Chapter 7 Management and Leadership Ms. Baumgartner Business Essentials

Think About it…. Who do you know who is a leader? Parents Teachers Friends Boss Preacher/minister Coach Team mates

Who is a Manager? Management Make things happen in a business The process of accomplishing goals of a company through effective use of people and resources Make things happen in a business The entrepreneur who develops the idea for the business is a manager

The 5 Management Functions Planning (analyze info, set goals, make decisions) Organizing (identify and arrange work needed to achieve goals and how to complete it) Staffing (find, prepare and pay employees) Implementing (direct and lead people to accomplish planned work) Controlling (makes sure the business does it’s part accomplishing its goals)

3 Levels of Management Top Management (EXECUTIVES) Set long term plans/directions, held accountable for profitability, spend time planning and controlling activities (CEO, President, VP) Spend most time planning/controlling activities Mid-Management (MID-MANAGERS) Focus on specific parts of a company They spend a lot of time organizing and staffing (Marketing Mgr, Operations Mgr, Customer Service Mgr) Supervisors Evaluate work of employees, focus on implementing, usually have other non-mgt duties First level of management; responsible

Management by Others Even if you are not a manager, you will still complete work that seems like a management function You might help train someone new Might be asked to be a group leader You can develop managerial skills and decide if you are interested in being a manager someday

Different Management Styles Management can be difficult – it’s not always easy to get along with everyone Backgrounds, personalities, experiences Managers approach this challenge and other tasks in different ways based on their management style Management style is the way a manager treats and directs employees 2 types (on next slide) for different kinds of managers

Different Management Styles There are 2 very different leadership styles often used by managers: Tactical management – manager is directive and controlling; monitors employees closely Strategic management – less directive and involve employees in decision-making process; work without direct supervision The combined use of tactical and strategic management known as mixed management

7-1 Assessment Questions T/F An entrepreneur who starts a new business is not considered to be a manager Which of the following is NOT one of the 5 functions of management? Planning Implementing Producing Controlling Which level of management spends most of its time completing planning and controlling activities? Top management Mid management Supervisors Team management

What is a Leader? One of the most important responsibilities is managing people Managers are often good at managing things but not as good at managing people Good leaders are hard to find

The Importance of Leadership Managers are responsible for the success or failure of a business. Managers are the people who are responsible for making sure that resources are used effectively, so that the business is successful

The Importance of Leadership People are the most important resource of a business The cost of hiring, training, and paying employees is usually 1 of a business’ highest expenses Managers must involve employees and find ways to meet employee needs as well as business needs

The Importance of Leadership Managers must also be effective leaders Leadership is the ability to motivate individuals and groups to accomplish important goals Leaders must have effective human relations skills (getting along with others)

The Importance of Leadership It takes skills to get people with different backgrounds and personalities to work well together “Leaders are born and not made”—agree? Leaders should possess: Understanding Initiative Dependability Objectivity See Figure 7-2 on pg.157

The Importance of Leadership Some people are born leaders, others are able to learn to lead by doing the following: Study leadership (books, courses to take) Participate in organizations & activities (clubs, teams) Practice leadership at work (be dependable, honest, helpful) Observe leaders (in leadership positions at work or school) Work with a mentor (sibling, teacher, coach to learn from) Do a self-analysis and ask for feedback (good/bad)

Importance of Human Relations Managers and leaders must be able to work well with others Human relations is the way people get along with each other The important human relation skills of managers are: Self-understanding (understand your own strengths and weaknesses) Understanding others (recognize similarities/differences in people for stronger team) Communications (can be classified in several ways—next slide) Team building (combined skills of whole team is better than 1 person alone) Developing job satisfaction(help people like their job more = happier = better work)

Types of Communication Formal: has been established and already approved Informal: common ways to communicate but not “official” Internal: occurs between managers, employees or groups External: occurs between company and customers (outsiders) Vertical: (move up and down between management and employees) Horizontal: (communication at the same level—mgr to mgr) Oral: (spoken communication) Written: (incl notes, emails, reports, letters)

Influencing People Effective leaders must be able to influence others into making a decision. Influence is the ability of a person to affect the actions of another person or people There are several kinds of influence a leader can use:

Influencing People Position influence – the ability to get others to accomplish tasks because a LEADER says so Reward influence – the ability of the leader to give or withhold rewards (money or job benefits) to get people to do or not do something Expert influence – when group members recognize that the leader has special expertise in the area Identity influence – having personal trust and respect for the leader—so you listen to what they say

Influencing People There are 2 types of influence in an organization – formal influence and informal influence Formal influence – an elected leader—supposed to be the leader; in charge because of role Informal influence – someone who naturally emerges as a leader from a group

7-2 Assessment It is often said that the most important resource of a business is: Cash Technology Customers People T/F Research has proven that effective leaders are born, not made The way people get along with each other is known as Human relations Influence Management style Communications A person who is not a manager but is still able to get a group focused and organized is using Tactical management Strategic management Formal influence Informal influence

Importance of Ethical Behavior Is it okay for an employee to call in sick if they are not sick? Would you cheat on a test to ensure a higher grade? Do you believe a mgr should ever lie to an employee or ignore unsafe working conditions to save money? Individuals and organizations develop reputations based on their actions and the decisions they make. You can identify people and businesses that are not trustworthy vs ones that are

What is Ethical Behavior? Ethics are the principles of conduct governing an individual or a group. Ethical business practices: make sure company is practicing highest level of conduct within company and with customers Ethical behavior is made up of 2 parts: actions of individuals the results of those actions.

Ethical Behavior (cont.) Consider these before deciding if something is ETHICAL or not: It is lawful? Is it consistent with company policies? It does not harm someone while helping someone else If the actions and results become public, will it embarrass the company?

Preparing an Organization to Make Ethical Decisions Mgrs must create an atmosphere where employees know they are expected to act ethically. Employees are supported when making right decisions. Company Mission Statement describes why the business exists and what it believes in Have a statement of core values – the important principles that will guide decisions and actions of the company

What Can the Manager Do? Managers should always model ethical behavior….remember actions speak louder than words!!!! Treat each employee with respect Reject decisions that would damage the reputation of the business.

7-3 Assessment Which of the following is NOT a standard of ethical behavior: It should be lawful It should not benefit someone while harming someone else It should not give the company a competitive advantage It should not result in embarrassment for the company T/F Managers are responsible for the ethical actions of businesses Important principles that guide decisions and actions in a company are: A mission statement A business plan Ethical behavior Core values

Chapter Assignments Chapter 7 Assessmt: 4, 5, 11-24 (Def & Ans) Chapter 7 Study Guide

Any Questions? “A leader is one who knows the way, goes the way, and shows the way.”