POSDCORB: The Circadian Rhythm of Business

Know about the POSDCORB theory that lay the foundation of all businesses


We can simply say that in today’s world, management goes much beyond top-rung managers or company CEOs ruling with an iron fist or overworked teams compelled to hit the targets every time. Instead, it is all about strategies which ensure efficient operations, sustainable team performance and keeping alive people’s motivation for growth and success. It is easier said than done, but it is quite achievable if all companies, big or small, follow the seven basic management functions – a systematic framework for running a business without a hitch. Many of us may have come across the widely used management acronym POSDCORB (stands for Planning, Organising, Staffing, Directing, Coordinating, Reporting and Budgeting).

In 1937, a social scientist, Luther Gulick and business thinker, Lyndall Urwick described seven major activities and duties of any higher authority of the organisation, in their paper titled The Science of Administration. Since then, the term POSDCORB has been used to describe the seven functions of management. Even though the term was coined decades ago, its application and significance stand the test of time. These functions were, are and will be used by businesses to get the maximum output of their resources.

Now, let us take a look at how these seven management functions help business operations and why they are so important.

‘‘

A manager sets objectives, organizes, motivates and communicates, sets yardsticks, and measures develops people.

- Peter Drucker

Planning

Failing to plan is planning to fail. Planning is the foundation of POSDCORB as any work you intend to do and it involves a lot of thinking involved. When you are planning, you are visualizing your goals, identifying the tasks to meet those goals, determining how you are going to do those tasks and preparing in advance to handle any possible setback. In a business environment, your personal, short-term plans must align with the long-term goals of the organisation.

We see examples of effective planning almost every day. A student appearing for UPSC might have planned her preparations years before the actual test, given the vast syllabus and difficulty level. Taking into account the days she will not be able to study, the success of this study plan relies on her time management and skill execution. Excellent managers always plan on how they are going to face any upcoming challenges.

Organising

Now that you have the blueprint, the next step according to POSDCORB is organising your resources to get maximum outputs. The set-plans are divided and allocated among different teams. The different departments of the organisation divide and conquer to ensure that the tasks are conducted as planned. organising gives a structure to the plan by breaking down the work, defining its scope and allocating it accordingly.

The example of organising is the sports days and annual days in schools. After planning all the events of the annual day, the teachers then have to select students for the performances based on their talents. Here the teachers act like managers and have to assign the right student to the right job. In this case, the job being singing, dancing, acting – If the teacher organises the annual day performances by assigning the acts to students whose talents best suit said act, the annual day is bound to succeed. The same thing applies in an organisation, where after defining activities, responsibilities are distributed and duties are allocated.

Staffing

Unlike self-driving cars, people or human resources with specific skills are required to carry out specific tasks to fulfill organisational goals. Staffing is focused on bringing hiring the best people to get the job done. If you have more than required people, over-staffing will lead to wastage of your resources. On the other hand, if you are under-staffed, achieving organisational goals can get difficult. Staffing is also about hiring qualified staff for skill-specific job roles. Recruitment, selection, placement, training, development and remuneration are all a part of the staffing function.

An evident example of insufficient staffing is the Government bank counters. During rush hours, people dread standing in huge lines. It has been a prevalent problem of under-staffing or even inefficient staffing. With the advent of digitalization, online banking has solved this issue for a lot of people but not eradicated it. Since most of India still opts for going to the bank instead of doing things online.

Directing

Directing, in a nutshell, is setting the tone of how work is done, oversee and handhold. It is having efficient communication with the workforce by motivating and inspiring them. A manager has to ensure that he unleashes his team’s maximum productivity by tapping to the fullest potential of his employees.

The way a manager directs can make the work environment better or bitter. Directing is about supervising the work of your employees, monitoring their performance, communicating in a supportive manner, motivating them to face challenges and mainly leading by example. An effective manager uses the principle of directing by working along with his employees rather than ahead of them.

We come across different ways with which parents handle their children. The parents here act like managers while handling the children. Their directing skills are put to test every day while getting their homework done, ensuring they eat their food, or simply not hurt themselves.

Co-ordinating

They work in sync, in tandem, so that no one is out of the loop and every cog is doing her job. Co-ordinating is the management function of POSDCORB that ensures all the teams of an organisation are on the same page. Different teams of the organisation are always interdependent on each other to get the end goals accomplished. Synchronizing the responsibilities of various departments and employees is vital for stable functioning.

In the festival of Dahi Handi, pyramids are formed to break the pot of curd, money and butter hung on the top of any structure. A business operates similarly where there are different departments, all working towards the same goal. In Dahi Handi, if all the tiers of the pyramid are well-coordinated, the goal of breaking the pot is achieved. If not, the pyramid collapses and the pot is a distant dream. Coordination in a company works similarly – the more synced it is, the better the chance of success.

Reporting

Reporting is about accountability and work progress. It makes the communication of an organisation more transparent and integrated. It also helps in having written data of the past, on the basis of which the company can plan their present and future actions. Weekly and quarterly team meetings highlight the present functioning of an organisation.

We have been seeing reports since we were kids. The report cards that we dreaded after every exam in schools and colleges are a classic example of reporting. Also, attendance records, the school fees receipts and calendars denote a form of reporting.

‘‘

Those who plan do better than those who do not plan, even though they rarely stick to their plan.

- Winston Churchill

Budgeting

A business runs with the intention of making profits. Budgeting is allocating money, workforce, raw material and time to different tasks. A predetermined allocation helps in understanding the resources required to accomplish a task. Budgeting is a part of POSDCORB that helps in gauging an estimate of how many resources are needed and to avoid any excess or waste of it.

Most people who grew up in an Indian household are no stranger to the concept of budgeting. Since we were kids, we have seen our parents drafting a monthly budget for our house. The budget is planned according to the paycheck that comes on the first day of the month. An estimate of household expenses, everyday expenditures and savings help keep the track of money and avoid any reckless spending.

Theories parallel to POSDCORB

Apart from the popular POSDCORB, there are several other theories on functions of management. Several theorists came up with their own combination of management functions, which according to them a business needs to function optimally.

Henri Fayol’s 5 five functions of management

Henri Fayol was the first to classify management activities into specific and detailed functions. He is also known as the ‘father of modern management’. Henri Fayol established the five functions of management in his book, “Administration Industrielle et Generale” in 1916. The five functions of management according to Fayol were planning, organising, commanding, coordinating and controlling. He stated that these functions are universal in nature and are being practised by managers in everyday work.

George R. Terry

George R. Terry wrote a book, “The Principles of Management” in 1968. Terry stated that there are four functions of management – planning, organising, actuating and controlling. He also theorized that each of the four key functions solves a specific question of the management.

Harold Koontz and Cyril O’Donnell

Harold Koontz and Cyril O’Donnell published back in 1976, an essay, “Management: A Systems and Contingency Analysis of Managerial Functions”. They believed that the previous principles of management could be more detailed and specific. They came up with the five functions of management – planning, organising, staffing, directing/leading and controlling.

The several theories on functions of management find their relevance and applicability even today. This is because they revolve around the core human behaviour and managing people. These functions act like a lighthouse that helps you reach the shore of your business goal. If these functions are used efficiently, handling of the elements of management becomes easier. To know more about the elements of management, check out our article, ‘5Ms of Management.

Tanisha Achrekar
Tanisha Achrekar
Tanisha is a Business Writer at Dutch Uncles, she writes on personal finance, management and financial concepts. Her stint includes JP Morgan and Media.net

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