Management and Organizations Week 1 Quiz

Course Information

• Course Title: Management and Organizations
• Course Description: Basic Concepts in Management
• Week: 1
• Instructor: Asst. Prof. Dr. Birol Baysak
• Institution: Istanbul Gelisim University

Source Materials and Recommended Reading

• Kocel, T., (2003). Business Management. Beta Publications.
• Simsek, M. S., & Celik, A. (2015). Management and Organization. Egitim Bookstore.
• Kast, F. E., & Rosenzweig, J. E. (1974). Organization and Management: A Systems Approach. McGraw-Hill.
• Robbins, S. P., De Cenzo D. A., Coulter, M. (2016). Fundamentals of Management. Pearson
• Kadri Mirze, Introduction to Business. Literatur Publishing, 2002.

Learning Objectives

• Define the objectives of business.
• Describe the role of entrepreneurs in starting businesses.
• Describe the role of managers in administering business operations.
• Detail different management levels and required skills for managers.
• Outline non-managerial employee roles within a business structure.
• Describe the general and industrial environment of a business.
• Explain the business-environment relationship and environmental changes.
• Explain how managers adapt their organizations to environmental changes.

Basic Concepts of Business

• Business is an organization providing goods or services to meet customer needs and wants profitably.
• Any activity that provides goods or services to consumers, intending to earn a profit.
• Businesses are needed to provide necessary goods and services.

Our Relationships with Businesses

• Daily interactions with various businesses
• Examples: Hospitals where we were born, schools we attended, supermarkets, stores, restaurants, cafes, hostels, hotels, insurance companies, banks, gyms, cinemas

Goods and Services

• Goods are tangible products like food, electronics, or tools.
• Services are intangible actions or work done for payment, for example, repair services, healthcare, or entertainment.

Profit, Loss, and Value

• Profit = Revenue – Expenses
• Loss occurs when expenses exceed revenue.
• Value is the customer's perceived benefit in exchange for their cost.

Practice Question 1

• The correct option describing a business is that it is an activity that produces goods or services for customers with the purpose of making profits.

Practice Question 4

• Defining value is the perceived benefits of a product, service, or business to a customer, in proportion to the cost.

Basic Concepts of Business: Non-profit Organizations

• Non-profit organizations provide goods or services.
• Their objective is not profit but contributing to the community, or a cause.

For-profit vs. Non-profit Businesses

• For-profit businesses generate income to sustain and increase profits.
• Non-profit businesses generate income to achieve their mission's goals.

Resources and Factors of Production

• Resources are inputs required for producing outputs.
• Resources are also known as Factors of Production.

Basic Concepts of Business: Factors of Production (Baking a Cake)

• Natural resources (e.g., electricity)
• Labor (baker)
• Capital (ovens, pans, ingredients)
• Entrepreneurship (individual or bakery)

An Entrepreneur

• An entrepreneur is an individual who starts a business.
• They risk loss (time, money, and reputation) for profit.
• Their benefit is earning profit for producing desirable goods or services.

Why Do People Become Entrepreneurs?

• They want to be their own boss.
• They want to pursue their ideas.
• They want financial rewards.

Characteristics of Entrepreneurs

• Being their own boss
• Creative personalities
• Having an internal locus of control
• Self-confidence
• Optimistic
• Having high energy
• Having vision
• Tolerance to failures
• Tolerance for ambiguity
• Desire to achieve

Practice Question 5

• The four factors of production needed for businesses to operate are natural resources, labor, capital, and entrepreneurship.

Understanding Functional Areas

• Management plans, organizes, controls, and leads an organization.
• Operations converts resources to products.
• Marketing identifies and satisfies customer needs.
• Finance plans, obtains, and manages funds.
• Research and Development provides knowledge and ideas to help the company remain competitive.

Operations

• Operations is where resources are converted to outputs.
• Operations is the heart of a business; it ensures that goods and services meet customer needs.
• The operations manager oversees daily tasks, and raw materials, and scheduling to produce goods or services.

Marketing

• Marketing identifies customers' requirements and creates products and services to satisfy those needs.
• Marketing includes promotion, delivery methods, competitive pricing strategies, and online presence.

Finance

• Finance involves planning for, obtaining, and managing funds within a company.
• Finance managers determine short and long-term financial needs.
• Finance departments answer questions regarding funds raising and implications.

Research and Development (R&D)

• R&D is an essential core function for manufacturing businesses.
• It's staffed with scientists and specialists; their goal is to provide knowledge and ideas to remain competitive.
• R&D is managed by the CTO or equivalent manager.

Organization

• Organization is a structured collection of people working together toward a specific objective.
• Organizations have goals, people, and structure.

What Three Characteristics Do All Organizations Share?

• Goals
• People to achieve the goals.
• Structure, including systematic operation rules, that shapes behavior.

What Is Management?

• Management is the process that gets tasks done effectively and efficiently.
• Efficiency means doing things correctly & producing maximum outputs with least inputs.
• Effectiveness is about doing things right, ensuring organizational goals are met.

What Is Management? Efficiency and Effectiveness

• Efficiency: Doing things right
• Effectiveness: Doing things efficiently

Managerial Functions

• Planning: Setting short- and long-term goals and strategies to execute the goals.
• Organizing: Executing organizational operations through resources use.
• Controlling: Ensuring operations and processes stay on course.
• Leading: Leading work teams and guiding the organization's interaction with communities, suppliers, and customers.

Issues a Manager Should Consider

• Resources that are available
• Tasks needed to be done, assigning tasks to the right person.

Management Levels

• Different managerial jobs at various levels in a company's pyramid.
• Levels include top, middle, and lower management.
• Managers perform their tasks in various departments, like marketing, manufacturing, finance, HR, and R&D.

Managerial Roles

• Managers have several roles, including interpersonal (e.g., figurehead, leader, liaison), informational (e.g., monitor, disseminator, spokesperson), and decisional (e.g., entrepreneur, disturbance handler, resource allocator, negotiator).

Managerial Roles

• Performing different duties to accomplish tasks
• Interpersonal: interacting with people inside and outside the company
• Informational: processing and distributing information
• Decisional: making decisions

Exhibit 1-1 Minztberg's Managerial Roles

• Figurehead: A symbolic role in presenting the company.
• Leader: Motivating and guiding employees.
• Liaison: Networking with external contacts
• Monitor: Gathering information.
• Disseminator: Sharing information.

Exhibit 1-1 Continued (Decisional Roles)

• Spokesperson: Sharing information about the organization.
• Entrepreneur: Initiating projects to create change in a company.
• Disturbance handler: Addressing unexpected situations.
• Resource allocator: Approving important organizational tasks.
• Negotiator: Representing the organization in negotiations.

Is the Manager's Job Universal? (Size of the Organization)

• The importance of certain roles varies based on the size of the business.
• Significant differences exist in the priorities of various departmental roles.

Practice Question

• Mintzberg's 10 management roles are categorized into interpersonal, informational, and decisional roles.