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BAEB510 Chapter 6: Manage a Small Business
- 2. Chapter 6: Management a Small Business
Topic Outlines
6.1 Introduction
6.2 Definition
6.3 Characteristics of a Small Business
6.4 Management Functions
6.5 Business Input
6.6 Business Vision, Mission, Goals & Objective
6.7 Planning
6.8 Organizing
6.9 Leading
6.10 Controlling
6.11 Organization
6.12 Organizational Principles
6.13 Organizational Structure
6.14 Personnel Planning
6.15 Recruitment Process
6.16 Retaining Employees
© 2010 Cosmopoint Slide 2 of [11]
- 3. Chapter 6: Management a Small Business
Learning Outcomes
After completing this chapter, student should be able to:
Explain the elements to manage a small business
Understand the elements in managing a small business.
Manage your own business.
© 2010 Cosmopoint Slide 3 of [11] Topics
- 4. Chapter 6: Management a Small Business
6.1 Introduction
The importance of small and
medium-sized businesses in
helping the economic
development of our nation
cannot be refuted.
Creating a job opportunities
SMEs play a crucial role in
contributing to the prosperity
of big and multinational
corporations.
© 2010 Cosmopoint Slide 4 of [11] Topics
- 5. Chapter 6: Management a Small Business
6.2 Definition
A small sized business is:
“A business establishment with an annual sales turnover of not more
than RM10 million and which employs not more than 50 full time
workers”.
© 2010 Cosmopoint Slide 5 of [11] Topics
- 6. Chapter 6: Management a Small Business
6.3 Characteristics of a Small Business
Ownership – Privately owned by individual or
partners, typically registered as a sole
proprietorship, partnership or private limited
company.
Management – The business is managed ad
operated by the owner (s).
Resources - A small business often has
limited resources.
Organizational Structure – For a small
business, the structure is often flat and
informal.
Flexibility of Change – more flexibility to
adapt to changes, vulnerable to development
in the business environment.
© 2010 Cosmopoint Slide 6 of [11] Topics
- 7. Chapter 6: Management a Small Business
6.4 Management Functions
Management functions refer
to the activities of planning ,
organizing, leading and
controlling of business input.
What is business input?
Business input refers to
the resources required to
operate a business
activity. These include
capital, manpower,
technology, and raw
materials.
© 2010 Cosmopoint Slide 7 of [11] Topics
- 9. Chapter 6: Management a Small Business
6.6 Business Vision, Mission, Goals & Objective
Business Vision. The vision is the long term goal of the business. It is often
stated in terms of a value statement announcing where the business wants
to go or what it aspires to be.
Business Mission. A mission is a statement of purpose or the reason for
existence. It establishes the identity of the business and what it does. It
defines long-term goals of the company but in a specified time frame.
Business Goals/Objectives. Business goals or objectives support the
achievement of a business mission and vision. They are more specific,
stated in a shorter term and have a definite time frame. A good business
objective should be specific, measurable, achievable, realistic and have a
time frame.
© 2010 Cosmopoint Slide 9 of [11] Topics
- 10. Chapter 6: Management a Small Business
6.7 Planning
Planning covers the activity of
formulating company’s policy and
procedure to ensure the
attainment of business mission
and objectives through the most
effective and efficient means.
To determine his business
mission and objectives and
device a workable strategy to
achieve them .
© 2010 Cosmopoint Slide 10 of [11] Topics
- 11. Chapter 6: Management a Small Business
6.8 Organizing
The word organize means
“to properly arrange”.
Refers to the activities of
designing and
organizational structure,
dividing and assigning jobs
and tasks among
departments, sections, or
units besides handling the
infrastructure and operation
methods.
© 2010 Cosmopoint Slide 11 of [11] Topics
- 12. Chapter 6: Management a Small Business
6.9 Leading
The act of getting the job done
through other people is referred
to in managerial functions as
leading.
Leading involves:
Assigning of jobs and
responsibilities
Motivating employees
Providing and receiving
feedback
© 2010 Cosmopoint Slide 12 of [11] Topics
- 13. Chapter 6: Management a Small Business
6.10 Controlling
Controlling is monitoring function
to ensure that activities carried out
are on the right track in achieving
the goals set out by the business.
Should not be viewed as
restricting personnel activities,
initiative or creativity.
Ongoing function that should not
be put off towards the end of the
project.
© 2010 Cosmopoint Slide 13 of [11] Topics
- 14. Chapter 6: Management a Small Business
6.11 Organization
What is organization?
An organization is a social unit which comprises people
performing different tasks in a coordinated manner in order to
achieve organizational goals.
© 2010 Cosmopoint Slide 14 of [11] Topics
- 15. Chapter 6: Management a Small Business
6.12 Organizational Principles
Organizational principles consists of the following:
Division of Work
Authority and Responsibility
Unity of Command
Span of Control
Delegation of Authority and Responsibility
© 2010 Cosmopoint Slide 15 of [11] Topics
- 16. Chapter 6: Management a Small Business
6.13 Organizational Structure
An organizational structure is essential so that every individual in an
organization can be assigned a specific task and responsibility.
Most effective and commonly used organizational structure in a small
business is the line structure.
© 2010 Cosmopoint Slide 16 of [11] Topics
- 17. Chapter 6: Management a Small Business
6.13 Organizational Structure
© 2010 Cosmopoint Slide 17 of [11] Topics
- 18. Chapter 6: Management a Small Business
6.13 Organizational Structure
© 2010 Cosmopoint Slide 18 of [11] Topics
- 19. Chapter 6: Management a Small Business
6.14 Personnel Planning
There are 3 basics things prepared
by a manager:
Job Analysis
A systematic process to
identify tasks and determine
skills and knowledge
required to perform a job.
Job Description
A written statement outlining
a given job
Job Specification
Detailed in the form of job
description
© 2010 Cosmopoint Slide 19 of [11] Topics
- 20. Chapter 6: Management a Small Business
6.15 Recruitment Process
There are 3 tasks involve in selection process:
Job Application Form
Job Interview
Selection Tests
© 2010 Cosmopoint Slide 20 of [11] Topics
- 21. Chapter 6: Management a Small Business
6.16 Retaining Employees
How to retain your employees?
There are several ways to retain your
employees:
Compensation
Salary
Wages
Sales Commission
Contribution to the Employees
Provident Fund (EPF)
Contribution to the Social
Security Organization (SOCSO)
Allowances
© 2010 Cosmopoint Slide 21 of [11] Topics