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Subject:
Entrepreneurship Education
Unit:
Class:
S.3
Topic:
Sub-topics:
1. Meaning of management
2. The role of management
3. Functions of management
4. Importance of management.
5. Responsibilities of management.
6. Tasks of management.
Introduction
In Unit 2, we looked at businesses in Uganda and learnt that there are different types
of businesses. This unit focuses on managing a small business enterprise. In order to
understand how a small business enterprise can be managed effectively, we shall look
at the meaning, role, importance, and the functions of management. The unit will
conclude with a discussion of the tasks and responsibilities of management.
Main Content and Concepts to Emphasize
Meaning of management
Management tasks
Markers
Flip charts
1. Meaning of management
Management is the art of getting things done through people and the proper utilisation
of resources like capital, raw materials and time, which enables the enterprise to
achieve its goals and objectives. Management is a problem solving process of
effectively achieving organizational objectives through the efficient use of scarce
resources in a changing environment. In a small business enterprise, the entrepreneur
acts as the top manager while the few employees and family members serve as lower
managers.
Who are the managers?
A managers job is highly crucial to the success of any organization. The more
complex the organisation is, the more crucial is the managers role. It is the managers
job to achieve the organizational objectives through the proper utilization of its human
and material resources. However, since the material resources of equipment, capital,
facilities, information, etc., can only be used by humans, the human resources are the
most valuable assets of any organization. Accordingly, a manager must be highly
skilled in the art of optimally utilizing the human resources. Some of the essential
skills are:
(1) Technical skills
These involve the knowledge, methods and techniques and the ability to use these
techniques in performing a job effectively.
(2) Human skills
Human skill is the ability to work with other people amicably. It involves patience,
trust and genuine involvement in interpersonal relationships.
(3) Analytical skills
Effective and right decision making is the most important function of management. A
successful manager must possess the analytical skill, involving the ability to logically,
objectively, and scientifically analyse the problems and opportunities and use
scientific approaches to arrive at feasible and optimal solutions.
(4) Conceptual skills
The conceptual skill is the ability to view the organisation as a whole, and as a system
comprised of various parts and sub-systems, integrated into a single unit.
Not all managers are successful. Those managers who are successful have certain
characteristics which create a climate for success for themselves and their
subordinates. Some of the more important personality traits of a successful manager
are:
(a) Knowledge
To have the knowledge about competitive markets, about technological advancements
and about social changes is very important for taking action.
(b) Decisiveness
Decision making involves more than simply choosing the best alternative. A good
manager should possess conceptual logical ability, intuitive and courageous
judgement and ability to analyse the problem by breaking it into parts and identifying
the nature and effect of each part.
(c) Ability to handle conflict
A good manager is calm, able to listen, is positively responsive to criticism and is able
to handle conflicts and differences in a constructive manner. In order to handle
conflicts well, a manager must be confident, self-assertive, fair and dominant.
(d) Emotional stability
Emotional stability is the major ingredient for effective leadership and an effective
manager is always an effective leader. Emotional instability often leads to wrong and
impulsive decisions with dire consequences.
Student Activity 1
1. Define management.
2. What are the various skills that an effective manager must possess? Are all these
skills equally important?
3. Are the characteristics of a good manager in-born traits or can these be acquired by
environmental influences?
2. Roles of an entrepreneur in the management of a small business enterprise
An entrepreneur plays a number of roles in a small enterprise. Among these are:
(a) Decision making
Decision making is the process of choosing the best alternative from among different
alternatives to maximize the achievement of business goals and objectives. The
decision-making role can be seen in resolving conflicts, resource allocation and in
negotiations. The entrepreneur makes decisions concerning:
Translating the business idea into a real business that produces goods and
services
Searching for new ideas and innovations to meet changing customer needs,
tastes and preferences
In his/her role as a monitor, the entrepreneur regularly scans the internal and
external environment which affects the business. He/she collects information
on changes in customers needs, tastes and preferences. This information can
be collected from newspapers, magazines, and other media.
Student Activity 2
1. What are the different roles that an entrepreneur is expected to play?
2. Describe in detail the manager as a decision maker.
3. How do managers different work roles affect his/her ability to perform as an
effective manager?
(c) Consumers
Management tries to ensure that a customer is their business lord and is always right.
Management thus produces quality products and services at fair prices with
guaranteed satisfaction to meet the interests/needs of their customers.
(d) Government
Management ensures that its business operates within the legal system abiding by all
the laws and regulations of the state. This is important to the government in that;
(c) Consumers
(d) Government
(e) Community
4. Functions of management in a small business enterprise
Management carries out a number of functions in a small business enterprise. These
functions include planning, organising, staffing, leading, controlling, communication,
motivation, and budgeting.
(a) Planning
Planning involves the establishment of business goals and objectives, and determining
the ways in which they will be achieved. In planning, an entrepreneur is envisaged to:
Planning aims at reducing future uncertainty. Planning answers questions like: what
should be done? When will it be done? Where will it be done from? Who will do it?
How will it be done?
(b) Organising
This refers to identifying the activities to be done, categorising them into
sections/departments and assigning the activities to particular people to carry them
out. In order to organise efficiently, an entrepreneur should:
Identify the tasks to be performed and group them into departments, for
example, sales and distribution under the marketing department
(c) Staffing
This involves the process of recruiting, training, developing, compensating and
evaluating employees. It also involves maintaining employees with incentives like
good salaries, housing and medical facilities or allowances, etc. This is likely to result
in commitment to work on part of the employees.
(d) Leading
This involves motivating and guiding the employees about business procedures and
methods. There should be open communication such that employees receive
information and also give feedback. An entrepreneur should lead by example and
employees should be motivated either verbally or through other rewards like money,
promotion, recognition, etc.
(e) Controlling
Controlling in a small business enterprise is concerned with monitoring purchases and
sales, money received and paid out, stock and other business property. It consists of
those activities which are undertaken to ensure that the activities done are not
different from the pre-planned ones. An entrepreneur should look at the original set
goals, and find out whether or not they have been achieved as planned.
(f) Communication
This is the process of receiving and sending messages. It is the process of passing
information from one individual to another. An entrepreneur should transmit and share
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messages, ideas, facts and information with his/her suppliers, employees, customers,
etc.
(g) Motivation
This is the process of encouraging employees to do their best towards the desired
goals of the business. Employers should aim at getting their employees to willingly
pursue company objectives. Motivation can be through fair payments/salaries,
allowances, promotion, fringe benefits like free housing, medical care, etc.
(h) Budgeting
A budget is a quantitative statement, for a defined period of time, which may include
planned revenues, expenses, assets, liabilities and cash flows. It is a financial plan
outlining how funds will be spent in a given period of time and how these funds will
be obtained. The process of preparing a budget is known as budgeting.
Types of budgets
1. Master budgets
This is a comprehensive summary budget, incorporating all the functional and
operational budgets, generally including sales, production, material and labour costs,
any overhead costs, profit, etc.
2. Materials and utilities budget
This budget also known as operations budget includes budgeting for raw materials
required for production, spare parts for maintenance, labour time, machine time,
energy consumption, etc. Labour time and machine time is the output per unit of time.
3. Control of liquidity
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This involves cash flow and is very important in controlling and meeting current
financial obligations. This budget forecasts cash receipts and outlays in a set time
basis and is necessary to control the income and expenses, so that there is no shortage
of cash to pay bills, and also no excessive unused cash which may be unproductive.
4. Revenue and expenses budgets
The revenue budgets should show anticipated sales by product or by geographical
area or department, etc. The expense budgets should cover all necessary and relevant
areas such as rent, utilities, supplies, security, etc.
5. Capital expenditure budgets
These budgets plan for long term investments and include expenditures for new plant
and equipment, major installations, replacement of existing equipment, building, etc.
6. Sales budget
The sales budget is the direct outcome of sales forecast and is based on the
consideration of the following factors: demand and supply, competition, past sale
trends, future prediction of sales, seasonal changes that affect sales, etc. The sales
forecasting is based on such factors as population trends, consumers purchasing
power, disposable income, price trends of the products, inflation rate and the general
business economy, etc.
7. Production budget
The production budget contains manufacturing program for future operations and is
based upon the sales forecasts and sales budgets. It aims at obtaining maximum
utilization of manufacturing methods and facilities.
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8. Balance sheet
It is a composite budget and reflects anticipated assets, liabilities and owners equity
or net worth at the end of a given period in the future. It provides a forecast of the
anticipated financial status of the company at a future date.
9. Flexible budget
Flexible or variable budget reflects and combats the changes in expenditure as a result
of changes in volume of production and revenues. These expenditures are primarily
variable costs since the fixed costs are not generally affected by changes in revenues.
Benefits of budgeting
Budgets are produced in all organizations, whether they are small, large, private or
public sector. They are important and are produced for the following reasons:
To co-ordinate the activities of the various parts of the business and to ensure
that the parts are working together
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The budgeting process induces the management to shift attention to the future
operations. It forces managers to anticipate and forecast the trends and
changes in the external environment
Limitations of budgeting
Some of the problems associated with budgeting are:
Budgets are often too rigid and restrictive and supervisors are given little free
hand in managing their resources. The budgets may either be changed too
often or not at all, making it difficult for employees to meet performance
levels
Budgets are used to evaluate the performance and results, but the causes of
failures and successes are not thoroughly investigated
Budgets may be used punitively. The employees may regard budgets simply as
rating tools or as a device for catching their mistakes. This will lower their
morale and dilute their sense of dedication
Budget goals may be conceived as too high. A high production level or sales
level may be resented as un realistic and may create tension and pressures
which could very well result in worker inefficiency and create conflict
between workers and the management
Student Activity 4
1. (a) List seven functions of management in a small business enterprise.
(b) For any four functions chosen, describe the activities managers must perform to
achieve a desired goal.
(c) List two problems managers might encounter in performing any one of the
functions chosen in part (a).
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(d) Describe one way in which any one of the problems chosen in part (c) might be
eased or solved.
2. Define budgeting and a budget.
3. List six types of budgets.
4. Why is budgeting important to an entrepreneur?
5. What are some of the problems associated with budgeting?
5. The responsibilities of management
Management is responsible and answerable to many groups. Sometimes the interests
of these groups conflict with each other. Hence, management must conduct its affairs
in a manner so as to be fair and equitable to all parties who have a vested interest and
claim on management. These parties include the government, shareholders, the
community, employees, customers and board of directors. These responsibilities are
discussed in more detail as follows:
(a) Responsibilities to government
Management responsibilities towards government are to maintain the law of the land,
not to flout trading practices, to pay taxes such as (corporation tax and value added
tax). Managers must operate within guidelines established by the National Bureau of
Standards.
(b) Responsibilities to shareholders
These responsibilities include calling annual general meeting, inviting shareholders to
attend, declaring the dividend and making profits for the company.
(c) Responsibilities to society and the environment
Management should use environmentally friendly practices and every board of
directors should be fully aware of the disastrous consequences of environmentally
damaging actions.
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Student Activity 5
1. (a) Outline, briefly, five responsibilities of management.
(b) For any three responsibilities chosen give two activities for each to show how
managers operate.
(c) Explain one problem for any one responsibility chosen in part (a) that might
hinder the performance of managers.
(d) Explain the role of workers in the solution of the problem outlined in part (c).
2. What are the managements responsibilities towards employees? Should the return
on investment be the primary concern of the shareholders?
3. Are the managements responsibilities towards employees applicable in all
situations or in the democratic style of management system only?
6. Management tasks
A task refers to activities organised in units for particular purposes. In a small
enterprise, the management tasks include production, marketing, personnel and
financial management.
(a) Production management
Production management is the process of taking a set of inputs and turning them into
outputs. The inputs are the factors of production while the outputs are the goods and
services. Production management is the process of effectively planning and regulating
the operations of that part of an enterprise which is responsible for the transformation
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of materials into finished products. Production management deals with planning and
controlling production activities, which include:
acquisition of inputs such as land, capital, raw materials, human resources and
information
Transformation of the inputs into output. Output refers to products that have
been processed from raw materials into finished or semi-finished goods.
setting prices that customers are willing to pay but are still profitable to the
enterprise
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selection, which is the process an entrepreneur follows to pick out the most
suitable candidate for a particular job
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record-keeping
Student Activity 6
1. Examine the various management tasks in a small business enterprise.
2. Define personnel management.
3. What is the importance of personnel management?
4. Ask students to visit any business of their choice and find out how the roles,
functions and tasks of management are being performed.
5. Ask students to write a report of their findings and include a list of the aspects
which they think are missing and should be done to enable the business to perform
better.
References:
Abiraj, B.M.C. 1998. Higher Level Business and Economics for Caribbean Students.
Hodder Headline Group. pp.258-260.
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LESSON PLAN
Date: Class: . Period: . No. of Students:
Topic: Managing a Small Business Enterprise
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(ii)
Teaching methods: (i) Guided discovery; (ii) Demonstrations; and (iii) Question and
Answer
Teaching Aids/Materials: Chalkboard; Flip Chart; Markers
References:
Abiraj, B.M.C. 1998. Higher Level Business and Economics for Caribbean Students.
Hodder Headline Group. Pp.250-251.
Chandan, J.S. 2005. Management Theory and Practice. Vikas Publishing House PVT
Ltd. pp3-23.
Kabatire, S. and Mutyaba, S.V. 2007. Entrepreneurship Skills. Netsoft Publishers.
Kampala, Uganda. P.120-122.
National Curriculum Development Centre (NCDC). 2002. Entrepreneurship for
Secondary Schools. Book 3. National Curriculum Development Centre, Kampala,
Uganda. P.4-6.
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Step Time
1
10 mins
Content
Review
Teachers activity
Students activity
the Reviews
previous Students respond
of
importance
management
II
III
10 mins
40 mins
Introduction
of management
to
on
importance
to
the
of
management
the Introduces and writes Students listen and write
functions
of topic
on
management
Functions
blackboard
of Asks students to form Students
form
into
of of management
management
Displays
students
management
to Students
identify
the
23
performing
IV
10 mins
functions
Exercise
their functions
functions
Gives exercise and Students
moves around
10 mins
to
Conclusion
and Summarises
summary
face
their
copy
of what to be covered
in the next lesson
Self Evaluation
..........................................................................................................................................
..
Evaluation Exercise
1. (a) Describe any two functions of management that help managers to perform their
duties.
(b) Explain two problems managers might have in performing any one function
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and
while
SCHEME OF WORK
Subject: Entrepreneurship Education
Year:..
No of students ..
Topic:
No of periods.
Class:
S.3
Sub-Topic
periods
4
Managing in a Meaning
Aims/objectives
Teaching
methods
of By the end of the lesson, Guided
Enterprise
to:
Skills
of
manager
a -Define
N.C.D.C. 2002.
Textbooks
Entrepreneurship
the
Questions and
for
answers
Schools. Book 3.
term Discussion
Secondary
Kabatire, S. and
Mutyaba,
Chalkboard
Education Skills
management
Characteristics of -Identify
Comments
exercises
the
test
S.V.
2007.
Entrepreneurship
Skills.
characteristics of a good
manager
25
Managing in a Roles
of
Chalkboard
NCDC.
Textbooks
Entrepreneurship
management of a to:
small
Education Skills
business
enterprise
2002.
Questions and
for
in
Secondary
School. Book 3.
the Discussions
management of a small
business enterprise
Self
test
exercises
3
Managing in a Importance
Enterprise
to:
NCDC.
Chalkboard
Question
and
management
Entrepreneurship
Education Skills
Textbooks
to
2002.
for
Secondary
Schools. Book 3.
Guided
Self
test
26
exercises
4
NCDC.
Entrepreneurship
Enterprise
to:
Education Skills
Examine
responsibilities
the
of
for
2002.
Secondary
Schools. Book 3.
management in a small
Management tasks
business enterprise
- Outline the tasks of
management in a small
business enterprise
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