SUMMARY OF MANAGING BUSINESS ENTREPRISE

INTRODUCTION OF BUSINESS

LECTURER : Dr. RAHMI FAHMI, SE, MBA

BY : FARIZ AULIA MUBARAK

1711323007
 MANAGING BUSINESS ENTREPRISE
SETTING GOALS AND FORMULATING STRATEGY

Setting goals is the starting point of effective management. Every business needs goals, and
the program for guiding decisions to achieve those goals is called a strategy. Goals are
objectives that a business hopes and plans to achieve.

Types of Strategy

Corporate strategy
Strategy for determining the firms overall attitude toward growth and the way it will manage
its businesses or product lines.
 Business (or competitive) strategy
Strategy, at the business-unit or product-line level, focusing on a firms competitive position.

Functional strategy
Strategy by which managers in specific areas decide how best to achieve corporate goals
through productivity

Setting Business Goals

Goals are performance targetsthe means by which organizations and their managers measure
success or failure at every level.

Purposes of Goal Setting

1. to provide direction and guidance for managers at all levels

2. to help firms allocate resources
3. to help define corporate culture
4. to help managers assess performance

Kinds of Goals
Goals differ from company to company depending on the firms purpose and mission. A firms
basic mission is usually easy to identify. Businesses often have to rethink their missions as the
competitive environment changes.
Three kinds of goals for every firm are:

long-term goals - goals set for an extended time, typically 5 years or more into the future
intermediate goals - goals set for a period of 1 to 5 years into the future
short-term goals - goals set for the very near future, typically less than 1 year

Formulating Strategy

The creation of a broad program for defining and meeting an organizations goals
Setting Strategic Goals is long-term goals derived directly from a firms mission statement

SWOT Analysis is Identification and analysis of organizational strengths and weaknesses and
environmental opportunities and threats as part of strategy formulation Analyzing the Organization
and Its Environment.

Environmental analysis is process of scanning the business environment for threats and opportunities
(external factors).

Organizational analysis is process of analyzing a firms strengths and weaknesses (internal factors)

Matching the Organization and Its Environment is The heart of strategy formulation matches
environmental threats and opportunities against corporate strengths and weaknesses.
A Hierarchy of Plans. Strategic plans - plans reflecting decisions about resource allocations, company
priorities, and steps needed to meet strategic goals.

Tactical plans - generally short-range plans concerned with implementing specific aspects of a
companys strategic plans.

Operational plans - plans setting short-term targets for daily, weekly, or monthly performance.

Contingency Planning and Crisis Management

Even the best-laid plans can become impractical. Managers prepare for these situations with
contingency planning and crisis management.
Contingency Planning - recognizes the need to find solutions to specific aspects of a problem by
seeking to identify in advance important aspects of a business or its market that might change.
Crisis Management - describes an organizations methods for dealing with emergencies.

THE MANAGEMENT PROCESS

The process of planning, organizing, directing, and controlling an organizations resources to achieve
its goals. The four functions of management are not discrete. They overlap and influence one another.
To transform a vision into a successful business, managers must perform the functions of planning,
organizing, leading, and controlling.

Planning - management process of determining what an organization needs to do and how best to
get it done. Yahoos creation of partnership agreements with firms like Reuters, Standard & Poors,
and the Associated Press for the new coverage it provides it users represent a form of operational
planning.

Organizing - management process of determining how best to arrange an organizations resources

and activities into a coherent structure. Hewlett-Packards recent realignment into an integrated,
centralized firm, rather than a corporate confederation of individual businesses, has served its
comeback strategy well.

Directing - management process of guiding and motivating employees to meet an organizations

objectives. Gordon Bethune, CEO of Continental Airlines, has turned around morale and performance
through his leadership skill, listening to and rewarding employees to guide the company back on
track.

Controlling - management process of monitoring an organizations performance to ensure that it is

meeting its goals. Bethune of Continental instituted a variety of performance indicators including on-
time arrivals, baggage-handling errors, number of empty seats per plane, and surveys of customer
and employee satisfaction.

TYPES OF MANAGERS
Not all managers have the same degree of responsibility for planning, organizing, directing, and
controlling.

Levels of Management
Top Managers

managers responsible to the board of directors and stockholders for a firms overall performance and
effectiveness. They set strategic goals, make long-range plans, establish major policies, and
represent the company to the outside world.

Middle Managers

managers responsible for implementing the strategies, policies, and decisions made by top
managers. In more innovative management structures, they may function as team leaders, acting as
consultants who must understand every departments function and are granted more decision-making
authority, previously reserved for high-ranking executives.

First-line Managers

managers responsible for supervising the work of employees.

Areas of Management

Human Resources Managers - managers responsible for hiring and training employees, evaluating
performance, and determining compensation.
Operations Managers - managers responsible for the production system, inventory and inventory
control, and quality control.
Marketing Managers - managers responsible for the development, pricing, promotion, and distribution
of goods and services.
Information Managers - managers responsible for designing and implementing systems to gather,
organize, and distribute information.
Financial Managers - managers responsible for the firms accounting functions and financial
resources.
Other Managers - some firms also employ other specialized managers, such as public relations
managers, research & development managers, etc.

BASIC MANAGEMENT SKILLS

Whatever the type or size of the organization, managers employ basic kinds of skills. As they rise
through the hierarchy, they may need to strengthen one or more of these skills.
Technical Skills - skills needed to perform specialized tasks such as writing computer code, drawing
animated characters, or auditing a companys records.

Human Relations Skills - skills in understanding and getting along with people, such as
communicating and motivating.

Conceptual Skills - abilities to think in the abstract, diagnose and analyze different situations, and
see beyond the present situation to recognize future market opportunities and threats.

Decision-Making Skills - skills in defining problems and selecting the best course of action. Basic
steps in decision making:
 define the problem, gather facts, and identify alternative solutions
evaluate each alternative and select the best one
implement the chosen alternative, periodically following up and evaluating the effectiveness of
that choice

Time Management Skills - skills that involve the productive use managers make of their time. Time
wasters include paperwork, the telephone, meetings, and e-mail.

Management Skills for the Twenty-First Century

Global Management Skills - special tools, techniques, and skills necessary to compete in a global
environment. Managers need to understand foreign markets, cultural differences, and the motives and
practices of foreign rivals as well as understanding international operations. Management and
Technology Skills - abilities to process, organize, and interpret a plethora of data and information.
Information now flows to everyone in the organization simultaneously, decisions are made more
quickly, and more people are involved.

MANAGEMENT AND THE CORPORATE CULTURE

A strong corporate culture directs employees efforts and helps everyone work toward the same goals
and helps newcomers learn accepted behaviors. Culture either originates with the companys
founders (as at Walt Disney Co, Wal-Mart, and JC Penney) or is forged over a long period guided by
a constant, focused business strategy (as at PepsiCo). Some cultures are best described as
countercultures, such as Apples self-styled image as the alternative to staid competitors in the
computer industry.

Communicating the Culture and Managing Change

To use its culture to a firms advantage, managers must understand the culture and also transmit it to
others in the organization.
Communicating the Culture - A clear and meaningful statement of the organizations mission is a
valuable communication tool.
Managing Change. Organizations must sometimes change their cultures and also communicate the
nature of the change to both employees and customers. The process has three stages:

Analysis of the companys environment highlights 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.