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Chapter 1

MGM101H5 Chapter Notes - Chapter 1: Henry Mintzberg, Henri Fayol, Production Planning

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Dave Swanston

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Chapter 1
Management, the art of getting things done through people in organizations
The Functions of Management
In the early twentieth century, Henri Fayol stated that management had 5 main functions:
Planning, Organizing, Commanding, Coordinating, and Controlling. This list identifies 4/5
management functions, with Coordinating now being considered part of Organizing:
Planning and Strategizing
A formal process whereby managers choose goals, identify actions to
attain those goals, allocate responsibility for implementing actions to
specific individuals or units, measure the success of actions by comparing
actual results against the goals, and revise plans accordingly.
Used by senior management to provide overall strategies for
An action that managers take to attain the goals of an
Examples of Managerial Planning tasks:
Planning expenditures every year in a budgeting process
Draw up plans for building new factories/opening offices
Implementing new information systems
Improving inventory control systems
Introducing new products
Launching new marketing campaigns
Rolling out employee benefits
Dealing with crisis’
Planning is often about formalizing a strategy that has already been
selected and documenting the steps that managers must follow within the
organization to put that strategy into effect
The process of thinking on a continual basis what strategies an
organization should pursue to attain its goals
Being aware of and analyzing what competitors are doing
Thinking about how changes in the external environment impact
the organization (i.e. changes in technology, changes in
government regulation)
Weighing the pros and cons and anticipating competitors
response to alternative strategies
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And choosing courses of action
Whereas planning is a formal process of generating the strategies of an
organization, strategies can also arise in the absence of planning
Strategizing is more than just planning, it involves constantly thinking
about strategic alternatives
Refers to the process of deciding:
Who within an organization will perform what tasks
Where decisions will be made
Who reports to who
How different parts of the organization will coordinate their activities to
pursue a common goal
Typically involves dividing the enterprise into subunits based on functional tasks
and deciding how much decision-making authority to give each subunit
The process of:
Monitoring performance against goals
Intervening when goals are not met
Taking corrective action wherever necessary
Without control systems, an organization can veer off course
Requires managers to compare performance against the plans so as to monitor
how successful an organization is at implementing a strategy
An important aspect of controlling is providing incentive that aligns the interests
of the individual employee with those of the organization
A factor, monetary, or nonmonetary, that motivates individuals to
pursue a particular course of action
Leading and Developing Employees
The process of motivating, influencing, and directing others in the
organization to work productively in pursuit of organization goals
Also involves articulating a grand strategic vision for an organization and
becoming a tireless advocate for that vision
Involves listening to others, learning from them, and empowering them to
pursue actions that benefit the organization
Developing Employees
An important aspect of leading
Refers to the task of hiring, training, mentoring, and rewarding employees
in an organization, including managers.
It is often said that people are the most important aspect of an
Human Capital
The knowledge, skills, and capabilities embedded in individuals
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The former CEO of General Electric estimated that he spent 70
percent of his time as CEO developing and selecting other
managers, mentoring them, and evaluating their performance
Skilled Leaders
Drive strategic thinking while articulating their own vision for the
Have a plan for their organization and push others to develop plans
Structure the organization proactively to implement their chosen strategy
Exercise control with a deft hand yet never take their eye off the ball
Put the right kinds of incentives in place
Get the best out of people by persuading them that a task is worthy of
their effort
Build a high quality team of other managers and employees
Without skilled leaders, strategy may fail and the organization may suffer
insufficient human capital from a lack of incentives and motivation within
Types of Managers
Three main types of managers
General Managers:
Responsible for the overall performance of an organization or one of its
major self contained subunits or divisions
Corporate-Level General Managers:
The principal General Manager at the corporate level is the CEO
CEO (Chief Executive Officer) tasks
The CEO formulates new strategies that span businesses
I.e. Whether or not to enter a new businesses
through acquisitions or whether to exit a business
Exercises control over divisions, monitoring performance
and deciding what incentives to give division heads
Helps develop the human capital of an organization
Manages relationships with shareholders
CEO reports to board of directors whose main job
is to make sure the strategy of the company is
consistent with the best interests of shareholders
Normally sits on the board and spends most of their
time describing company strategy to shareholders
Managers of the top help the CEO in all of this. The team normally
A CFO (Chief Financial Officer)
Responsible for the overall financing of the
A COO (Chief Organizational Officer)
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