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MGTA01H3 (583)
Chapter 7

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Management (MGT)
Chris Bovaird

Managers and Managing The Management Process Management: the process of planning, organizing, leading, and controlling a business’s financial, physical, human, and information resources in order to achieve its goals  The planning , organizing, leading, and controlling aspects of a manager’s job are interrelated o The CEO of Walt Disney Productions is a mangers because he regularly carries out these four functions as films are made o Actors such as Tom Cruise, while they may be starts of the movies, are not managers because they don’t carry out the four functions of management Planning Determining what the organization needs to do and how best to get it does requires planning Planning: that portion of a manager’s job concerned with determining what the business needs to do and the best way to achieve it Planning has 3 main components: 1. It begins when managers determine the firm’s goals 2. Next, they develop a comprehensive strategy for achieving those goals 3. After a strategy is developed, they design tactical and operational plans for implementing strategy The planning process has 5 basic steps: 1. Goals are established for the organization 2. Managers identify whether a gap exists between the company’s desire and actual position o For example, a year-end financial analysis will reveal whether a company met its profitability objectives 3. Managers develop plans to achieve the desired objectives o Objectives indicate what results are desired, while plans indicate how those objectives are to be achieved 4. The plans that have been decided upon are implemented o This is the point in the planning process where thinking is converting into action 5. The effectiveness of the plan is assessed o This Requires comparing actual results with planned performance Organizing The portion of a manager’s job that is concerned with mobilizing the necessary resources to complete a particular task know as organizing Organizing: that portion of a manager’s job concerned with mobilizing the necessary resources to complete a particular task. The importance of the organizing function of management can be seen by considering what happened to HP  HP had long prided itself on having a corporate confederation of individual businesses o Sometimes these businesses even ended up competing against themselves o This was beneficial for much of the firms history because it was easier for each business to make its own decisions quickly and efficiently  By 1998, problems began to occur 1  Ann Livermore realized that it was the structure that was holding them back o HP needed an integrated, organization-wide internet strategy  A reorganized HP has bounced back and is quickly regaining its competitive strength Leading The activities involving interactions between managers and their subordinates to meet the firm’s objectives are known as leading Leading: that portion of a manager’s job concerned with guiding and motivating employees to meet the form’s objectives By definition, managers have the power to give orders and demand results Leading, however, goes beyond merely giving orders  Leaders attempt to guide and motivate employees to work in the best interest of the organization o At discount airline WestJet, for example, CEO Clive Beddoe has been very successful in motivating employees to go above and beyond normal work practices t ensure the company’s (and their own) financial success Controlling Controlling: that portion of a manager’s job concerned with monitoring the firm’s performance and, if necessary, acting to bring it in line If for example, a company wants to increase sales by 20% over the next 10 years, then an appropriate standard might be an increase of about 2% a year  Managers then measure actual performance against standards. If the two amounts agree, the organization continues along its present course  If they vary significantly, however, one or thestther needs adjustments o If sales have increased 2.1% by the end of the 1 year, things are probably fine o If sales have dropped by 1%, some revision in plans may be needed  Perhaps the original goal should be lowered or more money should be spend advertising Control can also show where performance is running better than expected and, thus, can serve as a basis for providing rewards or reducing costs  For example, when Ford introduced its Explorer SportsTrac (an SUV with a pickup bed), initial sales were so strong that the firm was able to delay a major advertising campaign for three months because it was selling all the vehicles they could make anyway Types of Managers Although all managers plan, organize, lead, and control, not all managers have the same degree of responsibility for each activity. Thus we divide managers by their level of responsibilities or by their area or responsibility Levels of Management The three basic levels of management are senior, middle, and first-line management Senior Managers The small numbers of executives who guide the fortunes of most companies are senior managers 2 Senior Mangers: those managers responsible for a firm’s overall performance and effectiveness and for developing long- range plans for the company  Common titles include president, vice-president, treasurer, chief executive officer (CEO), and chief financial officer (CFO)  They are responsible to the board of directors and shareholders of the firm for its overall performance and effectiveness  They set general policies, formulate strategies, and oversee all significant decisions, and represent the company in its dealings with other businesses and government Middle Managers Although below the ranks of the senior executives, middle managers occupy positions of considerable autonomy and importance  Common titles include plant manager, operations manager, and division manager  They are responsible for implementing the strategies, policies, and decisions of the top managers o For example, if top management decides to bring out a new product in 12 months, middle management will have to decide to increase the pace of new product development First-Line Managers Those who hold titles such as supervisor, office manager, and group leader area first-line managers  Although they spend most of their time working with and supervising the employees who report to the, first-line managers activities are not limited to that arena o At a building site, for example, the project manager not only ensures that workers are carrying out construction as specified by the architect, but also interacts extensively with material suppliers, community officials, and middle and top managers at the home office Areas of Management Within any large company, the top, middle, and first-line mangers work in a variety of areas, including marketing, finance, operations, human resources, and information Marketing Managers Marketing includes pricing, promotion, and distribution of a product or services. Marketing managers are responsible for getting products and services to buyers. Marketing is especially important for firms dealing in consumer products, such as Coca-Cola, and Procter & Gamble  These firms often have large numbers of marketing managers at various level o Large firms will probably have a vice-president for marketing (senior manager), regional ma
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