Nature of management

• Interpersonal skills


  People skills that involve managing and motivating employees
• Interpersonal skills


  • Using positive or assertive language
  • Active listening
  • Ongoing feedback
  • Empowerment
  • Clarity in expectations
  • Empathy and understanding
• Communication


  Efficient and effective communication with stakeholders and employees
• Communication process


  1. Communicate using appropriate language

  2. Ensure understanding and avoid ambiguity

  3. Impose control over information flow

  4. Use modern communication methods
• Strategic thinking


  Developing an understanding of the overall picture of the organisation
• Strategic thinking


  • Clearly articulating vision, goals and objectives
  • Continuously analysing internal and external environment
  • Anticipating threats and opportunities
  • Synthesising up-to-date information
  • Prioritising goals
  • Aligning people and new ideas with vision
• Vision


  The picture of the future of the business
• Vision


  • Simplifies decisions around future direction
  • Coordinates people and business functions to achieve shared direction
• Problem solving


  Recognising problems, analysing causes, identifying solutions, assessing consequences, selecting best action
• Decision making


  Gathering facts, considering possibilities, analysing options, selecting best option, identifying reasons for decision
• Flexibility


  Ability to adjust behaviour to new information or changing circumstances
• Adaptability to change


  Open mindedness, leading workforces, analysing observations, utilising creative approaches, thinking outside comfort zone, looking to make improvements
• Reconciling conflicting stakeholder interests

  Establishing relationships, listening to needs, communicating, making decisions, gathering support, minimising negative impact
• Autocratic leadership style


  Makes all decisions, dictates work methods, limits worker knowledge, frequently checks performance, gives punitive feedback, closely controls people, motivates through threats
• Participative/democratic leadership style


  Involves employees in decision making, encourages input, delegates responsibility, motivates through empowerment
• Ethics


  Standards that define acceptable and unacceptable behaviour, concerned with what is morally right and wrong
• Ethical business practices


  • Fairness and honesty
  • Respect for people
  • Avoiding conflicts of interest
  • Proper financial management
  • Truthful communication
• Code of conduct


  Set of ethical standards for managers and employees to abide by
• Profit


  Total revenue minus total costs
• Market share


  Proportion of total market sales for a particular product
• Competitive advantage


  Advantage over competitors through lower prices, improved quality, or greater benefits/service
• Growth goals


  Objectives to increase sales, market share, customer base, and improve processes/services/products
• Share price


  Cost of purchasing a single share of a company's stock
• Social goals


  Objectives to meet ethical, environmental, or societal standards, not focused on profits
• Environmental goals


  Objectives to reduce negative environmental impact, such as reducing carbon footprint, minimizing waste, improving energy efficiency
• External responses to change

  Education, technology, transnational corporations
• Internal responses to change

  Changes to business structure, changing employee culture, using technology as an advantage
• Managing change effectively


  1. Identifying need for change

  2. Setting achievable goals

  3. Creating a culture of change using change agents

  4. Knowing reasons for resistance to change

  5. Using management consultants
• SMART goals


  • Specific
  • Measurable
  • Achievable
  • Realistic
  • Time-referenced
• Reasons for resistance to change

  • Financial costs
  • Purchasing new equipment
  • Redundancy payouts
  • Retraining
  • Recognising plant layout
  • Inertia of management and owners
• Redundancy Payouts


  Costs such as superannuation, holiday pay, and large redundancy packages that a company may incur when introducing new technology and management structures that lead to redundancies
• Retraining


  • Costly because output is interrupted while employees learn new skills
  • Many employees are reluctant to learn new skills, and resistance can occur
• Recognising plant layout


  • Resistance may stem from cost, inconvenience, and lost production time
• Inertia of management and owners

  • Business owners and managers may resist change as they may be cautious or slow in their decision making
  • They may be comfortable with the existing situation and reluctant to take what they see as unnecessary risk
• Cultural incompatibility with mergers and takeovers


  • Employees and managers may struggle to adjust as each business would have developed its own culture and procedures
  • Mergers or takeovers may result in redundancies and reduced status for some managers
  • To foster a new culture, new teams and procedures may need to be established
• Deskilling


  • Changes in technology and the adoption of new techniques and practices may imply that many employees' existing skills are no longer required or valued
  • This can be a very threatening experience because their status and importance are at stake
  • As a result, many employees will not enthusiastically embrace the changes that lead to this situation
• Acquiring new skills


  • This is a requirement associated with many changes
  • These new skills are necessary to deal with changing technology and the new operational and management systems
  • Acquiring new skills is costly in financial terms and is also costly in human terms as stress and effort may be experienced, particularly when mature staff members are involved
• Loss of career prospects or promotional opportunities

  • When change takes place there is often a need for many employees to constantly upgrade their skill levels
  • Mergers and takeovers can reduce career paths and reduce the importance of the existing skills of many employees
  • As a result, many staff, particularly middle management, will resist much change which they find threatening
• Management consultants


  Experts in business who provide advice to business leaders and managers on how to develop their business, respond to changes in the internal and external business environment, restructure and reorganise businesses, and finance current business operations and business expansion
• Situational analysis


  • Strengths
  • Weaknesses
  • Opportunities
  • Threats