VCE Business Management Unit 3 & 4

1. VCE Business Management Unit 3 & 4 • 2013: LECTURE SLIDES • UNIT 3: AREA OF STUDY 2 • INTERNAL ENVIRONMENTS OF LSOs • PART A

2. Key knowledge • • management structures; • • corporate culture and its future development; • • key management roles: • – planning: long, medium and short-term • – organising: resource and task allocation techniques • – leading: importance of leadership qualities, including interpersonal, informational and decision-making • – controlling: financial and non-financial processes and control systems; • • the need for, and process of, policy development and its application; • • different styles of management, including autocratic, persuasive, consultative, • participative and laissez-faire, and their appropriate application to various • management situations; • • key management skills as appropriate to the process of effective management; • • the relationship between management styles and skills; • • implications of managing the internal environment of large-scale organisations in • an ethical and a socially responsible manner.

3. AOS 2 Contents- Dot Points (DPs) 8. ESR Management

4. DP1 Management Structures (2.1 in Textbook)

5. What is Management Structure?

6. Management Structures • The division of the organisation into parts based • on the roles, responsibilities and lines of • communication required of each person • The structure is determined after goals, and then • strategies to achieve these goals, have been • determined. • Often represented in an Organisational Chart

7. Purpose of Management Structures • To coordinate work activities within the organisation so that goals/objectives can be met. • Formalise lines of communication • Establish a hierarchy of decision making, also known as a chain of command • The vertical line of authority that passes through the levels of an organisation’s hierarchy.

8. Hierarchical Organisation • Relates to the different layers (levels) of management the organisation has. • It shows the levels of authority and decision making within the organisation, from senior positions down to the entry level of the organisation. • It refers to the lines of communication up and down the organisation and to the chain of command • Vertical Specialisation looks at the height of an organisation.

9. Hierarchical Organisation

10. Hierarchical Organisation • Senior management (executives) • -Set the long term goals & are involved in the long term strategic planning. • -In charge of managers subordinate to them (middle managers) • Middle management (Store Manager/Department head) • -Involved in translating the long term goals into specific projects for those • managers subordinate to them (front-line managers). • -This is called ‘operational planning.’ • -They monitor front-line managers and the project’s progress • Front-line management (supervisors/team leaders) • -lowest level of management --- • -spend most of their time leading, supervising &controlling employees • under them who are working on specific projects or tasks. -- • -They are accountable or answerable to middle management • Lower level employees

11. Flatter Organisational Structures • Relates to the span of control • the spread of responsibility across an organisation • It refers to the width of an organisation • different areas of specialisation an organisation is broken into • A wide span of control is related to a flatter organisational structure • Anarrow span of control is associated with a more hierarchical structure

12. Traditional vs. New/EmergingStructures:

13. Learning Activity: • Complete the Test Your Understanding questions 1-5 from your textbook – page 49.

14. Types of ManagementStructures • Three main types of horizontal structures. • Employees can be organised and grouped on the basis of: • Functional Structure • Divisional Structure • Matrix Structure

15. Functional Structures • Employees are grouped according to their management function • - i.e. type of work/role undertaken • - Finance, Marketing, HR, Operations & R&D etc. • Often the best structure where the organisation has a small range of products • Example: A school • Even though persons from each department/ division may liaise from time to time, they are sub divided into their own areas

16. Functional Structures - Example Board of Directors Chief Executive Officer - CEO Management Functions Human Resources R&D Finance Operations Marketing Designing new, or improving existing products involved with actual Production of the Product Financial transactions & reports involved with Promotion of the Product Hiring, training & maintaining employee well being

17. Functional Structures - Evaluation • Advantages • Defined career pathway for employees • High degree of task specialisation • Efficient use of resources • Disadvantages • Lack of flexibility – due to bureaucratic nature • Narrow focus of staff • Isolation and ‘empire building’ behaviours

18. Divisional Structures • Employees are grouped according to division • Often used where the company has a large product range or many geographical locations. • Could include divisions based on: • Producte.g. cereals, confectionary, beverages, chocolate • Geographice.g. Asian, North American& European offices • Customere.g. wholesale, retail and corporate clients • Example; ANZ banking Customer based structure - corporate or personal banking options

19. Divisional Structures - Example Board of Directors Chief Executive Officer - CEO Division by Geographic location Paris Snacks Manager Munich Drinks Manager Sydney Snacks Manager London Drinks Manager New York Snacks Manager

20. Divisional Structures- Evaluation • Advantages • Staff expertise in a particular area • Rapid response to changes • Encouragement of cooperation between departments • Disadvantages • Duplication of work in different divisions • Rivalry amongst divisions

21. Matrix Structures • A combination of a functional structure and a divisional structure • Specialists from each area of the functional structure work together on a special project for a short period of time • They are responsible to both their team leader and department manager • Example: Unilever Multi-National, sells various products across many countries, hence combination suits it.

22. Matrix Structures - Example

23. Matrix Structures- Evaluation • Advantages • Enhanced Flexibility • Enhances communication, Co-operation and teamwork amongst divisions • Synergy of ideas using pooled expertise • Disadvantages • Uncertainty of who to report to • Others have to cover the extra workload

24. Management Structures - Activity Missing Word Passage. Copy the passage into your workbooks and fill the blanks using the word bank provided. Complete Question 3 and 5 on Page 53.

25. SAMPLE EXAM QUESTION Identify the ways in which a divisional structure can be organised – and why a company would choose one over the other. 2marks

26. DP2 Corporate culture and its future development (2.3 in Textbook)

27. What is Corporate Culture? • The shared values, ideas and beliefs held by people in the organisation that unite and keep the organisation together • A set of moral, social and behavioural norms • based on beliefs, values and attitudes • employees use to interact with each other in • an organisation • The way organisations ‘do things’. It guides • how employees think, act and feel within an • organisation.

28. Elements or Indicators of Corporate Culture • Values • The beliefs shared amongst staff such as honesty, hard work, teamwork, innovation which are developed through: • Training programs • Polices & procedures • Management style • Relationship between staff and management

29. Elements or Indicators of Corporate Culture • Symbols • Events or objects that represent what the organisation value or stand for such as: • The company logo • Uniform • Slogans • Style of language • Song

30. Elements or Indicators of Corporate Culture • Rituals • Routine patterns of behaviour that help frame the organisations identity such as: • Social gatherings • Regular meetings • Celebrations and ceremonies

31. Elements or Indicators of Corporate Culture • Heroes • Employees who reflect the organisations values and act as an example for others • “The fish rots from the head” • Champions of a common goal

32. Points to Consider • There is often a difference between the • official culture and the real culture • Sometimes the culture is a negative one • Difficult to change organisational culture • “This is the way we’ve always done it!” • Change needs to be embraced by the • employees

33. Developing Culture within an Organisation • In order to reinforce positive culture, management must: • Model desired behaviour • Provide adequate training • Reward employees who embrace culture • Recruit staff who fit the desired culture • Devise strategies consistent with the culture

34. SAMPLE EXAM QUESTION Explain what is meant by corporate culture. Name three ways in which a new employee in an organisation can learn about its corporate culture. 4 marks

35. DP3 Key management Roles Planning, Organising, Leading & Controlling (2.4 in Textbook)

36. What are the Key Management Roles? • In the SACs and examination, you will be • asked about management roles or the roles • of management in a given situation. • Whenever there is a reference to ROLES, • it is referring to the four roles of: • Planning • Organising • Leading • Controlling Always Remember: POLC

37. What are the Key Management Roles? “Key management roles refers to the process of planning, organising, leading and controlling resources (human, financial, physical & informational) in order to achieve the organisation’s objectives. Management involves getting work done through the actions of others”.

38. Key Management Roles: Planning • The process of setting objectives and formulating strategies to achieve those objectives. • Planning can be: • Strategic - Long term planning covering a period of the next 2-5 years made by Upper or Senior Management • Tactical - Medium term planning covering a period of 6-24 months made by Middle Management • Operational- Short term planning covering daily planning up to 6 months made by lower, junior or frontline management • Often the best structure where the organisation has a small range of products • Example: A school • Even though persons from each department/ division may liaise from time to time, they are sub divided into their own areas

39. Levels of Planning

40. Planning: What is a SWOT Analysis? • The process of analysing an organisation’s: • Strengths and Weaknesses (from its internal environment) • & • Opportunities and Threats (that exist from the external environment) • It is part of the Analysis phase of the Planning process Always Remember: SWOT

41. The Planning Process

42. The Planning Process : SADIM • Set objectives • Managers define what they wish to achieve in a given period of time • Analyse the current situation • Managers conduct a SWOT Analysis • Develop alternative strategies • Managersbrainstorm various ways the company may achieve the objective

43. The Planning Process • Implement solution • Managers choose the most appropriate strategyto achieve the objectives and put the strategy into practice • Monitor and Evaluate the solution • Determine whether the objectives are being met by monitoring performance indicators

44. Activity: Planning • Follow the “5 step planning process” to increase student numbers at RSC to 2100 students by 2015!

45. Key Management Roles: Organising • The process of determining how to make the most efficient use of the organisations resources in order to put the plans into action to best achieve the company objectives. • For Organising, the study design states • ‘organising: resource and task allocation’

46. Key Management Roles: Organising • The 3 step Organisation Process: • Determine the work activities which are required to achieve the company objectives. • - Includes the manufacturing of goods or the delivery of services • Classify and group the activities – to ensure efficiency • - These include staff, raw materials, finances, machinery etc. • Assign work and delegate authority. • - Which staff are allocated to which area of production etc.

47. Key Management Roles: Leading • The process of influencing, guiding and motivating employees to ensure work is completed in the most efficient and effective manner in order to best achieve the company’s objectives • For Leading, the study design states • ‘leading: importance of leadership qualities including interpersonal, informational and decision-making’

48. Key Management Roles: Leading • In the SAC and exam, use terms such as: • Directing.. • Guiding.. • Inspiring.. • Supporting.. • Developing.. • Human Resources

49. Key Management Roles: Leading • Three of the most important leadership qualities • include: • Interpersonal skills – the ability to get along with, understand and react to the needs of others • Informational skills – the ability to gather, analyse, interpret and transmit key information to other stakeholders in the organisation • Decision making skills – the ability to choose the best alternative from a range of different options to solve problems • For Leading, the study design states • ‘leading: importance of leadership qualities including interpersonal, informational and decision-making’

50. Key Management Roles: Leading • Qualities of good leaders include (but are not limited to) the ability to: • Communicate well • Understand themselves and their staff • Be sensitive to cultural issues • Provide for collaborative team • Undertake inclusive decision making • Be creative and visionary • Model good behaviour • Undertake Internal motivation & achievement • Make fair decisions