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Management Definition

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-Set of activities designed to achieve an organization's objectives by using its resources effectively in a changing environement

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Three dimensions of Management

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-Leadership: influences the activities of individuals toward achievement of a goal -Decision making: Choosing a course of action to solve a problem -Implementation of work tasks: Carrying out the work decision

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Stakeholder

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-Person or group that can affect or is affected by, an organization's goals or the means to achieve those goals

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Stakeholders include

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-Employees -Shareholders -Suppliers -Gov't regulators -Communities -Customers

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Decision making affects

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-Not only organization, but a much broader group (Stakeholders)

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4 Functions of Managment

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-Controlling -Leading -Organizing -Planning

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Planning

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Determining appropriate goals for the firm and deciding how to accomplish these goals

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Organizing

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Assigning responsibility to employees for task achievement to collaboratively achieve goals

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Leading

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Influencing and motivating other to achieve set goals

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Controlling

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Monitoring, evaluating and maintaining desired performance

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10 tips for successful leadership

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-Support employees participation and creativity -Develop effective teams -Listen as much as you speak -Encourage employee feedback -Identify and guard against ethical risks -Act as a role model -Build solid relationships -Clearly communicate company expectations -Align employees behind a common vision -Never rest on your laurels, but always look for improvement

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Decision making process

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-Gathering information -Using information to reach a decision -Implementing the decision

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3 General Roles of Management

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-Interpersonal: involve interaction with others who are external or internal to the organization, at the same level as the manager, or at higher or lower levels. -Informational: focus on obtaining data that are important for the decisions the manager makes. -Decisional: deal primarily with the allocation of resources to reach organizational objectives.

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Mintzberg's 10 Management roles (Fall under the 3 general roles)

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-Interpersonal: Figurehead, Liason, Leadership -Informational: Monitor, Disseminator, Spokesperson -Decisional: Entrepreneur, Disturbance handler, Resource allocator, Negotiator -(LEARN SOME EXAMPLES)

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General Skills of Managers

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-Interpersonal skills -Technical skills -Conceptual skills

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Specific Skills of Managers

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-Job knowledge -Oral communication -Persuasiveness -Problem analysis -Cooperativeness -Tolerance of stress -Negotiation -Assertiveness -Initiative

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Levels of Management

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-CEO>Upper Level>Middle Level>First Line -Upper: CEO, CFO, Chairman, President, Executive VP -Middle: Product manager, Department Head, Plant Manager -First line: Supervisor, Sales manager, loan officer, store manager

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Trends in management

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-Electronic business (e-business): Achieving management goals through the use of the Internet -Global organizations: Expanding business activities beyond national boundaries -Ethics and social responsibility: Leadership in promoting ethical and socially responsible business decisions

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Learning management in class

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-Sources of information and relationships among variables -Basic principles to use in decision making -Fundamentals of implementing decisions

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4 major developments in western culture that set the stage for study of management

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-Protestant ethic (work ethic) -Capitalism and division of labor (Adam Smith) -Industrial revolution (Steam engine) -Productivity problem (Developments lead to chaos, needed management to fix this)

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Management theory (definition)

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A systematic statement based on observations of how management processes might best occur, given stated underlying principles

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4 Major groups of management theories

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-Classical approach -Behavioral approach -Systems approach -Contingency approach

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Classical approach

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-Stresses manager's role in a formal hierarchy of authority and focuses on the tasks, machines, and systems needed to accomplish the task -Two components: Scientific management and Administrative management

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Scientific Management

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-Classical approach -Theory that focuses on improvement of operational efficiencies through the systematic and scientific study of work methods, tools, and performance standards. -Ignores human element, treats people like machines

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Frederick Taylor

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-Classical school of thought -"Father of Scientific Management" -Develop the "one best way" to perform any task. -Scientifically select, train, teach, and develop each worker. -Cooperate with workers and provide an incentive to ensure that the work is done according to the "one best way." -Divide the work and the responsibility equally between management and the workers.

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Soldiering

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-Systematic slow down by laborers, with the deliberate purpose of keeping employers ignorant of how fast the work can be done. -Frederick Taylor's main observation when creating scientific management

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Frederick Taylor's assumptions

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-Employers and employees have mutual interests associated with economic gain. -Humans are rational beings and economically motivated. -For every person willing to work hard, there is a job for which he or she is ideally suited.

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The Gilbreths

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-Scientific Management -Discovered ways to increase effenciency through motion (Frank, brick laying) and recomended methods of reducing fatigue among workers -Lillian Gilbreth was first PHD in US

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Henry Gantt

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-Scientific Management -Gantt chart and pioneered business morality -Gantt Chart: Simple graph method of scheduling work according to the amount of time required instead of the quantity of work to be performed

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Morris L Cooke

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-Scientific management -In an attempt to reduce ineffeciencies, applied Scientific management to higher education, Gov't, and WW1

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Administrative Management

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-Classical Approach -Emphasized the universality of management as a function that can be applied to all organizations -Differs from systematic because systematic because systematic focused on industrial organizations -Focuses on the need to organize and coordinate the workings of the entire organization, instead of dwelling on work of individuals

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Henri Fayol

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-Administrative Management -Defined management as a universal process composed of five functions and developed principles needed to coordinate all the activities of the entire organization.

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Max Weber

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-Administrative Management -Ideas about BUREAUCRACY added the concept of rational authority and management by position to classical management theory.

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Contributions of the Classical Approach

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-Emphasized work and getting it done efficiently. -Focused too narrowly on work, machines, authority structures, and efficiency -Ignored the human aspect of work. -Basic purpose behind each classical theory was to improve the standard of living and quality of life for all members of the organization and society in general

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Behavioral Approach

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-Emphasizes understanding the importance of human behavior, needs, and attitudes within formal organizations

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Mary Parker Follett

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-Behavioral approach -Emphasized integrative unity, shared power, and human cooperation

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Hawthorne Studies

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-Behavioral Approach -Brought to managers' attention the critical nature of the social needs of workers and led to the development of the human-relations movement -Test to see if lighting affected output, instead found that increased output was related to social relationships among workers and supervisors

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Abraham Maslow

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-Behavioral approach -Hierarchy of human needs -Physiological>Safety>Social>Esteem>Self-Actualization -Management practices directed toward satisfying self-actualization pointed to a new direction for management theory and practice.

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Douglas Macgregor

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-Behavioral -Theory X and Y. Theory X assumes people are lazy and must be threatened and forced to work. Theory Y assumes that people naturally want to work, are capable of self control, and try to fulfill higher-order needs at work

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Sigmund Freud

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-Behavioral approach -Sigmund Freud's work on "transference" showed that awareness of transferences is an important skill with respect to effective management leadership.

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Carl Jung

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-Behavioral approach -Work on personality types helped lead to the development of the Myers-Briggs Type Indicator.

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Myers-Briggs

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-Behavioral approach -Personality test aimed to determine what career suits test taker

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Systems approach

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-The systems approach to management theory views organizations and the environment within which they operate as sets of interrelated parts to be managed as a whole to achieve a common goal.

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Chester Barnard

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-Systems approach -Cooperative Systems -Believed that cooperative systems and the acceptance theory of authority helped organizations to adjust effectively to a constantly changing external environment

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W. Edwards Deming

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-Systems approach -Transformed the notion of quality into a driver of profits instead of a cost of doing business. -"Six Sigma" -JIT (Just in Time) -Theory Z: William Ouchi (wrote of six sigma and JIT)

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Contingency Approach

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-Helped bridge the gap between theory and practice -It emphasizes identifying the key variables in each management situation, understanding the relationships among these variables, and recognizing the complex system of cause and effects that exists in every managerial situation. -As such, the contingency approach maintains that there is no one best way to manage.

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Twenty First Century Management

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-Peter Drucker: knowledge workers, long-term sustainability, corporate social responsibility -Peter Senge's theory of learning organizations states that modern organizations must be in a state of constant learning through continuous improvement and adaptation.

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Management Theory Past Present and Future

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-Each major approach to management theory has added significantly to current knowledge about management. -The ideas embedded in each approach have also changed, in some respects, the way managers think and act. -Contemporary managers and managers of the future benefit most from understanding and applying selected aspects of each approach.

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Environment

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-All factors that affect the operation of the organization

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Three main Components of the Environment

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-Macro environment (General) -Competitive Environment (Task) -Internal environment

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Macro environment (General Environment)

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-The external factors that affect all organizations, including economic, technological, sociocultural, political-legal, and global dimensions

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Competitive Environment (Task Environment)

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-The external factors that are specific to an organization, such as customers, suppliers, competitors, substitutes, and potential new entrants to the industry

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Internal Environment

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-All the factors that make up the organization, such as the owners, managers, employees, and board of directors

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Sociocultural Dimension

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-General Environment (Macro) -The sociocultural dimension: Demographics and the values of the society within which the firm operates.

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Political Legal Dimension

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-General Environment (Macro) -Refers to the nature of the relationship between various areas of government and the organization.

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Technological Dimension

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-General Environment (Macro) -Refers to the knowledge and process of changing inputs (resources, labor, money) to outputs (goods and services).

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Economic Dimension

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-General Environment (Macro) -Reflects the overall condition of the complex interactions of economies throughout the world.

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Global Dimension

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-General Environment -Refers to those factors in other countries that affect the organization.

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Task Environment (Competitve Environment) (5 factors, what they do)

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-Suppliers are organizations and individuals that provide resources to other organizations. -Customers buy an organization's goods or services. -Substitutes are goods or services that may be used in place of those of the business. -Competitors are other organizations that produce similar, or in some cases, identical goods or services. -Potential new competitors are companies not currently operating in a business's industry but that have a high potential for entering the industry.

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Internal Environment

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-In the smallest companies, the owner is the sole manager of the firm and fulfills all typical management tasks. -As the organization expands and becomes more complex, the owner normally brings in additional persons to act as managers.

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Three types of managers within internal environment

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-Strategic: Overall direction of organization -Technical: Serve under strategic, and act to coordinate various levels (middle managers) -Operations: Transform organizational inputs into ouputs (Lower level or supervisors)

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Employees in internal environment

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-Employees can be classified as unionized or non-unionized, with the relationship between managers and unionized employees being more formal. -Changing demographics is creating an older and more culturally diverse work force. -Technological change is forcing employees to acquire more complex skills.

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Corporate Governance in internal environment

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-Corporate governance is the formal system of oversight, accountability, and control for organizational decisions and resources. -BOD represent stockholders of corporations

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Stakeholder view of the environment

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-Concerned with those individuals or organizations that could affect the organization. -Primary stakeholders: ongoing relationships with the organization through formal contracts, ownership, or monitoring of a legal obligation of the organization. Customers, suppliers, employees, investors, community -Secondary stakeholders do not have a formal connection to the firm but may affect it through public opinion. Special interest groups, media -Stakeholders, though external to the organization, constantly influence the organization.

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A stake can be three different types

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-Equity interest: stockholder or lender -Market Interest: Might be shared by buyers and suppliers -Influencing interest: Government or interest group

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Gathering information on stakeholders

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-Collecting information about stakeholders allows organizations to anticipate changes in their environment and develop plans to respond to these changes. Techniques: -Customer surveys -Economic forecasting -Trend analysis

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Techniques for interacting with the environment

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-Organizations interact with and manage their external environment to lessen the threats and take advantage of the opportunities. Common interaction techniques include: -Public relations -Boundary spanning -Lobbying -Negotiation -Forming alliances -Organizational restructuring

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Importance of external environment

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-Managers must perceive the threats and opportunities in the external environment and react accordingly. -Problems in receiving and using information about the external environment include: -Limited capability -Lack of information -Superfluous information -Current organizational constraints -The external environment may be thought of as differing among organizations in two dimensions: homogeneity and change.

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Business Ethics

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-Principles, values, and codes of conduct that define acceptable behavior in business

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Ethical issue

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-An ethical issue is an identifiable problem, situation, or opportunity requiring a person or organization to choose from among several actions that may be evaluated as ethical or unethical. -Managers have an obligation to ensure that their ethical decisions are consistent with company values, codes of ethics, and policies—as well as community and legal standards.

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Ethical Decision making process

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-The factors that influence how a person makes ethical decisions include-- -An individual's personal values: Sets of principles that describe what a person believes are the right way to behave and that can be broken into two categories: utilitarianism and deontology -Organizational relationships, including the influence of managers, coworkers, and the work group -Opportunity: A set of conditions that punish unfavorable behavior or reward favorable behavior

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Ethics and Compliance Programs

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-Ethical standards and policies can help reduce unethical behavior by prescribing which activities are acceptable and which are not, and by removing the opportunity to act unethically. -Formal codes of ethics and policies reduce the incidence of unethical behavior by informing employees of what is expected and providing punishments for those who fail to comply. -Support from top management is needed for the ethics program to be effective. -Ethics training helps to familiarize employees with the ethical situations they might come across in the workplace.

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Ethics Audit

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-Managers can use ethics audits to evaluate the effectiveness of an ethics and compliance program and identify weaknesses to be corrected.

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Whistle Blowing

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-Managers should encourage employees to report ethical concerns or observed misconduct.

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Social Responsibility

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-The obligation of a business to maximize positive impact and minimize its negative impact on society -Socially responsible businesses may win the trust and respect of their employees, customers, and society, and in the long run increase profits. -There are strong arguments both for and against social responsibility by businesses. -Greater societal demand for socially responsible business activities has led some firms to view socially responsible activities as a way to gain competitive advantages.

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4 Stages of social responsibility

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1. Financial Viability 2. Compliance with legal and regulatory requirements 3. Ethics, principles, and values 4. Corporate Citizenship

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Social Responsibility Issues

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-Organizations must be responsible to their owners and investors, who expect to earn a profit or a return. -In relations with employees, businesses are expected to provide a safe workplace, pay employees adequately, treat employees fairly, and provide equal opportunities. -Consumerism refers to the activities undertaken by independent individuals, groups, and organizations to protect four consumer rights: -The right to safety -The right to be informed -The right to choose -The right to be heard

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Trends in Social Responsibility

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-Consumers are demanding that businesses take responsibility for impact on environment -Pollution, Waste disposal, etc.

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Social Audits

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-Managers evaluate a company's long- and short-term contributions to society to determine whether the firm's social responsibility approach is working. -The audit can pinpoint areas where the firm can take additional steps to maximize the positive effect of its activities as well as to minimize their negative impact

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Moral Theories

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-Utilitarianism -Egoism -Deontology -----Rules-based -----Rights-based -Virtue ethics

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Utilitarianism

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-If the end doesn't justify the means, what does? -Consequence-based -Weights suffering against happiness (produces greatest balance of good over harm) -Can we actually measure something called "the greatest good"?

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Utilitarian method

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-Identify all courses of action -Identify parties affected -Identify contribution of each course of action to that person's net happiness -Ignoring all other considerations, compare courses of action, taking account of the NUMBER of people affected -Choose the course of action that maximizes overall happiness

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Egoism

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-Opposite to utilitarianism -Do the most good for yourself

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Deontology (Rights based)

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What is my moral duty? We should do our duty because of a sense of good will, not because of reward or punishment Everyone has rights Everyone needs to respect each other's rights Does this address the utilitarian weakness (can we ever be sure of the consequences?)?

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Deontology (Rules based)

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Legalistic or rule-bound theory

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Virtue Ethics

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Being a virtuous person is most important

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Ethics codes (2 types)

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Value based and compliance based -A mix of the two is the most effective written code

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Global Business

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-A strategy in which organizations treat the entire world or major regions as the domain for conducting business

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International Business

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-Narrower than global business, buying, selling, trading across nat'l boundaries

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Global management must consider 4 environments

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-Economic -legal -political -sociocultural

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Sociocultural environment in global business

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-culture, language, body language, local customs, time perception, religious considerations, and more. -Hofstede framework and the GLOBE project are two common frameworks for evaluating a country's culture.

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Collectivism vs individualism (socioculrutal)

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-If an employee tends to approach a situation as an individual or as a team

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Power distance (sociocultural)

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-Perceived power between managers and subordinates -Higher power distances: less acceptable to question a mangers decision

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Political legal environment (Global business)

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-Tariffs and other trade restrictions -Must consider relative stability of other countries when doing international business

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Economic environment (Global Business)

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-Countries look at GDP, economic development of other countries before doing business -infrastructure -exchange rate

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Import tariff

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-Tax levied on goods imported into a country -Can be based on quantity of goods or ad valorum (based on value)

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Quota

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-Maximum number of a certain good that can be imported

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Embargo

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-Suspension of trade between two countries by the Gov't

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Dumping

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-When a country sells products at a lower price than whey it costs to produce them -This can hurt an economies domestic procution because Countries producers can't compete with prices -Quotas and tariffs try and prevent dumping

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WTO

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-World Trade Organization -Promote free trade -Facilitate and resolve trading disputes (dumping)

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World Bank

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-Loan money to countries for reconstruction and developing

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International monetary fund

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-Help ensure stable currencies and exchange rates

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Countertrade agreements

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involve bartering products for other products instead of currency.

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Trading company

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links buyers and sellers in different countries to facilitate trade.

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Lisencing

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-one company agrees to allow a foreign company the use of its company name, products, patents, brands, trademarks, raw materials, and production processes, in exchange for a flat fee or a royalty

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Franchising

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-form of licensing in which a franchiser agrees to provide a franchisee with a name, logo, methods of operation, advertising, products, and other elements associated with the franchiser's business, in return for a financial commitment and the agreement to conduct business in accordance with the franchiser's standard of operations.

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Contract manufacturing

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occurs when a company hires a foreign company to produce a specified volume of the firm's product to specification; the final product carries the domestic firm's name.

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Joint venture

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A partnership in which companies from different countries agree to share the costs and operation of the business.

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Strategic alliance

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A partnership formed to create competitive advantage on a worldwide basis.

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Direct investment

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Purchase of overseas production and marketing facilities

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Outsourcing

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Form of direct investment, involves transferring manufacturing or other tasks to countries where labor and supplies are less expensive.

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Multinational corporation

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One that operates on a worldwide scale, without significant ties to any one nation or region.

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Regional trade alliances

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-NAFTA (North American Free Trade Agreement) -EU (European Union) -CAFTA (Attempt to create NAFTA but for central america, never been implemented)

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