Chapter 7: Business Management

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Management Functions

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Introduction to Management

• Management includes the processes or functions of planning, organizing, leading, and controlling.
• Managers can help by supervising and directing employees.
• Management helps businesses focus on setting and meeting goals efficiently and effectively so that a profit can be made.
• The word management also refers to the people who are in charge of running a business.
  • They develop the objectives for a firm or a department and then figure out how to meet those objectives through people, work processes, and equipment.

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The Four Functions of Management

• Most managers carry out four different functions of management: planning, organizing, leading, and controlling.
• Planning is the act or process of creating goals and objectives as well as the strategies to meet them.
  • Planning must be completed first, then organization can take place.
• Organization allows managers to lead and control employees and activities to get work done.
• Leading involves providing guidance to employees so they can fulfill their responsibilities effectively.
• Controlling involves measuring how the business performs to ensure that financial and operational goals are met.
• An organizational chart shows how the firm is structured and who is in charge of whom.
• A top-level manager is responsible for setting goals and planning for the future as well as leading and controlling the work of others.
• A middle manager carries out the decisions of top management.
• An operational manager is responsible for the daily operations of a business.
  • Supervisors, office managers, and crew leaders are types of operational managers.

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Management Structures

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Managerial Structures

• Line authority is an organizational structure in which managers on one level are in charge of those beneath them.
• A line and staff authority organizational chart shows the direct line of authority (indicated by solid lines) as well as staff who advise the line personnel (indicated by dotted lines).
• Some firms have a centralized organization that puts authority in one place—with top management.
• Decentralized organization gives authority to a number of different managers.
• Formal structures are usually departmentalized.
  • Departmentalization divides responsibility among specific units, or departments.
• Smaller businesses can be run informally.
• If a business does not need a big marketing or distribution network, it does not need a lot of managers.

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Is a Manager’s Job for You?

• Most managers begin their career in an entry-level job.
• An entry-level job is a beginner-level position.
  • Managers are usually task-oriented.
  • A manager often has to work under pressure and solve many small problems.
  • Managers need human relations skills, or skills in dealing with people.
  • All managers must have some knowledge about the technical aspects of their business.
• Higher-level managers have to know what is happening in the world and in their sector of the business world.
• Otherwise, they will have trouble conceptualizing and solving problems that the company faces.
• Managers usually earn more money than employees in non- management jobs.
• Managers are often blamed when things go wrong, even if they did not cause the problem.
  • Their mistakes can be very costly to a company so they are under a lot of pressure to make the right decisions.

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