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Introduction to Business

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Introduction to Business ­MGT 211
VU
Lesson 13
WHO ARE MANAGERS?
SETTINGGOALS AND FORMULATINGSTRATEGY
Settinggoals is the starting point of effective management.Everybusiness needsgoals,and
theprogramfor guidingdecisions to achieve thosegoals is called a strategy.Goalsare
objectivesthat a business hopes andplans to achieve.
a. Types of Strategy
i. Corporatestrategy--Strategyfordetermining thefirm'soverallattitude
towardgrowthand the way it willmanage its businesses or product
lines.
ii.Business(orcompetitive) strategy--Strategy, at the business-unit or
product-linelevel,focusing on a firm'scompetitiveposition.
iii.Functionalstrategy--Strategy by which managers in specificareas
decidehowbest to achievecorporategoalsthroughproductivity
b. SettingBusinessGoals
Goalsareperformance targets­themeans by which organizationsandtheir
managersmeasuresuccess or failure at everylevel.
i. Purposes of Goal Setting
1. to provide directionandguidance for managers at alllevels
2. to help firmsallocateresources
3. to help definecorporateculture
4. to help managersassessperformance
ii.Kinds of Goals
Goalsdifferfrom company to companydepending on thefirm'spurpose
andmission. A firm's basicmission is usually easy to identify.
Businessesoftenhave to rethinktheirmissions as thecompetitive
environmentchanges.
1. MissionStatement--organization'sstatement of how it will
achieveitspurpose in theenvironment in which it conductsits
business.
2. Three kinds of goalsforevery firmare:
a. long-termgoals--goalssetfor an extendedtime,
typically 5 years or more intothefuture
b. intermediategoals--goalssetfor a period of 1 to 5
yearsintothe future
c. short-termgoals--goalssetfor the verynearfuture,
typicallylessthan 1 year
c. FormulatingStrategy--The creation of a broad programfor definingand
meeting an organization's goals
i. SettingStrategicGoals--long-termgoalsderived directly from a firm's
missionstatement
ii.SWOTAnalysis--Identificationandanalysis of organizationalstrengths
andweaknessesand environmentalopportunitiesand threats as part of
strategyformulation
iii.Analyzingthe Organizationand ItsEnvironment
1. Environmentalanalysis--process of scanning thebusiness
environmentforthreats andopportunities(externalfactors)
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Introduction to Business ­MGT 211
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2. Organizational  analysis--process  of  analyzing
a
firm's
strengthsandweaknesses(internalfactors)
iv.MatchingtheOrganization andItsEnvironment--The heart of
strategyformulationmatches environmentalthreatsandopportunities
againstcorporatestrengthsandweaknesses.
v. A Hierarchy of Plans
1. Strategicplans--plansreflectingdecisionsaboutresource
allocations,companypriorities, andsteps needed to meet
strategicgoals
2. Tacticalplans--generallyshort-rangeplans concernedwith
implementingspecificaspects of a company'sstrategicplans
3. Operationalplans--planssettingshort-term targetsfordaily,
weekly, or monthly performance
d. ContingencyPlanningandCrisisManagement
Eventhebest-laid plans canbecomeimpractical. Managerspreparefor these
situationswithcontingency planningandcrisismanagement.
i. ContingencyPlanning--recognizestheneed to find solutions to
specificaspects of a problem by seeking to identify in advance
importantaspects of a business or itsmarketthat mightchange.
ii.CrisisManagement--describes an organization's methodsfordealing
withemergencies.
2. THEMANAGEMENTPROCESS
Themanagementprocess is theprocess of planning, organizing,directing,andcontrolling
an organization's resources to achievebusiness goals. Thefourfunctions of management
arenotdiscrete. They overlapandinfluence one another. To transform a vision into a
successfulbusiness,managers mustperform thefunctions of planning,organizing,
leading,andcontrolling.
a. Planning--managementprocess of determining what an organizationneeds to
do and how best to get it done. Yahoo's creation of partnership agreements
withfirmslike Reuters, Standard & Poor's, and theAssociatedPress forthe
newcoverage it provides it usersrepresent a form of operationalplanning.
b. Organizing--managementprocess of determining howbest to arrange an
organization'sresourcesand activitiesinto a coherent structure.  Hewlett-
Packard'srecentrealignment into an integrated,centralized firm,rather than a
corporateconfederation of individual businesses,hasserved itscomeback
strategywell.
c. Directing--managementprocess of guiding andmotivatingemployees to meet
an organization's objectives.GordonBethune, CEO of ContinentalAirlines,
hasturnedaround morale andperformancethrough hisleadershipskill,
listening to and rewarding employees to guide the company back on track.
d. Controlling--management  process  of  monitoring  an  organization's
performance to ensure that it is meetingits goals.  Bethune of Continental
instituted a variety of performanceindicatorsincludingon-timearrivals,
baggage-handlingerrors,number of emptyseats perplane, andsurveys of
customerandemployeesatisfaction.
3. TYPES OF MANAGERS
Notallmanagers have thesamedegree of responsibilityforplanning,organizing,
directing,andcontrolling.
a. Levels of Management
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Introduction to Business ­MGT 211
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i. TopManagers--managersresponsible to the board of directorsand
stockholdersfor a firm's overallperformanceandeffectiveness.They
setstrategicgoals, makelong-range plans,establishmajor policies,and
representthecompany to theoutsideworld.
ii.Middle  Managers--managers  responsible  for  implementing  the
strategies,policies,and decisions made by topmanagers.  In more
innovativemanagementstructures, theymay function as teamleaders,
acting as consultants whomustunderstand everydepartment'sfunction
andaregranted moredecision-makingauthority, previouslyreservedfor
high-rankingexecutives.
iii.First-lineManagers--managersresponsiblefor supervisingthe work of
employees
b. Areas of Management
i. HumanResourcesManagers--managersresponsiblefor hiringand
training  employees,  evaluating  performance,  and  determining
compensation.
ii.OperationsManagers--managersresponsiblefor theproduction
system,inventoryand inventorycontrol, andqualitycontrol.
iii.MarketingManagers--managersresponsiblefor thedevelopment,
pricing,promotion,and distribution of goodsand services.
iv.InformationManagers--managersresponsiblefor designingand
implementingsystems to gather, organize,anddistributeinformation.
v. FinancialManagers--managersresponsiblefor thefirm'saccounting
functionsandfinancialresources.
vi.OtherManagers--some firmsalso employotherspecializedmanagers,
such as public relationsmanagers,research & developmentmanagers,
etc.
4. BASICMANAGEMENTSKILLS
Whateverthetype or size of theorganization, managersemploybasic kinds of skills.
As they rise throughthehierarchy, they mayneed to strengthen one or more of these
skills.
a. TechnicalSkills--skillsneeded to perform specializedtaskssuch as writing
computercode,drawing animatedcharacters, or auditing a company'srecords.
b. Human Relations Skills--skills in understanding andgettingalong with
people,such as communicatingandmotivating.
c. ConceptualSkills--abilities to think in theabstract,diagnose andanalyze
differentsituations,and see beyondthepresent situation to recognizefuture
marketopportunitiesandthreats.
d. Decision-MakingSkills--skills in defining problemsandselecting thebest
course of action. Basic steps in decision making:
i. define the problem,gatherfacts, andidentifyalternativesolutions
ii.evaluateeach alternativeand selectthe bestone
iii.implementthe chosenalternative,periodically following up and
evaluatingtheeffectiveness of thatchoice
e. TimeManagementSkills--skillsthatinvolve the productiveusemanagers
make of their time. Timewastersinclude paperwork,thetelephone,meetings,
ande-mail.
f.  Management SkillsfortheTwenty-FirstCentury
i. GlobalManagementSkills--specialtools,techniques, andskills
necessary to compete in a global environment.  Managers need to
understandforeignmarkets, culturaldifferences,and themotivesand
practices of foreign rivals as well as understanding international
operations.
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Introduction to Business ­MGT 211
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ii.ManagementandTechnology Skills--abilities to process, organize,
andinterpret a plethora of dataandinformation. Informationnowflows
to everyone in theorganizationsimultaneously, decisionsaremade
morequickly,and more peopleareinvolved.
5. MANAGEMENT AND THECORPORATECULTURE
CorporateCulture--The sharedexperiences, stories,beliefs,and normsthatcharacterize
an organization. A strongcorporateculture directsemployees'efforts andhelpseveryone
worktowardthe same goalsandhelps newcomerslearnacceptedbehaviors.Culture
eitheroriginateswith thecompany's founders(as at Walt Disney Co,Wal-Mart,and JC
Penney) or is forged over a longperiod guided by a constant,focusedbusinessstrategy
(as at PepsiCo). Someculturesare best described as "countercultures," such as Apple's
self-styledimage as the alternative to staidcompetitors in thecomputerindustry.
a. CommunicatingtheCulture andManagingChange
To use its culture to a firm'sadvantage, managersmustunderstandtheculture
andalsotransmit it to others in theorganization.
i. CommunicatingtheCulture--A clearand meaningfulstatement of the
organization'smission is a valuablecommunicationtool.
ii.ManagingChange--- Organizationsmustsometimes changetheir
culturesandalso communicate thenature of the change to both
employeesandcustomers. The processhasthree stages:
1. Analysis of thecompany'senvironment highlightschange as the
mosteffectiveresponse to itsproblems
2. Top management begins to formulate a vision of a new
company.
3. The firm sets up newsystems for appraisingandcompensating
employeeswhoenforce the firm'snewvalues.
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Table of Contents:
  1. INTRODUCTION:CONCEPT OF BUSINESS, KINDS OF INDSTRY, TYPES OF TRADE
  2. ORGANIZATIONAL BOUNDARIES AND ENVIRONMENTS:THE ECONOMIC ENVIRONMENT
  3. BUSINESS ORGANIZATION:Sole Proprietorship, Joint Stock Company, Combination
  4. SOLE PROPRIETORSHIP AND ITS CHARACTERISTICS:ADVANTAGES OF SOLE PROPRIETORSHIP
  5. PARTNERSHIP AND ITS CHARACTERISTICS:ADVANTAGES AND DISADVANTAGES OF PARTNERSHIP
  6. PARTNERSHIP (Continued):KINDS OF PARTNERS, PARTNERSHIP AT WILL
  7. PARTNERSHIP (Continued):PARTNESHIP AGREEMENT, CONCLUSION, DUTIES OF PARTNERS
  8. ORGANIZATIONAL BOUNDARIES AND ENVIRONMENTS:ETHICS IN THE WORKPLACE, SOCIAL RESPONSIBILITY
  9. JOINT STOCK COMPANY:PRIVATE COMPANY, PROMOTION STAGE, INCORPORATION STAGE
  10. LEGAL DOCUMENTS ISSUED BY A COMPANY:MEMORANDUM OF ASSOCIATION, CONTENTS OF ARTICLES
  11. WINDING UP OF COMPANY:VOLUNTARY WIDNIGN UP, KINDS OF SHARE CAPITAL
  12. COOPERATIVE SOCIETY:ADVANTAGES OF COOPERATIVE SOCIETY
  13. WHO ARE MANAGERS?:THE MANAGEMENT PROCESS, BASIC MANAGEMENT SKILLS
  14. HUMAN RESOURCE MANAGEMENT:Human Resource Planning
  15. STAFFING:STAFFING THE ORGANIZATION
  16. STAFF TRAINING & DEVELOPMENT:Typical Topics of Employee Training, Training Methods
  17. BUSINESS MANAGERíS RESPONSIBILITY PROFILE:Accountability, Specific responsibilities
  18. COMPENSATION AND BENEFITS:THE LEGAL CONTEXT OF HR MANAGEMENT, DEALING WITH ORGANIZED LABOR
  19. COMPENSATION AND BENEFITS (Continued):MOTIVATION IN THE WORKPLACE
  20. STRATEGIES FOR ENHANCING JOB SATISFACTION AND MORALE
  21. MANAGERIAL STYLES AND LEADERSHIP:Changing Patterns of Leadership
  22. MARKETING:What Is Marketing?, Marketing: Providing Value and Satisfaction
  23. THE MARKETING ENVIRONMENT:THE MARKETING MIX, Product differentiation
  24. MARKET RESEARCH:Market information, Market Segmentation, Market Trends
  25. MARKET RESEARCH PROCESS:Select the research design, Collecting and analyzing data
  26. MARKETING RESEARCH:Data Warehousing and Data Mining
  27. LEARNING EXPERIENCES OF STUDENTS EARNING LOWER LEVEL CREDIT:Discussion Topics, Market Segmentation
  28. UNDERSTANDING CONSUMER BEHAVIOR:The Consumer Buying Process
  29. THE DISTRIBUTION MIX:Intermediaries and Distribution Channels, Distribution of Business Products
  30. PHYSICAL DISTRIBUTION:Transportation Operations, Distribution as a Marketing Strategy
  31. PROMOTION:Information and Exchange Values, Promotional Strategies
  32. ADVERTISING PROMOTION:Advertising Strategies, Advertising Media
  33. PERSONAL SELLING:Personal Selling Situations, The Personal Selling Process
  34. SALES PROMOTIONS:Publicity and Public Relations, Promotional Practices in Small Business
  35. THE PRODUCTIVITY:Responding to the Productivity Challenge, Domestic Productivity
  36. THE PLANNING PROCESS:Strengths, Weaknesses, Threats
  37. TOTAL QUALITY MANAGEMENT:Planning for Quality, Controlling for Quality
  38. TOTAL QUALITY MANAGEMENT (continued):Tools for Total Quality Management
  39. TOTAL QUALITY MANAGEMENT (continued):Process Re-engineering, Emphasizing Quality of Work Life
  40. BUSINESS IN DIGITAL AGE:Types of Information Systems, Telecommunications and Networks
  41. NON-VERBAL COMMUNICATION MODES:Body Movement, Facial Expressions
  42. BUSINESS ORGANIZATIONS:Organization as a System
  43. ACCOUNTING:Accounting Information System, Financial versus Managerial Accounting
  44. TOOLS OF THE ACCOUNTING TRADE:Double-Entry Accounting, Assets
  45. FINANCIAL MANAGEMENT:The Role of the Financial Manager, Short-Term (Operating) Expenditures