BAFSBusiness

Ch.4 Management Functions

1) Basic of Management
Process of coordinating resources to meet
organizational goals
Planning, organizing, leading, controlling
What is
Managers:
management?
leading other people in accomplishing the
organizational goals
make plans, give instructions, oversee operations, solve
problems
A guide to accomplishing organizational goals
Managers decide the direction of the organization and
how to use its resources to accomplish the goals
Ensure effectiveness and efficiency
Importance
Effectiveness: Getting goals accomplished
Efficiency: Getting the most output from the least
amount of input (lower expenditure)
2) Levels of management
Top Management (e.g. president, vice-president, chief executive officer
(CEO), COO, CFO)
making company-wide decisions and determine overall goals &
direction of company
decide on companys vision and mission
important decisions, e.g., open new plant, acquire other companies,
raising capital by issuing shares, etc.
Middle Management (e.g. regional manager, division manager, department
head, centre director)
carry out company plans and decisions (by top)
work closely with first-line mangers and monitor daily running of the
business
resolve operational problems and improve companys performance
bridge between TM and F-LM
First/Front-Line Management (e.g. shop manager, assistant manager,
executive officer, supervisor. Team leader, coordinator)
supervise workers in daily operation of the business
deal with problems in production lines and ensure tasks are done as
planned
e.g. first-line managers: supervise & motivate workers, resolve conflicts
among workers in workplace, handle problems which may affect production,
deal with customers
3) 4 management functions

Planning
Establish goals and objectives
Determine the best ways to achieve

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Plans=road map to help people accomplish their goals

Importanc
e

Planning
process

Anticipate potential problems

Plans=blueprintguide management in carry out companys
business strategy + meet companys goals
Managers make plans look into futureanticipate
problems
take precautionary measures against potential problems
+ make alternative arrangements to deal with
Provide direction to employees
clear directions for employees to follow
employees are more motivated to work towards goals &
objectives in plan (specific goals in mindmore focused and
committed to complete tasks)
Clarify roles and responsibilities
clarifyfacilitate the coordination of their activities

Establish objectives decide what the firm wants to achieve

and goals
Gathering useful & search for info which is important for
relevant information
achieving the objectives

Planning
process
(2)
Goals
setting

Evaluate &
develop and examine possible options
determine
and choose the best one
alternative
Specificoptions
Set Measurable
a time frame for create schedue for actions to be taken
Attainable
actions
Relevance
carry out the actual actions according to
Implement
with a Time
frame
the plan
plan (monitor & revise accordingly)
(goals other than profit the
making)

4) Organizing

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What is
organizing?

Design and create an organizational structure

individuals are grouped into departments
work is coordinated and directed towards goals
Organizational structure
specify responsibilities for each job position and
relationship between positions
help company achieve goals by coordinating work done
by different people

Tall
Levels

Communication

Organizational
Structures

Efficiency &
flexibility

Span of control
()

Motivation

Flat

Many

Few

Difficult: Many delays

and distortion msg
pass through many
levels

Faster: msg go up &

down quickly with little
distortion

Less efficient &

inflexible: Decision
making is slow +
required complicated
coordination (many lv)
Narrow: many
managerseach
manages only a few
subordinates

Efficient & flexible:

Quick decisions can
be made and actions
taken

Low: workers are

closely monitored by
managers

High: workers enjoy

more autonomy

Wide: few
mangerseach
manages many subor.

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Organizational
Structures(2)Authority

Line authority (Superior-subor. Relationship)

Job positions at a higher lv hv the authority to give
instructions to those directly below them
line managers direct & monitor their subor., make
decisions, carry out plans
Staff authority
pos. created to support, assist and give advice to line
mangers/departments
ppl in those pos. are experts in certain areas (e.g. HR,
Account, Finance)
their advice and assistance help line managers make
decisions + accomplish tasks effectively

Organizational
Structures (3)Job
relationships

Superiors: persons who give instructions

Subordinates: persons who work under superiors
Colleagues: persons who are at the same level as subor.

Organizational
Structures (4)Groupings

Different grps are formed with job positions linked tgt

Call: divisions, departments, committees, units

Organizational
Structures (5)Communicatio
n channels

Lines in organization chart are formal communication channels

Forming
departments
(Departmentalzation/Departmentation)

By function
functional
departments
formed by
grouping jobs that
perform similar
functions
(e.g. accounting,
production, marketing
dept.)

By Product
product
departments
formed by
grouping jobs
according to the
types of products
produced/sold
companies
produce/sell many

By
geographical
location
geographical dept.
formed by
grouping jobs
according to
locations
multinational
corporations

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small
companies/companie
s with only a few
products

different types of
products

5) Leading
Guiding, directing, motivating people to work towards goals
In organization: all managers at all lv are leaders
Provide direction & guidance for subor.
Encourage & support subor. to overcome difficulties
Resolve conflicts among subor.

Methods

Importance

Set meaningful goals

Give clear instructions
Provide support & advice
Understand needs
Communicate effectively
Recognize contributions
Give rewards for gd performance
Motivate workers to perform their tasks
more job satisfaction when managers display effective leadership
behavior
Avoid problems and mistakes
problems appear without effective leadership
Improve company performance
communicate & motivate workerswilling to perform their jobs

Autocratic leadership
Leader retains as much power & decision-making authority as possible
Does not involve subor. in the decision-making process
Appropriate when:
workers: Inexperienced, passive, unwilling to take up job responsibilities,
likely to resist the decisions
a crisis and a quick decision is required
the info needed for decision-making is available only to managers

+ve

Particularly effective when quick

decisions are required

-ve

-ve impact on employee motivation

become passive, unwilling to take
the initiative, lower job satisfaction,
less committed

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Participative leadership (democratic leadership)

Leader sharing power with subor.
Willing to accept ideas and suggestions from subor.
Subor. are involved in decision-making process
Appropriate when:
wokers are experienced, capable, willing to take up additional job
resposibilites
other workers will be affected by the decision
Workers possess more info than manager
cannot carry out without support from workers

+ve

Different ideas & suggestions lead

to better decisions
Workers: more motivated, more
willing to carry out the decisions,
more committed

-ve

Slow down process

Laissez-faire leadership
Leader provides little/no direction as much freedom as possible
Workers can make decision on their own (managers: set some limits to hold
them accountable for results)
Appropriate when:
workers can work independently, highly motivated
tasks require freedom of expression (eg painting, design), a high lv of creativity (eg
scientific research)

+ve

Give workers a sense of challenge,

commitment & satisfaction in their
jobs

-ve

May lead to chaos (may only focus

on own, fail to cooperate with others)
Inexperienced & passive workers
may feel frustrated & helpless

6) Controlling
Monitor activities to ensure that they are done as planned
An effective control systemall activities are done towards achieving
organizational goals

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1.Set performance
standards
evaluate & determine
whether the activity has
been done properly
4.Take corrective actions

2.Measure actual
performance
collect info related &
measure in no.

integral part
unaccetable>desirable

3.Compare actual
performance with the
standard
Acceptable range of variation
acceptable lower/upper limit

7) Principles of effective management

Division of labour
Allow workers to specialize in doing parts of the job rather than the entire job
Production process is broken down into different taskseach worker
specializes in doing one or a few tasks
Can be applied in manufacturing plants, service business

+ve

Workers can learn faster

Improve skills by repeating a
task many times
Specialize in tasks that they
can perform wellimprove
efficiency
Save time (dont hv to switch
frm doing one part of job to
another)
Use machine to replace is
easier (as production is divided
into small tasks
Easier to supervise the
process

-ve

Mistakesaffect entire process

Same task againboring->low job
satisfaction
Workers with specialized skills cannot
perform other tasks

Unity of command
Each worker has only one superior to whom he is directly responsible
Foundation of building formal decision-making structure
Clarify who to reports to whomavoid conflicting instructions being given by
two or more superiors

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Unity of direction
Ensure that all employees follow the same plan and have the same goals
Each plan is led by only one manager ; only one plan a group of activities that
have the same objectives
Efforts of all staff are directed towards achieving the same goals (no conflicting
goalsno confusion)
Authority
Give a position the formal and legitimate power to give orders and make
decisions
Managers accomplish tasks by exercising authority
power to give orders, make decisions, supervise others, reward others
The authority that a person has should match the nature of the job
a position with greater responsibilities and involves more complicated
tasksmore authority
Responsibility
The obligation of a person to get the assigned tasks done
The parity of authority and responsibility: authority and responsibility go
hand-in-hand and should be in balance
Delegation
Transfer of formal authority and responsibility for completing a task from
one person to (another) person(s)
Although delegating tasks to subor., managers are accountable for the result
(managers should oversee and monitor)
Workers abilities and sense of responsibility
The importance of tasks
Management by Objectives
Ensure that the overall objectives of the organization are translated into
objectives for each succeeding level

+ve

Managers and subor. set objectives

tgtsubor. hv higher commitment
(set by themselves but not imposed
by managers)
Subor: clear understanding of the
objectives
Each knows how his work can
contributeenhance coordination
among workers at different levels
(work tgt to carry out plans)
Ensure objectives of subor. are
linked to organizations objectives
Improve communication between
managers and subor. (regular
meetings)better relationship

-ve

Takes time as managers and

subor. meet regularly to jointly set
objectives and discuss progress
Add burden of managers who
need to play an active role in the
entire MBO process
Focus primarily on short-term
objectives rather than long-term
objectives

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Feedback and support frm

managersmotivate workers to
accomplish tasksimprove
performance
Better control over the tasks as the
performance is regularly reviewed +
rewards can be given at once