BUSINESS STUDIESHSC TOPIC 1

Business Management and

Change

Students learn about:1.1 the nature of management

1.1.1 the importance of effective management 1.1.2 management roles – interpersonal,

informational, decisional 1.1.3 skills of management – people skills,

strategic thinking, vision, flexibility and adaptability to change, self-managing, teamwork, complex problem-solving and decision-making, ethical and high personal standards

1.1.4 responsibility to stakeholders; reconciling conflicts of interest

The Nature of Management 1.1

• Management is the process of coordinating the work of other people to achieve organisational objectives

• Managers are those people who are able to select organisational goals and achieve them through coordinating others.

• “Management is …the process of designing and maintaining an environment in which individuals working together can efficiently accomplish selected aims or the art of getting things done through and with people in formally organized groups.” (Harold Koontz)

The Nature of Management 1.1

Management involves activities relating to the following functions (POLC model):

• Planning, which involves defining goals, establishing strategy and developing plans.

• Organising, which is the process of translating plans into reality by deciding what tasks are to be done, by whom and how.

• Leading, which involves directing, motivating and developing others and.

• Controlling, which is about monitoring and evaluating performance against plans.

   

   Planning

 

Controlling Organising POLC Management Cycle

    

Leading

    

The Nature of Management 1.1

 

The Nature of Management 1.1

Focus Questions

1. Define management.2. Identify and describe the functions of

management.

(http://www.peter-drucker.com/ontheweb.html)

Importance of Effective Management

1.1.1

Successful managers are both effective and efficient. One of the world's most influential writers on organization and management, Peter F Drucker sees management as a crucial component to all organisations

(http://www.peter-drucker.com/ontheweb.html)

Importance of Effective Management 1.1.1

Drucker distinguishes between:

• effective management, which is about doing the right thing and

• efficient management which is doing things well or right

‘the pertinent question is not only how to do things right, but also how to do right things.’

(http://www.peter-drucker.com/ontheweb.html)

Importance of Effective Management

1.1.1 Effective management is also about making the right decisions at the appropriate time:

• Proactive management, where managers act in advance to deal with an expected difficulty is more successful than

• Reactive management, where managers simply respond to changes related to the business after they have impacted, often adversely, on it. (see later – Managing Change Effectively)

Importance of Effective Management 1.1.1

Focus Questions

1.  Distinguish between effective management and efficient management.

2.  Explain why effective management requires managers to be proactive rather than reactive.

(http://www.onepine.info/pminz.htm) Management Roles 1.1.2

• This refers to those set of behaviours displayed by managers when performing their duties. Henry Mintzberg, [1973], classifies three types of managerial roles:

• interpersonal• informational • decision-making

• Roles are useful when working with managers to assist them to examine:

• what they do with their time, • what the balance of tasks is like and • is it appropriate for what they need to

do or not.

(http://www.onepine.info/pminz.htm) Management Roles 1.1.2Interpersonal, which involves all activities

when dealing with people, both within the organisation and outside. This includes:

figurehead activities where the manager represents the organisation in legal on social occasions

leading which involves motivating and directing employees, including hiring training and even disciplining employees

liaising, which involves contacting people/establishing networks both within and outside the organisation

(http://www.onepine.info/pminz.htm) Management Roles 1.1.2

Informational, which involves:

monitoring or collecting and understanding information from outside the organization

disseminating, which is transferring the information to subordinates in the organisation

spokesperson when the manager communicates the organisations plans and results to various groups, such as annual general meeting

(http://www.onepine.info/pminz.htm) Management Roles 1.1.2Decisional whereby the manager is involved in

making a choice between alternative courses of action. Decisional roles include:

entrepreneur when the manager initiates new projects

disturbance handler when the manager deals with unforeseen problems

resource allocator, which involves decisions about the use of human, physical and financial resources within the organization or department

negotiator when the manager represents the organization or department in a bargaining process

Management Roles 1.1.2

Focus Question1. Identify and describe Minzberg’s classification

of managerial roles.

Skills of Management 1.1.3

Effective and efficient managers possess a range of skills that enable them to achieve the organisation’s objectives. The HSC Business Studies syllabus identifies eight key skills of management: People skills, which include skills to motivate,

delegate, give feedback, actively listen and even discipline

Vision, which is creating and communicating an image of what the organisation will be like in the future.

Skills of Management 1.1.3 Strategic thinking, which involves the ability to

translate the vision and mission into a long-term strategy

Flexibility and adaptable to change because the business environment is constantly changing and the pace of that change has increased dramatically in the last twenty years

Self-management skills relate to the ability of a manager to manage themselves and the time they have available to achieve their goals

Skills of Management 1.1.3 Teamwork is becoming increasingly important

in organisations as current management theories and popular management styles support the use of teams for the achievement of organisational, team and individual goals

Complex problem-solving and decision-making. Problem-solving and decision making have always been a major part of the work of managers and in an increasingly competitive and challenging business environment it remains important

Skills of Management 1.1.3 Ethical and high personal standards can be

defined as rules or standards governing the conduct of a person or organisation or a set of principles of right conduct, are regarded as essential for a successful organisation.

ethical behaviour by managers towards all stakeholders includes the values of honesty, fairness and tolerance

high personal standards not only include the adoption of the organisation’s ethics code but also relates to grooming manners and speech

Skills of Management 1.1.3

Focus Question1.   Outline the management skills that are

required for effective and efficient management.

Skills of Management 1.1.3 undertake a personal

skills audit and prepare a brief oral

report on yourself mentioning three positive and negative attributes that will contribute/inhibit your current performance

this is to be presented to the class.

Responsibility to Stakeholders 1.1.4 a stakeholder is any person, group or organisation

that has an interest in an organisation and will be affected by decisions of that organisation

internal stakeholders include owners/shareholders, managers and employees

external stakeholders include the government, customers, suppliers/creditors and competitors

some people even suggest that the environment and future generations are external stakeholders

Responsibility to Stakeholders 1.1.4

Primarily a business has an economic responsibility to its key stakeholder, which is

the owner of the business, which in the case of a public company are the shareholders.  

legal responsibilities to its stakeholders, such as: providing factual and accurate records (shareholders &

suppliers); paying taxes (government); supplying safe products (customers), not engaging in uncompetitive behaviour (competitors) and meeting all occupational health and safety requirements for

its workers and observe all legislation related to employment of workers, such anti-discrimination legislation (employees)

Responsibility to Stakeholders 1.1.4

nowadays, an organisation is expected to go beyond its legal responsibility and display social responsibility to its stakeholders. Social justice issues would include: contributing to ecological sustainability of the

environment through recyclable products; only using suppliers who do not exploit their workers; introducing policies that seek to eliminate practices

that perpetuate the ‘glass ceiling’, such as workplace child-care centers and

supporting charitable organisations

Responsibility to Stakeholders 1.1.4

a conflict of interest arises when trying to meet the needs of different stakeholders.

for instance, when pursuing its economic responsibility to shareholders, to increase profits and investment returns, the legal and social responsibilities to other stakeholders invariably increase costs that reduce profits.

reconciling conflicts of interest is part of management’s role and in doing it they need to acknowledge prioritise their economic, legal and social responsibilities

Responsibility to Stakeholders 1.1.4

Focus Questions1. Distinguish between the different types of stakeholders

in an organisation.2. Identify and describe the types of responsibilities

organisations have to stakeholders.

3. Explain why conflicts often arise when organisations try

meet their responsibilities to all stakeholders.