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Meaning of Business Organization

A business organization is an individual or group of people that collaborate to achieve


certain commercial goals. Some business organizations are formed to earn income for
owners. Other business organizations, called nonprofits, are formed for public purposes.
These businesses often raise money and utilize other resources to provide or support
public programs.
Organization Meaning
The best way to derive the meaning of the term "business organization" is to focus on
each word separately. Organization is a broader term, as it includes businesses and other
groups of people not organized for commercial purposes. Clubs and sports teams are
examples of non-business organizations. Organizations have a specific structure and
hierarchy. People and systems create a culture within the organization and guide its
operation. Different organizations have different policies, work flows and objectives.
Business Meaning
All businesses have commercial objectives. For-profit businesses sell products or services
to generate revenue and earnings. Success depends on the ability to gain more in
revenue than is spent on fixed and variable expenses. Nonprofit businesses must bring in
enough revenue to pay employees and cover the costs to administer or support
programs. Any money they have left over after expenses is put back into the
organization.
System View
Definitions of organizations typically emphasize the systematic approach used to achieve
goals. Businesses typically begin with a hierarchy that establishes structure and order in
communication and workflow. Business leaders work to establish a business mission,
vision, values, objectives and strategies. These establish the direction for the
organizational system. People, processes and policies are used to fulfill the mission and
strategies. The effectiveness of a business organization often relates to the ability of
leaders to get all departments and employees to work together toward company
objectives.
Organizational Culture
An organizational culture reflects the shared values within the organization that impact
employee morale, communication and, ultimately, success. Companies use formal
processes and activities to influence culture, such as social activities to promote
teamwork. However, much of an organization's unique culture evolves through informal
channels. For example, a company's culture can be affected by the way employees
communicate during lunch, breaks and other informal encounters.

Business organization, an entity formed for the purpose of carrying on commercial


enterprise. Such an organization is predicated on systems of law governing contract and
exchange, property rights, and incorporation.
Business enterprises customarily take one of three forms: individual proprietorships,
partnerships, or limited-liability companies (or corporations). In the first form, a single
person holds the entire operation as his personal property, usually managing it on a day-
to-day basis. Most businesses are of this type. The second form, the partnership, may
have from 2 to 50 or more members, as in the case of large law and accounting firms,
brokerage houses, and advertising agencies. This form of business is owned by the
partners themselves; they may receive varying shares of the profits depending on
their investment or contribution. Whenever a member leaves or a new member is
added, the firm must be reconstituted as a new partnership. The third form, the limited-
liability company, or corporation, denotes incorporated groups of personsthat is, a
number of persons considered as a legal entity (or fictive person) with property,
powers, and liabilities separate from those of its members. This type of company is also
legally separate from the individuals who work for it, whether they be shareholders or
employees or both; it can enter into legal relations with them, make contracts with
them, and sue and be sued by them. Most large industrial and commercial organizations
are limited-liability companies.

Business entities are not the same. Some provide owners a lot of flexibility in
management and control and some do not. Some provide owners a significant degree of
protection from liability and some do not. Some are heavily regulated, and some are
not. On top of these differences is the fact that our friendly tax code provides different
tax treatments for different business entities. All of these factors should be considered
when an entrepreneur is selecting the type of business entity she wishes to use for her
business.
BUSINESS FUNCTIONS CHART

Good companies meet demands, great companies create demands.

The following diagram gives most of the main functions to start a business.

Internal functions are those which are part of the company.

External functions are those which are supplied by an outside agency.


This chart is a simplification. Not all companies can be easily categorised, and
some will have specialist functions which are not included here, but is
nevertheless provides a useful starting point for graduates considering a career in
business.

Specialised businesses will have functions not mentioned here, for


example retailers will have staff working as merchandisers.

Some companies will not have all the functions listed, for example service
and finance companies will not normally have research and production
departments.

Some functions such as Market Research and PR may be internal, external or


both. A small company will probably hire an external agency when it needs these
functions. A large company may well have in-house market research and
corporate PR staff, but will still outsource much of the work that is of a specialist
nature.

PRODUCING

Production is the creation of goods and services with the help of certain processes. The
production of goods depends essentially on the organisation of men, money, materials,
and facilities into a smoothly operating business. In modern organisations, production is
highly organised, mechanized, and specialised mass production, and, therefore, its
overall charge is entrusted to the Production Manager.

A production manager has four basic responsibilities in this regard : (i) to ensure the
production of goods and services in specified quantities, (ii) to meet the specified time
schedule or delivery dates, (iii) to fulfill the quantity requirements, and (iv) to perform all
production operations at the minimum cost.

In order to fulfill these responsibilities, the production manager has to perform a


number of functions, such as production planning, production engineering (concerned
with design of tools, jigs, and installation or equipment), plant layout, plant building,
materials handling, purchasing, inventory management, work improvement and work
measurement, production control, and the maintenance of physical environment of
production.
Research & Development
Develops products. Designs & conducting experiments & tests. Interprets data.
Manages projects. Writes reports. Keeps up to date with new developments.

Production & Quality


Manages the production process. Plans production schedules. Ensures that
machinery, staff & materials are efficiently utilised. Monitors health & safety &
environmental issues. Liaises with marketing, research & finance.

Distribution/Logistics
Manages all the supply chain processes from raw materials to where the end
product is used. Coordinates supply, distribution & storage of goods. Manages
transport & distribution centres including drivers & warehouse staff.

Marketing

Marketing is the process of getting goods and services into the hands of the
consumer with a view to satisfying the needs and desires of consumers and
producers. In other words, the marketing function creates a process through
which producers and consumers are brought together in an exchange relationship
and transfer of ownership takes place.

For this, the marketing manager must make judicious decisions regarding 4 Ps: (i)
product (decisions about new product development, packaging, branding, etc.);
(ii) physical distribution (decisions about marketing channels, and policies and
procedures relating to warehousing, transportation, etc.); (iii) promotion
(involving advertising, salesmanship, sales promotion, and publicity); and (iv)
pricing (policies and procedures relating to the setting up of profitable prices).

Coordinates all the elements involved in successfully promoting & selling a


product: market research, pricing, packaging, advertising, sales, distribution.
Involves forecasting, budgeting & planning, implementation of plans.

Sales
Demonstrates & presents products to customers. Manages budgets. Learns about
new products. Makes sure that the product meets the customers requirements.
Writes tenders & proposals.
Finance function:

Finance function of business is basically responsible for three decisions and their
proper implementation, viz., (i) investment decisions (financial planning, capital
budgeting, etc.) (ii) Financial decisions (capital structurefixed and working;
short and long-term and (iii) dividend decisions.

Business maintains relationship with financial markets including institutions and


major shareholders and also takes care of other concerns such as share buybacks,
capital raising sources of borrowings and risk management.

Provides the information required for the financial protection & planning of
companies. Prepares accounting records & management information.

Computing
Designs, implements & maintains computer systems to meet requirements of
users. Provides computing support for staff. Maintains databases & networks.

Human Resource (HR) function:

The HR function deals with the human side of business. It is concerned with
increasing the effectiveness of human performance in any organisation.
Specifically stated, the HR function aims at obtaining arid maintaining a capable
and effective workforce, motivating the employees individually and in groups to
contribute their maximum to the fulfilment of organisational goals.

In order to accomplish the goals of dynamic HR management, the HR manager


has to undertake the following functions : (i) selectiondetermination of
manpower requirements, job analysis, nature and sources of recruitment,
employee selection, and induction and follow-up; (ii) traininghuman resource
development; (iii) promotions and transfers, (iv) employee compensationwage
and salary administration; (v) employee involvement and welfare activities; and
(vi) industrial relationsindustrial discipline, industrial unrest, trade unionism,
and workers' participation in management. For the accomplishment of these
functions, the personnel department renders specialised services.

Recruits & selects new staff. Involved with contracts of employment, job
descriptions, training, management development, industrial relations &
disciplinary matters.
Information function:

Like production, marketing, finance, and human resource, the information


function is equally important in a modern business. It is being increasingly
recognised that the modern business cannot be managed without the assistance
of efficient information function. The information function is basically concerned
with records.

The net result of the preparation of records is the generation of a mass of


"information", and therefore, the purpose of information function is to collect,
generate, and communicate, in clearly and easily intelligible form the information
to all those who need it, especially to executives for purposes of decision making
and policy formulation.

Thus, information cell acts as a storehouse of valuable information and real brain
behind every activity of a business concern. The responsibility of performing this
function should be entrusted to the information manager in the organisation
because information function is a specialist function requiring an expert
knowledge and technical skill in this area of the operation. The scope of
information function in a modern business is very wide.

The information manager is generally burdened with the following three broad
functions: (i) information function (receiving and collecting, recording and
preserving, arranging and analysing, and providing information); (ii) operational
function (such as systems and procedures, records management, etc.); and (iii)
public relations function.

6. Innovation:

"An innovation is the implementation of a new or significantly improved product


(good or service), or process, a new marketing method, or a new organisation
method in business practice, workplace organisation or external relations." Thus,
innovation, which means creativity as well, is more of a philosophy and the entire
business function needs to adopt it.

Here in terms of new product development we are talking about Research and
Development. In this age of increasing rivalry among competing firms, the
importance of innovation is hardly exaggerating. Normally businesses innovate
through product or process.
Innovation often is stimulated by creative thinking on the part of people who are
willing to think 'outside the box'.

Buying/Purchasing
Locates & maintains relationships with suppliers, of products. Negotiates prices,
delivery dates & product specifications. Works with managers to anticipate future
demands.

EXTERNAL SERVICES

Chartered Accountants
Visits clients as part of an audit team; reviews their business operations &
financial records to establish the validity of the company's accounts. Advises on
tax liability & other matters.

Management Consultants
Identifies & investigates, problems concerned with policy, organisation,
procedures & methods of organisations. Recommends appropriate action & helps
to implement this.

Recruitment Agency
Matches job-seekers with employers' vacancies. Assesses candidates' skills &
employers' requirements.

Advertising
Liaises with & advises clients on all aspects of marketing communications;
presents proposals to clients; manages advertising spend budget; keeps clients
up-to-date on their own & competitors activities.

Market Research
This can be done by the marketing department inside a company, or by an
external market research agency. Plans market research projects on behalf of the
client. Analyses the problem. Drafts proposals. Prepares questionnaires & survey
methods. Briefs interviewers. Analyses data & presents it to client. Prepares
reports.

Public Relations
All aspects of media & public relations for clients: e.g. corporate brochures &
exhibition stands. Answers enquiries. Prepares press releases, organises press
briefings, conferences & PR campanies.

A business decision is a coherent collection of business rules and/or analytics which


expresses (and helps to automate) an operational choice of importance to your business.
The following are the main types of decisions every organization need to take:

Programmed and non-programmed decisions: ...


Routine and strategic decisions: ...
Tactical (Policy) and operational decisions: ...
Organisational and personal decisions: ...
Major and minor decisions: ...
Individual and group decisions:
The following are the main types of decisions every organization need to take:
1. Programmed and non-programmed decisions:
Programmed decisions are concerned with the problems of repetitive nature or routine
type matters.

A standard procedure is followed for tackling such problems. These decisions are taken
generally by lower level managers. Decisions of this type may pertain to e.g. purchase of
raw material, granting leave to an employee and supply of goods and implements to the
employees, etc. Non-programmed decisions relate to difficult situations for which there
is no easy solution.

2. Routine and strategic decisions:


Routine decisions are related to the general functioning of the organisation. They do not
require much evaluation and analysis and can be taken quickly. Ample powers are
delegated to lower ranks to take these decisions within the broad policy structure of the
organisation.
Strategic decisions are important which affect objectives, organisational goals and other
important policy matters. These decisions usually involve huge investments or funds.
These are non-repetitive in nature and are taken after careful analysis and evaluation of
many alternatives. These decisions are taken at the higher level of management.

3. Tactical (Policy) and operational decisions:


Decisions pertaining to various policy matters of the organisation are policy decisions.
These are taken by the top management and have long term impact on the functioning
of the concern. For example, decisions regarding location of plant, volume of production
and channels of distribution (Tactical) policies, etc. are policy decisions. Operating
decisions relate to day-to-day functioning or operations of business. Middle and lower
level managers take these decisions.

An example may be taken to distinguish these decisions. Decisions concerning payment


of bonus to employees are a policy decision. On the other hand if bonus is to be given to
the employees, calculation of bonus in respect of each employee is an operating
decision.

4. Organisational and personal decisions:


When an individual takes decision as an executive in the official capacity, it is known as
organisational decision. If decision is taken by the executive in the personal capacity
(thereby affecting his personal life), it is known as personal decision.

Sometimes these decisions may affect functioning of the organisation also. For example,
if an executive leaves the organisation, it may affect the organisation. The authority of
taking organizational decisions may be delegated, whereas personal decisions cannot be
delegated.

5. Major and minor decisions:


Another classification of decisions is major and minor. Decision pertaining to purchase of
new factory premises is a major decision. Major decisions are taken by top
management. Purchase of office stationery is a minor decision which can be taken by
office superintendent.

6. Individual and group decisions:


When the decision is taken by a single individual, it is known as individual decision.
Usually routine type decisions are taken by individuals within the broad policy
framework of the organisation.
Group decisions are taken by group of individuals constituted in the form of a standing
committee. Generally very important and pertinent matters for the organisation are
referred to this committee. The main aim in taking group decisions is the involvement of
maximum number of individuals in the process of decision- making.

Business leaders make thousands of decisions each


year, and sometimes, a single decision can have a powerful far reaching impact. In the
book, The Greatest Business Decisions of All Time, Verne Harnish explores those black
swan decisions that brought great success at companies like Zappos, Intel, Tata, Toyota
and many others. Below is Harnishs personal list of the greatest business decisions of all
time.
#5 Greatest DecisionGeneral Electric. Jack Welchs decision to fully fund a first-in-class
training center at Crotonville, led to the development of hundreds of great leaders who
practiced the GE Way.
#4 Greatest DecisionSamsung. Their decision to launch a sabbatical program that
sends top talent all around the world continues to be the secret behind Samsungs
success as a global brand.
#3 Greatest DecisionWal-Mart. Sam Waltons decision to hold Saturday morning, all-
employee meetings led to a culture of rapid information and decision making, which in
turn created one of the biggest companies in the world.
#2 Greatest DecisionApple. The boards decision to bring back Steve Jobs, after firing
him a decade earlier, led to amazing product innovation and to the creation of one of
the most valuable companies in the world.
#1 Greatest DecisionFord. Henry Fords decision to double the wages of his workers
enabled him to attract the talent he needed, and helped insure a class of worker who
could afford the very products they were building.
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Shares
Here are six suggestions on how to make the right business decisions.

1. Know all the facts regarding your company. Gather all of the facts and necessary
information that impacts your business. This is important, because you do not want to
miss critical information that could make a difference in how you run your business.
Also, by being part of the information-gathering process, you can eliminate biases or
opinions others may have.

For example, understanding how your competition is doing business is very important.
Finding ways to improve customer satisfaction is another example of knowing the facts
of your company. A business owner can talk to their employees and customers to get
the necessary information regarding certain business operations. It is also important to
read all of your important business reports and keep abreast on the media coverage of
your business. These are just a few of things a business owner should know about his or
her company.

2. Focus on the results. Think about what you want and consider the possible outcomes
of your decision. A person needs to focus on the short-term and long-terms goals
regarding every aspect of their company. For example, keeping up to date on the
companys financial statements is very important. Keeping abreast on your employees
morale is another example on determining the direction of your company. Looking for
ways on improving how your company does business will go a long way in accomplishing
your business goals and mission statements.

3. Ask around. It is important to consider other viewpoints other than your own, so get
advice from your friends and business peers.

For example, a good technique is to talk to your important business colleagues and
managers to get their opinion on how to manage your business. For instance, you have
to make a decision on which client should manage your marketing campaign. Ask your
business advisors and other managers on what they think who would be the best fit in
managing your campaign.

In addition, a business person can join a local business support group to network with
other professionals in the field. This is a great way to get valuable information regarding
your industry.

4. Relax. Do not try to do everything all at once and when things get hectic stop what
you're doing and take a 10 minute break. Take a few deep breaths and try to do
something that will make you feel more relaxed such as taking a 10-minute walk,
listening to the radio or doing some stretching exercises to help de-stress. You will feel
better and gain a fresh perspective on your current situation, whether it is dealing with
your employees, giving a presentation or improving your companys marketing plan.

5. Stay the course. Managing your own business involves a series of ongoing business
decisions. Dont put off important decisions, and dont worry about your past mistakes --
just keep focusing on what is best for your company. To determine the best outcome for
your business, always listen to your customer needs and have your finances and
expenses organized. Customer satisfaction and making sure your company doesnt run
out of money are some of the important priorities of any business. If your business is
going in the wrong direction then you need to re-evaluate how you run your business.

6. Learn from your mistakes and re-evaluate. If you make an incorrect business then the
next step is to learn from your mistakes and go from there. Learn what you did right and
learn what you did wrong.

For example, your company decides on a marketing plan for a certain product, however
you dont get the expected results in terms of sales and customer satisfaction. When
this happens, learn what went wrong and use this knowledge the next time you market
your other products.

Business idea generation and opportunity analysis are the foundation building block for
launching a new business or venture. The origin of a business idea and the analysis of
the opportunity needed to build and grow such idea into a business structure is one
necessary marriage in entrepreneurship.

The process of generating business idea could be learn and developed. This is a unique
quality that an entrepreneur need to develop if he wants to generate business ideas that
would later become a business structure.

Idea generation (ideation) is an emerging buzzword representing the creative process of


generating, developing, and communicating new ideas, while an idea is understood as a
basic element of thought that can be visual, concrete, or abstract. Ideation can be
contrasted with brainstorming in that brainstorming is a specific instance of ideation.
Brainstorming employs specific rules (such as disallowing any contributor to negate any
idea offered during a brainstorming session), while ideation encompasses all techniques
that can be used to generate ideas.

Ideation is also critical to the design and marketing of new products, marketing strategy,
and to the creation of effective advertising copy. In new product development, for
example, idea generation is a key component of the front end of the process, often
called the fuzzy front end and recognized as one of the highest leverage points for a
company.

Clear-cut plan for growth. The following seven steps

A road map that can infuse new energy, enthusiasm and vision into your company's
growth plans.

Step 1: Focus on your core product. A very successful e-newsletter entrepreneur has
built his business around this mantra: "Prospects buy when they trust your value is
applicable to them and believe your company is stable."

Step 2: Keep your pitch simple. The last time you asked someone at a party what their
company does, did you get a clear, concise response?

What every company needs is a simple "elevator pitch." That's a short, concise message
that can communicate your message to a prospect in 30 seconds or less. It explains the
value your product or service provides so the prospect understands why it's applicable
to them.

Step 3: Stay true to who you are. Knowing who you are and what gets you excited (and
bores you to tears) will help you reach your goals.

Step 4: Map it. Mapping your capabilities with your target clients' needs is an excellent
way for you to determine your service strategy.

Step 5: Utilize marketing tools that work best for you. When deciding on a marketing
strategy, implement one that fits your personality and the customers you serve.

Step 6: Implement a plan of action.

Establish goals that can be reviewed at three and six months. At incremental points
within each three-month period, keep checking your plan to see if you're meeting your
goals.
Step 7: Exercise the plan. This final step is really straightforward: Just do it: Complete the
daily actions, and then do something extra to accelerate your success plan.

The Key Components of an Effective Business

Every business is unique, whether it serves a specific niche market, employs an


alternative organizational structure or relies on an owner's passions and special skills.
But on another level, all businesses have some of the same basic needs and limitations.
Certain key components are present in effective businesses of all sizes and types.
Profitability
One of the most essential and common traits among effective businesses is the ability to
make a profit in the face of competition. Profitability allows businesses not only to
expand and grow, but to remain fiscally stable and earn money for their owners. To
profit, a business must take in more money than it pays out. Controlling costs and
marketing desirable products or services are important elements in turning a profit.
Human Resources
Effective businesses manage their human resources efficiently. This includes hiring the
right workers, expanding the workforce as needed and providing pay and benefits that
find a balance between adequate compensation and reasonable cost to the business.
Making the most of human resources extends to management techniques, such as
motivating employees with recognition and incentives. Retaining highly-skilled workers is
also important.
Customer Relations
Customer relations refer to the interactions between a company's representatives and
its customers, as well as the views customers hold toward the business. An effective
business must devote resources to customer relations and develop a policy for handling
complaints, soliciting customer feedback and addressing public-relations issues. Larger
businesses use customer-service departments to process merchandise returns, log
complaints and administer surveys. Whatever the scale, customer service can help a
business gain new customers through a positive reputation and keep existing customers,
making it easier to generate profits.
Effective Marketing
Businesses of all sizes employ marketing techniques to make customers aware of their
goods and services. Marketing plays a role in customer relations, since it is one way in
which businesses interact with their customers. But marketing also involves the power
of persuasion and, in some cases, an informative aspect that seeks to reach customers
about a particular product or promotion. Marketing campaigns position businesses and
attract customers and profits.

10 Essential Business Plan Components

Business plans are critical to the success of any new venture. I believe that
entrepreneurs should dedicate time to create them, regardless if youre searching for
investors. Business plans serve as the framework for your company and provide
benchmarks to see if youre reaching your goals. In my experience, they are key to
helping you think through your business and keep you on track.

Mission statement and/or vision statement so to articulate what youre trying to


create;

Description of the company and product or service;

Description of how the product or service is different;

Market analysis that discusses the market to enter, competitors, where you fit,
and what type of market share you believe you can secure;

Description of the management team, including the experience of key team


members and previous successes;

How to plan market the product or service;

Analysis of companys strengths, weaknesses, opportunities, and threat, to show


realistic and considered opportunities and challenges;
Develop a cash flow statement to understand what the needs are now and will be
in the future (a cash flow statement also can help to consider how cash flow could
impact growth);

Revenue projections; and

Summary/conclusion that wraps everything together (this also could be an


executive summary at the beginning of the plan).

An organization can have many different managers, across many different titles,
authority levels, and levels of the management hierarchy.
Hierarchy
Any group of objects ranked so that every one but the topmost is subordinate to a
specified one above it.

The three levels of management typically found in an organization are low-level


management, middle-level management, and top-level management.

manager
A person whose job is to manage something, such as a business, a restaurant, or a
sports team.
Top-level managers are responsible for controlling and overseeing the entire
organization.

o Examples of top-level managers include a company's board of directors,


president, vice-president and CEO;
board of directors
A group of people, elected by stockholders, to establish corporate policies, and make
management decisions.
These managers are classified in a hierarchy of authority, and perform different
tasks. In many organizations, the number of managers in every level resembles a
pyramid.
In addition, top-level managers play a significant role in the mobilization of
outside resources.
Top-level managers are accountable to the shareholders and general public.
Middle-level managers

Middle-level managers are responsible for executing organizational plans which comply
with the company's policies. These managers act at an intermediary between top-level
management and low-level management.
General managers, branch managers, and department managers are all examples of
middle-level managers. They are accountable to the top management for their
department's function.

Middle-level managers devote more time to organizational and directional functions


than top-level managers. Their roles can be emphasized as:

Executing organizational plans in conformance with the company's policies and


the objectives of the top management;
Defining and discussing information and policies from top management to lower
management; and most importantly
Inspiring and providing guidance to low-level managers towards
better performance.

Some of their functions are as follows:

Designing and implementing effective group and intergroup work and


information systems;
Defining and monitoring group-level performance indicators;
Diagnosing and resolving problems within and among work groups;
Designing and implementing reward systems supporting cooperative behavior.
Low-level managers focus on controlling and directing. They serve as role models for the
employees they supervise.
Examples of middle-level managers include general managers, branch managers, and
department managers.

Low-level managers

Supervisors, section leads, and foremen are examples of low-level management titles.
Also referred to as first-level managers, low-level managers are role models for
employees.
Low-level managers usually have the responsibility of:

Assigning employees tasks;


Guiding and supervising employees on day-to-day activities;
Ensuring the quality and quantity of production;
Making recommendations and suggestions; and
Up channeling employee problems.
Basic supervision;
Motivation;
Career planning;
Performance feedback;
Staff supervision.
Good managers discover how to master five basic functions: planning, organizing,
staffing, leading, and controlling.
Planning: This step involves mapping out exactly how to achieve a particular goal. Say,
for example, that the organization's goal is to improve company sales.

What is the function of planning?


Planning is also a management process, concerned with defining goals for a company's
future direction and determining the missions and resources to achieve those targets. To
meet objectives, managers may develop plans, such as a business plan or a
marketing plan.

How Does Planning Relate to Other Management Functions?


The conventional view of a manager is someone who controls and directs his employees.
Some companies give managers titles such as "coach," "team leader" or "coordinator."
These titles help reflect the sentiment that management should encourage and inspire,
rather than berate and belittle. The management process holds leaders accountable for
the "big picture."

Planning
Managers plan by deciding what to accomplish. During the planning process,
management lays out what goals to achieve. Besides deciding what to strive for, leaders
decide how to accomplish goals. Planning is the first step in the management process.
Goals can be for a department, a division, the entire company or for an individual
product. For example, it may be the goal of a retail store manager to increase customer
loyalty by 15 percent in one year's time. In some cases, managers may decide on goals
for their employees' development.
During planning, managers decide how to fit all the pieces of that "big picture" together.

Organizing
Organizing is the management function that entails gathering resources. Once a plan is
in place, managers need to structure a way to accomplish their goals. Leaders arrange
human and material resources according to how they plan to achieve their objectives. If
the objectives are to increase employee job satisfaction and decrease turnover,
managers might hire outside help from consultants. They could also schedule more
training sessions on job tasks, responsibilities and technical knowledge. This could mean
leaders will have to reach out to the company's trainers, mentors and specialists
Leading
Leading is about communicating the plan to employees and advising them along the
way. Managers try to motivate those who perform the tasks that are necessary to
achieve their goals. The leading function isn't so much about telling employees what to
do but why it needs done. When they lead, managers build relationships by answering
questions, addressing concerns and showing positive enthusiasm. Leaders often can't
carry out their planned objectives alone and need to instill a sense of teamwork and
harmony.
Controlling
Controlling is about measuring performance results against planned objectives. In other
words, did the employees and the company accomplish what they wanted to? If actual
performance fell short of management's goals, what can be done to correct it?
Controlling isn't always a reactive function, as managers may intervene while employees
are carrying out the plan. Intervention may be necessary if actual performance is too far
off track. Managers may revise or tweak goals and objectives. They may also use
performance results to plan future goals.