Chapter 7: Business Management

Management Functions

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.

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.

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.

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.