Transcript Slide 1

BUSİNESS
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Chapter 5:Management Functions and
Decision Making
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What Is Management
Every organization requires effective management
to succeed. Management is the process of
achieving the organization’s aims through the
activities of planning, organizing, staffing, directing,
and controlling. In short, management involves
getting things done through other people.
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The Management Pyramid
The management pyramid illustrates the levels of
management in an organization (upper, middle, and
lower) and reflects the fact that there are fewer
managers at each successively higher level in an
organization. In most firms, the distrubition of uppermiddle-lower level is shaped much like a pyramid.
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Top
Middle
Lower
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Different levels of managers have much in common.
They all get involved in planning for others,
organizing the work of others, recruiting, motivating,
and controlling. But there are some important
differences. First, executives and middle managers
both have managers as subordinates. First line
management (supervisors) have workers as
subordinates. Managers who are higher in the
organization spend more time planning, organizing,
and staffing. Lower-level managers spend more
time directing and controlling the work.
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Top management: The top managers of an
organization are responsible for setting the
company’s overall direction. Their challenge is to
filter information from the environment, determine
how it affects the company, and use it to plot a
strategy designed for success. Top managers spend
more time than lower-level managers developing
plans for the business. To make these plans,top
management needs information about the
environment (competitors, the economy, suppliers,
customers, stockholders and other stakeholders in
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the company).
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Middle Managers: The term middle management
covers a wide range of managerial jobs. These fall
roughly between the vice-presidents on the top
management level and supervisors on the bottom
level of the management pyramid. Production
managers, sales managers, purchasing managers,
personnel managers, marketing research managers,
advertising managers are just some of the titles of
people in middle management.
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First-Line Supervisors: First-line supervisors
manage nonmanagerial, often hourly employees;
they are on the firing line every day.
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Basic Managerial Skills
In every occupation, certain skills are needed for
success. A surgeon must be decisive and have the
technical skills to perform intricate operations. It
should come as no suprise that managers also need
certain skills. The basic managerial skills are:
Technical skills
Human skills
Conceptual skills
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Technical Skills: Technical skills involve a
manager’s ability to understand and use techniques,
methods, equipment and procedurs how things
operate. These skills are most important at the lower
management level. As a manager moves up the
management hierarchy, technical skills become less
important than conceptual and interpersonal skills.
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Human Skills: Managers get their work done
through other people. Therefore, the ability to
influence, supervise, lead and control people at all
levels is a skill managers must have.
Human skills include communication, motivation,
and leadership. They are perhaps the most
important managerial skills at any level in the
organization.
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Conceptual Skills: A manager with conceptual
skills can see the organization as a whole- as a
complex of parts that interact with and depend on
each other. The manager also sees how the
organization relates to its environment, including
customers and competitors.
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The Management Process
The management process consists of the basic
functions of planning, organizing, staffing, directing
and controlling.
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Planning: Planning is the process of setting goals
and deciding on the methods of achieving them. It is
the first management function, because all of the
other functions are useless without the solid
foundation of a plan. There are four main step:
Step 1: Develop forecasts and basic planning
assumptions:
Step 2: Define specific objects
Step 3: Develop alternative courses of action
Step 4: Decide on a course of action
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Planning is important because it provides direction
and a sense of unity for a firm. It helps to ensure
that the firm’s efforts are all aimed at achieving the
same objective, rather than being haphazard and
uncoordinated.
Most managers distinguish between strategic
planning and operational (tactical) planning.
Strategic planning is the process of developing a
broad plan for how a business is going to compete
in its industry , what its goals should be and what
policies will be needed to achieve these goals.
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Operational Planning is the process of formulating
short-term plans for implementing the firm’s overall
strategic plan.
Different levels of managers usually emphasize
different types of planning. Top level managers
devote most of their planning time to strategic
planning. Lower-level managers are devoted to
operational or tactical planning. Middle-level
managers devote some planning time to both
strategic and operational planning.
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Setting goals and objectives: Setting goals and
objectives is the heart of the planning process- a
manager first has to identify what he or she wants to
achieve before courses of action can be formulated.
An objective is a specific achievement to be attained
at some future date. A well-written objective should
be SMART:
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Specific: enough detail to be meaningful.
Measurable: quantifable and capbale of being
judged against a standard.
Assignable: delegated to an individual or a group
charged with performance.
Realistic: high enough to require hard work, but not
so high as to discourage performance.
Timely: attached to a schedule for successful
completion.
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For example “ achieving a 40 percent share of the
fast food market in London by 1992” might be an
objective for Burger King Corparation.
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Management by objectives (MBO) is a technique in
which a superior and subordinates jointly set the
subordinates’ goals and objectives and periodically
assess progress toward these goals. The use of
MBO is based on the assumption that when
employess participate in setting their own goals,
they are more apt to be committed to accomplishing
them.
The MBO process:
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1.
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Manager established her own objectives in writing.
First meeting with employee (the manager explains
her objectives, describe MBO process).
Employee established objectives (the manager
plays the role of coach when necessary).
Second meeting with employee (the manager and
the employee discuss and jointly agree on what the
employee will do for a specific time period).
Employee implements action plan (the employee
attacks the jobs to be done).
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6.
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Periodic progres updates (the manager periodically
measures the employee’s progress toward his
objectives, offering help and support when
neccessary)
Target date (on the target date for achieving the
employee’s objectives, the manager and the
employee assess his performance)
Feedback and recognizition ( the manager must
give the employee feedback concerning his
performance)
Set new objectives and repeat the process
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Organizing: Organizing is the process of arranging
the resources of the firm in such a way that its
activities systematically contribute to the firm’s
goals. The purposes of organizing are to give each
person a distinct task and to ensure that these tasks
are coordinated in such a way that the firm
accomplishes its goals.
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Staffing: Staffing is the process of recruiting,
selecting, training, appraising, and developing
employees. It is a crucial management function.
Human resource determines success or failure.
Directing: Directing is the process of motivating and
leading employees to ensure that the firm
accomplishes its objectives.
Controlling: Controlling is the task of ensuring that
activities are producing the planned results. It is
opposite side of the planning coin.
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Decision Making
It is true that the basic functions of management
are planning , organizing, staffing, directing, and
controlling. But each function involves decisions.
There are two basic types of decisions: routine
decisions and nonroutine decisions
A routine decision is a decision that must be faced
over and over.
A nonroutine decision is one that is nonrecurring
and so cannot be completely planned for in
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advance.
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The decision making process is the seven basic
steps that one goes through to make a decision:
Recognizing a problem or opportunity
Gathering information
Developing alternatives
Analyzing alternatives
Choosing the best alternative
Implementing the decision
Evaluating the decision
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First, a business opportunity must be recognized
before it can be explored. Similarly, a problem must
be recognized before it can be attacked. Here it is
important to define the problem clearly and decide
whether or not anything will be done about it.
After recognizing the problem or opportunity, the
decision maker’s next step is to gather information.
This might involve talks with company personnel
and outsiders who might provide greater insight.
Company records and secondary sources of
information such as libraries also might be used.
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Next the decision maker begins to look for
alternative courses of action. The help of others
might be sought in brainstorming sessions. In such
sessions, people are encouraged to suggest
alternatives freely as they come to mind.
After making a list of alternatives, the decision
maker begins to analyze them critically. Alternatives
that are not likely to pay off are eliminated.
Once the decision has been made, the manager
must make sure that the decision is implemented.
Finally, as the decision is being implemented, the
decision maker will want to evaluate the results of
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the decision.
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Managing the Future
The future holds an incredible amount of change: the
increasing globalization of business; world markets
growing and shrinking with phenomenal speed;
international competitors appearing and disappearing
almost overngiht; increasing pressure to meet
quality,design and service standards; speed and
agility as absolute requirements to compete; greater
difficulty in recruiting employees; greater importance
on managing information; and many other changes
yet to appear.
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In the future managers must encourage change and
willingness to take risks. They must develop
organizations build on speed and flexibility. They
must create strategies for capturing and using vital
information to gain competitive edge in reaching the
market.
Management styles will be dramatically different too.
Managers at all levels will be depend more heavily
on participative management techniques.
Management efforts will focus more on building an
attitude of team-work among workers.
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Future managers will need is leadership ability.
Effective leaders must provide a sense of direction
for the company and an electrifying desire for taking
it there. In the future simply managing won’t be
enough. The dean of the Wharton School of
Business says:
“Forget managers; what we need are leaders.”
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