Chapter Seven

Understanding the Management

Process

What Is Management?

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

organization

Resources– Material resources

• physical inputs to production an organization uses

– Human resources• people who staff the organization and use the other

resources to achieve the goals of the organization

– Financial resources• funds the organization uses to meet its obligations to

investors and creditors

– Information resources• data about internal and external business environmental

conditions that the firm uses to create a competitive advantage

Strategic Planning

The process of establishing an organization’s major goals and allocating the resources to achieve them

Planning

• Establishing goals and objectives– Goal

• An end result that the organization is expected to achieve over a one-to-ten year period (get a degree in Business Administration)

– Objective• A specific statement detailing what the

organization intends to accomplish over a shorter period of time (take Bus 1100 and get an A)

“Plan B”

– Contingency plan• A plan of alternative courses of action if

the organization’s other plans are disrupted or become ineffective

(If I don’t do well in Bus 1100, I’ll get a degree in Psychology)

Who’s Doing the Planning?

Levels of Management

-Top manager—guides and controls the overall fortunes of the organization-plan the future

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

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

CEO, COO

Dept head, plant mgr

Supervisor, foreman

What Makes Effective Managers?

Key Management Skills

– Technical skill• A special skill needed to accomplish a

specialized activity-1st line and mid mgrs

– Conceptual skill• The ability to think in abstract terms-top mgrs

– Interpersonal skill• The ability to deal effectively with other people

-Needed by all mgrs

Leadership

The ability to influence others

Formal – uses legitimate power of position &

corporate authority to influence others

Informal – uses charisma & special

knowledge to gain voluntary

allegiance

Styles of Leadership

1) Authoritarian (UPS) -Manager holds all authority & responsibility -Top to bottom communication

2) Laissez-faire (Apple) -Manager delegates authority to employees -Allows subordinates to work with a minimal interference -Horizontal communication among work groups

3) Democratic (Saturn) -Manager holds final responsibility but delegates authority to others -Communication is active upward and downward

So, which leadership style is best?

Which Leadership Style Is Best?none and all

• Match style to the situation

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

The Managerial Decision-Making Process

1) Identifying the problem or opportunity

– Problem• The discrepancy between an actual condition

and a desired condition-have low sales, want higher sales

Opportunity• A “positive” problem-have good sales, see a

way to make more sales

Managerial Decision-Making

2) Generating alternatives

– BrainstormingEncouraging participants to come up with new ideas to solve a problem

– “Blast! Then Refine” Erase past solutions from choices

and devise a new solution from scratch

-- Trial and error

Just do it an watch what happens

Managerial Decision-Making Process

3) Selecting an alternative– Satisficing

• Choosing an alternative that is not the best possible solution, but one that adequately solves the problem-needed when time/money or both are scarce

Managerial Decision-Making Process

4) Implementing your choice

- Requires time, planning, preparationof personnel, and contingencies

5) Evaluating the solution

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

– If its not working• give it more time• change it • scrap it