1. Introduction to Management
Welcome to MT140
Introduction to Management
Unit 2 Seminar
Foundations of Management

2. Agenda General Questions and Announcements Introduction
Macroenvironment of a Business
Competitive Environment of a Business
History of Management Theory
Recap
Unit Assignment Q & A
Conclusion of Seminar

3. Introduction In Unit 2, we examine:
The environmental forces that shape the business organization
That the business organization is an open system, constantly exchanging information with both its macro environment and its competitive environment.
Major management theories over time

4. Organization Inputs and Outputs
Figure 2.1

5. Open Systems
Open systems
Organizations that are affected by, and that affect, their environment.

6. Open Systems
Inputs
Goods and services organizations take in and use to create products or services.
Outputs
The products and services organizations create.

7. Open Systems
External environment
All relevant forces outside a firm’s boundaries, such as competitors, customers, the government, and the economy.
Competitive environment
The immediate environment surrounding a firm; includes suppliers, customers, rivals, and the like.

8. Open Systems Macroenvironment
The general environment; includes governments, economic conditions, and other fundamental factors that generally affect all organizations.

9. The External Environment
Figure 2.2

10. Laws and Regulations
Regulators include agencies such as:
Occupational Safety and Health Administration (OSHA)
Interstate Commerce Commission (ICC)
Federal Aviation Administration (FAA)
Equal Employment Opportunity Commission (EEOC)
National Labor Relations Board (NLRB)

11. The Economy
The economic environment dramatically affects managers’ ability to function effectively and influences their strategic choices.
Interest and inflation rates affect the availability and cost of capital, growth opportunities, prices, costs, and consumer demand for products.

12. The Economy
In publicly held companies, managers may feel required to meet Wall Street’s earnings expectations.
Managers may focus on short-term results at the expense of long-term success
Some managers may be tempted to engage in unethical or unlawful behavior that misleads investors

13. Technology
As technology evolves, new industries, markets, and competitive niches develop.
Technological advances create new products, advanced production techniques, and better ways of managing and communicating.

14. Demographics
Demographics
Measures of various characteristics of the people who make up groups or other social units

15. Demographics Growth of the labor force
Demographic trends
Growth of the labor force
Increasing education and skill levels
Immigration
Increased numbers of women in the workforce
Increasingly diverse workforce

16. Social Issues and the Natural Environment
Societal trends regarding how people think and behave have major implications for management of the labor force, corporate social actions, and strategic decisions about products and markets.
Family leave, domestic partner benefits

17. The Competitive Environment
Figure 2.3

18. Competitors There are many direct competitors Industry growth is slow
Competition is most intense when:
There are many direct competitors
Industry growth is slow
Product/service is not easily differentiated

19. New Entrants
Barriers to entry
conditions that prevent new companies from entering an industry
government policy, capital requirements, brand requirements, cost disadvantages, distribution channels

20. Substitutes and Complements
products or services that increase purchases of other products
car insurance  automobile purchases
Substitutes
alternative products or services
video games  watching television

21. Customers Intermediate customers Final customers
purchase raw material or wholesale products before selling them to final customers
Final customers
purchase products in their finished form

22. Evolution of Management Theories
There are four primary approaches of management thought:
In chronological order:
Classical (late 1800s)
Behavioral (early 1900s)
Systems (early-mid 1900s)
Contingency (1960s…)

23. Assignment Questions
There are 4 graded assignments in Unit 2. They are:
Discussion Board: Discussion scenario: Marc has opened a 24-Hour fitness center in a fast-growing city. Before purchasing the franchise and starting his new business, Marc looked at the one other fitness center currently operating in that area. In the same general area are video game rooms, fast food restaurants, a sports bar, a golf driving range, a sporting goods store, and a bowling alley. Marc believes that the one fitness center forms his competition. Based on your reading of “Substitutes and Complements”, do you agree with Marc or disagree? Why or why not?

24. Dropbox Assignment
For this assignment, you must watch the video presentation on the Evolution of Management. You will find the video in the course.
After watching the video and viewing the timeline please complete your assignment.
By explaining how the theories presented are different from one another, and…
By stating which management theory you think is more important and why.
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.

25. Review
Don’t forget that you can take the Review as often as you need to during the Unit Week prior to the Tuesday midnight deadline until you get the score that you desire.
I expect everyone to get full credit on the Review. You can refer to the text and retake it until you get 100%, as long as you do so before the unit’s deadline.
SEMINAR

26. Thank You for Attending!
This concludes our seminar for Unit 2.
I appreciate your taking the time out to join me and to invest in the concepts.