Business ManagementIntroduction

Traditional Definition:

The process of coordinating a business’s resources to achieveits goals

Contemporary Definition:

The process of working with and through other people to achieve business goals in a changing environment. Crucialto this process is the effective and efficient use of limited resources.

Management

Key aspects of

theManageme

nt process

Task:

Find an example of an effective manager. Relate to The 5 key aspects

Management is about relationships

“Innovation has nothing to do with how many R&D dollars you have. When Apple came up with the Mac, IBM was spending at least 100 times more on R&D. It’s not about money. It’s about the people you have, and how you’re led.” – Steve Jobs

 “The best executive is the one who has sense enough to pick good men to do what he wants done, and self-restraint to keep from meddling with them while they do it.” - Theodore Roosevelt

“If you pick the right people and give them the opportunity to spread their wings—and put compensation as a carrier behind it—you almost don’t have to manage them.” – Jack Welch 

“Surround yourself with the best people you can find, delegate authority, and don’t interfere as long as the policy you’ve decided upon is being carried out.” - Ronald Reagan

Task:

Determine which you think is the more difficult management task:getting employees to work in teams rather than independently, orgetting employees to accept change in the workplace.Provide reasons for your answer.

Skills of Management

Interpersonal Communication

Strategic Thinking

VisionProblem solving and Decision making

Flexibility andadaptability

Reconciling the conflicting interestsof stakeholders

Interpersonal Skills

Interpersonal skills centre on the ability to relate to people, being aware of and appreciating their needs, and showing genuine understanding

Task 2: Complete the snapshot activities – “Healthy Management” and “Choco Management”

Communication SkillsIt's not just about what you say, it's about how you say it and what medium you choose to get your message across

Without effective communication the most carefully detailed plans and brilliant strategies will most probably fail

Well-written letters, an inviting telephone manner, pleasant conversation, concise emails, and friendly smiles and gestures reinforce carefully planned business strategies and client networking.

Task 3- Instructions

Non-verbal communication

Nonverbal communication is any message that is not written or spoken. Nonverbal communication mainly consists of body language (posture, facial expressions, placement of limbs and proximity to others)

Usually, body language conveys a more powerful message than spoken or written communication.

Task 4: Simon says

Task 5: Persuasive

Strategic Thinking:Strategic thinking is defined as a mental or thinking process applied by an individual in the context of achieving success in business.

i.e. How are we going to achieve success?

Strategic thinking allows a manager to see the business as a wholeand to take a broad, long-term view.

Strategic thinking is about asking the right questions

Vision:‘the first response of the manager … to give others vision and the ability to perform’ Peter Drucker

Vision provides a clear, shared sense of direction that allows People to attain a common goal.

A manager without a clear vision for the business is like a person who attempts to lead a bushwalk without any idea of where the group wants to go, without a compass or even a map. The walk would become aimless.

Problem solving

Is a broad set Of activities involved in searchingfor, identifying and the implementing a courseof action to correct an unworkable situation.

Flexibility and Adaptability to Change

I think there is a world market for about five computers.’Thomas J. Watson, chairman IBM, 1943

‘There is no reason for any individual to have a computer in their home.’Ken Olsen, president, Digital Equipment, 1973

‘Nothing has come along that can beat the horse and buggy.’Chauncey De Pew, president of the New York Central Railroad, warning his nephew against investing in Henry Ford's new company circa 1911

21st Century manager needs to be proactive rather than reactive

Reconciling the conflicting interests of stakeholders

Stakeholders are groups and individuals who interact with the business and thus have a vested interest in its activities

Most businesses are now extremely sensitive to public opinion and strive to be recognised as ‘good corporate citizens’

Task: Identify stakeholders that may have conflicting interests

Corporate Social Responsibility (CSR)

Corporate social responsibility challenges each business to be accountable for the consequences of its actions. This means businesses must consider effects on all stakeholders while pursuing traditional economic goals.

‘triple bottom line’ — economic, social and environmental performance — where shareholder value increases through the careful management of stakeholder value.

Explain how the management of conflicting stakeholder interests can lead to a business being viewed as socially responsible. (6 marks)

Business GoalsA goal/objective is a desired outcome (target) that an individual or business intends to achieve within a certain time frame.

The importance of goalsCarefully prepared goals — begin with the end in mind — benefit managers by:

• Serving as targets

• Measuring sticks

• Motivation

• Commitment

S.M.A.R.T. Goal setting

Specific. Goals should be straightforward and emphasise what the business wants to happen.

Measurable. Decide on goals whose progress can be measured so the business owner can see the change occur. This helps the business stay on track.

Achievable. Goals need to be challenging but not be too far out of the business's reach, otherwise the business owner and employees will become unmotivated due to the lack of success.

Realistic. The goals must represent something that the business owner and employees are both willing and able to work towards.

Timebound. The goals must have deadlines and sub-deadlines attached to them otherwise the commitment is too vague.

Questions:1) ‘We plan to expand our market into Asia, increasing worldwidemarket share by 2 per cent over the next three years.’ Determine whether this goal is more likely to belong to a large or small business. Give reasons for your answer.

2) Reflect on a goal you have recently achieved. Analyse the reasons why you were successful in achieving this goal.

3) Using the S.M.A.R.T. technique, create a suitable goal forthe following businesses:

• Blue Hills Corner Store• Evergreen Nursery• Banthai Restaurant.

Business Goals - Financial

• Profit maximisation occurs when there is a maximum difference between the total revenue coming into the business and total costs being paid out. (no.1 business goal)

• Increasing market share is an important goal for businesses that dominate the market, because small market gains often translate into large profits. (see Coles/Woolworths – SNAPSHOT ACTIVITIES FOR HOMEWORK)

Maximising growth can be achieved internally (organically) or externally.

Internal growth could involve; employing more people, increasing sales, introducing innovative products, purchasing new equipment or establishing more outlets.

External growth is achieved by merging with or acquiring other businesses

Increase share priceFor companies that wish to be successful, they need to maximise the returns of their shareholders.

This is achieved by keeping the share price rising = Cap gains + high dividends

Coco-Cola Amatil:

Business Goals: Staff involvement

Why involve staff in goal setting?

Innovation Motivation

Motivation

'Money brings some happiness. But, after a certain point, it just brings more money.’ Neil Simon

Is money the best motivator? Discuss

Classical Management Approach:

• Classical-scientific approach• Classical-bureaucratic approach

• Management as planning• Management as organising• Management as controlling

• Hierarchical organisational structure

• Leadership style – Autocratic

Behavioural Management approach:

• Management as leading• Management as motivating• Management as communicating

• Teams

• Leadership style – Participative or democratic

Contingency management approach:

• Adapting to changing circumstances

• Leadership style?

• Summary and comparison of management approaches

Format:

Classical approach: 45 min lesson – Wednesday 6 Aug

Behavioural approach: 30 min lesson – Thursday 7 Aug

Contingency approach: 20 min lesson – Thursday 7 Aug