What Is The Important Managerial Functions Commerce Essay


Management refers to the tasks and activities involved in directing the company through the processes of planning, organizing, leading, and controlling. A manager plans, organizes, directs and controls the allocation of human, material, financial, and information resources to achieve company goals.

From the above assessments, it is clear that organising is the second function in management. This essay will discuss organising and its relevance as a managerial function.

Organising Defined

Organising involves the combination of human, physical and financial resources, collectively working to aid in achieving goals.Through this process , companies are able to decide where decisions are made, who performs specific tasks, how the line of authority and chain of command are defined.

An organisational structure is designed in line with the company's goals. The organisation chart is a diagram (visual representation) that illustrates the organisational structure. It shows the reporting lines between departments and people within the company.

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An organization chart communicates the following information:

The departments within the company.

The work performed by people responsible for departments.

Reporting relationships of managers and subordinates.

Managerial levels within the company.

Principles of Organising

Managers are able to effectively execute the organising function by following the outlined principles:


Tasks are divided amongst employees on the basis of qualifications, abilities and skills. This is achieved effectively through division of work.

Functional Definition

All functions are defined to the managers and employees. This is achieved by clearly defining the duties, responsibilities, authority and relationships of people towards each other.

Span of Control

The span of control indicates the number of employees that can be handled and controlled effectively by a single manager. The number of employees to be managed can be categorised as either a wide span of control or narrow span of control.

Chain of command

The chain of command or authority flows from top to bottom. As the authority flows from top to bottom, the authority positions of managers at all levels is clarified.

Unity of Command

This implies a one subordinate, one superior relationship. Every subordinate reports to and is accountable to one manager at one time.

Organising Processes

Managers need to carry out the following steps in determining how they will execute the organising function:

Identify activities

All the activities which have to be performed are first identified. Activities include sales, record keeping, quality control, stock control and preparing financial statements.

Organise activities

The manager groups similar and related activities into units or departments. This is referred to departmentalisation.

Classify authority

The manager classifies authority and its extent to the managers. Assigning ranks in order to managerial positions is known as hierarchy. Top management is responsible for formulating policies; middle management is responsible for departments whilst lower level management is responsible for supervisors.

Co-ordinate authority and responsibility

Relationships are established among groups to facilitate the smooth interaction toward the achievement of company goals. A clear organisational structure is created and it is made known to all the employees.

Importance of Organising

An organised company is one in which the resources are rearranged and orderly placed. In today's business environment, resources are scarce and must be utilised in a manner that yields the best return. It is important for a company to achieve effectiveness and efficiency in its business operations.

Organising Principles

Specialisation and division of work aids in the efficient administration of the company. The organisation structure clearly defines the scope and depth of managerial levels.

The availability of a chain of command (authority) minimises resource wastage and avoids the overlapping of duties.

Unity of command assists in the avoidance of communication gaps, improves feedback and ensures responses are on time. It aids in the effective combination of resources which improves coordination and results in effective organisation.

The clarification of authority and responsibility assists in co- ordination. This is achieved by defining the authority levels to every manager and how to exercise that authority so that misuse does not occur. Well defined jobs and responsibilities increase the efficiency of managers and ultimately increase productivity. For example, the functions of operations and finance; the authority and responsibility in these departments are clearly defined to every person attached to that department.

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Employee Morale and Performance

Organizing people is critical in achieving company goals. People need to be orderly placed. This includes putting them in the right position where they are most efficient, effective, motivated and productive for proper placement to be effected.

Although the assignment of tasks to employees needs to be flexible, it does not mean they should always deviate from these tasks. Flexibility should only be implemented in the event of emergencies and not for routine activities. When employees are exposed to continuously changing activities over a prolonged time frame, the end result will be unrest and deviance from achievement of goals. For example a senior accountant assigned in clerical and administrative tasks shows lack of strategic management.


Organising creates co- ordination among different departments of the company. It creates clear cut relationships among positions and ensures mutual co- operation among individuals. Harmony of work is realised by managers exercising their authority over interconnected tasks across managerial levels.

Competitive Advantage

The saying that 'Time is Money and Money is Time' is a reality. The capacity to execute tasks in the fastest possible way saves money. Every transaction in business carries a cost, regardless of whether that transaction yields results or not. A well organised company improves its operations to drive a competitive edge against competitive forces within the same industry by operating better and at cost effective rates.

Financial Impact

The level at which a company is organised determines the continuity of its operations. Managers need to consider business viability and growth. A well structured company will achieve its goals and progress to higher levels. This impacts profits and attractiveness to potential investors.


In organising, managers establish a structure of relationships that dictate how members of an organization work together to achieve company goals. Organising involves grouping employees into departments, groups, and teams based on the tasks they perform. Organising establishes a decision making structure which ensures that all personnel know what they should be doing and the contribution they are expected to input in the company.

The organising of any company needs to be in line with the achievement of company goals. The structure designed during the organising function must be flexible enough to adjust in line with goal achievement.