Introduction to Management

CS173: Introduction to Management

Autumn Semester 2005

Why are we here? Why Introduction to Management?

to provide a basic understanding of management concepts, the business world and how it operates

What is management about?

Outcomes / Organisations
People / Decisions
Products / Power – of organisations, of people
Profit / Services
Efficiency / Planning
Controlling / Growth
Resources – availability and use / Balancing conflicting demands
Stakeholders / Finance/money
The environment / Me
Technology

Where is management to be found?

COMPANIES

/

Amateur sporting clubs

Government– national

/

Military

Government – local

/

Religious organisations

Government service organisations e.g. NHS

/ Projects e.g. the Channel Tunnel, the Dome, London Cross-Link Railway

Charities: 189,000; 2004-5 income £37 bn

/

Schools

Professional sporting clubs

/

Universities

Managing oneself

UK Government Expenditure 2005-6

£bn
Social Security / 146
Health / 90
Education / 68
Public order & safety / 31
Defence / 28
Debt interest / 26
Personal social services / 23
Transport / 20
Industry, agriculture, employment / 20
Housing & environment / 16
Other / 49

Total

/ 517
= about £8700 for every man, woman and child in the UK

How is management defined?

Many definitions. Examples:
A decision-making process, working through people, which guides, structures and controls the progress of the organisation
Hannagan : the process of optimising human, material and financial contributions for the achievement of organisational goals.

Drucker: Managing is about results

The challenge in management:

• Not intellectual in the sense of the Theory of Relativity
  
• But being intelligently practical, in the sense of:
  - Getting the outcomes you want when you do not control all the action
  - Rarely having complete information
  - Often having multi-faceted situations with complex trade-offs to deal with
  - which has to be distilled into a few ‘bold messages’ if real people are going to be able to absorb, understand and be motivated to action
  - Having to handle those exciting, creative, disobedient things called people
  

So what should students know about in order to be more effective in the ‘management’ world?

CS173 Topics

Management Fundamentals
What is it all about? / Business Strategy
Where are we going & how do we get there? / Marketing
How to match our products or services to customer wants?
Products & Markets
Do our products & services fit well into available or new markets? / Finance
Are we profitable? Where do our funds come from & how well do we use them? Are we controlling our cash? / Project Management
Will the project be on time, within budget & working OK?
Human Resources
How do we get the best out of those essential, creative, difficult things called people? / Management Control
How do we keep control of so many activities to ensure that the results are what we want? / Environmental Issues
How to make a profit without destroying our surroundings and the planet?
Personality Factors
The influence of personality on decisions & on other people / Ethics
Knowing what is right
Doing what is right /

Business Report Writing Making it clear & persuasive

At the end of the module, students are expected to be able to:

• Demonstrate an understanding of the concepts of products, markets, marketing, human resources and management control in different business situations
• Assess the financial health of a company as expressed in the profit and loss account, the balance sheet and cash flow statement
• Show an understanding of the processes of strategy formulation
• Apply the basic management tools of SWOT Analysis, the Ansoff Matrix, Payback, and Net Present Value to given business situations
• Show an awareness of business ethics
• Describe and apply the essentials of effective project management to different kinds of project
  

Assessment:

50% coursework (written work + a presentation); 50% class exam – in December

Approach

Lectures + weekly reading + class discussion

Course notes on the departmental website

+ occasional handouts

The Course: What it is and what it is not

• Concerned with the management of companies
  
• Management – an enormous subject:
  
• Selective: cannot consider all management topics
• Tries to provide a practical framework for current & future thinking
  
• Treats finance and accounting matters:
  
• But is not a course for producing accountants
  
• Recognises the importance of computers and IT:
  
• but does not aim to address technical issues directly

• Recognises the reality of global business:
  
• but centres its treatment on the UK
  
• Points towards important legislation:
  
• but cannot cover the details

Course Topics & Timetable: see separate handout

Principal textbook for the course: Management Concepts and Practices; 3rd edition; Tim Hannagan; Published by the Financial Times. ISBN 0-273-65189-7. Available in both the University library and bookshop. Additional Reading:

Collins Dictionary of Business: (3rd Edition 2002). ISBN: 0 0071 26697

Peter Ainsley

• Background
  
• Oxford physics degree; then 2 years in the Archaeological Research Lab at Oxford working on X-ray fluorescent spectrometry
  
• Moved into management problem-solving in industry – much more interesting!
  
• Wide experience of UK industry (+ some USA, some European, some Middle East)
  

• Operated sometimes as an in-house manager or director, sometimes as an external consultant; ran own consulting business for 10 years
  
• Particularly interested in strategy
  

• Office: 19 BB02
  
• Office hour: Tuesdays 4 – 5 pm
  
• Usually in the University on Mondays, Tuesdays and Wednesdays
  
• E-mail:
  

______

Management Decision Levels

Strategic:What are we aiming to achieve, in what markets and with what resources?

(E.g. should we sell apples as well as oranges?)

Structural:How do we structure our resources to achieve our objectives?

(E.g. should we have a warehouse in Birmingham as well as London?)

Operational:Are we running an effective and efficient day-to day operation?

(E.g. what percentage of yesterday’s orders were delivered today?)

Basics

• Every company is a processor of some kind:
  input resources processing



 customer  product



costs income



profit

• Every company a dynamic entity, functioning in a changing environment
  

Fundamentals in a Commercial Company

It must generate
a product or service / Which sufficient customers are willing to buy / At a price which covers all thecosts and makes a sufficient profit
 /  / 
 /  / 
 /  / 
People
Facilities
Systems
For / Production
Distribution / Customers identified & developed
Marketing & selling
Cash collection / Pricing policy
Costs structured & controlled
Financial control
 /  / 
 /  / 
 Controlling operations 
 /  / 
 Managing - strategy & results 

In summary:

• Management energy is devoted to:
  -maintaining the basic process
  -increasing the volume (normally)
  -developing the business – new products, processes, customers, suppliers, ………
  
• Maintaining a proper balance between maintenance and development is crucial
  
• Management is surrounded by change either actually or potentially affecting the business:
  

Community / Markets / Social
Competition / Regulatory / Suppliers
Economic / Shareholders / Technology
(Higher management) / Trade unions

• Management has the key task of:
  -Looking out for these change factors
  -Assessing their importance
  -Deciding what action to take
  
• When a crisis occurs, there is no choice, new action has to be taken. But in most company situations, there is a choice between taking new ‘development’ action and leaving things unaltered.
  
• Key to success in management has to rest with not only taking action, but effective action. Action without sufficient thought, or action without resolve, are frequently the paths to failure.
  

An Example: Some factors to take into account in running the Mars business

• Sales………production volumes………….costs
  
• Financing: stocks, debtors, plant, owner’s requirements,
  
• Distribution system – lorries, depots, wholesalers
  
• Staff availability, requirements and costs
  
• Customers/outlets
  
• Rise of supermarkets
• Petrol station shops
• Discount stores
• The internet
  
• Consumer tastes

• Parallel products (e.g. Mars ice cream, mars drinks)
  
• Production methods; quality
  
• Food legislation
  
• Competitors: old and new. Globalization and consolidation of the chocolate business
  
• Raw materials: quality, cost, continuity of supply

______

Guide For (Younger) Managers in Companies

• Know your personal objectives: why this job and this company: where do you want to be in 1,2,3 …. years’ time?
  
• Know the key outputs from your job
  - and ensure they are produced
  - It is outputs, not activities which are important
  
• Decide on your priorities
  - today, next week, next month
  
• Separate the urgent from the important: manage your time and what you do with it
  
• Be concerned for your boss’s interests
  - and contribute to them
  
• Say what you will do and do what you say
  
• Most things take longer and cost more than expected
  
• Work smarter not harder
  
• Surround yourself with good people
  
• Understand that people vary in their personality types: some are easier to work with than others; and each one of us is a mixture of strengths and weaknesses.
  
• Be ruthless in decision, humane in execution
  
• Pay attention to your market value and ensure that this increases every year
  

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CS17305 Intro.doc