The four elements of management process include planning, organizing, leading and controlling. Planning is an activity, whereby a manager formulates objectives, based on an analysis of tasks and challenges, faced by the business. Organizing refers to bringing together multifaceted resources (e.g, human, financial, physical) to ensure reaching an objective. Leading deals with motivating and guiding employees to reach objectives. Finally, controlling refers to measuring achievement vis-à-vis established objectives.
Frederick Taylor was a U.S. engineer, who became one of the pioneers in management consulting. He applied engineering concepts to management in order to increase efficiency. He also coined the concept of scientific management.
The firm macro-environment includes political, economic, sociocultural, technological and legal factors. Political and legal factors affect a company’s revenues and expenditure (e.g., taxes, guaranteed employee benefits, FDI opportunities), competition (antitrust) and public opinion (e.g., health awareness campaigns). Economic factors determine customers’ purchasing power and influence taxation. Sociocultural factors form people’s attitudes and opinions and, thus, are considered in terms of marketing strategy. Changes in technology determine innovation-related needs and, thus, a company’s strategy. Finally, environmental factors also influence a strategy of a company, a choice of means to achieve targets and financials.
The five forces are barraging power of suppliers (an ability to pressure the firm), bargaining power of customers, threat of new entrants, threat of substitutes (customers’ disposition to switching to other products/services) and an intensity of competitive rivalry,
The first step is defining a situation and a most desired outcome. Secondly, a decision-maker conducts a research and formulates options. Thirdly, alternatives are considered in light of their consequences. Fourthly, the most suitable alternative is chosen. Fifthly, an action plan is designed and implemented. Finally, the results are evaluated.
Firstly, examining the pros and contras of existing solutions can help to generate new ones. Secondly, analogies may help to see alternative options. Thirdly, brainstorming sessions can stimulate ideation and combination of ideas. Finally, sketching and doodling may help one to see additional aspects and ramifications of a problem.
Psychological biases deal with one’s disposition to think in a specific way (e..g, neglecting probability). They affect managerial decisions due to preventing a manager to think beyond his/her usual frames and leading to one’s ignoring certain factors.
The advantages include synergy (the whole that is greater as an aggregate of parts), taking into account broader scope of data, eliminating biases and participants’ empowerment. The disadvantages include diffused responsibility (no one to blame), additional time for discussions, participants’ protecting their own interests and the phenomenon of groupthink (members’ inclination to conformity).
The crisis management plan shall include a chain of command, crisis team (aiming to support crisis leader), essential contacts (a list of phone and emails of cooperating companies and individuals), as well as evaluation procedures (investigating the extent of damage and its drivers and alternative resources (e.g., temporary business premises).
Three levels of planning in management are strategic, tactical and operation. Strategic level provides an overview of the business as a whole, its vision, mission, objectives and values. Tactical plans include specific goals with specific deadlines and allocate resources for their completion. Finally, operational plans are developed on an ongoing basis and can even be single-used.
SWOT analysis is a structured strategic management tool that allows identifying strengths, weaknesses, opportunities and threats, faced by an organization or a specific project.
The barriers for strategy implementation include top-down or laissez-faire style of senior management, ineffective senior management, the lack of clear strategy and unclear priorities, ineffective vertical communication, poor coordination (e.g., across functions, businesses) and inadequate leadership and development skills.
The remedies are a leadership style that combines to-down approach and upward influence, effective senior management, clearly defined strategy and priorities, open vertical communication, quality coordination and adequate leadership.
