1. Principles of Management – Notes for 2.6.13 Chapter 1, Section 1, continued from last class  A principle is a basic truth or law  Most management principles are developed through observation and deduction  Likely to be interpreted differently by different people  Management principles are best viewed as guides to action rather than rigid laws  Dress codes, work schedules…

2. Why so few women and minorities?  As recently as the 1960’s encouraged to hold support roles (e.g. secretaries, teachers, waitresses, sales clerks)  Glass Ceiling: invisible barrier that prevents women and minorities from moving up in the world of business  an unofficial but real impediment to somebody's advancement into upper-level management positions because of discrimination based on the person's gender, age, race, ethnicity, or sexual preference.  Read: Breaking the Glass Ceiling…”Avon Case Study”  Pg. 6 in text  Be ready to discuss next class!

3. BUSINESS MANAGEMENT Entrepreneurship & Small Business Chapter 1 – Section 2

4. Is this for YOU?  If you were to start your own business or company, what would it be and why?  Would you rather join a company already in existence and work your way up? Why?

5. Professional Manager  Professional managers are paid to perform management functions within a company  Senior, middle, and supervisory managers  Receive salaries for the work they do  Work for companies, but do not own them

6. What are entrepreneurs?  People who launch and run their own businesses  Read Case Study… “Nestlé's Sweet Organizational Structure”  Pg. 11  Be ready to discuss next class!

7. Entrepreneurs  Much riskier than being professional manager  Can be more rewarding than working for a company  Opportunity of high income and personal accomplishment  Usually more independent  Often less formal education  Make own decisions  own boss  Long hours and lots of decisions about all aspects of a business  Risk of losing entire personal investment  Create exciting developments/innovations Entrepreneurs – people who launch and run their own businesses Entrepreneurs – people who launch and run their own businesses Pros and Cons? Pros and Cons?

8. Activity  Are you a professional manager or entrepreneur?  Take this quiz to find out!  http://bcentral.thirdwaveresearch.com/bulletin/AptitudeTe st.html http://bcentral.thirdwaveresearch.com/bulletin/AptitudeTe st.html

9. Types of Ownership  Sole proprietorship  Partnership  Corporation  Franchise

10. Entrepreneurs in Large and Medium-Sized Businesses  Businesses want managers to think more like entrepreneurs  they must find ways to support and encourage people to develop new products and services  Entrepreneurship within a large or medium-sized company is often called intrapreneurship  Intrapreneurs take risks, but not with their own investments

11. What is a “Small” Business?  A small business is a company that is independently owned and operated, and serves local areas or customers all over the world  Small Business Administration (SBA)  government agency that lends money to small businesses  Considered “small business” if it employs fewer than 100 people  More than 99% of businesses in the US are small businesses

12. The Importance of Small Business  Play an important role in the U.S. economy  employ millions of workers  sell billions of dollars of products and services  Tend to produce more innovations than larger businesses

13. Industries Attracting Small Businesses  Service - medical and dental care, repair shops, hair cutting, restaurant meals, dry cleaning, etc.  Distribution - industries that are concerned with moving goods from producers to consumers  retailers, wholesalers, transport companies, communications companies  Production - construction, mining, and manufacturing companies  NOTE: these industries usually require a large initial investment.

14. Why Do Some Small Businesses Fail?  lack of experience - around 40% of all small businesses are started by people who have little experience in their field  lack of money - don’t have enough money to get them through the growing pains of starting up a business; some businesses don’t make a profit for many years after starting  bad location - many people try to save on rent and find they have a good deal on a bad location

15. Why Do Some Small Businesses Fail?  mismanaging inventory - carrying improper merchandise is a drain on business; not having good controls  poor credit-granting practices - the pressure to sell merchandise on credit is great, but credit sales create many other problems which many firms can’t handle  poorly planned expansion - many businesses expand too quickly

16. Famous Entrepreneur Facebook Page  See handout on my website  This is DUE on Friday, Feb. 8 th at the END OF CLASS!