What is Management?
Mr. Sherpinsky
Business Management Class
Council Rock School District
Learning Outcomes
1. Define management
2. Identify and explain the levels
of management
3. Explain the management
process
4. Understand the different
perspectives of scientific
management and the human
relations movement
Group Activity
Groups of 4
• Discuss:
– 5 Conceptual Skills used
over the last week
– 5 Technical Skills used
over the last week
– 5 Human Relations Skills
used over the last week
• Elect a spokesperson
The World of Work
• Taco Barn, Inc.
• Tony Davis
• Promotions
Questions:
1-Do you think Tony is ready for this promotion?
2-The team at Tony’s location is performing well. Is there anything
else that he needs to change?
3- What skills do you think Tony will need to succeed in his new role?
(Page 6)
4- What should Tony do in his first week as manager?
The Business World Today
• Constant change!
– Technology
– Society
– Environment
– Competition
– Diversity
What is Management?
• Management: The process of deciding
how best to use a business’s resources to
produce good or provide services…
• Organization’s Resources:
–Employees
–Equipment
–Money
What is Management?
• Managers must:
– Make good decisions
– Communicate well
– Assign work (delegate)
– Plan
– Train and motivate people
– Appraise employee job performance
The Management Pyramid
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
– Board of Directors, CEO, COO, senior
vice presidents
Levels of Management
• Middle management
– Responsible for meeting the goals that senior
management sets
– Sets goals for specific areas of the business
– Decides which employees in each area must
do to meet goals
– Department heads, district sales managers
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
– Also called “Line” managers
The Management Process
• 3 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
Role Playing
• Class Activity:
–Players:
• Bob
• Jane
• Tom
• Paula
• Janice
• Sam
• Amelia
Management Tasks
• 5 Major Tasks Performed:
–Planning
–Organizing
–Staffing
–Leading
–Controlling
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
– One of the most
important tasks of
supervisory or line
managers
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
– One of the most
important tasks of
supervisory or line
managers
Relative Amount of Emphasis
Placed on Each Function of
Management
Function
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
Mintzberg’s Management Roles
• Interpersonal roles
– A manager’s relationships with
people
• Figurehead: Performs symbolic
duties
• Leader: Establishes work
atmosphere and motivates
subordinates
• Liaison: Develops and maintains
webs of contacts outside of the
organization
Mintzberg’s Management Roles
• Informational-related roles
– Provide knowledge, news
or advice to employees
• Monitor: Collect all types of
information relevant and useful
to organization
• Disseminator: Gives other
people the information they
need to make decisions
• Spokesperson: Transmits
information to the outside
world
Mintzberg’s Management Roles
• Decisional-making roles
– Makes changes in policies, resolves conflicts,
decides how to best use resources
• Entrepreneur: Initiates controlled change in
the organization to adapt to changing
environment
• Disturbance Handler: Deal with the
unexpected changes
• Resource Allocator: Makes decisions on the
use of organizational resources
• Negotiator: Deals with other organizations and
individuals
Mintzberg’s Findings
• Mintzberg found that most managers
are often placed into situations
beyond their control such as:
– Constant interruptions
– Jumping from subject to
subject
– Problem to Problem
• Rarely giving undivided or
uninterrupted attention to anything
for any length of time
Challenge
• Mintzberg identified one of the biggest
challenges of management as the
necessity to be in the moment, rather
than focusing on long-term plans.
• Challenge: How do you see this in
your own life?
– Business Connection: How can we as
managers get better at balancing
challenges? (Identify 3 ways to do so)
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
Conceptual, Human Relations, and
Technical Skills
Conceptual Skills
• Decision making
planning, and
organizing
• Understanding how
different businesses
relate
Human Relation
Skills
•Need to work well
together
•Resolving conflicts
•Forming partnerships
Technical Skills
• Abilities used to perform their job
• Training people to use a new system
Conceptual, Human Relations, and
Technical Skills
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 various software applications
• Overseeing things like: designing a brochure, training
people to use a new budgeting system
History of Management
• Knowledge is Power!
– Where you’re going, where you’ve
been!
– Management is relatively a
modern concept…
The Industrial Revolution
• Began in the United States in 1860
– Just before the Civil War
• Period during which a country develops an
industrial economy
– Before the Industrial Revolution,
economy based on agriculture
– By the late 1800s, economy depended
on industries such as oil, steel, railroads,
and manufactured goods
Causes of the Industrial Revolution
• Many people left their farms to work in
factories
– Professional managers supervised their work
• Changes in technology,
communication, and transportation
– Telegraph and cable lines extended across the
U.S. after the Civil War
– Railroad lines, canals, roads, steamships
Captains of Industry
• Powerful
businesspeople who
created enormous
business empires
dominated and
shaped the U.S.
economy
Cornelius Vanderbilt
B. (banking)
Duke
Andrew
John
J. P.James
D.
Morgan
Carnegie
Rockefeller
(steel)
(Oil)
(steamships
& railroads)
(tobacco)
Creation of Monopolies
• The captains of industry often pursued
profit and self-interest above all else
– Drove competitors out of business
– Created giant companies that maintained
monopolies in their industries
• Monopoly
– Occurs when one party maintains total control
over a type of industry
– Trust: giant industrial monopoly
– By 1879, Rockefeller controlled >90% of the
country’s refining capacity and pipelines
The Break-Up of Trusts
• People became
worried about the
concentration of
wealth in the
hands of a only a
few
• In response, the
government began
regulating business
Cornelius Vanderbilt
The Break-Up of Trusts
• The Interstate Commerce Act,
1887
– The railroads gave rebates to some
customers but not others
– This act forced railroads to publish their
rates and forbade them to change rates
without notifying the public
– Established the Interstate Commerce
Commission (ICC) to supervise the
railroads
The Break-Up of Trusts
• The Sherman Act, 1890
– Made it illegal for companies to create
monopolies
– Intended to restore competition
– Example
• Standard Oil Company was broken into
smaller companies so that other oil
companies could compete with the former
giant
• John D. Rockefeller
New Challenges for Management
• When most Americans worked on
farms, sophisticated management
techniques were not necessary
– By the end of the 19th century, giant
companies employed thousands of
people and distributed products all
over the country
• Workers performed tasks that needed to be coordinated
• These changes demanded new ideas about how to
manage people working in large corporations
Frederick W. Taylor
and Scientific Management
• Father of Scientific Management
• Wanted to find ways to motivate
workers to work harder
• To increase efficiency, he tried to
figure “one best way” to perform a
particular task
– Used a stopwatch to determine which
work method was most efficient
– These time and motion studies lead to
scientific management principles
Frederick W. Taylor
and Scientific Management
• Scientific management seeks to
increase productivity and make work
easier by carefully studying work
procedures and determining the best
methods for performing particular
tasks
Frederick W. Taylor
and Scientific Management
Henry Ford followed Taylor’s work
• Created the assembly line
–
–
–
–
Mass production lowered costs
Could price car low enough to attract more customers
Every part was counted, production was timed
Paid a daily wage of $5 when the average was $2.50
• This allowed workers to become customers
– Low morale & injuries resulted
• Repetition caused boredom
• High turnover
Frederick W. Taylor
and Scientific Management
• Companies today continue to use the
principles of scientific management
– Marriott Corporation
• Customer satisfaction
The Hawthorne Studies of
Productivity
• In the roaring 20s--Researchers began to
look at the relationship between working
conditions and productivity
• Series of experiments at the Hawthorne
plant of Western Electric in Cicero, IL
– Lowered the lighting and expected to see
productivity to fall
– What happened?
– Productivity increased…Why?
The Hawthorne Studies of
Productivity
• Baffled by results, a team of psychologists
from Harvard University were called upon
• Over five years, hundreds of experiments
were conducted at the plant
–
–
–
–
Different wage payments
Rest periods
Work hours
Other variables
• What were the results?
• Same: Productivity increased!!
The Hawthorne Studies of
Productivity
• Researchers concluded that
productivity rose because
workers worked harder when
they received attention
• Hawthorne effect
– Change of any kind increases
productivity
• Factors other than the physical
environment affected worker
productivity
– Psychological and social
conditions, effective supervision
The Hawthorne Studies of
Productivity
• Informal group pressures
– Teaming tends to drive everyone not to
let the others on the team down….
• Individual recognition
– Highlighting a worker contribution tends
to motivate them to work harder
• Participation in decision-making
– When workers are part of the process
they work harder
Abraham H. Maslow and
the Hierarchy of Needs
• According to Maslow
– All people have five basic types of needs
– People fulfill lower-level needs before
seeking to fulfill higher-level needs
• One set of needs must be met before
another is sought
• “Hierarchy of needs” is his grouping and
ordering of physical, security, social, status,
and self-actualization needs
Maslow’s Hierarchy of Needs
Applying Maslow’s Theory
• At the lowest level, workers
are motivated by basic needs
– Wages or salary, physical
conditions
• Safety or security needs
– Providing insurance, retirement
benefits, job security
– Safe from physical,
psychological, or financial harm
Applying Maslow’s Theory
• At the lowest level, workers
are motivated by basic needs
– Wages or salary, physical
conditions
• Safety or security needs
– Providing insurance, retirement
benefits, job security
– Safe from physical,
psychological, or financial harm
Applying Maslow’s Theory
• Social needs
– Provide a work environment in
which colleagues interact
• Company lunch rooms, company
retreats
• Status needs
– Provide workers with signs of
recognition that are visible to
others
• Job titles, private offices,
designated parking spaces, awards,
promotions
Applying Maslow’s Theory
• Social needs
– Provide a work environment
in which colleagues interact
• Company lunch rooms, company
retreats
• Status needs
– Provide workers with signs of
recognition that are visible to
others
• Job titles, private offices,
designated parking spaces,
awards, promotions
Applying Maslow’s Theory
to Management
• Self-fulfillment needs
– Provide employees with
opportunities to be
creative at work
• Include employees in
decision making
• Example
– ITT’s Ring of Quality
Control: Gave awards to
employees for ideas
WEB QUEST
MASLOW”S HEIRARCHY
• Individual Activity: PowerPoint
• Directions: Demonstrate an understanding
of Maslow’s Theory.
– Select products available to the general public, then
produce a PowerPoint using images from
advertisement campaigns for that specific product
that capitalize on the various level of Maslow’s
Theory.
Professional Management
• The professional manager
(started in the 1930’s)
– Defined: Career person
who does not necessarily
have controlling interest in
the business
The Systems Approach
• An attempt to manage all the different schools of
management into an integrated approach
– Defined: A system is a set of connected elements
that function as a whole.
– The systems’ approach was viewed as a “way of
thinking about the job of managing.”
– Two Types:
• Open System: interacts with its external environment
• Closed System: No interaction with its external environment
Theory X & Theory Y Inventory
What is your belief
about workers?
– Take the quick
inventory and find
out!
TEAM WORK: Critical Thinking
ADVANTAGES
What are the
Advantages and
Disadvantages
of working in
Teams?
Group Activity:
Name 4 for both!
Be Ready to
Share!
DISADVANTAGES
Empowering Employees
• As organizations grew
in size and
complexity, new
styles and methods of
management began to
emerge
• Different philosophies
developed on how
best to manage
employees
Douglas McGregor
• McGregor is the other
major theorist
associated with the
Human Relations
school of
management.
• McGregor believes
there are two basic
kinds of managers.
Theory X
• Assumes that people
are basically lazy and
will avoid working if
they can
• Managers impose
strict rules and make
sure that all
important decision
are make only by
them
Theory Y
• Assumes that people find
satisfaction in their work
• Managers believe that
people will work
productively if put in the
right environment
• People are creative & will
come up with good ideas
if encouraged to do so
• Employees given more
freedom and allowed to
make mistakes
Theory Z
• William Ouchi, management researcher
• Integrates Japanese and American
business practices
• Japanese emphasis on collective decision
making and concern for employees
• American emphasis on individual
responsibility
• Johnsonville Foods
Japanese, American, and Theory Z
Organizations
Johnsonville Foods
• Johnsonville Foods, located in Sheboygan
Wisconsin
• Teams of empowered workers
•
•
•
•
•
Buy equipment
Write budgets
Train one another
Cut their hours when necessary
Even hire and fire one another
• Called “self-managing” or “autonomous
teams”…It is NOT crazy!
• Goal: Teach people to do for themselves
• Results: Get far better performance
• Sales increased by 20%
• Productivity increased by 50%
• Rejects dropped from 5% to less than ½ of 1%
Theory X & Theory Y
Inventory
What is your belief about
workers? Using MS Word…
• After taking an inventory and finding out your
viewpoint with regard to Theory X and Theory Y,
now you can answer these questions:
A. What does your profile mean for the type of
leader you will be?
B. What are the implications of being driven by
Theory X beliefs? (For the employer, employee
& manager)
C. What are the implications of being driven by
Theory Y beliefs? (For the employer, employee
& manager)
Centralization vs.
Decentralization
• Centralization
• The concentration of
power among a few
key decision makers
• Decentralization
• Process by which
decisions are made by
managers at various
levels within an
organization
Women and Minorities
in Management
• In the last four decades, the number
of women and minorities have joined
the workforce has tripled
– Commonplace to hold positions at all levels of
management in companies of all sizes
• Women and minorities serve as the
CEOs of prestigious businesses
– PepsiCo, Kraft, Archer Daniels, Avon, Harpo, eBay,
Lucent, Dupont, IBM, XEROX, Yahoo
Women and Minorities
in Management
• Caucasian males still
hold most senior
management positions
• Glass ceiling: the
invisible barrier that
prevents women and
minorities from moving
up in the world of
business
– Steadily becoming a
window of opportunity!
– Global Influences
Attracting Working Mothers
• What does the
demographic need
in workplace?
• Daycare
– Can cost $500$1000 per child per
week
• Flexible Schedules
• Tele-commuting
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
Web Quest: Research
Entrepreneurs
ACTIVITY: Partners
– Identify/Choose an High Profile
Manager you would like to
research and know more about
(only one per team)
– Using MS PowerPoint 2010,
complete a presentation about your
chosen person.
– Include ALL the required
elements for highest grade!!!