The Interrelationships of the Four Management Functions

The Interrelationships of the Four Management Functions

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The Interrelationships of the Four Management Functions

Over recent years companies have become less dependent on paper and more dependent on technology. Take American Honda Motors for example; the Davenport Parts facility recently converted computer systems to more efficiently manage its inventory. Prior to its new system months of preparation was needed in order to ensure a smooth change over. Without the four basic functions of management all working together success would not have been possible.

As Schermerhorn states in Management planning, organizing, leading, and controlling are the tools needed by managers to accomplish performance goals. It is crucial that managers be able to recognize and act upon problems or opportunities as they arise. Planning is perhaps the cornerstone of the four processes. All good processes were at some point given great detail so as to anticipate possible problems and solutions to those problems. When the Honda Motor Company decided it needed to refine its inventory they didn't just jump at the first idea that was proposed; they first set their objectives and discussed ways to meet those objectives. After giving careful consideration to processes and the streamlining of those processes human error rose as the top need for change. Sounds simple you might respond; in reality it is much more complicated.
Once the decisions are made organizing becomes the crucial function in order to facilitate completing any plan. In the case of Honda it was decided that a team of conversion specialists would be assembled from various centers across the US. That new team would be fully trained on how the new system is implemented and facilitate all conversion functions. Prior to any facility being converted the new team spent eight months learning, researching, and performing pre-installations. The new team assembled wasn't the only people involved in the process, each parts center was given some guidelines for preparation and tasks that needed to be accomplished.
At this stage in the process it was up to the center manager to provide leadership and facilitate all pre-installation needs. One month prior to the new system being implemented a center manager from one of the already converted centers was brought on to motivate and generate a positive atmosphere about the new changes. Since he had been through the process previously he could explain and help prevent past mistakes.
Five months prior to the scheduled conversion date inventory began its systematic routine of counting certain inventory that had potential for problems.

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That process acted as a control for the data that would be imputed into the new system.

So did the conversion go well or did it meet with problems? The conversion was a success and actually far exceeded previous center conversions. Davenport's inventory value is estimated at roughly $50 million. Of the 141,000 part numbers 57,000 were counted on the weekend before conversion. The rate of discrepancy between what they said they had and what they really counted was .00442% or $221,000. This by far exceeded the expectations of top management; early estimates projected for each parts center suggested the highest allowable discrepancy be $1 million. Each center was given the chance on a first count; after that the data would be compared. Davenports first count discrepancy ended up at $172,000; quite impressive. It was decided that a recount would still take place in order to count more of the uncounted inventory. As stated earlier the final tally was $221,000. To top it all off pre-conversion and counts and preparation were completed a full half day prior to the scheduled launch date.
The leadership provided all the necessary support to the inventory staff in order to successfully complete a timely count. Good organization and planning lead to all goals being accomplished and surpassing expectations.

In this case all four functions of the management process were needed and also successfully implemented. Leadership was dependent on the planning and organization in order to meet deadlines. Control (Inventory Control Staff) was dependent on leadership to provide the necessary resources; manpower, equipment etc. Control also depended on planning to allow time for all the necessary steps needed to take place.

As with all things that change, problems will arise that are unexpected and the Davenport center is no exception. Some details were overlooked but this is just another thing that can be improved upon on the next center conversion. These new improvements can only benefit the next center scheduled for conversion. It is always good to learn from your own mistakes.

Although this is a relatively short explanation of the process I believe you can see how the loss of one function in the process could easily have doomed if not destroyed any hope for a successful launch. The four processes were vital to the success of Davenport's launch of a new inventory system. Had it not been for the clear execution and the interdependence of the management processes


Schermerhorn, J. (2005). Management (Eighth Edition). New York: Wiley. P.19
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