What is Management?

What is Management?Mr. Sherpinsky

Business Management ClassCouncil Rock School District

Learning Outcomes1. Define management2. Identify and explain the

levels of management3. Explain the management

process4. Understand the different

perspectives of scientific management and the human relations movement

Group ActivityGroups 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

ManagementFunction

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 Managerial 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

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

• Decision making planning, and organizing

• Understanding how different businesses relate

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

John D. Rockefeller (Oil)James B. Duke (tobacco)

Andrew Carnegie (steel)J. P. Morgan (banking)Cornelius Vanderbilt

(steamships & railroads)

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 QUESTMASLOW”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 DISADVANTAGESWhat are the Advantages and Disadvantages of working in Teams?

Group Activity:Name 4 for both!

Be Ready to Share!

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 Minoritiesin 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 Minoritiesin 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 Minoritiesin 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!!!