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

Figure 6. 1: The Four Main Resources of Management Copyright © Cengage Learning. All

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

Planning …establishing organizational goals and deciding how to accomplish them. Copyright © Cengage Learning.

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

Figure 6. 3: Types of Plans Copyright © Cengage Learning. All rights reserved. Chapter

Strategic Plan …an organization’s broadest plan, developed as a guide for major policy setting

Tactical Plan …a smaller-scale plan developed to implement a strategy. Copyright © Cengage Learning.

Operational Plan …a type of plan designed to implement tactical plans. Copyright © Cengage

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

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

Figure 6. 4: The Control Function Copyright © Cengage Learning. All rights reserved. Chapter

Managers’ Classifications § Level in organization § Area of management Copyright © Cengage Learning.

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

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

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

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

Informational Roles Ø Monitor Ø Disseminator Ø Spokesperson Copyright © Cengage Learning. All rights

Leadership …the ability to influence others. § Formal § Informal Copyright © Cengage Learning.

Styles of Leadership Ø Authoritarian Ø Laissez-faire Ø Democratic Copyright © Cengage Learning. All

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

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

Problem …the discrepancy between an actual condition and a desired condition. Copyright © Cengage

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

“Satisfice” …describes a solution that is only adequate and not ideal. Copyright © Cengage

Implementation Requires § Time § Planning § Preparation of personnel § Evaluation of results

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

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