Intro to Business Management (BWL I

FILM SET Introduction to
Business Management ( BWL I)
Univ. Dr. Dietrich von der Oelsnitz Institute of

Management
Winter Semester 2018/19
Univ. Dr. Dietrich von der Oelsnitz
winter semester
Purpose and Route Construction of
the ship the ship
Guidance and training Nautical

the Team know-how
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winter semester
structure
I. Business Administration and Management
II. Planning as a basic function of management
III. Decision as a basic function of management
IV. Leadership and participation as fundamental function of management
V. Control as a basic function of management
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Basic literature I
Especially for this lecture:
D. from Oelsnitz (2009):

Management, Munich.
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Basic literature II
monographs
Robbins, S./Coulter, M./Fischer, I. (2014):

Management, 12th ed., Wiesbaden.
Steinmann, H./Schreyögg, G. (2005):

Management, 6th ed., Wiesbaden.
compilation
Schreyögg, G./von Werder, A. (eds.) (2004):
Handwörterbuch Management and Organization, Stuttgart.
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1. Business Administration and Management ( VL 1-3)
Second Planning as a basic function of management
Third Decision as a basic function of management
4th Leadership and participation as fundamental function of management
5th Control as a basic function of management
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1. Business Administration and Management
1.1 Business Administration
The Business Administration is a cultural studies. Compared to

other KW (architecture, law) distinguishes it
by their economic orientation.
It occupies an intermediate position between the natural and
Social science one.
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The world of business is subject to the

cold star of scarcity. "
- E. S chneider ( 1962)
► The problem area of business administration extends to the well-planned
supply of people with scarce resources.
This is necessary because the resources compared to the needs (or rather desires) of
people are scarce and finite.
This forces to a rational use of raw materials and goods.
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► What is needed is the application of a general
Reason principle ( "rational choice").
This exists in business administration as so. economic principle.
It asked to either:
- with a minimal effort to achieve a certain output to input ( minimum
principle ) or
- with a given effort a Maximum output
to reach ( maximum principle ).
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Types of goods according Rivalitäts- and exclusion principle
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efficiency:
"Doing the right things" (= Resources; ie, efficiency)
Effectiveness:
"Doing the right things" (= Achievement of objectives; ie effectiveness)
Effectiveness: Was the goal achieved?
starting point aim
efficiency: Were on the way there

wasted resources?
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Accordingly Management as a process
Purpose: transformation of
resources into results
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1.1.1 The object of knowledge in business administration
From Economics Business Administration is distinguished mainly by their cognitive interest :
Economics: the focus is on aggregate operations

(Often modeled detected)
BWL: einzelwirtschaftliche orientation (microscopic perspective).
The management theory supporting disciplines include the
Sociology, the Psychology, the Legal and Industrial Engineering,
but also the computer science or Mathematics.
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The BWL refers primarily to the events in operated
Companies are foreign demand covering economic units that produce

regularly on their own needs beyond tangible or intangible product or offer,
while the
note economic principle (Narrow operating concept).
An intermediate position so-called own. public enterprises and administrations.
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e RICH G Utenberg - founder of the German post-war economics
Central at Gutenberg: The system of production factors

Management appears as so-called. dispositive factor ,
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Characteristic of the operating concept
Systemindifferente factors:
O Combination of production factors
O Principle of efficiency
O Financial balance (?)
System-dependent factors:
O principle of autonomy
O Acquisition Economic Principle
O Principle of private property
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The operation relations with its environment
Money and Capital Market

equity borrowing
procurement market
market
workers
Companies
Companies
resources
households
materials
Taxes and fees included Grants, subsidies
Country
Goods movement
financial movement Distinguished: Shareholder vs.
stakeholder
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1.1.2 The self-image of Business Administration
► Is the BWL a "pure" science?
Pure Science:
will mainly TELL, that it refuses to give reviews and ratings
Applied Science:
SHAPING wants, that aims to direct decision-making tools
So the background is the question of whether science explain primary or make
primarily to (so-called. first Methodenstreit).
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Main proponent of applied BWL:
e UGEN S CHMALENBACH
Therefore :
The economics is a "theory of art"! The aim must be to facilitate the management staff, the organization
and management of companies headed by him with concrete recommendations (analogous to economics,
for example, in public finance).
The BWL thus sees itself as a practical and normative science!
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Main proponent of pure BWL:
The recommendations of the Business Administration are derived from the standpoint of economic
efficiency. This simulates a value-free, is the de facto not given!
If the economists already want to promote the rationalization, they

should admit that they do not care whether people are happier
through all these technological advances or not. "
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So today applies:
The traditional economics is owner-oriented and capital providers!
Means that the goals and needs of other economic subjects (eg households)
remain mostly left out!
: Draft of an experiment - so as - discontinued
Work-oriented single administration (AOEWL)
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1.2 Corporate Governance
1.2.1 concept and the history of ideas of corporate governance
lat. manus: the hand

managere: lend a hand, make!
Management ( "Management") is the targeted

management, design and development
arbeitsteiliger economic organizations
USA: Business Administration.
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• management as function
= a complex of activities and tasks for purposeful

Management and design of labor systems
• management as institution
= a person or group of persons involved in instruction and

entrusted decision-making powers
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A (short) history of ideas of corporate governance
United States
Development of university Business Schools as a first step in a systematic

management theory and Manager professionalization
• 1908: Foundation of the Harvard Business School
Germany, Austria, Switzerland
Founded the first business schools as places of systematic and independent university
merchant training
• 1858: Vienna Business Academy
• 1898: Business schools in Leipzig and St. Gallen
• 1914: first WiWi faculty in Germany (Frankfurt am Main)

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England
as the parent of industrialization, the spiritual fathers of management theory:
• 1735: Construction of the first spinning machine (J. Wyatt)
• 1769: Construction of the first steam engine (J. Watt)
• 1895: Foundation of the London School of Economics
Adam Smith ( 1723-1790): Pioneer of the division of labor-market economy
Robert Owen ( 1771-1858): Pioneer of Human Relations movement
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Productivity gains through labor decomposition
Adam Smith ( 1723-1790)
Founder of the national economy - and Scottish moral philosopher
HW: " "An Inquiry into the Nature and Causes of the Wealth of Nations (1776)
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Economic performance vs. controlling corporate functions
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Schools of thought in management theory
Historical Performance Management Knowledge (Staehle 1999, p 22)

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"Scientific Management"
Frederick W. Taylor (1856-1915):
Law degree at Harvard, initially training as a mechanic, trained as an

engineer, most recently a management consultant.
basic theme :
How to increase the productivity of human labor, without increasing the burden on
the individual worker?
Answer: by division of labor or. specialization ( → A. Smith!)
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"Principles of Scientific Management"
O Maximum separation of work into steps
O Separation of planning ( "head work") and execution ( "crafted")
O Control over the implementation by management (so-called. Function Master)
O Systematic selection and training of the workforce
O Tight control; performance-based incentives ( "piece rate")
T aylor combines engineering thinking with Protestant work ethic: Hard work leads verb with "good"
management to be more productive.!
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1.2.2 Action levels of corporate management
a) dimensions of action
• normative management
Specifying a parent, values-based framework for action
• Strategic management
focused on normative management competitive control
• operational management
action-oriented and measurable implementation of the above requirements
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Management levels to B Patchy
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Development of entrepreneurial
conflicting concerns
normative management Legitimacy and
and interests
understanding potentials
Complexity and
Building sustainable
uncertainty in market Strategic management
competitive advantages
conditions
Scarcity of operational management Use of efficient processes
production factors and techniques
After Rüegg-Storming (2002)
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b) the main contents of the General Management
... the cross-functional control of the system by means of
suitable control principles and instruments ( "About discipline").
General Mgt mainly comprises basic functions :
O planning
O decision
O control
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1.2.3 management functions and managers act
1.2.3.1 The normative view
a) management tasks H. FAYOL "Administration Industrielle"
Create foresight and action program

Weihrich / KOONTZ (2007)
build physical and social organism of the company
Goals and plan activities

put the staff in activity
organize cooperation
link actions together and harmonize
Select staff and use
Employees and company lead Make sure that everything complies with the rules
and instructions
control processes and results
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b) management capabilities
(Macharzina / Wolf 2005, p 629)
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Conceptual skills
Ability to develop an overall conceptual view ( "Strategic

competence")
Human skills
Abilities to lead employees and external

stakeholders ( "Social skills")
Technical skills
Use of instruments for operational process control ( "Methodological

competence")
"Today companies are over managed and underled!"
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1.2.3.2 The empirical view
"The first myth of management is it did exist!"
Management is only an illusion of control and feasibility?
→ Social constructivism (attribution)
→ Are decisions even more by chance? ( "Garbage can")
So management as omnipotence? Or rather as a symbolic action?
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"Wheeling and dealing"
Empirical studies of the "real" activities of managers, among others:
MINTZBERG (1973), KOTTER (1982); Kurke / ALDRICH (1983).
Result:
O extremely fragmented working
O much oral communication (50-75%)
O Questions and listening instead of directly instructing
O open Cycles
O Ambiguity and late feedback
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Management activities on the degree of their time requirement (Staehle 1999, p 94)
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Manager roles as complex requirements
(After Mintzberg)
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Dilemmas of a manager
O Action must, without being able to grasp the consequences!
O to achieve results only with others, but this
can hardly influence or even control!
O must take responsibility for results that are not predictable
and / or caused by others!
Manager acting is more of a compromise between ...
Constraints, restrictions and own design!
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Second (Planning as a basic function of management VL 4-6)
5. control as a basic function of management
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2. Planning as a basic function of management
2.1 function and support planning
To plan: Systematic thinking through and setting objectives, means and resources
Planning: Institutionalized anchoring of planning and codification of the results (

"Plan")
demarcation improvisation and Foresight?
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Corporate Planning
Planning is the mental anticipation of future action.

This requires an information processing prioritization process and
especially relates to the determination
goals, resources and action.
The UP forms the general basis for the functional part of plans, such as the financial,
personal or purchasing plans.
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2. Planning as a basic function
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The current planning context
O Price and cost pressures
O innovation pressure
O demand differentiation
O Social values change
O Increasing legislative regulation

( "Compliance")
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Main function of planning
The ultimate goal of any planning is the reduction of complexity!
In detail :
O backup function
derived: Coordination Function
O optimization function Flexibility Innovation
function function function
Motivation
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Your opinion:
If top-down planned - or rather bottom-up?
On the one hand:
O Plan implementation in top-down likely

O Plan exercises normative steering function (overall context)
O Methods expertise of staff positions is used
On the other hand:
O Higher detailed knowledge and greater commitment at its own planning
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Possible support of corporate planning
O Top or line management
O Special planning staff or departments
O controller
O Temporary planning organs (eg Task Force)
O External management consultant
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2.2 systematization planning possibilities
Here: content and horizons of planning
a) Strategic Planning
carried out by the upper levels of the hierarchy, longer-term planning with
guidance character (minimum 3-8 years)
The central task :
Control of the future potential for success of the company (esp. Building and
maintaining)
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Principles of Strategic Planning
O Concentration of forces
O Referring to strengths
O Attempt to achieve synergy
O Continuity (also: taking advantage of unforeseen opportunities!)
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b) Tactical Planning
medium-term planning (1-3 years), primarily on the implementation of the strategic planning
and so on concrete problems refers
Mark :
- mostly based on the upcoming fiscal year

- takes place in the operational functions and business units
Ex .: Program planning, recruitment
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c) Operational Planning
short-term, process-oriented planning (maximum 1 year), which is primarily focused on

the achievement of operational objectives.
Mark :
- mostly based on the current fiscal year
- Focus on a specific functional area
- Methods oriented or highly formalized
Information base mostly Accounting or (project) Controlling
Ex .: Budgeting an advertising campaign Solving Complaints
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2.3 In focus: The Strategic Planning
2.3.1 Target planning
A target…
... always refers to the Future,
... is positive loaded ( "target state"),
..., by own actions be realized in principle.
Objectives control the behavior and provide an action direction and

stamina!
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What is the purpose operational objectives?
• spiritual orientation
• Interdepartmental coordination
• Motivation ( "pull")
• Problem detection (as a measure of control)
• Justification ( "legitimacy")
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Formal requirements for an effective target system
• relevance
• consistency
• Suggestibility of goal achievement
• Internal and external enforceability
• Verifiability (operationality).
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Important elements in the development of a target system
a) Target level:
Distinction between individual and organizational goals as well as total and
partial field goals!
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b) Target species:
O strategic Tangible goals - "Defining the business"
Definition of the basic area of activity or corporate purpose (

"The Why of Business")
O strategic Formal goals - "Defining the business mission"
Definition of the expectations of success, for example in the form of sales, profits, image,
market share, etc.
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Objectives of industrial enterprises (Fritz / from Oelsnitz 2006, p 111)

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The main objective of "maximizing profits" is just a

theoretical model relevant!
In the long term often applies:
profit max = Profit 0!
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Example: "Tradition counts"!
• Model tide and constant Neuvarianten
• Switching to medieval drive technology

• sensitive parts increasingly manufactured in China and Hungary
Philosophies of "locust" and customers do not match:
moneymaking Here, tech-savvy tinkerers and lovers out there!
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Systematizing of objectives
Economic Market performance targets Product quality Product Innovation

performance targets Customer mix depth and width
product quantities
Market position goals Sales volume market share per segment

market application (reputation / image) New
Markets
Financial Targets profitability targets Profit return on investment

return on sales return on
capital efficiency value
productivity
financial targets WTP / capacity are required capital

structure capital commitment cash flow
credit
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social Social objectives in terms of Income and social satisfaction Job satisfaction
goals staff Personal Development Operation Peace
Social goals of the Ethics Environmental

company Education / Arts Regional
Development
Influence and prestige Independence / Cooperation image

and prestige Political influence
Social influence
Required: systematic target relationship analysis
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c) Target relationships:
The analysis of the objective relations is a prerequisite for the

development of a coherent target!
possible relations
Konfliktär e Relationship (= target competition)
Complementary e Relationship (= target harmony)
Indifferent e Relationship (= target neutrality)
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If target competition: Conflict management!
Starting points :
O target weighting ( Differentiation in primary and secondary targets)
O claim adjustment ( Satisficing instead Maximizing)
O Sequential tracking ( Determining time-related target priorities)
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2.3.2 Strategic Analysis
a) environmental analysis
Micro and macro environment of the company

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Example: Strategic Early (FE)
The object of the strategic FE is the timely information of the

Makers on relevant context changes.
Instruments of early detection include:
O Leading indicators
The raw radar
(Source: Business
O diffusion models
Week 47/2016, pp 38)
O Gap analysis
O Qualitative forecasting methods
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potential sources of information
primary survey secondary survey

+ personal experiences of managers
and MA
internal + internal statistics, logs, memos
%
source
+ Contolling / Revision
+ customer complaints + Annual otherwise. Companies

+ supplier surveys Publications
external + Field service reports + Statistical Yearbooks
sources + Consulting projects + specialized publications
+ Databases (PIMS; WHO)
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b) Company Analysis
1. Strengths / weaknesses analysis
Analysis of the outlying and intellectual resources of a company in terms of:
• the critical success factors
• the main competitors

• on ideal ,
Criteria for selecting the source of information:
The purpose of information collection, accessibility,
Procurement time and costs.
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Example: ordinal strengths / weaknesses profile of Lufthansa
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Evolve into a strategic competitive advantage matrix
(Raffée / Fritz / Wiedmann 1994, p 185)

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Goal: integration of competition and customer perspective!
to: Identification of relevant competitive weaknesses and deriving

strategic objectives and countermeasures.
Strategy Recommendations:
Competitive disadvantage: improve skills essential!
Competitive advantage: hold position or better still expanding!
Overspending : degrade or - with a view of the future - keep!
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2.3.3 Planning Tools
Planning tools are tools or techniques that use the planning

agencies at work to increase efficiency.
distinguished:
O Analysis Instruments
O creativity instruments
O Forecasting tools
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a) Analytical planning tools
principle : Logical-deductive processes of investigation and order

a state of affairs.
Selected techniques:
• Strengths / weaknesses analysis
• Actual and standard costing
• Utility analysis
• Netzplantechnik
• Feedback charts
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The international bestseller 1972: The Limits to Growth
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Basic insights of the systemic approach
O Our linear thinking is not enough to appropriate strategies
develop!
O Complex interdependencies call for a networked thinking,
trying to involve as all relevant aspects of decisions.
O Isolated "solutions" have the disadvantage that they certainly lead to other, unexpected
areas in difficulties.
O Anyone who wants to solve problems must be aware of the causal relationships! As in
medicine must precede the diagnosis of treatment, the exact
Analysis of a problem, the requirement for informed decisions.
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Example: Feedback diagram ( "Network Cards")
idea Not only simple cause-effect relationships, but analysis

multidimensional interrelationships!
(Steinmann / Schreyögg
2000, p 168)
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b) Heuristic instruments
principle Creative search processes, the conventional case of non-applicability
by restructuring and gradual clarification of an issue is finding algorithms

new solutions.
• brainstorming
• Synectics
• 635 Method
• Morphological box
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Example: Morphological box
developer : F RITZ Z WICKY ( futurologist)
Originally:
Development of technical alternatives (USA 1942: Drive technology in rocket)
Step 1: Dissection of a problem into its component parts
Step 2: Listing and representation of all conceivable combinations
Step 3: Evaluation of combinations in terms of consistency and achievement of goals
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Zwicky:
This method is a "systematization of the invention process
as such "Succeeded. And: "Every morphologist is a professional genius!"
Over the top! But is reached:
Systematic tracing of innovations and extensive elimination of chance!
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c) Prognostic planning tools
principle : Improving the information base by anticipating or predetermine

future events.
To do this: use of qualitative and quantitative forecasting techniques.
• indicator forecasts
• trend extrapolation
• Delphi method
• Scenario Technique
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Which forecasting tools uses the practice?
(Source: Welge / AlLaham

2008, p 443)
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Something simple: The trend extrapolation
Source: Hungenberg
2001, p 141
Bild newspaper: verk. ed .; Source: Wikipedia.de

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Example 1: The Delphi forecast
developer :
OLAF Helmer and his associates at the RAND

Corporation
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Ideal Typical procedure
Step 1: Surveys another unknown experts (mostly differnet.

Disciplines) to a selected topic
Step 2: Alternatively, the feedback opinions (eg respect. Time estimates,

arguments, scattering) to the experts
Step 3: Request for comments or further explanation of one's own

opinion
Step 4: re surveys; if necessary, revision of the original views
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a grinding of unrealistic (?) is reached extreme positions by multistage Consult

with feedback.
advantage : Different opinions and counter positions are visible and work information improving
one another.
disadvantage : Possibly true extreme opinion is leveled ( "central tendency").
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The Delphi method was first in the research and Science policy
applied (including the selection of topics or technology assessment).
Later, by the industry for Technology and product planning accepted.
It is used, amongst others, to
• Prediction of innovations
• Establishing priorities in the R & D planning ( incl. budgeting)
• assessment of future market or resource situation
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Example 2: The scenario technique
A scenario is a vision that on a number

logically conclusive assumptions based.
ultimate goal:
Stimulation of workplace learning and development conditional action programs
Or: Less predicting the future, but rather the study of possible developments!
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Scenario with disruptive event and course of action
To identify significant fault events, use is

among other things, various creative techniques (oil production Ex.)
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To :
Step 1 : Identification of future determining key factors

( "Descriptors")
Step 2: Development of the respective future development ( "projection")
Step 3: Compilation and combination to positive scenarios
distinguished: Forward Approach vs. Backward Approach
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Forward Approach using the example of the book trade

(Hungenberg 2001, p 146)
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Feedback scenario ( Hungenberg 2001, p 145)
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2.4 Problems and limitations of planning
"I think there is a world market for about

five computers." ( 1948)
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Design errors result in particular from:
1. the intellectual and material limitations

the planning system
• human weaknesses of information acquisition and

-processing (eg dominance of hard facts)
• limited resources planning ( "Planning economy")
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Second the general uncertainty of the planning situation
• including through increasingly discontinuous developments
• increasing design complexity (globalization, etc.)
Third a general tension between ...
• Forecasting detailing and entrance security
• Planning and freedom of action (often: indiv self-interest.)
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C HAMP: How to make good predictions
C omparisons: Similar events as a starting point the

use forecast!
Source: Good Judgment Project (Philip Tetlock)

H Using historical events as the basis - unless it: istory
are good reasons to assume a different development!
A verage Opinions: compare different expert opinions

and the average value determined!
M athematical Models: If there are such models: Including!
P redictable Biases: Let your forecast does not and by prejudice

affect personal desires!
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Third Decision as a basic function of management ( VL 7-8)
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3. Decision as a basic function of management
3.1 decision Theoretical Foundations
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decisions
link the thinking with the
action "
Preuss. Field Marshal and Chief of General Staff of

the OHL ( ӝ 1800; † 1891)
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► The starting point of economics as an applied science is the

Decision-Oriented Approach by EDMUND HEINEN (1971).
The focus therefore on concrete needs for action!
A decision is to choose a course of action from a set of alternatives to

be realized not simultaneously. It embodies an intellectual act of voting
with reference action.
Question: Do decisions an impulse of will be based on?
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3. Decision as a basic function
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Two approaches to decision theory
normative empirical
differ in the approaches: When it comes to the ...
content (A decision eg business strategy, location, legal form)
or
process decision-making ( for example, participants, methodology, period)
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3.2 The model of perfect rationality ( "Homo economicus")
O The problem perception is objective and fully
O All decision alternatives (incl. Their consequences)

are known and are also included
O The alternatives are alone essential, ie, free of emotions and

rated personal preferences and selected
O When selecting dominated decision-making, not action rationality
Empirically, this "rational actor model" is a purely idealized
consideration!
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Example: The EU and its euro zone
• Wrong order: Only decision then legitimacy
• Dubious Reasons: ( eg "is GRIE motherland of democracy")
• Selective assessment: Opportunities be overemphasized; Risks willingly ignored
• TINA: suppressed alternatives (eg outlet individual debt States)
• Denial of unpleasant facts: ( eg "is GRIE on track")
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This includes especially:
Formal decision models with decision rules
A decision rule is a rule that the arbiter for selecting one of the available
alternatives by
suggests a certain criterion.
► The search for formal decision rules corresponding to Rational normative model. is not asked after the
process of decision-making even after the empirical reality.
Base: a formal decision model.
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On decision model is the formal representation of a decision problem,

the at least one multi-element Alternative Volume ( "decision space") and
at least one of
contains the defined objective function.
Formal decision models require information on:
• alternative environmental conditions ( "Scenarios")
• standing for election decision options
• the respective decision consequences
• to trace the aims ,
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The formal decision theory recognizes three cases ...
► Decisions under Security
Each alternative action can accurately be assigned to an action consequence. There is only one
future outcome state.
► Decisions under uncertainty
There are several possible consequences of actions. For this but no probability of event
can be specified.
► Decisions under risk
For the possible consequences of actions a probability distribution can be specified.
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example
Markov Decision Matrix at risk or uncertainty
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Classical decision rules
Minimax rule
Decisions for that action, which in the worst future location
give the best results (= highest lines minimum)!
Maximax Rule
Decisions for that action that the best in the future situation
best result leads (= highest lines maximum)!
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Bernoulli's principle (also: Bayes rule)
Maximize the expected value of the target!
Savage Niehans Rule
Minimize the maximum disadvantage incorrect assessment of the future
( "Rule of least regret")!
These rules are applied for example in game theory to several actors!
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3.3 The model bounded rationality
3.3.1 The tests of H ERBERT S IMON
Simon (1916-2001) was one of the most influential social scientists of the
20th century.
HW: Decision Making in Organizations
Nobel Prize for Economics in 1978

H ERBERT A. S IMON, 1978
► Descriptive decision research
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H ERBERT S IMON: "Bounded rationality"
► Intellectual limitations: "Allocation of Attention"
Limited problem-solving capacity and limited (time) resources
► Political restrictions: conflicts of interest
Conflicts between individual, departmental and organizational goals and differing
interests of the system environment
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"Bounded rationality" (cont.):
► Contextual restrictions: acceptance problem
Focusing on the politically feasible (see. Action rationality)
► Historic Restrictions: "Logic of Rule-Following"
Dominance of historically evolved patterns of thought
120
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3.3.2 The investigations of A. T VERSKY & D. K AHNEMAN
"Pioneers of cognitive psychology, the lead in the psychological

study of heuristics as well as the discovery of systematic human
error (cognitive bias) when making decisions under risk."
Economics Nobel Prize 2002
► Descriptive decision research
121
winter semester
Do you prefer win ...
1,000 EUR with 50% probability ... or
500.- EUR in each case?
500.- EUR
Do you prefer to lose…
1,000 EUR with 50% probability ... or
500.- EUR sure?
1,000 EUR
122
winter semester
Prospect theory
123
winter semester
Most decision-makers ...
O in potential profits risk averse in imminent

Loss risk taker
O assess losses emotionally stronger than profits
O the components of the decision problem worthy not-term stability and also
very relative (so-called. framing )
(Eg lead prior experience or the type of problem presentation differents

judgments).
Price discount 10 EUR the precious filler vs. DVD?
"90% employment rate"?
124
winter semester
framing: People tend to relative Scales!
Three subscription offers for XY newspaper:
1. print edition: 49 euros
2. Only Internet edition: 125 €
3. Internet plus print edition: 125 €
What is preferred?
Which is preferred when supply 2 ( "bait") disappears?
125
winter semester
Offers act as an "optical illusion"!
As it is with an appetizer? Or very expensive men's suits?
126
winter semester
Questionnaire TIME
September 2018
127
winter semester
"Discount!"
http://www.faz.net/denkfehler
for example, Episode 31: "Trickery with the context"

128
winter semester
" Is framed "is already the language used
"Bailout"
"Microcensus"
"Free movement
monitoring"
"Haircut"
"Deepening of the EU"
The political language was created in order to let

the lie seem honorable and wind appear to be
solid. "
winter semester
Economic Nobel Prize in 2017 for "nudging"!
Richard Thaler
Concept of behavioral economics, which describes a method
how people's behavior can be influenced in a predictable manner
without resort to bans or economic incentives
change to have.
130
winter semester
The experiment by Carolyn ...
students benefit
randomly
"Natural" arrangement
Bonus from suppliers
profit maximum
In 2010, the British government set up Behavioral Insights Team one whose job it was to find
ways to use the Nudge theory to improve government policy. (Wikipedia.de)
131
winter semester
3.3.3 Digression: A journey into Tanaland
Research project at the University of Bamberg,

led by Dietrich Dörner
12 teams rule (separated) as "dictator" a fictitious

country in East Africa.
There are a total of 6 intervention packages.
132
winter semester
May 1975: On the Tanaland!
133
winter semester
In detail, was observed:
O Act without precise situation analysis

(Number of choices increases, the information collection from)
O Failure to take account of long-distance and side effects
O Fallacies: No negative effects = right strategy
O Partly development cynical reactions!
► Values, moods, thinking interact inextricably together!
134
winter semester
What has been learned in Tanaland?
The complex (and thereby often obscure) total system is treated as a collection of
individual systems.
We do not fail because the left brain does not work, but by
informational encapsulation, which tends involving failure to brutal
activism or denial of reality. "
Conclusion:
The problem is less the "big mistakes" - but rather the addition of many
small mistakes!
135
winter semester
Recommended reading:
Daniel Kahneman (2012) Dan Ariely (2008)
136
winter semester
3.4 The evidence-based management (EBM)
Each decision-making process is improved by use of relevant

and reliable facts - whether it comes to buy a suitable birthday
gift or a matter of finding the right machine. "
- Briner, Denyer & Rousseau, in: AMP (2009), p 22
Big Data!
137
winter semester
138
winter semester
2. Planning as a basic function of management
3. Decision as a basic function of management
4 , Guide & participation as a basic function of management (VL 9-11)
139
winter semester
4. Leadership & Participation as a basic function of management
4.1 Personnel Management Overview
Staff management is concerned with the selective acquisition,
management and development of the production factor
"Man" in corporate value creation process.
components :
O Human Resources ( inter alia, procurement, deployment, remuneration etc.)
O Human Resources Management ( among other things, guidance, motivation, embossing)
140
winter semester
human Resource management
administrative PM Behavior-related PM
( "Human Resources") ("Human Resources Management")
• recruitment • people images

• workforce • leadership qualities
• staff remuneration • motivation theories
• Personalcontrolling • Situational Leadership Models
behavioral Sciences
Fundamentals of PM
4. Leadership as a basic function winter semester
In practice, the personnel management tasks are performed in "dual

ownership".
Office Human human resources Managers with personnel

Resources features responsibility
Communication and cooperation!

winter semester
4.2 Personnel Management
As for me, I'll pay for the ability to treat

people properly, more than for any other in
the world.
John D. Rockefeller (1839-1937)
143
4. Leadership as a basic function
winter semester
Leadership can inter alia be interpreted as ...
• a special position That someone holds ( of structural Term)
• The enforcement of foreign will iS a asymmetric foreign regulation ( making

related Term)
• on systematic influence process (For the realization of

intended results functional Term)
144
winter semester
What are the main functions accept Leading actually

was?
145
winter semester
• proper function and social functions
• cognitive and motivational features
Tangible functions - cognitive Tangible functions - motivational
• To plan • Place of performance incentives

• Coordinate • Disclosure of interim results of the work
• methodical support
Social functions - cognitive Social functions - motivational
• Driving alternatives problem perspectives • awaken listening and interested

• Strengthening of togetherness, team spirit
• Creating social consensus
146
winter semester
Motivation and performance
"Motivation is a prerequisite for goal-directed behavior and
therefore from a management perspective
Main starting point for performance-enhancing
Influencing strategies. "
Motivation: from movere ( lat. "move")
intervening variable between situational and personal conditions and

observable behavior
► hypothetical construct
147
winter semester
Distinction between content and process theories
Content theories:
What generated A certain Behavior?
Process theories:
How is a certain behavior controlled?
148
winter semester
The pyramid of needs of M ASLOW
Key points:
• Human behavior is controlled by needs
• Hierarchy: urgent needs are different and

behave relevant succession
• Distinction in deficit and growth needs
The pyramid of needs (1954)
149
winter semester
Distinction between intrinsic

and extrinsic motivation
Services are provided from two principal reasons:
- wg. Interest in the work itself or the work product
- wg. Interest in "external" reward (see. T aylor)
intrinsically : Work is the purpose (= Direct gratification)
extrinsically: work is medium for the purpose (= indirect gratification)
150
winter semester
4.3 Management by concepts
Wedding of Management by concepts were the 1970s.
At that time the main topics:
• How does the top management of the time-consuming daily routine, without losing
control over what happens rid?
• Let us consider strongly the political demands for employee participation?
151
winter semester
a) Management by Exception (MbE)
► Leadership in exceptional cases
principle : The MA is responsible for all routine tasks. The MA may
act independently within a predetermined discretion; the supervisor

intervenes only "in exceptional cases".
Unlike the MBO the emphasis is on more at MbE

Tasks (achievement) and Control.
152
winter semester
It is assumed here that:
• it is neither possible nor a manager at any time to know everything yourself or to determine
• Not all processes are equally relevant in a company.
recommendation :
organize the management process so that the supervisor of its supervisory function without
permanent inclusion can meet in the work process!
153
winter semester
b) Management by Objectives (MBO)
► Management by objectives (from 1955 by P ETER D RUCKER)
principle : Supervisors and MA shall together objectives and plug

by consensus of their respective area of responsibility from.
For this two-step approach :
At the start: Tw agreement to be reached performance goals. Superior and MA
At the end: Joint comparison of target / actual and variance analysis.
154
winter semester
MBO as circulation scheme
after O DIORNE ( 1967)
155
winter semester
particularly suitable for target setting: The SMART principle
(S) Specific
(M) Measurable
(A) Attainable
(R) Realistic
(T) Terminated
156
winter semester
• Socio-political background
Does the demand for "democratization" of the workplace bill! Lowest possible
autonomy circumcision.
• Behavior Scientific background
Participation in the target formation increases employee motivation!
• Pragmatic background
Target agreement increases target acceptance and commitment! Uses
creativity and knowledge of employees.
MBO is ideal for knowledge workers who are more likely to have goals (rather than
formal guidelines or automatic. Processes) controlled!
157
winter semester
MBO ultimately aims: With the staff to be at eye level, to accompany him
continuously and he - provide support to the side - in recurring grinding!
158
winter semester
Management by objectives emphasizes the structural leadership and aims at the
substitution of management interventions.
But :
Target agreements provide only a framework that ultimately requires the

"steering-moderating" influence of superiors!
And :
Considerable time through individual negotiation and formation of a consistent

target!
159
winter semester
c) management by walking around
► Tour of presence "on the spot"
aim : The executive employees are human

Interest and professional close to the superiors are
symbolized ( • Consideration).
legendary Steve Jobs as well as ...
160
winter semester
4.4 Managing the Boss (guide from the bottom)
Alone or together?
"Postheroic Management":
Leading are both initiators and target social influence
• Two-Way Influence Concept of Leadership
Ex .: secretary, experienced project staff, intrapreneurs!
The company is a
Resource pool!
161
winter semester
Alone or together?
"Leadership from below" refers to the goal-oriented, mutual
(...) influencing people a higher hierarchy level
(Wunderer 2003, p 254).
empiricism :
1. Subordinates have other lead content ( "Issue")
Second Subordinates practicing other influence tactics ( "Medium").
The company is a
Resource pool!
162
winter semester
Influence tactics in
social interactions
Successful are:
fact-based suggestions
u./o. Coalition-building!
(Y UKL / T RACEY 1992, p 526)

winter semester
164
winter semester
Alone or together?
The Capri-Fischer
The company is a
"Resource pool"!
165
winter semester
4.5 Personnel participation
Whose interests should bear the corporate regulation bill?
Two control areas:
Who will take the necessary corporate governance decisions? ( • Decision

problem)
How are the fruits of the company's activities between the resources carriers
divided? ( • Distribution problem)
166
winter semester
4.5.1 The decision problem (intangible investment)
a) participation at company level (via Supervisory Board)
(G ERUM 2000, p 257)

167
4. Participation as a basic function
winter semester
starting point : Corporate (. Esp BGB, HGB, AktG):
"Property founded decision-making power"
Company law is, however, "added" by the various MitbestG!
The jurisdiction of the Mitbest. laws

depends in Germany on the:
O legal form
O Company Size
O business
168
winter semester
The main MitbestG at company level
1. Coal and Steel Co-determination Act of 1951
2. General Co-Determination Act of 1976
3. pull. Third Parity Act of 2004
169
winter semester
Scope of the main Mitbestimmungsgesetz
(See equ. ERUM 2000, p 258)

170
winter semester
aa) Montan-participation Act (1951)
Scope : Companies in the mining sector and the

Iron and steel-making industry with more than 1000 standing at
Historical background:
War economic importance of the mining area in the II. World War.
The aim of the occupying powers: the dismantling of the industrial monopolies (IG Farben)
171
winter semester
Basic model of
MontanmitbestG
172
winter semester
from) General Co-Determination Act (1976)
Scope : Companies with more than 2,000 permanent ON
Basic model of the general.
Mitbestimmungsgesetz
173
winter semester
German willingness to strike by international standards
164 days a year:

Spain Pooh -
Germany hui!
174
winter semester
Working hours 2007: 1880 (USA) to 1689 (D)

175
winter semester
b) co-determination (at operating level via council)
The most important MitbestG at company level:
Betriebsverfassungsgesetz (1972)
It includes mainly provisions on labor law and employee participation in the workplace:
• Kündigungsschutzgesetz
• Working Time Regulations
• Co-determination at work ( §§ 81-86).
176
winter semester
On works Council can be selected at least 5 constantly employed AN.
The application is not legal form, but rather depending on size !
• for the field of public service:
Bundespersonalvertretungsgesetz ( 1974)
(analogous Country staff representation laws)
• for executives: Sprecherausschuss Act ( 1989)
177
winter semester
Basic standard of WCA: Cooperation bid!
This is reflected among other things in:
O Prohibition of industrial action (= Only the trade unions)
O Prohibition of operations that the workflow or
disturb industrial peace
O Ban on partisan activity ( of the client and contractor in operation)
178
winter semester
The WCA has a double objective:
Work Legal Protection ( va individual rights) and
Internal democracy ( va collective rights).
► After impact intensity can be to cooperate and
Participation rights in the narrow sense differ.
The latter has the BR really only in personal and social
Affairs. But hardly in economic!
179
4. Participation as a basic function winter semester
180
Humboldt University, Berlin (2017):
The average content Board (DAX 30) is 4.35 million EUR; ie:
58 x workers' incomes
From 1987 to 2017, the directors' remuneration are to 1000% gone up!
In the United States had the CEO's remuneration of the 350 largest Corp.
1978-2012 already at 876% increased!
181
winter semester
(Source: WiWo 2018, No. 26, p. 8)
READING SUGGESTION:
https://www.wiwo.de/erfolg/management/dax-vorstaende-zehnmal-so-viel-geldwie-1987/22724964.html
► Envy debate or immoral-oblivious salaries?
182
winter semester
183
winter semester
4.5.2 The distribution problem (material participation)
Through the participation of personnel success or capital of an enterprise of this

system is broken!
184
winter semester
Level of German real wages since 2010 at best stable!
Do we want American executive pay and Chinese wages?
dissemination of Capital- or. profit sharing in Europe (2009)
http://de.worker-participation.eu/Nationale-Arbeitsbeziehungen/Quer-durch-Europa/Finanzielle-
employee participation
- in ITA 4% (3%) - FRA 5% (35%)
- in NDL 5% (27%) - in Austria 2% (8th %)
- in D. 3% (14%)
READING SUGGESTION
https://www.wiwo.de/unternehmen/mitarbeiterbeteiligung-ein-stueckvom-unternehmen-fuer-die-angestellten/556
185
winter semester
Forms of material staff participation
• pure profit sharing
• pure equity investment
• called. laboristische equity
The latter provides a mixed form represents:
Part of the income from wages u./o. an upstream profit sharing are converted into a share
of the business asset (reinvested).
• investive
186
winter semester
a) profit sharing
Systematization is based on the tax base. Because of various side effects is mainly the profit
sharing Importance.
Types of profit sharing by reference

(Hentze 1994, p 132)
187
b) equity
The main forms of equity participation
• Participation in the equity of the company
• Participation in the debt of the company
Be distinguished:
O Indirect participation: the employee shares are collected

transmitted, and an intermediary institution
O Direct participation: individual contracts for contract law
188
winter semester
Basic logic of employee share ownership
189
winter semester
Employees should not only be simple wage

earners, but real partners of their businesses. "
"The employee participation is a modern way

workers can benefit in times of stagnating
wages from globalization."
Horst Köhler, Federal
President iR
(Interview in STERN, 29.12.2005)
190
Overview - equity
191
winter semester
Example 1: Workforce Fund
(Example of Hentze 1994, Vol 2, pp 142 ff.)
192
winter semester
Example 2: Publicly funded loans to employees
► Foray Rh.-Palatinate: Employee participation RLPplus

(From May 2007)
• for companies with up to 250 employees
• Ceiling of EUR 10,000 per employee
• RP Investment Bank provides funds available, the example
4000 EUR employee contribution subsidized 6,000 EUR
• Companies pay employees 2.6% interest, if successful, an additional 2%

for employees (possibly even land grants)
• AN-share bankruptcy remote after two years to 90%
193
winter semester
Studies of the IAB:
Companies with the participation options are more productive!
Motives for the beneficial interest
• Promote motivation and entrepreneurship
• improved employee retention
• Finanzstruktur- positive and liquidity effects (esp. for SMEs)
• socio-political stabilization
194
winter semester
One reason: The return on investment is much higher than the operating margin ( → "Winner
takes all" markets)!
195
winter semester
Global inequality in income (and wealth)
O 8% of humanity collected 50% of global income.
O 2014 flowed to the top 1% of Americans 22% of national income to!
95% of all income growth since 2009 went to the top 1%!
O The middle-income deposited globally slightly (not in USA & D)
however, the lower the global 5% is unchanged!
196 Source: Wirtschaftswoche 47/2016, p 118

197
winter semester
5. control as a basic function of management (VL 12)
198
winter semester
5th Control as a basic function of the guide
5.1 to semantic change of operational control function
Task: continuing review of planning caused selection decisions on

Zieldienlichkeit and achievement level.
This concerns both the efficiency and the effectiveness of corporate

actions.
► comparison operation
199
winter semester
Control in the classical sense
O Comparison of plan sizes and realization sizes

("Should, is")
planned figures :
- Normative set target values (eg sales targets)
realization sizes :
- Results of plan implementation (eg development of new growth areas)
200
winter semester
Defects classical result controls
1. Information often come too late; can not be considered in the

planning enforcement ( " Time aspect ")
• At the end of an advertising campaign insufficient attention value of advertising materials

used are found
Second If you want sizes not questioned ( " Reflection aspect ")
• Sales targets for diesel passenger cars will remain unchanged despite the meantime
increased diesel taxation
Third Budget review will only be encouraged if it actually target

Actual deviations is ( " Compensation aspect ")
• Coated seller targets are compensated for a time through increased

commitment of AD staff
201
winter semester
Control in the modern sense
O Inclusion of projected sizes
(Eg expected sales developments)
= targeted advance checks ( Is-actual or set-is-comparison)
Also: systematic error analysis
► The control is no longer a subordinate, the decision phase final appendage but a
function permanently controlling the management process.
202
5. Control the basic function winter semester
controls: Monitoring processes which directly or indirectly from
process-dependent people are made
Checks (revisions): Monitoring operations of process-independent,

often external persons
Controlling: Control plus specific proposals for corrective action.
But on cost-related variables fixed!
Management Audits: Systematic analysis of the management situation, and

(The quality of management performance • Effectiveness).
Put to the test in order is: the entire operational management system!
203
winter semester
5.2 characteristics and types of strategic control
a) characteristics of strategic control
- forward orientation
- Networking of individual areas / wholeness
- increased focus on Softfacts
- Relation to the total company level
Strategic control has: backup, control and learning function!
204
b) types of strategic control
I. strategic monitoring
II. premise control
III. Enforcement control ( often: Plan progress monitoring)
205
winter semester
Types of strategic control (cont.)
(Steinmann / Schreyögg 2000, p 246)

206
winter semester
5.3 Corporate Governance
CG aims to rules of "good" corporate governance
aim : Specifying a framework for the management and supervision

a company or its executives.
207
winter semester
CG is one of the most discussed topics of the past 20 years

- triggered by global accounting scandals, fraud, corruption
and theft.
The efficiency and / or "loyalty" of the governing bodies is often
doubtful.
background :
Historic separation of ownership (= liability) and authority.
Managers are ultimately employees who carry no capital risk!
208
winter semester
Ensure the quality and transparency of the managers work
The control of management is - especially in Germany - often unprofessional!
For example, there pa on average only 4-5 AR sessions; the SB members are often times strange.
Tendency to over-size and over-regulation!
► Demarcation of the concept of Corporate Constitution, the more domestically
oriented (eg, forms of participation, etc. controls).
209
Selected control offenses
• Legal content rules
• Appropriate management structures and persons
• Compensation for typical conflicts of interest

(Shareholder vs. Stakeholder)
• Regulations on performance evaluations of leadership
• Business communication internally and externally
210
winter semester
The principal-agent theory
Need to control employee managers who possess information advantages over

non-operational stakeholders. The latter suffer
under incomplete contracts. The actors are opportunistic!
Example: Fire sale of Sachsen LB (2007); ECB policy (since Sept. 2012): manipulated
Inflation indexes etc .; German Bank (2011-14): fraud in CO2 certificates
► Governance to act as a system of institutional arrangements that help decision-makers should be
made, in accordance with the company's owners (or the sovereign).
211
winter semester
The rules of "good corporate governance" can in principle a

market-based or statutory Regulation be delivered.
Core are often indices
• in Germany: GCGC
• in USA: Sarbanes-Oxley Act
• in the UK "Combined Code"
► The various models of governance are in an international competition

system!
212
winter semester
Typical for Germany: the

two-stage model
The supervisory model (two tier system)

(See Theisen 2002, p 1058;. After Bleicher / Liver / Paul 1989)
213
The German system
Three-stage structure: board, supervisory board, general meeting
advantage : Board may "among themselves" fast and confidential decisions
believe it. Less energy. Controllers are independent!
disadvantage : The SB members are often not sufficiently qualified or primary

politically motivated! Tendency to foreclose on the board.
214
winter semester
Internationally, the
board model
dominates
The board model (one tier system)

(See Theisen 2002, p 1060;. After Bleicher / Liver / Paul 1989)
215
winter semester
The board system (USA)
Two-stage: combination of Executive Directors ( "CEO") and Non-Executive Directors (

"Chairman" - this sometimes also executive).
advantage :
Non-Executive Directors are more familiar with the business, can thus draw the initiative rather
in itself.
disadvantage :
Lack of independence of the inspectors ( "Supervisor").
216
winter semester
External effect findings:
• The board system shows strong tendencies to the detriment of other
(mostly non-commercial) interest groups!
• The German system is suffering more from inefficiency!
Corporate Governance: Political framework for companies in:

WISU, 4/2012, pp 524-528
217
218
winter semester
What basic insights should stay?
219

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Intro to Business Management (BWL I

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FILM SET Introduction to

Business Management ( BWL I)

Univ. Dr. Dietrich von der Oelsnitz Institute of

Purpose and Route Construction of

the ship the ship

Guidance and training Nautical

I. Business Administration and Management

II. Planning as a basic function of management

III. Decision as a basic function of management

IV. Leadership and participation as fundamental function of management

V. Control as a basic function of management

Especially for this lecture:

D. from Oelsnitz (2009):

Robbins, S./Coulter, M./Fischer, I. (2014):

Steinmann, H./Schreyögg, G. (2005):

Schreyögg, G./von Werder, A. (eds.) (2004):

Handwörterbuch Management and Organization, Stuttgart.

1. Business Administration and Management ( VL 1-3)

Second Planning as a basic function of management

Third Decision as a basic function of management

4th Leadership and participation as fundamental function of management

5th Control as a basic function of management

1. Business Administration and Management

1.1 Business Administration

The Business Administration is a cultural studies. Compared to

It occupies an intermediate position between the natural and

Social science one.

The world of business is subject to the

► The problem area of ​business administration extends to the well-planned

supply of people with scarce resources.

people are scarce and finite.

This forces to a rational use of raw materials and goods.

► What is needed is the application of a general

Reason principle ( "rational choice").

This exists in business administration as so. economic principle.

- with a minimal effort to achieve a certain output to input ( minimum

- with a given effort a Maximum output

to reach ( maximum principle ).

Types of goods according Rivalitäts- and exclusion principle

"Doing the right things" (= Achievement of objectives; ie effectiveness)

Effectiveness: Was the goal achieved?

starting point aim

efficiency: Were on the way there

Accordingly Management as a process

12 (S TAEHLE 1999, p 81)

1.1.1 The object of knowledge in business administration

From Economics Business Administration is distinguished mainly by their cognitive interest :

Economics: the focus is on aggregate operations

BWL: einzelwirtschaftliche orientation (microscopic perspective).

The management theory supporting disciplines include the

Sociology, the Psychology, the Legal and Industrial Engineering,

but also the computer science or Mathematics.

The BWL refers primarily to the events in operated

Companies are foreign demand covering economic units that produce

An intermediate position so-called own. public enterprises and administrations.

e RICH G Utenberg - founder of the German post-war economics

Central at Gutenberg: The system of production factors

Characteristic of the operating concept

O Combination of production factors

O Financial balance (?)

O Acquisition Economic Principle

O Principle of private property

The operation relations with its environment

► The problem area of business administration extends to the well-planned