5 chapter. Instructor Lecture PowerPoints 9/23/2017. Business Management. Business Essentials, 7 th Edition Ebert/Griffin

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1 5 chapter Business Management Business Essentials, 7 th Edition Ebert/Griffin Instructor Lecture PowerPoints L E A R N I N G O B J E C T I V E S After reading this chapter, you should be able to: 1. Describe the nature of management and identify the four basic functions that constitute the management process. 2. Identify different types of managers likely to be found in an organization by level and area. 3. Describe the basic skills required of managers. 4. Explain the importance of strategic management and effective goal setting in organizational success. PowerPoint Presentation prepared by Carol Vollmer Pope Alverno College L E A R N I N G O B J E C T I V E S (cont d) After reading this chapter, you should be able to: 5. Discuss contingency planning and crisis management in today s business world. 6. Describe the development and explain the importance of corporate culture. Who Are Managers? Good Managers Are responsible for business performance and effectiveness Effective do the right things; achieve goals Efficient do things right; lower costs Are accountable to all key stakeholders Develop strategic plans and tactical plans Analyze their competitive environments and plan, organize, direct, and control day-to-day operations The Management Process Management The process of planning, organizing, leading, and controlling a firm s financial, physical, human, and information resources to achieve its goals Planning Setting Goals The Planning Process Planning Determining firm s goals Developing strategy for achieving goals Designing tactical and operational plans for implementing the strategy Controlling Monitoring Performance Organizing Structuring Leading Guiding and Motivating 1

2 Organizing The Organizing Process Arranging resources and activities in a coherent structure Prepare organizational charts to help everyone understand roles and reporting relationships Leading Leading Guiding and motivating employees to meet the organization s objectives Uniting employees in a clear and targeted manner and motivating them to work in the best interests of the employer Controlling FIGRE 5.1 The Control Process The Controlling Process Monitoring a firm s performance to make sure that it is meeting its goals Begins when management establishes standards, often for financial performance Can serve as a basis for providing rewards or reducing costs Types of Managers Levels of Management Top managers: Responsible for the overall performance of the firm President, vice president, CEO, CFO Middle managers: Implement strategies and work toward goals set by top managers Plant manager, operations manager, division manager First-line managers: Work with and supervise employees Supervisor, office manager, project manager, group leader 2

3 Areas of Management Basic Management Human Resources Marketing Operations Information Conceptual Technical Human Relations Decision- Making Financial Other timemanagement skills time-management skills Four leading time wasters: Paperwork Telephone calls Meetings Management for the 21st Century Global Management Understand foreign markets, cultural differences, and the motives and practices of foreign rivals Understand how to collaborate with others around the world on a real-time basis Management and Technology Needed to process increasing amounts of information Strategic Management: Setting Goals and Formulating Strategy Planning Set goals Goals Objectives that a business hopes and plans to achieve Strategy The broad set of action plans to achieve company goals SWOT Analysis A. STRENGTHS - internal, positive B. WEAKNESSES - internal, negative C. OPPORTUNITIES - external, positive D. THREATS - external, negative 3

4 Setting Business Goals Goals Performance targets that organizations and their managers use to measure success or failure Purposes of Goal Setting: Provides direction and guidance for managers at all levels Helps firms allocate resources Helps to define corporate culture Helps managers assess performance Mission Statement A statement of how a business will achieve its fundamental purpose Exmaples: ission-statements.html Effective organizations set goals at many different levels: Long-term goals: five years or more Intermediate goals: one to five years Short-term goals: one year or less Corporate Strategy Determines what business or businesses a company will own and operate Growth Related diversification Unrelated diversification -Retrenchment -Retrenchment What drives retrenchment? Uncompetitive cost structure Inadequate returns on investment Poor competitive position Financial distress (e.g. High debt) Market decline Failed takeovers Ecenomic downturn Change of ownership All of which indicate the need for stratagic change Methods of retrenchment? Significant reductions in output & capacity Significant job losses Product or market withdrawals Disposals of business units Outsourcing key business functions De-mergers 4

5 (cont d) Formulating Strategy Business (or Competitive) Strategy Focuses on improving the company s competitive position at the level of the business unit or product line Functional Strategy Guides managers in specific areas such as marketing, finance, and operations in deciding how best to achieve corporate goals by performing their functional activities most effectively Step 1: Step 2: Step 3: Setting Strategic Goals Strategic goals are derived from a firm s mission statement Analyzing the Organization and the Environment: SWOT Analysis Assessing internal strengths and weaknesses and external opportunities and threats Environmental analysis Organizational analysis Matching the Organization and Its Environment Matching environmental threats and opportunities against corporate strengths and weaknesses Figure 5.2 Strategy Formulation Strategic Plans A Hierarchy of Plans Reflect decisions about resource allocations, company priorities, and the steps needed to meet strategic goals Tactical Plans Shorter-term plans for implementing specific aspects of the company s strategic plans Operational Plans Mid-level and lower-level managers set shortterm targets for daily, weekly, or monthly performance Contingency Planning and Crisis Management Contingency Planning Planning for change Seeks to identify in advance important aspects of a business or its market that might change and the ways in which a company will respond to changes Crisis Management Involves an organization s methods for dealing with a crisis an unexpected emergency requiring immediate response Management and the Corporate Culture Corporate Culture Is the shared experiences, stories, beliefs, and norms that characterize an organization Helps define the work and business climate that exists in an organization Communicating the Culture Managers must understand the culture Managers must transmit the culture to others in the organization Managers can support the culture by rewarding and promoting those who understand it and work toward maintaining it 5