Business Essentials, 7th Edition Ebert/Griffin Business Management Business Essentials, 7th Edition Ebert/Griffin Instructor Lecture PowerPoints PowerPoint Presentation prepared by Carol Vollmer Pope Alverno College © 2009 Pearson Education, Inc.

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L E A R N I N G O B J E C T I V E S After reading this chapter, you should be able to: Describe the nature of management and identify the four basic functions that constitute the management process. Identify different types of managers likely to be found in an organization by level and area. Describe the basic skills required of managers. Explain the importance of strategic management and effective goal setting in organizational success. © 2009 Pearson Education, Inc.

L E A R N I N G O B J E C T I V E S (cont’d) After reading this chapter, you should be able to: Discuss contingency planning and crisis management in today’s business world. Describe the development and explain the importance of corporate culture. © 2009 Pearson Education, Inc.

© 2009 Pearson Education, Inc. What’s in It for Me? By understanding the material discussed in this chapter, you’ll be better prepared to: Carry out various management responsibilities yourself More effectively assess and appreciate the quality of management in various companies from the perspective of a consumer or investor © 2009 Pearson Education, Inc.

Who Are Managers? Good Managers Are responsible for business performance and effectiveness Effective—do the right things; achieve goals Efficient—do things right; lower costs Are accountable to all key stakeholders Develop strategic plans and tactical plans Analyze their competitive environments and plan, organize, direct, and control day-to-day operations © 2009 Pearson Education, Inc.

The Management Process The process of planning, organizing, leading, and controlling a firm’s financial, physical, human, and information resources to achieve its goals Planning Setting Goals Controlling Monitoring Performance Organizing Structuring Leading Guiding and Motivating © 2009 Pearson Education, Inc.

Planning The Planning Process Determining firm’s goals Developing strategy for achieving goals Designing tactical and operational plans for implementing the strategy © 2009 Pearson Education, Inc.

The Organizing Process Arranging resources and activities in a coherent structure Prepare organizational charts to help everyone understand roles and reporting relationships © 2009 Pearson Education, Inc.

Leading Leading Guiding and motivating employees to meet the organization’s objectives Uniting employees in a clear and targeted manner and motivating them to work in the best interests of the employer © 2009 Pearson Education, Inc.

The Controlling Process Monitoring a firm’s performance to make sure that it is meeting its goals Begins when management establishes standards, often for financial performance Can serve as a basis for providing rewards or reducing costs © 2009 Pearson Education, Inc.

FIGRE 5.1 The Control Process © 2009 Pearson Education, Inc.

Types of Managers Levels of Management Top managers: Responsible for the overall performance of the firm President, vice president, treasurer, CEO, CFO Middle managers: Implement strategies and work toward goals set by top managers Plant manager, operations manager, division manager First-line managers: Work with and supervise employees Supervisor, office manager, project manager, group leader © 2009 Pearson Education, Inc.

Areas of Management Human Resources Operations Marketing Information Financial Other © 2009 Pearson Education, Inc.

Basic Management Skills Human Relations Skills Technical Skills Decision-Making Skills Conceptual Skills time-management skills © 2009 Pearson Education, Inc.

time-management skills Four leading time wasters: Paperwork Telephone calls Meetings E-mail © 2009 Pearson Education, Inc.

Management Skills for the 21st Century Global Management Skills Understand foreign markets, cultural differences, and the motives and practices of foreign rivals Understand how to collaborate with others around the world on a real-time basis Management and Technology Skills Needed to process increasing amounts of information © 2009 Pearson Education, Inc.

Strategic Management: Setting Goals and Formulating Strategy The process of helping an organization maintain an effective alignment with its environment Goals Starting point in effective strategic management Objectives that a business hopes and plans to achieve Strategy The broad set of action plans to achieve company goals © 2009 Pearson Education, Inc.

Setting Business Goals Performance targets that organizations and their managers use to measure success or failure Mission Statement A statement of how a business will achieve its fundamental purpose Effective organizations set goals at many different levels: Long-term goals: five years or more Intermediate goals: one to five years Short-term goals: one year or less © 2009 Pearson Education, Inc.

Purposes of Goal Setting – Provides direction and guidance for managers at all levels – Helps firms allocate resources – Helps to define corporate culture – Helps managers assess performance © 2009 Pearson Education, Inc.

Types of Strategy Corporate Strategy Growth Retrenchment Determines what business or businesses a company will own and operate Growth Related diversification Unrelated diversification Retrenchment Downsizing and divestiture © 2009 Pearson Education, Inc.

Types of Strategy (cont’d) Business (or Competitive) Strategy Focuses on improving the company’s competitive position at the level of the business unit or product line Functional Strategy Guides managers in specific areas such as marketing, finance, and operations in deciding how best to achieve corporate goals by performing their functional activities most effectively © 2009 Pearson Education, Inc.

Formulating Strategy Step 1: Setting Strategic Goals Strategic goals are derived from a firm’s mission statement Step 2: Analyzing the Organization and the Environment: SWOT Analysis Assessing internal strengths and weaknesses and external opportunities and threats Environmental analysis Organizational analysis Step 3: Matching the Organization and Its Environment Matching environmental threats and opportunities against corporate strengths and weaknesses © 2009 Pearson Education, Inc.

Figure 5.2 Strategy Formulation © 2009 Pearson Education, Inc.

A Hierarchy of Plans Strategic Plans Tactical Plans Operational Plans Reflect decisions about resource allocations, company priorities, and the steps needed to meet strategic goals Tactical Plans Shorter-term plans for implementing specific aspects of the company’s strategic plans Operational Plans Mid-level and lower-level managers set short-term targets for daily, weekly, or monthly performance © 2009 Pearson Education, Inc.

Contingency Planning and Crisis Management Planning for change Seeks to identify in advance important aspects of a business or its market that might change and the ways in which a company will respond to changes Crisis Management Involves an organization’s methods for dealing with a crisis—an unexpected emergency requiring immediate response © 2009 Pearson Education, Inc.

Management and the Corporate Culture Is the shared experiences, stories, beliefs, and norms that characterize an organization Helps define the work and business climate that exists in an organization Communicating the Culture Managers must understand the culture Managers must transmit the culture to others in the organization Managers can support the culture by rewarding and promoting those who understand it and work toward maintaining it © 2009 Pearson Education, Inc.

Managing Change in the Culture Stages in the Change Process – 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 who enforce the firm’s new values. © 2009 Pearson Education, Inc.

Key Terms business (or competitive) strategy conceptual skills contingency planning controlling corporate culture corporate strategy crisis management decision-making skills leading environmental analysis first-line manager functional strategy goal human relations skills intermediate goal long-term goal management middle manager mission statement organizational analysis organizing operational plan planning short-term goal strategic goal strategic management strategic plan © 2009 Pearson Education, Inc.

Key Terms (cont.) strategy strategy formulation SWOT analysis tactical plan technical skills time-management skills top manager © 2009 Pearson Education, Inc.