MNG 2601 Notes summary

MNG 2601 notes Chapter 2 2.1. Managers and management A company is only as good as its management 2.2. Management and the management process Management is defined as the process of working with and through others to achieve organisational objectives as efficiently and effectively as possible within changing environment. Six components: 1. Management is a process 2. Working with and through others 3. Achieve organisational goals and objectives 4. Balance effectiveness and efficiency 5. Make the most of limited and scarce resources 6. Coping with a changing environment 2.2.1. Management is a process A process is a structured, interrelated set of activities designed to produce a specific output. Managers need inputs to deliver outputs: Input resources:  People – Human resources  Capital – financial resources  Physical resources  Raw materials  Components  Information  Entrepreneurial skills All managers, regardless of the type of organisation, the level at which they are involved, their designated roles or specific skills, engage in some manner in four fundamental, interrelated activities, also called the management function:  Planning  Organising  Leading  Controlling Planning Setting an organisation’s goals and finding the best way to achieve them. Determines the organisation’s mission and goals. Plans are mostly made by Top Management. Vary from 1-5 or even 10 years. Called strategic plans Tactical plans are made by functional managers Operational plans are made by lower management Organising Developing an organisational structure that indicates how people and other resources should be deployed to achieve organisational goals, called organisational design, establish authority. Leading Directing human resources and motivating them in such a way that their actions are aligned with previously formulated goals and plans. Controlling Monitoring the organisation’s progress towards the attainment of its goals. Output of performance Inputs are transformed to realise outputs of which gaol achievement, products, services, profit, job creating, efficiency and effectiveness. This is called performance. 2.2.2. working with and through others Management is a social process. In all cases managers are needed for getting things done by working with and through other people and other organisations. It is an important skill that managers should have in order to be successful. 2.2.3 Achieving organisational goals and objectives Objectives – a target to be strived for. Organisational goals and objectives serve later as measuring sticks for performance without goals and objectives, the management process would be aimless and wasteful 2.2.4 Balancing effectiveness and efficiency Effectiveness is achieved when the organisation formulates and pursues appropriate goals. (doing the right thing) Efficiency – resources required to achieve an objective are weighed against what was actually accomplished (doing things right). Efficiency is achieved by using the fewest inputs to generate a maximum amount of outputs. Managers are responsible for balancing effectiveness and efficiency. 2.2.5 Making the most of limited and scarce resources 2.2.6 Coping with a changing environment Successful managers anticipate and adjust to changing circumstances rather than being swept along or being unprepared. 2.3 Levels and areas of management 2.3.1 Levels of management Top management –  small group of managers who control the organisation as a whole and with whom the final authority and responsibility for executing the management process rests.  Responsible for determining mission, goal and overall strategies  Concerned with long term planning, designing the organisation’s broad organisational structure, leading the organisation and controlling it.  Influences the corporate culture.  Annual reports of organisational usually depict their top management structure.  Usually comprises the board of directors, partners, the managing director, chief executive officers and management committees. Middle management –  Responsible for specific departments  Primarily concerned with implementing the policies, plans and strategies formulated by top management  Functional heads ( marketing managers, purchasing managers, human resource manager)  Concerned with near future, responsible for medium term and short term planning , organising functional areas, leading by means of the departmental heads and controlling the management activities of the middle managers’ own departments  Continually monitor environmental influences that may affect their own departments.  Link upper and lower levels of the organisation  implement the strategies developed at the executive level Lower-level management –  first line managers  responsible for even smaller segments of the organisation (different subsections)  functions are centred on daily activities of their departments or sections, on short term planning , and on implementing the plans of middle management  primary concern is to apply policies, procedures and rules in order to achieve a high level of productivity, to provide technical assistance, to motivate subordinates and to accomplish day – to – day gaols. 2.3.2. Areas of management  the financial function is responsible for obtaining the necessary finances for an organisation at the lower cost, investing these finances in assets that would earn greater returns than the cost of capital as well as managing the profitability, liquidity and solvency of the organisation.  The operations function includes that group of activities concerned with the actual provision of goods and services to the organisation’s clients.  The human resource function entails the appointment, development and maintenance of the human resources of the organisation  The procurement function is concerned with buying the materials and resources needed to create products and services  The research and development function is responsible for developing new products and services and improving old products and services  The public relations function of an organisation is responsible for creating a favourable, objective image of the organisation and to establish good relations with those directly or indirectly concerned with the business and its products or services  The marketing function is responsible for getting the final customer of client to buy the organisation’s products or services. 2.4 The role distribution of managers 2.4.1 Interpersonal role Management jobs are people – intensive In fulfilling the interpersonal role of management, managers perform three sub-roles: Figureheads – attending events Leader – work with and through others Liaison – maintain good relations within and outside the organisation 2.4.2 Information role