The Management Process
The process of planning, organizing, leading and controlling an enterprise’s financial,
physical, human and information resources to achieve the organization’s goals of
supplying various products and services.
Efficiency: Achieving the greatest level of output with a given amount of input.
Effectiveness: Achieving the organizational goals that have been set.
The process of determining the firm’s goals and developing a strategy for achieving
There are 5 steps:
Step 1 – Goals are established for the organization
Step 2 – Identify whether a gap exists between the company’s desire and actual
Step 3 – Develop plans to achieve desired goal
Step 4 – Implement plans
Step 5 – Assess effectiveness of plan
Prediction markets help managers assess future possibilities. It’s a market where
people can buy “shares” in various answers to important questions that need to be
Hierarchy of Plans
Strategic Plans – Top management. Decisions about resource allocation and company
Tactical Plans – Upper/Middle management. Short range plans regarding
implementing specific aspects of the company’s strategic plans.
Operational Plans – Middle/Lower management. Very short-term targets. 2. Organizing
Mobilizing the resources that are required to complete a particular task.
Involves the interactions between managers and their subordinates as they both work
to meet the firm’s objectives.
Leaders should guide and motivate employees to work in the best interests of the
The process of monitoring a firm’s performance to make sure that it is meeting its
goals. Types of Managers
Levels of Management:
1. Top Managers
The managers responsible for a firm’s overall performance and effectiveness and for
developing long-range plans for the firm.
Set policies, formulate strategies, oversee decisions and represent the company in its
dealings with other businesses and government.
CEO, CFO, COO
2. Middle Managers
The managers responsible for implementing the strategies, policies and decisions of
the top managers.
Plant manager, operations manager, divisions manager
3. First-line Managers
The managers responsible for supervising the work of employees.
Supervisor, Office Manager, Group leader
Areas of Management:
1. Human Resource Managers
Provide assistance to other manages when they are hiring employees, training them,
evaluating their performance and determining their compensation level. May be
involved with negotiations with the union.
2. Operations Managers
Responsible for the production systems that create goods and services. Watch through
production control, inventory control, quality control.
3. Information Managers
Responsible for designing and implementing systems that gather, process and
4. Marketing Managers
Responsible for getting products and services to buyers.
5. Financial Managers
Responsible for planning and overseeing its financial resources (investment and
accounting functions). Basic Management Skills
1. Technical Skills
Skills associated with performing specialized tasks within a company.
Developed through education and experience.
Top Middle First-line
2. Human Relations Skills
Skills that enable managers to understand and get along with other people.
Very important for middle managers who often act as a bridge between top and first-
3. Conceptual Skills
A person’s ability to think abstract, to diagnose and analyze different situations, and to
see beyond the present situation.
It helps managers to recognize new market opportunities and threats.
4. Time Management Skills
The productive use of time.
Four causes of wasted time: PAPERWORK, TELEPHONE, MEETINGS, EMAIL. 5. Decision Making Skills
Skills in defining problems and selecting the best courses of action to solve them.
The Rational Decision-Making Process
1. Recognizing and Defining the Decision Situation
Some stimulus indicates that a decision must be made. The stimulus may be
positive or negative.
2. Identifying Alternatives
Both obvious and creative alternatives are desired. In general, the more important
the decision, the more alternatives should be generated.
3. Evaluating Alternatives
Each alternative is evaluated to determine its FEASIBILITY, its
SATISFACTORINESS, and its CONSEQUENCES.
4. Selecting the Best Alternative
Consider all situational factors and choose the alternative that best fits the
5. Implementing the Chosen Alternative
The chosen alternative is implemented into the organizational system.
6. Following Up and Evaluating the Results
At some time in the future, the manager should ascertain the extent to which the
alternative chosen in step 4 and implemented in step 5 has worked.
Behavioral Aspects of Decision Making
Many managers tend to use “decision-based evidence making” rather than “evidence-
based decision making”. This means that managers will decide what they want to have
happen and then later conduct an analysis to support their decision.
Factors that affect decision making are:
1. Organizational Politics: The actions that people take as they try to get what they