BAEB510 Chapter 6: Manage a Small Business

BAEB501 : ENTREPRENEURSHIPCHAPTER 6:Management a Small Business

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Chapter 6: Management a Small Business

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Topic Outlines

6.1 Introduction6.2 Definition6.3 Characteristics of a Small Business6.4 Management Functions6.5 Business Input6.6 Business Vision, Mission, Goals & Objective6.7 Planning6.8 Organizing 6.9 Leading6.10 Controlling6.11 Organization6.12 Organizational Principles6.13 Organizational Structure6.14 Personnel Planning6.15 Recruitment Process6.16 Retaining Employees

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Learning Outcomes

After completing this chapter, student should be able to: Explain the elements to manage a small business Understand the elements in managing a small business. Manage your own business.

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6.1 Introduction

Topics

The importance of small and medium-sized businesses in helping the economic development of our nation cannot be refuted.

Creating a job opportunities

SMEs play a crucial role in contributing to the prosperity of big and multinational corporations.

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6.2 Definition

Topics

A small sized business is:

“A business establishment with an annual sales turnover of not more than RM10 million and which employs not more than 50 full time workers”.

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6.3 Characteristics of a Small Business

Topics

Ownership – Privately owned by individual or partners, typically registered as a sole proprietorship, partnership or private limited company.

Management – The business is managed ad operated by the owner (s).

Resources - A small business often has limited resources.

Organizational Structure – For a small business, the structure is often flat and informal.

Flexibility of Change – more flexibility to adapt to changes, vulnerable to development in the business environment.

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6.4 Management Functions

Topics

Management functions refer to the activities of planning , organizing, leading and controlling of business input.

What is business input? Business input refers to

the resources required to operate a business activity. These include capital, manpower, technology, and raw materials.

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6.5 Business Input

Topics

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6.6 Business Vision, Mission, Goals & Objective

Topics

Business Vision. The vision is the long term goal of the business. It is often stated in terms of a value statement announcing where the business wants to go or what it aspires to be.

Business Mission. A mission is a statement of purpose or the reason for existence. It establishes the identity of the business and what it does. It defines long-term goals of the company but in a specified time frame.

Business Goals/Objectives. Business goals or objectives support the achievement of a business mission and vision. They are more specific, stated in a shorter term and have a definite time frame. A good business objective should be specific, measurable, achievable, realistic and have a time frame.

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6.7 Planning

Topics

Planning covers the activity of formulating company’s policy and procedure to ensure the attainment of business mission and objectives through the most effective and efficient means.

To determine his business mission and objectives and device a workable strategy to

achieve them.

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6.8 Organizing

Topics

The word organize means “to properly arrange”.

Refers to the activities of designing and organizational structure, dividing and assigning jobs and tasks among departments, sections, or units besides handling the infrastructure and operation methods.

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6.9 Leading

Topics

The act of getting the job done through other people is referred to in managerial functions as leading.

Leading involves: Assigning of jobs and

responsibilities Motivating employees Providing and receiving

feedback

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6.10 Controlling

Topics

Controlling is monitoring function to ensure that activities carried out are on the right track in achieving the goals set out by the business.

Should not be viewed as restricting personnel activities, initiative or creativity.

Ongoing function that should not be put off towards the end of the project.

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6.11 Organization

Topics

What is organization? An organization is a social unit which comprises people

performing different tasks in a coordinated manner in order to achieve organizational goals.

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6.12 Organizational Principles

Topics

Organizational principles consists of the following:

Division of Work

Authority and Responsibility

Unity of Command

Span of Control

Delegation of Authority and Responsibility

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6.13 Organizational Structure

Topics

An organizational structure is essential so that every individual in an organization can be assigned a specific task and responsibility.

Most effective and commonly used organizational structure in a small

business is the line structure.

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Topics

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Topics

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6.14 Personnel Planning

Topics

There are 3 basics things prepared by a manager:

Job Analysis A systematic process to

identify tasks and determine skills and knowledge required to perform a job.

Job Description A written statement outlining

a given job

Job Specification Detailed in the form of job

description

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6.15 Recruitment Process

Topics

There are 3 tasks involve in selection process:

Job Application Form

Job Interview

Selection Tests

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6.16 Retaining Employees

Topics

How to retain your employees?

There are several ways to retain your employees: Compensation Salary Wages Sales Commission Contribution to the Employees

Provident Fund (EPF) Contribution to the Social

Security Organization (SOCSO) Allowances