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BUS 103 Business Management. 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.

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Bus 103 business management l.jpg

BUS 103Business Management

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Business Management BUS 103


  • 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.


    Students will be able to learn and grasp: Management key concepts and terms/ Management theory and history/ Management process.


  • Nature of Management

  • Evolution of Management thought

  • The changing environment of Management

  • Primary Management function

  • Primary Management function

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  • Principles Of Management

  • M.Govidarajan / S.Natarjan

  • Prentice_Hall Of Fndia/2005

    Prepared by:

  • DR.Ghada Nemetallah

  • King Abdulaziz Univ

  • Faculty of business

  • Administration

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Chapter 1

Introduction To Business

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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.

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Business for profit buying & selling

In the by labour for consumers goods & services


Means of business exchange of goods and


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.)

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Objectives of business


  • 1-return on investment (ROI)

  • 2-growth of business


  • 3-product innovation

  • 4-ensure productivity

    (strong market position)


  • 1-prevention of environmental

    pollution and ecological


  • 2-development of locality of a


  • 3-development of backward


  • 4-promotion of small industry

    Scale business

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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


  • 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)

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Difference between management and administration


-Activity of regulating daily

to day operation in an


-Getting policy decisions


-Term used in circles.


  • 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.

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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)


    -Establish authorities (say who is the


    -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


Manager l.jpg

  • 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.

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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


  • 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)

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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,


  • 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)

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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


  • 3-Decisional use information (be powerful

    and take good decisions on

    time) initiates change.

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Managerial skills

  • The manager should acquire three skills:

  • 1-Technical use the techniques of specialized

    people e.g. engineers, surgeons,


  • 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)

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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)

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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.

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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


    -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)

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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


  • 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)

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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.

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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.

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Chapter 2


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  • 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.


  • 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.

Definition of planning l.jpg
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.

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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)

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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).

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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.

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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).

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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.

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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.

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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.

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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.

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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.

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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

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  • 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.

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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.

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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.

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Hierarchy of Objectives



Overall objective of the

organization long-range

More specific overall objectives

Division objectives

Department and unit objectives

Individual objectives

Performance personal development objectives

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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

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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.

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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

    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

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Types of Organization

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

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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).

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  • 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.

Chapter4 l.jpg



Definition l.jpg

  • 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

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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


Tests personality the test measures.

Tests interest capacity for learning,

tests achievement ability to reason,

tests dexterity and some physical


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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.

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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.

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The Concept Of Human Resources Development HRD

3. Career planning: this is the philosophy of HRD, to formulate career

strategy. People perform better when they feel

trusted and see meaning in what they are doing.

4. Training: this is the outcome (result) of performance a

appraisal and career planning.

  • There are in house (inside work) training courses and periodic assessments. The training is useful for employees.

    5. Organizational Development OD: This function includes periodic surveys for employees to make sure of their psychological health.

  • It includes solve problems such as low production or conflicts at work.

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Organizational Conflicts

  • In any place, there is grievance which is a feeling of discontent of dissatisfaction.

  • It could lead to conflicts and hence, at that moment, there should be grievance handling procedure (ways to resolve conflicts) conflicts arise from frustration, tension, etc.

    Types of conflicts

    1. Individual : it happens or it is found when more motives block each ether. It means when you have more them one problem.

    2. Role Conflict: when an individual performs a number of roles and wants to be perfect in all and be can not. (e.g. being a good person, a good father or mother, a good employee, all at the some time an you con not fulfill).

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Types of conflicts

  • 3.Interpersonal: Vertical (between superior and subordinate) or horizontal (between employee and his equal).

  • 4.Intra group Conflict: it happens when people come from different socio-economic backgrounds and have different views.

  • 5.Intergroup Conflict: problem among different groups in the some organization.

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Areas of Conflict

  • Regarding wage (salaries).

  • Regarding working conditions (comfortable or not).

  • Regarding supervision (good or bad).

  • Regarding attitude of management (flexible or rigid).

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Resolution Actions

1-Problem solving method: find a common interest between employees.

2-Avoidance: another way to overcome a conflict is it a void it, do not confront.

3-Smoothing: playing down differences and emphasizing common interest, is say what is good and bad in both parties.

4-Compromise: no one is loser or a winner all is solved by negotiation.

5-Confrontation: apply strength against each other, face the problem.

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  • Staffing is one of the main function of management. To recruit and select the proper employee and place him in the right place is difficult task. HRD plays an important role in the staff and solving the conflicts in different areas.

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Suggested question

  • 1. Give the full meaning of the following abbreviations:

  • A. HRD…………….

  • B. OD………………

  • 2. Give two examples of resolution action?

  • A. …………………..

  • B. ……………………

    Answer key

  • 1). A. HRD: human resources development.

  • B. OD: organization development

  • 2). A. smoothing.

  • B. confrontation.

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Chapter 5


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  • This chapter deals with directing as one of the main pillars of management leadership traits, managerial grid, communication process and motivation are all related to directing and will be discussed.


  • By the end of this chapter, the students will be able to:

  • 1. grasp the notion of directing and leadership.

  • 2. study different managerial grid.

  • 3. study motivation needs and communication tools and hierarchy.

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  • Directing id leadership which means the activity of influencing people to work for group activities.

  • Direction is manager. Hi’s role is to achieve the goal in a given time.


    Influence group Close and general

    activities to supervision to be

    achieve goals. sure that worker do their

    jobs effectively.

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Leadership Traits

  • Any leader has to be armored with several traits. (any leader has to possess certain qualities in his character), such as:

  • 1- competent in handling new situations (know how to face a new problem).

  • 2- self confident and stable.

  • 3- identify himself with goals (know his objective and tries to achieve it efficiently).

  • 4- intelligent and sympathetic with his workers.

  • 5- he should be a listening supervisor, as listening is an active and not a passive activity.

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Managerial Grid

  • Any employee in any company or organization could be evaluated. His superior checks if he works well or not.

    What about the superior himself? Is the manager evaluated. The answer is yes.

  • Managerial grid is the tool to assess (evaluate) the

    It is a tool to assess the leadership style (the style of the superior or the manager).

  • The grid was developed be Blake and Mouton to pint out two major aspects of supervisor job. The two aspects are job and employee with different styles.

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Managerial Grid

  • Brief summaries of the five possible leadership styles will follow:

  • Style (1,1) this style place low concern for employees and

    job (the owner does not care that much).

  • Style (1,9) this style gives high concern for employees and

    low for job (he cares about employees more so

    the relationship is good).

  • Style (9,1) high for the job and low for employees (bad


  • Style (9,9) high for employees and high for job (best


  • Style (5,5) middle some concern for job and some for


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Tri-Dimensional Grid

  • Another scientist invented another way or tool to assess leaders.

  • Red din concentrated on

    3 axes

    Task (TO) Orientation Relationship (RO) OrientationEffectiveness

    Manager Directs Manager has Extent to which a

    the subordinated personal relationship. manager is successful

    to achieve the goal. in his position.

    E.g. job done or not. E.g. employees like E.g. the subordinate

    him or not. Wants him at work or


Communication l.jpg

  • It is the very important in the manager job.

  • Understanding is the target in communication.

  • It is a human transaction and understand people.

  • Successful Communication is the result of competent management (listening and understanding manager).

  • A good manager is a good communicator.

  • Effective work is the result of good communication.

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Types of communication


Communication has purposes such as:

1. Gain communication. When the superior communicates with the subordinate, he is committed to do the job.

2. provide data for information. When the employee know all the date, he can easily decide what could be done in the job.

3. Clarify tasks and responsibilities (communication leads to clarity, the employee knows exactly their job).

Process l.jpg

  • It is who? (some of message) says what? (message) in which channel (what information in that way) to whom (receiver of message) with what effect? (response).

  • E.g. An employee wants a raise talks to his superior in the meeting supervisor refuses or agree.

  • 1. Who?

  • 2. Says what?

  • 3. In which channel?

  • 4. To whom?

  • 5. With what effect?

Model l.jpg

  • The model include the basic elements of communication.

    Communicator message medium

    Encoder (transmission)

    Noise feedback decoder


  • E.g. Message from superior (who sends the message) through the e-mail to the subordinate (who receives) and takes the answer (feedback).

Motivation l.jpg

  • How is the person be activated, directed and willing to work is motivation.

  • When the employee enjoys his job. He finds it challenging and satisfactory, he be comes motivated.

  • Motivation is inner force

  • is extent of drive To produce optimal out put

    To reach the best result

  • There is an approach to motivation

    Carrot Stick

  • Money, profit award Physical, financial and social


  • The idea of carrot and stick comes from the reward and punishment theory, work here and you will be more rewarded or else.

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Maslow's Need HierarchyMaslow realized that any employee has needs and he formed a five basic human needs.

Figure Maslow need hierarchy model

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Maslow's Need Hierarchy

Level 1 (physiological needs)

  • refers food, air, sleep, water

    Level 2 (security)

  • clothing shelter.

    Level 3 (affiliation)

  • develop meaningful relationship in work.

    Level 4 (esteem)

  • self respect, sense of achievement and recognition from others.

    Level 5 (NFS)

  • fulfil ones need to become successful.

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Herzberg's Motivation hygiene theory

  • Herzberg’s developed Maslow’s hierarchy and divided the needs or categorized them into tow groups:

  • Hygiene Factors


  • It is mean if they are not founded in a job, the employee will be dissatististfied.

  • Examples of hygiene factors are : money, personal life, Work conditions and relationship etc

  • Motivation Factors (satisfiers)

  • They satisfy the employee and motivate him to work more.

  • They includes challenge, dance for personal growth performance feedback etc.

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Mcclelland's Three needs Model

  • He added three motives:

  • Need for achievement

  • Need for affiliation

  • Need for power

  • Employees work more and efficiently if they have achievement, good relations and power at work.

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Chapter 6


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  • Controlling is the fourth function of management. It has steps, types and process. It also includes management and it utilizes balance sheet.


  • By the end of this chapter the students will be able to:

  • 1-define controlling.

  • 2-differentiate between controlling and planning.

  • 3-study the steps, types and areas of overall controlling.

  • 4-study balance sheet and management audit.

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  • Definition

    Controlling is determine what is being accomplished.

  • To evaluate performance

  • To apply corrective measures

    (check if the employees are following the rules, monitor their performance and if there is any fault, correct it)

  • Planning

  • Identifies commitment

    to action

    (the performance of the employee should lead to the organization objective)


Ensures that commitments are carried.

(make sure the plans are carried out).

Planning has a close relationship to controlling

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Types of controlcontrol includes three types


(unify understanding policy and procedures)

(if the worker understands the rules and policies of the work, he will follow the procedures, is steps

E.g. no salesman must change any price the company makes it insteadof


Check the right quantity right quality at the right time

e.g. at the airline, the luggage should reach the passengers at the right time, and the same bags.


Is the data gathered for better results

(information for correction

e.g. electronic funds transfer, money moves quickly from one country to another

Slow manual system, due to the feedback.

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Management audit

  • There are major guidelines for effective controlling such as management audit. It has developed to evaluate the efficiency of various system in an organization. Audit can be performed either.


Directed to evaluate other firms (companies) for possible merger (join companies together) or find strengths and weaknesses for competition


Used to improve internal control systems. It is in the form of periodic assessment for evaluating present past and future performance.

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Areas For overall controlling

  • This areas are checked to minimize losses in sales, material, time, profit, capital and facilities.

  • They include:

  • Market standing of the enterprise (what is the position of the company in the market, strong or weak).

  • Innovation (what did the company make new).

  • Profitability (how much is the profit).

  • Materials acquisition and use (the use is good normal or excessive).

  • Employee performance development (is the worker developing or not?).

  • Capital (money is increase or not).

  • Productivity.

  • Physical resources (e.g. raw material, machines, cars etc).

  • Public responsibility

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Balance sheet

  • Financial statements are helpful in controlling.

  • Balance sheet is an important accountant document showing the financial picture of the company at a given moment (what is the financial position of the company in a certain month or part of the year).

    Balance sheet

    AssetsLiabilities Share holder’s equity

    Items owned Amounts owed Amounts to

    by the company to various creditors owners or those

    (things belong corporation’s (outside with shares

    the company) the company)

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  • Controlling is a fundamental process in the filed of management. It is applied by loss and profit. The higher the quality of the manager, the less will be the need for control. Controlling has balance sheet. It has many steps and areas for overall controlling.

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Chapter 7

Decision Making

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  • This chapter is known from it’s title.

  • It deals with the decision making process, techniques and classification of decisions.


  • By the end of this chapter the students will be able to:

  • 1-Define decision making.

  • 2-Identify decision making process.

  • 3-Know the techniques and classification.

  • 4-Study the limiting factor.

  • 5-Evaluate the decision.

  • 6-Spot difficulties in decision making.

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  • Definition:

  • Decision making is the process of selecting a course of action from among alternatives. Decision involves a choice to reach a goal.

  • (If you have many ways, alternatives, choose the best for the goal).

    Decision Maker Problem

    Outcome Objectives Environment

    (Final choice)





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Decision Making Process certain situation or a particular environment, he think of an objective and reaches the outcome.

  • 1-Define the problem.

  • 2-Classify Objectives.

  • 3-Identify evaluation criteria (cost, risk).

  • 4-Model Building (make computer example simulation).

  • 5-Evaluating results (after taking the decision).

  • 6-Taking Final decision.

  • 7-Feedback (to see your results).

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Techniques of Decision-Making certain situation or a particular environment, he think of an objective and reaches the outcome.

  • 1-Scientific Management (cost control).

  • 2-Human Relation (depend on problem of motivation and leadership).

  • 3-Empirical(use experiences of successful managers).

  • 4-Financial (accounting methods)

  • 5-Mathematical (one plus one equals two).

  • 6-Decision theory (rely on quantitative and qualitative aspects).

  • 7-Decision support (focus on understanding and improving).

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Classification of certain situation or a particular environment, he think of an objective and reaches the outcome.decisions

  • There are many types of decision and managers may select:

  • 1-Organizational and Personal the first is taken by a superior and the second is taken by the executive about himself.

  • 2-Routine (follow established rules).

  • 3-Programmed and non programmed (rely on established structure).

  • 4-Policy and operative (taken by top-level).

  • 5-Individual and group.

  • 6-Major and Minor (small or big).

  • 7-Long-Term (period is more and risk too).

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Principle of limiting factor certain situation or a particular environment, he think of an objective and reaches the outcome.

  • To evaluate your decision, take care of several factors. One of them is limiting factor.

  • Limiting factor means strategic.

  • For example If a machine does not work and the reason is the screw, it is called a limiting factor.

  • (any small item is important in taking the decision, even if it is only a screw in a big machine, still it will delay the work).

    Evaluating the decision

  • Managers com evaluate their decisions by many factors. They evaluate according to:

  • 1-size (big project or small).

  • 2-flexibility of plans (could be changed).

  • 3- certainty of good (objectives is fixed).

  • 4-human impact (payroll or computer).

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Difficulties in decision-making certain situation or a particular environment, he think of an objective and reaches the outcome.

  • There are difficulties discovered by managers when they take a decision such as:

  • 1-Incomplete info (data is not enough).

  • 2-Un supporting environment (if he wants to be a pioneer in a field and faces opposition).

  • 3-Ineffective communication (no understanding).

  • 4-Incorrect timing (not the right time).

  • 5-Non-acceptance by subordinates.

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Summary certain situation or a particular environment, he think of an objective and reaches the outcome.

  • Managers can take decision if they first define the problem and use decision making process.

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Chapter 10 certain situation or a particular environment, he think of an objective and reaches the outcome.

Modern management concepts

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Introduction certain situation or a particular environment, he think of an objective and reaches the outcome.

  • This chapter summarizes and adds new management concepts. Market changes and competition makes companies be flexible. The need for better quality and profit has been born new tools in management and will be known and studied in the final chapter.

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Objectives certain situation or a particular environment, he think of an objective and reaches the outcome.

By the end of this chapter students are acquainted with management concepts such as:

  • Business Plan

  • Benchmarking

  • Business Process Reengineering

  • Change Management

  • Customer Relationship Management

  • Employee Empowerment

  • Enterprise Resource Planning

  • Globalization

  • International business management

  • Management by objectives

  • Outsourcing

  • Quality circle

  • Supply Chain Management

  • Elements of TQM

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Business Plan certain situation or a particular environment, he think of an objective and reaches the outcome.

  • In the plan managers discuss how the business will be established, what is the purpose of the business, description of the product and financial details.


  • A- It is a systematic and continuous measurement for the development in a company.

    It has three types


  • Check between who is the competitors keep an eye

    department in the and measure the on the best

    company. company With them. Company

    every where.

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  • B-What can be benchmarked? certain situation or a particular environment, he think of an objective and reaches the outcome.

  • Quality + Productivity + Time + Employee satisfaction etc.

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Business Process certain situation or a particular environment, he think of an objective and reaches the outcome.Reengineering

  • It is task of any manager to ensure that all processes are adding value or else be deleted. This is the philosophy of (BPR).

  • It is a process of rethinking and restructuring like the engineer, for better value.

    (BPR) is means for total customer satisfaction and best results.

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Change Management certain situation or a particular environment, he think of an objective and reaches the outcome.

  • Every organization makes changes to face changes in the environment.

  • Management changes to increase ability of company and learn from changes.

  • When does management change?

  • Reactive change when there are external forces.

  • Proactive change when the need comes from inside

    the company to increase it’s


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Process of change certain situation or a particular environment, he think of an objective and reaches the outcome.

  • It involves the following

  • Unfreezing It involves the need for change.

    People must accept the change.

  • Changing Change brings new ideas.

  • Refreezing New change or new pattern is put in

    the new place.

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Customer- relationship certain situation or a particular environment, he think of an objective and reaches the outcome.management (CRM)

  • (CRM) Provides customer- oriental services such as internet, mobile devices etc.

  • (CRM) helps companies to satisfy customers better than their competitors.

  • (CRM) measures, predicts and optimizes (make the best) customer relationship.

  • E.g. when there is sale, the company contacts the customer by phone, mobiles or e-mails to reach customer satisfaction and make more profit.

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Employee Empowerment certain situation or a particular environment, he think of an objective and reaches the outcome.

  • Empowerment means encouragement. It means to allow the employees to take responsibility and decision. They should have confidence that they can make a difference and achieve success to the organization.

  • The first example to employee empowerment

  • Is (TQM) Total Quality Management

  • It is an employee driven

    process that gives the employee

    power to create and decide.

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Significance (function) of employee empowerment certain situation or a particular environment, he think of an objective and reaches the outcome.

  • 1- increases peace of change in the company (make change faster)

  • 2- decentralize the system (give the chance to all levels to share in decisions).

  • 3- employees develop their talents and change.

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Globalization certain situation or a particular environment, he think of an objective and reaches the outcome.

  • Definition

  • It means that there are no more country strategies but subordination to global framework (no more rules in my country but businessmen and foreign products)

  • Reasons

  • 1-For internal efficiency to become global,

    you gain more volume.

  • 2-complete in markets the cost is low and

    the company become competitive.

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International Business Management certain situation or a particular environment, he think of an objective and reaches the outcome.

  • Definition

  • It refers to transactions across national boundaries including transfer of goods, services, knowledge and capital to other countries:

  • Examples:

  • 1-exportation of goods and services.

  • 2-forming a joint-venture

  • 3-multinationals companies opening branches in host country. (MNC’s)

  • 4-international firms.

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Management by objectives certain situation or a particular environment, he think of an objective and reaches the outcome.

  • MBO is a process where by the superior and the

    subordinate identify their goals in their organization.

  • MBO is a comprehensive management planning and control

    technique to affect the structure and style of the


  • MBO the important benefit of MBO is that the judgmental

    role of the supervisor vanishes (is deleted) as every

    individual is evaluated according to standard and not

    personally, due to the objectives put by all employees.

  • MBO causes improvement improves communication

    stimulates subordinates motivation.

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Outsourcing certain situation or a particular environment, he think of an objective and reaches the outcome.

  • Is the strategic use of outside parties to perform activities handled by internal staff and sources (as the work is too much, the company uses outside people to help).

    Reasons for outsourcing

  • Increasing competition and rapid changes in business world made companies.


  • 1-companies concentrate on important strategic issues and use outside hands to help in miner tasks (less important work).

  • 2-best in practice processes are used (companies use best things every where).

  • 3-use late technology as companies benefit from others.

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Quality Circle certain situation or a particular environment, he think of an objective and reaches the outcome.

  • Is a small group of employees doing similar work, share area of responsibility meet regularly to identify, analyze and solve product – quality problems.

  • the group of employees is led by a supervisor- organized as work units.

  • Quality circle is important to develop, improve, stimulate, motivate achieve and recognize are all organizational issues.

  • The result is improvement on all levels, methods, products, working condition etc.

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Supply Chain Management certain situation or a particular environment, he think of an objective and reaches the outcome.

  • It includes the organization and process of acquisition, storage and sale of new materials etc.

  • It encompasses (includes) customer- supplier partnerships.

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Elements of TQM certain situation or a particular environment, he think of an objective and reaches the outcome.

  • There are elements of total quality management. They refer to meeting the requirements of customers consistently, (all the time) to improve the quality of work of all employees.

  • The elements are modified or changed to meet the requirements of customers.

  • For example the ISO, 9000 series standards change every five years.

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The Elements are certain situation or a particular environment, he think of an objective and reaches the outcome.

  • Meeting customer requirement (satisfy the clients).

  • Continuous improvement (for better quality).

  • Empowerment of employees.

  • TQM is the philosophy that calls for development and should be the concern of all organization.

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The End certain situation or a particular environment, he think of an objective and reaches the outcome.