Lesson 5 of 28
Nature of Management
- 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.
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.
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.