Business Studies Notes
Topic 1 – Business Management and Change
The Nature of Management
The importance of Effective Management
* Management = process of coordinating and integrating work activities in order to achieve goals and objectives of the business. * Planning:
1. Strategic plans – long term (3-5 yrs), responsibility of senior management Eg. Expand overseas, new product development, diversify.
2. Tactical plans – medium terms (6 months – 3 yrs), responsibility of middle management Eg. Increasing market share, implementing strategic plans
3. Operational plan – short term (1 week – 6 months), responsibility of department heads Eg. Rosters, ordering supplies
* Organising = establishing the structure of business (flat, pyramid, functional, geographic, product, team based), assigning tasks, allocating resources, rules and reporting relationships. * Structures:
- flat (short chain of command, wide span of control)
- pyramid (long chain of command, narrow span of control)
- functional (separating business functions)
- geographic (structure based on location)
- product (sparating business by products)
* Leading = motivate workers by influencing and encouraging, leading by example, providing a stimulating work environment, including staff in decision making, commanding respect. * Controlling = process of measuring the business performance against the plan and taking corrective action. - Controls = input/preventative, concurrent and output/feedback. * Effective managers = achieve the objectives and goals of the business * Efficient managers = achieving objective and goals using the least amount of resources in the most cost effective manner. * Within POLC there are two aspects – decision making & communication * Mangers responsible for providing correct working environment to facilitate the process (involves creating business culture).
* Interpersonal Role:
- involves dealing with people inside and outside organisation - managers must communicate, act as figurehead in representing organisation to public. - they command subordinates and liaise with stakeholders by compromising and negotiating - figurehead = symbolic head to perform legal or social duties (eg greets visitors, signs documents). - leader = deals with people, motivating, training and staffing (eg directs and influences subordinates). - liaison = fosters relationships with outside contacts (eg external work, responds to client complaints). * Informational Role:
- access information through setup management information systems (emails, notifications), receive and collect/disseminate information - monitor information through report analysis, pass information through meetings, phone calls and notice boards. - act as spokesperson in public.
- monitor = establishes and maintains an information network (eg read trade journals and internal reports). - disseminator = transmits information to members of organisation (eg holds meetings, phone calls) - spokesperson =
* Decisional Role:
- Entrepreneur look for, initiate and oversee projects with risk - Disturbance handler control situations and take corrective action - Resource allocation capital, expenditure, space and time
- Negotiator resolve disputes, negotiates wages, prices with suppliers and credit terms.
Skills of Management
* People skills = how managers interact with people both in and out organisation. This is the ability to communicate, lead, delegate, motivate, and negotiate. - feedback skills (both positive and negative feedback, not be personal, be understood, specific) - delegation skills (tasks must be shared to allow managers to do jobs, recognise who can do the book, inform person about the job) - discipline skills (fair and consistent, attend to a problem, allow people to explain, take corrective action) * Strategic skills (long term) = managers must be able to organise business activities to...
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