Business Approaches

• Main management approaches


  • Classical
  • Behavioral
  • Contingency
• Classical management approach


  Ensures that management exerts full control over the business and its employees. More work = higher output = higher profit.
• Classical management approach


  1. Planning

  2. Organizing

  3. Controlling
• Planning


  • Strategic planning
  • Tactical planning
  • Operational planning
• Strategic planning


  Long term planning developed by senior management. Where the firm wants to be in 10 years time in terms of sales/growth/profitability.
• Tactical planning


  Short term planning developed by middle management, 1-2 years ahead. Steps needed to achieve long term goals. More adaptable and responsive to changes.
• Operational planning


  Day to day planning by supervisors, with specific objectives for the day of business.
• Organizing


  Involves the framework for the implementation of the business plan. How work activities will be sequenced, allocating employees to departments, assigning work/delegating authority.
• Controlling


  Comparing results with what was planned. Monitoring the business, assessing performance against goals, and making adjustments as needed.
• Control process


  • Establishing standards
  • Benchmarking
  • World's best practice
• Key terms (classical)


  • Strategic planning
  • Tactical planning
  • Operational planning
  • Benchmarking
  • World's best practice
  • Chain of command
  • Span of control
• Behavioral management approach


  Focuses on people (employees) and meeting their social needs in addition to production efficiency. Requires skills in communication, social motivation and democratic leadership.
• Leading (behavioral)


  Act as a leader by displaying empathy and active listening, keeping an open mind, seeking new ideas, sharing information, showing confidence in people, giving recognition, setting an example, delegating tasks.
• Communicating (behavioral)


  Exchanging information, coordinating activities, exerting influence and promoting understanding through one-on-one, meetings, written/email, social networking, conferences.
• Motivating (behavioral)


  Providing trust and freedom to employees, developing a workplace culture that fosters employee participation, using recognition, self-worth and positive reinforcement.
• Key terms (behavioral)


  • Model
  • Specialization
  • Collegial
  • Communication
  • Quality circles
  • Participative
  • Democratic
• Contingency management approach


  An adaptive approach to a dynamic business environment. Leadership style changes based on circumstances.
• Contingency approach to circumstances


  • Internal/external business environment
  • Separate functional departments
  • Widening span of control
• Key terms (contingency)


  • Laissez-faire
  • Boss centered leadership
  • Subordinate centered leadership