INTRODUCTION INTRODUCTION TO MANAGEMENTTO MANAGEMENT

CHAPTER 1CHAPTER 1BUSINESS MANAGEMENTBUSINESS MANAGEMENT

REAL WORLD APPLICATIONSREAL WORLD APPLICATIONS & CONNECTIONS& CONNECTIONS

LEARNING OBJECTIVESLEARNING OBJECTIVES• Discuss changes taking place in the business Discuss changes taking place in the business

world today.world today.• Define management and the management Define management and the management

process.process.• Understand the three levels of management.Understand the three levels of management.• Explain the three types of management skills.Explain the three types of management skills.• Explain the importance of management.Explain the importance of management.• Define entrepreneurship.Define entrepreneurship.• Understand the term “glass ceiling” and how Understand the term “glass ceiling” and how

it applies to the role of women and minorities it applies to the role of women and minorities in management.in management.

• Define a principle.Define a principle.

THE IMPORTANCE OF THE IMPORTANCE OF BUSINESS MANAGEMENTBUSINESS MANAGEMENT

• Business today operate in a world of Business today operate in a world of constant changeconstant change

• Technology and society are changing Technology and society are changing more rapidly than ever beforemore rapidly than ever before

• Concern for the environment has Concern for the environment has forced companies to think about how forced companies to think about how their actions affect the quality of the their actions affect the quality of the air, land, and waterair, land, and water

• Competition is fiercer than ever before Competition is fiercer than ever before because companies from all over the because companies from all over the world now try to sell their products world now try to sell their products and services to the same customers.and services to the same customers.

• Workplaces have become increasingly Workplaces have become increasingly diverse as minorities, women, and new diverse as minorities, women, and new immigrants participate in growing immigrants participate in growing numbers.numbers.

• All these changes have created new All these changes have created new challenges for challenges for managersmanagers—the people —the people who manage businesses.who manage businesses.

What is Management?What is Management?

Management Management is the process of is the process of deciding how best to use a business’s deciding how best to use a business’s resources to produce goods or provide resources to produce goods or provide services. A business’s resources services. A business’s resources include its:include its:

• EmployeesEmployees• Money (capital)Money (capital)• EquipmentEquipment

• All organizations, from one person All organizations, from one person businesses to giant corporations, need businesses to giant corporations, need managers.managers.

Senior ManagementSenior Management

• The highest level of management—top levelThe highest level of management—top level– First, it establishes the goals or objectives of the First, it establishes the goals or objectives of the

businessbusiness– Second, it decides what actions are necessary to Second, it decides what actions are necessary to

meet those goalsmeet those goals– Finally, it decides how to use the company’s Finally, it decides how to use the company’s

resources.resources.

• This level of management usually includes This level of management usually includes the the chairperson chairperson of the board of directors, of the board of directors, the the CEO, COO,CEO, COO, and the company’s and the company’s senior senior vice presidentsvice presidents..

• Middle managementMiddle management is responsible for is responsible for achieving the goals set by senior achieving the goals set by senior management. Middle management management. Middle management includes the following:includes the following:– Company department headsCompany department heads– District sales managersDistrict sales managers

• Supervisory managementSupervisory management is responsible is responsible for the people who physically produce for the people who physically produce the company’s products or provide its the company’s products or provide its services. They includeservices. They include– Forepersons (floor supervisors)Forepersons (floor supervisors)– Crew leadersCrew leaders– Store managersStore managers

OrganizationOrganization• The term The term organizationorganization refers to an refers to an

entity that has a distinct entity that has a distinct purposepurpose, has , has peoplepeople or members, and has a or members, and has a systematic structuresystematic structure. .

• An An organizationorganization is a is a systematicsystematic arrangement of arrangement of peoplepeople brought together brought together to accomplish some specific to accomplish some specific purposepurpose..

• PurposePurpose• PeoplePeople• Systematic StructureSystematic Structure

Management TasksManagement TasksManagers in all organizations—from small Managers in all organizations—from small

businesses to large corporations—engage businesses to large corporations—engage in some basic activities. These activities in some basic activities. These activities can be divided into can be divided into fourfour main categories. main categories.

1.1. PlanningPlanning——a manager decides on company a manager decides on company goalsgoals (objectives)(objectives) and the actions the company must take to meet them. This is the and the actions the company must take to meet them. This is the job of the CEO.job of the CEO.

2.2. LeadingLeading—a manager provides the guidance —a manager provides the guidance employees employees (people)(people) need to perform their tasks. This helps to ensure that need to perform their tasks. This helps to ensure that company goals are met.company goals are met.

3.3. OrganizingOrganizing—a manager groups related —a manager groups related activities (tasks)activities (tasks) together and assigns employees to perform them.together and assigns employees to perform them.

4.4. ControllingControlling——a manager measures how the business a manager measures how the business performs to ensure that financial goals are being met. performs to ensure that financial goals are being met. (performance)(performance)

Definitions of Definitions of Management RolesManagement Roles

Interpersonal RolesInterpersonal Roles ( (manager’s manager’s relationships with peoplerelationships with people))– FigureheadFigurehead:: Manager serves as Manager serves as

official representative of the official representative of the organization of unit.organization of unit.

– Relationship BuilderRelationship Builder:: Manager Manager interacts with peers and with people interacts with peers and with people outside the organization to gain outside the organization to gain information.information.

– LeaderLeader:: Manager guides and Manager guides and motivates staff and acts as positive motivates staff and acts as positive influence in the workplaceinfluence in the workplace..

Information-Related Information-Related RolesRoles

• Monitor:Monitor: Manager receives and Manager receives and collects information.collects information.

• Communicator:Communicator: Manager Manager distributes information within the distributes information within the organization.organization.

• Spokesperson:Spokesperson: Manager Manager distributes information outside the distributes information outside the organization.organization.

Decision-Making RolesDecision-Making Roles

• Entrepreneur:Entrepreneur: Manager initiates change. Manager initiates change.• Disturbance Handler:Disturbance Handler: Manager decides Manager decides

how conflicts between subordinates should how conflicts between subordinates should be resolved and steps in when a be resolved and steps in when a subordinate suddenly leaves or an subordinate suddenly leaves or an important customer is lost.important customer is lost.

• Resource Director:Resource Director: Manager decides how Manager decides how the organization will use its resources.the organization will use its resources.

• Negotiator:Negotiator: Manager decides to negotiate Manager decides to negotiate major contracts with other organizations or major contracts with other organizations or individuals.individuals.

Management SkillsManagement Skills

Conceptual SkillsConceptual Skills

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

Human Relations SkillsHuman Relations Skills

INTERPERSONAL SKILLSINTERPERSONAL SKILLS

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

Technical SkillsTechnical Skills

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

Political SkillsPolitical Skills• Having the right connections at the Having the right connections at the

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

Principles of Principles of ManagementManagement

• A A PrinciplePrinciple is a basic truth or law is a basic truth or law• Management principles are more likely to Management principles are more likely to

change than physical principleschange than physical principles• They are more likely to be interpreted They are more likely to be interpreted

differently by different people.differently by different people.• Management principles are best viewed as Management principles are best viewed as

“guides to action rather than rigid laws.”“guides to action rather than rigid laws.”• Being able to change and adapt during Being able to change and adapt during

times of uncertainty is an important times of uncertainty is an important management skill.management skill.

• A dress code is an example of a mgmt. A dress code is an example of a mgmt. principleprinciple

Women & Minorities in Women & Minorities in Management in the PastManagement in the Past

• In the past managers of most large and In the past managers of most large and medium-sized US businesses were almost medium-sized US businesses were almost exclusively white males.exclusively white males.

• In the 1950s and 1960s women in the In the 1950s and 1960s women in the workforce provided mostly service roles, workforce provided mostly service roles, such as secretaries, teachers, sales such as secretaries, teachers, sales clerks, waitresses, etc.clerks, waitresses, etc.

• Many minority workers, especially those Many minority workers, especially those with little education, were confined to with little education, were confined to menial jobs such as custodial work and menial jobs such as custodial work and manual labourmanual labour

Women & Minorities Women & Minorities TodayToday• Women and minorities now serve as CEOs Women and minorities now serve as CEOs

of some of the most prestigious businesses of some of the most prestigious businesses including Avon, eBay, and Lucent.including Avon, eBay, and Lucent.

• In 1999, Hewlett-Packard was the first of In 1999, Hewlett-Packard was the first of the 30 largest US companies to appoint a the 30 largest US companies to appoint a woman as CEO—Carleton Fiorinawoman as CEO—Carleton Fiorina

• In 2000 women held 44% of the In 2000 women held 44% of the managerial positions in the field of public managerial positions in the field of public administrationadministration

• In 2002 women had made up 25% of the In 2002 women had made up 25% of the Senior Executive Service, the federal Senior Executive Service, the federal government’s highest- ranking managers.government’s highest- ranking managers.

EntrepreneurEntrepreneur

• Entrepreneurs are people who launch and Entrepreneurs are people who launch and run their own businesses. When they start run their own businesses. When they start out, they must perform many of the basic out, they must perform many of the basic management functions that professional management functions that professional managers perform. As their companies managers perform. As their companies grow, they sometimes hire professional grow, they sometimes hire professional managers. managers.

Professional managers are paid to perform Professional managers are paid to perform management functions within a company; management functions within a company; they do not own the businessthey do not own the business..

EntrepreneursEntrepreneursWithout entrepreneurs, there would be no new Without entrepreneurs, there would be no new

businesses and fewer exciting developments, businesses and fewer exciting developments, or innovations in business and industry.or innovations in business and industry.

• Being an entrepreneur is much riskier than Being an entrepreneur is much riskier than being a professional manager.being a professional manager.

• Entrepreneurs tend to be more independent Entrepreneurs tend to be more independent than managers.than managers.

• Entrepreneurs tend to have less formal Entrepreneurs tend to have less formal education.education.

• Some entrepreneurs jump from job to job Some entrepreneurs jump from job to job before starting their own businesses.before starting their own businesses.

Entrepreneurs, cont’d.Entrepreneurs, cont’d.• Start with an idea for creating or modifying a Start with an idea for creating or modifying a

product or service that they believe in.product or service that they believe in.• Like the idea of making decisions and being Like the idea of making decisions and being

their own bosses.their own bosses.• They often find tremendous satisfaction in They often find tremendous satisfaction in

their work, and their financial rewards can their work, and their financial rewards can be great.be great.

• They work long hours and make decisions They work long hours and make decisions about every aspect of the business.about every aspect of the business.

• They invest money in their businesses and They invest money in their businesses and risk losing all of it.risk losing all of it.

EntrepreneursEntrepreneurs

• Entrepreneurs own their businesses, but they Entrepreneurs own their businesses, but they can choose among different types of can choose among different types of ownership.ownership.– Sole proprietorship: Own and run a business Sole proprietorship: Own and run a business

single-handedly.single-handedly.– Partnership: One or more partners may supply the Partnership: One or more partners may supply the

money while another runs the business; or two or money while another runs the business; or two or more people may run a business together.more people may run a business together.

– Corporation: Formed to avoid being held Corporation: Formed to avoid being held personally responsible.personally responsible.

– Franchise: some entrepreneurs choose to own Franchise: some entrepreneurs choose to own franchises.franchises.

DefinitionsDefinitions• Operatives:Operatives: People who work directly on a job or People who work directly on a job or

task and have no responsibility for overseeing the task and have no responsibility for overseeing the work of others. For example, the person who serves work of others. For example, the person who serves your coffee at Tim Horton’s is an operative—worker.your coffee at Tim Horton’s is an operative—worker.

• Managers:Managers: People in an organization who direct People in an organization who direct the work of others.the work of others.

• Managerial roles:Managerial roles: The categories of managerial The categories of managerial behavior grouped under three primary headings: behavior grouped under three primary headings: – Interpersonal relationshipsInterpersonal relationships– The transfer of informationThe transfer of information– Decision makingDecision making

• Role:Role: A set of behaviors associated with a A set of behaviors associated with a particular jobparticular job..