BOH4M1 Unit 1: Foundations of Management

• BOH4M1 Unit 1 is about the Foundations of Management
• There is a test review

Lesson 1.1 - What is an Organization?

• An organization is a collection of people working together to achieve a common goal like profit or giving back to society
• Includes small and large businesses as well as non-profit organizations and school groups

For-Profit Organizations

• Aim to make profit
• Profit is the money left over after all expenses are paid, and is the business owner's take-home pay
• Shareholders are individuals that invest in a small portion of the business
• Inputs like raw materials are transformed into outputs like final products

Factors of Production

• Factors of production are resources or inputs that organizations use to produce goods and services
• Divided into four categories: land, labor, capital, and entrepreneurship
• Used to create outputs or finished products which meet customer demand

#1 - Land as a Factor of Production

• Land includes any natural resource used to produce goods and services or anything that comes from the land
• Common land or natural resources are water, oil, copper, natural gas, coal, and forests
• Land resources are the raw materials in the production process
• These resources can be either renewable, e.g. forests, or nonrenewable, e.g. oil or natural gas

#2 - Labour as a Factor of Production

• Labour is the effort contributions that people make towards the finished goods and services
• Labour resources include the work done by a waiter at a local restaurant and the engineer who designed the bus
• Contributing labour resources to the production of goods or services if you have ever been paid for a job

#3 - Capital as a Factor of Production

• The capital of a business is the money available to pay for day-to-day operations and to fund future growth
• Capital includes the machinery, tools and buildings humans use to produce goods and services
• Common capital examples include are hammers, forklifts, conveyor belts, computers, and delivery vans

#4 - Entrepreneurship as a Factor of Production

• An entrepreneur is a person who combines land, labor, and capital to earn a profit
• Successful entrepreneurs are innovators who find new ways to produce goods and services, developing these to bring to market
• Without entrepreneurs creatively combining land, labor, and capital, innovations that we see would not exist

Lesson 1.2 - Functions of Management

• The four major functions of management are: planning, organizing, leading, and controlling
• To achieve organizational goals, management decides how to utilize human, financial, and material resources

1. Planning

• Is the process of setting objectives and choosing strategies that will help the organization achieve these objectives
• Company plans to grow sales 12% by next year.
• Production managers plan to increase production.
• Marketing managers create promotional plans
• Sales managers arrange for new contracts with customers, and Human Resources managers hire new staff

2. Organizing

• Arranging people and tasks to carry out the business's plans and objectives
• There are three levels of management which are upper, middle, and lower management
• Upper management sets long-term company goals and strategic direction
• Middle management interprets upper management plans and puts them into action
• Lower-Level management implement plans from above

3. Leading

• Managers achieve organizational goals by motivating, communicating, and encouraging participation
• Motivating defines finding ways to get employees to give their best work at all times
• Communication includes a clear vision of what needs to be done, defining company values, and plans

4. Controlling

• Ensuring that output/performance matches what was planned
• Involves activities like employee discipline, performance appraisals, and budgeting
• These methods are used to increase, maintain, or decrease the resources that are allocated to them

Lesson 1.3 - Ethics & Corporate Social Responsibility

• Ethics is a set of moral principles that guide each person's actions in order to help choose right from wrong.
• Being ethical means behaving equitably, honestly, and with integrity

What does it Mean to be Ethical in Business?

• Fair treatment of employees
• Participating in fair buying practices
• Respecting the community and the environment Giving back to the community

Major Ethical Issues in the Workplace

• Bribery and harrassment
• Polluting the environment and theft
• Involvement in illegal activities to further business interests

Corporate Social Responsibility

• Includes bringing value to the community and generating a positive impact
• The Walt Disney company donated over $27 million towards food donations and PPE during the COVID 19 Pandemic
• They encouraged employees to participate in virtual volunteering
• Ford Motor have invested over $22B in electric vehicles and their goal is to make all vehicles to be carbon neutral by 2050
• Coca Cola is aiming to create a "world without waste." and is aiming to reduce their carbon footprint by 25% by 2030

Lesson 1.4 - Levels of Management & Managerial Roles

• The levels of management are senior, middle, and lower management
• Senior: guides the overall direction of the organization
• Middle: is responsible for departments
• Lower level: directly contributes to production of goods and services

Top Managers

• Guides performance of an organization or a major component of it
• Responsible for vision and overall operations and communicates it to middle managers
• Ex. president, owner, CEO, director, and VP

Middle Managers

• Oversee the work of large departments or divisions
• Responsible for supervising first-line managers and translating top-manager plans into specific activities for first-line managers

Lower Level Management

• Directly contributes to the production of basic goods/services
• Ex include retail manager, department supervisors

1) Interpersonal Role of Manager

• Has to do with relationships a manager has with others
• The two roles within this category are leader and liaison
• Managers must act as leaders because of their formal authority and symbolic position representing the organisation
• Managers connect people to what they need; maintaining a network of relationships, both inside and outside the organisation

2) Informational Role of Manager

• Managers collect, disseminate, and transmit information
• Monitoring goes on in the organisation where managers seek and receive information about internal and external events to transmit to others
• Dissemination is defined as to pass on information to others
• Managers give information concerning the organisation to staff and to outsiders, acting as a spokesperson to the general public and others of authority

3) Decisional Role of Manager

• Act as an entrepreneur, disturbance handler, resource allocator, and negotiator
• They make decisions about changing what is happening in an organisation
• Disturbance handlers make decisions arising from events that are beyond their control and are unpredictable
• As a Resource Allocator managers make decisions about the allocation of money, equipment, people, time and other resources
• As an important negotiation role, managers negotiate with others and make decisions about the commitment of organisational resources

Lesson 1.5/1.6 - Management Theories & Practices

• Classical approaches involves scientific management, bureaucratic organization & administrative principles

#1 - Classical Approach

• Scientific management theory entered the mainstream in the early 1900s with emphasis on increasing worker productivity.
• Developed by Frederick Taylor
• Aim is to provide workers with the tools necessary for maximizing their efficiency and output
• Requires managers to observe employees thoroughly to determine where problems arise and how time is lost
• Projects broken down into assignments and people are appointed based on skills
• Suited to businesses that use repetitive tasks such as factories
• Scientific Management is a branch of the the classical approach to management
• Frederick Taylor focused on scientific research to properly organize factory work
• Frederick Taylor's Science of management replaces rules of thumb where workers are trained in best way to do a job and motivated by money, and labour and management should cooperate

#2 - Behavioural Approach

• Focuses on the human side of the workplace
• People seek social relationships and personal fulfillment
• The Hawthorne studies in the late 1920 and early 1930 helped to lend credence to the behavioral approach
• In 1924, Australian Elton Mayo began a series of studies that demonstrated that employee motivation is heavily influenced by social and situational factors
• Workers are more motivated by emotional than economic factors, management attention and engagement had more of an impact on productivity, and by being involved workers feel important

Douglas McGregor's Theory X & Theory Y

• Theory X- Authoritarian, strict control, and no development
• Theory Y- Liberating and developmental. High control, achievement and continuous improvement achieved by enabling

#1 - The Systems Approach to Management

• The systems theory of management: any organization is a single, unified system of interrelated parts
• Each part of the overall system is dependent on the others and cannot function optimally without them
• Factors that negatively affect one department or area will likely affect other parts of the system too
• Finance department will interact with the marketing department to inform them how much they can spend on a marketing campaign
• A system is an interrelated set of elements functioning as a whole or holistic
• An Open System is an organizational system that interacts with its environment
• A Closed System is an organizational system that does not interact with its environment
• A Subsystem is a system within a broader system
• Most organizations are characterized by a transofmrative processes that include operations, management & employee input
• An open system is bringing in resources from the outside environment like raw materials, capital, information and human labour

#2 - Total Quality Management (TQM)

• TQM focuses on continuously improving product/service quality
• Uses philosophy of continuous improvement
• Goal is to exceed customer expectations by delivering defect-free, time-efficient, and high-quality products
• Is achieved by focusing on key principles: customer focus, continuous improvement, employee involvement, & process orientation
• An organization that practices TQM understands that customer expectations matter and employee involvement is a matter for every aspect of the organization
• Improves processes that are efficient, effective, and error-free
• An organization that practices TQM is always looking for ways to improve its processes and products in order to increase efficiency and effectiveness

Review of BOH4M1 Unit 1, which covers the foundations of management. Topics include what is an organization and factors of production like land, labor, capital, and entrepreneurship. Includes for-profit organization.