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._Functions_of_Management (3)

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._Functions_of_Management (3)

Uploaded by

Vicky Singh
Copyright
© © All Rights Reserved
Available Formats
Download as PDF, TXT or read online on Scribd
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Functions of Management

Decisions Managers May Make: Planning and


Organizing
Decisions Managers May Make: Leading and
Controlling
What Is Planning?
• Planning: management function that involves setting goals,
establishing strategies for achieving those goals, and
developing plans to integrate and coordinate work activities
• Formal planning
• Specific, time-oriented goals
• Goals written and shared
Why Do Managers Plan?
• Provides direction
• Reduces uncertainty
• Minimizes waste and redundancy
• Establishes the goals and standards for controlling
Planning and Performance
• Formal planning is associated with positive financial results
• Quality of planning/implementation more important than the
extent of it
• External factors can reduce the impact of planning on
performance
• Planning-performance relationship seems to be influenced by
the planning time frame
Types of Plans

most popular ways to describe organizational plans.


Strategic and Operational Plans
• Strategic plans: plans that apply to the entire organization and
establish the organization’s overall goals
• Operational plans: plans that encompass a particular
operational area of the organization
Long-Term and Short-Term Plans
• Long-term plans: plans with a time frame beyond three years
• Short-term plans: plans covering one year or less
Specific and Directional Plans
• Specific plans: plans that are clearly defined and leave no
room for interpretation
• Directional plans: plans that are flexible and set out general
guidelines
Specific Versus Directional Plans
Single-Use and Standing Plans
• Single-use plans: a one-time plan specifically designed to meet
the needs of a unique situation
• Standing plans: ongoing plans that provide guidance for
activities performed repeatedly
Static and Scenario Plans
• Static plans: Plans made under the assumption that the
business environment and internal conditions will remain
unchanged
• Scenario plans: Plans involving making assumptions about the
future and determining how the company will respond
• Scenario: A consistent view of what the future is likely to be
Contingency Factors in Planning
• Three contingency factors affect planning
1. Level in the organization
2. Degree of environmental uncertainty
3. Length of future commitments
Planning in the Hierarchy of Organizations
Objectives
• Objectives: Desired outcomes for individuals, groups, or the
entire organization.
• They provide management with direction and serve as a
means to measure progress.
• Stated Objectives: Official statements of what the organization
wants the public to believe.
• Real Objectives: Objectives that the organization actually
pursues.
Approaches to Setting Objectives
• Traditional objective-setting: an approach to setting objectives
in which top managers set objectives that then flow down
through the organization and become subgoals for each
organizational area
Traditional Objective Setting

The figure illustrates what can happen as the objectives make their way down from
the top of the organization to lower levels.
Management by Objectives (MBO)
• Management by objectives (MBO): a process of setting
mutually agreed-upon goals and using those goals to evaluate
employee performance
• MBO involves setting objectives that cascade down through
the organization that are translated into operational objectives
at each level
SMART Objectives
• Specific
• Measurable
• Achievable
• Relevant
• Time-bound
Does MBO Work?
• Assessing the effectiveness of MBO is a complex task.
• If factors such as a person’s ability and acceptance of goals are
held constant, evidence demonstrates that more difficult goals
lead to higher performance.
• However, if individuals perceive a goal to be impossible instead
of challenging, their desire to achieve it decreases, and the
likelihood that they will abandon it increases.
Cascading Objectives
How Can Managers Use Environmental Scanning?

• Environmental scanning: screening information to detect


emerging trends
• Competitive intelligence: gathering information about
competitors that allows managers to anticipate competitors’
actions rather than merely react to them
Environmental Scanning
What Where
General Environment
Political Lobbyists; political representative
Economic Fed minutes; financial news
Social Social media
Technological Patent reports
Specific Environment
Industry Business media; industry associations
Competitors Web sites; others in the industry
Suppliers Vendors
Customers Surveys; focus groups
Using Artificial Intelligence to Support
Planning
• Business leaders know that artificial intelligence (AI) holds
opportunities to manage and grow businesses.
• A recent survey of 1,500 CEOs found that 75 percent believe if
they don’t figure out how to integrate AI into their
management practices, they risk going out of business.
• AI can be used to help managers plan since it can analyze large
volumes of data and spot patterns.

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