“Companies fail when they become complacent and imagine that they will always be successful. So we are always challenging ourselves. Even the most successful companies must constantly reinvent themselves. --Bill Gates Chairman and Chief Software Architect Microsoft The Importance of Business Management 1.1 The Business World Today • Constant change! – Technology – Society – Environment – Competition – Diversity What is Management? • The process of deciding how best to use a business’s resources to produce goods or provide services – Employees – Equipment – Money What is Management? • Auto industry managers – Assembly line: schedule work shifts, supervise assembly of vehicles – Engineering: develop new product features, enforce safety standards – General: plan for the future – All organizations need managers! • From one-person businesses to giant corporations Levels of Management • Senior management – Establishes the goal/objectives of the business – Decides how to use the company’s resources – Not involved in the day-to-day problems – Set the direction the company will follow – Chairperson of the company’s board of directors, CEO, COO, senior vice presidents Levels of Management Senior management may set a • Middle management goal of increasing company sales – Responsible for meeting the goals that senior by 15% in the management setsnext year. To meet thatforobjective, middle – Sets goals specific areas of the business management might indevelop – Decides which employees each areaamust donew to meet goals advertising campaign for – Department district sales managers one of theheads, company’s products. Levels of Management • Supervisory management – Make sure the day-to-day operations of the business run smoothly – Responsible for the people who physically produce the company's products or services – Forepersons, crew leaders, store managers The Management Pyramid JCPenney • Supervisory managers run stores and departments – Responsible for making sure the daily operations run well • Middle managers oversee districts – Responsible for making sure that all store managers within their district are performing well – Suggest ideas for increasing sales, improving service, or reducing costs within their districts • Senior management includes the CEO and senior vice presidents – Make decisions about the company’s policies, products, and organization – Decision to increase salaries throughout the company would be made here The Management Process • Three ways to examine how management works: – Tasks performed • Planning, organizing, staffing, leading, controlling – Roles played (set of behaviors associated with a particular job) • Interpersonal, information-based, decision-making – Skills needed • Conceptual, human relations, technical The Management Process • Planning – Decides company goals and the actions to meet them – CEO sets a goal of increasing sales by 10% in the next year by developing a new software program The Management Process • Organizing – Groups related activities together and assigns employees to perform them – A manager sets up a team of employees to restock an aisle in a supermarket The Management Process • Staffing – Decides how many and what kind of people a business needs to meet its goals and then recruits, selects, and trains the right people – A restaurant manager interviews and trains servers The Management Process • Leading – Provides guidance employees need to perform their tasks – Keeping the lines of communication open • Holding regular staff meetings The Management Process • Controlling – Measures how the business performs to ensure that financial goals are being met – Analyzing accounting records – Make changes if financial standards not being met Relative Amount of Emphasis Placed on Each Function of Management Management Roles • Managers have authority within organizations – Managers take on different roles to best use their authority • Interpersonal roles • Information-related roles • Decision-making roles Management Roles • Interpersonal roles – A manager’s relationships with people • Providing leadership with the company • Interacting with others outside the organization • Senior managers spend much of their time on interpersonal roles – Represent the company in its relations with people outside the company, interacting with those people, and providing guidance and leadership to the organization – Determine a company’s culture » Sears, Roebuck and Co. Management Roles • Information-related roles – Provide knowledge, news or advice to employees • Holding meetings • Finding ways of letting employees know about important business activities • Decision-making roles – Makes changes in policies, resolves conflicts, decides how to best use resources • Middle and supervisory managers spend more time resolving conflicts than senior managers Management Skills • Conceptual skills – Skills that help managers understand how different parts of a business relate to one another and to the business as a whole – Decision making, planning, and organizing Management Skills • Human relations skills – Skills managers need to understand and work well with people – Interviewing job applicants, forming partnerships with other businesses, resolving conflicts Management Skills • Technical skills – The specific abilities that people use to perform their jobs – Operating a word processing program, designing a brochure, training people to use a new budgeting system Management Skills • All levels of management require a combination of conceptual, human relations, and technical skills – Conceptual skills most important at senior management level – Technical skills most important at lower levels – Human relations skills important at all levels Principles of Management • A principle is a basic truth or law • Managers often use certain rules when deciding how to run their business Principles of Management • Management principles are best viewed as guides to action rather than rigid laws • If a principle does not apply to a specific situation, an experienced manager will not use it – Important to recognize when a principle shouldn’t be followed – Being able to change and adapt is an important management skill Principles of Management • Do all employees need to arrive at work at the same time? • Do people who work in offices need to dress in a certain way? Women and Minorities in Management • In the last three decades, an increased number of women and minorities have joined the workforce – They’ve attained positions as managers in companies of all sizes • Women and minorities now serve as the CEOs of prestigious businesses – Avon, eBay, Lucent Women and Minorities in Management • White men still hold most senior management positions • In 2002, 16% of the executives in the Fortune 500 were women – 71 of the Fortune 500 had no female officers at all • African Americans, Hispanics, other minorities – Made up only 24% of the officials and managers Women and Minorities in Management • Glass ceiling: the invisible barrier that prevents women and minorities from moving up in the world of business – Steadily becoming a window of opportunity! Women and Minorities in Management • Workers and managers must be sensitive to challenges presented by a multicultural workplace – Religious holidays that are celebrated at different times throughout the year by Muslims, Christians, Jews and other religious groups