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e. Setting up tentative courses of
action, then evaluating them.
ing up on the output.
3. The JUDICIAL DUE PROCESS of
discipline involves:
a. Establishing rules of behavior.
b. Setting prescribed penalties for
VIII. DEALING WITH UNIONS
Learning Objective 8.
Discuss some complexities of dealing with unions.
A. The percentage of the U.S. work force be-
longing to unions is declining.
1. Union membership is 2016 was only
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2. Union organizers are now trying to or-
ganize smaller firms, a large pool of
B. Laws Governing Union-Management
Relations
1. The National Labor Relations Act
(NLRA) (the Wagner Act) requires
management to bargain with the un-
ion if a majority of its employees de-
sire unionization. (See Table 11.1.)
a. Managers are forbidden to dis-
criminate against employees in
Court.
2. In some states a union shop clause
provides that employees must join
the union within 30 days after being
hired.
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3. RIGHT-TO-WORK LAWS permit
states to prohibit unions from requir-
ing workers to join a union; in effect in
C. What Happens When the Union Enters
1. Unions exist to bargain with the em-
ployer on behalf of their members for
2. If you employees want to form a un-
ion, it is because they feel they need
the union’s protection.
3. You, as owner, should ask yourself
D. Negotiating the Agreement
1. Preparing for the bargaining
a. Preparation may be the most im-
portant step in bargaining.
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complaints and disciplinary ac–
tions.
d. Prepare a carefully researched
proposal before the first bargain-
ing session.
2. Bargaining with the union
a. Preparation results in a positive
negotiating position instead of a
d. Areas to be negotiated:
(1) Union recognition.
(2) Wages.
(3) Vacations and holidays.
(4) Working conditions.
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CHAPTER OUTLINE AND TEACHING NOTES
e. The MANAGEMENT PREROG-
ATIVES CLAUSE defines the ar-
eas in which you have the right
E. Living with the Agreement
1. The agreement becomes a legal doc-
ument when it’s signed.
REAL WORLD EXAMPLE 11.8
The economic problems of the air industry have resulted
in clashes with unions about retirement and benefits.
2. You owner must learn to live with its
provisions until time for renegotiation.
3. Managers should be thoroughly
IX. TERMINATING EMPLOYEES
Learning Objective 9.
Understand the difficulty in terminating employees.
A. EMPLOYMENT AT WILL means that em-
ployers may hire or fire workers with or
without cause.
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X. SETTING UP THE ORGANIZATIONAL
STRUCTURE
Learning Objective 10.
Discuss basic organizational concepts and show how small
firms can use them.
A. ORGANIZING is determining those activi-
ties that are necessary to achieve a firm’s
objectives and assigning them to respon-
sible persons.
1. Many problems within the organiza-
tions can be addressed with the pub-
lication and use of an employee
B. Some Basic Organizational Concepts
1. These basic organizational concepts
may need to be adjusted when ap-
plied to mom-and-pop firms.
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2. DELEGATION is assigning responsi–
bility to subordinates for certain activi-
ties and giving them the authority to
perform those activities.
a. Many owners and managers of
small firms have difficulty dele-
gating.
b. You need to learn to delegate if
c. Except in very small mom-and–
pop shops, you should give em-
ployees a job description, a writ-
3. SPECIALIZATION is using employ-
ees to do the work that they are best
suited for.
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a. Rigid specialization in very small
businesses can mean some em-
C. Some Organizational Problems in
Small Firms – signs of trouble
1. An owner who does not delegate au-
thority.
2. An owner who is afraid to make deci-
sions, paralyzing the business.
5. The owner who holds too many meet-
ings attended by too many people,
resulting in wasted hours and exces-
sive costs.
6. Administrative expenses grow more
rapidly than sales.
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8. The attendance of key people is not
D. Some Ways of Organizing a Small Busi-
ness
1. Organizing by types of authority
a. In a LINE ORGANIZATION, the
owner has a direct line of com-
mand over employees.
(1) The owner hires a few peo-
b. A LINE-AND-STAFF ORGANI-
ZATION is one that has special-
ists to advise and perform ser–
vices for other employees.
(1) As the firm becomes more
complex, specialized work-
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c. The INFORMAL ORGANIZA-
TION is the set of interpersonal
relationships that come about as
a result of friendships that de-
velop on and off the job.
(1) Two examples are the infor-
2. Organizing by activities to be per–
formed. You can set these up in small,
workable groups according to:
a. Function performed, such as pro-
duction, sales, or finance, as
shown in Figure 1.9.
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e. Types of customers served, such
E. Preparing an Organization Chart
1. No one structure is best for all busi-
2. An ORGANIZATION CHART shows
the authority and responsibility rela-
tionships that exist in a business.
F. Using Team Management to Improve
Performance
1. Quality management and teamwork
may be the best ones suited to small
firms.
a. The goal of teamwork is to im-
prove performance by involving
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d. It is important that new hires do
not face the “Clique syndrome”,
2. The more important types of teams
are:
a. Problem-solving teams, which
meet for an hour or two a week
b. Self-managing work teams,
which take over managerial du-
ties, such as work and vacation
scheduling, hiring new members,
and ordering materials.
c. Cross-functional teams, which
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LEARNING OBJECTIVES REVISITED
1. Explain how managerial assumptions affect human relationships with workers.
● To inspire workers to perform productively, a small business owner must provide leader-
2. Explain why exercising effective leadership is so important in small business.
● Leadership is the ability of one person to influence others to attain organizational objec-
3. List some barriers to effective communication and show some ways to improve communication.
● Some barriers:
○ The owner’s position of authority and status
4. Explain how to improve employee motivation.
● Different incentives must be used for different purposes.