Business Management - Lecture notes 1-3 PDF

Preview

Summary

Business Management and Administration ...

Description

PINNACLE COLLEGE – NEW ACHIMOTA PROGRAM: HUMAN RESOURCE MANAGEMENT – ICM UK

Course: Business Management & Administration

Session 1 •

What are business administration and management? Business administration is the process of managing workers and allocating resources efficiently and effectively by applying microeconomic principles. Frederick Taylor defined it as “the art of leading and directing the activities of a group of people to achieve a certain goal”. For organizations, microeconomic principles applied in business administration include decisions made at the individual level, such as the choices individual consumers and companies make after evaluating resources, costs, and tradeoffs. The goal is to achieve stability, growth and profitability for a business. Business administration is a function of organizational structure, the desired system of task allocation, coordination and supervision. Depending on the organizational structure, some or all of these business administrators work together to apply business principles such as accounting, marketing, finance and management to effectively work toward their common goals.

Four main characters related to Management: HOG2 1. 2. 3. 4.

Human: it’s human based not electronic. Organized: which means that it’s a planned and organized activity aimed for a certain goal. Group: More than one person participates in this activity. Goal: it’s related to a goal which is clear and beneficial to the Organization.

The elements of management and business administration

1|P age

PINNACLE COLLEGE – NEW ACHIMOTA PROGRAM: HUMAN RESOURCE MANAGEMENT – ICM UK

Course: Business Management & Administration

Similarities between Business Administration and Public Management 1. Both seek to implement the same management principles (planning, organizing, coordination, directing, supervising) to achieve the desired goals. 2. The manager in both do the same roles and duties. 3. Both need human interactions within it. 4. Both suffer the same effect from the administrative problems.

Deference between Management and Administration Management 1. Management is an art of getting things done through others by directing their efforts towards achievement of pre-determined goals. 2. Nature: Management is an executing function. 3. Process: Management decides who should as it & how should he do it. 4. Function: Management is a doing function because managers get work done under their supervision. 5. Skills: Technical and Human skills 6. Level: Middle & lower level function 7. Influence: The management decisions are influenced by the values, opinions, beliefs & decisions of the managers. 8. Status: Management constitutes the employees of the organization who are paid remuneration (in the form of salaries & wages).

Administration 1. It is concerned with formulation of broad objectives, plans & policies. 2. Nature: Administration is a decision-making function. 3. Process: Administration decides what is to be done & when it is to be done. 4. Function: Administration is a thinking function because plans & policies are determined under it. 2|P age

PINNACLE COLLEGE – NEW ACHIMOTA PROGRAM: HUMAN RESOURCE MANAGEMENT – ICM UK

Course: Business Management & Administration 5. Skills: Conceptual and Human skills 6. Level: Top level function – Strategic decision making 7. Influence: The administration is influenced by public opinion, govt. policies, religious organizations etc. 8. Status: Administration represents owners of the enterprise who earn return on their capital invested & profits in the form of dividend.

Practically, there is no difference between management & administration. Every manager is concerned with both - administrative management function and operative management function as shown in the figure. However, the managers who are higher up in the hierarchy denote more time on administrative function & the lower level denote more time on directing and controlling worker’s performance i.e. management. Hence there are three school of thoughts – 1. Mgt is the same as Admi 2. Mgt is above Admin 3. Mgt is below Mgt The stands you take on this is never wrong

•

The board of directors Across the world, there exist different governance models or boards. Some boards are unitary while other are a two-tier board or directors. Ghana and the UK practice the single or unitary board. Board of directors in a corporation is a group of top-level executives or directors from various departments and others from outside the organization who are appointed to be members of the board. A Board is a strategic wing of the organization. Its basic function is to ensure the organization is managed properly and that corporate governance policies are adhered to. It has Executive members and Non-executive members with the latter expected to be independent and keep the executive members on their toes. The BOD has an obligation to approve all decisions that might affect the long-term performance of the corporation. This means that the corporation is fundamentally governed by the board of directors overseeing top management, with the agreement with the shareholders (Owners). A board of directors is essentially a panel of people who are elected to represent shareholders. Every public company is legally required to install a board of directors; nonprofit organizations and many private companies – while not required to – also name a board of directors.

3|P age

PINNACLE COLLEGE – NEW ACHIMOTA PROGRAM: HUMAN RESOURCE MANAGEMENT – ICM UK

Course: Business Management & Administration In a broad sense, a corporate board of directors acts as a fiduciary (representatives worth trusting who only seeks the interest of shareholders) for shareholders. The board is also tasked with a number of other responsibilities, including the following: • • • • • • • •

Creating dividend policies Hiring and firing of senior of executives (especially the CEO) Establishing compensation for executives Supporting executives and their teams Maintaining company resources Setting general company goals Making sure that the company is equipped with the tools it needs to be managed well

Functions within an organization (MS. HARP PAID) Marketing Functions Sales Functions Human Resource Functions Accounting/Finance Functions Research and Development Functions Purchasing Functions Production/Service Functions Administration Functions ICT Functions Distribution Functions

•

The Sales Function This is a vital function in every business. The role varies depending on the industry. Most businesses have sales targets as part of their aims and objectives. Meeting these targets is the responsibility of the sales staff or sales team.

•

Sales Function Organizing sales promotions Responding to customer enquires

•

Selling the product or service to customers, either over the telephone or face to face

•

Preparing quotations or estimates for customers

•

Negotiating discounts or financial terms for business customers

•

Providing technical advice

•

Keeping customer records up to date

4|P age

PINNACLE COLLEGE – NEW ACHIMOTA PROGRAM: HUMAN RESOURCE MANAGEMENT – ICM UK

Course: Business Management & Administration

•

The Production Function Production refers to the manufacture or assembly of goods.

•

Production staff must ensure that goods are produced on time and are of the right quality.

•

Production function such as Ordering, Storing and checking the stocks of raw materials

•

Planning production schedules to maximise machine capacity and staff levels

•

Producing or assembling the finished product

•

Checking the quality of the product throughout the production process

•

Checking production is on schedule and resolving delays or problems

•

Packing and storing the final products before distribution

•

Scheduling routine machinery inspections and maintenance

•

Carrying out repairs to machinery and equipment as required

•

The purchasing Function All businesses need to buy a wide variety of items on a routine basis.

•

In large businesses they will buy consumable items.

•

Purchasing staff are responsible for making sure they pay the best price for goods this is not necessarily the cheapest price

•

Purchasing functions

•

Ordering new stock and consumable items from suppliers

•

Solving supply problems, for example changing supplier

•

Evaluating alternative sources of supply in relation to price, reliability, quality, payment terms, terms of delivery and so on

•

Agreeing stock levels with managers and stock controllers

•

Finding suppliers to meet new requirements

•

Monitoring new sources to achieve cost savings

•

Dealing with problems on delivery

•

Maintaining good relationships with suppliers

5|P age

PINNACLE COLLEGE – NEW ACHIMOTA PROGRAM: HUMAN RESOURCE MANAGEMENT – ICM UK

Course: Business Management & Administration

•

The Administration Function Administrators carry out a variety of support activities in order to help business operations run smoothly.

•

In a small business the administrator is normally a ‘jack of all trades’ who can turn their hand to anything

•

In larger businesses they will be working for a department offering all the assistance required

•

Administration functions Collecting, distributing and dispatching the mail

•

Storing and retrieving paper and electronic records

•

Organising meetings and preparing meeting documents

•

Responding promptly to enquires

•

Preparing documents using word processing, spreadsheet and presentation packages

•

Researching information

•

Sending and receiving messages by telephone, fax and

•

Making arrangements for visitors

•

Making travel arrangements

•

Purchasing supplies of office stationery and equipment

•

Making arrangements for events, such as interviews or sales conferences

•

The Customer Service Function Customer service looks after the customer from an enquiry, concern to complaint.

•

They make sure that the customer leaves with everything they wanted and have had a good experience

•

They also deal with complaints and problems and make sure they are dealt with quickly and consistently

•

Customer service functions Answering customer enquires about products and services

•

Providing specialist information and advice to meet customer needs

6|P age

PINNACLE COLLEGE – NEW ACHIMOTA PROGRAM: HUMAN RESOURCE MANAGEMENT – ICM UK

Course: Business Management & Administration

•

Solving customer problems

•

Providing an after sales service

•

Dealing with customer complaints

•

Using customer feedback to improve customer service and satisfaction

•

The Distribution Function Distribution means ensuring that goods are delivered to the right place, on time and in the right condition.

•

Distribution functions Ensuring all goods are appropriately stored before dispatch

•

Ensuring goods for dispatch are securely packed and correctly labelled

•

Checking vehicle loads are safe and secure

•

Ensuring goods are despatched at the right time

•

Checking that all deliveries match orders precisely and notifying sales if there is a discrepancy

•

Completing the delivery documents

•

Planning and scheduling vehicle routes

•

Notifying sales staff of delivery schedules so that customers can be informed

•

Dealing with distribution problems

•

The finance/Accounting Function

•

Finance staff support the accounts by keeping financial records, chasing up late payments and paying for items purchased. Some finance departments prepare the payroll and pay staff salaries Producing invoices, checking payments are received and chasing up overdue payments Recording money received Checking and paying invoices received Preparing the payroll and paying staff salaries Monitoring departmental budgets to check managers are not overspending Issuing regular budget reports to all departmental managers

•

Producing cash flow forecasts and regular financial reports for senior managers Advising senior managers on sources of finance for capital expenditure Producing the statutory accounts each year 7|P age

PINNACLE COLLEGE – NEW ACHIMOTA PROGRAM: HUMAN RESOURCE MANAGEMENT – ICM UK

Course: Business Management & Administration

•

Human Resources Function Hr is responsible for recruiting new employees and ensuring that each vacancy is filled by the best person for the job.

•

Hiring the wrong person can be costly and cause problems both for the individual and the firm

•

Human resource function

•

Advertising job vacancies

•

Notifying staff of promotion opportunities

•

Receiving and recording all job applications, arranging interviews and notifying candidates of the result

•

Sending a contract of employment and their essential information to new staff

•

Arranging staff training and encouraging continuous professional development

•

Monitoring the working conditions of staff

•

Checking health and safety and keeping accident records

•

Recording sick leave and reasons for absence

•

The ICT Function

•

They maintain servers, installing new software and additional hardware, such as printers and scanners.

•

ICT specialists are responsible for system security.

•

They ensure only authorised users have access to the system.

•

They also assist other users, from solving problems to advising on the use of new software or updating the intranet

•

Recommending new/updated systems and software to keep abreast of technological developments and the needs of the business

•

Buying and installing new hardware and software and providing information or training as appropriate

•

Assisting users who have computer problems

•

Repairing the computer system when required

•

Advising on/obtaining/issuing computer supplies and consumables

8|P age

PINNACLE COLLEGE – NEW ACHIMOTA PROGRAM: HUMAN RESOURCE MANAGEMENT – ICM UK

Course: Business Management & Administration

•

Connecting new or additional equipment to the system

•

Installing a security system which limits access to authorised users and protects against hackers and viruses

•

Technically maintaining the company website

•

Monitoring staff computer use for compliance with the IT policy

•

The Marketing Function Marketing is all about identifying and meeting customer needs.

•

Marketing staff identify future customer needs. Products are developed to meet the needs of customers

•

They will also promote all the company’s products through different media

•

Carrying out market research to obtain feedback on potential and existing products and/or services

•

Analysing market research responses and advising senior managers of results and implications

•

Promoting products and services through a variety of advertising and promotional methods, e.g. Press, TV and online

•

Obtaining and updating a profile of existing customers to target advertising and promotions appropriately

•

Producing and distributing publicity materials, such as catalogues or brochures

•

Designing, updating and promoting the company website

•

The research and development Function Involves new product development as well as improvements to existing products

•

R&D staff work with designers to develop a usable product that can be manufactured at a reasonable cost

•

Note that the exact activities will depend upon the Industry.

•

In the pharmaceutical industry, scientists research and develop new medicines and drugs

•

In the food industry, technologists work with chefs to prepare new products such as ready meals, sauces or flavourings

•

Electronic and IT companies concentrate on new technology products and software, such as HD televisions, the X Box 360 and Sony PS3In the aerospace and car industries, engineers focus on improving performance and safety whilst reducing emissions or noise. Designers concentrate on the shape and look, both internally and externally

9|P age

PINNACLE COLLEGE – NEW ACHIMOTA PROGRAM: HUMAN RESOURCE MANAGEMENT – ICM UK

Course: Business Management & Administration

The ‘systems’ approach to organization When a passerby looks at your company, he may see just a building with a bunch of people going in and out. Inside that building, however, is a living entity that is more than a group of people. Every company and every organization is a unique, organic system with interrelated subsystems working together to change the world around it and, in turn, respond to changes in the world. •

The organization as a whole

•

Interactions between parts, not the parts themselves

•

The way systems affect other systems

•

Reoccurring patterns rather than just individual events

•

Change over time

•

How feedback affects the parts

A restaurant could be described as a system that turns hungry customers into satisfied patrons. Pinnacle College is made up of several subsystems working together and affecting each other. Just as the human body is an organized collection of systems interacting with the environment, the same principles can apply to a company. The sales and marketing departments, production department and accounting department can be examples of subsystems all working together. 5 Principles of the Systems Approach Using a systems approach, business leaders are able to look at the big picture and look at underlying patterns and trends as well as the consequences of changes in how...