chapter 08 management and organization

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Chapter EightUnderstanding the

Management Process

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PRIDE HUGHES KAPOOR

INTRODUCTION TOBUSINESS

ELEVENTH EDITION


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 of successful managers.

5. Explain the different types of leadership.

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Learning Objectives (cont’d)

6. Discuss the steps in the managerial decision-making process.

7. Describe how organizations benefit from total quality management.

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The Four Main Resources of Management

Managers coordinate an organization’s resources to achieve the goals of the organization.

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Figure 8.1


What Is Management?

The process of coordinating people and other resources to achieve the goals of an organization• Material resources

- The tangible physical resources an organization uses• Human resources

- The people who staff an organization and use the other resources to achieve the goals of the organization

• Financial resources- The funds an organization uses to meet its obligations

to investors and creditors

• Information resources- The information about external business environmental

conditions that a firm uses to its competitive advantage

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Basic Management Functions

The Management Process

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Figure 8.2


Planning

Planning• Establishing organizational goals and deciding

how to accomplish them

Mission• A statement of the basic purpose that makes

an organization different from others

Strategic planning• The process of establishing an organization’s

major goals and objectives and allocating the resources to achieve them

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Planning (cont’d)

Establishing goals and objectives• Goal

- An end result that an organization is expected to achieve over a one- to ten-year period

• Objective- A specific statement detailing what an organization

intends to accomplish over a shorter period of time

• Properly set goals are- Set at every level in the organization- Consistent (supportive) with each other- Optimized (balanced) to reduce conflicts

between goals

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Planning (cont’d)

SWOT analysis• The identification and evaluation of a firm’s

- Strengths- Weaknesses- Opportunities- Threats

Core competencies• Approaches and processes that a company

performs well and may give it an advantage over its competitors

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Elements and Examples of SWOT Analysis

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Figure 8.3


Planning (cont’d)

Types of plans• Plan

- An outline of the actions by which an organization intends to accomplish its goals and objectives

• Strategic plan- An organization’s broadest plan, a guide for major policy

setting and decision making

• Tactical plan- A smaller-scale plan to implement a strategy

• Operational plan- A plan to implement a tactical plan

• Contingency plan- A plan of alternative courses of action if the organization’s

other plans are disrupted or become ineffective

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Types of Plans

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Figure 8.4


Organizing the Enterprise

Organizing• The grouping of resources and activities to

accomplish some end result in an efficient and effective manner

Leading and motivating• Leading

- Influencing people to work toward a common goal

• Motivating- Providing reasons for people to work in the best

interests of an organization

• Directing- The combined processes of leading and motivating

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Controlling Ongoing Activities

Controlling• Evaluating and regulating ongoing activities to

ensure that goals are achieved

Control function

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Figure 8.5


Kinds of Managers

Levels of management• Top manager—guides and controls

the overall fortunes of an organization

• Middle manager—implements the strategy and major policies developed by top management

• First-line manager—coordinates and supervises the activities of operating employees

The coordinated effort of all three levels of managers is required to implement the goals of any company

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Areas of Management Specialization

Other areas may have to be added, depending on the nature of the firm and the industry

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Figure 8.7


Areas of Management Specialization

Financial managers• Responsible for an organization’s financial resources

Operations managers• Manage the systems that convert resources into goods

and services Marketing managers

• Responsible for facilitating the exchange of products between an organization and its customers or clients

Human resources managers• Manage an organization’s human resources programs

Administrative managers (general managers)• Not associated with any specific functional area; provide

overall administrative guidance and leadership

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Key Skills of Successful Managers

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Figure 8.2


Key Skills of Successful Managers (cont’d)

Key management skills• Conceptual skills

- Ability to think in abstract terms

• Analytic skills- Ability to identify problems, generate alternative

solutions, and select the best solution

• Interpersonal skills- Ability to deal effectively with other people

• Technical skills- Needed to accomplish a specialized activity

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Key Skills of Successful Managers (cont’d)

Key management skills (cont’d)• Technical skills

- Needed to accomplish a specialized activity

• Communication skills

• Ability to speak, listen, and write effectively

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Leadership

The ability to influence others Leadership versus management Formal leadership

• Legitimate power of position is the basis for authority

Informal leadership• Not recognized formally by the

organization authority

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Styles of Leadership

Autocratic• Task-oriented style; workers are told what to do and

how to do it, they have no say in the decision making process

Participative• All members of a team are involved in identifying

essential goals and developing strategies to reach those goals

Entrepreneurial• Personality-based, the manager seeks to inspire

workers with a vision of what can be accomplished to benefit all stakeholders

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Which Leadership Style Is Best?

Matching style to the situation

Effective leadership depends on• Interaction among the employees• Characteristics of the work situation• The manager’s personality

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Top-Ranked Traits of Successful Female Leaders

Source: Accenture survey of 1,000 full-time female workers 22-35 years old. Margin of error +3 percentage points. Multiple responses allowed. USA Today, March 2, 2010, 7B.

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Tips for Successful Leadership

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Table 8.1


Managerial Decision Making

The act of choosing one alternative from among a set of alternatives

Major steps in the managerial decision-making process

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Figure 8.9


Managerial Decision Making (cont’d)

Identifying the problem or opportunity• Problem

- The discrepancy between an actual condition and a desired condition

• Opportunity- A “positive” problem

• Problem-solving impediments- Preconceptions about the problem- Focusing on unimportant matters while overlooking

significant issues- Analyzing symptoms rather than causes- Failing to look ahead

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Generating alternatives• Brainstorming

- Encouraging participants to come up with new ideas• “Blast! then refine”

- Reevaluating objectives, modifying them if necessary, and devising a new solution to a recurring problem

• Trial and error Selecting an alternative

• Satisficing- Choosing an alternative that is not the best possible

solution, but one that adequately solves the problem

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Implementing and evaluating the solution• Requires time, planning, preparation of

personnel, and evaluation of the results

• An effective decision removes the difference between the actual condition and the desired condition

• If a problem still exists, managers may- Decide to give the chosen alternative more time- Adopt a different alternative- Start the process all over again

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Managing Total Quality

Total Quality Management (TQM)• The coordination of efforts directed at

- Improving customer satisfaction- Increasing employee participation- Strengthening supplier partnerships- Facilitating an organizational atmosphere of

continuous quality improvement

Benchmarking – evaluating another organization that is superior in order to improve quality

Issues crucial to TQM• Top management commitment• Coordination of efforts

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chapter 08 management and organization

Business

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management process

organizations resources

human resources

organization different

area of management

learning objectives