Business Management Overview

Business Management and the Decision Process

• Business management involves a continuous, coordinated process using material and human resources to achieve corporate objectives.
• Successful management requires a a diverse and versatile skill setto perform various managerial roles.
• Management's essential function encompasses not only making informed decisions at all levels but also identifying potential challenges and opportunities. This ensures that the company effectively aligns with the strategic vision laid out by senior management, facilitating the growth and progress of the organization as a whole.

Management Levels and Hierarchies

• Company management is structured with two levels:
  • Directors: establish long-term goals and oversee their completion.
  • Management: achieve objectives by setting sub-objectives and working with lower-level staff. Performance depends on the directors.
• This structured approach ensures that each level of management can align their actions with the overarching goals of the organization.

Basic Functions of Management

• Planning: Define objectives, strategies and allocate resources to accomplish those objectives.
• Organization: Vertical/horizontal differentiation of tasks into separate departments or teams. This is driven by tasks.
• Human Resources Management: Acquiring, training, and managing employees effectively.
• Control: Comparing actual performance results to pre-determined goals and making adjustments if necessary.

Types of Decisions

• Programmed decisions: routine, repetitive, based on established procedures. Used for well-defined, predictable situations.
• Non-programmed decisions: unique or unstructured situations, requiring judgment and analysis, not following standardized procedures
• Strategic decisions: high-level decisions impacting the organization's long-term direction and objectives.
• Tactical decisions: intermediate-level decisions carrying out strategies and plans.
• Operational decisions: low-level decisions concerning daily operations and activities.
• Personal decisions: individual decisions about lifestyle, finances, career.
• Group decisions: involve multiple individuals, often aiming for consensus.
• Crisis decisions: decisions needed in emergency and critical situations, typically requiring rapid response.

Planning Process

• Problem identification: Analyze current situation and future forecasts.
• Objective specification: Identify and break down main objectives into sub-objectives based on analysis.
• Planning assumptions: These are educated guesses about future conditions and outcomes that inform the planning process, helping to create a framework for decision-making and strategy implementation.
• Alternative courses of action: Consider different ways to achieve objectives.
• Evaluation of alternatives: Compare various options, using relevant criteria.
• Best alternative selection: Choose the most suitable option.
• Budgeting: Allocate resources to enact the chosen plan.

Organizational Charts and Manuals

• Organizational charts: Show the structure, relationships, and hierarchical levels. Crucial for organizational visibility.
• Organization manuals: They serve as comprehensive resources that outline the structure of an organization, delineating roles, responsibilities, and interdepartmental interactions to ensure clarity and efficiency in operations.

Human Resource Management

• HRM involves personnel needs analysis, allocating and de-allocating personnel, training and development, and performance evaluation.
• HRM is crucial for organizational success and growth.
• Job positions must be analyzed.
• Recruitment, selection, and onboarding of new employees are vital HRM functions.
• Downsizing—reduction—may also be necessary. (layoffs or temporary suspensions).
• Development and training is an important part of HRM.
• Job performance is evaluated regularly.

Management Control Function

• Constant monitoring of organizational results and deviations from plans.
• Establishing mechanisms to track results (e.g., statistics, audits).
• Determining measures to align actual results with pre-established standards.
• Necessary interventions and adjustments to maintain alignment, or modify if no longer effective.

Management Roles

• Interpersonal roles include building relationships, facilitating communication, and fostering teamwork.: Figurehead, leader, and leason act to represent, lead, and encourage collaboration, respectively.
• Informational roles: Monitor, disseminator, and spokesperson roles serve to collect, share, and disseminate information effectively.
• Decisional roles: Entrepreneur, disturbance handler, and resource allocator concentrate on reacting to and resolving business crises and changes; with the ultimate goal to allocate resources effectively.

Decision-Making Process

• 8-step model:
• 1 Identify the need,
• 2 gather information,
• 3 set clear goals,
• 4 generate options,
• 5 evaluate options,
• 6 select the best option,
• 7 execute the chosen course of action,
• 8 evaluate results and adapt as necessary.
• Important aspects of decision-making process include: identifying the need or problem, collecting information, evaluating potential solutions or options, picking the best option, executing the chosen option, and finally, evaluating the success of the decision.
• Understanding different decision types (programmed, non-programmed, strategic, tactical, operational, personal, crisis, and group) helps to more effectively structure the process to reach optimal results.

Organizational Components

• An organization's effectiveness hinges on its architecture and operations, composed of five core elements.
• Strategic Apex: At the helm of the organization are senior leaders, including executives such as the CEO and other top management. They are responsible for setting the vision, direction, and overall strategy of the organization, ensuring that all parts align with its long-term objectives.
• Middle Line: This layer consists of management personnel who bridge the gap between the strategic apex and the operating core. Managers in this category are tasked with translating strategic directives into specific actions and policies, overseeing the implementation of plans, and ensuring that their teams perform effectively.
• Operating Core: These are the essential workers who perform the primary tasks and create the output of the organization. Their roles vary widely, depending on the industry, but they keep the organization functioning day-to-day.
• Support Staff: Personnel in this category provide necessary assistance and services to facilitate the functioning of the organization, ensuring that the operating core can focus on their primary tasks without additional distractions.
• Technostructure: This group includes individuals whose main role is to standardize and refine processes and systems within the organization. They work on improving operational efficiency through methodologies, quality control measures, and the establishment of best practices, ultimately contributing to the overall productivity of the organization.