BAGIAN KEDUA:

THE MANAGEMENT
PROCESS
PENGANTAR MANAJEMEN
MATRIKULASI PRGRAM PASCA SARJANA
STIE INDONESIA BANJARMASIN
Hj. NIRZA MARZUKI HUSIEN, SE, MSi

The Management Process

Planning and
Decision Making
Setting the organizations goals and
deciding how best
to achieve them

Organizing
Determining how
best to group
activities and
resources

Controlling
Monitoring
and correcting
ongoing activities
to facilitate goal
attainment

Leading
Motivating members
of the organization
to work in the best
interests of the
organization

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Figure 1.2

Management in
Organizations
Planning
and decision
making

Organizing

Inputs from the environment

Human resources
Financial resources
Physical resources
Information resources

Goals attained
Efficiently
Effectively

Controlling

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Leading

13

Figure 1.1

The External
Environment
Environment

nm
al
en
t

Po
lit
ica
En
l/L
vir
eg
o

ph
ic

ra

m
og

ne

De

Ge

General

ic

Technological

ra
ne
Ge

al
t
ob
en
Gl
m
on

vir
En

Industry
Environment
Threat of new
entrants
Power of suppliers
Power of buyers
Product substitutes
Intensity of rivalry
Competitor
Environment

om
on
Ec

ra
l

Sociocultural

External Environmental
Analysis
A continuous process which includes

Scanning: Identifying early signals of environmental

changes and trends
Monitoring: Detecting meaning through ongoing observations of
environmental changes and trends
Forecasting: Developing projections of anticipated outcomes based
on monitored changes and trends
Assessing: Determining the timing and importance of environmental
changes and trends for firms strategies and their management

External Environmental
Analysis
Analysis of general environment
Analysis of industry environment
Analysis of competitor environment

The External
Environment
Strategic Intent
Strategic Mission

The Planning Process

The Environmental Context
The organizations mission
Purpose Premises Values Directions

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Strategic goals

Strategic plans

Tactical goals

Tactical plans

Operational goals

Operational plans

77

Figure 7.1

Contingency Planning
Ongoing planning process
Action point 1

Action point 2

Action point 3

Action point 4

Develop plan,

Implement plan and

Specify indicators

Successfully complete

considering

formally identify

for the contingency

plan or contingency

contingency events

contingency events

events and develop

plan

contingency plans for

each possible event

Monitor contingency event indicators and

implement contingency plan if necessary

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Developing and Executing Tactical Plans

Developing tactical plans

Executing tactical plans

Recognize and understand

Evaluate each course of action

overarching strategic plans

in light of its goal

and tactical goals

Obtain and distribute

Specify relevant resource and

information and resources

time issues

Monitor horizontal and vertical

Recognize and identify human

communication and integration

resource commitments

of activities
Monitor ongoing activities for
goal achievement

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Figure 7.4

Types of Operational Plans

Plan

Description

Single-use plan

Developed to carry out a course of action not likely to

be repeated in the future

Program

Single-use plan for a large set of activities

Project

Single-use plan of less scope and complexity than a

program

Standing plan

Developed for activities that recur regularly over a period of time

Policy

Standing plan specifying the organizations general

response to a designated problem or situation

Standard operating procedure

Standing plan outlining steps to be followed in particular circumstances

Rules and regulations

Standing plans describing exactly how specific activities are to be carried out

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710

Table 7.1

Barriers to Goal Setting and

Planning
Major Barriers

Inappropriate goals
Improper reward system
Dynamic and complex environment
Reluctance to establish goals
Resistance to change
Constraints

Overcoming the Barriers

Understanding the purposes of goals and planning

Communication and participation
Consistency, revision, and updating
Effective reward systems

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711

Table 7.2

Formal Goal-Setting Process

Starting
the formal
goal-setting
program

Establishment
of organizational goals
and plans

Collaborative
goal setting
and planning

Communicating organizational goals

and plans

Periodic
review

Evaluation

Meeting
Verifiable
goals and
clear plans
Counseling
Resources

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Figure 7.5

SWOT
Analysis
Strengths
Weaknesses
Opportunitie
s
Threats

Mission
An organizations fundamental purpose

SWOT Analysis
To formulate strategies that support the mission

Internal Analysis
Strengths
(distinctive
competencies)

External Analysis
Opportunities

Weaknesses

Threats

Good Strategies
Those that support the mission and
exploit opportunities and strengths
neutralize threats
avoid weaknesses

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813

Figure 8.1

Structure of Entrepreneurial
Organizations (contd)
Identifying a Genuine Business Opportunity
Where are they?

Who are my
customers?

At what price
will they buy
my product?

In what
quantities
will they
buy?

How will my
product vary
from those of my
competitors?

Who are my
competitors?
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Porters Generic Strategies

Strategy Type

Definition

Examples

Differentiation

Distinguish products or
services

Rolex (watches)
Mercedes-Benz (automobiles)
Nikon (cameras)
Cross (writing instruments)
Hewlett-Packard (hand-held calculators)

Overall cost leadership

Reduce manufacturing
and other costs

Timex
Hyundai
Kodak
Bic
Texas Instruments

Focus

Concentrate on specific
regional market, product
market, or group of buyers

Tag Heuer
Fiat, Alfa Romeo
Polaroid
Waterman Pens
Fisher Price

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Table 8.1

The Miles and Snow

Topology
Strategy Type

Definition

Examples

Prospector

Is innovative and growth oriented,

searches for new markets and new
growth opportunities, encourages
risk taking

Amazon.com
3M
Rubbermaid

Defender

Protects current markets, maintains stable growth, serves current

customers

Bic
eBay.com
Mrs. Fields

Analyzer

Maintains current markets and

current customer satisfaction with
moderate emphasis on innovation

Dupont
IBM
Yahoo

Reactor

No clear strategy, reacts to

changes in the environment, drifts
with events

International Harvester
(in the 1960s and 1970s)
Joseph Schlitz Brewing Co.
W. T. Grant

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Table 8.2

The Product Life Cycle

High

Stages
Growth

Maturity

Decline

Sales Volume

Introduction

Low

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Time

817

Figure 8.2

Related Diversification
Basis of Relatedness

Examples

Similar technology

Phillips, Boeing, Westinghouse, Compaq

Common distribution and marketing skills

RJR Nabisco, Phillip Morris, Procter & Gamble

Common name brand and reputation

Disney, Universal

Common customers

Merck, IBM, AMF-Head

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Table 8.3

The BCG Matrix

Market growth rate

High

Stars

Question
marks

Cash cows

Dogs

Low
High

Relative market share

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Perspectives,
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Low

Figure 8.3

Industry growth rate

The GE Business Screen

High

Winner

Winner

Question
mark

Medium

Winner

Average
business

Loser

Profit
producer

Loser

Loser

Good

Medium

Poor

Low

Competitive position

Competitive position

Source: From Strategy Formulation:

Analytical Concepts, by Charles W. Hofer
and Dan Schendel. Copyright 1978 West
Publishing. Used by permission of SouthWestern College Publishing, a division of
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1. Market share
2. Technological know-how
3. Product quality
4. Service network
5. Price competitiveness
6. Operating costs
820

Industry attractiveness

1. Market growth
2. Market size
3. Capital requirements
4. Competitive intensity

Figure 8.4

Decision-Making Conditions
The decision
maker faces
conditions of...

Certainty

Risk

Uncertainty

Level of ambiguity and chances of making a bad decision

Lower

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Moderate

921

Higher

Figure 9.1

The Classical Model of Decision

Making

obtain complete
When faced with a

and perfect information

decision situation,

eliminate uncertainty

managers should . . .

evaluate everything
rationally and logically

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. . . and end up with

a decision that best
serves the interests
of the organization.

Figure 9.2

Steps in the Rational

Decision-Making Process
Step

Detail

Example

1. Recognizing and
defining the decision
situation

Some stimulus indicates that a

decision must be made. The
stimulus may be positive or
negative.

A plant manager sees that

employee turnover has increased by 5 percent.

2. Identifying alternatives

Both obvious and creative

alternatives are desired. In
general, the more important
the decision, the more alternatives should be considered.

The plant manager can increase wages, increase benefits, or change hiring standards.

3. Evaluating alternatives

Each alternative is evaluated

to determine its feasibility, its
satisfactoriness, and its
consequences.

Increasing benefits may not be

feasible. Increasing wages and
changing hiring standards may
satisfy all conditions.

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Table 9.1a

Steps in the Rational

Decision-Making Process (contd)
Step

Detail

Example

4. Selecting the best

alternative

Consider all situational factors,

and choose the alternative that
best fits the managers
situation.

Changing hiring standards will take

an extended period of time to cut
turnover, so increase wages.

5. Implementing the
chosen alternative

The chosen alternative is

implemented into the
organizational system.

The plant manager may need

permission from corporate
headquarters. The human resource
department establishes a new wage
structure.

6. Following up and
evaluating the
results

At some time in the future, the

manager should ascertain the
extent to which the alternative
chosen in step 4 and
implemented in step 5 has
worked.

The plant manager notes that, six

months later, turnover has dropped
to its previous level.

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Table 9.1b

Evaluating Alternatives in the

Decision-Making Process

Is the alternative
feasible?

Yes

Is the alternative
satisfactory?

Yes

Are the alternatives

consequences
affordable?

No

No

No

Eliminate from
consideration

Eliminate from
consideration

Eliminate from
consideration

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Yes

Retain for further

consideration

Figure 9.3

The Administrative Model of

Decision Making
use incomplete and
When faced with a
decision situation
managers actually

imperfect information
are constrained by
bounded rationality
tend to satisfice

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. . . and end up with a

decision that may or may
not serve the interests
of the organization.

Figure 9.4

Advantages and Disadvantages of

Group and Team Decision Making
Advantages

Disadvantages

1. More information and knowledge

are available.

1. The process takes longer than individual decision making, so it is costlier.

2. More alternatives are likely to be

generated.
3. More acceptance of the final
decision is likely.
4. Enhanced communication of the
decision may result.

2. Compromise decisions resulting from

indecisiveness may emerge.
3. One person may dominate the group.
4. Groupthink may occur.

5. Better decisions generally

emerge.

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Table 9.2