UNIT 3Chapters 5, 6, 7, 8.

3.4 Outcomes

On completion, the student should be able to:

3.4.1 define management;3.4.2 identify the importance of management skills in areas such as home, school, local community, Government departments and business start-up;3.4.3 list the characteristics of managers;3.4.4 explain the basic management skills;3.4.5 explain the central role of communications in business and management;3.4.6 identify and explain the main barriers to effective communications;3.4.7 demonstrate business data in the following written forms: memos, reports, and business letters; draft a visual presentation from given data;3.4.8 identify the duties of a chairperson and secretary and draft an agenda and minutes of a meeting;3.4.9 distinguish between the methods of communication;3.4.10 discuss the importance of general communication skills (HL);3.4.11 differentiate between enterprise and management (HL);3.4.12 explain the contribution of both managers and entrepreneurs to business (HL);3.4.13 discuss the nature of management activities and their linkages(HL).

MANAGEMENT Management is the process of setting

objectives and the ability to achieve results through people. An objective is a goal or target to be achieved. Management is a process involving the achievement of goals by working with and through people.

CHARACTERISTICS Decisiveness Self motivation Achievement Self belief Hard working Time management

MANAGEMENT IN ACTION Home – planning and organising a holiday School – organising teachers and students

timetable Community – planning a local disco in the

GAA Business – controlling finances Government – leading a government

department

MANAGEMENT V’S ENTERPRISEEntrepreneur

Sets up the business Takes all the risk Comes up with the idea Short term activities

with a long term goal E.g. Tony Ryan

Manager Runs the business Not much risk, only his job Ensures entrepreneurs

ideas are carried out Long term activities, day

to day running E.g. Michael O’Leary

SKILLS Leadership Motivation Communication

LEADERSHIP The ability to influence and direct people to

follow a particular path an achieve particular goals through setting a positive example and motivating workers through delegation and responsibility.

TYPES OF LEADERSHIP – AUTOCRATIC Likes control. Makes all the decisions and doesn’t consult

employees. Uses fear to motivate.

Benefits• Time saved• Things are all done

the same way

Problems• Opinions left out• Overload of work

on manager• No motivation• High staff turnover

DEMOCRATIC Delegates tasks Brainstorms with employees Trusts employees with their own ideas

Benefits• Best ideas available• Motivation• Intrapreneurship• High staff morale

Problems• Takes too long to make

decision• Poor decisions could be

made from trying to accommodate too many opinions

LAISSEZ FAIRE Manager doesn’t interfere with how employees do

their work. Gives goals and leaves it entirely up to them, Delegates a lot as he trusts his employees. Uses reasoned arguments to get them to co operate‐

Benefits• High intrapreneurship• Manager has free time• Employees enjoy

working

Problems• Problems go

unnoticed • Lack of clarity• Employees may make

bad decisions

DELEGATION Important part of leadership. Giving employees an important task to carry

out and giving him all the responsibility of that task.

Manager has more time to deal with important things and employee feels like an important part of the workforce.

E.g. asking the HR manager to completely take care of the interview process as the manager hasn’t got the time to

MOTIVATION Involves the manager energising employees

and providing them with incentives so that they will work harder for the business.

Manager ants employees to work towards achieving the goals of the company and their own personal goals.

Motivated workers: Work hard Improve skills Enjoy work Produce excellent results

MASLOW'S HIERARCHY OF NEEDS

This states that: Everything we do is done to satisfy one of

these 5 needs. We are motivated by a lot more then just

money. When one need is satisfied, we move on to

the one above it on the pyramid

Self Actualisation - Need to reach full potential. More challenging work.

Esteem - need for respect and self respect. Praise or promotions.

Social - friendship and love. Staff parties. Safety - need for feel safe and secure. Employment

contract. Physiological - essential human needs. Pay,

canteen.

MCGREGOR’S THEORY X AND THEORY Y Theory X Believes employees don’t like work, are all lazy and

prefer to be told what to do (takes a pessimistic view).

Motivates by the hard approach (threats and punishments) and the soft approach (promise of more money).

He does not delegate to employees. Employees resent being treated like this,

become un- co- operative and will try to get most money for least work.

Theory Y: Believes employees enjoy work and want

more responsibility. Motivates by offering promotions and titles. He

praises employees for good work. He delegates to employees. This results in happy, co- operative

employees who work hard.

COMMUNICATION Transfer of information through writing, orally

or visually which is received through listening, reading, or watching.

It involves SENDER MESSAGE RECIVER MEDIUM FEEDBACK/REPLY

Effective communication: Clear and concise Accurate Timely Done in the correct medium Done in the right form Recorded

Internal Communications Communication between people who are all inside

same business. Methods include newsletters, internal phone, e- mail, intercom and meetings.

Upward - Moves from lower to higher e.g. employees asking management.

Downward - Higher to lower e.g. manager advising employee.

Horizontal - Between people of same level e.g. directors meeting

External Communications Between business and other people outside. Examples are with Banks- entrepreneur meets

manager for loan or with Customers- The marketing manager writes

back to address a complaint. Methods include telephone, e- mail, letter or

video- conferencing.

WRITTEN, ORAL, VISUAL Written Business documents, e- mail, fax, letter,

memo Advantages: Permanent record, can be re-

read and e-mail is very fast. Disadvantages: Feedback slower than oral,

risk of information overload

Oral Conversation, intercom, meeting,

telephone, video- conferencing.Advantages: Quick with instant response,

problems can be explained, personal communication, allows emotion and body language.

Disadvantages: No record, message may come out wrong, receiver may not listen.

Visual Bar chart, pie chart, break- even chart,

pictogram.Advantages: Good for statistics,

makes information clearer.Disadvantages: Not sufficient alone

and needs to be accompanied

Bar Chart Displays information in form of bars. Good for showing relative size of things.

Pie Chart Fractions of circle are shaded to represent what each item

bears to total. Good way of showing fractions and percentages.

Pictograms Represents information in form of pictures. Good for showing relative sizes.

Line Graph Shows how something's value changes over time Value plotted as point. Points joined by straight line to show trend.

BARRIERS TO EFFECTIVE COMMUNICATION Language Prejudice Information overload Poor listening skills Trust Timing Technology breakdown

CHOOSING A METHOD OF COMMUNICATION Cost Urgency Confidentiality Nature of message Legality

BUSINESS LETTERS Senders name and address Date. Name and address of receiver. RE. Dear Sir/Madam. Main Body. Yours faithfully (if name known)/sincerely Signature.

REPORTS Title Terms of reference Contents Introduction Methods Body Recommendations Summary Appendices

MEETINGS Ad-hoc – short notice, new problem Formal – planned, set procedures Annual general meeting – once a year Extraordinary general meeting – emergency,

cannot wait for next AGM Virtual meeting – use of video connection

(webcam)

MEMO To: __________ From: _________ Date:______ RE:__________________________________________

____________________________________________________________________________________________________________________________________________________________________________________

Signed: ________ (position):_______

NOTICE

MINUTES

AGENDA

SECRETARY Notice Agenda Venue Minutes and notes Liaise with chairperson

CHAIRPERSON Quorum Agenda Standing orders Ensure everyone participates Voting & casting vote Summarise

CHALLENGES WITH IT System breakdowns Information security Virus New technology expenses Junk mail Customers not having technology Payment security

DATA PROTECTION ACTRights for Data Subjects Get copy of data kept about you. Have errors corrected Complain to Data Protection Commissioner. Receive compensation if you have suffered

Responsibilities of Data Controllers Obtain information fairly and honestly by

identifying herself and saying what the information is for.

Keep information safe and secure with password protection and ensure only authorised people have access.

Delete information once no longer needed and not kept ‘just in case’

Give copy of data to person who asks for it within 40 days and by not charging more than €6.35

Functions of Date Protection Commissioner Keep register of Data Controllers such as

public bodies which anyone can see. Give enforcement notices. Give information notices. Investigate complaints and make decision on

matter.

ACTIVITIES Planning Organising Controlling

PLANNINGTypes of plans Mission statements Strategic plan Tactical plan Operational plan Contingency plan

STEPS INVOLVED IN PLANNING1. SWOT AnalysisThis is analysing the situation the business is in Strengths - Someone the business owns or

does well (excellent staff). Weaknesses - Something the business does

badly or lacks (not enough money). Opportunities - Something in the outside

world that the business can avail of (new countries join EU).

Threats - Something outside the businesses which can act prevent it from succeeding (competition)

2. SMART objectives Specific Measured Agreed Realistic Timed

BENEFITS Know the position Anticipate change Identify strengths and weaknesses Forecasts needs Keep employees focused with goals

ORGANISATIONAL STRUCTURESFunctional Organisation StructureSplitting the business into different jobs and functions. A person is in charge of each department

Advantages1. Specialisation - ­Each department concentrates on the same job and becomes expert.2. Accountability -­­The director of each department is responsible.3. Clarity -­­Everyone knows who to report to and who is responsible for what. Disadvantages1. Isolation -­­People may know and care little about what happens in other departments.2. Co- ordination -­­Difficult to get all departments to pull together in same direction

Matrix Organisation StructureThis combines functional structure and project team structure. It is used when business is involved in major temporary projects. Employees are temporarily removed from normal job and invited to project team and report to team leader. When doing their normal work they report to their normal functional manager

Advantages1. Motivation -­­Employees feel special and it satisfies their esteem.2. Better Relationships -­­Team is made up of people from different departments

Disadvantages1. Two Bosses - ­Employees report to two bosses and may become stressed if they are given conflicting orders.­2. Increased Cost - Business has to train project manager and there are extra secretarial costs etc.

SPAN OF CONTROLThis is the number of employees that report directly to a manager and who the manager can effectively supervise.It can be: Wide - he can supervise a lot Narrow - can only supervise a few at same

time

Depends on: Managers experience and ability Employees experience and ability Type of work

CONTROLLINGThis makes sure the business stays on target to achieve the objectives it set during planning. If the business is off target the manager can take corrective action.

Financial control Quality control Credit control Stock control

FINANCIAL CONTROL

Minimise losses (stock, money, lawsuits) Earn more profits Keep customers Ensure high demand for profit Keep good reputation

QUALITY CONTROL

Cash flow forecast Budgeting Ratio analysis

ISO 9000 International standards organisation Recognised worldwide Looks good for customers

Quality mark Excellent Ireland Quality Association

CREDIT CONTROL Business sets limit for maximum amount of

credit it will give. Business vets each customer with a credit

check (interview and references) to make sure he can be trusted with credit.

Bills are sent out immediately with customers offered discounts if they pay early.

Business has procedures for customers who don’t pay - calling them up, adding interest to bill or taking them to court.

Advantages of Credit Control:

Ensures a business receives its money in plenty of time to pay bills and ensures that the business will not go bankrupt.

It reduces cost as business doesn’t lose money on bad debts

STOCK CONTROL This is to make sure that the business has

exactly the right amount of stock. Too much stock results in it not selling,

deteriorating and going out of date. Too little means that the business runs out Maximum Stock level - business should

never have more than this. Minimum Stock level - business should

never have less than this. Re- order point - put in new order when

stock falls to this. Re- order quantity - correct amount of stock

to purchase each time

Just In Time production (JIT) minimises the stock of parts needed by

ordering them just in time for production/assembly.

Requires a very trustworthy supplier. It improves cash flow as money is not tied up

in stock. More space is available in factory. Less wasted, obsolete, damaged stock.