INTRODUCTION TO MANAGEMENT CHAPTER 1 BUSINESS MANAGEMENT REAL WORLD APPLICATIONS & CONNECTIONS

LEARNING OBJECTIVES Discuss changes taking place in the business world today. Define management and the management process. Understand the three levels of management. Explain the three types of management skills. Explain the importance of management. Define entrepreneurship. Understand the term “glass ceiling” and how it applies to the role of women and minorities in management. Define a principle.

THE IMPORTANCE OF BUSINESS MANAGEMENT Business today operate in a world of constant change Technology and society are changing more rapidly than ever before Concern for the environment has forced companies to think about how their actions affect the quality of the air, land, and water

Competition is fiercer than ever before because companies from all over the world now try to sell their products and services to the same customers. Workplaces have become increasingly diverse as minorities, women, and new immigrants participate in growing numbers. All these changes have created new challenges for managers—the people who manage businesses.

What is Management? Management is the process of deciding how best to use a business’s resources to produce goods or provide services. A business’s resources include its: Employees Money (capital) Equipment All organizations, from one person businesses to giant corporations, need managers.

Senior Management The highest level of management—top level First, it establishes the goals or objectives of the business Second, it decides what actions are necessary to meet those goals Finally, it decides how to use the company’s resources. This level of management usually includes the chairperson of the board of directors, the CEO, COO, and the company’s senior vice presidents.

Middle management is responsible for achieving the goals set by senior management. Middle management includes the following: Company department heads District sales managers Supervisory management is responsible for the people who physically produce the company’s products or provide its services. They include Forepersons (floor supervisors) Crew leaders Store managers

Organization The term organization refers to an entity that has a distinct purpose, has people or members, and has a systematic structure. An organization is a systematic arrangement of people brought together to accomplish some specific purpose. Purpose People Systematic Structure

Management Tasks Managers in all organizations—from small businesses to large corporations—engage in some basic activities. These activities can be divided into four main categories. 1. Planning—a manager decides on company goals (objectives) and the actions the company must take to meet them. This is the job of the CEO. 2. Leading—a manager provides the guidance employees (people) need to perform their tasks. This helps to ensure that company goals are met. 3. Organizing—a manager groups related activities (tasks) together and assigns employees to perform them. 4. Controlling—a manager measures how the business performs to ensure that financial goals are being met. (performance)

Definitions of Management Roles Interpersonal Roles (manager’s relationships with people) Figurehead: Manager serves as official representative of the organization of unit. Relationship Builder: Manager interacts with peers and with people outside the organization to gain information. Leader: Manager guides and motivates staff and acts as positive influence in the workplace.

Information-Related Roles Monitor: Manager receives and collects information. Communicator: Manager distributes information within the organization. Spokesperson: Manager distributes information outside the organization.

Decision-Making Roles Entrepreneur: Manager initiates change. Disturbance Handler: Manager decides how conflicts between subordinates should be resolved and steps in when a subordinate suddenly leaves or an important customer is lost. Resource Director: Manager decides how the organization will use its resources. Negotiator: Manager decides to negotiate major contracts with other organizations or individuals.

Management Skills Conceptual Skills The skills that help managers understand how different parts of a business relate to one another and to the business as a whole. Decision making, planning, and organizing are managerial activities that require conceptual skills.

Human Relations Skills INTERPERSONAL SKILLS The skills managers need to understand and work well with people. Interviewing job applicants, forming partnerships with other businesses, and resolving conflicts all require good human reltions skills.

Technical Skills The specific abilities that people use to perform their jobs, such as operating a word processing program, designing a brochure, using Simply Accounting, and training people to use a new budgeting system are all technical skills.

Political Skills Having the right connections at the various levels of government or with businesses within a community; not considered a good business practice, but helps anyway. In business, as in life, “It’s not about what you know; it’s who you know.” It helps to have friends in high places or with the right connections. I.e., rich people hang out or socialize with other rich people.

Principles of Management A Principle is a basic truth or law Management principles are more likely to change than physical principles They are more likely to be interpreted differently by different people. Management principles are best viewed as “guides to action rather than rigid laws.” Being able to change and adapt during times of uncertainty is an important management skill. A dress code is an example of a mgmt. principle

Women & Minorities in Management in the Past In the past managers of most large and medium-sized US businesses were almost exclusively white males. In the 1950s and 1960s women in the workforce provided mostly service roles, such as secretaries, teachers, sales clerks, waitresses, etc. Many minority workers, especially those with little education, were confined to menial jobs such as custodial work and manual labour

Women & Minorities Today Women and minorities now serve as CEOs of some of the most prestigious businesses including Avon, eBay, and Lucent. In 1999, Hewlett-Packard was the first of the 30 largest US companies to appoint a woman as CEO—Carleton Fiorina In 2000 women held 44% of the managerial positions in the field of public administration In 2002 women had made up 25% of the Senior Executive Service, the federal government’s highest- ranking managers.

Entrepreneur Entrepreneurs are people who launch and run their own businesses. When they start out, they must perform many of the basic management functions that professional managers perform. As their companies grow, they sometimes hire professional managers. Professional managers are paid to perform management functions within a company; they do not own the business.

Entrepreneurs Without entrepreneurs, there would be no new businesses and fewer exciting developments, or innovations in business and industry. Being an entrepreneur is much riskier than being a professional manager. Entrepreneurs tend to be more independent than managers. Entrepreneurs tend to have less formal education. Some entrepreneurs jump from job to job before starting their own businesses.

Entrepreneurs, cont’d. Start with an idea for creating or modifying a product or service that they believe in. Like the idea of making decisions and being their own bosses. They often find tremendous satisfaction in their work, and their financial rewards can be great. They work long hours and make decisions about every aspect of the business. They invest money in their businesses and risk losing all of it.

Entrepreneurs Entrepreneurs own their businesses, but they can choose among different types of ownership. Sole proprietorship: Own and run a business single-handedly. Partnership: One or more partners may supply the money while another runs the business; or two or more people may run a business together. Corporation: Formed to avoid being held personally responsible. Franchise: some entrepreneurs choose to own franchises.

Definitions Operatives: People who work directly on a job or task and have no responsibility for overseeing the work of others. For example, the person who serves your coffee at Tim Horton’s is an operative—worker. Managers: People in an organization who direct the work of others. Managerial roles: The categories of managerial behavior grouped under three primary headings: Interpersonal relationships The transfer of information Decision making Role: A set of behaviors associated with a particular job.