VCE Business Management Unit 3 & 4
2013: LECTURE SLIDES
Key knowledge
• management structures;
• corporate culture and its future development;
• key management roles:
– planning:
long, medium and short-term
– organising:
– leading:
resource and task allocation techniques
importance of leadership qualities, including
interpersonal, informational and decision-making
– controlling:
financial and non-financial processes and control systems;
• the need for, and process of, policy development and its application;
• different styles of management, including autocratic, persuasive, consultative,
participative and laissez-faire, and their appropriate application to various
management situations;
• key management skills as appropriate to the process of effective management;
• the relationship between management styles and skills;
• implications of managing the internal environment of large-scale organisations in
an ethical and a socially responsible manner.
2
AOS 2 Contents- Dot Points (DPs)
8. ESR
Management
7.Relationship
(mgt. styles & skills)
6.Management
Skills
5.Management
Styles
1.Management
structures
2.Corporate
Culture
3. Management
Roles (POLC)
4.Policy
Development
3
DP1
Management Structures
(2.1 in Textbook)
4
What is Management Structure?
5
Management Structures
 The division of the organisation into parts based
on the roles, responsibilities and lines of
communication required of each person
 The structure is determined after goals, and then
strategies to achieve these goals, have been
determined.
 Often represented in an Organisational Chart
Purpose of Management Structures
• To coordinate work activities within the
organisation so that goals/objectives can be met.
• Formalise lines of communication
• Establish a hierarchy of decision making, also
known as a chain of command
 The vertical line of authority that passes
through the levels of an organisation’s
hierarchy.
Hierarchical Organisation
• Relates to the different layers (levels) of management
the organisation has.
• It shows the levels of authority and decision making
within the organisation, from senior positions down
to the entry level of the organisation.
• It refers to the lines of communication up and down
the organisation and to the chain of command
• Vertical Specialisation looks at the height of an
organisation.
Hierarchical Organisation
Senior
Management
Middle management
Lower management
Other Employees
Hierarchical Organisation
• Senior management (executives)
-Set the long term goals & are involved in the long term strategic planning.
-In charge of managers subordinate to them (middle managers)
• Middle management (Store Manager/Department head)
-Involved in translating the long term goals into specific projects for those
managers subordinate to them (front-line managers).
-This is called ‘operational planning.’
-They monitor front-line managers and the project’s progress
• Front-line management (supervisors/team leaders)
-lowest level of management
---spend most of their time leading, supervising & controlling employees
under them who are working on specific projects or tasks.
--They are accountable or answerable to middle management
Lower level employees
Flatter Organisational Structures
• Relates to the span of control
 the spread of responsibility across an organisation
• It refers to the width of an organisation
 different areas of specialisation an organisation is
broken into
• A wide span of control is related to a flatter
organisational structure
• A narrow span of control is associated with a
more hierarchical structure
Traditional vs. New/Emerging Structures:
Traditional
Current
Bureaucratic
Team Oriented
Top down approach
Emphasis on delegation
Tall
Flat
Many levels of management
Fewer middle managers
Centralised
Decentralised
All responsibility with managers
Shared responsibility with employees
Inefficient
Efficient
Static
Dynamic
More vertical specialisation
More horizontal specialisation
Levels of management
The number of divisions
Learning Activity:
• Complete the Test Your Understanding
questions 1-5 from your textbook – page 49.
Types of Management Structures
 Three
main types of horizontal structures.
 Employees
can be organised and grouped on
the basis of:
•
•
•
Functional Structure
Divisional Structure
Matrix Structure
Functional Structures
 Employees
are grouped according to their
management function

- i.e. type of work/role undertaken
- Finance, Marketing, HR, Operations & R&D etc.
 Often
the best structure where the
organisation has a small range of products
 Example: A school
Even though persons from each department/ division may liaise
from time to time, they are sub divided into their own areas
Functional Structures - Example
Board of Directors
Chief Executive Officer - CEO
Management Functions
Human
Resources
Hiring, training
& maintaining
employee
well being
Finance
Financial
transactions &
reports
Operations
involved with
actual
Production of
the Product
R&D
Designing new,
or improving
existing
products
Marketing
involved with
Promotion of
the Product
Functional Structures - Evaluation


Advantages
•
Defined career pathway for employees
•
High degree of task specialisation
•
Efficient use of resources
Disadvantages
•
Lack of flexibility – due to bureaucratic nature
•
Narrow focus of staff
•
Isolation and ‘empire building’ behaviours
Divisional Structures

Employees are grouped according to division

Often used where the company has a large
product range or many geographical locations.

Could include divisions based on:
•
•
•
•
Product
e.g. cereals, confectionary, beverages, chocolate
Geographic e.g. Asian, North American & European offices
Customer
e.g. wholesale, retail and corporate clients
Example; ANZ banking
Customer based structure - corporate or personal banking options
Divisional Structures - Example
Board of Directors
Chief Executive Officer - CEO
Division by Geographic location
New York
Paris
London
Munich
Sydney
Snacks
Manager
Snacks
Manager
Drinks
Manager
Drinks
Manager
Snacks
Manager
Divisional Structures- Evaluation

Advantages
•
Staff expertise in a particular area
•
Rapid response to changes
•
Encouragement of cooperation between
departments

Disadvantages
•
Duplication of work in different divisions
•
Rivalry amongst divisions
Matrix Structures
A
combination of a functional structure and
a divisional structure
 Specialists
from each area of the functional
structure work together on a special project
for a short period of time
 They
are responsible to both their team
leader and department manager
•
Example: Unilever
Multi-National, sells various products across many countries,
hence combination suits it.
Matrix Structures - Example
22
Matrix Structures- Evaluation

Advantages
•
Enhanced Flexibility
•
Enhances communication, Co-operation and
teamwork amongst divisions
•

Synergy of ideas using pooled expertise
Disadvantages
•
Uncertainty of who to report to
•
Others have to cover the extra workload
Management Structures - Activity
Missing Word Passage.
Copy the passage into your
workbooks and fill the blanks using
the word bank provided.
Complete Question 3 and 5 on Page
53.
SAMPLE EXAM QUESTION
Identify the ways in which a divisional structure can
be organised – and why a company would choose
one over the other.
2marks
DP2
Corporate culture and its future development
(2.3 in Textbook)
26
What is Corporate Culture?
 The shared values, ideas and beliefs held by
people in the organisation that unite and
keep the organisation together
 A set of moral, social and behavioural norms
based on beliefs, values and attitudes
employees use to interact with each other in
an organisation
 The way organisations ‘do things’. It guides
how employees think, act and feel within an
organisation.
Elements or Indicators of Corporate Culture
Values
•
The beliefs shared amongst staff such as
honesty, hard work, teamwork, innovation
which are developed through:




Training programs
Polices & procedures
Management style
Relationship between staff and management
Elements or Indicators of Corporate Culture
Symbols
•
Events or objects that represent what the
organisation value or stand for such as:





The company logo
Uniform
Slogans
Style of language
Song
Elements or Indicators of Corporate Culture
Rituals
•
Routine patterns of behaviour that help frame
the organisations identity such as:
 Social gatherings
 Regular meetings
 Celebrations and ceremonies
Elements or Indicators of Corporate Culture
Heroes
•
Employees who reflect the organisations values
and act as an example for others
 “The fish rots from the head”
 Champions of a common goal
Points to Consider
 There is often a difference between the
official culture and the real culture
 Sometimes the culture is a negative one
 Difficult to change organisational culture
― “This is the way we’ve always done it!”
 Change needs to be embraced by the
employees
Developing Culture within an Organisation
In order to reinforce positive culture, management must:
- Model desired behaviour
- Provide adequate training
- Reward employees who embrace culture
- Recruit staff who fit the desired culture
- Devise strategies consistent with the culture
SAMPLE EXAM QUESTION
Explain what is meant by corporate culture. Name
three ways in which a new employee in an
organisation can learn about its corporate
culture.
4 marks
DP3
Key management Roles
Planning, Organising, Leading & Controlling
(2.4 in Textbook)
35
What are the Key Management Roles?
In the SACs and examination, you will be
asked about management roles or the roles
of management in a given situation.
Whenever there is a reference to ROLES,
it is referring to the four roles of:




Planning
Organising
Leading
Controlling
Always Remember:
POLC
What are the Key Management Roles?
“Key management roles refers to the process
of planning, organising, leading and
controlling resources (human, financial,
physical & informational) in order to achieve
the organisation’s objectives. Management
involves getting work done through the
actions of others”.
Key Management Roles: Planning
• The process of setting objectives and formulating
strategies to achieve those objectives.
Planning can be:

Strategic - Long term planning covering a period of the
next 2-5 years made by Upper or Senior
Management

Tactical - Medium term planning covering a period of 6-24
months made by Middle Management

Operational - Short term planning covering daily planning
up to 6 months made by lower, junior or
frontline management
Levels of Planning
TYPE
TERM
DURATION
MANAGEMENT
LEVEL
EXAMPLE
Expanding
Overseas
STRATEGIC
Long
2-5 Years
Senior
Board & CEO
TACTICAL
Medium
6-24 Months
Middle
Head of IT
Opening a
new store
OPERATIONAL
Short
Daily up to 6
months
Lower
Manager
Weekly Staff
Roster
Planning: What is a SWOT Analysis?
• The process of analysing an organisation’s:
Strengths and Weaknesses
(from its internal environment)
&
Opportunities and Threats
(that exist from the external environment)
Always Remember:

SWOT
It is part of the Analysis phase of the Planning process
The Planning Process
5. MONITOR
1. SET OBJECTIVES
2. ANALYSE
CURRENT
SITUATION
(SWOT Analysis)
4. CHOOSE &
IMPLEMENT
3. DEVELOP
ALTERNATIVES
The Planning Process : SADIM
1. Set objectives
Managers define what they wish to achieve
in a given period of time
2. Analyse the current situation
Managers conduct a SWOT Analysis
3. Develop alternative strategies
Managers brainstorm various ways the
company may achieve the objective
The Planning Process
4. Implement solution
Managers choose the most appropriate
strategy to achieve the objectives and put
the strategy into practice
5. Monitor and Evaluate the solution
Determine whether the objectives are being
met by monitoring performance indicators
Activity: Planning
• Follow the “5 step planning process” to increase
student numbers at RSC to 2100 students by 2015!
Key Management Roles: Organising

The process of determining how to make the most
efficient use of the organisations resources in
order to put the plans into action to best achieve
the company objectives.
For Organising, the study design states
‘organising: resource and task allocation’
Key Management Roles: Organising
The 3 step Organisation Process:

Determine the work activities which are required to
achieve the company objectives.
- Includes the manufacturing of goods or the delivery of services

Classify and group the activities – to ensure efficiency
- These include staff, raw materials, finances, machinery etc.

Assign work and delegate authority.
- Which staff are allocated to which area of production etc.
Key Management Roles: Leading

The process of influencing, guiding and motivating
employees to ensure work is completed in the
most efficient and effective manner in order to
best achieve the company’s objectives
For Leading, the study design states
‘leading: importance of leadership qualities including
interpersonal, informational and decision-making’
Key Management Roles: Leading
In the SAC and exam, use terms such as:
Directing..
Guiding..
Inspiring..
Supporting..
Developing..
Human Resources
Key Management Roles: Leading
Three of the most important leadership qualities
include:
 Interpersonal skills – the ability to get along with,
understand and react to the needs of others
 Informational skills – the ability to gather, analyse,
interpret and transmit key information to other
stakeholders in the organisation
 Decision making skills – the ability to choose the best
alternative from a range of different options to solve
problems
Key Management Roles: Leading
• Qualities of good leaders include (but are not
limited to) the ability to:
– Communicate well
– Understand themselves and their staff
– Be sensitive to cultural issues
– Provide for collaborative team
– Undertake inclusive decision making
– Be creative and visionary
– Model good behaviour
– Undertake Internal motivation & achievement
– Make fair decisions
Activity: Leading
• Identify some good leaders in society
• Come up with a list of characteristics
that make good leaders
Key Management Roles: Controlling

The process of monitoring and evaluating
performance and taking corrective action where
necessary to ensure the company is achieving its
desired objectives.
For Controlling, the study design states
‘controlling: financial and non-financial processes
and control systems’
Key Management Roles: Controlling
Financial and non-financial processes and control systems
 Financial Controls include:
- Budgets that anticipate financial performance
- Accounting systems to reflect recent performance
- External audits
 Non-financial controls include:
- Measures of production levels
- Quality indicators
- Health and Safety indicators
- Environmental indicators
Control Process

1.
3 Step Process
Establishing standards
e.g. absenteeism rate of not more than 5% per week
2.
Measuring & evaluating performance
against the standards.
e.g. via observation, establishing KPI’s
3.
Taking corrective action where necessary
to ensure objectives established in step 1 are achieved
Learning Activity:
• Complete the Test you Understanding Questions 1-8
of your textbook – Page 62
• Complete the Apply your skills Case Study and
answer questions 1-4 on Page 64
DP4
Policy development
(2.5 in your textbook)
56
What are Policies?
 Policies are a set of broad rules or guidelines
that guide decision making and action in an
organisation.
 Some examples include:
-
ICT Usage Policy
-
Bullying Policy
-
Harassment Policy
-
Environmental Policy
-
Recruitment Policy
-
Uniform Policy
What are Procedures?
 Procedures are the practical steps and activities
required for carrying out or applying the
organisations policies.
 Some examples include:
-
How to record a complaint
-
How to investigate a harassment claim
-
Grievance procedures when staff feel unfairly treated
Policies and Procedures
Both policies and procedures provide a sense of:
- predictability
- consistency
concerning behaviour & decision making in an organisation
 They both help to reflect and develop corporate culture
The process of Policy Development

5 Step Process
1.
Identify the issue or problem
-
2.
This establishes a need for a policy
Research and seek stakeholder input
-
3.
Find out why the problem exists and seek feedback
as to possible solutions from various stakeholders
Draft policy and seek stakeholder feedback
-
Make amendments to the draft based on feedback
The process of Policy Development
4.
Approve, distribute and implement policy
-
5.
Policy is finalised, communicated and put in practice
Monitor and evaluate policy
-
Monitor policies effectiveness
Internal and External Pressures on
Policy Making and Amendments
Internal
Eg Management & employees
re: Dress code, workplace flexibility
environment
Policy
Eg Unions
re: job sharing policy
Operating
environment
Macro
environment
Eg Legislative compliance
re: OH&S Policy/ Procedures
Learning Activity
• Complete the Test your Understanding
Questions – 1 to 3 and 8