Welcome to MT140 Introduction to Management

Unit 2 Seminar

Foundations of Management

Agenda

• General Questions and Announcements

• Introduction• Macroenvironment of a Business• Competitive Environment of a

Business• History of Management Theory• Recap• Unit Assignment Q & A• Conclusion of Seminar

Introduction

• In Unit 2, we examine:

-The environmental forces that shape the business organization

-That the business organization is an open system, constantly exchanging information with both its macro environment and its competitive environment.

-Major management theories over time

Organization Inputs and Outputs

2-4Figure 2.1

Open Systems

• Open systems

-Organizations that are affected by, and that affect, their environment.

2-5

Open Systems

• Inputs

-Goods and services organizations take in and use to create products or services.

• Outputs

-The products and services organizations create.

2-6

Open Systems

• External environment

-All relevant forces outside a firm’s boundaries, such as competitors, customers, the government, and the economy.

• Competitive environment

-The immediate environment surrounding a firm; includes suppliers, customers, rivals, and the like.

2-7

Open Systems

• Macroenvironment-The general environment; includes governments, economic conditions, and other fundamental factors that generally affect all organizations.

2-8

The External Environment

2-9Figure 2.2

Laws and Regulations

• Regulators include agencies such as:

-Occupational Safety and Health Administration (OSHA)

-Interstate Commerce Commission (ICC)-Federal Aviation Administration (FAA)-Equal Employment Opportunity Commission (EEOC)-National Labor Relations Board (NLRB)

2-10

The Economy

• The economic environment dramatically affects managers’ ability to function effectively and influences their strategic choices.

• Interest and inflation rates affect the availability and cost of capital, growth opportunities, prices, costs, and consumer demand for products.

2-11

The Economy

• In publicly held companies, managers may feel required to meet Wall Street’s earnings expectations.

• Managers may focus on short-term results at the expense of long-term success

• Some managers may be tempted to engage in unethical or unlawful behavior that misleads investors

2-12

Technology

• Technological advances create new products, advanced production techniques, and better ways of managing and communicating.

• As technology evolves, new industries, markets, and competitive niches develop.

2-13

Demographics

• Demographics

-Measures of various characteristics of the people who make up groups or other social units

2-14

Demographics

• Demographic trends

-Growth of the labor force-Increasing education and skill levels-Immigration-Increased numbers of women in the workforce-Increasingly diverse workforce

2-15

Social Issues and the Natural Environment

• Societal trends regarding how people think and behave have major implications for management of the labor force, corporate social actions, and strategic decisions about products and markets.

• Family leave, domestic partner benefits

2-16

The Competitive Environment

2-17Figure 2.3

Competitors

• Competition is most intense when:

-There are many direct competitors-Industry growth is slow-Product/service is not easily differentiated

2-18

New Entrants

• Barriers to entry

-conditions that prevent new companies from entering an industry

-government policy, capital requirements, brand requirements, cost disadvantages, distribution channels

2-19

Substitutes and Complements

• Substitutes -alternative products or services

-video games watching television

• Complements -products or services that increase purchases of other products

-car insurance automobile purchases

2-20

Customers

• Final customers -purchase products in their finished form

• Intermediate customers -purchase raw material or wholesale products before selling them to final customers

2-21

Evolution of Management Theories

• There are four primary approaches of management thought:

• In chronological order:

-Classical (late 1800s)-Behavioral (early 1900s)-Systems (early-mid 1900s)-Contingency (1960s…)

Assignment Questions

There are 4 graded assignments in Unit 2. They are:

1.Discussion Board: Discussion scenario: Marc has opened a 24-Hour fitness center in a fast-growing city. Before purchasing the franchise and starting his new business, Marc looked at the one other fitness center currently operating in that area. In the same general area are video game rooms, fast food restaurants, a sports bar, a golf driving range, a sporting goods store, and a bowling alley. Marc believes that the one fitness center forms his competition.

Based on your reading of “Substitutes and Complements”, do you agree with Marc or disagree? Why or why not?

Dropbox Assignment

• For this assignment, you must watch the video presentation on the Evolution of Management. You will find the video in the course.

• After watching the video and viewing the timeline please complete your assignment.

• By explaining how the theories presented are different from one another, and…

• By stating which management theory you think is more important and why.

• Respond in a paper of at least one full double-spaced page in length, using size 12-point Times New Roman font. Submit your paper to the Unit 2: Assignment Dropbox.

Review

• Don’t forget that you can take the Review as often as you need to during the Unit Week prior to the Tuesday midnight deadline until you get the score that you desire.

• I expect everyone to get full credit on the Review. You can refer to the text and retake it until you get 100%, as long as you do so before the unit’s deadline.

SEMINAR

Thank You for Attending!

This concludes our seminar for Unit 2. I appreciate your taking the time out to join me and to

invest in the concepts.