Professional Small Business Management Chapter Thirteen Professional Small Business Management

Chapter Focus Describe the functions and activities of managing a small business. Explain the stages of growth and their consequences on your business. Discuss the significance of leadership to small business. Explain the importance of motivation in small businesses. Compare the positive and negative aspects of total quality management (TQM) for small business.

The Four Functions of Management Planning Controlling Organizing Leading Fig. 13-1

A Small Business Manager Needs to: Develop relationships with peers Carry out negotiations Motivate subordinates Resolve conflicts Establish information networks and then disseminate information Make decisions in conditions of extreme ambiguity in allocating resources Most important, a manager must be willing to continually learn on the job. page 344

Stages of Business Growth Solo Stage Manager/Owner Coach Team Building Stage Growth Stage Professional manager Formal Organization Stage Fig. 13-2

What’s Bugging You? STARTUP GROWTH Obtain external financing Internal financial management Sales and marketing Product development Production and operations management General management Human resource management Economic environment Regulatory environment 17% 16% 38% 5% 4% 11% 3% 1% 1% 22% 23% 2% 8% 14% 17% Table 13-1

Balance: A Manager’s Goal Entrepreneurial focus: Where is the opportunity? How do I capitalize on it? What resources do I need? How do I gain control over them? What structure is best? Administrative focus: What sources do I control? What structure determines our organization’s relationship to its market? How can I minimize the impact of others on my ability to perform? What opportunity is appropriate? page 350

Six Styles of Entrepreneurial Management Classic. Coordinator. Craftsman. The Entrepreneur + Employee Team. Small Partnership. Big-Team Venture. page 352

MASLOW’S HEIRARCHY OF NEEDS Self-actualization Esteem needs Social needs Safety & security needs Physiological needs

Herzberg’s Motivation-Hygiene Theory Motivation factors (Satisfiers) Achievement Recognition Work itself Responsibility Advancement Growth

Herzberg’s Motivation-Hygiene Theory Hygiene Factors (Dissatisfiers) Company policy & administration Supervision Work conditions Salary Relationship with peers

Job Dissatisfiers and Satisfiers Factors characterizing 1,844 events on the job that led to extreme dissatisfaction Factors characterizing 1,753 events on the job that led to extreme satisfaction Achieve- ment Recognition Work itself Responsibility Advancement Growth Company policy and admin. Supervision Fig. 13-3a

Job Dissatisfiers and Satisfiers Factors characterizing 1,844 events on the job that led to extreme dissatisfaction Factors characterizing 1,753 events on the job that led to extreme satisfaction Relationship with supervisor Work conditions Salary Relationship with peers Personal life Relationship with subordinates Status Security Fig. 13-3b

Job Satisfiers and Dissatisfiers All factors contributing to job dissatisfaction All factors contributing to job satisfaction 69 Hygiene 19 31 Motivators 81 80% 60 40 20 0 20 40 60 80% Ratio and percent Fig. 13-3c

Deming’s 14 Points of TQM 1. Constant purpose toward improvement. 2. Adopt the new philosophy. 3. Stop depending on mass inspection to ensure quality. 4. Stop awarding business on the basis of price tag alone. 5. Constantly improve the system of production and service. 6. Train everyone. 7. Institute leadership. page 359a

Deming’s 14 Points of TQM 8. Drive out fear. 9. Break down barriers between departments. 10. Eliminate slogans, exhortations, and targets that demand zero defects. 11. Eliminate numerical quotas. 12. Remove barriers to pride in workmanship. 13. Start a vigorous program of education and self-improvement. 14. Put everyone to work on the transformation. page 359a