Welcome to MT140 Introduction to Management Professor Rhonda Shannon Unit 2 Seminar – Foundations of Management This seminar is being recorded

Unit 2 Agenda General Questions and Announcements Introduction Examine the environmental forces that shape the Business organization Discuss the organization as an open system Examine major management theories Recap of Today’s Seminar and Unit What is new for next week

Unit 2 Outcomes During this unit we will: 1.Identify significant past and current management theories 2.Describe the business organization as an open system 3.Indentify the role of internal and external environmental factors in business

Any questions ?

What do the different parts of a business do?

Functional Areas of Business

Closed and Open systems Closed System Does not allow anything to enter from outside its environment nor does it allow anything to escape into its environment. Open System Accepts input from its external environment (the area outside the system) and is changed to some extent by this input.

Businesses are Open Systems

What is an External Environment?

How does an external environment affect the internal environment?

Can you think of an example of a change within the external environment that would create an opportunity to a business?

External Environment Subdivisions External environment can be broken further into a subdivisions that are significant to the specific business. General Environment (Macro environment) Competitive Environment

The General and Competitive Environment General Environment Competitive Environment Threat on new entrants Bargaining power of suppliers Bargaining power of buyers Threat of substitute products Competitive rivalry Demographics Political/Legal Technological Global Sociocultural Macoreconomic

Barriers to Market Entry Barriers to entry are things that make it harder for competition to enter a particular Market. Barriers can originate from: Government Policy Capital Requirements Brand Identification Cost Disadvantages Distribution Channels

What is the most important barrier to entry in any market and why?

Any questions ?

Management Theories One way to break down management theories is to divide them into three broad categories: 1.Scientific Management Theories 2.Administrative Management Theories 3.Behavioral Management Theories 4.Management Science Theory 5.Organizational Environment Theory

Scientific Management Theories Frederick Taylor in the late 1800’s to replace informal rule of thumb knowledge. Taylor sought to reduce the time a worker spent on each task by optimizing the way the task was done.

Administrative Management Theories Max Weber Developed the concept of bureaucracy as a formal system of organization and administration designed to ensure efficiency and effectiveness. Five Principles of Bureaucracy 1.Authority is the power to hold people accountable for their actions. 2.Positions in the firm should be held based on performance, not social contacts. 3.Position duties are clearly identified so that people know what is expected of them. 4.Lines of authority should be clearly identified such that workers know who reports to who. 5.Rules, standard operating procedures (SOPs), and norms guide the firm’s operations.

Behavioral Management Theories Suggested workers help in analyzing their jobs for improvements—the worker knows the best way to improve the job. If workers have relevant knowledge of the task, then they should control the task.

Management Science Theories An approach to management that uses rigorous quantitative techniques to maximize the use of organizational resources. Quantitative management—utilizes linear programming, modeling, simulation systems. Operations management—techniques to analyze all aspects of the production system. Total Quality Management (TQM)—focuses on improving quality throughout an organization. Management Information Systems (MIS)—provides information about the organization.

Theory X and Y Douglas McGregor proposed the two different sets of worker assumptions. Theory X Employee is lazy Managers must closely supervise Create strict rules & defined rewards Theory Y Employee is not lazy Must create work setting to build initiative Provide authority to workers

Recap of Today’s Seminar and Unit Areas of Business Close/Open Systems of Business External Environment General/Competitive Environment Barriers of Market Entry Management Theories Items due this week are: Discussion (35 points) Assignment (40 points) Review (10 points) Seminar (15 points)

Unit 2 Assignment This week's assignment consists of watching the video presentation on the Evolution of Management. In addition to the video, click the Timeline icon below to view the Timeline of Management Theory. 1.Explain how the theories presented are different from one another 2.State which management theory you think is more important and why. 3.Respond in a paper of at least one full double-spaced page in length, using size 12-point Times New Roman font. Submit your paper to the Unit 2: Assignment Dropbox.

Next Week: Unit 3 – Planning

Any questions ?

Instructor Contact Information Professor Rhonda Shannon. MBA (Eastern Time Zone) Phone: (317) Cell: (317) AIM: Please don’t hesitate to or call me if you have questions.

Reminders There are many resources that Kaplan offers beyond the class experience. You can attend school meetings, seminars and presentations as well as visiting the online library and the writing center. Take advantage of the extra help in areas where you need it. Also, don’t forget I will be posting my notes and PowerPoint out on doc sharing and will also be ing you those as well. You are always welcome to listen to the archives after the Seminar.

Thanks for attending seminar I look forward to seeing you next week. Everyone have a great night!