A summary of chapter 6

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28 Sep 2011

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Chapter 6 Managing the Business Enterprise
1Who are Managers
Principles of management apply to all kinds of organization
2The Management Process
Management: the process of planning, organizing, leading, and controlling an enterprise’s
financial, physical, human, and information resources to achieve the organization’s goals of
supplying various products and services
Management Efficiency: Achieving the greatest level of output with a given amount of input
Management Effectiveness: Achieving the organizational goals that have been set
1. Planning: The process of determining the firm’s goals and developing a strategy for
achieving them
Step 1: set goal
Step 2: identify whether a gap exists between desire and actual position
Step 3: develop plans to achieve
Step 4: implement plan
Step 5: assess the effectiveness of the plan
Prediction Markets: creating a market where people can buy “shares” in various answers to
important questions that need to be answered.
hierarchy (层次) of plans——
Strategic Plans: set by top management; reflect decisions about resource allocations, company
priorities, and the steps needed to meet strategic goals.
Tactical 战术的 Plans: Shorter-range plans concerned with implementing specific aspects of the
company’s strategic plans. They typically involve upper and middle management.
Operational Plans: plans developed by middle and lower-level management that set short-term
targets 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 firm’s objectives
4. Controlling: The process of monitoring a firm’s performance to make sure that it is meeting
its goals
(see figure 6.1,p183)
3Types of Managers
1. Levels of Management
Top managers: (president, vice-president, chief operating officer(COO), chief executive
officer(CEO), and chief financial shareholders of the firm for its overall performance and
Those managers responsible for a firm’s overall performance and effectiveness and for developing
long-range plans for the company.
Middle Managers: Those managers responsible for implementing the decisions made by top
First-line managers: Those managers responsible for supervising 监督 the work of employees
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