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MANAGING THE BUSINESS ENTERPRISE. CHAPTER 5. D epartment of Business Administration Eastern Mediterranean University GaziMağusa, TRNC. This slide set is prepared for use with Ebert and Griffin, Business Essentials. Fifth Edition. Prentice Hall, New Jersey. 2005. TOPICS SUMMARY.

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Managing the business enterprise

MANAGING THE BUSINESS ENTERPRISE

CHAPTER 5

Department of Business AdministrationEastern Mediterranean UniversityGaziMağusa, TRNC

This slide set is prepared for use with Ebert and Griffin, Business Essentials. Fifth Edition. Prentice Hall, New Jersey. 2005.


Topics summary

TOPICS SUMMARY

  • Setting Goals and Formulating Strategy

  • The Management Process

  • Types of Managers

  • Basic Management Skills

  • Management and the Corporate Culture


Introduction

INTRODUCTION

Principles of management apply to all kinds of organizations -- private or public; profit or not-for-profit; service producing or goods producing.

Managers work in all kinds of organizations at all levels.

Regardless of the size or nature of an organization, managers are among its most important assets.

In this chapter, the management process is described and the skills that are required by managers are discussed.


Setting goals and formulating strategy

SETTING GOALS AND FORMULATING STRATEGY

  • Every business needs goals

  • Every manager has to start by setting goals.

    Goal : objective that a business hopes and plans to achieve in the future (hedef; amaç)

  • Managers must set goals and then carry out actions (eylemler) in order to achieve those goals


Strategy

STRATEGY

Strategy: The broad set of organizational plans for achieving organizational goals

Types of strategy:

  • Corporate Strategy

  • Business Strategy

  • Functional Strategy

  • let’s see each one..

Taken from publisher’s slide set for Ch.6 of textbook.


Strategy1

STRATEGY

Types of Strategy:

  • Corporate strategy - strategy for determining the firm’s overall attitude toward growth and the way it will manage its businesses or product lines. (şirket/kurum stratejisi)

  • Business (or competitive) strategy - strategy at the business-unit or product-line level, focusing on a firm’s competitive position (rekabet stratejisi)

  • Functional strategy - strategy by which managers in specific areas/departments decide how best to achieve corporate goals by being as productive (üretken) as possible (fonksiyonel strateji)


Setting goals and formulating strategy1

SETTING GOALS AND FORMULATING STRATEGY

  • A goal is an objective that a business hopes and plans to achieve.


Setting business goals

SETTING BUSINESS GOALS

  • Goals are also used as performance targets; they are used as a measure of organizational success or failure.

  • An organization commits its resources on all levels to achieve its goals.

    When you set personal goals (such as attending a university to get an education), don’t you commit your resources to achieve those goals?


Setting business goals1

SETTING BUSINESS GOALS

  • Purposes of Goal Setting in organizations:

    • Goal setting provides direction (yön) and guidance (yolgösterici) for managers at all levels.

    • Goal setting helps firms allocate resources.

    • Goal setting helps to define corporate culture (kurumsalkültür)

    • Goal setting helps managers assess (değerlendirme, ölçme) performance.


Setting business goals2

SETTING BUSINESS GOALS

  • Goals depend upon the company’s purpose or mission.

    • Mission: overall purpose of an organization (misyon; varoluşnedeni). The mission of an organization defines its reason for existence.

      It asks the question “Why are we in business?”


Setting business goals3

SETTING BUSINESS GOALS

The mission also includes

  • a definition of products and services the organization provides,

  • technologies used,

  • types of markets, important customer needs, and distinctive competencies - those characteristics or areas of expertise that sets the firm apart from others.

  • Mission Statement:organization’s statement of how it will achieve its purpose in the environment in which it conducts its business(Misyonun Yazılı Olarak Açıklanması)


  • Some examples of mission statements

    SOME EXAMPLES OF MISSION STATEMENTS

    • Eastern Mediterranean University, as an institution of higher learning, is dedicated to the dissemination (yayma) of knowledge through high-quality teaching; to promoting the discovery of knowledge through scholarly research; and to the application of knowledge for the good of humanity.

    CLICK THE IMAGE


    Setting business goals4

    SETTING BUSINESS GOALS

    • Top management prepares and circulates mission statements.

      • Consider the mission statements of two companies making the same product -- watches.

        • Timex -- sells low cost reliable watches in department stores

        • Rolex -- sells high quality, high priced watches at selected jewellery stores

        • As a result, these two companies have very different missions.


    Setting business goals5

    SETTING BUSINESS GOALS

    • Kinds of goals

      Regardless of a company’s purpose and mission, every firm has three kinds of goals:

      • Long-term goals (uzun vadeli amaçlar)

      • Intermediate goals (orta vadeli amaçlar)

      • Short term goals (kısa vadeli amaçlar)

        Let us discuss each one briefly....


    Setting business goals6

    SETTING BUSINESS GOALS

    1.Long-term goals

    • typically five years or more

    • changes from industry to industry

      in the computer industry “long term” might be 2 years; in the steel industry “long term” may mean 15 years

    • Examples:

      • increase market share from 20 % to 45 % in 6 years

      • become a world leader in communications technology in 10 years


    Setting business goals7

    SETTING BUSINESS GOALS

    2.Intermediate goals

    • usually are set for a period of onetofive years

    • companies set intermediate goals in several functional areas such as marketing, production, finance, human resources, and R & D (research and development)

    • Examples:

      • increase sales by 5 % in two years (marketing)

      • reduce production cost by 10 % in one year (production)

      • an increase in return-on-investment (yatırımgetirisi) of 5 % in 4 years (finance)


    Setting business goals8

    SETTING BUSINESS GOALS

    3.Short-term goals

    • these goals are set for lessthanone year

    • determined for several functional areas such as marketing, production, finance, human resources, and R & D (research and development)

    • same examples as in intermediate term but for a period of one year or less


    Formulating strategy

    FORMULATING STRATEGY

    • What is a strategy?

      It is a broad program that describes what the organization wants to do in order to achieve long term goals.

    • Strategy Formulation: Creation of a broad program for defining and meeting an organization’s goals.


    Formulating strategy1

    FORMULATING STRATEGY

    • Strategy formulation involves three basic steps:

      • Setting strategic goals

      • Analyzing the organization and its environment

      • Matching the organization and its environment

        NOTE: In the past, strategy formulation was done exclusively by top management; today lower level managers and employees also participate in this process


    Managing the business enterprise

    Match the Organization and its Environment

    Strategy Formulation

    Analyze the Organization

    Formulate Strategy

    Set Strategic Goals

    Analyze the Environment

    Figure taken from publisher’s slide set for Ch.6 of textbook.

    A Well-Formulated Strategy Is Vital to a Business’s Success


    Formulating strategy2

    FORMULATING STRATEGY

    Let us discuss each one briefly:

    1.Setting strategic goals:

    Strategic goals: long-term goals derived (obtained) from an organization’s mission statement. These are goals focusing on broad organizational issues and apply to the whole company; set by top management

    • areas ---› market standing, innovation, human resources, financial resources, physical resources, productivity, social responsibility, and profit


    Formulating strategy3

    FORMULATING STRATEGY

    2.Analyzing the organization and its environment (Environmental Analysis) (çevre analizi)

    Environmentalanalysis is the process of scanning (taramak) the business environment for threats (tehditler) and opportunities

    (fırsatlar)

    • Opportunities -- new markets, new technology, new inventions (such as the SONY transistor radio story), new more favorable government regulations, etc.

    • Threats -- new competitors (Napster vs. record companies), new and unfavorable government regulations, changing consumer tastes and preferences, and many more.


    Formulating strategy4

    FORMULATING STRATEGY

    Analyzing the Organization (also called Organizational Analysis)

    Managers must also examine internal (inside the organization) factors. This is the process of analyzing a company’s strengths and weaknesses (şirketin güçlü ve zayıf yönleri)

    Some examples of strengths:

    • strong financial position

    • a well-trained and dedicated workforce (iş gücü)

    • managerial talent (able managers) and technical expertise

    • little or no competition


    Formulating strategy5

    FORMULATING STRATEGY

    Some examples of weaknesses:

    • poor financial position

    • poor workforce

    • not enough managerial talent

    • lack of technical expertise

    • outdated technology (eskiteknoloji)

    • strong competitors

    • shrinking (decreasing) market share


    Formulating strategy6

    FORMULATING STRATEGY

    3.Matching the Organization and Its Environment

    This is the final step in strategy formulation. It is the heart of strategy formulation.

    Environmental

    Threats

    Organizational

    Strengths

    Environmental

    Opportunities

    Organizational

    Weaknesses


    A popular technique for strategy formulation

    A POPULAR TECHNIQUE FORSTRATEGY FORMULATION

    • SWOT ANALYSIS

      STRENGTHS

      WEAKNESSES

      OPPORTUNITIES

      THREATS

      NOT IN THE TEXTBOOK


    Formulating strategy7

    FORMULATING STRATEGY

    • Matching companies with their environments is necessary for successful strategy formulation and then planning and conducting the business.

    • Matching of company strengths and weaknesses with the opportunities and threats of the environment also determines whether the firm typically takes risks or behaves more conservatively.


    Formulating strategy8

    FORMULATING STRATEGY

    • A Hierarchy of Plans (Levels of Plans)

      • Actions are needed to achieve organizational goals. These actions must be planned in order to achieve goals. Each level of goals has a corresponding level of plans.

      • Plans can be viewed on three levels:

        • Strategic plans (uzun vadeli stratejik planlar)

        • Tactical plans (orta vadeli taktik planlar)

        • Operational plans (kısa vadeli işletme planları)

          Let us see what these plans are....


    Formulating strategy9

    FORMULATING STRATEGY

    • StrategicPlans -- plans that include decisions about resource allocations, company priorities, and steps needed to meet strategic goals. Determined by board of directors and top management.

    • TacticalPlans -- “shorter range” plans that are concerned with implementing the strategic plan in the intermediate term. Usually prepared by upper and middle management.

    • OperationalPlans -- plans which set short-term targets for daily, weekly, or monthly performance


    Formulating strategy10

    FORMULATING STRATEGY

    • Contingency Planning and Crisis Management

      • contingency plannig : identifying aspects of a business or its environment that might entail (require) changes in strategy

      • a protection against unexpected changes that might take place

      • it is planning for change


    Formulating strategy11

    FORMULATING STRATEGY

    • Crisis Management

      • organization’s methods for dealing with emergencies (kriz yönetimi)

        • “love-bug” computer virus

        • earthquakes (countries)

        • any unexpected event that might cause big problems if not dealt with effectively


    The management process

    THE MANAGEMENT PROCESS

    • What is management?

      It is the process of planning, organizing, directing, and controlling an organization’s

      • financial

      • physical

      • human

      • information

        resources in order to achieve its goals.


    The management process1

    THE MANAGEMENT PROCESS

    • Managers in all organizations perform the same set of functions:

      1. Planning

      2. Organizing

      3. Directing (now called Leading)

      4. Controlling

      Each one is discussed in the following

      slides...


    The management process2

    THE MANAGEMENT PROCESS

    • Planning is done in order to determine what an organization needs to do and how best to get it done (planlama)

      • establishing objectives and goals for the organization and determining the best ways for achieving them

      • all other functions depend on planning

    Goals

    Strategy

    Tactical &

    Oper. Plans


    The management process3

    THE MANAGEMENT PROCESS

    • Organizing is the process of determining how best to arrange an organization’s resources and activities into a coherent structure (örgütleme)

    • Directing is the process of guiding and motivating employees to meet the organization’s goals and objectives. Today the term “leading” (liderlik)

      is more common.


    The management process4

    THE MANAGEMENT PROCESS

    • Controlling is the process of monitoring (izlemek) an organization’s performance at all levels to ensure that it is meeting its goals and objectives. (denetleme)

      • costs

      • quality of product or service

      • productivity

      • market performance

      • cash position

        are just a few areas for control.


    The management process5

    THE MANAGEMENT PROCESS

    THE CONTROL PROCESS

    Establish

    Standards(goals)

    Measure

    Performance

    NO

    YES

    Performance

    =

    Standards?

    Continue

    Take Action


    Types of managers

    TYPES OF MANAGERS

    • All managers plan, organize, direct, and control.

    • But not all managers have the same degree of responsibility for these activities.

    • Thus we will classify managers according to levels and areas of responsibility.


    Types of managers1

    TYPES OF MANAGERS

    • Levels of Management

      • The three basic levels of management are top, middle, and first-line.

      • Top Managers -- those who are responsible to the board of directors and stockholders for a firm’s overall performance and effectiveness. (üstyönetim)

        • president, vice president, treasurer, chief executive officer (CEO), chief financial officer (CFO)


    Types of managers2

    TYPES OF MANAGERS

    • MiddleManagers -- managers responsible for implementing (uygulamak) the strategies, policies, and decisions made by top managers (orta düzey yönetim)

      • plant manager (fabrika müdürü), operations manager (işletme müdürü), division manager


    Types of managers3

    TYPES OF MANAGERS

    • First-Line Managers -- managers responsible for supervising the work of employees (alt düzey yönetim)

      • supervisor (şef), office manager, group leader, project manager (proje yöneticisi), site manager (şantiye müdürü veya şefi)


    Types of managers4

    TYPES OF MANAGERS

    • Areas of Management

      Top, middle, and first-line managers work in a variety of areas. These are the following:

      • Human Resource Managers (İnsan Kaynakları Yöneticileri)

        • recruit, hire and train employees; evaluate performance; determine compensation (ödeme)

        • One department or several departments may be present in companies


    Types of managers5

    TYPES OF MANAGERS

    • Operations Managers (Üretim veya İşletme Yöneticileri)

      Operations (işlemler; işletme) are systems by which a firm produces goods and services

      • production (üretim); inventory (stok); quality control (kalitekontrolu); transportation (ulaştırma)

      • vice-president for operations (top); plant managers (middle); production supervisors (first-line)


    Types of managers6

    TYPES OF MANAGERS

    • Marketing Managers (PazarlamaYöneticileri)

      Marketing is the development, pricing, promotion, and distribution of goods and services. Marketing managers are responsible for getting products from producers to consumers.

      • vice president for marketing (pazarlamadan sorumlu genel müdür yardımcısı); regional marketing managers (pazarlama bölge müdürü), district sales managers (semtsatış müdürü) in large cities


    Types of managers7

    TYPES OF MANAGERS

    • InformationManagers (Bilgi Sistemleri Yöneticileri)

      Information managers design, and implement systems to gather, organize, and distribute information. This is a new type of manager because of the huge increase in all kinds of information and the need for it to be managed effectively.

      • chief information officer (bilgisistemlerimüdürü)


    Types of managers8

    TYPES OF MANAGERS

    • FinancialManagers (FinansalYöneticiler)

      Financial managers are responsible for planning and supervising accounting functions and financial resources.

      • chief financial officer; vice president for finance; division controller; accounting supervisor

    • Other Managers

      • public relations managers; research & development managers; legal affairs managers; etc.


    Basic management skills

    BASIC MANAGEMENT SKILLS

    Managementskills (yönetsel beceriler)

    Irrespective of the type or size of the organization, managers employ (use) five basic kinds of skills:

    1. Technical skills

    2. Human relations skills

    3. Conceptual skills

    4. Decision-making skills

    5. Time-management skills


    Basic management skills1

    BASIC MANAGEMENT SKILLS

    • Technical Skills (teknikbeceriler)

      • Skills needed to perform specialized tasks; ability and knowledge to perform the mechanics of a particular job

        • operate a drill press (matkap); operate a commercial laundry machine; prepare a balance sheet; use Excel to prepare an income statement; use MINITAB to perform statistical analysis, fill out an order form correctly, etc.)

      • developed through education, training and experience

      • especially important for first-line supervisors


    Basic management skills2

    BASIC MANAGEMENT SKILLS

    • Human Relations Skills (İnsanilişkileribecerileri)

      • skills required to understand other people and to interact effectively (to get along) with them; get people to work effectively as a team. (to inspire trust in people and encourage them to try new things and to offer new ideas)

      • important at all levels of management; especially for middle managers, who must act as bridges between top managers, first-line managers and managers from other areas of the organization.


    Basic management skills3

    BASIC MANAGEMENT SKILLS

    • ConceptualSkills (kavramsalbeceriler)

      • abilities to think in the abstract (soyut), diagnose and analyze different situations, and see beyond the present situation; “ability to see the whole picture”

      • conceptual abilities help managers to recognize (see) new market opportunities and threats. They help them analyze the probable outcomes (olasısonuçlar) of their decisions

      • most important for top managers; least for first-line supervisors


    Basic management skills4

    BASIC MANAGEMENT SKILLS

    • Decision-Making Skills (karar verme becerileri)

      • skills in defining problems and selecting the best courses of action

      • what is decision-making?

        It is the process of identifying a decision situation, analyzing the problem, weighing the alternatives, arriving at a decision, taking action, and evaluating the results.


    Basic management skills5

    BASIC MANAGEMENT SKILLS

    THE DECISION MAKING PROCESS

    Define the Problem

    Gather Facts

    Develop Alternatives

    Implement the Chosen

    Alternative

    Follow Up and Evaluate

    the Chosen Alternative

    Evaluate Alternatives

    Select the Best

    Alternative


    Basic management skills6

    BASIC MANAGEMENT SKILLS

    • Time Management Skills (Zaman Kullanım Becerileri)

      Time management skills are those skills associated with the productive use of time.

      Time is a valuable resource; thus it should be used wisely.


    Basic management skills7

    BASIC MANAGEMENT SKILLS

    • Causes of wasted time:

      • Paperwork -- letters and reports

      • Telephone -- too much time spent speaking on the phone

      • Meetings -- too much time spent on meetings

        • clear agenda (gündem)

        • start on time

        • keep focused on the agenda (sadede gel!!)

        • end the meeting on time

      • Internet and E-mail is another source of time waste these days if one is not careful about it.

      • “What would you like to drink?” routine in Turkey and Cyprus (Ne içersiniz? faslı)


    Basic management skills8

    BASIC MANAGEMENT SKILLS

    • Management Skills for the Twenty-First Century

      Basically two important challenges are faced by managers as we enter the 21st century:

      1. Global Management Skills

      2. Management and Technology Skills


    Basic management skills9

    BASIC MANAGEMENT SKILLS

    • Global Management Skills

      Managers must equip themselves with

      • special tools

      • techniques

      • skills

        necessary to compete in a global environment.


    Basic management skills10

    BASIC MANAGEMENT SKILLS

    Managers of the next century will need to understand

    • foreign markets

    • cultural differences

    • motives and practices of foreign rivals (yabancı rakipler)


    Basic management skills11

    BASIC MANAGEMENT SKILLS

    In the future, businesses will need and hire managers who are capable of understanding international operations.

    YOU, as business students, should do your best to prepare yourselves to become the kind of graduate who will attract the attention of employers. This means hard work and seriousness of purpose on your part.


    Basic management skills12

    BASIC MANAGEMENT SKILLS

    2.Technology Skills

    Managers have always had to deal with information. Today managers are overloaded with information.

    • computer technology

    • communication technology

    • computer networking

    • e-mail

    • tele-conferencing

    • e-business

      All these and much more require a different kind of manager than what we are used to.


    Management and the corporate culture

    MANAGEMENT AND THE CORPORATE CULTURE

    • What is corporate culture?

      It is the shared beliefs, values, norms, and experiences that characterize an organization. (kurumsalkültür)

      • A strong corporate culture serves several purposes:

        • It directs employees’ efforts and helps everyone work toward the same goals

        • It helps new employees learn accepted behaviors

        • It gives each organization its own identity (kimlik)


    Management and the corporate culture1

    MANAGEMENT AND THE CORPORATE CULTURE

    • Communicating the Culture and Managing Change

      • Corporate culture influences

        • management philosophy

        • management style

        • management behavior

      • Managers must carefully consider the kind of culture they want for their organizations, then work to develop that culture by communicating with everyone who works there.


    Management and the corporate culture2

    MANAGEMENT AND THE CORPORATE CULTURE

    • Communicating the Culture

      Managers must use effective communication in order to accomplish the following tasks:

      • managers must have a clear understanding of the culture

      • managers must transmit (iletmek) the culture to others in the organization; they must also communicate the mission of the organization to their employees

      • managers should maintain the culture by rewarding (ödüllendirmek) and promoting (yükseltmek) those who understand it and work toward maintaining it


    Management and the corporate culture3

    MANAGEMENT AND THE CORPORATE CULTURE

    • Managing Change

      Organizations must sometimes change their cultures. This means that they must communicate the nature of the change to both

      • employees and

      • customers

    • Organizations must continuously change in view of the changes taking place in the environment, technology, consumer tastes and preferences.


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