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Objectives 1. An understanding of the importance of management to society and individuals 2. An understanding of the role of management 3. An ability to define management in several different ways 4. An ability to list and define the basic functions of management 5. Working definitions of managerial effectiveness and managerial efficiency 6. An understanding of basic management skills and their relative importance to managers Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 1 -2

The Importance of Management l Managers influence all phases of modern organizations. Copyright ©

The Importance of Management Influences all phases of an organization Operations Markets Workforce Copyright

The Management Task l In addition to understanding the significance of managerial work to themselves and society and its related benefits, prospective managers need to know what the management task entails. l To the society: l Our society couldn’t exist or improve without managers guiding its organizations l Effective management is the main source of developed countries, and the most needed source of developing ones Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 1 -5

The Management Task l Management positions have increased from 10% to 18% of all jobs since 1950. l Managers come from varying backgrounds l To themselves (the managers): l Managerial positions can yield: l High salaries l Status l Interesting work l Personal growth l Intense feeling of accomplishment Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 1 -6

The Management Task Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 1

The Management Task l Top managers and CEOs Salaries (or compensations) should be determined by how much value they add to the company. The more value they add, the more compensation they deserve. l The 20 highest-paid European executives make only a third as much as the 20 highest-pain American executives. Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 1 -9

The Role of Management l The role of managers is to guide organizations toward goal accomplishment. l All organizations exist for certain purposes or goals l Because the process of management emphasizes the achievement of goals, managers must keep organizational goals in mind at all times. Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 1 -10

Defining Management l The term “Management” can be used in different ways. It can be defined as: l The process that managers follow in order to accomplish organizational goals l. A body of knowledge l. A cumulative body of information that furnishes insights on how to manage l The l. A individuals who guide and direct organizations career devoted to the task of guiding and directing 1 -11 Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall

Defining Management l Most commonly used definition in this book: l Management: is the process of reaching organizational goals by working with and through people and other organizational resources. l. A broad agreement that management encompasses the following three main characteristics: 1. It is a process or series of continuing and related activities. 2. It involves and concentrates on reaching organizational goals. 3. It reaches these goals by working with and through people and other organizational resources. Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 1 -12

The Management Process: Management Functions l The four basic management functions/activities that make up the management process are: 1) 2) 3) 4) Planning Organizing Influencing Controlling Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 1 -13

Basic Management Functions: 1. Planning l Planning: planning involves choosing tasks that must be performed to attain organizational goals, outlining how the tasks must be performed, and indicating when they should be performed. l Planning is essential to getting the “right” things done. l Planning is concerned with organizational success in short and long term Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 1 -14

Basic Management Functions: 2. Organizing l Organizing: organizing can be thought of as assigning the tasks developed under the planning function to various individuals or groups within the organization. l It is a mechanism to put plans into action. l It includes determining tasks and groupings of work, in an adaptable and flexible way to meet challenges as circumstances change. l Tasks are organized so that the output of individuals contributes to the success of departments, which, in turn, contributes to the success of divisions, which ultimately contributes to the success of the organization. Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 1 -15

Basic Management Functions: 3. Influencing l Influencing (motivating - leading – directing – actuating): is guiding the activities of organization members in appropriate directions. It is concerned primarily with people within organizations. l An appropriate direction is any direction that helps the organization move toward goal attainment. l Purpose: to increase productivity. l Compare: Human-oriented production vs. taskoriented work Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 1 -16

Basic Management Functions: 4. Controlling l Controlling: is the management function through which managers: 1. 2. 3. Gather information that measures recent performance within the organization. Compare present performance to pre-established performance standards. From this comparison, determine whether he organization should be modified to meet preestablished standards. l Controlling is an ongoing (continual) process. Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 1 -17

Mistakes Commonly Made by Managers Copyright © 2009 Pearson Education, Inc. Publishing as Prentice

Management Process and Goal Attainment l The four functions of management are integrally related l They cannot be separated in practice. l They are interrelated because the performance of one depends on the performance of the others (examples? ) l Managers use these activities for reaching organizational goals Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 1 -19

Management Process and Goal Attainment Copyright © 2009 Pearson Education, Inc. Publishing as Prentice

Management Process and Goal Attainment l Management Characteristics that Best Describe Excellently Run Companies: l Bias for action l Closeness to customer l Autonomy and entrepreneurship l Productivity l Hands-on, l “Sticking l Simple through people value-driven orientation to the knitting’’ organizational form with lean staff l Simultaneous loose-tight properties Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 1 -21

Management and Organizational Resources l Organizational Resources: composed of all assets available for activation during the production process l Four 1. 2. 3. 4. l basic types: Human Monetary Raw materials Capital The following figure shows, organizational resources are combined, used, and transformed into finished products during the production process. Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 1 -22

Management and Organizational Resources Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall

Management and Organizational Resources 1. Human Resources l 2. Monetary Resources l 3. Are the money used to purchase goods and services for the organization Raw Materials l 4. Are the people who work for an organization (Knowledge & skills) Are ingredients used directly in the manufacturing of products (e. g. rubber, wood, …etc) Capital Resources Are machines and equipments used during the process (what’s Copyright ©manufacturing 2009 Pearson Education, Inc. Publishing as Prentice Hall the effect of worn-out 1 -24 l

Managerial Effectiveness l Managerial Effectiveness: is the management’s use of organizational resources in meeting organizational goals. l Managers must strive to be both effective and efficient in using org. resources l If organizations are using their resources to attain their goals, the managers are said to be effective. l Managerial effectiveness can be measure by degrees. The closer an organization comes to achieving its goals, the more effective its managers are considered to be. l Managerial effectiveness, then, exists on a continuum ranging from ineffective to effective. Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 1 -25

Managerial Effectiveness l Managerial effectiveness, then, exists on a continuum ranging from ineffective to effective. Ineffecti ve Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall Effective 1 -26

Managerial Efficiency l Managerial Efficiency: is the proportion of total organizational resources that contribute to productivity during the manufacturing process. l Efficient means that a large proportion of resources contributes to productivity. Inefficient means that a small proportion of total resources contributes to productivity. l The more resources wasted or unused during the production process, the more inefficient the manager, and vice versa. l Organizational resources includes raw materials, Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 1 -27

Managerial Efficiency l Like management effectiveness, management efficiency is best described as being on a continuum ranging from inefficient to efficient. Inefficie nt Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall Efficient 1 -28

Relation Between Managerial Effectiveness & Efficiency l. A manager can be effective without being efficient, and vice versa. l To maximize organizational success, both effectiveness and efficiency are essential. l For example: A manager could be relatively ineffective (little goal attainment) because of major 1 inefficiencies (waste/poor utilization of resources) (situation # ) l Also, 2 a manager can be effective despite being inefficient (situation # ) (if demand for goods is so high that the manager can get an extremely high price Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 1 -29

Relation Between Managerial Effectiveness & Efficiency 3 4 Maximum org. success 1 2 Copyright

Management Skills: The Key to Management Success l Management Skills: is the ability to carry out the process of reaching organizational goals by working with and through people and other organizational recourses. l It is important to learn and develop these skills, because they are the prerequisite for management success l Companies focus on improving the skills of their managers because management skills are so critical to the success of the organization Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 1 -31

Management Skills: The Key to Management Success Management Skill: A Classic View l Managers’ ability to perform is a result of their managerial skills With the necessary management skills → perform well, be successful Without the necessary management skills → perform poorly, be unsuccessful Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 1 -32

Management Skills: The Key to Management Success Management Skill: A Classic View The three types of skills are important for successful management performance: 1. Technical Skills: l involve the ability to apply specialized knowledge and expertise to work-related techniques and procedures. (examples? ) l Work with things (processes & physical objects) 2. Human Skills: l Build cooperation within the team being led l Working with people (attitudes &communication, individual &groups) 3. Conceptual Skills: l The ability to see the organization as a whole, to understand how various functions of the org. complement one another, how the org. relates to its as environment, & how change in 1 -33 one Copyright © 2009 Pearson Education, Inc. Publishing Prentice Hall

Management Skills: The Key to Management Success Management Skill: A Classic View l What does this chart explain? l What is the denominator of all management levels? Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 1 -34

Management Skills: The Key to Management Success Management Skill: A Contemporary (Modern) View 1. Define major activities that managers typically perform 2. List skills needed to carry out these activities successfully Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 1 -35

Management Skills: The Key to Management Success Management Skill: A Contemporary (Modern) View The major activities that modern managers typically perform (three basic types): 1. Task-related activities: l Critical management-related duties (include: short-term planning, clarifying objectives of jobs in org. , monitoring operations & performance. 2. People-related activities: l Managing people (include: provide support & engorgement, recognition for achievements & contributions, develop skills & confidence of org members, consult when making decisions, empower Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 1 -36

Management Skills: The Key to Management Success Management Skill: A Contemporary (Modern) View The major activities that modern managers typically perform (three basic types): 3. Change-related activities: l Modifying organizational components (include: monitor org. external environment, propose new strategies & vision, encourage innovative thinking, taking risks to promote needed change) Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 1 -37

Management Skills: The Key to Management Success Management Skill: A Contemporary (Modern) View l Not a list of all skills that managers need to be successful, but an important list containing many of the necessary skills Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 1 -38

Management Skills: The Key to Management Success Management Skill: A focus of This Book l Skills categories are too broad to be practical l They contain more narrowly focused skills (practical & essential abilities) l These skills are not valuable on themselves. They are specialized tools to help managers meet important challenges and successfully carry out (=perform = do) the management functions. l Management skill is generally a prerequisite for management success. Managers should strive to develop such skills. l The value of individual management skills will vary from manager to another depending on the specific Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 1 -39