What is management about?



}Definition of Management: The process of coordinating and overseeing the work activities of others
so that their activities are completed efficiently and effectively.
}Importance: Management is crucial for achieving organizational goals, optimizing resource use, and
adapting to changing environments.




}Main idea: the maximization of the profit
◦Main goal – our version of maximization of the profit
}Analyze the possibilities – the ways how to reach the main goal
}Choosing the best option

}Goal Achievement: Aligning organizational activities with set objectives.
}Resource Optimization: Efficient and effective use of human, financial, and material resources.
}Adaptation to Change: Navigating and responding to external and internal environmental shifts.







}Definition: The process of setting objectives and determining the actions required to achieve
them.
}Types of Planning:
◦Strategic Planning: Long-term goals and strategies.
◦Tactical Planning: Short-term actions and plans.
◦Operational Planning: Day-to-day operations and processes.

}Definition: Structuring resources and activities to accomplish objectives efficiently.
}Key Aspects:
◦Division of Labor: Assigning specific tasks to individuals or groups.
◦Delegation of Authority: Empowering employees to make decisions.
◦Coordination: Ensuring all parts of the organization work together harmoniously.

}Definition: Guiding and motivating employees to fulfill organizational objectives.
}Leadership Styles:
◦Autocratic: Centralized decision-making.
◦Democratic: Inclusive decision-making with team input.
◦Laissez-Faire: Minimal managerial intervention.

}Definition: Monitoring activities to ensure they meet established standards and making necessary
adjustments.
}Steps in the Control Process:
◦Establishing Standards: Setting performance benchmarks.
◦Measuring Performance: Collecting data on actual performance.
◦Comparing Performance: Analyzing deviations from standards.
◦Taking Corrective Action: Implementing changes to align performance with standards.

}What are the goals?
}Who makes the decision?
}Who participate on the profit?
}Shareholders
◦Are owners of the company
◦They are unique decision making (or management, nominated by the owners)
◦Profit belongs to owners
}Stakeholders
◦All groups, who are interested in the company

Name of the group
Requirements
Benefits
Owners
Profit
Capital
Creditor
repayment and interest of the loan
Capital
Employees
Fair wage, motivation
Labor
Management
Reward, power, prestige
Leadership
Customers
Goods or services for the good price
Consumption
Suppliers
reliable payment obligations, long-term profitable relationships
delivery of goods and services (of the best quality)
Public
Paying taxes, law enforcement, environmental behavior
infrastructure, rule of law

Customers want lower prices
Employees want secure the job


}The main problem of the big companies
}The relationship between shareholders and managers
}Information asymmetry
◦Shareholders cannot effectively control the board of directors
◦Two marginal problems od BoD:
–They can have different goals (too smart)
–The are not able to do their job well (too stupid)

}Corporate governance refers to the system of rules, practices, and processes by which a company is
directed and controlled.
}Three objectives:
◦Organization structure, processes and people
◦Transparency
◦Control

}Separation of powers
◦Competencies are divided between more than 1 person
◦Some decision of Board of Directors must be confirmed by Supervisory Board
}Motivation
◦Management is motivated to follow the owners goals (profit, no. of new business cases etc.)
◦Eliminate the temptation of the management
}System of risk monitoring
◦Information systems
◦Necessary to have all information as soon as possible

}The problem of moral hazard
◦ a tendency to take undue risks because the costs are not borne by the party taking the risk
}The management is not giving the right information to the owners
}Tools to eliminate
◦Obligation to publish financial statements
◦Rating agencies

}The process of decision making must be controlled
}Otherwise the decisions of the managers could be more risky
}Types of control
◦Market
–Capital market
◦Institutionalized
–Auditors
–Supervisory board

}Digital Transformation: AI, big data, and automation are reshaping business operations and
decision-making.
}Agile Management: Organizations are adopting agile methodologies to improve flexibility and
responsiveness.
}Remote Work and Hybrid Models: Post-pandemic trends have accelerated the shift to flexible work
arrangements.

}The main goal of the management
◦To form production process in the best way
◦Main idea is maximizing of the profit
}Shareholders x Stockholders attitude
◦Different targets, same idea (maximizing the profit)
◦Motivation of the subjects
}Corporate Governance
◦Moral hazard
}
}
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