Chapter 2 - Managing a business Flashcards
What is managment?
Process of dealing with people
What are the four components of management
- Planning
- Organising
- Controlling
- Leading
What does management do in terms of planning
Sets direction and strategy of business
What does management do in terms of leading?
Exercise their authority - influencing people
What does management do in terms of controlling
Corrective action if expectations aren’t met
What does management do in terms of organising?
Allocate resources and processes to meet plans
What is power defined as?
Getting things done
What are the 6 forms of power management have?
- Reward power
- Coercive power
- Referent power
- Expert power
- Legitimate power
- Negative power
What is reward power?
Reward employees for carrying out orders
What is cocervice power
Punish another for not meeting requirements
What is referent power?
Charismatic - imitate another
What is Expert power
Expert in the field
What is Legitmate power
Job title - power of authority based off title
What is negative power
Disrupts trade unions
How is authority defined?
Right to do something or right to request and expect another person to do something
How is responsibility defined?
Obligation a person has to fulfil a task assigned to them
How is accountability defined?
Liability to be called to account for the fulfilment
Can accountability be delegated?
No. However responsibility can.
What is delegation?
involves giving a subordinate a responsibility and authority to carry out a given task
What are the Pros of delegating a task?
- Relieves senior of less important activities
- Quicker decisions
- Greater flexibility
- More interesting for the subordinate
- Allows career development
- Brings together skills and ideas
- Greater motivation
- Allows for performance appraisal
What are the Cons of delegating a task?
- Over-supervision can waste time and is de-motivating
- Under supervision leads to poor results
- Manager may only delegate boring work
- Manager delegates impossible task
- Manager refuses to delegate enough
- Inadequate training
What are the four types of managers?
- Line manager
- Staff manager
- Functional manager
- Project Manager
What is the role of a line manager?
Direct authority over subordinates
What is the role of a staff manager?
Authority in an advisory capacity .e.g IT manager advises production manager
What is the role of Functional Manager
Combination of line and staff manager - has authority in certain circumstances to direct, design and control activities or procedures in another department
What is the role of a project manager?
Temporary team managre
What are the three key roles within an organisation?
- Informational
- Interpersonal
- Decisional
What does informational management role mean?
Collect and share relevant information
What does Interpersonal management role mean?
Have effective interpersonal skills to lead and co-ordinate
What does decisional management role mean?
Make effective decisions regarding resources, problems, issues, negotations
What is culture?
Common assumption, values and beliefs that the people become ‘the way we do things around here’
What are the four features of business cultures?
- Flexible?
- Controlled?
- Inwards looking?
- Outwards looking
What does Flexible business culture mean?
Does the business allow change or initiative
What does controlled business culture mean?
Does the business seek stability and order?
What does inwards business culture mean?
Does the business focus on internal operations
What does outwards-looking business culture mean
Does the business adapt to external change and opportunity
What are the four types of business cultures?
- Human relations culture
- Open systems culture
- Rational goal culture
- Internal process culture
Define the flexibility, outlook and features of Human relations culture
Flexible
In-wards looking
Business is focused on being flexible to internal needs
Define the flexibility, outlook and features of Open systems culture
Flexible
Outwards looking
Flexible internally
Adapts to constantly changing envrionment
Define the flexibility, outlook and features of Rational goal culture
Controlled
Outwards-looking
Flexible internally
Adapts to constantly changing external environment
Define the flexibility, outlook and features of Internal process culture?
Controlled
Inwards-looking
Rigid and stable organisations
Driven by procedures
What are the five business functional strategies?
- Finance
- Human resource management
- Marketing
- IT
- Operations
Define marketing
Management process which identifies anticipates and supplies the customer requirements efficiently and profitably
What are the four marketing concepts
- Marketing orientation
- Sales orientation
- Production orientation
- Product orientation
What does marketing orientation mean?
- Business focused on the needs of potential customers as basis for its operations.
- Dependent on developing and marketing products to satisfy those needs
What does sales orientation mean?
- Purpose is to sell more of the product or services already available
- No attempt to identify customer needs nor create product or services which will satisfy them
What does production orientation mean?
- Make as many units as possible.
- Customer needs are are secondary factor
What does product orientation mean
Company is obsessed with developing a highly sophisticated and expensive product way beyond needs of customers
What are consumer markets?
Products/services brought for the use of individuals and their families
What are some features of customer markets?
- Fast-moving consumer goods (low value high volume)
- Consumer durables (high value, low volume)
- Services (doctor, dentist, holidays)
What are industrial markets?
Products and services bought for the use of customers
What are the examples of products from industrial markets?
- Raw material
- Components
- Capital goods
- Supplies
- Services
What are the characteristics of industrial markets?
- Small number of large customers
- Large purchase size
- Expert buyers - rational decisions - based on technical/detailed specifications
- High bargaining power
- Complex negotiation
What is a marketing mix?
Set of controllable marketing variables that a firm blends to produce the response it wants in the target market (Kotler)
What is the 4P model (or 7)
Outlines the marketing mix
P - Product where the customer physically buys
P - Promotion- How awareness is raised of goods to services
P - Place - How goods and services are distrubuted
P - Price - What is charged to customers and other discount loyalty schemes
Service industry specific P
P - People - the employee that provides the rservice
P - Processes - the order and how well things are done
P - Physical evidence - not many tangible products but appearance of employees is an example of how comfy the hotel bed is
What is market segmentation
Division of market into homogeneous groups of potential customers who are treated same for marketing purposesW
What’s a plus of segmentation?
Allows organisation to vary its marketing mix to each segment it cares about
E.g. when targeting families it focuses on safety of product whereas if segment is high income group the promotion will focus on the quality or status
What is operation management?
Involves the transformational process of changing inputs into outputs in order to add value.
Includes: Design, creation, implementation, and control of these processes
What are the FOUR Vs from operational management
V - Volume - High operations are more capital intensive than low volume operation and more specialisation of labour skills
V - Variety - Some operations handle a wide range of different items. Others can be more restricted
V - Variation in demand - Demand might vary significantly with periods of peak and low demand. [Seasons]
V - Visibility - If customer can see the operations e.g. mcdonalds
What is pure research?
Intended to gain new scientific or technical understanding although there is no commercial view point in mind
What is applied research
Research aimed at achieving an obvious commercial or practical view point
What is development research?
Takes existing scientific or technical knowledge and uses it to produce new products or systems intended for commercial production
What is procurement
Acquisition of goods or service
What are the three factors to consider for procurement
- Quantity - balance the risk of stock out and holding stock
- Quality - Quality of inputs affects the quality of outputs
- Price - The best price should be obtained based on weighing up quality, lead times, cost of holding stock
- Lead times - time it takes from order to delivery
What are the five rights of procurement?
- The right quality in
- The right quantity
- The right price
- The right place
- The right time
What is the supply chain?
Network of organisations, their systems, resources and activities that are required to turn raw resources into a product or service for end customer
What does integrated supply chain mean?
Sees members of the supply chain working collaboratively with shared goal of satisfying ultimate consumer through quality and efficiency
What is upstream supply chain
Supply chain members typically provide the raw materials and components for products e.g. ore mining
What is down stream supply chain?
Involved in getting finished goods to the ultimate consumer
What is human resource management?
Defined as the creation, development and maintenance of an effective workforce, matching requirements of the organisation and responding to the environment
What are the functions of HR?
- Personnel planning and control
- Job analysis and design
- Recruitment and selection
- Training and development
- Performance appraisal
- Discipline, demotion and dismissal
- Remuneration and compensation schemes
- Meeting legal and ethical standards
- Personnel records
-Communication/counselli - Workforce diversity issues
What are the two approaches of HRM
Hard and Soft
What are the differences between Hard and Soft HRM
- Hard: Emphasis on resource element HRM
- Soft: Emphasis on Human element of HRM
- Hard: Goal is to meet organisational objectives
- Soft: Goal is to create human assets
- Hard: Dictatorial/control business culture
- Soft: Flexible culture
- Hard: Management style top down, imposed
- Soft: Management style participative
- Hard: Training focused on meeting the current needs of the organisation
- Soft: Training focused on personal and career development
- Hard: Centralised structure
- Soft: Devolved, delegation, autonomy
- Hard: Short-term perspective
- Soft: Long-term perspective
Describe the Harvard FOUR C model to evaluate the effectiveness of HRM
- Commitment - assess employees’ motivation, loyalty and job satisfaction
- Competence - look at skills, abilities and potential
- Congruence - Do management and employees share the same vision and goals
- Cost-effectiveness - Operational efficiency and productivity
What are the four considerations of IT management
- Plan-inhouse IT activities - Updates and modification to ensure smooth systems
- Consider outsourcing or external help - If expert needs cannot be met by internal IT function
- Be aware of IT possibilities - Competitiveness
- Innovation and investment in service development
What is IT delivery?
- Data extraction and reports
- Capacity monitoring
- Customer billing
- Budgeting
What is IT service support
- IT maintenance
- IT security controls
- Prevention of IT problems
- Investigation of IT problems
What is organisational behaviour?
Understanding the individual behaviour, group behaviour and patterns of structure in order to improve organisational efficiency and performance
What is overt organisational behaviour?
Visible part of the business including
- Rules and regulations
- Products
- Physical assets
- Financial
- Resources
What is Covert organisational behaviour?
Invisible
- Attitudes
- Personalities
- Conflict
- Informal communication
What is motivation?
Reason for acting a certain way
What are the five layers of Maslow’s hierarchy of needs
TOP
1. Self-fullment - what people think about me
2. Ego Needs - Desire to be respected
3. Social Needs - Feel part of a group
4. Safety Needs - Physical safety when dealing with hazardous material
5. Basic Needs - Afford food shelter and clothing
What are the characteristics of a group
- Common sense of identify
- Common aim or purpose
- Behavioural norms
- Communication between members
- Leader
Why are groups a good thing?
- Bring together different skills
- Problem solve
- Plan/organise
- Co-ordinate between functions and departments
What are Tuckman’s four stages of development for a group
- Forming - team have no clue about rules
- Storming - Conflict through assertion, different POV
- Norming - Individual rules have been established
- Performing - Operating to full potential
What are Belbin’s 8 group roles
- Leader - co-ordinates the group
- Shaper - Promotes activity
- The plant - thoughtful and thought provoking
- The monitor-evaluator - criticise ideas
- The resource-investigator - adds to others ideas
- The team worker - defuses potential conflicts
- The finisher - progress chase
- The specialist/expert - if required
ONLY ONE LEADER AND SHAPER IS REQUIRED. AND ONE FINISHER. Equal numbers of the rest
What are four types of Rensis Likert’s leadership roles
- Exploitative authoritative
- Benevolent authoritative
- Consultative
- Participative
What is the difference between the four types of Rensis Liker’s leadership roles
- Exploitative authoritative: Decisions imposed
- Benevolent authoritative and Consultative: Increased trust in subordinates ability
- Participative: Complete trust and discussion
__ - Exploitative authoritative: Motivated by threats
- Benevolent authoritative and Consultative:
Motivated by participative motivation style - Participative:
Motivated by rewards - goals agreed
___
- Exploitative authoritative: Centralised decisions
- Benevolent authoritative and Consultative: Increasing delegation
- Participative: High degree of delegation
__
- Exploitative authoritative: Rare communication
- Benevolent authoritative and Consultative: Increasing communication
- Participative: Frequent communication
____ - Exploitative authoritative: Act as individuals
- Benevolent authoritative and Consultative: Increasing teamwork
- Participative:
Act as a team
