Management Process and Entrepreneurship

Management and the Management Process

• Management is the process of getting something done effectively and efficiently by and with other people. Its goal is to achieve business objectives.
• Efficiency means doing things right, focusing on optimal resource use and minimal costs.
• Effectiveness means doing the right things, ensuring that goals are achieved.
• Management involves four interconnected functions: Planning, Organizing, Leading, and Controlling.

Entrepreneur vs. Intrapreneur

• Entrepreneur: An individual who owns a company, takes significant risks, and reaps all the benefits of success. Resources are self-funded and professional development is self-funded.
• Intrapreneur: An employee within a company who innovates and takes risks, but does so within the confines of an established organization. The company provides resources and funds for professional development. Risk and reward are shared.

Three Dimensions of Entrepreneurship

• Business entrepreneurship: Focuses on profit-driven innovation and taking risks with new ideas. (e.g., Ford's Model T assembly line).
• Social entrepreneurship: Seeks to solve social problems with entrepreneurial skills, while profit is a secondary goal. (e.g., Mohamed Yunus' microloan programs).
• Personal entrepreneurship (Intrapreneurship): Employee-led innovation relating to an existing company, with the aim of developing new products or services within an established organization.

Management Levels and Skills

• Top management - primarily conceptual and interpersonal skills, leading to overall company goals and strategy.
• Middle management - balances interpersonal and conceptual skills, focusing on tactical planning and implementation within specific departments.
• Lower management - highly focused on technical and interpersonal skills, handling daily tasks and operations.

Stakeholders of a Company

• External stakeholders: Individuals and groups outside the company that influence or are influenced by its operations. (e.g., Customers, Suppliers, Competitors, Banks, Government, Interest Groups, and Unions).
• Internal stakeholders: Individuals and groups within the company who have a vested interest in its success (e.g., Employees, Shareholders).

Organization Characteristics

• Organizational structure specifies how people/tasks are divided, grouped, and coordinated within the company.
• Organizational objective(s): the shared goal or mission that drives the company.
• Essential elements of an organization include people, who work towards a common goal, and a structure (rules and organizational hierarchy) to coordinate efforts.

Horizontal/Vertical Organization Layout

• Horizontal organization structures focus on dividing goals and tasks to relate to differing functional groups, departments, or teams, which will streamline efforts towards defined goals.
• Vertical organization structures prioritize hierarchical relationships with different levels of authority, command and decision-making responsibilities that determine company direction and outcomes.

Ashridge Mission Model

• Goal: What the organization wants to achieve.
• Values: The core beliefs and principles that shape the organization's culture.
• Behavioral norms: The guidelines for how people should behave.
• Strategy: The path to meeting the organizational goal (how the company intends to achieve that goal)

Matrix Organization

• A matrix organizational structure uses dual management, where both functional and project leaders have shared responsibility. This is efficient where projects or services require input from several departments.

Motivation Theories

• Herzberg's Two-Factor Theory: Motivation factors (internal factors needed for satisfaction) separate from hygiene factors (external factors needed for preventing dissatisfaction). Hygiene factors are required to maintain a neutral state between the two.
• Maslow's Hierarchy of Needs: A five-tiered model of human needs, starting with basic physiological needs and culminating in self-actualization. Lower levels must be met before moving on.

Innovation

• Innovation entails implementing new combinations or improvements in products, services, or processes, as well as expanding markets.
• It promotes broader societal advancement by improving effectiveness/efficiency, therefore freeing up time for broader tasks.

Decision-Making within a Company

• Strategic decisions relate to the long-term direction of a company.
• Tactical decisions relate to the short to medium-term implementation of strategy within departments.
• Operational decisions are used for daily tasks.

Span of Control

• The span of control refers to the number of subordinates a manager is responsible for.
• Narrow span of control means limited direct reports due to high workload and less independence.
• Wide span of control means more direct reports due to distributed workloads and more independence.

Trends and Developments

• Trends - trends that provide opportunities and direction.
• Stakeholders - individuals and groups that have a vested interest in the organization's operation.

SMART Objectives

• Specific: Clear and unambiguous
• Measurable: Quantifiable and traceable
• Attractive: Relevant and desirable for the stakeholders
• Realistic: Achievable within constraints
• Time-bound: Within a defined timeframe.

Control Process

• Establish standards and methods for measuring results: Defining clear goals and how results will be assessed.
• Measure results: Regularly monitoring activities against pre-set standards continuously.
• Measure results against established goals: Checking performance against the defined objectives.
• Adjust if needed: Adapting strategy, processes, and operations whenever the results do not meet standards.

Mission and Vision

• Vision: Outlines the company's aspirations and desired position in the marketplace.
• Mission: Describes the company's core purpose, values, and how they function as a business to conduct their daily operations.

Entrepreneurship's Importance

• Promotes innovation: Drives invention and research, with the aim of producing new products, jobs, and opportunities.
• Enhances social cohesion: Improves quality of life and promotes community development.

Strategic Management Process

• Step 1: Setting the current mission, objectives, and the company's strategies.
• Step 2: Completing external analysis to understand the outside forces that shape the business.
• Step 3: Evaluating internal resources to ascertain the company's capabilities.
• Step 4: Evaluating the interplay of inside and outside factors, including the company's strengths, weaknesses, opportunities, and threats to build a strategy.
• Step 5: Establishing the appropriate marketing strategy for the market, by determining how the product will be introduced, distributed, and promoted.
• Step 6: Establishing an implementation plan, which determines how the strategy will be executed.

SWOT Analysis

• Strengths: Internal positive factors.
• Weaknesses: Internal negative factors.
• Opportunities: External positive factors.
• Threats: External negative factors.

Role of Professional Groups and Unions

• Professional groups: Represent specialized industries; advocate for sector-specific interests; and establish legal guidance.
• Unions: Advocate for employees in specific industries; they often lobby for better working conditions and fair compensation.

Organizing Structure

• An organizational structure is a system or framework that defines how a company divides, groups, and coordinates tasks in order to achieve its organizational goals.

Managerial Grid

• A model of management styles based on concerns for production (task efficiency) and people (employee needs), resulting in several different leadership styles.

Deming Circle

• Plan: Determining a course of action.
• Do: Executing the plan or undertaking the project.
• Check: Evaluating the results of the plan or project and its effect.
• Act: Improving the project or plan based on the preceding stages.

Gantt Chart

• A project management tool that visually represents tasks, timelines, and dependencies in a project.

Balance Sheet

• A financial statement that summarizes a company's assets, liabilities, and equity at a specific point in time, indicating the company's financial health.

Cash Flow

• The flow of cash within and into an organization, categorized for operational, investment, and financing activities.
• In essence, the measure of cash coming in and out of the business.

Business Plan

• A document that outlines a company's goals, strategies, and financial projections, serving as a roadmap and a guide for the business operations.

Leasing

• Leasing is a financial arrangement where one party (the lessee) uses an asset from another party (the lessor) in exchange for periodic payments over a specified period.
• It avoids large upfront investments and allows for flexibility in purchasing tangible assets.

Break-Even Point

• The point where total revenue equals total costs, thus resulting in "zero profit" or the "no gain/no loss" point for your organization.

Controlling

• Measuring performance regularly using metrics or standards in order to evaluate the effectiveness of objectives.
• Evaluating and providing feedback, is integral to the development and sustainability of the organization.

Depreciation

• Depreciation is the reduction of an asset's value used over a period of operation or utilization.
• It's important for calculating net income (profit) to accurately reflect the company's financial condition over time.

Bank Influence

• Banks are crucial stakeholders in a company's operations due to their role in providing loans for capital investments and expansion.
• Banks influence operation decisions, and in certain cases, their ethical policies can affect or determine the success/survival of the organization.

Manager vs. Leader

• Managers are responsible for achieving objectives using a more structured and methodical approach.
• Leaders focus on inspiring and supporting teams to achieve shared goals.

Inflation

• Inflation is the rate at which prices for goods and services are rising.
• It generally erodes the purchasing power of money over time.

Situational Leadership

• Situational leadership recognizes that there is no one perfect style of leadership. A leader needs to tailor their approach to the specific context, skills, and readiness of the people they lead.

Product Life Cycle (PLC)

• Introduction: A period of slow sales growth as a product is introduced to a new market.
• Growth: A period of rapid sales growth as the product gains market share.
• Maturity: A period of slowing sales growth as the market for the product reaches its limit.
• Decline: A period of declining sales as the product becomes less relevant or desirable.

Cost Price Calculation

• Selling price, total cost, industrial cost, and proportional cost are important elements in price determination as they influence the projected profit margin and product pricing in the market.