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BUS201 Chapter 6 Notes.docx

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Department
Business Administration
Course
BUS 201
Professor
Peter Tingling
Semester
Fall

Description
From Evernote: [NOTES] Chapter 6: Managing the Business Enterprise LO-1 Describe the four activities that constitute the management process. MANAGEMENT: process of planning, organizing, leading, and controlling (POLC) a business's financial, physical, human + info. resources (PHIF) to achieve the organization's goals (managerial functions) - process of accomplishing organizational goals through planning, execution, and control - series of activities developed to allow businesses to achieve their goals Mintzberg's Management Roles: - managers work at unrelenting pace - activities are brief, varied + fragmented - Interpersonal roles (3): figurehead, leader, liaison ('link to assist communication between people') - Informational roles (3): monitor, disseminator ('propagator: someone who spreads news), spokesperson - Decisional roles (4): entrepreneur resource, disturbance handler, allocator, negotiator Difference between management efficiency + management effectiveness: EFFICIENCY: achieving greatest level of output with given amount of input (doing things right) EFFECTIVENESS: achieving set organizational goals (doing the right things) (1) PLANNING: determining and developing a strategy for achieving a firm's goals 1. Step 1 - Establish goals. [commercial airline: fill 90% seats each flight] 2. Step 2 - Identify/measure gaps between desired and actual position. [analyze load data + find only 73% seats on avg. are filled] 3. Step 3 - Develop plans to close gaps. [reduce fares on heavily traveled to increase % of seats filled] 4. Step 4 - Implement plans. [fare from Toronto to Montreal reduced by 10%] 5. Step 5 - Measure effectiveness/correct plan. [measure % of seats filled after implementing plan] #### McDonald's: Until 2002 = Canada's largest fast-food chain - then taken over by Tim Hortons Step 1 - Set goal to reinvent itself and grow again. Step 2 - Gap between where McDonald's was and where it wanted to be was obvious. Step 3 - Develop "Plan to Win" to achieve the new objective: develop new menu items (Angus Burger, new salads, snack wraps), renovate restaurants to contemporary cafes/bistros look (polished stone tabletops + fireplaces), target local tastes (McLobster sandwich in the Maritimes), longer opening hours (60% now 24/7). Step 4 - Implemented 2003/04. Step 5 - Effectiveness accessed - sales: $2.9 billion in 2008, $3 billion in 2009; record sales levels achieved despite recession #### Hierarchy of plans: 1. STRATEGIC PLANS: plans that reflect decisions about resource allocations, company priorities, and steps needed to meet strategic goals - top management [P&G's strategy to have its products rank 1st/2nd in their category] 2. TACTICAL PLANS: short-range plans concerned with implementing specific aspects of a company's strategic plans - upper/middle management [Coca-Cola's decision to increase sales in Europe by building European bottling facilities] 3. OPERATIONAL PLANS: plans setting short-term targets for daily/weekly/monthly performance [McDonald's explains precisely how Big Macs are to be cooked, warmed + served] (2) ORGANIZING: determining how to use existing resources to implement plans - jobs must be arranged in a structure to create an efficient task system - organizational charts diagram various jobs and relationships between them within company - help understand their job and to whom to report #### HP: prided itself on being a corporate confederation of individual businesses - each business can make decisions more efficiently + competition motivated businesses to work hard - late 1990's: Ann Livermore (head of software + services business) realized structure now holding company back - HP needed an integrated, organization-wide strategy - led development of a team of top managers and re-organization of major components of firm's structure - now regained place as one of world's top technology businesses #### (3) LEADING: guiding + motivating employees to meet firm's objectives - managers' responsibilities with regard to employees: 1. authority to give orders 2. ability to guide employees 3. power to motivate subordinates (4) CONTROLLING: monitoring firm's performance - determine if goals have been met - determine what actions were most effective in achieving goals - understanding what went wrong and how to fix it LO-2 Identify types of managers by level and area. Levels of Management: - TOP MANAGERS: responsible for overall performance and effectiveness of the firm - set general policies, formulate strategies, and approve all significant decisions - represent the company in dealings with other firms + gov't bodies [president, vice president, treasurer, CEO, CFO] - MIDDLE MANAGERS: responsible for implementing decisions of top managers [plant manager, operations manager, division manager, regional sales manager] - FIRST-LINE MANAGERS: responsible for supervising employees - ensure employees understand and are properly trained [supervisor, office manager, project manager, group leader, sales manager] Areas of Management: - HUMAN RESOURCE MANAGERS: hire, train, evaluate, and compensate employees - O
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