CHAPTER 1: MANAGEMENT
FUNDAMENTALS
Business Leadership: Management Fundamentals
John R. Schermerhorn, Jr., Barry Wright, and Lorie Guest
© John Wiley & Sons Canada, Ltd.
PLANNING
AHEAD —
CHAPTER 1
LEARNING
GOALS
o Understand the current workplace
environment in Canada
o Identify the characteristics of an
organization
o Understand who managers are and
what they do
o Describe the management process and
how managerial skills and
competencies are learned
OVERVIEW OF THE NEW WORKPLACE
• The dynamics of ever-present change extend into the workplace
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and raise a host of new career challenges.
Smart people commit their energies and intellect to continuous
learning and personal development.
Companies with a future are committed to people.
Companies with a future offer inspirational leadership and
rewards, respect people, and provide supportive work
environments.
High performing companies gain extraordinary results from
people.
WORKING TODAY
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Talent
Diversity
Globalization
Technology
Ethics
Careers
TALENT
• People and their talents are the ultimate foundations of
organizational performance.
• Intellectual capital is the collective brainpower or
shared knowledge of a workforce that can be used to
create value.
• A knowledgeable worker’s mind is a critical asset to
employers and adds to the intellectual capital of an
organization.
DIVERSITY
• Workforce diversity reflects differences with respect to
gender, age, race, ethnicity, religion, sexual orientation, and
able-bodiedness.
• A diverse and multicultural workforce both challenges and
offers opportunities to employers.
• Many call diversity a “business imperative” and view it as an
asset.
DIVERSITY
(CONT’D)
• How diversity bias can occur in the workplace:
– Prejudice: the display of negative, irrational attitudes toward
members of a diverse population.
– Discrimination: actively denies minority members the full
benefits of organizational membership.
– Glass ceiling effect: an invisible barrier limiting career
advancement of women and minorities.
VIDEO: A SCIENCE GLASS CEILING
- GLOBE & MAIL
A Science Glass Ceiling
(external link)
GLOBALIZATION
• National boundaries of world business have largely
disappeared.
• Globalization is the worldwide interdependence of resource
flows, product markets, and business competition that
characterize the new economy.
© John Wiley & Sons Canada Ltd.
TECHNOLOGY
• Continuing transformation of the modern workplace
through:
- The Internet
- World Wide Web
- Computer networking
- Information technology
- Telecommuting/virtual teaming/mobile offices
• Increasing demand for knowledge workers with the skills to
fully use technology.
VIDEO: SOCIAL MEDIA REVOLUTION
Social Media Revolution by Erik Qualman
(external link)
ETHICS
• Ethics
- Code of moral principles that set standards of conduct of
what is good and right
• Ethical expectations for modern businesses:
- Integrity and ethical leadership at all levels
- Sustainable development
- Natural environment protection
- Consumer protection
- Human rights
CAREERS
• Core workers, contract workers, and part-time workers
• People must be prepared to be any one of these types of
workers
• People must make sure that their skills are portable and of
current value in employment markets
EARLY CAREER SURVIVAL SKILLS
• Critical skills for success in the new workplace
– Mastery
– Networking
– Entrepreneurship
– Love of technology
– Marketing
– Passion for renewal
WHAT IS AN ORGANIZATION?
• A collection of people working together to achieve a
common purpose
• Organizations provide useful goods and/or services that
return value to society and satisfy customer needs
ORGANIZATIONS
(CONT’D)
• Organizations are open systems
– Composed of interrelated parts that function together to
achieve a common purpose
– Interact with their environments
– Transform resource inputs into product outputs (goods and
services)
– Environmental feedback tells organization how well it is
meeting the needs of customers and society
FIGURE 1.3 ORGANIZATIONS AS
OPEN SYSTEMS
ORGANIZATIONS
(CONT’D)
• Organizational performance
– “Value creation” is a very important notion for organizations
– Value is created when an organization’s operations adds
value to the original cost of resource inputs
– When value creation occurs:
• Businesses earn a profit
• Nonprofit organizations add wealth to society
© John Wiley & Sons Canada Ltd.
ORGANIZATIONAL PERFORMANCE
• Productivity
- An overall measure of the quantity and quality of outputs
relative to the cost of inputs
• Performance effectiveness
- An output measure of task or goal accomplishment
• Performance efficiency
- An input measure of the resource costs associated with
goal accomplishment
FIGURE 1.4 PRODUCTIVITY AND THE
DIMENSIONS OF ORGANIZATIONAL
PERFORMANCE
CHANGING NATURE OF
ORGANIZATIONS
• Workplace changes that provide a context for studying
management:
– Renewed belief in employees
– Disappearance of “command-and-control”
– Emphasis on teamwork
– Prominence of technology
– Embrace of networking
– New workforce expectations
– Concern for work-life balance
– Focus on speed
MANAGERS IN THE NEW
WORKPLACE
• Importance of human resources and managers
– People are not ‘costs to be controlled.’
– High performing organizations treat people as valuable
strategic assets.
– Managers must ensure that people are treated as strategic
assets.
MANAGERS
• Directly support and help activate the work efforts and
performance accomplishments of others
• The people who managers help are the ones whose tasks
represent the real work of the organization
LEVELS OF MANAGEMENT
• Top managers: responsible for the performance of an
organization as a whole or for one of its larger parts
• Middle managers: in charge of relatively large departments
or divisions
• Team leaders or supervisors: in charge of a small work group
of non-managerial workers
FIGURE 1.5 MANAGEMENT LEVELS IN A
TYPICAL BUSINESS AND NON-PROFIT
ORGANIZATIONS
RESPONSIBILITIES OF TEAM
LEADERS
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Plan meetings and work schedules
Clarify goals and tasks, and gather ideas for improvement
Appraise performance and counsel team members
Recommend pay raises and new assignments
Recruit, train, and develop team members
Plan meetings and work schedules
Clarify goals and tasks, and gather ideas for improvement
Appraise performance and counsel team members
Recommend pay raises and new assignments
Recruit, train, and develop team members
TYPES OF MANAGERS
• Line managers: are responsible for work activities that
directly affect organization’s outputs
• Staff managers: use technical expertise to advise and
support the efforts of line workers
• Functional managers: are responsible for a single area of
activity
• General managers: are responsible for more complex units
that include many functional areas
• Administrators: work in public and nonprofit organizations
ORGANIZATIONAL EFFECTIVENESS
• In order to attain sustainable high performance,
organizations use resources effectively to accomplish
missions and objectives.
- The Systems Resource Approach focuses on resource
acquisition
- The Internal Process Approach focuses on operations
efficiency
- The Goal Approach focuses on accomplishing key
objectives
- Strategic Constituencies focus on stakeholder impact
MANAGERIAL PERFORMANCE
• Accountability is the requirement of one person to answer to
a higher authority for relevant performance results.
• Effective managers fulfill performance accountability by
helping others to achieve high performance outcomes and
experience satisfaction in their work.
MANAGERIAL PERFORMANCE
(CONT’D)
• Quality of work life (QWL)
– An indicator of the overall quality of human experiences in
the workplace
– QWL indicators:
• Fair pay
• Safe working conditions
• Opportunities to learn and use new skills
• Room to grow and progress in a career
• Protection of individual rights
• Pride in work itself and in the organization
HIGH PERFORMING MANAGERS
• Are well informed of their team’s needs
• Work alongside those they supervise
• Provide advice and develop support for their team
• Help others perform to the best of their abilities
THE ORGANIZATION AS AN UPSIDEDOWN PYRAMID
• Reflects the changing nature of work today
• A manager’s job is to support workers’ efforts
• Whole organization is devoted to serving the customer
FIGURE 1.6 – THE ORGANIZATION AS
AN UPSIDE-DOWN PYRAMID
MANAGEMENT PROCESS
• Managers achieve high performance for their organizations by
best utilizing its human and material resources.
• Management is the process of planning, organizing, leading, and
controlling the use of resources to accomplish performance
goals.
• All managers are responsible for the four functions.
• The functions are carried on continually.
FIGURE 1.7 THE FOUR FUNCTIONS
OF MANAGEMENT
FUNCTIONS OF MANAGEMENT
• Planning:
- The process of setting objectives and determining what
actions should be taken to accomplish them
• Organizing:
- The process of assigning tasks, allocating resources, and
arranging the coordinated activities of individuals and
groups to implement plans
FUNCTIONS OF MANAGEMENT
(CONT’D)
• Leading:
- The process of arousing people’s enthusiasm to work
hard and direct their efforts to fulfill plans and
accomplish objectives
• Controlling:
- The process of measuring work performance, comparing
results to objectives, and taking corrective action as
needed
MANAGERIAL ROLES AND
ACTIVITIES
• Informational roles:
- Involves giving, receiving, and analyzing information
• Interpersonal roles:
- Involves interactions with persons inside and outside the
work unit
• Decisional roles:
- Involves using information to make decisions, solve
problems, or address opportunities
FIGURE 1.8 MINTZBERG’S 10
MANAGERIAL ROLES
CHARACTERISTICS OF MANAGERIAL
WORK
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Managers work long hours
Managers work at an intense pace
Managers work at fragmented and varied tasks
Managers work with many communications media
Managers work largely through interpersonal relationships
MANAGERIAL AGENDAS AND
NETWORKS
• Agenda setting
- Development of action priorities for one’s job
- Include goals and plans that span long and short time frames
• Networking
- Process of building and maintaining positive relationships with
people whose help may be needed to implement one’s work
agendas
• Social Capital
- Capacity to attract support and help from others in order to
get things done
ESSENTIAL MANAGERIAL SKILLS
• Learning
- The change in a behaviour that results from experience
• Lifelong learning
– The process of continuously learning from daily experiences
and opportunities
• Career success depends on real commitment to learning
• Not just formal classroom learning
ESSENTIAL MANAGERIAL SKILLS
(CONT’D)
• Skill: the ability to translate knowledge into action that
results in desired performance
• Technical skill: the ability to apply a special proficiency or
expertise to perform particular tasks
• Human or interpersonal skill: the ability to work well in
cooperation with others
- Emotional intelligence is the ability to manage ourselves
and relationships effectively
• Conceptual skill: the ability to think critically and analytically
to solve complex problems
FIGURE 1.9 KATZ’S ESSENTIAL
MANAGERIAL SKILLS
MANAGERIAL COMPETENCY
• A skill-based capability that contributes to high performance in a
management job
COMPETENCIES FOR MANAGERIAL
SUCCESS
• Communication
• Teamwork
• Self-management
• Leadership
• Critical thinking
• Professionalism
© John Wiley & Sons Canada Ltd.
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