Chapter 6

1. Chapter 6 Understanding theManagement Process

2. Learning Objectives • Define what management is. • Describe the four basic management functions: planning, organizing, leading and motivating, and controlling. • Distinguish among the various kinds of managers in terms of both level and area of management. • Identify the key management skills and the managerial roles. • Explain the different types of leadership. • Discuss the steps in the managerial decision-making process. • Describe how organizations benefit from total quality management. • Summarize what it takes to become a successful manager today.

3. Management …the process of coordinating peopleand other resources to achieve the goals of an organization.

4. Figure 6.1: The Four MainResources of Management

5. Organizational Resources • Material ─ tangible physical resources • Human ─ people, most important asset • Financial ─ funds organization uses to meetobligations to investors and creditors • Informational ─ knowledge about changes in the industry

6. Figure 6.2: The Management Process

7. Planning …establishing organizational goalsand deciding how to accomplish them.

8. Planning • MissionA statement of the basic purpose that makes an organization different from others. • Strategic planningThe process of establishing an organization’s major goals and objectives and allocating the resources to achieve them.

9. EstablishingGoals and Objectives • GoalAn end result an organization is expected to achieve over a one- to ten-year period. • Set at every level of company • Must be consistent among levels • Optimization = balancing process • Objective A specific statement detailing what the organization intends to accomplish over a shorter period of time.

10. Plan …an outline of the actions by whichan organization intends to accomplishits goals and objectives.

11. Figure 6.3: Types of Plans

12. Strategic Plan …an organization’s broadest plan, developed as a guide for major policysetting and decision making.

13. Tactical Plan …a smaller-scale plan developedto implement a strategy.

14. Operational Plan …a type of plan designed to implement tactical plans.

15. Contingency Plan …a plan that outlines alternativecourses of action that may be takenif an organization’s other plans aredisrupted or become ineffective.

16. Organizing …the grouping of resources andactivities to accomplish some end resultin an efficient and effective manner.

17. Leading and Motivating • Leading ─ influencing people to work toward a common goal • Motivating ─ providing reasons for people to work in best interests of an organization; people’s motivations vary Leading + Motivating = Directing

18. Controlling …the process of evaluating andregulating ongoing activities to ensurethat goals are achieved.

19. Figure 6.4: The Control Function

20. Managers’ Classifications • Level in organization • Area of management

21. Levels of Management • Top ManagerGuides/controls overall fortunes of an organization • Middle ManagerImplements the strategy and major policies developed by top management • First-Line ManagerSupervises the activities of operating employees

22. Figure 6.5: Management LevelsFound in Most Companies

23. Figure 6.6: Areas ofManagement Specialization Spotlight How Much Do Executives in Selected Business Areas Earn Yearly? Source: www.execunet.com, accessed November 25, 2008.

24. Manager Specialists • Financial ManagerResponsible for financial resources • Operations ManagerManages systems that convert resources into goods/services • Marketing ManagerFacilitates exchange of products between organization and its customers/clients • Human Resources ManagerManages employee programs and employment practices • Administrative ManagerNot associated with any specific function; provides overall administrative guidance/leadership

25. Effective Managers • Possess certain important skills • Are able to use those skills in a number of managerial roles

26. Key Management Skills • Technicalability to accomplish a specialized activity • Conceptual ability to think in abstract terms • Interpersonalability to deal effectively with people inside and outside organization

27. Role …a set of expectations that one must fulfill.

28. Managerial Roles • Decisional ─ involves aspects of decision making • Interpersonal ─ deals with people • Informational ─ gathers or provides information

29. Decisional Roles • Entrepreneur ─ voluntary initiator of change • Disturbance Handler ─ resolves emotional differences • Resource Allocator ─ decides how resources should be distributed in the organization • Negotiator ─ brings resolution to conflicting points of view

30. Interpersonal Roles • Figurehead • Liaison • Leader

31. Informational Roles • Monitor • Disseminator • Spokesperson

32. Leadership …the ability to influence others. • Formal • Informal

33. Styles of Leadership • Authoritarian • Laissez-faire • Democratic

34. Best Leadership Style? The ‘best’ leadership seems to occur when the leader’s style matches the situation.

35. Rules for Leaders • Audit your company cultures. • Informed people don’t fear change. • Beware “Aspirational Accounting.” • Empower your people─turn them loose. • Prevent erosion of human assets. • Be generous with what you know. • Expand your roster. • Don’t judge a man by the size of his wallet. • Harness your skills for good. • Groom your people for success. Fast Company, “25 Rules for Leaders,” http://www.fastcompany.com/articles/2002/05/rtsd_quotes.html.

36. Figure 6.7: Major Steps in Decision Making …the act of choosing one alternativefrom a set of alternatives.

37. Problem …the discrepancy between an actual condition and a desired condition.

38. Rules of Decision Making • Know what decision should accomplish • Allow time to make decision • “Sleep on” critical/complex decisions • Ask the right questions • Seek other opinions • Understand the risks • Be aware of resources • Obtain new information

39. Generating Alternatives • Brainstorm • “Blast! Then Refine.” • Trial and Error

40. “Satisfice” …describes a solution that is only adequate and not ideal.

41. Implementation Requires • Time • Planning • Preparation of personnel • Evaluation of results

42. Total Quality Management …the coordination of efforts directed at improving customer satisfaction, increasing employee participation, strengthening supplier partnerships, and facilitating an organizational atmosphere of continuous quality improvement.

43. Components of TQM • Customer Satisfaction • Employee Participation • Strengthening Supplier Partnerships • Continuous Quality Improvement

44. Critical IssuesThat Affect TQM Success • Top management must give it top priority and frequent attention • Management must coordinate specific elements of TQM to work in harmony with each other

45. Financial Benefits of TQM • Lower operating costs • Higher return on sales/investments • Ability to use premium pricing

46. Successful Manager Today • Long work hours • Time spent getting information from individuals • Personal skills • Oral communication • Written communication • Computer • Critical thinking

47. Highest Paid CEOs, 2008 Source: Forbes.com, “CEO Compensation,” http://www.forbes.com/lists/2008/12/lead_bestbosses08_CEO-Compensation_Rank.html.

48. Chapter Quiz • People in an organization are what type of resources? • Material • Informational • Inventory • Human • Financial

49. Chapter Quiz (cont.) • In executing their functions, managers must first • organize activities. • establish goals. • motivate employees. • evaluate activities. • select employees.

50. Chapter Quiz (cont.) • Roles such as entrepreneur, disturbance handler, and resource allocator are types of _____________roles. • interpersonal • informational • decisional • leadership • ownership