Chapter ThirteenChapter ThirteenChapter ThirteenChapter Thirteen

Professional Small Business Management

Chapter FocusChapter FocusChapter FocusChapter Focus• Describe the functions and activities of managing a

small business.• Explain the stages of growth and their consequences on

your business.• Discuss the significance of leadership to small business.• Explain the importance of motivation in small

businesses.• Compare the positive and negative aspects of total

quality management (TQM) for small business.

The Four Functions of The Four Functions of ManagementManagement

The Four Functions of The Four Functions of ManagementManagement

PlanningPlanning

LeadingLeading

OrganizingOrganizingControllingControlling

Fig. 13-1

A Small Business Manager Needs to:A Small Business Manager Needs to:A Small Business Manager Needs to:A Small Business Manager Needs to:

• Develop relationships with peers

• Carry out negotiations

• Motivate subordinates

• Resolve conflicts

• Establish information networks and then disseminate information

• Make decisions in conditions of extreme ambiguity in allocating resources

• Most important, a manager must be willing to continually learn on the job.

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Stages of Business GrowthStages of Business GrowthStages of Business GrowthStages of Business Growth

Solo Stage

Team BuildingStage

Growth Stage

FormalOrganizationStage

Manager/Owner

Coach

Fig. 13-2

Professionalmanager

What’s Bugging You?What’s Bugging You?What’s Bugging You?What’s Bugging You?

STARTUP

17%16%38%

5%4%

11%5%3%1%

Table 13-1

GROWTH

Obtain external financingInternal financial managementSales and marketingProduct developmentProduction and operations managementGeneral managementHuman resource managementEconomic environmentRegulatory environment

1%22%23%

2%8%

14%17%

2%8%

Balance: A Manager’s GoalBalance: A Manager’s GoalBalance: A Manager’s GoalBalance: A Manager’s Goal• Entrepreneurial focus:

– Where is the opportunity?

– How do I capitalize on it?

– What resources do I need?

– How do I gain control over them?

– What structure is best?

• Administrative focus:– What sources do I control?

– What structure determines our organization’s relationship to its market?

– How can I minimize the impact of others on my ability to perform?

– What opportunity is appropriate?

page 350

Six Styles of Entrepreneurial Six Styles of Entrepreneurial ManagementManagement

Six Styles of Entrepreneurial Six Styles of Entrepreneurial ManagementManagement

• Classic.

• Coordinator.

• Craftsman.

• The Entrepreneur + Employee Team.

• Small Partnership.

• Big-Team Venture.

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MASLOW’S HEIRARCHY OF NEEDSMASLOW’S HEIRARCHY OF NEEDSMASLOW’S HEIRARCHY OF NEEDSMASLOW’S HEIRARCHY OF NEEDS

• Self-actualization

• Esteem needs

• Social needs

• Safety & security needs

• Physiological needs

Herzberg’s Motivation-Hygiene TheoryHerzberg’s Motivation-Hygiene TheoryHerzberg’s Motivation-Hygiene TheoryHerzberg’s Motivation-Hygiene Theory

• Motivation factors (Satisfiers)– Achievement– Recognition– Work itself– Responsibility– Advancement– Growth

Herzberg’s Motivation-Hygiene TheoryHerzberg’s Motivation-Hygiene TheoryHerzberg’s Motivation-Hygiene TheoryHerzberg’s Motivation-Hygiene Theory

• Hygiene Factors (Dissatisfiers)– Company policy & administration– Supervision– Work conditions– Salary– Relationship with peers

Job Dissatisfiers and SatisfiersJob Dissatisfiers and SatisfiersJob Dissatisfiers and SatisfiersJob Dissatisfiers and Satisfiers

-50% -40% -30% -20% -10% 0% 10% 20% 30% 40% 50%

dissatisfaction satisfaction

Factors characterizing 1,844 eventson the job that led to extreme dissatisfaction

Factors characterizing 1,753 eventson the job that led to extreme satisfaction

Supervision

Company policy and admin.

Growth

Advancement

Responsibility

Work itself

Recognition

Achieve-ment

Fig. 13-3a

Job Dissatisfiers and SatisfiersJob Dissatisfiers and SatisfiersJob Dissatisfiers and SatisfiersJob Dissatisfiers and Satisfiers

-50% -40% -30% -20% -10% 0% 10% 20% 30% 40% 50%

dissatisfaction satisfaction

Security

Status

Relationship with subordinates

Personal life

Relationship with peers

Salary

Work conditions

Relationship with supervisor

Factors characterizing 1,844 eventson the job that led to extreme dissatisfaction

Factors characterizing 1,753 eventson the job that led to extreme satisfaction

Fig. 13-3b

Job Satisfiers and DissatisfiersJob Satisfiers and DissatisfiersJob Satisfiers and DissatisfiersJob Satisfiers and Dissatisfiers

All factorscontributing tojob dissatisfaction

All factorscontributing tojob satisfaction

Hygiene69 19

31 81Motivators

80% 60 40 20 0 20 40 60 80%Ratio and percent

Fig. 13-3c

Deming’s 14 Points of TQMDeming’s 14 Points of TQMDeming’s 14 Points of TQMDeming’s 14 Points of TQM• 1. Constant purpose toward improvement.

• 2. Adopt the new philosophy.

• 3. Stop depending on mass inspection to ensure quality.

• 4. Stop awarding business on the basis of price tag alone.

• 5. Constantly improve the system of production and service.

• 6. Train everyone.

• 7. Institute leadership.

page 359a

Deming’s 14 Points of TQMDeming’s 14 Points of TQMDeming’s 14 Points of TQMDeming’s 14 Points of TQM• 8. Drive out fear.

• 9. Break down barriers between departments.

• 10. Eliminate slogans, exhortations, and targets that demand zero defects.

• 11. Eliminate numerical quotas.

• 12. Remove barriers to pride in workmanship.

• 13. Start a vigorous program of education and self-improvement.

• 14. Put everyone to work on the transformation.

page 359a