Business Management Modul5

Definition of Objectives

The goals or results that an organization aims to achieve, typically followed simultaneously.

Functions of Objectives

To guide/coordinate decisions, enable monitoring, motivate employees, and communicate intentions to stakeholders .

SMART Criteria

Criteria for assessing goals: Specific, Measurable, Attainable, Rewarded, and Timed.

Motivational Goals (Locke & Latham)

Goals are most motivational when they are difficult, specific, participative, and involve feedback.

Purpose (Business)

The main reason for a firm's existence, focusing on long-term stability and general social impact .

Mission Statement

A concise statement of what the firm does, for whom, and how it differentiates its value proposition .

Vision Statement

A prospective and aspirational declaration of where the organization is headed in the future (revised every 5-10 years) .

General Objectives

Goals consistent with the mission that specify intended results for the whole organization.

Operational Objectives

Goals that specify general goals at all decision levels (units, departments, sections) to facilitate achievement.

Relationships among Objectives

Objectives can be Complementary, Incompatible (leading to conflict), or Hybrid .

Importance of Decision Making

Managers choose how to use limited resources (inputs, transformation, outputs) to affect value added .

Stages in Decision Making

1. Recognize problem/opportunity, 2. Set objectives, 3. Set/weight criteria, 4. Develop alternatives, 5. Compare/choose, 6. Implement, 7. Evaluate .

Programmed Decisions

Decisions for familiar, structured problems resolved by procedures, rules, and quantitative analysis.

Non-programmed Decisions

Decisions for unique, unfamiliar problems requiring judgement, intuition, and creativity .

Decision-Making Conditions

Ranges from Certainty (all info) and Risk (estimated info) to Uncertainty (clear goals, lack info) and Ambiguity (unclear goals and methods) .

Decision Biases: Prior Hypothesis

Selecting information that only supports previous beliefs.

Decision Biases: Escalating Commitment

Putting more resources into a project despite evidence of failure.

Definition of Planning

Developing projects about actions aimed at achieving organization objectives (who, when, and how).

Purposes of Planning

Clarify direction, motivate commitment, use resources effectively, and measure progress .

Forecasting (Planning Technique)

Using the past to predict the future, though it carries the risk of the "planning fallacy".

Scenario Planning

Analyzing how alternative, plausible futures could affect the business.

Definition of Control

Reviewing and verifying that results fit the forecast and correcting deviations.

Types of Control: A priori

Preventive control exerted before acting to anticipate unwanted effects.
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Performance Indicators (Monitoring)

Indicators include profitability (EBITDA), growth (market share), solvency, and stakeholder satisfaction .

Organizational Structure

The principles and relationships that combine resources to achieve a common goal (can be formal or informal).

Organizational Chart

Graphical representation showing authority, communication channels, working groups, and responsibility.

Differentiation of Activities

Dividing work into elementary tasks and assigning resources and responsibilities.

Integration of Activities

Coordinating efforts based on control, information flows, and liaison mechanisms.

Functional Organization

Units grouped by common professional know-how; suitable for low diversification.

Divisional Organization

Basic units organized around products, markets, or technologies; suitable for high diversification.

Matrix Organization

Mixed grouping combining two criteria (e.g., functions and products), breaking the principle of a single unit of command.

Mintzberg’s Parts of the Organization

Strategic Apex, Middle Line, Operating Core, Techno-structure, and Support Staff .

Definition of Power

The ability of a group or individual to influence the behavior or performance of others.

Sources of Power

Rational/legal, Reward, Coercive, Charismatic, and Expert power .

Management (Formal Power)

Integrating efforts to achieve both organizational and individual member objectives based on legal authority.

Leadership (Informal Power)

Voluntary collaboration of members based on charismatic or expert power.

Likert’s Management Styles

Authoritarian-Exploiter, Authoritarian-Benevolent, Consultative, and Participative (the best for long-term productivity) .

Transactional Leadership

Leadership based on an exchange or transaction of rewards for specific behaviors.

Transformational Leadership

Leadership based on charisma, motivation, intellectual stimulation, and individualized consideration.

UN Global Compact Principles

Ten principles covering Human Rights, Labour standards, Environment protection, and Anti-Corruption