Management and Leadership in Today’s Organization Chapter 6 Chapter 6 Learning Goals • • • • • What is the role of management? What are the four types of planning? What are the primary responsibilities of managers in organizing activities? How do leadership styles influence a corporate culture? How do organizations control activities? Chapter 6 Learning Goals (cont’d.) • • • What roles do managers take on in different organizational settings? What set of managerial skills is necessary for managerial success? What trends will affect management in the future? Learning Goal 1 • What is the role of management? – Management is the • Process of guiding development, maintenance, and allocation of resources to attain organizational goals – Managers are • Responsible for developing and carrying out this management process – Primary functions of Managers • • • • Planning Organizing Leading Controlling Management: The process of guiding the development, maintenance, and allocation of resources to attain organizational goals Four Activities of Management 1. Planning 2. Organizing 3. Leading 4. Controlling Learning Goal 2 • What are the four types of planning? – Strategic planning • Creating long-range (one to five years), broad goals • Determining necessary resources to accomplish goals – Tactical planning • Has a shorter time frame (less than one year) • Specific objectives that support the broader strategic goals – Operational planning • Creates specific standards, methods, policies, and procedures used in specific functional areas of organization – Contingency plans • Identify alternative courses of action for unusual or crisis situations Four Types of Planning 1. Strategic Planning • long-range, broad goals 2. Tactical Planning 3. Operational Planning • to implement a strategic plan; shorter term and more specific • creating very specific policies and procedures 4. Contingency Planning • alternative actions for unusual or crisis situations Contingency Planning Some types of contingency planning that were used in preparation for the Year 200 computer bug: – Cities stocked gasoline & diesel fuel for emergency vehicles – Hotel chains stocked food & water for guests if needed – Stores devised paper & pen backups for credit card processing – The Red Cross set up a national Disaster Operations Center Learning Goal 3 • What are the primary responsibilities of managers in organizing activities? – Organizing involves • Coordinating and allocating a firm’s resources in order to carry out its plans • Developing a structure for the people, positions, departments, and activities within the firm by: – Dividing up tasks (division of labor) – Grouping jobs and employees (departmentalization) – Assigning authority and responsibilities (delegation) Levels of Management Top Management Middle Management Supervisory Management CEO Vice President Division Heads, Regional Managers Supervisors, Team Leaders, Foremen Strategic Plans Tactical Plans Operational Plans Sources of Power for Leaders: Type of Power: Derived from: 1. Legitimate position in organization 2. Reward control over rewards 3. Coercive 4. Expert 5. Referent control over punishments extensive knowledge charisma, respect, admiration Automatic Deference to Expert & Legitimate Power can be Harmful – 95% of nurses in a research study were willing to follow doctors’ orders to administer a clearly unsafe dosage of medicine to patients (Source: Hofling et al., 1966, Journal of Nervous and Mental Disease, v. 143, pp. 171-180) – 46% of nurses in another study admitted to a time that they complied with a doctor’s order that they thought was unsafe (Source: Krackow & Blass, 1995, Journal of Social Behavior and Personality, v. 10, pp. 585-594) Learning Goal 4 • How do leadership styles influence a corporate culture – Corporate culture is the set of attitudes, values, and standards of behavior that distinguishes one organization from another • Evolves over time • Based on the accumulated history of the organization, including the vision of the founders • Dominant leadership style within the organization also determines corporate culture Leadership Styles 1. Autocratic directive, controlling 2. Participative democratic, consensual, consultive 3. Free-rein (Laissez-Faire) members have freedom, leaders give ideas and information Learning Goal 5 • How do organizations control activities? – Controlling is the process of assessing the organization’s progress toward accomplishing its goals by: • Setting performance standards (goals) • Measuring performance • Comparing actual performance to established performance standards • Taking corrective action, if necessary • Using information gained from the process to set future performance standards 5-stage Cycle of Controlling 1. Set performance standards 2. Measure performance 3. Compare performance to standards 4. Take corrective action, if needed 5. Use information gathered to set future performance standards Learning Goal 6 • What roles do managers take on in different organizational settings? – Informational role • Manager may act as an information gatherer, an information distributor, or a spokesperson for the company – Interpersonal role • Manager may need to act as a figurehead, a company leader, or a liaison – Decisional role • Manager may have to think like an entrepreneur, make decisions about resource allocation, help resolve conflicts, or negotiate compromises Managerial Roles Type of role: 1. Informational Activities: 2. Interpersonal 3. Decisional figurehead, leader, liaison information gathering, disseminating, spokesperson entrepreneur, resource allocation, resolve conflicts, negotiate The Decision-Making Process 5. Follow up to see if problem is solved 4. Put plan into action 3. Select one or more alternatives 2. Search for solutions 1. Define the problem Learning Goal 7 • What set of managerial skills is necessary for managerial success? – Technical skills • Specialized areas of knowledge and expertise • Ability to apply knowledge – Human Relations skills • Understand human behavior • Communicate effectively with others • Motivate individuals to accomplish their objectives – Conceptual skills • Ability to view the organization as a whole • Understand how the various parts are interdependent • Assess how the organization relates to its external environment Managerial Skills 1. Technical Skills specialized knowledge and expertise 2. Human Relations Skills interpersonal skills 3. Conceptual Skills understanding the big picture 4. Global Management Skills ability to operate in diverse environments Learning Goal 8 • What trends will affect management in the future? – Increasing employee empowerment • Increased autonomy and discretion to make their own decisions • Control of the resources needed to implement decisions – Increasing use of information technology • Managers can make quicker, better-informed decisions • Keeps organization members connected – Growing need for global management skills • Managers must – – – – adapt to a new culture learn a new language manage a diverse workforce operate in a foreign economic system Trends in Management Increased employee empowerment Increased role of information technology Increase in global management Empowering Employees Things needed to empower employees, according to Don Fites, CEO of Caterpillar: • • • • Give them decision-making authority Develop a culture & climate that support it Organize the business to support it Reward employees based on performance Source: Neff & Citrin: Lessons from the Top, 1999, pp. 123-128.