CHAPTER 5

Managing the Business Enterprise

Reference: Ebert & Griffin (2007). "Business Essentials" Pearson, Prentice Hall 1

Setting Goals and Formulating (

غيصي

) Strategy

Goal ( فده ) Objective that a business hopes and plans to achieve. Goals are performance targets ( by which organizations and their managers measure success or failure at every level. ءادلأا فادهأ )—the means Strategy ( ةيجيتارتسإ ) Broad (large) program underlying decision making process ( رارقلا عنص ةيلمع achieving company goals )to assist managers in

Reference: Ebert & Griffin (2007). "Business Essentials" Pearson, Prentice Hall 2

Purposes of setting Goals (1)

We have four main purposes in organizational goal setting:

1. Goal setting provides direction and guidance ( داشرإ

) for managers at all levels.

(example: increasing sales by 2% will clearly inform everyone to find new customers or improve current customers sales.)

2. Goals setting helps firms allocate resources( صصخي

sales potential (

( ) ةورث

). (example: the company allocates more resources to new projects with large ةلمتحملا weak sales potential.) ), and less resources for Reference: Ebert & Griffin (2007). "Business Essentials" Pearson, Prentice Hall 3

Purposes of setting Goals (2)

3. Goal setting helps to define corporate culture ( فيقثت ).

example: GE goal is to push each of its divisions (electrical goods, financial services, aircraft unit…etc) to become the 1 st culture) in that organization.

or 2 nd in its industry. this results in a competitive and stressful environment (corporate

4.Goal setting helps managers assess performance ( ةبيرض رادقم ددحي ).

(if a unit sets a goal of increasing sales by 10% in a given year, managers in that unit who achieve this goal can be rewarded.) Reference: Ebert & Griffin (2007). "Business Essentials" Pearson, Prentice Hall 4

Kinds of Goals

Goals differ from company to company, depending on the firm’s purpose and mission. Every enterprise has a purpose, or a reason for being. • Businesses seek profits, • universities seek to discover and transmit new knowledge, and • government agencies seek to set and enforce public policy (law)

Mission Statement

Organization’s statement of how it will achieve its purpose in the environment in which it conducts its business. Reference: Ebert & Griffin (2007). "Business Essentials" Pearson, Prentice Hall 5

Kinds of Goals

Regardless of a company’s purpose and mission, every firm has:

Long-term Goals

Goals set for an extended time, typically 5 years or more into the future

Intermediate Goals

Goals set for a period of 1 to 5 years into the future

Short-term Goals

Goals set for the very near future, typically less than 1 year Reference: Ebert & Griffin (2007). "Business Essentials" Pearson, Prentice Hall 6

• • • •

Contingency planning and crisis management (1).

Business environments are often difficult to predict

( أبنتي ).

Most managers recognize that even best plans sometimes simply do not work.

Therefore managers develop alternative (

ليدبلا )

plans in case things go wrong.

Two common methods of dealing with the unknown ( فورعم ريغ ) and unforeseen are: contingency planning and crisis management. Reference: Ebert & Griffin (2007). "Business Essentials" Pearson, Prentice Hall 7

Contingency planning and crisis management (2).

1. Contingency planning

) ئراوطلا تلااحل طيطختلا ( : Identifying aspects of a business or its environment that might entail (involve) changes in strategy.

2. Crisis Management

) ثراوكلا ةرادأ ( : Organization’s methods for dealing with emergencies.

( Example: www.filterfresh.com

, September 11 th , one extra hour because of increased security, employed 24 new people . ) • Crises is an unexpected emergency requiring immediate response.

Reference: Ebert & Griffin (2007). "Business Essentials" Pearson, Prentice Hall 8

The Management Process

Management is the process of planning, organizing, directing, and controlling an organization’s financial, physical, human, and information resources to achieve its goals.

•

Planning (

ةطخ مسري

) what an organization needs to do and how to get it done

•

Organizing

( سسؤي ) how best to arrange an organization’s resources and activities into a coherent ( ً ايقطنم طبارتم ) structure

•

Directing (

هجوي

) guiding and motivating ( to meet an organization’s objectives ثحي )employees

•

Controlling (

طبضي

)

monitoring an organization’s performance to ensure that it is meeting its goals

Essentials" Pearson, Prentice Hall 9

Types of Managers

Top Managers Managers responsible ( stockholders for a firm’s overall performance and effectiveness. لوؤسم ) to the board of directors and (e.g. president, CEO, CFO) they set general policies, formulate strategies, approve the important decisions, and represent the company in dealing with other businesses or government bodies. Middle Managers Managers responsible for implementing the strategies, policies, and decisions made by top managers . (Plant manager, operations manager, division manager). If top manager decide to cut the cost by a 5%, the middle manager must decide how to do meet this goal.

First-line Managers Managers responsible for supervising the work of employees . (such as Supervisor, office managers, group leader).

Essentials" Pearson, Prentice Hall 10

Levels of Management

Top manager Middle Manager First-Line Manager

Reference: Ebert & Griffin (2007). "Business Essentials" Pearson, Prentice Hall 11

  

Areas of Management (1)

Human resource managers ( هيرشبلا دراوملا ءاردم

): hire and train employees, evaluate performance, and determine compensation (salaries and wages).

Operations managers ( تايلمعلا يريدم )

: responsible for production, inventory, and quality control ( ، نوزخملا ، جاتنلاا هدوجلا ةبقارمو ). Manufacturing companies usually needs operation managers such as Ford.

Marketing managers ( قيوستلا ءاردم

distribution for the products .

)

: responsible for getting products from producers to consumers, they are responsible for developing pricing, promotions, and Reference: Ebert & Griffin (2007). "Business Essentials" Pearson, Prentice Hall 12

  

Areas of Management (2)

Information Managers ( manage it.

تامولعملا يريدم ): they design and implement systems to gather, organize, and distribute information. this is due to the increase in the volume of information and the ability to Financial Managers ( resources.

نييلاملا نيريدملا ): almost every company has a financial manager to plan and oversee its accounting functions and financial Other Specialized Managers: some companies need specialized managers, like public relation managers, research and development managers..

Reference: Ebert & Griffin (2007). "Business Essentials" Pearson, Prentice Hall 13

 

Basic Management Skills (1)

Technical Skills: ) هينقتلا فرحلا ( skills needed to perform specialized tasks. (example: a programmer’s ability to program. people develop these skills through experience and education, these skills are important for first line managers since they need to help the employees.) Human Relations Skills: skills in understanding and getting along ) فلآتلا )with people.( mostly important for middle level managers, these are the communications skills, and the ability to understand employees and make them understand you. managers must care about the welfare of his employee.) Reference: Ebert & Griffin (2007). "Business Essentials" Pearson, Prentice Hall 14

Basic Management Skills (2)

 Conceptual Skills: ) هينهذلا فرحلا ( abilities to think in abstract ( ةدرجم ), diagnose and analyze ( ليلحتو صيخشت ) different situation, and see beyond the present situation . (these skills are needed in almost any job-related activity, and are more required as the level of management increase, it is the managers ability to analyze the probable outcome of their decisions. The ability to foresee the future prospect of a business aspect.) Reference: Ebert & Griffin (2007). "Business Essentials" Pearson, Prentice Hall 15



Basic Management Skills (3)

Time Management Skills: skills associated with the productive use of time.

(manager’s time is valuable, and poor use of it translates into cost and wasted productivity. Some manager get paid high salaries, wasting their time means wasting the stockholders money.

The four leading causes of wasted time:

1. Paperwork: mangers must organize their documents.

2. Telephone: managers get interrupted by phone calls, an assistant must screen these calls to priorities.

3. Meetings: meetings must have agenda, start on time, and keep everyone focused on the agenda, and end on time.

4. E-Mail: Managers depend on emails, it need sorting according to its importance too.

Reference: Ebert & Griffin (2007). "Business Essentials" Pearson, Prentice Hall 16

5.4: Basic Management Skills (4)

•

Decision-Making Skills (

رارقلا عنص تاراهم

): are the skills in defining problems and selecting the best courses of action.

Decision-Making Skills steps 1. Define the problem( ةلكشملا ديدحت

), gather the facts, and identify alternative solutions.

2. Evaluate each alternative( ليدب لك مييقت

) and select the best one.

3. Implement the chosen alternative( ليدبلا ذيفنت راتخملا

), periodically following up and evaluating the effectiveness of that choice.

Essentials" Pearson, Prentice Hall 17

Porsche decision making steps

1. Porsche define their problem, they are losing their market share. they developed alternatives: selling their business to larger company of their choice, or growing their business larger to ensure independency 2. They evaluate the alternative, and preferred the option of grow instead.

3. Implementing the chosen decision was to introduce new product (SUV/4WD) into this high growth market. Reference: Ebert & Griffin (2007). "Business Essentials" Pearson, Prentice Hall 18