P.O.M CHAPTER 1

Chapter 1: PRINCIPLES OF BUSINESS MANAGEMENT

Business Management

• Definition: The acts of getting people together to accomplish desired goals and objectives efficiently and effectively.

Management Overview

• According to Wheeler: Human activity that directs and controls the organization and operation of a business enterprise.

  • Focus on administrators/mangers integrating people, material, and money.

Key Concepts

• Organizations: Groups of people coordinating actions to achieve specific goals.

• Goals: Desired future condition that organizations strive to achieve.

• Management Functions: Process of using resources to achieve organizational goals through:

  • Planning

  • Organizing

  • Leading

  • Controlling

Efficiency vs. Effectiveness

• Efficiency: How well resources are utilized to achieve a goal (minimizing input).

• Effectiveness: Appropriateness of goals set and the degree to which they are achieved; choosing the correct goals is crucial for organizational effectiveness.

Managerial Functions

• Henri Fayol's Contribution: Identified four managerial functions applicable to both for-profit and non-profit organizations:

  • Planning

  • Organizing

  • Leading

  • Controlling

The Four Functions of Management

• Planning: Determining goals and the means to achieve them; includes resource allocation decisions.

• Organizing: Creating the structure of working relationships to facilitate goal achievement; involves grouping tasks and establishing authority.

• Leading: Establishing direction and a clear vision; leveraging influence and communication to motivate employees.

• Controlling: Evaluating achievement of goals; monitoring performance and making necessary adjustments.