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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