Cynthia Cherry

Welcome to MT 140Unit 2 – Foundations of Management

Unit 2 Outcomes

• Identify significant past and current management theories

• Describe the business organization as an open system

• Identify the role of internal and external environmental factors in business

Take out a piece of paper….

J FKFB INAT OUP SNA SAI RS

JFK FBI NATO UPS NASA IRS

From Made to Stick by Chip Heath and Dan Heath

Businesses are open systems

Raw Materials

Services

Equipment

Capital

Information

INPUTSOUTPUTS

Products

ServicesOrganization

Bateman/Snell: Management

Businesses are open systems

The External Environment

Bateman/Snell: Management

Competitive Environment

• Who is the competition?

• How do they compete?

• What are competitors doing?

Barriers to Market Entry

Barriers to Market Entry

• Government Policy

• Capital Requirements

• Brand Identification

• Cost Disadvantages

• Distribution Channels

Substitutes and Complements

• Substitutes: a potential threat

• Complements: a potential opportunity

Management Theories

• Classical

• Behavioral

• Systems

• Contingency

Classical Approach

• Late 1800’s• “One best way”

• Task definition• Dividing and simplifying tasks

• Frederick Taylor, Fayol, etc.

• Our current POLC is derived from Henri Fayol’s Theory circa 1917!

Behavioral Approach

• Early 1900’s

• Need to understand people attitudes and behaviors

• Hawthorne Experiment

Systems Approach

• 1930-1940

• Organization is a set of interrelated parts that can be managed as a whole

• Inputs, transformation, output, feedback

• W. Edward Deming• Continuous improvement and process control

Contingency Approach

• 1960’s

• “It depends”

Unit 2 Assignments

• Reading, Chapter 2

• Discussion Question

• Assignment

• Review