BUSINESS MANAGEMENT (AE1014, FC1014, EC1014)

UNIT 1. THE NATURE OF BUSINESS MANAGEMENT

Luis Martnez Chfer (chafer@emp.uji.es) Dpto. Administracin Empresas y Marketing UNIVERSITAT JAUME I

OBJECTIVES

Reflecting on the administration process. Know the different key functions of the management process. Recognizing the company as a system formed by subsystems. Understanding the importance of the interaction between the human

system and the technical system.

UNIT 1. THE NATURE OF BUSINESS MANAGEMENT

1.1. Management 1.2. The classic or functional approach to the management process 1.3. Systems theory: systemic analysis of the firm 1.4. The company as a socio-technical system

REFERENCES Camisn, C.; Dalmau, J.I. (2009) Introduccin a los negocios y su gestin. Pearson Prentice Hall

Iborra M. et al. (2007): Fundamentos de Direccin de Empresas. Thomson: Madrid Robbins, Stephen P.; Coulter Mary (2014). Management (Twelfth Edition). Pearson.

UNIT 1. THE NATURE OF BUSINESS MANAGEMENT

UNIT 1. THE NATURE OF BUSINESS MANAGEMENT 1.1. What is Management

Who Are Managers?

Manager Someone who works with and through other people

by coordinating and integrating their work activities in order to accomplish organizational goals.

MANAGERS

UNIT 1. THE NATURE OF BUSINESS MANAGEMENT 1.1. What is Management

Responsible for carrying out the administration process

Decide the goals of the organization, how to reach them, who is responsible for each task, what resources are needed, how it will control that the objectives are achieved properly.

EFFECTIVENESS: the goals are achieved Business management should improve the effectiveness and efficiency :

EFFICIENCY: how the resources are used to achieve the objectives

UNIT 1. THE NATURE OF BUSINESS MANAGEMENT 1.1. What is Management

UNIT 1. THE NATURE OF BUSINESS MANAGEMENT 1.1. What is Management

Activity 1

In todays environment which is more important to organizations-Efficiency or effectiveness?

Explain Your choice

UNIT 1. THE NATURE OF BUSINESS MANAGEMENT 1.1. What is Management

UNIT 1. THE NATURE OF BUSINESS MANAGEMENT

1.2. The classic or functional approach to the management process

Functional Approach

Planning vDefining goals, establishing strategies to achieve goals,

developing plans to integrate and coordinate activities. Organizing

vArranging work to accomplish organizational goals. Leading

vWorking with and through people to accomplish goals. Controlling

vMonitoring, comparing, and correcting the work.

THE MANAGEMENT PROCESS

UNIT 1. THE NATURE OF BUSINESS MANAGEMENT

1.2. The classic or functional approach to the management process

UNIT 1. THE NATURE OF BUSINESS MANAGEMENT

1.3. Systems theory: systemic analysis of the firm

A system is a set of interdependent elements that form an integrated whole and interact with each other regularly

They have a structure that is defined by its parts and processes They are generalizations of the reality They process a number of inputs that return to the environment with certain modification The diverse parts of a system have functional and structural relationships between them

CHARACTERISTICS

A set of interrelated and interdependent parts arranged in a manner that produces a unified whole

SYSTEM DEFINED

UNIT 1. THE NATURE OF BUSINESS MANAGEMENT

1.3. Systems theory: systemic analysis of the firm BASIC TYPES OF SYSTEMS Closed systems

vAre not influenced by and do not interact with their environment (all system input and output is internal).

Open systems vDynamically interact to their environments by taking in

inputs and transforming them into outputs that are distributed into their environments.

vThey can grow, change, reproduce and adapt to the environment

vThey can compete and / or cooperate with other systems

SYSTEM COMPONENTS

Elements Objectives Interactions among elements

UNIT 1. THE NATURE OF BUSINESS MANAGEMENT

1.3. Systems theory: systemic analysis of the firm

Implications of the Systems Approach

Coordination of the organizations parts is essential for proper functioning of the entire organization.

Decisions and actions taken in one area of the organization will have an effect in other areas of the organization.

Organizations are not self-contained and, therefore, must adapt to changes in their external environment.

THE FIRM AS A SYSTEM

UNIT 1. THE NATURE OF BUSINESS MANAGEMENT 1.3. Systems theory: systemic analysis of the firm

The system as cycles of recurring events

Negative entropy

Diferenciation Balance and homeostasis

Characteristics of open systems

applicable to the firm Equifinality Information and

feedback

Limits or boundaries

UNIT 1. THE NATURE OF BUSINESS MANAGEMENT 1.3. Systems theory: systemic analysis of the firm

According to systems theory, a system is composed of subsystems, each one with the same properties as the system that contains them.

ENTERPRISE SUBSYSTEMS Subsystem of management and administration: strategic management, organizational structure definition, administration and management, human resources management, information systems management, etc.

Subsystem of operations: manufacture, processes, design, innovation, strategic operations management.

Subsystem of accounting and finance: fund-raising and financial investment.

Subsystem of marketing: market research, consumer behavior, marketing strategy, etc.

UNIT 1. THE NATURE OF BUSINESS MANAGEMENT 1.3. Systems theory: systemic analysis of the firm

UNIT 1. THE NATURE OF BUSINESS MANAGEMENT

1.4. The firm as a socio-technical system

Combination of social (people, attitudes, values, society) and technical aspects (technology, processes, procedures, machinery) Interaction between both Need for joint optimization

SOCIO-TECHNICAL SYSTEM

The interactions between people and technology are analyzed in order to optimize its relations

Examples: job enrichment, job enlargement, process improvement, etc.

UNIT 1. THE NATURE OF BUSINESS MANAGEMENT

1.4. The firm as a socio-technical system

UNIT 1. THE NATURE OF BUSINESS MANAGEMENT

1.4. The firm as a socio-technical system

SOCIO-TECHNICAL SYSTEM

Joint optimization is the goal of Socio-Technical design. For example, a manufacturing workcell that requires high teamwork will not produce in an environment of suspicion and command/control. A self-directed work team will be ineffective when the layout of their area prevents communication or does not require cooperation. The social and technical systems must integrate and assist one another