Introduction to Business Management Ch 6, 8, 9

Planning

The process of determining the firm's goals and developing a strategy for achieving those goals

Planning Involves 5 Steps

1. Goals are established for the organization

2. Managers identify whether a gap exists between the company's desires and actual position

3. Managers develop plans to achieve the desired objective

4. The plans that have been decided upon are implemented

5. The effectiveness of the plan assessed

Organizing

Involves mobilizing the resources required to complete a particular task

Leading

Involves the interactions between managers and their subordinates as they work to meet the firm's objectives

Controlling

The process of monitoring a firm's performance to make sure it is meeting its goals

3 Levels of Management

Top, Middle, First-line

Top Managers

• Responsible for the overall performance of the firm.

• Executives who guide the fortunes of the companies.

• Responsible for the board of directors and shareholders of the firm for it overall performance and effectiveness.

• Set general policies, formulate strategies, oversee significant decisions, represent the company in its dealings with other businesses and government.

Middle Managers

• Responsible for implementing decisions of top managers

• Still manage positions of considerable autonomy and importance

• Plant manager, operations manager, division manager

• Responsible for implementing strategies, policies, and decisions made by top managers

First-Line Management

• Responsible for supervising employees

• Spend most of their time working and supervising the employees who report them

• Supervisor, office manager, group leader

Management Skills

Technical, Human Relations, Conceptual, Time Management, Decision Making

Technical Skills

• Skills associated with performing specialized tasks.

• Allow managers to perform specialized tasks

• Important for first-line managers

• The further you move up on the corporate ladder, the less technical skills you need

Human Relations Skills

• Skills in understanding and working with people

• Help managers lead, motivate, communicate with, and get along with their subordinates

• To be successful, managers must have good self-awareness, have superb written and verbal communication skills, and be critical thinkers- all of which are so-called "soft" skills, not technical skills

Conceptual Skills

• Ability to think in the abstract, diagnose and analyse various situations, and see beyond the present situation

• Refer to a person's ability to think in the abstract, to diagnose and analyze various situations, and to see beyond the present situation

Time Management Skills

• Ability to make productive use of time

• Refer to the productive use that managers make of their time

• Important for highly paid managers

• Managers must adress 4 leading causes of wasted time

  □ Paperwork

  □ The telephone

  □ Meetings

  □ Email and SMS

Decision Making Skills

• Skills in defining problems and selecting the best courses of action

• Help managers define problems or opportunities and select the best course of action.

3 basic Decision Characteristics

1. They must make problem decisions

2. They must make opportunity decisions

3. Make decisions under several different risk conditions

Rational Decision Making Process

1. Recognizing and defining the decision situation

2. Identifying Alternatives

3. Evaluating Alternatives

4. Selecting the Best Alternative

5. Implementing the Chosen Alternative

6. Following up and evaluating the results

Behavioural Aspects of Decision Making

• Organizational politics

• Intuition

• Escalation of commitment

• Risk propensity

Organizational politics

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

Intuition

• Managers will do something because they have a hunch

• Usually based on years of experience and practice making decisions in similar situations

Escalation of commitment

- When managers make decisions and then remain committed to its implementation in spite of clear evidence that it was a bad decision

Risk propensity

How much a manager is willing to gamble when making decisions

Hierarchy of Plans (for 3-step strategy formulation process)

1. Strategic

2. Tactical

3. Operational

Strategic Plans

Reflect decisions about resource allocations, company priorities, and the steps needed to meet strategic goals

Tactical Plans

Shorter-range ones concerned with implementing specific aspects of the company's strategic plan

Operational Plans

Developed by middle and lower-level managers

3 Levels of Strategy in a Business Form

1. Corporate-Level

2. Business-Level

3. Functional

Corporate-level strategy

Indicates various businesses a company will be in and how they will relate to each other

• Concentration, growth, integration, diversification, investment reduction

• Growth can include market penetration, geographic expansion, and product development

Business-Level Strategy

Identifes the Ways a business will compete in its chosen line of products and services

Micheal Porters Competitive Strategies

Cost Leadership, Differentiation, Focus

Cost Leadership

Becoming the low-cost leader in an industry

Differentiation Strategy

Tries to be unique in its industry along some dimension that is valued by buyers

Focus Strategy

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

Functional Strategies

Identify the basic courses of action each department will pursue so that it contributed to the business's overall goals

2 methods for dealing with the unforseen

1. Contingency Planning

2. Crisis Management

Contingency Planning

Identifying in advance changes that might occur that would affect a business and developing a plan to respond to such changes

Crisis Management

Dealing with an emergency that demands an immediate response

Corporate Culture

Shared experience, stories, beliefs, and norms that characterize a company

5 Important Factors to Developing a Strong Corporate Culture

1. Create careers not just jobs

2. Lead by example 3 .Tailor the workplace to meet employee needs

3. Emphasize the missions

4. Explicitly tell employees what behaviours are unacceptable

Human Resource Planning Involves

Job Analysis, Forecasting HR Demand and Supply, Matching Supply and Demand

Job Analysis

A systematic analysis of jobs within an organization.

2 Parts of Job Analysis

1. Job Description

2. Job Specification

Forecasting HR Demand and Supply

Planning for the organization’s future HR needs requires managers to assess trends in past HR usage, future organizational plans, and general economic trends.

2 Tasks Involved in Forecasting the Supply of Labour

1. Forecasting Internal Supply

2. Forecasting External Supply

Forecasting Internal Supply

• Relates to the number and type of employees who will be in the firm at some future date.

• The simplest approach to forecasting internal supply is to adjust present staffing levels for anticipated turnover and promotions

• At higher levels, managers plan for specific people and positions. They most commonly use the replacement chart

Forecasting External Supply

• Relates to the number and type of people who will be available for hiring from the labour market at large.

• More difficult than forecasting the internal supply

• To get an idea of the future availability of labour, planners must rely on information from outside sources, including population and demographic statistics and other data that are supplied by colleges and universities on the number of students in major fields.

Matching Supply and Demand

After comparing future demand and internal supply, managers can make plans to deal with predicted shortfalls or overstaffing

Recruiting:

The process of attracting qualified people to apply for available jobs.

Internal Recruiting

Considering present employees as candidates for openings.

External Recruiting

Attracting people outside the organization to apply for jobs.

Validation:

The process of determining the predictive value of information

Application Forms:

An efficient method of gathering information about the applicant’s previous work history, educational background, and other job-related demographic data

Tests

Tests of ability, skill, aptitude, or knowledge relevant to a particular job are usually the best predictors of job success, although tests of general intelligence or personality are occasionally useful as well.

Assessment Centre

Provider of a series of exercises in which the management candidates perform realistic management tasks while being observes by appraisers

Video Assessment

Involves showing potential hires videos of realistic work situations and asking them to choose a course of action to deal with the situation.

Interviews

A popular selection device, but it has become increasingly evident that it is a poor predictor of job success because of biases inherent in the way people perceive and judge others when they first meet them.

Behaviour-Based Interviewing

An approach to improving validity by asking questions that focus the interview much more on behaviour than on what a person says

Orientation

The process of introducing new employees to the company’s policies and programs, the co-workers and supervisors they will interact with, and the nature of their job.

Popular Training Techniques Include

On-the-job training, Off-the-job training, Management Development Programs

On-the-job training

Placing the employee in an actual work situation and having a supervisor or experienced employee demonstrate how to perform the task.

Job rotation

Having employees learn a wide array of tasks and acquire more abilities as they are moved from one job to another

Off-the-job Training

Performed at a location away from the work site

Vestibule training

Involves employees performing work under conditions that closely simulate the actual work environment

Management development programs

Development Programs in which managers conceptual analytical, and problem-solving skills are enhanced

Networking

Informal interactions among managers for the purpose of discussing mutual problems, solutions, and opportunities.

Mentoring

Having a more experienced manager sponsor and teach a less experienced manager

Reverse Mentoring

Having less experienced (often younger, more tech-savvy employees) mentor senior staff members on subjects like social media applications

Performance Appraisal

A formal program for evaluating how well an employee is performing a job; helps managers determine how effective they are in recruiting and selecting employees

2 Types of Appraisals

1. Objective

2. Judgmental:

Objective Appraisal

Include factors such as actual output (number of units produced), the scrap rate, the dollar volume of sales, and the number of claims processed.

Judgmental Appraisal

Subjective/ judgmental measures include ranking and rating methods.

"Check-in” Approach

Involves managers and their direct reports having regularly scheduled “conversations” in which the primary goal is to provide feedback on both how the subordinate is doing and what they may need to do to improve.

Compensation

The rewards that organizations provide in return for employees’ willingness to perform various tasks.

Wages

Generally refers to hourly compensation paid to operating employees.

Salary

Dollars paid at regual intervals in return for doing a job regardless of the amount of time or output involved

Furloughing

Workers in this situation had their hours and pay reduced but retained their full benefits.

Job Evaluation

A method for determining the relative value or worth of a job to the organization, so that individuals who perform it can be compensated appropriately

Incentive Programs

Special pay programs designed to motivate high performance.

Individual Incentives

Individual incentive systems are most common where performance can be assessed objectively (e.g., by number of units produced or by sales revenues generated).

Individual Incentives Include:

Piece-rate incentive plan, Pay-for-knowledge plans, Pay-for-performance (or variable pay) schemes, Workforce management systems:

Piece-rate incentive plan

Employees receive a certain amount of money for every unit they produce.

Pay-for-knowledge plans

Encourage workers to learn new skills and to become proficient at different jobs.

Pay-for-performance (or variable pay) schemes:

Managers are rewarded for especially productive output—for producing earnings that significantly exceed the cost of bonuses

Workforce Management Systems:

Schedule the most productive staff to work at the store’s busiest times. Less productive employees are given fewer or less desirable hours.

Types of Team and Group Incentives

Profit-sharing plans, Gainsharing plans

Profit-sharing plans

Profits earned above a certain level are distributed to employees

Gainsharing plans

Distribute bonuses to employees when a company’s costs are reduced through greater employee efficiency or productivity.

Benefits

Rewards, incentives, and other things of value that an organization gives to employees in addition to wages, salaries, and other forms of direct financial compensation.

Protection Plans:

Assist employees when their income is threatened or reduced by illness, disability, unemployment, or retirement.

Employment Insurance

Provides a basic subsistence payment to employees who are unemployed but are actively seeking employment.

Canada Pension Plan (CPP)

Provides income for retired individuals to help them supplement their personal savings, private pensions, and part-time work

Workers’ Compensation:

Mandated insurance that covers individuals who suffer a job-related illness or accident.

Wellness Programs:

Concentrate on preventing illness in employees rather than simply paying their expenses when they become sick

Cafeteria-style benefit plans

Allow employees to choose the benefits they really want

HR Regulations Include

• Equal employment opportunity,

• Comparable worth,

• Sexual harassment,

• Employee safety and health, retirement.

Equal employment opportunity regulations

The basic goal is to protect people from unfair or inappropriate discrimination in the workplace.

Canadian Human Rights Act of 1977

• The key federal anti-discrimination legislation

• The goal of the Act is to ensure that any individual who wishes to obtain a job has an equal opportunity to do so.

• Applies to all federal agencies, federal Crown corporations, employees of the federal government, and business firms that do business interprovincially.

Bona Fide Occupational Requirement

An overring characteristic of the job based on which an employer may choose one applicant over another. Help determine whether discrimination has occurred.

Comparable Worth

A legal concept that aims at paying equal wages for jobs that are of comparable value to the employer.

Sexual Harassment:

Requests for sexual favours, unwelcome sexual advances, or verbal or physical conduct of a sexual nature that creates an intimidating or hostile environment for a given employee.