Introduction to Management

INTRODUCTION!TO!MANAGEMENT! ! ! ! ! ! ! MAN AGIN G&IN&A &DYN AMIC &E NVIRO NME NT& The!word!dynamic!is!putting!an!emphasis!on!change.!Change!is!happening!all!around!us.!Organizational! survival!depends!on!coping!with!change.! n.! ! Change!can!be!brought!about!by!technology.!If!demand!changes,!we!have!to!change!our!product.!The!only! constant!in!managing!in!an!organisation!is! .!Management!is!related!to!addressing!the!changes!required! for!the!organisation!to!succeed.!We!no!longer!produce!typewriters!as!computers!have!replaced!them.! ! ¥ ! ! ! People!in!the!industry!are!prone!to!making!mistakes.!It!is!a!natural!process.!The!important!thing!is!to!learn! from!them.!From!a!personal!perspective!we!have!to!change!stumble!blocks!into!stepping!stones.!There!is!a!lot! of!convergence!going!on.!For!exampleQ!before!you!would!use!separate!devicesQ!GPS,!mobile,!camera,! nowadays,!you!will!find!all!these!functions!in!a!smartphone.! If!you!don’t!adapt!to!change!you!are!prone!to!failure,!example,!Nokia!found!some!problems!as!other!mobile! brands!had!begun!to!change!their!appearance!into!sleeker!versions,!where!as!Nokia!took!longer!to!diversify! their!appearance.! Products!pass!through!a!life%cycle,!at!the!moment,!the!sector!in!computers!which!is!currently!booming/growing! is!that!of!netbooksQ!cheaper,!portable,!small!just!as!efficient!! DEFIN E&MA NAG ERS,&M ANA GEM EN T&&&O RGA NIZAT IO NS& Leadership,!decision!making,!coordination,!control!of!resources!and!expenses!are!very!relevant!to! management.! Different!types!of!management:!time,!stress,!conflict,!relationship,!weight,!waste,!organisational!and!business.! The!word!‘Management’!has!also!been!given!many!definitions,!both!simple!and!complex.! ‘Knowing!what!you!(or!people)!want!to!do!and!then!seeing!that!they!do!it!in!the!cheapest!way’.!But!sometimes! cheap!is!associated!with!cheaper!quality.!Efficiency!might!be!a!better!word!as!we!minimize!costs.!You!have!to! do!market!research!and!get!to!know!the!level!of!quality!expected!by!your!customers!and!incorporating!this! quality!in!the!product!at!a!relative!price.!! 1" ! Management!is!‘being&concerned&with&the&running&of&an&organization&or&part&of&it’.!This!is!different!from!the! pre!vious!definition!but!they!are!not!mutually!exclusive.! WHA T&IS&A N&ORG ANIS ATION & An!organization!is!a!group!of!people!working!together!to!reach!their!goal!in!a!period!of!time.!It!is!not! necessarily!a!business.! An!‘Organization’!is!any! There!will!be!people!having!different!skills!in!order!to!achieve!their!goal.!Everyone!has!to!have!his!own!specific! role!in!the!organization.!There!is!interdependence!to!achieve!the!goal.!! A!’Goal’!can!be!defined!as!an! The!time!element!is!important!as!we!distinguish!between!the!shortQterm!and!longQterm!objectives.!In!the! shortQrun!there!is!little!to!be!done!to!increase!your!output!if!demand!increases.!If!it!is!a!continued!trend,!then! it!makes!sense!to!invest!in!machinery!and!other!resources!to!increase!output!in!the!longQterm.!Sometimes!we! have!to!keep!an!eye!on!the!longQrun!by!saving!money!for!future!investment!to!guarantee!longQterm! satisfaction.! An!organization!is!not!the!building/!factory/!office/!procedures…..! ¥ ¥ At!times!of!economic!uncertainty,!organisations!strive!to!survive!exampleQ!closing!down!unprofitable! departments,!lay!off!workers! Times!of!uncertainty!bring!a!lot!of!problems!for!organisations;!therefore,!organisations!need!to!thrive! on!stability.!Employees!tend!to!start!feeling!demotivated!since!their!jobs!are!no!longer!secure.!!One! can’t!help!but!think!who!will!leave!the!firm?!The!inefficient!worker!who!won’t!find!a!job!or!the! best/most!talented!worker!who!has!many!job!offers?!It!is!the!star!employees!that!will!change!job!and! ¥ this!is!not!a!good!sign!for!the!organisation! In!management!there!is!no!right!answer!or!solution!to!a!problem,!it!also!depends!on!the!economic! situation!of!the!company!and!of!the!market,!thus,!2!different!companies!would!adopt!different! strategies!and!would!still!be!successful.!You!shouldn’t!try!to!copy!your!competitors!but!do!what!is! right!for!your!organisation.! The!organization!is!the!people!and!relationships,!the!interaction!and!communication.!We!must!not!forget!the! critical!role!these!have!in!the!organization.!W .!Companies!can! decide!to!get!together!to!help!achieve!their!common!goals.!Strategic!alliance!or!alliance!is!not!a!merger!i.e.! they!do!not!decide!to!become!one!organization.! !Sony!and!Erickson!still!exist!as!different!companies!but!they!share!their! resources!in!the!mobile!phone!industry.!T t.!Sony!were!known!for!their!design! 2" ! while!Erickson!were!known!for!their!technology!and!they!joined!to!produce!a!better!product!by!enhanced! expertise.!Different!skills!combined!can!be!used!to!get!a!better!product.!In!having!joint!ventures!there!is!also! the!element!of!risk.!There!is!always!a!gamble!on!which!product!the!customers!will!choose.!!! A&Joint&Venture& The&parties&agree&to&create&a&new&entity&by&both&contributing&equity,&and&they&then&share&in&the&revenues,& expenses&and&control&of&the&enterprise.&The&venture&can&be&for&one&specific&project&only,&or&a&continuing& business&relationship&such&as &joint&venture.&& A&merger&is&a&combination&of&two&companies&into&one&larger&company.&& An!organisation!is!not!necessarily!a!business!…!of!course.! It!can!be!a!business!operating!for!profit!…!OR!maximise!shareholders!wealth.! National!Health!Service! World!Health!Organisation! University! Government! Greenpeace! Vatican! BBC/!PBS! Political!Party! For!Profit! Global!Giant! Organisacon! Small!Start! Up! NonQProfit! ! ! Organisations!could!be!offering!either!products!and/!or!services.! 3" ! They!have!different!aims!rather!than!aiming!for!profit.!They!offer!a!service!to!the!general!public:!education,! health,!etc...!Sometimes!you!get!into!issues!regarding!licence!fees!in!the!case!of!public!broadcasting.!Following! liberalisation!of!broadcasting,!the!issue!was!why!should!the!public!broadcaster!get!money!from!licences!if!it!is! allowed!to!compete!for!advertising?!If!you!are!participating!in!the!open!market,!then!the!licence!fees!should! not!go!to!the!public!broadcasting.! One!may!have!a!corner!shop!while!at!the!other!end!of!the!spectrum!one!may!have!a!worldwide!organisation.! One!may!have!organisations!solely!focused!on!the!national!market!and!others!operating!in!the!international! marketing.!Though!organisations!may!differ!in!aims,!etc...!but!they!still!require!effective!management.!! DISTI NGUIS HING &F EA TUR ES&BET WEEN &GOO DS&A ND&SE RVICE S& Intangibility:!goods!can!actually!be!touched.!A!service!cannot!be!experienced!before!they!are!bought.! In!services!the!client!is!part!of!the!process.!There!is!reputation!and!word!of!mouth!but!still!this! depends!on!trust!as!you!cannot!know!what!you!will!get!for!sure.! Variability:!the!service!could!be!variable.!A!lecture!on!two!different!days!will!surely!not!be!identical. Inseparability:! If!you!want!a!haircut!you!need!to!go!to!the!hairdresser.!It!is!also!something!you!cannot!store.!In!a!way!this! could!be!done!using!vouchers.!FAQs!(frequently!asked!questions)!are!trying!to!come!up!with!the!most! common!questions!asked!and!to!provide!an!automated!response!to!give!legal!advice!when!needed.!But! generally!speaking,!that!doesn’t!really!work.! Perishability:! Services!generally!have!a!limited!period!value.!What!is!the!value!of! a!newspaper!of!a!week!ago?!Certain!services!are!perishable.! Nowadays,!when!you!are!selling!a!good,!you!are!also!selling!a!package!of!services.! .!It!is!done!to!distinguish!between!one!product!and!another.!The! services!offered!could!be!free!insurance!for!one!year,!afterQsales!service,!etc...! All!organisations!have!goals!which!they!are!trying!to!achieve!as!efficiently!and!effectively!as!possible.! Effective!managers!are!essential!to!any!organisation’s!overall!success.! WHO &NEE DS&M ANAG EMEN T?& Griffin!explains:! The!definition!of!who!needs!an!organisation!provided!by!Griffin!is!the!same!as!the!definition!of!organisation.! Therefore,!any!organisation!needs!management.! 4" ! THE& NEED &F OR&AF FECTIV E&MA NAG EM ENT && Profit&seeking&organisations& Large!businesses:!In!large!organisations,!management!is!required!to!define!the!operations!of!each! worker,!share!resources,!etc...!As!the!organisation!grows,!the!structure!becomes!more!complicated.! Effective!management!is!essential.! Small!businesses!and!startQup:!a!small!business!needs!effective!management!to!survive!and!hopefully! get!bigger.!It!is!important!to!survive!against!competition.!If!you!are!a!small!startQup,!you!need!to!enter! a!market!where!there!are!already!many!key!players.!The!other!companies!could!be!able!to!set!the! prices!of!your!common!product!to!a!low!minimum!as!they!can!survive!by!selling!other!products.!You! would!be!ruined!by!the!market.!Thus,!management!in!small!businesses!is!fundamental!because!of! .! International!management:!things!can!get!rather!complicated!even!because!of!language.! 5" ! NotZforZprofit&organisations! Governmental!organisations:!national!resources,!taxes,!etc...!T Educational!organisations:!!Universities!and!other!schools!need!effective!management!to!be!relevant! and!bringing!in!the!best!talent!around!(lecrtures!and!teachers!)!.!Hence!there!should!be!conformity! and!quality!in!all!faculties.! Healthcare:!tolerance!of!error!is!very!small!in!certain!industries.!It!is!important!that!mistakes!are!very! rare!and!therefore!management!has!to!be!very!effective.! NonQtraditional!settings:!all!management!their!operations!as!much!as!possible.! WHA T&OR &R ATHE R&WH O&IS&A &M ANA GER? & The!definition!of!a!“Manager”!then!follows:! Having!expounded!Taylor’s!and!the!Oxford!Dictionary’s!simple!definition!of!‘Management’!–!we!can!now! introduce!a!more!complete!definition!of!‘Management’!for!our!purposes:! Management!is!a!set!of!activities:!(planning,&organisation,&leading,&controlling)! Directed!at!an!organisation’s!resources:!(human,&material,&financial,&informational)! Aiming!to!achieve!organisational!goals!efficiently!and!effectively.! Efficiency!implies!minimizing!waste!and!maximizing!value!from!our!limited!resources.!Using&resources&wisely& and&without&waste.& Effectiveness!implies!getting!the!required!results.!Doing&things&successfully&–&realising&desired&results.& All!resources!no!matter!how!abundant!are!finite!and!limited.! DIFFE RENT &T YPES&O F&M ANAG ERS& There!are!many!different!types!of!Mangers:! Department!! Brand! ! District!! ! Product! ! Plant!! ! Division! ! Task!Force! Accounts! ! What!do!all!these!managers!have!in!common?! A!manager!doesn’t!need!to!be!called!a!‘Manager’! 6" ! Chief!Executive!Officer! Supervisor! ! ! ! Vice!President! Coach! What!about:! Accountants! Journalists! Lawyers!! Architects! Stockbrokers! Programmers! They!are!all!essential!to!achieving!their!organisations!goals...!however,!they!contribute!through!own!individual! work!not!by!directing!others.!! The!common!thing!about!managers!is!the! !As!managers!within!organisations,!the!performance!is! measured!not!on!your!individual!performance!but!on!the!performance!of!your!department.! Responsibility!for!the!effort!of!a!group!of!people!who!share!common!goals!and!resources!in!perusing!their! goals.! The!difference!between!‘Managers’!and!individual!contributors!is!that!‘Managers’&are&evaluated&on&the& performance&of&the&people&they&direct.&& Managers!achieve!goals!by!enabling!people!to!do!their!jobs!effectively!and!efficiently!not!by!performing!all!the! tasks!themselves.!You!are!paid!to!coordinate!and!plan!ahead!to!get!effective!and!efficient!performance!by! your!workers.! DEFIN E&WH AT&M ANA GERS& DO& The!basic!managerial!functions!as!first!defined!by!Fayol!still!stand:! Planning!and!Decision!Making! Organising! Leading! Controlling! ! 7" ! Resources! Input!from! environment:!! Planning! and! Decision! Making! Organizing! Goals! attained:! Efficiently! Effectively! Human! Financial! Physical! Information! Controlling! Leading! ! Regardless!of!their!level,!most!managers!perform!all!the!functions!of!management!(to!different!extends! and!magnitudes).! It!is!a!cycle!with!no!beginning!and!no!end.!Without!a!plan!you!have!a!tendency!to!fail!(depends!on!what! project!you!are!working!on!and!depends!on!what!kind!of!manager!you!are).!!All!managers!no!matter!who! they!are,!they!engage!in!all!these!four!factors.! ! PLAN NING ! Defining!organisational!goals!and!proposing!ways!to!reach!them.! To!establish!an!overall!direction!for!the!future! To!identify!and!commit!resources!at!achieving!organisation’s!goals! To!decided!which!tasks!must!be!done!to!reach!those!goals! The!first!part!of!planning!is!first!to!define!organisational!goals!and!then!we!have!to!plan!the!way!to!reach!these! goals.! Planning!is!mostly!about!setting!the!targets/!objectives.!Planning!involves!looking!ahead;!it!is!planning!for! today/tomorrow.!!First!you!decide!amongst!various!alternatives!(Defining!organisational!goals)!and!then!you! (proposing!ways!to!reach!them).!How!shall!you!achieve!those!objectives?!!The!end!and!the!means!.! 8" ! ORG ANISIN G! s.! Through!effective!organisation,!management!can!better!coQordinate!human,!material!and!information! resources.!(not!wasting!time!and!keeping!the!same!quality,!movement!and!wastage!of!resources!,)! An!organisation’s!success!depends!largely!on!management’s!ability!to!utilise!those!resources! efficiently!and!effectively.(split!into!departments!)! ! LEAD IN G! Leading!refers!to!motivating!staff!to!work!in!the!best!interests!of!the!organisation.! The!managerial!function!of!communicating!with!and!motivating!others!to!perform!the!tasks!necessary! to!reach!the!organisation’s!goals.!(!performance!of!the!manager!is!based!on!the!performance!of!the! people..!this!can!be!quite!complex!)! CON TROLL IN G! The!process!by!which!a!person,!group!or!organisation!consciously!monitors!feedback!and!performance!and! takes!corrective!action.!Controlling!can!be!a!feedback!to!decide!whether!planning!has!been!correct.!! Controlling!brings!the!whole!process!to!a!circular!action.!!You!have!to!compare!with!your!own!statistical! records!but!you!have!also!to!compare!with!those!of!your!competitors.!! You!have!to!have!the!objectives!and!measure!the!results!to!get!feedback.!! Control!procedures:! Sets!standards!of!performance! Measures!current!performance!against!set!standards:!importance!of!comparing!internally!with!past! performance!and!even!comparing!with!competitors!as!well.!! Takes!action!to!correct!deviations! Adjusts!the!standards!if!necessary! Now!that!the!general!functions!performed!by!managers!have!been!defined,!let’s!back!up!and!talk!about!the! work&environment.! Managers!work!in!Organisations:!different!forms!of!organisations:!small,!large,!international;!effective! management!is!still!required.! !Effective!management!is!just!as!important!in!small!and!large!organisations.! Managerial!jobs!differ!from!each!other!in:! Level!within!the!organisational!hierarchy! 9" ! Functional!areas!of!specialisation! The!CEO(Chief!Executive!Officer)!and!Store!Manager!are!both!Managers.!However,!they!have!different!goals,! tasks,!and!responsibilities.! LEVE LS&OF &M ANA GEM EN T& In!a!small!organisation!there!is!usually!one!level!of!management.!With!growth,!an!organisation!needs!more! levels!of!management.! There!are!3&basic&levels!of!management:! Top!Managers:!CEO,!Executives;!usually!the!policy!formulators! Middle!Mangers:!these!link!Top!Managers!with!FirstQline!Mangers! FirstQline!Managers:!these!link!the!Managers!with!NonQManagers! NonQMangers! Top! Managers! Middle! Mangers! FirstQline!Mangers! NonQManagers! ! TOP !M ANA GERS! .!Top!managers!include!the!President/!ViceQPresident/!CEO/!Managing!Director.!These!set! the!direction!of!the!organisation.!They!devise!the!policy!to!reach!the!organisation’s!aims:!increase!profits,! reduce!costs,!and!increase!marketQshare.!All!these!go!hand!in!hand.!They!make!longQterm!plans!and!objectives.! Smallest!management!group! Develop!goals,!policies!and!strategies!for!the!entire!organisation:!what!markets!to!operate!in,!joint! ventures,!acquisitions! Set!the!goals!which!eventually!cascade!down!the!hierarchy,!eventually!reaching!all!workers! Spend!over!75%!of!their!time!planning!and!leading!(mostly!with!key!people!and!others!from!outside)! Pressures!can!be!intense!(tight!schedules,!travelling,!meetings,!e’taining!–!day!and!night)! Often!represent!the!organisations!in!community/!social!occasions! Increasing!Public!Relations!duties!(maintain!organisation’s!image)! ! 10" ! ! ! ! MID DLE!M ANAG ERS! The!largest!difference!between!middle!managers!and!first!line!managers!is:! ¥ Middle!Managers!receive!broad!strategies/!policies!from!top!management!and!translate!them!into!specific! goals/!plans!for!firstQline!management!to!implement.! Possibly!the!largest!management!group!in!most!organisations! In!large!organisations,!some!focus!on!coQordinating!employees,!determining!what!products!or!services! to!provide,!deciding!on!marketing!...!These!include!Department!Head/!Plant!Manager/!Director!of! Finance! Direct!and!coQordinate!firstQline!managers!as!well!as!nonQmanagerial!staff!...!clerks!etc...! Major!difference!to!firstQline!managers!is!the!management&of&group&performance&and&resource& allocation& Most!time!spent!planning,!organising!and!leading.!Delegate!much!work!to!subordinates! Much!time!spent!on!phone,!in!meetings,!preparing!reports!–!less!emphasis!on!technical!issues! Responsible!for!staff!development/!resource!development! FIRST QLINE! MAN AG ERS! First!line!managers!are!the!interface!between!the!managerial!ranks!and!the!nonQmanagerial!level.!They!spend! a!lot!of!time!with!people!who!do!not!direct!–!employees!within!that!department!ecc.!Planning!is!for!today/! tomorrow!and!not!for!a!long!period!of!time.!! These!a Heads/!Production!Supervisors.! .!These!include!Sales!Managers/!Section! This!level!of!management!is!the! Employees!reporting!to!these!managers!to!basic!production!work!–!goods!or!services.!This!affects!the! quality!of!the!production!and!thus!is!very!important!for!the!organisation! Spend!little!time!with!higher!management!and!people!from!outside!the!company.!These!normally! spend!much!time!with!other!firstQline!mangers!and!with!their!own!department!i.e.!nonQmanagers! Most!time!spent!with!the!people!they!supervise!and!other!firstQline!managers.!Hectic!and!lots!of! pressure! Little!time!planning!and!organisation,!most!time!is!spent!directing!(leading)!and!inspecting! (controlling)!as!most!decisions!that!needed!to!be!taken!are!already!made!by!Top!Mangers!and!Middle! Managers.!! Strong!on!technical!expertise!to!teach!and!supervise!subordinates.! SMA LL&BU SINESS &M ANA GERS & 11" ! In!large!organisations,!managers!at!each!level!are!responsible!for!different!types!of!tasks.!!! With!growth!things!MUST!change!! In!small!companies,!1!person!(usually!the!founder/!owner)!often!carries!the!whole!load!–!Jack!of!all!trades! There!is!no!differentiation!between!levels!of!management! With!growth!this!must!change!however.!Concentrating!on!certain!tasks!only!and!hiring!managers.! Possible!problems!with!‘relinquish’!control!can!be!incurred.!(Maybe!in!the!future,!‘cloning’!may!be!an! option)! ! In! is!vitally!important!...!the!owner!should!focus!on!a!particular!competency:! however!should!also!oversee!the!company’s!direction,!results!and!stance.!Otherwise!growth!is! restrained.!! ! Principle&agent&problem&arises!from!the!fact!that!when!u!are!the!owner,!you!are!the!principle!u!have! a!lot!of!interest!in!the!bank,!because!if!the!business!fails!you!have!lost!all!your!investments.!If!you!lose! it,!you!have!lost!everything!! ! FUN CTION AL&AR EAS&O F&MA NAGE MEN T& There!are!many!different!types!of!managers.!Managerial!jobs!differ!from!each!other!in!various!ways:! Managers!who!supervise!employees!having!specialised!skills!in!a!single!areas!of!operation,!such!as! accounting,!human!resources,!finance,!marketing,!production!or!IT.! General&Managers:!broad!scope/!overall!duties.!The!general!manager!is!not!focused!on!a!particular!issue.!They! need!to!rely!on!expertise!of!other!employees!within!the!department.!! Managers!responsible!for!the!overall!operations!of!a!complex!unit!such!as!a!company!or!a!division.! Characteristics!of!Functional!and!General!Managers! & Functional&Managers& General&Managers& Example& Vice!President!of!Finance! Store!Manager! Task&Diversity&of&Subordinates& Low:!specific! High:!broad!definition! Technical&Skills& High:!accountant! Low:!general! ‘Big&Picture’&Thinking& Low:!just!finance! High:!overall!business! 12" ! ! Regardless!of!what!level!they!operate!in,!Managers!may!work!in!various!specialised!functional!areas!within!an! organisation.!These!basically!the!most!important!sectors!of!the!organisation.! Typically!functional!areas!include:! Marketing& Finance& Operations& Human&Resources& And&increasingly&Information&Technology& You!will!have!VP!for!Marketing,!Middle!Managers!of!Marketing!etc...!All!sectors!have!their!various!level!of! operation.! Top!Managers! Middle!Mangers! FirstQline!Mangers! NonQManagers! ! ! ! Finance! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! Marketing! ! Ops! ! Human!Resources! 13" ! ! ! ! MAR KETIN G!MA NAGE R! Often!in!the!‘Sales!and!Marketing’!Department,!the!word!‘Marketing’!is!a!misnomer/!misleading!! & Focus!on!4Ps:! Product!development:!you!research!what!your!clients!want!and!then!work!around!that.!Quality!needs! to!satisfy!the!needs!of!the!customers.!They!decided!what!a!quality!product!is.! Pricing:!price!must!be!reasonable!for!the!product!offered! Promotion:!the!consumers!must!know!about!your!product!and!its!quality! Place!and!Distribution:!it!must!be!available!to!your!customers! ! Marketing!is!not!just!advertising,!it!is!product!development.!It!involves!researching!customer!needs!and!trying! to!come!up!with!the!right!product.!!Pricing,!price!tactics!and!price!strategy!is!very!important.!! FINA NCE!M ANA GER! It!is!one!of!the!most!important!resource!owned!by!the!organisation!and!thus!managing!the!financial!flow!is! very!important!as!it!affects!our!liquidity!levels,!etc!...!The!Finance!Manager!is!concerned!with!managing!the! flow!of!funds!into!and!out!of!the!organisation.!He!needs!to!determine!how!the!funds!can!be!most!effectively! used.! The!Finance!Manager!is!responsible!for:! Granting!and!using!organisation’s&credit! Investing!the!organisation’s!funds:!excess!cash!in!hand!is!doing!nothing!and!thus!should!be!invested! Safeguarding!the!organisation’s!assets! Keeping!track!of!financial&health:&The!balance!sheet.!! Preparing&budgets:&preparing!and!planning!for!the!future.!! ! Finance!manager!is!responsible!to!take!care!of!accounts!and!cash!flow.!Money!is!going!in!and!out!of!the! company.!The!responsibility!of!the!finance!manager!is!to!manage!those!flows.!No!matter!how!abundant,!you! always!have!to!efficiently!and!effectively!measure!the!resources.!!! ! ! ! ! ! ! ! ! ! ! ! 14" ! ! ! ! OPE RA TION S!MA NAGE R! ! The!operations!manager!is!concerned!with!creating!and!managing!systems!that!create!the!organisations’! products!and!services.! ! Perform!operations!needed!to:! ! Manufacture!an!item! Provide!a!service! ! Especially!in!manufacturing:! ! Controlling!inventory!levels!and!deliveries:!it!is!important!because!of!money.!Excess!stock!is!dead! money.!It!takes!up!space!and!perishable!goods!are!ruined.! Determining!factory!layout! Scheduling!production:!taking!care!of!the!shifts! Maintaining!equipment:!especially!production!machinery!which!is!switched!on!all!day!long.! Meeting!quality!requirements.! ! ! HUM AN!R ESOU RCES!M ANA GER! Responsible!for!building!and!maintain!a!competent!and!stable!workforce.! Human!Resource!Planning:!are!many!of!employees!retiring?!You!should!not!have!the!core!of!your! employees!retiring!at!the!same!time.!Looking!ahead!into!the!future.! Recruitment!and!Selection:!this!is!very!important!as!you!will!allow!a!person!into!the!organisation.!It! also!involves!various!costs:!advertising,!selection!costs,!and!training!costs.!We!try!to!match!the! employee!with!the!organisation!to!have!an!efficient!workforce.!It!is!the!gateway!into!the!organisation.! It!is!creating!goods!match!between!the!employee!and!the!organisation.!There!shouldn’t!be!any! misleading!agreements! Training!and!Development:!is!the!employee!performing!wrongly!because!of!training!or!because!he!is! not!capable!of!doing!the!job?!Training!improves!skills.! Performance!Appraisal! Reward/!Motivation!Systems:!motivating!employees!to!get!better!work.! Overseeing!relations!with!unions!within!legal!regulations! Increasingly!nowadays,!the!employees!are!the!most!important!resource!in!the!organisation.!We!need!to!have! employees!that!know!their!work,!participate,!and!take!their!own!initiative.! ! ! ! ! ! ! ! 15" ! ! ! ! INFO RMA TI ON!TE CHNO LOGY !M ANA GER! Information!Technology!helps!organisation:!eQmails,!stockQkeeping,!payQrolls,!onQline!bank!transactions,! printing,!and!instantaneous!communication!with!customers.!! The!Information!Technology!Manager!is!responsible!for!developing!information!systems!as!a!strategic!tool!for! the!organisation!and!its!employees.!! Information&is&a&valueZadded&resource&derived&from&data.& Knowledge!is!used!by!individuals!to!create,!store,!share,!and!apply!information.! Through!realQtime!communications!networks,!basic!managerial!functions!are!dramatically!changing!rapidly! improving!or!quickly!becoming!more!closely!linked.! Key!important!and!interrelated!information!technologies!are:! Internet! Intranet/!Extranet! Decision!Support!Systems! Expert!Systems! ! AI!(artificial!intelligence),!MIS!(Management!Information!Systems)!and!ES!(Expert!Systems).! Although!functional!managers!are!specialised!and!focused!they!cannot!operate!oblivious!(unaware)!of!the! organisations’!wider!goals!and!strategies.!All!departments!must!pull!together!towards!the!organisation’s! GOAL.! CrossZfunctional!interaction!and!communication!are!essential.! Communication!feedback!should!flow:! TopQDown! BottomQUp! And!laterally!across!functions! ! !! WHA T!MA KES!A !G OOD! MAN AGER ?! Good!decision!making,!responsible,!good!leadership!skills,!good!interQrelationships,!communications,!and! listening!skills.! To!become!a!successful!manager!one!must!acquire!necessary!skills.!These!skills!are!achieved!through!a! combination!of:! Education! 16" ! Experience! Experience!is!extremely!important.!We!learn!through!mistakes.!Education!can!help!us!avoid!these!mistakes! through!others’!experience!and!mistakes.!We!learn!from!other!people’s!experience.! ! EDUCATION' EXPERIENCE' Sound!education!base!and!continued!through! lifeQlong!educational!experiences.!Everything! changes!because!of!technology!for!example!and! so!we!need!to!continue!learning.!It!is!a!lifeQlong! learning!process.! Initial!job!experiences!and!continued!with! experiences!through!a!variety!of!job! assignments.! ! MANAGEMENT'SKILLS' Successful!acquisition!and!utilisation!of!basic! management!skills!requires!a!balance! between!the!two.! ! 17" ! Therefore,!running!an!organisation!effectively!has!2!main!components:! ! ORGANIZATIONAL'SKILL' ENTREPRENEURIAL'SENSE' [EDUCATION]! It!involves!principles!and! techniques!of!management! This!includes!the!ability!to!delegate! It!is!taught!at!colleges!and!business! schools! [EXPERIENCE]! Recognizing!and!making!use!of! opportunities,!predicting!market! needs!and!trends! Achieving!one’s!goal!by!sustained! drive!and!skillful!negotiation! These!natural!tendencies!and!‘gut’! feelings!are!not!as!easily!taught! SKILL S&FOR &E FF ECTIV E&MA NAGE MEN T& There!are!6!key!competencies/skills!necessary!for!effective&management:! Communication!Competency! Planning!and!Administration!Competency! Strategic!Action!Competency! SelfQManagement!Competency! Global!Awareness!Competency! Teamwork!Competency! All!these!skills!lead!to!Managerial&Effectiveness.! To!be!a!good!manager,!you!have!to!be!also!good!at!these!6!key!competencies.!! DIM ENSIO NS!OF !C OMM UNIC ATION !COM PETE NCY! Communication!is!the!basis!of!every!relationship.!It!is!one!of!the!most!fundamental.!! The!Communication!competency!is!the!most!fundamental!competency!necessary!for!the!deployment!of!all! other!competencies.!It Communication!is! Informal)communication) The!relationship!you!establish!with!your!manager.!!! Example:!is!a!flexible!and!varies!approach!in!different!situations,!promotes!2Qway!communication!and! feedback,!build!relationships.! 18" ! A!good!manager!has!to!be!not!only!good!at!informal!communication!and!if!he!were!to!give!a!presentation!he! has!to!write!and!express!himself!in!a!clear!and!concise!way.!!The!funds!are!finite!and!limited!within!the! organisation.!Each!year!when!setting!a!budget!they!have!the!rights!to!demand!why!should!extra!funds!be!given! to!that!particular!company.! Formal)communication) Example:!writes!clearly,!concisely!and!effectively,!using!traditional!as!well!as!electronic!media,!has!presence,! high!impact,!persuasive.! Negotiation) Example:!skilled!at!developing!relationships!and!exercising!influence!up,!down,!and!laterally,!negotiates!on! behalf!of!team!for!limited!resources.! ! DIM ENSIO NS!OF !P LANN IN G!AN D!ADM INIST RATIO N!CO MPET ENCY ! Deciding&the&task&that&need&to&be&done,&determining&how&to&do&them.!Allocating!resources!to!those!tasks!and! monitoring!their!progress!–!ensuring!they!are!done.!Planning!is!preparing!for!tomorrow!today.!! Administration!in!management!involves!running!the!whole!package.! MBA&–&Masters!in!Business!Administration! Information)gathering,)analysis,)and)problem)solving) Example:!takes!calculated!risks!and!anticipates!consequences! ¥ All!part!of!the!planning!process,!especially!in!decision!making! Planning)and)organising)projects) ¥ ¥ ¥ ¥ ¥ ¥ Planning!–!start!planning,!having!an!idea!what!to!do.! Planning!involves!forecasting,!in!order!to!prepare!in!times!of!uncertainty.! To!plan!we!need!to!take!calculated!risks,!need!information!to!do!this.!! Example:!plans,!schedules,!prioritises,!delegates! Planning!involves!looking!aheadQ!what!is!the!likelihood!of!this!happening,!or!that!happening?!! One!may!consider!planning!as!the!starting!point,!although!it!is!an!ongoing!process! Time)management) Example:!handles!many!issues!at!once,!manages!deadlines,!know!when!to!permit!interruptions.!Multitasking! and!being!able!and!capable!of!handling!several!issues!at!the!same!time.!You!need!to!have!a!clear!idea!on!what! your!financial!statements!are!telling!you!whether!sales,!purchases!etc.! Example:!Microsoft!just!launched!a!new!version!of!Internet!Explorer!and!Firefox!have!been!working!to!launch! their!new!version!since!November,!since!their!competitor!has!launched!already!time!is!of!the!essence!if!Firefox! wish!to!be!successful! 19" ! Budgeting)and)financial)management) Example:!understands!budgets,!cash!flows,!financial!reports,!and!annual!reports!and!regularly!uses!such! information! DIM ENSIO NS!OF !T EAM WORK !C OMP ETENC Y! Accomplishing!goals!through!small!groups!who!are!collectively!responsible!whose!work!is!independent.!A! supportive!environment!is!necessary.!Team!must!be!empowered!to!act!and!decide!on!their!‘best!judgement’.! Teams!must!be!fully!supported!by!management.! In!the!development!of!new!products!and!ideas!not!everything!is!a!success.!One!must!think!in!innovative!ways.! Every!success!is!trailed!by!several!things!that!did!not!work!out!as!planned.!Therefore!it!is!important!to!foster!a! sense!of!teamwork!so!as!to!make!things!as!successful!as!possible.! Having!an!effective!team!doesn’t!mean!that!everybody!agrees!with!one!another,!there!tends!to!be!rivalry! between!them.!It!is!up!to!the!manager!to!control!the!team!members.! Designing)teams) Example:!formulates!clear!objectives!that!inspire!team!members!and!motivate!commitment,!measures!the! progress!and!performance.!A!manager!should!not!micro!manage!a!team.!You!must!communicate!with!them:!if! they!need!anything.!It!does!take!time!to!train!your!team.!! Creating)a)Supportive)Environment) Example:!acts!as!a!coach,!counsellor,!and!mentor,!being!patient!with!team!members!as!they!learn,!reward! ‘teamwork’!not!individuals! Managing)team)dynamics) Example:!brings!conflict!and!dissent!into!the!open!and!uses!it!to!enhance!the!quality!of!decisions,!understands! strengths!and!weaknesses!of!individuals,!facilitates!open!communication.! ! DIM ENSIO NS!OF !S TRAT EG IC!AC TION! CO MPE TENC Y! This&consists&in&understanding&the&overall&mission&and&values&of&the&organisation.!It!means!ensuring!that! actions!are!aligned!with!the!company!mission!and!values.!When&you&think&strategy&you&are&thinking&longZ term&and&are&values&that&affect&the&whole&organisation.&Strategy&refers&to&the&objectives&for&our&organisation& (Group!of!people!working!for!the!same!goal).&Managing!teams!is!important,!yet!very!complex.!! As!a!manager!you!need!to!know!what!there!is!in!your!disposal.!Understanding!the!industry!(what’s!going!on,! where!the!competition!is!leading!and!technology)!is!important.!Having!a!good!grasps!on!what!are!your! strengths!and!weaknesses.!! Here!we!are!looking!at!two!dimensions!!the!internal!dimension!(strengths!and!weaknesses)!and!also!the! external!dimension!(opportunities!and!threats).![See!diagram!below]! 20" ! Understanding)the)Industry) Example:!knowing!industry!history!and!evolution,!informed!of!the!actions!of!competitors!and!strategic! partners,!analysis!of!trends!and!future!implications.!It!means!understanding!what!is!going!on!in!the!external! environment.!What!if!your!dominant!position!in!the!market!was!to!be!eroded!away!overnight!by!having!the! small!organisations!in!the!market!joining!together?! Understanding)the)Organisation) Example:!balance!shareholders’!concerns,!understand!strengths!and!weaknesses!of!various!strategies,!know! organisation’s!core!competencies!of!the!organisation,!reinforces!culture.! Taking)Strategic)Actions) Example:!considers!the!longQterm!implications!of!actions!in!order!to!sustain!and!further!develop!the! organisation,!plans!with!crossQfunctional!knowledge,!decisions!consistent!with!mission.! Strategy!involves!2&components;!! ¥ Performance!(Training!and!Development)! ¥ Competitors! SWOT&Analysis&Z&& ! ! ! ! DIM ENSIO NS!OF !G LOBA L!AW AREN ESS!CO MPE TE NCY! This!refers!to!work!entailing!resources!(Human,!Material,!Financial,!and!Information)!from!multiple!countries! and!serving!markets!spanning!multiple!countries!(ex.!Boeing![US]!–!Airbus![EU],!US!–!EU).! Cultural)Knowledge)and)Understanding) ¥ ¥ Example:!stays!informed!of!political,!social!and!economic!trends!and!events!around!the!world.! Recognises!the!impact!of!global!events!on!the!organisation! ¥ Understands,!reads!and!speaks!more!than!one!language!i.e.!mobility! Cultural)openness)and)Sensitivity) ¥ ¥ Example:!recognises!variation!within!culture!and!avoids!stereotyping.! Understands!how!own!cultural!background!affects!own!attitudes!and!behaviours! 21" ! ¥ Can!empathize!and!see!from!different!perspectives!while!still!retaining!self!confidence!and! determination.! DIM ENSIO NS!OF !S ELFQM ANAG EME NT!CO MPET ENCY ! This!refers!to!taking!responsibility!for!life!at!work!and!beyond.!Not!blaming!difficulties!on!personal!situations! or!on!others.!Managers!have!weaknesses!as!well.!They’re!only!human.! Integrity)and)Ethical)Conduct) ¥ Example:!maintains!integrity!and!ethical!conduct!in!all!situations! ¥ Accepts!responsibility!for!own!actions! Personal)Drive)and)Resilience) ¥ Example:!shows!perseverance!in!the!face!of!obstacles!and!bounces!back!from!failure,!ambitious!and! motivated!to!reach!objectives! Balancing)Work)and)Life)Issues) ¥ Example:!strikes!a!reasonable!balance!between!work!and!other!life!activities,!able!to!reduce!stress! and!tension! SelfLAwareness)and)Development) ¥ ¥ Example:!has!clear!personal!and!career!goals!and!knows!own!values,!feelings,!and!areas!of!strengths! and!weaknesses! Analyzes!and!learns!from!work!and!life!experiences,!willing!to!unlearn!and!relearn!and!acquire!new! skills.! You!have!to!remain!up!dated!on!the!onQgoing!developments!in!your!area!of!specification.! SUM MAR Y& A!Manager!is!responsible!for!using!skills!and!competencies!to!engage!in:! Planning! Organising! Leading! Controlling!! Recall!the!fundamental!importance!of!COMMUNICATION.! It!is!very!important!that!an!organisation’s!goals!are:! Communicated&Z&Clearly&Defined&Z&Fully&Understood!...!at!all!levels! ¥ The!message!must!be!cascaded!down!the!organisation! 22" ! ¥ Employees!must!have!ownership!and!understand!why!things!are!being!done!in!a!particular!way.!They! must!know!where!they!are!going.! ¥ Communication!must!be!simple!and!straight!forward!not!shrouded!in!jargon! Goal:& ¥ ¥ A!GOAL!clearly!expressed!and!widely!understood!provides!clear!guidelines!for!managerial!action! A!GOAL&well!communicated!and!understood!keeps!decisions!focussed!on!what!the!business!wants!to! achieve! ¥ The!STRATEGIC&AIM!or!stance!must!be!known,!communicated!and!hammered!to!the!masthead!–!it! must!be!reinforced!and!owned!by!management!and!employees!alike!...!otherwise,!initiatives!will!be! disparate!and!lacking!strategicQfit,!thus!disruptive!and!destructive!to!the!organisation’s!overall! direction!! COMMUNICATION!and!effective&FEEDBACK!are!imperative!in!reinforcing!strategic!aim.!! WHA T&IS&ST RATE GY?& Strategy!is!derived!from!the!Greek!word!‘Stratos’!where!Stratos!means!Army.! Its!origins!lie!in!planning!and!conducting!military!campaigns:! Displacing!enemy!powers! Gaining!advantage!and!supremacy! Defending!one’s!position! Strategy!is!like!a!flag!in!the!battle!...!something!around!which!people!can!rally!–!a!unified!objective,!a!driving! force.! The!flag!must!be!seen!...!otherwise!the!battle!is!lost!! Strategy!is!an!objective!which!drives!you!through!business.!The!objective!provides!a!plan!which!in!turn! provides!a!direction.! All!the!organisation’s!employees!must!know:! Where!they!are!going?! How!they!can!best!get!there?! An!organisation!needs!to!have!a!clear!and!well!communicated!strategy!to!survive!longQterm.! Without!defined&GOALS!and!a!viable&PLAN!to!achieve!them!an!organisation!will!gradually!come!apart.! Strategy!provides!organisation!with:! Focus!and!rationale!for!ordering!and!deploying!resources! Helps!determine!what!actions/!processes!promote!or!obstruct!progress! Helps!measure!progress!...!anything!not!measured!doesn’t!get!done! 23" ! Possible!promotes!creativity!and!innovation!towards!a!central!purpose! No!strategy!means!no!vision!and!no!direction...! “If'you'don’t'know'where'you’re'going'any'road'will'take'you'there”'as'you'do'not'have'any'particular' destination'and'anywhere'you'go'will'be'ok'for'you.' Important!for!an!organisation’s!longQterm!survival!is!flexibility.! The!need!to!be!aware!of!what’s!happening!in!the!environment! The!need!to!anticipate!change!and!be!proactive!with!alternatives! The!need!to!be!adaptable!to!change!in!the!marketQplace! If!an!organisation!has!been!around!for!long!it’s!probably!shown!some!adaptability,!flexibility!–!adapting!to! change!is!essential!for!SURVIVAL.! “...It'is'not'the'strongest'of'the'species'that'survive,'but'those'that'are'most'adaptable'to'change...”' True!for!the!turtles!of!the!Galapagos!as!well!as!for!organisations!! THE& CHAN GING &C ONTE XT&OF &M ANA GERIA L&WO RK& The!realm!of!management!is!constantly!changing! Management!is!dynamic!as:! The!environment!changes! People!change! Conditions!and!rules!change! Technologies!change! Management!evolves!because!the!situation!changes.!When!the!situation!changes,!even!the!tool!i.e.! management!has!to!change!so!that!the!tool!is!effective!once!again.!In!management,!new!theories!and! practices!are!developed!in!the!light!of!new!challenges.! The!dynamic,!fastQchanging!environment!has!given!rise!to:! The!restructuring!of!organisations! A!changing!work!force! Changing!technology! Globalisation! REST RUCT URIN G&OF&O RGA NISAT IO NS& In!the!1990s,! workers!and!their!families.! This!is!often!accompanied!by! were!a!major!source!of!corporate!restructuring,!affecting!millions!of! t.! Objectives!of!downsizing:! 24" ! !thinned!out! “FirstQline”!managers!assumed!greater!responsibilities! SelfQmanaged!work%teams!brought!workers!and!firstQline!managers!together!to!take!joint!decisions!and!solve! problems!at!the!roots.! ! As!a!result!of!this!trend,!companies!become!flatter!and!smaller!and!so!become!less&bureaucratic.!Companies! also!make!outZsourcing.! ! ! ! The!aim!is!towards!flexibility!aided!by!strategic&alliances.!It!leads!to!collective!risk&sharing!and!responding!to! change!better.! organisations& “In%a%strategic%alliance,%organisations%agree%to%co5operate%in%a%venture%expected%to%benefit%all%participants.”% A!network&organisation&is!a!webQlike!structure!linking!several!organisations!through!strategic!alliances.! A&CH ANGI NG&W ORKF ORCE & Change!in!age!distribution!of!workforce:!shrinking!number!of!new!workers!in!the!18Q24!year!age! group!increasing!productivity!among!older!workers.! New!gender!mix:!increasing!levels!of!women!in!labour!force!but!still!very!few!women!in!top! management!positions.! Increased!immigration:!mobility,!language,!crossQborder!worker!movement.! Diversity!initiatives:!more!tolerance,!flexibility!sensitivity!to!women,!minority!group,!disabled!persons! etc...!to!prevent!discrimination.! Multicultural!organisations:!organisations!with!workforces!including!a!full!mix!of!cultures.! MAN AGE MEN T& TH OUG HT:&PA ST&AN D&PRE SENT & For!many!generations!people!believed!the!earth!was!flat!and!at!the!centre!of!the!universe.!No!educated! person!believes!that!today.! One&generation’s&“fact”&often&becomes&the&next&generation’s&fiction& 25" ! Each!era’s!conventional!wisdom!evolves,!as!cherished!beliefs!are!challenged!by!new!–!leaving!only!beliefs!that! stood!the!test!of!time.! Managers!must!understand!lessons!learned!by!predecessors.!Preceding!generations!of!managers!have!much! to!teach.! Management!is!relatively!recent!phenomenon.! Environment!changes!with!time.!We!have!to!change!the!management!techniques!with!time.!If!we!do!not! change,!management!would!not!be!effective!anymore.! Management!was!only!established!recently!as!a!professional!disciple!but,!although!not!formalised!as!a! discipline,!systems!for!effective!management!existed.! ! ! 26" ! EVO LU TION &O F&MA NAGE MEN T& Management!as!a!tool!in!order!to!address!a!situation!in!an!organisation.! Over!the!centuries!3!major!forces!shaped!management!thought:! Social&forces:!the!norms!and!values!that!characterise!a!culture! Economic&forces:!associated!with!economic!systems,!economic!conditions!and!trends! Political&forces:!governing!institutions,!policies,!regulations,!attitudes!towards!business! Management!today:! Reflects!the!evolution!of!theories!over!many!decades! Seeks!to!answer:!“What’s!the!best!way!to!manage!an!organisation?”! Continues!utilising!several!models!as!they!still!apply!to!the!manager’s!job! &&OF&M ANA GEM ENT&T HOUG HT& 1980Q2000!! Quality!theory! 1960Q2000! Contingency!theory! 1950Q2000! Systems!and!Quantitative!theories! 1930!Q2000! Behaviour!theory! 1890Q2000! Traditional/!Classical!theory! TRAD ITION AL!OR !C LASS IC AL!MA NAG EM ENT !T HEOR Y! This!management!theory!began!in!late!1700s!with!the!invention!of!reliable!steam!powered!machinery.! Imagine!a!small!family!business!producing!in!the!traditional!way!producing!limited!output!and!sharing! revenues.!With!the!industrial!revolution,!production!increased!and!from!a!small!family!business!it!became!a! large!business!and!so!this!required!better!management.!Everything!is!blown!out!of!proportion.! Traditional!or!Classical!management!theory!is!focussed!on:! Finding!the!“one!best!way”!to!perform!and!manage!tasks! The!manager’s!role!in!a!strict!hierarchy! Efficient!and!consistent!job!performance! Classical!management!theory!has!3!schools!of!thought:! Bureaucratic&management! Scientific&management! Administrative!management! A!common!ideology!is!that!they!see!the!manager’s!role!in!a!strict!hierarchy.! ! ) 27" ! Bureaucratic)Management)(focuses)on)the)whole)organisation)) Bureaucracy&is&a&system&relying&on&rules,&hierarchy,&clear&division&of&labour,&and&detailed&rules&and& procedures.!The!founding!father!of!bureaucratic!thought!is!Max&Weber!who!was!concerned!with!socioQ economic!issues.! The!Bureaucratic!school!of!thought!prescribes!7!characteristics!for!effective!managerial!operation:! Rules:!in!a!small!organisation!it!is!easy!to!maintain!rules!but!as!the!organisation!gets!larger,!things!will! get!out!of!hands!if!there!are!no!clear!rules.! Impersonality:!as!an!employee!you!are!based!on!your!performance!not!on!who!you!are!related!to.! You!should!be!judged!on!nothing!else!but!your!performance.! Division&of&labour:!specialisation;!simple!tasks!to!each!person.! Hierarchical&structure:!layer!after!layer!of!authority.! Authority&structure:!everyone!has!different!authority.! Lifelong&career&commitment& Rationality:!using!the!most!efficient!means.! An!example!of!a!bureaucratic!type!of!organisation!is!McDonalds!since!it!is!highly!automated!and!all!products! must!be!standard!and!non!is!adjustable!.!The!type!of!service!should!be!the!same!all!year!round!also!the! cooking!process!can!not!be!changed!voluntarily!.! Top! Manager! Middle! Manager! FirstQLine! Manager! Work! Group! Work! Group! Middle! Manager! FirstQLine! Manager! Work! Group! Work! Group! FirstQLine! Manager! Work! Group! Work! Group! FirstQLine! Manager! Work! Group! Work! Group! ! ! Pros!of!Classical!Bureaucracy:! Efficiency! Consistency! Productivity! Cons!of!Classical!Bureaucracy:! Rigid!adherence!to!rules!for!their!own!state! Managerial!focus!on!authority!not!employee!productivity! Slow!decision!making! Incompatible!with!changing!technology! Incompatible!with!professional!values!of:! 28" ! o o o Advancing!knowledge! Serving!clients!and!customers! Finding!innovative!solutions! ! Bureaucratic!management!is! Standard!rules!dictate!every!detail!to!ensure!reaching!standards:!product,!interaction!with!customers,!logos,! colours,!etc...! It!is!most!effective&when:! Large!amounts!of!standard!information!must!be!processed! Efficient!processing!methods!have!been!found! Customer’s!needs!are!known!and!aren’t!likely!to!change! Technology!is!routine!and!stable! Many!employees!are!delivering!a!standardised!product! Continuum!of!Bureaucratic!Orientation:! Low!Bureaucratic!Structure! MidZRange&Bureaucratic!Structure! ! Amazon,!Starbucks,!DreamWorks! ! CocaQCola,!Sony! ! ! High!Bureaucratic!Orientation! ! McDonald’s,!UPS! ! ! UPS!:!process!in!excess!!of!12,000,000!packages!daily.!!! Scientific)Management)(focuses)on)the)employee)) Focuses!on:! Individual!workerQmachine!relationship! Getting!work!done!on!the!factory!floor! Removing!guesswork!from!management! Fred&Taylor!pioneered!labour!efficiency.!! At!the!time:! Business!was!expanding! Capital!was!available! Labour!was!in!short!supply! The!employee!as!an!extension!of!the!machinery.! Taylor!used!timeZandZmotion!studies!to!analyse:! Work!flows! 29" ! Supervisory!techniques! Worker!fatigue! Functional!foremanship!:!based!on!!managerial!expertise! This!considers!the!employee!as!an!extension!of!the!machine!itself.!! Frank&and&Lillian&Gilbreth!used!motion&picture!(filming!people)!to!redesign!jobs!for!greater!efficiency.! Lillian!championed:z! Standard!working!days! Scheduled!breaks! Child!labour!laws! Safety!issues!!!! It!is!not!enough!to!find!the!one!best!way!of!doing!things.!Once!you!find!out!the!best!method,!then!you!need!to! ensure!that!all!the!employees!use!that!method.! Henry&Gantt!focused!on:! Production!scheduling! Quota!systems!and!bonuses! Gantt!charts!are!used!toQdate!to!visually!plan,!schedule!and!project!timelines.!! " " " Pros!of!classical!Scientific!management:! ¥ ! Cons&of!classical!Scientific!management:! ¥ Social!needs,!working!conditions!and!job!satisfaction!often!more!important!than!money! ¥ Limits!workers’!morale!and!participation!affecting!their!performance.! ! Assessing!classical!Scientific!management:! o Scientific!school!recommends!that!today’s!managers:! Improve!employee!selection!and!training!processes.! Seek!one!best!way!to!perform!each!task.! o Scientific!school!ignores!workers’!social!and!selfQesteem!needs.! Administrative)Management)(focuses)on)the)manager)) Administrative!management!focuses!on!the!role!of!the!manager!within!the!organisation;!the!manager!and! managerial!functions.! Henri&Fayol!defined!the!management!functions!as!being:!planning,!organising,!leading!and!controlling.!He!emphasised! formal!structures!and!process!how!individual!tasks!are!geared!to!meet!defined!objectives.! Fayol’s!14!principles!managers!must!apply:! 1.&Division&of&Labour& & & & &&&&8.&Centralisation:&imp&decisions&taken&by&management& 30" ! 2.&Authority& & & 3.&Discipline:&respect&for&rules& & & &&&&9.&Scalar&chain:&hierarchical&structure& & & &&&&10.&Order& 4.&Unity&of&Command:¬&having&conflicting&orders& Equity& 5.&Unity&of&Direction& :&coordination&of&efforts& &&&&&&11.&Staff&stability:&keep&labour&turn&over&low& 6.&Subordination&for&common&good& &&&&&&&&&&&&&&&&&&&&&&12.&Initiative& 7.&Remuneration&(payment)& & & &&&&&&13.&Espirit&de&corps:&foster&the&idea&&&&of&teamwork& ! Pros!of!Classical!Administrative!management:! ! Cons!of!classical!Administrative!management:! Internal!focus:!all!of!the!other!previous!concepts!focus!within!the!organisation!itself!and!exclude!the! external!factors! Overemphasises!rational!behaviour!of!managers! Traditional&or&Classical&theory& Is&still&applied&effectively&today& & & & & & & & & & & & 31" ! & & & & & & BEH AVIOU RALIS T!MA NAGE MENT !T HEOR Y! During!great!depression!of!1930s!government,!regulating!entities!and!unions!started!taking!a!greater!role!in! the!operation!of!organisations.! In!a!relatively!short!period!of!time,!the!organisations!grew!large.!If!you!adopt!wrong!management!theories,! then!you!would!ruin!the!lives!of!many!employees.!They!treated!the!employees!as!disposable!assets!of!the! organisation.!When!a!company!went!bust,!because!of!mismanagement,!there!were!many!who!lost!their!jobs! and!many!investors!lost!all!their!wealth!as!well!as!there!was!not!much!respect!for!the!investors!and!the! shareholders!themselves.! Focus!of!the!Behavioural!movement:! Mary&Follett&(1868&–&1933)&!suggested!that:& Management!is!a!continuous!process:!it!is!not!automatic!when!you!find!a!formula.!Unlike!a!project,! management!knows!no!end!as!you!are!constantly!trying!to!improve.!Since!organisations!exist!in!a! dynamic!environment,!you!need!to!keep!adjusting!and!moving.! Employees!should!be!involved!in!problem!solving! This!contradicted!the!views!of!Classicists&Weber,&Taylor&and&Fayol!!& Follett’s!4!coordination!principles!for!manager!to!apply! 1. 2. 3. 4. Coordination&is&best&achieved&when&people&responsible&for&decision&making&are&in&direct&contact& Coordination&is&essential&for&planning&and&implementation& Coordination&should&address&all&factors&in&a&situation& Coordination&should&be&worked&at&continuously& 32" ! Follett!argued!in!favour!of!good!working!relations,!proposing:! This!is!different!from!the!previous!theories!of!management!as!an!employee!was!only!considered!as!a!number,! an!extension!of!a!machine.!However,!now!we!are!considering!communication!with!the!employees!and! recognition!of!their!feelings.! Chester&Bernard!made!2!contributions:! 1. Employee!cooperation!to!be!effective! Continual!communication! Analysis!of!organisation’s!external!environment!and!alignment!of!its!internal!structure!to!maintain! balance! & 2. Acceptance&theory&of&authority:! Employees!will!follow!management’s!orders!if!they:! Understand!what!is!required! Believe!the!orders!are!consistent!with!organisation’s!goals! See!benefit!to!themselves!in!carrying!them!out! The!Hawthorne!contributions! Illumination!tests!at!Western!Electric’s!Hawthorne!plant...!Professor!Mail...!contributed!3!observations:! Productivity!–!The!Hawthorne!Effect:!Productivity!was!increased!by!receiving!special!attention!NOT!by! physical!changes!(such!as!lighting!levels,!heating,!etc...)! It!is!not!the!physical!factors!which!changes!production,!but!the!perceived!interest!of!the!management!on! employees.!It!is!not!simply!economic!gains!that!make!a!difference!in!motivation.!There!are!other!needs!apart! from!economic!needs!for!employees.! & Considers!motivation,!group!dynamics,!and!interpersonal!processes! Focuses!managerial!attention!on!these!processes! Employees!are!not!tools!but!are!valuable!resources! Cons!of!Behavioural!management:! Individual!complexity!makes!behaviour!prediction!difficult! 33" ! Many!managers!reluctant(unwilling)!to!practice!such!concepts!as!there!was!reluctance!to!consult! employees!as!this!could!be!a!treat!to!the!managers’!authority! Assessing!behavioural!management:! Employees!motivated!by!social!needs,!a!sense!of!identity.!If!they!perceive!that!they!are!being!given! importance!by!the!management,!then,!production!would!possibly!increase! Employees!are!more!responsive!to!social!forces!exerted!by!peers!rather!than!management’s!financial! incentives!and!rules! Employees!respond!to!mangers!that!help!and!satisfy!their!needs! Managers’!need!to!apportion!work!democratically!to!improve!efficiency! SYST EMS!M ANA GEM EN T!TH EORY ! Solving!problems!by!diagnose!them!within!a!framework!of:! Inputs! Transformation!processes! Outputs! Feedback!! o Management’s!role!is!facilitating!transformation!processes!through!planning,!organising,!leading,! and!controlling.!! o A!system!is!a!more!holistic!way!of!working.!A!system!would!be!an!organisation.!It!can!have!subQ systems!in!it.!A!system!is!an!association!of!interrelated!and!interdependent!parts.! o An!organisation!in!an!internal!system!the!employees,!teams,!departments,!and!levels!linked!to! achieve!its!goals.! o An!organisation!is!linked!externally!to!suppliers,!customers,!shareholders,!regulating!bodies,! etc...! Basic!Systems!View!of!Organisation:! ! ! !! ! Inputs:!human,! physical,!financial,! and!informacon! resources! ! Environment Transform!Process:! Technology,! Operacng,! Administering,!and! Contorl!systems !! Outputs:!Products,! and!services! ! QUA NTITA TIVE!M ANA GEME NT!TH EORY ! This!was!developed!in!the!World!War!II!era.!You&want&to&maximise&output&for&your&input.& 34" ! Government,!scientists,!and!managers!help!military!deploy!resources!efficiently!and!effectively.! Experts’!mathematical!approaches!applied!to!logistical!problems!–!troops!and!armament!deployment.! After!war,!companies!began!using!same!techniques.! !branches:! 1. Operations!Management:! Techniques!for!the!efficient!production!of!goods!and!services! Less!mathematically!sophisticated! We!want!to!make!our!system!more!efficient.!We!minimize!loss.! 2. Management!Science:! Specific!focus!on!developing!mathematical!models! Equations!as!a!representation!of!reality! For!example,!the!DaimlerZChrysler!use!computer!simulations!to!study!collision!damage!to!cars!–!giving!better! data!and!saving!on!costs.!The!advantage!of!a!simulator!is!that!it!can!run!much!more!tests!than!those!that! would!be!performed!in!reality.!The!simulator!has!to!be!based!on!reality.! t:! Sophisticated!decision!making!techniques! Models!increase!awareness!of!complex!organisational!processes! Very!useful!in!planning!and!controlling!processes! Cons!of!Quantitative!management:! Cannot!fully!explain!and!predict!people’s!behaviour!in!organisations! Maths!sophistication!may!come!at!expense!of!other!skills! Models!may!require!unrealistic/!unfounded!assumptions! Models!cannot!account!for!human/!individual!behaviour!and!attitudes! Assessing!Quantitative!management:! Used!mainly!in!managing:!! o Transformation!and!change!processes! o Technical!planning!and!decision!making! Not!used!to!deal!with!human!aspects!of!management! ! CON TINGE NCY!M ANA GEME NT!TH EOR Y! 35" ! Performance!Contingent!Pay!means!that!it!depends!on!how!much!you!work.! .!We!change!according!to! circumstances.!These!theories!are!directed!to!the!company’s!resources!to!achieve!its!goals!efficiently!and! effectively.!If!the!situation!changes,!we!have!to!change!the!tools!i.e.!management!theories.! A!situational!approach!(because!everything!is!changing!about!us)!proposing!that!management!should!be! consistent!with!the:! o External!environment! o Technology!used!in!production! o Capabilities!of!employees! Managers!analyse,!diagnose!and!determine!what!action!is!more!effective!in!a!given!situation.! The!3!other!theories!used!independently!or!combined!as!necessary!in!dealing!with!various! situations.! ! ! 36" ! Assessing!Contingency!management:! o Most,!intuitively!use!this!approach!in!everyday!life! o Makes!sense!to!change!viewpoint!depending!on!situation! o Managers!must!diagnose!contingency!variable!for!each!situation! Contingency%Viewpoint% & Tradiconal! Behavioural! Systems/! Quanctacve! &&&&&&&& & & & Concngency! & & 37" ! Traditional& What!managers!do:! Plan! Organise! Lead! Control! Behavioural& How!managers!influence!others:! Informal!Groups! Employee!coQoperation! Employees’!social!needs! Systems/&Quantitative& Efficient!and!effective!resource!utilisation! Inputs! Processes! Outputs! Decision!making! Economic!criteria! Math!and!Computers! & & & & Contingency& Manager’s!use!of!other!viewpoints!to!solve!problems!involving:! External!environment! Technology! Individuals! 38" ! TOT AL !Q UALI TY !MAN AGEM ENT ! What!is!important!is!the!quality!of!the!product.!Q!refers!to!quality.! Deming’s!methods:! Poor!Q!is!unacceptable! Measure!Q!throughout!production!(Statistical!Process!Control):!how!do!you!measure!the!quality!of! what!you!produce?! Rely!on!few!Q!suppliers!not!on!delivery!sampling:!firstly,!you!are!building!a!relationship!with!the! suppliers.!The!price!might!also!be!higher!from!one!supplier!to!another.!If!you!buy!from!the!same! person!with!volume,!you!might!get!lower!prices.!On!the!other!hand,!if!the!only!supplier!you!have!fails,! you!do!not!have!a!supplier!anymore.!These!might!have!no!available!stocks!when!they!fail!and!you! would!be!left!with!no!materials.!The!manufacturer!dictates!the!levels!of!quality!that!the!suppliers!are! to!supply.!! Train!employees!for!Q!and!empower!them!to!decide!and!report!on!Q! Total%Quality%Management%(TQM)%Concepts% Quality!=!how!well!product/!service!does!what!it!is!supposed!to!do! Customer!ultimately!defines!quality!in!the!marketQplace! The%Quality%Control%Process% Focuses!on!measuring:! Enabling!managers!and!employees!make!decisions!about!product!quality of!the!process.! ! Input! Process!! !!!!!!!!!!! At!the!input&stage,!this!involves!quality!control!of! and!requirements.! Output! ! n!line!with!customer!expectations! ! 39" ! At!the Waste!of!overproduction/!surges:!overproduction!leads!to!accumulation!of!unsold!stock!which!could! possibly!be!sold!at!a!lower!price!when!the!resources!could!be!used!to!produce!another!product!which! is!sold!immediately.! Waste!in!transportation! Waste!of!extra!stockQinQhand! Waste!of!timeQonQhand/!waiting! Waste!in!processing!itself! Waste!of!movement! Waste!of!making!defective!products! At!the!output&stage,!this!involves!quality!control!and!assessment!of! Measure!by!variable:! o Assesses!quantifiable!product!characteristics!e.g.!length,!diameter,!weight,!etc...! ! Measure!by!attribute:! o Evaluates!product!as!acceptable!or!unacceptable!to!the!customer! Importance%of%Quality% Posicve! Company! Image! Lower!Costs! and!Higher! Market! Share! Decreased! Product! Liability! !!!!!!!!!!!!!!!! All!these!lead!to!quality.!The!9!dimensions!of!Quality:! 1. 40" ! THE& ORGA NISAT IO NAL &E NVIRO NME NT& The!business!environment!is!growing!increasingly!complex.! Managers!must!be!effective!within!this!dynamic!environment.! Organisations! No!organisation!exists!or!operates!in!a!vacuum.! Organisations!are!open!systems!–!affecting!and!affected!by!various,!constantly!changing!environmental!forces.! Managers!must!harness!internal&resources,!exploiting!strengths!and!shoring!weakness!toward!addressing! opportunities!and!threats!in!the!external&environment.! Maltacom!ventured!in!4!types!of!industries:!fixed!line!telephone,!mobile!telephony,!broadband,!digital! televisions.!They!did!so!because!of!changes!happening!in!the!external!environment.!The!industry!became!so! competitive!that!Maltacom!had!to!venture!also!in!broadband!and!digital!television.! To&whom&should&the&organisation&be&responsible?& & The!principle&agent!problem!refers!to!the!fact!that!the!owners!of!the!organisation!invests!in!the!organisation! and!wants!to!maximise!return!on!their!investment.!The!managers!all!their!have!involved!with!their! organisation!is!their!reputation!and!their!salary.!If!the!company!goes!bust,!the!manager!loses!his!job!while!the! owners!may!lose!everything.!So,!organisations!and!managers,!own!responsibility!to!the!owners!of!the! organisation.! Organisations!are!also!responsible!to!the!overall!society!and!to!their!suppliers.!! Social!responsibility!refers!to!the!extent!to!which!organisations!should!strive!to!add!value!or!quality!of!life!to! relevant!segments!of!society!i.e.!the!obligations!of!the!entity!towards!society,!including!the!general!public.! Managerial!Capitalism:! Classic!view!of!social!responsibility!that!a!firm’s!primary!purpose!is!to! It!is!not!the!responsibility!of!the!organisation!to!care!for!society!as!this!should!be!left!to!the! government! The!organisation!is!in!line!with!the!law,!pays!taxes,!provides!employment,!and!then!the!government! has!to!distribute!the!wealth!generated!from!the!organisation! If!the!organisation!grows,!there!is!an!increase!in!the!overall!wealth!of!the!country.!Therefore,!the! organisation’s!aim!to!grow!should!be!the!main!driving!force!of!the!organisations.! Stakeholder!Theory:! Opposing!view!that! Shareholders!are!individuals!or!groups!that! Stakeholders!are groups,!and!suppliers!are!all!stakeholders.! !Shareholders,!employees,!environmental! 41" ! .&There!is!some! kind!of!relationship!going!on!between!these!stakeholders!and!the!organisation;!it!is!not!a!one!way!relationship! as!any!decision!taken!by!any!party!is!going!to!influence!the!other!party.!Any!decision!that!the!organisation! takes!is!going!to!influence!so!many!of!the!organisation’s!stakeholders.!There!are!conflicting!agendas!which! cause!problems!with!decisionQmaking.! To!be!a!social!responsible!manager!you!must!be!sure!you!are!concerned!with!the!stakeholders’!interests.!! For!example,!employees!expect!a!good!remuneration,!profitability!and!stability!of!the!organisation.! Sometimes,!employees!are!also!shareholders!and!so!it!is!in!their!interest!that!the!organisation!does!well.!The! customers!expect!good!value!for!their!money!and!a!good!service! Meeting&responsibilities&to&stakeholders& Owners:! Businesses!owe!a!fair!return!to!investors! Managers!must!oblige!to!use!resources!efficiently!and!effectively! Managers!must!disclose!an!honest!account!of!affairs!(not!only!in!the!interest!of!the!owners!but!also! because!of!suppliers,!present!and!potential!investors,!etc...)! Employees:! Most!important!asset!needs!safe!and!psychologically!rewarding!environment! Open!communication!and!concern!for!employees’!values!and!welfare:!they!must!know!what!is! expected!from!them!and!what!their!effort!is!going!to!contribute!to!the!organisation!overall!goal! Right!to!knowledge!of!risks,!rules!and!rewards!exposed!to! Customers:! Depend!on!businesses!for!employment!and!needed!goods/!services! Legal!right!to!safe!work!environments,!services!and!products:!for!example,!Toyota!workers!working! with!Methode!to!manufacture!switches!to!be!used!on!Toyota!cars.!The!Toyota!workers!are!customers! and!still!require!a!safe!work!environment.!This!refers!to!customers!who!are!also!workers!of!the! organisation.! Ethical!right!to!fair,!honest!and!equitable!treatment! Suppliers! Need!honest!and!open!communication!from!organisation!served! Deserve!to!be!paid!fairly!for!goods!and!services!rendered! Should!have!the!terms!of!their!contracts!honoured! Society! Fair!employment!practices! Donating!funds!and!equipment! Preventing!pollution! Offering!communities!kinds!of!assistance! These!can!serve!as!a!form!of!advertisement! 42" ! ! The&organisation&and&its&environments& External!Q!General!environment! o International!forces,!Political!–!Legal!forces,!Economic!forces,!SocialQCultural!forces,!Technological! forces! External!–!Task!environment! o Owners!(shareholders,!not!within!the!organisation),!competitors,!customers,!suppliers,!strategic! allies,!regulators,!unions! Internal!environment! o Organisation:!Directors,!employees,!resources,!culture! External!Q! General! Environment! External!Q! Task! Enviornment! Internal! Environment! ! ! The! external! environment! is! divided! between! the! External! General! and! Task! environment.! ! The! task! environment! refers! to! a! more! internal! environment.! The! external! general! environment! is! the! furthest! away! from! the! organisation.! The! key! difference! between! them! is! that! as! in! the! task! environment! we! are! talking! about!specific!entities,!in!the!case!of!the!general!macroQenvironment!we!are!talking!about!forces.!The!external! macroQeconomic!forces!are!referred!to!as!PEST.!The!two!key!distinctions!are!the!following:! In!the!task!environment,!a!change!is!only!going!to!affect!our!organisation.!If!there!is!a!change!in!the!general! environment,!there!will!be!an!effect!on!the!other!organisations!as!well.! ! ! 43" ! EXTE RNAL !G ENER AL!EN VIRON MEN T! Also!called!macroQenvironment! External!forces!affecting!all!or!most!organisations! It!includes!sectors!that!do!not!have!a!direct!impact!on!daily!operations,!but!indirectly!influence!the! organisation.!The!effects!are!usually!vague!and!long!term:!economic!growth,!consumption!level,!etc...! Each!dimension!of!the!general!environment!encompasses!conditions!and!events!with!the!potential!of! influencing!the!organisation!in!important!ways.!! Analysis!of!the!General!(macro!environment)!is!done!through!PEST.! Political/)Legal)forces) The!laws!dictate!the!laws!of!the!game!i.e.!what!can!and!what!cannot!be!done.!The!law!even!monitors!mergers! and!acquisitions!against!monopolistic!practices.!There!is!also!a!level!playing!field!as!the!law!applies!to!any! organisation.! Pro/!antiQbusiness!government:!expansionary!or!tight!policy! Foreign!trade!relationships! Communities/!EU! Laws!about!pollution,!employment,!safety,!equality,!competition,!disclosure,!and!consumer! Economic)forces) It!considers!the!overall!health!of!the!economic!system.!Focus!on!trends!in!how!group!or!countries!produce,! distribute,!purchase,!and!use!goods!and!services.!Economic!conditions!influence!costs!and!availability!or! resources.! Economic!ideological!structure:! Capitalism! Socialism! Communism! State!of!the!economy:! Recession:!unemployment,!surplus!production!as!people!save.!Generally!speaking,!it!is!not!a!good!time!to! start!a!business.!Discount!supermarkets!have!developed.!People!slow!down!in!their!consumption.! Recovery! Boom! Depression! 44" ! Important!issues!are!the!level!of:! Taxes! ! ! ! ! ! ! Tariffs! Wages! ! ! ! ! ! ! Unemployment! Interest!rates:!high!interest!rate!reduces!investment! ! Inflation! Standard!of!living!! ! ! ! ! Personal!spending/!saving! Government!spending! ! ! ! ! Business!spending!and!profits! Demand!! ! ! ! ! Prices! ! SocioLcultural)forces) Customs,!values,!trends!and!demographic!characteristics!of!society!in!which!the!organisation!functions.! Demographics:! Age:!ageing!population.!Opportunities!for!new!products!and!services!including!design!of!products! with!the!older!customers!in!mind! Gender! Race! Ethnic!origin! Education!level! SocioQcultural!forces!determine!products/!services!and!standards!that!the!society!will!value.! Technological)forces) Technology!refers!to!the!methods!available!for!converting!resources!into!products!and!services.! Technology!makes!what!was!yesterday!impossible,!today.!Not!only!does!it!improve!efficiency,!but!it!also! improves!the!products.!There!is!competition!to!acquire!the!latest!technology!and!provide!an!innovative! product!in!the!market.!If!you!do!not!change!with!the!demand,!you!will!not!survive!in!the!market.! Breakthroughs!in!technology!influence:! Operating!efficiency! Competitiveness! Quality!of!goods/!services! ! ! ! 45" ! Trends%in%the%new%versus%the%Old%Economy% Old! Size!of!organisation!matters;!manufacturing!is!key! Defined!market!segments;!demographics! Customers!for!a!lifetime;!loyalty,!repeat!business! Physical!and!capital!assets;!tangible!assets! New! Value!matters;!information!is!key! New!markets;!distance!vanquished! Customers!buy!activities!not!products;!a!click!away! Human!capital;!rise!of!the!knowledge!worker! The!external!general!environment!is!generally!referred!to!as!the!general!macroQenvironment.! ! EXTE RNAL !T ASK!E NVIRO NME NT! External!Task!Environment!is!also!referred!to!as!the!competitive!environment.!We!have!the!key!entities!having! a!direct!relationship!with!the!environment.!They!are!OUR!customers,!competitors,!etc...! Competitive)forces)–)Porter’s)5)Forces) Organisations!in!any!industry!are!directly!affected!by!at!least!5!competitive!forces!in!the!task!environment:! Threat!of!new!entrants:!depends!on!the!relative!ease!with!which!new!firms!can!compete!with!established! firms.!You!never!know!from!where!the!competition!is!coming!from.!Google!can!eventually!compete!with!Nokia! or!Sony!Ericson.! Threat!of!substitute!products/!services:!products!and!services!which!may!be!alternatives!to!those!supplied!by! the!firm! !bargaining!power:!try!to!force!down!prices,!obtain!more!and!higher!quality!products,!and!also!increase! competition!among!sellers!by!playing!them!against!each!other.!There!are!two!types!of!buyers:!business!to! business!and!individuals.! Supplier!bargaining!power:!try!to!force!down!prices,!obtain!more!and!higher!quality!products,!and!also! increase!completion!among!sellers!by!playing!them!against!each!other.! Rivalry!among!existing!firms:! ! 46" ! Rivalry!among!existing!firms: Threat!of!new! compectors! Supplier! bargaining! power! Rivalry! among! exiscng!firms! in!the!industy! Buyer! bargaining! power! Threat!of! subsctute! goods/! services! ! ! ! ! ! 47" !