2 MANAGEMENT FUNCTIONS
Henri Fayol, who was a managing director (CEO) of a large steel company in the early 1900s, was one of the founders of the field of management. You'll learn more about Fayol and management's other key contributors when you read about the history of management in Chapter 2. Based on his 20 years of experience as a CEO, Fayol argued that “the success of an enterprise generally depends much more on the administrative ability of its leaders than on their technical ability.”8 Although Google CEO Eric Schmidt has extensive expertise and experience in computer technology, Google succeeds because of his capabilities as a manager and not because of his ability to write computer code.
Managers need to perform five managerial functions in order to be successful, according to Fayol: planning, organizing, coordinating, commanding, and controlling.9 Most management textbooks today have updated this list by dropping the coordinating function and referring to Fayol's commanding function as “leading.” Fayol's management functions are thus known today in this updated form as planning, organizing, leading, and controlling. Studies indicate that managers who perform these management functions well are more successful, gaining promotions for themselves and profits for their companies. For example, the more time CEOs spend planning, the more profitable their companies are.10 A 25-year study at AT&T found that employees with better planning and decision-making skills were more likely to be promoted into management jobs, to be successful as managers, and to be promoted into upper levels of management.11