Chapter 5 Managing the Business Enterprise Leonardo Matarrese @MyPlick

Outline Setting Goals and Formulating Strategy The Management Process Types of Managers Basic Management Skills Management and the Corporate Culture Leonardo Matarrese @MyPlick

Setting Goals and Formulating Strategy

The Management Process

Types of Managers

Basic Management Skills

Management and the Corporate Culture

Setting Goals and Formulating Strategy Goal Objective that a business hopes and plans to achieve Strategy Broad program underlying decision making process to assist managers in achieving company goals Leonardo Matarrese @MyPlick

Goal

Objective that a business hopes and plans to achieve

Strategy

Broad program underlying decision making process to assist managers in achieving company goals

Setting Business Goals Goals are performance targets—the means by which organizations and their managers measure success or failure at every level. Leonardo Matarrese @MyPlick

Goals are performance targets—the means by which organizations and their managers measure success or failure at every level.

Purpose of Goal Setting Goal setting provides direction and guidance for managers at all levels. Goal setting helps firms allocate resources. Goal setting helps to define corporate culture. Goal setting helps managers assess performance. Leonardo Matarrese @MyPlick

Goal setting provides direction and guidance for managers at all levels.

Goal setting helps firms allocate resources.

Goal setting helps to define corporate culture.

Goal setting helps managers assess performance.

Kinds of Goals Goals differ from company to company, depending on the firm’s purpose and mission. Every enterprise has a purpose , or a reason for being. Businesses seek profits, universities seek to discover and transmit new knowledge, and government agencies seek to set and enforce public policy. Mission Statement Organization’s statement of how it will achieve its purpose in the environment in which it conducts its business Leonardo Matarrese @MyPlick

Goals differ from company to company, depending on the firm’s purpose and mission. Every enterprise has a purpose , or a reason for being.

Businesses seek profits, universities seek to discover and transmit new knowledge, and government agencies seek to set and enforce public policy.

Mission Statement

Organization’s statement of how it will achieve its purpose in the environment in which it conducts its business

Kinds of Goals Regardless of a company’s purpose and mission , every firm has: Long-term Goals Goals set for an extended time, typically 5 years or more into the future Intermediate Goals Goals set for a period of 1 to 5 years into the future Short-term Goals Goals set for the very near future, typically less than 1 year Leonardo Matarrese @MyPlick

Regardless of a company’s purpose and mission , every firm has:

Long-term Goals

Goals set for an extended time, typically 5 years or more into the future

Intermediate Goals

Goals set for a period of 1 to 5 years into the future

Short-term Goals

Goals set for the very near future, typically less than 1 year

Formulating Strategy Strategy Formulation Creation of a broad program for defining and meeting an organization’s goals Leonardo Matarrese @MyPlick

Strategy Formulation

Creation of a broad program for defining and meeting an organization’s goals

Strategy Formulation Set Strategic Goals Analyze the Organization Analyze the Environment Formulate Strategy 5 - Leonardo Matarrese @MyPlick Match the Organization and its Environment

Setting Strategic Goals Strategic Goals Long-term goals derived directly from a firm’s mission statement Leonardo Matarrese @MyPlick

Strategic Goals

Long-term goals derived directly from a firm’s mission statement

Analyzing the Organization and Its Environment Environmental Analysis Process of scanning the business environment for threats and opportunities Organizational Analysis Process of analyzing a firm’s strengths and weaknesses Leonardo Matarrese @MyPlick

Environmental Analysis

Process of scanning the business environment for threats and opportunities

Organizational Analysis

Process of analyzing a firm’s strengths and weaknesses

Matching the Organization and Its Environment Matching environmental threats and opportunities against corporate strengths and weaknesses is the final step in strategy formulation. The matching process is the heart of strategy formulation and lays the foundation for successfully planning and conducting business. Leonardo Matarrese @MyPlick

Matching environmental threats and opportunities against corporate strengths and weaknesses is the final step in strategy formulation.

The matching process is the heart of strategy formulation and lays the foundation for successfully planning and conducting business.

Hierarchy of Plans Strategic Plans Plans reflecting decisions about resource allocations, company priorities, and steps needed to meet strategic goals Tactical Plans Generally short-range plans concerned with implementing specific aspects of a company’s strategic plans Operational Plans Plans setting short-term targets for daily, weekly, or monthly performance Leonardo Matarrese @MyPlick

Strategic Plans

Plans reflecting decisions about resource allocations, company priorities, and steps needed to meet strategic goals

Tactical Plans

Generally short-range plans concerned with implementing specific aspects of a company’s strategic plans

Operational Plans

Plans setting short-term targets for daily, weekly, or monthly performance

Contingency Planning and Crisis Management Two common methods of dealing with the unknown and unforeseen are: Contingency Planning Crisis Management Leonardo Matarrese @MyPlick

Two common methods of dealing with the unknown and unforeseen are:

Contingency Planning

Crisis Management

Contingency Planning Is planning for change by: seeking to identify in advance important aspects of a business or its market that might change. identifying ways in which a company will respond to changes. Many companies use computer programs for contingency planning. Leonardo Matarrese @MyPlick

Is planning for change by:

seeking to identify in advance important aspects of a business or its market that might change.

identifying ways in which a company will respond to changes.

Many companies use computer programs for contingency planning.

Crisis Management Involves an organization’s methods for dealing with emergencies. Leonardo Matarrese @MyPlick

Involves an organization’s methods for dealing with emergencies.

The Management Process Management is the process of planning, organizing, directing, and controlling an organization’s financial, physical, human, and information resources to achieve its goals. Leonardo Matarrese @MyPlick

Management is the process of planning, organizing, directing, and controlling an organization’s financial, physical, human, and information resources to achieve its goals.

“ Everybody now needs e-mail. Somebody shuts it down and we are significantly out of business .” ~ Steve White IBM Computer-Virus Scientist on attack of the “Love Bug” 5 - Leonardo Matarrese @MyPlick

“ Everybody now needs e-mail. Somebody shuts it down and we are significantly out of business .”

~ Steve White

IBM Computer-Virus Scientist

on attack of the “Love Bug”

The Management Process Planning Organizing Directing Controlling Leonardo Matarrese @MyPlick

Planning

Organizing

Directing

Controlling

Planning what an organization needs to do and how to get it done Organizing how best to arrange an organization’s resources and activities into a coherent structure Directing guiding and motivating employees to meet an organization’s objectives Controlling monitoring an organization’s performance to ensure that it is meeting its goals Leonardo Matarrese @MyPlick

Planning

what an organization needs to do and how to get it done

Organizing

how best to arrange an organization’s resources and activities into a coherent structure

Directing

guiding and motivating employees to meet an organization’s objectives

Controlling

monitoring an organization’s performance to ensure that it is meeting its goals

Control Process 5 - Establish Standards Measure Performance Does measured performance match standards? YES NO Continue Current Activities Adjust Performance or Standards Leonardo Matarrese @MyPlick

Types of Managers Top Managers Managers responsible to the board of directors and stockholders for a firm’s overall performance and effectiveness Middle Managers Managers responsible for implementing the strategies, policies, and decisions made by top managers First-line Managers Managers responsible for supervising the work of employees Leonardo Matarrese @MyPlick

Top Managers

Managers responsible to the board of directors and stockholders for a firm’s overall performance and effectiveness

Middle Managers

Managers responsible for implementing the strategies, policies, and decisions made by top managers

First-line Managers

Managers responsible for supervising the work of employees

Areas of Management Human Resource Managers Operations Managers Marketing Managers Information Managers Financial Managers Specialized Managers Leonardo Matarrese @MyPlick

Human Resource Managers

Operations Managers

Marketing Managers

Information Managers

Financial Managers

Specialized Managers

Basic Management Skills Technical Skills Skills needed to perform specialized tasks Human Relations Skills Skills in understanding and getting along with people Conceptual Skills Abilities to think in the abstract, diagnose and analyze different situations, and see beyond the present situation Decision-making Skills Skills in defining problems and selecting the best courses of action Leonardo Matarrese @MyPlick

Technical Skills

Skills needed to perform specialized tasks

Human Relations Skills

Skills in understanding and getting along with people

Conceptual Skills

Abilities to think in the abstract, diagnose and analyze different situations, and see beyond the present situation

Decision-making Skills

Skills in defining problems and selecting the best courses of action

The Decision-Making Process Gather facts and develop alternatives. Select the best alternative. Follow up and evaluate the chosen alternative. Define the Problem Evaluate Alternatives Implement the chosen Alternative Leonardo Matarrese @MyPlick

Time Management Skills To manage time effectively, managers must address four leading causes of wasted time: Paperwork The Telephone Meetings E-mail Leonardo Matarrese @MyPlick

To manage time effectively, managers must address four leading causes of wasted time:

Paperwork

The Telephone

Meetings

E-mail

Management Skills for the 21 st Century Global Management Skills Management & Technology Skills Leonardo Matarrese @MyPlick

Global Management Skills

Management & Technology Skills

Management & the Corporate Culture Corporate Culture The shared experiences, stories, beliefs, and norms that characterize an organization Leonardo Matarrese @MyPlick

Corporate Culture

The shared experiences, stories, beliefs, and norms that characterize an organization

Communicating the Culture & Managing Change Communicating the Culture Mangers must: understand the culture. transmit the culture to others in the organization. maintain the culture by rewarding and promoting those who understand and work toward maintaining it. Leonardo Matarrese @MyPlick

Communicating the Culture

Mangers must:

understand the culture.

transmit the culture to others in the organization.

maintain the culture by rewarding and promoting those who understand and work toward maintaining it.

Communicating the Culture & Managing Change Managing Change – Three Stages At the highest level, analysis of the company’s environment highlights extensive change as the most effective response to its problems. Top management begins to formulate a vision of a new company. The firm sets up new systems for appraising and compensating employees that enforce its new values. Leonardo Matarrese @MyPlick

Managing Change – Three Stages

At the highest level, analysis of the company’s environment highlights extensive change as the most effective response to its problems.

Top management begins to formulate a vision of a new company.

The firm sets up new systems for appraising and compensating employees that enforce its new values.