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RSM100Y1 (431)
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Chapter 6

Chapter 6: Managing the Business Enterprise.pdf

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Department
Rotman Commerce
Course
RSM100Y1
Professor
John Oesch
Semester
Winter

Description
C H . 6: M ANAGING THE BUSINESS ENTERPRISE RSM 100Y THE M ANAGEMENT P ROCESS - management: process of planning, organizing, leading, and controlling an enterprise’s financial, physical, human, and information resources to achieve the organization’s goal of supplying various products and services. - efficiency: achieving the greatest level of output with a given amount of input - effectiveness: achieving the organizational goals that have been set Planning Step 1 •Goals established for organization •Managers identify whether a gap is present between the Step 2 company's desire and actual position •Managers develop plans to achieve desired goal Step 3 Step 4 •Finalized plans are implemented Step 5 •Plan effectiveness is assessed - prediction markets: creating a market where people can buy “shares” in various answers to important questions that need to be answered. o Ex: a game where employees buy shares based on how many defects they expect to find in a product. The winner is the one with the closest guess. A Hierarchy of Plans Strategic Plans: set up by top management; resource allocations, company priorities, and steps needed to meet strategic goals Tactical Plans: shorter-range concerned with specific aspects of company's strategic plans. Typically with upper & middle management. Operational Plans: developed by middle & lower level managers which set goals for daily, weekly, or monthly performance. - organizing: bringing together the necessary resources to complete a task. - leading (or directing): involves the interactions between managers and their subordinates as they both work to meet the firm’s objectives. o beyond giving orders, includes guiding and inspiring employees to work in the best interest of the company - controlling: the process of monitoring a firm’s performance to make sure it is meeting its goals. o difference between standard and performance  one of them needs adjustment T YPES OF M ANAGERS - three levels: top management, middle management, first-line management o density of each hierarchy disproportional to highness of level - top managers: responsible for firm’s overall performance & effectiveness & for developing long-term plans for the company o CEO, COO, CFO - middle managers: responsible for implementing the decisions made by top managers o plant manager, operations manager - first-line managers: responsible for supervising the work of employees B ASIC M ANAGEMENT S KILLS (5) 1) technical skills: performing specialized tasks within a company 2) human relations skills: enable managers to understand and get along with other people 3) conceptual: ability to think in the abstract, to diagnose and analyze different situations and see beyond present situation 4) time management: productive use that managers make of their time o some causes of wasted time: paperwork, telephone, email, meetings 5) decision-making skills: defining problems and selecting the best courses of action o problem decision: a decision which is necessary when actual results do not conform to those expected o opportunity decision: taking new initiatives or doing a current activity more efficiently even if no problem exists Breakdown of Skills in Different Levels of Management - human relations skills equally important in all three levels - technical  descending importance as ascending hierarchy - conceptual  ascending importance as ascending hierarchy Behavioural Aspects of Decision Making - organizational politics: the actions that people take as they try to get what they want; may or may not be beneficial to organization - intuition: “inner sense”/“hunch” based on years of experience 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 evidence it was a bad decision - risk propensity: how much a manager is willing to gamble when making decisions S TRATEGIC M ANAGEMENT : S ETTING G OALS AND F ORMULATING S TRATEGY - strategic management: process of aligning the organization with its external environment. - strategic goals: overall objectives that a business wants to achieve. - strategy: broad set of organizational plans for implementing the decisions made for achieving organizational goals. o should not be made to only appease arising problems when they appear - goals: performanc
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