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Chapter 5

 Perspectives of Business and Management (Syracuse University)

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Chapter 5: Managing the Business

I. The Management Process: describe the nature of management and identify the four basic
functions that constitute the management process
A. The basic management functions
1. Management is the process of planning, organizing, leading, and controlling an
organization’s financial, physical, human, and information resources to achieve its
goals
B. 4 basic managerial functions
1. Setting goals - planning
2. Setting up the organization - organizing
3. Managing people - leading
4. Monitoring performance - controlling
C. Planning
1. Manager must determine the firm’s goals
2. Develop a strategy
3. Design tactical and operational plans for implementation
D. Organizing
1. Delegating roles and allocating resources
E. Leading
1. Guiding and motivating employees
F. Controlling
1. The process of monitoring a firm’s performance and testing performance against a
standard
G. The science of management
1. Managers need to take a scientific approach to problem solving - so they need to
make decisions based off data, facts, etc - need research and analysis
H. The art of management
1. They also solve problems on the basis of intuition, experience, instinct, and personal
insights
2. Relying heavily on conceptual, communication, interpersonal, and time-management
skills
I. The role of education in becoming a manager
J. The role of experience in becoming a manager
II. Types of managers: identify different types of managers likely to be found in an organization by
level and area
A. Levels of management
1. The three basic levels of management are: top, middle, and first-line
2.
B. Areas of management
1. Human resource managers
a) hire and train employees, evaluate performance, and determine
compensation
2. Operations Managers
a) responsible for production, inventory, and quality control
3. Marketing Managers
a) responsible for getting products from producers to consumers

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4. Information Managers
a) design and implement systems to gather, organize, and distribute
information
5. Financial Managers
a) plan and oversee its accounting functions and financial resources
III. Management Roles and Skills: describe the basic roles and skills required of managers
A. Managerial roles

B. Basic Management Skills

1. Technical Skills: the skills needed to perform specialized tasks - writing code,, ability
to draw, ability to audit
a) Developed through education and experience
2. Human Relations Skills: skills that enable managers to understand and get along with
other people
a) Most important for middle managers who act as a bridge between tap
managers, first-line managers, and managers from other organizations
3. Conceptual Skills: refer to a person’s ability to think in the abstract, to diagnose and
analyze different situations, and to see beyond the present situation
a) help managers recognize new market opportunities and threats
4. Decision-making skills: the ability to effectively define a problem and to select the
best course of action
a) involve gathering facts, identifying solutions, evaluating alternatives, and
implementing the chosen alternative
5. Time management skills: the productive use that managers make of their time
a) 4 leading causes of wasted time
(1) Paperwork: some managers spend too much time deciding what to
do with letters and reports - they need to learn how to quickly
recognize and handle papers
(2) Telephone calls: interruptions of phone calls - they should have an
assistant screen calls and set aside a certain block of time each day
to return the important ones
(3) Meetings: to make meetings more efficient there should be a clear
agenda and everyone should remain focused
(4) Email: spam mail
6. Global Management skills
a) Need to understand foreign markets, cultural differences, and the motives
and practices of foreign rivals in order to compete in the global environment
b) Need to understand international operations - helps firms transfer their
corporate cultures to foreign operations
7. Management and technology skills
a) New forms of technology have added to a manager’s ability to process
information while simultaneously making it even more important to organize
and interpret an ever-increasing wealth of input and to develop effective
technology skills.
b) Information now flows to everyone simultaneously, as opposed to before
technology it strictly moved up and down through hierarchies

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IV. Strategic Management: Setting Goals and Formulating Strategy: Explain the importance of strategic
management and effective goal setting in organizational success.
A. Strategic management: the process of helping an organization maintain an effective alignment
with its environment
1. Ex. fierce competition may cause the company to cut its costs and develop better
products
B. Strategy: a broad set of organizational plans for implementing the decisions made for
achieving organizational goals
C. Setting Business Goals
1. Purpose of goal setting
a) Provides direction and guidance for managers at all levels
2. helps firms allocate resources
a) Areas that are expected to grow get first priority
3. helps to define corporate culture
4. helps managers assess performance
a) Which employees achieve the goals and are good workers
D. Kinds of goals
1. Mission statements: how they will achieve their purposes in the environments in
which they conduct their businesses
2. Long-term goals : 5 or more years - expanding into a larger marketplace
3. Intermediate goals: 1-5 years - increasing sales by a certain percentage
4. Short-term goals: 1 year - reducing turnover percent over the next 6 months
E. Types of strategy
1. Corporate Strategy: to determine what business or businesses a company will own
and operate
a) A company may decide to grow by increasing its activities or investment or
to retrench by reducing them
b) related/unrelated diversification/e-partnering
(1) Related: A company owning various similar operations - YUM
owns KFC and taco bell
(2) Unrelated: a company owning different operations - Samsung owns
phones and hotels
(3) e-partnering: buying shares of small companies that can provide
technology that AmEx itself does not have
2. Business Strategy
a) corporation owns and operates multiple businesses, it must develop
strategies for each one
(1) Ex. pepsi has a different strategy for its soft-drink as opposed to its
juices
3. Functional Strategy:
a) managers in specific areas such as marketing, finance, and operations decide
how best to achieve corporate goals by performing their functional activities
most effectively.
(1) Ex. Pepsi develops functio strategies for marketing and operations
strategies for distribution
F. Formulating strategy

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1. Step 1: setting strategic goals

a) strategic goals are derived directly from a firm’s mission statement
2. Step 2: analyzing the organization and the environment: SWOT
a) To asses the organization use SW
b) To assess the environment use OT - environmental analysis
3. Step 3: Matching the Organization and Its Environment
a) Matching environmental threats and opportunities against corporate
strengths and weaknesses
(1) This is the heart of strategy formulation - tows matrix
G. A Hierarchy of Plans - translating the strategy into more operations language ie a game plan

1. Strategic plans: reflect decisions about resource allocations, company priorities, and
the steps needed to meet strategic goals
2. Tactical plans: shorter-term plans for implementing specific aspects of the
company’s strategic plans
a) Managers develop short term plans to guide decisions that are consistent
with the strategic plan
3. Operational plans: short-term targets for daily, weekly, or monthly performance -
how things need to be run
V. Contingency Planning and Crisis Management: Discuss contingency planning and crisis management
in today’s business world
A. Contingency planning: seeks to identify in advance important aspects of a business or its
market that might change
1. Also identifies the ways in which a company will respond to changes
2. When you expect something to happen and it doesn’t you need a backup plan
B. Crisis Management: involves an organization’s methods for dealing with emergencies
VI. Management and the Corporate Culture: describe the development and explain the importance of
corporate culture
A. Corporate culture: the shared experiences, stories, beliefs, and norms that characterize an
organization.
1. This culture helps define the work and business climate that exists in an organization
2. directs employees’ efforts and helps everyone work toward the same goals
3. corporate culture helps newcomers learn accepted behaviors
B. Building and communicating culture
1. In some cases corporate culture emanates from the days of an organization’s founder
2. In other cases, an organization’s culture is forged over a long period of time by a
constant and focused business strategy
3. Corporate culture influences management philosophy, style, and behavior - so
managers must constantly work on developing a strong culture and the communicate
it with everyone
C. Changing culture

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