Management

Copyright 2004 Prentice Hall, Inc.1BUSI

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PART 2

UNDERSTANDING THE BUSINESS OF

MANAGING


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CHAPTER 6

Managing the Business Enterprise

Copyright 2004 Prentice Hall, Inc.3 BU

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7eChapter Outline

Who Are Managers? Setting Goals and Formulating Strategy The Management Process Types of Managers Basic Management Skills Management and the Corporate Culture


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7eWho Are Managers?

All corporations depend on effective management.

The principles of management apply to all kinds of organizations.

Managers are among an organization’s most important resources.


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What Are Goals?

Objectives that a business hopes and plans to achieve


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What Is Strategy?Broad set of organizational plans for implementing the decisions made for achieving organizational goals


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7eTypes of Strategy

Corporate strategy determines the firm’s overall attitude toward growth and the way it will manage its businesses or product lines

Business (or Competitive) strategy takes place at the business-unit or product-line level and focuses on a firm’s competitive position

Functional strategy involves managers in specific areas who decide how best to achieve corporate goals through productivity


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7eHierarchy of Strategy


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7ePurposes of Goal Setting

1. Goal setting provides direction and guidance for managers at all levels.

2. Goal setting helps firms allocate resources.

3. Goal setting helps to define corporate culture.

4. Goal setting helps managers assess performance.


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What Is a Mission Statement?

Organization’s statement of how it will achieve its purpose in the environment in which it conducts its business


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7eKinds of Goals

Long-term goals are set for an extended time, typically five yearsor more

Intermediate goals are set for a period of one to five years

Short-term goals are set for the very near future, typically less than one year


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What Is Strategy Formulation?

Creation of a broad program for defining and meeting an organization’s goals


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7eStrategy Formulation


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7eSetting Strategic Goals

Strategic goals are long-term goals derived directly from a firm’s mission statement SWOT analysis is a process involving

the assessment of organizational strengths and weaknesses (the S and W) and environmental opportunities and threats (the O and T)


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7eAnalyzing the Organization and Its Environment

Environmental analysis is the process of scanning the business environment for threats and opportunities

Organizational analysis is the process of analyzing a firm’s strengths and weaknesses


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7eMatching the Organization and Its Environment

The matching process is the heart of strategy formulation.

The matching process may determine whether a firm typically takes risks or behaves more conservatively.


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7eA Hierarchy of Plans

Strategic plans reflect decisions about resource allocations, company priorities and steps needed to meet strategic goals

Tactical plans are shorter-range plans for implementing specific aspects of the company’s strategic plans

Operational plans set short-term targets for daily, weekly or monthly performance


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7eContingency Planning and Crisis Management

Contingency planning identifies aspects of a business or its environment that might entail changes in strategy

Crisis management involves an organization’s methods for dealing with emergencies


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What Is Management?Process of planning, organizing, directing and controlling an organization’s resources to achieve its goals


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7eThe Management Process

Planning determines what an organization needs to do and how best to get it done

Organizing determines how best to arrange an organization’s resources and activities into a coherent structure

Directing involves guiding and motivating employees to meet an organization’s objectives

Controlling monitors an organization’s performance to make sure that the firm is meeting its goals


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7eThe Control Process


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7eTypes of Managers

Top managers are responsible to the board of directors and stockholders for a firm’s overall performance and effectiveness

Middle managers are responsible for implementing the strategies, policies and decisions made by top managers

First-line managers are responsible for supervising the work of employees


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7eAreas of Management

Human Resource Managers Operations Managers Marketing Managers Information Managers Financial Managers Other Managers


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7eBasic Management Skills

Technical skills are needed to perform specialized tasks

Human relations skills are required in understanding and getting along with other people

Conceptual skills are abilities to think in the abstract, diagnose and analyze different situations and to see beyond the present situation

Decision-making skills include the ability to define problems and select the best course of action

Time management skills are associated with the productive use of time


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7eThe Decision-Making Process


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7eManagement Skills for the21st Century

Global management skills include the need to understand foreign markets, cultural differences and the motives and practices of foreign rivals

Management and technology skills refer to the ability to process, organize and interpret a wealth of data and information


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What Is Corporate Culture?

The shared experiences, stories, beliefs and norms that characterize an organization


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7eCommunicating the Culture

Managers must: Understand the culture. Transmit the culture to others

in the organization. Maintain the culture by rewarding and

promoting those who understand it and work toward maintaining it.


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7eManaging Change

Three-stage process: Analysis of the company’s environment

highlights extensive change as the most effective response to its problems.

Top management begins to formulate a vision of a new company.

The firm sets up new systems for appraising and compensating employees who enforce the firm’s new values.

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Management