Business management: functions, levels, and process

• Business management involves managing productive resources through knowledge and skills.

Management Functions

• Planning sets goals and establishes plans.
• Organization distributes tasks and responsibilities.
• Control verifies plan execution.
• Coordination works towards objectives through communication.

Management Levels

• Top management: general manager or president.
• Middle management: administrator or department head.
• Line management: operational level chief.
• Business management involves administrative processes.
• Successful operation, anticipation, and effective communication are important.
• Elements include decision-making, communication/leadership, and human talent/motivation.

Administrative Process

• This is a series of steps to execute administration.

Mechanics of the Administrative Process

• Planning involves defining what to do:
• Setting goals and objectives.
• Strategy development and budgeting.
• Organization involves how to do it:
• Includes structure, activities, and procedures.
• Direction involves getting it done and providing motivation.
• Control involves assessing how it was done through measurement and experience.

Planning Defined

• Includes mission, vision, objectives, strategies, policies, procedures, programs, and budget.
• The Planning Process outlines steps to define functions, timelines, and support to achieve goals
• The purpose is direction, reducing uncertainty, ensuring success, and improving capacity.

Organization Defined

• Departmentalization: Departments with specialized functions coordinated with other units.
• Organizational Culture: A learning process, a system of shared meanings and ethics.
• Organization: Establishes the structure to systematize resources and hierarchies.
• Formation involves workgroups with functions based on skills and abilities.
• Importance includes continuous change, supplying methods, avoiding slowness, and reducing effort.
• Principles:
• Objective = goal
• Specialization = flexible
• Hierarchy = authority
• Coordination = balance
• Resources needed include organization and manuals.

Leadership

• Capacities and abilities to influence, direct, motivate, and guide actions to achieve goals.
• Leadership is linked to hierarchy and whether management directs or delegates.
• Fundamental aspects: setting an example.
• Intellectual Process: conceiving objectives.
• Human Process: influencing others to pursue values and achieve goals.
• A leader requires tactical knowledge, essential precision and judgment, trust, and consensus.

Leader Characteristics

• Prudent and responsible.
• Does not abuse authority and inspires.
• Guides collaborators and has vision and ideals.

Qualities of a Leader

• Realist, adaptable and agile
• Social and collaborative.
• Open communication with less hierarchy.
• Energetic, responsible, a facilitator, an advisor, and is bold.

Leadership Style

• Depends on character and circumstances.
• Can be authoritarian or autocratic.

Motivation

• Internal and external forces action on an individual.
• "Dynamic root of behavior."
• Intrinsic: Personal motivation, satisfaction,
• Extrinsic: External, tangible (salary, benefits).
• Transcendent: Contributing, setting aside individual interests.
• Direction involves directive area and bases thinking.
• A directive person is important, plans, coordinates, and is responsible for success.
• Roles may be by area or teams and need technical and cognitive skills.

Key Processes

• Planning: strategies.
• Organizing: internal structure or organizational chart.
• Coordinating and leading: actions.
• Executing: teamwork.
• Analyzing teams: what improvements?
• A good manager has management skills, is organized, experienced, decisive, and perceptive.

Manager Functions

• Ongoing, with problem analysis, decision-making, and communication.
• Sequencing: Planning
• Business Environment: Develop strategies to achieve goals and ensure the company's flexibility for survival.
• Factors: External and Internal like economy, sustainability, opportunities.
• Importance: Addressing demand, improving functionality, effectiveness, and organizational growth.

Business Characteristics

• Constant change and dynamics
• Evolution and ambiguity
• General: External factors (PESTEL).
• Specific: Internal and external.

Microenvironment

• Static/Direct: The company with little impact.
• Gaps: everything departmental.
• Suppliers: Provide inputs, can negotiate or influence.
• Clients: Wholesalers, retailers.
• Competitors: Present.
• Public

Variables

• Competition: current and potential.
• Group: All or each one.
• Substitute products and sector and power.
• Perception includes information.

Financials

• Interest in scenarios.

Porter’s Five Forces

• Competitive rivalry.
• Supplier power.
• Threat of substitutes.
• Buyer power.
• Threat of new entrants: Current and potential competitors.

SWOT Analysis

• Internal: Strengths and Weaknesses.
• External: Opportunities and Threats.

Motivation

• Extrinsic: External, self-discipline.
• Intrinsic: Internal, own motivation.

Benefits of Work Motivation

• Efficiency: Supports values and seeks/supports them.
• Productivity: Multiplies work output.
• Interpersonal Relationships: Creates union and strategies.
• Effectiveness: Increases the chances of achieving goals if there is satisfaction.
• Stress Management: Provides positive perspectives.
• Job Success: Leads to success with higher job satisfaction.

Motivation Techniques

• Find incentives and gather new ideas.
• Build interpersonal relationships and practice optimism.
• Take breaks, organize, plan, and expand possibilities.
• Appreciate how the work fits in the role.
• Support idea contribution and provide valuable information.

Business Environment Analysis

• It forecasts, analyzes, plans, and develops the environment to create value and sustainability.
• Includes auditing studies to identify the company's position.
• The entrepreneurial environment is evolving with updated information on world.
• Based on gathering information and includes internal and external variables.

Macro and Micro Environment

Macro Environment Factors

• Economy
• Culture
• Nature
• Demography
• Politics
• Technology

Micro Environment Factors

• Competitors
• Suppliers
• Clients
• Intermediaries
• Public
• Internal: Internal organization, can be controlled: personnel, culture, processes.
• External: External organization, cannot be controlled.
• Through processes and policies.

PESTEL Model

• The general environment (PESTEL) is made up of six external factors that influence a company:
• Political
• Economic
• Socio-cultural
• Technological
• Ecological
• Legislative
• The specific environment includes factors closer to the company, such as:
• Customers
• Suppliers
• Competitors
• Public
• Intermediaries
• Associates

Microenvironment

• Company: Departments united to achieve objectives.
• Strengths, weaknesses, resources.
• Suppliers: Provide resources for the production of goods or services.
• Distributors: Ensure the product reaches the final consumer.
• Clients: Individuals who acquire the product to satisfy needs.
• Competition: Companies that produce similar goods/services.
• Prescribers: Influence the purchase decision.
• Financial Intermediaries: Impact the economy.

Analyzing the Environment

• Understanding the environment allows a business to make educated strategic decisions
• The macro-environment shapes trends in businesses and is made of external forces.
• Factors cannot be controlled, but can be analyzed to prep for changes and strategies.

Macro Environment Factors

• Legal: constitution, policies, laws, government regulations (local, national, international).
• Environmental: climate, natural resources, environmental impact of economic activity.
• Sociological and cultural: nature and social class, demographics, culture, customs.
• Economic and competitive: national economic activity level, unemployment rate, comms.
• Technological: technological advances, production innovation, methods and processes.
• Demographic: population, migration, diversity.
• Economic: purchasing power, credit access, and financial risk level.
• Analyzing the macro-environment helps companies adapt to market changes to make strategic decisions.
• Analysis ensures that planning and business management is well-executed.