Managing a Business

Chapter-02

What is management?
Management is getting things done through other people- Stewart.

Why does the organization need for management?

Objectives have to be set for the organization-

1. To monitor the progress and result to ensure that the objectives are met
2. To monitor corporate values, ethics and principles
3. To look after the interest of owner and the stakeholder of the organization

What is needed for effective management?

Businesses have a large number of different activities to be co-ordinated and large numbers of
people whose co-operation and support is necessary for a manager to get anything done.

To understand how managers can do their jobs effectively, we need to understand the differences
between power, authority, responsibility, accountability and delegation.

What is Power?

Power is the ability to get things done.

What are different types of power?

1. Coercive power: The power based on the physical force or punishment. The definition of
coercive is something related to the act of convincing someone through threats, force or
without regard to what they want to do.

2. Reward (Resource) Power: Reward power is simply the power of a manager to give some
type of reward to an employee as a means to influence the employee to act. The power based
on the access to and control over valued resources. For example, managers have access to
information, contacts and financial rewards for team members.

3. Legitimate (position) Power: Legitimate power is the formal authority given to a person
within an organization. Because it comes from a position or job title, legitimate power is a
form of positional power. The power based on the position of the organization.

4. Expert Power: Expert power is the perception that a certain person has an elevated level of
knowledge or a specific skill set that others in an organization don't have. The power based on
the expert knowledge and expertise.
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5. Referent power (personal): Referent power is a unique type of personal power. It is built on
respectful interpersonal relationships rather than manipulation or coercion. The power based
on the personality to attract, influence. An example of referent power in the workplace is a
manager who is admired and respected by his subordinates and seen as a role model.

6. Negative power: The power to disrupt operation such as industrial action, sabotage etc.

What is Authority?
It is the right to do something or requires someone else to do something and expect it to be done.
In an organization it is the right of a manager to require a subordinate to do something in order to
achieve the goals of the organization.
Managerial Authority is exercised in such areas are;
• Making decisions within the scope of authority given to the position.
• Assigning tasks to subordinates
• Expecting and requiring satisfactory performance of these tasks by subordinates.

What is Responsibility?
It is obligation of what is done. It is the obligation to do something. In an organization, it is the
duty of an official to carry out assigned tasks.

What is Accountability?
It is the liabilities of what is done. Managers are accountable to their superiors for their actions
and are obliged to report to their superiors how well they have exercised the authority delegated
to them.

Difference between Responsibility and Accountability:

A person is said to be responsible for a piece of work when he is required to ensure that the
work is done.
The same person is said to be accountable to his superior when he is given work by that
superior.

What is Delegation?
The principle of delegation is that a manager may make subordinates responsible for work, but
remains accountable to his own manager for ensuring that the work is done, that he retains
overall responsibility.

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What are the different types of manager?
Types of manager in a business can be classified according to the types of authority they hold.

Line Manager: Has authority over a subordinate. Line managers who are directly involved in
the production or delivery of products, goods and/or services. As the interface between an
organization and its front-line workforce, line manager represents the lowest level of
management within an organizational hierarchy.

Staff Manager: Has authority in giving specialist advice to another manager or department,
over which they have no line authority. A staff manager is a professional who oversees a team
of employees, providing them with information and guidance. In general, they are
responsible for keeping their team motivated and performing at its best.

Functional Manager: The functional manager is the person who has management authority
within a business unit/department with direct supervision over one or more resources on the
project/program team, and/or direct responsibility for the functions affected by or that affect the
project/program deliverable(s).

Project Manager: Has authority over project team members in respect of the project in
progress. This authority is likely to be temporary. Project managers (PMs) are responsible
for planning, organizing, and directing the completion of specific projects for an
organization while ensuring these projects are on time, on budget, and within scope.

What are the Management Hierarchy?

1. Top level manager: Managing the business. Formulates the policies and strategies. Few
in Number, responsible for overall direction and performance of the business.
2. Middle level manager: Managing the managers. Convey the policies and strategies to the
First line managers. Many in number, responsible for ensuring performance targets are
met by first line managers.
3. First Line manager: Managing staff on direct operations to implement the policies and
strategies. Numerous in number, responsible for ensuring Direct Operational staff do
what is required.
4. Direct Operational Staff: They implement the policies and strategies to achieve the
objectives. They doing the work.

What is the Management Process?

The management process comprises Planning, Organizing, Controlling and Leading.
Planning:
• Pinpointing specific aims
• Forecasting what is needed
• Looking at actual and potential resources
• Developing objectives, plans and targets
• To make necessary amendments to the plan.
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Organising:
• Defining what process, technology and people are required
• Allcating and co-ordinating work.

Controlling: Managers monitor events s they can be compared with the plan and remedial
action can be taken if required.

Leading: Managers generate effort and commitment towards meeting objectives including
motivation of staff.

What are different types of managerial roles?

1. Informational roles: Checking data received and passing to other and acting as a
spokesperson of the team.
2. Interpersonal roles: Acting as a leader of the team and linking with the manager of other
teams.
3. Decisional roles: It is the roles that managers actually do what we perceive as managing.

What do managers do as decisional role?

1. Allocate resources to operations,
2. Handle disturbances,
3. Negotiate for what they need,
4. Solve problems that arise,
5. Act as entrepreneur,

What are different types of culture?

Culture is the basic assumption, values, belief that designs a particular behavior of human.

Types of culture:
Internal process culture
Rational goal culture
Open systems culture
Human Relation culture

What is model?
Models are used in management theory to represent complex reality. Model is the real world
representation.

Mohammad Moniruzzaman ACA, FSIBL

How model helps-
1. It helps to explain the past
2. It helps to understand the present
3. To predict the future
4. More influence over future events

Describe the rational goal model of management.

Taylor analyzed a factory work and came to the conclusion that in order to reach maximum
efficiency of each worker, managers are needed to be in detailed control of every last part of the
process. Taylor put forward five principle of scientific management
• Determine the best way to do the work
• Select the best person to do the work
• Train the worker to follow the set procedures
• Give financial incentive to ensure the work is done in a prescribed way
• Give all responsibility to plan the work to manager not worker

Describe internal process model of management.

It looks at how the organization is doing things; not at why.
• Rationality: Efficient means are used to meet objectives
• Hierarchical line of authority: defined authority
• Division of labor
• Centralization

Describe the Business Functions:

The Key Business Functions are:
• Marketing including Sales and customer services
• Operations or Productions
• Human resources
• Finance.

Article Ⅰ. What is marketing?

The management process which identifies, anticipates and supplies customer requirements
efficiently and profitably.
• Customer: Who purchase and pays for a good or services, and
• Consumer: Who is the ultimate user of the goods or services.

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Article ⅠⅠ. What is Consumer & Industrial marketing?
Consumer markets: Consumer markets are the markets for products and services bought by
Individuals for their own or family use. Such as;
• FMCGs (First Moving Consumer Goods): High Volume, Low Unit Value fast
Repurchase such as Rice, Bread etc.
• Consumer Durables: Low Volume, High Unit Value Such as;
▪ White Goods: fridges, freezers
▪ Brown Goods: CD Players, Car etc
▪ Soft goods: Clothes, bed linen
▪ Services: Dentist, Doctors etc.

A business which operates in the consumer market, selling to consumer this is called B2C
Market.

Industrial marketing: In its simplest format, industrial marketing is B2B (business-to-

business marketing) and promotes goods and services from one business to another. It aims to
sell raw materials and components for production needs. The simplest format of industrial
marketing is B2B marketing.
For example, we can say a customer buys a mixer or juicer or grinder for domestic use it is a
consumer product, whereas when the same mixer/juicer/grinder is sold to a fruit juice vendor it is
termed as an industrial product. Industrial marketing can also be carried out in Business Services.

What is marketing Mix and what are the components of Marketing Mix?
The term "marketing mix" is a foundation model for businesses, historically centered on product,
price, place, and promotion. The marketing mix has been defined as the "set of marketing tools
that the firm uses to pursue its marketing objectives in the target market"

What is Marketing Mix and its segmentation?

The term "marketing mix" is a foundation model for businesses, historically centered on product,
price, place, and promotion. The marketing mix has been defined as the "set of marketing tools
that the firm uses to pursue its marketing objectives in the target market"

Market Segmentation: The Division of the market into homogeneous groups of potential
customers who may be treated similarly for marketing purposes.
Segment of Market Target segment by placing most emphasis on
High Income Groups Promotion-To create the image of quality, status
Families with Children Product-size, safety
Low Income Groups Price-Low, Product-reliability, economy.

Mohammad Moniruzzaman ACA, FSIBL

What are the For P’s of the Marketing Mix for Tangible products?
• Product
• Price
• Promotion
• Place

What are the Seven P’s of the Marketing Mix for Services?
• Product
• Price
• Promotion
• Place
• People
• Process
• Physical Evidence.

What is product? What are the elements of product?

Anything that can be offered to market for attention and acquisition and which can satisfy the
demand of the consumer is known as product.
Element of product:
• Basic product: This is the basic product and the focus is on the purpose for which the
product is intended. For example, a warm coat will protect you from the cold and the
rain. The more important benefits the product provides, the more that customers need the
product.
• Actual product: The actual product refers to the tangible object and relates to the
physical quality and the design.
• Augmented product: An augmented product is an additional benefit or special
service supporting the main product. Sellers use this method to provide their clients with
additional value for free. Offering a warranty is an example of product augmentation.

What is Price? What are the influences of pricing Policy?

Price is the amount that consumers will be willing to pay for a product.
Influences on the business pricing policy:
• Cost
• Competitors
• Customers
• Corporate Objectives:

▪ To maximize profits
▪ To achieve a target return on investment
▪ To achieve a target revenue figure
▪ To achieve a target market share
Mohammad Moniruzzaman ACA, FSIBL
 ▪ To match the competition
▪ To drive competitors out of the market.

What is Place?
Place refers to where consumers buy your product, or where they discover it. Today's consumers
may learn about products and buy them online, through a smartphone app, at retail locations, or
through a sales professional.

What is Promotion?
Promotion is a marketing tool, used as a strategy to communicate between the sellers and
buyers.
➢ Advertising
➢ Sales promotion
➢ Public relation
➢ Personal selling.

What is Operation Management?

Operations management means creating the goods or services that the business supplies to
customers by transforming inputs into output.

What are the key dimensions of Operation Management?

• Volume
• Variety
• Variation in Demand
• Visibility

What are the concerned with balancing key variable?

• External and Internal demand for goods & services

• Resources
• Capacity
• Inventory levels
• Performance levels

What is Procurement?
It is the acquisition of goods or services at the best possible total cost of ownership, in the right
quantity & quality, at the right time, in the right place and from the right source for the direct
benefit of the business.

Mohammad Moniruzzaman ACA, FSIBL

What are the elements of Procurement Mix?

• Quantity
➢ Time
➢ Cost of Holding Inventories.
• Quality
• Price
• Lead Time

What is human resource management?

Human resource management is the creation, development, maintenance of an effective
workforce, matching the requirements of the business and responding to the environment.

What are the Functions of Human resources management?

1. Personnel planning and development

2. Job designs
3. Recruitment and selection
4. Training and development
5. Performance appraisal
6. Remuneration
7. Disciplining employee
8. Promotion

What are the approaches of HRM?

Hard approach: It emphasizes the resource element of HRM. Human resources are planned
and developed to meet the wider objectives of the organization as with other resources such as
material and money.

Soft approach: It emphasizes on the human element of HRM. It is concerned with the
employee relation, development of skill and the welfare of the staff.

What are the 4Cs of Human Resource management?

1. Commitment
2. Competence
3. Congruence
4. Cost effectiveness

Mohammad Moniruzzaman ACA, FSIBL

What is Organizational Behavior?
Organizational behavior describes individual and group behavior in organization.

What is Organizational Iceberg?

“What sinks ship isn’t always what the sailor can see; but what they cannot see”. Two aspects
are characterized

1. Formal aspects: It is overt and visible such as formal goal, technology, physical
facilities of an organization etc.
2. Behavioral aspects: It is covert and not visible as Conflict, political behavior,
attitudes, values and personality of an organization.

What are the McGregor’s Models of human Behavior?

McGregor developed two theories, X and Y. Each one represents a different set of assumptions
about how people are.

Theory X:
• Individual dislike work and avoid it where possible
• Individual lack ambition, dislike responsibility and prefer to be led.
• A system of coercion, control and punishment is needed to achieve business
objectives
• The individual desires security.

Theory Y:
• Physical and mental effort in work is as natural as rest or play.
• Commitment to objectives is driven by rewards.
• External control and threats are not the only way to achieve objectives.
• People learn to like responsibility.

What are the Hierarchy of need theory?

1. Self-actualization: It is concerned with how people think themselves. They consider

whether their lives are worthwhile and have meaning.
2. Status/Ego Needs: People desire esteem and respect from others
3. Social Needs : people want to be a group
4. Safety or security Needs: Once the basic need is satisfied, people feel security. Safety
means physical safety, security from employment
5. Basic/Physiological need: People seek to satisfy their basic need such as fooding,
clothing etc.

Mohammad Moniruzzaman ACA, FSIBL

What is Group Behavior?
A collection of people with the following characteristics:
• Common sense of identity
• Common purpose
• Existence of Group norms
• Communication within the group
• The presence of a leader

The Usefulness of Groups:

• Bring together several skills
• Plan & organize
• Solve Problems/take decisions
• Distribute Information

Stage of Group Developments:

• Forming
• Storming
• Norming
• Performing

Team Roles:

• The Leader
• The Shaper
• The Plant
• The Evaluator
• The Resource-Investigator
• The Company worker
• The Team worker
• The Finisher.

Thanks

Mohammad Moniruzzaman ACA, FSIBL