the specific managers. Other plans that are common at Rio Tinto include weekly plans and daily plans of mine exploration, with accompanying details of activities to be undertaken by each employee and the supervisors6. Planning entails defining the current situation, establishing the objectives of the plans, and developing an action plan for attaining the goals7. Other elements of planning include budgeting, implementing the plans and controlling the plans. Planning should also forecast the aids and barriers to the goals of the organisation. For instance, some of the aids to achieving planned objectives in Rio Tinto include well qualified personnel and superior technology. However, some barriers to planning at Rio Tinto include complexity of the plans due to unforeseen uncertainties like a possibility of cancellation of the mining rights and contracts in many jurisdictions. Some of the factors that influence the planning function in Rio Tinto include political factors, environmental factors and government control over the mining industry in many countries. Planning is important in any organisation since it enhances the coordination and contributes to the strategic direction of the organisation. Planning also clarifies the organizational objectives and enhances the commitment of employees. Although planning at Rio Tinto is expensive since it requires high analytical knowledge, it enhances the attainment of long term organizational goals8. Planning reduces the uncertainty and risks associated with the mining industry and encourage innovation in decision making. Plans also include standards of control that facilitate help in identifying any deviation from the pre-determined goals and objectives. Organizing This is the process of bring together the financial, human resource and physical resources of the organisation. Some of the activities involved in organizing function include identification of activities, assignment of duties, grouping of activities, delegation of authority and responsibility. The company has five operational business units that are divided according to the product type. Some of the units include Rio Tinto iron Ore, Rio Tinto Energy, Rio Tinto Copper, Rio Tinto Alcan and Rio Tinto Diamonds. The company has a complex organizational structure that involves several subsidiaries that are either wholly or partly owned by Rio Tinto. Some of the subsidiaries include Anglesey Aluminium, Bell Bay Smelter, Dampier Salt, Palabora, Three Springs Mine, Hathor Exploration Ltd, Murowa, Iron Ore Company of Canada, and Diavik Diamond Mines. Organizing involves identification of the activities and duties in the organisation, classification of the activities and putting related activities in to one function, assignment of the duties, responsibility and authority, and establishing communication relationships in the organisation9. One of the important roles in organizing is establishing and organizational structure and culture that supports the business strategy. For instance, Rio Tinto has a matrix organizational structure that is essential in attaining the high growth strategy since the company has diversified operations. The company has different operational units that are managed by different people with the head being the country manager. The company has a devolved organisation structure with the board of directors running both Rio Tinto in United Kingdom and Australia. Organizing also includes division of work and assignment of responsibilities. There is a need of departmentalization, and assignment of responsibilities and authority. For instance, Rio Tinto comprises of five product groups that include Aluminum, copper, Diamonds and minerals, Iron Ore and Energy and finally support groups such Technology and innovation and Exploration support group. Coordinating Coordinating refers to all activities of the organisation that ensure smooth running by integrating the group efforts towards accomplishment of shared mission. Coordination ensures unity of direction through collaboration of the different departments. Coordination also ensures optimum utilization of the organizational resources and cordial working relationships in the organisation10. Coordination will subordinate individual interests to the organisation wide interests thus ensuring high employee morale and productivity in the organisation. Some of the organizational elements involved in the coordination process include efficient communication channels, proper leadership styles of management, and work supervision11. Rio Tinto has established open communication channels that ensure information flows to all employees in the organisation. For instance, employees can openly communicate with supervisors and management. The company has a participative leadership approach whereby junior staff participate in the decision making process. There is no close supervision since the majority of the staff includes professionals who are able to control their working processes and procedures12. Controlling Controlling refers to measurement of achievement of pre-determined objectives against an established standard and taking any corrective action if pre-determined goals have not been attained. An efficient control system ensures that deviations are identified before they occur. Controlling in any organisation entails establishment of standards of performance, measurement of the actual performance, identification of any deviation and finally taking a corrective action. Rio Tinto has established efficient control systems that check on the quality of exploration, the production procedures, and administrative controls that ensure rules and procedures are followed by all employees13. The main aim of control is to ensure the organizational plans, policies and procedures are adhered and deviations from planned objectives are identified in advance. Controls over the behavior of employees such as employment rules, compensations systems, punishments and incentives ensure the workers are committed to the strategic objectives of Rio Tinto. Control systems also ensure organizational effectiveness and efficiency14. The company offers fair compensation to all employees and rewards to employee who meet their performance targets. Additionally, the human resource policies encourage skills training, career growth and employee retention. In order to control the quality of production and exploration, Rio Tinto has well documented work processes that ensure the safety of employees and quality of minerals. Conclusion Henry Fayol suggested several functions of management. Some of the functions of management according to Fayol include planning, organizing, coordinating and controlling. Planning entails preparing future forecasts and taking the necessary steps to meet the pre-determined goals. Organisation involves putting related activities in to groups and allocating resources in the organisation. Coordination process ensures that employee work in harmony and information flows to every individual in the organisation. The controlling function of management ensures that pre-determined goals are attained and deviations identified in advance in order to take a corrective action. Reference list: Daft, Richard. 2011. 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