The Six Steps in Decision Making

normaldeerManagement

Nov 20, 2013 (3 years and 7 months ago)

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Chapter 2

The Agribusiness
Manager

The Practice of Mnagement


The common business management
principle that unifies everything a
manager does is the desire to maximize
the long
-
term profits of the firm by
profitably satisfying customers’ needs.

The Agribusiness Manager

To be successful managers must be:


Technically knowledgeable about the firm’s
products and services


A good communicator to everyone, especially
those who work for the firm


Able to motivate people effectively


Proficient in the technical skills of business
management such as inventory management,
accounting, and forecasting


Be able to mix each of these skills in just the
right proportion in each market situation to gain
the greatest benefit to the firm


Management Vs. Leadership


Effective Manger is to accomplish tasks
through people.


Management can effectively and
efficiently mange the technical process


Effective leaders who communicate and
motivate people

Agribusiness Management


Confront extra burdens of uncertain
weather, disease, changing technology,
changing government policies,
fluctuations in foreign currency exchange
rates, and perishable nature of their
products.

The Six Steps in Decision Making

Identifying


the Problem

Selecting

the Best Alternatives

Analyzing

the Alternatives

Following Up

Determining Alternative

Courses of Action

Implementing

the Decision

The Four Functions of Management

Planning

Organizing

Controlling

Directing

Dynamic

Continuous

Process

Planning Functions


The objective of planning:
Put the firm in the best
possible position relative to
future business conditions
and customer demands


Planning begins with the
organization developing its
marketing plan

1.
Define the firm’s
purpose

2.
State the firm’s objective

The Organizing Function


Development of an
organizational scheme
that can accomplish
the firm’s purpose and
objective efficiently and
effectively


The selection of a legal
structure


Sole Proprietorship


Partnership


Cooperative


Corporation

ORGANIZING

Legal Forms of Organization

Sole Proprietorship


Owned and operated by one person


Simple to organize and shut down


Has few legal restrictions


Owner is free to make all decisions


Profit is taxed only once (in USA)


Unlimited responsibility for debts


Difficult to raise capital for growth of business


Duration of business is limited to the life of proprietor



Proprietorship, Partnership, Corporation, and Cooperative

ORGANIZING

Legal Forms of Organization

Partnership


Association of two or more
partners


Has relatively few legal
restrictions


Permits the pooling the
managerial skills and judgements


Divided decision making and
authority might cause problems


Partners have unlimited liability
for debts


In a limited partnership, there
must be at least one general partner


Limited partners are limited only
to the extent of their investment



Most common form of business organization

Proprietorship, Partnership, Corporation, and Cooperative

ORGANIZING

Legal Forms of Organization

Corporations


Legal entities owned by shareholders


Shareholder has no liability beyond
loss of the value of stock



Have perpetual life as long as
submitting necessary reports


Raising money for growth is easy


Easiness in transfer of ownership and
change management


More difficult and expensive to
organize


Subject to many rules and regulations


More taxing is applied


Most large organizations are corporations

Proprietorship, Partnership, Corporation, and Cooperative

ORGANIZING

Legal Forms of Organization

Cooperatives


Special type of organization
owned by users or customers


Earnings are usually
distributed tax free


Board members managing
cooperative are elected by all
members



Proprietorship, Partnership, Corporation, and Cooperative

The Controlling Function




Concerned with giving management feedback on the
firm’s progress toward the goals set in planning


Include measures of an individual’s progress as well as
the progress of entire departments and business


Production rates per hour, cost per unit, or annual dollar
sales will determine the success or failure of the
business

The Directing Function




Implementation of the other three management functions
(planning, organizing, and controlling)


Successful directing relies strongly on good leadership
skills to accomplish its mission


The success of the directing function depends on the
managers’ ability to motivate their employees

Discussion Questions

1.
Why is business management referred to as a
profession rather than a discipline? What is the
difference between a discipline and a profession?

2.
Business managers practice management just as a
physician practices medicine or a lawyer practices law.
Do you agree or disagree with this statement? Explain
your answer.

3.
What is the difference between business management
and leadership?

4.
Describe the decision
-
making process.

Discussion Questions

5.
List the four functions of management and describe how
they interact to permit a firm to succeed.

6.
Agribusiness management is described as a dynamic,
continuous process. Do you agree or disagree? Explain
your answer.

7.
What is the difference between efficiency and
effectiveness?