Business and Industry
- A business is an organization that strives for a profit by providing goods and services desired by its customers.
- Goods are tangible items manufactured by businesses, whereas services are intangible offerings that can’t be held, touched or stored.
- Industry refers to economic activities which relate to conversion of resources into useful goods. The term is also used for activities in which mechanical appliances and technical skills are involved.
- Industry refers to a group of companies or organizations that produce similar goods or services, whereas a business refers to an individual company or organization engaged in commercial activities.
- Industry represents a specific sector of the economy. A business is a singular entity that operates within a specific industry to turn a profit.
Industry Classification
- Primary - extracts raw materials from the planet
- Secondary - processes and manufactures products from raw materials
- Tertiary - provides a service
- Quaternary - incorporate a high degree of research and tech in their processes + highly qualified people
Managers
Individuals in an organization who direct the activities of others.
- An organization is a deliberate arrangement of people brought together to accomplish some specific purpose.
- A manager is an individual responsible for planning, organizing, leading and controlling resources and activities within an organization to achieve specific goals.
Levels of Management
- Top - executive coaching, change management, leadership, delegation, empowerment.
- Middle - problem solving, team building, talent development
- Low Level - emotional intelligence and coaching for performance
Functions of Managers
- Planning - selecting missions and objectives as well as actions to achieve them.
- Organize - establishing intentional structure of roles for people to fill in an organization
- Staffing - filling and keeping filled the positions in organization structure
- Leading - influencing people to contribute positively to organization and group goals
- Controlling - measuring and correcting individual and organizational performance to ensure that events conform to plans
Henri Fayol’s 14 Principles of Management
Management principles are statements of fundamental truth based on logic which provide guidelines for managerial decision making and actions. The principles are as follows:
- Division of Labor Proper subdivision of work based on specializations
- Authority and Responsibility A person can not get authority without getting responsibility with it
- Unity of Command (principle of one boss) A subordinate should not report to more than one boss to avoid confusion, indiscipline, disloyalty, duplication and overlapping.
- Unity of Direction (principle of one plan) There should be one plan for group of activities with similar objectives
- Equity (fairness, kindness, justice)
- Order (systematic arrangement of things and people) Material and Social order. Material for things, social for people. American 5S Standard - Sort, Straighten, Shine, Standardize, Sustain
- Discipline
- Initiative Take action without needing it assigned
- Fair Renumeration
- Stability of Tenure
- Scalar Chain (chain of command, gang plank)
- Subordination or individual interest to general interest
- Esprit De’ Corps (team spirit)
- Centralization and Decentralization (sharing or consolidating authority, depends on size and nature of the organization)
Managerial Roles
Interpersonal
- Figurehead - ceremonial, routine but necessary
- Leader
- Liason - make contacts outside his vertical chain of command
Informational
- Monitor - scans environment for useful (soft) information
- Disseminator - share and distribute much of information to direct subordinates
- Spokesperson - send some information to people outside his unit, influential people such as directors, shareholders, consumer groups and the government.
Decisional
- Entrepreneur - voluntary initiator of change
- Disturbance Handler - responding to pressures and changes, crisis and incident management
- Resource Allocator
- Negotiator - make sure everyone is satisfied
Social Responsibility of Managers
From a purely economic view, the management’s only social responsibility is to maximize profits. On the other side is the socio-economic problem which includes the social responsibility to protect and improve society’s welfare.
CSR - Corporate Social Responsibility
Company efforts that go beyond what is required of regulators and environmental protection groups.
Drivers of CSR:
- Employees and shareholders
- Brand equity
- Ethical marketing practices and social awareness
- Environmental consciousness
- Energy conservation and global warming
- Governmental responsibility
Ethics in Managing
Ethics in managing has three basic types of moral theories:
- Utilitarian Theory - plans and actions should be evaluted by their consequences
- Based on Rights - holds that all people have basic rights to freedom.
- Theory of Justice - Decision makers be guided by fairness and equity as well as impartiality.
International Business
Country’s culture impacts employee behavior in five dimensions:
- Individualism vs Collectivism
- Large Power Distance vs Small Power Distance
- Uncertainty Tolerance vs Avoidance
- Masculinity vs Feminity
- Short-Term vs Long-Term Orientation
1. German Management
Reliance on authority in directing the workforce. While managers may show concern for subordinates, they also expect obedience.
2. Austrian Management
Self-realization and leadership. Independence and competitiveness are valued. Low risk-taking tolerance
3. Australian Management
Influenced by country’s moralistic stance and emphasis on political and social values, achievement and risk-taking.
4. Italian Management
Low risk tolerance. Very competitive, but value group decision-making
4. England Management
Job security is important as well as resourcefulness, adaptability, and logic. Individualism is also highly valued.
Theory Z
| Japanese | American |
|---|---|
| lifetime employment | short-term employment |
| collective decision making | individual decision making |
| collective responsibility | individual responsibility |
| slow evaluation and promotion | rapid evaluation and promotion |
| implicit control mechanism | explicit control mechanisms |
| non-specialized career path | specialized career path |
| holistic concern for employee as a person | segmented concern for employee as an employee |
Theory Z
Theory Z focuses on increasing employee loyalty towards the company by providing a job for life with a strong focus on the well-being of the employee, both on and off the job.
Theory Z type of organization:
- Long-term employment
- Consensual, participative decision making
- Individual Responsibility
- Slow evaluation and promotion
- Implicit, informal control with explicit, formalized measures
- Moderately specialized career path
- Holistic concern, including family