Key Management Functions and Environmental Analysis

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Management Functions: Planning, Organization, Direction, and Control

Planning

The process of defining goals and objectives with their respective strategies for action to develop the activities to achieve them.

If there is no fixed course plan of the organization, these are some planning activities:

  • Analysis of current situations.
  • Anticipating the future.
  • Targeting.
  • The decision of such activities.
  • The choice of corporate and business strategies.
  • The identification of resources needed to achieve the goals of the organization.

Organization

Involves designing the most appropriate structure to carry out the plans.

  • This function determines:
    • Measures to be implemented,
    • How to group,
    • Who performs, and
    • Clearly stated positions and hierarchies within the organization.
  • These are some activities of the organization:
    • Attracting people to the organization.
    • Specifying the responsibilities of the post.
    • Grouping tasks into work units.
    • Managing and allocating resources and creating conditions.

Direction

Direction includes:

  • Motivation,
  • Leadership,
  • Selecting the most effective communication channels, and
  • Negotiation and conflict management.
  • Administrators have to lead and coordinate effectively with company employees to achieve organizational success.
  • Includes address and close daily contact with people to guide and inspire towards achieving team goals and organization.

Control

  • Control is the monitoring of activities to ensure that they are performing according to plan and, if necessary, correcting any deviations found.
  • If control is inadequate, the flaws are not detected.
  • Monitors progress and performs the necessary changes.
  • Control activities include:
    • Monitoring the development of people and areas to collect data on their performance.
    • Providing feedback.
    • Identifying and correcting performance problems.

The Company and its Environment

  • Open System.
  • Constant and rapid changes.
  • Labor Management:
    • Avoid resistance.
  • Businesses exchange resources with the environment and depend on it.

The Overall Process

External Environment

These are all the relevant forces outside the company boundaries. By this, we mean all relevant factors that managers should pay attention to, to help their organizations compete effectively for survival.

Macroenvironment

These are those environmental factors that affect all or nearly all organizations in a particular country or region. For analysis, it can be divided into:

  • Natural environment or ecosystem,
  • Economic system,
  • Legal and political system,
  • Sociocultural system.

The natural environment or ecosystem is based on the full range of natural resources that men have used and exploited throughout history to meet their needs and generate diverse cultures and technological progress. Some of these resources are renewable, such as wood, and others, such as oil, are not.

Demography

The statistical study of the characteristics of a group of people who are likely to be measured or counted, either in time or through its history.

  • Example: the number of households, the number of people by age, sex, race, education, or profession.

The Competitive Environment

Includes specific organizations with which the organization interacts. Includes:

  • The power of customers,
  • The power of potential competition,
  • Indirect competition,
  • The power of direct competition,
  • The sales and distribution structure.

Direct competition are those individuals or organizations that offer similar products or services and that, therefore, address the same market. Indirect competition are those individuals or organizations that provide products or services that, even if they are not similar, cover the same need.

Potential competition: Those individuals or organizations that may become direct or indirect jurisdiction of an organization.

Environmental Analysis

Environmental uncertainty means that managers have insufficient information about the environment. As environmental uncertainty increases, managers need to develop techniques and methods to collect, select, and interpret information about the environment.

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