Key Functions and Importance of Management

Management

Is a process designed to achieve an organization's objectives by using its resources effectively and differently in a changing environment.

Effectively

Having the intended result.

Efficiently

Accomplishing the objectives with a minimum of resources.

Managers

Make decisions about the use of the organization's resources and are concerned with planning, organizing, directing, and controlling the organization's activities so as to reach its objectives.

Staffing

Hiring people to carry out the work of the organization.

Downsizing

Elimination of significant numbers of employees from an organization.

Functions of Management

Planning, Organizing, Directing, Controlling.

Planning in Management

The process of determining the organization's objectives and deciding how to accomplish them, is the first function of management.

Importance of Planning

Designs the map that lays the groundwork for the other functions.

What Planning Involves

Forecasting events and determining the best course of action from a set of options or choices.

Plan Specifics

What should be done, By whom, Where, When, How.

Planning Document

A written document that provides a blueprint or complete outline of an organization's mission, goals, and objectives as well as the activities that will need to be implemented.

Strategic Plan

Clearly explains the sequencing of decision stages, resources and business functions to serve markets and achieve profits.

Mission Statement

Declaration of an organization's fundamental purpose and basic philosophy.

Mission Statement Questions

What business are we in?

Characteristics of Good Mission Statements

Clear and concise statements that explain the organization's reason for existence.

Five Basic Questions of Mission Statements

1. Who are we? 2. Who are our customers? 3. What is our operating philosophy (basic beliefs, values, ethics, etc.)? 4. What are our core competencies and competitive advantages? 5. What are our responsibilities with respect to being a good steward of environmental, financial, and human resources?

Benefits of a Good Mission Statement

The foundation for the development of a strong organizational culture, a good marketing plan, coherent business strategy.

Goals

Aspirational and long term in nature and should be consistent and comprehensive to achieve an outcome that are not measurable.

Objectives

Measurable benchmarks that derive from the organization's mission and goals.

Common Business Objectives

Common objectives relate to sales and growth. Example: increasing sales by 50% in a specific period.

Efficiency Objectives

Making the best use of the organization's resources.

Growth Objectives

Relate to an organization's ability to adapt and to get new products to the marketplace in a timely fashion.

Key Performance Indicators (KPIs)

Specific and quantitative metrics that are measured, tracked and analyzed to measure progress toward objectives.

Examples of KPIs

Gross profit margin, Operating cash flow, Return on assets, Cost per unit, Lead time, Turnover rate.

Types of Plans

1. Strategic plans 2. Tactical plans 3. Operational plans.

Strategic Plans

Establishes the long-range objectives and overall strategy or course of action by which the firm fulfills its mission.

Tactical Plans

Short range and designed to implement the activities and objectives specified in the strategic plan.

Operational Plans

Actions specific individuals, work groups, or departments need to accomplish in order to achieve the company's tactical plan.

Operational

Very short term and specify what actions specific individuals, work groups, or departments need to accomplish in order to achieve the tactical plan and ultimately the strategic plan.

Crisis management

Seals with potential disasters such as product tampering, oil spills, fire, earthquake, computer viruses, pandemics, or even a reputation crisis due to unethical or illegal conduct by one or more employees.

Contingency plan

A business with a clear contingency plan will be better able to respond effectively when crisis situations or disasters occur.

Contingency plans

All organizations must consider the possibility of unplanned disasters and create contingency plans, which specify how the company will handle a variety of unplanned situations.

Organizing

The structuring of resources and activities to accomplish objectives in an efficient and effective manner.

Business model

Relates to how a firm creates, delivers, and is organized to operate and provide value to stakeholders.

Directing

Motivating and leading employees to achieve organizational objectives.

Good directing

Involves telling employees what to do and when to do it through the implementation of deadlines and encouraging them to do their work, as well as giving people rewards and recognition.

Controlling

Process of evaluating and correcting activities to keep the organization on course.

CEO job

Manage the overall strategic direction of the company and plays a key role in representing the company to stakeholders.

COO

Responsible for daily operations.

High level managers

Spend their time planning, making strategic decisions, and representing their company to the public and to government regulators.

Middle management

Responsible for tactical and operational planning that will implement the general guidelines established by high-level management.

Front line management

Supervise workers and the daily operations of the organization, responsible for implementing the plans established by middle management and directing workers' daily performance on the job.

Technical expertise

Specialized knowledge and training required to perform jobs related to their area of management.

Conceptual skills

The ability to think in abstract terms, and to see how parts fit together to form the whole, are needed by all managers, but particularly high-level managers.

Analytical skills

The ability to identify relevant issues and recognize their importance, understand the relationships between them, and perceive the underlying causes of a situation.

Human relations skills

Deal with people inside and outside the organization.

Autocratic leaders

Make all the decisions and then tell employees what must be done and how.

Democratic leaders

Involve their employees in decisions.

Servant leaders

Consider needs of their employees and form strong relationships with shareholders.

Employee empowerment

When employees are provided with the ability to take on responsibilities and make decisions about their jobs.

Decision making

Systematic approach to recognizing and defining the decision situation, developing options to solve the situation, analyzing the options, selecting the best option, implementing the decision, and monitoring the consequences of the decision.