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RSM100Y1 (431)
Chapter 6


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University of Toronto St. George
Rotman Commerce
Marcel Danesi

CHAPTER 6: MANAGING THE BUSINESS ENTERPRISE WHO ARE MANAGERS? - All corporations depend on effective management - Regardless of the type of business, managers are responsible for many of the same tasks, and have many of the same responsibilities - Involves developing strategic and tactical plans - Analyze their competitive environments and plan, organize, direct, and control day-to-day operations - Principles of management apply to all kinds of organizations - Work in charities, churches, social organizations, educational institutions, and government agencies - Prime minister of Canada, president of University of Toronto, the dean = managers - Regardless of the nature and size of an organization, managers are among its most important resources THE MANAGEMENT PROCESS - Management: the process of planning, organizing, leading, and controlling a businesss financial, physical, human, and information resources in order to achieve its goals - Planning, organizing, leading, and controlling aspects of a managers job are interrelated Planning - Determining what the organization needs to do and how best to get it done requires planning - Planning: managers job concerned with determining what the business needs to do and the best way to achieve it - Three main components 1. Begins when managers determine the firms goals 2. Develop comprehensive strategy for achieving those goals 3. Design tactical and operational plans for implementing the strategy - Planning process has five basic steps 1. Goals are established for the organization 2. Managers identify whether a gap exists b/w the companys desire and actual position 3. Managers develop plans to achieve the desired objectives Goals indicate WHAT results are required and plans indicate HOW these goals are to be achieved 4. Plans that have been decided upon are implemented: thinking action 5. Effectiveness of the plan is accessed; requires comparing actual results with planned performance - E.g. Yahoo! assessed what search engine users want , strategy was to foster partnerships and relationships with other companies Began fashioning alliances with diverse partners Organizing - Organizing: managers job concerned with mobilizing the necessary resources to complete a particular task - Very important for firms Leading - Leading: managers job concerned with guiding and motivating employees to meet the firms objectives - Managers have the power to give orders and demand results - Leaders attempt to guide and motivate employees to work in the best interests of the organization CHAPTER 6: MANAGING THE BUSINESS ENTERPRISE Controlling - Controlling: concerned with monitoring the firms performance and acting to bring it in line with the firms goals - Control process begins when management establishes standards, often for financial performance - Then measure actual performance against standards If the two amounts agree, the organization continues along its present course If they vary, one or the other needs adjustment - Control can show where performance is running better than expected, thus can serve as a basis for providing rewards or reducing costs TYPES OF MANAGERS - Not all managers have the same degree of responsibility for each activity - Managers differ in the specific application of these activities - Divide managers by their level of responsibility or by their area of responsibility Levels of Management - Top, middle, and first-line management - In most firms, first-line managers > middle managers > top managers - The power of managers and the complexity of their duties increase as we move up the pyramid Top Managers - Small number of executives who guide the fortunes of most companies - Top managers: responsible for a firms overall performance and effectiveness and for developing long-range plans for the company - President, vice-president, treasurer, CEO, etc - Responsible to the board of directors and shareholders of the firm - Set general policies, formulate strategies, oversee all significant divisions, and represent the company Middle Managers - Although below the ranks of the top executives, they occupy positions of considerable autonomy and importanceCHAPTER 6: MANAGING THE BUSINESS ENTERPRISE - Middle managers: those managers responsible for implementing the decisions made by top managers - The job of middle manager has lately become precarious in many large companies First-Line Managers - Those who hold titles such as supervisor, office manager, and group leader - First-line managers: those managers responsible for supervising the work of employees Areas of Management - Within any large company, the top, middle, and first-line managers work in a variety of areas, including marketing, finance, operations, human resources, and information Marketing Managers - Includes development, pricing, promotion, and distribution of a product or service - Marketing managers are responsible for getting products and services to buyers - Especially important for firms dealing in consumer products (e.g. Coca-Cola, Roots) - Firms that produce industrial products (e.g. machinery supplies) tend to have less emphasis on marketing - In recent years, law firms and universities have also come to recognize the value & importance of marketing Financial Managers - Management of a firms finances, including its investments and accounting functions - Extremely important to its survival -
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