Uploaded by Mahdeeya Halidh


Nature of management
features of effective
❖ Manager: Someone who coordinated the business’s limited resources in
order to achieve specific goals
❖ Management definitions:
➢ Traditional: Process of coordinating a business's resources to
achieve its goals.
■ 4 main resources available to a business are:
● Human resources - employees of the business
● Informational resources - knowledge and data
required by the business
● Physical resources - equipment, machinery and
● Financial resources - funds used to meet obligations
of various creditors
➢ Contemporary: Process of working with and through other people to
achieve the goals of the business in a rapidly changing environment.
■ Key aspects of the management process
● Working with and through others
● Getting the most from limited resources (efficiency)
● Coping with rapidly changing environment
● Balancing efficiency and effectiveness
● Achieving business goals
Features of effective management
❖ Planning - the preparation of a predetermined course of action for a
➢ Refers to process of setting objectives and finding methods to
achieve them
❖ Organising - Structuring of the organisation to translate plans and
goals into action
❖ Leading: Process of influencing or motivating people to work towards
the company’s objectives
❖ Controlling - compares what was intended to happen with what has
actually occurred.
❖ Needed for business to succeed
❖ Effective management joins the efforts of employees and directs them on
how to achieve business goals
❖ Influences success or failure of a business.
skills of management
– interpersonal,
strategic thinking,
vision, problemsolving, decisionmaking, flexibility,
adaptability to change,
❖ Interpersonal (people)
➢ Skills needed to work and communicate with other people and to
understand their needs
➢ Centre on the ability to relate to people and to appreciate their needs
➢ Ability to communicate, motivate, lead and inspire
❖ Communication
➢ The exchange of information between people; the sending and
receiving of messages
reconciling the
conflicting interests of
➢ Needed for long term survival of business
➢ Managers who are good communicators will easily influence others
➢ Nonverbal communication - any message not written or spoken.
Usually body language
❖ Strategic thinking
➢ Allows a manager to see the business as a whole and to take the
broad, long term view
➢ Lets the manager see the ‘big picture’
➢ Allows manager to:
■ Visualise how work teams and individuals interrelate
■ Understand the effect of actions on the business
■ Gain insight into an unknown future
➢ Thinking about the business’s future and future goals
❖ Vision
➢ Clear, shared sense of direction that allows people to attain a
common goal
➢ Manager must have clear vision for future of the business
➢ To share their vision, managers must show leadership
■ Ability to influence people to set and achieve goals
❖ Problem solving
➢ Searching for, identifying and implementing a course of action to
correct an unworkable situation.
➢ Steps to solving problems:
1. Identify the problem and causes
2. Gather relevant information
3. Develop alternative solutions
4. Analyse the alternatives
5. Choose one alternative and implement it
6. Evaluate the solution.
❖ Decision-making
➢ Process of identifying options available and then choosing a specific
course of action to solve a problem
➢ Effective decision making means making decisions in time frames
➢ Manager must assess risk involved if decision is implemented
❖ Flexibility and adaptability to change
➢ Flexible - being responsive to change and able to adjust to changing
➢ Managers must anticipate and adjust to changing circumstances
➢ Proactive rather than reactive
■ Proactive - Forward thinking to achieve objectives
Reconciling the conflicting interests of stakeholders (135)
❖ Stakeholders - groups or individuals who interact with the business
❖ Businesses expected to act responsibly and accountable
❖ Reconciling conflicting interests ensures long term growth and survive
❖ Stakeholders place demands on businesses
➢ May be compatible e.g. quality products at reasonable prices
➢ Some expectations are incompatible; oppose each other
■ Results in some stakeholders being dissatisfied
❖ Managers must attempt to satisfy as many stakeholder expectations as
➢ Must also act in responsible manner
❖ Strategies:
➢ Place emphasis on environmental practises
■ Benefits society and shareholders
➢ Management of stakeholder value
❖ Employee share acquisition schemes
➢ Allows eligible employees to buy shares of the business at a reduced
➢ Aligns interests of both groups as employees are then shareholders
❖ Offer training and professional development to employees
➢ Greater efficiency → reduces production costs
➢ Raises profits → pleases shareholders
➢ Higher quality product
❖ Responsible, informed managers
❖ Stakeholder engagement - businesses sharing information with and seeking
input from stakeholders and involving them in decision making.
achieving business
– profits, market share,
growth, share price,
social, environmental
– achieving a mix of
the above goals
– staff involvement –
motivation, mentoring,
Goals benefit managers by...
 Serving as targets
 Measuring sticks - Benchmark against which a business can measure
 Motivation
 Commitment
SMART goals
1. Specific
2. Measurable
3. Achievable
4. Realistic
5. Timebound
Achieving business goals
❖ Profit
➢ Profit maximisation - When there is a maximum difference between
the total revenue (sales x price) and total costs being paid out
➢ Done through: Increasing sales
 Lowering price so customers purchase more
 Marketing campaigns
❖ Market share
➢ Business’s share of the total industry of sales for a certain product
➢ Goals for businesses dominating the market
 Small market gains - large profits
➢ Promotion
 Methods used to inform, persuade and remind a market
about a business’s products
 Convinces new customers to try products while maintaining
established customer loyalty
❖ Growth
➢ Internal
 employing more people
 increasing sales
 new equipment
 establishing new outlets
➢ External
 Merging with or acquiring other businesses
 Merger - two businesses combine
 Acquisition - One businesses purchases another
➢ Some SME owners decide not to expand businesses to:
 Avoid added pressure
 Keep control of business operations
 Maintain personal contact with customers
❖ Share Price
➢ Share - Part ownership of a business
 Reasons why shares are bought:
● To sell them at a higher price
● Shareholder is entitled to part of company’s profits
➢ Successful businesses maximise shareholder returns
 Keep share price rising
 Paying back good dividends
❖ Social
➢ Goals benefitting the community while achieving financial goals
➢ Social goals:
 Community service - Sponsorship of community events and
 Provision of employment - Small businesses often employ
family members who would otherwise be unemployed
 Social justice - Set of policies ensuring employees and
community members are treated fairly and equally.
❖ Environmental
➢ Sustainable development - balance between economic and
environmental concerns
 When needs of population are met without endangering
ability of future generations to meet their needs
➢ Increasing awareness of environmental issues from society
Staff Involvement
❖ Involving employees in the decision making process and giving them
needed skills and rewards
❖ Employees are a business's most important resource
❖ Business must provide work environment that maximises employee
involvement and labour productivity
➢ Measures how much an employee can produce in a set period of
❖ Allows employees some authority in decision making
➢ Encouraged to accept responsibility for their work
❖ Influences business performance - employees gain confidence
➢ Show determination and initiative in reaching goals
➢ Solves organisational problems
❖ Must recognise importance of the following:
➢ Innovation
■ When a new idea is applied to improve a pre-existing product
■ Allows for competitive advantage
■ Intrapreneurs - employees who take on an entrepreneurial
role in a business
● Staff must be encouraged to be innovative
● Practises include:
◆ Rewarding employees for profitable innovative
◆ Management that does not micromanage
➢ Motivation
■ Process that directs, energises and sustains a person’s
behaviour - what drives people
■ Motivation techniques:
● Lead by example
● Encourage suggestions
● Clear expectations
● Communication
● Positive reinforcement
● Providing a safe work environment
● Delegate responsibility
■ Money works as a short term motivator
■ Good managers must be good motivators
➢ Mentoring
■ Process of coaching, tutoring and modelling acceptable
● Mentor - someone who helps a less experienced
◆ usually a more experienced person
◆ Act as a guide
■ Passes on acceptable behaviours and attitudes
■ Teaches individuals what is expected of them
■ Assists with training and development
■ Transfer of skills and abilities
■ Provides career and personal support
➢ Training
■ Process of teaching staff how to perform their job more
efficiently by enhancing knowledge and skills
■ Creates multi skilled employees who are able to:
● Adapt to changing technological environments
● Provide better customer service
● Show greater commitment to the business
■ Improves productivity
■ Done through:
● Informal, on the job training
● Formal off the job training
◆ Lectures and classroom teaching
◆ Conferences and seminars
■ Investment in the human capital of the business, rather than
an expense.
Management approaches
Classical approach
- Management
as planning,
- Hierarchical
❖ Classical approach: Stresses the best way to manage and organise workers
in order to improve productivity (output)
Management as planning
❖ Planning: preparation of a business’s predetermined course of action.
❖ Levels of planning:
➢ Strategic (long-term)
■ Planning for the next 3-5 years
Used to determine the business’s location in the market and
achievements compared to competitors
➢ Tactical (medium-term) planning
■ Usually 1-2 years
■ Flexible and adaptable - business responds quickly to change
■ Helps implement a strategic plan.
■ How goals will be achieved through allocation of resources.
➢ Operational (short-term) planning
■ How the business operates in the short term
■ Management controls daily operations contributing to short
term goals
■ E.g. daily production schedules
Management as organising
❖ Organising: Structuring of the business to turn plans and goals into actions
❖ Organising the financial, human and material resources
❖ The organisation process:
➢ The range of activities that turn business goals into reality.
1. Determining the work activities
■ Must be broken down into smaller steps
2. Classifying and grouping activities
■ Similar activities are grouped together.
■ Improves efficiency
■ E.g. grouping activities into departments and allocating
employees to each section
3. Assigning work and delegating authority.
■ Determine who is carrying out the work
■ Ensuring the delegated people carry out the process
Management as controlling
❖ Controlling: Evaluating performance and taking action to ensure that
objectives are achieved.
❖ Compares what was intended to happen with what occurred
❖ Control process:
1. Establish standards lined with business goals and influences
2. Measure performance and determine how comparisons against
standards are made
3. Take corrective action to ensure business goals are met
Hierarchical organisational structure.
❖ Management hierarchy: Arrangement providing increasing authority at
higher levels
➢ Senior management has more responsibilities compared to lower
➢ Management hierarchy:
➢ Traditional hierarchical structures - people grouped according to their
specialised functions.
Autocratic Leadership style
 Autocratic leadership style: When the manager makes all decisions, dictates
work methods and constantly checks employee performance
o E.g. army officer during military exercises.
 Provides clear instructions without listening to or allowing employee input
 Controlling, expect obedience
 Provides more negative feedback
 Can be effective during a crisis or when employees lack skills
 Does not encourage best performance
❖ Advantages
➢ Directions are clear with less chance of uncertainty
➢ Control is centralised - time is used efficiently
➢ Problems are dealt with quickly due to no discussion
➢ Hierarchical structure - outcomes match management objectives
❖ Disadvantages
➢ No employee input - do not feel valued
■ Ideas are not encouraged or shared
➢ Ignores importance of employee motivation
➢ Conflict increases
- Management
as leading,
- Teams
- participate/
❖ Behavioural approach: Stresses that people/employees are the main focus
of the way a business is organised
 Belief that successful management depends on a manager’s ability
to work with diverse people
 Features:
➢ Employees are the most important resource
➢ Economic and social needs of employees must be satisfied
➢ Employee participation in decision making
Management as...
❖ Leading: influencing or motivating people to work together to achieve a goal
➢ Managers must should empathy and be good listeners
➢ High employee expectations of their ability to implement ideas
➢ Successful leaders:
■ Concentrates on employee needs
■ Delegates tasks
■ Leads by example
❖ Motivating:
➢ Encourages an individual’s behaviour
➢ Motivated workers perform at a high level
➢ Efficient managers must motivate employees to perform at a higher
■ Motivating work practices
■ Including them leads to sense of involvement
● Sense of importance → motivating force
■ Recognition, self worth and positive reinforcement - important
as external factors (e.g. pay rates)
➢ Must foster employee participation
❖ Communicating
➢ Exchanging information - sending and receiving messages.
➢ Complex
➢ Good communicators + ability to share thoughts and plans =
influence over others
■ Motivates
➢ Leads to higher performance levels of employees and businesses
❖ Teamwork: Involves individuals interacting and coordinating their work
towards a common goal
 Functioning teams = superior performance
 Managers must understand team dynamics
 Teams lead to flatter organisational structures
 Leads to greater responsibilities of individuals
 Managers do not control, only facilitate
Participative or democratic leadership style
❖ Leadership style where managers ask for employee suggestions and
seriously considers them when making decisions
❖ Behavioural approach
❖ Leaders share decision making authority with employees
❖ Effective when business environment is undergoing change
❖ Advantages:
➢ Communication is 2-way process
➢ Positive employer/employee relations
➢ High motivation and job satisfaction - employees are included
➢ Employees develop more skills
➢ High level of trust
❖ Disadvantages:
➢ Time consuming to reach decisions
➢ Role of management may be weakened if employees have too much
➢ Internal conflict
➢ Not all employees want to contribute
- Adapting to
❖ Contingency approach: stresses the need for flexibility in management
practices to suit changing circumstances.
❖ No situations are the same - need their own solution
➢ Managers must be adaptable to solve problems
❖ Urges managers to blend various management approaches and practices
OPERATIONS:--logisticslogicalbusinesses need to be
-input, throughout, outputs
-Market research
-customer research
aided design
CAM- computer
-tech is v.
Business operations will face supply issues. For example, some inputs will be bulky
or fragile and, therefore, storage options will need to be considered. A just in time
system where items are delivered just in time to meet costumers’ needs is one way
that management deal with these factors.
If suppliers are not chosen well, there may be delays in delivery or defects. Business
managers need to build relationship with key suppliers so that many of these
problems do not arise.
Operations management is about logistics; that is the logical order that the
production of a good service should take. Thus managers, will look at schedules and
rosters so that the inputs are combined in the efficient way. They also look at the
physical layout of the business so that an orderly flow occurs.
Rostering is where workers are timetabled to work within the production process.
Scheduling determines the time each task in a process will take and enables the
best sequence to be identified.
Airlines will schedule more planes for the busiest times and roster on more staff.
The layout of the business must be set out so that production is not delayed by people
getting in each other’s way, and hazards do not occur,
In the same way, the business needs to have good storage facilities so that bulky items
are not lying around or damaged by inadequate warehousing.
CAM- computer aided manufacturing
The progress of technology has assisted the operations function. Goods can be
designed on computers (computer aided design(CAD)), or made by computers (aided
manufacturing (cam)). Records on computers.
Human resource management:
The effective management of the formal relationship between the employer and
Take care to hire the best people
Develop cooperative and effective working relationships
Motivate staff to do their best
Provide employees with opportunities for training and development
Snapshot q’s
Problems with tiny staff:
Not having employees with a wide range of skills
Staff teamworkbuillding a team
By multitasking workers don’t get bored. When someone is away jobs are able to be
If she hires someone ethical issue-can she afford the worker for long term
Staff management is important because this is the backbone of any business
and poor industrial relations can mean that productivity will be low and staff
turnover will be high.
The main functions of staffing are to attract and acquire, train and develop, reward
maintain and separate people.
HUMAN RESOURCE CYCLE: The staffing process
Human resource planning is a process that identifies current and future human
resources needs for an organization to achieve its goals. Human resource planning
should serve as a link between human resource management and the overall strategic
plan of an organization.
Job analysis is a family of procedures to identify the content of a job in terms of
activities involved and attributes or job requirements needed to perform the activities.
Job analysis provides information of organizations which helps to determine which
employees are best fit for specific jobs.
A job description is an internal document that clearly states the
essential job requirements, job duties, job responsibilities, and skills required to
perform a specific role.
a job specification is a written statement of educational qualifications, specific qualities, level
of experience, physical, emotional, technical and communication skills required to perform
a job, responsibilities involved in a job and other unusual sensory demands.
Recruitment refers to the overall process of attracting, shortlisting, selecting and appointing
suitable candidates for jobs (either permanent or temporary) within an
organization. Recruitment can also refer to processes involved in choosing individuals for
unpaid roles.
Employee Selection is the process of putting right men on right job. It is a procedure of
matching organizational requirements with the skills and qualifications of people.
Effective selection can be done only when there is effective matching.
1. JOB AUDIT- looks at the requirement of the position
2. JOB DESCRIPTION/JOB SPECIFICATION – details of what needs doing in the
position and skills/ qualifications needed
3. WHERE TO GET THE PERSON- internal (from within the business)
External (from outside the business)
ADVANTAGES (internal)
The person knows the organisation
No new ideas come into the business
It is a low-cost option
Internal jealousy
ADVANTAGES (external)
Fresh ideas
Its expensive
Where a business specialises in recruitment, carries out the recruitment steps
ADVANTAGES: that they are experts and they can carry out the initial stages in a
timely way.
DISADVANTAGES: That the agency might not fully understand the culture if the
organisation and so the wrong candidate is selected.
Legislation needs to be addressed in the recruitment process so that the business
does not attract fines or negative publicity:
Training is teaching a new skill. Development is changing the way that employees
think. T & D will differ depending on the skills, experiences and mindset of the
employees. One way to workout requirements is through regular employee appraisal
One important aspect of training is induction where the new employee is introduced to
aspects of their workplace and their job.
1. Marketing is important to the success of a business because it helps the
business sell the businesses products/services. Making profit is the main aim
for biz’s, “marketing is an essential channel to reach that end goal.”
2. Target market is like kids (more broad) .Niche market is like brown kids (more
3. To promote products letter box flyers, ad in local newspaper, large signs on
mobile van.