“Companies fail when they become complacent and imagine that they will always be successful. So we are always challenging ourselves. Even the most successful companies must constantly reinvent themselves. -- Bill Gates Chairman and Chief Software Architect Microsoft

The Importance of Business Management

Business - Definition An organization or economic system where goods and services are exchanged for one another or for money.organizationeconomic systemgoods and servicesmoney Every business requires some form of investment and enough customers to whom its output can be sold on a consistent basis in order to make a profit.forminvestmentcustomersoutputconsistentorderprofit Businesses can be privately owned, not-for-profit or state-owned. An example of a corporate business is PepsiCo, while a mom-and-pop catering business is a private enterprise.PepsiCoprivate enterprise

The Business World Today Constant change! – Technology – Society – Environment – Competition – Diversity

What is Management? The process of deciding how best to use a business’s resources to produce a product or provide services resources – Employees – Equipment&Matrials – Money

Levels of Management (a)Senior management (b)Middle management (c)Supervisory management

Levels of Management (a) Senior management – Establishes or sets 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 (Vision) the company will follow – Tasks – Chairperson of the company’s board of directors, Chief operating officer COO, Chief executive officer CEO, senior vice presidents SVP.

Levels of Management (b) 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 the goals – Tasks – Department heads, sales managers

Levels of Management (C) 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 – Tasks – Fore persons, crew leaders, store managers

The Management Pyramid

The Management Process Three 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

The Management Process C.L.O.P.S.StaffingPlanningOrganizingLeadingControlling

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

The Management Process Leading – Provides guidance employees need to perform their tasks – Keeping the lines of communication open – Holding regular staff meetings

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 Planning – Decides company goals and the actions to meet them – CEO (Chief executive officer) sets a goal of increasing sales by 10% in the next year by developing a new software program – developing a new software program

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

Assignment#1 fill the following cells with management Process according to management level StaffingPlanningOrganizingLeadingControlling Senior Middle Supervisor

Relative Amount of Emphasis Placed on Each Function of Management

4 steps Management process Step 1: Established Performance Standards Step 2: Measure Actual Performance Step 3: Compare Measured Performance Against Established Standards Step 4: Take Corrective Action

Step 1: Established Performance Standards Establishes a base for future measurement Predicts specific expectations for a product, service, machine or individuals Set numerically (quality, quantity, time) Occurs mainly in top management

Step 2: Measure Actual Performance Collection of data to determine variation from standard Written: time cards, production tallies, inspection reports, sales tickets Personal: statistical reports, oral reports, and written reports Management by walking around, observation of workers

Step 3: Compare Measured Performance Against Established Standards Comparing results with standards determines variation Supervisor’s role

Step 4: Take Corrective Action Fixing inefficiency, making sure employees and company is on track Supervisor’s role

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

Management Roles Interpersonal roles – A manager’s relationships with people Providing leadership with the company Interacting with others outside the organization Senior managers spend much of their time on interpersonal roles – Represent the company in its relations with people outside the company, interacting with those people, and providing guidance and leadership to the organization – Determine a company’s culture

Management Roles Information-related roles – Provide knowledge, news or advice to employees Holding meetings Finding ways of letting employees know about important business activities Decision-making roles – Makes changes in policies, resolves conflicts, decides how to best use resources Middle and supervisory managers spend more time resolving conflicts than senior managers

Management Skills Conceptual skills Human relations skills Technical skills

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 Conceptual skills most important at senior management level – Decision making, planning, and organizing

Management Skills Human relations skills: Skills managers need to understand and work well with people Human relations skills important at all levels – Interviewing job applicants, forming partnerships with other businesses, resolving conflicts

Management Skills Technical skills: The specific abilities that people use to perform their jobs Technical skills most important at lower levels – Operating a word processing program, designing a brochure, training people to use a new budgeting system

Entrepreneurship

What is an Entrepreneur? People who launch and run their own businesses – At first, they must perform many of the basic management functions Estee Lauder, Kellogg, General Electric, Microsoft, Dell, Land’s End Estee LauderKelloggGeneral Electric MicrosoftDellLand’s End – All started by entrepreneurs!

What is an Entrepreneur? A lot of risk! Can lose all the money invested in their company Can be more rewarding than working for a company High reward!

What is an Entrepreneur? Tend to be more independent May have less formal education Some jump from job to job before starting their own business

What is an Entrepreneur? Start with an idea for creating or modifying a product or service they believe in Like being their own boss! Tremendous satisfaction in their work Must work long hours and make decisions about every aspect of a business Without entrepreneurs, there would be no new businesses and fewer exciting innovations in business and industry

Types of ownership – Sole proprietorship: people who run their businesses single handedly Medicine, dentistry, accounting – Partnership: one or more partners supply the money and runs the business – Corporation: avoid being held personally liable for financial losses