BUS101 Study Guide
Unit 5: Management
5a. Define the management process
- What are the four functions of management?
- Can you name an example of an action a manager might perform for each of the four management functions?
- What is the difference between efficiency and effectiveness?
- How do managers combine efficiency and effectiveness for managerial success?
Most businesses require leaders who can help provide vision and guide the different elements of the business process, such as idea generation, production, accounting, marketing, and customer service, so they fit together to create an efficient system; someone who can see the "big picture". Efficiency is the process of getting things done in your company, while effectiveness is when you do the right things for the company.
The four functions of management are planning, organizing, directing (or leading), and controlling. Planning includes setting objectives for the company and determining how to achieve those objectives. Organizing includes determining resources and how to best utilize those. Directing or leading includes motivating employees to help achieve company goals. Controlling includes monitoring the progress you've made during the planning, organizing, and directing stages, and evaluating the performance of the employees and their performance to help achieve company objectives and goals.
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5b. Explain how management contributes to the success or failure of a business
- What is a strategic plan?
- Why does a company need a mission statement?
- How do managers establish a positive corporate or organizational culture in their business?
- How does management contribute to the success or failure of a business?
A strategic plan is an important part of ensuring organizational success. The strategic plan helps management, employees, and shareholders to better understand their role in helping the company achieve its objectives and goals. This document outlines goals, actions, and objectives and may be updated frequently to keep up with company and industry changes.
A mission statement is created by management, showing the company's purpose, goals, and values. The mission statement is often only one or two sentences, but it focuses on how the company wants to grow. Sometimes, employees may be involved in writing the company's mission statement.
Managers and leaders may contribute to the success or failure of a business. If a manager's goals do not align with the overall company goals, then a manager may contribute to the failure of a company. When management and organizational goals are properly aligned, the success of a business is more likely.
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5c. Differentiate between various management styles
- Why is it important to understand leadership styles?
- What are some benefits and disadvantages of the autocratic leadership style?
- When would a laissez-faire leadership style be useful?
We can describe leadership styles as ranging from controlling to hands-off. The most popular leadership styles include autocratic, democratic, and laissez-faire. Each leadership style has strengths and weaknesses that are important to match the job given at a company.
An autocratic leader is extremely useful in a time of chaos. Autocratic leaders are very good at making decisions quickly without others' input. Depending on the situation, this skill can be both a strength and a weakness.
A laissez-faire leader gives quite a bit of freedom to direct reports, and if those direct reports are good at working independently, they may thrive under this type of leadership. However, if a direct report needs quite a bit of guidance or is new to a job, this leadership style may not be the best.
A democratic leader enjoys open communication and includes several people in decision-making. A democratic leader enjoys working and creating a collaborative work environment.
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5d. Explain corporate missions, corporate culture, corporate social responsibility, human resource management, and labor unions
- Why do businesses try to limit the negative effects of their business operations on their community?
- How do employees benefit from the labor unions that operate at the companies where they work?
- Why do some companies discourage labor unions from operating within their businesses?
During the interview process, you should determine a company's corporate mission, corporate culture, and corporate social responsibility to help assess whether the organization aligns with your values and career goals. The corporate mission is the company's overall purpose and reason for existing. It defines what the company stands for and what it aims to achieve. Corporate culture refers to the shared values, beliefs, attitudes, and behaviors that shape how employees interact and work together within the organization. Leadership style often influences this culture and can impact employee morale, collaboration, and the overall work environment. The type of culture and values a company promotes can affect how well leaders and employees collaborate, how the company is structured, and how actively employees engage in socially responsible initiatives.
While most businesses focus on their primary mission to meet the needs of their communities by providing products and services that their consumers want and need, many expect firms to make a positive contribution to their community. At the very least, they should not cause any harm.
When applying for a position, you should review the company's human resource management policies to review the financial and social benefits of working for the company and see how the employees resolve any disputes. You should also see whether a labor union will be available to represent you on these issues.
In human resource management, managers determine the human resource needs for different parts of the company, recruit and hire people to fill job openings, train employees so they can perform their jobs successfully, compensate employees fairly, perform evaluations, help resolve conflicts, and, at times, let employees go if they are not performing effectively.
Labor unions are organizations formed by workers to collectively negotiate with employers regarding wages, benefits, working conditions, and other workplace policies. Labor unions can benefit employees and employers. For the most part, the role of labor unions has changed as collective bargaining has become more of a collaborative effort between the bargaining unit and management.
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5e. Describe the steps in conducting labor negotiations
- What are the differences between negotiation, mediation, and arbitration?
- In labor negotiations, what are boycotts, strikes, lockouts, and strikebreakers?
- How does the negotiation process between labor and management work?
- What is collective bargaining?
Negotiation is the process of discussing a situation to resolve a conflict or disagreement. In the workplace, conflict management is an important part of managing employees and maintaining a collaborative work environment. Negotiation helps conflict management by discussing the issues and negotiating a better way to move forward.
Mediation occurs when someone, typically within the company, helps two people to resolve a situation. This mediator does not make the decisions for the people who resolve a conflict, but assists them through the process. Many times, this person may be in human resources.
Arbitration occurs when an outside person listens to both sides of the conflict and decides which side will win. Typically, both parties have previously agreed to whatever verdict the arbitrator makes. There is no opportunity to go back and negotiate after an arbitrator has made a decision.
Collective bargaining is used in contract, group, or union negotiations. This occurs when a large group of people has a collective negotiation. There is some power in collective bargaining in that most people want the same thing, and as a group, they may strike (walk off the job) if they don't get what they want. Union negotiations over salary and benefits are an example of collective bargaining.
A boycott occurs when a population is encouraged not to buy products from a specific company for a reason. For example, recently, Target and Amazon pulled back on diversity, equity, and inclusion (DEI) policies, and a group of consumers asked the public to boycott these retailers for 40 days to show that those DEI policies were important.
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5f. Describe business law concepts that apply to business
- What is an example of a contract in business?
- Can you name three sources of contract law?
- Which form of bankruptcy disbands the business?
Businesses create and enter into contracts with other companies and with individuals to delineate the terms of any financial agreements they have with one another. Three sources of contract law include case law, statutory law, and International Sales Law.
Businesses may fail for several reasons that are within and outside their control. When this happens, business managers must choose a form of bankruptcy to legally disband or restructure their business.
There are three forms of bankruptcy: Chapter 7 is used when a business files for bankruptcy and closes the business completely. Chapter 11 is a business reorganization that allows a company to restructure its finances in a court with a judge who supervises it. Chapter 13 is a personal bankruptcy for a sole proprietor to restructure their debts and propose a payment plan. The court also oversees this process.
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Unit 5 Vocabulary
This vocabulary list includes terms you will need to know to successfully complete the final exam.
- arbitration
- autocratic leader
- bankruptcy
- boycott
- Chapter 7
- Chapter 11
- Chapter 13
- collective bargaining
- contract law
- corporate culture
- corporate mission
- democratic leader
- four functions of management
- human resource management
- labor union
- laissez-faire leader
- mediation
- mission statement
- negotiation
- strategic plan
- strike