Business management principles

Role of a manager

Role of a manager

planning, leading, organizing, controlling

goals

broken down into tasks, tasks are given to people, tasks help reach the goal

plan

setting or pathway to reaching to goal

controlling

having the ability to recover from potential failures

organizing

assigning people to tasks

leadership

communicate, motivate, discipline, training

where was management born out of

factories

classical management

factory work

Mintzberg 3 roles of management

interpersonal roles, informational roles, decision making rules

Interpersonal roles

having a figurehead to represent, a leader for those working, liason to work with outside companies

Informational roles

someone to monitor what is happening, disseminator to distribute info, spokes person

Decision making role

entrepreneur, someone to handle disturbances, resource allocator to determine jobs, negotiator to work out situations

Frederic Taylor

Scientific theory of management, always one best way to complete a goal

Scientific theory of management (Frederic Taylor)

manager determines the best way to operate, scientific orientation of personnel to look for workers fit for the job, people paid based on production

Gilbreth

Focused on one best way and most efficient method to produce

Time and motion studies

using video recordings to track inefficiencies in production

Kaizen

finding the smallest improvement in production everyday

Henry Fayol 14 principles of management

division of work, authority and responsibility, discipline, unity of command, unity of direction, subordination of personal interest, remuneration, centralization, scale chain, concept of order, equity (equitable), tenure, initiative, Espris de corps

Theory x

people will work for reward

theory y

if given the right environment people will want to do good work

External environment effects

market, inflation, interest rates, competition, clientele, suppliers, physical change policies + laws, economy, innovation

Internal environment effects

management style, resources, policies, workforce, organization, physical, equipment, culture, technology

Multinational corporation

manufacture and market in more than one country

Franchise

legal right to market and sell other peoples product

Joint venture/strategic alliance

two corporations working together to earn a profit

Direct foreign investment

company invests money in another company

wholly owned subsidiary

when a company owns the entire daughter company

social responsibility (3 categories)

Profitable company is valuable to a community/economy, profit seen as social objective, profit seen as ethically good thing

Should company money be used for the benefit of the community?

no

Social obligation

the only right thing to do for a community is help a community make a profit and not contribute to a community of societal needs

Social reaction

if there is a need in society, it is ethical to help

Social responsiveness

do not believe in responding to needs, work to prevent the problems

Business ethics

core values we have are not big enough to deal with realities of the world, we do not know enough to know what is right and wrong

3 Forms of business organizations

sole proprietorship, partnership, corporation

Sole proprietorship

a human is behind the organization and a human is the entity

Partnership

two or more people who are in charge of the business with intent to make profit

Corporation

government makes the corporation a person

Directors

in control of the corporation

contracts with a corporation

only the corporation can be sued

Equity in a business

selling parts of the ownership, short term and not owed back

Debt in a business

you are in control and you are not taxed on debt

Programmed decision

a situation you have experienced before and you know the answer to the situation

Non programmed decision

new decision that you have not experienced

4 steps of problem solving

define the problem, determine alternatives, analyze alternatives, implement/action plan

Creative model

place info in your brain, incubate, illumination (“aha”), verification

Cognitive styles

Sensing, intuitive (up and down, feeling, thinking (side to side)

Sensing

only know things if you have experienced it (seen, heard, smelled, tasted, touched)

Intuitive

use prior knowledge to solve things by assumptions

Feeling

hunt around until the answer appears

Thinking

process info in a logical pattern

Decision making traps

biases, inaccurate framing, anchoring, psychological set, organizational process

Brainstorming

Generate ideas

5 rules of brainstorming

quantity over quality, no evaluation, encourage wild ideas, piggyback ideas, don’t stop when ideas slow down

Benefits of planning

gives time to think, prevents aimless wandering, gives ability to see how pieces fit, allows you to see future and respond to it, allows for innovation, forecast good results

Human resources connection to planning

Need to get the people that will help complete the tasks

Marketing connection to planning

need to know what people want, what people will pay for a product

Goals connection to planning

specific, measurable, achievable, relevant, time bound

Management by objectives connection to planning

set goals for worker, evaluate worker based on goal

strategic management

deals with what the strategy you need to make money

Corporation strategies

concentration, vertical integration, diversification, status quo, investment relation, strategic alliance/joint venture

Concentration

focused on specific group

Vertical integration

buying companies that supply you so you only supply yourself

Diversification

start as selling one thing then sell more things

Status quo

keeping everything as is

Investment relation

sell of parts of the market/divisions

Strategic alliance/joint venture

partnering with another company

Cost leadership Strategy

cheapest option

Differentiation

convince people your product is better

Focus

get a particular person to buy your product to fit in

Barriers to entry for a new business

saturation, ease of copying success, high start up cost, ability of large companies to absorb large losses, satisfied customers, difficult to obtain staff and supplies, inability to compete with existing companies

SWOT analysis

strength, weakness, opportunity, threat

Benchmarking

comparing yourself to what is already out there