1. Professional Small Business Management
Chapter Thirteen
Professional Small Business Management

2. 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.

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

4. 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

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

6. 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

7. 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

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

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

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

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

12. 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

13. 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

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

15. 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

16. 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