Chapter 5: Effective Management Area of Study 2: Internal environment of large-scale organisations

Key Roles of Management ● Roles are goal directed, interrelated and independent. ● Describe the abilities that all managers should have PlanningOrganisingLeadingControlling

Planning ● a formalised procedure to produce a set of integrated systems of decisions ● determining achievable goals or objectives within a specified time frame ● Three main distinctions in planning Type of PlanningTime PeriodWho is responsible Strategic Planning Long term - up to five years (e.g. opening new branches) Senior managers (directors, CEOs) Tactical Planning Short term – 6 months to one to two years (e.g. seasonal buying for retail outlets) Middle Managers (functional managers, divisional managers) Operational Planning Very short term – daily, weekly, monthly (e.g. ordering stock, weekly rosters) Lower Managers (frontline managers or supervisors)

Planning Process Step One Define/Identify Objective Outlining what the organisation wants to achieve Step Two Outlining of Situation – present and forecasting future Conduct a SWOT analysis Step Three Devise planning alternatives Determine possible ways of achieving the objective (e.g. new policies, training) Step Four Select the best option and implement it. Identify the most appropriate strategy and put it into action Step Five Monitor and Evaluate (modify if necessary) Are the objectives being met? If not, taking corrective action.

SWOT Analysis Strengths What is working well in the current situation? Especially relevant to internal and operating environments Opportunities Are there potential chances for success in the future? Opportunities can come from any of the three environments (internal, operating, macro) Weaknesses What is not working well in the current situation? Also applies to internal and operating environment Threats Are there potential forces that could prevent success in the future? If from internal or operating they might be avoided, but if from macro environment they may be inevitable

Organising The coordination of resources and systems so that plans and objectives can be achieved Resources include human resources, money, time, knowledge, raw materials, equipment and workers’ skills. Task Allocation: managers organising workers in such a way as to ensure that all required jobs are completed in the most productive way Systems: the method of combining all of the factors necessary to make the plans a reality What needs to be organised will differ depending on the position of the manager

Leading Characteristics of a good leader Process of influencing workers so that they want to do their best to achieve organisational objectives A leader, through demonstration of personal qualities, achieves good results because workers want to follow their lead The difference between managing and leading is subtle so qualities are sometimes interchangeable Interpersonal Qualities: visionary skills, inspirational qualities, able to establish trust but remain humble Informational qualities: have knowledge required for role, able to gather information, analyse it and communicate it to followers Decision-making qualities: take responsibility seriously, and try to be fair and just in making decisions.

Controlling What needs to be controlled? Implementing and monitoring systems necessary to regulate activities and allow the evaluation of the achievement of plans Four basic steps in control process: 1. Setting a standard, target or objective 2. Measuring performance 3. Identifying and investigating any deviations 4. Marking changes where necessary to make sure objectives are being achieved Finances: money wasted if not being controlled properly (e.g. budgets, accounting systems, auditors) Employees: having established work policies, procedures and practices to ensure safety and efficiency Resources: ensuring stock levels are satisfactory and resources used in the most cost-effective manner

Management Styles The manner and approach of providing direction, implementing plans and motivating people Style will depend on: Manager’s personality Managers skills Skill levels of employees Nature of workplace Time available Changes to environments

Autocratic Management Style FeaturesStrengthsWeaknesses -Manager desires to be in complete control -Manager makes decisions alone -Belief that money is linked to motivation -Authority is centralised -Communication is one way from the manager down -Decision making is fast as only one person -Leader experienced -Often clear directions are given -High regard for production and efficiency -No opportunity for input from workers -Workers may resent being ordered around, leading to decreased morale and productivity -Doesn’t allow for open communication, feed back on ideas

Persuasive Management Style FeaturesStrengthsWeaknesses -Manager makes decisions alone but explains why -Authority is centralised -One-way communication -places some value on the importance of employee’s contribution to performance of organisation -Decision making quick -Suits high risk decisions e.g. closure of a factory -employees clear in what they have to achieve -no input from workers into decision making -Workers can still feel alienated as opinions not sought

Consultative Management Style FeaturesStrengthsWeaknesses -Manager makes decision alone, after consulting with staff -Authority is still centralised by workers opinions are considered -Two-way communication -places value on employee’s contribution -gain a variety of ideas – may lead to better decision-making -workers may take more ownership of decision if involved in process -acts to motivate and increase employees level of job satisfaction -can be time-consuming if all employees/stakeholders are consulted -workers may still feel alienated if they were consulted but their opinions not included in final decision

Participative Management Style FeaturesStrengthsWeaknesses -Manager and employees make decision together -Authority is decentralised -two-way communication -motivating employees by trying to satisfy their broad needs -manager demonstrating faith in employees -Can boost morale, motivation and productivity -high levels of ownership as workers make decisions themselves -Shared vision and direction between management and employees -Can be very time-consuming -can cause conflict between workers -not all workers want to be involved in decision-making; they may resent being part of the process

Laissez-faire Management Style FeaturesStrengthsWeaknesses -Employees are left to make decisions on their own in their area -Authority is totally decentralised -Communication channels can vary depending on the organisation -Workers experience a great deal of control, can lead to boosts in morale and productivity -can be a good style in workplaces where creative freedom is important -good for team work -lack of guidance and monitoring from management can lead to problems in terms of control -some workers may not be capable of this level of self- direction -does not suit unskilled employees who need routine tasks

Management Skills Communication Conveying and receiving information effectively in both oral and written form Two kinds of communication: Interpersonal – information shared between a manager and a subordinate or work team Organisational – systems are used to share info with large groups of people Skills include: Speaking and writing well Demonstrating communication is a two- way process Using active listening techniques

Delegation Passing of authority down the hierarchy to perform tasks or make decisions. Responsibility remains with the person delegating Authority retained by senior management (not delegated) is said to be centralised. Authority passed down to lower levels is said to be decentralised. Skills needed: Ability to select appropriate people to perform the delegated tasks Good communication skills

Decision Making Identifying and defining problems and opportunities and choosing a solution Skills include: Assessing risks associated with making a decision and choosing the best alternative The ability to make decisions within a time frame

Problem Solving Skills Involves finding an effective solution to an unacceptable solution (problem)

Negotiation Process by which one party seeks to obtain something it wants from another party in face-to-face discussion Steps for negotiation: 1. Preparation 2. Planning 3. Make the proposal 4. Responding to the proposal (listening) 5. Investigating other persons proposal and possible options 6. Bargaining by making concessions 7. Agree on an action, close the negotiation Using time (a limited resource) effectively to complete set tasks. Skills include: Prioritising and setting deadlines Delegating tasks Avoiding time wasting Three types of work: Boss determined Organisation determined Self determined Time Management

Stress Management Skills required by a manager to reduce the level of stress/distress in both themselves and their subordinates Managers can take measures to reduce workplace stress Ability to analyse or study the nature of a given situation or set of circumstances Important management skill particularly for middle and senior management Analytical Skills

Technical skills Emotional Intelligence Represents a manager’s ability to perform a particular task, e.g. knowledge of computing, technology, accounting Very important for front- line and middle managers Ability or capacity a person has to observe, gauge and manage their emotions and the emotions of others and of groups Involves: Perceiving emotions Using emotions Understanding emotions Managing emotions

Relationship between styles and skills Different management styles draw upon specific management skills Managers with good people or soft skills will find it easier to successfully use a participative management style Managers who are poor at decision making would find it difficult to use autocratic, persuasive or even the consultative management style.

Examination Preparation Questions 1-6 Page 130 Chapter Summary Questions 1 (glossary), 3, 6 and 8