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Chapter Eight

PRIDE HUGHES KAPOOR INTRODUCTION TO BUSINESS ELEVENTH EDITION. Chapter Eight. Understanding the Management Process . 8 | 1. Learning Objectives. Define what management is. Describe the four basic management functions: planning, organizing, leading and motivating, and controlling.

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Chapter Eight

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  1. PRIDE HUGHES KAPOOR INTRODUCTION TO BUSINESS ELEVENTH EDITION Chapter Eight Understanding the Management Process 8 | 1

  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 of successful managers. • Explain the different types of leadership. 8 | 2

  3. Learning Objectives (cont’d) • Discuss the steps in the managerial decision-making process. • Describe how organizations benefit from total quality management. 8 | 3

  4. The Four Main Resources of Management Figure 8.1 Managers coordinate an organization’s resources to achieve the goals of the organization. 8 | 4

  5. What Is Management? • The process of coordinating people and other resources to achieve the goals of an organization • Material resources • The tangible physical resources an organization uses • Human resources • The people who staff an organization and use the other resources to achieve the goals of the organization • Financial resources • The funds an organization uses to meet its obligations to investors and creditors • Information resources • The information about external business environmental conditions that a firm uses to its competitive advantage 8 | 5

  6. Basic Management Functions • The Management Process Figure 8.2 8 | 6

  7. Planning • Planning • Establishing organizational goals and deciding how to accomplish them • Mission • A statement of the basic purpose that makes an organization different from others • Strategic planning • The process of establishing an organization’s major goals and objectives and allocating the resources to achieve them 8 | 7

  8. Planning (cont’d) • Establishing goals and objectives • Goal • An end result that an organization is expected to achieve over a one- to ten-year period • Objective • A specific statement detailing what an organization intends to accomplish over a shorter period of time • Properly set goals are • Set at every level in the organization • Consistent (supportive) with each other • Optimized (balanced) to reduce conflicts between goals 8 | 8

  9. Planning (cont’d) • SWOT analysis • The identification and evaluation of a firm’s • Strengths • Weaknesses • Opportunities • Threats • Core competencies • Approaches and processes that a company performs well and may give it an advantage over its competitors 8 | 9

  10. Elements and Examples of SWOT Analysis Figure 8.3 8 | 10

  11. Planning (cont’d) • Types of plans • Plan • An outline of the actions by which an organization intends to accomplish its goals and objectives • Strategic plan • An organization’s broadest plan, a guide for major policy setting and decision making • Tactical plan • A smaller-scale plan to implement a strategy • Operational plan • A plan to implement a tactical plan • Contingency plan • A plan of alternative courses of action if the organization’s other plans are disrupted or become ineffective 8 | 11

  12. Types of Plans Figure 8.4 8 | 12

  13. Organizing the Enterprise • Organizing • The grouping of resources and activities to accomplish some end result in an efficient and effective manner • Leading and motivating • Leading • Influencing people to work toward a common goal • Motivating • Providing reasons for people to work in the best interests of an organization • Directing • The combined processes of leading and motivating 8 | 13

  14. Controlling Ongoing Activities • Controlling • Evaluating and regulating ongoing activities to ensure that goals are achieved • Control function Figure 8.5 8 | 14

  15. Kinds of Managers • Levels of management • Top manager—guides and controls the overall fortunes of an organization • Middle manager—implements the strategy and major policies developed by top management • First-line manager—coordinates and supervises the activities of operating employees • The coordinated effort of all three levels of managers is required to implement the goals of any company 8 | 15

  16. Areas of Management Specialization • Other areas may have to be added, depending on the nature of the firm and the industry Figure 8.7 8 | 16

  17. Areas of Management Specialization • Financial managers • Responsible for an organization’s financial resources • Operations managers • Manage the systems that convert resources into goods and services • Marketing managers • Responsible for facilitating the exchange of products between an organization and its customers or clients • Human resources managers • Manage an organization’s human resources programs • Administrative managers (general managers) • Not associated with any specific functional area; provide overall administrative guidance and leadership 8 | 17

  18. Key Skills of Successful Managers Figure 8.2 8 | 18

  19. Key Skills of Successful Managers (cont’d) • Key management skills • Conceptual skills • Ability to think in abstract terms • Analytic skills • Ability to identify problems, generate alternative solutions, and select the best solution • Interpersonal skills • Ability to deal effectively with other people • Technical skills • Needed to accomplish a specialized activity 8 | 19

  20. Key Skills of Successful Managers (cont’d) • Key management skills (cont’d) • Technical skills • Needed to accomplish a specialized activity • Communication skills • Ability to speak, listen, and write effectively 8 | 20

  21. Leadership • The ability to influence others • Leadership versus management • Formal leadership • Legitimate power of position is the basis for authority • Informal leadership • Not recognized formally by the organization authority 8 | 21

  22. Styles of Leadership • Autocratic • Task-oriented style; workers are told what to do and how to do it, they have no say in the decision making process • Participative • All members of a team are involved in identifying essential goals and developing strategies to reach those goals • Entrepreneurial • Personality-based, the manager seeks to inspire workers with a vision of what can be accomplished to benefit all stakeholders 8 | 22

  23. Which Leadership Style Is Best? • Matching style to the situation • Effective leadership depends on • Interaction among the employees • Characteristics of the work situation • The manager’s personality 8 | 23

  24. Top-Ranked Traits of Successful Female Leaders Source: Accenture survey of 1,000 full-time female workers 22-35 years old. Margin of error +3 percentage points. Multiple responses allowed. USA Today, March 2, 2010, 7B. 8 | 24

  25. Tips for Successful Leadership Table 8.1 8 | 25

  26. Managerial Decision Making • The act of choosing one alternative from among a set of alternatives • Major steps in the managerial decision-making process Figure 8.9 8 | 26

  27. Managerial Decision Making (cont’d) • Identifying the problem or opportunity • Problem • The discrepancy between an actual condition and a desired condition • Opportunity • A “positive” problem • Problem-solving impediments • Preconceptions about the problem • Focusing on unimportant matters while overlooking significant issues • Analyzing symptoms rather than causes • Failing to look ahead 8 | 27

  28. Managerial Decision Making (cont’d) • Generating alternatives • Brainstorming • Encouraging participants to come up with new ideas • “Blast! then refine” • Reevaluating objectives, modifying them if necessary, and devising a new solution to a recurring problem • Trial and error • Selecting an alternative • Satisficing • Choosing an alternative that is not the best possible solution, but one that adequately solves the problem 8 | 28

  29. Managerial Decision Making (cont’d) • Implementing and evaluating the solution • Requires time, planning, preparation of personnel, and evaluation of the results • An effective decision removes the difference between the actual condition and the desired condition • If a problem still exists, managers may • Decide to give the chosen alternative more time • Adopt a different alternative • Start the process all over again 8 | 29

  30. Managing Total Quality • Total Quality Management (TQM) • The coordination of efforts directed at • Improving customer satisfaction • Increasing employee participation • Strengthening supplier partnerships • Facilitating an organizational atmosphere of continuous quality improvement • Benchmarking – evaluating another organization that is superior in order to improve quality • Issues crucial to TQM • Top management commitment • Coordination of efforts 8 | 30

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