EB122 – SU1 (Ch9) General and Strategic Management

General Objective
After you have completed this study unit, you must understand the
overarching business function called general and strategic management,
including various management concepts such as the management tasks,
levels, skills, competencies and roles.
 General Information
Lecturer responsible: Mr Storm Watson – storm.watson@mandela.ac.za
Learning objectives
1. Give an overview of the main schools of management thought
and their main authors or proponents. (Section 2)
2. Identify the main contributions of the schools of thought to
contemporary management theory. (Section 2)
3. Distinguish between the concepts "Information Society",
Knowledge Economy" and "Knowledge Management" (Section
2)
4. Describe the concepts of general management, leadership and
strategic management. (Section 3)
Learning objectives
5. Explain the strategic management process. (Section 3)
6. Differentiate between the different managerial levels, skills,
competencies and roles. (Section 4)
7. Give a presentation of the importance of the four managerial
tasks, planning, organising, leading & controlling. (Section 5)
INTRODUCTION
 This study unit gives a concise overview of all the activities of the overarching
business function called general and strategic management.
 The study unit includes a discussion on the relationship between general
management, strategic management and leadership and the major part of the
chapter will be devoted to an overview of the four managerial tasks (planning,
organising, leading and controlling) underpinning general and strategic
management.
 The study unit will also incorporate sections on managerial levels, skills
competencies and roles.
INTRODUCTION
 See Figure 9.1 page 218
Management – Is the rational process
of getting things done, with the help of
other people by performing
management tasks such as planning,
organising, leading and controlling to
achieve the goals of the business
enterprise.
 LEARNING OUTCOME 1

Give an overview of the main schools of

management thought and their main
authors or proponents. (Section 2)
 LEARNING OUTCOME 2

Identify the main contributions of

the schools of thought to contemporary
management theory. (Section 2)
Classical Management School
 Theclassical management school can be summarised as follows:
• The scientific and Bureaucratic management schools
• Fayol’s (Functional School)
• The human relations or behavioural management school
Contemporary Management School
 The Contemporary Management school is believed to have originated in the
1950’s
 Read about the following in your textbook on Pg 222-223

• Organisational Behaviour School

• Quantitative Management School
• Contingency Management School All of these are
• Total Quality Management (TQM) School explained in detail
• Asian Management School on page 222 & 223
• Global Management schools
• Afro-centric management style
 LEARNING OUTCOME 3

Distinguish between the concepts "Information

Society", Knowledge Economy" and
"Knowledge Management" (Section 2)
The outstanding features of an Information Society
(IS) include the following:
 The Information Society (IS) is a concept in which information replaces
material goods as the chief driver of economic activities. The main product
or a prerequisite to other products is the acquisition of relevant information. In
essence, in the information society, the workers’ outputs and the success of the
business depend on the ability to utilise information.
 In an IS there is a general appreciation of the importance of information and
knowledge as key inputs into socio-economic, political and other social
processes, and strong support for knowledge retention, knowledge networking
and knowledge discovery strategies.
 Read Further on Page 224
Outstanding features of the Knowledge
Economy:
 The Knowledge Economy (KE) is an economic system of production and
consumption that is based on intellectual capital. The production or
distribution of knowledge is a foundation block of the knowledge economy.
 The KE is one in which the generation and exploitation of knowledge has
come to play the predominant part in the creation of wealth. It is not simply
about pushing back the frontiers of knowledge; it is also about the most
effective use and exploitation of all types of knowledge in all manner of
economic activity.
 Read further on page 224
Outstanding features of Knowledge
Management:
 Knowledge management (KM) is the systematic management of the
knowledge assets of a business for the purpose of creating value and meeting
tactical and strategic requirements; it consists of the initiatives, processes,
strategies and systems that sustain and enhance the storage, assessment,
sharing, refinement and creation of knowledge.
 KM therefore implies a strong tie to the business’s goals and strategy, and it
involves the management of knowledge that is useful for some purpose and that
creates value for the business in question.
 Read further on page 224
 LEARNING OUTCOME 4

Describe the concepts of general

management, leadership and strategic
management. (Section 3)
Concepts: General management, leadership
and strategic management
 General management - is the overarching business function charged with
the management and integration of all the other business functions.
 Leadership - the individuals who are regarded collectively as the leaders in a
business. Leadership also refers to the activity of leading a group of people or a
business firm, or the ability to do this.
 Strategic management - the process of forming a strategic vision, setting
objectives, crafting a strategy, implementing and executing the strategy, and
then over time initiating whatever corrective adjustments in the vision,
objectives, strategy, and execution are deemed appropriate.
 LEARNING OUTCOME 5

Explain the strategic management

process. (Section 3)
Concepts: General management,
leadership and strategic management
The strategic management process

 Figure 9.2 page 227

Concepts: General management,
leadership and strategic management
The strategic management process Adopted
from figure
Task 1: Developing a strategic vision and business mission
9,2 pg 227

Task 2: Setting Objectives

Task 3: Crafting a strategy to achieve the desired outcomes

Task 4: Implementing and executing the chosen strategy effectively

and efficiently

Task 5: Evaluating performance, monitoring new developments, and

initiating corrective adjustments  Figure 9.2 page 227
 LEARNING OUTCOME 6

Differentiate between the different

managerial levels, skills, competencies
and roles. (Section 4)
Managerial levels, skills, competencies and
roles
Managerial levels, skills and planning responsibilities

 Figure 9.3 page 228

Managerial levels, skills, competencies and
roles
 Executive management - Executive management comprises those individuals
or groups (founder entrepreneurs and executive managers) who are responsible
for managing the firm as a whole.
 Middle or intermediate management - Middle management consists of the
managers in charge of the business functions of the enterprise.
 Lower-level management - Lower-level management or supervisory
management includes section heads, such as foremen, store managers, area
managers and supervisors
Managerial levels, skills, competencies and
roles
 Technical skills- the knowledge and capabilities to perform specialised tasks
 Analytical skills- the ability to analyse information and to come to well-
considered conclusions.
 Interpersonal skills- life skills we use every day to communicate and interact
with other people, both individually and in groups, both inside and outside the
business.
 Conceptual skills - skills that allow a person to think creatively, while also
understanding abstract ideas and complicated processes.
Managerial levels, skills, competencies and
roles

 Figure 9.4 page 230

Managerial levels, skills, competencies and
roles

 Figure 9.4 page 230

 Managerial levels, skills, competencies and
roles
 Interpersonal roles
• Figurehead: Communicating with employees and customers; welcoming important
visitors; signing legal documents; and representing their businesses at official
functions.
• Leader: Leading through sound business and personal values, work ethics and code
of ethics; inspirational communication; staffing; and developing and motivating all
subordinates.
• Link: Maintaining network of external business contacts and representing their
firms on business and community bodies that provide links to valuable
opportunities and information, such as the local chamber of commerce.
 Managerial levels, skills, competencies and
roles
 Decision-making roles
• Entrepreneur and intrapreneur: Continuously searching for and exploiting new
opportunities to grow their businesses.
• Conflict handler: Handling problems such as electrical power failures, non-
delivery by a suppliers, or labour disputes.
• Resource allocator: Allocating resources to tasks and departments; and scheduling,
authorizing and financing projects within the budgetary framework of the business.
• Negotiator: Representing the business in all major negotiations, for example, with
suppliers of raw materials and trade unions.
 Managerial levels, skills, competencies and
roles
 Informational roles
• Monitor: Scanning the business environments; perusing periodicals and business
reports; maintaining contacts with internal and external takeholders; and gathering
information at meetings, through informal conversations and from feedback from
project teams.
• Disseminator: Convening informational meetings; circulating memoranda to the
staff; and making telephone calls and sending e-mails to relay information.
• Spokesperson: Transmitting information concerning policies, plans or products to
all relevant stakeholders.
 LEARNING OUTCOME 7

Give a presentation of the importance of

the four managerial tasks, planning,
organising, leading & controlling.
(Section 5)
The Management Process
From Chapter One onwards, we have emphasised that entrepreneurs and managers
must execute four key interrelated managerial tasks aimed at achieving the strategic
intentions (mission, goals and objectives) of the business. The four key managerial
tasks of planning, organising, leading and controlling collectively constitute the
management process. The four managerial tasks and their subtasks are reproduced in
Figure 9.7 and explained in Sections 5.1 to 5.4 of this chapter.

 SEE FIGURE 9,7 ON PAGE 236

The Managerial Tasks and Subtasks

Figure 9.7
Pg: 236
PLANNING
Planning as a managerial task
 Planning involves defining business goals, crafting an overall strategy for achieving
these goals, and developing a comprehensive set of plans to integrate and coordinate the
activities of firms. It concerns both what is to be done and how it is to be done.

 Planning is important for the following reasons:

§ Planning gives direction to the business as a whole, because it ensures that all activities in
the business are focused towards a common objective, that all resources are properly
allocated to these activities, and that managers know which performance results must be
controlled.
§ Planning limits risk and uncertainty, because the firm’s goals and objectives are known to
all its stakeholders. This instils confidence and a proactive attitude towards the future.
Nature of Planning
 Planning is not always a process of logically defined steps, but rather a mental
process in which unknown data about the future is combined with known data
about the present, in order to formulate a plan. We would, however, propose the
following broad guidelines for the planning process. Figure 9.8 depicts the
typical steps (or phases) in the planning process.

 SEE FIGURE 9,8 ON PAGE 237

 Steps in the planning process

Step 1: Step 2: Step 3: Step 4: Step 5: Step 6:

Formulate clear Collect and analyse Set assumptions Evaluate the costs Communicate the Monitor the
objectives, information that and develop and benefits of plan and the control implemented plans
standards, norms would play a role in alternatives. these alternatives standards (and/or through regular
and targets against the achievement of and choose the norms and targets) feedback meetings.
which the actual these objectives, best plan to to the relevant
results will be standards, norms achieve the stakeholders.
controlled. or targets. objective.
Types of plans found within a firm
 Depending on the classification criteria, various plans can be identified in
business firms. The various types of plans based on the classification criteria
are illustrated in Table 9.2.

 SEE TABLE 9,2 ON PAGE 238

Types of permanent plans
Comprehensiveness

• Strategic
• Functional
• Operational

Time span

• Long-term
• Medium-term
• Short-term

Permanency

• Unique/Single-use
• Standing
ORGANISING
Organising as a managerial task
 The task of organising entails a process through which a structure of tasks
and authority relationships is created and resources (people, equipment
and raw materials) and functions are allocated to these structures so that
business goals can be achieved.

 Without executing organising activities, businesses will not be coherent and

integrated entities. Through the process of organising, an organisational
structure is created that makes it possible to undertake the activities necessary
to achieve the desired organisational goals.
Importance of organising
 The most important benefits of organising are:
§ Organising leads to the attainment of synergy (the 2 + 2 = 5 effect, where the output is
greater than the sum of the inputs). In other words, through organising, co-operation to
work towards a common set of objectives is achieved among people.
§ Because of the clarity of structures and relationships, the duplication of tasks is
eliminated.
§ Clarity in lines of authority, responsibility and accountability facilitates reporting and
organisational discipline.
§ Organising ensures that work is completed and products supplied at the desired time.

 Organising is consequently important for the determination and execution of tasks. Without
the task of organising, planning will remain an intellectual exercise that does not lead to
tangible results.
Organisational structures and organisational systems in
firms
 A firm’s organisational structure or organogram is the product or end-
result of the organising process. Apart from establishing the authoritative
relationships and lines of communication between individuals and groups,
the organisational structure also indicates how departments, divisions or
sections are formed.
Organisational structures and organisational systems in
firms
Departments are generally formed according to five methods:

Forms of
departmentalization

Functional Product Geographical Customer Matrix

departmentalisation departmentalisation departmentalisation departmentalisation departmentalisation
LEADING
Leading as a managerial task
 Some management scientists regard leading (or leadership) as more important
than the managerial tasks (planning, organising and controlling), as
management primarily entails getting the work done through other people.

The following will now be examined briefly:

 The definition of leadership; and
 The nature and importance of leadership.
Definition of leadership
 Leadership (or leading) is the ability
of a manager to influence the
behaviour of co-workers, through
motivation, communication and
empowerment, so that they
voluntarily contribute to the
attainment of the business intentions
of their firms.
Nature and importance of leadership
Leaders exhibit a personal influence (power), which they use, through
communication, persuasion and example, to direct followers to goal attainment.

The influence of leaders is incrementally over and above a mechanical compliance

with directions and orders.

Leadership causes others to act and respond in a shared direction (a component of

transformational leadership).

Leadership is the principal dynamic force that motivates employees and coordinates
the business in the achievement of its objectives.

Leaders are willing to take the responsibility for their actions (in other words, they are
accountable).
CONTROLLING
Controlling as a managerial task
 Controlling can be defined as those
activities that involve the
monitoring of actual performance,
comparing performance to
predetermined norms, standards,
plans, policies, procedures and
objectives, and taking corrective
action, if necessary.
Importance of controlling
 By executing controlling activities, managers ensure that any unfavourable
deviations, faults, mistakes and non-compliance with standards are
rectified timeously and also prevented in future, if at all possible.
 Controlling is the critical link to planning, because managers will never know
whether the goals they have set, have been met or are progressing according to
plan if they do not exercise control.
Types of control
 In all businesses, three types of control should be implemented, as depicted in
Figure 9.10.

 SEE FIGURE 9,10 ON PAGE 242

Types of control
Pre-control is aimed at preventing or minimising
errors.

Concurrent control monitors activities while they

are taking place.

Post-control is done reactively, in other words,

after the error or event has occurred.
Application – self-evaluation/quiz
 Do the following self-evaluation questions for Study Unit 1 LO 6 – Not to be
handed in – only for self reflection
 Question 1:
Strategic management is a key task of executive management. Briefly describe the steps involved in the
strategic management process.
 Question 2:
Explain the importance of planning, organising, leading and control as managerial tasks.
 Question 3:
Without the control task of management, firms will not be able to assess whether the goals that they have set
have been met, or whether their business activities are progressing according to plan. Support this statement
by explaining the nature of the control task of management.
If you have any questions regarding the content of
this study unit, please contact Mr S Watson

Storm.watson@mandela.ac.za