THE MICRO ENVIRONMENT (CHAPTER 1)
The management of a business can be divided into nine business functions namely: General and strategic management
Production and operations
Administration and information
Financial and accounting
The nine functions are important because their role is to ensure that the goals of the business are achieved. All the functions work together to ensure the survival of a business just like the organs of a human. None of the functions can work independently. 2. Content
General and strategic management
General management has three levels namely top management, middle management and lower management and with these three levels comes four tasks and they are planning, organizing, leading and controlling. Three levels of management
Top management: consist of the heads of all the divisions, sections or departments of the business. Their role is to think about the long term direction of the business and set in place long-term plans and projects, as well as monitoring their progress. These managers take strategic decisions. Middle management: mangers that reports to top managers. The focus of middle managers is on the medium term goals. They implement the plans and visions of top management and makes sure things happen. The decisions taken by these managers are of a tactical nature. Lower management: the lower management reports to the middle management. They are also known as supervisors and are responsible for overseeing day to day operations and routine decisions in the business. They take operational decisions of a short term nature. Tasks for management
Planning: setting goals and objectives and developing plans to achieve them. In order to plan effectively management should gather all appropriate information. Plans should meet the following requirements: A plan should be adaptable, realistic and cost effective.
Plans should be communicated clearly, preferably in writing, in order for everyone to understand what is expected of them. The plan should be suitable for the activity to be implemented There should be a time frame linked to plans.
Planning should be done in advance so that the planning can be adequate. A back-up plan, Plan B, should also be available in case the original plan fails. Problems that may occur during planning
Not all problems and risks are taken into account during planning If workers feel the plan is too prescriptive they will oppose the plan If the plan is uneconomical in execution
Human error during planning can upset the execution of the plan Issues occur without warning which require crisis management Organizing: organizing people, allocating tasks and ensuring that there is co-ordination between different departments. Each business has its own unique organizational structure.
Five different structures can be used, depending on the kind of business. Line organizational structure
In this structure the manager makes decisions and gives orders to subordinates. Authority flows in a direct line from top to bottom.
Delegation means the transfer of authority – manger gives tasks to workers on lower level It is clear who has the responsibility (the obligation to do something to the best of your ability) and authority (the right to give orders) in a business. All managers have accountability – this is the expectation to give reasons why decisions or actions were taken. The span/range of control (the number of people under your direct supervision) of each manager is limited.
Advantages of the line organization:
The system is simple, easy to design and easily understood by everyone in the organization Only one head or boss gives instructions / orders to particular workers. This eliminates confusion. It is easy to determine who carries authority in a department and who has the responsibility to carry out orders The organization lends itself to guided decision-making...
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3. Meyer, E., Russell, Y. 2011. Studying Business, Grade 10
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