Management Skills (VCE SSCE Business Management): Revision Notes

Management skills

Introduction to management skills

Management skills are abilities developed through training and experience that enable managers to perform tasks effectively and achieve business goals. These skills are closely linked to management styles, with different styles emphasising particular skills more than others.

Effective managers must be capable of producing outcomes that meet or exceed ethical standards. They should avoid activities that conflict with their deeply held moral values and ensure their decisions align with accepted professional conduct.

Regardless of business size, management level (senior, middle or front-line), or functional area (operations, human resources, finance, sales and marketing, or technology support), managers require a comprehensive set of skills to succeed.

These skills work together to create effective management. For example, delegation requires strong communication skills, while leading requires interpersonal abilities. Business owners and entrepreneurs who wish to grow their operations must develop these skills or bring in team members who possess them.

Communication skills

Communication involves creating and exchanging information between people to produce a required response. For managers, this skill is fundamental because they must clearly explain tasks, expectations and objectives to employees.

Forms of communication used by managers

Managers engage in three main forms of communication, each serving distinct purposes in the organizational environment:

Personal communication involves sharing information directly with individual employees, small groups or work teams. Research suggests managers spend between 60% and 80% of their working time in conversation, making effective interpersonal communication absolutely essential. This one-on-one or small group interaction allows managers to provide specific guidance, receive feedback and build working relationships.

Internal organisational communication uses formal systems to inform and share information with employees (internal stakeholders). Examples include organisational charts that show business structure, functional areas, chain of command and communication channels. Policy and procedure manuals also fall into this category, informing employees about how the business operates and what standards are expected.

External operational communication occurs when managers need to communicate with stakeholders outside the business. This includes transmitting information to customers, suppliers, investors, shareholders (for companies) and the broader community. The tone and content of external communication often differs from internal communication, as it represents the business to the outside world.

Why open communication matters

Open communication is vital for achieving the business vision. When managers create an environment where employees feel comfortable expressing and developing ideas, the business benefits from increased innovation and engagement.

Varieties of communication methods

Managers must be proficient in multiple communication methods to function effectively in diverse business situations:

Reading skills enable managers to locate, understand and interpret written information such as letters, reports, emails, documents, policies, procedures, codes of practice, contracts and graphs. Strong reading comprehension helps managers stay informed and make evidence-based decisions.

Writing skills allow managers to express thoughts, ideas, information and messages through emails, word-processing documents, manuals and reports. Clear written communication ensures that important information is documented and can be referred to later.

Speaking skills enable managers to communicate orally with individuals or groups of any size. This includes presentations, meetings, informal discussions and instructions. Speaking effectively allows managers to disseminate information quickly and gauge immediate reactions.

Listening skills are equally important. Managers must receive, attend to, interpret and respond appropriately to oral messages. Without developed listening skills, managers may miss valuable suggestions or critical information from employees. Active listening demonstrates respect and builds trust within teams.

Delegation

Delegation is the process of passing formal authority down the business hierarchy to enable subordinates to perform tasks or make decisions. Importantly, while authority is delegated, responsibility remains with the person who delegated the task.

Understanding delegation fundamentals

Delegation occurs at all levels and in all types and sizes of businesses. For instance, senior managers delegate to middle management, who then delegate to front-line managers, who in turn instruct workers in their tasks.

The authority to delegate must originate from the top of the business. In a company, shareholders elect the board of directors and assign them the right to delegate to the chief executive officer and senior management. In a sole trader or partnership, authority comes directly from the owner or partners.

Key concepts in delegation

Understanding these fundamental concepts is essential for effective delegation:

Responsibility refers to the requirement for a person in a particular position to perform specific tasks. When someone accepts a delegated task, they accept responsibility for completing it.

Accountability is the extent to which a worker is held answerable to supervisors or managers for their work actions or performance. Even when tasks are delegated, the original manager remains accountable for the outcomes.

Authority is the power and status to pass commands down a business hierarchy. Formal authority specifically refers to influence derived from one's position in the organisation (also called legitimate power).

The five-step delegation process

Effective delegation follows a systematic process that ensures clarity and accountability:

1. Analysis - Determine which tasks can be delegated by examining job requirements and identifying components that subordinates could handle
2. Appointment - Nominate the appropriate subordinate to whom the task will be allocated, considering their skills and experience
3. Briefing - Clearly define the task to be delegated, including expectations, deadlines and available resources
4. Control - Monitor progress and encourage the person undertaking the task, providing support without micromanaging
5. Appraisal - Review the completed work and provide constructive feedback for future improvement

Skills required for effective delegation

Delegation is both a skill in itself and a process requiring other complementary skills. Successful delegators must possess:

• Ability to analyse a job and understand what authority is required for different components
• Ability to establish clear performance standards
• Ability to set realistic checkpoints and deadlines
• Ability to select appropriate people for delegated tasks
• Strong communication skills to explain expectations clearly
• Ability to assess completed work and provide meaningful feedback, including praise and constructive advice

Tasks suited and not suited to delegation

Not all tasks should be delegated. Managers must exercise judgement in deciding what to delegate.

Tasks suited to delegation	Tasks not suited to delegation
Tasks forming part of a larger project	Strategic planning
Repetitive or time-consuming tasks	High-risk decisions
Collection or organisation of data	High-cost decisions
Training and development of subordinates	Confidential matters
	Highly specialised areas requiring specific training

Benefits of delegation

When implemented effectively, delegation provides multiple advantages that benefit both the business and its employees:

• Assists workflow continuity - Production and work processes continue smoothly even when the owner or manager is absent
• Saves time for management - Frees managers to focus on longer-term planning and more important strategic tasks
• Develops employees - Provides opportunities for skill training, personal development and job satisfaction
• Demonstrates trust - Shows faith in employees' abilities, which can boost morale and engagement

Barriers to delegation

Not all managers delegate effectively. Recognizing these common barriers is the first step in overcoming them:

• Insecurity or fear that subordinates may let them down
• Feeling threatened that subordinates doing too well might highlight their own inadequacies
• Being too disorganised or inflexible in managing their own work
• Focusing too heavily on short-term deadlines and thinking it's quicker to do jobs themselves
• Lacking trust and faith in subordinates' abilities
• Desire to maintain power and reluctance to relinquish authority
• Subordinates lacking confidence, training, experience or willingness to accept responsibility

Understanding these psychological and organizational barriers enables managers to develop strategies for becoming more effective delegators.

Planning

Planning is a formalised decision-making process that is future-oriented. It involves understanding the business's purpose or mission and formulating objectives at various levels. The business environment contains factors that create uncertainty, and planning helps reduce these uncertainties.

The five-step planning process

Effective planning follows a systematic approach that ensures comprehensive consideration of all relevant factors:

Step	Explanation
1. Set the goal(s)	When establishing goals, consider management values and the business's approach to social responsibility
2. Gather information using SWOT	Analyse the internal and external environment. A SWOT analysis examines Strengths, Weaknesses, Opportunities and Threats
3. Establish promoting and restraining factors	Determine possible opportunities and threats or problems facing the business currently or in the future
4. Develop the action plan to reach the goal(s)	Create strategies (courses of action) to take advantage of opportunities. Contingency plans may be needed to address identified threats
5. Evaluate and review	After a set period, evaluate results to determine if the plan was useful and accurate

SWOT analysis as a planning tool

A SWOT analysis assesses the internal strengths and weaknesses and external opportunities and threats for a business in a given situation. This management tool determines the current state of the business and gathers extensive information for creating accurate plans.

By identifying internal strengths and weaknesses alongside external opportunities and threats, the business builds a comprehensive picture of its position. This information-gathering process is crucial, and consulting stakeholders such as employees and customers provides input from those with vested interests in the business. Consultation also helps overcome resistance to planned changes.

Three levels of planning

Planning is organised hierarchically, with overall direction coming from the top level of the business. For companies, this means the board of directors and senior management; for smaller businesses, the owner or partners provide this direction.

Strategic planning is long-term planning (two to five years) undertaken by senior management or business owners to establish the overall direction of the business. Strategic planning decisions impact the business structure, values, business philosophies, strategic direction and objectives. This level of planning sets the foundation for all other planning activities.

Tactical planning is medium-term planning (one to two years) undertaken by middle management to implement the strategic plan. This planning occurs within each department or functional area and aims to bring business objectives into reality. Middle managers translate broad strategic goals into specific departmental actions.

Operational planning is the lowest level of planning, relating to setting goals and implementing plans for small groups, teams or individual employees. Front-line managers or supervisors conduct this planning on a daily, monthly or up to one-year basis. Examples include:

• Staffing rosters
• Ordering supplies
• Production output schedules
• Workflow improvements
• Efficiency initiatives

Each planning level connects to the others, creating a cohesive approach from strategic vision to daily operations.

Leading

Leading involves influencing others towards attaining business objectives. A good leader knows when to step in and when to allow talented team members to demonstrate their capabilities. Business owners and managers who cannot relinquish some control may find their business growth stunted and its full potential unrealised.

Requirements for effective leading

Effective leading requires managers to develop and demonstrate multiple capabilities simultaneously:

• Establish conditions that motivate, engage and inspire subordinates
• Be excellent communicators
• Act as role models who are creative, curious, humble, caring and trustworthy, using power effectively
• Understand those they lead, including their personalities, values, attitudes and emotions
• Build cohesive teams
• Inspire loyalty, dedication and commitment
• Resolve conflicts constructively
• Serve as mentors to developing employees
• Respond quickly and appropriately to change and help others do the same

Emotional intelligence in leadership

Learning to lead effectively takes time and can be enhanced by understanding emotional intelligence (EI). This concept, developed by psychologist Daniel Goleman in 2002, is closely related to effective leadership.

When leading, managers must ensure tasks are completed successfully while keeping the team cohesive and ensuring each individual remains happy and contributes to team success.

Competency	Explanation
Emotional self-awareness	Knowing what one is feeling at any given time and understanding how those moods impact others
Self-regulation	Controlling or redirecting one's emotions and anticipating consequences before acting on impulse
Motivation	Utilising emotional factors to achieve goals, enjoying the learning process and persevering despite obstacles
Empathy	Sensing and understanding the emotions of others
Social skills	Managing relationships, inspiring others and inducing desired responses from them

Managers with excellent leadership skills attend to all five competencies, creating a balanced approach to leading people.

Team leadership

Businesses function more effectively when they operate as teams. These may include senior management teams establishing strategic direction, project teams working on specific initiatives, or natural work groups performing regular functions.

A team leader guides, instructs, directs and leads a group of individuals towards achieving business goals. Whether leading a project team or work group, team leaders must exhibit specific skills to ensure success.

Teamwork occurs when a group works together to complete a task, requiring workers to be multiskilled and allowing for worker empowerment. When people listen carefully to each other, seek and value each other's opinions, and utilise each other's competencies and expertise, they engage in genuine teamwork.

Teamwork encourages open communication, improves morale, enhances workplace cooperation and productivity, and develops a positive corporate culture. These benefits make team leadership skills crucial for managers at all levels.

Decision-making

In day-to-day business operations, managers and business owners face numerous problems and decisions resulting from changes in the macro, operating and internal environments. Some decisions are routine and require minimal deliberation, while others are more difficult or complex, requiring substantial time and thought.

Decision-making is a multistep approach where managers select between different alternatives. Complex decisions typically involve several challenging factors.

Factors requiring careful consideration

Problem or issue	Explanation
High level of uncertainty	Many facts surrounding the problem are unknown
Complexity	Numerous interrelated factors require consideration
High-risk consequences	The outcome of the decision carries significant potential impact
Interpersonal issues	How people involved will react to the decision must be considered
Multiple alternatives	Numerous choices need review and evaluation

The six-step decision-making process

Using a systematic process reduces the likelihood of overlooking important factors. The decision-making skill requires managers to recognise problems, become resourceful in seeking help from others, think critically and creatively, and adapt to alternative solutions. Managers who follow this process understand that quick solutions rarely resolve complex issues effectively.

Step	Explanation
1. Identify the problem and define the objectives	Ensure you identify and define the actual problem requiring resolution, not just symptoms
2. Gather necessary information to establish the cause	Investigate circumstances surrounding the issue and search for factors that may have created the problem. Reassess the problem once all information is gathered
3. Develop alternative solutions	Create creative and imaginative possible solutions. Remember that retaining the status quo is always one alternative worth considering
4. Analyse the alternatives	Rank and sort different alternatives. Evaluate each in terms of strengths, weaknesses, benefits, costs, advantages and disadvantages
5. Choose an alternative and implement it	Decide the best outcome given current conditions. Communicate the decision clearly, including required results and personnel involved in implementation
6. Evaluate the implementation	Provide feedback on progress and make necessary adjustments. Evaluation enables learning from experience and improves future decision-making

Team involvement in decision-making

The decision-making process may reflect strong team involvement at the discussion stage, particularly when exploring risks and alternatives. The overall decision may be a team effort or require an individual to make the final call.

Managers should spend time analysing problems from all angles and remain open and honest when communicating with those involved in or affected by decisions.

Interpersonal skills

Interpersonal skills are abilities used every day to communicate and interact with other people, both individually and in groups. For managers, these skills are essential when dealing with people on a personal basis, including leading, motivating, communicating, managing conflict and building team rapport.

Core interpersonal skills

Emotional intelligence, discussed in the leading section, forms an important component of a manager's interpersonal skill set. Several core interpersonal skills are recognised as particularly important:

Being a team player means working effectively with others in both internal and external business environments. This requires cooperation, flexibility and a willingness to contribute to collective goals rather than focusing solely on individual achievements.

Demonstrating empathy and assertiveness involves understanding situations from others' points of view (empathy) while also being able to state your own requirements clearly (assertiveness). Balancing these two qualities allows managers to respect others while maintaining necessary boundaries and expectations.

Communicating effectively underpins all interpersonal interactions. Clear, honest and timely communication prevents misunderstandings and builds trust.

Motivating and encouraging others helps create positive work environments where people feel valued and inspired to contribute their best efforts.

Acting ethically and respectfully means being honest and respecting the values, beliefs, aspirations and contributions of others. This creates a workplace culture based on mutual respect and integrity.

Managing conflict

For interpersonal relations to remain positive, managers must manage conflict effectively with stakeholders, both internal and external. Conflict often arises through differences in expectations, goals, needs and wants between managers and their subordinates.

When a manager wants something done but subordinates want something different, two approaches are possible:

Remember!