BUS 103 Business Management Business Management BUS 103

BUS 103 Business Management

Business Management BUS 103 Course: This course will provide a comprehensive readable introduction to management theory and practice in English. The course will integrate a classical and modern concepts so students can interact in a real word organization. Objectives: Students will be able to learn and grasp: Management key concepts and terms/ Management theory and history/ Management process. Content: Nature of Management Evolution of Management thought The changing environment of Management Primary Management function

Book: Principles Of Management M. Govidarajan / S. Natarjan Prentice_Hall Of Fndia/2005 Prepared by: DR. Ghada Nemetallah King Abdulaziz Univ Faculty of business Administration

Chapter 1 Introduction To Business

Definition Of Business: Q: What is business? A: Business is buying and selling. Q: What? A: Goods (cars or books) and services (change currency) Q: By whom? A: By labour (workers) Q: For whom? A: For customers, clients, people. Q: Why? A: For profit (money) Q: Where? A: In the market (world). So business is buying and selling goods and services, by labour to the consumers for profit in the market.

Business for profit In the market by labour Means of business Aim of business Risks of business buying & selling for consumers goods & services exchange of goods and services. wealth, profit, money -changing technology (If new machines or new theories appear, rest is history) -changes in consumer’s preferences (People change every day and their ideas and likes too. People go after fashion) -competitive threats (If people make the same product but less in price, this will affect business) -government policies (taxes, no deals with certain countries etc. )

Objectives of business Social Economic 1 -return on investment (ROI) 2 -growth of business (merger/diversification) 3 -product innovation 4 -ensure productivity (strong market position) 1 -prevention of environmental pollution and ecological imbalance 2 -development of locality of a business 3 -development of backward areas 4 -promotion of small Scale business

Essentials of good business : 1 -Well-defined objectives (what do you want to do) 2 -Up-to-date and proper planning (reliable plan) 3 -Proper location (minimize costs & maximize profits) 4 -Flexible Management (responds to changes) 5 -Good organization structure (good manager & effective employees 6 -Customer-focused marketing system (aim is the satisfaction of buyer) 7 -Sound personnel policies (laws for employees)

Difference between management and administration Management Art of getting things done through people in formally organized groups. Art of directing human activities and physical resources to reach a goal. As a term used in business world. Administration -Activity of regulating day to day operation in an organization. -Getting policy decisions done. -Term used in government circles.

Five basic Functions of management 1 -Planning 2 -Organizing 3 -Staffing 4 -Directing 5 -Controlling -Develop plans & future plans to counter threats(make plans for the organization & be prepared for any competition). -Assign duties (give work -Establish authorities (say who is the boss) -Allocate resources (make business) -Recruitment (hire employees) Leading, influencing, motivating human resources -monitor performance to reach the goal (supervising all basic functions of management for the success of company)

Manager Q: Who is the manager? A: He is the one who acquires the five basic functions of management. He plans, organizes, leads and controls for goal. Modern Manager Q: Who is the modern manager? A: He is not an owner-manager, but a salaried one. He does not own the company or the organization, but he is an employee hired from outside and takes a salary.

Characteristics Of Modern Manager 1 -Encourages employees to use technology. (we live in an information age and technology changes and develops every day). 2 -Encourages employees of an organization to develop team work spirit. (every employee joins forces with his colleague, shares ideas and effort). 3 -Makes an atmosphere of empowerment (he lets the workers make decisions and increase productivity). 4 -Applies scientific methods to the development of knowledge (uses science in work, ideas, experiments, concepts etc). 5 -He applies management theory, (understands, communicates and learns)

Objectives of modern manager: 1 -Efficient use of resources(no waste of time & energy) 2 -Customer satisfaction (as the customer is the goal & for more development & profit) 3 -Return on capital (profit from invested money) 4 -satisfied work force (as the workers are the assets of the company, they should be satisfied) 5 -Improved work conditions (wages, good salaries, security) 6 -Supplier relationship (good relations with supplier is a must for supply of raw material) 7 -Contribution to national goal (a good company is useful to its country)

Managerial Roles To be success full at work, managers assume or have many roles. 1 -Interpersonal 2 -Informational 3 -Decisional provide information (he should feed his employees with info) and be a good person with them. process information (checks if understood and applied) use information (be powerful and takes good decisions on time) initiates change.

Managerial Roles Interpersonal : Figurehead (represents the company legally and socially eg. weddings) Leader (unique position) Liaison(interacts with peers and people outside the organization ) Informational : Monitor (receives and collects info. ) Disseminator (transmits special info. into the organization) Spokesperson (disseminates the org. ’s info into its environment)

Decisional : Entrepreneur(initiates change) Disturbance Handler (deals with threats to the org. ) Resource Allocator (where the org. expands its efforts) Negotiator(negotiates on behalf of the org. )

Managerial skills The manager should acquire three skills: 1 -Technical uses the techniques of specialized people e. g. engineers, surgeons, accountants. 2 -Human 3 -Conceptual Understands and be able to work with other people Coordinate and integrates goals with activities (decides what is the aim and go for it and be determined to achieve it)

president Supervisor A Employees Vice president Finance Vice president Marketing Supervisor B Supervisor C Employees Vice president production

Managerial ethics 1. Ethics are the standards of behaviour. Managerial ethics guide thinking and decision –making of the managers. He can know by the managerial ethics what is good and what is bad. 2. Managers should pay close attention to the values that guide the employees in the firm. it is important to differentiate between personal ethics and business ethics. Deals with How we treat others in our –day to day life Involves choices on an organizational level and not on personal one Eg. If the manager does not like a certain worker who does his job perfectly, the manager should judge him professionally and not personally.

Four Management levels This means that there are different levels in any company and various managerial positions. 1 -Top-level management executives (those responsible for overall management) make plans + put instructions + prepare budgets etc). 2 -Upper middle management heads of divisions (responsible for effective performance of departments). 3 -Middle management employees directing the work and activities. 4 -lower level or first line supervisors, foremen (guide and Train works)

Scientific Management Is the kind of management that depends on observation and experiment. The Manager should not stick to old ways but observe new trends, thinks of new theories, tries them if they are successful and could bring profit to the organization.

History of Management There are many scientists who contributed to the field of management. They developed theories in the area. Babbage Taylor Gilbreth Gantt -specialization of labour (all workers and employees should be specialized and have experience in their fields). -science for each job. -select skillful workers. -incentives (prizes or bonus) for good results -divide responsibilities. -rest pauses in 8 hr work. (workers take rest after working eight hours). -work quota systems (number of working hours differs from one employee the other). -bonus (work more and there is a new system giving you a prize)

History of Management Fayol all management tasks are classified under categories ( Technical , Financial, Accounting) (he cares about the function of categories in the departments) Barnard Simon organizational communication system(success comes where employees accept authority of others). he believes that the manager is an administration man not an economic man. (he should lead, select, choose, decide and not count profit and loss only)

History of Management Owen Munsterberg Mayo Follet Maslow Mc. Gregor he was the first to speak about (HR) (He cares about people and not machines) he was the father of industrial psychology. (he studied the application of psychology in work) he studied factors of satisfaction and dissatisfaction to the workers (he is important for the study of behavior at work) he believes in group work and self control. employees share same power and beliefs. he believes that a man’s needs could be placed in “hierarchy of needs” he cares about employee work relationship. He is interested in humane view.

Business environment Just as Human beings get affected by the environment, so does the business. These environments can be classified into four groups: 1 -Economic 2 -Social 3 -Political 4 -Legal -Capital (money) -Labour (employees “good” + worker “bad”) -Price levels (changes could create problems) -Government tax policies -Customers (business is based on customers) -Technology (new products, tools, machine) -Desires, expectations and attitudes of people could be high or low, change and effect business causing loss or gain. -leaders make new laws or new restrictions could affect business -laws and regulations could make any business successful or failure.

Approaches to the study of Management There are different schools and various thoughts. one of them, as an example , is: Contingency or situational approach This approach emphasizes the idea that managers depend upon a given set of circumstances when they take a decision. Contingency means situation. •

This approach addresses managers and how they behave and what is the influence they are exposed to when they face a situation. The manager’s task is to identify the technique they will use in a particular situation under particular circumstances.

Caselets in Management Chapter 1, p. 23 ( in the book) Problem of being a supervisor: In Farm Products limited, there was a supervisor who had risen to his position by way of hard work and sincerity. Before , becoming a supervisor , he had been a very active and dynamic unionist. After becoming supervisor he, was forced to drift away from union activities. The union leaders did not like the clerk’s promotion to a supervisor post.

One day he assigned some work to the peon of the department but the peon refused to do the same. There was an exchange of heated arguments ; lot of people gathered around at a certain point of time , the supervisor, offensively gesticulated towards the peon. the whole department refused to work unless the supervisor apologized for his behavior and the trade union was also brought into a picture.

Question 1: If you were the personnel manager , how would you resolve the When a student reads a caselet , three steps let 3. provide the solution

With regards to the above caselet , there is the situation : 1. Conflict between the employee and the supervisor (analysis) Employee conflict supervisor 2. The supervisor did not have managerial control and business ethics (problem) , or mcregor. 3. The have to adopt follet theoy , or Mcregeor. They have to go back to theories of the scientists to solve the solution and thus the caselet. (solution ) Follet behovioural model f self –control (employee) ( manager)

Chapter 2 Planning

Introduction This chapter deals with the definition of planning, nature and types of plan. The limitations of planning are considered obstacles in the development or success of any project Planning premises and forecasting methods are studied to promote business. Objective By the end of this chapter, students are acquainted with the definition, nature, kinds, types and limitations of planning. They would be introduced to the system of forecasting, its methods and types. Importance of planning is emphasized.

Definition of Planning Planning is Deciding in advance: What When To do Who How It means what is the business you are going to do, how (money, people), when (now or in the future) and where (place, country). What is your idea, doing business alone or with partner, in your country or outside etc.

Nature of Planning Is your business good or bad? If good, why? And if bad, what are the reasons or aspects. This is the nature of planning. Did you make a good or a bad plan? There some aspects (features) to follow for judging the nature of planning aspects. 1)Contribution to purpose and objectives facilitate the accomplishment of the enterprise objectives (make sure that your plan leads to success). 2)Primacy of planning precedes the executions of all managerial functions (plan before you execute “do”). 3)Pervasiveness of planning varies with authority and nature of supervisors plans (it is a must to plan as it is the function of all managers). 4)Efficiency of plans measured by contribution to objectives (if it’s a good, it will lead to the goal)

Types of planning Standing Plans (Used over a long period of time) Single-use plans (used for only specific periods) Good plan Based on facts Well Balanced Up dating By following rules (guide for action), methods (step of procedure) and projects (type of plan), the plan is devised and executed. (follow the rules and the plan will be good).

Steps in planning It is impossible to fix steps in planning for all organizations, however, there are major steps. 1. Perception of opportunities (chances) exist for it’s performance. • It is a preceding process of actual planning. • (there has to be an opportunity first and then plan for a project). 2. Establishing objectives set your goal. 3. Establish planning premises check all factors e. g. political, ethical etc. 4. Determine alternative plan proper plan A×B. 5. Select best course choose most suitable plan.

Limitations of planning Planning is important and any factor limiting it’s success should be abolished (deleted). Limitation means factors or difficulties in planning. 1)lack of accurate information (incomplete information cause bad result). 2)Problems of change (technology or customer taste might affect your plan) 3)Failure of people (not qualified to formulate or implement a plan, they do not value planning) 4)Internal inflexibilities (such as human psychology, you cannot plan when the workers suddenly change or be exposed to any problem).

Limitations of planning 5)External inflexibilities these factors may be social, technological, legal or geographical. (if workers live away from work, how can managers plan in the future? ). 6)Rigidity in planning stiffness or inflexible plans delay work performance and reduce employee stimulation or enthusiasm. 7)Time and cost factors time is important, as time is money. Do not take too much time in planning as costs will increase and quality of work will not be very good or effective.

Planning Premises It is the frame work in which plans operate. It is the environment where plans work. It is include Forecasting or Assumption. Forecasting probe (expect) the future by inference (predication) from known facts. Assumption believe in something or pretend. If you want to plan right, you have to forecast (like the weather). You have to be assume what kind of problems you will face in the future in order to be ready to solve them and not be surprised.

Importance of forecasting 1 -Helps in effective planning by providing scientific and reliable basis. 2 -Reducing area of uncertainty (reduce the unknown, conquer your fear of the darkness). 3 -Managers have plenty of time to think ahead (for the future) as they have plan A and plan B because of the forecasting process). 4 -Managerial control, as areas of lack of control will be closed because of forecasting.

Forecasting Methods Qualitative Techniques It includes methods such as polls output, brainstorming. Quantitative Techniques It comprises input and output analysis, curve fitting These techniques are used to apply to the long term time scale and for future demand. You can control or face any problem that might face you in the future by forecasting techniques either by quality or quantity.

corporate planning It is a process of determining the major objectives of an organization and its policies and strategies. Manager must have vision, mission and purpose. Vision: picture of the future, what a company wants to accomplish. Mission: strategic planning, it flows from the vision. Purpose: realize the goals let the decisions speak.

corporate planning Kinds of plans Strategy Process of deciding objective, resources and policies. Time Horizon: -Several years Scope: - wide range of activities Degree of detail: -simplistic generic Operational - One year - narrow - finer details

Summary To be good manager, you have to plan. Definition of planning, kinds, type, methods, steps and limitations should be known. In order to be ready for any problem in the future, forecasting method should be adopted. Make plan A and plan B for yourself to overcome any difficulties that might hinder the process and development of your company.

Chapter 3 Organizing

Objective of chapter 3 To give definition of organizing as one of the five basic functions of management. To refer to the principles of management. To be acquainted with types and mistakes of organization. By the end of this chapter the students will Study the hierarchy of objectives to organize their companies. Definition, types and mistakes of of organization are studied. Centralization and decentralization will be defined and known.

Definition of Organizing refers to the formal grouping of people and activities to achieve the firm's objectives (employee and activities have to conform to the goal). Theory of organization Is the study of structure, functioning and performance of organizations and behavior of groups (every company has to have a theory to organize the structure and the behavior). There is hierarchy of objectives indicating the relationship of objectives and organizational level.

Hierarchy of Objectives Socio Mission Overall objective of the organization long-range More specific overall objectives Division objectives Department and unit objectives Individual objectives Performance personal development objectives

Principles of Organizing The success of any organization depends on its principles. Basic principles should be observed. 1. Unity of objective 2. Efficiency 3. Span of management 4. Division of work Functional definition if the aim is one to all employees and managers, success will follow. doing maximum work at minimum cost is efficiency. managers have long time to direct a number of executives. proper departmentalization (each department has it’s own function and job) when duties of every one is defined

Principles of Organizing 6. Scalar Principle 7. Unity of command unity of direction 8. Authority and Responsibility 9. Balance and flexibility 10. Continuity and Flexibility the chain of command or line of authority must be clarified, every subordinate should know his superior. one superior and no confusion. they should co-exist, found together. balance between centralization (authority in the hand of one manager) and decentralization (the opposite). manager should continue working and be flexible to give effective lead.

Types of Organization There are different patterns to organize the personal (employees) 1 -Military or Line 2 -Functional 3 - matrix system authority flows from top to lower vertically general manager Manager 1 1 Subordinate 2 2 separate departments but interrelated (connected) (some work in every department but different names of department. an employee has a number of superiors and a project manager. Project manager Superior One employee Superior

Types of Organization 4 -Hybrid Design uses functional and divisional system, either workers perform similar task or according to function. Centralization Decentralization Authority is in the hand Authority is pushed downward of top management This is effective, easily achieved, clear control and no conflicting decisions. To lower management level Not in one hand. . Act quickly, innovative and motivated.

Departmentation Functional Specialization on the basis of overall function Divisional Product Customer Location

Mistakes in Organization If the principle of organization are missing or not followed, in this case they are considered mistakes. 1 -Poor plan. 2 -No precise authority. 3 -Lack of responsibility. 4 -Responsibility without authority. 5 -Multiple managers. 6 -Failure to delegate authority (the manager cannot tell the employee what is this authority). 7 -Overorganization

Summary Organizing is a basic part in the function of any organization. It has principles and have to be applied. There are many types of organizing personnel. Finally, mistakes of organizing should be avoided. Organizing makes any company a success or a failure.

Chapter 4 Staffing

Definition It refers to effective recruitment, selection and placement to occupy proper roles in the organization structure, (to choose good employee that fit in the position in the company and put them in the right place). (right people in the right place) What does staffing need? 1 - goals and objectives: to decide what is required. 2 - job designing: the determination of the employees work responsibilities. 3 - grouping of job: departmentation job content (to fit in the work of the department). Recruitment and selection Select employees choosing best employees

There are different procedural steps 1)Job Description 2)Application Forms candidate for 3)Employment Tests in the recruitment program Describes the work and the requirements for the job e. g. job titles, job responsibilities, working conditions, job knowledge. This is a universal system where the applicant fills a form to be a an interview. Tests are considered essential part. The test measures. The capacity for learning, ability to reason, and some physical abilities. eg. Intelligence, personality, interest, achivement, dexterity.

There are different procedural steps 4)Interviewing it is a conversation between the applicant and the interviewer to decide if the employee fits in the position or no. 5)Physical Examination it is a medical check up for the (new) freshly recruited employee (to check that there are no diseases and that the applicant meets the job requirements). it is concerned with the process of welcoming the new employees or orienting them to the rules and procedures of work. 6)Orientation The function of the orientation is to create a sense of belongingness and loyalty to the organization.

The Concept Of Human Resources Development HRD 1. 2. It is a way to help the employees in a planned and continuous way. Goals: improve the capabilities of employees as individuals and their relationship to one another their supervisors together with their future roles. Process: every superior has the role and responsibility to einsure the development of his subordinates. Subsystems: HRD include various subsystems. Performance appraisal: superior understands the problems of the subordinate and tries to solve them, use their talents and encourage their capabilities. Performance Coaching: know your strength to be effective, choose situations when strengths are required and avoid situations in which weaknesses could create problems. HRD system is responsible for discovering your strengths and weaknesses and guide you for improvement.

The Concept Of Human Resources Development HRD 3. Career planning: this is the philosophy of HRD, to formulate career strategy. People perform better when they feel trusted and see meaning in what they are doing. 4. Training: this is the outcome (result) of performance a appraisal and career planning. There are in house (inside work) training courses and periodic assessments. The training is useful for employees. 5. Organizational Development OD: This function includes periodic surveys for employees to make sure of their psychological health. It includes solving problems such as low production or conflicts at work.

Organizational Conflicts In any place, there is grievance which is a feeling of discontent of dissatisfaction. It could lead to conflicts and hence, at that moment, there should be grievance handling procedure (ways to resolve conflicts) conflicts arise from frustration, tension, etc. Types of conflicts 1. Individual : it happens or it is found when more motives block each ether. It means when you have more them one problem. 2. Role Conflict: when an individual performs a number of roles and wants to be perfect in all and can not. (e. g. being a good person, a good father or mother, a good employee, all at the some time an you con not fulfill).

Types of conflicts 3. Interpersonal: Vertical (between superior and subordinate) or horizontal (between employee and his equal). 4. Intra group Conflict: it happens when people come from different socio-economic backgrounds and have different views. 5. Intergroup Conflict: problem among different groups in the same organization.

Areas of Conflict Regarding rigid). wage (salaries). working conditions (comfortable or not). supervision (good or bad). attitude of management (flexible or

Resolution Actions 1 -Problem solving method: find a common interest between employees. 2 -Avoidance: another way to overcome a conflict is to avoid it, do not confront. 3 -Smoothing: playing down differences and emphasizing common interest, say what is good and bad in both parties. 4 -Compromise: no one is a loser or a winner, all is solved by negotiation. 5 -Confrontation: apply strength against each other, face the problem.

Summary Staffing is one of the main function of management. To recruit and select the proper employee and place him in the right place is difficult task. HRD plays an important role for the staff to solve the conflicts in different areas.

Suggested question 1. Give the full meaning of the following abbreviations: A. HRD……………. B. OD……………… 2. Give two examples of resolution action? A. …………………. . B. ………… Answer key 1). A. HRD: human resources development. B. OD: organization development 2). A. smoothing. B. confrontation.

Chapter 5 Directing

Introduction This chapter deals with directing as one of the main pillars of management leadership traits, managerial grid, communication process and motivation are all related to directing and will be discussed. Objectives By the end of this chapter, the students will be able to: 1. grasp the notion of directing and leadership. 2. study different managerial grid. 3. study motivation needs and communication tools and hierarchy.

Definition Directing is leadership which means the activity of influencing people to work for group activities. Direction is managing. The director’s role is to achieve the goal in a given time. Leadership Influence group activities to achieve goals. Supervision Close and general supervision to be sure that workers do their jobs effectively.

Leadership consists of Authority it is the right of directing workers to do something. Tells the subordinate what to do Power It is the ability to achieve expected outcomes(results) Get the subordinates to do.

Leadership Traits Any leader has to be armored with several traits. (any leader has to possess certain qualities in his character), such as: 1 - competent in handling new situations (know how to face a new problem). 2 - self confident and stable. 3 - identify himself with goals (know his objective and tries to achieve it efficiently). 4 - intelligent and sympathetic with his workers. 5 - he should be a listening supervisor, as listening is an active and not a passive activity.

Managerial Grid Any employee in any company or organization could be evaluated. His superior checks if he works well or not. What about the superior himself? Is the manager evaluated. The answer is yes. Managerial grid is the tool to assess (evaluate) the leadership style (the style of the superior or the manager). The grid was developed be Blake and Mouton to point out two major aspects of supervisor job. The two aspects are job and employee with different styles.

Managerial Grid Brief summaries of the five possible leadership styles will follow: Style (1, 1) Style (1, 9) Style (9, 1) Style (9, 9) Style (5, 5) this style places low concern for employees and job (the owner does not care that much). this style gives high concern for employees and low for job (he cares about employees more so the relationship is good). high for the job and low for employees (bad atmosphere). high for employees and high for job (best atmospheres). middle some concern for job and some for employees

Tri-Dimensional Grid Another scientist invented another way or tool to assess leaders. Red din concentrated on 3 axes Task (TO) Orientation Relationship (RO) Orientation Effectiveness Manager Directs the subordinates to achieve the goal. E. g. job done or not. Manager has personal relationship. E. g. employees like him or not. Extent to which a manager is successful in his position. E. g. the subordinate Wants him at work or not

Communication It is very important in the manager’s job. Understanding is the target in communication. It is a human transaction to understand people. Successful Communication is the result of competent management (listening and understanding manager). A good manager is a good communicator. Effective work is the result of good communication.

Types of communication formal, informal e. g. by command or by agreement Downward (from top to low)or upward (from employee to manager) Oral or written e. g. from supervisor to subordinate or vice versa e. g. words or messages. Purpose Communication has purposes such as: 1. Gain communication. When the superior communicates with the subordinate, he is committed to do the job. 2. provide data for information. When the employee knows all the date, he can easily decide what could be done in the job. 3. Clarify tasks and responsibilities (communication leads to clarity, the employee knows exactly their job).

Process It is who? (some of message) says what? (message) in which channel (what information in that way) to whom (receiver of message) with what effect? (response). E. g. An employee wants a raise talks to his superior in the meeting supervisor refuses or agree. 1. Who? 2. Says what? 3. In which channel? 4. To whom? 5. With what effect?

Model The model includes the basic elements of communication. Noise Message (transmission) feedback medium Decoder (reciever) E. g. Message from superior (who sends the message) through the e-mail to the subordinate (who receives) and takes the answer (feedback).

Motivation How is the person be activated, directed and willing to work is motivation. When the employee enjoys his job. He finds it challenging and satisfactory, he be comes motivated. Motivation is inner force is extent of drive To produce optimal out put To reach the best result There is an approach to motivation Carrot Money, profit award Stick Physical, financial and social punishment. The idea of carrot and stick comes from the reward and punishment theory, work more and you will be more rewarded or else.

Maslow's Need Hierarchy Maslow realized that any employee has needs and he formed a pyramid consituting five basic human needs. NFS Esteem Needs Affiliation or Acceptance needs Security and safety needs Physiological Needs Figure Maslow need hierarchy model

Maslow's Need Hierarchy Level 1 (physiological needs) refers food, air, sleep, water Level 2 (security) clothing shelter. Level 3 (affiliation) develop meaningful relationship in work. Level 4 (esteem) self respect, sense of achievement and recognition from others. Level 5 (NFS) fulfill one’s need to become successful.

Herzberg's Motivation hygiene theory • • Herzberg’s developed Maslow’s hierarchy and divided the needs or categorized them into tow groups: Hygiene Factors (dissatisfies) It means if they are not foundin a job, the employee will be dissatististfied. Examples of hygiene factors are : money, personal life, Work conditions and relationship etc Motivation Factors (satisfiers) They satisfy the employee and motivate him to work more. They includes challenge, chance for personal growth performance feedback etc.

Mcclelland's Three needs Model He added three motives: Need for achievement Need for affiliation Need for power Employees work more and efficiently if they have achievement, good relations and power at work.

Vroom’s Valence Expectancy Theory Motivation = Valence + Expectancy + Instrumentality

Chapter 6 Controlling

Introduction Controlling is the fifth function of management. It has steps, types and process. It also includes management and it utilizes balance sheet. Objectives By the end of this chapter the students will be able to: 1 -define controlling. 2 -differentiate between controlling and planning. 3 -study the steps, types and areas of overall controlling. 4 -study balance sheet and management audit.

Controlling Definition Controlling is determining what is being accomplished. To evaluate performance To apply corrective measures (check if the employees are following the rules, monitor their performance and if there is any fault, correct it) Planning Identifies commitment to action (the performance of the employee should lead to the organization objective) Controlling Ensures that commitments are carried out. (make sure the plans are carried out). Planning has a close relationship to controlling

Process Control The process is made up of three steps Measuring Performance (see if the quality and quantity are correct ) Comparing performance with standard (There is always a good example or standard the manager takes it into consideration and compares it with other things) Correcting deviation (if there is a mistake , and action should be done and correction takes place)

Types of control includes three types Preliminary (unify understanding policy and procedures) (if the worker understands the rules and policies of the work, he will follow the procedures, is steps E. g. no salesman must change any price the company makes it i Concurrent Check the right quantity right quality at the right time e. g. at the airline, the luggage should reach the passengers at the right time, and the same bags. Feedback Is the data gathered for better results (information for correction e. g. electronic funds transfer, money moves quickly from one country to another instead of the Slow manual system, due to the feedback.

Management audit There are major guidelines for effective controlling such as management audit. It has developed to evaluate the efficiency of various system in an organization. Audit can be performed either. External Directed to evaluate other firms (companies) for possible merger (join companies together) or find strengths and weaknesses for competition Internal Used to improve internal control systems. It is in the form of periodic assessment for evaluating present past and future performance.

Areas For overall controlling These areas are checked to minimize losses in sales, material, time, profit, capital and facilities. They include: Market standing of the enterprise (what is the position of the company in the market, strong or weak). Innovation (what did the company make new). Profitability (how much is the profit). Materials acquisition and use (the use is good normal or excessive). Employee performance development (is the worker developing or not? ). Capital (money is increase or not). Productivity. Physical resources (e. g. raw material, machines, cars etc).

Balance sheet Financial statements are helpful in controlling. Balance sheet is an important accountant document showing the financial picture of the company at a given moment (what is the financial position of the company in a certain month or part of the year). Balance sheet Assets Items owned by the company (things belong the company) Liabilities Amounts owed to various creditors corporation’s (outside the company) Share holder’s equity Amounts to owners or those with shares

Summary Controlling is a fundamental process in the field of management. It is applied by loss and profit. The higher the quality of the manager, the less will be the need for control. Controlling has balance sheet. It has many steps and areas for overall controlling.

Chapter 7 Decision Making

Introduction This chapter is known from it’s title. It deals with the decision making process, techniques and classification of decisions. Objectives By the end of this chapter the students will be able to: 1 -Define decision making. 2 -Identify decision making process. 3 -Know the techniques and classification. 4 -Study the limiting factor. 5 -Evaluate the decision. 6 -Spot difficulties in decision making.

Decision-Making Definition: Decision making is the process of selecting a course of action from among alternatives. Decision involves a choice to reach a goal. (If you have many ways, alternatives, choose the best for the goal). Decision Maker faces reaches Outcome (Final choice) Problem Objectives has in Environment

The process is easy. If the manager faces a problem in a certain situation or a particular environment, he thinks of an objective and reaches the outcome. This will be his final choice and final decision.

Decision Making Process 1 -Define the problem. 2 -Classify Objectives. 3 -Identify evaluation criteria (cost, risk). 4 -Model Building (make computer example simulation). 5 -Evaluating results (after taking the decision). 6 -Taking Final decision. 7 -Feedback (to see your results).

Techniques of Decision-Making 1 -Scientific Management (cost control). 2 -Human Relation (depend on problem of motivation and leadership). 3 -Empirical(use experiences of successful managers). 4 -Financial (accounting methods) 5 -Mathematical (one plus one equals two). 6 -Decision theory (rely on quantitative and qualitative aspects). 7 -Decision support (focus on understanding and improving).

Classification of decisions There are many types of decision and managers may select: 1 -Organizational and Personal the first is taken by a superior and the second is taken by the executive about himself. 2 -Routine (follow established rules). 3 -Programmed and non programmed (rely on established structure). 4 -Policy and operative (taken by top-level). 5 -Individual and group. 6 -Major and Minor (small or big). 7 -Long-Term (period is more and risk too).

Principle of limiting factor To evaluate your decision, take care of several factors. One of them is limiting factor. Limiting factor means strategic. For example If a machine does not work and the reason is the screw, it is called a limiting factor. (any small item is important in taking the decision, even if it is only a screw in a big machine, still it will delay the work). Evaluating the decision Managers com evaluate their decisions by many factors. They evaluate according to: 1 -size (big project or small). 2 -flexibility of plans (could be changed). 3 - certainty of good (objectives is fixed). 4 -human impact (payroll or computer).

Difficulties in decision-making There are difficulties discovered by managers when they take a decision such as: 1 -Incomplete info (data is not enough). 2 -Un supporting environment (if he wants to be a pioneer in a field and faces opposition). 3 -Ineffective communication (no understanding). 4 -Incorrect timing (not the right time). 5 -Non-acceptance by subordinates.

Summary Managers can take decision if they first define the problem and use decision making process.

Chapter 10 Modern management concepts

Introduction This chapter summarizes and adds new management concepts. Market changes and competition makes companies be flexible. The need for better quality and profit has been born new tools in management and will be known and studied in the final chapter.

Objectives By the end of this chapter students are acquainted with management concepts such as: Business Plan Benchmarking Business Process Reengineering Change Management Customer Relationship Management Employee Empowerment Enterprise Resource Planning Globalization International business management Management by objectives Outsourcing Quality circle Supply Chain Management Elements of TQM

Business Plan In the plan managers discuss how the business will be established, what is the purpose of the business, description of the product and financial details. Benchmarking A- It is a systematic and continuous measurement for the development in a company. It has three types Internal Check between department in the company. Competitive who are the competitors and measure the company With them. Functional keep an eye on the best Company every where.

B-What can be benchmarked? Quality + Productivity + Time + Employee satisfaction etc.

Business Process Reengineering It is task of any manager to ensure that all processes are adding value or else be deleted. This is the philosophy of (BPR). It is a process of rethinking and restructuring like the engineer, for better value. (BPR) is means for total customer satisfaction and best results.

Change Management Every organization makes changes to face changes in the environment. Management changes to increase ability of company and learn from changes. When does management change? Reactive change when there are external forces. Proactive change when the need comes from inside the company to increase it’s effectiveness.

Process of change It involves the following Unfreezing It involves the need for change. People must accept the change. Changing Change brings new ideas. Refreezing New change or new pattern is put in the new place.

Customer- relationship management (CRM) Provides customer- oriented services such as internet, mobile devices etc. (CRM) helps companies to satisfy customers better than their competitors. (CRM) measures, predicts and optimizes (make the best) customer relationship. E. g. when there is sale, the company contacts the customer by phone, mobiles or e-mails to reach customer satisfaction and make more profit.

Employee Empowerment means encouragement. It means to allow the employees to take responsibility and decision. They should have confidence that they can make a difference and achieve success to the organization. The first example to employee empowerment Is (TQM) Total Quality Management It is an employee driven process that gives the employee power to create and decide.

Significance (function) of employee empowerment 1 - increases pace of change in the company (make change faster) 2 - decentralize the system (give the chance to all levels to share in decisions). 3 - employees develop their talents and change.

Enterprise Resource Planning (ERP) ERP is an enterprise-wide system which encompasses mission , objectives, values and operating style. It is the method of effective planning of all resources in an organization. The best benefit of ERP is the complete integration of the business process leading to coherence and harmony.

Globalization Definition It means that there are no more country strategies but subordination to global framework (no more rules in my country but businessmen and foreign products) Reasons 1 -For internal efficiency to become global, you gain more volume. 2 -compete in markets the cost is low and the company become competitive.

International Business Management Definition It refers to transactions across national boundaries including transfer of goods, services, knowledge and capital to other countries: Examples: 1 -exportation of goods and services. 2 -forming a joint-venture 3 -multinationals companies opening branches in host country. (MNC’s) 4 -international firms.

Management by objectives MBO MBO is a process where by the superior and the subordinate identify their goals in their organization. is a comprehensive management planning and control technique to affect the structure and style of the organization. the important benefit of MBO is that the judgmental role of the supervisor vanishes (is deleted) as every individual is evaluated according to standard and not personally, due to the objectives put by all employees. causes improvement improves communication stimulates subordinates motivation.

Outsourcing Is the strategic use of outside parties to perform activities handled by internal staff and sources (as the work is too much, the company uses outside people to help). Reasons for outsourcing Increasing competition and rapid changes in business world made companies use outside help. Benefits 1 -companies concentrate on important strategic issues and use outside hands to help in minor tasks (less important work). 2 -Best in practice processes are used (companies use best things every where). 3 -use late technology as companies benefit from others.

Quality Circle Is a small group of employees doing similar work, share area of responsibility meet regularly to identify, analyze and solve product – quality problems. The group of employees is led by a supervisorand in the organized work units. Quality circle is important to develop, improve, stimulate, motivate achieve and recognize are all organizational issues. The result is improvement on all levels, methods, products, working condition etc.

Supply Chain Management It includes the organization and process of acquisition, storage and sale of raw materials etc. It encompasses (includes) customer- supplier partnerships as it is a chain (client, company, supplier)

Elements of TQM There are elements of total quality management. They refer to meeting the requirements of customers consistently, (all the time) to improve the quality of work of all employees. The elements are modified or changed to meet the requirements of customers. For example the ISO, 9000 series standards change every five years.

The Elements are Meeting customer requirement (satisfy the clients). Continuous improvement (for better quality). Empowerment of employees. TQM is the philosophy that calls for development and should be the concern of all organizations.

The End