Chapter 4

Management & Organization

Some men see things as they are

and say why. I dream of things
that never were and say why not.
John F. Kennedy

Key Topics

Setting goals and formulating strategies

Types of managers by level and area
The management process
The five basic management skills
The development and importance of
corporate culture

Setting Goals - Starting Point of

Effective Management
Goals Objective that a
business hopes and plans
to achieve
Strategy: The broad set
of action plans to achieve
company goals

Setting Goals - Starting Point of

Effective Management
Vision - realistic, attainable view of the future
(Where to go?)
Mission : a document defining why an
organization exists (How to get there?)
- describes : Companys product / service,
primary market, managerial philosophy,
commitment to quality & social responsibility

Hierarchy of Strategy

Figure 51

Types of strategy
Corporate strategy to determine the firms
overall goal toward growth and ways to
manage its business.
- what business a company is in, should be in
or wants to be in.
Types of strategy growth (develop new
business / product), stability (maintain the
status quo), renewal

Types of strategy
Business strategy strategy at the business unit or
product line level focusing on firms competitive position.
(How organization will compete in the market)
To gain competitive advantage, its distinctive strategy. Eg.
Michael Porter 5 forces;
- Threat of new entrants
- Threat of substitutes
- Bargaining power of buyers
- Bargaining power of suppliers
- Current rivalry
Functional strategy managers in specific areas decide
how best to achieve corporate goals through productivity

Business Goals Performance Targets

The purposes of goal-setting:
To provide direction for managers
To help firms allocate resources
To help define corporate culture
To help managers assess
performance

Effective Organizations Set

Goals at Many Different
Levels
Mission Statement: How a business will
achieve its fundamental purpose
Long-term Goals (> 5 yrs)
Intermediate Goals (1-5 yrs)
Short-term Goals (< 1 yr)

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Strategy Formulation

Figure 52

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Effective Managers: An
Invaluable Resource for
Business
Managers are responsible for business
performance and effectiveness. (Effective doing
the right things)
Managers are accountable to all key stakeholders.

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The Management Functions

Management
- is the process of planning, organizing,
directing and controlling (POLC) an
organizations financial, physical and
information resources to achieve its goals.

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The Management Functions

Planning
Strategic
Tactical
Operational
Contingency
Crisis
Organizing
Directing / Leading
Controlling
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The Management Functions

Planning
- Management process of determining what
an organization needs to do and how best to
get it done.
- Basic activities;
i) Establishing organizational goals and
objectives.
Goals broad, long-range accomplishment
organization wishes to obtain
Objectives Specific, short-term target
designed to help reach goal
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The Management Functions

ii) Develop strategic goals
- focus on broad issues
- apply to company as a whole
- aim to enhance the companys performance
iii) Tactical objectives
- focus on department issues
- Define short-term results necessary to
achieve strategic goals
iv) Operational objectives
- Focus on short term issues.

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The Management Functions

v) Contingency planning
- identifying aspects of a business or its
environment that might entail changes in
strategy
vi) Crisis planning
- Organizations methods for dealing with
emergencies

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The Management Functions

Organizing W, & H ?

- Management process of determining how best

to arrange an organizations resources and
activities into a coherent / logical structure
- Evaluate activities of employees, facilities and
equipment and determine who will have
authority to make decision

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The Management Functions

Leading
- The process of influencing and motivating
people to work effectively and willingly.
- Successful managers are good at influencing
others opinions and motivating others.
- Good leaders tend to have high emotional
quotients (EQ)
- Self awareness recognizes ones own feelings
- Motivation
- Empathy consider others feelings
- Social skill

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The Management Functions

- Adopting an effective Leadership style - the
way a manager uses authority to lead others
i) autocratic leaders make decision w/o
consulting others
ii) Democratic leaders delegate authority &
involve employees in d.mkg
iii) Laissez-faire : take the role of consultant,
encouraging employees ideas. -

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The Management Functions

- Building a strong organizational culture
values, norms and practices shares by firm
( a companys way of doing things)
- Values what is right, what is wrong
- influence the way people treat and react to
each other at work

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The Management Functions

Controlling
- means monitoring a firms progress toward
meeting its organizational goals
- involves resetting the course / path / track if
goals or objectives change
- 4 steps :
i) Set standard for measuring performance
ii) Assess performance (quan. & qual.
Measures)
iii) Compare performance with estab. standards
iv) Take corrective action

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The Control Process

Establish
Establish Standards
Standards
Assess/
Assess/ Measure
Measure Performance
Performance
YES

Continue
Continue
Current
Current
Activities
Activities

Does
Does measured
measured
performance
performance match
match
standards?
standards?

NO

Adjust
Adjust
Performance
Performance or
or
Standards
Standards

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5 - 23

The Control
Process

Figure 53

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Levels of Management
Top
Managers

Middle
Managers

First-Line
Managers

Top
Managers

Middle
Managers

First-Line
Managers

Middle
Managers

First-Line
Managers

First-Line
Managers
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Level of Managers
Top Managers
- Upper level managers take overall
responsibility for an organization
- Make long range plans
- Establish major policies
- represent the company to outside world

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Level of Managers
Middle Managers
- Responsible in similar ways but usually for one area
of production
- Develop plans for implementing goals of top
managers
- Coordinate first line managers
- Traditionally include plant managers, branch
managers
- Normally lead teams or groups of employees
- Must understand every departments function

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Level of Managers
Lower Managers
- Oversee work of employees
- put into action plans developed at higher levels.

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Areas of Management
Human
Human
Resources
Resources Mgr
Mgr

Marketing
Marketing Mgr
Mgr

Financial
Financial Mgr
Mgr

Operations
Operations
Mgr
Mgr
IInformation
nformation
Mgr
Mgr

Other
Other Mgr
Mgr

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Managerial roles
Interpersonal roles Lead employees, build
relationships among managers, peers,
employees, and act as liaison within and outside
the company.
Informational roles distribute information to
employees, other managers, and outsiders,
communicate with people inside and outside the
company.
Decisional roles encourage innovation,
resolve unexpected problems, decide how
organizational resources will be used, negotiate
with individuals and groups.

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Basic Managerial Skills

Technical
Skills
Conceptu
al Skills

Human
Relations
Skills

DecisionMaking
Skills

Time
Manageme
nt Skills

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Managerial skills

Interpersonal skills
- communication or exchange of information
with employees
- ability to listen and perceive the needs of
stakeholders
Technical skills
- Knowledge and ability to perform mechanics /
method / procedure of a job
- Administrative skills
- Technical skills needed to manage an
organization

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Managerial skills

Conceptual skills
- Ability to see how various parts of an
organization make up the larger context of the
company and use this data to plan for the future.
Decision-making skills
- Recognizing the need for a decision
- Analyzing and defining the problem or
opportunity
- Developing alternatives
- Selecting and implementing the chosen
alternatives

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The Decision-Making Process

Figure 54

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Managerial skills

Time Management skills

- refer to the productive use that managers make
of their time.
- To manage time effectively, managers must
adhere to 4 leading causes of wasted time:
a) paperwork - check on priority
b) Telephone to get assistant to screen all calls
c) Meetings to specify clear agenda, start on
time, keep everyone focused & end on time
d) E-mail some are unimportant & not significant.
Therefore more time spend on sorting e-mail

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Management Skills for the 21st

Century
Global Management Skills
- to understand foreign market,
cultural differences.
Information and Technology Skills
- esp. used of teleconferencing,
e.\-mail.
- bureaucracies are breaking
down, planning, d. mkg and other
activities are beginning to benefit
from teamwork & group building.

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Management Is Tightly
Linked to
Corporate Culture
Corporate Culture (System of shared
meaning)
The shared experiences, stories, beliefs,
and norms that characterize an
organization
Communicating
the Culture

Managing
Change

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Chapter Review / Discussion

Explain the importance of setting goals and
formulating strategies.
Identify types of managers by level and area.
Describe the management process.
Describe the basic management skills.
Explain the development and importance of
corporate culture.

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Class activity 4
Referring to the same business as your group have
chosen in the previous activities, identify the
following :
1. Mission & Vision of your company
2. SWOT analysis of your company
a) 2 point for strength
b) 2 point for weakness
c) 2 points for opportunities
d) 2 points for threats

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