Introduction to Management

Business ManagementChapter 1

Standards

• After this lesson you will be able to…– Discuss changes taking place in the business world

today.– Define management– Explain the importance of management.– Define entrepreneurship.– Discuss the role of women and minorities in

business today.

THE IMPORTANCE OF BUSINESS

MANAGEMENT

Understanding Management

• Microsoft’s wealth and power seem to grow and grow. By any account, Bill Gates, one of Microsoft’s founders, is one of the richest people in the world. To keep his company on the cutting edge, Gates demands that his colleagues be remarkably well-informed, logical, vocal, and thick-skinned. According to Gates, “My goal is to prove that a successful corporation can renew itself and stay in the forefront.”

Analyzing Management Skills

• What do you think of the demands Bill Gates places on his colleagues?

• What do you think of this management approach?

The Importance of Business Management

• To understand how businesses make decisions, you will need to understand how management works.

• Businesses today operate in a world of constant change.

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

• Competition is fiercer than ever.• Workplaces have become increasingly diverse.• All of these are challenges for managers – the people

who operate businesses.

International Management

• McDonald’s is one of the many U.S. companies that now have branches in many countries.

• What challenges do you think McDonald’s managers face in setting up an American fast food restaurant in a foreign country?

What is Management?

• 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, equipment, and money.

Management Processes

• Managers coordinate people, equipment, and money so that businesses can create products or provide services.

• What are some of the things managers would have to do to set up an assembly line like this one?

Levels of Management

• Top Management• Middle Management• Supervisory Management

Top Management• Highest level of management also known as

senior management.• Establishes the goals, or objectives, of the

business.• Decides what actions are necessary to meet

those goals.• Decides how to use the company’s resources.• Not involved in the company’s day to day

problems. Instead, they concentrate on setting the direction the company will follow.

Middle Management

• Responsible for meeting the goals that senior management sets.

• Sets goals for specific areas of the business and decides what the employees in each area must do to meet those goals.– Increase company sales by 15% in the next year.– In order to do that, develop new advertising

campaign for one of the company’s products.

Supervisory Management

• Supervisory Management is the lowest level of management.

• Make sure that the day-to-day operations of the business run smoothly.

• In charge of people who physically produce the company’s products or provide its services.

Management Pyramid

• The three levels of management form a hierarchy, or a group ranked in order of importance.

The Management Process

• There are several ways to examine how management works.– One way is to divide the tasks managers perform

into categories.– A second way is to look at the roles different types

of managers play in a company.– A role is a set of behaviors associated with a

particular job.– A third way is to look at the skills managers need

to do their jobs.

Management Tasks• What do managers do? (many management activities

overlap_– Plan

• Decides on company goals and the actions the company must take to meet them.

– Organize• Groups related activities together and assigns employees to perform

them.– Staff

• Recruits, selects, and trains the right people.– Lead

• Provides the guidance employees need to perform tasks.– Control

• Measures how the business performs to ensure that financial goals are being met.

Relative Amount of Emphasis Placed On Each Function of Management

• Top Management– Divide their time about equally among the five

activities. Main is Planning.

• Middle Management– Most of their time leading and controlling

• Supervisory Management– Most of their time controlling.

Red = Planning; Orange = Organizing; Green = Staffing; Light Blue = Leading; Blue = Controlling

Management Roles • Managers have authority, or power, within

organizations and use it in many ways.• Interpersonal roles– Manager’s relationships with people.– Interacting within and outside the organization.

• Information related roles– Provide knowledge, news, or advice to employees.– Hold meetings

• Decision making roles– Making changes in policies, resolving conflicts, and

deciding how best to use resources.

Management Skills• Conceptual Skills– 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

• Human Relations Skills– Understand importance of working well with people.

• Interviewing job applicants, forming partnerships, resolving conflicts

• Technical Skills– Specific abilities that people use to perform their jobs.

• Operating word processing programs, designing a brochure, training people

Mix of Skills Used At Different Levels of Management

Green = Conceptual; Light Blue = Human Relations; Red = Technical

Principles of Management

• Principles are certain rules used when deciding how to run a business. It is a basic truth or law.– Dress codes– Arrive to work at the same time

Women and Minorities in Management

• For many years the managers of most large and medium sized US businesses were almost exclusively white males.

• Now more and more women and minorities have attained positions as managers in companies of all sizes.

• The problems women and minorities have had winning promotions to senior management positions gave rise to the term glass ceiling. This is the invisible barrier that prevents women and minorities from moving up in the world of business.

• Managers need to be aware of the needs of their staff.

Dress Code• Not all businesses apply the

same management principles.

• Why might some companies want their employees to dress formally?

ENTREPRENEURSHIP

What Is An Entrepreneur?

• Senior, middle, and supervisory managers are all professional managers. – Paid to perform management functions within a company.– Receive salaries for the work they do.– Work for businesses but do not own them.

• Entrepreneurs are people who launch and run their own businesses.– They have to fulfill all management functions at first.– Much riskier than being a professional manager.– Like being their own boss.– Creative thinkers! Innovators! Developers!

Entrepreneurial Challenges

• Wally Amos created a cookie empire based on his gourmet chocolate chip cookie.

• What kinds of business problems do you think he faced when he started his cookie company?

Entrepreneurial Characteristics

• Bill Gates cofounded Microsoft as a small business with his high school friend, Pau Allen.

• What special personal characteristics do you think entrepreneurs need in order to succeed?

Development

• This company spends hundreds of millions of dollars a year testing new drugs.

• Why does it spend so much money developing new products?

Types of Ownership Options

• Sole Proprietors– People who run their businesses single handedly.

• Medicine, dentistry, accounting

• Partnerships– Work with another person and share responsibilities

and talents.

• Corporations– Join big business– Avoid being held personally liable for financial losses.

The Importance of Small Business• A small business is a company that is independently

owned and operated.– Flower shops, restaurants, dry cleaning stores, etc.

• Owners of small businesses often perform all management tasks.

• The Small Business Administration (SBA), the government agency that lends money to small businesses, considers a business small if it has fewer than 100 employees.

• 99% of the businesses in the United States are small businesses.

• Produce more innovations than larger businesses.