1-1
McGraw-Hill
© 2003 The McGraw-Hill Companies, Inc. All rights reserved.
1-2
Chapter
1
McGraw-Hill
Managing
© 2003 The McGraw-Hill Companies, Inc. All rights reserved.
1-3
Learning Objectives

After studying Chapter 1, you will know:






the major challenges of managing in the new era
the drivers of competitive advantage for your company
the functions of management and how they are evolving in
today’s business environment
the nature of management at different organizational levels
the skills you need to be an effective manager
what to strive for as you manage your career
McGraw-Hill
© 2003 The McGraw-Hill Companies, Inc. All rights reserved.
1-4
Managing In The New Era
Managerial practices will always separate effective from
ineffective organizations
 Four key elements are new elements in business today

Internet
Globalization
New Era
Management
Knowledge
Management
McGraw-Hill
Collaboration
Across
“Boundaries”
© 2003 The McGraw-Hill Companies, Inc. All rights reserved.
Managing In The New Era (cont.)

1-5
The Internet


communication technologies are driving massive change
initial enthusiasm for e-business has dwindled



25% of publicly-held Web companies became profitable in 2002
most profitable Web companies sell information-based
products that don’t require shipping
old economy types now using the Internet as a tool to solidify
their future
McGraw-Hill
© 2003 The McGraw-Hill Companies, Inc. All rights reserved.
Managing In The New Era (cont.)

1-6
Globalization


far more than in the past, enterprises are global
competing globally is not easy


companies often overestimate the attractiveness of foreign
markets
even small firms that do not operate on a global scale must
make strategic decisions based on international considerations

McGraw-Hill
face intense competition from high-quality foreign producers
© 2003 The McGraw-Hill Companies, Inc. All rights reserved.
Managing In The New Era (cont.)

Knowledge management

practices aimed at discovering and harnessing an
organization’s intellectual resources



1-7
unlock people’s expertise, skills, wisdom, and relationships
intellectual capital is the collective brainpower of the
organization
Collaboration across “boundaries”

capitalize on the ideas of people outside the traditional
company “boundaries”

occurs between as well as within organizations

McGraw-Hill
e.g., must effectively capitalize on customers’ brains
© 2003 The McGraw-Hill Companies, Inc. All rights reserved.
Managing For Competitive Advantage

1-8
Best managers and companies deliver all four
Cost
Competitiveness
Innovation
Competitive
Advantage
Quality
McGraw-Hill
Speed
© 2003 The McGraw-Hill Companies, Inc. All rights reserved.
Managing For Competitive Advantage
(cont.)

Innovation

the introduction of new goods and services




1-9
comes from people
must be a strategic goal
must be managed properly
Quality



excellence of a product, including its attractiveness, lack of
defects, reliability, and long-term durability
importance of quality has increased dramatically
catering to customers’ other needs creates more perceived
quality
McGraw-Hill
© 2003 The McGraw-Hill Companies, Inc. All rights reserved.
Managing For Competitive Advantage
(cont.)

Speed




1 - 10
fast and timely execution, response, and delivery of results
often separates winners from losers in world competition
requirement has increased exponentially
Cost competitiveness



costs are kept low enough so that you can realize profits and
price your products at levels that are attractive to consumers
key is efficiency - accomplishing goals by using resources
wisely and minimizing waste
little things can save big money

McGraw-Hill
cost cuts involve tradeoffs
© 2003 The McGraw-Hill Companies, Inc. All rights reserved.
The Functions Of Management

1 - 11
Management


the process of working with people and resources to
accomplish organizational goals
good managers must be:



effective - achieve organizational goals
efficient - achieve goals with minimum waste of resources
there are timeless principles of management


McGraw-Hill
still important for making managers and companies great
must add fresh thinking and new approaches
© 2003 The McGraw-Hill Companies, Inc. All rights reserved.
The Functions Of Management (cont.)

1 - 12
The manager who does not devote adequate attention and
resources to all four functions will fail
Leading
Organizing
Controlling
Planning
McGraw-Hill
© 2003 The McGraw-Hill Companies, Inc. All rights reserved.
The Functions Of Management (cont.)

1 - 13
Planning


specifying the goals to be achieved and deciding in advance
the appropriate actions taken to achieve those goals
delivering strategic value - planning function for the new era


McGraw-Hill
a dynamic process in which the organization uses the brains of
its members and of stakeholders to identify opportunities to
maintain and increase competitive advantage
process intended to create more value for the customer
© 2003 The McGraw-Hill Companies, Inc. All rights reserved.
The Functions Of Management (cont.)

1 - 14
Organizing


assembling and coordinating the human, financial, physical,
informational, and other resources needed to achieve goals
building a dynamic organization - organizing function for the
new era


McGraw-Hill
viewing people as the most valuable resource
the future requires building flexible organizations
© 2003 The McGraw-Hill Companies, Inc. All rights reserved.
The Functions Of Management (cont.)

Leading



1 - 15
stimulating people to be high performers
in the new era, managers must be good at mobilizing people to
contribute their ideas
Controlling




monitoring progress and implementing necessary changes
makes sure that goals are met
new technology makes it possible to achieve more effective
controls
for the future, will have to be able to monitor continuous
learning and changing
McGraw-Hill
© 2003 The McGraw-Hill Companies, Inc. All rights reserved.
1 - 16
Management Levels

Top-level managers (strategic managers)





senior executives responsible for the overall management and
effectiveness of the organization
focus on long-term issues
emphasize the survival, growth, and effectiveness of the firm
concerned with the interaction between the organization and
its external environment
titles include Chief Executive Officer (CEO), Chief Operating
Officer (COO), company presidents and vice presidents
McGraw-Hill
© 2003 The McGraw-Hill Companies, Inc. All rights reserved.
Management Levels (cont.)

1 - 17
Middle-level managers (tactical managers)




located between top-level and frontline managers in the
organizational hierarchy
responsible for translating strategic goals and plans into more
specific objectives and activities
traditional role was that of an administrative controller who
bridged the gap between higher and lower levels
provide operating skills and practical problem solving the
keep the company working
McGraw-Hill
© 2003 The McGraw-Hill Companies, Inc. All rights reserved.
Management Levels (cont.)

Frontline managers (operational managers)





1 - 18
lower-level managers who supervise the operational activities
of the organization
directly involved with nonmanagement employees
increasingly being called on to be innovative and
entrepreneurial
titles include supervisor or sales manager
Working leaders with broad responsibilities

in small firms and large firms that have adapted to the times,
managers have strategic, tactical, and operational
responsibilities
McGraw-Hill
© 2003 The McGraw-Hill Companies, Inc. All rights reserved.
Transformation of Frontline
Management Roles and Tasks
1 - 19
Changing roles
• From operational implementers to aggressive
entrepreneurs
Primary value
• Driving business performance by focusing on
productivity, innovation and growth within frontline
units
Key activities
• Creating and pursuing new opportunities for the
business
• Attracting and developing resources and
competencies
• Managing continuous performance improvement
within the unit
McGraw-Hill
© 2003 The McGraw-Hill Companies, Inc. All rights reserved.
Transformation of Middle-Level
Management Roles and Tasks
Changing roles
• From administrative controllers to supportive
coaches
Primary value
• Providing the support and coordination to bring
large company advantage to the independent
frontline units
Key activities
• Developing individuals and supporting their
activities
1 - 20
• Linking dispersed knowledge, skills, and best
practices across units
• Managing the tension between short-term
performance and long-term ambition
McGraw-Hill
© 2003 The McGraw-Hill Companies, Inc. All rights reserved.
Transformation of Top-Level
Management Roles and Tasks
1 - 21
Changing roles
• From resource allocators to institutional leaders
Primary value
• Creating and embedding a sense of direction,
commitment and challenge to people throughout
the organization
Key activities
• Challenging embedded assumptions while
establishing a stretching opportunity horizon and
and performance standards
• Institutionalizing a set of norms and values to
support cooperation and trust
• Creating an overarching corporate purpose and
ambition
McGraw-Hill
© 2003 The McGraw-Hill Companies, Inc. All rights reserved.
1 - 22
Management Skills
Skill - specific ability that results from knowledge,
information, and aptitude
 Technical skill




ability to perform a specialized task that involves a certain
method or process
managers at higher levels rely less on technical skills
Conceptual and decision skills


ability to identify and resolve problems for the benefit of the
organization
assume greater importance as manager acquires more
responsibility
McGraw-Hill
© 2003 The McGraw-Hill Companies, Inc. All rights reserved.
Management Skills (cont.)

1 - 23
Interpersonal and communication skills

ability to lead, motivate, and communicate effectively with
others


people skills
important throughout your career at every level of
management
McGraw-Hill
© 2003 The McGraw-Hill Companies, Inc. All rights reserved.
1 - 24
You And Your Career

Jobs are no longer as secure for managers as they used to be



organizations still try to develop and retain good employees
employee loyalty and commitment are still important
Companies offering “employability” to workers tend to be
more successful


provide training and other learning experiences
employees perform work with greater responsibility
McGraw-Hill
© 2003 The McGraw-Hill Companies, Inc. All rights reserved.
You And Your Career (cont.)

Be both a specialist and generalist

specialist - expert in something



1 - 25
provide concrete, identifiable value to the firm
generalist - knowing about a variety of business functions so
that you can understand work with different perspectives
Be self-reliant


take responsibility for yourself, your actions, and your career
regardless of where you work
think and act like an entrepreneur


McGraw-Hill
look for opportunities to contribute in new ways
generate constructive change
© 2003 The McGraw-Hill Companies, Inc. All rights reserved.
You And Your Career (cont.)

1 - 26
Be connected



establish many good working relationships
be a team player with strong interpersonal skills
all business is a function of human relationships

McGraw-Hill
competitive advantage depends upon you and other people
© 2003 The McGraw-Hill Companies, Inc. All rights reserved.
1 - 27
Keys to Career Management
1.
2.
3.
4.
5.
6.
7.
8.
Think of yourself as a business.
Define your product: What is your area of expertise?
Know your target market: To whom are you going to sell this?
Be clear on why your customer buys from you. What is your
“value proposition” - what are you offering that causes him to
use you?
As in any business, strive for quality and customer satisfaction, even
if your customer is just someone else in your organization - like
your boss.
Know your profession or field and what’s going on there.
Invest in your own growth and development, the way a company
invests in research and development. What new products will you
be able to provide?
Be willing to consider changing your career.
McGraw-Hill
© 2003 The McGraw-Hill Companies, Inc. All rights reserved.
You And Your Career (cont.)

1 - 28
Actively manage your relationship with your organization

two ways to think about the nature of the relationships
between you and your employer

view yourself as an employee



two-way, mutually-beneficial exchange relationship


McGraw-Hill
model for just getting by
contributions likely to be minimal
think about how you can contribute and act accordingly
 figure out new ways to add value
organization likely provide full and fair rewards, support further
personal development, and offer more gratifying work environment
© 2003 The McGraw-Hill Companies, Inc. All rights reserved.
Two Relationships: Which Will You
Choose?
#1
You as a passive employee
1 - 29
#2
You as an active contributor
in a productive relationship
Employer
You
You
McGraw-Hill
Your
Organization
© 2003 The McGraw-Hill Companies, Inc. All rights reserved.
Managerial Action Is Your Opportunity
To Contribute
1 - 30
You
Your
Organization
McGraw-Hill
Managerial Actions
1. Delivering Strategic
Value
2. Building a Dynamic
Organization
3. Mobilizing People
4. Learning and
Changing
© 2003 The McGraw-Hill Companies, Inc. All rights reserved.
You And Your Career (cont.)

1 - 31
Survive and thrive







be prepared to move from project to project, team to team
be a master at something that the world values
develop a strong network of colleagues who can help with
current and future projects
have entrepreneurial skills that help you act as if you were
running your own business
love technology
market yourself
be willing to constantly improve and even reinvent yourself
McGraw-Hill
© 2003 The McGraw-Hill Companies, Inc. All rights reserved.