What is Management?Chapter 1 Review

Mr. SherpinskyBusiness Management ClassCouncil Rock School District

The Business World Today• Constant change!

– Technology– Society– Environment– Competition– Diversity

What is Management?• Management: The process of

deciding how best to use a business’s resources to produce good or provide services…

• Organization’s Resources:–Employees–Equipment–Money

Levels of Management• Senior management

– Establishes the goal/objectives of the business

– Decides how to use the company’s resources

– Not involved in the day-to-day problems

– Set the direction the company will follow

– Board of Directors, CEO, COO, senior vice presidents

Levels of Management• Middle management

– Responsible for meeting the goals that senior management sets

– Sets goals for specific areas of the business

– Decides which employees in each area must do to meet goals

– Department heads, district sales managers

Levels of Management• Supervisory

management– Make sure the day-to-day

operations of the business run smoothly

– Responsible for the people who physically produce the company's products or services

– Forepersons, crew leaders, store managers

– Also called “Line” managers

The Management Process3 ways to examine how management works:

– Tasks performed• Planning, organizing, staffing, leading,

controlling– Roles played

• Set of behaviors associated with a particular job

• Interpersonal, information-based, decision-making

– Skills needed• Conceptual, human relations, technical

Management Tasks• 5 Major Tasks Performed:

–Planning–Organizing–Staffing–Leading–Controlling

The Management Process• Planning

– Decides company goals and the actions to meet them• CEO sets a goal of

increasing sales by 10% in the next year by developing a new software program

The Management Process• Organizing

– Groups related activities together and assigns employees to perform them• A manager sets up a

team of employees to restock an aisle in a supermarket

The Management Process• Staffing

– Decides how many and what kind of people a business needs to meet its goals and then recruits, selects, and trains the right people• A restaurant manager

interviews and trains servers

The Management Process• Leading

– Provides guidance employees need to perform their tasks

– Keeping the lines of communication open• Holding regular staff

meetings– One of the most

important tasks of supervisory or line managers

The Management Process• Controlling

– Measures how the business performs to ensure that financial goals are being met• Analyzing accounting

records• Make changes if financial

standards not being met– One of the most

important tasks of supervisory or line managers

Relative Amount of Emphasis Placed on Each Function of

ManagementFunction

Management Roles• Managers have authority

within organizations– Managers take on different

roles to best use their authority• Interpersonal roles• Information-related roles

• Decision-making roles

Mintzberg’s Management Roles

• Interpersonal roles– A manager’s relationships

with people• Figurehead: Performs

symbolic duties• Leader: Establishes work

atmosphere and motivates subordinates

• Liaison: Develops and maintains webs of contacts outside of the organization

Mintzberg’s Management Roles

• Informational-related roles– Provide knowledge,

news or advice to employees• Monitor: Collect all types

of information relevant and useful to organization

• Disseminator: Gives other people the information they need to make decisions

• Spokesperson: Transmits information to the outside world

Mintzberg’s Management Roles

• Decisional-making roles– Makes changes in policies, resolves

conflicts, decides how to best use resources• Entrepreneur: Initiates controlled

change in the organization to adapt to changing environment

• Disturbance Handler: Deal with the unexpected changes

• Resource Allocator: Makes decisions on the use of organizational resources

• Negotiator: Deals with other organizations and individuals

Mintzberg’s Findings• Mintzberg found that most

managers are often placed into situations beyond their control such as:– Constant interruptions– Jumping from subject

to subject– Problem to Problem

• Rarely giving undivided or uninterrupted attention to anything for any length of time

Management Skills• All levels of management

require a combination of conceptual, human relations, and technical skills– Conceptual skills most

important at senior management level

– Technical skills most important at lower levels

– Human relations skills important at all levels

Conceptual, Human Relations, and Technical Skills

Conceptual Skills

Human Relation Skills • Need to work well

together • Resolving conflicts • Forming

partnerships

Technical Skills • Abilities used to perform their job• Training people to use a new system

• Decision making planning, and organizing

• Understanding how different businesses relate

Management Skills• Conceptual skills

– 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

Management Skills• Human relations skills

– Skills managers need to understand and work well with people while forming partnerships• Interviewing job applicants, forming

partnerships with other businesses, resolving conflicts

Management Skills• Technical skills

– The specific abilities that people use to perform their jobs• Operating various software applications• Overseeing things like: designing a brochure,

training people to use a new budgeting system

History of Management• Knowledge is Power!• Even in life!

– Where you’re going, where you’ve been!

– Management is relatively a modern concept…

Causes of the Industrial Revolution

• Many people left their farms to work in factories– Professional managers supervised their

work• Changes in technology,

communication, and transportation– Telegraph and cable lines extended across

the U.S. after the Civil War– Railroad lines, canals, roads, steamships

The Break-Up of Trusts• The Sherman Act, 1890

– Made it illegal for companies to create monopolies

– Intended to restore competition– Example

• Standard Oil Company was broken into smaller companies so that other oil companies could compete with the former giant

• John D. Rockefeller

Frederick W. Taylor and Scientific Management

• Father of Scientific Management• Wanted to find ways to motivate

workers to work harder• To increase efficiency, he tried to

figure “one best way” to perform a particular task– Used a stopwatch to determine

which work method was most efficient

– These time and motion studies lead to scientific management principles

The Hawthorne Studies of Productivity

• In the roaring 20s--Researchers began to look at the relationship between working conditions and productivity

• Series of experiments at the Hawthorne plant of Western Electric in Cicero, IL– Lowered the lighting and expected to see

productivity to fall– What happened?– Productivity increased…Why?

The Hawthorne Studies of Productivity

• Researchers concluded that productivity rose because workers worked harder when they received attention

• Hawthorne effect– Change of any kind increases

productivity• Factors other than the

physical environment affected worker productivity– Psychological and social

conditions, effective supervision

The Hawthorne Studies of Productivity

• Informal group pressures– Teaming tends to drive everyone

not to let the others on the team down….

• Individual recognition– Highlighting a worker contribution

tends to motivate them to work harder

• Participation in decision-making– When workers are part of the

process they work harder

Abraham H. Maslow and the Hierarchy of Needs

• According to Maslow– All people have five basic types of

needs– People fulfill lower-level needs

before seeking to fulfill higher-level needs• One set of needs must be met before

another is sought• “Hierarchy of needs” is his grouping

and ordering of physical, security, social, status, and self-actualization needs

Maslow’s Hierarchy of Needs

Professional Management• The professional manager (started in the 1930’s)– Defined: Career person who does

not necessarily have controlling interest in the business but is paid to perform management functions

Theory X• Assumes that

people are basically lazy and will avoid working if they can

• Managers impose strict rules and make sure that all important decision are make only by them

Theory Y• Assumes that people

find satisfaction in their work

• Managers believe that people will work productively if put in the right environment

• People are creative & will come up with good ideas if encouraged to do so

• Employees given more freedom and allowed to make mistakes

Theory Z• William Ouchi, management

researcher• Integrates Japanese and American

business practices• Japanese emphasis on collective

decision making and concern for employees

• American emphasis on individual responsibility

• Companies commit to people

Japanese, American, and Theory Z Organizations

Centralization vs. Decentralization

• Centralization• The concentration

of power among a few key decision makers

• Decentralization• Process by which

decisions are made by managers at various levels within an organization

Women and Minoritiesin Management

• In the last four decades, the number of women and minorities have joined the workforce has tripled– Commonplace to hold positions at all levels of

management in companies of all sizes (Well represented at all levels of management)

• Women and minorities serve as the CEOs of prestigious businesses– PepsiCo, Kraft, Archer Daniels, Avon, Harpo,

eBay, Lucent, Dupont, IBM, XEROX, Yahoo

Women and Minoritiesin Management

• Caucasian males still hold most senior management positions

• Glass ceiling: the invisible barrier that prevents women and minorities from moving up in the world of business– Steadily becoming a

window of opportunity!– Global Influences

What is an Entrepreneur?What do you think an

Entrepreneur is????– Defined: People who own, operate, and

take the risk of a business venture are called entrepreneurs.

– These people are engaged in entrepreneurship: which is the process of running a business of one’s own.

– Difference between professional managers and entrepreneurs: Boss/No Boss

Employees vs. Entrepreneurs

• Entrepreneurs assume RISK!!!!

• Employees are different than entrepreneurs, employees are people who work for someone else.– Entrepreneurs are directly

affected by the outcomes of their decisions.

Intrapreneurship• An Intrapreneur is an

employee who is given funds and freedom to create a special unit or department within a company in order to develop a new product, process, or service– 3M utilized

intrapreneurship to create Post-It notes

Major Concept• Management

Principles should be followed except when they don’t fit a particular situation