© Image source Ltd. CHAPTER 6 Management and Leadership in Today’s Organizations The Future of Business The Essentials 4th Edition Gitman & McDaniel Chapter 6 Copyright ©2009 by South-Western, a division of Cengage Learning. All rights reserved Prepared by Deborah Baker CHAPTER 6 Learning Goals 1 What is the role of management? 2 What are the four types of planning? 3 What are the primary functions of managers in organizing activities? 4 How do leadership styles influence a corporate culture? 2 CHAPTER 6 Learning Goals (continued) 5 How do organizations control activities? 6 What roles do managers take on in different organizational settings? 7 What set of managerial skills is necessary for managerial success? 8 What trends will affect management in the future? 3 The Role of Management 1 1 What is the role of management? 4 The Role of Management management The process of guiding the development, maintenance, and allocation of resources to attain organizational goals. 1 5 The Role of Management efficiency Using the least amount of resources to accomplish the organization’s goal. effectiveness The ability to produce the desired result or good. 1 6 CONCEPT check Define the term management. What are the four key functions of managers? What is the difference between efficiency and effectiveness? 1 7 Planning 2 2 What are the four types of planning? 8 Planning planning The process of deciding what needs to be done to achieve organizational objectives; identifying when and how it will be done; and determining by whom it should be done. 2 9 The Four Types of Planning Strategic Tactical Operational Contingency 2 10 Strategic Planning mission statement A formal document that states an organization’s purpose and reason for existing and describes its basic philosophy. 2 11 CONCEPT check What is the purpose of planning, and what is needed to do it effectively? Identify the unique characteristics of each type of planning. 2 12 Organizing 3 3 What are the primary functions of managers in organizing activities? 13 Organizing Dividing up tasks 3 (division of labor) Grouping jobs and employees (departmentalization) Assigning authority and responsibilities (delegation) 14 The Managerial Pyramid 3 Top Management Strategic Plans Middle Management Tactical Plans Supervisory Management Operational Plans Exhibit 6.4 15 The Managerial Pyramid Top Management Middle Management Supervisory Management CEO, CFO, COO, CIO Regional Manager Supervisor President Division head Team leader Governor Director Foreman General Director Plant manager Sales manager 3 16 CONCEPT check Explain the managerial function of organizing. What is the managerial pyramid? 3 17 Leading, Guiding, and Motivating Others 4 4 How do leadership styles influence a corporate culture? 18 Leading, Guiding, and Motivating Others leadership The process of guiding and motivating others toward the achievement of organizational goals. 4 19 Primary Sources of Power 4 Legitimate power Derived from individual’s position in an organization Reward power Derived from individual’s control over rewards Coercive power Derived from individual’s ability to threaten negative outcomes Expert power Derived from individual’s extensive knowledge Referent power Derived from individual’s charisma and respect/admiration inspired 20 Leadership Styles of Managers Amount of authority held by the leader Autocratic Style Participative Style Free-Rein (Laissez-Faire) Style Amount of authority held by group members 4 Exhibit 6.5 21 Styles of Participative Leaders Democratic Consensual Consultative 4 22 Leadership Style The most effective leadership style depends on: 4 Characteristics of the subordinates Complexity of the task Source of the leader’s power Stability of the environment 23 Employee Empowerment empowerment The process of giving employees increased autonomy and discretion to make decisions, as well as control over the resources needed to implement those decisions. 4 24 Corporate Culture corporate culture The set of attitudes, values, and standards of behavior that distinguishes one organization from another. Based on: The accumulated history of the organization The dominant leadership style in the organization Heroes, myths, symbols, and ceremonies 4 25 CONCEPT check How do leaders influence other people’s behavior? How can managers empower employees? What is corporate culture? 4 26 Controlling 5 5 How do organizations control activities? 27 Importance of the Control Process 5 Helps managers determine the success of planning, organizing, and leading Directs employee behavior toward achieving organizational goals Provides a means of coordinating employee activities and integrating resources 28 CONCEPT check Describe the control process. Why is the control process important to the success of the organization? 5 29 Managerial Roles 6 6 What roles do managers take on in different organizational settings? 30 Managerial Roles Informational Roles Monitor Gathers information relevant to organization Disseminator Provides information where it is needed Spokesperson Transmits information to people outside the organization Interpersonal Roles Figurehead Represents the company in a symbolic way Leader Guides and motivates employees to achieve goals Liaison Acts as a go-between among individuals, inside and outside Decisional Roles 6 Entrepreneur Searches out new opportunities and initiates change Disturbance Handler Handles unexpected events and crises Resource Allocator Designates use of organizational resources Negotiator Represents the company at negotiating processes 31 Exhibit 6.7 Managerial Decision Making programmed decisions Decisions made in response to frequently occurring routine situations. nonprogrammed decisions Responses to infrequent, unforeseen, or very unusual problems and opportunities where the manager does not have a precedent to follow in decision making. 6 32 The Decision-Making Process 1. Define the problem 2. Identify possible solutions 3. Select one or more alternatives 4. Put the plan into action 5. Follow up to see if problem is solved 6 33 Exhibit 6.8 CONCEPT check What are the three types of managerial roles? Give examples of things managers might do when acting in each of the different types of roles. List the five steps in the decision-making process. 6 34 Managerial Skills 7 7 What set of managerial skills is necessary for managerial success? 35 Managerial Skills 7 Technical Skills A manager’s specialized areas of knowledge and expertise, and the ability to apply that knowledge Human Relations Skills A manager’s interpersonal skills used to accomplish goals through the use of human resources Conceptual Skills A manager’s ability to view the organization as a whole, understand the interdependencies, and its relation to external environment 36 CONCEPT check Define the basic managerial skills. How important is each of these skill sets at the different levels of the management pyramid? 7 37 Trends in Management and Leadership 8 8 What trends will affect management in the future? 38 Trends in Management and Leadership Crisis management Growing use of information technology Need for global management skills 8 39 Lessons Learned About Crisis Management Learn from one crisis at a time. Make life easier for your employees. Communicate for safety. Prepare for the next big one. Take care of everybody. Empower the workforce. Be flexible with company assets. 8 Exhibit 6.10 Source: “New Lessons to Learn,” Fortune, October 3, 2005, pp. 87-88. Copyright © 2005 by Time, Inc. All rights reserved. Reproduced by permission. 40 CONCEPT check How can information technology aid in decision making? What are three principles of managing multinational cultures? Describe several guidelines for crisis management. 8 41