EBZ1004

Business
Fundamentals
Topic 2
Management
Fundamentals 2-1
 Outline
 2a The Management Process

 2b Goals & Objectives

Business

 2c Levels of Planning

 2d Organising, Leading & Controlling

 2e Types of Organization Structures

 2f Management Skills

 2g Types of Managers
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 2a. The Management Process
The process of planning, organizing, leading, and
controlling a firm’s financial, physical, human,
and information resources to achieve its goals.
Business

I. Planning

IV. Controlling II. Organizing

III. Leading

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 2b. Goals & Objectives
What are Goals & Objectives?
They are performance targets – the means by which
organizations and their managers measure success or
failure at every level.
Business
What are their purposes?
1. Provides direction and guidance for managers at
all levels. If managers know what precisely where
the company is headed, there is less potential for
error in the different units of the business.

2. Helps firms allocate limited resources. Areas that

are expected to grow will get first priority. The
company usually allocates more resources to new
projects with large sales potential than it allocates to
mature products with established but stagnant sales
potential. 2-4
 2b. Goals & Objectives
What are their purposes?
3. Helps managers assess performance of
subordinates. Staff who attain or exceed a goal will be
assessed (and rewarded) better than those who fail to
reach their goals. This serves to motivate staff
Business
accordingly.

• Everyone (from CEO down to individual worker) in the

work force should have goals and objectives.

• Goal of a lower level worker will contribute towards the

goal of his manager.

• In other words, the ability of a manager to meet his goals

is dependent on the ability of his subordinates meeting
their goals.
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 2b. Goals & Objectives
Difference Goal Objective
Specific &
Width Strategic & broad
narrow
Business
Time Horizon Longer term Shorter term
Supported by many
objectives. Usually supports
Relationship
To achieve goal, all/most one or more goal
objectives must be met.

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 2b. Goals & Objectives

A simple example Objective 1.

Attend all lectures in the
Business
semester.

Goal
Objective 2.
Get ‘A’ for
Business Get at least 40/50 for term test.
Fundamentals
Objective 3.
Complete all tutorials every
weekend.

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 2b. Setting S.M.A.R.T. Objectives

S.M.A.R.T. Meaning Detail

Concrete, Detailed, What, Why, Who, When,
Specific Focused, Well Defined How.
Business
Allows tracking progress
Numbers, Quantity,
Measurable Comparison
and determine success /
failure.
Achievable Feasible, Actionable. Easy or difficult to
or Agreed Agreed by all achieve by looking at
stakeholders constraints.
Upon
Result
End result oriented, not What do we want to
oriented or task oriented. achieve in the end.
Relevant
Setting deadline to
Time Bound A Time Frame Defined create sense of urgency
and set priority. 2-8
 2b. Setting S.M.A.R.T. Objectives
Exercise 1:
Given this goal, develop two SMART objectives.
Goal: To improve the net profit margin from 5% to 8% within the
next 5 years .
Business

Objective 1: (About customer satisfaction.)

Objective 2: (About complaints handling.)

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 2b. Setting S.M.A.R.T. Objectives
Exercise 1:
Given this goal, develop two SMART objectives.
Goal: To improve the net profit margin from 5% to 8% within the
next 5 years .
Business
Objective 1: (About customer satisfaction.)
Through additional training, our service
engineers are to secure at least 95% of
customers satisfied with our yearly
maintenance, during our on-line survey with at
least 50% of customers by 2018.
Objective 2: (About complaints handling.)
By providing additional manpower, our
customer service reps are to resolve at least
90% of customer complaints within 24 hours (as
measured in complaints records), by 2017.

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 2c. Planning & Levels of Planning
Planning - Management process of determining what an
organization needs to do and how best to do it.
Business
Levels of Planning 3.Operational
Plan A1
2. Tactical
Plan A
3.Operational
1. Strategic Plan A2
Plan
2. Tactical 3.Operational
Plan B Plan B1

Being Unique - Michael Porter

(http://www.youtube.com/watch?v=u6zv3dLGx0c&feature=related)

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 Levels of Planning
An example of levels of planning for air-con maker –
Daikin.
Operational Plan A1
Tactical Plan 1 Convince new
Business
customers to sign up for
Offer 10 year 10 year service
service contracts contracts. Achieve 5%
Strategic Goal at a fee for all by Sep 2013, 10% by
new models wef Sep 2014, 15% by Sep
To increase Sep 2013 2015
profit margin
from 5% to 8%
Operational Plan A2
by 2019
Improve service average response
time from current 10 days to 8 days
Tactical Plan 2 by Sep 2013, 6 days by Oct 2013
Strategic Plan and 4 days by Nov 2015
Expand Offer extended
warranty (from 1 Operational Plan B1
revenue share year to 5 years)
from services at a fee for all
Improve reliability by reducing
from 20% to incidence of failure at 5 years from
new models wef 10% to 8% by July 2013, 6% by July
30% by 2019 Sep 2015 2014 and 3% by July 2015

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 Levels of Planning
Level 1. Strategic 2. Tactical 3. Operational
Focus Meeting Meeting objectives Meeting
organization goal of subgroups in quantitative
by responding to order to support objectives /
new challenges and organization goal, targets to
Business
new needs through by developing support tactical
resource allocation plans for specific objectives.
to improve aspects of the
competitiveness. strategic plan.
Scope Broad Specific Very specific
Time Long term Medium term Short term
frame (E.g.3-5 years) (E.g. 1-3 years) (Monthly,
weekly, daily)
Done Top management Middle Middle and
by management lower
management

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 2d. Organising
Organising - Management process of
determining how best to arrange an
organisation’s resources and activities into a
coherent structure to achieve the organization
Business
goals.

Covers these areas:

• Capital
• Human Resources
• Raw materials
• Other resources
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Tutorial
This article was extracted from www.straitstimes.com on 18 Sep 2012.
Read it to find out what SIA did to re-organise itself.
Business
B10 HOME
SIA creates senior IT post
Airline sets out to improve customer
experience after website fiasco
By KARAMJIT KAUR
AVIATION CORRESPONDENT
SINGAPORE Airlines (SIA) has created
a new senior vice-president position –
a move that industry insiders say is a
sign that the airline is determined to
debug its website once and for all and
ensure that all its other IT applications
run smoothly.
The post of senior vice-president
(information technology) will go to Mr
Tan Chik Quee, SIA’s current senior
vice-president (marketing). It is effec-
tive from Oct 8.
The change in portfolio for Mr Tan
2d. Organising
is part of a larger reorganisation with-
in the company.
Under this shift, SIA’s IT depart-
ment will be hived off as a standalone
unit, with Mr Tan reporting directly to
chief executive officer Goh Choon
Phong.
Before this, IT came under the
corporate planning umbrella, which in-
cludes public relations and communi-
cations.
In an interview carried in the Sep-
tember issue of the airline’s in-house
newsletter, Outlook, Mr Tan said that
fixing the website will be one of his pri-
orities.
He told Outlook: “There is no deny-
ing that the revamp was problematic
and we still have some issues to ad-
dress.”
While the major bugs have been
fixed, the focus now is to improve
customer experience and this has to be
a permanent area of focus, he said,
adding: “We cannot just stop one day
and say that everything has been ad-
dressed and nothing more needs to be
done.”
SIA’s website has been a blemish
on the airline’s reputation since it was
relaunched on May 22 last year.
On launch day, it was taken down
for more than an hour because of soft-
ware bugs.
Months after that, customers con-
tinued to face user problems, includ-
ing booking flights and retrieving
flight and travel information.
Mobile phone users have
encountered similar issues on its
FRIDAY, SEPTEMBER
mobile app as well.
The Outlook article said that the re-
structuring will allow SIA to focus
more on the IT side of its business.
As more travellers do their book-
ings and other transactions online and
via mobile apps, airlines need to en-
sure that they have reliable IT sys-
tems, analysts said.
As part of the changes, Mr Chin
Yau Seng, who will return to SIA after
more than a year at Tiger Airways,
will become acting senior vice-presi-
dent (sales and marketing).
Mr Chin was parachuted in by Ti-
ger’s board to steer the carrier back to
stability after its Australian arm was
grounded over safety concerns.
SIA, which owns about a third of
the budget carrier, said then that the
intention was for Mr Chin to eventual-
ly return.
karam@sph.com.sg
2-15
 2d. Organising
Tutorial
Exercise:
Q1 CEO
Business
Q1
Corporate Planning
Draw the organisation
chart before the change,
including the CEO, IT PR & Comms
Corporate Planning, IT
and PR & Q2
Communications. CEO

Q2 IT Corporate Planning
Draw the organisation
chart after the change. PR & Comms

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 2d. Organising
Tutorial
Exercise:
Q1: What were the problems / challenges that SIA was facing
that triggered this change?
Business
Ans: Problems with its website and mobile apps related to
booking flights and retrieving flight and travel information.

Q2: How is the change expected to help SIA overcome the

problem?
Ans: With the Sr VP (IT) reporting directly to the CEO, the CEO
is expected to be have a more direct control and involvement in
overcoming the IT related issues.
Q3: What does this change reflect on the Sr VP for Corporate
Planning and his ability to handle the problems?
Ans: Negatively.
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 2d. Leading / Directing
• Leading - a management process of
guiding & motivating employees to
meet an organisation’s objectives.
Business
• Also known as Directing,
• Create and communicate the
company’s vision and guide
employees towards that vision.
• Unite employees in a clear and
targeted manner and motivate them
to work in the best interests of the
employers.
• Guide, train and coach employees
to work effectively.
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 2d. Controlling
• Controlling is the process of monitoring a firm’s
performance to make sure it is meeting its goals timely.

• Focus on numerous indicators of performance by

Business
constantly measuring them and adjusting their plans.
• Compare intermediate results against intermediate
goals.

• Reward employees for doing a good job and take

corrective actions to steer towards next intermediate
goal.
• Question: What performance indicator did the SIA
CEO measure and what corrective action did he take?

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 2d. Controlling

From goals or objectives

set during planning stage
Business

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Business 2e. Organization Structures

• Flat structures have fewer levels and wide spans of

control.
• Structure results in quick communications but
can lead to overworked managers.
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Business 2e. Organization Structures

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Business 2e. Organization Structures

• Tall structures have many levels of authority

and narrow spans of control.
– As hierarchy levels increase, communication
gets difficult, creating delays in the time being
taken to implement decisions.
– Communications can also become distorted as it
is repeated through the firm.
– Can become expensive

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 2f. Management Skills
3.
Conceptual
Business
Skills
2. 4.
Human Decision-
Relations Making
Skills Skills
5.
1. Time-
Technical Management
Skills Skills

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 Technical Skills
• The skills needed to perform specialised tasks.
• Important for first line managers.
• Many of them spend much time helping
Business

employees solve work-related problems,

training them and monitoring their
performances.

Accounting Programming Building

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 Human Relations Skills
• Skills to understand and
communicate with other
Business
people.
• Needed to get along well with
subordinates, motivate
employees and maintain high
morale.
• Equally important to convince
customers to buy their product
or services, suppliers to
reduce their prices, banks to
lend them money, landlords to
give them the best locations
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etc.
 Conceptual Skills
• Ability to think in abstract, to
diagnose and analyse different
Business
situations, and to see beyond the
present situation.
• Help managers recognize new
market opportunities and threats.
• Also help managers predict and
analyse the probable
consequences of their decisions.
• Top managers depend most on
conceptual skills, first line
managers the least.
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 Decision-Making Skills
• Ability to define the problem and select the best
course of action.
Business
1.
Gather
Facts
2. Identify
5. Evaluate
Possible
Results
Solutions

4.
3.
Implement
Chosen Evaluate
Alternative Alternatives

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 Time Management Skills
Ability to use time productively.
Leading time wasters:
Business

•Paperwork Personal Telephone

•Meetings Personal Net-Surfing

•Chit-chatting

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 2g. Types of Managers

Human
Business
Operations
Resources

Information
Marketing
Technology

Financial Others

These 5 are the main types.

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 Types of Managers
1. Human Resources (HR)
Business

Human resources manager is involved in the

management of the people in a business from the
point of selecting, hiring, training, motivating and
retaining them. Different issues are involved in
each of these stages. E.g. Qualifications and
experience for each position, employment
contracts, compensation (salaries, medical and
welfare benefits, days of leave), work duties,
responsibilities, recognitions and awards. (Topic 5)
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 Types of Managers
2. Marketing
Business
Marketing manager is involved in understanding
customer needs, defining the right
products/services available at the right places and
right prices and finally seeking means to
communicate them (promotion) to the target
customers. Strategic marketing involves SWOT
analysis to use the organisation’s strength to
capitalise on opportunities in the environment.
Marketing research helps to understand the
consumers’ needs. (Topic 3) 2-32
 Types of Managers
Finance manager is involved in all aspects of
the money involved in the business, from
Business
securing sufficient capital through loans or
investors to start the business, maintaining
sufficient cash flow to pay suppliers and
employees, to budgeting to ensure the
business stays profitable and to having long
term financial plans like loans or capital
injection for further expansions.(Topic 4)

3. Finance
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 Types of Managers
4. Operations
Business

Operations manager is involved in the

processes to produce the products/services in
a cost effective and efficient manner in order
to stay profitable and competitive. This
involves acquiring and using the resources
like capital equipment, raw materials, supplies
and the human resources needed to run the
operations. It also includes design,
production, inventory and quality control. 2-34
 Types of Managers

5. Information
Business

Information technology manager is involved in

collecting, storing, retrieving and delivering all
kinds of information that each of the
management areas will need for decision making
and to carry out their work smoothly. This area is
mainly driven by various technology based tools
– both hardware and software as well as the
people needed to use them effectively. Manages
the information technology for the company. (IT)
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 Types of Managers
Others
Business
6. Research & Development (R&D) manager is involved in
developing new and innovative products, services or
manufacturing processes, mostly based on new technologies.

7. Public Relations (PR) manager is involved in building a cordial

and positive relationship with various external bodies including
customers, government, public. This is usually achieved through
timely communications tools like press releases or events.

8. Legal manager is involved in providing legal advice and

services to the organization relating to contract management, real
estate transactions, customer claims against the company for
product damages and defects, litigation, employment law, sales
and leases matters, debt collection, bankruptcy. 2-36
 Types of Managers
Tutorial
What degree / area of training do you need for each
Business
area of management in the aviation industry?

1. Human Resource Let us visit the website

2. Marketing of SIA Engineering to
understand their areas
3. Financial of management better.
4. Operations
5. Information Which area is most
6. Research & Development important for SIAEC?
7. Public Relations
What about for SIA?
8. Legal

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 Review
 2a The Management Process

 2b Goals & Objectives

Business

 2c Levels of Planning

 2d Organising, Leading & Controlling

 2e Types of Organization Structures

 2f Management Skills

 2g Types of Managers
2-38