Managing For

Business Success
Exploring Business

Chapter 4
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 Chapter Objectives
Exploring Business

1. Identify functions of management

2. Understand how a company develops
and implements strategic plan
3. Discuss options for organizing a
business
4. Explain how managers motivate
5. Describe how managers monitor
operations and assess performance
6. Discuss forms of business

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 Management
Exploring Business

“…the process of
planning, organizing,
directing, and controlling
resources to achieve
specific goals.”

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 Efficiency/Effectiveness
Exploring Business

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 Functions of Management
Exploring Business

Planning
Organizing
Directing
Controlling
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 Planning
Exploring Business

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 Planning
Exploring Business

“…managers set
goals and determine
the best way to
achieve them.”
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Exploring Business
Strategic Plan
“…establishing an overall
course of action.”
• Mission Statement
• Core Values/Beliefs
• SWOT
• Goals & Objectives
• Tactical/Operational Plans
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 Mission Statement
Exploring Business

“…the purpose of
your organization—
the reason for its
existence.”
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 Core Values
Exploring Business

“…fundamental beliefs about

what’s important and what
is and isn’t appropriate in
conducting company
activities.”
“…link…to performance evaluations
and compensation.”
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Exploring Business
SWOT Analysis
“…company’s fit with its environment.”

Strengths
Weaknesses
Opportunities
Threats
Examine internal and external forces
that affect the company.
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 Goals & Objectives
Exploring Business

Goals—major
accomplishments over
a long period of time
Objectives—short-term
performance targets that
direct efforts toward goal
Organization—
• Number of goals/objectives
• Change over time
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 Types Of Plans
Exploring Business

Strategic
 Long-term
 Overall course of action
 Established by upper-level managers
 Implemented by managers at all levels
Tactical
 Shorter term
 Specify activities and resources needed to
implement strategic plans
Operational
 Detailed action steps taken to implement tactical
plans

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 Contingency vs. Crisis
Exploring Business

o Contingency Planning—Identify
aspects most likely to be
adversely affected by
change, develop alternative
courses of action
o Crisis Planning—Create structure to
deal with emergencies

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 Organizing
Exploring Business

“…allocates resources
(people, equipment, and
money) to achieve a
company’s plans.”

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 Levels of Managers
Exploring Business

Top Managers—Responsible
for health &
performance
Middle Managers—
Oversee activities of
first-line managers
First-Line Managers—
Supervise & coordinate
employees
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 Organizing:
Levels of Management
Exploring Business

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 Organizational Structure
Exploring Business

“…arrangement of positions…
most appropriate for…
company at a specific point
in time.”

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Exploring Business
Structure Activities
Job Specialization—Dividing
tasks into jobs
 Identify activities needing to
be performed
 Break activities into tasks
Departmentalization—Grouping
jobs into units
 Functional
 Divisional
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Exploring Business
Product Division

Beverages. Knitwear &

Baked Packaged
Household Other
Goods Meats & Body-Care Clothing

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Exploring Business
Customer Division

Personal-Care Medical
Devices
& Prescription
&
Hygiene Drugs Diagnostic
Products Products
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Exploring Business
Process Division

Bowater
Thunder Bay

Tree Chemical
Finishing
Cutting Processing

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Exploring Business
Geographical Division
McDonald’s
Northeast
Southeast
Great Lakes
Midwest
West
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 Organization Chart
Exploring Business

“…a diagram
showing reporting
relationships.”

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 Notes-4-You
Exploring Business

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 Divisional
Organization Chart
Exploring Business

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 Divisional/Functional
Structure
Exploring Business

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 Lines Of Authority
Exploring Business

❚ Chain of Command—Who
reports to whom
❚ Unity of Command—
One boss
❚ Matrix Structure—Form
teams to combine skills
❚ Span of Control—Number of
people reporting to a manager
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 Delegating Authority
Exploring Business

Delegation—Process of
entrusting work to
subordinates
Responsibility &
Authority
Centralization &
Decentralization
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 Directing
Exploring Business

“…providing focus and

direction to others and
motivating them to
achieve organizational
goals.”

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 Leadership Styles
Exploring Business

“…way of interacting with and

influencing others.”

Autocratic
Democratic
Laissez-Faire
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 Recent
Leadership Style Views
Exploring Business

Transactional—Exercise
authority based
on rank
Transformational—
Mentor and develop
subordinates
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 Controlling
Exploring Business

“…comparing actual to
planned performance
and taking necessary
corrective action…”

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 Control Process
Exploring Business

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 Managerial Skills
Exploring Business

Technical Interpersonal

Decision
Making Conceptual

Time Mgmt.
Communication
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 Problem Solving
Exploring Business

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 Criteria For
Legal Forms of Business
Exploring Business

1) How much control?

2) Share profits?
3) Liability exposure?
4) Financing needs?
5) Business set-up and
reporting costs?
6) Business continuance?
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 Types Of Business
Exploring Business

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 Sole Proprietorship
Exploring Business

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Exploring Business
Partnership Agreement
Cash/Contribution of partners
Division of income/loss
Partner responsibilities
Conditions for sale
Conditions for dissolving
Conditions for settling disputes

“…liable…for actions of all of the

partners.”
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 Partnership
Exploring Business

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 Limited Partnership
Exploring Business

Limited Limited
Partner Partner

General
Partner
Limited Limited
Partner Partner

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Exploring Business
Corporation
Legal Entity
Owned by Shareholders—
Stock
Board of Directors—
Govern
 Oversees policies/decisions
 Sets goals
 Hires/evaluates CEO
 Declares dividends
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 Corporation
Exploring Business

Benefits Drawbacks
- Goals of
+ Limited Liability management &
+ Financial shareholders
differ
Resources
- Costly to set up
+ Continuity - Regulation &
Gov’t Oversight
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