ADM 1300 Chapter 6: Managing the business enterprise

4 functions of management

planning, organizing, leading, controlling

Planning

the process of determining the organization's objectives and developing a strategy for achieving these goals

leading

interactions between managers and subordinates to meet firms objectives

Organizing

mobilizing the resources required to complete a task

Controlling

monitoring performance to make sure the firm reaches its goals

Efficiency

achieving the greatest level of output with a given level of input

Effectiveness

achieving goals that have been set

Top Managers

maintain overall performance and effectiveness of the firm

Middle Managers

implement the policies and plans of the top managers

first-line managers

supervises employees and ensures they are well-trained

technical skills

helps managers perform specialized tasks

human relations skills

skills that involve communication and motivation; they enable managers to work through and with people

conceptual skills

the ability to analyze and diagnose a situation and see beyond the present situation

time management skills

productive usage of a manager's time

decision-making skills

helps managers define problems or opportunities and select the best course of action

problem decision

specific problems must be resolved

opportunity decision

no problem but there is an opportunity present

Certainty risk condition

manager knows the alternatives available and the conditions that come with each alternative

Risk (risk condition)

alternatives may be known but the costs are probabilities rather than certainties

Uncertainty risk condition

managers don't know the possible alternatives or the outcomes of the alternatives

steps of decision making

1. recognize and define the decision situation
2. identify alternatives
3. evaluate alternatives
4. select the best alternative
5. implement the chosen alternative
6. evaluate the results

organizational politics

the actions that people take as they try to get what they want

intuition

based on years of experience and making decisions in similar situations

escalation of commitment

an increased commitment to a previous decision in spite of negative information

risk propensity

how much a manager is willing to gamble when making decisions

Strategic Management

process of effectively aligning an organization with its external environment

strategy

broad set of organizational plans for implementing the decisions made for achieving organizational goals

vision

statement indicating why an organization exists and the type of organization it should be

Mission Statement

a statement of the organization's purpose and how it will achieve that in its business environment

SWOT analysis

strengths, weaknesses, opportunities, threats

strategic plans

decisions about resource allocations, company priorities and the steps needed to meet strategic goals are set by top management

tactical plans

concerned with implement specific aspects of the company's strategic pla

operation plans

setting short-term targets for performance

corporate level strategy

identifies the various businesses that a company will be in, and how these businesses will relate to each other

Concentration Strategy

focusing the company on one product or product line that it knows well

market penetration

more aggressive selling in the firm's current markets to boost sales

Geographic Expansion

expanding operations in new geographic areas or countries

product development

developing improved products for current markets

Horizontal Integration

gaining control of competitors in similar markets with similar products

vertical integration

Practice where a single entity controls the entire process of a product, from the raw materials to distribution

Diversification

spreading the risk among several products or markets

related diversification

adding new but related products or services

conglomerate diversification

Diversifying into products or markets not related to the firm's current businesses

Investment Reduction

reducing the company's investment in one or more of its lines of business

retrenchment

reduction of activity or operations

Divestment

selling one or more of a firm's business units

business level strategy

identifies the ways a business will compete in its chose line of products or services

Competitive Strategy

a plan to establish a profitable and sustainable competitive position

Cost Leadership

become the low cost leader in the industry

differentiation strategy

be unique in the industry with a dimension that is valued by buyers

focus strategy

selecting a market segment and serving the customers in that market niche better than competitors

functional strategies

the basic courses of action that each of the business's departments pursues to help the business attain its competitive goals

contingency planning

Planning for unexpected events and developing a plan to handle those changes

crisis management

dealing with an emergency that demands an immediate response

corporate culture

the shared experiences, stories, beliefs, and norms that characterize an organization

strong corporate culture

guides people to work toward the same goals and helps newcomers learn accepted behaviour