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Midterm

MGTA02H3 Study Guide - Midterm Guide: Ikea, Strategic Management, Focus Group


Department
Management
Course Code
MGTA02H3
Professor
Arif Toor
Study Guide
Midterm

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MGTA02 Midterm Notes
Wednesday, February 19, 2020 11:50 AM
Working To Accomplish A Task
Mission
Business: an organized effort, formed for a purpose
Mission: the reason why a business exists and the goals that it is trying to accomplish
In recent years, many businesses have chosen to articulate that purpose and direction through the creation of
a publicly enunciated mission statement
Most businesses strive to communicate, briefly and clearly, the reason they exist and the goals they are trying
to accomplish
Eg. IKEA: we shall offer a wide range of well-designed, functional home furnishing products at prices so low
that as many people as possible will be able to afford them
Regardless of the Mission Statement
All businesses exist to satisfy customer need and wants, and also to make a profit
In a well-run business, the particular purpose and direction should be clear to all stakeholders, especially
shareholders, employees and customers
The Process of Management
Managing: the process of planning, organizing, leading and controlling resources in order to accomplish a task
Managers: individuals responsible for planning, organizing, leading and controlling resources in order to accomplish
a task
Planning
Planning: determining what needs to be done to accomplish a task, and the best way to accomplish it
Organizing
Organizing: assembling and preparing the resources necessary to complete a task
Leading
Leading: the art of guiding or inspiring others to follow
Controlling
Definitions
Standard: the goal or intended result for the performance of an activity
Controlling: setting a standard, measuring performance against the standard and if necessary, taking action to bring
the performance into line
Stages of Controlling
1. Setting a standard
2. Measure the actual performance of the activity
3. The performance is then compared to the standard
4. If necessary, managers can take action to improve or correct performance, to bring it into line with the
standard
5. If the standard is being met, people can be rewarded and further encouraged
Management is a Universal Process
Management occurs is all fields of endeavour, and in all walks of life
Eg. The "mission" of the family organization is to raise and nurture children to become healthy, happy and
productive members of society
Leaders VS Managers

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While leading and managing are synonymous, "leadership" is more often applied to managers who have a longer
term orientation
Leaders
When we speak of leaders, we normally mean people whose concern is to plan, organize and control resources for
several years into the future
Managers
When we speak of managers, we normally associate the term with people who are planning, organizing, leading and
controlling resources over the next month, or the next week
What Do Business Managers Manage?
System
System: a series of connected parts of connected activities. The parts are organized for a common purpose, and
work together
In the case of a business, the system involves planning, organizing, leading and controlling labour, capital and
natural resources to transform them into finished goods and services that people need and want
Value Chain
Value chain: the system of activities that a business must manage in order to transform factors of production into
finished goods and services
Created by Michael Porter
Each activity involves the expenditure of time or other resources
Porter distinguished between two types of activities
1. Primary Activities: activities that are directly involved with making the good or the service that the
business provides to its customers
2. Support Activities: activities that don't directly involve customers or the making of the product, but
which are necessary for the organization to function
Support activities underpin the smooth functioning of the business
Allow the primary activities to take place
Include business functions such as:
1.
Leadership and Strategy
2.
Human Resource Management
a. Businesses need people
b. All activities involved with recruiting, hiring, training, developing, and compensating employees
3.
Financial Management
a. Businesses need capital
b. Need capital to buy or rent office space, to pay the wages and salaries of employees, to buy
equipment, software and other resources
The Organization of This Book
Approach taken is that a business begins with an entrepreneur's idea, set of skills or area of enterprise
Primary Activities
1. Identify and research target market
2. Develop product and set price
3. Operations create productions
4. Promote and distribute products
5. Measure and control
Support Activities
1. Strategy and leadership
2. Human resource management
3. Financial management

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Above diagram encapsulates all the major processes or areas of activity carried out by a typical business
Business function: a process or activity that is routinely carried out by a business
This text identifies and describes seven key business factors:
1.
Marketing: the activities involved with interacting with customers or potential customers
2.
Operations: the activities involved with transforming factors of production into the goods or services
that customers want
3.
Information Management: the development of systems for collecting for collecting data that can be
organized in such a way that produces information of use to the managers of a business
4.
Accounting: the system of collecting, analyzing and communicating financial information
5.
Strategic Management: the activities undertaken by an organization's senior leadership to determine
the organization's long terms goals and objectives
6.
Financial Management: planning, organizing, leading and controlling the use of capital
7.
Human Resource Management: all of the activities involved with planning, organizing, leading and
controlling an organization's people
Turning A Concept Into Satisfied Customers
A business is like a bicycle
Must be going forward in order to stay upright
Must stay upright in order to go forward
A business must satisfy customer needs in order to make a profit
A business must make a profit in order to satisfy customer needs
Without customers to buy the product, the business will generate no revenues and therefore no profits
Without profit motive, entrepreneurs will have no incentive to produce the goods and service that customers want
Marketing
Marketing: the business function concerned with planning and organizing the creation of a product, determining a
price that people will pay, making the product known and making it available to customers
Purpose of marketing is to create exchanges, so that customers get what they need and want and the business
owner makes a sale
Evolution In The Strategic Management of Business
Kotler believed in an evolution in the strategic management of business
19th century -> most business' resources had been directed on production, making goods and services
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