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RSM100Y1 (431)
Chapter 6

CHAPTER 6-Managing the Business Enterprise

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Rotman Commerce
Michael Szlachta

CHAPTER 6: MANAGING THE BUSINESS ENTERPRISE Who are managers? - work of managers: developing strategic and tactical plans, analyze competition, plan, organize, direct and control daily operations - principles of management applies to all organization including education, non profit, social, religious etc - major skill of a manager is the ability to make decisions and respond to challenges Setting Goals and Formulating Strategy - starting point is to set a goal, an objective that a business hopes and plans to achieve - manager must decide what a business intends to do (set the goal) and then the subsequent actions that willwill not achieve the goal - strategy underlies all these decisions Setting Goals - goals are performance targets THE PURPOSE OF GOAL SETTING: for an organization to function systematically, it needs to set goals and plan accordingly - an organization commits its resources to achieve its goals - 4 main purposes of goal setting: 1) provides direction, guidance and motivation for all managers - by knowing where the company is headed, there is less potential for error. The goal informs the managers of the firms priorities 2) Helps firms allocate resources - if the priority of the firm is to expand, then the resources must go towards opening new stores. 3) helps to define corporate culture - by knowing what the goal is (ie to be the #1 firm in the industry), the work environment becomes competitive in order to achieve that goal. 4) Helps managers assess performance - if the goal is to increase sales, then the manager who is successful at achieving the goal can get rewarded. The manager who does not achieve the goal also gets compensated accordingly KINDS OF GOALS: depending on a firms purpose, the goals of a firm differ. - every firm, depending on its type (ie profit seeking business or an educational university) has a purpose, a reason for existing - most enterprises have a mission statement = organizational statement of how it will achieve its purpose - mission statements should include a statement about the firms core values and its commitment to ethical behaviour - businesses can have the same purposes but they have different missions ie Timex vs Rolex - every company needs long term, short term and intermediate goals - long term - set for extended periods of time, usually 5+ years - intermediate - goals set for a period of 1-5 years - short term - very near future (1 year or less) Formulating Strategy - planning = choosing tactics and establishing schedules www.notesolution.com
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