Chapter 6 Understanding the Management Process Learning Objectives
Chapter 6 Understanding the Management Process
Learning Objectives 1. Define what management is. 2. Describe the four basic management functions: planning, organizing, leading and motivating, and controlling. 3. Distinguish among the various kinds of managers in terms of both level and area of management. 4. Identify the key management skills and the managerial roles. 5. Explain the different types of leadership. 6. Discuss the steps in the managerial decision-making process. 7. Describe how organizations benefit from total quality management. 8. Summarize what it takes to become a successful manager today. Copyright © Cengage Learning. All rights reserved. Chapter 6 | Slide 2
Management …the process of coordinating people and other resources to achieve the goals of an organization. Copyright © Cengage Learning. All rights reserved. Chapter 6 | Slide 3
Figure 6. 1: The Four Main Resources of Management Copyright © Cengage Learning. All rights reserved. Chapter 6 | Slide 4
Organizational Resources § Material ─ tangible physical resources § Human ─ people, most important asset § Financial ─ funds organization uses to meet obligations to investors and creditors § Informational ─ knowledge about changes in the industry Copyright © Cengage Learning. All rights reserved. Chapter 6 | Slide 5
Figure 6. 2: The Management Process Copyright © Cengage Learning. All rights reserved. Chapter 6 | Slide 6
Planning …establishing organizational goals and deciding how to accomplish them. Copyright © Cengage Learning. All rights reserved. Chapter 6 | Slide 7
Planning Ø Mission A statement of the basic purpose that makes an organization different from others. Ø Strategic planning The process of establishing an organization’s major goals and objectives and allocating the resources to achieve them. Copyright © Cengage Learning. All rights reserved. Chapter 6 | Slide 8
Establishing Goals and Objectives Ø Goal An 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 Ø Objective A specific statement detailing what the organization intends to accomplish over a shorter period of time. Copyright © Cengage Learning. All rights reserved. Chapter 6 | Slide 9
Plan …an outline of the actions by which an organization intends to accomplish its goals and objectives. Copyright © Cengage Learning. All rights reserved. Chapter 6 | Slide 10
Figure 6. 3: Types of Plans Copyright © Cengage Learning. All rights reserved. Chapter 6 | Slide 11
Strategic Plan …an organization’s broadest plan, developed as a guide for major policy setting and decision making. Copyright © Cengage Learning. All rights reserved. Chapter 6 | Slide 12
Tactical Plan …a smaller-scale plan developed to implement a strategy. Copyright © Cengage Learning. All rights reserved. Chapter 6 | Slide 13
Operational Plan …a type of plan designed to implement tactical plans. Copyright © Cengage Learning. All rights reserved. Chapter 6 | Slide 14
Contingency Plan …a plan that outlines alternative courses of action that may be taken if an organization’s other plans are disrupted or become ineffective. Copyright © Cengage Learning. All rights reserved. Chapter 6 | Slide 15
Organizing …the grouping of resources and activities to accomplish some end result in an efficient and effective manner. Copyright © Cengage Learning. All rights reserved. Chapter 6 | Slide 16
Leading and Motivating Ø Leading ─ influencing people to work toward a common goal Ø Motivating ─ providing reasons for people to work in best interests of an organization; people’s motivations vary Leading + Motivating = Directing Copyright © Cengage Learning. All rights reserved. Chapter 6 | Slide 17
Controlling …the process of evaluating and regulating ongoing activities to ensure that goals are achieved. Copyright © Cengage Learning. All rights reserved. Chapter 6 | Slide 18
Figure 6. 4: The Control Function Copyright © Cengage Learning. All rights reserved. Chapter 6 | Slide 19
Managers’ Classifications § Level in organization § Area of management Copyright © Cengage Learning. All rights reserved. Chapter 6 | Slide 20
Levels of Management § Top Manager Guides/controls overall fortunes of an organization § Middle Manager Implements the strategy and major policies developed by top management § First-Line Manager Supervises the activities of operating employees Copyright © Cengage Learning. All rights reserved. Chapter 6 | Slide 21
Figure 6. 5: Management Levels Found in Most Companies Copyright © Cengage Learning. All rights reserved. Chapter 6 | Slide 22
Figure 6. 6: Areas of Management Specialization Spotlight How Much Do Executives in Selected Business Areas Earn Yearly? Source: www. execunet. com, accessed November 25, 2008. Copyright © Cengage Learning. All rights reserved. Chapter 6 | Slide 23
Manager Specialists § Financial Manager Responsible for financial resources § Operations Manager Manages systems that convert resources into goods/services § Marketing Manager Facilitates exchange of products between organization and its customers/clients § Human Resources Manager Manages employee programs and employment practices § Administrative Manager Not associated with any specific function; provides overall administrative guidance/leadership Copyright © Cengage Learning. All rights reserved. Chapter 6 | Slide 24
Effective Managers ü Possess certain important skills ü Are able to use those skills in a number of managerial roles Copyright © Cengage Learning. All rights reserved. Chapter 6 | Slide 25
Key Management Skills § Technical ability to accomplish a specialized activity § Conceptual ability to think in abstract terms § Interpersonal ability to deal effectively with people inside and outside organization Copyright © Cengage Learning. All rights reserved. Chapter 6 | Slide 26
Role …a set of expectations that one must fulfill. Copyright © Cengage Learning. All rights reserved. Chapter 6 | Slide 27
Managerial Roles § Decisional ─ involves aspects of decision making § Interpersonal ─ deals with people § Informational ─ gathers or provides information Copyright © Cengage Learning. All rights reserved. Chapter 6 | Slide 28
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 Copyright © Cengage Learning. All rights reserved. Chapter 6 | Slide 29
Interpersonal Roles Ø Figurehead Ø Liaison Ø Leader Copyright © Cengage Learning. All rights reserved. Chapter 6 | Slide 30
Informational Roles Ø Monitor Ø Disseminator Ø Spokesperson Copyright © Cengage Learning. All rights reserved. Chapter 6 | Slide 31
Leadership …the ability to influence others. § Formal § Informal Copyright © Cengage Learning. All rights reserved. Chapter 6 | Slide 32
Styles of Leadership Ø Authoritarian Ø Laissez-faire Ø Democratic Copyright © Cengage Learning. All rights reserved. Chapter 6 | Slide 33
Best Leadership Style? The ‘best’ leadership seems to occur when the leader’s style matches the situation. Copyright © Cengage Learning. All rights reserved. Chapter 6 | Slide 34
Rules for Leaders 1. Audit your company cultures. 2. Informed people don’t fear change. 3. Beware “Aspirational Accounting. ” 4. Empower your people─turn them loose. 5. Prevent erosion of human assets. 6. Be generous with what you know. 7. Expand your roster. 8. Don’t judge a man by the size of his wallet. 9. Harness your skills for good. 10. Groom your people for success. Fast Company, “ 25 Rules for Leaders, ” http: //www. fastcompany. com/articles/2002/05/rtsd_quotes. html. Copyright © Cengage Learning. All rights reserved. Chapter 6 | Slide 35
Figure 6. 7: Major Steps in Decision Making …the act of choosing one alternative from a set of alternatives. Copyright © Cengage Learning. All rights reserved. Chapter 6 | Slide 36
Problem …the discrepancy between an actual condition and a desired condition. Copyright © Cengage Learning. All rights reserved. Chapter 6 | Slide 37
Rules of Decision Making ü Know what decision should accomplish ü Allow time to make decision ü “Sleep on” critical/complex decisions ü Ask the right questions ü Seek other opinions ü Understand the risks ü Be aware of resources ü Obtain new information Copyright © Cengage Learning. All rights reserved. Chapter 6 | Slide 38
Generating Alternatives 1. Brainstorm 2. “Blast! Then Refine. ” 3. Trial and Error Copyright © Cengage Learning. All rights reserved. Chapter 6 | Slide 39
“Satisfice” …describes a solution that is only adequate and not ideal. Copyright © Cengage Learning. All rights reserved. Chapter 6 | Slide 40
Implementation Requires § Time § Planning § Preparation of personnel § Evaluation of results Copyright © Cengage Learning. All rights reserved. Chapter 6 | Slide 41
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. Copyright © Cengage Learning. All rights reserved. Chapter 6 | Slide 42
Components of TQM ü Customer Satisfaction ü Employee Participation ü Strengthening Supplier Partnerships ü Continuous Quality Improvement Copyright © Cengage Learning. All rights reserved. Chapter 6 | Slide 43
Critical Issues That 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 Copyright © Cengage Learning. All rights reserved. Chapter 6 | Slide 44
Financial Benefits of TQM ü Lower operating costs ü Higher return on sales/investments ü Ability to use premium pricing Copyright © Cengage Learning. All rights reserved. Chapter 6 | Slide 45
Successful Manager Today § Long work hours § Time spent getting information from individuals § Personal skills • • Oral communication Written communication Computer Critical thinking Copyright © Cengage Learning. All rights reserved. Chapter 6 | Slide 46
Highest Paid CEOs, 2008 Rank 1 Name Lawrence J. Ellison Company Oracle Pay ($mil) 192. 92 2 Frederic M. Poses Trane 127. 1 3 Aubrey K. Mc. Clendon Chesapeake Energy 116. 89 4 Angelo R. Mozilo Countrywide Financial 102. 84 5 Howard D. Schultz Starbucks 98. 6 6 Nabeel Gareeb MEMC Electronic Mats 79. 56 7 Daniel P. Amos Aflac 75. 16 8 Lloyd C. Blankfein Goldman Sachs Group 73. 72 9 Richard D. Fairbank Capital One Financial 73. 17 10 Bob R. Simpson XTO Energy 72. 27 11 Richard S. Fuld, Jr. Lehman Bros Holdings 71. 9 Source: Forbes. com, “CEO Compensation, ” http: //www. forbes. com/lists/2008/12/lead_bestbosses 08_CEO-Compensation_Rank. html. Copyright © Cengage Learning. All rights reserved. Chapter 6 | Slide 47
Chapter Quiz 1. People in an organization are what type of resources? a) b) c) d) e) Material Informational Inventory Human Financial Copyright © Cengage Learning. All rights reserved. Chapter 6 | Slide 48
Chapter Quiz (cont. ) 2. In executing their functions, managers must first a) b) c) d) e) organize activities. establish goals. motivate employees. evaluate activities. select employees. Copyright © Cengage Learning. All rights reserved. Chapter 6 | Slide 49
Chapter Quiz (cont. ) 3. Roles such as entrepreneur, disturbance handler, and resource allocator are types of _______roles. a) b) c) d) e) interpersonal informational decisional leadership ownership Copyright © Cengage Learning. All rights reserved. Chapter 6 | Slide 50
Chapter Quiz (cont. ) 4. One type of leadership style is a) b) c) d) e) laissez-faire. CEO. entrepreneur. negotiator. bureaucratic. Copyright © Cengage Learning. All rights reserved. Chapter 6 | Slide 51
Chapter Quiz (cont. ) 5. All of the following are reasons for a greater focus on quality by U. S. firms except a) b) c) d) e) competition from foreign firms. customers that are more demanding. unpredictability on Wall Street. poorer financial performance. reduced market share. Copyright © Cengage Learning. All rights reserved. Chapter 6 | Slide 52
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