Chapter 6 notes.docx

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Management (MGT)
Chris Bovaird

Chapter 6 notes Who are Managers? - All corporations depend of effective management - Work of managers involves developing strategic and tactical plans- they must analyze competitive environement, plan, organize, direct, control day to day operations - Managers have the ability to make decisions and respond to a variety of challenges – same for small and large businesses – managers are an important resource Setting Goals and Formulating Stategy: - Starting point in effective management is setting GOALS- objectives a business hopes and plans to achieve - Every business needs goals- deciding what the business intends to do is only one step for an organization - Managers must make decisions about actions that will and will not achieve its goals - Stategy is the broad program that underlies those decisions Setting Goals: - Goals are performance targets – organization and their managers measure success/failure at every level The Purposes of Goal Setting - An organization functions systematically only because it sets goals and pans accordingly – it commits resources on all levels to achieving its goals. 4 main purposes in organizational goal setting: a) Goal setting provides direction, guidance and motivation for all managers: if managers know where company is headed, less potential for error. Starbucks- 15%+ goal of capital spending for new stores- clearly tells everyone in firm that expansion is a high priority b) Goal setting helps firms allocate resources: Areas that are expected to grow will get first priority- company allocates more resources to new projects with large sales potential than to mature projects c) Goal setting helps to define corporate culture: push to be divions number one or number two in industry- being competitive, stressful and a culture that rewards success and has little tolerance for failure. d) Goal setting helps managers assess performance: If a company sets goal to increase sales y 10%, unit managers who attain/exceed the goal can be rewarded- units failing to do so will be compensated accordingly. Kinds of Goals - Goals differ from company to company, depending on the firms purpose and mission (pupose: a reason for beign) - Mission statement: An organization’s statement of how it will achieve its purpose in the environment in which it conducts its business - Mission statements should include company’s core values and its commitment to ethical behavior - Two business firms can have the same purpose- yet have very different missions - Long Term Goals: Goals set for extended periods of time, typically five years or more into the future - Intermediate Goals: goals set for a period of one to five years. Companies have intermediate goals in several areas - Short Term Goals: Goals set for the very near future, typically less than one year. Are also developed for several different areas Formulating Strategy: - Planning is from the setting of goals, choosing tactics and establishing schedules- strategy has wider goals- describes an organizations intentions - A business strategy outlines how it intends to meet its goals and includes the organizations responsiveness to new challenges and needs - Strategy Formulation: Creation of a broad program for defining and meeting an organization’s goals - Strategic Goals: Long term goals derived directly from a firm’s mission statement - SWOT Analysis: Identification and analysis of organizational strengths and weaknesses and environmental opportunities and threats as part of strategy formulation - SWOT Analysis is the step after strategic goals have been established- and it helps to continue to formulate their strategy - Strengths,, Weaknesses, Opportunities, Threats - S & W- internal to company… O&T- external to company - Companies attempt to capitalize on organizational strengths and take advantage of environmental opportunities- they seek ways to overcome organizational weaknesses and cope with environmental threats Analyzing the Organization and its Environment - Environmental Analysis: The process of scanning the environment for threats and oppurtunities - changing consumer tastes, hostile takeover, gvmt regulations= threats- also come from new products and new competitors - Opportunities- areas where the firm can expans, grow or take advantage of existing strengths - The purpose of external factors is so that managers examine internal facors - Organizational Analysis: The process of analyzing a firm’s strengths and weaknesses - Strengths: surplus cash, dedicated work force, managerial talent, technical expertis
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