2: Managing a business Flashcards
What is management?
‘Getting things done through other people’
What is power?
The ability to get things done
What is needed for effective management?
Organisations rarely run like clockwork and all depend on the directed energy of those within them.
They need managers
Classifications / bases of power
Coercive power:
- physical force and punishment
Reward or resource power:
- based on control of valuable resources
Legitimate or position of power:
- associated with a position in an organisation
Expert power:
- based on experience, expertise, or qualification
Referent or personal power:
- based on force of personality (charisma)
- can attract or influence other people
Negative power:
- power to disrupt operations
- e.g. industrial action or sabotage
What is authority?
The right to do something or to ask someone else to do it and expect it to be done
Another word for legitimate power
Managerial authority can be exercised how?
- Making decisions within the scope of authority
- Assigning tasks to subordinates and expecting satisfactory performance of these tasks
What is responsibility?
The obligation a person has to fufil a task which they have been given
What is accountability?
A person’s liability to be called to account for the fufilment of tasks they have been given by persons with a legitimate interest in the matter
What is delegation?
Delegation involves giving a subordinate responsibility and authority to carry out a given task, while the manager retains overall responsibility
Types of manager
- A line manager has authority over a subordinate
- A staff manager has authority in giving specialist advise to another manager or department, over which they have no line authority
- A functional manager has authority over a hybrid line of staff
- A project manager has authority over project team members with repsect to an in progress project
Inevitable tensions involved in staff members asserting authority over other managers
The staff manager can undermine the line manager’s authority
Lack of seniority
Expert staff managers may lack realism going for technically perfect but commercially impractical solutions
Staff managers lack responsibility for the success of their ideas
What is the management process? (4)
Four main tasks
- Planning
- Organising
- Controlling
- Leading
What are the types of managerial roles? (3)
Informational role
Interpersonal role
Decisional role
What is business culture?
The common assumptions, values and beliefs that people share such that ‘this is the way we do things around here’
What are the types of business culture? (4)
- Internal process culture
- the business looks inwards aiming to make its internal environment controlled - Rational goal culture
- goals to satisfy external requirements - Open systems culture
- flexible to new ideas - Human relations culture
- business looks inwards to maintain its existence and wellbeing of staff
What is a management model?
Models are used in management theory to represent a complex reality, such as a client’s business, which is then analysed and broken down into its constituent parts
What is the rational goal model of management?
A business with a rational goal culture uses the reason why the business does something to make sure its done as well as possible
- systematic work methods
- detailed division of labour
- centralised planning and control
- ‘low involvement’ employment relations such as contract workers
What is the internal process model of management? (6)
- Rationality
- Hierarchal lines of authority
- Detailed rules and procedures
- Division of labour
- Impersonality
- Centralisation
What are the main business functions? (6)
Marketing
Operations or production
Procurement (acquiring goods or services)
Human resources
Fincance
IT
What is marketing?
The set of human activities directed at facilitating and consummating exchanges
OR
The management process which identifies, anticipates and supplies customer requirements efficiently and profitably
Difference between customer and consumer
Customer:
- purchases and pays for a good or service
Consumer:
- ultimate user of the good or service
What are consumer markets?
the markets for goods and services bought by individuals for their own or family use
What are some examples of consumer markets?
Fast moving consumer goods (FMCGs):
- high volume, low unit value, fast re-purchase
- e.g. bread, baked beans
Consumer durables
- low volume, high unit value
- white goods: fridges, freezers
- brown goods: mobile phones, cars
- soft goods: clothes, bed linen
Services:
- insurance
- broadband
- utilities
- holidays
What is marketing mix?
The set of controllable marketing variables that a firm blends to produce the response it wants in the target market