Chapter4.ppt

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OFPS Entrepreneurship 3e
© Oxford Fajar Sdn. Bhd. (008974-T), 2013 1– 1

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Chapter
BASICS OF BUSINESS
MANAGEMENT
4

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BASICS OF BUSINESS
MANAGEMENT
 AT THE END OF THIS CHAPTER, YOU WILL BE
ABLE TO:
– Define management.
– Describe management as a process.
– Specify the skills needed by managers.
– Explain the differences between efficiency and
effectiveness.
– Explain the major roles of managers in organizations.
– Identify the characteristics of successful managers.
– Describe the five types of organizational structure.

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4.1 DEFINITION OF MANAGEMENT
 Management can be defined as a set of
functions and activities that must be
accomplished by managers in order to achieve
organizational goals effectively and efficiently

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MANAGERIAL LEVELS
TOP-LEVEL
MANAGERS
MIDDLE-LEVEL MANAGERS
FIRST-LEVEL MANAGERS
Levels of Management

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 Top-level managers set the goals and provide
the strategic directions for organizations.
 Middle-level managers are responsible for
carrying out the goals set by the top
management.
 First-level managers are responsible for
directing and supervising the actual day-to-day
work of the organization at the operating level

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4.2 PROCESS OF MANAGEMENT
Process of Management

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PROCESS OF MANAGEMENT
 Management is fundamentally the process and
activities involved in pursuing organizational
goals efficiently and effectively by planning,
organizing, leading and controlling the
organization’s resources.

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PLANNING
 Planning involves setting appropriate and clear
goals and objectives, and establishing
appropriate strategies to accomplish them.
 Clear goals will provide the framework within
which the organization’s strategies are
formulated.
 For example, when a company aims to expand
its market share (the goal), its managers should
develop the appropriate strategies in order to
achieve the goal set.

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The Types of Planning at Different Levels of an Organization

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TYPES OF PLANNING
 Strategic planning involves setting long-term
goals and objectives. It is usually conducted for
a period of five years or more.
 Tactical planning is also known as mid-term
planning. This type of planning is usually
conducted for a period between one to five
years.
 Operational planning is also known as short-
term planning. It is performed for a duration of
one year or less.

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ORGANIZING
 The process of arranging and coordinating
organizational resources (particularly human
resources) to carry out the organizational plan.
 Determines the tasks to be done, how the tasks are to
be grouped, who is in charge of what, and who
reports to whom.
 Allows cooperation between organizational members
and motivates members to work together to achieve
organizational goals.

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LEADING / DIRECTING
 Leading is the process of motivating
subordinates and inspiring others towards
achieving organizational goals.
 Managers need to be leaders in order to get
others to do their best in fulfilling plans and
achieving objectives.
 A good manager who leads well can inspire
people to work hard.

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CONTROLLING
 Controlling is the final link in the chain of
management functions.
 Managers evaluate and monitor individuals, groups,
departments and their respective organizations as a
whole to see how well each level is on target towards
achieving its goals.
 Effective control systems allow managers to know
how well plans are being implemented.
 If the standard is not met, necessary corrective
actions or changes need to be carried out.

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4.3 MANAGEMENT SKILLS
Management Skills at Different Managerial Levels

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MANAGEMENT SKILLS
 Technical skills are the ability to understand and
demonstrate knowledge and proficiency in a
specialized field.
 Human skills are the ability to interact and work well
with other people. Managers with good human skills
develop good relationships with all levels of
employees.
 Conceptual skills are the ability to think of situations
analytically from a broad perspective. These skills
include analyzing complex situations, solving
problems and thinking creatively.

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4.4 EFFECTIVE OMMUNICATION
AS A MANAGEMENT TOOL
The Communication Process

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EFFICIENCY AND EFFECTIVENESS
Effectiveness: The degree to which an organization
achieves its goals. It is about doing the right things,
typically in terms of quantity as well as quality.
Managers are effective when they select the right or
appropriate things to be done and achieve them well.
Efficiency: The degree of how well resources are used
to achieve a goal. It is about doing things right.
Managers are efficient when they can minimize the
amount of resources (such as people and money)
used to attain their goals.

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 Efficiency: The degree of how well resources
are used to achieve a goal. It is about doing
things right. Managers are efficient when they
can minimize the amount of resources (such as
people and money) used to attain their goals.

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Relationship between effectiveness, efficiency and performance in
organizations

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4.5 MANAGERIAL ROLES
 Interpersonal Roles: Interpersonal roles are
primarily concerned with relationships with other
people.
 Informational Roles: Managers obtain information
and must communicate information to people inside
and outside the organization.
 Decisional Roles: Decisional roles require managers
to plan strategy and utilize resources. Managers use
information to make decisions or solve problems.

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4.6 CHARACTERISTICS OF
SUCCESSFUL MANAGERS
 Practise open communication
 Set clear directions
 Establish objective recognition
 Provide guidance and support to employees
 Design and monitor a control system

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SUMMARY
 Management is a set of functions and activities that must be
accomplished by managers in order to achieve organizational goals
effectively and efficiently.
 A manager is a person who is responsible for the work activities of the
organization towards achieving organizational goals. In most
organizations, there are typically three levels of management—the top,
middle and first levels.
 Organizational goals can be achieved efficiently and effectively by
planning, organizing, leading and controlling the organization’s
resources.
 Managers need three important skills—technical, human and
conceptual skills.
 The five types of organizational structure commonly adopted by
organizations are the functional, product, geographical, customer and
matrix structures.

Chapter4.ppt

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Chapter4.ppt