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BUS 101, Ch 6 notes

by: Alicia Notetaker

BUS 101, Ch 6 notes BUS 101

Alicia Notetaker

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Detailed notes from the textbook. Very helpful on tests
introduction to business
clinton williams
Class Notes
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This 11 page Class Notes was uploaded by Alicia Notetaker on Thursday September 29, 2016. The Class Notes belongs to BUS 101 at Tri-County Technical College taught by clinton williams in Fall 2016. Since its upload, it has received 4 views. For similar materials see introduction to business in Business at Tri-County Technical College.


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Date Created: 09/29/16
Ch. 6 Understanding the Management Process 6-1 What is Management?  Management: The process of coordinating people and other resources to achieve the goals of an organization.  Organizations use 4 kinds of resources: 1.) Material - The tangible & physical resources that an organization use. 2.) Human - People. Possibly the most important resource. Many firms believe that prioritizing human resources and working to ensure that employees are happy can greatly affect productivity and customer relationships. 3.) Financial - The funds an organization uses to meet its obligations to investors and creditors. (Ex. Tuition at a college) 4.) Informational - External environmental conditions. With so many things constantly changing rapidly, a business must adapt to survive. This is only possible through gathering information about competitors and changes to the industry. 6-2 Basic Management Functions  Planning - Mission: a statement of the basic purpose that makes an organization different from others. - Once a mission has been started, the next step is to engage in strategic planning - Planning: establishing organizational goals and deciding how to accomplish them st - Called the 1 management function because management functions depend on planning  Strategic Planning Process o Strategic planning process- the establishment of an organizations major goals and objectives and the allocation of resources to achieve them o Top management is responsible for strategic planning o Timeline is generally one or two years o Should be flexible and include action items (how plans will be implemented)  Establishing Goals and Objectives o Goal- an end result that an organization is expected to achieve over a 1-10 year period o Objective- a specific statement detailing what an organization intends to accomplish over a shorter period of time o Goals & objectives can involve a variety of factors such as sales, company growth, costs, customer satisfaction, and employee’s morale. o A small manufacturer may focus on sales to help them grow in the next 6 months, a large firm may be more interested in in goals that will drive the firm for many years. o Every member of an organization has a set of goals o Goals must be made consistent across an organization o When different departments have different goals the manager responsible must find a balance between the two, which is referred to as optimization o Optimization requires insight and ability  SWOT Analysis o SWOT Analysis- The identification and evaluation of a firm’s strengths, weaknesses, opportunities, and threats (pg. 169) o Strengths and weaknesses are the internal factors that affect a company’s capabilities -Strengths: a firm’s favorable characteristics and core competencies o Core Competencies- approaches and processes that a company performs well that may give it an advantage over its competitors. -Weaknesses: internal limitations a company faces in developing or implementing plans o External opportunities and threats exit independently of the firm -Opportunities: favorable conditions in the environment that could benefit the organization if properly exploited -Threats: conditions or barriers that may prevent the firm from reaching its objectives  Types of Plans (pg. 170) o Strategic Plans- An organizations broadest plan, developed as a guide for major policy setting and decision making -Designed to achieve long term goals -Set by board of directors -Defines what business the company is in or wants to be in, and the kind of company it is or wants to be. o Tactical Plans- A smaller scale plan developed to implement a strategy -May be updated periodically -Easier to change than strategic plans due to their more limited scope o Operational Plans- A type of plan designed to implement tactical plans -Plan is 1 year or less -Deals with how to accomplish specific objectives o Contingency Plans- A plan that outlines alternative courses of action that may be taken if an organizations other plans are disrupted or become ineffective -Used in conjunction with strategical, tactical, and operational, plans. -Address disruptions caused by natural disasters, criminal or ethical misconduct, political instability, or other unexpected activities -Ex.) Hawaii Electric Light drafts contingency plans incase lava strikes, so they will still have power.  Organizing the Enterprise - Organizing: The grouping of resources and activities to accomplish some end result in an efficient and effective manner.  Leading & Motivating - Leading: The process of influencing people to work toward a common goal. - Motivating: The process of providing reasons for people to work in the best interests of an organization. - Directing: The combined processes of leading and motivating - No one has discovered a general set of traits or characteristics that make a good leader  Controlling Ongoing Activities - Controlling: The process of evaluating and regulating ongoing activities to ensure that goals are achieved. - Control function has 3 steps: 1.) Setting standards against which performance can be compared 2.) Measuring actual performance and comparing it with standard 3.) Taking corrective action as necessary. - Control function is circular in nature - Repeated periodically until goal is achieved 6-3 Kinds of Managers -Managers can be classified in two ways: level within an organization & their area of management  Levels of Managers  Top Managers: an upper-level executive who guides and controls the overall fortunes of an organization -Smallest of the 3 groups -Responsible for: developing the organizations mission, & determine the firm’s strategy -Titles associated: president, vice president, chief executive officer (CEO), & chief operating officer (COO)  Middle Managers: a manager who implements the strategy and major policies developed by top management. -Largest of the 3 groups -Responsible for: develop tactical & operational plans, and coordinate & supervise the activities of the first line managers -Titles associated: division manager, department head, plan manager, and operations manager.  First-Line Managers: A manager who coordinates and supervises the activities of operating employees. -Most are former operating employees -Many of today’s middle and top managers began their careers on this first management level -Responsible for: working with and motivating their employees, answering questions, & solving day to day problems -Titles associated: office manager, supervisor, & foreman  Areas of Management Specialization  Financial Managers: a manager who is primarily responsible for an organizations financial recourses. -Areas of specialization include accounting & investment  Operations Managers: a manager who manages the systems that convert resources into goods and services -Traditionally they have been equated with manufacturing. -In recent years their techniques have been applied to the production of services and to a variety of nonbusiness activities  Marketing Managers: a manager who is responsible for facilitating the exchange of products between an organization and its customers or clients -Specific areas within marketing include: Marketing research, Product management, Advertising, Promotion, Sales, and Distribution  Human Resources Managers: a person charged with managing an organizations human resources programs -Helps with: Human resources planning, Designs systems for hiring, Training, Evaluating the performance of employees, & Ensures that the organization follows government regulations concerning employment practices  Administrative Managers (general manager): a manager who is not associated with any specific functional area but who provides overall administrative guidance and leadership -In charge of: Coordinating the activities of specialized managers in all these areas -Most top managers are really administrative managers 6-4 Key Skills of Successful Managers  Conceptual Skills: The ability to think in abstract terms. - The “big picture” - Useful in a wide range of situations including the optimization of goals described earlier  Analytic Skills: The ability to identify problems correctly, generate reasonable alternatives, and select the “best” alternatives to solve problems - These skills are needed in top-level managers because they must discern the important issues from the less important ones, along with recognizing the underlying reasons for different situations - Managers who use these skills not only address a situation but also correct the initial event or problem that caused it to occur.  Interpersonal Skills: The ability to deal effectively with other people. - The ability to: relate to people, understand their needs & motives, and show genuine compassion  Technical Skills: Specific skills needed to accomplish a specialized activity - These skills are needed in first-line managers (and to a lesser extent, middle managers), in order to understand the technical skills relevant to the activities they manage in order to train subordinates, answer questions, and provide guidance - Top managers don’t rely on technical skills as heavily as managers at other levels.  Communication Skills: The ability to speak, listen, and write effectively 6-5 Leadership - Leadership: The ability to influence others.  Formal and Informal Leadership - Both formal and informal have power of granting rewards or impose punishments, possession of expert knowledge, & personal attraction or charisma  Formal -Have legitimate power of position -Have authority within an organization to influence others to work toward the organizations objectives.  Informal -No authority -May or may not exert their influence in support if the organization -Informal leaders who identify with the organizations goals are valuable asset to any organization -Business can be greatly hampered by informal leaders who turn work groups against management.  Styles of Leadership - Autocratic leadership: task-oriented leadership style in which workers are told what to do and how to accomplish it without E - Participative Leadership: leadership style in which all members of a team are involved in identifying essential goals and developing strategies to reach those goals o Common in today’s business organizations o Can be classified into 3 groups: 1.) consultative leaders-discuss issues with workers but retain the final authority for decision making 2.) consensus leaders- seek input from almost all workers and make final decisions based on their support 3.) democratic leaders- give final authority to the group. Collect opinions and base their decisions on the vote of the group - Entrepreneurial leadership: personality-based leadership style in which the manager seeks to inspire workers with a vision of what can be accomplished to benefit all stakeholders o Task-oriented, driven, charismatic, and enthusiastic o Personality tends to be forward-looking and visionary o Enthusiasm energizes and inspires employees o Very interested in their business  Which Style of Leadership is the Best? - There is NO best - Each of the styles have advantages and disadvantages 6-6 Managerial Decision Making - Decision making: The act of choosing one alternative from a set of alternatives  1.) Identifying the Problem of Opportunity - Problem: The discrepancy between an actual condition and a desired condition - This stage of decision making creates many difficulties for managers. - Managers preconceptions of the problem prevent them from seeing the actual situation - Effective managers learn to look ahead so that they are prepared when decisions must be made  2.) Generating Alternatives - After a problem has been defined, the next task is to generate alternatives - Brainstorming encourages participants to produce many new ideas - During brainstorming, other group members are not permitted to criticize or ridicule - “Blast! Then Refine”- group members tackle a reoccurring problem by erasing all previous solutions and procedure… then the group re-evaluates its original objectives, modifies them if necessary, and devises new solutions. - Trial and Error  3.) Selecting an Alternative - Financial decisions are influenced by a number of considerations including: o Financial Constraints o Human and informational recourses o Time limits o Legal obstacles o Political factors - Satisfice- solutions that are only adequate and not ideal. - When lacking time or information, managers make decisions that “satisfice”  4.) Implementing & Evaluating the Solution - Requires time, planning, preparation of personnel, & evaluation of results. - If the alternative that was chosen removes the difference between the actual condition and the desired condition, the decision is considered effective. - If the problem still exists, managers may select one of the following choices: o Decide to give the chosen alternative more time to work o Adopt a different alternative o Start the problem identification process all over again 6-7 Managing Total Quality  Reasons for a greater focus on quality: Foreign competition, More demanding customers who have the ability to comparison shop online, & Poor financial performance resulting from reduced market shares and higher costs.  Total quality management (TQM): The coordination of efforts directed at improving customer satisfaction, increasing employee participation, strengthening supplier partnerships, and facilitating an organizational atmosphere of continuous quality improvement.  In order for TQM programs to be effective: o Customer satisfaction- providing higher-quality products, better customer service, & showing customers that the company cares o Employee participation- allowing employees to contribute to decisions, develop self-managed work teams, & assume responsibility for improving the quality of their work o Strengthening supplier partnerships- developing good working relationships with suppliers can ensure that the right supplies and materials will be delivered on time at lower costs o Continuous quality improvement- most effective long term approach  Benchmarking: a process used to evaluate the products, processes, or management practices of another organization that is superior in some way in order to improve quality.  Should be superior in safety, customer service, productivity, innovation, or in some other way  Four basic steps of benchmarking: 1.) identifying objectives 2.) forming a benchmarking team 3.) collecting & analyzing data 4.) acting on the results  Two issues are crucial in TQM programs: 1.) top management must make a strong commitment to TQM program by treating quality improvement as a top priority and giving it frequent attention 2.) management must coordinate the specific elements of a TQM program so that they work in harmony with each other.  Benefits of TQM: o Lower operating costs o Higher return on sales & investments o Improved ability to use premium pricing rather than competitive pricing  The long-term costs of not implementing TQM can involve damage to a company’s reputation and lost productivity and time spent fixing mistakes after they have happened


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