Chapter Seven

1. Chapter Seven The Nature of Management

2. Management A process designed to achieve anorganization’s objectives by using itsresources effectively and efficientlyin a changing environment.

3. Managers Individuals in organizations who make decisions about the use of resources and who are concerned with planning, organizing, leading, and controlling the organization’s activities to reach its objectives.

4. Managers Planningactivities toachieve the organization'sobjectives Organizingresources andactivities toachieve theorganization’sobjectives Staffingtheorganizationwith qualifiedpeople Directingemployees’activitiestowardachievementof objectives Controllingtheorganization’sactivitiesto keep iton course The Functions ofManagement

5. Where Planning Starts • Objectives - The ends or results desired by the organization and are derived from the organization’s mission. • Mission - The statement of an organization’s fundamental purpose and basic philosophy.

6. Types of Plans Specify Actions toAchieve Tactical Plans(very short-term) OperationalPlans Designed to ImplementStrategic Objectives(usually one year or less) TacticalPlans StrategicPlans Establish Long-RangeObjectives

7. Crisis Management, or Contingency Planning, Requires that Managers Plan for “When” rather than “If” a Disaster Occurs.

8. TopManagementPresident, CEO,ExecutiveVice Presidents Middle ManagementPlant Managers, Division Managers,Department Managers First-Line ManagementForeman, Supervisors, Office Managers The Levels of Management

9. The Top 5 Highest Paid CEOs Annual Salary Company CEO • Michael Dell Dell Computer $235,912K • Sanford Weill Citigroup $216,183K • Gerald Levin AOL Time Warner $164,183K • John Chambers Cisco Systems $157,305K • Henry Silverman Cendant $137,447K Source: “Forbes Top CEOs,” from http://www.forbes.com (accessed July 9,2001)..

10. MostImportant Controlling Controlling Controlling Organizing Organizing Organizing Directing Directing Directing Planning Planning Planning Staffing Staffing Staffing LeastImportant TopManagers MiddleManagers First-LineManagers Importance of Management Functionsto Managers in Each Level

11. Areas of Management • Financial Management • Production and Operations Management • Human Resources Management • Marketing Management • Administrative Management

12. Skills Needed by Managers • Leadership Skills • Technical Expertise • Conceptual Skills • Analytical Skills • Human Relations Skills

13. Three Basic Stylesof Leadership • Democratic • Autocratic • Free-rein

14. Investor’s Business Daily’s 10 Secrets To Success: How you think is everything. Decide upon your true dreams and goals. Take action. Never stop learning. Be persistent and work hard. Learn to analyze details. Focus your time and money. Don’t be afraid to innovate; Be different. Be honest and dependable; Take responsibility: Otherwise Nos. 1-9 don’t matter. Organizations are Successful Because of Successful Leaders Source: “IBD’S 10 SECRETS TO SUCCESS,” Investor’s Business Daily, October 23, 2001, A6.

15. Motivate Employees 1 3 Communicate Clear Vision 2 1 Create Effective Growth Strategy 3 5 Listen to Customer Needs 4 7 Set Ethical Standards 5 6 Build a Quality Management Team 6 4 Boost Shareholder Wealth 7 2 LEADERSHIP: The Most Important Role of a CEO RANKING AMONG CONSUMERS THE MANAGER’S ROLE RANKING AMONG EXECS Source: Wirthlin Worldwide

16. Where Do Managers Come From? • Good Managers are Made, not Born: • Promoting employees from within • Hiring managers from other organizations • Hiring managers graduating from colleges and universities

17. Steps in the Management Decision Making Process DevelopOptions Recognize andDefine theDecision Situation AnalyzeOptions Select theBest Option Implementthe Decision Monitor theConsequences

18. The Reality of Management There are Only Two Basic Activities of Management: • Figuring out what to do despite uncertainty, great diversity, and an enormous amount of potentially relevant information, and, • Getting things done through a large and diverse set of people despite having little direct control over most of them.

19. Human Behavior Principles Effects of goal setting, rewarding behavior, and learning Employee Characteristics Job skills and attitudes Work Characteristics Available technology and materials Time constraints Demand for output An Example of Managerial Decision Making: Influencing Employees’ Performance ImplementingDecision Information Gathered Using Informationto Make Decision Determine Alternatives Retraining of employees Initiating work teams Developing individual per- formance reward system Evaluate Alternatives Cost Feasibility of implementing Expected outcome Choose Alternative Developing individual per- formance reward system Identify Rewards to be Used Set Standards for Performance Communicate Standards to Employees Ensure Employees are Adequately Trained Determine Method of Measuring Performance Collect Performance Data Administer Rewards to Employees Reaching Standards

20. The Payoffs of Management • Management Position Median Annual Salary General Accounting $ 69,845 HR Manager $ 74,900 Building & Facilities $ 68,532 Administrative Services $ 59,682 Sales Promotion $ 68,750 Customer Service $ 60,000 Regional Sales $ 92,250 Regional Marketing $ 83,380 Operations $ 77,175 Plant Manager $102,573

21. Solve the Dilemma • Evaluate Infinity’s current situation and analyze its strengths and weaknesses. • Evaluate the opportunities for Infinity, including using its current strategy and propose alternative strategies. • Suggest a plan for Infinity to compete successfully over the next ten years.

22. Explore Your Career Options In which types of industries or sectors are managers the most likely to be hired?

23. Additional Discussion Questions and Exercises 1. What is the difference between strategic plans and tactical plans? 2. Which of the five functions of management is most closely concerned with evaluation? 3. Which level of management is most likely to need technical skills? 4. Describe the individuals with whom managers are involved in networking. What is the value of networking for managers?

24. Chapter 7 Quiz 1. Which of the following skills involves the ability to think creatively, to think in abstract parts, and to see how terms fit together to form a whole? a. analytical skills b. conceptual skills c. human relation skills d. technical skills 2. Which describes free-rein leaders? a. Leaders make all decisions and tell employees what to do and how to do it. b. Leaders allow employees to get involved in decisions. c. Leaders allow top management to make all decisions and tell employees what to do and how to do it. d. Leaders let employees work without much interference.

25. Chapter 7 Quiz 3. An agenda is most closely associated with a. networking. b. technical expertise. c. a calendar. d. financial resources. 4. The ability to deal with people is known as (an) a. analytical skill. b. conceptual skill. c. human relation skill. d. technical skill.

26. Multiple Choice Questions about the Video • What style of leadership does Gerstner likely use in empowering IBM employees? a. autocratic b. democratic c. dictator d. free rein e. socialistic • IBM has renewed its commitment to mainframe computers and ______. a. customers b. suppliers c. middle management d. top management e. intranets