Unit 5: Management
The management practices that a business adopts will inform how well it is able to achieve its goals and respond to changes in the workplace. For-profit and nonprofit businesses achieve their goals through the four steps of management: planning, organizing, controlling, and leading. Technical, conceptual, and interpersonal skills are essential to the management process. It also involves using human, financial, and informational resources. In this unit, we explore how successful business management involves teamwork, communication, creating a clear corporate mission and culture, following good business ethics, and making a commitment to social responsibility.
Completing this unit should take you approximately 17 hours.
Upon successful completion of this unit, you will be able to:
- define the management process;
- describe how management contributes to the success or failure of a business;
- differentiate among various management styles;
- identify the business implications of corporate mission, corporate culture, corporate social responsibility, human resource management, and labor unions;
- describe the steps in conducting labor negotiations; and
- describe business law concepts that apply to business.
5.1: Defining Management
Read pages 248–264 for an overview of what management is like. We will look at this section in more detail as we delve deeper into the process of management.
- Read the introduction and section 6.1 to see how important effective management is for a successful business, and to get an overview of the functions of the management process.
5.1.1: Functions of Management
We will explore the four functions of management: planning, organizing, directing, and controlling.
As you explore these topics, keep in mind that the functions of management are not linear, meaning managers do not perform these function one after another. In most instances, a manager could be performing two, three, or even all four functions in a single day, in any order.
5.1.1.1: Planning
- Read this section about the process businesses use to develop and implement a strategic plan.
5.1.1.2: Organizing
- Read this section to get a better understanding of the levels of management, functional organizational structures, the span of control, and how organizational charts are created.
5.1.1.3: Directing
- Read this section for more on the levels of management, functional organizational structures, the span of control, and how organizational charts are created.
5.1.1.4: Controlling
- The last function we will look at is controlling. The goal is to have all the other management functions working superbly, but how will you know they are working? This is where controlling comes in. The controlling function is all about monitoring and assessing performance. This lets you know what is working and what needs corrective action.
5.1.2: The Skills Needed for Management
- Read page 251 for a brief discussion of the leadership styles we looked at in the last section and, more importantly, the compensation managers receive in comparison to the average worker. Why is there such a discrepancy?
Read this section to help answer the question about pay differences between managers and other employees. Managers have to have a number of skills that put them at the top of the pay scale, including problem-solving skills that the average worker does not need to have.
5.2: The Role of Human Resource Management
Human resource management (HRM) could be the most important managerial duty for a business. Consider this: if a business cannot recruit, train, develop, motivate, and appraise their employees, they are likely wasting money which means cutting into their profit.
Read the introduction and section 7.1 to get an overview of the scope of HRM.
5.2.1: Recruitment
- Re-read pages 253–256 about recruitment and retaining to get a sense of the depth of information an HR person has to have just in the process of hiring and training new employees.
5.2.2: Development
What happens once an employee has been hired? This section discusses training and developing employees and the importance of having a diverse workforce.
5.2.3: Motivation
Drawing on many older theories of motivation like Maslow's Hierarchy of Needs and Herzberg's two-factor theory, as well as newer theories like expectancy and equity theories, HR managers can learn what might motivate employees to do their best work.
Read this section to see how these theories can be used.
5.2.4: Appraisal
It's not enough for HR to recruit, train, develop, and motivate employees. It is also important for employees to be assessed or reviewed so they know how they are doing.
Read this section to learn about some methods for employee performance review.
5.2.5: Employee Benefits
Another important duty of human resources is creating a compensation or benefits package that is sufficiently robust to keep employees from leaving but not so extravagant that the business goes bankrupt in trying to compensate their employees.
Read pages 256–262 for an overview of a few common and a few less common, but enticing, types of employee benefits.
This section takes another look at benefits and some factors that make a business a good place to work.
- Complete the assignment on page 271, and then complete the assignment on pages 273–274. Work on these tasks independently rather than with a team.
5.2.6: Labor Negotiation
A discussion of human resource management would not be complete without including some information on labor unions. While it would be nice to think that business owners would have their employees' best interests at heart, this is not the case. To provide employees with some power to negotiate for their benefits, labor unions use collective bargaining to get employees what they deserve.
Read pages 263–264 to learn some key terms in labor unions and labor negotiations.
Now, let's take a look at why unions exist, how they are structured, and how the collective bargaining process works.
5.3: Teamwork and Communications
Communication is a vital part of any human interaction and business is no exception. Read this chapter to learn about teams, teamwork, and communication in business environments. Complete the exercises at the end of each section to learn more about the importance of communication.
5.4: Forming a Corporate Mission and Culture
Review pages 249–250. Then, complete the assignment on page 265. Develop your own mission statement from your company analysis. It may help to find mission statements online for similar companies. Fill in the chart with your company and mission statement, as well as other the companies, and their mission statements, that you found online. Summarize your findings in a 500–700-word report.
If you wish, you may use this space to summarize your findings in a 500–700 word report.
5.5: Corporate Social Responsibility and Business Ethics
While the primary goals of a business are to provide a product society needs and to make a profit, they do not operate in a vacuum. In fact, they are an integral part of society and have a certain amount of responsibility to the society in which they operate.
Review pages 252–253 to refresh your memory about corporate responsibility.
Corporate social responsibility also includes a mandate for businesses to act ethically. While businesses themselves are neither ethical nor non-ethical, the people that run them are.
Read this chapter to see how ethics plays a role in business operations, then complete the exercise at the end of the chapter.
Complete this assignment. Instead of working as a team, work individually to research several companies that have succeeded or failed at maintaining ethics for social responsibility. Keep track of these companies by using the chart provided. After you have completed your research, present your finding to family members or friends, and then have them vote on which company was the best for the Hall of Fame and the worst for the Hall of Shame.
5.6: Business Law Concepts
While corporate social responsibility and ethics are an important part of managing a business, it is also important for businesses to follow the law in regards to human resources, production, and business ownership. It is also a good idea for managers of businesses to have a basic understanding of risk, contracts, and bankruptcy.
5.6.1: Risk and Risk Management
Since there is so much that is risky in operating a business, shouldn't there be ways to manage the risk? Read this article on risk management to get an overview of how businesses can manage risk.
5.6.2: Contracts
Contracts are an integral part of doing business. Managers in all areas of a business should have a basic understanding of what constitutes an enforceable contract.
Read the introduction and first section of each of chapters 8, 9, 10, 11, and 12. Combined, they will provide you will a basic understanding of the requirements for a contract.
5.6.3: Bankruptcy
While business managers would of course hope not to be in a situation where they had to consider bankruptcy, they should still be aware of the options that are available to them – from complete liquidation to reorganizing or renegotiating part of their debt.
Read this section to learn more about the purpose of, and options for, bankruptcy.
Unit 5 Assessment
- Receive a grade
Take this assessment to see how well you understood this unit.
- This assessment does not count towards your grade. It is just for practice!
- You will see the correct answers when you submit your answers. Use this to help you study for the final exam!
- You can take this assessment as many times as you want, whenever you want.
