Business Administration Past Paper PDF

Chapter 11: "The Manager's Role in All This" ============================================ **SO WHAT'S [YOUR] ROLE IN ALL THIS?** Until now, the focus of our course has been: **(a)** the natural flow of a business model; and **(b)** the role that employees and finance play in this flow; But what...

Chapter 11: "The Manager's Role in All This" ============================================ **SO WHAT'S [YOUR] ROLE IN ALL THIS?** Until now, the focus of our course has been: **(a)** the natural flow of a business model; and **(b)** the role that employees and finance play in this flow; But what exactly is a **manager's** responsibilities in all of this? They're clustered into **four groups:** 1. **Planning** (i.e. setting goals under consideration of your organization's\ external and internal environment); 2. **Organizing** (i.e. systematically arranging resources, tasks, and people\ in a structured manner to reach the goals that have been set); 3. **Communicating** (i.e. exchanging information and ideas with all your stakeholders in order to inform, learn, guide, and motivate them towards the goals that have been set); 4. **Controlling** (i.e. monitoring processes and performance to ensure your organization is moving towards the goals adequately (and taking corrective actions as needed). These are your "To Do's". In the following four chapters, we're going to look at them closely. **"MANAGEMENT": MANY TYPES OF PIZZA, MANY LEVELS OF BAKERS** We routinely use the term "**Management**" as if it were a standardized, "one size fits all"\ activity, much like the steps of baking a pizza. But that's inaccurate. Just like there are different types of pizza, there are [many] different functional\ **areas of management**. And once an organization reaches a certain size, there will\ also be different **layers of management** within these functional areas. **Some of the Functional Areas of Management: ([many more exist])** - - - - - - - - **The Levels of Management:** 1. 2. 3. **Why is this effective?** The levels of management allows different managers to [specialize] in their respective fields, enabling them to focus and work more effectively. It allows for [clear accountability, efficient communication, and effective resource allocation.] *Smaller organizations need their managers to cover a larger spectrum of challenges, due to the size of their work-force. This means that managers have to cover more than one level of management in order to accomplish their goals.* **\ ** **PLANNING: WHERE DO WE WANT TO GO (AND HOW DO WE GET THERE)?** The first of the four managerial responsibilities is "**Planning**". The core question\ that planning is meant to answer is: "Where do we want to go and how do we get there?" Or -- formulated in more organizational terminology: **"What are our goals and what is our strategy for reaching them?"** +-----------------------------------+-----------------------------------+ | **PLANNING =** | 2. **Setting Goals (i.e. "Where | | | do we want to go?")** | +===================================+===================================+ | | 1. **Formulating Strategy (i.e. | | | "How do we get there?"** | +-----------------------------------+-----------------------------------+ As you can imagine, planning is a never-ending cycle. Initially, goals are set\ and a strategy is formulated. Then, at regular intervals (or in case of market\ disruptions), the strategy and goals are reviewed, further detailed, modified\ or -- in some cases -- even abandoned. **Planning is a continual, never-ending, iterative process.** **THE MANY LEVELS OF ORGANIZATIONAL GOALS** All real managers set goals, but the types of goals that a top-level manager sets differ from\ the types of goals that a frontline manager sets: primarily in terms of **scope** and **timeframe**. Goals are hierarchically clustered into: 1. 2. 3. Let's go back to that pizza example. Assume we're running a pizzeria.\ These would be examples for strategic, tactical, and operational goals. - - - [As you can see, every lower-level goal must be set with a view to (ultimately) achieving a higher-level goal.] **SMART GOALS: NOONE REACHES GOALS THAT AREN'T CLEARLY DEFINED** As part of the human species, we're biologically wired to want to achieve\ things. This means that each of us regularly set goals for ourselves. There are many reasons why so few of us reach our goals. But one of the most\ underestimated reasons lies in [the way in which we formulate our goals]. Between the minute you woke of this morning and the minute you realized it\'s only Monday, not Friday, you probably set yourself twelve goals. "I'll do my homework on the bus", "I'll finally go shopping for food today", "I'll call my buddy 'Sergio Serpentine' and wish him a happy birthday even though he's in jail", etc. We set more goals on autopilot mode every day than chickens lay eggs. So we make a very faulty assumption: We think that because we set goals OFTEN, we set them well. We think of "goal-setting" as something 'easy', something 'peripheral' compared to e.g. calculating "deferred tax assets" on an accounting exam. Or memorizing the "Project Management Book of Knowledge". **The harsh reality is that most of us are absolutely horrible at setting goals.** Why is that? 1. 2. - - You get the picture. If you want to maximize your probability of getting "[from here to there]"\ rather than "[from here to here]", you need to train yourself repeatedly to formulate goals in as specific a manner as possible. And always with a deadline! This is true for all of us as individuals, and it's also true for every organization. A technique that provides an excellent set of training wheels for this purpose is that of the **SMART Goal**. The concept of SMART Goals was first introduced by George Doran. Doran listed [a set of five criteria that a goal must fulfill to increase the probability that the\ goal will be reached]. We'll look at these criteria on the next slides. 1. **SMART CRITERION \# 1: (S)PECIFIC** A goal is specific if it has been [formulated so precisely that different people interpret its content identically]; 2. **SMART CRITERION \# 2: (M)EASURABLE** A goal is measurable if -- after the deadline - [it can be objectively measured whether or not the goal has been reached]. This often goes 'hand-in-hand' with "specific". "Measurable" can involve numerical targets, but it doesn't need to; **\ ** 3. **SMART CRITERION \# 3: (A)CHIEVABLE** A goal is achievable if the people involved (e.g. team of employees) believe that by applying an 'ambitious-but-fair' resource quantity, the goal can be achieved. 4. **SMART CRITERION \# 4: (R)ELEVANT** A goal is relevant if it contributes to achieving one or more higher-level goals in an organization's goal hierarchy. 5. **SMART CRITERION \# 5: (T)IME-BOUND** A goal is time-bound if it includes a deadline by which the goal is to be achieved. *"Just because we do something [often] doesn't mean we do it well" -- G. Fenkart-Fröschl, 2023* In summary, setting goals is one of those management activities that appears so easy because we all set goals all the time, anyway. While the latter is true, the former isn't. [Setting goals in a manner that maximizes the probability that they will be reached is a skill that must be trained meticulously]. Think of how many billions of euro are wasted around the world each year because so many managers don't feel the need to develop and master this core managerial skill. You need to be better than them. **\ ** **FROM GOALS TO STRATEGY** Once managers have set goals, they plan the **Strategy** (i.e. [the sequence of activities whose execution will lead the organization to its goals]). Just like goals, strategy is formulated on [multiple hierarchical levels.] 1. **Corporate Strategy**: [If a company owns one or more other companies], then it is known as a "**Group**". In such cases, an overall strategy has to designed for the entire Group. 2. **Business (Unit) Strategy**: Every company (or division) must set an overall strategy for itself. *If the company is part of a Group, then this strategy must integrate logically into the Corporate Strategy.* 3. **Functional Strategy**: Additionally, every department of a company (e.g. Operations, Marketing, IT) [also] sets its own strategy. *A Functional Strategy must integrate logically into the Business (Unit) Strategy.* 4. **Operational Strategy**: The lowest level of strategy focuses on the day-to-day\ activities of e.g. a department. *An Operational Strategy must integrate logically into the department's Functional Strategy.* Organizational strategy -- particularly on the levels of "functional strategy" and "operational strategy" is often made "actionable" in form of an **Action Plan**. An Action Plan is [a document that describes the specific steps and resources required to achieve one (or more) organizational goals]. If goals answer the question of "Where to?", then an Action Plan is a very specific answer to the question of "How to?" It provides a roadmap for all employees involved in reaching a goal. The main components of an Action Plan include: - **Objective / Goal** -- Specification of the goal(s) to be reached; - **Tasks / Activities** -- A (sequential) list of all the specific steps that\ e.g. a department will carry out in order to reach the goal(s); - **Timeline** -- Outlines the start-and-end dates for all tasks/activities; - **Budget** -- Specification of the human and financial resources that have been allocated towards the tasks/activities. - **Roles** -- Defines the authorities and responsibilities of everyone involved in the tasks/activities; - **Performance Indicators** -- Specifies the metrics that will be used to measure the level of progress towards the goal(s); - **Monitoring and evaluation** -- Specifies how/when these performance indicators will be measured and interpreted. - **Risk Assessment** -- Identifies potential risks / issues that might arise in context of the tasks/activities; - **Communication** -- Outlines how departments and team-members will communicate with each other, and with relevant stakeholders. - **Contingency plans** -- Lists 'backup' plans that can be adopted in case the Action Plan does not deliver the expected level of progress towards the goal(s); **PLANNING: HERE'S HOW IT ALL THOSE GOALS AND STRATEGY FIT TOGETHER\...** **STRATEGIC GOALS** = are formulated on the basis of: Vision, Mission, Core Values, Business Model, and research (e.g. SWOT analysis). Leads to\... **= CORPORATE STRATEGY** ----------------------- --------------------------------------------------------------------------------------------------------------------------------- -------------------------------- **= BUSINESS (UNIT) STRATEGY** **TACTICAL GOALS** = are derived from the Strategic Goals and lead to\... **= FUNCTIONAL STRATEGY** **OPERATIONAL GOALS** = are derived from the Tactical Goals and lead to\... **= OPERATIONAL STRATEGY**