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MGT 201 ­ Principles of Management Chapter 1: The Evolution of Management Thought

Four key realities of managing today: · The only certainty today is change. Challenging goals motivate people to strive for improvement and overcome obstacles and resistance to change. · Speed, teamwork, and flexibility are the orders of the day, from both strategic and operational standpoints. · Managers at all levels need to stay close to the customer. Product/service quality is the driving force in the battle to stay competitive. · Without continuous improvement and lifelong learning, there can be no true economic progress for individuals and organizations alike. Effective management is the key to a better world, but mismanagement squanders our resources and jeopardizes our well-being. I. MANAGEMENT DEFINED: _______________ is the process of working with and through others to achieve organizational objectives in a changing environment. Central to this process is the effective and efficient use of limited resources. The key phrases in this definition make up the headings in this section. A. Working with and through Others 1. Management is a _______________. 2. In interviews with executives from across the United States and Europe, managers are often derailed because of their inability to work effectively with and through others. B. Achieving Organizational Objectives 1. Organizations are usually more successful when they are driven by _______________, yet _______________, objectives. 2. Organizational objectives require ______________________________ to succeed. 3. Powerful organizational objectives can help energize organizations. 4. Organizational objectives also serve later as measuring sticks for _______________. C. Balancing Effectiveness and Efficiency 1. _______________ entails achieving a stated objective. 2. _______________, which is actually a ratio of benefits to cost, involves using resources well in achieving an objective. 3. Managers need to balance effectiveness and efficiency to be successful. (See Figure 1.2.) D. Making the Most of Limited Resources 1. We live in a world of _______________. 2. There is a concern about running out of nonrenewable energy and material resources as well as the lopsided use of those resources, particularly the high relative consumption in the U.S. 3. Because of their common focus on resources, _______________ and management are closely related. 4. In productive organizations, managers are the trustees of limited resources and it is their job to see that the basic factors of production are used effectively and efficiently. E. Coping with a Changing Environment 1. Successful managers prepare for and adjust to changing circumstances. 2. There are five overarching sources of change: a. _______________ 1). Companies are having to become global players just to survive. 2). _______________, the controversial practice of sending jobs to low-wage countries, has moved from the long-standing approach to manual labor to higher-skilled jobs by well-educated workers outside the U.S.



d. e.

3). Today's model manager is one who is comfortable transacting business in multiple ______________________________. ______________________________ 1). The fix-it-in approach to quality 2). The inspect-it-in approach to quality 3). The build-it-in approach to quality 4). The design-it-in approach to quality ____________________________ 1). Managers around the world are becoming more concerned about environmental issues. 2). Researches found 80% higher stock market valuations for multinational corporations adhering to strict environmental standards. ______________________________ _____________________________________________ 1). From a Department of Defense research project during the 1960s, the _______________ has grown to a worldwide network of computers and the people who use them. By 2005, worldwide use exceeded 1 billion users. 2). Within the business community, heads are still spinning from the dot-com crash of 2000-2001. The result is more measured forays into _______________ (a business using the Internet for greater efficiency in all basic business functions such as production, marketing, and finance/accounting) and more realistic expectations.

II. WHAT DO MANAGERS DO? There are two approaches to analyzing management processes. A. ______________________________ are general administrative duties that need to be carried out in virtually all productive organizations. 1. This is the more traditional approach to analyzing management. 2. Henri Fayol developed the functional approach in 1916 with five functions: Planning, Organizing, Command, Coordination, and Control. 3. This list has been updated and revised over the years. There are eight functions in this text: a. _______________ -the formulation of future courses of action b. ______________________________ -selecting from alternative courses of action c. _______________ -considering the structural issues in an organization d. _______________ -recruiting, training, and developing people e. _______________ -both giving and receiving direction and feedback f. _______________ -encouraging people to move toward common goals by satisfying needs and meeting expectations g. _______________ -serving as a role model and adapting to the demands of the situation h. _______________ -making sure things stay on track B. _________________________ are specific observable behaviors that effective managers exhibit. 1. Clark L. Wilson conducted 30 years of research involving tens of thousands of mangers, creating a clear picture of what it takes to be a manager. 2. It takes three skills categories--that branch into the 12 specific managerial skills listed in Figure 1.4. a. _______________ 1). Technical expertise 2). Clarification of goals and objectives 3). Problem solving 4). Imagination and creativity

Revised: 8/29/2007 MGT 201 ­ Chapter 1 Notes Page 2

b. _______________ 1). Listening for insights 2). Directing and coaching 3). Solving problems as a team 4). Coordinating and cooperating c. _______________ 1). Standards of performance 2). Control of details 3). Energy 4). Exerting pressure 3. According to Wilson's research, about 1/3 of mangers at all levels do not achieve an appropriate balance of these skills and are thus ineffective managers. C. Some Managerial Facts of Life (With No Sugar Coating) 1. Managing is a tough and demanding job, both challenging and rewarding. According to AMA research, while a majority of managers feel more overwhelmed at work today than two years ago, 63 percent also feel enthusiasm for their jobs. 2. Managers experience a hectic pace. A manager's day is characterized by lots of brief interactions. Interruptions and fragmentation are the norm. 3. Managers lose their right to do many things. While there are privileges associated with management, managers also pay a price. According to one management expert, managers lose their right to do any of the following: a. lose your temper. b. be one of the gang. c. bring your personal problems to work. d. vent your frustrations and express all your opinions at work. e. resist change. f. pass the buck on tough assignments. g. get even with your adversaries. h. play favorites. i. put your self-interests first. j. ask others to do what you wouldn't do. k. expect to be immediately recognized and rewarded for doing a good job. 4. Management is not for everyone. III. LEARNING TO MANAGE A. How Do Managers Learn to Manage? 1. A survey of 3,600 Honeywell managers asked them to explain how they learned to manage. The distribution of sources was as follows: a. Job assignments: _______________ b. Relationships: _______________ c. Formal training and education: _______________ 2. Many indicated that they learned about management in the "school of hard knocks." A study of British managers provided this list of hard knocks learning experiences: a. Making a big mistake b. Being overstretched by a difficult assignment c. Feeling threatened d. Being stuck in an impasse or dilemma e. Suffering an injustice at work f. Losing out to someone else g. Being personally attacked

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B. How Can Future Managers Learn to Manage? 1. Students can learn to manage by ___________________________________. (See Fig 1.7) 2. _______________ provides a sound conceptual foundation. 3. _______________ provides an opportunity to test knowledge. IV. SMALL BUSINESS MANAGEMENT Small businesses are a huge and vibrant part of the global economy. The 5.6 million small businesses in the United States represent 99 percent of the nation's employers and account for over one quarter of the nation's $1.4 trillion in capital investment. About 60 percent of small businesses are "micro-businesses" with fewer than five employees, typically operating out of the owner's home. A. A ______________________________ is defined as an independently owned and managed profit-seeking enterprise employing fewer than 100 people. The 5.8 million companies with fewer than 100 employees constitute 98 percent of U.S. employers and generate 40 percent of the nation's output. B. Exploding Myths About Small Businesses 1. The 80-Percent-Failure-Rate Myth a. One study indicates that in fact only 18 percent of small businesses fail during their first eight years. b. It turns out that the old studies defined business failure too broadly, including those who died, sold their business, or retired. 2. The Low-Wage-Jobs Myth a. Eighty percent of new job growth was generated by smaller companies during the 1980s and 1990s. Most of that job growth came from fast-growing high-tech firms. b. While small businesses do pay less on average than big corporations, they are not lowwage havens. C. Career Opportunities in Small Business Table 1.2 on page 21 lists five small business career options. Success in the small-business sector depends on the right combination of money, talent, hard work, luck, and opportunity. D. Entrepreneurship 1. "_______________ is the process by which individuals-either on their own or inside organizations-pursue opportunities without regard to the resources they currently control." a. Entrepreneurs look beyond current resource constraints when they envision new possibilities. b. Entrepreneurs are __________________________ -and all they want is a chance. 2. A Trait Profile for Entrepreneurs a. Table 1.3 on page 22 contrasts trait profiles for entrepreneurs and general administrators. b. Some characteristics of entrepreneurs include high achievement, a focus on the future, and comfort with ambiguity and risks. 3. Entrepreneurship Has Its Limits a. A common stumbling block is when organizations outgrow entrepreneurs' ability to manage them. b. Entrepreneurs generally feel stifled by cumbersome and slow-paced bureaucracies. c. Successful entrepreneurs face a tough dilemma: either grow with the company or have the courage to step aside and turn the reins over to professional managers and administrators.

Revised: 8/29/2007

MGT 201 ­ Chapter 1 Notes Page 4


MGT 201 ­ Principles of Management

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