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The Four Functionsof Management:

1.1. PlanningPlanning

2.2. OrganisingOrganising

3.3. LeadingLeading

4.4. ControllingControlling

MORNÉ SCHUTTE

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CraftingStrategy

to AchieveObjectives

SettingObjectives

DevelopStrategic

Vision& Mission

Implementing& Executing

Strategy

Evaluatingand

Correcting

Task 1 Task 2 Task 3 Task 4 Task 5

The Five Tasks of Strategic Management

PlanningPlanning OrganisingOrganisingLeadingLeading

ControlControl

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Management Functions

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Planning

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Planning is the process used by managers to identify and select goals and courses of action for the organisation.

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Traditional Stages of the Planning ProcessTraditional Stages of the Planning Process

Determining theDetermining theOrganization’s goalsOrganization’s goals

FormulateFormulatePlansPlans

ImplementImplementPlansPlans

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The organisational plan that results from the planning process details the goals to be attained.

The pattern of decisions managers take to reach these goals is the organisation’s strategy.

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Levels of PlanningLevels of Planning

Strategic

Tactical

Operational

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Strategic Plans

Detailed action steps mapped out to achieve strategic goals

Generally developed by senior management and usually have a time horizon of 3 - 5 years.

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Tactical Plans

More specific and concrete, aimed at supporting the implementation of strategic plans.

Time horizon of 1 - 3 years.

Outline major steps to achieve objectives, and are developed by middle management

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Operational Plans

Set out specifically what, and how, must be achieved to achieve organisational objectives.

Time horizon of no more than 1 year.

Success of strategic and operational objectives are reliant on success of operational plans.

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Strategic Planning is the process of determining the company’s objectives, the courses of action needed to achieve them and the allocation of resources to enable them to be implemented

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Mission

Vision

Objectives

Internal

Analysis

External

Analysis

Develop

Strategies

Implement

Strategies

Control

Evaluate

Strategic Planning Process

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Mission

Vision

Objectives

Internal

Analysis

External

Analysis

Develop

Strategies

Implement

Strategies

Control

Evaluate

Strategic Planning Process

Step OneStep One

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Step One

Mission, Vision & Objectives

It is necessary for the organisation to determine it’s mission, vision and objectives before it begins to make plans for it’s future.

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Mission

Vision

Objectives

Internal

Analysis

External

Analysis

Develop

Strategies

Implement

Strategies

Control

Evaluate

Step TwoStep Two

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Step Two

Internal & External Analysis

Most commonly an organisation will undertake

a SWOT analysis

SSWWOOTT

pportunties

eaknesses

threngths

hreats

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Strategic SWOT Analysis

How do we improveour weaknesses toprevent, or reduce,

our threats?

How to we use ourstrengths to prevent,

or reduce, ourthreats?

How do we improveour weaknesses totake advantage ofthe opportunities?

How do we useour strengths to

take advantage ofthe opportunities?

ThreatsThreats

OpportunitiesOpportunities

StrengthsStrengths WeaknessesWeaknesses

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Step Two

External Analysis

Often an organisation will utilise Porter’s

competitive forces analysis tool

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SubstituteSubstituteProductsProducts

SubstituteSubstituteProductsProducts

RivalryAmong

Competitors

PotentialPotentialfor Entryfor Entry

PotentialPotentialfor Entryfor Entry

SuppliersSuppliersSuppliersSuppliersConsumersConsumersConsumersConsumers

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Porters’ Five Competitive ForcesPorters’ Five Competitive Forces

1. Level of Rivalry in an industry: how intense is the current competition with competitors? Increased competition results in lower profits.

2. Potential for entry: how easy is it for new firms to enter the industry? Easy entry leads to lower prices and profits.

3. Power of Suppliers: If there are only a few suppliers of important items, supply costs rise.

4. Power of Consumers: If there are only a few, large buyers, they can bargain down prices.

5. Substitutes: More available substitutes tend to drive down prices and profits.

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Mission

Vision

Objectives

Internal

Analysis

External

Analysis

Develop

Strategies

Implement

Strategies

Control

Evaluate

Strategic Planning Process

Step ThreeStep Three

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Step Three

Identifying Strategies

Once the organisation is fully informed about it’s environment (internal, operating and macro), it can then begin to develop strategies.

Remember, a strategy is a pattern of actions employed to achieve an organisations’ objectives.

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Strategic strategyStrategic strategydevelop a plan of actiondevelop a plan of action

maximizing long-run valuemaximizing long-run value

Tactical strategyTactical strategya plan of action to take a plan of action to take

advantage of opportunitiesadvantage of opportunitiesand minimize threatsand minimize threats

Operational strategyOperational strategya plan of action improving a plan of action improving

department’s ability to department’s ability to create valuecreate value

SWOT analysisSWOT analysisidentifies strengths & identifies strengths & weaknesses inside the weaknesses inside the firm and opportunitiesfirm and opportunities

& threats in the & threats in the environment.environment.

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Mission

Vision

Objectives

Internal

Analysis

External

Analysis

Develop

Strategies

Implement

Strategies

Control

Evaluate

Strategic Planning Process

Step FourStep Four

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Step FourStep FourImplementing StrategyImplementing Strategy

Step FourStep FourImplementing StrategyImplementing Strategy

After identifying appropriate strategies, managers confront the challenge of putting those

strategies into action

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Implementing StrategyImplementing StrategyImplementing StrategyImplementing Strategy

Strategy Implementation is a five step process.

• Allocating responsibility for implantation to the appropriate

individuals or groups

• Drafting detailed action plans that specify how a strategy is to

be implemented

• Establishing a timetable for implementation that includes

precise, measurable goals linked to the attainment of the action

plan.

• Allocating appropriate resources to the responsible individuals

or groups.

• Holding Specific individuals or groups responsible for the

attainment of corporate, divisional, and functional goals.

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Mission

Vision

Objectives

Internal

Analysis

External

Analysis

Develop

Strategies

Implement

Strategies

Control

Evaluate

Strategic Planning Process

Step FiveStep Five

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Step FiveStep FiveControlControl

Controlling is not the last function of management. This is because it is the function that monitors all other functions. Only through controlling can efficiency and effectiveness be maintained.

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Four Stages of Control

Establishing StandardsMeasuring PerformanceComparing Performance

against StandardsEvaluation and Action

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Example

Federal Express Corp. has a performance goal of delivering 99 % of its packages on time. If on-time deliveries fall to 97 %, managers know that they have a problem. On the other hand, an on-time rate of 99.5 % would indicate that the company is doing better than expected.

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OrganisingOrganising

Structure within the Organisation

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LeadingLeadingoror

LeadershipLeadership

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What should a Manager be?

A Leader

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Leadership

Think of a person who you consider a leader

What traits (attributes, characteristics) can you identify as central to their leadership?

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Leadership

Drive Leadership Motivation

IntegritySelf-confidence

Knowledge of the Business

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Central to effective leadership is ………………..

INFLUENCEINFLUENCE

…….. that is, the ability to influence other people

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InfluenceInfluence

AuthorityAuthority

Control overControl overRewardsRewards

Control overControl overPunishmentsPunishments

AppealingAppealingPersonalPersonal

CharacteristicsCharacteristics

Expertise

SourcesSourcesof Powerof Power

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Legitimate Influence

Power that stems from a position’s placement in the

managerial hierarchy and the

authority vested in the position.

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Reward Influence

Power that is based on the capacity to control and provide valued rewards to others.

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Coercive Influence

Power that depends on the

ability to punish others when they do not engage in

desired behaviour.

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Expert Influence

Power that is based on the possession of expertise that is valued by others.

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Information Influence

Power that results from access to and

control over the distribution of

important information about organisational

operations and future plans.

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Referent InfluencePower that results from being admired, personally identified with, or liked by others.

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Management Styles

The type of power, and the way it is used, by a manager will be greatly influenced the the type of management style he/she chooses to use.