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Business:
An entity which is entertains by an individual or an organization to earn profit is known as
business.
Management:
The process of planning, organizing, directing and controlling and proper utilization of
organizational resources (physical, technological, Human, and financial) both efficiently and
effectively to achieve organizational goals is known as Management.
Entrepreneurs:
Entrepreneurs are the persons who spot opportunities and organize resources to create new
business. They have the vision, business skills and courage to take risks and possess the
necessary leadership qualities to overcome problems.
Manager:
Manager is a person which performs day-to-day transactions and takes different effective
decisions for the survival of organization. We can say that manager do things right.
Leader:
Leader is a person who leads the organization and for leader we can say leader is the person
who does right things.
Consumers:
Those entities who consume the products or services are known as consumers.
Suppliers:
Those persons who supply raw materials to whole sellers are known as suppliers.
Whole sellers:
The one who buys finished products from suppliers and distribute the end products to retailers
are called whole sellers.
Competitors:
Competitors are those individuals or companies who can compete with your products or
services. They are the secondary stakeholders of a company and come in macro environment.
Market Environment:
The market environment has the potential to influence to a large degree how the business is
managed this influence is exerted through the behavior of consumers, suppliers, and
intermediaries, who are all sources of opportunities and threats to the business.
(See figure in Notebook)
Micro Environment:
Micro environment of organization is that in which organization actually operates. It includes customers,
suppliers, competitors, pressure groups, financial institutions, and different types of unions.
Macro Environment:
Macro environment contains all general forces such as Political, economical, social,
technological, physical, and international which effects business both directly and indirectly.
(See Figure in Notebook)
General management of any organization consists of general managers. General Managers are
the people who deal with day-to-day transactions, profit and loss statement (income statement)
and other functions of management. There are different types of managers which are;
i) CEO (Chief Executive Officer)
ii) CFO (Chief Financial Officer)
iii) COO (Chief Operating Officer)
iv) CMO (Chief Marketing Officer)
General management focuses on the entire business as a whole. General management duties and
responsibilities include
1. Formulating policies
However, general managers are too diverse and broad in scope to be classified in any one
functional area of management or administration such as personnel, purchasing, or
administrative services.
General management include owners and managers who head small-business establishments
with duties that are primarily manager. Most commonly, the term general manager refers to any
executive who has overall responsibility for managing both the revenue and cost elements of a
company's income statement. This means that a general manager usually oversees most or all of
the firm's marketing and sales functions, as well as the day-to-day operations of the business.
Frequently, the general manager is responsible for effective planning, delegating,
coordinating, staffing, organizing, and decision making to attain profitable results for an
organization.
While both general and functional management involve similar skills (interpersonal
skills, communication, multitasking, etc.), the critical difference is that a functional manager
often "zooms in" to one particular aspect of a broader operational paradigm. The general
manager must be more of a jack-of-all-trades, understanding enough about various different
gears in the machine to ensure it is running properly.
Management principles
Management principles are guidelines for the decisions and actions of managers. They were
derived through observation and analysis of events faced in actual practice. Principles are listed
below:
i) Division of Work / Labor: When employees are specialized, output can increase
because they become increasingly skilled and efficient.
ii) Authority: Managers must have the authority to give orders, but they must also keep
in mind that authority always comes with responsibility.
iii) Discipline: Discipline must be upheld in organizations, but methods for doing so can
vary form organization to organization.
iv) Unity of Command: Employees should have only one direct supervisor.
v) Unity of Direction: Teams with the same objective should be working under the
direction of one manager, using one plan. This will ensure that action is properly
coordinated.
vi) Subordination of Individual Interests to the General Interest: The interests of one
employee should not be allowed to become more important than those of the group.
This even includes managers.
vii) Remuneration: Employee satisfaction depends on fair remuneration for everyone.
This includes financial and non-financial compensation.
viii) Centralization: This principle refers to how close employees are to the decision-
making process. It is important to aim for an appropriate balance.
ix) Scalar Chain: Employees should be aware of where they stand in the organization's
hierarchy, or chain of command.
x) Order: The workplace facilities must be clean, tidy and safe for employees.
Everything should have its place.
xi) Equity: Managers should be fair to staff at all times, both maintaining discipline as
necessary and acting with kindness where appropriate.
xii) Stability of Tenure of Personnel: Managers should strive to minimize employee
turnover. Personnel planning should be a priority.
xiii) Initiative: Employees should be given the necessary level of freedom to create and
carry out plans.
xiv) Esprit de Corps: Organizations should strive to promote team spirit and unity.
Business Functions:
There are two types of business functions which are;
i) Internal Business Functions:
ii) External Business Functions:
Role of Management Functions, & Additional Functions of Management:
Major functions of Management and their roles are given below;
i) Planning:
ii) Organizing:
iii) Directing:
iv) Controlling:
The manager coordinates internally and externally. In internal coordination the other
managerial functions viz., planning, organizing, actuating and controlling are
coordinated within the constitution. In external coordination the manager coordinates
with outsiders as, government, public, trade unions, other enterprises, politicians etc.
In a business concern, with a large number of persons working at different levels and
performing diverse activities, it became essential to synchronies the work at each
level, and in the organization as a whole.
iii) Communication:
iv) Motivation:
Staffing and coordinating functions lead to organizing while communication and Motivation
functions lead to directing in major functions.
Role of Manager:
There are ten major roles of manager which are classified into three categories and they are;
i) Interpersonal Roles:
a. Figure Head Role:
b. Leader:
c. Liaison:
ii) Informational Role:
a. Monitor:
b. Discriminator:
c. Spokesperson:
iii) Decisional Role:
a. Entrepreneur:
b. Disturbance Handler:
c. Resource Allocator:
d. Negotiator:
Managerial Competencies:
There are different managerial competencies which can help organization to achieve competitive
advantages which are given below;
i) Communication: Manager should be a better communicator. He should have
interpersonal skills, writing skills, and oral communication skills in order to enhance
the performance of organization. Which he can insure by having effective
communication with subordinates.
ii) Planning and Administration: The first and important function of business is
planning. He/She should have both long term and short term plans. His or Her plans
should flexible. There should alternative strategy in order to face different situations.
On the other hand administration means staffing. Staffing means dividing the tasks
among employees. There should full capability utilization i.e. proper staffing should
be there. Also manager should insure that the general interest employees should
match with individual interest.
iii) Teamwork: Teamwork is also important in managerial competencies. Manager
should have teamwork qualities in order to achieve organizational goals effectively
and efficiently.
iv) Global Awareness: Manager should have knowledge about his business world in
which organization operates. He should have knowledge about ethics, culture, norms,
values and customs of people and environment.
v) Strategic Action: The long-term action, strategy or thinking is known as strategic
action. On the basis of consequences manager should take strategic action.
vi) Self Management: There should be an ethical code of conduct in manager. He or she
should have integrity, high skills and should have skills of problem solving. There
should emotions in manager for organization survival.
Leadership Competencies:
Environment in which organization operates is dynamic means that changes day by day. So in
order to meet those changes organization need a leader to manage all operations of organization.
There are different levels of management to achieve organizational goals. These levels can also
explore the leadership competencies which are;
i) Level 1 Managing Self: it consists of the following;
a. Integrity / Honesty: This means that there should integrity and honesty in a leader.
There should no discrimination and there should justice in both procedural and
distributive basis.
b. Interpersonal Skills: The leader should respectful, good listener to tackle different
situations and he or she should co-ordinate employees.
c. Continual Learning: Leader should learn new things and this can be done by
analysis of him-self as well as organization. As we know that a person can learn
from errors or mistakes so leader should also focus on errors and mistake in
organization and should learn new things or new ways of doing things.
d. Resilience: Leader should deal effectively with pressures or with adversity.
Leader should not be set back, he should keep moving with different situations
such as loss situation.
e. Oral Communication: The convening skills of leader should sharp such as Tahir-
ul-Qadri speech in Pakistan. The presentations, meetings, and other speeches
should clear, precise, and convenceful. The leader should concern with others.
f. Flexibility: Leader should always ready to change with environmental change and
dynamics. Means that leader should adopt new environmental changes. There
should not rigidity in strategies means that the strategies should flexible.
g. Problem Solving: Leader should a good problem solver. This can be done by
proper analysis of organization such as identification of issue, analysis of issue
and solution for the issue.
ii) Level 2 Managing Projects: Leader should have all the below qualities in order to
manage different projects;
a. Team Building: Leader should have skills to build teams and manage those teams
properly. He or She should motivate each member of a team.
b. Customer Service: Leader should fulfill the needs of internal and external
customers and He or She should have knowledge about how to satisfy them.
Customer service quality also means that leader should customer oriented.
c. Accountability: Leader should have self-control and He should also control
others. Leader should determine and sets objectives and He should very
responsible to organization.
d. Technical Creditability: Leader should always technical person. He or she should
expert in every field and should know about applications, operations, and
procedures of organization.
e. Decisiveness: Leader should provide true and pure information. He should fair in
dealing. He should take timely decisions and he should know decisive to others.
f. Persuasive: Leader should persuade others through gestures and he or she should
influence others easily.
iii) Level 3 Managing People: This level includes all intellectual capital of organization
such as human resources. For proper human resource management leader should have
following leadership competencies;
a. Human / Capital Management: Leader should have quality of managing people.
He or she should know that what skills require for organization and how much
employees are require for organization.
b. Leveraging Diversity: Every company or an organization have different types of
employees. So leader should have quality to manage different type of people.
c. Conflict Management: In every organization conflicts always occurs so leader
should have the ability to manage conflicts in organization and he or she should
always focus on building relationships between employees. There are two types of
relationship build by leaders between employees;
i. Constructive Relationship:
ii. Destructive Relationship:
iv) Level 4 Managing Programs: To create efficiency and effectiveness in organizational
performance leader should have the abilities to manage different programs. Those
abilities or qualities are;
a. Technology Management: Technology is a rapid changing factor nowadays so
leader should have the quality of changing strategies with the passage of time in
order to develop and utilize new technologies in organization.
b. Financial Management: Leader should have the quality to clarify all the check in
balances of organization. He or she should motivate employees to clear all the
transactions of organization.
c. Innovation or Creativity: The leader should creative and initiative. The mind of
the leader should creative and he or she should always focus on creation of new
ideas or new devices in organization.
d. Political Savvy: The leader should know about internal and external politics. He
or she should have good political behavior and he should make his actions true.
v) Level 5 Leading Organization: Leader always try to take organization to success this
is known as leading the organization. So this also needs some qualities or abilities
which are given below;
a. External Awareness: Leader should know about external environment. The threats
and opportunities in external environment and different policies of competitors in
order to gain success.
b. Vision: Leader is the person who has some vision for organization. So there
should the ability to think about future of organization. The leader should always
visionary for organization.
c. Strategic Thinking: The leader should always long-term thinker. He or she should
not think point less. Long-term thinking or strategies can help organization to
survive in environment.
d. Entrepreneurship: Leader should have a quality to adapt new opportunities and
diverse into new environment. Leader should always involve himself in new
things. For example, Engroo start production of food items with chemicals
production.
Financial Management:
According to Solomon, Financial management is concerned with the efficient use of important
economic resources such as capital funds.
According to Phillioppatus, Financial management is concerned with the managerial decisions
that result in the acquisition and financing of short-term and long-term credits for the firms.
According to Wheeler, Business finance is the business activity which is concerned with the
conservation and acquisition of capital funds in meeting financial needs and overall objectives of
a business enterprise.
It is an activity concerned with planning and controlling of firms financial resources. Financial
management means the funds or money in such a way that by investing optimum capital we can
get maximum output i.e profit. Utilization of less resources and gain maximum output and to
maximize the value of the firm is a basic objective of financial management. The main purpose is
to achieve maximization of share value to the owners (equity shareholders).
Financial Planning:
Financial Planning consists of;
i) Tools of Financial Planning:
ii) Short-Term Planning:
iii) Long-Term Planning:
(See Figure in Notebook)
Steps of Long-term Planning:
- Determine personal objectives
- Set goals and objectives
- Develop Long-range plans
- Focus on Requirements
- Study methods of Operations and new market securities.
Ratio Analysis:
There are four types of ratios to analysis. The purpose is to compare own assets, inventory (per-
forma) with the organizational per-forma. Forecasting of this is also important.
Break-Even Analysis:
Forecasting of this is to know about the equality of income and cost.
Pricing Policies:
Prices are assumed on basis of operation of business.
Marketable Securities:
These are securities with very low maturity time and official document sellout by company to
investors.
Account Receivables:
Account receivables are the assets receive by company on behalf of some services offered.
Marketing:
A process of creating customers value and building strong relations with customers in order to
capture value in return is known as marketing.
Purpose of Marketing:
The main purpose of marketing is;
- Creating customers value
- Building strong relations
To gain these objectives we have to make marketing strategies.
Marketing Strategy:
Marketing strategy helps in creating customer value and building strong relations. It consists of;
i) Segmentation and Targeting: Who will serve?
ii) Positioning and Differentiation: How it will serve? (see figure in Notebook)
Marketing Mix:
Marketing mix consist of four Ps which are product, price, place, promotion.
(See diagram in notebook)
Marketing Management:
It deals with marketing strategies and marketing mix. So managing all these can give us good
outcome.
The End