Management Introduction to Business Managers wear many hats

Management Introduction to Business

Managers wear many hats and must bring with them an entire toolkit of skills—conceptual skills, human skills, and technical skills—in order to reach organizational goals and objectives effectively.

Managerial Levels

Management Theory Although the world of business has changed tremendously over time, the four functions of management—planning, organizing, leading, and controlling—originally identified by Fayol in the early 1900 s still hold. What has changed is where and how managers perform these four primary functions.

Planning within a business ranges from the big picture to the very granular - from the organization’s foundational plan (its mission and vision) and set of strategic plans to tactical plans to its daily operations plans and contingency plans. Each one builds upon the other. Without a welldeveloped set of plans, an organization is unlikely to succeed.

SWOT Analysis

Organization The structure of an organization can have a tremendous impact on the organization’s ability to react to both internal and external forces. Organizational structure also determines the managers’ span of control, communication channels, and operational responsibilities. The organization should be structured in such a way that it reflects the company’s mission and supports its customer and product/services goals to the greatest advantage.

Divisional Structure

Functional Structure

Matrix Structure

Leadership There is a spectrum of leadership styles. Some of the most effective leaders are those who can adopt different styles to fit the situation at hand.

Management Styles 1. Autocratic/Authoritarian 2. Laissez-faire/Free Rein 3. Participative/Democratic

Management Styles: Autocratic • Decision-making power is concentrated in the manager. • Managers do not take any suggestions or consider initiatives from subordinates. • Is effective for quick decision making but is generally not successful in fostering employee engagement or maintaining worker satisfaction. • Can be useful in crisis situations, when it’s impractical to solicit employee input.

Management Styles: Laissez-faire • Known as “hands-off” management because the manager delegates the tasks to the followers while providing little or no direction. • Can sometimes result in a lack of productivity, cohesion, and satisfaction. • Effective when workers have the skills to work independently, are self-motivated, and are held accountable for results. • Managers of creative or innovative employees often adopt this approach in order to foster creativity.

Management Styles: Democratic • Manager shares the decision-making authority with group members. • Can help employees feel more invested in decisions, outcomes, or the choices they’ve made, because they have a say in them. • Effective during a transitional period when managers need to guide the workforce through the change. • Seeking input from employees at many levels within the organization can uncover people with invaluable experience, advice, and solutions.

Types of Leaders 1. Transformational 2. Transactional 3. Narcissistic

Type of Leadership: Transformational • Work with subordinates to identify needed change, create and share an inspiring vision, and bring about change together with committed members of a group. • Serves to enhance the motivation, morale, and job performance of followers.

Type of Leadership: Transactional • Focuses on supervision, organization, and performance. • Pays attention to their followers’ work in order to find fault or deviation and gain their compliance through a system of rewards and punishments. Two factors that form reward/punishment system: 1. Contingent reward 2. Management by exception

Type of Leadership: Narcissistic • Known for being interested only in themselves, at the expense of others, such as employees or group members. • Cons: arrogance, self-absorption, and a personal egotistic need for power. • Pros: takes charge and tend to take control of leaderless groups.

Control The control function of management has two aims: 1. Make order out of chaos 2. Evaluate whether the company’s efforts and resources are being maximized The “control function” doesn’t give management license to be manipulative or autocratic.

The Process of Control The process of control usually consists of the following four parts: 1. Setting standards 2. Measuring performance against those standards 3. Analyzing performance 4. Taking corrective action

Setting Standards and Objectives Standards and objectives • Guide managerial decision making • Stated in monetary terms = costs, profits • Stated in other terms = units produced, number of defective products, quality, customer satisfaction S. M. A. R. T operational objectives • Specific, Measurable, Achievable, Realistic, Time constrained

Performance Measurement Performance measurement is the process of collecting, analyzing, and/or reporting information regarding the performance of an individual, group, organization, system, or component. The rubric for measuring organizational performance is called a performance metric and includes: 1. Establishing critical processes/customer requirements 2. Identifying specific, quantifiable outputs of work 3. Establishing targets against which results can be scored

Analyzing Performance: The Balanced Score Card

Practice Question How could you apply the control process to your performance in this course? Set a SMART goal, measure your performance, analyze your performance, and take any needed corrective action.

Quick Review • What are three levels of management and the key skills needed by managers? • What are the key functions of management? • What types of planning and decision making do managers engage in? How do they help organizations reach their goals? • What are the organizing functions of management and common types of organizational structure? • What are common management and leadership styles, and when are they most effective? • Why is control an essential part of effective management, and what are the steps of the control process?