Mr. Sherpinsky Business Management Class Council Rock School District Sherpinsky-Business Management NOW What is Management? Mr. Sherpinsky Business Management Class Council Rock School District

Learning Outcomes Define management Sherpinsky-Business Management NOW Learning Outcomes Define management Identify and explain the levels of management Explain the management process Understand the different perspectives of scientific management and the human relations movement Explain in this introductory slide that to understand management, first we need to understand the basics of management, which is the purpose of this chapter.

Group Activity Groups of 4 Discuss: Elect a spokesperson Sherpinsky-Business Management NOW Group Activity Groups of 4 Discuss: 5 Conceptual Skills used over the last week 5 Technical Skills used over the last week 5 Human Relations Skills used over the last week Elect a spokesperson What qualities did the best person/boss you ever worked for have? How about the worse?

The World of Work Taco Barn, Inc. Tony Davis Promotions Questions: 1-Do you think Tony is ready for this promotion? 2-The team at Tony’s location is performing well. Is there anything else that he needs to change? 3- What skills do you think Tony will need to succeed in his new role? (Page 6) 4- What should Tony do in his first week as manager?

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

What is Management? Employees Equipment Money 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

What is Management? Managers must: Make good decisions Communicate well Assign work (delegate) Plan Train and motivate people Appraise employee job performance

The Management Pyramid

Levels of Management Senior management Sherpinsky-Business Management NOW 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

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

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

The Management Process 3 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

Role Playing Players: Class Activity: Bob Jane Tom Paula Janice Sam Amelia

Management Tasks Planning Organizing Staffing Leading Controlling 5 Major Tasks Performed: Planning Organizing Staffing Leading Controlling

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

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 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

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 supervisory or line managers

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

Relative Amount of Emphasis Placed on Each Function of Management

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

Mintzberg’s Managerial Roles

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

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

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

Mintzberg’s Findings Constant interruptions Mintzberg found that most managers are often placed into situations beyond their control such as: Constant interruptions Jumping from subject to subject Problem to Problem Rarely giving undivided or uninterrupted attention to anything for any length of time

Challenge Mintzberg identified one of the biggest challenges of management as the necessity to be in the moment, rather than focusing on long-term plans. Challenge: How do you see this in your own life? Business Connection: How can we as managers get better at balancing challenges? (Identify 3 ways to do so)

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

Conceptual, Human Relations, and Technical Skills Human Relation Skills Need to work well together Resolving conflicts Forming partnerships 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

Conceptual, Human Relations, and 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 Decision making, planning, and organizing

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

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

History of Management Knowledge is Power! Where you’re going, where you’ve been! Management is relatively a modern concept…

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 By the late 1800s, economy depended on industries such as oil, steel, railroads, and manufactured goods

Causes of the Industrial Revolution Many people left their farms to work in factories Professional managers supervised their work Changes in technology, communication, and transportation Telegraph and cable lines extended across the U.S. after the Civil War Railroad lines, canals, roads, steamships

Captains of Industry Cornelius Vanderbilt (steamships & railroads) John D. Rockefeller (Oil) Andrew Carnegie (steel) James B. Duke (tobacco) J. P. Morgan (banking) Powerful businesspeople who created enormous business empires dominated and shaped the U.S. economy

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 Monopoly Occurs when one party maintains total control over a type of industry Trust: giant industrial monopoly By 1879, Rockefeller controlled >90% of the country’s refining capacity and pipelines

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 business Cornelius Vanderbilt

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 forbade them to change rates without notifying the public Established the Interstate Commerce Commission (ICC) to supervise the railroads

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

New Challenges for Management When most Americans worked on farms, sophisticated management techniques were not necessary By the end of the 19th century, giant companies employed thousands of people and distributed products all over the country Workers performed tasks that needed to be coordinated These changes demanded new ideas about how to manage people working in large corporations

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

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

Frederick W. Taylor and Scientific Management Henry Ford followed Taylor’s work Created the assembly line Mass production lowered costs Could price car low enough to attract more customers Every part was counted, production was timed Paid a daily wage of $5 when the average was $2.50 This allowed workers to become customers Low morale & injuries resulted Repetition caused boredom High turnover

Frederick W. Taylor and Scientific Management Companies today continue to use the principles of scientific management Marriott Corporation Customer satisfaction

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 What happened? Productivity increased…Why?

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!!

The Hawthorne Studies of Productivity Researchers concluded that productivity rose because workers worked harder when they received attention Hawthorne effect Change of any kind increases productivity Factors other than the physical environment affected worker productivity Psychological and social conditions, effective supervision

The Hawthorne Studies of Productivity Informal group pressures Teaming tends to drive everyone not to let the others on the team down…. Individual recognition Highlighting a worker contribution tends to motivate them to work harder Participation in decision-making When workers are part of the process they work harder

Abraham H. Maslow and the Hierarchy of Needs According to Maslow All people have five basic types of needs People fulfill lower-level needs before seeking to fulfill higher-level needs One set of needs must be met before another is sought “Hierarchy of needs” is his grouping and ordering of physical, security, social, status, and self-actualization needs

Maslow’s Hierarchy of Needs

Applying Maslow’s Theory Sherpinsky-Business Management NOW Applying Maslow’s Theory At the lowest level, workers are motivated by basic needs Wages or salary, physical conditions Safety or security needs Providing insurance, retirement benefits, job security Safe from physical, psychological, or financial harm

Applying Maslow’s Theory Sherpinsky-Business Management NOW Applying Maslow’s Theory At the lowest level, workers are motivated by basic needs Wages or salary, physical conditions Safety or security needs Providing insurance, retirement benefits, job security Safe from physical, psychological, or financial harm

Applying Maslow’s Theory Social needs Provide a work environment in which colleagues interact Company lunch rooms, company retreats Status needs Provide workers with signs of recognition that are visible to others Job titles, private offices, designated parking spaces, awards, promotions

Applying Maslow’s Theory Social needs Provide a work environment in which colleagues interact Company lunch rooms, company retreats Status needs Provide workers with signs of recognition that are visible to others Job titles, private offices, designated parking spaces, awards, promotions

Applying Maslow’s Theory to Management Self-fulfillment needs Provide employees with opportunities to be creative at work Include employees in decision making Example ITT’s Ring of Quality Control: Gave awards to employees for ideas

WEB QUEST MASLOW”S HEIRARCHY Individual Activity: PowerPoint Directions: Demonstrate an understanding of Maslow’s Theory. Select products available to the general public, then produce a PowerPoint using images from advertisement campaigns for that specific product that capitalize on the various level of Maslow’s Theory.

Professional Management The professional manager (started in the 1930’s) Defined: Career person who does not necessarily have controlling interest in the business

The Systems Approach An attempt to manage all the different schools of management into an integrated approach Defined: A system is a set of connected elements that function as a whole. The systems’ approach was viewed as a “way of thinking about the job of managing.” Two Types: Open System: interacts with its external environment Closed System: No interaction with its external environment

Theory X & Theory Y Inventory What is your belief about workers? Take the quick inventory and find out!

TEAM WORK: Critical Thinking ADVANTAGES DISADVANTAGES What are the Advantages and Disadvantages of working in Teams? Group Activity: Name 4 for both! Be Ready to Share!

Empowering Employees As organizations grew in size and complexity, new styles and methods of management began to emerge Different philosophies developed on how best to manage employees

Douglas McGregor McGregor is the other major theorist associated with the Human Relations school of management. McGregor believes there are two basic kinds of managers.

Theory X Assumes that people are basically lazy and will avoid working if they can Managers impose strict rules and make sure that all important decision are make only by them

Theory Y Assumes that people find satisfaction in their work 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

Theory Z William Ouchi, management researcher Integrates Japanese and American business practices Japanese emphasis on collective decision making and concern for employees American emphasis on individual responsibility Johnsonville Foods

Japanese, American, and Theory Z Organizations

Johnsonville Foods Johnsonville Foods, located in Sheboygan Wisconsin Teams of empowered workers Buy equipment Write budgets Train one another Cut their hours when necessary Even hire and fire one another Called “self-managing” or “autonomous teams”…It is NOT crazy! Goal: Teach people to do for themselves Results: Get far better performance Sales increased by 20% Productivity increased by 50% Rejects dropped from 5% to less than ½ of 1%

Theory X & Theory Y Inventory What is your belief about workers? Using MS Word… After taking an inventory and finding out your viewpoint with regard to Theory X and Theory Y, now you can answer these questions: What does your profile mean for the type of leader you will be? What are the implications of being driven by Theory X beliefs? (For the employer, employee & manager) What are the implications of being driven by Theory Y beliefs? (For the employer, employee & manager)

Centralization vs. Decentralization The concentration of power among a few key decision makers Decentralization Process by which decisions are made by managers at various levels within an organization

Women and Minorities in Management In the last four decades, the number of women and minorities have joined the workforce has tripled Commonplace to hold positions at all levels of management in companies of all sizes Women and minorities serve as the CEOs of prestigious businesses PepsiCo, Kraft, Archer Daniels, Avon, Harpo, eBay, Lucent, Dupont, IBM, XEROX, Yahoo

Women and Minorities in Management Caucasian males still hold most senior management positions Glass ceiling: the invisible barrier that prevents women and minorities from moving up in the world of business Steadily becoming a window of opportunity! Global Influences

Attracting Working Mothers What does the demographic need in workplace? Daycare Can cost $500-$1000 per child per week Flexible Schedules Tele-commuting

Women and Minorities in Management Workers and managers must be sensitive to challenges presented by a multicultural workplace Religious holidays that are celebrated at different times throughout the year by Muslims, Christians, Jews and other religious groups

Web Quest: Research Entrepreneurs ACTIVITY: Partners Identify/Choose an High Profile Manager you would like to research and know more about (only one per team) Using MS PowerPoint 2010, complete a presentation about your chosen person. Include ALL the required elements for highest grade!!!