CHAPTER SIX
Management and Leadership in Today’s Organization
CHAPTER SUMMARY
Management is the process of guiding the development, maintenance, and allocation of
resources to attain organizational goals. The basic functions of management are
planning, organizing, leading, and controlling. Four types of planning are exercised
throughout the managerial pyramid; these planning types include strategic, tactical,
operational, and contingency plans. Organizing is the process of coordinating and
allocating a firm’s resources to carry out its plans. Leading is the process of motivating
and guiding workers toward organizational goals; with some types of leading,
employees are empowered to make and implement their own decisions in many areas.
Managers’ controlling function allows them to compare performance measures against
performance goals and equips them with the ability to react to deviations from
expected performance. To successfully carry out their functions, managers use a variety
of skills; including technical, human relations, conceptual, and global management skills.
Managers have unique leadership styles that range from autocratic to free-rein. The set
of attitudes, values, and standards of behavior that distinguishes one organization from
another is called corporate culture.
This chapter concludes identifying three important trends in management today:
preparing for crises management, the increasing use of information technology, and the
need to manage multinational cultures.
LEARNING OUTCOMES
➢ 1. What is the role of management?
Management is the process of guiding the development, maintenance, and
allocation of resources to attain organizational goals. Managers are the people
in the organization responsible for developing and carrying out this management
process. The four primary functions of managers are planning, organizing,
leading, and controlling. By using the four functions, managers work to increase
the efficiency and effectiveness of their employees, processes, projects, and
organizations.
Md. Shafiqul Islam (MSQI)
BUS101
➢ 2. What are the four types of planning?
Planning is deciding what needs to be done, identifying when and how it will be
done, and determining by whom it should be done. Managers use four different
types of planning: strategic, tactical, operational, and contingency planning.
Strategic planning involves creating long-range (one to five years), broad goals
and determining the necessary resources to accomplish those goals. Tactical
planning has a shorter time frame (less than one year) and more specific
objectives that support the broader strategic goals. Operational planning
creates specific standards, methods, policies, and procedures that are used in
specific functional areas of the organization. Contingency plans identify
alternative courses of action for very unusual or crisis situations.
➢ 3. What are the primary responsibilities of managers in organizing activities?
Organizing involves coordinating and allocating a firm’s resources to carry out its
plans. It includes developing a structure for the people, positions, departments,
and activities within the firm. This is accomplished by dividing up tasks (division
of labor), grouping jobs and employees (departmentalization), and assigning
authority and responsibilities (delegation).
➢ 4. How do leadership styles influence a corporate culture?
Leading is the process of guiding and motivating others toward the achievement
of organizational goals. Managers have unique leadership styles that range from
autocratic to free-rein. The set of attitudes, values, and standards of behavior
that distinguishes one organization from another is called corporate culture. A
corporate culture evolves over time and is based on the accumulated history of
the organization, including the vision of the founders.
➢ 5. How do organizations control activities?
Controlling is the process of assessing the organization’s progress toward
accomplishing its goals. The control process is as follows: (1) set performance
standards (goals), (2) measure performance, (3) compare actual performance to
established performance standards, (4) take corrective action (if necessary), and
(5) use information gained from the process to set future performance
standards.
➢ 6. What roles do managers take on in different organizational settings?
In an informational role, the manager may act as an information gatherer, an
information distributor, or a spokesperson for the company. A manager’s
interpersonal roles are based on various interactions with other people.
Md. Shafiqul Islam (MSQI)
BUS101
Depending on the situation, a manager may need to act as a figurehead, a
company leader, or a liaison.
➢ 7. What set of managerial skills is necessary for managerial success?
Managerial skills fall into three basic categories: technical, human relations, and
conceptual skills. Specialized areas of knowledge and expertise and the ability to
apply that knowledge make up a manager’s technical skills. Human relations
skills include the ability to understand human behavior, to communicate
effectively with others, and to motivate individuals to accomplish their
objectives. Conceptual skills include the ability to view the organization,
understand how the various parts are interdependent, and assess how the
organization relates to its external environment.
➢ 8. What trends will affect management in the future?
Three important trends in management today are preparing for crises
management, the increasing use of information technology, and the need to
manage multinational cultures. Crisis management requires quick action, telling
the truth about the situation, and putting the best people on the task to correct
the situation. Finally, management must learn from the crisis to prevent it from
happening again. Using the latest information technology, such as dashboard
software, managers can make quicker, better-informed decisions.
As more companies “go global,” the need for multinational cultural management
skills is growing. Managers must set a good example, create personal
involvement for all employees, and develop a culture of trust.
LECTURE OUTLINE
I.
The Role of Management > Learning Outcome 1
Management is the process of guiding the development, maintenance, and
allocation of resources to attain organizational goals. Managerial work can be
divided into four activities: planning, organizing, leading, and controlling.
Lecture Tidbit: A scout leader, a college dean, and the CEO of Dell Computers are all managers. Each of
them performs these management functions.
II.
Planning > Learning Outcome 2
Planning begins by anticipating potential problems or opportunities the
organization may encounter. Managers then design strategies to solve current
Md. Shafiqul Islam (MSQI)
BUS101
problems, prevent future problems, or take advantage of opportunities.
Managers use four basic types of planning: strategic, tactical, operational, and
contingency. Strategic planning involves creating long-range, broad goals for the
organization and determining what resources will be needed to accomplish
those goals. Strategic plans, such as the organization’s long-term mission, are
formulated by top-level managers and put into action at lower levels in the
organization.
Tactical planning begins the implementation of strategic plans. Tactical plans
have a shorter time frame than strategic plans and more specific objectives
designed to support the broader strategic goals.
Operational planning creates specific standards, methods, policies, and
procedures that are used in specific functional areas of the organization.
Contingency plans identify alternative courses of action for very unusual or crisis
situations. The contingency plan typically stipulates the chain of command,
standard operating procedures, and communication channels the organization
will use during an emergency.
Lecture Tidbit: Your local produce department at your grocery store and your florist have at least one
management problem in common – how to plan so that inventory is consumed without running out of
stock. Operational planning decisions must be made regarding stocking just enough inventory to satisfy
demand without being left with excess.
III.
Organizing > Learning Outcome 3
Organizing is the process of coordinating and allocating a firm’s resources to
carry out its plans. Elements of organizational structure include the three levels
of a managerial hierarchy: top management, middle management, and
supervisory management. Top management is the highest level of managers,
including the CEO, president, and vice-presidents, who develop strategic plans
and address long-range issues. Middle management is the level of management
in which managers design and carry out tactical plans in specific areas of the
company. Supervisory management (first-line management) includes managers
who design and carry out operational plans for the ongoing daily activities of the
firm.
Md. Shafiqul Islam (MSQI)
BUS101
What are the risks of a poorly designed organizational structure?
An organization’s structure has a dramatic influence on the way decisions
are made and communicated. The structure helps the company achieve its
goals by providing a framework for managers to divide responsibilities and
effectively distribute the authority to coordinate and control the
organization’s work. A poorly designed structure can create enormous
waste, confusion, and frustration for managers, employees, suppliers, and
customers; including miscommunication and lack of strategy.
Source: Ashe-Edmunds, Sam. “What Is the Impact of Poor Organizational
Structure Relative to Growth?” Small Business - Chron.com, Chron.com, 21
Nov. 2017, smallbusiness.chron.com/impact-poor-organizationalstructure-relative-growth-75327.html.
Md. Shafiqul Islam (MSQI)
BUS101
IV.
Leading, Guiding, and Motivating Others > Learning Outcome 4
Leading is the process of guiding and motivating others toward the achievement
of organizational goals. This ability to influence others to behave in a way is
called power. Researchers have identified five primary sources, or bases, of
power:
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Legitimate power, which is derived from an individual’s position in a
firm
Reward power, which is derived from an individual’s control over
rewards
Coercive power, which is derived from an individual’s ability to
threaten negative outcomes
Expert power, which is derived from an individual’s extensive
knowledge in one or more areas
Referent power, which is derived from an individual’s personal
charisma and the respect and/or admiration the individual inspires
Are leaders born or made?
Many psychologists and organizational researchers argue that leaders are
both made and born. However, researchers estimate that approximately
two-thirds of leadership is a skill that can be developed and only one-third
something we possess at birth. So, if you see leadership in your future,
seek out leadership development opportunities!
Source: Boerma, M. “Point/Counterpoint: Are Outstanding Leaders Born
or Made?” American Journal of Pharmaceutical Education. 8.3 (2017).
Retrieved August 6, 2018, from
https://www.ncbi.nlm.nih.gov/pmc/articles/PMC5423074/
A. Leadership Styles
Leadership style is the relatively consistent way that individuals in
leadership positions attempt to influence the behavior of others. Autocratic
leaders are directive leaders, allowing for very little input from subordinates.
There are three types of participative leadership: democratic, consensual,
and consultative. Democratic leaders solicit input from all members of the
group and then allow the group members to make the final decision through
a voting process; consensual leaders encourage discussion about issues and
then require that all parties involved agree to the final decision; consultative
Md. Shafiqul Islam (MSQI)
BUS101
leaders confer with subordinates before making a decision but retain the
final decision-making authority.
The third leadership style, at the opposite end of the continuum from the
autocratic style, is free-rein leadership, in which managers turn over all
authority and control to the subordinates.
What is the best leadership style to use?
No style works best for all situations. Great leaders vary their leadership
style based on what the situation demands. Some situations may call for
urgent action, and in these cases an autocratic style of leadership may be
best. The democratic style is best suitable where team working is
essential, and quality is more important than speed to market or
productivity. Free-rein (or laissez-faire) can be effective if the leader
monitors what is being achieved and communicates this back to his or her
team regularly. Most often, free-rein leadership works for teams in which
the individuals are very experienced and skilled self-starters.
Source: Cherry, Kendra. “What Are Prominent Leadership Styles and
Frameworks You Should Know?” Verywell Mind, Verywellmind, 14 Mar.
2018, www.verywellmind.com/leadership-styles-2795312.
B. Employee Empowerment
Empowerment means giving employees increased autonomy and discretion
to make their own decisions, as well as control over the resources needed to
implement those decisions.
Lecture Tidbit: If you shop at Costco, you may have had the situation where you needed to return an
item. Customers with returns don’t need a receipt, and there is no time limit when an item can be
returned. Employees are empowered to take purchases back and make exchanges, ensuring customers’
issues get resolved without the need to consult a supervisor.
Here are other examples of companies that empower their employees: American Airlines, Zappos, Ritz
Carlton, Virgin America, Disney, Trader Joe’s, Pret a Manger, Airbnb, and Chick-Fil-A.
Source: Morgan, B. (2018). 10 Companies That Arm Employees With Tools To Fix Customer Problems.
Forbes, March 14, 2018.
C. Corporate Culture
The set of attitudes, values, and standards of behavior that distinguishes one
organization from another is called corporate culture.
Md. Shafiqul Islam (MSQI)
BUS101
Shorts or Suits? Would you rather work 10-hour days in shorts or 8-hour
days in suits?
The architecture and decor of the building, what people wear on the job,
the overall environment of the company; all of these and more are part of
the corporate culture. Many companies even develop their own language.
As you explore career options, take time to consider the corporate culture
and decide whether it is a good fit for you.
V.
Controlling > Learning Outcome 5
Controlling is the process of assessing the organization’s progress toward
accomplishing its goals. It includes monitoring the implementation of a plan and
correcting deviations from that plan.
What are some examples of “control mechanisms” within an
organization?
Rules and regulations, the budget, employee evaluations, employee sales
quotas, quality standards, and even corporate culture are examples of
control mechanisms. Can you think of control mechanisms in your personal
life?
VI.
Managerial Roles > Learning Outcome 6
Managers’ roles fall into three basic categories: informational roles,
interpersonal roles, and decisional roles. In an informational role, the manager
may act as an information gatherer, an information distributor, or a
spokesperson for the company. A manager’s interpersonal roles are based on
various interactions with other people. When acting in a decisional role a
manger may have to think like an entrepreneur, making decisions about
resource allocation, help resolve conflicts, or negotiate compromises.
A. Managerial Decision Making
Decision making means choosing among alternatives. Programmed
decisions are made in response to routine situations. Nonprogrammed
decisions are responses to infrequent, unforeseen, or very unusual
Md. Shafiqul Islam (MSQI)
BUS101
problems and opportunities where the manager does not have a precedent
to follow in decision making.
VII.
Managerial Skills > Learning Outcome 7
To be successful in planning, organizing, leading, and controlling, managers must
use a wide variety of skills.
A. Technical Skills
Specialized areas of knowledge and expertise and the ability to apply that
knowledge make up a manager’s technical skills.
B. Human Relations Skills
Human relations skills are the interpersonal skills managers use to
accomplish goals with human resources.
Conceptual Skills
Conceptual skills include the ability to view the entire organization,
understand how the various parts are interdependent, and assess how the
organization relates to its external environment.
Lecture Tidbit: Emotional intelligence continues to be a buzzword ever since publication of
Daniel Goleman published his first book on it in 1995. Emotional intelligence (EI), or
emotional quotient as it is also referred to (EQ), is the ability to perceive and manage the
emotions of one's self and others. EI is a highly sought-after skill since it allows a person to
reason and problem-solve based on emotions rather than become distracted by them.
Today, many assessments are available to measure your EI.
Source: “About Daniel Goleman.” Daniel Goleman, 2018,
www.danielgoleman.info/biography/.
What special skills does a manager need when he or she accepts an
overseas assignment?
Managers who accept assignments in global operations or foreign-based
offices need special skills, including learning new languages, laws, cultural
customs, geography, and the practices and expectations of a foreign
business environment.
Md. Shafiqul Islam (MSQI)
BUS101
VIII. Trends in Management and Leadership > Learning Outcome 8
Three important trends in management today are: crisis management, the use
of outside directors to provide management control, the growing use of
information technology, and the need for managers with global management
skills.
A. Crisis Management
Crises, both internal and external, can hit even the best-managed
organization. Sometimes organizations can anticipate crises, in which case
managers develop contingency plans, and sometimes they can’t. Managers
must act, face the problem head on, tell the truth about the situation, ask
for help when necessary, and learn from the past.
B. Managers and Information Technology
The second trend having a major impact on managers is the proliferation of
data and analytics in information technology. An increasing number of
organizations are selling technology, and an increasing number are looking
for cutting-edge technology to make and market the products and services
they sell. One particularly useful type of technology is dashboard software,
which shows up-to-the-minute information and allows employees to see all
the information they need—such as financial and performance data—on a
single screen. Despite the increasing popularity of dashboard technology,
the control tool has some drawbacks, such as focusing too intently on shortterm results and ignoring the overall progress toward long-term goals.
C. Managing Multinational Cultures
Many companies must look to global markets to expand the sales of their
products and services. Managers face the challenge of directing the behavior
of employees around the world. The increasing globalization of the world
market has created a need for managers who have global management
skills, that is, the ability to operate in diverse cultural environments. With
more and more companies choosing to do business in multiple locations
around the world, employees are often required to learn the geography,
language, and social customs of other cultures.
Md. Shafiqul Islam (MSQI)
BUS101