ULTIMATE BUSINESS GOAL MAKING A PROFIT 4...
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ITEM DESCRIPTION PAGE ULTIMATE BUSINESS GOAL MAKING A PROFIT 4 HUMAN ACTIVITIES 6 TRANSFORMATION 6 EXCHANGE 6 PROFIT 7 BUSINESS ETHICS ETHICAL BEHAVIOUR OF MANAGERS & EXECUTIVE IN THE BUSINESS WORLD 11 CONSUMERISM SOCIAL FORCE THAT PROTECTS CONSUMERS AGAINST UNSAFE PRODUCTS & MALPRACTICES BY EXERTING MORAL & ECONOMIC PRESSURE OON BUSINESSES 11 SELF-REALISATION NEEDS 12 ESTEEM NEEDS 12 SOCIAL NEEDS (LOVE / RECOGNITION) 12 SECURITY NEEDS (PROTECTION) 12 PHYSIOLOGICAL NEEDS (HUNGER / THIRST) 12 NATURAL RESOURCES 14 HUMAN RESOURCES 14 CAPITAL 15 ENTREPRENEURSHIP 16 ECONOMIC PRINCIPLE HOW TO ENSURE THE HIGHTEST POSSIBLE SATISFACTION OF NEEDS WITH THESE SCARCE RESOURCES 16 WHICH PRODUCTS 16 WHO PRODUCE 16 HOW PRODUCED 16 FOR WHOM 16 NEED SATISFACTION CYCLE (FIGURE) 17 FREE-MARKET ECONOMY 19 COMMAND ECONOMY 19 SOCIALISM 21 COMPARISON OF ECONOMIC SYSTEMS (FIGURE) 24 MARKET SYSTEM (FIGURE) 26 ECONOMICS DEFINITION IS A SOCIAL SCIENCE THAT STUDIES HOW HUMANS CHOOSE DIFFERENT WAYS OF USING THEIR SCARECE RESOURCES TO PRODUCE PRODUCTS & SERVICES 29 BUSINESS MANAGEMENT DEFINITION IS AN APPLIED SCIENCE THAT IS CONCERNED WITH THE STUDY OF THOS INSTITUTIONS I A PARTICULAR ECONOMIC SYSTEM THAT SATIFY THE NEEDS OF A COMMUNITY 29 PURPOSE OF BUSINESS MANAGEMENT IS TO PRODUCE THE MOST UNITS OF PRODUCTS / SERVICES AT THE LOWES POSSIBLE COST 30 TASK OF BUSINESS MANAGEMENT IS TO DETERMIN HOW AN ORGANISATION CAN ACHIEVE THE HIGHEST POSSIBLE OUTPUT (PRODUCTS & SERVICES) WITH THE LEAST POSSIBLE INPUT (HUMAN RESOURCES, NATURAL RESOURCES & CAPITAL) 30 STUDY OF BMAN DEFINITION ENTAILS COMPREHENSIVE & ONGOING RESEARCH & THE EXAMINATION OF MANAGEMENT PROBLEMS, THE TESTING OF APPROACHES & PRINCIPLES, EXPERIAMENTAITON WITH METHODS & TECHNIQUES & THE CONTINUOUS WIEHING UP OF ENVIRONMENTAL VARIABLES 31 RESEARCH MARKETS 33 PURCHASE RAW MATERIALS 33 AQUIRE STAFF & EQUIPMENT 33 OBTAIN MONEY 33 CO-ORDINATE & MANAGE 33 GENERAL MANAGEMENT 34 MARKETING MANAGEMENT 34 FINANCIAL MANAGEMENT 34 PRODUCTION & OPERATIONS MANAGEMENT 34 PURCHASING MANAGEMENT 34 HUMAN-RESOURCES MANAGEMENT 34 PUBLIC-RELATIONS MANAGEMENT 34 ENTREPRENEURSHIP DEFINITION ENTREPRENEURSHIP IS THE PROCESS BY WHICH INDIVIDUALS PURSUE OPPORTUNITIES WITHOUT REGARD TO RESOURCES THEY CURRENTLY CONTROL 42 HAVE INNOVATIVE IDEAS 42 IDENTIFY OPPORTUNITIES 42 FIND RESOURCES 42 TAKE FINANCIAL RISKS 42 BRING CHANGE, GROWTH, ETC. TO ECONOMY 42 RE-ENERGISE ECONOMIES & CREATE JOBS 42 START, MANAGE & GROW SMALL BUSINESSES 42 TRAITS & CHARACTERISTICS 48 SKILLS & INDUSTRY EXPERIENCE 48 OPPORTUNITIES DUE TO INTERNATIONAL TRENDS 48 RESPONSIBLE FOR SOLVING PROBLEMS 49 SET AND REACH OWN GOALS 49 FEEDBACK ON DEGREE OF SUCCESS 49 BUSINESS ELEMENTS NEEDS (FIGURE) RESOURCES / FACTORS OF PRODUCTION ECONOMIC ISSUES ECONOMIC SYSTEMS MANAGEMENT ACTIVITIES 7 FUNCTIONS OF BMAN ENTREPRENEURS ARE PEOPLE WHO CATEGORIES OF REASONS FOR ENTREPRENEURS ENTREPRENEURIAL NEEDS
Transcript of ULTIMATE BUSINESS GOAL MAKING A PROFIT 4...
ITEM DESCRIPTION PAGE
ULTIMATE BUSINESS GOAL MAKING A PROFIT 4
HUMAN ACTIVITIES 6
TRANSFORMATION 6
EXCHANGE 6
PROFIT 7
BUSINESS ETHICS ETHICAL BEHAVIOUR OF MANAGERS & EXECUTIVE IN THE BUSINESS WORLD 11
CONSUMERISM
SOCIAL FORCE THAT PROTECTS CONSUMERS AGAINST UNSAFE PRODUCTS &
MALPRACTICES BY EXERTING MORAL & ECONOMIC PRESSURE OON
BUSINESSES
11
SELF-REALISATION NEEDS 12
ESTEEM NEEDS 12
SOCIAL NEEDS (LOVE / RECOGNITION) 12
SECURITY NEEDS (PROTECTION) 12
PHYSIOLOGICAL NEEDS (HUNGER / THIRST) 12
NATURAL RESOURCES 14
HUMAN RESOURCES 14
CAPITAL 15
ENTREPRENEURSHIP 16
ECONOMIC PRINCIPLEHOW TO ENSURE THE HIGHTEST POSSIBLE SATISFACTION OF NEEDS WITH
THESE SCARCE RESOURCES16
WHICH PRODUCTS 16
WHO PRODUCE 16
HOW PRODUCED 16
FOR WHOM 16
NEED SATISFACTION CYCLE (FIGURE) 17
FREE-MARKET ECONOMY 19
COMMAND ECONOMY 19
SOCIALISM 21
COMPARISON OF ECONOMIC SYSTEMS (FIGURE) 24
MARKET SYSTEM (FIGURE) 26
ECONOMICS DEFINITION
IS A SOCIAL SCIENCE THAT STUDIES HOW HUMANS CHOOSE DIFFERENT
WAYS OF USING THEIR SCARECE RESOURCES TO PRODUCE PRODUCTS &
SERVICES
29
BUSINESS MANAGEMENT DEFINITION
IS AN APPLIED SCIENCE THAT IS CONCERNED WITH THE STUDY OF THOS
INSTITUTIONS I A PARTICULAR ECONOMIC SYSTEM THAT SATIFY THE NEEDS
OF A COMMUNITY
29
PURPOSE OF BUSINESS MANAGEMENTIS TO PRODUCE THE MOST UNITS OF PRODUCTS / SERVICES AT THE LOWES
POSSIBLE COST30
TASK OF BUSINESS MANAGEMENT
IS TO DETERMIN HOW AN ORGANISATION CAN ACHIEVE THE HIGHEST
POSSIBLE OUTPUT (PRODUCTS & SERVICES) WITH THE LEAST POSSIBLE
INPUT (HUMAN RESOURCES, NATURAL RESOURCES & CAPITAL)
30
STUDY OF BMAN DEFINITION
ENTAILS COMPREHENSIVE & ONGOING RESEARCH & THE EXAMINATION OF
MANAGEMENT PROBLEMS, THE TESTING OF APPROACHES & PRINCIPLES,
EXPERIAMENTAITON WITH METHODS & TECHNIQUES & THE CONTINUOUS
WIEHING UP OF ENVIRONMENTAL VARIABLES
31
RESEARCH MARKETS 33
PURCHASE RAW MATERIALS 33
AQUIRE STAFF & EQUIPMENT 33
OBTAIN MONEY 33
CO-ORDINATE & MANAGE 33
GENERAL MANAGEMENT 34
MARKETING MANAGEMENT 34
FINANCIAL MANAGEMENT 34
PRODUCTION & OPERATIONS MANAGEMENT 34
PURCHASING MANAGEMENT 34
HUMAN-RESOURCES MANAGEMENT 34
PUBLIC-RELATIONS MANAGEMENT 34
ENTREPRENEURSHIP DEFINITION
ENTREPRENEURSHIP IS THE PROCESS BY WHICH INDIVIDUALS PURSUE
OPPORTUNITIES WITHOUT REGARD TO RESOURCES THEY CURRENTLY
CONTROL
42
HAVE INNOVATIVE IDEAS 42
IDENTIFY OPPORTUNITIES 42
FIND RESOURCES 42
TAKE FINANCIAL RISKS 42
BRING CHANGE, GROWTH, ETC. TO ECONOMY 42
RE-ENERGISE ECONOMIES & CREATE JOBS 42
START, MANAGE & GROW SMALL BUSINESSES 42
TRAITS & CHARACTERISTICS 48
SKILLS & INDUSTRY EXPERIENCE 48
OPPORTUNITIES DUE TO INTERNATIONAL TRENDS 48
RESPONSIBLE FOR SOLVING PROBLEMS 49
SET AND REACH OWN GOALS 49
FEEDBACK ON DEGREE OF SUCCESS 49
BUSINESS ELEMENTS
NEEDS (FIGURE)
RESOURCES / FACTORS OF PRODUCTION
ECONOMIC ISSUES
ECONOMIC SYSTEMS
MANAGEMENT ACTIVITIES
7 FUNCTIONS OF BMAN
ENTREPRENEURS ARE PEOPLE WHO
CATEGORIES OF REASONS FOR ENTREPRENEURS
ENTREPRENEURIAL NEEDS
PERSONAL ACCOMPLISHMENTS 49
CONTROL OVER TIME 49
INTERNAL LOCUS OF CONTROL DEFINITION INDICATES A PERSON'S NEED TO BE IN CHARGE OF HIS/HER OWN DESTINY 49
EXTERNAL LOCUS OF CONTROL DEFINITIONTHAT A PERSON BELIEVES THAT THE OUTCOME OF AN EVENT IS PRIMARILY
OUT OF HIS/HER PERSONAL CONTROL49
INNOVATION DEFINITION
OR PRODUCTION OF SOMETHING NEW / ORGINIAL, RESULTS FROM THE
ABILITY TO CONCEIVE OF & CREATE NEW & UNIQUE PRODUCTS, SERVICES &
PROCESSES
49
CREATIVITY DEFINITION REFERS TO THE CREATION OF SOMETHING NEW 49
RISK TAKING 50
ENTREPRENEUR SKILLS 51
ARCHITECTURAL DESIGN 51
TRASH AND WASTE REMOVAL 51
HOUSEKEEPING 51
FACILITY SYSTEMS 51
LANDSCAPE MAINTENANCE 51
PROPERTY APPRAISALS 51
MAJOR MOVES 51
HAZARDOUS-MATERIALS REMOVAL 51
MAJOR REDESIGNS 51
FURNITURE MOVES 51
FOOD SERVICES 51
SMALL BUSINESSLOCAL HAIRDRESSING SALON, GREENGROCER, VIDEO SHOP & HARDWARE
STORE52
NUMBER OF EMPLOYEES 53
SALES VOLUME 53
VALUE OF ASSETS 53
MARKET SHARE 53
FEWER THAN 200 EMPLOYEES 53
ANNUAL TURNOVER < R64 MIL 53
CAPITAL ASSETS < R 23 MIL 53
DIRECT MANAGERIAL INVOLVEMENT 53
PRODUCTION OF PRODUCTS & SERVICES 53
INNOVATION 53
AIDING OF BIG BUSINESSES 54
JOB CREATION 54
DECISION TO BECOME ENTREPRENEUR 54
ENTREPRENEURIAL ACTIVITIES & SKILLS 54
RESOURCES 54
OPPORTUNITIES & IDEAS 54
FEASIBILITY 54
BUSINESS PLAN 54
LAUNCH & MANAGE 55
STRATEGY SKILLS 56
PLANNING SKILLS 56
MARKETING SKILLS 56
FINANCIAL SKILLS 56
PROJECT MANAGEMENT SKILLS 56
HUMAN RELATIONS SKILLS 57
FINANCIAL RESOURCES 57
HUMAN RESOURCES 57
OPERATING RESOURCES / PHYSICAL RESOURCES 57
EXCHANGE RATE FAVOUR FOREIGNERS 58
HIGH UNEMPLOYMENT RATE / INCAPABLE POLICE 58
CHANGING SOCIAL TRENDS 58
NEW SERVICES 58
LIFE-CYCLE STAGES OF INDUSTRIES (FIGURE) 59
EDUCATION 59
HEALTH CARE 59
TOURISM 59
PRIVITISATION OF GOVERNMENT SERVICES 59
CLEARLY DEFINED MARKET 61
COMPETITIVE ADVANTAGE 61
GROWTH POTENTIAL 61
REWARDING TO INVESTOR & ENTREPRENEUR 61
TIMING MUST BE RIGHT
CUSTOMERS FAMILIAR WITH LOCATION 61
ESTABLISHED CUSTOMER BASE 61
EXPERIENCED EMPLOYEES 61
PLANNING BASED ON HISTORICAL DATA 61
SUPPLIER RELATIONSHIPS IN PLACE 61
INVENTORY & EQUIPMENT IN PLACE 61
FINANCING FROM OWNER MAY BE AVAILABLE 61
LOCATION MAY BE UNDESIREABLE 61
IMAGE WILL BE DIFFICULT TO CHANGE 61
SMALL BUSINESS CHARACTERISTICS
QUANTITIVE CRITERIA SMALL BUSINESS
ROLE OF SMALL BUSINESS IN ECONOMY
ENTREPRENEURIAL PROCESS
MOST OUTSOURCED SERVICES USA
ENTREPRENEURIAL REQUIRED SKILLS
RESOURCES NEEDED TO START A BUSINESS
NEW VENTURE TRENDS
GROWTH INDUSTRIES
NEW VENTURE OPPORTUNITIES
ADVANTAGES OF BUYING EXISTING BUSINESS
EMPLOYEES ARE INHERITED NOT CHOSEN 61
DIFFICULT TO CHANGE WAY BUSINESS IS RUN 61
LIABILITIES FOR PAST CONTRACTS 61
INVENTORY & EQUIPMENT MAY BE OBSOLETE 61
FINANCING COSTS COULD DRAIN CASH FLOW 61
FRANCHISING 62
CORPORATE ENTREPRENEURSHIP / INTRAPRENEURSHIP 62
FEASIBILITY OF IDEA OR OPPORTUNITY 64
LEGAL (OR JURISTIC) PERSONALITY 70
LIMITED LIABILITY 70
DEGREE OF CONTROL 71
CAPITAL ACQUISITION 71
COMPLIANCE WITH LEGAL FORMALITIES 71
TAXATION 71
TRANSFERABLE INTEREST 73
OWNED & MANAGED BY 1 INDIVIDUAL 73
NOT SEPARATE JURISTIC PERSON 73
INEXPENSIVE & EASY TO SET UP 73
LIFESPAN LINKED TO THE LIFESPAN OF OWNER 73
NO SEPARATION OF OWNER & BUSINESS ASSETS 73
PROFIT BELONGS TO OWNER 73
OWNER LIABLE 73
BUSINESS / PERSONAL CREDITORS CAN CLAIM AGAINST EACH OTHER 73
OWNER DIRECT CONTROL AND AUTHORITY 73
CAPITAL-ACQUISITION DEPENDS ON OWNER'S CAPITAL 73
FEW FORMALITIES & LEGAL REQUIREMENTS 74
INCOME = OWNER TAXABLE INCOME 74
TRANSFER OF OWNERSHIP IS SIMPLE 74
SIMPLE TO CREATE 74
LEAST-EXPENSIVE WAY TO BEGIN BUSINESS 74
OWNER HAS TOTAL DECISION-MAKING AUTHORITY 74
NO SPECIAL LEGAL RESTRICTIONS 74
EASY TO DISCONTINUE 74
OWNER IS PERSONALLY LIABLE WITHOUT LIMITATION 74
LIMITED DIVERSITY IN SKILLS AND CAPABILITIES 74
OWNER HAS LIMITED ACCESS TO CAPITAL 74
LACK OF CONTINUITY 74
TWO OR MORE, NOT MORE THAN 20 PERSONS 74
PARTNERS MAY BE NATURAL / JURISTIC PERSONS 74
EACH PARTNER HAS TO CONTRIBUTE 74
SHARE PROFIT 75
GOOD FAITH RELATIONSHIP 75
DOES NOT HAVE LEGAL PERSONALITY 75
ENTER TRANSACTIONS IN PERSONAL CAPACITY 75
ASSETS JOINTLY BELONG TO PARTNERS 75
JOINTLY LIABLE FOR DEBTS 75
CONTINUED EXISTANCE DEPENDS ON PARTNERS 75
DEPENDENT ON LEGAL CAPACITY OF PARTNERS 75
PERSONAL POSSESSIONS NOT PROTECTED 75
JOINT CONTROL 75
MAY BE TERMINATED DUE TO PERSONAL CIRCUMSTANCES 76
IMPROVED MANAGEMENT ABILITY 76
DIVISION OF LABOUR AND SPECILISATION 76
BETTER CAPITAL-ACQUISITION POTENTIAL 76
ESTABLISHED BY CONCLUDING A CONTRACT 76
NO FORMAL REQUIREMENTS 76
NOT SEPARATE TAX PAYER 76
PARTNERS MAY INSTITUTE LEGAL PROCEEDINGS IN NAME OF PARTNERSHIP 75
PARTNERSHIP ESTATE IS SEPARATE FOR SEQUISTRATION PURPOSES 75
EASE OF FORMATION 76
DIVERSIFICATION OF SKILLS & ABLITITIES OF PARTNERS 76
INCREASED OPPORTUNITY FOR ACCUMULATION OF CAPITAL 76
MINIMAL LEGAL FORMALITIES & REGULATIONS 76
PERSONAL LIABILITY OF PARTNERS 76
RELATIVE DIFFICULTY IN DISPOSING OF INTEREST IN PARTNERSHIP 76
POTENTIAL FOR CONFLICT BETWEEN PARTNERS 76
LACK OF CONTINUITY 76
COMPANIES ACT 71 OF 2008 NO LIMIT TO NUMBER OF PARTNERS 77
DESIRE FOR MORE CAPITAL 80
SEPARATE LEGAL ENTITY 80
POTENTIALLY UNLIMITED CAPITAL-GENERATING CAPACITY 80
COMPANIES WITH SHARE CAPITAL 80
COMPANIES LIMITED BY GUARANTEE 80
GENERAL MEETING OF MEMBERS 81
BOARD OF DIRECTORS 81
DISADVANTAGES OF PARTNERSHIP
COMPANIES
COMPANIES ACT 61 OF 1973 PROVIDES
TWO ORGANS OF A COMPANY
DISADVANTAGES OF BUYING EXISTING BUSINESS
LAW REGARDS PARTNERSHIP AS ENTITY
PARTNERSHIP
ADVANTAGES OF PARTNERSHIP
CHOOSING FORM OF ENTERPRISE
SOLE PROPRIETORSHIP
ADVANTAGES OF SOLE PROPRIETORSHIP
DISADVANTAGES OF SOLE PROPRIETORSHIP
LIMITED LIABILITY 82
ABILITY TO RAISE LARGE AMOUNT OF CAPITAL 82
SEPARATION OF OWNERSHIP & CONTROL 82
CONTINUITY 82
TRANFERABILITY OF SHARES 82
HIGH DEGREE OF LEGAL REGULATION 83
HIGH OPERATIONAL COSTS 83
MEMBERS / SHAREHOLDERS = 1 - 50 83
AT LEAST 1 DIRECTOR 83
SOME RESTRICTION ON THE TRANSFERABILITY OF SHARES 83
GENERAL PUBLIC CANNOT SUBSCRIBE TO SHARES 83
CANNOT LIST SHARES ON STOCK EXCHANGE 83
NAME MUST END WITH (PTY) LTD 83
OTHER TYPE: INCORPORATED / SECTION 53(B) INC 83
NOT AS STRICTLY CONTROLLED BY LEGAL REGULATIONS 83
AT LEAST 7 MEMBERS, NO MAX PROVIDED THAT # OF SHARES IN
MEMORANDUM IS NOT EXCEEDED83
AT LEAST 2 DIRECTORS 83
SHARES ARE FREELY TRANSFERABLE 83
PUBLIC CAN BUY SHARES BY MEANS OF PROSPECTUS 83
ELIGIBLE TO LIST SHARES ON STOCK EXCHANGE 83
NAME MUST END WITH LTD 83
LEGAL REGULATIONS STRICTLY CONTROLLED 83
SIMPLIFY THE REGISTRATION PROCEDURE 83
INSTEAD OF 2 CONTITUTIVE DOCUMENTS, REGISTRATION OF 1 DOCUMENT
CALLED MEMORANDUM OF INCORPORATION83
RESERVATION OF NAME OPTIONAL 83
REGISTER UNDER REGISTRATION NUMBER 83
OUTSIDERS NO LONGER KNOWLEDGE OF DOCUMENT 83
2 CLASSIFICATIONS: PROFIT & NON-PROFIT 83
PROFIT COMPANIES: 4 TYPES: STATE-OWNED COMPANIES, PRIVATE
COMPANIES, PERSONAL-LIABILITY COMPANIES, PUBLIC COMPANIES83
PUBLIC COMPANIES EVEN STRICTER REQUIREMENTS FOR ACCOUNTING
RECORDS; FINANCIAL REPORTING; AUDITING; MINUTES OF MEETINGS;
REGISTERS OF SHAREHOLDERS & ANNUAL RETURNS
84
LESS STRICT FOR PRIVATE COMPANIES & NON-PROFIT COMPANIES 84
POWERS & RESPONSIBLITIES OF DIRECTORS WILL BE INCREASED 84
BURDEN ON OFFICE OF DIRECTOR WILLB E INCREASED 84
RIGHTS OF SHAREHOLDERS TO HOLD DIRECOTRS ACCOUNTABLE & REMOVE
DIRECTORS HAVE BEEN EXTENDED84
DUTIES OF DIRECTORS ARE CODIFIED IN LEGISLATION 84
ASSETS UNDER CONTROL OF TRUSTEE 84
ASSETS & BENEFICIARIES MUST BE CLEARLY IDENTIFIED 84
NO LIMIT ON NUMBER OF BENEFICIARIES 84
BENEFICIARIES MAY BE NATURAL / JURISTIC 84
SEPARATE LEGAL ENTITY 84
NOT OWNED BY ANYONE 84
TERMINATE BY AGREEMENT / SEQUESTRATION 84
NOT CREATURES OF STATE 84
NOT REGISTERED WITH REGISTRAR OF COMPANIES 84
LEGAL CONTRACT = TRUST DEED 84
NO JURISTIC PERSONALITY 84
TRUSTEE IS LIABLE (NOT PERSONAL CAPACITY) 84
ANY PERIOD OF TIME 84
MANAGEMENT STRUCTURE SIMILAR TO PARTNERSHIP 85
CAPITAL PROVIDED BY FOUNDER 85
EASY AND CHEAP 85
INVESTMENT FROM PUBLIC (UNIT TRUST) SUBJECT TO REGULATION 85
SEPARATE TAX PAYER 85
EASE OF FORMATION 85
LIMITED LIABILITY 85
EXTREME FLEXIBILITY 85
ABSENCE OF LEGAL REGULATION 85
CONTINUITY 85
LIMITED ACCESS TO CAPITAL 85
POTENTIAL FOR CONFLICT BETWEEN PARTIES 85
AFFECT OF COMPANIES ACT NO 71 OF 2008 INCLUDED UNDER JURISTIC PERSONS 85
OTHER FORMS OF ENTERPRISE CO-OPERATIVE SOCIETIES 85
JOINT VENTURES 86
MOSTLY FARMING & AGRICULTURE 85
SIMILAR TO PRIVATE COMPANY 85
NOT REAL ALTERNATIVE TO OTHER ENTERPRISES 86
LEGAL CONSEQUINCES DEPEND ON SPECIFIC AGREEMENT 86
ORDINARY PARTNERSHIP PRINCIPLES APPLY 86
ENTERING INTO A FRANCHISE AGREEMENT 86
BUYING AND EXCISTING BUSINESS 86
DISADVANTAGES OF BUSINESS TRUST
CO-OPERATIVE SOCIETIES
JOINT VENTURES
THREE OPTIONS FOR ENTERING BUSINESS WORLD FOR
ENTREPRENEURS
DISADVANTAGES OF A COMPANY
PRIVATE COMPANY
PUBLIC COMPANY
AFFECT OF COMPANIES ACT NO 71 OF 2008
BUSINESS TRUST
ADVANTAGES OF PRIVATE BUSINESS TRUST
ADVANTAGES OF A COMPANY
COMPANIES ACT 71 OF 2008 EFFECTS ITO CORPORATE
GOVERNANCE
ESTABLISHING A BUSINESS FROM SCRATCH 86
OBJECTIVES OF BUSINESS PLAN 86
IMPORTANCE & NECESSITY OF BUSINESS PLAN 87
STAKEHOLDERS IN BUSINESS PLAN 88
SCOPE OF BUSINESS PLAN 90
COMPONENTS OF BUSINESS PLAN 90
DESCRIPTION OF NEW VENTURE 91
ANALYSING THE MARKET 94
DETERMINING FINANCIAL NEEDS 94
DESCRIBE NATURE OF BUSINESS 86
WRITTEN PLAN ON EXPLOITATION OF OPPORTUNITY 86
TO ATTRACT INVESTORS 87
SYSTEMATIC, REALISTIC EVALUATION OF CHANCES OF SUCCESS 87
IDENTIFY KEY VARIABLES THAT DETERMINE SUCCESS & PRIMARY RISKS 87
GAME PLAN FOR MANAGING BUSINESS 87
MANAGEMENT INSTRUMENT TO COMPARE RESULTS AGAINST TARGETED
PERFORMANCE87
PRIMARY TOOL FOR ATTRACTING MONEY 87
TO SELL THE BUSINESS TO HIM / HERSELF 87
TO OBTAIN BANK FINANCING 87
TO OBTAIN INVESTMENT FUNDS 87
TO ARRANGE STRATEGIC ALLIANCES 87
TO OBTAIN LARGE CONTRACTS 88
TO ATTRACT KEY EMPLOYEES 88
TO COMPLETE MERGERS AND ACQUISITIONS 88
TO MOTIVATE & FOCUS MANAGEMENT TEAM 88
INTERNAL STAKEHOLDERS 88
EXTERNAL STAKEHOLDERS 88
NEW VENTURE MANAGEMENT 88
EMPLOYEES 88
VISION 88
MISSION 88
KEY OBJECTIVES (DERIVED FROM MISSION STATEMENT) 88
CLEAR UNDERSTANDING OF STRATEGY TO ACCOMPLISH OBJECTIVES &
FUNCTIONAL STRATEGIES88
MARKETING STRATEGY 88
FINANCIAL STRATEGY 88
HUMAN-RESOURCES STRATEGY 88
CUSTOMERS 89
INVESTORS 89
BANKS 89
CAPITAL 89
COLLATERAL 89
CHARACTER 90
CONDITIONS 90
MATRIX FOR EVALUATION OF BUSINESS PLAN (FIGURE) 89
STYLE AND ABILITY 90
PREFERENCES OF MANAGEMENT TEAM 90
COMPLEXITY OF PRODUCT / SERVICE 90
COMPETITIVE ENVIRONMENT 90
LEVEL OF UNCERTAINTY 90
FORMAT 90
CONTENT 91
SKILLS ASSESSMENT FOR WRITING A BUSINESS PLAN
(FIGURE)91
EXECUTIVE SUMMARY 91
GENERAL DESCRIPTION OF VENTURE 91
PRODUCTS-AND-SERVICES PLAN 91
MARKETING PLAN 91
MANAGEMENT PLAN 91
OPERATING PLAN 91
FINANCIAL PLAN 91
SUPPORTING MATERIALS 91
NB OVERVIEW OF BUSINESS PLAN (TABLE) 92
NB OUTLINE OF SIMPLE BUSINESS PLAN (TABLE) 92
IS THIS A START-IP, BUY0OUT OR EXPANSION? 94
HAS THIS BUSINESS BEGUN OPERATION? 94
WHAT IS THE FIRM'S MISSION STATEMENT? 94
WHERE WAS THIS BUSINESS STARTED? 94
WHAT ARE THE BASIC NATURE AND ACTIVITY OF THE BUSINESS? 94
WHAT IS ITS PRIMARY PRODUCT OR SERVICE? 94
WHAT CUSTOMERS ARE SERVED? 94
IS THIS BUSINESS IN MANUFACTURING, RETAILING SERVICE OR ANOTHER
TYPE OF INDUSTRY?94
WHAT ARE THE CURRENT AND PROJECTED STATES OF THIS INDUSTRY? 94
COMPONENTS OF BUSINESS PLAN
CONTENT OF BUSINESS PLAN (COMPONENTS)
GENERAL DESCRIPTION OF NEW VENTURE (IMPORTANT
QUESTIONS)
NEW VENTURE MANAGEMENT (PRIMARY IMPORTANCE TO
ENTREPRENEUR & TEAM)
FUNCTIONAL STRATEGIES
EXTERNAL STAKEHOLDERS
BANKS (4 C'S TO EVALUATE LOAN APP)
SCOPE OF BUSINESS PLAN: HOW MUCH PLANNING IS
NEEDED? (CONSIDERATIONS)
MAIN OBJECTIVES OF BUSINESS PLAN
OTHER OBJECTIVES OF BUSINESS PLAN
IMPORTANCE & NECESSITY OF BUSINESS PLAN (REASONS
FOR ENTREPRENEUR TO WRITE BUSINESS PLAN)
STAKEHOLDERS IN BUSINESS PLAN
INTERNAL STAKEHOLDERS
ENTREPRENEURS
DEVELOPING NEW BUSINESS PLAN
WHAT IS THE BUSINESS'S STAGE OF DEVELOPMENT? EXAMPLE: HAS IT
BEGUN OPERATIONS? IS IT PRODUCING A FULL PRODUCT LINE?94
WHAT ARE ITS OBJECTIVES? 94
WHAT IS THE HISTORY OF THIS COMPANY? 94
WHAT CHANGES HAVE BEEN MADE IN THE STRUCTURE OR OWNERSHIP OF
THE EXISTING BUSINESS?94
WHAT IS THE FIRM'S DISTINCTIVE COMPETENCE? 94
CONCEPTS 94
IDENTIFICATION OF TARGET MARKET 94
RESEARCH & FORECASTING IN TARGET MARKET 94
MARKETING PLAN / STRATEGY FOR SELECTED MARKET SEGMENTS 94
UNDERSTANDING OF HOW FINANCIAL STATEMENTS WORK 94
UNDERSTANDING OF HOW PROFITABILITY IS ASSESSED 94
ABILITY TO DETERMINE VENTURE'S FINANCIAL REQUIREMENTS 94
CHOICE OF LOCATION 95
LOCATION FACTORS 95
SOURCES OF RAW MATERIALS 95
AVAILABILITY OF LABOUR 95
PROXIMITY OF AND ACCESS TO MARKET 95
AVAILABILITY & COST OF TRANSPORT FACILITIES 95
AVAILABILITY & COST OF POWER & WATER 95
AVAILABILITY & COST OF SITE BUILDINGS 95
AVAILABILITY OF CAPITAL 95
ATTITUDE, REGULATIONS & TARIFFS OF LOCAL AUTHORITIES 95
EXISTING BUSINESS ENVIRONMENT 95
SOCIAL ENVIRONMENT 95
CLIMATE 96
CENTRAL GOVERNMENT POLICY 96
PERSONAL PREFERENCES 96
MICRO-ENVIRONMENT 101
MARKET ENVIRONMENT 101
MACRO-ENVIRONMENT 101
TECHNOLOGICAL INNOVATIONS 101
ECONOMIC FLUCTUATIONS 101
NEW LAWS 101
SOCIAL FACTORS 101
BUSINESS ENVIRONMENT DEFINITION
BUSINESS ENVIRONMENT ARE ALL FACTORS / VARIABLES, BOTH INSIDE &
OUTSIDE BUSINESS ORGANISATION, MAY INFLUENCE CONTINUED &
SUCCESSFUL EXISTANCE OF BUSINESS ORGANISATION
105
VISION 105
BUSINESS FUNCTIONS 105
RESOURCES 105
CONSUMERS 105
COMPETITORS 105
INTERMEDIARIES 105
SUPPLIERS 105
TECHNOLOGICAL ENVIRONMENT 107
ECONOMIC ENVIRONMENT 107
SOCIAL ENVIRONMENT 107
PHYSICAL ENVIRONMENT 107
INSTITUTIONAL ENVIRONMENT 107
INTERNATIONAL ENVIRONMENT 107
COMPOSITION OF BUSINESS ENVIRONMENT (FIGURE) 106
INTERRELATEDNESS OF ENVIRONMENTAL FACTORS / VARIABLES 107
INCREASING INSTABILITY & CHANGE 108
ENVIRONMENTAL UNCERTAINTY 108
COMPLEXITY OF ENVIRONMENT 109
PHYSICAL ENVIRONMENT 108
CONSUMER BUYING POWER 108
INTERNATIONAL ENVIRONMENT 108
ECONOMIC ENVIRONMENT 108
VISSION, MISSION & OBJECTIVES 109
MANAGEMENT 109
RESOURCES 109
VISION STATEMENT WHAT DO WE WANT TO BECOME? 109
WHAT IS OUR BUSINESS? 109
DISTINGUISHES 1 BUSINESS FROM SIMILAR FIRMS 109
FOUNDATION FOR DEVELOPMENT OF LONG-TERM OBJECTIVES 109
OBJECTIVES SPECIFIC RESULTS SEEKS TO ACHIEVE 109
TANGIBLE RESOURCES 110
INTANGIBLE RESOURCES 110
ORGANISATIONAL CAPABILITIES 110
PRODUCTION FACILITIES 110
RAW MATERIALS 110
FINANCIAL RESOURCES 110
PROPERTY & COMPUTERS 110
ANALYSING THE MARKET (KEY ITEMS)
DETERMINING FINANCIAL NEEDS OF NEW VENTURE (KEY
ISSUES)
LOCATION OF BUSINESS
LOCATION FACTORS
BUSINESS ENVIRONMENT
ENVIRONMENTAL VARIABLES
MICRO-ENVIRONMENT (UNDER DIRECT CONTROL OF
MANAGEMENT)
MARKET ENVIRONMENT (TASK ENVIRONMENT)
MACRO-ENVIRONMENT
CHARACTERISTICS OF BUSINESS ENVIRONMENT
ENVIRONMENTAL FACTORS INFLUENCING INFLATION
MICRO-ENVIRONMENT VARIABLES
MISSION STATEMENT
RESOURCES
TANGIBLE RESOURCES
BRAND NAMES 110
PATENTS & TRADEMARKS 110
COMPANY REPUTATION 110
TECHNICAL KNOWLEDGE 110
ORGANISATIONAL MORALE 110
ACCUMULATED EXPERIENCE 110
ORGANISATIONAL CAPABILITIESABILITY TO COMBINE RESOURCES, PEOPLE & PROCESSES IN PARTICULAR
WAY110
MARKET 111
SUPPLIERS 112
INTERMEDIARIES 113
COMPETITORS 114
CONSUMERS' PERSONAL DISPOSABLE INCOME 111
INTERFACE BETWEEN MACRO- & MICRO-ENVIRONMENT 112
PERSONAL DISPOSABLE INCOME INCOME AFTER TAX & CREDIT PAYMENTS 111
DURABLE PRODUCTS (FURNITURE, APPLIANCES, CARS) 112
SEMI-DURABLE PRODUCTS (FOOD & TOBACCO) 112
SERVICES (INSURANCE, RENTAL & COMMUNICATION) 112
WHOLESALERS & RETAILERS 113
AGENTS & BROKERS 113
REPRESENTATIVES 113
SPAZA SHOPS 113
BANKERS 113
ASSET MANAGERS & INSURANCE BROKERS 113
COMPETATIVE FORCES IN AN INDUSTRY (FIGURE) 114
POSSIBILITY OF NEW ENTRANTS (OR DEPARTURES) 114
BARGAINING POWER OF CLIENTS & CONSUMERS 114
AVAILABILITY / NON-AVAILABILITY OF SUBSTITUTE PRODUCTS / SERVICES 114
NUMBER OF EXISTING COMPETITORS 114
COMPOSITION OF MACRO-ENVIRONMENT 115
TECHNOLOGICAL ENVIRONMENT 116
ECONOMIC ENVIRONMENT 119
SOCIAL ENVIRONMENT 122
PHYSICAL ENVIRONMENT 129
INSTITUTIONAL-GOVERNMENTAL ENVIRONMENT 131
INTERNATIONAL ENVIRONMENT 132
MEGA-TRENDS DEFINITIONVARIABLES THAT CONSTITUTE THE UNCONTROLLABLE FORCES IN THE
EXTERNAL ENVIRONMENT115
MACRO-VARIABLES DEFINITION VARIABLES THAT EXIST IN MACRO-ENVIRONMENT 115
MARKET ENVIRONMENT 115
DECISION-MAKING BY MANAGEMENT 115
EACH OTHER 115
MACRO-VARIABLES CAUSES CHANGE IN BUSINESS ENVIRONMENT 115
DEMOCRATICALLY ELECTED STATE
COMMUNITY (CONSUMER) DECIDES WHAT GOVERNMENT IT WANTS AND
GIVE GOVERNMENT A MANDATE TO FORM POLITICAL STRUCTURE WHICH
DETERMINES AFFAIRS OF COMMUNITY
115
NEW MACHINERY / PRODUCTS 116
NEW METHODS 116
NEW SERVICES 116
NEW APPROACHES TO MANAGEMENT 116
ECONOMIC GROWTH RATE, MEASURED IN GDP IS
INLUENCED BY NUMBER OF NEW INVENTIONS116
EARLY 19TH CENTURY - RAILWAYS 117
19TH CENTUREY - ELECTRICITY 117
BEGINNING OF 20TH CENTURY - CARS 117
1950'S - PASSENGER JET 117
NOW - MICRO-ELEMENTS (COMPUTER SIZES) 117
NOW - NANOTECHNOLOGY (HEALTH CARE & MINING) 117
NOW - INTERNET 117
SOCIAL CHANGE SATELLITE TV, INTERNET / CELLPHONES 117
NANOTECHNOLOGY DEFINITIONNANOTECHNOLOGY IS THE ENGINEERING OF FUNCTIONAL SYSTEMS AT THE
MOLECULAR SCALE118
IDENTIFICATION OF IMPORTANT TECHNOLOGICAL TRENDS 118
ANALYSIS OF POTENTIAL CHANGE IN IMPORTANT CURRENT & FUTURE
TECHNOLOGY118
ANALYSIS OF ORGANISATION'S TECHNOLOGICAL STRENGTHS &
WEAKNESSES118
LIST OF PRIORITIES THAT SHOULD BE INCLUDED IN TECHNOLOGY STRATEGY
FOR ORGANISATION118
WATER TECHNOLOGY 119
MINERAL TECHNOLOGY 119
MARINE TECHNOLOGY 119
AGRICULTURAL & VETENINARY TECHNOLOGY 119
MEDICAL TECHNOLOGY 119
TRANSPORT TECHNOLOGY 119
CONTINUED ASSESSMENT OF TECHNOLOGICAL
ENVIRONMENT INCLUDES
MANAGERS SHOULD ASSESS TECHNOLOGY TRENDS THAT
EVOLVE AROUND
FIVE FACTORS DETERMINING NATURE & INTENSITY OF
COMPETITION
MACRO-ENVIRONMENT
MACRO-VARIABLES EFFECT
TECHNOLOGICAL INNOVATION RESULTS
TECHNOLOGY & CHANGES IN LIFESTYLE
MARKET ENVIRONMENT
PURCHASING POWER
CONSUMER MARKET SUBDIVIDED INTO PRODUCTS THAT
CAN BE BOUGHT
INTERMEDIARIES (DYNAMIC & EVER-CHANGING NATURE)
INTANGIBLE RESOURCES
POWER TECHNOLOGY 119
BUSINESS AS A WHOLE 119
PRODUCTS 119
LIFE CYCLE 119
SUPPLY OF MATERIALS 119
PRODUCTION PROCESS 119
APPROACH TO MANAGEMENT 119
TECHNOLOGY 119
POLITICS 119
SOCIAL ENVIRONMENT 119
INTERNATIONAL ENVIRONMENT 119
AND VISE VERSA 119
ECONOMIC WELL-BEING / ECONOMIC GROWTH RATE IS
MEASURED BYRANGE AND NUMBER OF PRODUCTS AND SERVICES PRODUCED 119
GROSS DOMESTIC PRODUCT (GDP) DEFINITION
TOTAL VALUE OF ALL THE PRODUCTS & SERVICES FINALLY PRODUCED
WITHIN THE BORDERS OF A COUNTRY IN A PARTICULAR PERIOD (USUALLY 1
YEAR)
120
FAST ENOUGH TO REATE JOBS 120
EXPORTS MORE PRODUCTS THAN IMPORTS 120
PROVIDE PEOPLE WITH HIGH STANDARD OF LIVING 120
ECONOMIC GROWTH RATE INFLUENCES CUSTOMERS' PURCHASING POWER 120
INFLATION AFFECTS DECISIONS MANAGEMENT HAS TO MAKE 121
COST FOR EXPORTING INDUSTRIES 121
COST FOR LOCAL INDUSTRIES COMPETING AGAINST IMPORTED PRODUCTS 121
WHEN A COUNTRY'S INFLATION RATE IS HIGHER THAN THAT
OF ITS MAJOR TRADING PARTNERS & INTERNATIONAL
COMPETITORS
THERE IS A REDUCTION IN ITS INTERNATIONAL COMPETITIVENESS 121
GOVERNMENT'S MONETARY POLICY IS ANOTHER ECONOMIC VARIABLE AFFECTING A BUSINESS & ITS MARKET
ENVIRONMENT121
MONEY SUPPLY 121
INTEREST RATES 121
STRENGTH OF CURRENCY 121
HIGH INTEREST RATES RESULT INHIGH COST OF CREDIT WHICH MODIFIES BEHAVIOUR & RESULTS IN A
SUBSEQUENT DECLINE IN CONSUMER SPENDING & FIXED INVESTMENT121
GOVERNTMENT'S FISCAL POLICY AFFACTS BUSINESS & CONSUMERS THROUGH TAXATION & TAX REFORMS 121
SOCIAL ENVIRONMENT MOST SUBJECT TO THE INFLUENCE OF OTHER VARIABLES 122
DEMOGRAPHIC CHANGE 123
URBANISATION 124
LEVEL OF EDUCATION 124
CHANGING ROLE OF WOMEN 125
CONSUMERISM 125
SOCIAL RESPONSIBILITY & BUSINESS ETHICS 125
HIV/AIDS 128
CULTURE 129
DEMOGRAPHIC CHANGE DEFINITIONDEMOGRAPHIC CHANGE IS CHANGE IN THE GROWTH & COMPOSITION OF
POPULATIONS123
DEMOGRAPHIC CHANGE CAUSES MOST CHANGE IN THE MARKET 123
GROWING POPULATION OF AGEING, AFFLUENT PEOPLENEEDS GIVE RIST TO SPECIAL BUSINESS OPPORTUNITIES (LIKE TOURISM
INDUSTRY)123
POVERTY 123
POLLUTION 123
DEGRADATION OF THE ENVIRONMENT 123
ILLNESS 123
FAMINE (3RD OF WORLD POPULATION IN DANGER OF STARVING) 123
EFFECT OF POPULATION-GROWTH PATTERNSNEEDS, INCOOME & BEHAVIOUS OF CONSUMERS & EMPLOYMENT
PATTERNS124
URBANISATION DEFINITION THE MOVEMENT OF PEOPLE FROM RURAL AREAS TOWARDS CITIES 124
URBANISATION IS ONE OF THE FOREMOST TRENDS OF THE
WORLD'S POPULATION124
URBANISATION AFFECTSBUSINESSES IN MANY WASY, ESCPECIALLY IN HOUSING, SANITATION, SLUM
CONTROL & HEALTH SERVICES124
LEVEL OF EDUCATION GREATLY AFFECTS MANAGEMENT 124
RAISE LEVEL OF SKILLS OF MANAGEMENT 124
RAISE LEVEL OF SKILLS OF WORKERS 124
INCREASE DEMAND FOR BOOKS, MAGAZINES, NEWSPAPERS & ONLINE
RESOURCES124
MORE SOPHISTICATED CONSUMER 124
LACK OF ACCESS TO EDUCATION & TRAINING 125
TREND OF SKILLED PROFESSIONALS MIGRATING TO OTHER COUNTRIES 125
CHANGING ROLE OF WOMEN CLEAR IMPLICATIONS FOR MANAGEMENT 125
CONSUMERISM DEFINITIONTHE SOCIAL FORCE THAT PROTECTS CONSUMER BY EXERTING LEGAL,
MORAL, ECONOMIC & POLITICAL PRESSURE ON MANAGEMENT125
HIGHER LEVEL OF EDUCATION
SKILLS SHORTAGES DUE TO
INFLATION INCREASES
GOVERNMENT'S MONETARY POLICY INFLUENCES
SOCIAL ENVIRONMENT
CONCERNS SURROUNDING HIGH POPULATION-GROWTH
RATES
TECHNOLOGICAL PROCESSES EFFECTS
ECONOMY IS INFLUENCED BY
HIGH ECONOMIC GROWTH RATE (7-8% PER YEAR)
CONSUMERISM IS CONSEQUENCE OF
BETTER EDUCATED PUBLIC THAT RESIST MISLEADING ADVERTIMEMENTS,
UNSAFE PRODUCTS, PROFITEERING & OTHER OBJECTIONABLE TRADE
PRACTICES & PRESSES FOR RIGHTS OF CONSUMER
125
RIGHT TO SAFETY 125
RIGHT TO BE INFORMED 125
RIGHT TO FREEDOM OF CHOICE 125
RIGHT TO BE HEARD 125
PROTECT CUSTOMER 125
IS IN DIRECT CONTACT WITH MANUFACTURER, SUPPLIER & DISTRIBUTOR 125
MONITOR LEGISLATION 125
CAMPAIGNS FOR AMENDMENT OF EXISTING LAW 125
ADVOCATES FOR NEW LEGISLATION (EXAMPLE: CONSUMER PROTECTION
ACT NO 68 OF 2008)125
SOCIAL RESPONSIBILITY MEANS
THAT BUSINESS ORGANISATIONS SHOULD NOT ONLY SEEK TO MAXIMISE
THE VALUE FOR THEIR SHAREHOLDERS, BUT ALSO CONSTANTLY CONSIDER
THE CONSEQUINCES OF THEIR DECISIONS & ACTIONS ON SOCIETY
125
MISLEADING ADVERTISING 126
DANGEROUS PRODUCTS 126
POLLUTION OF THE ENVIRONMENT 126
LAY-OFFS 126
INDUSTRIAL ACCIDENTS 126
EXPLOITATION OF THE CONSUMER 126
OTHER CONSEQUENSES 126
CORPORATE SOCIAL RESPONSIBILITY (CSR) DEFINITION
THE BROAD CONCEPT THAT BUSINESSES ARE MORE THAN JUST PROFIT-
SEEKING ENTITIES AND, THERE FORE, ALSO HAVE AN OBLIGATION TO
BENEFIT SOCIETY
126
DESIGNATED GROUPS (ECONOMICALLY & MANAGERIALLY) 126
HOUSING 126
RESPONSE TO ENVIRONMENTAL CONCERNS 126
PROVISION OF A RESPONSIBLE & SAFE WORKPLACE 126
CARE ABOUT HEALTH ISSUES 126
INVOLVEMENT WITH COMMUNITY ISSUES 126
PRODUCES PROFIT FOR OWNERS 126
MARKETS SAFE PRODUCTS 126
COMBATS POLLUTIONS 126
RESPECTS THE RIGHTS OF EMPLOYEES & CONSUMERS 126
ASSISTS THE DISADVANTAGED 126
CLOSELY RELATED TO SOCIAL RESPONSIBILITY 126
HAS TO DO SPECIFICALLY WITH ETHICS / ETHICAL BEHAVIOUR OF
MANAGERS & EXECUTIVES IN BUSINESS WORLD126
ETHICS DEFINITIONA GUIDE TO MORAL BEHAVIOUR BASED ON CULTURALLY EMBEDDED
DEFINITIONS OF RIGHT AND WRONG126
SOCIAL RESPONSIBILITY OF BUSINESS 127
CORPORATE GOVERNANCE WAS INSTITUTIONALISED BY THE PUBLICATION OF THE KING REPORT I ON CORPORATE GOVERNANCE 127
PURPOSE OF THE CODE OF CORPORATE PRACTICES &
CONDUCT CONTAINED IN KING REPORTS
IS TO PROMOTE THE HIGHEST STANDARDS OF CORPORATE GOVERNANCE &
THEREFORE BUSINESS ETHICS IN SA127
KING REPORT III THE KING REPORT ON CORPORATE GOVERNANCE 127
REGIONAL STATISTICS FOR HIV & AIDS 128
COSTS OF ABSENTEEISM 129
LOST PRODUCTIVITY 129
HEALTH-CARE EXPENDITURES 129
REPLACEMENT (RECRUITMENT & TRAINING) OF WORKERS 129
EXTENDED FAMILY LIVING UNDER 1 ROOF VIEWED WITH DISFAVOUR 129
WOMEN MORE INDEPENDENT WITH NEGATIVE ATTITUDES TOWARS
MARRIAGE & LARGE FAMILIES129
SHAE OF MARKET 129
CULTURE THAT CURRENTLY ENJOYES POLITICAL POWER 129
ATTITUDE OF WORKFORCE 129
PHYSICAL ENVIRONMENT REFERS TOPHYSICAL RESOURCES THAT PEOPLE & BUSINESSES NEED TO SUPPORT LIFE
& DEVELOPMENT129
PHYSICAL RESOURCES INCLUDE WATER, AIR, CLIMATE, THE OCEANS, RIVERS, FORESTS, ETC 129
POPULATION & HEALTH PATTERNS 129
FOOD 129
WATER 129
ENERGY & CLIMATE 130
BIODIVERSITY (EXTINCTION OF PLANTS & ANIMALS) 130
COST OF ENERGY 130
GROWING COST OF POLLUTION 130
ENVIRONMENTALISM 131
SCARCE RESOURCES 131
INSTITUTIONAL-GOVERNMENTAL ENVIRONMENT AFFECTS BUSINESS ENTERPRISES IN REGULATING CAPACITY 131
ISSUES OF MOST CONCERN REGARDING PHYSICAL
ENVIRONMENT
INTERFACES WITH PHYSICAL ENVIRONMENT THAT PRESENTS
OPPORTUNITIES & THREATS TO BUSINESS
FACTORS FOR ASSESSING THE PERFORMANCE OF A
BUSINESS
BUSINESS SHOULD BE A GOOD CORPORATE CITIZEN
(BUSINESSES SHOULD PROMOTE THE INTERESTS OF
SOCIETY)
BUSINESS ETHICS IS
COST OF HIV/AIDS TO INDIVIDUAL BUSINESSES
WAYS CULTURE INFLUENCES ORGANISATIONS
IN MARKET SYSTEM, RIGHTS OF CONSUMER IS RECOGNISED
AS
SOUTH AFRICAN CONSUMER UNION
MANAGEMENT IS MOSTLY CRITICISED FOR
BY MEANS OF LEGISLATION 131
ANNUAL BUDGET 131
TAXATION 131
IMPORT CONTROL / LACK OF IT 131
PROMOTION OF EXPORTS 131
IMPORT TARIFFS TO PROTECT CERTAIN INDUSTRIES AGAINST EXCESSIVE
FOREIGN COMPETITION131
PRICE CONTROLS FOR CERTAIN PRODUCTS & SERVICES 131
HEALTH REGULATIONS 131
INCENTIVES TO ENCOURAGE DEVELOPMENT IN A SPECIFIC DIRECTION 131
GOVERNMENT EXPENDITURE 131
REPLACES COMPANIES ACT 61 OF 1973 132
AMENDS CLOSE CORPORATIONS ACT 69 OF 1984 132
REPLACE OUTDATED LEGISLATION OF ORIGINAL ACTS 132
DEFINE RELATIONSHIP BETWEEN COMPANIES & THEIR RESPECTIVE
SHAREHOLDERS / MEMBERS & DIRECTORS132
RESPOND TO GLOBALISATION & THE ADVENT OF DEMOCRACY 132
SIMPLIFY COMPANY REGISTRATION & MAINTENANCE 132
OPPORTUNITIES & THREATS IN THE MARKET ENVIRONMENT
& THE MACRO-ENVIRONMENT133
CHANGES THAT OFFER AND OPPORTUNITY 133
CHANGES THAT POSE A THREAT 133
ENVIRONMENTAL OPPPORTUNITY DEFINITION
A FAVOURABLE CONDITION / TREND IN MARKET ENVIRONMENT THAT CAN
BE EXPLOITED TO THE BUSINESS'S ADVANGATE BY A DELIBERATE
MANAGEMENT EFFORT
133
SUCCESS OF BUSINESS MAKING GOOD USE OF
OPPORTUNITY DEPENDS ON
ABILITY TO SATISFY THE REQUIREMENTS FOR SUCCESS IN THAT PARTICULAR
MARKET133
ENVIRONMENTAL THREAT DEFINITION
AN UNFAVOURABLE CONDITION / TREND IN MARKET ENVIRONMENT THAT
CAN, IN ABSENCE OF DELIVERATE EFFORT BY MANAGEMENT LEAD TO
FAILURE OF BUSINESS, ITS PRODUCTS / SERVICES
133
ENVIRONMENTAL SCANNING ENABLES MANAGEMENT TO IDENTIFY THREATS & DEMANDS FROM THE
ENVIRONMENT & TO TURN THESE INTO OPPORTUNITIES133
DEGREE TO WHICH ENVIORNMENT INFLUENCES
MANAGEMENT DEPENDS ON TYPE OF BUSINESS & GOALS & OBJECTIVES 133
ENVIRONMENTAL SCANNING DEFINITIONPROCESS OF MEASUREMENT, PROJECTION & EVALUATION OF CHANG
REGARDING DIFFERENT ENVIRONMENTAL VARIABLES133
ENVIRONMENT IS CONTINUALLY CHANGING - PURPOSEFUL MONITORING 133
DETERMINE WHAT FACTORS & PATTERNS IN ENVIRONMENT POSE THREATS
TO STRATEGY133
DETERMINE WHAT FACTORS IN ENVIRONMENT PRESENT OPPORTUNITIES
FOR MORE EFFECTIVE ATTAINMENT OF GOALS & OBJECTIVES133
THOSE THAT SCAN ARE MORE SUCCESSFUL THAN THOSE THAT DO NOT 133
SCAN ENVIRONMENT ADEQUATELY & ADAPT ACCORDINGLY 133
BASIC RELATIONSHIP BETWEEN BUSINESS & ENVIRONMENT 133
NATURE OF ENVIRONMENT WITHIN WHICH BUSINESS OPERATES &
DEMANDS MADE BY ENVIRONMENT ON BUSINESS134
SOURCE & EXTEND OF CHANGE 134
UPDATE RELEVANT SECONDARY / PUBLISHED INFORMATION OBTAINABLE
FROM MEDIA, ORGANISATION'S OWN DATA, PROFESSIONAL PUBLICATIONS,
FINANCIAL JOURNALS, STATISTICS, ASSOCIATES IN OTHER ORGANISATIONS,
BANKS, RESEARCH INSTITUTIONS, RECORDS IN FILING SYSTEM, EMPLOYEES
134
ADDITION OF PRIMARY INFORMATION / SPECIAL INVESTIGATIONS ON
PARTICULAR ASPECTS OF ENVIRONMENT134
ESTABLISHMENT OF A SCANNING UNIT WITHIN THE BUSINESS 134
COMPANIES HAVE RESPONSIBILITY FOR THEIR IMPACT ON SOCIETY &
NATURAL ENVIRONMENT144
COMPANIES HAVE RESPONSIBILITY FOR BEHAVIOUR OF OTHERS WITH
WHOM THEY DO BUSINESS144
BUSINESSES NEED TO MANAGE IS RELATIONSHIPS WITH WIDER SOCIETY 144
CSR FOCUSES ON RESPONSIBILITY OF BUSINESS 145
CORPORATE CITIZENSHIP FOCUSESBUSINESS BEING A SOCIAL PLAYER BY VIRTUE FO BOTH ITS RIGHTS &
RESPONSIBILITIES AS A CITIZEN145
CORPORATE CITIZENSHIP RECOGNISESCORPORATIONS AS LEGAL PERSONS WITH CERTAIN RIGHTS &
RESPONSIBILITIES IN THE SAME WAY AS INDIVIDUAL CITIZENS 145
RIGHT TO GOVERN INTERNAL AFFAIRS 145
RIGHT TO ENTER INTO CONTRACTS 145
RIGHT TO HOLD ASSETS 145
RIGHT TO HIRE 145
RIGHT TO SUE & BE SUED 145
CORPORATE SOCIAL INVESTMENT (CSI) ALSO CALLED CORPORATE PHILANTHROPY 145
CSR RECOGNISES FOLLOWING POINTS
RIGHTS OF CORPORATIONS
REASONS FOR IMPLEMENTING COMPANIES ACT 71 OF 2008
TWO GROUPS TO CLASSIFY CHANGES
IMPORTANCE OF ENVIRONMENTAL SCANNING
FACTORS DETERMINING EXTEND OF ENVIRONMENTAL
SCANNING
GUIDELINES FOR ENVIRONMENTAL SCANNING
GOVERNMENT INTERVENES IN MACRO-ENVIRONMENT ON
LARGE SCALE & INFLUENCES
COMPANIES ACT 71 OF 2008
CSI DOES NOT REFER TO
COMPANY'S CONTRIBUTION TO SOCIETY THROUGH ITS CORE BUSINESS
ACTIVITIES / LOCAL BUSINESS DEVELOPMENT / CONTRIBUTION THROUGH
ENGAGEMENT IN PUBLIC POLICY
145
SOCIAL DRIVERS 152
GOVERNMENTAL DRIVERS 153
MARKET DRIVERS 153
ETHICAL DRIVERS 154
SOCIAL DRIVERSMANY COMPANIES ENGAGE IN CSR BECAUSE SOCIETY EXPECT IT FROM
THEM - TO PROTECT REPUTATION153
LEGISLATION ABOUT COMPANIES 153
LABOUR RELATIONS 153
ENVIRONMENTAL MANAGEMENT 153
AVOIDING FINES 153
AVOIDING LEGAL COSTS 153
USING RESOURCES EFFICIENTLY 153
USING ALTERNATIVE RAW MATERIAL SOURCES (RECYCLABLES) 153
REDUCING RECRUITING COSTS 153
INCREASING STAFF RETENTION 153
REDUCING COST OF CAPITAL 153
DEVELOPING NEW PRODUCTS / SERVICES 153
GROWING MARKETS FOR SERVICES 153
IMPROVING ACCESS TO MARKETS 153
AVOIDING BOYCOTTS 153
EXPLOITING CSR PREMIUM (CONSUMER PREFERENCE) 153
ETHICAL DRIVERS DECIDING BETWEEN RIGHT & WRONG AT WORKPLACE & IN BUSINESS
GENERALLY154
BUSINESS ETHICS IS MORE A MATTER OF RELIGION THAN MANAGEMENT 154
OUR EMPLOYEES ARE ETHICAL SO WE DON'T NEED TO PAY ATTENTION TO
BUSINESS ETHICS154
BUSINESS ETHICS IS A DISCIPLINE BEST LED BY PHILOSOPHERS, ACADEMICS
& THEOLOGIANS154
BUSINESS ETHICS IS SUPERFLUOUS 155
BUSINESS ETHICS IS A MATTER OF THE GOOD GUYS PREACHING TO THE BAD
GUYS155
BUSINESS ETHICS IS THE NEW POLICEPERSON ON THE BLOCK 155
ETHICS CAN'T BE MANAGED 155
BUSINESS ETHICS & SOCIAL RESPONSIBILITY IS THE SAME THING 155
OUR ORGANISATION IS NOT IN TROUBLE WITH THE LAW, SO WE'RE ETHICAL 155
MANAGING ETHICS IN THE WORKPLACE HAS LITTLE PRACTICAL RELEVANCE 156
CORPORATE GOVERNANCE DEFINED 156
HOW DOES GORPORATE GOVERNANCE RELATE TO CSR 157
GORVERNANCE REFERS TOTHE WAY IN WHICH AN ORGANISATION / GROUP MAKES DECISIONS ABOUT
HOW TO MANAGE ITS AFFAIRS156
CORPORATE GOVERNANCE IS THE SYSTEM BY WHICH COMPANIES ARE MANAGED & CONTROLLED 156
OECD PRINCIPLES & KING REPORTS CORPORATE GOVERNANCE 156
APPOINTED BY BOARD 157
FULL-TIME EMPLOYEES 157
FIDUCIARY ROLE 157
SENIOR MANAGEMENT 157
NOT INVOLVED IN DAY-TO-DAY OPERATION OF BUSINESS 157
ONLY RECEIVED DIRECTOR FEES 157
INDEPENDENT OF MANAGEMENT 157
FREE FROM SIGNIFICANT BUSINESS / OTHER RELATIONSHIP WITH COMPANY 157
PROVIDE INDEPENDENT JUDGEMENT 157
ASSIST IN OBJECTIVELY MONITORING & REVIEWING MANAGEMENT'S
PERFORMANCE AGAINST BUDGET & COMPANY STRATEGY157
ENSURE ADEQUATE PROTECTION OF INTERESTS OF COMPANY 157
INDEPENDENT DIRECTOR IS NON-EXECUTIVE DIRECTOR
WHO
HAS NO EXISTING / PRIOR BUSINESS, EMPLOYMENT, CONSULTANCY /
OTHER RELATIONSHIPS WITH THE COMPANY157
CHAIRMAN IS RESPONSIBLE RUNNING THE BOARD 157
CEO IS RESPONSIBLE RUNNING THE COMPANY'S BUSINESS 157
GOOD CORPORATE GOVERNANCE IS AN IMPORTANT ASPECT OF CSR 157
CSR HAS EVOLVED AS AN APECT OF GOOD CORPORATE GOVERNANCE 157
CSR FINDS EXPRESSION IN CORPORATE GOVERNANCE 158
CSR RECOGNISES THE RESPONSIBILITY OF CORPORATIONS FOR THEIR IMPACT ON SOCIETY 157
WHAT IS BUSINESS FOR? 157
WHAT ARE OUR CORE VALUES? 157
WHO SOULD HAVE A SAY IN HOW COMPANIES ARE RUN? 157
WHAT IS THE APPROPRIATE BALANCE BETWEEN SHAREHOLDERS &
STAKEHOLDERS?157
HOW DOES CORPORATE GOVERNANCE RELATE TO CSR?
QUESTIONS BOARD SHOULD ASK
MARKET DRIVERS - COMPANIES CAN INCREASE REVENUE
TROUGH CSR BY
10 MYTHS ABOUT ETHICS
CORPORATE GOVERNANCE
EXECUTIVE DIRECTORS
NON-EXECUTIVE DIRECTORS
WHY WOULD A COMPANY IMPLEMENT CSR PROGRAMS?
GOVERNMENTAL DRIVERS - LOCAL & NATIONAL LEGAL
SYSTEMS
MARKET DRIVERS - COMPANIES CAN REDUCE COST
THROUGH CSR BY
WHAT BALANCE SHOULD BE STRUCT AT THE LEVEL OF THE TRIPPLE BOTTOM
LINE?157
VALUES-BASED SYSTEM 158
STAKEHOLDER-ENGAGEMENT PROCESS 158
COMBINATION OF THE VALUES-BASED & STAKEHOLDER-ENGAGEMENT 158
VALUES-BASED SYSTEMCSR POLICY IS ALIGNED TO COMPANY'S OWN VISION, MISSION, VALUES &
GUIDING PRINCIPLES (PROACTIVE)158
STAKEHOLDER-ENGANGEMENT PROCESS
ALLOWS STAKEHOLDERS TO DETERMINE WHAT THEY WANT FROM THE
COMPANY AND WHAT THEY CONSIDER TO BE THE ISSUES & CULTURE OF
THE COMPANY (REACTIVE)
158
IDENTIFYING APPROPRIATE KEY PERFORMANCE INDICATORS (KPIs) FOR
IMPLEMENTING CSR POLICY & MEASURING COMPANY PERFORMANCE WITH
RESPECT TO THESE INDICATORS
159
ENSURE THAT VARIOUS BUSINESS UNITS & LINE DEPARTMENTS KNOW
ABOUT THE CSR POLICY159
STAKEHOLDER-ENGAGEMENT 159
DEFINING ENGAGEMENT 159
DEFINING STAKEHOLDERS 159
PRINCIPLES FOR STAKEHOLDER-ENGAGEMENT 162
STAKEHOLDER-ENGAGEMENT PROCESS 163RESPONSIBLE COMPANIES WANT TO UNDERSTAND & RESPOND TO
SOCIETY'S EXPECTATIONS OF WHAT IT MEANS TO BE A RESPONSIBLE
MANFACTURERE, MARKETER & EMPLOYER
159
ENGAGEMENT IS A MEANS TO HELP BUILD BETTER RELATIONSHIPS WITH
ALL PARTIES, RESULTING IN IMPROVED BUSINESS-PLANNING AND
PERFORMANCE
159
ENGANGEMENT HELPS PROVIDE OPPORTUNITIES TO ALIGN BUSINESS
PRACTICES WITH SOCIETAL NEEDS AND EXPECTATIONS, HELPING DIRVE
LONG-TERM SUSTAINABILITY AND SHAREHOLDER VALUE
159
ENGAGEMENT DEFINITION
LEVEL OF ENGAGEMENT IS DETERMINED BY GOALS ASPIRED TO THROUGH
THE INTERACTION WITH STAKE-HOLDERS, THE MODE OF COMMUNICATION
WITH STAKEHOLDERS, THE NATURE OF THE RELATIONSHIP BETWEEN THE
COMPANY AND ITS STAKEHOLDERS, AND THE ENGAGEMENT APPROACH
USED WITH THE STAKEHOLDERS
159
STAKEHOLDERS DEFINITIONSTAKEHOLDERS ARE PERSONS OR GROUPS THAT ARE POTENTIALLY
AFFECTED OR AFFECT THE BUSINESS ACTIVITY OF A COMPANY159
EXTERNAL STAKEHOLDERSCUSTOMERS, EMPLOYEES, THE COMMUNITY, THE ENVIRONMENT,
SUPPLIERS, REGULATORS, NON-GOVERNMENTAL ORGANISATIONS159
NB LEVELS OF ENGAGEMENT (TABLE) 160
STAKEHOLDERS WHOSE ONGOING SUPPORT FOR THE COMPANY IS VITAL
FOR ITS SURVIVAL162
CONRACTUAL / FINANCIAL RELATIONSHIP WITH COMPANY 162
SHARHOLDERS & EMPLOYEES 162
GOVERNMENT (MINING COMPANY) 162
LOCAL COMMUNITY (MINING COMPANY) 162
LESS DIRECT IMPACT ON COMPANY 162
ENVIRONMENTAL NGOs 162
MEDIA 162
INVOLVEMENT 163
CANDOUR (CONSIDER EVERY ISSUE) 163
RELEVANCE 163
LEARNING 163
ACTION 163
PREPARE 163
PLAN 163
DESIGN 164
ENGAGE 164
EVALUATE 164
APPLY 164
DEFINING SUSTAINABLE DEVELOPMENT 164
HISTORY OF SUSTAINABLE DEVELOPMENT 165
INTERNATIONAL CONFERENCES & AGREEMENTS ON SUSTAINABLE
DEVELOPMENT165
CONTRIBUTION OF CSR TO SUSTAINABLE DEVELOPMENT 167
DEFINING SUSTAINABLE DEVELOPMENT
SUSTAINABLE DEVELOPMENT IS DEVELOPMENT THAT MEETS THE NEEDS OF
THE PRESENT WITHOUT COMPROMISING THE ABILITY OF FUTURE
GENERATIONS TO MEET THEIR OWN NEEDS
164
CONCEPT OF NEEDS, IN PARTICULAR THE ESSENTIAL NEEDS OF THE
WORLD'S PORR TO WHICH OVER-RIDING PRIORITY SHOULD BE GIVE164
IDEA OF LIMITATIONS IMPOSED BY THE STATE OF TECHNOLOGY AND SOCIAL
ORGANISATION OF THE ENVIRONMENT'S ABILITY TO MEET PRESENT AND
FUTURE NEEDS
164
SUSTAINABLE DEVELOPMENT ENCOMPASSES
A NUMBER OF AREAS AND HIGHLIGHTS SUSTAINABILITY AS THE IDEA OF
ENVIRONMENTAL, ECONOMIC & SOCIAL PROGRESS AND EQUITY, ALL
WIHTIN THE LIMITS OF THE WORLD'S NATURAL RESOURCES
164
STEPS IN THE PROCESS
SUSTAINABLE DEVELOPMENT
TWO KEY CONCEPTS FROM DEFINITION
STAKEHOLDER-ENGAGEMENT
REASONS WHY COMPANIES ENGAGE WITH STAKEHOLDERS
PRIMARY STAKEHOLDERS
SECONDARY STAKEHOLDERS
KEY APPROACHES OF THE STAKEHOLDER-ENGAGEMENT
PROCESS
3 WAYS IN WHICH BOARD & CSR COMMITTEE CAN
DETERMINE HOW TO ESTABLISH CORPORATE POLICY FOR
CSR
CSR DEPARTMENT IS RESPONSIBLE FOR
INTERNATIONAL INSTITUTE FOR SUSTAINABLE
DEVELOPMENT (IISD)EXPAINS SUSTAINABLE DEVELOPMENT IN TERMS OF SYSTEMS THINKING 164
RIO EARTH SUMMIT 1992 166
UNITED NATIONS GLOBAL COMPACT 1999 166
MILLENNIUM DEVELOPMENT GOALS 2000 166
WORLD SUMMIT ON SUSTAINABLE DEVELOPMENT 2002 167
RIO EARTH SUMMIT 1992AGENDA 21: PLAN OF ACTION & RECOMMENDATION THAT ALL COUTRIES
SHOULD PRODUCE NATIONAL SUSTAINABLE DEVELOPMENT STRATEGIES166
UNITED NATIONS GLOBAL COMPACT 1999 PROPOSED DUE TO CORPORATIONS LIMITED CONTRIBUTION TO AGENDA 21 166
ERADICATE EXTREME HUNGER & PROVERTY 166
ACHIEVE UNIVERSAL PRIMARY EDUCATION 166
PROMOTE GENDER EQUALITY & EMPOWER WOMEN 166
REDUCE CHILD MORTALITY 166
IMPROVE MATERNAL HEALT 166
COMBAT HIV/AIDS, MALARIA & OTHER DISEASES 166
ENSURE ENVIRONMENTAL SUSTAINABILITY 166
DEVELOP A GLOBAL PARTNERSHIP FOR DEVELOPMENT 166
RAISING AWARENESS OF NEED FOR BUSINESS TO CONTRIBUTE TO
SUSTAINABLE DEVELOPMENT167
CSR & CORPORATE ACCOUNTABILITY ON INTERNATIONAL AGENDA 167
DECLARATION ON SUSTAINABLE DEVELOPMENT 167
WSSD: DECLARATIONS ON SUSTAINABLE DEVELOPMENT
IS NOT JUST THE MULTI-NATIONAL CORPORATIONS THAT NEED TO
RESPOND TO THIS CALL. ALL BUSINESS WILL HAVE TO BE A PART OF THE
BROAD SHIFT TOWARDS SUSTAINABLE DEVELOPMENT AT LOCAL AND
GLOBAL LEVERLS
167
INTEGRATED DEVELOPMENT PLANS (IDPs) 168
BENEFITS OF PLANNING 176
COSTS OF PLANNING 177
PLANNING PROVIDES DIRECTION 177
PLANNING REDUCES THE IMPACT OF CHANGE 177
PLANNING PROMOTES CO-ORDINATION 177
PLANNING ENSURES COHESION 177
PLANNING FACILITATES CONTROL 177
PLANNING PROVIDES DIRECTIONGIVES DIRECTION TO THE ORGANISATION IN THE FORM OF GOALS & PLANS
(CREATE A BLUEPRINT)177
PLANNING REDUCES THE IMPACT OF CHANGE SCAN ENVIRONMENT TO ANTICIPATE CHANGE 177
PLANNING PROMOTES CO-ORDINATIONFOCUSES ACTIVITIES IN 1 DIRECTION: TO ATTAIN THE ORGANISATION'S
GOALS EFFECTIVELY & EFFICIENTLY177
PLANNING ENSURES COHESIONINCREASING COMPLEXITY & INTERDEPENDENCE EMPHASISE NECESSITY OF
PLANNING TO ENSURE COHESION177
PLANNING FACILITATES CONTROL
CONTROL IS PROCESS BY WHICH MANAGEMENT ENSURES THA THE ACTUAL
ORGANISATIONAL ACTIVITIES ARE COMPATIBLE WITH THE PRE-DETERMINED
GOALS & PLANNED ACTIVITIES
177
CREATING A BALANCED & ATTRACTIVE GLOBAL SPREAD OF BUSINESS 177
DEVELOPING STRONG, RELEVANT BRAND PORTFOLIOS IN LOCAL MARKET 177
CONSTANTLY RAISING PERFOMANCE OF LOCAL BUSINESS 177
LEVERAGING GLOBAL SCALE 177
MAY CREATE RIGIDITY 178
CONSUMES MANAGEMENT TIME 178
MAY REPLACE INTUITION & CREATIVITY 178
CAUSE DELAYS IN DECISION-MAKING 178
NATURE OF GOALS 178
IMPORTANCE OF GOALS 179
CRITERIA FOR EFFECTIVE GOALS 179
A GOAL-SETTING TECHNIQUE: MANAGEMENT BY OBJECTIVES 180
NATURE OF PLANS 180
WHERE DO WE WANT THIS ORGANISATION TO BE AT A SPECIFIC FUTURE
DATE? - SETTING GOALS178
HOW WILL THE ORGANISATION ACHIEVE ITS GOALS - FORMULATING PLANS 178
ORGANISATIONAL GOAL (OBJECTIVE) DEFINITIONA DESIRABLE STATE OF AFFAIRS THAN AN ORGANISATION AIMS TO ACHIEVE
AT SOME POINT IN THE FUTURE178
ORGANISATIONAL PLAN DEFINITION THE MEANS BY WHICH THE GOAL IS TO BE REALISED 178
ORGANISATIONAL GOALS ARE STARTING POINT IN PLANNING PROCESS 178
GOALS FLOW FROM MISSION STATEMENT 178
TYPE OF GOAL INFLUENCED BY LEVEL AT WHICH IT IS SET 178
STRATEGIC GOALS - TOP LEVEL MANAGERS 178
OPERATIONAL GOALS - LOWER LEVEL MANAGERS 178
STRATEGIC GOALS = HOLISTIC - APPLY TO WHOLE ORGANISATION 178
TIME PERIOD = SHORT TERM, INTERMEDIATE / LONG TERM 178
GOALS MAY BE PUBLICLY STATED / NOT 178
OFFICAL GOALS - FORMALLY & PUBLICLY DECLARED 178
OPERATIVE GOALS - PRIVATE GOALS OF ORGANISATION 179
MANAGERIAL GOALS & PLANS
PLANNING COMPRISES OF 2 COMPONENTS
NATURE OF GOALS
WORLD SUMMIT ON SUSTAINABLE DEVELOPMENT 2002
BENEFITS & COSTS OF PLANNING
BENEFITS OF PLANNING
KEY PERFORMANE INDICATORS TO MONITOR PROGRESS
REGARDING STRATEGIC PRIORITIES (SAB)
COSTS OF PLANNING
INTERNATIONAL CONFERENCES & AGREEMENTS ON
SUSTAINABLE DEVELOPMENT
MILLENNIUM DEVELOPMENT GOALS 2000
PROVIDE GUIDANCE & AGREEMENT ON DIRECTION OF ORGANISATION 179
FACILITAT EFFECTIVE PLANNING IN TERMS OF RESOURCE DEPLOYMENT 179
CAN INSPIRE & MOTIVATE EMPLOYEES 179
EVALUATION OF EMPLOYEE & ORGANISATIONAL PERFORMANCE &
CONTROL OF ORGANISATIONAL RESOURCES179
PLAYS IMPORTANT PART IN SUCCESS OR ORGANISATIONS 179
SPECIFIC 179
MEASURABLE 179
ATTAINABLE 179
RELEVANT 179
TIME BOUND 180
MANAGEMENT BY OBJECTIVES (MBO)TECHNIQUE DESIGNED TO ACHIEVE THE INTEGRATION OF INDIVIDUAL &
ORGANISATIONAL GOALS IN ORGANISATIONS180
MBO IS
SYSTEM WHEREBY MANAGERS & EMPLOYEES DEFINE GOALS FOR EVERY
DEPARTMENT, PROJECT & PERSON & USE THEM TO MONITOR SUBSEQUENT
PERFORMANCE
180
WITH MBO ALL EMPLOYEESMUST HAVE A CLEAR UNDERSTANDING OF THE ORGANISATION'S PURPOSE,
MISSION, LONG-TERM GOALS AND STRATEGY180
MANAGER & EMPLOYEES HAVE DISCUSSION THAT RESULTS IN
FORMULATION OF JOB DESCRIPTION & KEY PERFORMANCE AREAS FOR
EMPLOYEE
180
EMPLOYEE ESTABLISHES POTENTIAL KEY PERFORMANCE TARGETS.
EMPLOYEE & MANAGER MEET TO DEVELOP GOALS FOR EMPLOYEE180
EMPLOYEE & MANAGER ESTABLISH CHECKPOINTS TO MEASURE
PERFORMANCE180
EVALUATION OF DEGREE OF GOAL ATTAINMENT TAKES PLACE AT END OF
PRE-DETERMINED PERIOD180
EFFORTS OF MANAGERS & EMPLOYEES FOCUS ON ATTAINING
ORGANISATIONAL GOALS180
ORGANISATION'S PERFORMANCE CAN IMPROVE 180
EMPLOYEES ARE MOTIVATED 180
INDIVIDUAL GOALS ALIGN WITH ORGANISATIONAL GOALS 180
ENVIRONMENTAL CHANGES CAN CAUSE CHANGE IN ORGANISATIONAL
GOALS, DISRUPTS MBO180
POOR RELATIONS BETWEEN MANAGERS & EMPLOYEES REDUCE
EFFECTIVENESS180
OPERATIONAL GOALS MAY DISPLACE STRATEGIC GOALS 180
ORGANISATIONAL CULTURE MAY DISCOURAGE EFFECTIVE USE 180
CAN RESULT IN TOO MUCH PAPERWORK 180
PLAN IN BLUEPRINT FOR GOAL ACHIEVEMENT 181
INDICATES HOW GOALS ARE GOING TO BE REACHED 181
MANAGERS CONSIDER SEVERAL ALTERNATIVE PLANS OF ACTION 181VARIOUS FACTORS INFLUENCE MANAGERS WHEN THEY DEVELOP
ALTERNATIVE PLANS: EXTERNAL FACTORS (MARKET FACTORS, LEGISLATION
/ ECONOMIC TRENDS); ORGANISATION'S STRENGHTS & WEAKNESSES
(STRENGHTS: SKILLS, PATENTS, CAPITAL, IMAGE, RAW-MATERIAL,
MARKETING CHANNEL); COSTS ASSOCIATED WITH PLANS
181
PLANNING CONTEXT 181
STEPS IN PLANNING PROCESS 182
STRATEGIC COALS & PLANS 184
TACTICAL GOALS & PLANS 187
OPERATIONAL GOALS & PLANS 187
PLANNING CONTEXT
SEVERAL FACTORS DETERMINE CONTEXT IN WHICH PLANNING TAKES PLACE -
THESE VARIABLES SET THE PARAMETERS WITHIN WHICH MANAGERS
FORMULATE REALISTIC ORGANISATIONAL GOALS & PLANS
181
PURPOSE OF THE ORGANISATION 181
ORGANISATION'S MISSION STATEMENT 181
ORGANISATION'S ENVIRONMENT 181
MANAGERS' VALUES 181
MANAGERS' EXPERIENCE 181
PURPOSE OF THE ORGANISATION INCLUDES OBLIGATION TO SOCIETY 181
ORGANISATION'S MISSION STATEMENTSETS OUT UNIQUE PURPOSE THAT DISTINGUISHES THE ORGANISATION
FROM OTHERS182
ORGANISATION'S ENVIRONMENT CRUCIAL VARIABLE THAT INFLUENCES PLANNING 182
MANAGERS' VALUESINFLUENCE & CEMENT THE ORGANISATION'S CULTURE, STRATEGY &
STRUCTURE182
MANAGERS' EXPERIENCE INFLUENCES THE PLANNING PERFORMANCE OF MANAGERS 182
ESTABLISH GOALS 183
DEVELOP ALTERNATIVE PLANS 183
EVALUATE ALTERNATIVE PLANS 183
SELECT A PLAN 183
IMPLEMENT THE PLAN 183
DO REACTIVE PLANNING 183
PLANNING PROCESS (FIGURE) 183
TOP-LEVEL 183
MIDDLE-LEVEL 183
5 VARIABLES THAT SET THE PARAMETERS FOR
ORGANISATIONAL PLANNING
STEPS IN PLANNING PROCESS
LEVELS OF ORGANISATION
PROCESS FOR MBO
ADVANTAGES OF MBO
DISADVANTAGES OF MBO
NATURE OF PLANS
PLANNING PROCESS
IMPORTANCE OF GOALS
CRITERIA FOR EFFECTIVE GOALS (SMART)
LOWER-LEVEL 183
TOP-LEVEL LONG-TERM STRATEGIC GOALS & STRATEGY PLANS - ENTIRE ORGANISATION 183
MIDDLE-LEVELUSE STRATEGIC GOALS: MEDIUM-TERM TACTICAL GOALS & PLANS FOR
FUNCTIONAL DEPARTMENTS183
LOWER-LEVELUSE TACTICAL GOALS: SHORT-TERM OPERATIONAL GOALS & PLANS FOR
SECTIONS183
LEVELS OF GOALS & PLANS WITH TIME FRAMES (FIGURE) 184
STRATEGIC GOALS 184
STRATEGIC PLANS 185
VISION 184
MISSION STATEMENT 185
LONG-TERM STRATEGIC GOALS 185
IMPLIES THAT MANAGERS NEED TO THINK ABOUT NEW POSSIBLITIES THAT
WILL CARRY THEIR ORGANISATION INTO THE FUTURE184
PROMOTES CHANGE & PROVIDES FOUNDATION FOR STRATEGIC PLAN 184
PICTURE OF THE FUTURE THE ORGANISATION SEEKS TO CREATE 184
INDIVIDUALS ARE MOTIVATED BECAUSE THEY CAN SEE HOW THEIR EFFORTS
CONTRIBUTE TO SUCCESS185
SPELLS OUT MISSION / OVER-ARCHING GOAL OF ORGANISATION 185
SETS ORGANISATION APART FROM OTHERS 185
WHAT IS OUR BUSINES? (PRODUCTS & SERVICES) 185
WHO ARE OUR CUSTOMERS? (MARKET) 185
HOW DO WE PROVIDE OUR PRODUCTS OR SERVICES? (TECHNOLOGY) 185
MAY MAKE STATEMENT OF CULTURE, PUBLIC IMAGE, SELF-CONCEPT,
SOCIAL RESPONSIBILITY & QUALITY OF PRODUCTS185
SETS STAGE FOR STRATEGIC, TACTICAL & OPERATIONAL PLANNING 185
DERIVE FROM MISSION STATEMENT 185
COMPLEX & DEAL WITH ORGANISATION AS A WHOLE 185
TOP MANAGERS USUALLY INCLUDE GOALS: PROFITABILITY, PRODUCTIVITY,
COMPETITIVE POSITION, HUMAN RESOURCES DEVELOPMENT, HUMAN
REALTIONS, TECHNOLOGICAL LEADERSHIP & SOCIAL RESPONSIBILITY
185
SHOULD BE CLEAR 185
CORPORATE STRATEGIES 186
BUSINESS STRATEGIES 186
MARKET-DEVELOPMENT 186
PRODUCT-DEVELOPMENT 186
CONENTRATION-GROWTH STRATEGY 186
INNOVATION 186
HORIZONTAL-INTEGRATION 186
VERTICAL-INTEGRATION 186
JOINT-VENTURE 186
DIVERSIFICATION 187
TURNAROUND 187
DIVESTITURE 187
LIQUIDATION 187
MARKET-DEVELOPMENT DEVELOP EXISTING / NEW MARKET FOR PRESENT PRODUCTS 186
PRODUCT-DEVELOPMENT NEW / MODIFY PRODUCTS FOR EXISTING MARKETS 186
CONENTRATION-GROWTH STRATEGYDIRECTING ALL RESOURCES & SKILLS TO SINGLE PRODUCT IN SINGLE
MARKET186
INNOVATION CONSTANTLY IMPROVING PRODUCTS 186
HORIZONTAL-INTEGRATION TAKING OVER SIMILAR ORGANISATIONS 186
VERTICAL-INTEGRATION TAKING OVER OTHER BUSINESSES (RAW MATERIALS / ACTING AS OUTLETS) 186
JOINT-VENTURE 2 / MORE FIRMS EMBARK ON 1 PROJECT 186
DIVERSIFICATIONTAKE OVER OTHER FIRMS ENTER INTO NEW ACTIVITIES / SETS UP A
COMPLETELY NEW ENTITY187
TURNAROUND FOLLOW DURING DIFFICULT TIMES & COMPELLED TO CUT COSTS 187
DIVESTITURE SELLING OF A BUSINESS / PARTS OF BUSINESS IN LINE WITH MISSION 187
LIQUIDATIONADMIT TO FAILURE & WANTS TO KEEP SHAREHOLDERS' LOSSES @ A
MINIMUM187
BUSINESS STRATEGIES DETERMINE HOW BEST TO COMPETE IN A PARTICULAR INDUSTRY / MARKET 187
TACTICAL GOALS 187
TACTICAL PLANS 187
TACTICAL GOALS MEDIUM OR SHORT-TERM GOALS DERIVED FROM LONG-TERM GOALS 187
HAVE A MORE SPECIFIC FOCUS WHEN COMPARED TO STRATEGIC PLANS
BECAUSE THEY DEAL WITH PEOPLE & ACTIONS187
DEPARTMENTAL HEADS FORMULATE PLANS 187
TAKE INTO CONSIDERATION: STRATEGIC GOALS & PLANS; TACTICAL GOALS;
RESOURCE ALLOCATION; TIME ISSUES; HUMAN RESOURCE COMMITMENTS187
OPERATIONAL GOAS 187
OPERATIONAL PLANS 187
PERIOD OF NO LONGER THAN 1 YEAR 187
DEALS WITH DAY-TO-DAY ACTIVITIES 187
TACTICAL GOALS AND PLANS
TACTICAL PLANS
OPERATIONAL GOALS & PLANS
OPERATIONAL GOALS
VISION
MISSION STATEMENT
LONG-TERM STRATEGIC GOALS
TWO LEVELS OF STRATEGIC PLANS
CORPORATE STRATEGIES
STRATEGIC GOALS & PLANS
STRATEGIC GOALS
ALLOCATION OF RESOURCES 187
TAKE FORMM OF UNIT GOALS & OPERATIONAL STANDARDS 187
EXECUTED BY 1ST LINE MANAGERS 187
PERIOD OF NO LONGER THAN 1 YEAR 188
PURPOSE IS TO ACHIEVE OPERATIONAL GOALS 188
TWO BASIC FORMS: SINGLE-USE PLANS; STANDING PLANS 188
PROGRAM 188
PROJECT 188
BUDGET 188
PROGRAM SET OF PLANS FOR ATTAINING ONE-TIME ORGANISATIONAL GOAL
(BUILDING OF NEW MALL)188
PROJECTSET OF PLANS FOR ATTAINING ONE-TIME ORGANISATIONAL GOAL -
SMALLER IN SCOPE & COMPLEXITY (INSTALLATION OF AIR CONDITIONING)188
BUDGETNUMERICAL PLAN FOR ALLOCATING OF FINANCIAL, HUMAN, PHYSICAL &
INFORMATIONAL RESOURCES TO SPECIFIC ACTIVITIES188
POLICIES 188
RULE 188
STANDARD PROCEDURE 188
BROAD IN SCOPE 188
DERIVED FROM OVERALL GOALS 188
DEFINE BOUNDARIES FOR DECISION-MAKING 188
ENSURE THAT DECISIONS ARE CONSISTENT WITH GOALS 188
GUIDELINES ON MANAGERIAL ACTIONS 188
1ST LINE RARELY MAKE POLICIES 188
RULE PRESCRIBES TO EMPLOYEES WHAT THEY MAY / MAY NOT DO 188
STANDARD PROCEDURE DEFINE PRECISE SERIES OF STEPS TO ATTAIN CERTAIN GOALS 188
MARKETING 188
FINANCE 188
PRODUCTION & OPERATIONS 188
HUMAN RESOURCES 188
PURCHASING 188
MARKETINGPRODUCT LINE, MARKET POSITION, DISTRIBUTION CHANNELS, MARKET
COMMUNICATION, PRICES188
FINANCEPOLICY ON DEBTORS, DEVIDENDS, ASSET MANAGEMENT, CAPITAL
STRUCTURE188
PRODUCTION & OPERATIONS IMPROVEMENT OF PRODUCTIVITY, LOCAITON PROBLEMS, LEGISLATION 188
HUMAN RESOURCESLABOUR RELATIONS, LABOUR TURNOVER, TRAINING OF HUMAN
RESOURCES, EQUITY CONSIDERATIONS188
PURCHASING SUPPLIERS, POLICY ON CRETIORS, SOURCES OF RAW MATERIALS 188
IMPLEMENTING OF THE CHOSEN PLAN INVOLVES
DEVELOPING A FRAMEWORK FOR ITS EXECUTION, LEADERSHIP TO SET THE
PLAN IN MOTION ANT HE EXERCISE OF CONTROL TO DETERMINE WHETHER
THE PERFORMANCE OF THE ACTIVITIES IS GOING ACCORDING TO PLAN
188
IF THERE IS A DEVIATION FORM THE PLAN CONTROL WILL REVEAL THIS AND REACTIVE PLANNIN GWILL BE NECESSARY 189
ORGANISING MEANSTHAT MANAGEMENT HAS TO DEVELOP MECHANISMS IN ORDER TO
IMPLEMENT THE STRATEGY / PLAN192
THE ORGANISING PROCESS'S POINT OF DEPARTURE IS THE VISION, MISSION, GOALS & STRATEGIES OF THE ORGANISATION 192
ARRANGEMENTS HAVE TO BE MADE TO DETERMINE
WHAT ACTIVITIES WILL BE CARRIED OUT, WHAT RESOURCES WILL BE
EMPLOYED, WHO WILL PERFORM THE VARIOUS ACTIVITIES IN ORDER TO
ACHIEVE THE VISION, MISSION & GOALS
192
DISTRIBUTION OF TASKS AMOUNGST EMPLOYEES 192
ALLOCATION OF RESOURCES TO PERSONS & DEPARTMENTS 192
GIVING NECESSARY AUTHORITY TO ENSURE TASKS ARE CARRIED OUT 192
MUST BE COMMUNICATION, CO-OPERATION & CO-ORDINATION 192
SET OF FORMAL TASKS ASSIGNED TO INDIVIDUALS & DEPARTMENTS 192
FORMAL REPORTING RELATIONSHIPS (AUTHORITY, RESPONSIBILITY,
NUMBER OF HIERARCHICAL LEVELS, SPAN OF MANAGEMENT)192
DESIGN OF SYSTEMS TO ENSURE EFFECTIFE CO-ORDINATION 192
ENTAILS A DETAILED ANALYSIS OF WORK TO BE DONE & RESOURCES TO BE
USED TO ACCOMPLISH THE AIMS OF THE BUSINESS193
DIVIDES THE TOTAL WORKLOAD INOT ACTIVITIES THAT CAN BE PERFORMED
BY INDIVIDUALS / GROUPS193
PROMOTES PRODUCTIVE DEPLOYMENT & UTILISATION OF RESOURCES 193RELATED ACTIVITIES & TASKS OF INDIVIDUALS ARE GROUPED TOGETHER
RATIONALLY IN SPECIALISED DEPARTMENTS (MARKETING, PERSONNEL /
FINANCE DEPARTMENTS) EXPERTS CARRY OUT DUTIES
193
DEVELOPMENT OF ORGANISATIONAL STRUCTURE RESULTES IN A
MECHANISM THAT CO-ORDINATES ACTIVITIES OF WHOLD BUSINESS INTO
COMPLETE, UNIFORM HARMONIOUS UNITS
193
DESIGNING JOBS 194
GROUPING JOBS (DEPARTMENTALISATION) 194
ESTABLISHING REPORTING RELATIONSHIPS 194
ESTABLISHING AUTHORITY RELATIONSHIPS 194
ORGANISATIONAL STRUCTURE DEFINITION
REASONS FOR IMPORTANCE OF ORGANISING
FUNDAMENTALS OF ORGANISING
SINGLE-USE PLANS (TO ACHIEVE A SET OF GOALS THAT ARE
NOT LIKELY TO BE REPEATED)
STANDING PLANS (ONGOING THAT PROVIDE DIRECTION FOR
TASKS THAT ARE REPEATED)
POLICIES
FUNCTIONAL MANAGEMENT AREAS: KEY ASPECTS TO BE
CONSIDERED
INVOLVES
OPERATIONAL GOALS
OPERATIONAL PLANS
CO-ORDINATING ACTIVITIES 194
JOB DESIGN 194
SPECIALISATION 194
JOB SPECIALISATION 194
JOB ROTATION 195
JOB ENLARGEMENT 195
JOB ENRICHMENT 195
JOB DESIGN DETERMINATION OF AN EMPLOYEE'S WORK-RELATED RESPONSIBILITIES 194
SPECIALISATION
DEGREE TO WHICH THE OVERALL TASK OF THE ORGANISATION IS BROKEN
DOWN INTO SMALLER UNITS TO TAKE ADVANTAGE OF SPECIALISED
KNOWLEDGE OR SKILLS TO IMPROVE PRODUCTIVITY
194
JOB SPECIALISATION
IS AN EXTENSION OF ORGANISATIONAL GROWTH (THE GROWING BUSINESS
IN CONTINUALLY COMPELLED TO APPLY SPECIALISATION / DEVISION OF
LABOUR)
194
WORKERS PERFORMING SMALL & SIMPLE TASKS BECOME VERY PROFICIENT
AT EACH TASK195
TRANSFER TIME BETWEEN TASKS DECREASES. IF EMPLOYEES PERFORM
SEVERAL DIFFERENT TASKS, SOME TIME IS LOST AS THEY STOP DOING A
TAKS ON MOVE TO THE NEXT
195
THE MORE NARROWLY DEFINED A JOB IS, THE EASIER IT IS TO DEVELOP
SPECIALISED EQUIPMENT TO ASSIST WITH THAT JOB195
WHEN AN EMPLOYEE WHO PERFORMS A HIGHLY SPECIALISED JOB IS
ABSENT / RESIGNS, THE MANAGER IS ABLE TO TRAIN SOMEBODY NEW AT
RELATIVELY NO COST
195
WORKERS WHO PERFORM HIGHLY SPECIALISED JOBS MAY BECOME BORED
& DISSATISFIED, WHICH MAY LEAD TO ABSENTEEISM & LOWER QUALITY OF
WORK
195
ANTICIPATED BENEFITS OF SPECIALISATION DO NOT ALWAYS OCCUR 195
JOB ROTATIONINVOLVES SYSTEMATICALLY MOVING EMPLOYEES FROM ONE JOB TO
ANOTHER195
JOB ENLARGEMENTWAS DEVELOPED TO INCREASE THE TOTAL NUMBER OF TASKS THAT A
WORKER PERFORMS195
JOB ENRICHMENTINVOLVES INCREASING BOTH THE NUMBER OF TASKS THE WORKER DOES &
THE CONTROL THE WORKER HAS OVER THE JOB195
REASONS FOR DEPARTMENTALISATION
ARE INHERENT IN THE ADVANTAGES OF SPECILISATION & THE PRESSURE IN
A GROWING BUSINESS TO SPLIT THE TOAL TASK OF MANAGEMENT INTO
SMALLER UNITS
196
FUNCTIONAL DEPARTMENTALISATION 196
PRODUCT DEPARTMENTALISATION 196
LOCATION DEPARTMENTALISATION 196
CUSTOMER DEPARTMENTALISATION 196
MATRIX ORGANISATIONAL STRUCTURE 196
FUCTIONAL DEPARTMENTALISATIONACTIVITIES BELONGING TO EACH MANAGEMENT FUNCTION ARE GROUPED
TOGETHER196
FUCTIONAL DEPARTMENTALISATION (FIGURE) 196
PRODUCT DEPARTMENTALISATION
ALL ACTIVITIES CONCERNED WITH THE MANUFACTURING OF A PRODUCT / A
GROUP OF PRODUCS ARE GROUPED TOGETHER IN PRODUCT SECTIONS,
WHERE ALL THE SPECIALISTS ASSOCIATED WITH THE PARTICULAR
PRODUCTS ARE GROUPED
196
PRODUCT DEPARTMENTALISATION (FIGURE) 197
LOCATION DEPARTMENTALISATIONLOGICAL STRUCTURE FOR A BUSINESS THAT MANUFACTURES & SELLS
PRODUCTS IN DIFFERENT GEOGRAPHICAL REGIONS197
LOCATION DEPARTMENTALISATION (FIGURE) 198
CUSTOMER DEPARTMENTALISATION
IS ADOPTED PARTICULARLY WHERE A BUSINESS CONCENTRATES ON SOME
SPECIAL SEGMENT OF TE MARKET OR GROUP OF CONSUMERS OR, IN THE
CASE OF INDUSTRIAL PRODUCTS, WHERE IT SELLS ITS WARES TO A LIMITED
GROUP OF USERS
197
CUSTOMER DEPARTMENTALISATION (FIGURE) 198
MATRIX ORGANISATIONAL STRUCTURE INCORPORATES THE ADVANTAGES OF BOTH STRUCTURES 198
MATRIX ORGANISATIONAL STRUCTURE (FIGURE) 199
ESTABLISHING RELATIONSHIPS1ST STEP IN ESTABLISHING REPORTING LINES IS TO DETERMINE WHO
REPORTS TO WHOM200
CHAIN OF COMMANDCLEAR & PRCISE REPORTING LINES ARE IMPORTANT SO THAT EVERYBODY
KNOWS WHO IS IN CHARGE OF WHAT ACTIVITIES200
CHAIN OF COMMAND DEFINITIONA CLEAR & DISTINCT LINE OF AUTHORITY AMONG THE POSITIONS IN AN
ORGANISATION200
THE UNITY OF COMMAND 200
THE SCALAR PRINCIPLE 200
UNITY OF COMMANDSUGGESTS THAT EACH PERSON WITHIN AN ORGANISATION MUST HAVE A
CLEAR REPORTING RELATIONSHIP TO ONLY ONE SUPERVISOR200
THE SCALAR PRINCIPLE
SUGGESTS THAT THERE MUST BE A CLEAR & UNBROKEN LINE OF
AUTHORITY THAT EXTENDS FORM THE LOWEST TO THE HIGHEST POSITION
IN THE ORGANISATION
200
SPAN OF MANAGEMENT2ND STEP IN ESTABLISHING REPORTING LINES IS TO DETERMINE HOW MANY
PEOPLE WILL REPORT TO ONE MANAGER200
LIMITATIONS OF SPECIALISATION
COMMON BASIS FOR DEPARMENTALISATION
TWO COMPONENTS OF CHAIN OF COMMAND
DESIGNING JOBS
BENEFITS OF SPECIALISATION
SPAN OF MANAGEMENT (FIGURE) 200
TALL ORGANISATIONAL STRUCTURE 200
MANAGERS MIGHT BE UNDER-UTILISED 200
EXCESSIVE CONTROL OVER SUBORDINATES 200
FLAT ORGANISATIONAL STRUCTRUE 200
MIGHT BE DIFFICULT TO CO-ORDINATE & CONTROL THE TASKS OF A LARGE
NUMBER OF SUBORDINATES201
SKILLS, COMPETENCE & AUTORITY OF SUPERVISOR & SUBORDINATE
(GREATER SKILLS - WIDER SPAN OF MANAGEMENT)201
PHYSICAL DISPERSION OF SUBORDINATES (GREATER DISPERSION -
NARROWER SPAN OF MANAGEMENT)201
COMPLEXITY OF BUSINESS (MORE COMPLEX - NARROWER SPAN OF
MANAGEMENT)201
EXTEND OF NON-SUPERVISORY WORK IN MANAGER'S JOB (MORE NON-
SUPERVISORY WORK - NARROWER SPAN OF MANAGEMENT)201
DEGREE OF REQUIRED INTERACTION BETWEEN SUPERVISOR &
SUBORDINATE (LESS INTERATCION - WIDER SPAN OF MANAGEMENT)201
EXTEND OF STANDARDISED PROCEDURES (MORE PROCEDURES - WIDER
SPAN OF MANAGEMENT)201
SIMILARITY OF TASKS BEING SUPERVISED (MORE SIMILAR TASKS - WIDER
SPAN OF MANAGEMENT)201
FREQUENCY ONF NEW PROBLEMS (MORE FREQUENT PROBLEMS -
NARROWER SPAN OF MANAGEMENT)201
THE PREFERENCES OF SUPERVISORS & SUBORDINATES 201
ESTABLISHING AUTHORITY RELATIONSHIPS4TH BUILDING BLOCK IS DETERMINING OF HOW AUTHORITY IS TO BE
DISTRIBUTED AMONG POSITIONS201
RESPONSIBILITY DEFINITION DUTY TO PERFORM THE TASK / ACTIVITY AS ASSIGNED 201
AUTHORITY DEFINITION THE RIGHT TO COMMAND / GIVE ORDERS 201
POWER THAT HAS BEEN LEGITIMISED BY THE ORGANISATION 201
INCLUDES THE RIGHT TO TAKE ACTION TO COMPEL THE PERFORMANCE OF
DUTIES & TO PUNISH DEFAULT OR NEGLIGENCE201
BUSINESS APPOINTS DIRECTORS 201
DIRECTORS APPOINT MANAGERS 201
MANAGERS ASSIGN AUTHORITY TO SUBORDINATES 201
FORMAL AUTHORITY IS VESTED IN ORGANISATIONAL POSITIONS, NOT
PEOPLE202
FORMAL AUTHORITY IS ACCEPTED BY SUBORDINATES 202
FORMAL AUTHORITY FLOWS DOWN THE VERTICAL HIERARCHY OF AN
ORGANISATION202
LINE & STAFF AUTHORITY IN THE ORGANISATIONAL
STRUCTURE (FIGURE)202
LINE AUTHORITY IS AUTHORITY DELEGATED DOWN THROUGH THE LINE OF COMMAND 202
STAFF AUTHORITYIS AN INDIRECT & SUPPLEMENTARY AUTHORITY (SPECIAL KNOWLEDGE OF
PARTICULAR FIELD)202
ACCOUNTABILITY ISTHE MECHANISM THROUGH WHIH AUTHORITY & RESPONSIBILITY ARE
BROUGHT INTO ALIGNMENT202
ACCOUNTABILITY MEANS
THAT PEOPLE WITH AUTHORITY & RESPONSIBILITY ARE SUBJECT TO
REPORTING & JUSTIFYING TASK OUTCOMES TO THOSE ABOVE THEM IN THE
CHAIN OF COMMAND
202
DELEGATION IS
THE PROCESS USED BY MANAGERS TO TRANSFER AUTHORITY &
RESPONSIBILITY TO POSITIONS BELOW THEM IN THE ORGANISATIONAL
HIERARCHY
203
DECENTRALISATION IS
THE PROCESS OF SYSTEMATICALLY DELEGATING POWER & AUTHORITY
THROUGHOUT THE ORGANISATION TO MIDDLE- AND LOWER-LEVEL
MANAGERS
203
CENTRALISATION ISTHE PROCESS OF SYSTEMATICALLY RETAINING POWER & AUTHORITY IN THE
HANDS OF HIGHER-LEVEL MANAGERS203
CO-ORDINATING ACTIVITIES
5TH BUILDING BLOCK - ORGANISING MEANS DIVIDING UP THE TOTAL TASK
OF THE BUSINESS INTO SMALLER UNITES SO AS TO TAKE ADVANTAGE OF
SECIALISATION & ACHIEVE THE GOALS OF THE BUSINESS AS PRODUCTIVELY
AS POSSIBLE
203
CO-ORDINATION ISAN ENDEAVOUR BY MANAGEMENT TO DEVELOP CONGRUENCE, / HARMONY
OF GOALS, THROUGH ORGANISING203
OTHER MECHANISS THAT PROMOT CO-ORDINATION ARE
THE ORGANISATION CHART, THE BUDGET, A COMMITTEE, THE BROASD
POLICY & PROCEDURES IN ACCORDANCE WITH SHICH TASKS ARE CARRIED
OUT, & & THE INFORMATION SYSTEM OF THE BUSINESS
203
INFORMAL COMMUNICATION IS CALLED THE GRAPEVINE 204INFORMAL COMMUNICATION TAKES PLACE MUCH MORE RAPIDLY THAN
FORMAL COMMUNICATION, & THEREFORE DECISION-MAKING COULD BE
EXPEDITED
204
INFORMAL ORGANISATIONS PROMOTES TEAMWORK WITHIN
DEPARTMENTS, AS WELL AS CO-OPERATION BETWEEN DEPARTMENTS204
INFORMAL ORGANISATIONS SUPPORTS THE FORMAL ORGANISATIONS 204
ENVIRONMENT IN WHICH A BUSINESS OPERATES 204
RELATIONSHIP BETWEEN STRATEGY & STRUCTURE 205
SIZE OF THE BUSINESS 205
FACTORS THAT INFLUENCE THE APPROPRIATE SPAN OF
MANAGEMENT
AUTHORITY
FORMAL AUTHORITY DISTINGUISED BY 3 CHARACTERISTICS
WHY MANAGEMENT SHOULD ENCOURAGE INFORMAL
STRUCTURE
FACTORS THAT INFLUENCE ORGANISATIONAL STRUCTURE
BROAD (FLAT) SPAN OF MANAGEMENT
NARROW (HIGH) SPAN OF MANAGEMENT
STAFF EMPLOYED BY THE BUSINESS 206
ORGANISATIONAL CULTURE 206
BASIS FOR DESIGNING AN ORGANISATIONAL STRUCTURE 204
STARTING POINT FOR DEVELOPMENT OF STRATEGY 205
STRUCTURE IS MECHANISM THAT SHOULD KEEP BUSINESS IN TOUCH WITH
ENVIRONMENT205
STABLE ENVIRONMENT 205
TURBULENT ENVIRONMENT 205
TECHNOLOGICALLY DOMINATED ENVIRONMENT 205
DOES NOT CHANGE MUCH OR IS NOT SUBJECT TO UNEXPECTED CHANGE 205
PRODUCT CHANGES ARE EXEPTION TO THE RULE 205
DEMAND FOR PRODUCT IS REGULAR 205
TECHNOLOGICAL CHANGES ARE SMALL / UNLIKELY 205FUNCIONAL STRUCTURE IS SUITABLE - LITTLE IN THE WAY OF INNOVATION
& NO NEED FOR CO-ORDINATION & CO-OPERATION BETWEEN
DEPARTMENTS
205
DECISION-MAKING TAKES PLACE AT TOP LEVEL 205
CHANGES ARE NORM 205
COMPETITORS - NEW PRODUCTS UNEXPECTEDLY 205
DEPARTMENTILISATION ACCORDING TO PRODUCT = SUITABLE - SPEEDS UP
DECISION-MAKING205
DECISIONS MADE BY SEPARATE DEPARTMENTS RATHER THAN TOP
MANAGEMENT205
INFLUENCED BY LEVEL OF TECHNOLOGICAL SOPHISTICATION 205
TEND TO HAVE MORE MANAGERS 205
MORE LEVELS OF MANAGEMENT BECAUSE SPECIALISED TECHNISIONS
WORK IN SMALL GROUP WITH NARROW SPAN205
REQUIRE ADAPTABLE ORGANISATIONAL STRUCTURE BASED ON A FORM OF
DEPARTMENTALISATION205
STRATEGY PROVIDES DIRECT INPUT IN DESIGN OF ORGANISATIONAL
STRUCTURE & STRUCTURE CANNOT BE SEPARATED FROM STRATEGY205
STRUCTURE SHOULD ALWAYS FOLLOW STRATEGY 205
SIZE OF BUSINESSINCREASE IN SIZE CREATES NEED FOR GREATER SPECIALISATION, MORE
DEPARTMENTS & MORE LEVELS OF MANAGEMENT205
STAFF EMPLOYED BY BUSINESS
MOSTE MANAGERS HAVE PERSONAL PREFERENCE FOR PARTICULAR
STRUCTURE, TYPE OF RELATIONS WITH SUBORDINATES & ATTITUDES TO
FORMALITY & AUTHORITY
206
DEFINED AS BELIEFS AND VALUES SHARED BY PEOPLE IN A BUSINESS 206
PESONALITY OF THE BUSINESS 206
LEADERSHIP & MANAGEMENT 210
COMPONENTS OF LEADING FUNCTION 212
LEADERSHIP DEFINITION (FROM CONTEMPORARY POINT OF
VIEW
THE PROCESS OF INFLUENCING EMPLOYEES TO WORK WILLINGLY TOWARDS
THE ACHEIVEMENT OF ORGANISATIONAL OBJECTIVES210
THEY TAKE THE LEAD TO BRIDGE THE GAP BETWEEN FORMULATING PLANS
& REACHING GOALS210
TRANSFORM PLANS INTO REALITY BY INFLUENCING INDIVIDUALS, GROUPS
& TEAMS210
LEADERSHIP = NOT THE SAME AS MANAGEMENT 210
MANAGEMENT = BROADER IN SCOPE 210
MANAGEMENT HAS 4 MANAGEMENT FUNCTIONS - LEADING = ONLY 1
FUCTION210
CAN BE MANAGEMENT WITHOUT BEING LEADERS - LACK ABILITY TO
INFLUENCE210
THERE ARE LEADERS THAT ARE NOT MANAGERS 210
INFLUENCING DEFINITION
THE PROCESS LEEADERS FOLLOW WHEN COMMUNICATING IDEAS, GAINING
ACCEPTANCE OF THEM & INSPIRING FOLLOERS TO SUPPORT & IMPLEMENT
IDEAS THROUGH CHANGE
210
INFLUENCING IS ABOUT RELATIONSHIP BETWEEN LEADES & FOLLOWERS 210
MANAGERS MAY COERCE LEADERS DO NOT 210
INTEGRATION OF LEADERRSHIP & MANAGEMENT (FIGURE) 212
AUTHORITY 212
POWER 213
REVOLVES AROUND OBTAINING THE RIGHT TO PERFORM CERTAIN ACTIONS 212
TO DECIDE WHO DOES WHAT 212
TO DEMAND COMPLETION OF TASKS 212
TO DESCIPLINE THOSE WHO FAIL TO DO WHAT THE ORGANISATION EXPECTS
OF THEM212
AUTHORITY ENTAILSTHE RIGHT TO DEMAIND ACTION FROM EMPLOYEES & THE RIGHT TO TAKE
ACTION212
FINAL AUTHORITYOWNERS / SHAREHOLDERS WHO TRANSFER / DELEGATE AUTHORITY TO
BOARD212
BOARD DELEGATES AUTHORITY TO TOP MANAGEMENT 212
TOP MANAGEMENT DELEGATES AUTHORITY TO MINNLE MANAGEMENT 212
NATURE OF LEADERSHIP
WHEN MANAGEMENT PERFORM LEADING FUNCTION
LEADERSHIP & MANAGEMENT
COMPONENTS OF LEADING FUCTION
AUTHORITY
TECHNOLOGICALLY DOMINATED ENVIRONMENT
TURBULENT ENVIRONMENT
STABLE ENVIRONMENT
RELATIONSHIP BETWEEN STRATEGY & STRUCTURE
ORGANISATIONAL CULTURE
TYPES ON ENVIRONMENTS
ENVIRONMENT IN WHICH A BUSINESS OPERATES
POWER STRONG LEADERS INFLUENCE BECAUSE POSSESS POWER 213
POSITION POWER 213
PERSONAL POWER 213
POSITION POWER DELEGATED BY TOP MANAGEMENT DOWN CHAIN OF COMMAND 213
PERSONAL POWER FOLLOWERS BESTOW ON LEADERS 213
POWER CONTINIUUM (FIGURE) 213
COERCIVE POWER 213
REWARD POWER 213
LEGITIMATE POWER 213
REFERENT POWER 213
EXPERT POWER 213
COERCIVE POWERPOWER TO ENFORCE COMPLIANCE THROUGH FEAR, WHETHER
PSYCHOLOGICAL, EMOTIONAL / PHYSICAL213
REWARD POWERBASED ON MANAGER'S ABILITY TO INFLUENCE EMPLOYEES WITH
SOMETHING OF VALUE TO THEM213
LEGITIMATE POWER POWER AN ORGANISATION GRANTS TO A PARTICULAR POSITION 213
REFERENT POWER MANAGER'S PERSONAL POWER / CHARISMA 213
EXPERT POWER
POWER THAT A MANAGER'S EXPERTISE, KNOWLEDGE & PROFESSIONAL
ABILITY GIVE HIM/HER, PARTICULARLY OVER THOS WHO NEED KNOWLEDGE
/ INFORMATION
213
NB USES & OUTCOMES OF POWER (TABLE) 214
EQUILIBRIUM BETWEEN THE POWER OF MANAGEMENT &
THAT OF EMPLOYEES (FIGURE)214
TRAIT THEORY 214
BEHAVIOURAL THEORY 214
CONTNGENCY THEORY 214
TRAIT THEORY
ASSUMPTION OF TRAIT THEORY WAS THAT STRONG LEADERS HAVE
CERTAIN BASIC TRAITS THAT DISTINGUISH THEM FROM FOLLOWERS &
UNSUCCESSFUL LEADERS
215
BEHAVIOURAL THEORY
ASSUMPTION THAT BEHAVIOURAL THEORY MAKES ABOUT LEADERSHIP
THAT SUCCESSFUL LEADERS BEHAVE DIFFERENTLY FROM UNSUCCESSFUL
LEADERS
215
AUTOCRATIC 215
DEMOCRATIC 215
LAISSEZ-FAIRE 215
LAISSEZ-FAIRE STYLELEADERS LEAVE ALL DECISIONS TO EMPLOYEES & DO NOT FOLLOW UP =
INEFFECTIVE215
DEMOCRATIC LEADERSHIP STYLE
LEADER WHO INVOLVES EMPLOYEES IN DECISION-MAKING, DELEGATES
AUTHORITY, ENCOURAGES PARTICIPATION IN DECIDING WORK METHODS &
GOALS & GIVES FEEDBACK - MOST EFFECTIVE
215
INITIATING STRUCTURE 215
CONSIDERATION 215
INITIATING STRUCTUREEXTEND TO WHICH A LEADER DEFINES & STRUCTURES HIS/HER ROLE &
ROLES OF EOMPLYEES TO ATTAIN GOALS215
CONSIDERATION
EXTEND TO WHICH A LEADER HAS JOB RELATIONSHIPS CHARACTERISED BY
MUTUAL TRUST, RESPECT FOR EMPLOYEES' IDEAS & REGARD FOR THEIR
FEALINGS
215
EFFECTIVE LEADERS EXHIBIT BOTH STRONGLY 215
PRODUCTION-ORIENTED LEADERS 215
EMPLOYEE-ORIENTED LEADERS 215
PRODUCTION-ORIENTED LEADERS EMPHASISE TECHNICAL / TASK ASPECTS OF JOB 215
EMPLOYEE-ORIENTED LEADERSEMPHASISE INTERPERSONAL RELATIONS - HIGHER GROUP PRODUCTIVITY &
HIGHER JOB SATISFACTION215
DEVELOPED MANAGERIAL GRID 215
INSTRUMENT THAT IDENTIFIES VARIOUS LEADERSHIP STYLES ON 2-
DIMENSIONAL GRID215
MEASURE CONCERN FOR PEOPLE & CONCERN FOR PRODUCTION ON SCALE
OF 1 - 9215
IDEAL STYLE = TEAM MANAGEMENT STYLE - MANAGER STRONG ON BOTH
DIMENSIONS215
CONTINGENCY (SITUATIONAL) APPROACHACKNOWLEDGES THAT PREDICTING LEADERSHIP SUCCESS IN MORE
COMPLEX THAN EXAMINING TRAITS & BEHAVIOUR OF SUCCESSFUL LEADERS215
CONTINGENCY THEORYATTEMPTS TO DETERMINE THE BEST LEADERSHIP STYLE FOR A GIVEN
SITUATION215
HOW STRUCTURED A TASK IS 215
QUALITY OF RELATIONSHIP BETWEEN LEADER & EMPLOYEES 215
LEADER'S POSITION POWER 215
EMPLOYEES' ROLE CLARITY 215
EMPLOYEES' ACCEPTANCE OF LEADER'S DECISION 215
FRED FIEDLER'S CONTINGENCY THEORY OF LEADERSHIP
PROPOSES THAT EFFETIVE GROUP PERFORMANCE DEPENDS ON THE
PROPER MATCH BETWEEN A LEADER'S STYLE OF INTERACTION WITH
EMPLOYEES, & THE DEGREE TO WHICH THE SITUATION GIVES CONTROL &
INFLUENCE TO THE LEADER
216
ROBERT HOUSE'S PATH-GOAL MODEL IT IS THE LEADER'S RESPONSIBILTY TO HELP EMPLOYEES TO ACHIEVE GOALS 216
RESEARCHERS @ UNIVERSITY OF MICHIGAN
BLADE & MOUTON
VARIABLES CONSIDERED IN CONTINGENCY THEORY
TWO TYPES OF POWER
TYPES OF POWER IN POWER CONTINUUM
LEADERSHIP THEORIES
RESEARCHERS @ UNIVERSITY OF IOWA: 3 BASIC LEADERSHIP
STYLES
RESEARCHERS @ OHIO STATE UNIVERSITY: 2 LEADERSHIP
STYLES
HOUSE'S 4 LEADERSHIP BEHAVIOURS DIRECTIVE, SUPPORTIVE, PARTICIPATIVE & ACHIEVEMENT-ORIENTED 216
MAJORITY OF REASERCH SUPPORTS HOUSE THEORY
IF THE LEADER COUNTERACTS THE EMPLOYEE'S LIMITATIONS IN THE WORK
SITUATION, THIS WILL PROBABLY INFLUENCE THE EMPLOYEE'S
PERFORMANCE POSITIVELY
216
PAUL HERSEY & KEN BLANCHARD'S SITUATIONAL
LEADERSHIP THEORY
THE WORK MATURITY OF EMPLOYEES DETERMINES THE BEST LEADERSHIP
STYLE FOR A PARTICULAR SITIUATION216
HERSYE & BLANCHARD'S 4 LEADERSHIP STYLES TELLING, SELLING, PARTICIPATING & DELEGATING 216
INTEGRITY - MANAGER'S HONESTY & TRUTHFULNESS 216
COMPETENCE - MANAGER'S TECHNICAL & INTERPERSONAL KNOWLEDGE &
SKILLS216
CONSISTENCY - MANAGER'S REALIBILITY, PREDICTABILITY & GOOD
JUDGEMENT IN HANDLING SITUATIONS216
LOYALTY - MANAGER'S WILLINGESS TO PROTECT ANOTHER PERSON 216
OPENNESS - MANAGER'S RELIABILITY WHEN IT COMES TO TELLING THE
WHOLE TRUTH216
CHARISMATIC LEADERSHIP 216
VISIONARY LEADERSHIP 217
TRANSACTIONAL & TRANSFORMATIONAL LEADERSHIP 217
CHARISMATIC LEADERSHIPSTRONG POSITIVE RELATIONSHIP EXISTS BETWEEN CHARISMATIC
LEADERSHIP & EMPLOYEES' PERFORMANCE & SATISFACTION216
CHARISMATIC LEADER TRAITS
SELF-CONFIDENCE, VISION, ABILITY TO ARTICULATE VISION, STRONG
CONFICTIONS ABOUT VISION, UNCONVENTIONAL BEHAVIOUR &
ENVIRONMENTAL SENSITIVITY
217
VISIONARY LEADERSHIP
ABILITY TO CREATE & ARTICULATE A REALISTIC, CREDIBLE, ATTRACTIVE
VISION OF FUTURE OF ORGANISATION. CREATES ENTHUSIASM & BRINGS
ENGERGY & COMMITMENT TO ORGANISATION
217
VISIONARY LEADER SKILLS
ABILITY TO EXPLAIN VISION TO OTHERS, ABILITY TO EXPRESS VISION
THROUGH BEHAVIOUR, ABILITY TO EXTEND VISION TO DIFFERENT
LEADERSHIP CONTEXTS
217
TRANSACTIONAL LEADERS MOTIVATE FOLLOWERS BY APPEALLING TO THEIR SELF-INTEREST 217
TRANSFORMATIONAL LEADERSHIPPROCESS IN WHICH LEADERS & FOLLOWERS RAISE 1 OTHER TO HIGHER
LEVELS OF MORALITY & MOTIVATION218
TRANSACTIONAL LEADERSHIP EXCHANGE OF REWARDS FRO COMPLIANCE 218
TRANSFORMATIONAL LEADERSHIP
LEADER'S EFFECT ON FOLLOWERS THAT THEY FEEL TRUST, ADMIRATION,
LOYALTY & RESPECT & ARE MOTIVATED TO DO MORE THAN WHAT IS
EXPECTED
218
TRANSFORMATIONAL LEADERS BEHAVIOUR
ASSOCIATED WITH 4 TRANSFORMATIONAL STYLES: IDEALISED BEHAVIOUR,
INSPIRATIONAL MOTIVATION, INTELLECTUAL STIMULATION &
INDIVIDUALISED CONSIDERATION & 5TH CHARACTERISTIC: IDEALISED
ATTRIBUTES
218
MOTIVATION DEFINITION AN INNER DESIRE TO SATISFY AN UNSATISFIED NEED 218
VARIABLES THAT DETERMINES PERFORMANCEMOTIVATION, ABILITY (TRAINING, KNOWLEDGE & SKILLS) & OPPORTUNITY
TO PERFORM (RESOURCES)219
PERFORMANCE = ABILITY X MOTIVATION X RESOURCES 219
GROUPS & TEAMS WHILE ALL TEAMS ARE GROUPS, NOT ALL GROUPS ARE TEAMS 219
GROUP DEFINITIONGROUP COMPRISES OF 2 / MORE INIDIVUALS WHO REGULARLY INTERACT
WITH EACH OTHER & WHO WORK FOR A COMMON PURPOSE220
INFORMAL GROUPS 220
FORMAL GROUPS 220
INTEREST GROUPS - COMMON INTEREST 220
FRIENDSHIP GROUPS - SATISFY SOCIAL NEEDS OF MEMBERS 220
COMMAND GROUPS 220
TASK GROUPS 220
COMMAND GROUPSAPPEAR ON ORGANISATIONAL CHART WHICH INDICATES LINE OF
AUTHORITY220
TASK GROUPSTO COMPLETE A SPECIFIC TASK / PROJECT. AFTER COMPLETION, GROUP
DISBANDS220
GROUP SIZE 220
GROUP COMPOSITION 220
GROUP NORMS 220
GROUP COHESIVENESS 220
GROUP SIZE
AFFECTS OVERALL PERFORMANCE. IF TOO BIG - SOCIAL LOATHING
(TENDANCY OF INDIVIDUALS TO PUT IN LESS EFFORT WHEN WORKING IN A
GROUP)
220
GROUP COMPOSITION
HETEROGENEOUS GROUPS (DIFFERENT RACE, GENDER, ETC) MORE
DIFFICULTY TO WORK TOGETHER AT FIRST, BUT OUTPERFORM
HOMOGENEOUS GROUPS OVER TIME
220
GROUP NORMSSTANDARDS SHARED BY MEMBERS OF GROUP THAT DEVELOP FROM
INTERACTION BETWEEN MEMBERS. POSITIVE / NEGATIVE220
GROUP COHESIVENESS WAY GROUP STANDS TOGETHER AS A UNIT 220
STATUS OF GROUPSFORMAL / INFORMAL. DERIVE FROM FACTORS SUCH AS AGE / EXPERIENCE /
SOCIAL INFLUENCE221
GROUPS
INFORMAL GROUPS CAN BE
FORMAL GROUPS
CHARACTERISTICS OF GROUPS
CONTEMPORARY ISSUES IN LEADERSHIP: 5 DIMENSIONS OF
TRUST
CONTEMPORARY ISSUES IN LEADERSHIP
WORK TEAM
COMPRISES A SMALL NUMBER OF EMPLOYEES WITH COMPLEMENTARY
COMPETENCIES WHO WORK TOGETHER ON A PROJECT, ARE COMITTED TO
A COMMON PURPOSE & ARE ACCOUNTABLE FOR PERFORMING TASKS THAT
CONTRIBUTE TO ACHIEVING ORGANISATION'S GOALS.
221
WORK TEAMS PERFORM COLLECTIVELY & MEMBERS ARE DEPENDANT ON EACH OTHER 221
NEAUTRAL & SOMETIMES NEGATIVE SYNERGY 221
ONLY ACCOUNTABLE FOR OWN PERFORMANCE 221
SKILLS RANDOM AND VARIED 221
POSITIVE SYNERGY 221
INDIVIDUALLY & MUTAULLY ACCOUNTABLE FOR PERFORMANCE 221
SKILLS ARE COMPLEMENTARY 221
PROBLEM-SOLVING TEAMS 222
SELF-MANAGED WORK TEAMS 222
CROSS-FUNCTIONAL TEAMS 222
PROBLEM-SOLVING TEAMSEMPLOYEES FROM SAME DEPARTMENT - IMPROVING QUALITY, EFFICIENCY
& WORK ENVIRONMENT222
SELF-MANAGED WORK TEAMSTAKE ON RESPONSIBILITIES FROM FORMER MANAGERS INCL. PLANNING,
SCHEDULING & CONTROL. ADDRESS PROBLEMS IN WORK PROCESS222
CROSS-FUNCTIONAL TEAMS
SAME HIERARCHICAL LEVEL, DIFFERENT WORK AREAS TO ACCOMPLISH A
TASK. EFFECTIVE ALLOWING PEOPLE FROM DIVERSE AREAS TO EXCHANGE
INFORMAION, DEVELOP NEW IDEAS, SOLVE PROBLEMS & CO-ORDINATE
COMPLEX PROJECTS
222
CLEAR UNDERSTANDING OF TEAM'S GOALS & TECHNICAL SKILLS & ABILITIES
NEEDED TO ACHIEVE GOALS222
MEMBERS WHO ARE CAPABLE OF ADJUSTING THEIR SKILLS 222
HIGH MUTUAL TRUST AMONG MEMBERS & UNIFIED COMMITMENT 222
GOOD COMMUNICATION & ADEQUATE NEGOTIATING SKILLS 222
TEAM LEADERS WHO ENCOURAGE TEAM MEMBERS BY CLARIFIYING GOALS
& WHO HELP MEMBERS TO REALISE THEIR POTENTIAL222
THERE IS A CLEAR, ENGAGING REASON / PURPOSE 222
PEOPLE MUST WORK TOGETHER TO GET THE WORK DONE 222
THE ORGANISATION REWARDS TEAMWORK & TEAM PERFORMANCE 222
AMPLE RESORUCES ARE AVAILABLE 222
TEAMS WILL HAVE CLEAR AUTHORITY TO MANAGE & CHANGE THE WORK
THEY ARE DOING222
THERE IS NO CLEAR PURPOSE 222
PEOPLE WORKING INDEPENDENTLY CAN DO THE WORK 222
THE ORGANISATION REWARDS INDIVIDUAL EFFORT & PERFORMANCE 222
THE NECESSARY RESOURCES ARE NOT AVAILABLE 222
MANAGEMENT WILL CONTINUE TO MONITOR & INFLUENCE THE WORK
THEY ARE DOING222
BASIC COMMUNICATION MODEL (FIGURE) 223
COMMUNICATION DEFINITIONCOMMUNICATION IS THE TRANSFER OF INFORMATION / MESSAGES FROM
ONE PERSON TO ANOTHER223
SENDER SOURCE OF MESSAGE 223
MESSAGE MAY CONVEY IDEAS, OPINIONS, PLANS, ORDERS / EXPLANATIONS 223
CHANNEL MANNER IN WHICH MESSAGE REACHES THE RECEIVER 223
RECEIVERSHOULD ABSORB MESSAGE & SHOW THAT HE/SHE RECEIVED &
UNDERSTOOD THE MESSAGE223
CONTROL IS LINKED WITH PLANNING, ORGANISING & LEADING. WITHOUT
CONTROL, PLANNING IS POINTLESS229
CONTROL HELPS COMPANIES ADAPT TO ENVIRONMENTAL CHANGE 229
CONTROL HELPS LIMIT THE ACCUMMULATION OF ERROR 229
CONTROL HELPS COMPANIES COPE WITH INCREASING ORGANISATIONAL
SIZE & COMPLEXITY229
CONTROL HELPS MINIMISE COSTS 229
ESTABLISH STANDARDS 230
MEASURE ACTUAL PERFORMANCE 231
EVALUATE DEVIATIONS 232
TAKE CORRECTIVE ACTION 232
CONTROL PROCESS (FIGURE) 230
ESTABLISH STANDARDS: PERFORMANCE / CONTROLLED
STANDARD DEFINITION
PLANNED TARGET AGAINST WHICH ACTUAL PERFORMANCE WILL BE
COMPARED230
PERFORMANCE STANDARD SHOULD BE RELEVENT, REAILIST, ATTAINABLE, MEASURABLE 230
PROFIT SHARE STANDARDS 230
MARKET-SHARE STANDARDS 230
PRODUCTIVITY STANDARDS 230
STAFF-DEVELOPMENT STANDARDS 231
PROFIT SHARE STANDARDSINDICATE HOW MUCH PROFIT BUSINESS EXPECTS TO MAKE OVER A GIVEN
PERIOD230
MARKET-SHARE STANDARDSINDICATE WHAT SHARE OF THE TOTAL MARKET BUSINESS IS AIMING TO
CONQUER230
PRODUCTIVITY STANDARDSINDICATED BY EXPRESSING INPUTS & OUTPUTS IN RELATION TO EACH
OTHER AS RATIOS230
STAFF-DEVELOPMENT STANDARDS INDICATE EFFECTIVENESS OF TRAINING PROGRAMS FOR STAFF 231
REASONS FOR A CONTROL PROCESS
CONTROL PROCESS
APPROPRIATE PERFORMANCE STANDARDS
TEAMS
TYPES OF TEAMS
CHARACTERISTICS OF HIGH-PERFORMANCE TEAMS
TEAMS SHOULD BE USED WHEN
TEAMS SHOULD NOT BE USED WHEN
GROUPS
ACTIVITIES MUST BE QUANTIFYABLE 231
REPORTS SHOULD BE RELIABLE 231
OBSERVATION & MEASUREMENTS MUST BE CARRIED OUT AT STRATEGIC
POINTS & ACCORDING TO STANDARDS231
CONSIDERATIONS IN MEASUREMENT OF ACTUAL
PERFORMANCEWHAT INFORMATION, HOW MUCH INFORMATION, TO WHOM 231
CONTROL BY EXCEPTION DEFINITIONONLY IMPORTANT / EXCEPTIONAL DISPARTIES BETWEEN REAL & PLANNED
ACHIEVEMENT ARE REPORTED TO TOP MANAGEMENT231
MAKE SURE THAT DISPARITIES ARE GENUINE 232
DETERMINE WHETHER DEVIATIONS ARE LARGE ENOUGH TO JUSTIFY
FURTHER INVESTIGATION232
ALL REASONS & ACTIVITIES RESPONSIBLE FOR DEVIATION SHOULD BE
IDENTIFIED232
ACTUAL PERFORMANCE CAN BE IMPROVED TO REACH STANDARDS 232
STATEGIES CAN BE REVISED TO ACCOMPLISH STANDARDS 232
PERFORMANCE STANDARDS CAN BE LOWERED / RAISED TO MAKE THEM
MORE REALISTIC232
PHYSICAL RESOURCES - INVENTORY CONTROL & QUALITY CONTROL 234HUMAN RESOURCES - SELECTION & PLACEMENT OF EMPLOYEES, TRAINING
& PERSONNEL DEVELOPMENT, PERFORMANCE APPRAISAL &
REMUNERATION LEVELS
234
INFORMATION SOURCES - ACCURATE MARKET FORECASTING, ADEQUATE
ENVIRONMENTAL SCANNING & ECONOMIC FORECASTING234
FINANCIAL RESOURCES 234
KEY AREAS OF CONTROL (FIGURE) 234
INVENTORY CONTROL 235
QUALITY CONTROL 235
INVENTORY DEFINITION
RESERVES OF RESOURCES HELD IN READINESS TO PRODUCE PRODUCTS &
SERVICES, AS WELL AS END PRODUCTS THAT ARE KEPT IN STOCK TO SATISFY
CONSUMERS' AND CUSTOMERS' NEEDS
235
RAW MATERIALS 235
WORK-IN-PROGRESS 235
COMPONENTS 235
FINISHED PRODUCTS 235
TO SATISFY THE NEEDS OF CUSTOMERS & CONSUMERS 235IN CASE OF RAW MATERIALS & COMPONENTS, TO KEEP UNCERTAINTIES
REGARDING DELIVERY & AVAILABILITY TO A MINIMUM SO THAT
MANUFACTURING PROCESS IS NOT DISRUPTED
235
AS A HEDGE DURING TIMES OF HIGH INFLATION 235
ECONOMIC-ORDERING QUANTITY (EOQ) 235
MATERIALS-REQUIREMENTS PLANNING (MRP) 235
JUST-IN-TIME (JIT) 235
REPLENISHING INVENTORY LEVELS BY ORDERING THE MOST ECONOMIC
QUANITITY235
DISADVANTAGE: INVENTORY MUST BE KEPT, REGARDLESS OF NEEDS OF
MANUFACTURING DEPARTMENT / CUSTORMER, FOR PARTICULAR RAW
MATERIALS, COMPONENTS / FINISHED PRODUCTS
235
ITEMS KEPT IN STOCK FOR INDEFINITE PERIODS DESPITE EFFORTS TO KEEP
INVENTORY COST AS LOW AS POSSIBLE235
ELEMINATE SHORTCOMINGS OF EOQ SYSTEMS 235
ESTIMATE OF DEMAND FOR RAW MATERIALS & COMPONENTS NECESSARY
TO CREATE FINISHED PRODUCT235
INVENTORIES ONLY ORDERED WHEN NEEDED 235
COSTS OF MAINTEINING INVENTORY LEVELS OVER EXTENDED TIME PERIODS
ARE ELIMINATED235
REFINEMENT OF MRP 235
SAME PHILOSOPHY AS MRP: MANUFACTURE PRODUCTS WITHOUT
INCURRING SIGNIFICANT INVENTORY COSTS235
BASED ON PREMISE THAT ACTUAL ORDERS FOR FINISHED PRODUCTS ARE
CONVERTED INTO ORDERS FOR RAW MATERIALS & COMPONENTS235
ARRIVE JUST IN TIME FOR MANUFACTURING PROCESS 235
TOTAL QUALITY MANAGEMENT (TQM) DEFINITIONMANAGEMENT APPROACH THAT EMPHASISES THE MANAGEMENT OF
QUALITY235
CONTROL OF FINANCIAL RESOURCES 237
CONTROL OF INFORMATION RESOURCES 238
CONTORL OF HUMAN RESOURCES 238
RESOURCES AS THEY FLOW INTO THE ORGANISATION (RETURNS ON
INVESTMENTS)237
FINANCIAL RESOURCES THAT ARE HELD BY THE ORGANISATION (WORKING
CAPITAL & CASH)237
FINANCIAL RESOURCES FLOWING OUT OF THE ORGANISATION (SALARIES &
OTHER EXPENSES)237
BUDGET DEFINITION
FORMAL PLAN EXRESSED IN FINANCIAL TERMS THAT INDICATES HOW TO
USE RESOURCES ARE TO BE ALLCOATED TO DIFFERENT ACTIVITIES,
DEPARTMENTS / SUBDEPARTMENS OF AND ORGANISATION.
237
BUDGET FORMS BASIS FOR CONTROLLING FINANCIAL RESOURCES (BUDGETARY CONTROL) 237
FINANCIAL CONTROL IS CONCERNED WITH FOLLOWING
ASPECTS
3 CONTROL SYSTEMS RELEVANT TO INVENTORY CONTROL
ECONOMIC-ORDERING QUANTITY (EOQ)
MATERIALS-REQUIREMENTS PLANNING (MRP)
JUST-IN-TIME (JIT)
QUALITY CONTROL
TAKE CORRECTIVE ACTION: 3 POSSIBLE ACTIONS
AREAS OF CONTROL
PHYSICAL RESOURCES
FOUR BASIC KINDS OF INVENTORY
PURPOSES FOR KEEPING INVENTORY
MEASURE ACTUAL PERFORMANCE
EVALUATE DEVIATIONS
SUPPORTS MANAGEMENT IN CO-ORDINATING RESOURCES, DEPARTMENTS
& PROJECTS237
PROVIDES GUIDELINES ON APPLICATION OF ORGANISATION'S RESOURCES 237
DEFINES / SETS STANDARDS THAT ARE VITAL TO CONTROL PROCESS 237
MAKES THE EVALUATION OF RESOURCE ALLCOATION, DEPARTMENTS /
UNITS POSSIBLE237
FINANCIAL BUDGETS 238
OPERATIONAL BUDGETS 238
NON-FINANCIAL BUDGETS 238
FOCUS ON CASH FLOW 238
FOCUS ON CAPITAL EXPENDITURE 238
EXAMPLES: CASH-FLOW BUDGET, CAPITAL BUDGET 238
FOCUS ON REVENUE 238
FOCUS ON OPERATIONAL ASPECTS OF ORGANISATION 238
EXAMPLES: SALES BUDGET, CONTRACT BUDGET 238
FOCUS ON DIVERSE ASPECTS OF ORGANISATION THAT ARE NOT EXPRESSED
IN FINANCIAL TERMS238
EXAMPLES: PRODUCTION BUDGET IN UNITS, SALES VOLUME IN UNITS, TIME
PROJECTIONS OF PROJECTS238
FACILITATES EFFECTIVES CONTROL BY PLACING MONEY VALUE ON
OPERATIONS238
ENABLES MANAGERS TO PINPOINT PROBLEMS 238
FACLITATE CO-ORDINATION BETWEEN DEPARTMENTS 238
MAINTAIN RECORDS OF ORGANISATIONAL PERFOMRANCE 238
DISADVANTAGES OF BUDGETS MAY LIMIT FLEXIBILITY 238
CONTROL OF INFORMATION RESOURCES
ACCURATE & TIMELY INFORMATION ALLOWS MANAGEMENT TO
IMPLEMENT PLANS & DETERMINE ON A CONTINUOUS BASIS WHETHER
EVERYTHING IS PROCEEDING ACCORDING TO PLAN & WHETHER
ADJUSTMENTS NEED TO BE MADE
238
MAIN INSTRUMENT - PERFOMANCE MEASUREMENT 239
SPECIFIC RATIO ANALYSIS - LABOUR TURNOVER, ABSENTEEISM &
COMPOSITION OF LABOUR FORCE239
INTEGRATION 239
FLEXIBILITY 239
ACCURACY 239
TIMELINESS 239
SIMPLICITY 239
INTEGRATIONCONTROL SYSTEM IS MORE EFFECTIVE WHEN INTEGRATED WITH PLANNING
& WHEN IT IS FLEXIBLE, ACCURATE, OBJECTIVE, TIMELY & SIMPLE239
INTEGRATION OF PLANNING & CONTROL (FIGURE) 240
FLEXIBILITY SYSTEM SHOULD BE ABLE TO ACCOMMODATE CHANGE 240
ACCURACY SHOULD PROVIDE AND OBJECTIVE & ACCURATE PICTURE OF THE SITUATION 240
TIMELINESS CONTROL DATA SHOULD BE SUPPLIED REGULARLY, AS NEEDED 240
SIMPLICITY
UNNECESSARILY COMPLEX CONTROL SYSTEMS ARE OFTEN AN OBSTACLE
BECAUSE THEY CAN HAVE A NEGATIVE INFLUENCE ON THE SOUND
JUDGMENT OF COMPETENT MANAGERS.
240
ADVANTAGES OF BUDGETS
CONTROL OF HUMAN RESOURCES
CHARACTERISTICS OF AN EFFECTIVE CONTROL SYSTEM
BUDGETS' CONTRIBUTIONS TO FINANCIAL CONTROL
TYPES OF BUDGETS
NON-FINANCIAL BUDGETS
OPERATIONAL BUDGETS
FINANCIAL BUDGETS
