Test 1

Module 2 – Introduction to Management

Planningà plan around activities, how and what resources.

Leading à motivate people and making sure goals are being achieved

Organizingàorganize resources

Controlling à accountable about what happens

Profità  primary goal is to earn a profit after all business expenses have been paid.

Non-profit à primary objectives are focused on serving society.

Business History Eras

Colonial Period (Prior to 1776) à Focus was centered on rural and agricultural production.

Industrial Revolution (1760–1850) à major developments

-Focus on a factory system of mass-produced or large-scale production of goods.

-Growth in profits.

-Rapid industrialization.

-New technologies

-New railroad systems à efficient and economical transportation for goods and raw materials.

Industrial Entrepreneurs (Late 1800s) à Increased the demand for manufactured goods à John D. Rockefeller (oil), Andrew Carnegie (steel). Inventors created many commercial products and new production methods

Production Era (Through the 1920s)

-Businesses were concerned with what businesses could produce most efficiently.

-The goal was to sell as much of what businesses wanted to make.

-Creator of the assembly line was Henry Ford (common- place in major industries)

Marketing Era (Since 1950s) à Consumer orientation became the focus. Importance of understanding what consumers want and why they buy specific products.

Relationship Era (Began in 1990s) à Focus on developing and maintaining connections between businesses and existing customers.

NOTE: New era has been termed the Social Era, where social media technology such as Facebook and Twitter is the focus.

Work- life balanceà providing an environment that allows an employee to balance his professional life with his personal life.

Outsourcing à utilization of vendors outside of the organization, to produce goods and services instead of performing certain functions in-house.

The Environmental Protection Agency (EPA)à agency within the U.S. federal government created for the purpose of protecting human health and the environment. Its mission is to con- duct environmental assessments, research, and provide education. It has the responsibility of maintaining and enforcing national standards under a variety of environmental laws, in consultation with state, tribal, and local governments.

Ethicsà study of right and wrong and is considered a moral philosophy.

Business ethicsà is the practical application of moral standards within business situations.

Business lawà includes all laws that dictate how to establish and operate a business, and ethics often occurs.

Code of ethicsà written statement of how an organization expects employees to behave within the organization. As various cultures merge in a work environment, ethical dilemmas may occur as ethics and morals vary between cultures. Companies, therefore, must develop and implement a code of ethics that creates a standard policy to be followed by its employees.

Concerns of the Stakeholder

Customer à Expectation that products are safe, dependable, and realistic in price

Employee à Demand fair treatment, safe work conditions, and equitable compensation

Investor à Require that management make sound financial decisions that increase return on their investment

Competitor à Anticipate business practices and dealings will be reasonable and truthful

Creditor à Require timely payment on accounts and accurate accounting information provided by the business

Social Responsibilityà the ethical basis that advocates that a business or individual has a responsibility to act for the benefit of society at large.

Economic model perspectiveà promotes the idea that management’s main responsibility is to increase shareholders’ wealth and maximize profits.

Socioeconomic modelà supports the idea that a business has responsibilities to society beyond simply maximizing profits. Companies have adopted the socioeconomic model for at least three reasons:

(1) a business is dominated by the corporate form of ownership and the corporation is a creation of society;

(2) companies are starting to take pride in their social responsibility records; and

(3) business people consider it a competitive advantage or a distinct advantage over any of its competition.

Pros of Social Responsibilityà  increases a business’s accountability and provides transparency with media, stakeholders, local communities, and investors.

Cons of Social Responsibilityà The amount of time, money, and resources utilized to maximize profits and shareholder return can influence whether an organization invests in socially responsible behaviors.

Environmentalismà effort made by an organization to protect the environment from destruction or pollution. Carbon footprint à amount of carbon dioxide or other carbon compounds released into the atmosphere by an individual, company, or country.

Corporate philanthropyà organization’s ability to give back to the community around them and the world at large.

Scientific Management à This is a method of understanding work at a different level. Individual steps and processes were analyzed to ensure maximum efficiency. (introduced and popularized by such individuals as Frederick Taylor, Frank and Lillian Gilbreth)

Fayol’s 14 principles of management

1) Division of Work – The specialization of tasks leads to more efficient output.

2) Authority – Managers must have the right to give orders

3) Discipline – Rules and regulations must be respected and employees must adhere to them.

4) Unity of command – Employees should ahve one superior from whom they receive orders.

5) Unity of direction – There should be a single goal for managers and employees.

6) Subordination of individual interests to the general interest – The organization goals are more important than individual goals.

7) Remuneration – Employees should be compensated for their efforts.

8) Centralization – The degree to which activities are control by top management or by employees.

9) Scalar Chain – Also known as the chain of command, the scalar chain refers to the line of authority from the top management to the front-line employees.  

10) Order – All things have a place or position that they should occupy. 

11) Equity – Employees should be treated kindly and fairly.

12) Stability of tenure of personnel – Managers should engage in employee planning.

13) Initiative – Employees should be able to originate and develop ideas.

14) Esprit de corps – There should be a sense of unity and team among employees. 

TQMà management philosophy that fosters continuous improvement to meet the needs and expectations of customers. 

Demingà credited with starting the quality movement in the 1980s and 1990s.