Chapter 1 - Management and EntrepreneurshipPresentation Transcript
Management and Entrepreneurship
Describe a manager’s responsibility.
List and explain the three management skills.
List and explain the four management functions.
Identify the three management role categories.
List the hierarchy of management levels.
Describe the three different types of managers.
Describe the differences among management levels in terms of skills needed and functions performed.
Explain the difference between an entrepreneur and an intrapreneur.
Define the key terms listed at the end of the chapter.
After studying this chapter, you should be able to:
IDEAS ON MANAGEMENT at Gap Inc.
What resources does Gap Inc. use to sell its merchandise?
What management functions are performed at Gap stores?
What levels and types of managers have careers at Gap Inc.?
Is Gap Inc. entrepreneurial and/or intrapreneurial?
Why Study Management?
The better you can work with people, the more successful you will be in both your personal and your professional lives.
Employers want to hire employees who can participate in managing the firm.
Even nonmanagers are being trained to perform management functions.
Why Study Management? (cont’d)
The study of management builds the skills needed in today’s workplace to succeed in:
Becoming a partner in managing your organization through participative management.
Working in a team and sharing in decision making and other management tasks.
The study of management also applies directly to your personal life in helping you to:
Communicate with and interact with people daily.
Make personal plans and decisions, set goals, prioritize what you will do, and get others to do things for you.
What Is a Manager’s Responsibility?
The individual responsible for achieving organizational objectives through efficient and effective utilization of resources.
The Manager’s Resources
Human, financial, physical, and informational
Means of evaluating how effectively and efficiently managers use resources to achieve objectives.
Exhibit 1 – 1 ● A Day in the Life of a Manager
Enter the store and walk the sales floor to ensure a proper closing took place the night before.
Project the payroll cost for the week as a percentage of my forecasted sales, and call it in.
Perform opening procedures on the controller (computer that records sales transactions and inventory count for all cash registers in the store).
Walk the sales floor with staff and assign projects for them to create new displays for merchandise during the day (create a “to do” list for employees and myself).
Before the store opens, call voice mail and check e-mail for messages left by other store managers or my boss, the district manager.
Make business telephone calls for the day.
Assign sales associates to store zones.
Put money in computer cash register drawers.
Open the store.
Make sure sales associates are in their zones on the floor for proper floor coverage.
Make sure everyone who enters the store is greeted and has his or her needs determined.
Provide floor coverage. (Help out as needed—greet customers, assist customers with sales, stock shelves, assist at the changing room, etc.)
Do business analysis for previous month from operating statement and gross margin reports.
Exhibit 1 – 1 ● A Day in the Life of a Manager (cont’d)
12:30 P.M .
Provide floor coverage as needed for staggered employee breaks.
1:30–2:30 P.M. My break, then:
Prepare customer request transfers (merchandise our store has but other stores do not have) to be delivered. Enter transfers into computer and get merchandise.
Leave for district meeting.
Drop off transfers and pick up another store manager; continue on to district meeting.
Meeting is conducted by district manager with the seven general and store managers. Meeting begins with discussion of the following topics:
Previous week’s sales, previous week’s payroll, payroll projections for next month (cost as a percentage of sales), cleanliness, and standards of the stores.
New information items, mail, general discussion, questions, etc.
Meeting ends with a walk-through of the store at which the meeting is held. During a walk-through, the host store manager discusses new display ideas that the other store managers may want to use. In addition, the other store managers give the host manager ideas for improving the store visually. In other words, this is a time to share ideas that will help all team members in the Gap district.
Call my store to see how sales are going for the day, then leave for home.
What Does It Take to Be a Successful Manager?
Integrity, industriousness, and the ability to get along with people
Self-management; global, multicultural, diversity, and ethics environment; planning and administration; strategic action; communication; and teamwork
The Ghiselli Study
Initiative, self-assurance, decisiveness, intelligence, need for occupational achievement, and supervisory ability
Exhibit 1 –2 ● Management Skills
Power, political, negotiation, and networking skills
Conflict management skills
Diagnostic, analytical, and critical-thinking skills
Quantitative reasoning skills
Time management skills
What Do Managers Do?
Setting objectives and determining in advance exactly how the objectives will be met.
Delegating and coordinating tasks and allocating resources to achieve objectives.
Influencing employees to work toward achieving objectives.
Establishing and implementing mechanisms to ensure that objectives are achieved.
Exhibit 1 –3 ● Management Skills and Functions
A set of expectations of how one will behave in a given situation.
Management Role Categories (Mintzberg)
Figurehead, leader, and liaison
Monitor, disseminator, and spokesperson
Entrepreneur, disturbance handler, resource allocator, and negotiator
Exhibit 1 –4 ● Ten Roles Managers Play
Differences Among Managers
The Three Levels of Management
CEO, president, or vice president
Sales manager, branch manager, or department head
Crew leader, supervisor, head nurse, or office manager
Nonmanagement operative employees
Workers in the organization who are supervised by first-line managers
Exhibit 1 –5 ● Management Levels and Functional Areas
Types of Managers
Supervise the activities of several departments.
Supervise the completion of related tasks.
Common functional areas:
Human resources/personnel management
Coordinate employees across several functional departments to accomplish a specific task.
Join the Discussion Ethics & Social Responsibility
Do executives deserve to make 200 times more than the average worker?
Is it ethical for managers to take large pay increases when laying off employees?
Are companies being socially responsible when paying executives premium compensation?
Exhibit 1 –6 ● Skills Needed and Functions Performed at Different Management Levels
Exhibit 1 –7 ● Differences between Large and Small Businesses
Managing the Old versus New Workplace
Specialized jobs performed by individuals
Flexible jobs performed by teams
Managing the New Workplace
Have everyone engaged in identifying and solving problems, enabling change, and continuous improvement.
The sharing of information through knowledge management
Involves everyone in an organization in sharing knowledge and applying it to continuously improve products and processes.
Is the firm’s core capability and is important to sustained ability to compete.
Creating new products or processes
Entering new markets
Creating new business ventures
New Venture Entrepreneurs and Intrapreneurs
A new business or a new line of business.
One who starts a new small business venture.
One who starts a new line of business within a large organization.
New Venture Entrepreneurs and Intrapreneurs (cont’d)
Small Business Defined
Is independently owned and operated
Is not dominant in its field
Has annual receipts not in excess of $500,000
Fact: In 2005, there were approximately 25.8 million small businesses in the U.S.
Contributions of Entrepreneurs Society Economic Growth Support of Large Businesses Job Creation Innovation
Join the Discussion Ethics & Social Responsibility
What are the benefits of virtual internships to employers and to interns?
Should a student be given college credit for a virtual internship, or should he or she receive only pay without credit—a part-time job?
Is it ethical and socially responsible to use interns instead of regular employees?
Will the use of virtual interns become the norm, or will the practice fade?
Selecting the New Venture
Factors in Selecting a New Venture
Good growth potential and profit opportunities
Previous work experience
Observing others’ mistakes and successes
Finding an overlooked market segment or niche
Systematic search or hobby
Specifies how the organization offers unique customer value.
First-mover advantage involves offering a unique customer value before competitors do so.
Selecting the New Venture (cont’d)
Five Most Commonly Used Entrepreneurial Strategies
Creating a competitive advantage
Lowering the costs of developing and/or maintaining one’s venture
Defending an existing product/service
Creating a first-mover advantage
The Business Plan
The well-prepared business plan answers the following questions:
What is the purpose and mission of this business?
What products (goods and/or services) will the business provide? Who is in the target market?
Who are my competitors?
What is my competitive advantage? How will my business be successful?
How much money do I need to get started?
Where do I secure the money to finance the new venture?
What are the potential revenues, expenses, and profits?
How do I control the business?
What are possible expansion plans?
Elements of a Business Plan
Location and Layout
Exhibit 1 –8 ● Information Commonly Included in a Business Plan
Executive Summary. Although presented first, this section is written after the rest of the business plan has been completed.
Introduction. This section describes the business, answering these questions: What is the business? What goods or services does the business provide? Who are the business’s competitors? What is the business’s competitive advantage? It also introduces key managers and describes the legal form of the business (sole proprietorship, partnership, or corporation) and the type of business (an existing business, a new startup, a franchise, or a new line).
Location and Layout. Where will business be conducted, and how will the facilities be organized?
Operations. This section describes the systems process for transforming inputs into outputs.
Marketing. This section describes the marketing mix of the four Ps for the business: (1) products to be sold, (2) place products will be sold, (3) price of products, and (4) promotion to let target customers know about your products.
Human Resources. How many employees will the business need, and how will it recruit and hire them?
Accounting. How will the business keep records? The business plan should include a three-year projection ( pro forma ) for three important financial reports: balance sheet, income statement, and cash flow. The accounting plan indicates the company’s potential revenues, expenses, and profits. Potential creditors (people who will lend you money, assets, and inventory) and investors (co-owners with you) generally require projected financial statements.
Controls. This section describes the mechanisms to ensure that objectives are achieved.
Financing. The financial plan specifies how much money and other assets will be required to start and operate the new venture and where the financing will come from. (As a general rule, you should not start a new venture unless you can operate the business for one year without drawing money from the business for personal expenses. In other words, you need to live for a year without a salary. Paying rent, car payments, and so on with business profits during first years is rarely possible, and doing so can cause your business to run out of funds and close.)
Sources of Assistance in Planning, Starting, and Opening the New Venture
Palo Alto Software
Small Business Administration (SBA)
Service Corps of Retired Executives (SCORE)
Women’s Business Centers (WBCs)
Small Business Development Centers (SBDCs)
Minority Business Development Agency (MBDA)
Exhibit 1 –9 ● Features of This Book’s Three-Pronged Approach and Table of Contents