2The Practice of Mnagement The common business management principle that unifies everything a manager does is the desire to maximize the long-term profits of the firm by profitably satisfying customers’ needs.
3The Agribusiness Manager To be successful managers must be:Technically knowledgeable about the firm’s products and servicesA good communicator to everyone, especially those who work for the firmAble to motivate people effectivelyProficient in the technical skills of business management such as inventory management, accounting, and forecastingBe able to mix each of these skills in just the right proportion in each market situation to gain the greatest benefit to the firm
4Management Vs. Leadership Effective Manger is to accomplish tasks through people.Management can effectively and efficiently mange the technical processEffective leaders who communicate and motivate people
5Agribusiness Management Confront extra burdens of uncertain weather, disease, changing technology, changing government policies, fluctuations in foreign currency exchange rates, and perishable nature of their products.
6The Six Steps in Decision Making Identifyingthe ProblemFollowing UpDetermining AlternativeCourses of ActionAnalyzingthe AlternativesImplementingthe DecisionSelectingthe Best Alternatives
7The Four Functions of Management PlanningDynamicContinuousProcessDirectingOrganizingControlling
8Planning FunctionsThe objective of planning: Put the firm in the best possible position relative to future business conditions and customer demandsPlanning begins with the organization developing its marketing planDefine the firm’s purposeState the firm’s objective
9The Organizing Function Development of an organizational scheme that can accomplish the firm’s purpose and objective efficiently and effectivelyThe selection of a legal structureSole ProprietorshipPartnershipCooperativeCorporation
10Legal Forms of Organization ORGANIZINGProprietorship, Partnership, Corporation, and CooperativeLegal Forms of OrganizationSole ProprietorshipOwned and operated by one personSimple to organize and shut downHas few legal restrictionsOwner is free to make all decisionsProfit is taxed only once (in USA)Unlimited responsibility for debtsDifficult to raise capital for growth of businessDuration of business is limited to the life of proprietor
11Legal Forms of Organization ORGANIZINGProprietorship, Partnership, Corporation, and CooperativeLegal Forms of OrganizationPartnershipAssociation of two or more partnersHas relatively few legal restrictionsPermits the pooling the managerial skills and judgementsDivided decision making and authority might cause problemsPartners have unlimited liability for debtsIn a limited partnership, there must be at least one general partnerLimited partners are limited only to the extent of their investmentMost common form of business organization
12Legal Forms of Organization ORGANIZINGProprietorship, Partnership, Corporation, and CooperativeLegal Forms of OrganizationCorporationsLegal entities owned by shareholdersShareholder has no liability beyond loss of the value of stockHave perpetual life as long as submitting necessary reportsRaising money for growth is easyEasiness in transfer of ownership and change managementMore difficult and expensive to organizeSubject to many rules and regulationsMore taxing is appliedMost large organizations are corporations
13Legal Forms of Organization ORGANIZINGProprietorship, Partnership, Corporation, and CooperativeLegal Forms of OrganizationCooperativesSpecial type of organization owned by users or customersEarnings are usually distributed tax freeBoard members managing cooperative are elected by all members
14The Controlling Function Concerned with giving management feedback on the firm’s progress toward the goals set in planningInclude measures of an individual’s progress as well as the progress of entire departments and businessProduction rates per hour, cost per unit, or annual dollar sales will determine the success or failure of the business
15The Directing Function Implementation of the other three management functions (planning, organizing, and controlling)Successful directing relies strongly on good leadership skills to accomplish its missionThe success of the directing function depends on the managers’ ability to motivate their employees
16Discussion QuestionsWhy is business management referred to as a profession rather than a discipline? What is the difference between a discipline and a profession?Business managers practice management just as a physician practices medicine or a lawyer practices law. Do you agree or disagree with this statement? Explain your answer.What is the difference between business management and leadership?Describe the decision-making process.
17Discussion QuestionsList the four functions of management and describe how they interact to permit a firm to succeed.Agribusiness management is described as a dynamic, continuous process. Do you agree or disagree? Explain your answer.What is the difference between efficiency and effectiveness?