Business Management
Senior 4 · Entrepreneurship
Business Management
Lesson 2 of 5
25 min
Mutesi runs a catering business in Kigali. On Monday a family books her to serve lunch to 600 wedding guests on Saturday, at Frw 3,500 a guest. In five days she must work out how much rice, beef and vegetables to buy and what it will cost; split her staff into cooks, servers and drivers; hire extra servers; brief everyone on the menu and the timing; make sure the food leaves the kitchen exactly when the hall is ready; and, afterwards, check what she actually spent against what she planned. (Mutesi and her figures are illustrative.)
Think about it: list everything Mutesi has to do this week. Can you sort the jobs into a few groups that every manager, in every kind of business, would recognise?
Henri Fayol sorted a manager's work into five functions in Administration industrielle et générale (1916): planning (he called it prévoyance, looking ahead), organising, commanding, coordinating and controlling. Later writers renamed "commanding" as directing or leading, and added staffing (finding, training and keeping people), as in Luther Gulick's 1937 list known as POSDCORB. Today's textbooks often use four: planning, organising, leading and controlling. The ideas are the same; only the labels differ.
Definition
Planning: deciding in advance what to achieve (objectives) and how, when, by whom and with what resources it will be done. Its outputs include objectives, budgets, schedules and procedures.
Example: Mutesi's shopping list, budget and timetable for Saturday.
Definition
Organising: dividing the work into tasks, grouping the tasks into jobs and teams, giving each person authority and responsibility, and arranging the resources they need.
Example: a cooking team of six led by the head cook, a serving team of eight, and one driver with the van.
Definition
Staffing: filling the jobs created by organising: recruiting, selecting, training, paying and keeping people. Directing (leading or commanding): guiding and motivating people through instructions, communication, example and leadership so that they do the work well.
Definition
Coordinating: harmonising the work of different people and departments so that their efforts fit together in time and in direction. Controlling: checking that results match the plan, in four steps: set standards, measure actual performance, compare the two, and take corrective action.
| Function | Key question | Mutesi's week |
|---|---|---|
| Planning | What must be done, by when, at what cost? | Menu, quantities per guest, budget, timetable |
| Organising | Who does what, with which resources? | Cooking team, serving team, driver; who is in charge of each |
| Staffing | Do we have the right people? | Hires four extra servers for the day and shows them the routine |
| Directing | Do people know what to do, and want to do it well? | Briefs the staff on Friday; promises a bonus if there are no complaints |
| Coordinating | Do the parts fit in time? | Phones the hall so that the van leaves the kitchen exactly 40 minutes before serving |
| Controlling | Did results match the plan? If not, why? | Counts portions; compares actual costs with the budget; changes next quote |
Directing in practice. In 1939 Kurt Lewin and colleagues described three leadership styles: autocratic (the leader decides alone), democratic (the leader involves the team) and laissez-faire (the team decides with little guidance). A good manager matches the style to the situation: autocratic in an emergency in the kitchen, democratic when planning next month's menu with experienced cooks.
Tip
Control closes the loop. Controlling is useless without a plan to compare against, and planning improves only if control feeds back into the next plan. In exam answers, link the two: "the variance found by control shows the next plan must allow for higher beef prices".
Worked example 1: planning the quantities and the budget
Mutesi plans 0.15 kg of rice and 0.2 kg of beef per guest. Rice costs Frw 1,400 per kg and beef Frw 6,000 per kg; vegetables, oil and spices cost Frw 400 per guest. She will pay 12 staff Frw 15,000 each, and transport and gas cost Frw 120,000. She adds 10% for contingencies. Find the budget, the cost per guest and the planned profit.
Interpretation: the plan tells Mutesi what to buy, what to spend and the most she can lose to surprises (the Frw 138,600 contingency) while still making a profit.
Worked example 2: controlling with a variance table
After the wedding Mutesi compares the actual costs with the budget. A variance is ; for a cost, a positive variance is adverse (A) and a negative one favourable (F).
| Item | Budget (Frw) | Actual (Frw) | Variance (Frw) | |
|---|---|---|---|---|
| Rice (95 kg bought) | 126,000 | 133,000 | +7,000 | A |
| Beef (price rose to Frw 6,650 per kg) | 720,000 | 798,000 | +78,000 | A |
| Vegetables, oil, spices | 240,000 | 228,000 | −12,000 | F |
| Staff (one extra server) | 180,000 | 195,000 | +15,000 | A |
| Transport and gas | 120,000 | 120,000 | 0 | |
| Total | 1,386,000 | 1,474,000 | +88,000 | A |
The overspend (Frw 88,000) stayed inside the contingency (Frw 138,600), so the actual profit was Frw. Corrective action: beef caused almost 90% of the overspend, so before the next event Mutesi agrees a fixed price with her butcher and updates her quotes. That is controlling feeding back into planning.
Warning
Common mistakes. Controlling is not the same as punishing: its purpose is to find the cause of a gap and fix it. Coordinating is not a separate stage that happens once; it runs through every function. And an adverse cost variance is not always the manager's fault (beef prices rose in the market), but the plan must still respond to it.
The Business Professor, "Fayol's 5 Management Functions" (about 3.5 minutes). As you watch, write one example of each function from Mutesi's week, and note which function the video calls "commanding".
Practice
Key points
Sources and credits
Written by Ganzaa: the Kigali catering case, the cycle diagram, the tables, the worked examples and the practice items. People, businesses and figures are illustrative (2026).
Quick check
Put the four steps of the control process in order.
Tap the cards in the right order.
