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Question for Thought

If you won 100 million dollars in the Lotto, do you believe that would bring you happiness?

- Most of you probably answered yes, as did I, but studies show that money doesn’t necessarily make you happy.

- It’s what you do with the money that will make you happy.

- What would you do with 100 million dollars?*

Question for Thought

If you won 100 million dollars in the Lotto, do you believe that would bring you happiness?

- Most of you probably answered yes, as did I, but studies show that money doesn’t necessarily make you happy.

- It’s what you do with the money that will make you happy.

- What would you do with 100 million dollars?*

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Welcome to Family and Consumer Resource Management

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We will be going over Chapter 1. Management Today.

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The focus on this class is on American families.

We focus on how American families allocate their resources these decision affect the community, nation, and world economically, socially, and politically. It is said that nothing happens until someone decides to purchase something. Why does the American family decided to purchase what it does.

We will study this decision making through the lens of the Management Process Model. We will also look at human capital, time management, money management, stress and communication.

We will study this through lectures, readings, projects, and tests.

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What is management?

Management is the process of using resource to achieve goals.

Put another way, it is using what one has in order to get what one wants.

Whether in the family or in business, management by definition implies a working together .

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The Management Process Model involves thinking, action, and results.

Because it is result-oriented, management is considered an applied social science.

There are six steps in the Management Process Model.

• Identify problem, need, want, or goal.
• Clarify values.
• Identify resources.
• Decide, plan, and implement.
• Accomplish goals and evaluate.
• Provide feedback.*

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The first Step 1 includes Identify problem, need, want, or goal.

Problems are questions, dilemmas, or situations that need to be solved.

People often phrase problems as having to resolve a need, want, or obtain a goal.

It is extremely important to be able to differentiate between needs, wants and goals in order to effectively identify the problem and the solution.

Needs are what we need in order to survive.

Wants are things we desire and are not necessary for survival.

Goals are end results that require action for their fulfillment.

From a marketing perspective, it is to the benefit of company to blur the lines between a need and a want. Marketers want people to use the terms interchangeably in order to push people to purchase products they don’t need but want.

For Example:

Is getting to class on time a need or want? It is a want. It is not essential for survival. You want to get to class on time because you don’t want to the jewels of knowledge that is being shared.

Problem identification is the most difficult part of the Management Process Model. If you identify the wrong problem, you will misallocate your limited resources and you will not achieve your objectives.

The reason problem identification is the most difficult is because our views of the world cloud our ability to see the true problem. We are blinded to the true root cause of the problem because of our lived experiences, biases, values, morals, and socialization.

We spend most of our effort addressing symptoms not the problem. Not surprising we waste very valuable resources solving the same issues over and over. This applies governments, non-profits, for-profits, individuals, families, and communities.

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Let me give you an example of what I am talking about with respect to problem identification.

Unless you have been living under a rock, you should know that the United States faces significant problems related to equality. Minorities and the poor face significant challenges in accessing quality education, employment, health care, and government services. De facto and de jure discrimination have disproportionately deprived minority communities and the poor of the resources to participate equally in American society.

If we use this picture of a baseball game as an analogy of the game of life. The wall represents the barriers that prevent people from being able to fully participate in the game of life in the United States.

There are those who can fully participate because of their enact characteristics. There are those who face some challenges but ultimately participate and those who will simply never be able to participate.

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To address inequality, some have argued that everyone should get the same amount of support in order to help them participate in society and achieve their dreams irrespective of race, religion, sexual orientation, or background.

To these individuals, this seems fair and an efficient way to allocate society’s limited resources.

Historically this has meant that everyone has the same opportunity to get a free K-12 education.

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Others have argued that giving the same amount to everyone is not enough because people come to the table with different resources.

They argue that communities that have historically been marginalized and deprived of resources should get more because they are starting behind everyone else.

This is really referring to equity.

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Both these solutions only address the symptoms not the real problem.

They aren’t addressing the wall – us and the way we make decisions.

The wall is us. We make up society and we create the wall by the choices we make. Where we choose to buy products, the types of products we buy, how we treat others, how we make decisions in the workplace and in school, the friends we choose, and how we raise our children all either work to create or tear the wall down.

These solutions create waste and inefficiencies because they don’t address the problem.

Why, do we do this?

Why is it easier for politicians to say their going to lockup criminals and throw away the keys than to implement policies that prevent people from becoming criminals in the first place.

The reason is that solving the root cause of the problem would require us to look at our selves, face our demons, and work towards becoming better. This is hard work and most people don’t do. Just look at how many people don’t seek therapy even though they really need it.

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Successful life management beings with you knowing what you value and making decision based upon those values.

Research on the differences between those who are successful and those who aren’t indicates that people who are successful make decisions based upon their values and subsequently allocate their resources differently.

People who are successful prioritize those things that are important to them, continuously work to improve themselves, plan, and avoid time wasters.

There are two ways people make decisions.

• Needs Based Decision-Making is when people make decisions to first meet their primary needs. These primary needs include the need for food, shelter, belonging and love, self-esteem. If I am hungry, I eat irrespective of other factors.
• In Value Based Decision-Making people make decisions based upon their values not their needs/wants. When faced with a decision, the person thinks through the choices and makes those choices that are consistent with the values and help them achieve their goal. In the person values financial security but they are hungry, they may choose to hold off eating until they get home to save money.
• Successful individuals make value-based decisions

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There are our types of needs:

• Physical needs – person’s need to sustain life, obtain sensory pleasures, and maintain/ enhance physical characteristics.
• Social needs – need for relation/interaction with other’s, need to be included in a group.
• As social creatures we have a need social connectedness.
• We are not born knowing how to hunt for our food and survive.
• We need others in society to teach us.
• Wealth needs – need to obtain money, goods, property, and other assets.
• Everyone needs some type of wealth in order to survive in society because it is not possible for people to produce all the goods they consume.
• Information needs – need to gain knowledge and investigate, explore, study, and to satisfy intellectual curiosity.*
• Everyone has a need for information. We need to know that we will die if we step over a cliff, that a lion is a threat, and decipher when someone is a friend.

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Maslow’s Hierarchy of Needs is a hypothesized structure of the order of the needs we try to satisfy.

According to Maslow individuals will make decisions to satisfy their lower needs and then make decisions to address their higher order needs.

If you have ever seen TV shows like Survivor, Naked and Afraid, or any other show where people try to survive in the wilderness you will notice a pattern. They first focus on finding water, shelter and food. Only once these have been met, do they focus on meeting other needs.

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What is self-actualization is what we should strive to reach.

• It is the fulfillment of one’s highest potential.
• Self-actualizers attain self-realization – the process by which individuals have the opportunity to invest their talents in activities they find meaningful.
• People who are self-actualized do things because they want to not because they must.
• Only 10% of people every achieve self-actualization.
• Just because a person achieve self-actualization doesn’t mean that they will always be self-actualized.

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This is Maslow’s Hierarchy of Needs.

As stated, according to Maslow people must meet certain needs sufficiently first before they make decisions to pursue their higher order needs.

The first is their physiological needs for food, water, air. After that they focus on safety, then belonging and love, esteem, and finally self-actualization.

Where do you guess most people get stuck?

• Most people get stuck in belongingness and love.
• People get stuck in belonging and love because it is very difficult to find someone who loves you for who you are rather than what you bring to the table.
• We learn this vary early in life from our parents when they say things like “You are such a good kid; I love you very much.” What the child is hearing is that they are loved because they are a good kid. You can replace the word kid with student, son, daughter, or the many other words that people preface the statement I love you.

It is important to note this pyramid is upside down for Native Americans and some Asian communities. To these communities, you must first know yourself (self-actualization) before you can pursue the other needs. Otherwise you will just be tossed around aimlessly by the demands of your family, society, groups and situations.

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Successful marketers understand the needs that their products satisfy and develop corresponding messages.

The tag line “I fallen and I can’t get up” is targeting people’s need for safety.

The Mustang commercial is targeting people’s need for belong and love. It is communicating that if you have this car, these types of women will want to be with you.

The commercial with the family, is sending the message that if you use this product the family will love you and will see you as an amazing mother.

The Gap commercial is targeting the physiological need for sex. The commercial is sending that message that if you use these clothes, you will look like this and attract good looking partners. You will find a partner that you fit with. While some have argued that this is belonging and love, the position of the models indicates sex because they fit together. They are not looking longingly into each others' eyes.

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• Now let's talk about value-based decision-making.
• Values are deeply held psychological constructs that direct our behaviors.
• The values we hold are pretty much set by the age of 9.
• How we express them changes but what we value is pretty much set barring a significant emotional experience.
• Research shows that most of us don’t experience a significant emotional experience strong enough to alter the values we formed by the age of 9.
• The values we adopt are influence by our family, friends, media, and the socialization process.
• Our values shape our perception of situations and influence our decisions.

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Successful people have a strong positive self-belief, make decisions based upon their values, and accept they are not perfect.

So the first step in making good decisions is to know your values.

Unfortunately, most people don’t know their values.

They just follow blindly what they were taught by their family, friends, and society.

This is called the socialization process.

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Successful family and consumer resource management begins with and understanding of yourself…

Know what you value and basing your decisions on those values

This can be challenging because few individuals give much thought to what their values are?

• We can see our values in our attitudes and beliefs.
• How we frequently act may go against our values
• Few can evaluate how their “stuff” is shaping their view/decision
• Fewer make value-based decisions

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Have you asked yourself?

Why did I do that?

How did I end-up here?

Nothing happens in a vacuum

Who we are, the choices we make, and the situations we find ourselves have a history.

What seems to be random, is not.

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We will discuss the other 5 steps in the management process in other chapters.

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Now let’s move on to understanding why we management.

Management takes people from where they are to where they want to go.

Humans need to feel in control of their lives, therefore management is essential.

“Practically all people with schooling beyond high school, in the U.S., will spend 90% of their working lives as employees of managed organizations and could not make their living without them.” – Peter Drucker

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We all manage!

Every time you make a decision involving school, career, family, and personal life you employ the management process.

Although we all manage, each one of us has a unique management style a characteristic way of making decisions and acting.*

Some are more successful than others at management.

Learning to manage is a critical skill

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There are five influencing management styles:

• History – influences the way a person makes decisions and the options he/she considers.
• Biology – dictates basic physiological needs such as food, shelter, air, and water.
• Culture – provides a systematic way to fulfill needs.
• Personality – sum of total of individual characteristics, traits, and ways of interacting.
• Technology – applies method and materials to help people get what they want.

Of these 5 management styles, which style do you think is the easiest to make personal adjustments to?*

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If you answered personality, you are right!

• Reason for reading The 7 Habits of Highly Effective People.
• Do you look at the glass as half full or half empty?
• “It taught me that we must look at the lens through which we see the world, as well at the world we see, and that the lens itself shapes how we interpret the world.” – Stephen Covey, The 7 Habits of Highly Effective People is a very influential book in the business world.
• It is through this view that we personally internalize our perception of situations.
• “We began to realize that if we wanted to change the situation, we first had to change ourselves. And to change ourselves effectively, we first had to change our perceptions.” – Stephen Covey*

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Technology

• Shape, reshapes and shape
• One television per household used to be the norm.
• Now, American households average 2.8 televisions and 95% have access to cable.
• Today, most Americans have cell phones, the younger the age, the more likely the person will have a cell phone.
• E-mail, instant messaging, and the Internet have added new dimensions to communication.
• More than 61% of American households have personal computers.
• 69% are regular Internet users.
• The average American spends 2½ hours per day online.*

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So what is Family Resource Management?

It is the study of the decisions individuals and families make about developing and allocating resources such as time, money material assets, energy, friends, neighbors, and space to meet their goals.

It explores how human beings react to change and how they cause change to happen.

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We said we were going to study the family. But what is a family?

Census Bureau differentiates between a household and a family.

• Household-Comprises all persons who occupy a housing unit
• Family-Refers to group of 2+ persons related by birth, marriage or adoption and residing together in households.
• Householder: A person in whose name the house is owned or rented.
• American Red Cross has it own definition.
• There is no universal definition of a family.

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What is your definition of family?

• Population is aging, resulting in more elderly singles
• In 2013, 14.1% of Americans were ages 65 and older.
• Criminal laws and drug use have led to older adults having to raise their grandchildren.
• In 2012 10% of grandparents live with a grandchild, an increase from 7% in 1992

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More and more households are comprised of single adult households.

People are choosing to either not live with a partner, live with a partner but not get married, and to becoming single parents:

• 44% of all US residents 18 and older are unmarried.
• 53% of the unmarried are women.
• Of the 44%, 62% were never married, 24% divorced, and 14% were widowed.
• 27% of all households in the United States lived alone.

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What is your definition of family? (Cont.)

• Average number of people per household declined from 3.1 to 2.6 between 1970-2012.

• Life expectancy has risen to over 70. A boy born in 2000 will reach 73 on average; his sister will live into her 80’s.*

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Why Study Family Resource Management

• Choice is the act of selecting among alternatives
• Each choice has its risks.
• Risks is the possibility or perception of harm, suffering, danger, or loss.
• Where there is risk, there is opportunity.
• These choices have individual and societal implications.

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Life Management for Individuals and Families

Life Management:

Encompasses all the decisions a person and family will make and the way values, goals, and resources use affect decision making.

Process that evolves over a life span

Process takes place in a social context as part of the environment that surrounds individuals and families

Self-monitor:

Individuals assess or alter their actions, language, and reactions according to those around them.

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The Second Half of Life

Most of us will:

• Spend the first 25 years getting educated
• The next 25 – 30 years working
• The remaining 30 – 40 years in retirement

In your opinion, what contributes to the mid-life crisis?

• Questioning the nature of their work/profession
• Questioning marriage, children may have grown-up and moved out
• Boredom
• Loss of joy/satisfaction in work or life
• Redefining success or determining what is important*

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The Second Half of Life

A societal redefinition of retirement:

• Some retired workers are finding new ways to use old skills, knowledge, and relationships
• Some refuse to retire or to accept society’s definition of retirement
• Some are forced to continue to work due to lack of successful financial planning
• Some are forced to continue to work because they may have lost their financial nest egg in the stock market
• Work today is less physically demanding
• More and more people work from home thanks to technology, specifically the computer & the Internet*

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Did you Know?

• The median age of first marriage in the U.S. is 29 years for men & for 26.8 for women.

https://www.census.gov/hhes/families/files/graphics/MS-2.pdf

• The average person goes on 100 dates before getting married.
• An American woman, on average, will have her first child at age 25.8.

http://www.cdc.gov/nchs/data/nvsr/nvsr62/nvsr62_09.pdf

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Did you Know?

• 2012 28% of children of children in the U.S lived with one parent, 68% with two parents http://www.census.gov/prod/2013pubs/p20-570.pdf
• In 2012 nearly 40% of U.S. babies are born outside of marriage.
• http://www.cdc.gov/nchs/fastats/unmarried-childbearing.htm
• Less than 5% of Americans have a Master’s degree.*

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Question for Thought

If you won 100 million dollars in the Lotto, do you believe that would bring you happiness?

- Most of you probably answered yes, as did I, but studies show that money doesn’t necessarily make you happy.

- It’s what you do with the money that will make you happy.

- What would you do with 100 million dollars?*

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