BUS 103 Business Management

1. BUS 103Business Management

2. Business Management BUS 103 Course: • This course will provide a comprehensive readable introduction to management theory and practice in English. • The course will integrate a classical and modern concepts so students can interact in a real word organization. Objectives: Students will be able to learn and grasp: Management key concepts and terms/ Management theory and history/ Management process. Content: • Nature of Management • Evolution of Management thought • The changing environment of Management • Primary Management function • Primary Management function

3. Book: • Principles Of Management • M.Govidarajan / S.Natarjan • Prentice_Hall Of Fndia/2005 Prepared by: • DR.Ghada Nemetallah • King Abdulaziz Univ • Faculty of business • Administration

4. Chapter 1 Introduction To Business

5. Definition Of Business: • Q: What is business? • A: Business is buying and selling. • Q: What? • A: Goods (cars or books) and services (changes currency) • Q: By whom? • A: By labour (workers) • Q: For whom? • A: For customers, clients, people. • Q:Why? • A: For profit (money) • Q: Where? • A: In the market (world). • So business is buy and selling goods and services, by labour to the consumers for profit in the market.

6. Business for profit buying & selling In the by labour for consumers goods & services market Means of business exchange of goods and services. Aim of business wealth, profit, wealth Risks of business -changing technology (If new machines or new theories appears, rest is history) -changes in consumer preferences (People change every day and their ideas and likes too. People go after fashion) -competitive threats (If people make the same product but less in price, this will affect business) -government policies (taxes, no deals with certain countries etc.)

7. Objectives of business Economic • 1-return on investment (ROI) • 2-growth of business (merger/diversification) • 3-product innovation • 4-ensure productivity (strong market position) Social • 1-prevention of environmental pollution and ecological imbalance • 2-development of locality of a business • 3-development of backward areas • 4-promotion of small industry Scale business

8. Essentials of good business : • 1-Well-defined objectives (what do you want to do) • 2-Up-to-date and proper planning (reliable plan) • 3-Proper location (minimize costs & maximize profits) • 4-Flexibe Management (responds to changes) • 5-Good organization structure (good manager & effective employees • 6-Customer-focused marketing system (aim is the satisfaction of buyer) • 7-Sound personal policies (laws for employees)

9. Difference between management and administration Administration -Activity of regulating daily to day operation in an organization. -Getting policy decisions done. -Term used in circles. Management • Art of getting done through people in formally organized groups. • Art of directing human activities and physical resources to reach a goal. • As a term used in business world government.

10. Five basic Functions of management • 1-Planning -Develop plan & future plans to counterthreats(make plans for the organization & be prepared for any competition). • 2-Organizing -Assign duties (give work) establishing -Establish authorities (say who is the boss) -Allocate resources (make business) • 3-Staffing -Recruitment (hire employees) • 4-Directing Leading, influencing, motivating human resources • 5-Controlling -monitor performanceto reach the goal (supervising all basic function of management for success of company)

11. Manager • Q: Who is the manager? • A: He is the one who acquires the five basic functions of management. • He plans, organizes, leads and controls for goal. Modern Manager • Q: Who is the modern manager? • A: He is not an owner-manager, but a salaried one. • He does not own the company or the organization, but he is an employee hired from outside and takes a salary.

12. Characteristics Of Modern Manager • 1-Encourages employees to use technology. (we live in an information age and technology changes and develops every day). • 2-Encourages employees of an organization to develop team work spirit. (every employee joins forces with his colleague, shares ideas and effort). • 3-Makes an atmosphere of empowerment (he lets the workers make decisions and increase productivity). • 4-Applies scientific methods to the development of knowledge (use science in work, ideas, experiments, concepts etc). • 5-He applies management theory, understands, communicates and learns)

13. Objectives of modern manager: • 1-Efficient use of resources(no waste of time & energy) • 2-Customer satisfaction (as the customer is the good & for more development & profit) • 3-Return on capital (profit from invested money) • 4-satisfied work force (as the workers are the assets of the company, thy should be satisfied) • 5-Impoved work conditions (wages, good salaries, security) • 6-Supplier relationship (good relations with supplier is a must for raw material) • 7-Contribution to national goal (a good company is useful to it’s country)

14. Managerial Roles • To be success full at work, managers assume or have many roles. • 1-Interpersonal provide information (he should feed his employees with info) and be a good person with them. • 2-Informational process information (check if understood and applied) • 3-Decisional use information (be powerful and take good decisions on time) initiates change.

15. Managerial skills • The manager should acquire three skills: • 1-Technical use the techniques of specialized people e.g. engineers, surgeons, accountants. • 2-Human Understand and be able to work with other people • 3-Conceptual Coordinate and integrate • goals with activities (decide • what is the aim and go for it and • determine to achieve it)

16. Four Management levels • This means that there are different levels in any company and various managerial position. • 1-Top-level management executives (those responsible for overall management) make plans + put instruction + prepare budgets etc). • 2-Upper middle management heads of divisions (responsible for effective performance of departments). • 3-Middle management employees directing the work and activities. • 4-lower level or first line supervisors, foremen (guide and Train works)

17. Scientific Management • Is the kind of management that depends on observation and experiment. • The Manager should not stick to old ways but observe new trends, think of new theories, try them if they are successful and could bring profit to the organization.

18. History of Management There are many scientists who contributed to the field of management. They developed theories in the area. • Babbage -specialization of labour (all workers and employees should be specialized and have experience in their fields). • Taylor -science for each job. -select skillful workers. -incentives (prizes or bonus) for good results -divide responsibilities. • Gilbreth -rest pauses in 8hr work. (workers take rest after working eight hours). • Gantt -work quota systems (number of working hours differs from one employee the other). -bonus (work more and there is a new system giving you a prize)

19. History of Management • Fayol all management tasks are classified under categories ( Technical , Financial, Accounting) (he cares about the function of categories in the departments) • Barnard organizational communication system(success comes where employees accept authority of others). • Simon he believes that the manager is an administration man not an economic man. (he should lead, select, choose, decide and not count profit and loss only)

20. History of Management • Owen he was the first to speak about (HR) (He cares about people and not machines) • Munsterberg he was the father of industrial psychology. (he studied the application of psychology in work) • Mayo he studied factors of satisfaction and dissatisfaction to the workers (he is important for the study of behavior at work) • Follet he believes in group work and self control. employees share same power and beliefs. • Maslow he believes tat the man need could be placed in “hierarchy of needs” • McGregor he cares about employee work relationship. He is interested in humane view.

21. Business environment • Just as Human beings get affected by the environment, so do the business. These environments can be classified into four groups: • 1-Economic -Capital (money) -Labour (employees “good” + worker “bad”) -Price levels (changes could create problems) -Government tax policies -Customers (business is based on customers) -Technology (new products, tools, machine) • 2-Social -Desires, expectations and attitudes of people could be high or low, change and effect business causing loss or gain. • 3-Political -leaders make new laws or new restrictions could effect business • 4-Legal -laws and regulations could make any business successful or failure.

22. Chapter 2 Planning

23. Introduction • This chapter deals with the definition of planning, nature and types of plan. The limitation of planning are considered obstacles in the development or success of any project planning premises and forecasting methods are studied to promote business. Objective • By the end of this chapter, students are acquainted with the definition, nature, kinds, types and limitations of planning. • Thy would be introduced to the system of forecasting, it’s methods and types importance of planning is stressed.

24. Definition of Planning • Planning is Decide in advance: • What • When To do • Who • How • It means what is the business you are going to do, how (money, people), when (now or in the future) and where (place, country). What is your idea, doing business alone or with partner, in your country or outside etc.

25. Nature of Planning • Is your business good or bad? • If good, why? And if bad, what are the reasons or aspects. This is the nature of planning. Did you make a good or a bad plan? • There some aspects (features) to follow for judging the nature of planning aspects. • 1)Contribution to purpose and objectives facilitate the accomplishment of the enterprise objectives (make sure that your plan leads to success). • 2)Primacy of planning precedes the executions of all managerial functions (plan before you execute “do”). • 3)Pervasiveness of planning varies with authority and nature of supervisors plans (it is a must to plan as it is the function of all managers). • 4)Efficiency of plans measured by contribution to objectives (if it’s a good, it will lead to the goal)

26. Types of planning Standing Plans (Used over a long period of time) Single-use plans (used for only specific periods) Good plan Based on facts Well Balanced Up dating By following rules (guide for action), methods (step of procedure) and projects (type of plan), the plan is devised and executed. (follow the rules and the plan will be good).

27. Steps in planning • It is impossible to fix steps in planning for all organizations, however, there are major steps. • Perception of opportunities opportunities (chances) exist for it’s performance. • It is a preceding process of actual planning. • (there has to be an opportunity first and then plan for a project). • 2. Establishing objectives set your goal. • 3. Establish planning premises check all factors e.g. political, ethical etc. • 4. Determine alternative plan proper plan A×B. • 5. Select best course choose most suitable plan.

28. Limitations of planning • Planning is important and any factor limiting it’s success should be abolished (deleted). • Limitation means factors or difficulties in planning. • 1)lack of accurate information (incomplete information cause bad result). • 2)Problems of change (technology or customer taste might affect your plan) • 3)Failure of people (not qualified to formulate or implement a plan, they do not value planning) • 4)Internal inflexibilities (such as human psychology, you con not plan when the workers suddenly change or be exposed to any problem).

29. Limitations of planning • 5)External inflexibilities theses factors may be social, technological, legal or geographical. (if workers live away from work, how can managers plan in the future?). • 6)Rigidity in planning stuffiness or inflexible plans delay work performance and reduce employee stimulation or enthusiasm. • 7)Time and cost factors time is important, as time is money. Do not take too much time in planning as costs will increase and quality of work will not be very good or effective.

30. Planning Premises • It is the frame work in which plans operate. • It is environment where plans work. • It is include Forecasting or Assumption. • Forecasting probe (expect) the future by inference (predication) from known facts. • Assumption believe in something or pretend. • If you want to plan right, you have to forecast (like the weather). You have to be assume what kind of problems you will face in the future in order to be ready to solve them and not be surprised.

31. Importance of forecasting • 1-Helps in effective planning by providing scientific and reliable basis. • 2-Reducing area of uncertainty (reduce the unknown, conquer your fear of the darkness). • 3-Managers have plenty of time to think ahead (for the future) as they have plan A and plan B because of the forecasting process). • 4-Managerial control, as areas of lack of control will be closed because of forecasting.

32. Forecasting Methods Qualitative Techniques It includes methods such as polls output, brainstorming. Quantitative Techniques It comprises input and output analysis, curve fitting • These techniques are used to apply to the long term time scale and for future demand. • You can control for or face any problem that might face you in the future by forecasting techniques either by quality or quantity.

33. corporate planning • It is a process of determining the major objectives of an organization and its policies and strategies. • Manager must have vision, mission and purpose. • Vision: picture of the future, what accompany wants to be. • Mission: strategic planning, it flows from the vision. • Purpose: realize the goals le the decisions speak.

34. corporate planning Kinds of plans Strategy Operational Process of deciding objective, resources and policies. Time Horizon: -Several years - One year Scope: - wide range of activities - narrow Degree of detail: -simplistic generic - finer details

35. Summary • To be good manager, you have to plan. Definition of planning, kinds, type, methods, steps and limitations should be known. In order to be ready for any problem in the future, forecasting method should be adopted. Make plan A and plan B for yourself to overcome any difficulties that might hinder the process and development of your company.

36. Chapter3 Organizing

37. Objective of chapter 3 • To give definition of organizing as one of the five basic functions of management. • To refer to the principles of management. • To be acquainted with types and mistakes of organization. By the end of this chapter the students will • Study the hierarchy of objectives to organize their companies. • Definition, types and mistakes of of organization are studied. • Centralization and decentralization will bw defined an known.

38. Definition of Organizing • Organizing refers to the formal grouping of people and activities to achieve the firm's objectives (employee and activities have to conform to the goal). Theory of organization • Is the study of structure, functioning and performance of organizations and behavior of groups (every company has to have a theory to organize the structure and the behavior). • There is hierarchy of objectives indicating the relationship of objectives and organizational level.

39. Hierarchy of Objectives Socio Mission Overall objective of the organization long-range More specific overall objectives Division objectives Department and unit objectives Individual objectives Performance personal development objectives

40. Principles of Organizing The success of any organization depends on it’s principles. Basic principles should be observed. • Unity of objective if the aim is one to all employees and managers, success will follow. • Efficiency doing maximum work at minimum cost is efficiency. • Span of management managers have long time to direct a number of executives. • Division of work proper departmentalization (each department has it’s own function and job) • Functional definition when duties of every one is defined

41. Principles of Organizing 6.Scalar Principle the chain of command or line of authority must be clarified, every subordinate should know his superior. 7.Unity of command and one superior and no confusion. unity of direction 8.Authority and Responsibility they should co-exist, found together. 9.Balance and flexibility balance between centralization (authority in the hand of one manager) and decentralization (the opposite). 10. Continuity and Flexibility manager should continue working and be flexible to give effective lead.

42. Types of Organization • There are different patterns to organize the personal (employees) • 1-Military or Line authority flows from top to lower vertically manager Manager Manager 1 1 Subordinate Subordinate 2 2 • 2-Functional separate departments but interrelated (connected) (some work in every department but different names of department. • 3- matrix system an employee has a number of superiors and a project manager. Project manager Superior Superior Superior One employee

43. Types of Organization • 4-Hybrid Design use functional and divisional system, either workers perform similar task or according to function.

44. Mistakes in Organization • If the principle of organization are missing or not followed, in this case they are considered mistakes. • 1-Poor plan. • 2-No precise authority. • 3-Lack of responsibility. • 4-Responsibility without authority. • 5-Multiple managers. • 6-Failure to delegate authority (the manager con not tell the employee what is this authority).

45. Summary • Organizing is a basic part in the function of any organization. It has principles and have to be applied. There are many types of organizing personnel. • Finally, mistakes of organizing should be avoided. Organizing makes any company a success or a failure.

46. Chapter4 Staffing

47. Definition • It refers to effective recruitment, selection on and placement to occupy proper roles in the organization structure, (to choose good employee that fit in the position in the company and put them in the right place). • (right people in the right place) What does staffing need? • 1- goals and objectives: to decide what is required. • 2- job designing: the determination of the employees work responsibilities. • 3- grouping of job: departmentation job content (to fit in the work of the department). • Recruitment and selection Select employees choosing best employees

48. There are different procedural steps 1)Job Description Describes the work and the requirements for the job e.g. job titles, job responsibilities, working conditions, job knowledge. 2)Application Forms This is a universal system where the applicant fills a form to be could for an interview. 3)Employment Tests Tests are considers essential part in the e.g. intelligence recruitment program. Tests personality the test measures. Tests interest capacity for learning, tests achievement ability to reason, tests dexterity and some physical abilities.

49. There are different procedural steps 4)Interviewing it is a conversation between the applicant and the interviewer to decide if the employee fits in the position or no. 5)Physical Examination it is a medical check up for the (new) freshly recruited employee (to check that there are no diseases and that the applicant meets the job requirements). 6)Orientation it is concerned with the process of welcoming the new employees or orienting them to the rules and procedures of work. • The function of the organization is to create a sense of belongingness and loyalty to the organization.

50. The Concept Of Human Resources Development HRD • It is a way to help the employees in a planned and continuous way. • Goals: improve the capabilities of employees as individuals and their relationship to one another their supervisors together with their future roles. • Process: every superior has the role and responsibility to insure the development of his subordinates. • Subsystems: HRD include various subsystems. • Performance appraisal: superior understands the problems of the subordinate and tries to solve them, use their talents and encourage their capabilities. • Performance Coaching: know your strength to be effective, choose situations when strengths are required and avoid situations in which weaknesses could create problems. • HRD system is responsible for discovering your strengths and weaknesses and guide you for improvement.