BUS 101 Chapter 6 Study Questions

Explain why the American Heart Association would need management, even though its goal is not profit-related.

• All organizations, whether profit or nonprofit organizations, are involved with the process of coordinating human, physical, and financial resources to achieve their objectives. Managers and employees of nonprofit organizations work together to achieve the objectives of their organizations.

Why must a company have financial resources before it can use human and physical resources?

• An organization must have financial resources in order to purchase human resources (hire people) and to purchase physical resources.

Explain the steps in the decision-making process.

• Decision making is a six-step process that occurs at all management levels. • The first step involves recognizing and defining the situation. • Step two involves developing possible courses of action, both standard and creative one. • Step three involves analyzing the feasibility, appropriateness, and consequences of each option. • Step four involves selecting the best option from the list of options. • The decision is implemented in step five. • Step six requires the monitoring of the decision's consequences. • These steps in decision making should be viewed only as a broad framework to help people in their approaches to decision making.

Why is management so important, and what is its purpose?

• Management is the process of coordinating human, physical, and financial resources to achieve an organization's objectives. Management is important because people in an organization must work together to achieve some stated or implied objective. Management takes place in any organization calling for the coordination of resources.

What skills do managers need? Give examples of how managers use these skills to do their jobs.

• Skills needed by managers include leadership, technical expertise, conceptual skills, analytical skills, and human relations skills. • Leadership is the ability to influence and motivate employees to work toward the achievement of organizational goals. • Technical expertise is the specialized knowledge needed to perform a job, such as managing an auto production line. • Conceptual skills are the ability to think in abstract terms so that a manager can fit parts together to form a whole perspective of a business operation. • Analytical skills are the ability to identify relevant issues and recognize their importance, understand the relationships between them, and perceive their underlying causes. • Human relations skills involve dealing with people both inside and outside the organization.

In what areas can managers specialize? From what area do top managers typically come?

• The areas of management include financial management, production and operations management, human resources (personnel) management, marketing management, information technology management, and administrative management. • Financial managers deal primarily with an organization's financial resources. • Production and operations managers are concerned with the transformation of an organization's resources into goods, services, and ideas. • Human resources managers deal with employees in a formalized manner as related to hiring, training, and benefits. • Marketing managers are responsible for planning, pricing, and promoting products and making them available to customers. • Information technology managers deal primarily with establishing, maintaining, and controlling computer networks. • Administrative managers do not specialize in any particular area but manage an entire business or major segment of a business. • Many top executives come from financial management, production and operations management, or marketing management. Most top managers are actually administrative managers.

Name the five functions of management and briefly describe each function.

• The five functions of management include planning, organizing, staffing, directing, and controlling. • Planning is the process of selecting a course of action to achieve organizational objectives. • Organizing consists of structuring all resources and activities to accomplish objectives in an efficient and effective manner. • Staffing is hiring people to carry out the work of the organization. • Directing is motivating and leading employees to achieve organizational objectives. • Controlling is evaluating and correcting activities to keep the organization on course.

Identify the three levels of management. What is the focus of managers at each level?

• The three levels of management include top management, middle management, and Business 101 | Introduction to Business | Fall 2016 | Professor Lafferty Exam 1 Review first-line management. • Top management includes the president and other top executives who have overall responsibility for the organization. • Middle management includes plant managers, division managers, and other managers who have a narrower focus under top managers. • First-line management includes all the managers who supervise workers. These managers are involved in the everyday operations of the organization.

What are three styles of leadership? Describe situations in which each style would be appropriate.

• There are three styles of leadership: autocratic, democratic, and free-rein. • Autocratic leaders make all decisions and then tell employees what must be done and how to do it. Autocratic leaders work best when dealing with lower-level employees who are poorly motivated and require more supervision to accomplish the task. Business 101 | Introduction to Business | Fall 2016 | Professor Lafferty Exam 1 Review • Democratic leaders allow their employees to get involved in decision making. Democratic leaders work well in organizations that allow people to participate in decisions, such as accounting firms, consulting agencies, middle- and upper-management areas, or corporations. • Free-rein leaders let their employees work without much interference. Free-rein leaders work well in research and development firms where employees are highly educated and need freedom to conduct research projects.

What is the mathematical formula for perfect management? What do managers spend most of their time doing?

• There is no mathematical formula for perfect management. Most management decisions are largely subjective. • Most managers spend as much as 75 percent of their time working with others. • They also spend a lot of time establishing and updating an agenda of goals, networking with their colleagues, and confronting the complex and difficult challenges in the business world today.