The Management Process

Management is a process, a non-stop process of ensuring continuity and growth within an organization.
Itinvolves Goal-Setting,Executing the plan, Measuring results, and Sustaining operations—the four GEMS
of Management.

To ensure this the manager needs to concentrate on fulfilling four critical functions which are referred
to as the 4 GEMS of Management.

Literally, gems are precious stones. Likewise, the GEMS of Management emphasize the mostvaluable
aspects of the management process – aspects that serve as the “gold Mine” of management excellence.

In the diagram (Diagram 1), the 4 GEMS stand for each phase of the management process – Goal-
Setting, Executing the plan, Measuring results, and Sustaining operations – with sub functions under
each. These GEMS assume the framework of a wheel, signifying that the entire management process is
a continuous cycle.

There is only one management process with a constant set o stages. The difference lies mostly in: 1)
the application of these stages, 2) the phase that a certain ortanization will be inclined to concentrate
on, and 3) the length of time it would for the organization to finish each stage before the cycle begins
oncemore.
The diagram below (Diagram 2), mentioned heree as a ready reference, depicts the GEMS Management
Wheel. The different stages will be illustrated through much simpler examples. Each stage will be
explained through the stories of the Corn Vendor, the Sari-Sari Store Owner, and the Grocery Manager.

STAGE 1: GOAL-SETTING

The Management cycle begins with GOAL-SETTING, or establishing objectives for a company or
organization. Objectives and goals are derived from a sound review and understanding of the purpose,
vision and mission of the organization.

To fulfill this function, the manager must engagein the following activities:

1. Synthesizing Information

In this primary staage, the manager engages in DATA GATHERING. If his/her company plans to
embark on a project, he/she gathers information to find out if it will, indeed, be feasible and
beneficial to the company.

If one intends to put up a business, data gathering is useful for identifying crucial business
requirements, as well as market needs and trends.

Through data gathering, the manager then discerns whether or not the venture is viable by
SYNTHESIZING THE DATA. He/She examines the entire scenarion carefully—thenature of
business,the kind of product or service it will offer, its market demand,
competition,etc.Themanagerassesseseach factor and looks at the bussiness in its entirety. From
there, he/she makes a conclusion if the business is worth starting.
 Let us illustratethis function through the story of Mang Juan, a corn vendor. Before he even got
into the business of selling cor, Mang Juan went through the process of simple data gathering
and synthesis.

His objective: to look for a livelihood that would double his savings of Php3,000 in less than a
month. An experienced cigarette vendor, Mang Juan studied his options. He observed the easy
return of capital in selling boiled corn. So he began to ask corn hawkers about the market price
of corn and the peddling cart who are the wholesale corn dealers, what are the averages of daily
sales, and so on.

After calculating his possible earning in a day, Mang Juan considered his physical health.
Peddling corn will require him to walk around the city pushing a heavy cart. Does he have the
stamina to do this everyday? If not, how many days can he manage to sell corn in a week? How
will this affect his sales?

The answers to these questions---however small the business is—will determine if selling corn is
in Mang Juan’s best interest. If the job, through simple data synthesis, proves to be too arduous
or impractical for him, then he would consider other options.

2. Formulating Alternatives

Through effecive data gathering and synthesis, the manager arrives at a decision on whether or
not to pursue the business. He also comes up with alternatives or even a Plan B and Plan C, in
case Plan A does not work well.

In Mang Juan’s case, selling sauteed peanuts or cooking banana cue are good alternatives to
peddling corn. With about the same capital and average daily profit, the two businesses will
require less physical activity. Peanuts, unlike corn, are not heavy to peddle around. Selling
banana cue, on the other hand, gives the option to stay in just one location, where Mang Juan
can both cook and sell his product.

3. Deciding on Courses of Action

With enough data on three possible businesses—selling boiled corn, sauteed peanuts, and
banana cue, Mang Juan may now decide on the venture he would pursue.

He will choose of course, through the set of simple criteria comprising such questions as: Can he
do the job? Can he do it every day? Does he like the job? Will there be too much competition
among sellers? Will the business be cost-effective? Putting his answers on a checklist, which
compares the advantages and disadvantages of the three ventures, will help Mang Juan make
the final choice.
 4. Establishing Goals

Let us suppose Mang Juan decides to sell corn. The next step is for him to put his decision in
more concrete terms. His mind tells him that before he implements his decision, he must first
set his goal or “operating objective.” This means setting daily target revenues from sales, within
a certain level of budget for expenses, in order for him to arrive at an estimated net profit at the
end of the day.

STAGE 2: EXECUTING THE PLAN

The next phase involves directing the attainment of project or business goals. To do this, the
manager or business owner engages in three sub-stages: ORGANIZING, COMMUNICATING, AND
GUIDING.

ORGANIZING involves putting together the resources of people, time, money, and materials
required to implement the business plan. This includes identifying and purchasing physical
requirements (i.e. corn and peddling cart), and developing his schedule and peddling route in
the city.

The stage of COMMUNICATING comes in as soon as Mang Juan makes his business purchases. It
is expected that he will exhaust all means to find the best corn supplier who can give him the
best price. He will also need to communicate to attract his target customers. His advertising
tools are simple: he has a sign in his peddling cart that reads: “Mang Juan’s Delicious Corn” and
he shouts, “Mais! Mais! as he makes his rounds throughout the city.

GUIDING will only come in should Mang Juan decide to train his son, or hire a helper to assist
him in the business. He will need to pass on some skills, such as choosing the right kind and
amount of corn, cooking them properly, product pricing, and identifying which parts of the city
has the most number of corn buyers.

A business or organization, however, is usually not intended to last for a short period of time.
They are nurtured by the owner or manager, to expand and benefit an increasing number of
people.

As Mang Juan’s profits in the corn business increase, he starts thinking again of venturing into a
more stable business that, considering his old age, will require less physical exertion. Mang Juan
again studies his options, and with enough money saved, he decides to sell more goods through
a sari-sari store business. Juan will realize that with a store, setting goals and attaining them will
entail a few more considerations. Moreover, the management of operations gets more
complex.
 5. ORGANIZING

For sari-sari store business, oranizing means identifying your network of suppliers, developing
an inventory of your retail goods, and identifying your staff and their roles.
Mang Juan, for instance, decides to be in charge of purchasing while he appoints his wife to sit
behind the cash register. Their children are tasked to do the inventory every week. There are
other factors to consider, such as the schedule of store operations, salaries, etc.

6. COMMUNICATING

Communicating would include orienting the workforce about the business plans, goals, policies,
and systems. In this case, Mang Juan as the store manager needs to carefully explain how store
operations should work out, so that the business will run smoothly even while he is out of the
store.

7. GUIDING

Guiding is done by teaching the workforce to properly relate to customers, especially the
difficult and demanding ones. As Mang Juan gets older, guiding may even go as far as teaching
his son or a trusted member of the family every aspect of the business, so that somebody can
fully take over the store in the future.

STAGE 3: MEASURING RESULTS

After Goal-Setting and Execution comes the third stage in the GEMS management wheel—
MEASURING RESULTS. This requires the manager to evaluate how the project or business is
progressing toward its goals.

Proper evaluation allows the manager to detect deviations from the plan in time to take
corrective action. This is done by comparing actual activities with the planned activities.

Back when he was still selling corn, Mang Juan could easily evaluate the progress of his business.
If by noon he only makes Php200 worth of corn sales with a target income of Php800 a day, then
he can immediately conclude that he is doing poorly.

Such event will prompt Mang Juan to find out what caused the sluggish sales. He will check the
quality of his product, try another sales tactic, or consider changing his peddling route. At the
end of the day, he will have to ask himself, “Did I earn enough?”

In the case of the sari-sari store business, the process of evaluation may not be as quick and
easy. It should be understood that with more details to sort out, and perhaps a longer grace
period in auditing finances, assessment usually takes longer in larger businesses.
 It may not be as easy to calculate the daily profits of Mang Juan’s sari-sari store, since one must
also account for the payables due to creditos at the end of each week. Only by then can Mang
Juan compute his earnings, and find out if he is attaining his sales and profit targets.

This phase may even take longer for Mr. Chua, owner of a grocery business, given an inventory
four times larger than that of Mang Juan’s store.

Since Mr.Chua is doing large-scale retailing, he will have to go through each phase of the
management wheel more thoroughly.

From the phase of GOAL-SETTING and EXECUTING THE PLAN, Mr. Chua has to formally
“departmentalize” his operations. There should be individual departments taking care of
inventory, purchasing, maintenance, personnel, and so on.

And so while the head of grocery inventory will manage to submit a status report of his
department in just a week, Mr. Chua, as company head, may take a month before he can fully
assess the status of his grocery business.

To do this, he will have to study the synergy of the different departments, the cash flows,
purchase of supplies versus the sales, etc. He will also measure the success of his business
through qualitative and quantitative instruments.

The quantitative aspect in this case refers to the increase or decrease of shoppers in Mr. Chua’s
grocery, as well as how fast products are moving out of the shelves. These indicators will help
the business manager determine several things: 1) if he is selling the right products; 2) if he
should offer more variety or a bigger quantity of certain products; 3) and if he should pull out
certain commodities from the grocery shelves and replace them with new ones.

The qualitative aspect, on the other hand, basically refers to customer satisfaction. Customer
complaints and feedback through survey forms will help the manager find out which specific
part of the service needs improvement—customer assistance, cashiering, or security.

STAGE 4: SUSTAINING GROWTH

The management cycle does not end with MEASURING RESULTS, for there is a fourth state that
actually determines the success of a business.

In the GEMS Framework, this stage is referred to as SUSTAINING OPERATIONS which includes
two important management funcstions—DEVELOPING PEOPLE and ENCOURAGING CHANGE.
Only if you are able to ensure the continuity and growth of your company can say that you are
truly successful.
8. Promoting Change

Change is synonymous with improvement. Therefore, in order to keep improving, you must
welcome changes in your company. A good manager promotes creativity and innovation. He is
not afraid to take risks that are within reasonable bounds, for it is only through it that he can
sustain the growth of his company.

If Mr. Chua keeps offering the same three snack brands in his grocery even when 10 new brands
have surfaced in the market in the last three years, then people will begin to try shopping in
other stores. If he refuses to renovate the interios of his grocery or at least update his product
arrangements, then his patrons will see it less desirable to shop at his grocery store.

Variety and timeliness are the buzzwords in the retail business. Customers will always love to
try new things. To the manager should always be on the lookout for something new, something
fresh to offer. He should initiate promotions and be up-do-date with holidays and occasions.

Of course, introducing changes into the company does not instantly make it 100 percent
effective. It will always be a trial and error procedure. But this is normal. A good manager
should always make room for mistakes in order to perfect the change he/she would like to
initiate. As mentioned earlier, the manager should encourage his/her people to be creative in
their work, and speak up about their ideas.

9. Developing People

To have good people in the company, you must start with the righ people. If Mr. Chua wants a
fast turnout in the cashiering counter, he must hire someone with a previous cashiering work
experience, or someone who is young and is a fast learner. Even before the hiring stage, Mr
Chua must have a set of criteria for choosing his employees. Purchasers should be meticulous
and sharp, the janitors should be thorough, strong, and must know basic electrical tasks, and so
on.

If you have a good people, you will be confident to develop them to take on more
responsibilities and to become the next managers.

An effective manager should be involved in developing his/her subordinates. This is important

function ensures succession in the management of the organization-and thus ensures continuity
and growth.

Developing people involves: 1) delegation of importanttasks; 2) empowerment; 3) continuous

guidance; and 4) reward. These four tasks are important for you to find out who deserves a
promotion. It also tests and challenges the efficiency of your employees. The better ones will
get more creative and resourceful in the process, wile the incompetent ones will easily surface.
Empowering people will also bring new ideas into the company, as your employees explore their
capabilities in handling situations. Rather than punishing them outright, teach your employees
to learn from their mistakes. Giving a reward commensurate with their achievements in the
company will further motivate them to work better, and harder.

As you initiate these steps, keep a tight watch on your employees. Continuous guidance and
monitoring are still important, even when you have good people. Enforce systems that will not
breed a lax or a dishonest working environment among your employees.

In Mr. Chua’s case, he should make sure that his cashier will not also be in charge of
accomplishing the grocery’s bookkeeping. Someone else will have to do this task, so as not to
tempt the cashier into stealing money and fixing the company’s accounts

Too much control, however, will sacrifice efficiency in the workpalce. Agood manager must
learn how to strike a balance between these two aspects.

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