Management levels and Decision making
·
Each level of management has its own
responsibility and specific functions.
·
Strategic management:
o
Highest level
o
It aims to define the direction of the company
and the strategies to be implemented to achieve the objectives set.
o
Who makes: Top management, CEOs, Board of
directors.
o
The responsibilities and objectives of strategic
management include:
§
Determining the vision, mission and goals.
§
Developing a strategy to achieve these goals.
§
The allocation of resources for the
implementation of the strategy.
§
Market and competition analysis to adjust the
strategy as needed
§
Assessing business performance and identifying
opportunities for improvement
§
Strategic decision making
§
Strategic management focuses on a long-term
vision and performance
o
Tools used: Environmental Analysis (PESTEL),
Competitive analysis, BCG matrix, strategic planning etc.
·
Tactial management:
o
Intermediate level
o
Implements the strategies set by strategic
management. It involves the coordination of operational activities to achieve
the company’s short-term goals.
o
The responsibilities and objectives of tactical
management include:
§
Resource planning and allocation.
§
Supervision and coordination of day-to-day
activities to ensure short-term goals are met.
§
Communication of instructions and objectives to
the teams
§
Assessing operational performance and
identifying opportunities for improvement
§
Prepare equipment and manpower planning.
§
Make or buy decision.
o
Tools used: Short or medium-term operational
planning, Budgeting and tracking costs, Performance evaluation, process
analysis, Human resources management.
·
Operational management:
o
Operational management consists of implementing
the strategies defined by strategic management. The tasks to be accomplished
are prioritized and distributed.
o
Deals with routine decisions.
o
Prepared for shorter time frames.
o
Plans are definite, and action oriented,
expressed in terms of parameters which can be quantified and hence comparison
between planned and actual is easy.
o
Give detailed instructions regarding: What is to
be done? Who should do it? When and where?
o
The objectives of operational management
include:
§
Increased productivity and profitability
§
Reduction of costs and production times
§
Optimization of the use of human, financial and
material resources
§
Meeting the needs and expectations of employees
§
Anticipation and management of potential risks
o
Tools used: improvement of organizational
processes and methods, Identification of needs, supply chain management,
Performance indicators, Stock management, etc.
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