The Business World Today

1. The Business World Today • Constant change! • Technology • Society • Environment • Competition • Diversity

2. 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

3. What is Management? • Managers must: • Make good decisions • Communicate well • Assign work (delegate) • Plan • Train and motivate people • Appraise employee job performance Management teaches you how to be a boss! Basically

4. The Management Pyramid 2% 5-8% • Middle Management • Department head • Sales manager • Top Management • Chairperson of the board • Chief executive officer (CEO) • Chief operating officer (COO) • Senior vice presidents • Supervisory Management • Foreperson • Crew leader • Store manager Organizational Pyramid 92% Supervisory Management

6. 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

7. 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

8. 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

9. The Management Process • 3 ways to examine how management works: • Look @ Tasks performed on the job • Planning, organizing, staffing, leading, controlling • Roles played by specific job • Set of behaviors associated with a particular job • Interpersonal, information-based, decision-making • Skills needed to perform the job • Conceptual, human relations, technical

10. Management Tasks/Process • 5 Major Tasks Performed: • Planning • Organizing • Staffing • Leading • Controlling

11. 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

12. 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

13. 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

14. 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 supervisoryor line managers

15. 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

16. Relative Amount of Emphasis Placed on Each Function of Management Function

17. 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

18. 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

19. 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

20. Mintzberg’s Management Roles • Decisional-making roles • Makes changes in policies, resolves conflicts, decides how to best use resources • Entrepreneur: • Initiates controlled change • Adapt to changing environment • Disturbance Handler: • Deal with the unexpected changes • Resource Allocator: • Makes decisions on the use of resources • Negotiator: • Deals with other organizations and individuals

21. Roles & Management • Interpersonal • Being a friend • Inspire & motivate • Coach & mentor • Brokering problems • Lead by example

22. Roles & Management • Informational • Provide knowledge & expertise • Offering advice and counsel • Collect and share information • Investigate issues • Gauge intensity

23. Roles & Management • Decision Making • Weigh alternatives • Recognize and evaluate opportunities and related costs • Overcome unexpected changes • Choose options with logic • Deal with problems immediately

24. 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

25. Conceptual, Human Relations, and Technical Skills • Human Relation Skills • Need to work well together • Resolving conflicts • Forming relationships Conceptual Skills • Decision making planning, and organizing • Understanding how different businesses relate • Technical Skills • Abilities used to perform their job • Training people to use a new system

26. Conceptual, Human Relations, and Technical Skills

27. 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

28. 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

29. 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

30. The Industrial Revolution • Began in the United States in 1860 • Just before the Civil War • Period during which a country develops an industrial economy • Before the Industrial Revolution, economy based on agriculture • Factoid: Agriculture is Pennsylvania’s #1 • By the late 1800s, economy depended on industries such as oil, steel, railroads, and manufactured goods

31. Causes of the Industrial Revolution • Many people left their farms to work in factories • “Professional” managers supervised their work • Three (3) Major Changes occurred: • Technology, Communication, and Transportation • Telegraph and cable lines extended across the U.S. after the Civil War • Railroad lines, canals, roads, steamships

32. Creation of Monopolies • The captains of industry often pursued profit and self-interest above all else • Drove competitors out of business • Created giant companies that maintained monopolies in their industries • A “Monopoly” occurs when one party maintains total control over a type of industry • Trust: giant industrial monopoly • Example: By 1879, Rockefeller controlled >90% of the country’s refining capacity and pipelines

33. The Break-Up of Trusts • People became worried about the concentration of wealth in the hands of a only a few • In response, the government began regulating businesses • Management became a career Cornelius Vanderbilt

34. The Break-Up of Trusts • The Interstate Commerce Act, 1887 • The railroads gave rebates to some customers but not others • This act forced railroads to publish their rates and forbid them to change rates without notifying the public • Established the Interstate Commerce Commission (ICC) to supervise the railroads

35. 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

36. 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

37. Frederick W. Taylor and Scientific Management • Scientific management seeks to increase productivity and make work easier by carefully studying work procedures and determining the best methods for performing particular tasks

38. Frederick W. Taylor and Scientific Management Classical Management • Used experiments to improve • Employees need: • Clear directions • Close supervision • Productivity means using the least steps to make something, having the most efficient layouts for the work, and implementing fastest work procedures to complete tasks • Should be paid by piece rates • Employees paid for amount of production

39. 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 • Lowered room temp and raised room temp expected to see productivity to fall • What happened? • Productivity increased…Why?

40. The Hawthorne Studies of Productivity • Baffled by results, a team of psychologists from Harvard University were called upon • Over five years, hundreds of experiments were conducted at the plant • Different wage payments • Rest periods • Work hours • Other variables • What were the results? • Same: Productivity increased!!

41. The Hawthorne Studies of Productivity • Researchers concluded that productivity rose because workers worked harder when they received attention • Became known as the “Hawthorne effect” • Attention/Change of any kind increases productivity • Factors other than the physical environment affected worker productivity • Psychological and social conditions • Effective supervision • Culture of leadership (X vs. Y)

42. The Hawthorne Studies of Productivity • Informal group pressures • Teaming: • Drives everyone not to let the others on the team down…. • Individual recognition • Highlighting a worker’s performance • Tends to motivate them to work even harder • Participation in decision-making • When workers are part of the decision-making process they work even harder

43. Maslow’s Hierarchy of Needs

44. Professional Management • The professional manager (started in the 1930’s) • Defined:Career person who does not necessarily have controlling interest in the businessbut is paid to perform management functions

45. What is Trust? Trust n.& v. 1. (a) a firm belief in the reliability or truth or strength etc. of a person or thing (b) the state of being relied on 2. a confident expectation 3.(a) a thing or person committed to one’s care (b) the resulting obligation or responsibility (OED) The act of placing yourself in the vulnerable position of relying on others to treat you in a fair, open, and honest way

46. Architect of Trust Taking the responsibility to build trust Authenticity- finding your voice Emotional Intelligence- tuning into your own emotions and those of others. Climate Building- creating an environment where people can bring forth their ideas, values and concerns Walking the Talk- actions speak louder than words - espoused values v. values in action

47. Douglas McGregor • McGregor published his book: The Human Side of Enterprise in 1960 • Asserts social factors are important at work • If fact, it is the dominant motivational factor

48. Douglas McGregor • Challenged Abraham Maslow • Once a need is met, it no longer motivates…. • McGregor believes there are two (2) basic kinds of managers.

49. Theory X • Assumes that people are basically lazy and will avoid working if they can • Very pessimistic about workers • Work is a burden • Managers impose strict rules and make sure that all important decision are make only by them • Employees must be coerced to work harder • Very similar to Taylorism and Scientific Management

50. Theory Y • Assumes that people find satisfaction in their work • View work as enjoyable and fun • 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