Introduction to Management & Business Ethics
Module 2: Introduction to Management
Management Functions
Planning: Determining activities, resources, and methods.
Leading: Motivating individuals and ensuring goal achievement.
Organizing: Structuring and coordinating resources effectively.
Controlling: Monitoring progress and holding individuals accountable.
Types of Organizations
Profit: Primary objective is to generate profit after expenses.
Non-profit: Primary objective is to serve societal needs.
Business History Eras
Colonial Period (Prior to 1776)
Focus on rural and agricultural production.
Industrial Revolution (1760–1850)
- Factory system and mass production.
- Profit growth and rapid industrialization.
- Technological advancements and new railroad systems for efficient transportation.
Industrial Entrepreneurs (Late 1800s)
Increased demand for manufactured goods, led by figures like John D. Rockefeller (oil) and Andrew Carnegie (steel). Inventors developed new products and production methods.
Production Era (Through the 1920s)
- Emphasis on efficient production.
- Goal to maximize sales of produced goods.
- Henry Ford’s assembly line revolutionized manufacturing.
Marketing Era (Since 1950s)
Consumer-centric approach, understanding consumer needs and preferences.
Relationship Era (Began in 1990s)
Focus on building and maintaining relationships with customers.
Note: The emerging Social Era emphasizes social media technologies like Facebook and Twitter.
Modern Business Concepts
Work-life balance: Creating an environment that supports employees’ personal and professional lives.
Outsourcing: Utilizing external vendors for goods and services.
The Environmental Protection Agency (EPA): A U.S. federal agency dedicated to protecting human health and the environment through assessments, research, education, and enforcement of environmental standards.
Business Ethics and Social Responsibility
Ethics: The study of right and wrong, moral philosophy.
Business ethics: Applying moral standards in business situations.
Business law: Regulations governing business establishment and operation, often intersecting with ethics.
Code of ethics: A written document outlining expected employee behavior, promoting ethical standards across diverse cultures.
Stakeholder Concerns
- Customer: Safe, reliable, and affordable products.
- Employee: Fair treatment, safe working conditions, and equitable compensation.
- Investor: Sound financial decisions and return on investment.
- Competitor: Ethical and truthful business practices.
- Creditor: Timely payments and accurate financial information.
Social Responsibility: The ethical obligation of businesses to act for the benefit of society.
Economic model perspective: Prioritizes maximizing shareholder wealth and profits.
Socioeconomic model: Recognizes business responsibilities beyond profit maximization, including societal well-being.
Reasons for Adopting the Socioeconomic Model
- Corporations are societal creations.
- Companies value their social responsibility records.
- Social responsibility can be a competitive advantage.
Pros of Social Responsibility
Increased accountability and transparency with stakeholders.
Cons of Social Responsibility
Potential impact on time, money, and resources allocated to profit maximization.
Environmentalism: Efforts to protect the environment from harm.
Carbon footprint: The amount of carbon emissions released by an entity.
Corporate philanthropy: Organizations giving back to the community and the world.
Management Theories
Scientific Management
Analyzing individual steps and processes to maximize efficiency (pioneered by Frederick Taylor, Frank and Lillian Gilbreth).
Fayol’s 14 Principles of Management
- Division of Work
- Authority
- Discipline
- Unity of command
- Unity of direction
- Subordination of individual interests to the general interest
- Remuneration
- Centralization
- Scalar Chain
- Order
- Equity
- Stability of tenure of personnel
- Initiative
- Esprit de corps
Total Quality Management (TQM)
A management philosophy focused on continuous improvement to meet customer needs and expectations.
W. Edwards Deming: A key figure in the quality movement of the 1980s and 1990s.