Business Essentials 6e - Ebert and Griffin

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Nov 20, 2013 (3 years and 10 months ago)

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PowerPoint Presentation by Charlie Cook

The University of West Alabama

Business
Essentials



Ronald J. Ebert



Ricky W. Griffin

The Business of Managing

2

6e

© 2007 Prentice Hall, Inc.

All rights reserved.

BUSINESS MANAGEMENT

5

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5

2

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.

5.
Discuss contingency planning and crisis management
in today’s business world.

6.
Describe the development and explain the importance
of corporate culture.


© 2007 Prentice Hall, Inc. All rights reserved.

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What’s in It for Me?

After reading this chapter, you’ll be better
positioned to:


Carry out various management responsibilities
yourself


More effectively assess and appreciate the quality
of management in various companies from the
perspective of a consumer or investor


You should be better able to see whether or not you
want to be a manager


Analyze the corporate culture

Understanding the differences between:



Vision, Goals, Strategy, Mission and Culture

What Does Management Do?

How do they earn their pay?


Not what job they do, but how do they add to the
company?

What kind of damage do managers do when
they DON’T earn their pay?


Is it just the salary they draw?

What would happen if we didn’t have
“Management”?

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The Management Process

Leading

Guiding and Motivating

Controlling

Monitoring Performance

Planning

Setting Goals

Organizing

Structuring

Management


The process of planning, organizing, leading, and
controlling a firm’s financial, physical, human, and
information resources to achieve its goals

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Planning

The Planning Process


Determining firm’s goals


Developing strategy for achieving goals


Designing tactical and operational plans for
implementing the strategy


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Organizing

The Organizing Process


Arranging resources and activities in a coherent
structure


Prepare
organizational charts

to help everyone understand
roles and reporting relationships

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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 their
employer

Controlling

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


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The Control Process

Establish Standards

Measure Performance

Does measured
performance match
standards?

YES

NO

Continue Current

Activities

Adjust Performance
or Standards

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Types of Managers

Levels of Management


Top managers:

R
esponsible for the overall
performance of the firm


President, vice president, treasurer, CEO, CFO


Middle managers:

I
mplement strategies and work
toward goals set by top managers


Plant manager, operations manager, division manager


First
-
line managers:

W
ork with and supervise
employees


Supervisor, office manager, project manager, group leader

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Human
Resources

Marketing

Financial

Operations

Information

Other

Areas of Management

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Basic Management Skills

Human
Relations
Skills

Technical
Skills

Conceptual
Skills

Time
Management
Skills

Decision
-
Making
Skills

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The Decision
-
Making Process

Figure 5

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Management Skills for the 21st Century

Global Management Skills


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
Skills


Needed to process increasing
amounts of information

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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

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Management Is Tightly Linked
to

Corporate Culture

Corporate Culture


The shared experiences, stories, beliefs, and norms
that characterize an organization

Communicating
the Culture

Managing
Change

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A Strong Corporate Culture:

Less need for controls


Employees are more empowered to make decisions


Employees are happier with their work environment

Easier to understand strategy

Easier to get employees to accept change

May translate into superior customer service

May translate into superior quality product

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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

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Purposes of Goal Setting

Broad set of action plans to achieve company
goals


Corporate strategies


Business strategies


Functional (department) strategies

Corporate Goals

Broad set of action plans to
achieve company goals

Corporate strategies

Business strategies

Functional (department)
strategies

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Strategic Management:

Setting Goals and Formulating Strategy

Strategic Management


The process of helping an organization maintain an
effective alignment with its environment

Goals


Starting point in effective strategic management



Objectives that a business hopes and plans to
achieve

Strategy


The broad set of action plans to achieve company
goal

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Types of Strategy

Corporate Strategy


Determines what business or businesses a company will own
and operate


Growth


Related diversification


Unrelated diversification


Retrenchment


Downsizing and divestiture

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


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FIGURE 5.2

Hierarchy of Strategy

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Formulating Strategy

Step 1:

Setting Strategic Goals


Strategic goals are derived from a firm’s mission
statement

Step 2:

Analyzing the Organization and the Environment:
SWOT Analysis


Assessing internal strengths and weaknesses and
external opportunities and threats


Environmental analysis


Organizational analysis

Step 3:

Matching the Organization and Its Environment


Matching environmental threats and opportunities
against corporate strengths and weaknesses

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FIGURE 5.3

Strategy Formulation

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Setting Business Goals

Mission Statement


A statement of how a business will achieve its
fundamental purpose

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

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A Hierarchy of Plans

Strategic 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 short
-
term
targets for daily, weekly, or monthly performance

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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

A Vision Statement

Overall goal for the company

The vision for the company

“To provide the safest car line in America”


Fairly vague about HOW to go about doing it…

Some call the vision the strategy

Vision is the goal or purpose of the organization

Mission statement tells HOW a business will
achieve its vision, or goals, or fundamental
purpose

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Mission Statements

Only good if everyone knows them!

Since they can change, make sure everyone is
on the latest version


How do you do this effectively?

Imagine the difficulty in managing if you think
we are low cost, and others think we are high
quality

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© 2007 Prentice Hall, Inc. All rights reserved.

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K E Y T E R M S

business (or competitive)
strategy

conceptual skills

contingency planning

controlling

corporate culture

corporate strategy

crisis management

decision
-
making skills

leading

environmental analysis

first
-
line manager

functional strategy

goal

human relations skills

intermediate goal

long
-
term goal

management

middle manager

mission statement

organizational analysis

organizing

operational plan

planning

short
-
term goal

strategic goal

strategic management

strategic plan

strategy

strategy
formulation

SWOT analysis

tactical plan

technical skills

time
management
skills

top manager