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Introduction
to Business MGT 211
VU
Lesson
13
WHO ARE
MANAGERS?
SETTINGGOALS
AND FORMULATINGSTRATEGY
Settinggoals
is the starting point of
effective
management.Everybusiness
needsgoals,and
theprogramfor
guidingdecisions to achieve
thosegoals is called a
strategy.Goalsare
objectivesthat
a business hopes andplans
to achieve.
a.
Types of
Strategy
i.
Corporatestrategy--Strategyfordetermining
thefirm'soverallattitude
towardgrowthand
the way it willmanage
its businesses or
product
lines.
ii.Business(orcompetitive)
strategy--Strategy, at
the business-unit or
product-linelevel,focusing
on a
firm'scompetitiveposition.
iii.Functionalstrategy--Strategy
by which managers in
specificareas
decidehowbest
to
achievecorporategoalsthroughproductivity
b.
SettingBusinessGoals
Goalsareperformance
targetsthemeans by which
organizationsandtheir
managersmeasuresuccess
or failure at
everylevel.
i.
Purposes of
Goal Setting
1.
to provide
directionandguidance for
managers at alllevels
2.
to help
firmsallocateresources
3.
to help
definecorporateculture
4.
to help
managersassessperformance
ii.Kinds of
Goals
Goalsdifferfrom
company to companydepending on
thefirm'spurpose
andmission.
A firm's basicmission is
usually easy to
identify.
Businessesoftenhave
to rethinktheirmissions as
thecompetitive
environmentchanges.
1.
MissionStatement--organization'sstatement
of how it will
achieveitspurpose
in theenvironment in which it
conductsits
business.
2.
Three kinds of
goalsforevery
firmare:
a.
long-termgoals--goalssetfor
an extendedtime,
typically
5 years or more
intothefuture
b.
intermediategoals--goalssetfor
a period of 1 to 5
yearsintothe
future
c.
short-termgoals--goalssetfor
the
verynearfuture,
typicallylessthan
1 year
c.
FormulatingStrategy--The
creation of a broad
programfor
definingand
meeting
an organization's goals
i.
SettingStrategicGoals--long-termgoalsderived
directly from a
firm's
missionstatement
ii.SWOTAnalysis--Identificationandanalysis
of organizationalstrengths
andweaknessesand
environmentalopportunitiesand
threats as part of
strategyformulation
iii.Analyzingthe
Organizationand
ItsEnvironment
1.
Environmentalanalysis--process
of scanning
thebusiness
environmentforthreats
andopportunities(externalfactors)
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Introduction
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VU
2.
Organizational
analysis--process of
analyzing
a
firm's
strengthsandweaknesses(internalfactors)
iv.MatchingtheOrganization
andItsEnvironment--The heart
of
strategyformulationmatches
environmentalthreatsandopportunities
againstcorporatestrengthsandweaknesses.
v.
A Hierarchy of Plans
1.
Strategicplans--plansreflectingdecisionsaboutresource
allocations,companypriorities,
andsteps needed to
meet
strategicgoals
2.
Tacticalplans--generallyshort-rangeplans
concernedwith
implementingspecificaspects
of a
company'sstrategicplans
3.
Operationalplans--planssettingshort-term
targetsfordaily,
weekly,
or monthly performance
d.
ContingencyPlanningandCrisisManagement
Eventhebest-laid
plans canbecomeimpractical.
Managerspreparefor
these
situationswithcontingency
planningandcrisismanagement.
i.
ContingencyPlanning--recognizestheneed
to find solutions to
specificaspects
of a problem by seeking to identify in
advance
importantaspects
of a business or
itsmarketthat
mightchange.
ii.CrisisManagement--describes
an organization's
methodsfordealing
withemergencies.
2.
THEMANAGEMENTPROCESS
Themanagementprocess
is theprocess of planning,
organizing,directing,andcontrolling
an
organization's resources to
achievebusiness goals.
Thefourfunctions of
management
arenotdiscrete.
They overlapandinfluence
one another. To transform a
vision into a
successfulbusiness,managers
mustperform thefunctions of
planning,organizing,
leading,andcontrolling.
a.
Planning--managementprocess
of determining what an
organizationneeds to
do
and how best to get it
done. Yahoo's creation of
partnership agreements
withfirmslike
Reuters, Standard & Poor's,
and theAssociatedPress
forthe
newcoverage
it provides it usersrepresent a
form of
operationalplanning.
b.
Organizing--managementprocess
of determining howbest to
arrange an
organization'sresourcesand
activitiesinto a coherent
structure. Hewlett-
Packard'srecentrealignment
into an integrated,centralized
firm,rather than a
corporateconfederation
of individual
businesses,hasserved
itscomeback
strategywell.
c.
Directing--managementprocess
of guiding
andmotivatingemployees to
meet
an
organization's
objectives.GordonBethune,
CEO of
ContinentalAirlines,
hasturnedaround
morale andperformancethrough
hisleadershipskill,
listening
to and rewarding employees to
guide the company back on
track.
d.
Controlling--management
process of monitoring an
organization's
performance
to ensure that it is
meetingits goals.
Bethune of Continental
instituted
a variety of
performanceindicatorsincludingon-timearrivals,
baggage-handlingerrors,number
of emptyseats perplane,
andsurveys of
customerandemployeesatisfaction.
3.
TYPES OF
MANAGERS
Notallmanagers
have thesamedegree of
responsibilityforplanning,organizing,
directing,andcontrolling.
a.
Levels of Management
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Introduction
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VU
i.
TopManagers--managersresponsible
to the board of
directorsand
stockholdersfor
a firm's
overallperformanceandeffectiveness.They
setstrategicgoals,
makelong-range
plans,establishmajor
policies,and
representthecompany
to theoutsideworld.
ii.Middle
Managers--managers
responsible for
implementing the
strategies,policies,and
decisions made by
topmanagers. In
more
innovativemanagementstructures,
theymay function as
teamleaders,
acting
as consultants
whomustunderstand
everydepartment'sfunction
andaregranted
moredecision-makingauthority,
previouslyreservedfor
high-rankingexecutives.
iii.First-lineManagers--managersresponsiblefor
supervisingthe work
of
employees
b.
Areas of Management
i.
HumanResourcesManagers--managersresponsiblefor
hiringand
training
employees, evaluating
performance, and
determining
compensation.
ii.OperationsManagers--managersresponsiblefor
theproduction
system,inventoryand
inventorycontrol,
andqualitycontrol.
iii.MarketingManagers--managersresponsiblefor
thedevelopment,
pricing,promotion,and
distribution of goodsand
services.
iv.InformationManagers--managersresponsiblefor
designingand
implementingsystems
to gather,
organize,anddistributeinformation.
v.
FinancialManagers--managersresponsiblefor
thefirm'saccounting
functionsandfinancialresources.
vi.OtherManagers--some
firmsalso
employotherspecializedmanagers,
such
as public
relationsmanagers,research &
developmentmanagers,
etc.
4.
BASICMANAGEMENTSKILLS
Whateverthetype
or size of theorganization,
managersemploybasic kinds of
skills.
As
they rise
throughthehierarchy, they
mayneed to strengthen one or
more of these
skills.
a.
TechnicalSkills--skillsneeded
to perform
specializedtaskssuch as
writing
computercode,drawing
animatedcharacters, or auditing a
company'srecords.
b.
Human Relations Skills--skills
in understanding
andgettingalong
with
people,such
as
communicatingandmotivating.
c.
ConceptualSkills--abilities
to think in
theabstract,diagnose
andanalyze
differentsituations,and
see beyondthepresent
situation to
recognizefuture
marketopportunitiesandthreats.
d.
Decision-MakingSkills--skills
in defining
problemsandselecting
thebest
course
of action. Basic steps in
decision making:
i.
define the
problem,gatherfacts,
andidentifyalternativesolutions
ii.evaluateeach
alternativeand selectthe
bestone
iii.implementthe
chosenalternative,periodically
following up and
evaluatingtheeffectiveness
of thatchoice
e.
TimeManagementSkills--skillsthatinvolve
the
productiveusemanagers
make
of their time.
Timewastersinclude
paperwork,thetelephone,meetings,
ande-mail.
f.
Management
SkillsfortheTwenty-FirstCentury
i.
GlobalManagementSkills--specialtools,techniques,
andskills
necessary
to compete in a global environment.
Managers need to
understandforeignmarkets,
culturaldifferences,and
themotivesand
practices
of foreign rivals as well as
understanding international
operations.
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Introduction
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VU
ii.ManagementandTechnology
Skills--abilities to
process, organize,
andinterpret
a plethora of
dataandinformation.
Informationnowflows
to
everyone in
theorganizationsimultaneously,
decisionsaremade
morequickly,and
more
peopleareinvolved.
5.
MANAGEMENT AND
THECORPORATECULTURE
CorporateCulture--The
sharedexperiences,
stories,beliefs,and
normsthatcharacterize
an
organization. A
strongcorporateculture
directsemployees'efforts
andhelpseveryone
worktowardthe
same goalsandhelps
newcomerslearnacceptedbehaviors.Culture
eitheroriginateswith
thecompany's founders(as at
Walt Disney
Co,Wal-Mart,and JC
Penney)
or is forged over a
longperiod guided by a
constant,focusedbusinessstrategy
(as
at PepsiCo).
Someculturesare best
described as "countercultures," such as
Apple's
self-styledimage
as the alternative to
staidcompetitors in
thecomputerindustry.
a.
CommunicatingtheCulture
andManagingChange
To
use its culture to a
firm'sadvantage,
managersmustunderstandtheculture
andalsotransmit
it to others in
theorganization.
i.
CommunicatingtheCulture--A
clearand meaningfulstatement
of the
organization'smission
is a
valuablecommunicationtool.
ii.ManagingChange---
Organizationsmustsometimes
changetheir
culturesandalso
communicate thenature of
the change to both
employeesandcustomers.
The processhasthree
stages:
1.
Analysis of
thecompany'senvironment
highlightschange as
the
mosteffectiveresponse
to itsproblems
2.
Top management begins to formulate a
vision of a new
company.
3.
The firm sets up
newsystems for
appraisingandcompensating
employeeswhoenforce
the
firm'snewvalues.
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