5 Main Functional Areas of Management | Business Management

Some of the major functional areas of management are as follows:

It is also called operational management or functional areas of management. As being management, a social and universal process, its area is very wider. Inter disciplinary approach of management widens the functional areas.\

There are five main functional areas of management viz., human resource, production office, finance and marketing; which have been discussed below.

Nowadays, some new and emerging dimen­sions are also considered areas of management as: time management, environment management, transport management, international management, forex management.

In time management, the emphasis is given on achieving the target in minimum time. By the nature, only one thing time is allotted equally to every creature as 24 hours in a day. But the person, who knows the art of time management, ranks first. Japanese time management is regarded best in the world.

In environment management, the efforts are made to check the different types of industrial pollution viz., air, water and noise. It is the responsibility of general manager to plan for congenial ecology to plant, animal and human being. Transport management is the specialized branch for arranging efficient and cheaper transport facility.

In the age of multinational corporations (MNCs), the primary concern of international management is with the management of people, material and money of the international environment.

It is the extension of simple management process itself, but across national frontiers. A manager while dealing with different nations must take into account the legal, political, social, economic and technical aspects in the global perspective. Forex (foreign exchange) management is the application of management principles for earning more and more foreign money.

1. Human resource management:

Human resource development or personnel management or manpower management is concerned with obtaining and maintaining of a satisfactory and satisfied work force i.e., employees. It is a specialized branch of management concerned with ‘man management’.

The recruitment, placement, induction, orientation, training, promotion, motivation, performance appraisal, wage and salary, retirement, transfer, merit-rating, industrial relations, working conditions, trade unions, safety and welfare schemes of employees are included in personnel management. The object of personnel management is to create and promote team spirit among workers and managers.

2. Production management:

Production management refers to planning, organization, direction, coordination and control of the production function in such a way that desired goods and services could be produced at the right time, in right quantity, and at the right cost. Some authors treat material, purchase and inventory management as part of production management. Production management involves the following functions:

(a) Product planning and development,

(b) Plant location, layout and maintenance,

(c) Production systems and machines,

(d) Management of purchase and storage of materials,

(e) Ensuring effective production control.

3. Office management:

Office management can be defined as, “the organization of an office in order to achieve a specified purpose and to make the best use of the personnel by using the most appropriate machines and equipment, the best possible methods of work and by providing the most suitable environment.”

The main topics of office management are: office accommodation, layout and environment, communication, handling correspondence and mail, typing and duplicating, record management and filing, indexing, forms and stationary, machines and equipments, O & M, office reporting, work measurement and office supervision.

4. Financial management:

Financial management can be looked upon as the study of relationship between the raising of funds and the deployment of funds. The subject matter of financial management is: capital budgeting cost of capital, portfolio management, dividend policy, short and long term sources of finance. Financial management involves mainly three decisions pertaining to:

1. Investment policies:

It dictates the process associated with capital budgeting and expenditures. All proposals to spend money are ranked and investment decisions are taken whether to sanction money for these proposed ventures or not.

2. Methods of financing:

A proper mix of short and long term financing is ensured in order to provide necessary funds for proposed ventures at a minimum risk to the enterprise.

3. Dividend decisions:

This decision affects the amount paid to shareholders and distribution of additional shares of stock.

5. Marketing management:

Philip Kotler views marketing as a social and managerial process by which individuals and group obtain what they need and want through creating and exchanging products and values with others. American Marketing Association defines market­ing management as the “process of planning and executing the conception, pricing, promotion and distribution of ideas, goods and services to create exchange that satisfy individual and organizational objectives.”

The course content of marketing management generally includes: marketing concept, consumer behaviour, marketing mix, market segmentation, product and price decisions, promotion and physical distribution, marketing research and information, international marketing etc.

Modern marketing management is bridging the gap of demand and supply through de-marketing, remarketing, over-marketing and meta- marketing. Modern marketing, from societal point of view, is the force that harnesses a nation’s industrial capacity to meet the society needs and wants.

The main function of modern management is to organize human and physical resources and direct them toward efficient performance and higher productivity at the minimum costs. The same line of thinking can be applied in various functional areas viz., personnel, production, office finance and marketing. Modern managers are the harbinger of cooperation, fellow feeling, mutual understanding and growth.