2. Learning Objectives:
1. Understand the functions of management.
2. Explain the three basic leadership styles.
3. Explain the three basic levels of management.
4. Understand the management skills that are
important for a successful small business.
5. Understand the steps in ethical decision
making.
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3. OVERVIEW:
Management is the act of getting people together to
accomplish desired goals and objectives using
available resources efficiently and effectively. Since
organizations can be viewed as systems,
management can also be defined as human action,
including design, to facilitate the production of useful
outcomes from a system. This view opens the
opportunity to manage oneself, a pre-requisite to
attempting to manage others.
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4. What Is Management?
There is no universally accepted definition for
management. The definitions run the gamut
from very simple to very complex. For our
purposes, we define MANAGEMENT as “the
application of planning, organizing,
staffing, directing, and controlling
functions in the most efficient manner
possible to accomplish meaningful
organizational objectives
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5. Management principles apply to all
organizations—large or small, for-profit or not-for-
profit. Even one-person small businesses need to
be concerned about management principles
because without a fundamental understanding of
how businesses are managed, there can be no
realistic expectation of success. Remember that
the most common reason attributed to small
business failure is failure on the part of
management.
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6. Management Functions
On any given day, small business owners and
managers will engage in a mix of many different kinds
of activities—for example, deal with crises as they
arise, read, think, write, talk to people, arrange for
things to be done, have meetings, send e-mails,
conduct performance evaluations, and plan. Although
the amount of time that is spent on each activity will
vary, all the activities can be assigned to one or more
of the five management functions: planning,
organizing, staffing, directing, and controlling
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7. Management
Getting things done through people.
oPeople – most important response/asset
Process of planning, organizing, leading and
controlling in order to achieve organizational goals.
Is both a science and art of managing people and
other resources.
oScience – system – composed of interrelated parts
oArt – skills
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8. Resources Anything of value to the organization.
Classification of Resources
1.Organizational
a.Human
b.Financial
c.Physical
d.Technological
e.Intellectual capital
f. Human capital
g.Social capital
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9. 2.According to its nature
a.Tangible Resources
b.Intangible Resources
3.According to Economics
Factors of production:
a.Land
b.Labor
c.Capital
d.Entrepreneurship
4.According to M’s of Management
-man/manpower, machine, money, materials, means, measures,
market, method, motivation, minute
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10. Management Roles
1.Informational- gathering, analyzing and managing
information
2. Interpersonal-interacting with people inside and
outside the organization
3. Decisional -utilizing factual information to solve
problems or assure at a decision.
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11. Management Skills
1. Technical- ability to perform a specialized task
2. Interpersonal-- ability to deal with different types/group of
people
Three general groups of people in an organization
a.Subordinates
b.Peers
c.Superiors
3. Conceptual - ability to analyze a problem or situation.
4. Decisional -- ability to make sound decisions
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12. Evolution of Management
I.Classical Approaches to Management
A.Scientific Management
Frederick M. Taylor (engineer)
oFather of Scientific Management
oused scientific techniques in improving
performance of people and maximizing
output
oDivision of labor
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13. B. Motion Studies reducing task to its basic
physical motion
eliminating unnecessary or redundant motions
1. Frank Gilbreth - Father of Motion Study
Lilian Gilbreth – First Lady of Management
2. Henry Gantt-Developed the Gantt Chart as a
tool in work scheduling and monitoring
progress.Recognizes the value of non-monetary
rewards to motivate workers
3. Henry Ford (Industrialist)Introduced the
assembly line and mass productionUsed the
concept of division of labor in breaking down
jobs into small tasks
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14. All small businesses need to be concerned
about management principles. Management
decisions will impact the success of a business,
the health of its work environment, its growth if
growth is an objective, and customer value and
satisfaction. Seat-of-the-pants management
may work temporarily, but its folly will inevitably
take a toll on a business. This section discusses
management principles, levels, and skills—all
areas that small business owners should
understand so that they can make informed
and effective choices for their businesses.
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15. C. Administrative Management
1.Henry Fayol – Father of Modern Management
oDeveloped the 14 Principles of Management
1.Division of work
2.Authority
3.Descriptive
4.Unity of Command
5.Unity of Direction
6.Subordinates of Individual
7.Remuneration – compensation/monetary
reward
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16. 8.Centralization
9. Scalar chain – keep communication
within the chain of command
10.Order – structure, system,
standards
11.Equity – fairness and justice
12. Stability and tenure of personnel –
security of tenure
13. Initiative – act voluntarily
14. Esprit de corps – unity of interest
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17. D. Bureaucracy
oAn organization based on logic,
order, legitimate and authority.
Max Weber (sociologist)
oIntroduced the idea of bureaucratic
organization which is a rational and
efficient form of organization founded
in logic, order and legitimate
authority.
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18. II.Behavioral Theory
Human Relations Movement
emphasizes the importance of importance of
human element in the workplace
known as Organizational Behavior which is
the study of human behaviour in
organizational settings.
1. Elton Mayo
Developed the “Hawthorne Effect”
psychological and social factors are more
important than the physical condition of the
workplace and financial incentives in
motivating workers.
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19. 2. Abraham Maslow-Psychologist
Developed the motivational theory known
as “Maslow’s Hierarchy of Needs”
1)Psychological Needs – foods, shelter,
clothing, sex
2)Safety Needs – security, protection
3)Social Needs – belongingness
4)Esteem Self – recognition, achievement
5)Self-actualization – self-fulfilment
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20. 3. Frederick Herzberg (psychologist)
Developed the “Two Factor Theory” or
“Motivation-Hygiene Theory”
This theory proposes that employees are
motivated by intrinsic (motivation) factor than
extrinsic (hygiene) factor.
Intrinsic Factors : achievement and
recognition
Extrinsic Factors : making decisions,
company policies, pay, job security
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