CHAPTER 4 Basic of Business Management By: Engr. Muhammad Muizz Bin Mohd Nawawi
Management as the process of planning, organization, leading/direction, and control of members of the organization's efforts and use all the resources of the organization to achieve organizational goals. Definition, although a slight difference in the number and types of management functions, but both definitions contain the word "process" and "goals". This means that two important aspects in the management are: 1. Management as a process: Carry out systematically and in need of a particular relationship between an activity with an activity other 2. Achieving the goals of the organization : Goals of the organization can take the form of qualitative (subjective) or quantitative (objective).
Function of management 1. Planning Def : Planning is a basic process of selecting and determining suitable actions to achieve goals.(dessler 2001) Planning is a process of determining how the management system can move the organization towards achieving its goals. (Certo 1997) The importance of goals for an organization are as follows: (1) It provides direction (2) it focuses on effort (3) It drives organizational planning and decision making (4) It evaluates the organization s achievement The importance of planning: (1) it identifies business or investment opportunities (2) It identifies suitable alternative actions. (3) It reduces risk (4) It save costs (5) It facilitates the achievement of goals
(6) It provides guidance (7) It facilitates coordination (8) It ensures organizations do not stray from original goals. Planning process comprises : (1) set goals (2) define the current situation (3) Identify assistance and resistance (4) Develop a new set of plans and actions (5) re-evaluate goals
2. Organizing Organizing is an efficient way of managing organizational resources in order to achieve the planned goals and objectives. Organizing refers to the coordination of human resources and organizational resources whereby jobs, physical resources or financial resources are allocated within the organization. According to Stoner and Wankel (1986), organizing is a process whereby work activities are arranged and allocated to employees in order to achieve organizational goals and objectives. According to Jaafar Muhammad (1992), organizing is the effective arrangement of organizational resources to be in unity in order to achieve the organization s planned goals and objectives.
Importance of organizing It shows the job division or specialization whereby a unit or department bears a specific job burden and responsibilities in an organization. It shows the duties and responsibilities of each department in an organization It show the reporting relationship between managers and subordinates. It shows the types of jobs performed in an organization. It shows the grouping of work segments in an organization It shows the department or unit at each management level in the organizational hhierarchy.
3.Leading Leadership also refers to ability to influence other people in the organization in order to create an environment that motivates employees to work in a comfortable situation in achieving organizational goals. Leadership skill include cooperating with others, understanding values, using their inner sense, understanding themselves and having foresight. 4. Controlling According to Stoner, Freeman and Gilbert (1995), managerial control is a process to ensure that actual activities are conducted according to the planned activities. According to Mockler, control is defined as a systematic effort in determine a set of performance standards based on the objectives of planning the formation of a feedback system and the comparison between the actual performance and set standards.
Characteristics of effective control 1. accurate information Information obtained must be accurate, measureable and comparable to the standards. 2. Comprehensive objectives Objective must be understood by the individuals assigned to achieve it. 3. Timeliness Control must be conducted at the suitable and right time in order to bring progress to the organization 4. Easy to operate 5. Economical (in terms of cost) 6. Flexible 7. Acceptance by employees
Organizational Structure The organizational structure the way each activity in an organization is performed, the way formal job are allocated, the way resources are optimally allocated and the way departments are coordinated. The organization chart shows each department s functions, positions and relationship between each department in the organization. Types of organization 1. The functional organization 2. The divisional organization 1. Product departmentalization 2. Geographical departmentalization 3. Customer departmentalization 3. The matrix organization
Organization chart Functional organization General manager President Finance Marketing Administration Vice President Operation Vice President Production Vice President Finance Employees Employees Employees
The Divisional Organization (i) Product departmentalization (ii) Geographical departmentalization General General Fresh Milk Beef Butler Sabah Branch Johor Branch Perlis Branch
(iii) Customer departmentalization The matrix organization General General Industrial Customers Ordinary Customers Office Customers Production Finance Marketing Project vehicle A Production Finance Marketing Project Vehicle B Production Finance Marketing Project Vehicle C Production Finance Marketing
Questions.??????