chapter
1
Management
McGraw-Hill/Irwin
Principles of Management
© 2008 The McGraw-Hill Companies, Inc., All Rights Reserved.
Learning Objectives
1. Describe the basic functions of management
2. Identify where in an organization managers are
located
3. Discuss the challenges people encounter as they
become first-line managers
4. Describe the roles managers adopt to perform the
basic functions of management
5. Outline the competencies managers must have to be
effective
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Management and
Managers
• Management: The art of getting things done
through people in the organization
• Managers give organizations a sense of
purpose and direction
• Managers create new ways of producing and
distributing goods and services
• Managers change how the world works through
their actions
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Leaders versus Managers
Process
Management
Leadership
Vision
* Plans and budgets
Establishment * Develops process steps
and set timelines
* Set the direction and develops
the vision
* Develops strategic plans to
achieve the vision
Development
and
Networking
* Organizes and staffs
* Maintain structure
* Aligns organization
* Communicates the vision,
mission, and direction
Vision
Execution
* Controls processes
* Identifies problems
* Motivates and inspires
* Energizes employees to
overcome barriers to change
Vision Outcome * Manages vision order
* Promotes useful and dramatic
and predictability
changes
* Provides expected results
Source: Adapted from “Leadership versus management: What’s the difference?”, The Journal for Quality and Participation, 2006
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Functions of
Management
Planning &
Strategizing
Controlling
Organizing
Leading &
Developing
Planning &
Strategizing
• Planning – a formal process whereby managers choose goals,
identify actions, allocate responsibility for implementing
actions, measuring the success of actions, and revising plans
• Planning is used to develop overall strategies
• A strategy is an action that managers take to attain the goals
• Planning goes beyond strategy development to include the
regulation of a wide variety of organizational activities
• Strategizing – the process of thinking through on a continual
basis what strategies an organization should pursue to attain its
goals
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Who Makes the
Strategic Decisions?
By Senior Group
including CEO
With Formal Strategic
Planning Process
By Business Unit
Leaders
By CEO or Equivalent
By Others
Source: Improving Strategic Planning: A McKinsey Survey, The McKinsey Quarterly, September 2006
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Organizing
Organizing involves deciding:
• Who will perform the task?
• Where will decisions be made?
• Who reports to whom?
• How will different parts of the organization fit
together to accomplish the common goal?
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Controlling
• The process of monitoring
performance against goals,
intervening when goals are not met,
and taking corrective action
• First step – Drafting plans
• Important aspect is creating
incentives that align employees’ and
organization’s interests
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Benefits & Incentives
1.
2.
3.
4.
5.
6.
7.
8.
Performance Bonuses
Health Benefits
Performance-based Time Off
Education and Learning
Recognition and Awards
Retirement Planning and 401(k)
Promotion
Child Care and Elder Care Assistance
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Leading & Developing
• Leading – is the process of motivating, influencing,
and directing others in the organization to work
productively in pursuit of organization goals.
• Developing employees – the task of hiring, training,
mentoring, and rewarding employees in an
organization, including other managers.
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Skilled Leaders:
• Drive strategic thinking
• Have a plan for organization
• Proactively structure the organization
• Exercise control with a deft hand
• Use the right kind of incentives
• Get the best out of people
• Build a high-quality team
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America’s Best Leaders
• Steve Jobs, Apple, Pixar
• Alan Mulally, Boeing Commercial
Airplanes
• Terry Semel, Yahoo!
• A.G. Lafley, Procter & Gamble
• Kim Shin Bae, SK Telecom
Source: Best of 2005, Business Week, December 19, 2005
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Question
• Are the functions of
management only for
managers in
organizations or can they
apply to you as a student
as well? Explain.
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Types of Managers
General
Managers
Functional
Managers
Frontline
Managers
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Question
•
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Dr. John Alexander is the Chair of the Management
Department at Global University with their main campus in
New York, USA. The President of the university is Dr. Kim
Kerry. John can be described as a ________ manager whereas
Kim is a _______ manager.
a.
b.
c.
d.
general; functional
frontline; general
functional; frontline
general; frontline
Multi-divisional
Management Hierarchy
Corporate-level
general managers
CEO
Division
R&D
Division
Production
Marketing
Team
Business-level
general managers
Team
Team
Functional
managers
Frontline
managers
Division
Division
Sales
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Becoming a Manager
• From Specialist to Manager
- Journey begins when people are successful at a specialist task
that they were hired to do
- Need to be able to get things done through other people
• Mastering the Job
- Tends to be a large difference between expectations and reality
- Workload is tremendous
- Biggest challenge within the first year = “People challenges”
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Management Roles
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Interpersonal roles
Leader
Figurehead
Negotiator
Resource
Allocator
Managerial
roles
Disturbance
handler
Decisional roles
Liaison
Entrepreneur
Monitor
Disseminator
Spokesperson
Informational
roles
Interpersonal Roles
• Roles that involve interacting with other people
inside and outside the organization
• Management jobs are people-intensive
• Interpersonal roles:
- Figureheads: Greet visitors, Represent the company at
community events, Serve as spokespeople, and Function as
emissaries for the organization
- Leader: Influence, motivate, and direct others as well as
strategize, plan, organize, control, and develop
- Liaison: Connect with people outside their immediate unit
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Informational Roles
• Collecting, Processing and
Disseminating
• Roles: Monitor,
disseminator, and
spokesperson
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Decisional Roles
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• Whereas interpersonal roles deal with people and
informational roles deal with knowledge, decisional roles
deal with action
• Decisional roles:
- Entrepreneur: Managers must make sure their organizations
innovate, change, develop, and adopt
- Disturbance handler: Addressing unanticipated problems as
they arise and resolving them expeditiously
- Resource allocator: How best to allocate scarce resources
- Negotiator: Negotiation is continual for managers
Alan Mulalley, CEO
Boeing Commercial Airplanes
• Decisional Roles:
1. After September 11 attacks, Mulalley had to
renegotiate delivery of some 500 airplanes
2. Cut jet production by more than half
3. Fire 27,000 workers
4. During the downturn, he focused on cutting waste
and streamlining his airplane production lines
5. He then bet the company’s future on a set of new
technologies that are now turning Boeing’s super
efficient 787 Dreamliner into the hottest-selling
new jetliner in history
Source: Best of 2005, Business Week, December 19, 2005
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Management
Competencies
Motivational
Preferences
Skills
Includes
Values
Managerial Skills
Conceptual
Skills
Technical
Skills
Human
Skills
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Managerial Values
•Enacted Values
•Espoused Values
•Shared Values
•Ethical Values
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Managerial Motivation
Desire to Compete
Desire to Exercise Power
Desire to be Distinct
Desire to Take Action
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