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.
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Chapter 6 | Slide 2
Management
…the process of coordinating people
and other resources to achieve the
goals of an organization.
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Chapter 6 | Slide 3
Figure 6.1: The Four Main
Resources of Management
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Chapter 6 | Slide 4
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
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Chapter 6 | Slide 5
Figure 6.2: The Management Process
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Chapter 6 | Slide 6
Planning
…establishing organizational goals
and deciding how to accomplish them.
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Chapter 6 | Slide 7
Planning
 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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Chapter 6 | Slide 8
Establishing
Goals and Objectives
 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
 Objective
A specific statement detailing what the organization
intends to accomplish over a shorter period of time.
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Chapter 6 | Slide 9
Plan
…an outline of the actions by which
an organization intends to accomplish
its goals and objectives.
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Chapter 6 | Slide 10
Figure 6.3: Types of Plans
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Chapter 6 | Slide 11
Strategic Plan
…an organization’s broadest plan,
developed as a guide for major policy
setting and decision making.
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Chapter 6 | Slide 12
Tactical Plan
…a smaller-scale plan developed
to implement a strategy.
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Chapter 6 | Slide 13
Operational Plan
…a type of plan
designed to implement
tactical plans.
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Chapter 6 | Slide 14
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.
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Chapter 6 | Slide 15
Organizing
…the grouping of resources and
activities to accomplish some end result
in an efficient and effective manner.
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Chapter 6 | Slide 16
Leading and Motivating
 Leading ─ influencing people to work toward
a common goal
 Motivating ─ providing reasons for people to
work in best interests of an organization;
people’s motivations vary
Leading + Motivating = Directing
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Chapter 6 | Slide 17
Controlling
…the process of evaluating and
regulating ongoing activities to ensure
that goals are achieved.
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Chapter 6 | Slide 18
Figure 6.4: The Control Function
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Chapter 6 | Slide 19
Managers’ Classifications
 Level in organization
 Area of management
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Chapter 6 | Slide 20
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
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Chapter 6 | Slide 21
Figure 6.5: Management Levels
Found in Most Companies
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Chapter 6 | Slide 22
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.
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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
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Chapter 6 | Slide 24
Effective Managers
 Possess certain
important skills
 Are able to use those
skills in a number of
managerial roles
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Chapter 6 | Slide 25
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
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Chapter 6 | Slide 26
Role
…a set of expectations that one must fulfill.
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Chapter 6 | Slide 27
Managerial Roles
 Decisional ─ involves aspects of decision
making
 Interpersonal ─ deals with people
 Informational ─ gathers or provides information
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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
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Chapter 6 | Slide 29
Interpersonal Roles
 Figurehead
 Liaison
 Leader
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Chapter 6 | Slide 30
Informational Roles
 Monitor
 Disseminator
 Spokesperson
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Chapter 6 | Slide 31
Leadership
…the ability to influence others.
 Formal
 Informal
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Chapter 6 | Slide 32
Styles of Leadership
 Authoritarian
 Laissez-faire
 Democratic
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Chapter 6 | Slide 33
Best Leadership Style?
The ‘best’ leadership seems to
occur when the leader’s style
matches the situation.
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Chapter 6 | Slide 34
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.
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Chapter 6 | Slide 35
Figure 6.7: Major Steps in Decision Making
…the act of choosing one alternative
from a set of alternatives.
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Chapter 6 | Slide 36
Problem
…the discrepancy between an actual
condition and a desired condition.
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Chapter 6 | Slide 37
Rules of Decision Making
 Know what decision should accomplish
 Allow time to make decision
 “Sleep on” critical/complex decisions
 Ask the right questions
 Seek other opinions
 Understand the risks
 Be aware of resources
 Obtain new information
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Chapter 6 | Slide 38
Generating Alternatives
1. Brainstorm
2. “Blast! Then Refine.”
3. Trial and Error
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Chapter 6 | Slide 39
“Satisfice”
…describes a solution that is only
adequate and not ideal.
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Chapter 6 | Slide 40
Implementation Requires
 Time
 Planning
 Preparation of personnel
 Evaluation of results
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Chapter 6 | Slide 41
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.
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Chapter 6 | Slide 42
Components of TQM
 Customer Satisfaction
 Employee Participation
 Strengthening Supplier Partnerships
 Continuous Quality Improvement
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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
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Chapter 6 | Slide 44
Financial Benefits of TQM
 Lower operating costs
 Higher return on sales/investments
 Ability to use premium pricing
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Chapter 6 | Slide 45
Successful Manager Today
 Long work hours
 Time spent getting information from individuals
 Personal skills
•
•
•
•
Oral communication
Written communication
Computer
Critical thinking
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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 . McClendon
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_bestbosses08_CEO-Compensation_Rank.html.
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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
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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.
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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
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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.
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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.
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Chapter 6 | Slide 52