MANAGEM
ENT
FUNCTIONS
Planning
and
Decision making
in
Agribusiness
PLAN
is a blueprint or framework used to
describe how an organization expects to
achieve its goals.
PLANNING
is the process of determining which path, among
several possibilities, to follow in attempting to
reach a particular goal.
GOAL
is a desired state or condition that the
organization wants to achieve—a target the
organization wants to hit.
goals provide a clear purpose or direction for an
organization
E.g. A farm decides to go organic
Types of Goals
1. Goals by Management Level.
- are the purpose and mission of the organization as
determined by its board of directors. An organization’s
purpose is its reason for existence. An organization’s
mission is the way it attempts to fulfill its purpose.
Types of Goals
2. Goals by Organizational Area
- goals can also be established for each area across different
levels of an organization
- Managers in the marketing area might develop goals for
sales, sales growth, market share, and so forth. Operations
managers can establish goals for costs, quality, and
inventory levels. Financial goals can relate to return on
investment and liquidity. Human resource goals relate to
turnover, absenteeism, and employee development.
Research and development goals may include innovations,
new breakthroughs, and so forth.
Types of Goals
3. Goals by Time Frame and Specificity
- goal specifies the unit, the target amount, and a time frame
- Specificity refers to the extent to which the goal is precise
or general
E.g. Nestlé has a goal of providing products worldwide. This is
a very general goal in that it specifies no time frame and
establishes only a broadly stated target
Steps in Setting Goals
1. Scan the Environment
- The managers in an organization first scan the environment
for opportunities & threats and then assess organizational
strengths and weaknesses.
2. Establish General, Unit, and Subunit Goals
- establish general organizational goals that match strengths
& weaknesses with opportunities and threats.
3. Monitor Progress
- managers to monitor progress toward goal attainment at all
levels of the organization. This progress subsequently
affects all of the other steps as the cycle repeats itself.
Steps in Setting Goals
Kinds of Planning
1. Strategic Planning
- formulates the broad goals & plans developed by top
managers to guide the general directions of the
organization.
- follows from the major goals of the organization and
indicates the businesses the firm is in or intends to be in
and the kind of company its top managers want it to be..
Farms would include, for example, deciding when and how
much additional acreage to buy, whether to add new areas
such as food processing and packaging, or how to increase
the demand for any one of its products if it has the capacity
to do so. .
Kinds of Planning
2. Tactical Planning
- tends to focus on people and action and how to implement
the strategic plans that have already been developed. It
also deals with specific resources and time constraints..
3. Operational Planning
- operational planning has the narrowest focus and the
shortest time frame. Such plans are usually supervised by
middle managers but executed by first line managers.
There are two basic kinds of operational plans: standing
plans and single-use plans. .
Kinds of Planning
Standing plans – are the plans for handling recurring and
relatively routine situations
- basic kinds of standing plans
include policies (the most general),
standard operating procedures,
and rules and regulations (the
most specific).
Policies are general guidelines that govern relatively
important actions within the organization.
Standard operating procedures (SOPs) are more specific
guidelines for handling a series of recurring
activities
rules and regulations are statements regarding how to
perform specific activities.
Kinds of Planning
Single-Use Plans – are the plans handling one-time-
only events
- two types of single-use plans
include programs and projects.
A program is a single-use plan for a large set of
activities.
A project is similar to a program but usually has a
narrower focus.
Kinds of Planning
Contingency Planning
- is the part of the planning process in which managers
identify alternative courses of action that the organization
may follow if various conditions arise.
CHAPTER SUMMARY
A plan is a blueprint or framework used to describe how an
organization expects to achieve its goals. Planning is the process of
developing plans or of determining how best to approach a particular goal.
Because planning is so important, every manager must be involved in the
process.
A goal is a desired state or condition that an organization wants to
achieve. Goals may be differentiated by level of management, area, and time
frame and specificity. The steps in the goal-setting process are (1) scan the
environment for opportunities and threats; (2) assess organizational strengths
and weaknesses; (3) establish general organizational goals; (4) establish unit
goals; (5) establish subunit goals; and (6) monitor progress toward goal
attainment and provide feedback as the cycle repeats. Goal optimization is the
process of balancing and trading off between different goals for the sake of
organizational effectiveness.
CHAPTER SUMMARY
The three major kinds of plans are strategic, tactical, and operational.
Strategic plans are the broad, long-term plans developed by top managers to
guide the general directions of the organization. Tactical plans are designed to
implement strategic plans and hence have moderate scopes and intermediate
time frames. Operational plans have the narrowest focus and the shortest time
frames and are executed by first-line managers.
The three major time frames for planning are long-range,
intermediate, and short-range. Long-range planning covers a period of time is
as short as several years or as long as several decades. Intermediate planning
generally takes about one to five years. Short-range planning covers time
periods of one year or less and focuses on day-to-day activities, thus
providing a basis for evaluating progress toward the achievement of
intermediate and longrange plans. Each of these time frames should be
integrated with the others to ensure smooth functioning of the organization.
CHAPTER SUMMARY
Contingency planning is the part of the planning process that
identifies alternative courses of action that an organization may follow if
various different conditions arise. Critical contingency events relate either to
the extent to which the ongoing plan is being accomplished or to
environmental events that might change things in the future.
Roadblocks to effective planning include the environment, resistance
to change, situational constraints, poor goal setting, and the time and expense
of planning. Guidelines for avoiding these roadblocks include starting at the
top, recognizing the limits to planning, communicating, participating,
integrating, and developing contingency plans.
ORGANIZING
in
AGRIBUSINES
S
ORGANIZING
is the process of grouping activities and resources in a
logical and appropriate fashion.
pattern of organization which may have worked well in
a company’s early years must often give way in later
years to one better suited to its newer, more complex
environment and its expanded strategy.
earlier organization may have been eminently logical at
first but became obsolete over time
ORGANIZING
CONCEPTS
ORGANIZING CONCEPTS
1. Designing Jobs
- operating managers and managers from the
human resource department at some time
carefully decided how a job should be performed,
based on the best design for the job
Job design is the process of determining the procedures and
operations the employee in each position will perform.
The basis for all job-design activities is job specialization
ADVANTAGE
Advantages of Job Specialization
1. allows each employee to become an expert.
2. allows managers to exercise greater control
over workers
3. facilitate the development of equipment and
tools that can increase the efficiency of the job
holder
DISADVANTAGE
Disadvantages of Job Specialization
1. If the job is simplified too far, employees may
spend so much time passing the work from
person to person that efficiency is actually
decreased.
2. if jobs are too simple and specialized, workers
quickly get bored performing them. They
become dissatisfied, and their performances
may drop or they may consider looking for
more exciting work elsewhere.
ALTERNATIVES
Alternatives to Specialization
1. Job Rotation
- involves systematically moving employees from
one job to another.
- a way to train employees in a variety of skills
and/or as a part of a more comprehensive
job design strategy.
2. Job Enlargement
- involves adding more activities to the job and
changes the nature of the job itself.
- a way to train employees in a variety of skills
and/or as a part of a more comprehensive
job design strategy.
ALTERNATIVES
Alternatives to Specialization
3. Job Enrichment
- workers are given not only more activities to perform
but also more discretion as to how to perform them.
ORGANIZING CONCEPTS
2. Grouping Jobs
- properly grouped jobs make it easier to coordinate
and integrate activities and, hence, achieve the
goals of the organization. The process of grouping
jobs is called departmentalization or
departmentation.
- There are 3 bases for departmentation - by
function, by product, and by location
ORGANIZING CONCEPTS
Departmentalization by Function
- grouping together employees who are involved in the
same or very similar functions or broad activities
Departmentalization by Product
- group together all the activities associated with
individual products or closely related product groups
Departmentalization by Location
- jobs that are in the same or nearby locations are
grouped together in a single department
ORGANIZING CONCEPTS
Other Considerations in Departmentalization
Some companies use other bases of departmen-talization, such
as departmentalization by customer. This approach allows the company
to group activities associated with individual customers or customer
groups. Time also serves as a base for departmentalization. A plant
might operate on three shifts, and the company might view each shift
as a department. Departmentalization by sequence occurs when a
sequence of numbers or other identifying characteristics defines the
separation of activities. Customers who are picking up orders or buying
tickets may be organized into different lines on the basis of their last
names or the status of their order (place order here, pick up prepaid
orders, reserved or will-call tickets, etc.).
ORGANIZING CONCEPTS
3. Line and Staff Positions
- The last element of the organizing process is the idea of
line and staff positions. Line positions are traditionally in
the direct chain of command with specific responsibility
for accomplishing the goals of the organization. Staff
positions are outside the direct chain of command and are
primarily advisory or supportive in nature.
ORGANIZING CONCEPTS
3. Authority And Responsibility
- Another important part of the organizing process is
determining how to manage authority and responsibility
4. Group Effectiveness
Another important concept in organizing is group
effectiveness. Group effectiveness traditionally was thought to
be partly a function of the span of management, which is the
number of people who directly report to a given manager.
Companies must consider the relation of this number to group
effectiveness and to overall organizational effectiveness.
LEADING
in
AGRIBUSINES
S
LEADERSHIP
an influence process directed at shaping the
behavior of others and occurs in a variety of
settings and in a variety of ways
LEADERSHIP vs
MANAGEMENT
Leadership and management are in some
ways similar but in more ways different.
People can be leaders without being
managers, or managers without being
leaders, or both managers and leaders at the
same time
Differences Between Management and Leadership
Challenges of Leadership
To fulfill others’ expectations of them,
leaders must confront numerous challenges.
In large measure, the success of any given
leader depends on his or her ability to
address these challenges in a way that people
will accept
Power and Leadership
The foundation of leadership is power.
Leaders have power over their followers and
wield this power to exert their influence. The
various kinds of power can be used in
several different ways.
TYPES OF POWER
There are five basic types of power
1. Legitimate power
- is power created and conveyed by the organization
The person formally in charge of a group can generally
tell group members how they should be doing their jobs, how
they should allocate their time at work, and so forth
2. Reward power
- the power to grant and withhold various kinds of rewards
Typical rewards in organizations include pay increases,
promotions, praise, recognition, and interesting job
assignments
TYPES OF POWER
There are five basic types of power
3. Coercive power
- is the power to force compliance through psychological,
emotional, or physical threat
- coercion may take the form of physical force
4. Expert power
- is power based on knowledge and expertise
- The more important the knowledge is and the fewer people
who are aware of it, the more expert power the person has.
TYPES OF POWER
There are five basic types of power
5. Referent power
- the power that generally sets leaders apart from nonleaders.
- is based on personal identification, imitation, and charisma
USES OF POWER
There are numerous ways to use power. The manager
can make a legitimate request—that is, simply ask someone to
do something that falls within the normal scope of his job.
The manager may also try to gain instrumental
compliance—that is, use reward power by letting the person
know that a reward will be forthcoming if he does what is
needed
Coercion is the use of coercive power to get one’s way.
In the business context, it involves threatening a group
member.
LIMITS and OUTCOMES
Regardless of the manager’s skill, power always has its
limits. As a general rule, people can be influenced only up to a
point. Moreover, their willingness to follow someone may be
quite short-lived.
Few leaders can maintain long-term support for their
ideas and programs when mistakes are made and faulty
decisions are implemented.
When a person in charge attempts to influence group
members, the members usually respond in one of three ways:
commitment, compliance, or resistance
LIMITS and OUTCOMES
Commitment is the outcome when the manager is also a
leader. People are committed to the person and therefore
respond favorably to his or her attempt to influence them.
Compliance occurs when the person in charge is strictly
a manager but has little leadership quality. Employees go along
with the request but do not have any stake in the result.
Resistance occurs when the manager’s power base is
weak or inconsistent with the situation.
CONTROLLING
in
AGRIBUSINES
S
CONTROLLING
is the process of monitoring and adjusting
organizational activities toward goal attainment
AREAS of CONTROL
1. Physical resources control
- deals with such areas as inventory control
(having neither too much nor too little inventory),
quality control (ensuring that products are being
made to appropriate quality standards), and
equipment control (having the proper equipment to
do the job).
AREAS of CONTROL
2. Human resources control
- focuses on such activities as
employee selection and placement (hiring the right
kinds of employees and assigning them to
appropriate jobs within the organization), training
(upgrading employee skills), performance
appraisal (assessing employee performance), and
compensation (paying neither too much nor too
little).
AREAS of CONTROL
3. Information resources
- control involves making sure that various
forecasts and projections are prepared accurately and on a
timely basis, that managers have access to the information
they need to make decisions effectively, and that the proper
image of the organization is projected to the environment.
Without the right information, managers cannot make
decisions or they may make poorly conceived decisions.
AREAS of CONTROL
3. Financial resources control
- financial resources themselves must be
controlled.
- the organization needs to have enough cash on
hand to be able to function but not so much that resources
are used inefficiently
- many of the other areas of control relate to
financial resources. Improper inventory management costs
money, as do poor employee selection, inaccurate
forecasts, and so forth.
- financial resources are needed to maintain the
other resources of the firm and to keep it on sound footing.
