In this section: The Business World Today What Is Management? The many changes in the business world today are creating new challenges for people who operate, or manage, those businesses. This section discusses: The Business World Today What Is Management? Levels of Management The Management Process The Principles of Management Women and Minorities in Management

What You’ll Learn What management is. The three levels of management. The management types. Three types of management skills. The principles of management. The role of women and minorities in management.

Why It’s Important To understand how businesses make decisions, you will need to understand how management works.

Key Terms management human relations skills senior management technical skills middle management principle supervisory management glass ceiling role conceptual skills

The Management Pyramid

The Management Process What a manager does can be examined in three different ways. The tasks performed. The roles taken on. Type of skills required.

Management Tasks Planning Organizing Staffing Leading Controlling Think to our example of what a teacher does in the classroom or the policeman directing traffic

Relative Amount of Emphasis Placed on Each Function of Management

Decision-Making Roles Entrepreneur Negotiator Management Roles Interpersonal Roles Information-Related Roles Figurehead Monitor Relationship Builder Communicator Leader Spokesperson Decision-Making Roles Entrepreneur Negotiator Disturbance Handler Resource Director

Management Skills Conceptual Skills Human Relations Skills Technical Skills

Mix of Skills Used at Different Levels of Management

Principles of Management A principle is a truth or law. Management principles are rules by which managers make decisions. Scientists proved scientific principles through controlled experiments. Most management principles are developed through observation and deduction. Management principles are more likely to change than specific principles. When management principles need to be changed, it is important for a manager to be able to change and adapt. Arriving to work at the same time every day and wearing certain kinds of clothes to work are examples of management principles that are changing.

Women and Minorities in Management Until the 1980’s and 90’s, managers of most large and medium-sized U.S. businesses were almost exclusively white males. Women and minorities filled primarily service, support, and menial jobs. Management principles regarding women and minorities are changing, and they are now serving in senior management such as CEO. Women and minorities often face a glass-ceiling – an invisible barrier that prevents them from moving up in the world of business. Women and minorities who are promoted can also provide more opportunities to promote women and minorities.

Fact and Idea Review Cont. 1. How have changes in modern business created challenges for managers? 2. Which management level is responsible for: a. Establishing a business partnership? b. Resolving disputes between employees? c. Designing a plan to meet a company goal? Cont. Changes in technology and society, fierce competition and diverse workplaces has created challenges for managers. A. Senior management B . Supervisory C. Middle management

Fact and Idea Review cont. 3. Which role does a manager fill when resolving a dispute? Or when holding a staff meeting? 4. List the three types of management skills and explain why each is important. 5. Can a management principle be proven just like a scientific principle? Explain.

Entrepreneurship In this section: Professional managers are paid to manage companies, but they don’t own them. Businesses are started and run by entrepreneurs. This section discusses: What Is an Entrepreneur? Entrepreneurs in Large and Medium-Sized Businesses The Importance of Small Businesses

What You’ll Learn What entrepreneurs do. The difference between managers and entrepreneurs. The need for entrepreneurship and innovation in large and medium-size companies. The importance of small businesses.

Why It’s Important Knowing what is involved in starting and running a business will help you decide whether you want to start your own company some day.

Key Terms professional manager entrepreneur small business

What Is an Entrepreneur? Entrepreneurs are people who launch and run their own businesses. Being an entrepreneur is much riskier than being a professional manager. They can lose all the money invested in their business if the business fails. Entrepreneurs tend to be more independent than managers and may have less formal education. They start with an idea for creating or modifying a product or service that they believe in.

The Importance of Small Businesses A small business is a company that is independently owned and operated. According to the Small Business Administration, a small business has fewer than 100 employees. Owners of small businesses often perform all management tasks. More that 98 percent of the businesses in the United States are small businesses.

The Importance of Small Business They play an important role in the U.S. economy because they employ millions of workers and sell billions of dollars of products and services. Small businesses tend to produce more innovations than larger businesses.

Fact and Idea Review 1. List three personal characteristics shared by many entrepreneurs. 2. Being an entrepreneur is easier than being a professional manager—true or false? Explain. 3. Describe two things companies can do to encourage their managers to think more like entrepreneurs. 4. Name two important roles small business play in the economy.