2nd Bac - U2 Economy for Decision Making - Managerial Principles

 Managerial Principles

Every entrepreneur must develop managerial abilities and of economic analysis that allows them to know and act with greater certainty at the moment of defining and to put into action oriented decisions to better the inner situation of the business and to position the business in a state where it can defend from threats and take advantage of opportunities.

 

Managerial Process: planning, organization, direction and control

Planning: to answer questions such as:

Where are we? (to determine strengths, weaknesses, opportunities and threats)

Where are we going? (objectives)

How do we get there? (strategies, tactics and actions)

Will we get there or not? (research results)

 

Organization: Has to deal with the acquisition and ordering of the resources that the entrepreneurship needs to function well, and that the objectives are reached. For a new entrepreneurship this stage has to deal with creating the different work areas.

 

Direction: It’s related with the abilities an entrepreneur must have in order to make the planning a reality, plus the resources available and the staff hired. A good direction process includes:

-       Motivate the workers

-       Leaders for all areas

-       Effective communication

-       Conflict resolution

 

Control: The comparison between what was planned and what the entrepreneur is really accomplishing. To control that the activities are carried out as it was planned and to correct any mistakes.

 

Managerial effectiveness and efficiency

Construction: Effectiveness and efficiency are two indicators that help to measure the development that the business is reaching. To be able to say that the development is good or bad, the indicators must be compared to the following:

-       Standard indicators of the area

-       Historical results of the business or other

 

Effectiveness: When an entrepreneur has reached the objectives set, he or she is in the capacity to say that the entrepreneurship has worked effectively. Being effective simply means the capacity of a person or business to accomplish the goals and objectives established.

 

Efficiency: The process of measuring the results, this is obtained with two variables:

Efficiency = Products / Resources

The goal here is to produce as many products as possible with the least amount of resources, this means the entrepreneurship is efficient.

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