1. Managing the Business Enterprise
Chapter 4
Managing the Business Enterprise

2. The Management Process
The process of planning, organizing, directing, and controlling an organization’s resources (financial, physical, human, and information) to achieve its goals
Planning Setting Goals
Controlling Monitoring Performance
Organizing Structuring
Directing Guiding and Motivating

3. Planning
Management process of determining what an organization needs to do and how best to get it done:
This involves:
Determining firm’s goals
Developing strategy for achieving goals
Designing tactical and operational plans for implementing the strategy

4. Organizing
Management process of determining how best to arrange an organization’s resources and activities into a coherent structure.
This involves
Arranging resources and activities in a coherent structure
Preparing of organizational charts to help everyone understand roles and reporting relationships

5. Directing: This involves:
Management process of guiding and motivating employees to meet an organization’s objectives
This involves:
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

6. The Controlling Process
Management process of monitoring an organization’s performance to ensure that it is meeting its goals.
The Controlling Process
monitors 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.

7. The Controlling Process
© 2009 Pearson Education, Inc.

8. Types of Managers:
It is helpful to classify managers according to levels and areas of responsibility.
Levels of Management:

9. Human Resource Managers: Human resource managers hire and train
employees, evaluate performance, and determine compensation.
2. Operations Managers: operations managers are responsible for production,
inventory, and quality control.
3. Marketing Managers: Marketing managers are responsible for getting
products from producers to consumers.
4. Information Managers: information managers design and implement
systems to gather, organize, and distribute information.
5. Financial Managers: financial managers to plan and oversee its accounting
functions and financial resources.
6. Other Managers: Some firms also employ other specialized managers. Many
companies, for example, have public relations managers, research and develo-
pment managers,etc

11. Setting Goals and Formulating Strategy
Objectives that a business hopes and plans to achieve.
these are starting points in effective management of any business enterprise.
These are Performance targets that organizations and their managers use to measure their success or failure 11

12. Types of Strategy: Strategy
The broad set of organizational plans for implementing the decisions made for achieving organizational goals.
Types of Strategy:
Corporate Strategy:
Strategy for determining the firm’s overall attitude toward growth and the way it will manage its business or product lines.
Example: Growth, Expansion, retrenchment etc. 12

13. Example: Pricing, new product development, customer focus, etc.
2. Business (or competitive) strategy:
a strategy at the business-unit or the product line level, that focuses on a firm’s competitive position in the market.
Example: Pricing, new product development, customer focus, etc.
3. Functional Strategy:
Strategy by which managers in specific functional areas decide how best to achieve corporate goals through productivity.
Example: use single website for its entire range of products/services; price levels; discounts; promotions; distribution channels etc.

14. Purposes of setting business goals:
Organizations function systematically according to its goals and plans.
Organizations commit its resources at all levels to achieve its goals.
There are four major reasons / purposes for organizations to set goals:
Goal setting provide direction and guidance for managers at all levels
Goal setting help firms to allocate resources.
Goal setting help organizations to define their corporate culture
Goal setting help managers to assess and evaluate performance

15. Different kinds of Goals:
Mission Statements:
Organization’s statement of how it will achieve its purpose in the environment in which it conducts its business.
Regardless of a company’s purpose and mission, every firm has its goals divided into the following:
Long-term goals: goals set for an extended time, typically five years and more into the future
Intermediate (or Mid-term) goals: goals set for a period of one to five years into the future.
Short-term goals: goals set for very near future, typically less than one year.

16. Strategy formulation involves the three basic steps summarized in the following Figure: