Management Principles and Business Concepts Summary

Posted on Dec 18, 2025 in International Business Economics

Foundations of Management

Management is defined as “a process of assembling and using sets of resources, in a goal-directed manner, to accomplish tasks in an organizational setting.”

  • F.W. Taylor defined it as “The art of knowing what is to be done and seeing that it is done in the best possible manner.”
  • Mary Parker Follett described it as “The art of getting things done through people.”

The concept of work division can be traced back to Sir Thomas More (1474-1535), who described it in “Utopia.”

Key Challenges in the 2000s

Key challenges included:

  • Managing Change
  • Managing Resources
  • Managing Strategically
  • Managing Entrepreneurially

Technological Benchmark

Moore’s Law: The power of microprocessors doubles, and their cost halves approximately every 18 months.

Entrepreneurship and Change

Joseph Schumpeter (1883-1950), an Austrian economist, viewed the entrepreneur as the agent of change in the modern economy, associated with “creative destruction” (e.g., Kodak vs. Polaroid).

Mindset and Justice

  • Entrepreneurial Mindset: Focuses on identifying new opportunities (Example: GM & Latinos).
  • Procedural Justice: Ensuring that those affected by managerial decisions consent to the decision-making process and that the process is impartial.

Historical Management Figures

F.W. Taylor and Scientific Management

F.W. Taylor is considered the father of Scientific Management, focused on reducing time and boosting productivity.

Core Managerial Functions (Books4)

Managers perform four primary functions:

  1. Planning
  2. Organizing
  3. Directing
  4. Controlling

Related to control is Compensatory Justice: If distributive and procedural justice fail, those hurt by inequitable distribution of rewards are compensated.

Peter Drucker’s Five Functions

  1. Setting objectives.
  2. Organizing.
  3. Motivating and communicating.
  4. Measuring performance.
  5. Developing people.

Mintzberg’s Managerial Roles

Mintzberg categorized roles into three groups:

  • Interpersonal Roles: Figurehead, Leader, Liaison.
  • Informational Roles: Monitor, Disseminator, Spokesperson.
  • Decisional Roles: Entrepreneur, Disturbance-handler, Resource-allocator, Negotiator.

Ethical Decision-Making Approaches

Approaches to Ethical Decision-Making

  • Utilitarian Approach: Focuses on what brings the greatest good for the greatest number.
  • Moral Rights Approach: Determines actions based on whether they are fundamentally “right” or “wrong.”
  • Universalism Approach: (Incomplete text: NHLQNTGQTH)
  • Justice Approach: Focuses on fairness and equity (libra).

Moral Intensity Factors

Moral Intensity involves six factors determining the degree of ethical dimension:

  • Magnitude of Consequences
  • Social Consensus
  • Probability of Effect
  • Temporal Immediacy
  • Proximity
  • Concentration of Effect

Corporate Social Responsibility Perspectives

Efficiency Perspective (Milton Friedman)

Milton Friedman argued that the only responsibility of business is to increase profit $, as long as it operates legally.

Social Responsibility Perspective

This perspective suggests businesses should go beyond profit-making to protect the environment and promote justice.

Stakeholders

  • Primary stakeholders: Employees.
  • Secondary stakeholders: Local communities.

Responses to Social Pressures

Companies respond to social pressures in various ways:

  • Defenders: Maximize profit; only change when legally required.
  • Accommodators: Focus on profit but fight new restrictions.
  • Reactors: Respond to social pressure, even without formal requirements.
  • Anticipators: Proactive in social responsibility (los buenitos).

Promoting Ethical Conduct

Companies promote ethical conduct through:

  • Codes of Ethical Conduct
  • Whistleblowers

Corruption and Law

Corruption involves using power for bribery, blackmail, or influence-peddling. The (FCPA) of 1977 is a US law prohibiting bribing public officials in other countries.

Global Business Environment

Globalization Concepts

  • Globophobes (vs) Globophiles (with): Attitudes toward globalization.
  • Externality: An unintended or indirect consequence imposed on society that may not be understood or anticipated.
  • Friedman’s ‘Flat World’: The idea that globalization has leveled the economic playing field.

Country Institutional Environment

Key elements defining a country’s institutional environment include:

  • Economic development.
  • Political-legal system.
  • Physical infrastructure.

Cultural Norms

  • Folkways: Relate to dress code and manners.
  • Mores: Prohibitions against serious offenses like murder or theft.

Hofstede’s Cultural Dimensions

  • Power Distance: How much people accept unequal power distribution.
  • Individualism vs. Collectivism: Focus on “me” versus “we.”
  • Masculinity vs. Femininity: Valuing competition (masc) or quality of life (fem).
  • Uncertainty Avoidance: Tolerance level for uncertainty.

International Market Entry Strategies

Strategies vary by risk and control:

  • Exporting: Low risk, smaller returns.
  • Licensing: Distribute product for a royalty fee.
  • Strategic Alliances: Share costs but also profits.
  • Cross-Border Acquisition: Fast entry, High cost.
  • Greenfield Venture: 100% ownership; maximum control and profit potential, but riskiest.

Managing International Subsidiaries

  • Global Focus: Headquarters dictates rules.
  • Region-Country Focus: Local management dictates rules.
  • Transnational Focus: A mix of global and local control.
Strategic Corporate Social Responsibility Perspective

This perspective uses a three-criteria model to help managers focus on social areas where there are high chances of shared value creation for both business and society.