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The importance of effective management

To a very large extent the success or failure of a business operation is dependent on the role of management. This tutorial explains the commonly used planning, organisation, leadership and control (POLC) management model.

Outcomes
Responsibilities of management
Management skills
Exercise: management skills
Exercise: roles of management
More

HSC Topic 1: Business Management and Change is covered in the NSW Board of Studies Syllabus (June 1999) on pages 25 Ð 26. The specific outcomes for this section are:

Outcomes

The student:

H2.1	describes and analyses business functions and operations and their impact on business success
H3.2	evaluates the effectiveness of management in the organisation and operations of business and its responsiveness to change
H5.3	communicates business information, ideas and issues, using relevant business terminology and concepts in appropriate forms

Responsibilities of management

Management is the process of planning, organising, leading and controlling all phases of business operation in order to achieve the objectives of that organisation. Effective management invariably results in business success, while ineffective management often results in business failure.

The role of management is one of responsibility to the owners of a business. Management is entrusted with the responsibility for:

determining the business objectives in line with the vision of the business,
proactive planning for future growth,
anticipating and planning for changes in the business environment,
integrating all the human, physical and informational resources available,
administering and controlling business activities, and
accountability for the business operation and results.

The POLC cycle

	Planning
	Planning establishes objectives and devises programs to achieve them Establish mission statement Determine specific objectives Select strategies Implement programs Review and evaluate

Controlling		Organising
Keeping up standards Assess and monitor performance Compare with set standards Identify variants Take remedial action		Develops an organisational structure to implement strategies Determine the way the business will operate Choose taks to be done Determine the input mix Assign tasks Delegate authority and responsibility

	Leading
	Use of power or influence to get the best out of workers Give clear directions Set the example Communicate Motivate

Management skills

Various skills are related to each of the four management functions.

Planning

Skills required for	Examples of skills	Application
Planning	Strategic thinking	Highly developed conceptual skills Capacity to view organisation as a whole Product-related and technical knowledge Understanding of what can be done now
	Vision	Clear focus on the big picture Able to perceive opportunity Clear foresight Able to integrate component parts into an interacting whole Knowledge of support services
	Decision making	Awareness of alternatives through ability to assemble data Ability to assess alternatives and decide Creative and lateral thinking skills Clear understanding of the competing interests of stakeholders; ability to maintain a balance between competing goals Highly developed conceptual understanding of all interacting parts Ability to communicate decisions clearly

Organising

Skills required for	Examples of skills	Application
Organising	Self managing	Time management skills Capacity to stay focused Understanding of the role of support services in the organisational framework
	Teamwork	Providing networks for effective information flow Coach, teacher, mentor roles in creating and developing groups Delegation of team roles, tasks and responsibility

Leading

Skills required for	Examples of skills	Application
Leading	People skills	Understanding how people think and act Ability to motivate workers Creation of a harmonious workplace Effective written and oral communication skills Successful delegation
	Complex problem solving	Ability to gather and assess data to isolate a problem Sensitivity to the needs of others Procedures for dispute resolution Negotiation skills learned and practised
	Ethical and high personal standards	Generally agreed qualities of decisiveness, consistency, responsiveness, trustworthiness, friendliness and approachability

Controlling

Skills required for	Examples of skills	Application
Controlling	Skills involving setting of performance standards & measurement of performance	Technical measurement and diagnostic skills A wide variety of effective communication skills Preparedness to face up to identified weaknesses
	Flexibility & adaptability to change	Willingness to move in a new direction Constant evaluation of decisions taken in the light of subsequent performance Consistent monitoring of the changing external environment

Exercise: Management skills

Examine the management skills in Table 1 and classify them in Table 2:

Table 1

Management Skills
Management of time	Written communication
Stress management	Interpretation
Motivation	Confidence building
Interpersonal	Evaluation
Team building	Forecasting
Dispute settlement	Leading
Meeting/discussion	Negotiation
Coaching	Conceptual
Analysing	Technical
Counselling	Delegation
Oral communication	Training

Table 2

Planning	Organising	Leading	Controlling

Answers

Exercise: Roles of management

Henry Mintzberg, in The Nature of Managerial Work [New York, Harper & Row, 1973], classifies managerial roles as:

Interpersonal, or
Informational, or
Decisional.

These classifications are also identified in the NSW Board of Studies Business Studies Syllabus.

Roles that management may play are identified in the table below. Your task is to complete the table by providing an example of a task, activity or decision that management has undertaken in a business you have studied.

Classification	Role	Example of task, activity or decision
Interpersonal	Figurehead
	Leader
	Liaison
Informational	Monitor
	Dissemination
	Spokesperson
Decisional	Entrepreneur
	Disturbance handler
	Resource allocator
	Negotiator

Teachers and students seeking a relevant and in depth case study on the importance of effective management will enjoy the Harper Collins biography entitled Frank Lowy pushing the limits.

Answers

Planning	Organising	Leading	Controlling
forecasting	delegation	team building	analysing
management of time	writtten communication	coaching	evaluation
conceptual		oral communication	interpretation
		confidence building	dispute settlement
		leading
		counselling
		motivation
		meeting/discussion