Principles of Management – Notes for 2.6.13
Chapter 1, Section 1, continued from last class
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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…
Why so few women and minorities?
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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
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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”
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Pg. 6 in text
Be ready to discuss next class!
BUSINESS MANAGEMENT
Entrepreneurship & Small Business
Chapter 1 – Section 2
Is this for YOU?
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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?
Professional Manager
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Professional managers are paid to perform management
functions within a company
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Senior, middle, and supervisory managers
Receive salaries for the work they do
Work for companies, but do not own them
What are entrepreneurs?
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People who launch and run
their own businesses
Read Case Study… “Nestlé's
Sweet Organizational
Structure”
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Pg. 11
Be ready to discuss next class!
Entrepreneurs
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Entrepreneurs – people who launch and run their
own businesses
Pros
and
Cons?
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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
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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
Activity
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Are you a professional manager or entrepreneur?
Take this quiz to find out!
http://bcentral.thirdwaveresearch.com/bulletin/AptitudeTe
st.html
Types of Ownership
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Sole proprietorship
Partnership
Corporation
Franchise
Entrepreneurs in Large and
Medium-Sized Businesses
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Businesses want managers to think more like entrepreneurs
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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
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Intrapreneurs take risks, but not with their own investments
What is a “Small” Business?
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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)
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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
The Importance of
Small Business
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Play an important role in the U.S. economy
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employ millions of workers
sell billions of dollars of products and services
Tend to produce more innovations than larger
businesses
Industries Attracting
Small Businesses
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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
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retailers, wholesalers, transport companies, communications
companies
Production - construction, mining, and manufacturing
companies
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NOTE: these industries usually require a large initial investment.
Why Do Some Small Businesses Fail?
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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
Why Do Some Small Businesses Fail?
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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
Famous Entrepreneur
Facebook Page
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See handout on my website
This is DUE on Friday, Feb. 8th at the END OF CLASS!