Transcript management

Understanding
the Management
Process
From Chapter 7
Business Ownership
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Corporation
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A business that exists separately from its owners
and is permitted to sell stocks
An artificial being, (a legal person), invisible,
intangible, and existing only in contemplation of
the law.
An artificial person created by law with most of
the legal rights of a real person, including the
rights to start and operate a business, to buy or
sell property, to borrow money, to sue or be sued,
and to enter into binding contracts
Corporation
Advantages
Disadvantages
Difficulty / complex /
high cost starting
Formation
Source of funding Greater Financial
Capital(stock & loans)
Liability
Liability Limited to the
amount paid for stocks
Tax implications
Double taxation
Management and Specialized Management Internal Conflicts
control
Increased Liquidity
Hostile takeover (tender
Transferability
Unlimited Life
Others
offer)
Government regulations
and paperwork
Corporate Governance Structure
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Shareholders: owners
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Board of Directors:
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Preferred stocks: first to be paid; not voting right
Common stocks: last to be paid; with voting right
Elected by shareholders
Oversees corporate management: policies
Corporate Officers: CEO, President, VPs, (directors)
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Hired by the board
Day-to-day operations
Corporate Governance Structure
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Shareholders:
Electing directors
 Voting on critical issues
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Delegating votes:
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Proxy: temporarily transfer voting rights to others
Pooling agreements: a contract to vote for the same
thing
Voting trust: turn shares to a trustee, with a
certificate, the trustee votes according to agreements
Corporate Governance Structure
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Board of directors:
strategic planning and policy making
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The top governing body of a corporation, the
members of which are elected by the stockholders
Responsible for setting corporate goals, developing
strategic plans to meet those goals, and the firm’s
overall operation
Outside directors: experienced managers or
entrepreneurs from outside the corporation who
have specific talents
Inside directors: top managers from within the
corporation
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Executive Committee: management (3 board members)
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Audit Committee: watch dog (independent outside directors)
Corporate Governance Structure
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Corporate Officers
chairman of the board
president；executive vice presidents
corporate secretary, treasurer,
other top executives
Implement the chosen strategy and direct
the work of the corporation, periodically
reporting results to the board and
stockholders
Pay Difference
600
500
CEO Pay 400
Times
Worker 300
Pay
200
100
0
1980
1990
2000
2006
Source: 2007 Trends in CEO Pay,
http://www.aflcio.org/corporatewatch/paywatch/pay/index.cfm, accessed 2/8/09.
What is Management?
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The process of coordinating people and other
resources to achieve the goals of an organization
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Human resources
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Financial resources
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The funds the organization uses to meet its obligations to
investors and creditors
Material resources
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The people who staff the organization and use the other
resources to achieve the goals of the organization
The tangible physical resources an organization uses
Information resources
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The information about internal and external business
environmental conditions that the firm uses to its competitive
advantage
the management process
Basic Management Functions
Planning
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Establishing organizational goals and
deciding how to accomplish them
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Organizational goal: Mission
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A statement of the basic purpose that makes an
organization different from others
Strategic planning
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The process of establishing an organization’s major
goals and objectives and allocating the resources to
achieve them
Establishing goals and objectives
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Goal
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An end result that the organization is expected to
achieve over a one- to ten-year period
Objective
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A specific statement detailing what the organization
intends to accomplish over a shorter period of time
 Proper goals are
 Set at every level in the organization
 Consistent (supportive) with each other
 Optimized (balanced) to reduce conflicts
between goals
Why do businesses set
goals?
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Set directions and guidance for
managers
Allocate resources
Define corporate culture
Assess performance
Stated Goal: Mission Statement
Novartis:
We want to discover, develop and successfully
market innovative products to prevent and
cure diseases, to ease suffering and to enhance
the quality of life.
We also want to provide a shareholder return that
reflects outstanding performance and to
adequately reward those who invest ideas and
work in our company.
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Stated Goal: Mission Statement
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立足浦东，为浦东开发开放服务，为上海建
设成为国际经济、金融、贸易和航运中心培
养合格人才
“让人们更便捷地获取信息，找到所求”
香港生物科技研究院 致力为本地开发生产
科技产品之企业，提供下游产品研究开发支
持服务及辅助设施，并提供主要之基础设施
，促使香港特区生物科技工业之成功发展。
T3 Mission Statement
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determine the mission statement for
your company
3-5 sentences
upload to moodle by 10/31/2010
Strategic Planning
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objectives that a business hopes and plans
to achieve
Performance targets used to measure
success and failure
Cost reduction, profitability, revenue growth,
stock price, employee motivation, business
expansion, ……
Formulate Strategy
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Strategy: how to meet goals and how to
respond to new challenges and needs
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SWOT analysis
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Internal: Strength and Weakness
External: Opportunity and Threat
Organization and environment match
Working Plans: strategic, tactical, operational
(all levels of management)
Different types of plans
An outline of the actions by which the organization
intends to accomplish its goals and objectives
 Strategic plan
 An organization’s broadest plan, a guide for major policy
setting and decision making
 Tactical plan
 A smaller-scale plan to implement a strategy
 Operational plan
 A plan to implement a tactical plan
 Contingency plan
 A plan of alternative courses of action if the
organization’s other plans are disrupted or become
ineffective
Different types of plans
Organizing
The grouping of resources and activities to
accomplish some end result in an efficient
and effective manner
 Defining the tasks and activities to be carried out
by a number of people to achieve particular
objectives
 Deciding what is to be done and who is to do it
 The allocation of responsibilities: tasks, resources,
structures
Organizational Structure
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Functional
 Groups are established based on functions
needed to be performed
Divisional
 Divides into semi-autonomous groups which are
similar to individual companies
Project Organization/ Matrix Organization
 Specific function carried out by cross section
Basic Organizational Structure
Board of Directors
President
V.P. Finance
Payroll
V.P. Sales
Accounting
V.P. Marketing
National Sales
District Sales Manager District Sales Manger
V.P. H.R.
V.P. Production
Field Managers
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Financial managers
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Operations managers
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Responsible for facilitating the exchange of products between the
organization and its customers or clients
Human resources managers
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Manage the systems that convert resources into goods and services
Marketing managers
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Responsible for the organization’s financial resources
Manage the organization’s human resources programs
Administrative managers (general managers)
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Not associated with any specific functional area; provide overall
administrative guidance and leadership
Organizational Structure:
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Vertical:
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more levels, narrower span of
control
Flat:
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less levels, wider span of control
Leading and motivating
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Leading
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Motivating
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Influencing people to work toward a common goal
Providing reasons for people to work in the best
interests of the organization
Directing
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The combined processes of leading and motivating
Controlling
Evaluating and regulating ongoing activities to
ensure that goals are achieved
Management:
levels, skills, responsibilities
Board of directors / CEO /
President / GM
Functional
/ Divisional
Managers
Operational
Goal
Setting
Strategy
Formulation
Conceptual
/ human
Implementation
Operational
Conceptual/
human /
tech
Tech /
human
Management:
levels, skills, responsibilities
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Top management:
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Middle management:
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goal setting: vision, concept, abstract
Downward communication: human skills
strategy formulation: concept
Implementation: technical
Upward and downward communication: human
skills
Operational (first line) management:
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Operation: technical
Upward communication: human skills
To be an effective manager
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Personal skills
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Oral communication
Written communication
Computer skills
Critical thinking
Education and experience
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A solid academic background
Practical work experience
Management Skills
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Conceptual skills:
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Human relation skills (interpersonal skills):
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Ability to see beyond present (vision)
Ability to diagnose and analyze different situations
(decision-making)
Ability to think in abstract terms (idea-forming)
Ability to understand and to get along well with others
The ability to deal effectively with other people
Communication skills
Technical skills:
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Ability to perform specialized tasks
Top Management:
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Position titles:
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Responsibilities:
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Presidents, Treasurer, CEO, CFO
guides and controls the overall fortunes of the
organization
Policies, strategies, significant decision
Skills:
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Conceptual skills (vision, decision, idea)
Human skills (downward communication;
external)
Middle Management
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Position titles:
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Responsibilities:
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Plant manager, operations manager, division manager
implements the strategy and major policies developed
by top management
How to meet goals by Implementing strategies,
policies, decisions
Skills:
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Conceptual (implementation plan)
Technical (tasks, implementation)
Human (upward and downward communication)
First-Line Management
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Position titles:
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Responsibilities:
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Supervisor, office manager, group leader
coordinates and supervises the activities of operating
employees
Carry out tasks
Working with and supervising employees
Interacting with suppliers and other stakeholders
Skills:
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Technical (task)
Human (upward and downward communication; external
)
Manager vs. Leader
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Decisional roles
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Involve various aspects of
management decision
making
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Interpersonal roles
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The manager deals with
people
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Entrepreneur, disturbance
handler, resource allocator,
negotiator
Figurehead, liaison, leader
Informational roles
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A manager either gathers
or provides information
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Monitor, disseminator,
spokesperson
•
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Audit company cultures.
Stay informed—informed
people don’t fear change.
Beware of “aspirational”
accounting. (Enron)
Empower your people—
turn them loose.
Prevent erosion of human
assets.
Be generous with what you
know.
Leadership
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The ability to influence others
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Formal leadership
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Legitimate power of position as the basis for
authority
Informal leadership
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Not recognized formally by the organization
authority, but have influences through other
factors
Leadership Styles
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Authoritarian
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Laissez-faire
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Holds all authority and responsibility, with communication usually
moving from top to bottom
Gives authority to employees and allows subordinates to work as
they choose with a minimum of interference; communication flows
horizontally among group members
Democratic
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Holds final responsibility but also delegates authority to others, who
help determine work assignments; communication is active upward
and downward
Effective leadership
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Interaction among the employees
Characteristics of the work situation
The manager’s personality
Should Managers Use the
Authoritarian Leadership Style?
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YES
Some employees need the
close supervision that
authoritarian leaders
provide.
When authoritarian
leadership is used,
communication moves from
top (supervisor) to bottom
(employees).
An authoritarian leader
assigns workers to specific
tasks and expects precise
results, so workers know
exactly what is expected.
NO
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Workers resent the close
supervision that results from
the authoritarian leadership
style.
The democratic and laissezfaire leadership styles allow
workers to communicate
with the supervisor and
other members of their
group.
Authoritarian leaders stifle
the workers’ creativity and
their ability to solve
problems.
Decision Making
The act of choosing one alternative from among a
set of alternatives
Major steps in the managerial decision-making process
Identifying the problem or opportunity
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Problem
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Opportunity
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The discrepancy between an actual condition and a
desired condition
A “positive” problem
Problem-solving impediments
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Preconceptions about the problem
Focusing on unimportant matters while overlooking
significant issues
Analyzing symptoms rather than causes
Failing to look ahead
Generating alternatives
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Brainstorming
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Encouraging participants to come up with
new ideas
“Blast! then refine”
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Reevaluating objectives, modifying them if
necessary, and devising a new solution
Selecting an alternative
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Satisficing
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Choosing an alternative that is not the best possible
solution, but one that adequately solves the problem
Implementing and evaluating the solution
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Requires time, planning, preparation of
personnel, and evaluation of the results
An effective decision removes the difference
between the actual condition and the desired
condition
If a problem still exists, managers may
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Decide to give the chosen alternative more time
Adopt a different alternative
Start the process all over again