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RSM100Y1 (431)
Chapter 6

Chapter 6

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Department
Rotman Commerce
Course
RSM100Y1
Professor
Stojanovic Dragan
Semester
Winter

Description
CHAPTER 6 MANAGING THE BUSINESS ENTERPRISEWHO ARE MANAGERS y All organizations depend on effectivemanagement y No matter the type of organization managers perform the same basic function are responsible for many of the same tasks and have many of the same responsibilitiesy All managers plan organize direct and control daytoday operations y Principles of management apply to all kinds of organizations y Managers bring the same kind of skills the ability to make decisions and to respond to a variety of challenges y Regardless of size of organization managersare among its most important resources THE MANAGEMENT PROCESSthe process of planning organizing leading and controlling an enterprises financial physical human y Managementand information resources to achieve the organizations goal of supplying various products and services y Two important overall points to keep in mind when thinking about the management processThe planning organizing leading and controlling aspects of a managers job are interrelatedIts important to make the distinction between management efficiencyachieving the greatest level of output with a given amount of inputand management effectivenessachieving the organizational goals that have been set y In other words efficiency means doing things right while effectiveness means doing the right things y A manager who focuses on being effective will likely also be efficient but a manager who focuses on being efficient may or may not be effective Planning y Planning the process of determining the firms goals and developing a strategy for achieving them y Has five basic steps Step 1 goals are established for the organization Step 2 managers identify whether a gap exists between the companys desire and actual position Step 3 managers develop plans to achieve the desired goal Note that goals indicate WHAT results are required and plans indicate HOW these goals are to be achieved Step 4 the plans that have been decided upon are implemented Step 5 the effectiveness of the plan is assessed y One example of such planning is Yahooresearched what search engine users want and tried to implement it through alliances with others when needed and making Yahoo search engine simple and versatile for almost all of peoples needs y It may be difficult to predict which plans will be successful y One tool that helps managers assure future possibilities is called prediction markets y Prediction Markets creating a market where people can buy shares in various answers to important questions that need to be answered1 A Hierarchy of Plans y Plans can be made on three general levels with each level reflecting plans for which managers at that level are responsible y These levels constitute a hierarchy because implementing plans is practical only when there is a logical flow from one level to the next y Strategic Plans set by top management reflect decisions about resource allocations company priorities and the steps needed to meet strategic goals y Example General Electrics plan to be number one or two in all the markets in which it competes shorterrange plans concerned with implementing specific aspects of the companys strategic plans y Tactical Planstypically involve upper and middle management yExample Coca Colas plan to increase sales in Europe by building European bottling facilitiesy Operational Plans plans developed by middle and lowerlevel managers that set shortterm targets for daily weekly or monthly performance
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