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Chapter 11 – Managing a Business
Unit 2 – Business Organization
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Why management is necessary in any business
You will learn What managers do Why management is necessary in any business What is meant by risk-taking Role of entrepreneurs Manager’s approach on decision-making Manager responsibilities of main functional areas
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What do managers do? Plan Organize Coordinate Command Control
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Planning Future of the organization E.g. Setting aims or targets
What do managers do? Planning Future of the organization E.g. Setting aims or targets
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What do managers do? Aims or Targets “the school will aim to increase its student numbers in the primary school to over 200 in two years time”
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What do managers do? Aims or Targets “we should plan to increase sales of our fruit juice range by 50% in three years”
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Planning Organization Resource Planning What do managers do?
Future of the organization E.g. Setting aims or targets Organization Sense of direction Common feeling Work towards Resource Planning
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What do managers do? Aim/Target “the school will aim to increase its student numbers in the primary school to over 200 in two years time” Strategy “we need to build a new state-of-the-art facility to cater for the increase in student numbers”
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What do managers do? Strategy “we need to build a new state-of-the-art facilities to cater for the increase in student numbers”
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What do managers do? Aim/Target “we should plan to increase sales of our fruit juice range by 50% in three years” Strategy “increased advertising expenditure will be needed to increase sales”
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What do managers do? Strategy “increased advertising expenditure will be needed to increase sales”
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Organizing Organizational Chart What do managers do? People Resources
Chief Executive (Bill Murray) Marketing Director Store Manager Assistant Store managers Shop Workers Purchase Manager Financial Director Book-keeping Human Resource Director Administration Assistant Organizing People Delegation Resources Availability Organizational Chart Authority Specialization
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Co-ordinating Good Manager What do managers do? “working together”
“bring people in the organization together” Good Manager Departments achieve plans set by management Regular meetings Project Teams
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Aircraft Design First Class Business Class Premium Economy Economy
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Keep to Targets & Deadlines
What do managers do? Commanding Guiding Instructing Leading Supervising Keep to Targets & Deadlines
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Controlling Failing What do managers do? Measure & Evaluate
Individuals & Groups Remain on Target Failing Identify reasons for poor performance Corrective plans
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Organizations need clear and effective management Managers
What managers do? Organizations need clear and effective management Managers Give a sense of control and direction Co-ordinate departments Reduce wastage of effort Control the employees High output & sales
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What makes a good manager?
Can anyone be a good manager? Are the qualities of leadership limited to a few people? Why are some managers more successful than others? Is it that “good managers are born” “good managers are made by training”
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What makes a good manager?
Qualities Intelligence Understand difficult ideas Dealing with different issues Initiative Solutions to problems Take control of situations
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What makes a good manager?
Qualities Assertiveness & Determination Take command of others Push through ideas & policies See things to their conclusion Communication Skills Clear ideas and messages to subordinates Encourage positive responses
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What makes a good manager?
Qualities Energy & Enthusiasm Set high standards of effort & involvement Encourage others to act in similar ways “be a role model”
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What makes a good manager?
Qualities Styles of Leadership
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Types of Decision Making
Strategic Decisions Important Overall success of business Not that frequent Future plans of business Long-term investments Takeovers, expansion Change of Status
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Types of Decision Making
Tactical Decision Less important More frequent Middle-management Ways to train new staff Methods of advertising Types of machines to purchase
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Types of Decision Making
Operational Decisions Day-to-Day Repetitive Based on previous experience Lower Level Management Staffing levels Stock levels Methods of delivery of goods
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Management & Risk-Taking Decision Making
Should we open the new factory in the north or south of the country?
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Management & Risk-Taking Decision Making
What price should we charge for the new product range?
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Management & Risk-Taking Decision Making
Do we buy new machinery even though this will involve some job losses?
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Management & Risk-Taking Decision Making
Do we promote an internal applicant or recruit from outside the business?
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Management & Risk-Taking Decision Making
How much should we spend on developing new products?
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Management & Risk-Taking Decision Making
How do we finance the take-over of this business?
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Management & Risk-Taking Decision Making
How can we measure the performance of the sales division?
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Decisions Making Risks Accepted Sole Trader
Entrepreneurs / Risk Takers Public Limited Company Shareholders capital risk
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Reducing Risk in Decision-Making Decision-Making Process
Establish the Objectives of the Organization Identify & Analyze the Problem to be Solved Collect Data on all possible Alternatives Solutions Implementing the Decision Review & Evaluation of the Decision
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Case Study – Page 159 Jonas
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Case Study – Page 159 Paul
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Management Responsibilities in Departments
Resource Human Forecasting Staff Needs Recruiting Staff Prepare Job Descriptions Job Specifications Staff Training Programs Preparing Implementing Interviewing & Selecting Staff
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Management Responsibilities in Departments
Resource Human Negotiations Workers representatives Union leaders Staff Record Keeping Disciplining & Warning Staff
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Management Responsibilities in Departments
Resource Human Staff Turnover Wrong staff employed Efforts not made to keep staff Right staff employed Efforts made to keep staff
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Management Responsibilities in Departments
Marketing Research New & existing markets New Product Planning Research & Development (R & D) Production Department Marketing Mix Sale Records Extension Strategies, Withdrawal of Products
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Management Responsibilities in Departments
Accountig Finance and Recording Financial Transactions Firms & individuals Collect Data Regular Accounts Format Budgeting Analyze profitability of new investment projects
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Management Responsibilities in Departments
Accountig Finance and Decision-making Method of finance Control Cash-flow
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Management Responsibilities in Departments
Production Operations and Ordering Stock Materials, Resources Develop & Design new products Building Location Cost-effective area Production Methods & Machinery Financial Dept Involved
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Management Responsibilities in Departments
Production Operations and Control Production Ensure High Levels of Efficiency Maintaining the Efficiency Machinery Quality Control
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Management Responsibilities in Departments
Administration Clerical & Office Support Services Responsibility for the Information Technology System Cleaning Maintenance Security
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Answer the following……….
What are the main tasks of managers? What is involved in decision-making? What do we mean by “risk-taking”? How can we reduce risks in the decision-making process? Identify and explain the main responsibilities of managers.
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