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2
THE FOUR FUNCTIONS OF MANAGEMENT
Management
Planning Leading The process used to accomplish organizational
Setting organizational goals. Gilding and motivating employees to goals through planning, organizing, leading, and
Developing strategies to reach work effectively to accomplish controlling people and other organizational
those goals. organizations goals and objectives. resources.
Determining resources need. Giving assignments.
Setting precise standards. Explaining routines. Planning
Clarifying polices. A management functions that includes
Providing feedback on performance. anticipating trends and determining the best
Organizing strategies and tactics to achieve organizational
Allocations resources, assigning tasks, Controlling
goals and objectives.
and establishing procedures for Measuring results against
accomplishing goals. corporate objectives. Organizing
Preparing a structure (organizations Monitoring performance relative A management function that include designing
chart) showing lines of authority and to standards. the structure of the organization and creating
responsibility. Rewarding outstanding
conditions and systems in which everyone and
Recruiting, selecting, training, and performance.
everything work together to achieve the
developing employees. Taking corrective action when organization’s goals and objectives.
Placing employees where they’ll be necessary.
most effective. Leading
WHAT MANAGERS DO Creating a vision for the organizations and
Some moderns managers perform all of these tasks with the full cooperation and guiding, training, coaching, and motiving others
participation of workers. Empowering employees means allowing them to to work effectively to achieve the organization’s
participate more fully in decision making. goals and objectives. 3
PLANNING AND DECISION MAKING
Potential Internal STRENGHT Potential internal WEAKNESSES
Core competencies in key areas No clear strategic direction
An acknowledged market leader Obsolete facilities
Well-conceived functional areas strategies Subpar profitability
Proven management Lack of managerial depth and talent
Cost advantages Weak market image
Better advertising campaigns Too narrow a product line
Operational Planning
OPERATIONAL The process of setting work standards and
CONTINGENCY schedules necessary to implement the
PLANNING company’s tactical objectives.
PLANNING
The setting of work
Backup plans in case
standards and Contingency Planning
primary plans fail The process of preparing alternative courses
schedules of action that may be used if the primary
plans don’t achieve the organization’s
Figure 3: PLANNING FUNCTIONS
objectives.
Very few firms bother to make contingency plans. If something changes the market,
such companies may be slow to respond. Most organizations do strategic, tactical, and operational planning. 5
Decision Making: Finding the Best Alternative
Decision making
Chose among two or more alternatives.
Problem solving
The process of solving the everyday
problems that occur. Problem solving is
less formal than decision making and
usually calls for quicker action.
Brainstorming
Coming up with as many solutions to a
problem as possible in a short period of
time with no censoring of ideas.
PMI
Listing all the Pluses for a solution in
one column, all the Misuses in another,
and the implications in a third column.
6
ORGANIZING: CREATING A UNIFIED SYSTEM
LEVELS OF MANAGEMENT Organization Chart
This figure shows the three A visual device that shows relationship
levels of management. In among people and divides the
organization’s work; it shows who report to
many firms, there are several
whom.
levels of middle management. TOP
Recently, however, firms have MANAGEMENT Top management
been eleiminating middle- President Highest level of management, consisting
level managers because fewer Vice presidents of the president and other key company
are needed to oversee self- executives who develop strategic plans.
MIDDLE MANAGEMENT
management teams of Plan managers
employees. Division heads
Middle management
The level of management that includes
Branch managers general managers, division managers, and
SUPERVISORY (FRIST- branch and plant managers who are
LINE) MANAGEMENT responsible for tactical planning and
controlling.
Supervisors, Foremen
Department heads
Supervisory management
Section leaders Managers who are directly responsible
NONSUPERVISORY for supervising workers and evaluating
their daily performance..
Employees 7
Tasks and Skills at Different Levels of Management
Technical skills
Top Technical Human relations Skills that involve the ability to
Conceptual skills perform tasks in a specific discipline or
Managers skills skills department.
Conceptual skills
First-Line Human relations Conceptual Skills that involve the ability to picture
Managers Technical skills the organization as a whole and the
skills skills
relationship among its various parts.
Are standards
realistic? FEEDBACK
Internal customers
Internal customers: Individual and units within the firm
• Operatives that receive services from other
individuals or units..
• Quality inspectors
• field sales people
External customers:
• Dealers
• Ultimate customers
10
50%
TYPES OF PROCESSES
Buffer
Stage 1 Stage 2 50%
Alternative paths
Multistage process with buffer
Buffering
Skills that involve the ability to
perform tasks in a specific discipline or
department.
Blocking
Occurs when the activities in the stage Simultaneous activities
must stop because there is no place to
deposit the item just completed.
Starving
Occurs when the activities in the stage
must stop because there is no work.
Bottleneck
It limits de capacity of the process. Different products produced 11
Make - to - Stock versus Make - to - Order
Make - to - Stock
Make - to – Order
This type of process is activated only in
Is the type of process that produces
response to an actual order. Inventory
standard products that can be delivered
(both work in process and finished
quickly to the customer.
goods) is kept to a minimum.
12
A. McDonald's - Old Process
Example:
Making Hamburgers
at McDonald's, Burger B. Burger King
King and Wendy's
C. Wendy's
13
MEASURING PROCESS PERFORMANCE
Setup Queue Operation time = Setup time + Run time
Batch Time/
size unit time Time
Flow time = Average time for a unit to
move through the system
Buffer Buffer
Raw Finished
material goods
Source In Transit Factory In Transit Deliver
15
PRODUCTION PROCESSES
Make-to-Stock
Assemble to order
Make-to Order
Engineer-to-order
Low –
One - of-a-kind
Project
Workcenter
Product Manufacturing
Standardization Cell
Assembly
Line
Continuous
Process
High –
Standardized
commodity product
Low Product Volume High
Buy $200/unit
Make on
Revenue at $300/unit
machine center
at $15/unit
Make on semiautomatic
lathe at $75/unit
Number of units