What Is Management?

The planning,
organizing,
leading and
controlling
of resources to achieve
organizational goals
effectively and efficiently.

Effectiveness

Efficiency

(ends)

(means)

GOAL

RESOURCE

ATTAINMENT

USAGE

Organization Dynamics
Commerce
Invisible Hand
Transformation Process Model
Profit
Product Life Cycle
Revenue and Cost Dynamics
Value, Cost, Price
Productivity

Transformation Process Model

Human Capital
Inputs

Transformation Process

Technology

Outputs

Physical Capital

The difference in the value of the inputs and outputs

represents the value increase generated by the company

Profit Equation
Profit = Q * (P Vc) Fc
Where,
Q is Quantity sold
P is sales Price
Vc is Variable cost
Fc is Fixed costs

Manipulating the Profit Equation

Profit = Revenues Costs
Profit = Q * P [(Q * Vc) + Fc]
Total Revenue
Q*P
Total Costs = Total Variable Costs + Fixed Costs
(Q * Vc) + Fc
Contribution margin = P - Vc

Relating Value, Price and Cost

Value to the Buyer

Value Generated
by the Exchange

Price to the Buyer

Cost to the Seller

Product Life Cycle

I

II

III

IV

Represents Changes in the Quantity That Can Be Sold

Revenue and Cost Dynamics

P
Vc

Time

Revenue and Cost Dynamics

I

II

III

IV

P
Vc

Time

Productivity =

Outputs
Inputs

Definition

The overall output of goods and

services produced divided by the
inputs needed to generate that
output.

Management History Outline

n
n
n
n
n

Adam Smith
The Industrial Revolution
The Great Depression
WWII
Decline in US Manuf.

Classical Approach
Human Relations Approach
Quantitative Approach
Quality Management Approach

PYRAMID OF CORPORATE
RESPONSIBILITY

Be a good
corporate citizen

Be ethical

Obey the law

Be profitable

Discretionary
Responsibility

Ethical Responsibility

Legal Responsibility

Economic Responsibility

Management By Objectives

3.

SMART goals
Commitment
Action plans

4.

Monitor

1.
2.

Specific objectives are

jointly established

Progress is periodically
reviewed
Rewards are linked

Planning

Strategic Management Process

Establish
the
mission
and the
vision

Analyze the
environment
and
organizations
resources

Establish the
corporate
strategy

Formulate
the
industry
strategy

Carry out
the
strategic
plan

SWOT

What Do We Want
To Accomplish?

Choosing How To Get There

Control
process

Example of Cascading Objectives

Top management
(strategic plans)
Broad goals

Middle management
(tactical plans)
Specific plans

First-line management
(operational plans)
Daily activities

Individual objectives = MBO

BCG Matrix

Market Growth

Boston Consulting Group Matrix

High

4
Question Marks
3

Low

Stars

Dogs

Cash Cows

Small

Large

Relative Market Share