Q No.1 Define Management? What are the various functions of Management?

Explain

briefly?

Introduction of Management

Management is the getting things done through and with people. - “Terry”

Management in all business areas and organizational activities are the acts of getting
people together to accomplish desired goals and objectives efficiently and effectively. Or

The group of individuals who make decisions about how a business is run

“Management is the process of planning, organizing, actuating and controlling,

performed to determined and accomplish common goals by the use of human and other
resources.”

Some definitions of management are:

• Organization and coordination of the activities of an enterprise in accordance with

certain policies and in achievement of clearly defined objectives. Management is
often included as a factor of production along with machines, materials, and
money. According to the management guru Peter Drucker (1909–2005), the basic
task of a management is twofold: marketing and innovation.
 • Directors and managers who have the power and responsibility to make decisions
to manage an enterprise. As a discipline, management comprises the interlocking
functions of formulating corporate policy and organizing, planning, controlling,
and directing the firm's resources to achieve the policy's objectives. The size of
management can range from one person in a small firm to hundreds or thousands
of managers in multinational companies. In large firms the board of directors
formulates the policy which is implemented by the chief executive officer.
•

Function of Management

Planning

“Planning is deciding the best alternatives among others to perform different managerial
operations in order to achieve the pre-determined goals.” - H Fayol,

Importance of Planning
Organizing

Organizing is a process of designing and grouping the activities of enterprise and

establishing the authority relationship among them. In performing the organization
function the manager defines, departmentalizes and assigns activities so that they can be
most effectively executed.

Nature of organizing
Staffing

Staffing is a continuous and vital function of management. After objectives have been
determined, activities for the implementation identified and grouped into the job, so
staffing is to procure suitable personnel for managing the job. Efficiency and
effectiveness of an organization depends on the quality of its personnel.

Importance

Directing

Directing is the function of leading the employees to perform efficiently and effectively,
and contribute their optimum to the achievement of organizational goals.

Jobs are assigned, explained, employees have to be provided guidance in job performance
and supervised, and they are to be motivated to contribute their optimum performance
with enthusiasm.
Directing involves…

Controlling

Controlling is the function of ensuring that the divisional, departmental, sectional and
individual performance are consistent with the predetermined goals. Controlling implies
that objectives, goals and standards of performance exists and are known to employee
and their superiors.

Controlling involves…
Q No.2 What is strategic Management? Write Two Page Summary that include your

personal thoughts on the subject?

Defining Strategic Management

Strategic management consists of the analysis, decisions, and actions an organization
undertakes in order to create and sustain competitive advantages. This definition captures
two main elements that go to the heart of the field of strategic management.

Summary

First, the strategic management of an organization entails three ongoing processes:

analysis, decisions, and actions. That is, strategic management is concerned with the
analysis of strategic goals (vision, mission, and strategic objectives) along with the
analysis of the internal and external environment of the organization. Next, leaders must
make strategic decisions. These decisions, broadly speaking, address two basic questions:
What industries should we compete in? How should we compete in those industries?
These questions also often involve an organization’s domestic as well as its international
operations. And last are the actions that must be taken. Decisions are of little use, of
course, unless they are acted on. Firms must take the necessary actions to implement their
strategies. This requires leaders to allocate the necessary resources and to design the
organization to bring the intended strategies to reality. As we will see in the next section,
this is an ongoing, evolving process that requires a great deal of interaction among these
three processes.
Second, the essence of strategic management is the study of why some firms outperform
others. Thus, managers need to determine how a firm is to compete so that it can obtain
advantages that are sustainable over a lengthy period of time. That means focusing on
two fundamental questions: How should we compete in order to create competitive
advantages in the marketplace? For example, managers need to determine if the firm
should position itself as the low-cost producer, or develop products and services that are
unique which will enable the firm to charge premium prices-or some combination of
both. Managers must also ask how to make such advantages sustainable, instead of highly
temporary, in the marketplace. That is: How can we create competitive advantages in the
marketplace that are not only unique and valuable but also difficult for competitors to
copy or substitute?

Ideas that work are almost always copied by rivals immediately. In the 1980s, American
Airlines tried to establish a competitive advantage by introducing the frequent flyer
program. Within weeks, all the airlines did the same thing. Overnight, instead of
competitive advantage, frequent flyer programs became a necessary tool for competitive
parity, not competitive advantage. The challenge, therefore, is to create competitive
advantage that is sustainable.

Michael Porter argues that sustainable competitive advantage cannot be achieved through
operational effectiveness alone. Most of the popular management innovations of the last
two decades-total quality, just-in-time, benchmarking, business process reengineering,
outsourcing all are about operational effectiveness. Operational effectiveness means
performing similar activities better than rivals. Each of these is important, but none lead
to sustainable competitive advantage, for the simple reason that everyone is doing them.
Strategy is all about being different from everyone else. Sustainable competitive
advantage is possible only through performing different activities from rivals or
performing similar activities in different ways. Companies such as Wal-Mart, Southwest
Airlines, and IKEA have developed unique, internally consistent, and difficult to imitate
activity systems that have provided them with sustained competitive advantage. A
company with a good strategy must make clear choices about what it wants to
accomplish. Trying to do everything that your rivals do eventually leads to mutually
destructive price competition, not long-term advantage.
Q. NO 3 Write Notes on the following.

(i) Vision Statement

Vision statement is sometimes called a picture of your company in the future but it’s so
much more than that. Your vision statement is your inspiration, the framework for all
your strategic planning.

A vision statement may apply to an entire company or to a single division of that

company. Whether for all or part of an organization, the vision statement answers the
question,

“Where do we want to go?”

What you are doing when creating a vision statement is articulating your dreams and
hopes for your business. It reminds you of what you are trying to build.

While a vision statement doesn’t tell you how you’re going to get there, it does set the
direction for your business planning. (For more on the role of your vision statement in
business planning, that’s why it’s important when crafting a vision statement to let your
imagination go and dare to dream – and why it’s important that a vision statement
captures your passion

(ii) Mission Statement

A mission statement is a brief description of a company's fundamental purpose. A

mission statement answers the question, "Why do we exist?"

The mission statement articulates the company's purpose both for those in the
organization and for the public.

For instance, the mission statement of Canadian Tire reads (in part): “Canadian Tire is a
growing network of interrelated businesses... Canadian Tire continuously strives to meet
the needs of its customers for total value by offering a unique package of location, price,
service and assortment.”

The mission statement of River corp., business development consultants in Campbell

River, B.C., is:

“To provide one stop progressive economic development services through

partnerships on behalf of shareholders and the community.”
As you see from these two mission statement samples, mission statements are as varied
as the companies they describe. However, all mission statements will "broadly describe
an organization's present capabilities, customer focus, activities, and business makeup"

(iii) Environment Scanning

Environmental scanning is a process of gathering, analyzing, and dispensing

information for tactical or strategic purposes. The environmental scanning process entails
obtaining both factual and subjective information on the business environments in which
a company is operating or considering entering.

There are three ways of scanning the business environment:

• Ad-hoc scanning - Short term, infrequent examinations usually initiated by a

crisis
• Regular scanning - Studies done on a regular schedule (e.g. once a year)
• Continuous scanning (also called continuous learning) - continuous structured
data collection and processing on a broad range of environmental factors

Most commentators feel that in today's turbulent business environment the best scanning
method available is continuous scanning because this allows the firm to act quickly, take
advantage of opportunities before competitors do and respond to environmental threats
before significant damage is done.

Benefit

The benefits to environmental scanning for the businesses are that they can uncover many
issues that have an affect on the organizations mission and goals. They might use it to
increase their profits ratio. One of the motives could be for the environmental scanning is
that they can know that whether the market is going as they expected it. One of the latest
methods for the environmental scanning which are frequently used by the companies is
the computer intelligence. By using these processes the businesses get information about
their rivals. So this is very latest technological way for keeping eye on your business.
Many of the third party services who provide this to other companies are doing
environmental scanning.

(iv) SWOT Analysis

SWOT analysis is a strategic planning method used to evaluate the Strengths,

Weaknesses, Opportunities, and Threats involved in a project or in a business venture. It
involves specifying the objective of the business venture or project and identifying the
internal and external factors that are favorable and unfavorable to achieve that objective.
A scan of the internal and external environment is an important part of the
strategic planning process. Environmental factors internal to the firm usually can
be classified as strengths (S) or weaknesses (W), and those external to the firm
can be classified as opportunities (O) or threats (T). Such an analysis of the
strategic environment is referred to as a SWOT analysis.

The SWOT analysis provides information that is helpful in matching the firm's
resources and capabilities to the competitive environment in which it operates.
As such, it is instrumental in strategy formulation and selection. The following
diagram shows how a SWOT analysis fits into an environmental scan:

SWOT Analysis Framework

Environmental Scan
/ \
Internal Analysis External Analysis
/\ /\
Strengths Weaknesses Opportunities Threats
|
SWOT Matrix

Strengths

A firm's strengths are its resources and capabilities that can be used as a basis
for developing a competitive advantage. Examples of such strengths include:

• patents
• strong brand names
• good reputation among customers
• cost advantages from proprietary know-how
• exclusive access to high grade natural resources
• favorable access to distribution networks

Weaknesses

The absence of certain strengths may be viewed as a weakness. For example,

each of the following may be considered weaknesses:
 • lack of patent protection
• a weak brand name
• poor reputation among customers
• high cost structure
• lack of access to the best natural resources
• lack of access to key distribution channels

In some cases, a weakness may be the flip side of a strength. Take the case in
which a firm has a large amount of manufacturing capacity. While this capacity
may be considered a strength that competitors do not share, it also may be a
considered a weakness if the large investment in manufacturing capacity
prevents the firm from reacting quickly to changes in the strategic environment.

Opportunities

The external environmental analysis may reveal certain new opportunities for
profit and growth. Some examples of such opportunities include:

• an unfulfilled customer need

• arrival of new technologies
• loosening of regulations
• removal of international trade barriers

Threats

Changes in the external environmental also may present threats to the firm.
Some examples of such threats include:

• shifts in consumer tastes away from the firm's products

• emergence of substitute products
• new regulations
• increased trade barriers

The SWOT Matrix

A firm should not necessarily pursue the more lucrative opportunities. Rather, it
may have a better chance at developing a competitive advantage by identifying a
fit between the firm's strengths and upcoming opportunities. In some cases, the
firm can overcome a weakness in order to prepare itself to pursue a compelling
opportunity.
To develop strategies that take into account the SWOT profile, a matrix of these
factors can be constructed. The SWOT matrix (also known as a TOWS Matrix) is
shown below:

SWOT / TOWS Matrix

Strengths Weaknesses

Opportunities S-O strategies W-O strategies

Threats S-T strategies W-T strategies

• S-O strategies pursue opportunities that are a good fit to the company's
strengths.
• W-O strategies overcome weaknesses to pursue opportunities.
• S-T strategies identify ways that the firm can use its strengths to reduce
its vulnerability to external threats.
• W-T strategies establish a defensive plan to prevent the firm's
weaknesses from making it highly susceptible to external threats.

(v) Strategy

"Strategy is the direction and scope of an organization over the long-term: which
achieves advantage for the organization through its configuration of resources within a
challenging environment, to meet the needs of markets and to fulfill stakeholder
expectations".

In other words, strategy is about:

Where is the business trying to get to in the long-term (direction?)

Which markets should a business compete in and what kind of activities is involved in
such markets? (Markets; scope)

How can the business perform better than the competition in those markets?
(Advantage)?

What resources (skills, assets, finance, relationships, technical competence, and facilities)
are required in order to be able to compete? (Resources)
What external, environmental factors affect the businesses' ability to compete?
(Environment)?

What are the values and expectations of those who have power in and around the
business? (Stakeholders)

Strategy at Different Levels of a Business

Strategies exist at several levels in any organization - ranging from the overall business
(or group of businesses) through to individuals working in it.

Corporate Strategy - is concerned with the overall purpose and scope of the business to
meet stakeholder expectations. This is a crucial level since it is heavily influenced by
investors in the business and acts to guide strategic decision-making throughout the
business. Corporate strategy is often stated explicitly in a "mission statement".

Business Unit Strategy - is concerned more with how a business competes successfully
in a particular market. It concerns strategic decisions about choice of products, meeting
needs of customers, gaining advantage over competitors, exploiting or creating new
opportunities etc.

Operational Strategy - is concerned with how each part of the business is organized to
deliver the corporate and business-unit level strategic direction. Operational strategy
therefore focuses on issues of resources, processes, people etc.

(vi) Strategist

Strategists are individuals or groups, who are primarily involved in the formulation,
implementation and evaluation of strategy.

A strategist is a person skilled in designing and planning action and policy to achieve a
major or overall aim.

In a limited sense, all managers are Strategists.

A design strategist has the ability to combine the innovative, perceptive and holistic
insights of a designer with the pragmatic and systemic skills of a planner to guide
strategic direction in context of business needs, brand intent, design quality and customer
values. [1][2][3][4]
An economic strategist is a person who can create a sustainable commercial advantage
by applying innovative and quantitative ideas and systems at a sell side financial
institution.

A trading strategist contributes revenue to the business in which his team is embedded
by developing and delivering innovative trade ideas, models and analytic systems to the
trading desk.

Working closely with investment managers, a principal investment strategist

contributes revenue by providing principal investment analytics and alternative product
structuring.

A sales strategist develops innovative trade ideas and assists in the marketing of those
trades to buy side clients.

A banking strategist partners with investment bankers and capital market experts on
corporate finance and capital structure analyses to identify and execute banking
transactions.

Within the financial services industry, strategists are known as “strats”.

An IT Strategist develops an IT strategy that is aligned with the business strategy to

implement systems to give business processes efficiency and productivity gains and
therefore a possible competitive advantage.

(vii) Annual Objectives

Benefits of Annual Objectives:

1. Tangible & Meaningful focus through which managers translate long term objectives
& grand strategies into specific actions

2. Clarity of Purpose: A better understanding of each person’s role in business mission

3. Link b/w Strategic Intent & operating reality: Process to form annual objectives form
for addressing conflicting political concerns

4. Basis for Strategic Control: Developing budgets, schedules, Trigger points & other
mechanisms for controlling Strategy implementation.

5. Motivational Pay Offs in strategy

Implementation - Link to Business reward structure