Chapter4 Basics of Bus MGT

OFPS#Entrepreneurship#3e All#Rights#Reserved
©"Oxford"Fajar"Sdn."Bhd."(0089747T),"2013 1– 1
4
Chapter
BASICS"OF"BUSINESS"
MANAGEMENT
BASICS#OF#BUSINESS#
MANAGEMENT
! AT"THE"END"OF"THIS"CHAPTER,"YOU"WILL"BE"
ABLE"TO:
– Define"management.
– Describe"management"as"a"process.
– Specify"the"skills"needed"by"managers.
– Explain"the"differences"between"efficiency"and"
effectiveness.
– Explain"the"major"roles"of"managers"in"organizations.
– Identify"the"characteristics"of"successful"managers.
– Describe"the"five"types"of"organizational"structure.
4.1#DEFINITION#OF#MANAGEMENT
! Management"can"be"defined"as"a"set"of"
functions"and"activities"that"must"be"
accomplished"by"managers"in"order"to"achieve"
organizational"goals"effectively"and"efficiently
MANAGERIAL#LEVELS
TOP7LEVEL"
MANAGERS
MIDDLE7LEVEL"MANAGERS
FIRST7LEVEL"MANAGERS
Levels#of#Management
! Top9level#managers#set"the"goals"and"provide"
the"strategic"directions"for"organizations.
! Middle9level#managers#are"responsible"for"
carrying"out"the"goals"set"by"the"top"
management."
! First9level#managers#are"responsible"for"
directing"and"supervising"the"actual"day7to7day"
work"of"the"organization"at"the"operating"level
4.2#PROCESS#OF#MANAGEMENT
Process#of#Management
PROCESS#OF#MANAGEMENT
! Management is"fundamentally"the$process$and$
activities$involved$in$pursuing$organizational$
goals$efficiently$and$effectively$by$planning,(
organizing,(leading(and(controlling the$
organization’s$resources.
PLANNING
! Planning"involves"setting"appropriate"and"clear"
goals"and"objectives,"and"establishing"
appropriate"strategies"to"accomplish"them."
! Clear"goals"will"provide"the"framework"within"
which"the"organization’s"strategies"are"
formulated."
! For"example,"when"a"company"aims"to"expand"
its"market"share"(the"goal),"its"managers"should"
develop"the"appropriate"strategies"in"order"to"
achieve"the"goal"set.
The#Types#of#Planning#at#Different#Levels#of#an#Organization
TYPES#OF#PLANNING
! Strategic#planning#involves"setting"long7term"
goals"and"objectives."It"is"usually"conducted"for"
a"period"of"five"years"or"more.
! Tactical#planning#is"also"known"as"mid7term"
planning."This"type"of"planning"is"usually"
conducted"for"a"period"between"one"to"five"
years."
! Operational#planning#is"also"known"as"short7
term"planning."It"is"performed"for"a"duration"of"
one"year"or"less.
ORGANIZING
! The"process"of"arranging"and"coordinating"
organizational"resources"(particularly"human"
resources)"to"carry"out"the"organizational"plan."
! Determines"the"tasks"to"be"done,"how"the"tasks"are"to"
be"grouped,"who"is"in"charge"of"what,"and"who"
reports"to"whom."
! Allows"cooperation"between"organizational"members"
and"motivates"members"to"work"together"to"achieve"
organizational"goals.
LEADING#/#DIRECTING#
! Leading is"the"process"of"motivating"
subordinates"and"inspiring"others"towards"
achieving"organizational"goals.
! Managers"need"to"be"leaders"in"order"to"get"
others"to"do"their"best"in"fulfilling"plans"and"
achieving"objectives.
! A"good"manager"who"leads"well"can"inspire"
people"to"work"hard."
CONTROLLING
! Controlling is"the"final"link"in"the"chain"of"
management"functions."
! Managers"evaluate"and"monitor"individuals,"groups,"
departments"and"their"respective"organizations"as"a"
whole"to"see"how"well"each"level"is"on"target"towards"
achieving"its"goals."
! Effective"control"systems"allow"managers"to"know"
how"well"plans"are"being"implemented."
! If"the"standard"is"not"met,"necessary"corrective"
actions"or"changes"need"to"be"carried"out.
4.3#MANAGEMENT#SKILLS#
Management#Skills#at#Different#Managerial#Levels
MANAGEMENT#SKILLS#
! Technical#skills#are"the"ability"to"understand"and"
demonstrate"knowledge"and"proficiency"in"a"
specialized"field.
! Human#skills#are"the"ability"to"interact"and"work"well"
with"other"people."Managers"with"good"human"skills"
develop"good"relationships"with"all"levels"of"
employees.
! Conceptual#skills#are"the"ability"to"think"of"situations"
analytically"from"a"broad"perspective."These"skills"
include"analyzing"complex"situations,"solving"
problems"and"thinking"creatively."
4.4 EFFECTIVE#OMMUNICATION#
AS#A#MANAGEMENT#TOOL
The#Communication#Process
EFFICIENCY#AND#EFFECTIVENESS#
Effectiveness:"The"degree"to"which"an"organization"
achieves"its"goals."It"is"about"doing"the"right"things,"
typically"in"terms"of"quantity"as"well"as"quality."
Managers"are"effective"when"they"select"the"right"or"
appropriate"things"to"be"done"and"achieve"them"well."
Efficiency:"The"degree"of"how"well"resources"are"used"
to"achieve"a"goal."It"is"about"doing"things"right."
Managers"are"efficient"when"they"can"minimize"the"
amount"of"resources"(such"as"people"and"money)"
used"to"attain"their"goals.
! Efficiency:"The"degree"of"how"well"resources"
are"used"to"achieve"a"goal."It"is"about"doing"
things"right."Managers"are"efficient"when"they"
can"minimize"the"amount"of"resources"(such"as"
people"and"money)"used"to"attain"their"goals.
Relationship#between#effectiveness,#efficiency#and#performance#in#
organizations
4.5#MANAGERIAL#ROLES#
! Interpersonal#Roles:#Interpersonal"roles"are"
primarily"concerned"with"relationships"with"other"
people."
! Informational#Roles:#Managers"obtain"information"
and"must"communicate"information"to"people"inside"
and"outside"the"organization.
! Decisional#Roles:#Decisional"roles"require"managers"
to"plan"strategy"and"utilize"resources."Managers"use"
information"to"make"decisions"or"solve"problems.
4.6##CHARACTERISTICS#OF#
SUCCESSFUL#MANAGERS#
! Practise"open"communication
! Set"clear"directions
! Establish"objective"recognition
! Provide"guidance"and"support"to"employees
! Design"and"monitor"a"control"system
4.7##TYPES#OF#ORGANIZATIONAL#
STRUCTURE#
! Functional"structure"
! Product"structure"
! Geographical"structure"
! Customer"structure"
! Matrix"structure"
A#Functional#Structure
A#Product#Structure
A#Geographical#Structure
A#Customer#Structure
A#Matrix#Structure
SUMMARY
! Management"is"a"set"of"functions"and"activities"that"must"be"
accomplished"by"managers"in"order"to"achieve"organizational"goals"
effectively"and"efficiently.
! A"manager"is"a"person"who"is"responsible"for"the"work"activities"of"the"
organization"towards"achieving"organizational"goals."In"most"
organizations,"there"are"typically"three"levels"of"management—the top,"
middle"and"first"levels."
! Organizational"goals"can"be"achieved"efficiently"and"effectively"by"
planning,"organizing,"leading"and"controlling"the"organization’s"
resources.
! Managers"need"three"important"skills—technical,"human"and"
conceptual"skills."
! The"five"types"of"organizational"structure"commonly"adopted"by"
organizations are"the"functional,"product,"geographical,"customer"and"
matrix"structures.

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