CHAPTER 1BUSINESS MANAGEMENT

REAL WORLD APPLICATIONS & CONNECTIONS

INTRODUCTION TO MANAGEMENT

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.

THE IMPORTANCE OF BUSINESS MANAGEMENT Con’t

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.

WHAT IS MANAGEMENT?

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

OTHER TYPES OF MANAGEMENT

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 SkillsThe 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 SKILLSThe 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 relations 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 lawManagement principles are more likely to

change than physical principlesThey 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 labor

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.