Lesson 5 of 28
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Nature of Management

Overview

  • Features of effective management
  • Skills of management
    • Interpersonal, communication, strategic thinking, vision, problem-solving, decision making, flexibility, adaptability to change, reconciling the conflicting interests of stakeholders
  • Achieving business goals
    • Profits, market share, growth, share price, social, environmental
    • Achieving a mix of the above goals
    • Staff involvement – innovation, motivation, mentoring, training

Features of Effective Management

  • Planning: Setting strategic and tactical plans, establishing roles and allocating resources
  • Organising: Using an organisational structure and set of procedures to implement plans.
  • Leading: Motivating employees to work had by example to achieve goals.
  • Controlling: Monitor and evaluate performance; adjusting plans/procedures to achieve goals.

Skills of Management

  • Interpersonal skills: Relates to skills needed to work and communicate with other people and to understand their needs.
  • Communication skills: Relates to the exchange of information between people; both verbal and non-verbal.
  • Strategic thinking: See the business as a whole and think about future direction and goals.
  • Vision skills: Defined by the clear, shared sense of direction that allows people to attain a common goal.
  • Problem solving skills: Identifying and implementing a course of action to correct a problem.
  • Decision making skills: Identifying options available and choosing the most effective.
  • Flexibility and adaptability to change: Managers need to adapt to the changing external environment.
  • Reconciling the interests of stakeholders: Stakeholders place demands on business, such as the need for a good CSR.

Achieving Business Goals

Business goals need to be SMART: Specific, Measurable, Achievable, Realistic and Timebound.

Goals

Possible business goals can include:

  • Maximise profits: Money left after the costs have been deducted from money of sales.
  • Increase market share: The business’s share of the total industry sales for a particular product.
  • Growth: Internal – increase employees and sales; external – merging with other businesses.
  • Increase share price: Satisfy shareholders and provide healthy dividends.
  • Social goals: Goals which benefit the community.
  • Environmental goals: Goals involving sustainability and ethics.

Staff Involvement

Maximised employee involvement and satisfaction results in increased labour productivity.

  • Innovation: Businesses should encourage innovation by recognising employees’ ideas.
  • Motivation: Managers should energise and sustain an employee’s behaviour through positive reinforcement and encouragement.
  • Mentoring: Teaching new employees business expectations help strengthen their dedication and commitment to the business.
  • Training: Improve employee productivity by boosting knowledge and skill.