Course:
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This course will provide a comprehensive readable introduction to
management theory and practice in English.
The course will integrate a classical and modern concepts so students
can interact in a real word organization.
Objectives:
Students will be able to learn and grasp: Management key concepts and
terms/ Management theory and history/ Management process.
Content:
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Nature of Management
Evolution of Management thought
The changing environment of Management
Primary Management function
Primary Management function
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Principles Of Management
M.Govidarajan / S.Natarjan
Prentice_Hall Of Fndia/2005
Prepared by:
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DR.Ghada Nemetallah
King Abdulaziz Univ
Faculty of business
Administration
Introduction To Business
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Q: What is business?
A: Business is buying and selling.
Q: What?
A: Goods (cars or books) and services (changes currency)
Q: By whom?
A: By labour (workers)
Q: For whom?
A: For customers, clients, people.
Q:Why?
A: For profit (money)
Q: Where?
A: In the market (world).
So business is buy and selling goods and services, by labour to
the consumers for profit in the market.
Business for profit
In the
market
by labour
Means of business
Aim of business
Risks of business
buying & selling
for consumers
goods & services
exchange of goods and
services.
wealth, profit, wealth
-changing technology (If new
machines or new theories
appears, rest is history)
-changes in consumer
preferences (People change
every day and their ideas and
likes too. People go after fashion)
-competitive threats (If people
make the same product but less
in price, this will affect business)
-government policies (taxes, no
deals with certain countries etc.)
Social
Economic
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1-return on investment (ROI)
2-growth of business
(merger/diversification)
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3-product innovation
4-ensure productivity
(strong market position)
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1-prevention of environmental
pollution and ecological
imbalance
2-development of locality of a
business
3-development of backward
areas
4-promotion of small industry
Scale business
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1-Well-defined objectives (what do you want to do)
2-Up-to-date and proper planning (reliable plan)
3-Proper location (minimize costs & maximize
profits)
4-Flexibe Management (responds to changes)
5-Good organization structure (good manager &
effective employees
6-Customer-focused marketing system (aim is the
satisfaction of buyer)
7-Sound personal policies (laws for employees)
Management
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Art of getting done
through people in
formally organized
groups.
Art of directing human
activities and physical
resources to reach a
goal.
As a term used in
business world
government.
Administration
-Activity of regulating daily
to day operation in an
organization.
-Getting policy decisions
done.
-Term used in circles.
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1-Planning
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2-Organizing
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3-Staffing
4-Directing
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5-Controlling
-Develop plan & future plans to
counter threats(make plans for
the organization & be prepared
for any competition).
-Assign duties (give work)
establishing
-Establish authorities (say who is the
boss)
-Allocate resources (make business)
-Recruitment (hire employees)
Leading, influencing, motivating
human resources
-monitor performance to reach the
goal (supervising all basic function
of management for success of
company)
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Q: Who is the manager?
A: He is the one who acquires the five basic
functions of management.
He plans, organizes, leads and controls for goal.
Modern Manager
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Q: Who is the modern manager?
A: He is not an owner-manager, but a salaried
one.
He does not own the company or the
organization, but he is an employee hired from
outside and takes a salary.
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1-Encourages employees to use technology.
(we live in an information age and technology
changes and develops every day).
2-Encourages employees of an organization to
develop team work spirit. (every employee
joins forces with his colleague, shares ideas
and effort).
3-Makes an atmosphere of empowerment (he
lets the workers make decisions and increase
productivity).
4-Applies scientific methods to the development
of knowledge (use science in work, ideas,
experiments, concepts etc).
5-He applies management theory, understands,
communicates and learns)
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1-Efficient use of resources(no waste of time & energy)
2-Customer satisfaction (as the customer is the good
& for more development & profit)
3-Return on capital (profit from invested money)
4-satisfied work force (as the workers are the assets of
the company, thy should be satisfied)
5-Impoved work conditions (wages, good salaries,
security)
6-Supplier relationship (good relations with supplier is
a must for raw material)
7-Contribution to national goal (a good company is
useful to it’s country)
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To be success full at work, managers assume or have
many roles.
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1-Interpersonal
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2-Informational
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3-Decisional
provide information (he
should feed his employees
with info) and be a good
person with them.
process information
(check if understood and
applied)
use information (be powerful
and take good decisions on
time) initiates change.
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The manager should acquire three skills:
1-Technical
use the techniques of specialized
people e.g. engineers, surgeons,
accountants.
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2-Human
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3-Conceptual
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Understand and be able to work
with other people
Coordinate and integrate
goals with activities (decide
what is the aim and go for it and
determine to achieve it)
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This means that there are different levels in any company and
various managerial position.
1-Top-level management
executives (those responsible
for overall management) make
plans + put instruction +
prepare budgets etc).
2-Upper middle management
heads of divisions
(responsible for effective
performance of departments).
3-Middle management
employees directing the work
and activities.
4-lower level or first line
supervisors, foremen (guide and
Train works)
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Is the kind of management that depends on
observation and experiment.
The Manager should not stick to old ways but
observe new trends, think of new theories, try
them if they are successful and could bring
profit to the organization.
There are many scientists who contributed to the field of
management. They developed theories in the area.
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Babbage
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Taylor
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Gilbreth
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Gantt
-specialization of labour (all workers and
employees should be specialized and
have experience in their fields).
-science for each job.
-select skillful workers.
-incentives (prizes or bonus) for good
results
-divide responsibilities.
-rest pauses in 8hr work. (workers take
rest after working eight hours).
-work quota systems (number of working
hours differs from one employee the other).
-bonus (work more and there is a new system
giving you a prize)
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Fayol
all management tasks are classified under
categories ( Technical , Financial, Accounting)
(he cares about the function of categories in
the departments)
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Barnard
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Simon
organizational communication system(success
comes where employees accept authority of
others).
he believes that the manager is an
administration man not an economic man.
(he should lead, select, choose, decide and not
count profit and loss only)
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Owen
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Munsterberg
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Mayo
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Follet
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Maslow
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McGregor
he was the first to speak about (HR)
(He cares about people and not machines)
he was the father of industrial psychology.
(he studied the application of psychology in work)
he studied factors of satisfaction and
dissatisfaction to the workers (he is important for
the study of behavior at work)
he believes in group work and self control.
employees share same power and beliefs.
he believes tat the man need could be placed in
“hierarchy of needs”
he cares about employee work relationship.
He is interested in humane view.
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Just as Human beings get affected by the environment, so do the
business. These environments can be classified into four groups:
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1-Economic
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2-Social
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3-Political
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4-Legal
-Capital (money)
-Labour (employees “good” + worker “bad”)
-Price levels (changes could create problems)
-Government tax policies
-Customers (business is based on customers)
-Technology (new products, tools, machine)
-Desires, expectations and attitudes of people
could be high or low, change and effect
business causing loss or gain.
-leaders make new laws or new restrictions
could effect business
-laws and regulations could make any business
successful or failure.
Planning
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This chapter deals with the definition of planning, nature and
types of plan. The limitation of planning are considered
obstacles in the development or success of any project
planning premises and forecasting methods are studied to
promote business.
Objective
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By the end of this chapter, students are acquainted with the
definition, nature, kinds, types and limitations of planning.
Thy would be introduced to the system of forecasting, it’s
methods and types importance of planning is stressed.
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Planning is Decide in advance:
What
When
To do
Who
How
It means what is the business you are going to
do, how (money, people), when (now or in the
future) and where (place, country). What is your
idea, doing business alone or with partner, in
your country or outside etc.
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Is your business good or bad?
If good, why? And if bad, what are the reasons or aspects.
This is the nature of planning. Did you make a good or a bad
plan?
There some aspects (features) to follow for judging the nature
of planning aspects.
1)Contribution to purpose and objectives facilitate the
accomplishment of the enterprise objectives (make sure that
your plan leads to success).
2)Primacy of planning
precedes the executions of all
managerial functions (plan before you execute “do”).
3)Pervasiveness of planning
varies with authority and
nature of supervisors plans (it is a must to plan as it is the
function of all managers).
4)Efficiency of plans
measured by contribution to
objectives (if it’s a good, it will lead to the goal)
Types of planning
Standing Plans
(Used over a long period
of time)
Single-use plans
(used for only specific
periods)
Good plan
Based on facts
Well Balanced
Up dating
By following rules (guide for action), methods (step of procedure) and
projects (type of plan), the plan is devised and executed.
(follow the rules and the plan will be good).
It is impossible to fix steps in planning for all organizations,
however, there are major steps.
1. Perception of opportunities
opportunities (chances)
exist for it’s performance.
• It is a preceding process of actual planning.
• (there has to be an opportunity first and then plan for a
project).
2. Establishing objectives
set your goal.
3. Establish planning premises
check all factors e.g.
political, ethical etc.
4. Determine alternative plan
proper plan A×B.
5. Select best course
choose most suitable plan.
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Planning is important and any factor limiting it’s success
should be abolished (deleted).
Limitation means factors or difficulties in planning.
1)lack of accurate information (incomplete information cause
bad result).
2)Problems of change (technology or customer taste might
affect your plan)
3)Failure of people (not qualified to formulate or implement a
plan, they do not value planning)
4)Internal inflexibilities (such as human psychology, you con
not plan when the workers suddenly change or be exposed to
any problem).
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5)External inflexibilities
theses factors may be social,
technological, legal or geographical. (if workers live away
from work, how can managers plan in the future?).
6)Rigidity in planning
stuffiness or inflexible plans delay
work performance and reduce employee stimulation or
enthusiasm.
7)Time and cost factors
time is important, as time is
money. Do not take too much time in planning as costs will
increase and quality of work will not be very good or
effective.
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It is the frame work in which plans operate.
It is environment where plans work.
It is include Forecasting or Assumption.
Forecasting
probe (expect) the future by inference
(predication) from known facts.
Assumption
believe in something or pretend.
If you want to plan right, you have to forecast (like the
weather). You have to be assume what kind of problems you
will face in the future in order to be ready to solve them and
not be surprised.
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1-Helps in effective planning by providing scientific and
reliable basis.
2-Reducing area of uncertainty (reduce the unknown,
conquer your fear of the darkness).
3-Managers have plenty of time to think ahead (for the
future) as they have plan A and plan B because of the
forecasting process).
4-Managerial control, as areas of lack of control will be
closed because of forecasting.
Qualitative Techniques
It includes
methods such as polls
output, brainstorming.
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Quantitative Techniques
It comprises input
and output analysis,
curve fitting
These techniques are used to apply to the long term time
scale and for future demand.
You can control for or face any problem that might face you
in the future by forecasting techniques either by quality or
quantity.
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It is a process of determining the major objectives
of an organization and its policies and strategies.
Manager must have vision, mission and purpose.
Vision: picture of the future, what accompany
wants to be.
Mission: strategic planning, it flows from the
vision.
Purpose: realize the goals le the decisions speak.
Kinds of plans
Strategy
Process of deciding objective,
resources and policies.
Time Horizon:
-Several years
Scope:
- wide range of activities
Degree of detail:
-simplistic generic
Operational
- One year
- narrow
- finer details
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To be good manager, you have to plan. Definition
of planning, kinds, type, methods, steps and
limitations should be known. In order to be ready
for any problem in the future, forecasting method
should be adopted. Make plan A and plan B for
yourself to overcome any difficulties that might
hinder the process and development of your
company.
Organizing
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To give definition of organizing as one of the five basic
functions of management.
To refer to the principles of management.
To be acquainted with types and mistakes of organization.
By the end of this chapter the students will
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Study the hierarchy of objectives to organize their companies.
Definition, types and mistakes of of organization are studied.
Centralization and decentralization will bw defined an known.
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Organizing refers to the formal grouping of people and
activities to achieve the firm's objectives (employee and
activities have to conform to the goal).
Theory of organization
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Is the study of structure, functioning and performance of
organizations and behavior of groups (every company has to
have a theory to organize the structure and the behavior).
There is hierarchy of objectives indicating the relationship of
objectives and organizational level.
Socio
Mission
Overall objective of the
organization long-range
More specific overall objectives
Division objectives
Department and unit objectives
Individual objectives
Performance personal development objectives
The success of any organization depends on it’s principles. Basic
principles should be observed.
1.
Unity of objective
2.
Efficiency
3.
Span of management
4.
Division of work
5.
Functional definition
defined
if the aim is one to all employees
and managers, success will follow.
doing maximum work at minimum
cost is efficiency.
managers have long time to direct
a number of executives.
proper departmentalization (each
department has it’s own function
and job)
when duties of every one is
6.Scalar Principle
7.Unity of command and
unity of direction
8.Authority and Responsibility
9.Balance and flexibility
10. Continuity and Flexibility
the chain of command or line of
authority must be clarified, every
subordinate should know his superior.
one superior and no confusion.
they should co-exist, found together.
balance between centralization
(authority in the hand of one manager)
and decentralization (the opposite).
manager should continue working and
be flexible to give effective lead.
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There are different patterns to organize the personal (employees)
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1-Military or Line
authority flows from top to lower vertically
manager
Manager
1
Subordinate
2
Manager
1
Subordinate
2
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2-Functional
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3- matrix system
separate departments but interrelated
(connected) (some work in every department
but different names of department.
an employee has a number of superiors and
a project manager.
Project manager
Superior
Superior
One employee
Superior
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4-Hybrid Design
use functional and divisional
system, either workers perform similar task or according to
function.
Centralization
Decentralization
Authority is in the hand
authority is pushed
downward of top
management
To lower management
level
This is effective, easily
achieved, clear control
and no conflicting
decisions.
Not in one hand..
Act quickly, innovative
and motivated.
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If the principle of organization are missing or not followed, in
this case they are considered mistakes.
1-Poor plan.
2-No precise authority.
3-Lack of responsibility.
4-Responsibility without authority.
5-Multiple managers.
6-Failure to delegate authority (the manager con not tell the
employee what is this authority).
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Organizing is a basic part in the function of any
organization. It has principles and have to be
applied. There are many types of organizing
personnel.
Finally, mistakes of organizing should be avoided.
Organizing makes any company a success or a
failure.
Staffing
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It refers to effective recruitment, selection on and placement to
occupy proper roles in the organization structure, (to choose good
employee that fit in the position in the company and put them in the
right place).
(right people
in the right place)
What does staffing need?
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1- goals and objectives: to decide what is required.
2- job designing: the determination of the employees work
responsibilities.
3- grouping of job: departmentation job content (to fit in the work
of the department).
Recruitment
and
selection
Select employees
choosing best employees
1)Job Description
2)Application Forms
3)Employment Tests
Describes the work and the
requirements for the job e.g. job
titles, job responsibilities, working
conditions, job knowledge.
This is a universal system where the
applicant fills a form to be could for
an interview.
Tests are considers essential part in
the e.g. intelligence recruitment
program.
Tests personality the test measures.
Tests interest capacity for learning,
tests achievement ability to reason,
tests dexterity and some physical
abilities.
4)Interviewing
it is a conversation between the
applicant and the interviewer to decide
if the employee fits in the position or no.
5)Physical Examination
it is a medical check up for the (new)
freshly recruited employee (to check that
there are no diseases and that the
applicant meets the job requirements).
it is concerned with the process of
welcoming the new employees or
orienting them to the rules and
procedures of work.
6)Orientation
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The function of the organization is to create a sense of
belongingness and loyalty to the organization.
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1.
2.
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It is a way to help the employees in a planned and continuous way.
Goals: improve the capabilities of employees as individuals and their
relationship to one another their supervisors together with their
future roles.
Process: every superior has the role and responsibility to insure the
development of his subordinates.
Subsystems: HRD include various subsystems.
Performance appraisal: superior understands the problems of the
subordinate
and tries to solve them, use their talents and encourage their
capabilities.
Performance Coaching: know your strength to be effective, choose
situations when strengths are required and avoid situations in which
weaknesses could create problems.
HRD system is responsible for discovering your strengths and
weaknesses and guide you for improvement.
3. Career planning: this is the philosophy of HRD, to formulate career
strategy. People perform better when they feel
trusted and see meaning in what they are doing.
4. Training:
this is the outcome (result) of performance a
appraisal and career planning.
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There are in house (inside work) training courses and periodic
assessments. The training is useful for employees.
5. Organizational Development OD: This function includes periodic
surveys for employees to make sure of their psychological health.
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It includes solve problems such as low production or conflicts at
work.
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In any place, there is grievance which is a feeling of
discontent of dissatisfaction.
It could lead to conflicts and hence, at that moment, there
should be grievance handling procedure (ways to resolve
conflicts) conflicts arise from frustration, tension, etc.
Types of conflicts
1. Individual : it happens or it is found when more motives
block each ether. It means when you have more them one
problem.
2. Role Conflict: when an individual performs a number of
roles and wants to be perfect in all and be can not. (e.g. being
a good person, a good father or mother, a good employee, all
at the some time an you con not fulfill).
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3.Interpersonal: Vertical (between superior and
subordinate) or horizontal (between employee and
his equal).
4.Intra group Conflict: it happens when people
come from different socio-economic backgrounds
and have different views.
5.Intergroup Conflict: problem among different
groups in the some organization.
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Regarding
Regarding
Regarding
Regarding
rigid).
wage (salaries).
working conditions (comfortable or not).
supervision (good or bad).
attitude of management (flexible or
1-Problem solving method: find a common interest between
employees.
2-Avoidance: another way to overcome a conflict is it a void it,
do not confront.
3-Smoothing: playing down differences and emphasizing
common interest, is say what is good and bad in both parties.
4-Compromise: no one is loser or a winner all is solved by
negotiation.
5-Confrontation: apply strength against each other, face the
problem.
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Staffing is one of the main function of
management. To recruit and select the proper
employee and place him in the right place is
difficult task. HRD plays an important role in the
staff and solving the conflicts in different areas.
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1. Give the full meaning of the following abbreviations:
A. HRD…………….
B. OD………………
2. Give two examples of resolution action?
A. …………………..
B. ……………………
Answer key
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1). A. HRD: human resources development.
B. OD: organization development
2). A. smoothing.
B. confrontation.
Directing
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This chapter deals with directing as one of the main
pillars of management leadership traits, managerial
grid, communication process and motivation are all
related to directing and will be discussed.
Objectives
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By the end of this chapter, the students will be able to:
1. grasp the notion of directing and leadership.
2. study different managerial grid.
3. study motivation needs and communication tools
and hierarchy.
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Directing id leadership which means the activity of
influencing people to work for group activities.
Direction is manager. Hi’s role is to achieve the goal in a
given time.
Leadership
Influence group
activities to
achieve goals.
Supervision
Close and general
supervision to be
sure that worker do their
jobs effectively.
Authority
Power
it is right of directing workers to do
something.
It is the ability to achieve expected
outcomes(results)
Tells the subordinate Gets the what
to do
Get the subordinates to do.
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Any leader has to be armored with several traits.
(any leader has to possess certain qualities in his
character), such as:
1- competent in handling new situations (know
how to face a new problem).
2- self confident and stable.
3- identify himself with goals (know his objective
and tries to achieve it efficiently).
4- intelligent and sympathetic with his workers.
5- he should be a listening supervisor, as listening
is an active and not a passive activity.
Any employee in any company or organization could be
evaluated. His superior checks if he works well or not.
What about the superior himself? Is the manager evaluated. The
answer is yes.
 Managerial grid is the tool to assess (evaluate) the
It is a tool to assess the leadership style (the style of the
superior or the manager).
 The grid was developed be Blake and Mouton to pint out two
major aspects of supervisor job. The two aspects are job and
employee with different styles.
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Brief summaries of the five possible leadership styles will follow:
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Style (1,1)
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Style (1,9)
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Style (9,1)
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Style (9,9)
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Style (5,5)
this style place low concern for employees and
job (the owner does not care that much).
this style gives high concern for employees and
low for job (he cares about employees more so
the relationship is good).
high for the job and low for employees (bad
atmosphere).
high for employees and high for job (best
atmospheres).
middle some concern for job and some for
employees
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Another scientist invented another way or tool to assess leaders.
Red din concentrated on
3 axes
Task (TO) Orientation
Relationship (RO) Orientation Effectiveness
Manager Directs
the subordinated
to achieve the goal.
E.g. job done or not.
Manager has
personal relationship.
E.g. employees like
him or not.
Extent to which a
manager is successful
in his position.
E.g. the subordinate
Wants him at work or
not
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It is the very important in the manager job.
Understanding is the target in communication.
It is a human transaction and understand people.
Successful Communication is the result of
competent management (listening and
understanding manager).
A good manager is a good communicator.
Effective work is the result of good communication.
formal, informal
Downward (from top to
low)or upward (from
employee to manager)
Oral or written
e.g. by command or by
agreement
e.g. from supervisor to
subordinate or vice versa
e.g. words or
messages.
Purpose
Communication has purposes such as:
1. Gain communication. When the superior communicates with the
subordinate, he is committed to do the job.
2. provide data for information. When the employee know all the
date, he can easily decide what could be done in the job.
3. Clarify tasks and responsibilities (communication leads to clarity,
the employee knows exactly their job).
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It is who? (some of message)
says what? (message)
in
which channel (what information in that way)
to whom
(receiver of message)
with what effect? (response).
E.g. An employee wants a raise
talks to his superior in
the meeting
supervisor refuses or agree.
1. Who?
2. Says what?
3. In which channel?
4. To whom?
5. With what effect?

The model include the basic elements of
communication.
Communicator
Encoder
Noise

message
(transmission)
feedback
medium
decoder
receiver
E.g. Message from superior (who sends the message) through
the e-mail to the subordinate (who receives) and takes the
answer (feedback).
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How is the person be activated, directed and willing to work is
motivation.
When the employee enjoys his job. He finds it challenging and
satisfactory, he be comes motivated.
Motivation
is
inner force
is
extent of drive
To produce optimal out put
To reach the best result

There is an approach to motivation

Carrot
Money, profit award

Stick
Physical, financial and social
punishment.
The idea of carrot and stick comes from the reward and
punishment theory, work here and you will be more rewarded or
else.
NFS
Esteem
Needs
Affiliation or
Acceptance needs
Security and safety
needs
Physiological Needs
Figure Maslow need hierarchy model
Level 1 (physiological needs)
 refers food, air, sleep, water
Level 2 (security)
 clothing shelter.
Level 3 (affiliation)
 develop meaningful relationship in work.
Level 4 (esteem)
 self respect, sense of achievement and recognition from others.
Level 5 (NFS)
 fulfil ones need to become successful.
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•
•
Herzberg’s developed Maslow’s hierarchy and divided the
needs or categorized them into tow groups:
Hygiene Factors
(dissatisfies)
It is mean if they are not
founded in a job, the
employee will be
dissatististfied.
Examples of hygiene
factors are : money,
personal life, Work
conditions and
relationship etc
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Motivation Factors
(satisfiers)
They satisfy the employee
and motivate him to work
more.
They includes challenge,
dance for personal growth
performance feedback etc.
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He added three motives:
Need for achievement
Need for affiliation
Need for power
Employees work more and efficiently if they have
achievement, good relations and power at work.
Controlling

Controlling is the fourth function of management. It has
steps, types and process. It also includes management and it
utilizes balance sheet.
Objectives

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By the end of this chapter the students will be able to:
1-define controlling.
2-differentiate between controlling and planning.
3-study the steps, types and areas of overall controlling.
4-study balance sheet and management audit.
Definition
Controlling is determine what is being accomplished.

To evaluate performance

To apply corrective measures
(check if the employees are following the rules, monitor their
performance and if there is any fault, correct it)

Planning
Identifies commitment
to action
(the performance of the
employee should lead to the
organization objective)

Controlling
Ensures that commitments
are carried.
(make sure the plans are
carried out).
Planning has a close relationship to controlling
Preliminary
(unify understanding
policy and
procedures)
(if the worker
understands the
rules and policies of
the work, he will
follow the
procedures, is steps
E.g. no salesman
must change any
price the company
makes it insteadof
Concurrent
Check the
right quantity
right quality at
the right time
e.g. at the
airline, the
luggage
should reach
the
passengers at
the right time,
and the same
bags.
Feedback
Is the data
gathered for
better results
(information for
correction
e.g. electronic
funds transfer,
money moves
quickly from one
country to another
Slow manual
system, due to the
feedback.

There are major guidelines for effective controlling such as
management audit. It has developed to evaluate the efficiency
of various system in an organization. Audit can be performed
either.
External
Directed to evaluate other
firms (companies) for
possible merger (join
companies together) or find
strengths and weaknesses
for competition
Internal
Used to improve internal
control systems. It is in
the form of periodic
assessment for
evaluating present past
and future performance.
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This areas are checked to minimize losses in sales, material,
time, profit, capital and facilities.
They include:
Market standing of the enterprise (what is the position of the
company in the market, strong or weak).
Innovation (what did the company make new).
Profitability (how much is the profit).
Materials acquisition and use (the use is good normal or
excessive).
Employee performance development (is the worker
developing or not?).
Capital (money is increase or not).
Productivity.
Physical resources (e.g. raw material, machines, cars etc).
Public responsibility


Financial statements are helpful in controlling.
Balance sheet is an important accountant document showing
the financial picture of the company at a given moment (what
is the financial position of the company in a certain month or
part of the year).
Balance sheet
Assets
Items owned
by the company
(things belong
the company)
Liabilities
Amounts owed
to various creditors
corporation’s (outside
the company)
Share holder’s equity
Amounts to
owners or those
with shares

Controlling is a fundamental process in the filed of
management. It is applied by loss and profit. The
higher the quality of the manager, the less will be
the need for control. Controlling has balance sheet.
It has many steps and areas for overall controlling.
Decision Making


This chapter is known from it’s title.
It deals with the decision making process, techniques and
classification of decisions.
Objectives
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By the end of this chapter the students will be able to:
1-Define decision making.
2-Identify decision making process.
3-Know the techniques and classification.
4-Study the limiting factor.
5-Evaluate the decision.
6-Spot difficulties in decision making.
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
Definition:
Decision making is the process of selecting a course of action
from among alternatives. Decision involves a choice to reach
a goal.
(If you have many ways, alternatives, choose the best for the
goal).
Decision Maker
faces
reaches
Outcome
(Final choice)
Problem
Objectives
has
in
Environment
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
The process is easy. If the manager faces a
problem in a certain situation or a particular
environment, he think of an objective and reaches
the outcome.
This will be his final choice and final decision.
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1-Define the problem.
2-Classify Objectives.
3-Identify evaluation criteria (cost, risk).
4-Model Building (make computer example
simulation).
5-Evaluating results (after taking the decision).
6-Taking Final decision.
7-Feedback (to see your results).
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1-Scientific Management (cost control).
2-Human Relation (depend on problem of
motivation and leadership).
3-Empirical(use experiences of successful
managers).
4-Financial (accounting methods)
5-Mathematical (one plus one equals two).
6-Decision theory (rely on quantitative and
qualitative aspects).
7-Decision support (focus on understanding and
improving).
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There are many types of decision and managers may select:
1-Organizational and Personal
the first is taken by a
superior and the second is taken by the executive about
himself.
2-Routine (follow established rules).
3-Programmed and non programmed (rely on established
structure).
4-Policy and operative (taken by top-level).
5-Individual and group.
6-Major and Minor (small or big).
7-Long-Term (period is more and risk too).
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To evaluate your decision, take care of several factors. One of
them is limiting factor.
Limiting factor means strategic.
For example If a machine does not work and the reason is the
screw, it is called a limiting factor.
(any small item is important in taking the decision, even if it
is only a screw in a big machine, still it will delay the work).
Evaluating the decision
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Managers com evaluate their decisions by many factors. They
evaluate according to:
1-size (big project or small).
2-flexibility of plans (could be changed).
3- certainty of good (objectives is fixed).
4-human impact (payroll or computer).
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There are difficulties discovered by managers when
they take a decision such as:
1-Incomplete info (data is not enough).
2-Un supporting environment (if he wants to be a
pioneer in a field and faces opposition).
3-Ineffective communication (no understanding).
4-Incorrect timing (not the right time).
5-Non-acceptance by subordinates.

Managers can take decision if they first define
the problem and use decision making
process.
Modern management concepts

This chapter summarizes and adds new
management concepts. Market changes and
competition makes companies be flexible. The
need for better quality and profit has been born
new tools in management and will be known and
studied in the final chapter.
By the end of this chapter students are acquainted with
management concepts such as:
 Business Plan
 Benchmarking
 Business Process Reengineering
 Change Management
 Customer Relationship Management
 Employee Empowerment
 Enterprise Resource Planning
 Globalization
 International business management
 Management by objectives
 Outsourcing
 Quality circle
 Supply Chain Management
 Elements of TQM

In the plan managers discuss how the business will be
established, what is the purpose of the business, description
of the product and financial details.
Benchmarking

A- It is a systematic and continuous measurement for the
development in a company.
It has three types
Internal
 Check between
department in the
company.
Competitive
who is the competitors
and measure the
company With them.
Functional
keep an eye
on the best
Company
every where.

B-What can be benchmarked?

Quality + Productivity + Time + Employee satisfaction etc.
It is task of any manager to ensure that all
processes are adding value or else be deleted. This
is the philosophy of (BPR).
 It is a process of rethinking and restructuring like
the engineer, for better value.
(BPR) is means for total customer satisfaction and
best results.
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Every organization makes changes to face changes in the
environment.
Management changes to increase ability of company and
learn from changes.
When does management change?
Reactive change
when there are external forces.
Proactive change
when the need comes from inside
the company to increase it’s
effectiveness.
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It involves the following
Unfreezing
It involves the need for change.
People must accept the change.
Changing
Change brings new ideas.
Refreezing
New change or new pattern is put in
the new place.
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(CRM) Provides customer- oriental services such as internet,
mobile devices etc.
(CRM) helps companies to satisfy customers better than their
competitors.
(CRM) measures, predicts and optimizes (make the best)
customer relationship.
E.g. when there is sale, the company contacts the customer
by phone, mobiles or e-mails to reach customer satisfaction
and make more profit.
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Empowerment means encouragement. It means to
allow the employees to take responsibility and
decision. They should have confidence that they
can make a difference and achieve success to the
organization.
The first example to employee empowerment
Is (TQM)
Total Quality Management
It is an employee driven
process that gives the employee
power to create and decide.



1- increases peace of change in the company
(make change faster)
2- decentralize the system (give the chance to all
levels to share in decisions).
3- employees develop their talents and change.

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Definition
It means that there are no more country strategies
but subordination to global framework (no more
rules in my country but businessmen and foreign
products)
Reasons
1-For internal efficiency
to become global,
you gain more volume.
2-complete in markets
the cost is low and
the company become competitive.
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
Definition
It refers to transactions across national
boundaries including transfer of goods,
services, knowledge and capital to other
countries:
Examples:
1-exportation of goods and services.
2-forming a joint-venture
3-multinationals companies opening
branches in host country. (MNC’s)
4-international firms.

MBO

MBO

MBO

MBO
is a process where by the superior and the
subordinate identify their goals in their organization.
is a comprehensive management planning and control
technique to affect the structure and style of the
organization.
the important benefit of MBO is that the judgmental
role of the supervisor vanishes (is deleted) as every
individual is evaluated according to standard and not
personally, due to the objectives put by all employees.
causes improvement improves communication
stimulates subordinates motivation.

Is the strategic use of outside parties to perform activities
handled by internal staff and sources (as the work is too
much, the company uses outside people to help).
Reasons for outsourcing

Increasing competition and rapid changes in business world
made companies.
Benefits



1-companies concentrate on important strategic issues and
use outside hands to help in miner tasks (less important
work).
2-best in practice processes are used (companies use best
things every where).
3-use late technology as companies benefit from others.
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Is a small group of employees doing similar work,
share area of responsibility meet regularly to
identify, analyze and solve product – quality
problems.
the group of employees is led by a supervisororganized as work units.
Quality circle is important to develop, improve,
stimulate, motivate achieve and recognize are all
organizational issues.
The result is improvement on all levels, methods,
products, working condition etc.


It includes the organization and process of
acquisition, storage and sale of new materials etc.
It encompasses (includes) customer- supplier
partnerships.



There are elements of total quality management.
They refer to meeting the requirements of
customers consistently, (all the time) to improve
the quality of work of all employees.
The elements are modified or changed to meet the
requirements of customers.
For example the ISO, 9000 series standards change
every five years.
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Meeting customer requirement (satisfy the clients).
Continuous improvement (for better quality).
Empowerment of employees.
TQM is the philosophy that calls for development
and should be the concern of all organization.