CHAPTER 6 & 7

Management Functions

Leading

Planning Decision Making

Organizing

Controlling
SOLE PROPRIETORSHIP- Is a business owned and
operated by one person.
PARTNERSHIP- is an “association of two or more
partners to carry on as co-workers of a business for
profit”.
 ADVANTAGES:
 Almost easy to organize
 Few legal restrictions
 Permit pooling the managerial skills and judgments and the
financial strengths of several people who have interest in the
enterprise
 Does not pay taxes
 Shared responsibilities on liabilities

 DISADVANTAGES:
 Divided decision-making authority
 Potential damage to the business when partners disagree
 Death of one partner means death of partnership
LIMITED LIABILITY COMPANY (LLC)
 Owners, called members
 Have limited personal liability for the debts
and actions of the LLC
 No maximum number of members
 Similar to a partnership
 Provides management flexibility and benefit
of pass-through taxation.
 Income is only taxed once.
CORPORATIONS
 Are legal entities owned by shareholders, who in general
have no liability beyond loss of the value of their stock

 ADVANTAGES:
 Have perpetual life
 Easier to raise money, transfer ownership, and
change management

DISADVANTAGES:
 Income is taxed twice: Corporation income tax and
personal income tax
 Subject to many state and federal controls
 COOPERATIVES
 Are a special type of
organization owned by
users or customers, to
whom earnings are usually
distributed tax-free in
proportion to patronage.

 Each customer buys a share

initially for a few dollars and
can cast one vote to elect
the board members who
manage the cooperative.
 Organizing is the process of arranging people and
other resources to work together to accomplish a
goal.

 arranging and structuring work to accomplish an

organization’s goals.

 Purpose is to create a division of labor and then

coordinate results to achieve a common purpose
 Planning
-to set the
direction

Organizing
-To create
structures

Leading Controlling
- To inspire -To ensure
effort results
 System of tasks, reporting relationships, and
communication linkages that link together the
work of diverse individuals and groups
 the formal arrangement of jobs within an
organization.
Organizational Design - a process involving
decisions about six key elements:
• Work specialization
• Departmentalization
• Chain of command
• Span of control
• Centralization and decentralization
• Formalization
 THE FIVE COMMON
FORMS OF
DEPARTMENTALIZATION
THE FIVE COMMON FORMS
OF DEPARTMENTALIZATION
(CONT.)
 EXHIBIT 10-3: OF
DEPARTMENTALIZATION
(CONT.)
CHAIN OF COMMAND
AND LINE AUTHORITY
 CHAIN OF COMMAND
- Links all persons with successively higher levels of
authority

SPAN OF CONTROL
- Number of persons directly reporting to a manager

Tall Structures
- Have narrow spans of control and many hierarchical
levels
Flat Structures
- Have wide spans of control and few hierarchical levels
 DELEGATION
- Process of distributing and entrusting work to
other persons

Authority and Responsibility Principle

- Authority should equal responsibility when
work is delegated

EMPOWERMENT
- Allows others to make decisions and exercise
discretion in their work
 CENTRALIZATION
 the degree to which decision making is concentrated
at upper levels in the organization.
 This is common in organizations in which top
managers make all the decisions and lower-level
employees simply carry out those orders.

DECENTRALIZATION
when an organization relegates decision making to
managers who are closest to the action.

 Employee Empowerment
◦ Increasing the decision-making authority (power) of
employees
 LINE FUNCTIONS
- Accomplished the main mission or objectives
of the organization
- Production, Sales and Finance
 STAFF FUNCTIONS
- Provide technical expertise for other parts of
the organization
- Helped the line accomplish these objectives
by providing some sort of advice or service
- Personnel, Procurement, Legal Counsel, and
Market Research
CHAPTER 7
EFFECTIVE STAFFING REQUIRES:

• first identifying the nature and number of people needed

• planning how to get them
• selecting the best applicants
• orienting and training
• evaluating their performance
• providing adequate compensation.
 HIRING TECHNICAL PROFESSIONALS

1. Document the number of technical personnel of each

classification presently on hand.
2. Estimate the number of professionals of each type
needed in the near future to meet firm contracts and
likely potential business.
3. Estimate the expected attrition in the current staff,
including
a. Resignations
b. Transfers out to other divisions and promotions to
higher positions;
c. Retirements, deaths, and leaves of absence
 4. Establish the need for increased personnel as
Increase = Need – Personnel on Hand + Attrition
5. Subdivide this Increase into New College Hires,
Experienced Professionals, Technician Support, and Other
Sources.
 6. Develop a hiring plan to acquire experienced
personnel.
 7. Develop a plan to acquire needed technicians and
technologists.

 8. Needs that cannot be met by sources new college

hires, experienced professionals and technician
support, especially those of too short a duration to
justify permanent hiring, can be met by other sources.
 HIRING MANAGERS
 JOB REQUISITION/ DESCRIPTION
 RESUME AND COVER LETTER
 Guidelines in Making a Cover Letter:
1. It should be addressed to the appropriate individual by
NAME, not “Personnel Director” or “To Whom it May Concern”.
Call the company if you do not have a name.

2. Begin by identifying the position/ or type of work you are

applying for and, if appropriate, where you heard of the
opening. Be direct and specific.

3. On the second paragraph state why the company and position

interests you, and describe concisely the education,
experience, and other abilities that have prepared you for
the position you seek.

4. A closing paragraph can refer to the attached resume,

thank the recipient for his/ her consideration of it, and
indicate that you will call within a specified time to
inquire about a possible interview.
 The RESUME itself includes all or most of the following:
1. Name, address, e-mail address, and telephone
number(s)
2. Current job position and/or status (such as
“graduating senior”)
3. Current and longer-term employment objectives
4. Summary of education (formal degrees and continuing
education)
5. Employment experience, with the most recent
employment first, emphasizing accomplishment
6. Publication, significant presentations, and patents
7. Significant honors and awards
8. Professional affiliations
9. “References available on request”
 Electronic Cover Letter Tips:

1. Electronic cover letter best serve as a short, usually one

paragraph, introduction to resumes that you e-mail to
individual employers.
2. Do open the cover letter with a salutation, but leave off titles.
Stick with the person’s first and last name.
3. Do not get casual in your cover letter. Stick to business style
and formatting.
 Some Dos and Don'ts of Cover Letters
1. Do follow rules of a standard business letters.

2. Do make sure that there are no spelling, grammar, or

punctuation errors.
3. Do limit letter to one page.

4. Do keep a copy of everything that you send out.

5. Do make sure your original signature is on everything

you mail out.
6. Do close with a direct request for some type of action.

7. Don’t be generic and impersonal.

8. Don’t start every sentence with I.

9. Don’t use unprofessional language

10.Don’t include personal information that is not relevant

to the position
11.Don’t give false impressions
 EMPLOYMENT APPLICATION
 If the resume leads to further interest from a potential
employer, the applicant will typically have to fill out
(neatly, of course) much of the same information on an
employment application, arranged in a standard form
familiar to interviewers from that organization.

 Should not ask for race, religion, citizenship, or national

origin, height, weight, age or date or birth, marital
status, age of children, or require a photograph because
of antidiscrimination laws

 Application form needs to agree with the resume

 CAMPUS INTERVIEW

 The newly graduating engineer typically makes the first

contact with potential employers in the campus placement
interview.

 The interviewer needs to learn enough about the applicant to

recommend for or against an invitation for a plant visit.

 The applicant needs to learn about the employment

opportunities and other advantages of working for the
employer.
 REFERENCE CHECKS

 References for the new graduate include professors and

supervisors from part-time jobs; for the experienced
engineer they will be primarily past and current
supervisors and co-workers.

 Checked by electronic mail or telephone

 An increasing problem with references is the fear of

liability if a bad reference is given.
 SITE VISITS
 The applicant should be interviewed by three or four
people on the staff, including one or more supervisors
with open positions for whom the candidate is being
considered
 Part of the visit should involve a tour of the area in which
the candidate might work
 The candidate’s reaction to the work observed and the
type of questions asked give insight into his or her
interest and suitability for the position.
 The candidate can gain insight into the work being done
and judge from work observed and answer to his or her
questions whether that might be the right assignment.
 Personnel office will provide information on company
benefit programs and answer questions on general
company policies.
 STARTING SALARY
 JOB OFFER
 The employment offer is a standard formal letter
delineating a specific position and salary offer,
reporting date, position and title, the person the
candidate will report to, and often provisions for
moving expenses.

 An offer for employment is not official until this

letter is received.

 The candidate should acknowledge the offer

immediately.
 ORIENTATION AND TRAINING

 The human resources department normally has the responsibility

to tell the newcomer about fringe benefits such as medical
insurance, vacations, tuition reimbursement, pensions and the
like.
 Some large organizations will spend from three months to a year
rotating the new employee through a variety of departments and
jobs to orient the individual to the organization before placing
him or her in the first permanent assignment.
 The immediate supervisor of the new employee bears the major
responsibility for introducing him or her to the new group and
the specific job assignment.
 Orientation and training can be considered to include the total
SOCIALIZATION of the new employee to the environment and
culture of his or her new organization.
 APPRAISING PERFORMANCE
 APPRAISING PERFORMANCE
 ASSIGNMENT OF DUTIES
 Making subordinates responsible for carrying out the
specified activities

DELEGATION OF AUTHORITY
 Once a subordinate has been assigned tasks to perform, it
is important to provide him/ her with the resources
needed to carry out the assignment
 Include authority over people who will be needed to carry
out the assignment as well as financial authority to acquire
the equipment, perform the travel, or make commitments
of resources needed

ACCOUNTABILITY
 Making the subordinate responsible to the manager for
carrying out the duties and reporting progress periodically
 The manager is still accountable (responsible) to the next
higher level of executive to assure that the task is
effectively carried out
 Relievesthe manager of work the subordinate is
capable of doing, substituting the need to assure
that the work is actually done.

 Thesubordinate is given the chance to develop

his/her skills by being delegated more and more
responsible problems

 Delegationlocate decision making closer to the

work being performed, and this often results in
more practical and prompt decisions
 GROUPS
Two or more interacting and
interdependent individuals who
come together to achieve specific
goals.

Formal groups
Work groups defined by
the organization’s structure
that have designated work
assignments and tasks

Informal groups
Groups that are
independently formed to
meet the social needs of
their members
 TEAMS
A small number of people who are committed to a
common goal, objectives, and approach to this
goal that they are mutually accountable to
reaching
Advantages of Using
Teams
Teams outperform individuals.
Teams provide a way to better use employee
talents.
Teams are more flexible and responsive.
Teams can be quickly assembled, deployed,
refocused, and disbanded.
GROUPS VS
TEAMS