Business Essentials Tenth Canadian Edition Chapter 6 PDF

Business Essentials Tenth Canadian Edition Chapter 6 Managing the Business Enterprise Copyright © 2023 Pearson Canada Inc. 6-1 Learning Objectives Descr...

Business Essentials Tenth Canadian Edition Chapter 6 Managing the Business Enterprise Copyright © 2023 Pearson Canada Inc. 6-1 Learning Objectives Describe the four functions that constitute the management process. Identify types of managers by level and area. Describe the five basic management skills. Explain the importance of goal setting Globe and Mail/Canadian Press and strategic management in organizational success. Discuss contingency planning and crisis management in today’s business world. Explain the idea of corporate culture and why it is important. Copyright © 2023 Pearson Canada Inc. 6-2 The Management Process (L O 6.1) (1 of 5) Functions of Management Planning Leading Organizing Controlling As top managers, Shahrzad Rafati of BroadbandTV Corp., Linda Hasenfratz of Linamar, and Galen Weston, Jr., Executive Chairman of Loblaw Companies, are important resources for their companies. They set the strategic direction for their companies and provide leadership to other managers. They are also accountable to shareholders, employees, customers, and other key constituents for the performance and effectiveness of their businesses. Tobias Hase)/dpa/Alamy Images Copyright © 2023 Pearson Canada Inc. 6-3 The Management Process (L O 6.1) (2 of 5) Planning – determining what the business needs to do and the best way to achieve it Copyright © 2023 Pearson Canada Inc. 6-4 The Management Process (L O 6.1) (3 of 5) Organizing – determining how to use existing resources to implement the plan – arranging jobs in a structure to create an efficient task system Managers are needed in all kinds of business firms, including professional sports teams. Paul Maurice, the head coach of the Winnipeg Jets, is a first-line manager who is responsible for the day-to-day success of the team. John Woods/The C P Images Copyright © 2023 Pearson Canada Inc. 6-5 The Management Process (L O 6.1) (4 of 5) Leading – guiding and motivating subordinates to meet objectives – managers have various responsibilities with regard to their employees ▪ Authority to give orders As top managers, Shahrzad Rafati of BroadbandTV ▪ Ability to guide Corp., Linda Hasenfratz of Linamar, and Galen Weston, Jr., Executive Chairman of Loblaw Companies, are employees important resources for their companies. They set the strategic direction for their companies and provide ▪ Power to motivate leadership to other managers. They are also accountable to shareholders, employees, customers, subordinates and other key constituents for the performance and effectiveness of their businesses. J.P. Moczulski/Reuters Copyright © 2023 Pearson Canada Inc. 6-6 The Management Process (L O 6.1) (5 of 5) Controlling: managers monitor the firm’s performance Figure 6.2 The control process Copyright © 2023 Pearson Canada Inc. 6-7 Types of Managers (L O 6.2) (1 of 2) Figure 6.3 Organizations Levels of Management have three basic levels of Top Management management – responsible for overall performance of the firm Middle Management – responsible for implementing decisions of top managers First-line Management – responsible for Michaeljung/Shutterstock supervising employees Shutterstock Hurst Photo/Shutterstock Copyright © 2023 Pearson Canada Inc. 6-8 Types of Managers (L O 6.2) (2 of 2) Areas of Management Marketing Managers Financial Managers Operations Managers Human Resource Managers Information Managers Education plays a vital role in becoming a manager. Prospective managers usually complete at least one degree in business, taking courses in finance, marketing, accounting, management, and other areas. Shutterstock Copyright © 2023 Pearson Canada Inc. 6-9 Basic Management Skills (L O 6.3) (1 of 4) Technical skills Figure 6.4 Different levels in Human Relations skills an organization require Conceptual skills different combinations of managerial skills Time Management skills Decision-Making skills Copyright © 2023 Pearson Canada Inc. 6 - 10 Basic Management Skills (L O 6.3) (2 of 4) Time-Management Skills – productive use of time Leading causes of wasted time – paperwork – telephone – meetings Managers play a variety of important roles. One key interpersonal role is that of figurehead, for example, – email attending a ribbon-cutting ceremony for the opening of a new business. Ryan Miller/Getty Images Copyright © 2023 Pearson Canada Inc. 6 - 11 Basic Management Skills (L O 6.3) (3 of 4) Decision-Making Skills – Recognize and define the decision situation – Identify alternatives – Evaluate the alternatives – Select the best alternative – Implement the chosen alternative – Follow up and evaluate the results Copyright © 2023 Pearson Canada Inc. 6 - 12 Basic Management Skills (L O 6.3) (4 of 4) Behavioral Aspects of Decision Making Organizational Politics Intuition Escalation of Commitment Risk Propensity Copyright © 2023 Pearson Canada Inc. 6 - 13 Setting Goals and Formulating Strategy (L O 6.4) (1 of 4) Strategic Management – process of aligning the organization with its external environment Strategic Goals – performance objectives that a firm plans to Plexiglas manufacturers could not keep up with soaring achieve demand as companies around the world scrambled to add protective barriers everywhere. Alessandro Pintus/Shutterstock Copyright © 2023 Pearson Canada Inc. 6 - 14 Setting Goals and Formulating Strategy (L O 6.4) (2 of 4) Purpose of Setting Goals – Provides direction, guidance, and motivation – Assists in allocating resources – Helps to define corporate culture – Helps managers assess performance Copyright © 2023 Pearson Canada Inc. 6 - 15 Setting Goals and Formulating Strategy (L O 6.4) (3 of 4) Kinds of Goals Long-term – five or more years Intermediate – one to five years Short-term – less than one year Copyright © 2023 Pearson Canada Inc. 6 - 16 Setting Goals and Formulating Strategy (L O 6.4) (4 of 4) SMART Goals Specific Measurable Achievable Relevant Time-Framed Copyright © 2023 Pearson Canada Inc. 6 - 17 Strategic Management: Setting Goals and Formulating Strategy (L O 6.4) (1 of 8) Mission Statement – how the organization will achieve its purpose (reason for being) – clarifies who the organization serves, what it offers, and how it As top managers, Shahrzad Rafati of BroadbandTV will be provided Corp., Linda Hasenfratz of Linamar, and Galen Weston, Jr., Executive Chairman of Loblaw Companies, are important resources for their companies. They set the – includes core values strategic direction for their companies and provide leadership to other managers. They are also and ethical commitment accountable to shareholders, employees, customers, and other key constituents for the performance and effectiveness of their businesses. Mark Blinch/Reuters Copyright © 2023 Pearson Canada Inc. 6 - 18 Strategic Management: Setting Goals and Formulating Strategy (L O 6.4) (2 of 8) Formulating Strategy Setting strategic goals long-term goals based on the mission statement Analyzing the organization and its environment (SW O T) Matching the organization to its environment Copyright © 2023 Pearson Canada Inc. 6 - 19 Strategic Management: Setting Goals and Formulating Strategy (L O 6.4) (3 of 8) Analyzing the Organization and Its Environment SW O T Analysis – Internal ▪ Strengths – External ▪ Opportunities – Internal ▪ Weaknesses – External ▪ Threats Copyright © 2023 Pearson Canada Inc. 6 - 20 Strategic Management: Setting Goals and Formulating Strategy (L O 6.4) (4 of 8) Matching the Organization and Its Environment Final step in strategy formulation – Matching company strengths to environmental opportunities – Minimizing the impact of threats and company weaknesses Who says you can’t teach an old dog a new trick? Harley-Davidson’s LiveWire Electric bike is just that sort of revolutionary change for a company founded in 1903 and is a real sign of the times! MaggioP H/Shutterstock Copyright © 2023 Pearson Canada Inc. 6 - 21 Strategic Management: Setting Goals and Formulating Strategy (L O 6.4) (5 of 8) Hierarchy of Plans Strategic plans – associated with senior management – establish long-term plans (2-5 years) Tactical plans – usually created by middle managers – support the strategic plans & define resource allocation (1-2 years) Operational plans – executed and finalized by first-line managers – for short-term targets of less than a year (usually monthly, weekly or daily) Copyright © 2023 Pearson Canada Inc. 6 - 22 Strategic Management: Setting Goals and Formulating Strategy (L O 6.4) (6 of 8) Levels of Strategies Corporate-level strategy – what businesses will we pursue? – how do these businesses relate to each other? Business-Level (competitive) strategy – how will we compete in our chosen area? Functional strategy – what actions can our department pursue to reach the overall goals? Copyright © 2023 Pearson Canada Inc. 6 - 23 Strategic Management: Setting Goals and Formulating Strategy (L O 6.4) (7 of 8) Corporate-Level Strategies Concentration Growth Integration Diversification Investment reduction Copyright © 2023 Pearson Canada Inc. 6 - 24 Strategic Management: Setting Goals and Formulating Strategy (L O 6.4) (8 of 8) Business-Level (Competitive) Strategies Cost Leadership Differentiation Focus Copyright © 2023 Pearson Canada Inc. 6 - 25 Contingency Planning and Crisis Management (L O 6.5) Contingency Planning – identify in advance changes that might occur and ways the company can respond to changes Crisis Management Some people have had the flexibility to work remotely for – methods for dealing years, but the COVID-19 pandemic dramatically increased this practice. This freelance worker, for example, is working with emergencies from the comfort of her home office. Thinnapob Proongsak/Shutterstock Copyright © 2023 Pearson Canada Inc. 6 - 26 Management and Corporate Culture (L O 6.6) (1 of 2) Corporate Culture – a firm’s personality ▪ shared experience of employees ▪ stories, beliefs, and norms that characterize the organization ▪ culture can direct employee’s efforts Copyright © 2023 Pearson Canada Inc. 6 - 27 Management and Corporate Culture (L O 6.6) (2 of 2) Communicating the Culture – ensure new and existing managers understand the culture – develop a clear mission statement – communicate the culture to employees – reward those who understand and maintain the culture Managing Change – Cultural change process ▪ management formulates vision of new company ▪ new systems of appraisal and compensation Copyright © 2023 Pearson Canada Inc. 6 - 28 Quick-Check Questions (1 of 5) 1) Tactical planning is concerned with: A) finding the optimal solution for an emergency situation. B) developing specific short-run strategies about what needs to be done, who will do it, and how it will be accomplished. C) devising alternative courses of action to be used if the original plan does not work out. D) setting long-run goals that will dictate the strategic plan of the organization. Copyright © 2023 Pearson Canada Inc. 6 - 29 Quick-Check Answer (1 of 5) 1) Tactical planning is concerned with: A) finding the optimal solution for an emergency situation. B) developing specific short-run strategies about what needs to be done, who will do it, and how it will be accomplished. C) devising alternative courses of action to be used if the original plan does not work out. D) setting long-run goals that will dictate the strategic plan of the organization. Copyright © 2023 Pearson Canada Inc. 6 - 30 Quick-Check Questions (2 of 5) 2) When Jasmine analyzes monthly sales figures for her flower shop, and uses this information to determine whether or not sales targets have been met, she is involved in the _________ function of the management process. A) leading B) planning C) controlling D) organizing Copyright © 2023 Pearson Canada Inc. 6 - 31 Quick-Check Answer (2 of 5) 2) When Jasmine analyzes monthly sales figures for her flower shop, and uses this information to determine whether or not sales targets have been met, she is involved in the _________ function of the management process. A) leading B) planning C) controlling D) organizing Copyright © 2023 Pearson Canada Inc. 6 - 32 Quick-Check Questions (3 of 5) 3) All managers require human relations, conceptual, time management, and decision-making skills, but top managers depend most on ______________. A) human relations skills B) conceptual skills C) time management skills D) decision-making skills Copyright © 2023 Pearson Canada Inc. 6 - 33 Quick-Check Answer (3 of 5) 3) All managers require human relations, conceptual, time management, and decision-making skills, but top managers depend most on ______________. A) human relations skills B) conceptual skills C) time management skills D) decision-making skills Copyright © 2023 Pearson Canada Inc. 6 - 34 Quick-Check Questions (4 of 5) 4) Effective goal setting is helped by comparing the outcomes to the SMART guideline. What does SMART stand for? A) Specific, Measurable, Achievable, Relavant, and Time- framed B) Simple, Mature, Achievable, Responsible and Time- Framed C) Simple, Maximized, Achievable, Reliable and Time- Framed D) Specific, Mature, Aggressive, Realistic and Time-Framed Copyright © 2023 Pearson Canada Inc. 6 - 35 Quick-Check Answer (4 of 5) 4) Effective goal setting is helped by comparing the outcomes to the SMART guideline. What does SMART stand for? A) Specific, Measurable, Achievable, Relavant, and Time- framed B) Simple, Mature, Achievable, Responsible and Time- Framed C) Simple, Maximized, Achievable, Reliable and Time- Framed D) Specific, Mature, Aggressive, Realistic and Time-Framed Copyright © 2023 Pearson Canada Inc. 6 - 36 Quick-Check Questions (5 of 5) 5) When one company buys a competitor in the same industry it is known as ____________. A) horizontal integration B) diversification C) vertical integration D) lateral divestment Copyright © 2023 Pearson Canada Inc. 6 - 37 Quick-Check Answer (5 of 5) 5) When one company buys a competitor in the same industry it is known as ____________. A) horizontal integration B) diversification C) vertical integration D) lateral divestment Copyright © 2023 Pearson Canada Inc. 6 - 38