“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 1.1

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 goods or provide services –Employees –Equipment –Money

What is Management? Auto industry managers –Assembly line: schedule work shifts, supervise assembly of vehicles –Engineering: develop new product features, enforce safety standards –General: plan for the future –All organizations need managers! From one-person businesses to giant corporations

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 –Chairperson of the company’s 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 Senior management may set a goal of increasing company sales by 15% in the next year. To meet that objective, middle management might develop a new advertising campaign for one of the company’s products.

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

The Management Pyramid

JCPenney Supervisory managers run stores and departments –Responsible for making sure the daily operations run well Middle managers oversee districts –Responsible for making sure that all store managers within their district are performing well –Suggest ideas for increasing sales, improving service, or reducing costs within their districts Senior management includes the CEO and senior vice presidents –Make decisions about the company’s policies, products, and organization –Decision to increase salaries throughout the company would be made here

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 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

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

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

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 »Sears, Roebuck and Co.

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 –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 a word processing program, designing a brochure, training people to use a new budgeting system

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

Principles of Management A principle is a basic truth or law Managers often use certain rules when deciding how to run their business

Principles of Management Management principles are best viewed as guides to action rather than rigid laws If a principle does not apply to a specific situation, an experienced manager will not use it –Important to recognize when a principle shouldn’t be followed –Being able to change and adapt is an important management skill

Principles of Management Do all employees need to arrive at work at the same time? Do people who work in offices need to dress in a certain way?

Women and Minorities in Management In the last three decades, an increased number of women and minorities have joined the workforce –They’ve attained positions as managers in companies of all sizes Women and minorities now serve as the CEOs of prestigious businesses –Avon, eBay, Lucent

Women and Minorities in Management White men still hold most senior management positions In 2002, 16% of the executives in the Fortune 500 were women –71 of the Fortune 500 had no female officers at all African Americans, Hispanics, other minorities –Made up only 24% of the officials and managers

Women and Minorities in Management Glass ceiling: the invisible barrier that prevents women and minorities from moving up in the world of business –Steadily becoming a window of opportunity!

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