Chapter 4.1 Admin Plan

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SMALL BUSINESS

MANAGEMENT

CHAPT



Small and Medium Enterprises (SMEs) plays an important role in

economy. The development of SMEs has received much attent

implementation of the New Economic Policy (191!199"). #t was a$ain

the Second %on$ Term Malaysia Plan (1991!&""")

DefinitionThere are several definitions of what constitutes a small 'usiness. #n M

a$encies adopt different definitions of SMEs dependin$ on their 'usi

ne commonly used definition is that provided 'y the Small and Med

evelopment *orporation (SM#E*) which defines SMEs accordin$ to tw

i.e annual sales turnover and num'er of full time wor+ers.



MEDIUM SIZED BUSINESS

“A business establishment ith an annual salesof beteen RM#$ million an% RM&' million an

em)lo*s not mo!e than #'$ full+time o!,

A((o!%in. to SMIDEC

SMA// SIZED BUSINESS

“A business establishment ith an annual salesof not mo!e than RM#$ million an% hi(h em)

mo!e than '$ full+time o!,e!s-



CHARACTERISTICS OF A SMBUSINESS

0ne!shi)

1le2ibilit*of Chan.e

Mana.ement

0!.ani3ational

St!u(tu!e

Resou!(es



OWNERSHIP

Privatelyowned by

individual orarent!"tyi#ally

re$i!tered a!

a !olerorietor!%i"

artner!%ior rivate

l&ited 'Sdn(

B%d()



MANAGEMEN T

T%e bu!ine!! i!

&ana$ed andoerated by t%eowner'!)( T%e

entrereneur o**ounder o* t%ebu!ine!! lead!t%e #o&any"

and a#t! a! bot%&ana$er andwor+er( T%e

develo&ent o*t%e bu!ine!! i!deter&ined by

t%e owner(,e#i!ion &a+in$i! &o!tly done by



RESOURCES

A !&all bu!ine!!o*ten %a! li&itedre!our#e!( T%i! i!

e!e#ially true*or new !tart-u!

due to la#+ o*tra#+ re#ord in

t%e bu!ine!! to#onvin#eotential

inve!tor! andban+er!( T%u!" it

i! %i$%lydeendent on

t%e ability o* t%eowner to



OrganizationalStructure

For a !&allbu!ine!!" t%e

!tru#ture i! o*ten.at and in*or&al(T%e owner %a! to

do al&o!teveryt%in$ and

t%e wor+er! arenor&ally

e/e#ted to beable to *un#tiona! $enerali!t!

!in#e t%ere i! no#lear

de&ar#ation o*ta!+!



Flexibilit o!C"angeT%e bu!ine!! %a! &ore.e/ibility to adat to

#%an$e! in t%e environ&entdue to it! !i0e and in*or&al

!tru#ture(It i! al!o vulnerable to develo&ent in

t%e bu!ine!! environ&ent( For in!tan#e"any #%an$e! in te#%nolo$y or

$overn&ent oli#y &i$%t %ave a $reati&a#t on t%e bu!ine!! be#au!e

i&&ediate #%an$e! nor&ally re1uireadditional #aital or re!our#e!( T%i!

&i$%t be#o&e a #on!traint to t%ebu!ine!! to #o&ete and !u!tain it!el* in

t%e &ar+et



MANA2EMENT

FUNCTIONS

PLANNIN2 OR2ANISN2

LEA,IN2CONTROLLI

N2



Mana.ement 1un(tion

#4P/ANNIN5

• Planning i# t"e $o#t i$%ortant $anage$ent !ua $anager&

• Planning co'er# t"e acti'it o! !or$ulating co$

%olic an) %roce)ure to en#ure t"e attain$ent bu#ine## $i##ion an) ob*ecti'e# t"roug" t"e $oe+ecti'e an) e,cient $ean#&



Bu!ine!! 3i!ion" Mi!!ion" 2Ob5e#tive!

Bu!ine!! 3i!ionIt i# o!ten #tate) in ter$# o! a 'alue #taannouncing -"ere t"e bu#ine## -ant# -"at it a#%ire# to be&

Ex.“To be a reputable halal food producer in the r

serve the needs of the global Muslim communi




Bu!ine!! Mi!!ion

A $i##ion i# a #tate$ent o! %ur%o#e or t%e r*or e/i!ten#e& It e#tabli#"e# t"e i)entit o! bu#ine## an) -"at it )oe#& It )e/ne# long0teo! t"e co$%an but in a #%eci/e) ti$e !ra$

Ex.“to be a market leader in the production and di

of halal food products in Malaysia within five y

in Asia within the next 10 years”




Bu!ine!! 2oal!6Ob5e#tive!

1u#ine## goal# or ob*ecti'e# #u%%ort t"e ac"ie'e$ebu#ine## $i##ion an) 'i#ion& T"e are $ore #%eci/c#"orter ter$ an) "a'e a )e/nite ti$e !ra$e& A gooob*ecti'e #"oul) be #%eci/c2 $ea#ureable2 ac"ie'aan) "a'e a ti$e !ra$e&Ex.

“to establish and operate an international standard pr facility for halal food products in Malaysia”

“to produce 10 types of in!house products within the f

operation and identify five vendors to support product

capacity”



Mana.ement 1un(tion

&4 0R5ANISIN5

• The word or$anise means ,to properly arran$e-.• r$anisin$ refers to the activities of desi$nin$ an

or$anisational structure drivin$ and assi$nin$ /o's an

amon$ departments sections or units 'esides the

infrastructure and operation methods.



Mana.ement 1un(tion

64 /EADIN5

• %eadin$ refers to the act of $ettin$ the /o' done thro

people.• 0usiness owner would have other people to assist him

mana$in$ his 'usiness effectively.• Supervises a $roup of wor+ers to do what needs to 'e

order to achieve his 'usiness o'/ectives.• s leader or mana$er they are responsi'le for2 Ensurin$ that the /o' is carried out effectively an

efficiently Motivate the wor+ers to perform their tas+s.



Mana.ement 1un(tion

64 /EADIN5

• %eadin$ involves2

a. ssi$nin$ of /o's and responsi'ilities

'. Motivatin$ employees

c. Providin$ and receivin$ feed'ac+

• mana$er needs to develop interpersonal and $ood

communication s+ills to ena'le him to lead and moti

wor+ers.



Mana.ement 1un(tion

74 C0NTR0//IN5

• *ontrollin$ is a monitorin$ function to ensure that ac

carried out are on trac+ in achievin$ the $oals set ou

'usiness.



0R5ANISATI0PRINCIP/ES

STRUCT

8hat is an 0!.an



8hat is an 0!.anisation

An or$ani!ation #an be de7ned a! a !o#w%i#% #o&ri!e! eole er*or&in$ di8

ta!+! in a #oordinated &anner in orda#%ieve or$ani!ational $oal!(



Or$ani!ational Prin#iOrganisational principles can be used as a tool fo

business to organise inputs such capital, manpowtechnology and raw materials.

Organisational principles consist of:

1. Division of Work

2. Authority and Responsibility3. Unity of Command

4. pan of Control

!. Dele"ation of Authority and Responsibility



#4 Di"ision of 8o!,

• Activities or jobs that need to be done in any organisation must first be ident• These activities or jobs then have to be assigned to workers.

• Jobs assigned to a worker must commensurate with his capability and skills• All activities must lead to achieving organisational goals.

&4 Autho!it* an% Res)onsibilit*

• Managers who have been given a responsibility must have the authority to do

assigned to them.• Authority is the power given to enable managers to delegate and take action

subordinates.• Ecessive authority without proper responsibility will lead to abuse of power.



64 Unit* of Comman%

• !nity of command means a worker should receive direction only from one m• A subordinate should report to one superior

74 S)an of Cont!ol

• "ne of the important aspects of ensuring effective management in an organis

to be able to organise and control subordinate.• Managers should supervise a certain manageable number of subordinates.• #pan of control refers to the number or workers under the supervision of a m• An effective span of control depends on several factors such as worker$

competencies% nature of the job or work plan that needs to be eecuted.



'4 Dele.ation of Autho!it* an% Res)on

• &elegation of authority and responsibility refers to job and responsibility assig

subordinates.



PERS0NNE/ P/AN



Job

Description

JobSpecification

Job Analysis

PERSONNEL

PLANNING



Job Analysis• A systematic process to identify tasks and determine skills and knowledge re

perform a job.• Each job is thoroughly analysed to identify all the tasks involved.

• Job analysis can be done based on the manager$s previous eperience in pethe job.• Job analysis helps to determine the scope of a position identified.

Job Description• A written statement outlining a given job.• (t states the functions% duties and responsibilities of the person appointed to • (t also outlines specific tasks involved% states guideline on how to do it% speci

machinery and supplies needed and describes a suitable environment to do



Job Specification• Jobs are created as a result of job description.• Each job is detailed in the form of a job description and needs to be filled by

personnel.

• A job specification states the minimum 'ualifications re'uired of a candidate for a position.• (t may be specified in terms of education level% work eperience% skills% perso

physical capability and other necessary criteria related to the job.

Job Description• A written statement outlining a given job.

• (t states the functions% duties and responsibilities of the person appointed to • (t also outlines specific tasks involved% states guideline on how to do it% speci

machinery and supplies needed and describes a suitable environment to do



RETAININ5 EMP/0o!pensation" Salary" #a$es" Sales o!!

SOSO" Allo&ances" %rin$



o!pensation

E!ployees nee( to be

co!pensate( for t)eir &or* an(

contrib+tions' A so+n( an( fair

co!pensation sc)e!e )elps to

retain e!ployees in t)e co!pany'

o!pensation refers to t)e

!onetary re&ar( in ,ario+s for!s

of pay' A!on$ t)e !ain

cate$ories of cas) co!pensation

are salary" &a$es" sales

co!!ission" allo&ances" bon+s"

EP% an( SOSO contrib+tions'

Salary

Salary is a fi-e( !oneta

to &or*ers on perio(ica

pai( on a &ee*ly" bi&ee

basis as re.+ire(' /o&e

practise to pay salarie(

!ont)ly basis' Salarie(

e-pecte( to &or* a cert

n+!ber of )o+rs per (a

(ays per !ont)' Salarie

not s+b0ecte( to a loss

case of allo&e( absenc

illness'



#a$es

#a$es are pai( to part1ti!e orte!porary &or*ers base( on

o+tp+t of 0ob perfor!e(' Often t)ey

(o not en0oy e.+al e!ploy!ent

benefits as salarie( &or*ers'

#a$es can be (aily" &ee*ly"

bi&ee*ly or !ont)ly as a$ree( by

bot) parties' T)e rate of &a$es is(eter!ine( by t)e o+tp+t'

So!eti!es t)ey are pai( by t)e

)o+r' /o+rly &a$es are co!!only

associate( &it) bl+e1collar 0obs'

Sales

o!!issio

Pai( base( on a percensales $enerate(' T)is f

co!pensation is *no&

co!!ission' %or instan

sales!an !i$)t recei,

basic salary b+t )is sal

co!!ission can be ,er

)e perfor!s &ell'



%rin$e

Benefits

%rin$e benefit can be eit)er !onetary or non1!onetary' Monetarybenefits are +s+ally referre( to as bon+s' Bon+s is often a s)are(

ac)ie,e!ent re&ar( an( +s+ally pai( base( on perfor!ance' It is

an a((itional re&ar( for e!ployees for t)eir contrib+tion to&ar(s

ac)ie,in$ or e-cee(in$ set tar$ets' Bon+s can be re$ar(e( as an

in(ication of $oo( perfor!ance of t)e co!pany as a &)ole'

Non1!onetary benefits s+c) as !e(ical co,era$e" pai( recreationcl+b !e!bers)ip" pai( )oli(ays an( sport cl+b !e!bers)ip are

so!eti!es offere( to .+alifie( e!ployees as a((itional incenti,e

to retain t)e! in t)e co!pany'



ontrib+tion E!ployees Pro,i(ent



• EP% is !an(atory for all re$istere( e!ployers in Malaysia'• Responsibility of t)e e!ployer to re$ister its e!ployees if t)e

not yet contrib+tors to EP%'• T)e stat+tory rate of !ont)ly contrib+tion for e!ployees is 44

t)e basic salary'

• T)e e!ployer6s portion of t)e !ont)ly contrib+tion is 475

EMPLO9EE ACCOUNT

445

(e(+cte(

fro!

e!ployee6s

salary

475

e!ployer

contrib+te t

e!ployee

acco+nt

!ont)ly



E,ery re$istere( an( incorporate( b+siness entity !+st infor! t

boar(" &)ic) acts as t)e tr+stee for EP% !e!bers not later t)an

after bein$ incorporate(' Any e!ployer &)o (oes not confir! to

allot!ent +n(er t)e Act s+bsection 243 is liable for i!prison!en

to 283 T/REE years or a fine +p to RM49"999 or bot)'



Social Sec+rity Or$anis

2SO



• #")#" responsible for the implementation% administration and enfor

the *orkers #ocial #afety Act +,-, and *orkers #ocial #afety egul

+,/+.• #")#" offers two (nsurance #chemes

E!In0+r

In,ali(ity

PensionSc)e!e

Documents

Chapter 4.1 Admin Plan