Chapter 3: Management and Entrepeneurship Flashcards
Management
Taking responsibility for the innovative use of resources in order to achieve business goals
* Directing the business
* Making sure the business is sustainable
* Using resources to achieve business goals
* Making decisions that ensure that the business wil survive in an ever-changing environment
Levels of management
- Top level
- Middle level
- Lower level
At the end of the day all levels do the same basic thing, just to differ
Top Level Management
- Make strategic decisions
- Having to consider the demands of different interest groups
- Responsible for the overall performance and results of the business within the market share
Middle Level management
- Make tactical decisions
- Interpret top level’s decisions
- Decisions are then implemented while they ensure synergy of all departments
Lower Level Management
- Make day to day decisions
- Make decisions for the daily operations of the departments within the parameters of the business policies and procedures for those departments
Planning
Combining creative and logical thinking to improve the future performance of the business
* Principles of effective planning
* Importance of planning
* Steps in the planning process
Principles of effective planning
- Future must be anticipated in order to bridge the gap between where the business is currrently and where its future achievements and goals are
- Decision makers have to discuss, debate, and formulate the business’s vision, mission, policies, objectives, and procedures
- Management has to plan where and how resources are going to be obtained
- Flexibility
- Discussing decisions with the manager’s superior to make sure its realistic
Imprtance of planning
- Making sure that all business decisions are aimed at the vision and mission
- Attention is focused on the business objectives
- Helps management prepare for changes and helps them be more proactive
- Ensures the integreation of business functions
- Plans can be used as benchmarks/ standards to perform at
Steps in planning process
- Establishing objectives- Management must determine direction of the business which will thus determine the vision, mission, and objectives
- Decidnig on a planning period- achieve long-term or short-term objeectives
- Considering alternatives- Having contigency plans and choosing the msot feasible and viable option
- implementing the plan- executing the chosen option and making sure theres the necessary resources in place
- Control- Making sure the objectives are reached according to the benchmarks set.
Organising
- Steps that need to be undertaken to ensure the business objectives are achieved
- Helps focus all activities toward achieving success
Steps in Organising
- Considering objectives
- Identifying and grouping actvities
- Assigning duties
- Delegating authority
Considering Objectives
Manager must make sure that business knows what the objectives are and the importance in achieving them
Identifying and grouping activities
Business must know which activities are important in achieving the objectives. Knowing what activities need to be done helps the business avoid unnecessary mistakes
Assigning duties
Once activities have been set, tasks will given to the workers of different teams to make sure they know what is expected of them. Then resources are given to those teams to help them accomplish those tasks.
Delegating authority
Necessary authority is given to subordinates to make sure that tasks are in line with objectives
Advantages of organising
- Patterns of communication- Organising people in a logical manner helps to create communication structure
- Stimulates growth- A flexible structure/framework will promote growth because the business will be able to create new opportunities
- Creates proper balance- Balance is created when activities of the same importance are given to the same level of management
- Encourages creativity- People’s creativity is stimulated when they are forced to focus at the task at hand
- Authorty and responsibilty-organising helps identify which stakeholder is responsible for what task
Principles of leadership
- Harmony of objectives- Manager must ensure that the business’s objectives are achieved as well as the staff’s personal ones
- Effective communications- Make sure all employees understand the procedures and policies of their responsibilty
- Unison of direction- Employees know they must report to and get instructions from
- Direct supervision- When a manager has a more personal approach and knows personal details about his employees
- Follow Up- Manager must be aware of staff’s difficulties and be able to accomodate to them without micro managing
Difference between a leader and a manager
- A manager is an appointed position in a business
- They have formal power
- Leaders influence the team into completing what’s required
- They have informal power
Sound leadership qualities
- Planning- Be prepared to achieve future goals
- Make decisions- Be able to make best decisions for whats required
- Guide staff- Be able to guide staff when things go wrong
- Encourage- To encourage rewards and implement discipline
- Initiative- Must not just sit on the side lines but must also get involved in tasks in need be
- Mediator and Atributor- Will encourage relationships between staff and solve conflict
Types of leadership
- Autocratic- No staff gets to contribute to decision making or objectives
- Democtratic- Leader allows staff to participate in decision making or objectives
- Laissez Fair- Leader provides resources for everyone to make the decision
Control
Comparing the future goals with the current state to make sure there is progress
* Establishing standards
* Measuring performance
* Corrective Action
Communication
Making sure that everyone knows what to do, how to do it, and why.
Sound Coordination
- Clear objectives
- Comprehensive objectives
- Induction
- Chain of command
- Liaison between departments
Clear objectives
- Everyone should be abble to umderstand the objectives ao that there is little room for confusion and therefore less conflict
Comprehensive Policies
- These create uniformity within the workplace as everyone will understand what is expected of them
Induction
Ensures that emplyees know the vision, mission and objectives from day one so that they know what to do from the word go
Chain of command
This is the line of authority in the business and knowing this makes communication faster and less conflict
Liaison between departments
Every department is dependant on each other so they have to be coordinated so they can communicate what they need from one another
Delegation
Manager must distribute authoruty and responsibility to subordinates and make sure that they have the adequate training to complete that repsonsibility. Manager must also assess the effectiveness of the delegation
Discipline
- Discipline is to guide the future behaviour of the employee
- The intensity of the discipline depends on the offense
- Employees shoild be made aware of this through the business’s code of conduct
Decision making
Manager must make decisions based off of PESTLE and Porter’s factors
Motivation
If employees are pushed to perform they must be motivated to have special interest in their tasks. Performance is dependant their ability to achieve and their willingness to achieve
Maslow’s hierachy of needs
- Psychological needs- Basic survival
- Security needs- Feel safe and secure
- Social needs- Sense of belonging
- Esteem needs- Develop a need for power
- Self-actualisation- Personal desires to reach full potential
Adam’s Equity Theory
- Workers will determine if the rewards are equitable or not
- Inequitable rewards=Low efforts and reduced output
- Equitable rewards=Efforts will be kept the same and output will remain steady
- Over-equitable=Higher efforts and output will exceed expectation
Entrepeneural qualities
- Initiative
- Planner
- Risk taker
- Concern for quality
- Assertive
- Persistent
- Credible
- Experienced
Difference between Entrepeneur and Manager
- Manager is employed, entrepeneur builds their business and owns it
- Manager does not bear financial risk, entrepeneur assumes all risk
- Manager is rewarded with a salary, entrepenuer recieves profit
- Manager executes plans, entrepeneur creatives and innovates
Activities performed by entrepeneur
- Generating ideas
- Market research
- Obtaining funds
- Procurement
- Recruitment
- Executing ideas
Intrapeneur
An employee working in a large business who is always coming up with new ideas and converts them into new products/services
Ultrapeneur
Sells shares once the business has established itself, aim is to recieve maximum return in the shortest amount of time
Eco- preneur
Business’s purposed is to combat environmental problems
Socio-preneur
Business’s goal is to solve social problems, not profit
Techno-preneur
Uses technological developments as business ventures
Tender-preneur
Adapt the business to qualify for tenders. Live off of tenders then subcontract them to other businesses
