Topic 4 (Chapter 6) PDF

Topic 4 (Chapter 6 in text book) The Nature of Management © McGraw Hill LLC. All rights reserved. No reproduction or distribution without the prior written consent of McGraw Hill LLC. ©McGraw-Hill Education. All r...

Topic 4 (Chapter 6 in text book) The Nature of Management © McGraw Hill LLC. All rights reserved. No reproduction or distribution without the prior written consent of McGraw Hill LLC. ©McGraw-Hill Education. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw-Hill Education.  Introduction For any organisation- small or large, for profit or nonprofit , to achieve its objectives, it must have resource to support its operation; (employees to make and sell the products; and financial resource to buy additional goods and services, pay employees, and generally operate the business.) To achieve this, it must also have one or more managers to plan, organise , staff, direct and control the work that goes on. ©McGraw-Hill Education. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw-Hill Education.  Learning Objectives 6-1 Define management and explain its role in the achievement of organizational objectives. 6-2 Describe the major functions of management. 6-3 Distinguish among three levels of management and the concerns of managers at each level. 6-4 Specify the skills managers need in order to be successful. 6-5 Summarize the systematic approach to decision making used by many business managers. ©McGraw-Hill Education.  Management:- 1.PLANNIN G ORGANISATIONAL Process 2.ORGANISING 4.CONTROLLIN GOALS (profit) G 3.LEADING ©McGraw-Hill Education.  Definition of Management 1 Management is a process of planning , organising , leading , controlling to achieve organisational goals(profit) Management , process of P -Planning L- leading/ directing O -organising C-controlling A process designed to achieve an organisation’s objectives by using its resources effectively and efficiently in a changing environment Effectively means having the intended result (can achieve goals) Efficiently means accomplishing objectives with a minimum of resources (can save cost , do work faster) ©McGraw-Hill Education.  Roles of Managers 2 Managers Individuals in organisations who make decisions about use of resources (money, workers, equipment) Use planning, organising, staffing, directing and controlling to reach organisational objectives ©McGraw-Hill Education.  Every organisation must acquire/manage resources (people, services, raw materials, equipment, finances, and information) to effectively pursue its objectives. Managing resources involve: - Staffing - Acquiring Suppliers - Financial Resources ©McGraw-Hill Education.  Roles of Managers 3 Staffing Hiring people to carry out the work of the organisation Sometimes, managers must also make the difficult decision to reduce the workforce Downsizing: the removal of large numbers of employees from an organisation. Acquiring Suppliers Ensure products are made available to customers and maximizes efficiencies and provides creative solutionsto help the company reduce expenses and reach its objectives. Financial Resources Needed to pay for essential activities ©McGraw-Hill Education.  **The major functions of management Access the text alternative for these images. ©McGraw-Hill Education.  Planning Planning is the process of determining the organisation’s objectives (goals) and deciding how to achieve them. Eg: When manager of Air Asia plans, they set plan “everyone can fly”, they decide to achieve by selling the ticket in low price Planning involves setting the organisation’s mission statement, goals and objectives. ©McGraw-Hill Education.  Mission, Goal and objective A mission, or mission statement, is a declaration/statement of an organisation’s fundamental purpose (why the company is set up) and basic philosophy. It explains the organisation’s reason for existence. ©McGraw-Hill Education. Goal Objectives (ii) A goal is expressed in the ends or results desired by an organisation, derive from the general terms and do not organisation’s mission and goals contain specific, quantifiable Common objectives relate to metrics of where the firm is now profit, competitive advantage or where it is going (the advantage to win the competitor, and growth (how the Eg : To be the market leader company can expand.) in the industry. The principal difference between goals and objectives is that objectives are generally stated in such a way that they are measurable (can be measure in quantity. eg 10%) Eg : To increase profit by 10 % in 2 years Eg: To open 10 more outlet in 1 year ©McGraw-Hill Education.  Forms of planning/plan * Top management Example : developLG4 New * Strategic Planning product Middle management Example: Research new product and the annual Tactical Planning costs to produce Example: Specific dates/days - First-line management ingredients must be sent to Operational Planning branches, work schedule Non-supervisory Employees 7-13 ©McGraw-Hill Education.  3 Levels/types of plan Eg Restaurant )Strategic plan -long term , set by top managers -Planning for the whole organisation – overall strategy – Not contain __detail____ plan , general how the organisation compete -Example : How to expand the business 2) Tactical plan -__medium____ term, set by __middle___ managers -- planning for __department______, contain __specific ___ plan how to achieve the strategic plan -Example: set menu, location for the restaurant, advertising, decoration of the restaurant 14 ©McGraw-Hill Education.  3 Levels/types of plan Extra 3) Operation plan -__Short____ term set by supervisor -Planning about _routine_____ activities, daily, weekly work -Planning about workers schedule, delivery schedule -Example set timetable for workers, how much meat to buy ©McGraw-Hill Education. 4) Crisis management (backup plan) – emergency planning when disaster (crisis) happen such as planning when earthquake, flood, pandemic ©McGraw-Hill Education.  Organising Organising – Dividing people to different departments, gives them jobs.setting reporting relationship Organising is important for several reasons : Helps create synergy (Makes the team stronger together.) Establishes lines of authority(Shows who's in charge.) Improves communication Helps avoid duplication (copying) of resources Can improve competitiveness by speeding up decision making ©McGraw-Hill Education.  Directing/Leading4 During planning and organising, staffing occurs and management must direct the employees.Directing refers to motivating and leading employees to achieve organisational objectives..Good directing involves: Telling employees what to do and when to do it by using deadlines Determining and administering rewards and recognition Motivate employees by providing incentives Asking workers to contribute ideas ©McGraw-Hill Education.  Controlling Controlling – to monitor employees’ work, compare the work to the goal , if there is deviation , take corrective action ©McGraw-Hill Education.  Controlling Steps/activities in controlling Controlling is consists of five activities: 1. Measuring performance (check performance of employees, check their actual work) 2. Comparing present performance with standards or objectives (compare the actual work with the goal set , see if can achieve goal) 3. Identifying deviations(out of plan, not follow plan) from standards (check if any actual work not follow plan, cannot achieve goal) 4. Investigating causes of deviations (investigate why out of plan ) 5. Taking corrective action when necessary (take action to ©McGraw-Hill Education. correct the situation so thatin future can achieve plan) 21 POLLING QUESTION 1 The local grocery store manager regularly communicates with employees about their sales strategies and goals. This is part of the function. A. Planning B. Organizing C. Directing D. Controlling ©McGraw-Hill Education.  Figure 6.2 Levels of Management Planning Access the text alternative for these images. ©McGraw-Hill Education.  Types/Three levels of Management 1 1. High-level management. Includes the president and other top executives of a business, such as chief executive officer (CEO), chief financial officer (CFO), and chief operations officer (COO), who have overall responsibility for the organisation is manager responsible to the board of directors and stockholders for a firm’s overall performance and effectiveness They set general policies, formulate strategies, approve all important decisions and represent the company in dealing with stockholders, the board of directors, other businesses and government. ©McGraw-Hill Education.  LEVELS of MANAGEMENT * Top management President, Vice president * Middle management Plant mgr, Division head, Branch mgr Supervisory / First-line management Supervisors, Department heads, Section leaders Non-supervisory Employees 7-24 ©McGraw-Hill Education.  Top management What they do?/Function: ✔ Spend most of their time planning ✔ Compensation committees - to work with directors to plan about compensation (reward given to employees eg salary, bonus) so that compensation suitable for performance of employee ✔ Encourage **workforce diversity is good for workers and bottom line **workforce diversity – workers come from different background eg different age, gender, religion. Companies want encourage employees come from different background ©McGraw-Hill Education.  Types of Management 2 2. Middle management Responsible for tactical and operational planning that carry out the general guidelines set by top management Responsibility: ✔ their responsibility more focus. eg how do marketing, how improve image ✔ Involved in the specific operations of the organisation ❑ In business, plant managers, Division managers, department head, regional managers ©McGraw-Hill Education.  Types of Management 3 3. First-Line management This level includes supervisors, team leaders, and project managers. Responsible for carry out the plans set by middle management Responsibility ✔ Direct workers’ daily performance ✔ Spend most of their time directing and controlling ©McGraw-Hill Education.  Figure 6.3 Importance of Management Functions to Managers in Each Level Access the text alternative for these images. ©McGraw-Hill Education.  4. Areas of Management Financial Manager Focus on obtaining the money needed for the successful operation of the organisation and using that money in accordance with organisational goals. Production and Operations Manager Develop and manage the activities involved in changing resources into goods, services, and ideas ready for the marketplace Human Resources Manager Handle the staffing function and deal with employees in a formalised manner. ©McGraw-Hill Education.  Table 6.3b Areas of Management Marketing Manager Responsible for planning, pricing, and promoting products and making them available to customers through distribution. Information Technology (IT) Manager Responsible for implementing, maintaining, and controlling technology applications in business, such as computer networks. Administrative Manager Manage an entire business or a major segment of a business; do not specialize in a particular function. ©McGraw-Hill Education. 31 IT Managers IT managers are responsible for implementing, maintaining, and controlling technology applications including cyber defense systems like Darktrace. ©McGraw-Hill Education. 32 POLLING QUESTION 2 Roman is responsible for pricing the new menu items for a national restaurant chain. He manages promotion for the company, creating national and regional ad campaigns. Roman is the A. Marketing manager B. HR manager C. Administrative manager D. IT manager ©McGraw-Hill Education.  Henry Mintzberg’s Managerial Roles Interpersonal Informational Figure Attending an award Monitor Contacting government banquet regulatory agencies Liaison Coordinating production Disseminator Conducting meetings schedule with supply with subordinates to manager pass along safety policy Leadership Conducting performance appraisal for subordinates Spokesperson Meeting with consumer group to discuss product safety Decisional Entrepreneur Changing work process Disturbance Handler Deciding which unit moves into new facilities Resource Allocator Deciding who receives new computer equipment Negotiator Settling union grievance ©McGraw-Hill Education. Source: Roles developed by management professor  Henry Mintzberg’s Managerial Roles角色 When manager is performing a function they play certain role, eg when manager is planning for new business , he is playing decisional role at the moment. Eg when manager is dividing work to employees , he is playing leader role )Interpersonal )Figurehead – the manager perform activities that _represent_____ the company Eg Manager attend opening ceremony of other company ii) Liason – manager is connecting , _communicate_________ with other people Eg Customer service manager liase with marketing manager about customer project iii) Leader – manager is performing the function of __leading____ Eg Manager give instruction to employees ©McGraw-Hill Education.  Henry Mintzberg’s Managerial Roles (B) Informational )Monitor – managers receiving information from different sources Eg Manager play a golf game and talk to other managers to get the information ii) Disseminator – manager ____pass___ the information to employees Eg Manager hold a meeting to announce the information to employees iii) Spokesperson – manager announce the information to the _public____ Eg Manager hold a press conference and announce the company new project to the reporters ©McGraw-Hill Education.  Henry Mintzberg’s Managerial Roles (C) Decisional i)Entrepreneur – manager is making decision to find new __opportunity__________ for the company Eg: manager is making decision to invest in a new project ii) Resource allocator – manager is making decision on how to __dividing____ the resources (money, people) Eg: manager is making decision to set the budget for next year iii) Disturbance handler – manager is making decision to _solve____ a problem for the company Eg : manager make decision to repair the machine but not buy a new one iv) Negotiator – manager is making decision to _bargaining______ to get more advantages for the company Eg: Manager is negotiating with supplier to get higher discount ©McGraw-Hill Education.  Skills Needed by Managers/Managerial skill 1) Technical skill - Specialised skill to perform the job , must have this skill so that can do the job - Eg Chef - _cooking_______ ©McGraw-Hill Education. 2) Conceptual skill – to _analyze________ how macroenvironmental forces affect the company, analyse what actions can take if changes in macronenvironment (to understand why some issues happen and if happen what outcome) Eg what are the causes of inflation and how affect the company Important for __top___ managers - Eg: CEO of a big company that makes phones. they decide to focus on making phones with new features like better cameras becouse they see many people want to take a good pictures. they also think about how new rules about selling phones overseas might affect thier business. The CEO’s skills help them plan for the future and make decisions that keep the company successful. ©McGraw-Hill Education.  Managerial skill 3) Analytical skill – identify what is the _problem____ faced by the company, analyse why this problem occur -analyse what are the relationship between factors that affect the company -analyse a problem or situation, can help manager make better decision -Eg analyse what product do customers like ©McGraw-Hill Education. 4) Human relations/people skill - are the ability to deal with _people_____, both inside and outside the organisation – build good relationship, communicate ©McGraw-Hill Education. 5) Leadership skill - Ability to _directing______ employees to work toward organisational goals – to motivate ©McGraw-Hill Education.  Managers often can be classified into three types based on their leadership style:- i. Autocratic leaders -make all the decisions and then tell employees what must be done and how to do it. ©McGraw-Hill Education. ii. Democratic leaders involve their employees in decisions. The manager presents a situation and encourages his or her subordinates (lower level workers) to express opinions and contribute ideas. ©McGraw-Hill Education. iii. Free-rein leaders let their employees work without much interference. (Do not control employees work). The manager sets performance standards(_goal) and allows employees to find their own ways to meet them. ©McGraw-Hill Education.  Table 6.5 Requirements for Successful Leadership 1. Communicate objectives and expectations. 2. Gain the respect and trust of stakeholders. 3. Develop shared values. 4. Acquire and share knowledge. 5. Empower employees to make decisions. 6. Be a role model for appropriate behavior. 7. Provide rewards and take corrective action to achieve goals. ©McGraw-Hill Education.  Figure 6.4 Steps in the Decision-Making Process Access the text alternative for these images. ©McGraw-Hill Education.  Decision Making (Steps in decision making process) 1 1) Recognizing and Defining the Decision Situation Understand what situation is the company facing now situation may be positive (good situation) ( an opportunity to increase sales) or negative (bad situation) ( example: huge losses on a particular product) Once a situation is recognized, management must define it ©McGraw-Hill Education.  Decision Making (Steps in decision making process) 2 2) Developing Options Developing _choices_______ for actions to be taken Include choices that are always used by the companies and new ideas to solve the problem Eg : Option 1 : Give discount Option 2 : give extra quantity to attract customer Brainstorming: a technique in which group members on-the-spot suggest ideas to solve a problem, is an effective way to encourage creativity and explore a variety of options. Creative process where employees immediately give their idea , and try to give as many ideas as possible to find out more creative options ©McGraw-Hill Education.  Decision Making (Steps in decision making process) 3) Analyzing Options – analyse each option to see which option is suitable -Will analyse the _strength____ and _weakness______ of each option -Have to analyse is the option can help to overcome the problem ©McGraw-Hill Education.  Decision Making (Steps in decision making process 3 4) Selecting the Best Option - After analyzing the option, _select_____ the best option to solve the problem - It is base on the opinion of decision maker Often a subjective procedure The best option always relates to analyzing risks and trade-offs 5) Implementing the Decision - after choosing the option, do the work to __implement________ the decision -Sometimes decision made by top managers , and implemented by ___lower_______ level managers -May have to be prepared for unexpected events 6) Monitoring the Consequences – (check the __result______ ) Did the decision achieve the desired result? Eg can the option help to increase sales ©McGraw-Hill Education.  Management in Practice Management is not an exact process (precise activity), is not exact and calculated. There is no mathematical formula for managing an organisation and achieving organisational goals. Managers spend time on: Working with others Establishing and updating an agenda of goals and implementation plans Networking (build connection)(build relationship and share information with colleagues ) Deal with complex and difficult challenges of the business world ©McGraw-Hill Education.  POLLING QUESTION 4 Which of the following is an example of networking? A. Attending a team meeting B. Connecting with colleagues on LinkedIn C. Hiring a new employee D. Establishing and updating an agenda ©McGraw-Hill Education. 52