Understanding

1. Understanding the Management Process

2. From Chapter 7 Business Ownership • Corporation • A business that exists separately from its owners and is permitted to sell stocks • An artificial being, (a legal person), invisible, intangible, and existing only in contemplation of the law. • An artificial person created by law with most of the legal rights of a real person, including the rights to start and operate a business, to buy or sell property, to borrow money, to sue or be sued, and to enter into binding contracts

3. Corporation

4. Corporate Governance Structure • Shareholders: owners • Preferred stocks: first to be paid; not voting right • Common stocks: last to be paid; with voting right • Board of Directors: • Elected by shareholders • Oversees corporate management: policies • Corporate Officers: CEO, President, VPs, (directors) • Hired by the board • Day-to-day operations

5. Corporate Governance Structure • Shareholders: • Electing directors • Voting on critical issues • Delegating votes: • Proxy: temporarily transfer voting rights to others • Pooling agreements: a contract to vote for the same thing • Voting trust: turn shares to a trustee, with a certificate, the trustee votes according to agreements

6. Corporate Governance Structure • Board of directors: strategic planning and policy making • The top governing body of a corporation, the members of which are elected by the stockholders • Responsible for setting corporate goals, developing strategic plans to meet those goals, and the firm’s overall operation • Outside directors: experienced managers or entrepreneurs from outside the corporation who have specific talents • Inside directors: top managers from within the corporation • Executive Committee: management (3 board members) • Audit Committee: watch dog (independent outside directors)

7. Corporate Governance Structure • Corporate Officers chairman of the board president；executive vice presidents corporate secretary, treasurer, other top executives • Implement the chosen strategy and direct the work of the corporation, periodically reporting results to the board and stockholders

8. Pay Difference Source: 2007 Trends in CEO Pay, http://www.aflcio.org/corporatewatch/paywatch/pay/index.cfm, accessed 2/8/09.

9. What is Management? • The process of coordinating people and other resources to achieve the goals of an organization • Human resources • The people who staff the organization and use the other resources to achieve the goals of the organization • Financial resources • The funds the organization uses to meet its obligations to investors and creditors • Material resources • The tangible physical resources an organization uses • Information resources • The information about internal and external business environmental conditions that the firm uses to its competitive advantage

10. the management process Basic Management Functions

11. Planning • Establishing organizational goals and deciding how to accomplish them • Organizational goal:Mission • A statement of the basic purpose that makes an organization different from others • Strategic planning • The process of establishing an organization’s major goals and objectives and allocating the resources to achieve them

12. Establishing goals and objectives • Goal • An end result that the organization is expected to achieve over a one- to ten-year period • Objective • A specific statement detailing what the organization intends to accomplish over a shorter period of time • Proper goals are • Set at every level in the organization • Consistent (supportive) with each other • Optimized (balanced) to reduce conflicts between goals

13. Why do businesses set goals? • Set directions and guidance for managers • Allocate resources • Define corporate culture • Assess performance

14. Stated Goal: Mission Statement • Novartis: We want to discover, develop and successfully market innovative products to prevent and cure diseases, to ease suffering and to enhance the quality of life. We also want to provide a shareholder return that reflects outstanding performance and to adequately reward those who invest ideas and work in our company.

15. Stated Goal: Mission Statement • 立足浦东，为浦东开发开放服务，为上海建设成为国际经济、金融、贸易和航运中心培养合格人才 • “让人们更便捷地获取信息，找到所求” • 香港生物科技研究院 致力为本地开发生产科技产品之企业，提供下游产品研究开发支持服务及辅助设施，并提供主要之基础设施，促使香港特区生物科技工业之成功发展。

16. T3 Mission Statement • determine the mission statement for your company • 3-5 sentences • upload to moodle by 10/31/2010

17. Strategic Planning • objectives that a business hopes and plans to achieve • Performance targets used to measure success and failure Cost reduction, profitability, revenue growth, stock price, employee motivation, business expansion, ……

18. Formulate Strategy • Strategy: how to meet goals and how to respond to new challenges and needs • SWOT analysis • Internal: Strength and Weakness • External: Opportunity and Threat • Organization and environment match • Working Plans: strategic, tactical, operational (all levels of management)

19. Different types of plans An outline of the actions by which the organization intends to accomplish its goals and objectives • Strategic plan • An organization’s broadest plan, a guide for major policy setting and decision making • Tactical plan • A smaller-scale plan to implement a strategy • Operational plan • A plan to implement a tactical plan • Contingency plan • A plan of alternative courses of action if the organization’s other plans are disrupted or become ineffective

20. Different types of plans

21. Organizing The grouping of resources and activities to accomplish some end result in an efficient and effective manner • Defining the tasks and activities to be carried out by a number of people to achieve particular objectives • Deciding what is to be done and who is to do it • The allocation of responsibilities: tasks, resources, structures

22. Organizational Structure • Functional • Groups are established based on functions needed to be performed • Divisional • Divides into semi-autonomous groups which are similar to individual companies • Project Organization/ Matrix Organization • Specific function carried out by cross section

23. Basic Organizational Structure

24. Field Managers • Financial managers • Responsible for the organization’s financial resources • Operations managers • Manage the systems that convert resources into goods and services • Marketing managers • Responsible for facilitating the exchange of products between the organization and its customers or clients • Human resources managers • Manage the organization’s human resources programs • Administrative managers (general managers) • Not associated with any specific functional area; provide overall administrative guidance and leadership

25. Organizational Structure: • Vertical: • more levels, narrower span of control • Flat: • less levels, wider span of control

26. Leading and motivating • Leading • Influencing people to work toward a common goal • Motivating • Providing reasons for people to work in the best interests of the organization • Directing • The combined processes of leading and motivating

27. Controlling Evaluating and regulating ongoing activities to ensure that goals are achieved

28. Management: levels, skills, responsibilities Conceptual / human Board of directors / CEO / President / GM Goal Setting Strategy Formulation Functional / Divisional Managers Conceptual/ human / tech Implementation Tech / human Operational Operational

29. Management: levels, skills, responsibilities • Top management: • goal setting: vision, concept, abstract • Downward communication: human skills • Middle management: • strategy formulation: concept • Implementation: technical • Upward and downward communication: human skills • Operational (first line) management: • Operation: technical • Upward communication: human skills

30. To be an effective manager • Personal skills • Oral communication • Written communication • Computer skills • Critical thinking • Education and experience • A solid academic background • Practical work experience

31. Management Skills • Conceptual skills: • Ability to see beyond present (vision) • Ability to diagnose and analyze different situations (decision-making) • Ability to think in abstract terms (idea-forming) • Human relation skills (interpersonal skills): • Ability to understand and to get along well with others • The ability to deal effectively with other people • Communication skills • Technical skills: • Ability to perform specialized tasks

32. Top Management: • Position titles: • Presidents, Treasurer, CEO, CFO • Responsibilities: • guides and controls the overall fortunes of the organization • Policies, strategies, significant decision • Skills: • Conceptual skills (vision, decision, idea) • Human skills (downward communication; external)

33. Middle Management • Position titles: • Plant manager, operations manager, division manager • Responsibilities: • implements the strategy and major policies developed by top management • How to meet goals by Implementing strategies, policies, decisions • Skills: • Conceptual (implementation plan) • Technical (tasks, implementation) • Human (upward and downward communication)

34. First-Line Management • Position titles: • Supervisor, office manager, group leader • Responsibilities: • coordinates and supervises the activities of operating employees • Carry out tasks • Working with and supervising employees • Interacting with suppliers and other stakeholders • Skills: • Technical (task) • Human (upward and downward communication; external )

35. Decisional roles Involve various aspects of management decision making Entrepreneur, disturbance handler, resource allocator, negotiator Interpersonal roles The manager deals with people Figurehead, liaison, leader Informational roles A manager either gathers or provides information Monitor, disseminator, spokesperson Audit company cultures. Stay informed—informed people don’t fear change. Beware of “aspirational” accounting. (Enron) Empower your people—turn them loose. Prevent erosion of human assets. Be generous with what you know. Manager vs. Leader

36. Leadership • The ability to influence others • Formal leadership • Legitimate power of position as the basis for authority • Informal leadership • Not recognized formally by the organization authority, but have influences through other factors

37. Leadership Styles • Authoritarian • Holds all authority and responsibility, with communication usually moving from top to bottom • Laissez-faire • Gives authority to employees and allows subordinates to work as they choose with a minimum of interference; communication flows horizontally among group members • Democratic • Holds final responsibility but also delegates authority to others, who help determine work assignments; communication is active upward and downward

38. Effective leadership • Interaction among the employees • Characteristics of the work situation • The manager’s personality

39. YES Some employees need the close supervision that authoritarian leaders provide. When authoritarian leadership is used, communication moves from top (supervisor) to bottom (employees). An authoritarian leader assigns workers to specific tasks and expects precise results, so workers know exactly what is expected. NO Workers resent the close supervision that results from the authoritarian leadership style. The democratic and laissez-faire leadership styles allow workers to communicate with the supervisor and other members of their group. Authoritarian leaders stifle the workers’ creativity and their ability to solve problems. Should Managers Use the Authoritarian Leadership Style?

40. Decision Making The act of choosing one alternative from among a set of alternatives Major steps in the managerial decision-making process

41. Identifying the problem or opportunity • Problem • The discrepancy between an actual condition and a desired condition • Opportunity • A “positive” problem • Problem-solving impediments • Preconceptions about the problem • Focusing on unimportant matters while overlooking significant issues • Analyzing symptoms rather than causes • Failing to look ahead

42. Generating alternatives • Brainstorming • Encouraging participants to come up with new ideas • “Blast! then refine” • Reevaluating objectives, modifying them if necessary, and devising a new solution

43. Selecting an alternative • Satisficing • Choosing an alternative that is not the best possible solution, but one that adequately solves the problem

44. Implementing and evaluating the solution • Requires time, planning, preparation of personnel, and evaluation of the results • An effective decision removes the difference between the actual condition and the desired condition • If a problem still exists, managers may • Decide to give the chosen alternative more time • Adopt a different alternative • Start the process all over again