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RSM100Y1 (431)
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Chapter 6

RSM100- Chapter 6 [Managing the Business Enterprise].docx

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Department
Rotman Commerce
Course
RSM100Y1
Professor
John Oesch
Semester
Fall

Description
Managing the Business Enterprise [Chapter 6] Corporate Culture  Shared experiences, values, norms and ethical stance that characterize an organization Who are managers?  Plan, organize, direct, and control day to day operations The management process  The process of planning, organizing, leading and controlling an enterprises financial, physical, human and information resources to achieve the organizations goals of supplying various product and services o These are all interrelated  Important to notice the difference between management effectiveness and management efficiency o Efficiency means achieving the greatest level of output with a given amount of input o Effectiveness means achieving the organizational goals that have been set  The four functions/steps are: Planning, Organizing, Leading, Controlling 1) Planning  Process of determining the firms goals and developing a strategy for achieving them  5 basic steps: o Goals are established for the organization o Managers identify whether a gap exists between the company’s desire and actual position o Managers develop plans to achieve the desired goal o The plans that have been decided upon are implemented o The effectiveness of the plan is assessed  Prediction markets: a tool that helps managers to assess future possibilities of whether or not plans will be successful  creating a market where people can buy “Shares” in various answers to important questions that need to be answered (offer reward to group of people with best answer eg)  A hierarchy of plans: 3 general levels: o Strategic plans: step by top management; reflect decisions about resource allocations, company priorities, and the steps needed to meet strategic goals o Tactical plans: shorter-range plans concerned with implementing specific aspects of the company strategic plans, they typically involve upper and middle management o Operational plans: plans developed by middle and lower level managers that set short term target for daily, weekly, or monthly performance 2) Organizing  Mobilizing the resources that are required to complete a particular task 3) Leading (or directing)  Involves the interactions between managers and their subordinates as they both work to meet the firms objectives  Attempt to guide and motivate people (leadership) 4) Controlling  The process of monitoring a firms performance to make sure that it is meeting its goals Types of managers  Can divide by level of responsibility and area of responsibility Levels of management  Top managers: responsible for a firms overall performance and effectiveness and for developing long-range plans for the company o Eg. COO, CEO, CFO  Middle managers: responsible for implementing the decisions made by top managers  First-line managers (low): responsible for supervising the work of employees Areas of management  Human resources: provide assistance to other managers when they are hiring employees, training them or evaluating them  Operations managers: responsible for production systems that create goods and services (production control, inventory control, quality control etc)  Information managers: design and implement systems that gather process, an disseminate information  Marketing managers: responsible for getting products and services to buyers  Financial managers: management of firms finances, including investments and accounting functions Basic management skills  Have 5 key skills: technical, human relations, conceptual, time management, decision-making 1. Technical skills  Skills associated with performing specialized tasks within a company  Eg. animators ability to draw a cartoon, requires education and experience  Become less important as you go up in management (CEO don’t know how to do it all) 2. Human relations skills  Skills that enable managers to understand and get along with people  Most important for middle managers 3. Conceptual skills  A persons ability to think in the abstract, to diagnose and analyze different situations, and to see beyond the present situation  Top managers mostly depend on this 4. Time management skills  The productive use that managers make of their time  To manage time effectively, must address 4 leading causes of wasted time: o Paperwork o Telephone o Meetings o Email 5. Decision-making skills  Skills in defining problems and selecting the best courses of action  Can improve effectiveness by following the rational decision making process: o Step 1: recognizing and defining the decision situation  Problem decision: decision that is necessary when actual results do not conform to those expected  Opportunity decision: taking new initiatives or doing a current activity more effectively even if no problem exists o Step 2: identifying alternatives o Step 3: evaluating alternatives o Step 4: selecting the best alternative o Step 5: implementing the chosen alternative o Step 6: following up and evaluating results Behavioural aspects of decision making  Non-logical and emotional factors often influence managerial decision making: organizational politics, intuition, escalation of commitment, risk propensity  Organizational politics: the actions that people take as they try to get what they want  Intuition: an inner sense that is based on years of experience usually and practice in making decisions in similar situations  Escalation of commitment: when a manager makes a decision and then remains committed to its implementation in spite of cle
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