ELEMENTS OF MANAGEMENTS
Management teaching people how to manage themselves. Management means many things to many people.
In economist management is one of the factors of production.
In socialist class or status;
According to Henry Fayol( Father of Administrator) in 1916 he define management as forecast, to plan, to organise, to command, to coordinate and to control.
Merry Parker Fullet in 1941 she defines management as the act of getting things done through others.
Breach EFL in 1957 defines management as a social process entitles ling responsibility for effective and economical, planning and regulative of operation of an enterprise in fulfilment of the given purpose or task.
Mescum Albert and Khandouri in 1985 sees management as the process of planning, organising, leading and controlling the efforts of organisational member in order to achieved organisational objectives.
Pearce and Robinson in 1989 see management as the process of optimizing human material and financial contribution for the achievement of organisational objectives.
According to Weinrich and Koontz in 1994 defines management as the process of designing and maintaining an environment in which individuals working together in group efficiently to accomplish selected aims.
According to Dr. Babangida Management can be seen as a professional discipline that assembles and uses resources to accomplish objectives or to achieve objectives.
FOUR UNIVERSAL FUNCTION OF MANAGEMENT
Planning
Organising
Directing/Coordinating/Leading
Controlling
1. Planning is a management function that’s concern with anticipating the feature and determining the best course of action to achieve organizational objectives.
Planning is the first function of management that lays the ground work for all the other function of management.
Planning is the continuous process that involve determining course of action to answer the question of that what should be done, by who, where, when and how.
As a manager by planning property you will devise a blue print or role map to achieve our own goals.
Four questions must be answers by planners (Basic Planning Concepts)
What do we want to do?
Where are we in relation to that goal?
Which factors will help or hinder as in reaching goal?
What alternative are available to use and which one is the best to achieve the goal?
Planning Achieve the Following
Determination of what resources will be needed to achieve particular objectives.
Identification of number and types of personate (technical, , supervisor and managerial) the organization needed.
Development of foundation of the organisation environment in which work to accomplish organisational chart or hierarchy.
Determination of standard against which to progress toward the objectives can be measured.
ELEMENT OF PLANNING
Setting organisational goals
Developing strategies to reach their goals
Setting standard
Determining resources needed
Collect and forecast information
2. Organizing it include designing the structure of the organisation and create condition and system in which everyone and everything together to achieve organisational objectives. Many of today organizations have the ideas to design the organization, so that every member of the organizations follows.
Therefore, the organization must be flexible, adaptable to change the customers because customers need changes and organization with exchanges along or losses.
Elements of Organizing
Allocating resources, assigning tax and establishing procedure for accomplished objectives.
Preferring extraction (organizational chart) sharing lines of authority and responsibility
Recruiting, selecting, training and developing employees
Placing employees where they will be most effect.
3. Directing/Coordinating/Leading means creating a vision for organisation and communication, training, counting and motivating other to work effectively to achieve organizational goals. The training is to empower employees given them as much freedom as possible to become self directed and self motivated.
Elements of Directive
Guiding and motivated employees to work effectively.
Giving assignment.
Explaining routines.
Clarifying policies.
Providing feedback for on performance.
Controlling: it involves establishing clear standard to determine whether and organisation is progressing toward its goal and objectives and taking corrective action if it is not.
Basically, these means measuring whether what actually occurs meet the organisational goals.
Elements of controlling
Measuring result against cooperative objectives.
Monitoring performance relative to standard.
Rewarding outstanding performance.
Taking correcting action where necessary.
Managerial Levels
Top level management
Middle level management
First line in a lower level management
Non managerial level
Top level management: these are managers at the uppermost level of management they make up of small group of people that give the overall direction and objectives of the organisation.
Top level managers are called Executives are in general refers to as chief executive officer (CEO) or chief operative officer (COO). In some countries called them Managing directors (MD) in another places they called them President.
Functions of top level management
They make plans and strategies of the organisation.
Make decision that affects the organisation.
They design the structure of the organisation
They serve as the guardians of share holders of the organisation.
They allocate the resources among this unit.
They provide effective leadership and control mechanism.
Middle level management: are those found between the top and lower level management. These managers manage the work of the first time managers and may have title such as Regional managers, Division managers, Deans and Directors.
Functions of middle level management
To translate and implement policies and the general rule laid down.
To provide information to top management to formulate realistic and attainable goals.
To coordinate the working of their branch, units and functional areas to achieve organisational goals.
They are concern with short term goal and specific result.
First line or lower line management: they manage the work of non-managerial employees who typically are involved with producing organisational product.
Examples are supervisor, sectional or unit help, clerical supervisors, foremen e.t.c
Functions of first line or lower line
They assign specific jobs for the worker and access their daily work performance.
They outline day to day operation of the organisation.
They serve as a line between the workers and middle level operators.
They kept record of the operation of the organisation.
They trained, lead, and motivate their worker to achieve in their best way.
Managerial Skills
A managerial skill is the ability of managers to carry out their duties efficiently and effectively or is their ability to plan and organise, direct and control in organisation. In other word managerial skills is the ability to perform a particular task and achieve a particular objective.
According to Henri Fayol (the father of the modern management theories) indentifies 3 basics skills that manage at all levels need. The 3 skills are:
Technical skills: it involves the ability to use the procedure, technique and knowledge to perform task of specified field or area. Engineers, directors, pilots, musicians e.t.c
A person who is able to operate a machine, prepare a financial statement, programme a computer must have a technical skills in that area.
This means he/she is capable of efficiently performing the process and technique of the particular job. The managers that need a technical skill ‘most’ are the first line manager.
This is because there are so close to the actual work and the unskilled employees who need constant supervision and training.
However, both the middle and the top levels managers also need technical skill but not as much as the first line managers.
The top level managers need the general management skills. Technical skills of supervisors and the middle level manager are often not ready transferrable from one industry to another, but general managers skill often transferrable to a wide range of industries, for example if you are trained to operate every equipment in the industry, you may be able to transfer your skill to an automobile industry. But if you are CEO of the textile company you might however be able to use your general managerial skill. In a number of different industries.
Human Relation skills: this are the skills required in order to understand other people and interact effectively with them, the skills include: leadership, motivation, coaching, communication, moral building, training and development, help and supportiveness and delegation. This skill is needed of all levels of management.
Conceptual skills: no how matter how good a manager posses both technical and human relations skills he/she need conceptual skills.
Conceptual skills is the ability to see the organisation as a whole and understand the relationship of various parts and how one parts depends on another and anticipating how a change in any of the part would affect the whole, this calls for manager to be able to see the big picture, the complexities of the overall organisation and how the various fit together.
Conceptual skills are extremely critical to top manager’s performance.
Fayol emphasizes that although all three of these skills are essential to the manager, they are relevant depends on a level at which a manager is placed.
Technical skills is most important to the first line managers although all managers of the organisation needs human relation skills, Top managers on the other hand needs to use few technical skills instead most of their time is devoted to human relation and conceptual skills.
Other skills needed by managers:
Computer skills: this skills is variables to today’s managers and is essential for advancement for management because in minute can perform task in financial analysis, human resources planning and in other areas that will otherwise takeout as even days to complete, the computer is helpful for decision making and assists managers with a vast array of flexible and usable information.
Decision making skills: all managers makes decision, the quality of this decision is to determine their effectiveness, a good understanding of analytical skills largely influence decision making skills.
Analytical skills: this involves using scientific apparatus or techniques such as materials requirement, planning, inventory control modifier, activity based costing, forecasting and human resource information system to solve management problems.
Analytical skills is the ability to diagnose and evaluate problem, its needed to understand the problem and to develop a plan of action without which there is little hope for long term success.
MANAGEMENT ROLES
Interpersonal role: this is one of the roles of managers that involve people (subordinate and person outside organisation) and other duties that are ceremonial and symbolic in nature, organisation managers provide unity of action and effort and peaceful coexistence between members of the organisation, and managers also provide direction and proper supervision for both employees and organisation through this role.
Interpersonal role categorises into three:
Figure head role: managers are symbol of organisation or departments, they perform ceremonial duties e.g. receiving visitors or representing the organisation on an occasion or important event.
Leadership role: this is the part of interpersonal role managers’ exercise a non coercive influence to their subordinates so that they can perform at high level and reach their full potentials.
Liaison: managers deals with people they inside or outside the organisation and they maintain contact with the organisation stakeholders.
Informational roles: this involves connecting, receiving and disseminating information to keep everybody in the organisation while involves 3 categories;
Monitor: to monitor the activities within the organisation.
Disseminator: mangers disseminate information.
Spoke person: all stakes holders receive information from the managers not form the people around.
Decisional role: this entails making decision or choices it involves the making of strategy organisation decisions base on authority and access to information, this also categorised into 4:
Enterpreunnial role: managers plan changes by explaining opportunities and taking action to improve existing situation because it involve risk taking.
Disturbance handler: managers are responsible for handle unexpected changes or crisis that threaten the organisation.
Resource allocator: managers decide how base to use organisational resources.
Negotiator: this involves reaching agreement with stake holders e.g. trade unions, share holders, community leaders, costumers, government e.t.c
DECISION MAKING
Decision in business is one of the most crucial activities of a managers, the necessary to decide is the everyday pre-occupation of management in all organisation. Decision making is the heart of all the function of management, managers are both action and thinking oriented, there must always task is decision making, and it’s the quality of this decision that determine how successful the manager is.
Decision making is about deliberating opting for one choice from two or more alternatives, it’s also define as the process by which managers of an organisation respond to the opportunities and trend that control them by analysis and choosing a specific force of action that assist in achieving organisational objectives.
Managers spend their times choosing between the alternatives force of action on the basic of the information available today and the time, In other words making decision.
Decision making is closely lay of the management function of planning; planning is all about taking decision on future action.
According to ACKKOF (1970) he said planning is a particular time decision making with three distinguishing characteristics:
It’s an anticipating decision making
It involved a set of interdependent decision that is decision strategies.
It’s directed toward making decision which will not otherwise be made.
Decision making process: is influence by the unique environment of the decision making, these are some of the unique environment organisation position, available information. And experience in decision making:
Problem definition and diagnosis: it begins by the awareness of the problem by the manager e.g. employment resignation or costumers reaction to quality, price or services render and also changes in the business environment such as economic, political, social, technological, globalization e.t.c
Problem diagnosis:- this means trying to discover the nature of problem by making carefully investigation, it consists of the following:
Information gathering: this involves searching information to determine the nearly the part about the [problem.
Problem resolution: attempting to get rules debate and discussions of some organisation view or confessor on the problem that is to be tackled.
Development alternatives: when managers are relied as the opportunity and traits in the problem that he/she must generate a set of feasible alternative causes of action to take it should be noted that alternative and not given but have to be searched for and criteria has to be used in choosing some among them where there are no alternatives there will no choice and hence no decision. In business there are always alternatives to any cause of action if we can think of any we have not thought hard enough detentation to accept the first possible alternative prevent this no major decision should be made until several alternatives have been developed.
Evaluating alternatives: once appropriate alternatives have been found, the next step is to evaluate to get the one that will best contribute to the attainment of the organisational goals.
Considering the strength and weakness of alternatives and the one with most advantages chosen. The need for good assessment of the advantage and disadvantage is to property define the opportunity and traits of each alternatives.
There are some criteria for evaluation of alternatives, these are:
Economic feasibility: that is the financial implication of each alternatives must be assess in respect of cost and benefit analysis of each alternation. This is to ensure whether the additional of the cost will create more revenue to the organisation.
Legality: to ensure that adaptation of the alternatives does not contravene the laws of the land and the business ethics.
Ethical contradiction: to ensure that the chosen alternatives does not present potential harm to the society.
Practicality: this means that the alternatives can be workable and successful and the organisational resources are sufficient to support the implementation of the option chosen.
Selecting among alternatives: a choice must be made as which is the most feasible and preferable alternatives.
Implementing and monitoring the decision: the decision was made most be implemented at the right time, this implementation should be done within the limit of the organisational resources, structures and systems, proper implementation and monitoring require sufficient control system.
Feedback: the final stages in the decision making process is getting feedback on the success or failure in the implemented decision, managers who always try to learn from past mistake and success are likely to continuously improve the decisions they made.
LEADERSHIP
Leadership refers to a process of moving people in a plan direction by motivating them to action through non-compulsive means. Good leadership moves people in a direction that is truly in their long-term best interest in case the means and the end should serve the best interest of the people involved in a real long-term sense.
Leadership is both a role and a process of influencing others, a leader is a member of a group or is given a certain rank and is expected to perform in a manner consistent with that rank, also a leader is the person who is expected to exercise, influence in forming and accomplishing a group goals, a honest leader is the one who is not the one who manipulate to lead.
Characteristics of Leader
A leader is a servant to his people, thus, a leader should be in a business of serving and helping others to get ahead:
Allegiance: a leader and the lay are bound in allegiance in the same purpose.
Global objectives: a leader perceives the goal of the organisation not only of the interest of the groups but also in terms of whether ethical objectives (other stake holders)
Adherence to the rules and ethical manner: a leader is not above the rule and can only continues in office as long as he/she adherence to what organisational politics enjoy in the conduct of his/her affairs they must adhere to ethical manners particularly in dealing with opposition subordinate.
Delegated trust: a leader should accept his/her authority as a divine trust of great responsibility; therefore he/she should show kindness to those under their authority.
LEADERSHIP STYLE
In practice from autocracy to liaise fair:
autocrat was leader has the following qualities:
has little trust in group member
they believe only material reward motivate people
they issue others to be convey with no questions
Benevolent autocrats characteristics:
They listen carefully to their followers
They give impressing of being democratic while they are not
They always make their own personal decision
Democrat characteristics
A democrat leader shared decision making with group members
They explain to group reasons for personal decision
Objectively communicate, critics and questions
Laissez faire characteristics:
Has little confidence in his leadership ability
They set no goals for the groups
They minimise communication and group interactions.
The democratic leadership style is the most effective and productive; it’s also the one in keeping in near ethics today, its leads to new ideas positive changes and a sense of groups’ responsibility.
Effective leadership: is the process of creating a vision, developing strategy, legalising cooperation and motivating action and effective leader is the one that has the following duties:
Create a vision of the future that takes him into account legitimate long-term interest of the parties involved
Developed a rational strategy for moving towards that vision
Enlist the support of the key power centres whose cooperation, compliances or team work is necessary to produce that movement
Highly motivate that core group of people whose action are central to implementing the strategy.
Organisational Conflict
Conflict may be defined as hustle struggle between two or more person or group for an object of value in each opposing parties attain to injure, harm or destroy one another in order to achieve a certain goals.
Others define conflict as a condition of objectives in compatibility between values and words, some scholars see conflict as a behaviour deliberating interfering with another person goals achievement. In another definition conflict is a situation in which two or more people or groups disagree over issues of organisational substances and experience some emotional antagonism with one another.
Conflict is present everywhere
Nobody want to enjoy conflict
Yet it is every at all time
It occurs within individuals, families, organisations, societies, nation e.t.c
Conflict can be categorised as:
Intra personal and interpersonal conflict
Intra and inter organisational conflict
Internally and externally propelled conflict
Constructive and destructive conflict
Substantive and emotional conflict
Political, economics, technological, social cultural e.t.c
Diplomatic/international conflict
Strategic or tactical conflict
Conflict develops in stages and managers who know the stages can make best use of them by preventing conflict from escalation, the stages are as follows:
Latent stage: at this stage conflict condition exists but is not yet to organise by either or both parties involved.
Perceived stage: at this stage causes or factors conflict are recognised by both of them or either one of the parties.
Field stage: at this stage the tension begins to arise between the parties involve.
Manifestation stage: this is a stage where by actions including physical psychological, oral and writing exchanges will be made.
After math: this stage is the post conflict situation where result resolution reaction is concluded. This stages may last the total of limit one day, one week, one month, one year or more, it depend on the issues involved types of conflicts, the people or party involve,
The time dimension as sense of agency. The development may also reverse the mementoes as any stage, they by annulling the conflict.
Causes of Organisational Conflict
Policies: unfair an arbitrary performance, paying equities or equalities, inflexible rule, ambiguous procedure, frequent relocation, in realistic job description.
Structure: centralization and lack of participation little or more opportunity for advancement against interdependent of department within organisation.
Process: the process of ruling the organisation also causes a conflict; example poor communication, inadequate or poor feedback can cause conflict in an organisation, ambiguous conflict goals, and inaccurate/ambiguous performance measurement.
Others: this are some of the most common issue that causes conflict in the organisation e.g partiality or favourism personality clashes hidden genders by all (some step can hide some genders in an organisation for them to progress as managers selfish and personal ambition).
Conflict Prevention
Preventing measures should be put and be reducing regularly as follows:
Staff empowerment
Set up organisational complaint unit
Get closed to your staffs and customers
Provide conducive working environment
Keep professionally bad tempered staff away from the centre
Analyse past conflict experience and builds on them.
TIME MANAGEMENT
Time is the moment when opportunity is highest time to other is simply a measures or yardstick of seconds, minutes, hours, month and years, when they think of time they only see either a clock or a calendar, it has only one dimension that is duration, this is most shallowed concept of time no great minds deep important to this concept of time. The tragedy of this concept is that it’s destroy initiatives, discourage, creating impulse and leaves nothing to kill the time allotted to it, for e.g. if we have full week to perform a task it must take a week to perform that task. Also we have those individual that give real meaning to live by giving great quality of depth to time to them time is no longer in prison by the clock or calendar, there accomplishment are given by a spirit of dedication and enthusiasm not by hours or weeks, they believe strongly in what they are doing, they are drawn towards their goals on success by a powerful, spiritual force which does not recognise time. They have committed their heart to a task they loved and their works is emission blazing with a purpose to these people time is life. These approaches to time should be a challenge to all of us. The proper uses of time determine the failure or success of an average employee, even more than his/her knowledge of the product or services. The people organising of time is certainly one of the best items on any formula for success. The most difficult task ever founds among groups is that of getting people to organise their time. This is why every individual must spend time at the beginning plan in details to exact schedule of his/her time.
IMPORTANCE OF TIME
Time is a medium of activity: time is the medium of all human activity, no human activity take place outside the theatre of time.
Medium of exchange: leaving is a business in which the currency or medium of exchange is time. To this exchange therefore time is a resource and indispensible resource like all resources freely provided by the creature of the universe. Therefore must not only use judiciously but also for valid purposes. In fact some scholars see time as the real capital of man which depending on how it has been invested determines one status, success, degree of happiness and well being here on earth as well as life after capital.
Time is life: your life is time that passes between your birth and your death. Time however, once you lost can neither is renewed nor restricted. Therefore is more valuable than money more expensive than gold and diamonds.
Time is transience: the transience nature time next in persistence demand on man to utilised and take advantage of each must urgent.
Time is a universal measured: time can serve as a business
Time is a blessing from almighty God: it’s a favoured gift.
STAGES IN THE TIME MANAGEMENTS
Time planning
Daily work schedule
Implementation
Follow up and monitoring
TIME WASTED (TIME LEAVE)
It can be categorised according to those who have responsibilities for the time wasting ability;
Yourself
Poor communication
Absence of priority
Procrastination: is a tips of time and is a type of key wasted, keep what you are suppose to do today because tomorrow may never come, factors that causes procrastinations are; personal character, multiple engagement, time pressure, lack of priority, unpleasant task, overwhelming or complex project, no idea of how or when to start.
Making unproductive calls and browsing
Delegating without authority
Subordinates
Lack of motivation
Interfering from boss
Lack of technical knowledge of the job
By passing the change of common
Bosses
External factors
Increase in social visitors
Visitors who over stay their welcome
Traffic hold up
Drop in business associated
Influence in business environment
Therefore for effective time management, this time wasting activity must be stopped and their causes identify and removed, time is the most valuable processing source of fortunes or misery runs out and does not wait, goes fast and does not retime.
Change Management
Change managements is inevitable in an organisation, the only things that is permanent that is change business operate in a dynamic environment which implies change, and organisation that fail to organised the inevitability of change is planning to failed. Changes are taking place on all level to the societies, personal, family, cooperate, geographical and global.
The human race as move from the ancient ages to modern, industrial and service industries and presently to the information. Changes are so frequent, fast complex and continue that firms and societies at large now operate in a state of chaos. The managers that succeed today are the one that constantly adopted the direction and the operation of his/her enterprise to changes in technology, social, political, economic and global environment in which it operates.
Factors of Change management
Political factor: this factor includes government policies, rules and regulation, preference and philosophy.
Economic factor: this includes disposable income, propensity to save or spend, interest state, exchange rate, general health of the economy.
Social cultural factors: this includes belief, values, attitudes and life style of people and religion.
Population dynamics: this includes age distribution, sex, life expectancy, migration, urbanisation e.t.c
Consumers: this includes changing consumer taste, awareness and education.
Work force: this includes gender, age, educational and material status of the work forces.
Competitions: this includes new players, new products and new competitive strategies.
Technological factor: this includes automation and computerisation or digitalisation leading to new product, modification of existence, improvement, delivering and changing in marketing techniques.
Resources: this includes natural resources and their availability.
Globalization: this includes changing attitudes and way of life of the people and internationalization of the business.
Resistance to Change
Training and development
Habit (people don’t want to change because it become their habit)
Fear of the unknown: some people are frightening of what will happen in the future perhaps because of change.
Personal attitude
Financial reason
Psychological reason
Condition necessary for effective change are:
Communication.
The change must be useful.
Employee participation.
Benefit to be gain.
Change should be gradual.
Timing.
Give positive reinforcement.
TEAM BUILDING AND MANAGEMENT
Group dynamics generally refers to the operators of groups and the impact of group on their behaviour. A group is a number of people who engage in symbolic interactions, are psychologically aware of each other and perceive themselves as group members. While a team is small number of people which complementary skills that are committed to a common purpose, sets of performance, goals and approach for which they hold themselves mutually accountable. Team work represent a set of values that encourage listening and responding constructively to views expressed by others, giving others the benefit of doubt, providing support and recognizing the interest and achievement of others.
A team may be;
Making things (front liners, manufacturing. Marketing e.t.c.)
Recommending things (task force, audit things problem solving teams)
Running teams (over seeing a business or a specific programmes)
Features or character of a good teams
Collections of individuals with complementary skills. - Strong commitments.
Common aims. - Leadership. - Synergy (extra power).
Individual and mutual accountability
Team development process
Teams are not automatic entities individuals come together learn about themselves. The task and the method develop the required behavioural trade settle down to new bus and move on to performance. Teams take time to develop just like new product that move from introduction, growth, maturity and declined stages. It is necessary to understand these stages to manage each stage strategically so as to ensure and easily and fuse attainment of team maturity and effectiveness.
Stage 1: forming
People get together. - Trying and testing each other. - Polite, cautions
Learning and studying one another. -Objectives not yet clear
Some of the team may reserved or shy. -Lead holds way
Finding about rules task and method. - Acquiring information and resources.
Stage 2: Storming
In fright conflict and confrontation. - Question on establish pattern.
Possible decamping and withdrawal by small members. - De-motivation.
Differences of believes, values and method. - Leadership trust.
Fractionalization (visible or invisible). - Interpersonal conflict.
Possible new leadership
Stage 3: Norming
Conflict settling. – Develop skills. – Views Exchange
Getting organise. – Issues confronted. – Interpersonal relation improves.
Cooperation within themselves. - Back to storming if cares is not taken.
Stage 4: Performing
Team Work. - Openness. - Effectiveness. - Supporting. - Trust.
At this stage, they learn to utilise individual capabilities of team performance.
Consensus is reached through relational discuss.
Members to show greater interest in each other.
The most critical stage is the task stage (i.e Storming Stage), the managers
Has duty to ensure that the team move to the final stage without getting entangled in perpetual crisis. It is usual for the learn to move back to the storming stage. Therefore, all efforts must be made to break the forming, storming and norming circle.
BUSINESS ENVIRONMENT
Business environment is everything (forces and condition) in within and outside the business organisation that affects mangers ability to acquire by utilize resources, event in the environment in which a business operate have a direct effect on the success or failure of the business to it environment and identify in advance the opportunities and trade which environmental change bring the environment of the business has never being, so complex and challenging as it is today. Managers more-than ever before and finding themselves confronted by increasing pressure and demand which they must understand and respond to.
Types of Business Environment
Internal environment/micro environment: it consists of forces operating within an organisation, as streaming from the organisation structure, policy and culture.
The micro environment is found within the industry setting, it has been defined as these individuals group and organisation that has a two way operational relationship with the business and may be control and influence to some degree. The factors in the micro environments includes; Competitors, Suppliers, Distributors, Employee, Labour Union, Creditors, Shareholder, Customers e.t.c
Competitors are organisation that produces goods and services that are similar to that are particular to an organisation. Competitors can also be defined as organisation that is contesting for the same customers e.g. Toyota and Honda.
Competitors are the exception in the micro environment in that they continues threaten rather than contribute to the survival of the business. Potential competitors are components that are currently not competing with an industry but have capability to do so if they choose to do so e.g. when new competitors enters an industry, the competition increase and the prices decreases. The existing companies try to discourage new entrance through barrier to entrance. This concept implies that it is very expensive and difficult for a potential competitor to enter the industry the greater the barrier, barrier sometime result from economics of scale and branch loyalty.
Strategies dealing with competitors:
Cooperation and Competition: this is a situation where two rivals organisation cooperate with one another to compete pavarable in an industry.
Joint venture. - Buying and existing competitors. - Price reduction.
Suppliers: are individuals and cooperate unite that provide input to the organisation (such as raw material, equipment and employee) in other to produces good and services they are a critical links between the organisation and its environment. Organisation may have hundred of suppliers specialize in providing different material e.t.c. however firms are now reducing their member of suppliers but demanding in return long-term contact, total quality, just in time delivery and changes in the nature of numbers or types of suppliers result in factors that present opportunities and trades which managers most respond to prosper.
Threat presented by suppliers:
Suppliers bargaining power increases.
Suppliers’ failure to meet the time of delivery.
When a supplier is a monopoly.
When the supplier has repulsion of quality and ability depending on one or two supplier has considerable risk, just as this risky for small business with only one or two customers any action or decision may have critical consequence.
Distributors: are organisations or individuals that help other organisation sell their product or services to customers. They made product available to customers or users distributors may include: Whole-sellers, Retailers, agents and franchiser.
Distributors also add to the product level of the product.
Shareholders and Creditors: this are the internally factors that affect the business positively or negatively. They provide long-term capitals while creditors such as financial institution provide short and medium-term in the organisation.
Employees and unions: most business has employed who contribute their time and skills for monitoring and other rewards. They form part of the larger society and reflect the values and believes found there. They are clearly affected by company activities including harmful ones. They can also unionize adversely to affect productivity and may decide to leave.
Customers: are individuals or groups that buy the goods and services of an organisation, every business have customers as the final link in the input-output chain, examples are individuals, small and large organisation, government and its agencies, educational institution e.t.c.
Today customers are very demanding they not only want quality goods and services at low prices, but they want grade after sell services.
Organisations today should consider the customers as kings/queens and must work to fascinate and delight them. We should know that customers are the reason why we are in business and without satisfying and ensuring their loyalty, very little’s if at all can be reached.
Businesses are becoming customers driven not management driven as in the past. This means that customers need and want come first; therefore, successful organization must adjust their policies and practices to meet the demand of their customers.
Importance of customers:
Customers are the only source of revenue of most organisation,
If they withdraw or transfer their loyalty, the survival of the business is in danger.
A dissatisfy Customer tells many.
Customers are looking for values.
Customers’ preference can change frequently.
External environment/macro environment: these are factors in the macro environment they are uncontrollable elements, these factors creates a potential trade and or opportunities for the business managers, therefore must continue to study and analyse the factors in the macro environment because these factors affects long-term decision making and planning of the organisation.
