Managing The Business Enterprise

BUSINESS
7e
PART 2
UNDERSTANDING
THE BUSINESS OF
MANAGING
Copyright 2004 Prentice Hall, Inc.
BUSINESS
7e
CHAPTER 6
Managing the
Business Enterprise
BUSINESS
7e
Chapter Outline
Who Are Managers?

Setting Goals and Formulating Strategy
The Management Process
Types of Managers
Basic Management Skills
Management and the Corporate Culture
Copyright 2004 Prent
BUSINESS
7e
Who Are Managers?
All corporations depend on

effective management.
The principles of
management apply to all
kinds of organizations.
Managers are among an

organizations most
important resources.
BUSINESS
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What Are Goals?

Objectives that a
business hopes and
plans to achieve
What Is Strategy?
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Broad set of
organizational plans for
implementing the
decisions made for
achieving organizational
goals
Types of Strategy
Corporate strategy determines the firms
overall attitude toward growth and the way it
will manage its businesses or product lines
Business (or Competitive) strategy takes
place at the business-unit or product-line level
and focuses on a firms competitive position
Functional strategy involves managers in
specific areas who decide how best
to achieve corporate goals
through productivity
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Hierarchy of Strategy
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Purposes of Goal Setting

1.
2.
3.
4.
Goal setting provides direction and

guidance for managers at all levels.
Goal setting helps firms allocate
resources.
Goal setting helps to define corporate
culture.
Goal setting helps managers assess
performance.
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What Is a Mission
Statement?
10
Organizations
statement of
how it will
achieve its
purpose in the
environment in
which it
conducts its
Kinds of Goals
Long-term goals are set for an
extended time, typically five years
or more
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Intermediate goals are set for a period

of one to five years
Short-term goals are set for the very

near future, typically less than one year
11
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What Is Strategy
Formulation?
Creation of a broad
program for defining
and meeting an
organizations goals
12
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Strategy Formulation
13
Setting Strategic Goals

Strategic goals are long-term goals
derived directly from a firms mission
statement
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14
SWOT analysis is a process involving

the assessment of organizational
strengths and weaknesses (the S and
W) and environmental opportunities
and threats (the O and T)
Analyzing the Organization and

Its Environment
Environmental analysis is the process
of scanning the business environment
for threats and opportunities
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Organizational analysis is the process

of analyzing a firms strengths and
weaknesses
Matching the Organization and

Its Environment
The matching process is the heart of
strategy formulation.
The matching process may

determine whether a firm typically
takes risks or behaves more
conservatively.
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A Hierarchy of Plans
Strategic plans reflect decisions about
resource allocations, company priorities
and steps needed to meet strategic goals
Tactical plans are shorter-range plans for

implementing specific aspects of the
companys strategic plans
Operational plans set short-term targets

for daily, weekly or monthly performance
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17
Contingency Planning and

Crisis Management
Contingency planning identifies
aspects of a business or its environment
that might entail changes in strategy
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Crisis management involves an

organizations methods for dealing with
emergencies
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What Is Management?
Process of
planning,
organizing,
directing and
controlling an
organizations
resources to
achieve its goals
19
The Management Process

Planning determines what an organization
needs to do and how best to get it done
Organizing determines how best to arrange an

organizations resources and activities into a
coherent structure
Directing involves guiding and motivating

employees to meet an organizations objectives
Controlling monitors an organizations

performance to make sure that the firm is
meeting its goals
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20
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The Control Process
21
Types of Managers
Top managers are responsible to the board
of directors and stockholders for a firms
overall performance and effectiveness
Middle managers are responsible for
implementing the strategies, policies and
decisions made by top managers
First-line managers are responsible for
supervising the work of employees
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22
Areas of Management
Human Resource Managers
Operations Managers
Marketing Managers
Information Managers
Financial Managers
Other Managers
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23
Basic Management Skills

Technical skills are needed to perform specialized
tasks
Human relations skills are required in
understanding and getting along with other people
Conceptual skills are abilities to think in the
abstract, diagnose and analyze different situations
and to see beyond the present situation
Decision-making skills include the ability to
define problems and select the best course of
action
Time management skills are associated with the
productive use of time
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24
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The Decision-Making Process
25
Management Skills for the

21st Century
Global management skills include the
need to understand foreign markets,
cultural differences and the motives and
practices of foreign rivals
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26
Management and technology skills

refer to the ability to process, organize
and interpret a wealth of data and
information
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What Is Corporate
Culture?
The shared
experiences, stories,
beliefs and norms
that characterize an
organization
27
Communicating the Culture
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Managers must:
28
Understand the culture.
Transmit the culture to others

in the organization.
Maintain the culture by rewarding and

promoting those who understand it and
work toward maintaining it.
Managing Change
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Three-stage process:
29
Analysis of the companys environment

highlights extensive change as the most
effective response to its problems.
Top management begins to formulate a vision

of a new company.
The firm sets up new systems for appraising

and compensating employees who enforce
the firms new values.

Managing The Business Enterprise

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BUSINESS

Copyright 2004 Prentice Hall, Inc.

Copyright 2004 Prentice Hall, Inc.

Who Are Managers?

Copyright 2004 Prent

Who Are Managers?

All corporations depend on

Managers are among an

What Are Goals?

Copyright 2004 Prentice Hall, Inc.

Copyright 2004 Prentice Hall, Inc.

Copyright 2004 Prent

Copyright 2004 Prent

Purposes of Goal Setting

Goal setting provides direction and

Copyright 2004 Prent

Intermediate goals are set for a period

Short-term goals are set for the very

Copyright 2004 Prent

Copyright 2004 Prentice Hall, Inc.

Copyright 2004 Prent

Setting Strategic Goals

SWOT analysis is a process involving

Analyzing the Organization and

Organizational analysis is the process

Copyright 2004 Prent

Matching the Organization and

The matching process may

Copyright 2004 Prent

Tactical plans are shorter-range plans for

Operational plans set short-term targets

Copyright 2004 Prent

Contingency Planning and

Crisis management involves an

Copyright 2004 Prent

Copyright 2004 Prentice Hall, Inc.

The Management Process

Organizing determines how best to arrange an

Directing involves guiding and motivating

Controlling monitors an organizations

Copyright 2004 Prent

The Control Process

Copyright 2004 Prent

Copyright 2004 Prent

Copyright 2004 Prent

Basic Management Skills

Copyright 2004 Prent

The Decision-Making Process

Copyright 2004 Prent

Management Skills for the

Management and technology skills

Copyright 2004 Prent

Copyright 2004 Prentice Hall, Inc.

Communicating the Culture

Understand the culture.

Transmit the culture to others

Maintain the culture by rewarding and

Copyright 2004 Prent

Analysis of the companys environment

Top management begins to formulate a vision

The firm sets up new systems for appraising

Copyright 2004 Prent

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