1. 5 chapter Business Essentials, 8 th Edition Ebert/Griffin Business Management Instructor Lecture PowerPoints PowerPoint Presentation prepared by Carol Vollmer Pope Alverno College Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

2. After reading this chapter, you should be able to: 1.Describe the nature of management and identify the four basic functions that constitute the management process. 2.Identify different types of managers likely to be found in an organization by level and area. 3.Describe the basic skills required of managers. L E A R N I N G O B J E C T I V E S 5-2 Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

3. After reading this chapter, you should be able to: 4. Explain the importance of strategic management and effective goal setting in organizational success. 1.Discuss contingency planning and crisis management in today’s business world. 2.Describe the development and explain the importance of corporate culture. L E A R N I N G O B J E C T I V E S (cont.) 5-3 Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

4. 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 5-4 Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

5. Who Are Managers? Good Managers – Responsible for business performance Effective—do the right things; achieve goals Efficient—do things right; lower costs – Accountable to all key stakeholders Develop strategic and tactical plans Analyze competitive environments and plan, organize, direct, and control operations 5-5 Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

6. The Management Process Leading Guiding and Motivating Controlling Monitoring Performance Planning Setting Goals Organizing Structuring Management The process of planning, organizing, leading, and controlling a firm’s financial, physical, human, and information resources to achieve its goals 5-6 Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

7. Planning The Planning Process – Determining firm’s goals – Developing strategy for achieving goals – Designing tactical and operational plans for implementing the strategy 5-7 Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

8. Organizing The Organizing Process – Arranging resources and activities in a coherent structure Prepare organizational charts to help everyone understand roles and reporting relationships 5-8 Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

9. Leading – Guiding and motivating employees to meet the organization’s objectives 5-9 Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

10. Controlling The Controlling Process – Monitoring a firm’s performance to make sure goals are achieved Management establishes standards, often for financial performance Can serve as a basis for providing rewards or reducing costs 5-10 Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

11. FIGRE 5.1 The Control Process 5-11 Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

12. Types of Managers Levels of Management – Top managers: Responsible for performance of the firm President, vice president, treasurer, CEO, CFO – Middle managers: Implement strategies set by top managers Plant manager, operations manager, division manager – First-line managers: Supervise employees Supervisor, office manager, project manager, group leader 5-12 Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

13. Human Resources MarketingMarketing FinancialFinancial OperationsOperations InformationInformation OtherOther Areas of Management 5-13 Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

14. Basic Management Skills Human Relations Skills Technical Skills Conceptual Skills Time- Management Skills Decision- Making Skills 5-14 Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

15. Time-Management Skills Four leading time wasters: – Paperwork – Telephone calls – Meetings – E-mail 5-15 Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

16. 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 5-16 Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

17. Strategic Management: Setting Goals and Formulating Strategy Strategic Management – The process of helping an organization maintain an effective alignment with its environment Goals – Starting point in effective strategic management – Objectives that a business plans to achieve Strategy – Broad set of action plans to achieve company goals 5-17 Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

18. Setting Business Goals Goals – Performance targets that are used to measure success or failure Mission Statement – A statement of how a business will achieve its purpose Effective organizations set goals at different levels : – Long-term: five years or more – Intermediate: one to five years – Short-term: one year or less 5-18 Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

19. Purposes of Goal Setting Goal Setting: – Provides direction and guidance for managers at all levels – Helps firms allocate resources – Helps to define corporate culture – Helps managers assess performance 5-19 Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

20. Types of Strategy Corporate Strategy – Determines what business or businesses a company will own and operate – Growth Related diversification Unrelated diversification – Retrenchment Downsizing and divestiture 5-20 Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

21. 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 5-21 Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

22. 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 5-22 Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

23. Figure 5.2 Strategy Formulation 5-23 Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

24. Hierarchy of Plans Strategic Plans – Steps needed to meet strategic goals; resource allocations; focus on company priorities Tactical Plans – Shorter-term plans for implementing specific aspects of the company’s strategic plans Operational Plans – Short-term targets for daily, weekly, or monthly performance 5-24 Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

25. Contingency Planning and Crisis Management Contingency Planning – Planning for change – Identify important aspects of a business that might change and the ways to respond to changes Crisis Management – Organization’s methods for dealing with a crisis— an emergency requiring immediate response 5-25 Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

26. Management and the Corporate Culture Corporate Culture – Shared experiences, stories, beliefs, and norms that characterize an organization – Defines the work and business climate in an organization Communicating the Culture – Managers must: understand the culture; transmit the culture to others in the organization; support the culture 5-26 Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

27. Managing Change in the Culture 3 Stages in the Change Process – After analyzing the company’s environment, extensive change is the most effective response to its problems. – Top management formulates a vision of a new company. – The firm sets up new systems for appraising and compensating employees who enforce the firm’s new values. 5-27 Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

28. 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 5-28 Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

29. Key Terms (cont.) management middle manager mission statement organizational analysis organizing operational plan planning short-term goal strategic goal strategic management strategic plan strategy strategy formulation SWOT analysis tactical plan technical skills time-management skills top manager 5-29 Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall

30. All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of the publisher. Printed in the United States of America. 305-30 Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall