SUBJECT:- ENGINEERING ECONOMICS AND MANAGEMENT TOPIC:- - FUNCTION OF MANAGEMENT YEAR EC-DEPARTMENT

SUBJECT: - FUNCTION OF MANAGEMENT PEN NO

Functions of Management Leading – Attracting people to the organization. – Specifying job responsibilities – Grouping jobs into work units – Marshalling and allocation of resources – Creating good working conditions

Strategic Management Process Establishing a mission, vision and objectives Environmental Analysis Internal Analysis Strategy Formulation Strategy Implementation Strategic Control and Performance Evaluation

Mission, Vision & Objectives A company’s mission is a statement of – the basic purpose or reason for its existence – its values (role to stakeholders - customers, employees, society, etc.). The vision goes beyond the mission statement – clarifies the long-term direction of the company (where the company is going) – reflects management’s aspirations for the company

Mission, Vision & Objectives Objectives are yardsticks for tracking a company’s performance or end result. – Financial performance objectives (e.g., ROA, ROI, ROE, Dividend growth, Stock price, etc.). – Strategic performance objectives (e.g., market share, growth, innovation leader, customer service, community & environmental responsibility, etc.)

Examples of Mission & Vision Southwest Airlines: – Mission: To provide high quality service at a lower price in the airline industry. – Vision: Opening air travel to a wider group of leisure travelers while infusing the organization with a sense of fun. Apple Computer: – Mission: To bring the best personal computing products and support to consumers around the world. – Vision: One person, one computer.

Financial & Strategic Objectives Alcan Aluminum – Financial: To outperform the average return on equity of the S&P’s industrial stock index. – Strategic: To be lowest-cost producer of aluminum. GE – Financial: To achieve an average of 10 inventory turns and a corporate operation profits margin of 16% by – Strategic: To become most competitive enterprise in the world by being #1 or #2 in market share in every business the company is in.

Environmental Analysis Environment of firm classified by proximity into (1) Macro-environment; and (2) Micro-environment or task environment. – All externInvolves the evaluation of the business environment of the organizational influences that impact a company’s decision and performance.

Environmental Analysis The macro-environment consists of – The international/national economy; changes in demographic structures; social and political trends; technology; and the natural environment. The micro-environment consists of – The industry environment such as competitors, suppliers, customers; unions and employees; owners and shareholders, etc

Internal Analysis Involves the evaluation of the inventory of the firm’s resources and capabilities. Resources/Capabilities can be classified as: – Tangible resources: Financial or physical assets – Intangible resources: brand name, reputation (product & firm), organizational culture, etc. – Capabilities or competencies: managerial ability, specialized skill & knowledge base of employees, etc

Strategy Implementation levelStrategy implementation is the process of putting a company’s various strategies into action – development of programs, policies, budgets & procedures. It can take several months to years to complete. Most difficult part of the strategy process. The job of implementing strategy involves managers at all s

Strategic Management Process On-going and continuous cycle of – Situation Analysis : Internal evaluation & Environmental scanning – Strategy formulation – Strategy implementation – Strategy evaluation

Misconceptions about Strategy & Strategic Management Strategy & strategic planning are dead – Every organization needs the focus and direction provided by its strategies and the strategic management process Strategy is strictly for top management – Top management play a crucial role, but everyone in the organization has a part to play. Strategy is about planning – Strategic management process shows that strategy is not only about planning, but also about doing

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