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Business Studies - Management Notes

Business Studies Study Notes

The Nature of Management:

Definition of Management: The process of working with and through other

people to achieve business goals in a changing environment. Crucial to this
process is the effective and efficient use of limited recourses.

The importance of effective management:

Effectiveness is concerned with determining goals and making future

decisions, aligning people and recourses to make sure that the goals of the
business are achieved.
Efficiency refers to the allocation of recourses and output of production.
Efficient managers try to achieve maximum output from minimum inputs and

Management Roles:

The three types of management roles are:

Interpersonal Role:

The interpersonal role involves the manager to have the ability to relate and
interact with people.
Leading includes the capacity to communicate and motivate employees
towards the organizations goals and objectives.

Informational Role:
The informational role involves monitoring and sharing knowledge listening
to others and acting as the spokesperson for a business.
Managers need to gather, progress and pass on information to the relevant

Decisional Role:
Involves problem solving and making choices. The four main decisional roles

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1: Entrepreneur- looks for and implements new ideas that hopefully will make
the business more efficient and effective.

2: Disturbance Handler: must make decisions that allow the business to

operate under extraordinary circumstances.

3: Recourse Allocator- sharing out the recourses of the business.

4: Negotiator- Settlement of all disputes involving the business

Skills Of Management:

People Skills: involve managing and motivating people. Strong interpersonal

skills allow a manager to build effective relationships with staff. This may be
achieved through use of positive and assertive language, active listening,
ongoing feedback, empowerment, clarity in expectations, empathy and
understanding. Poor people skills in management can lead to an unproductive

Strategic Thinking Skills: is ongoing in nature and involves a manager

articulating the vision, goals and objectives of the business, usually through a
strategic plan. The plans for the business will be identified and actions will be
outlined to achieve these plans.

Vision Skills: Without it there can be no sense of cooperation and

commitment, which makes achieving goals impossible. Knowing where the
business is headed and what it is trying to achieve helps employees
understand where the manager wishes to take the business.

Flexibility and adaptability to change skills: Regardless of their level of

management, successful managers are those who anticipate and adjust to
changing circumstances. They must be flexible and adaptable.

Self Management Skills: Involves adopting techniques that allow people to

manage their own behavior so that less outside control is necessary.

Team Work Skills: Layers of management are being removed and replaced by
work teams. One obvious change is that managers will have to work more
closely with people over whom they have no apparent authority.

Complex Problem Solving and decision making skills:

Problem Solving- is a broad set of activities involved in searching for,
identifying and then implementing a course of action to correct an unworkable
Decisional Making- is the process of identifying the options available and then
choosing a specific course of action to solve a specific problem.

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Understanding Business Organizations with Reference to Management

Classical Scientific:

These theories or philosophies outline the main functions of management

including planning, organizing and controlling.

Management as Planning:

Effective planning provides a vision and objectives for a business, strategies

to achieve the vision and objectives and future decisions for change. Planning
is the preparation of a predetermined course of action for a business. It
involves showing how the business will achieve its stated mission and
organizational objectives.

Levels of planning - Strategic, tactical and operational:

Strategic (long term planning)- is planning for the following three to five years.
This level of planning will assist in determining where in the market the
business wants to be and what the business wants to achieve in relation to its

Tactical (medium term planning)- is flexible, adaptable planning, usually over

one or two years, that assists in implementing the strategic plan. Tactical
planning allows the business to quickly respond to changes.

Operational (short term planning)- provides specific details about the way in
which the business will operate in short term. Management controls the day to
day operations that contributors to achieving short term actions and
objectives. Examples of operational plans are daily and weekly production

Management as Organizing:

Organizing: is the structuring of the organization to translate plans and the

business objectives into action.

The organizational process:

1: Determining the work activities

2: Classifying and grouping activities - similar activities may be grouped

together, this improves efficiency by enabling appropriate allocation of

3: Assigning work delegating authority - the next step is determining who is

going to carry out the work, it is also the responsibility of the manager to
check the work that the worker has completed.

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Management as Controlling:
Controlling: is the comparison between what was intent to happen to what
actually happened, this allows changes and improvement to occur.

The controlling process:

1: establish standards in the line with the firms objectives and influences from
employees, management, industry and government.
2: Measure performance and determine how comparisons will be made
against standards or benchmarks.
3: Take corrective action - changing activities, processes and personal to
ensure objectives of the business have been met.

Hierarchical Organizational Structure Based on Division of Labor:

Division of labour refers to the degree to which tasks are subdivided into
separate jobs. Classical scientific theorists believed that there was only one
way to do a job and complex tasks should be broken down into a series of
simplified series of tasks. This hierarchical structure has a:

limited number of senior managers who dominate decision making eg

a board of directors
a series of middle managers who coordinate the supervisors through
the development of tactical plans
Supervisors who put the operational plan into action and get the job
done through management.

Leadership Styles:

Autocratic: An autocratic leader is one who is controlling, rigid in decision

making with little or no participation from staff. An often used example for this
type of style is the military.

Democratic: Authority and power decentralised throughout the organization,

encouragement of employee contribution

Laissez Faire: Very free management and employees know what they are
doing and get it done.

Behavioural Management Theory:

The behavioural management approach stresses to employees that they are

the main focus of the business operations.

Management as Leading:

Leading: is having a vision of where the business should be in the long and
short term and being able to direct and motivate human recourses in an
organisation to achieve its objectives.

A good leader is someone who:

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Sets an example and earns respect of employees
Listens to the opinions of others
Delegates tasks to suitable employees
Conveys the goals of the business to workers and motivates them to
achieve those goals
Avoids jargon when talking to employees

Management as Motivating:
Motivation: is the internal process that energises, directs and sustains
individuals behaviour. It is the personal force that causes a person to behave
in a particular way. Some techniques for motivation include, rewarding,
encouragement, enhancing self esteem and employee participation.

Management as Communicating:
Communication: is the exchange of information between people, the sending
and receiving of messages. Without effective communication the most well
thought out plans and strategies will probably fail.

Flat Organizational Structure:

Characteristics of flat organizational structure:

De layering of the traditional organisational hierarchical at several

levels for example, middle management.
Establishment of market focused work cells, with concentration on one
product, process or customer.
Making each work cell responsible for a wide range of production
function, which encourages multiskilling, quality control and

Political Management Theory:

This theory emphasises the formal and informal acknowledgement of power

that exists in an organisation.

Uses or Power and Influence:

Power= the ability to gather together recourses to get something done. Power
can be used correctly or incorrectly. If managers understand the nature or
power and how it can be used to empower others then they have an
advantage when it comes to influencing others and getting things

Managers have to match the correct source of power to each situation, they

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Legitimate power: is given because of the status or position of a person
within the organization.
Expert Power: emerges as a result of a persons skills and expertise eg
computer technician.
Referent Power: emerges as a result of a persons personal attributes
or personality.
Reward Power: relates to the rewards or compensation a manager
distributes for doing a job.
Coercive Power: controls individuals in the organisation by actions or
words eg if this isnt done by the deadline youre fired.

Management as Negotiating and Bargaining:

Negotiating or bargaining is a decision making process among people with
different expectations. It attempts to bring about a solution that is agreeable to
the greatest number of people. Negotiating or bargaining strategies are crucial
communication skills all managers need to develop and practice.

Structures as Coalitions:
A manager adopting this management theory will be in a better position to
view the organisation as a coalition of groups who are, for the most part,
pursuing their own sell interest and personal agendas.

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Strengths and Weaknesses of the different Management Theories:

Management approach Major strenghs Major weaknesses

Classical-scientific approach Easy to understand Too simple for current
and implement dynamic business climate;
Management as concepts inflexible and bureaucratic
planning, Organising, with 'red tape' related to
controlling Emphasis on the policies and procedures
importance of
Hierarchical planning;efficient Workers treated as
organisational allocation of machines with little
structure and division of resources; making opportunity to be motivated,
labour judgements based on stimulated ( as work is
planned and actual repetitive and boring) or
Autocratic leadership performance involved in decision-making
Division of labour and Excessive supervision and
specialisation allows over-specialisation with little
increased responsibility or
productivity, targeted opportunities for workers
training and simple
task design Leadership is rigid and
controlling with one way,
Straightforward top down communication
organisational and little or no input from
structure so workers workers about ways to
clearly know the improve the process
chain of command,
responsibilities, lines
of authority and
policies and

Behaviour approaches More flexible and Developed in a time that

adaptable to the was still relatively stable
Management as changing before the impact of
leading, motivating, and environment and globalisation and
communicating people's needs technological advances

Flat management Treats people as an Uncertainly in task designs,

structure and teams important resource job clarity and ecpectations
rather than a machine due to lack of obvious chain
participative/ democratic of command
leadership style Emphasises
motivation and the Difficult to gauge the link
ability to satisfy between improved
business goals at the productivity and human
same time as motivation
individual needs

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Allows employees to Each person has different
feel valued and that motivational needs making
they belong, take on it difficult for a manager to
responsibility, and be adjust to the individual's
empowered and self- needs
directed so as to
reach their potential Decision-making is time
( self-actualisation) consuming because of
manager's consultation
Communications process with the workers
improved as a two-
way process because
of flatter management
structures and a team

leaders are able to

make more informed
decisions as they
encourage worker
participation and
Political approaches Recognition of the Can create a conspiracy
different interests of theory approach where
Power and influence, individuals and managers may see
management as groups and the role of coalitions and agendas in
negotiating and power to influence places where there are
bargaining decisions none

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Management approach Major strenghs Major weaknesses
The use of coalitions As organisations Too much time can be
become more spent on analysing office
Stakeholder view complex and as politics, power plays and
stakeholders stakeholder views, leading
become more to lower productivity
managers who Less dominant groups,
are politically such as female employees,
astute and good can be disadvantaged
negotiators are
more effective
Strong coalitions Not all interest groups and
have greater stakeholders have equal
opportunities to power and there may be
influence and inappropriate allocation of
persuade scarce resources to the
managers to group with the greatest
address their power
May be a lack of unity due
Can allow to the different coalitions in
consensus and a the organisation
better allocation
of resources to Often too much information
take place and time spent on
through negotiation and bargaining
negotiation and
bargaining Coalitions are constantly
changing and this can
Allows change as cause uncertainly
more groups are

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System Management Theories:

System: is a set of interrelated parts that operate as a whole in order to

achieve a common goal.
System management Theory is characterised by:

Commitment to a shared purpose and direction, supported by common
Sensitivity towards the needs of all members within the group
Co operation between all groups within the organization.

Contingency (Like Plan B) Management Theories:

Stresses the need for flexibility and adaption of management practices and
ideas to suit changing circumstances.

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