CHAPTER 7
Understanding the Management Process
NOTE FROM THE AUTHORS
This chapter is the first of three chapters on management activities and organization. In this chapter, we
provide an overview of the management process. We define management as the process of coordinating
people and other resources of an organization to achieve the goals of the organization. We also describe
four basic management functions: planning, organizing, leading and motivating, and controlling. (A
more detailed discussion of organizational structure follows in Chapter 8.)
We also cover the various managerial levels of responsibility, areas of expertise, skills, and roles. Next,
we examine the concept of leadership and briefly discuss the authoritarian, laissez-faire, and democratic
styles of leadership. Then we turn to the major steps in the managerial decision-making process: identifying the problem or opportunity, generating alternatives, selecting an alternative, and implementing the
solution. We also examine total quality management and the nature of total quality management programs. Finally, we summarize what it takes to become a successful manager today.
LEARNING OBJECTIVES
After studying this chapter, students should be able to:
1.
Define what management is.
2.
Describe the four basic management functions: planning, organizing, leading and motivating, and
controlling.
3.
Distinguish among the various kinds of managers in terms of both level and area of management.
4.
Identify the key management skills and the managerial roles.
5.
Explain the different types of leadership.
6.
Discuss the steps in the managerial decision-making process.
7.
Describe how organizations benefit from total quality management.
8.
Summarize what it takes to become a successful manager today.
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Chapter 7: Understanding the Management Process
BRIEF CHAPTER OUTLINE
I.
II.
What Is Management?
Basic Management Functions
A. Planning
1. Establishing Goals and Objectives
2. Establishing Plans to Accomplish Goals and Objectives
B. Organizing the Enterprise
C. Leading and Motivating
D. Controlling Ongoing Activities
III. Kinds of Managers
A. Levels of Management
1. Top Managers
2. Middle Managers
3. First-Line Managers
B. Areas of Management
1. Financial Managers
2. Operations Managers
3. Marketing Managers
4. Human Resources Managers
5. Administrative Managers
IV. What Makes Effective Managers?
A. Key Management Skills
1. Technical Skills
2. Conceptual Skills
3. Interpersonal Skills
B. Managerial Roles
1. Decisional Roles
2. Interpersonal Roles
3. Informational Roles
V. Leadership
A. Formal and Informal Leadership
B. Styles of Leadership
C. Which Managerial Leadership Style Is Best?
VI. Managerial Decision Making
A. Identifying the Problem or Opportunity
B. Generating Alternatives
C. Selecting an Alternative
D. Implementing and Evaluating the Solution
VII. Managing Total Quality
VIII. What It Takes to Become a Successful Manager Today
A. A Day in the Life of a Manager
B. Personal Skills Required for Success
C. The Importance of Education and Experience
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Chapter 7: Understanding the Management Process
GUIDE FOR USING TRANSPARENCY ACETATES
Figure 7.1
Figure 7.2
Figure 7.3
Figure 7.4
Figure 7.5
Figure 7.6
Transparency 7.A
Transparency 7.B
Transparency 7.C
Transparency 7.D
Transparency 7.E
Transparency 7.F
Transparency 7.G
Transparency 7.H
This transparency illustrates the four basic resources organizations
must use to achieve their goals: material, human, financial, and
informational.
This transparency illustrates the management process: planning,
organizing, leading and motivating, and controlling.
This transparency summarizes the three steps in the control function:
(1) setting standards, (2) measuring actual performance, and (3)
taking corrective action.
This transparency shows the management levels found in most
companies.
This transparency shows the different areas of management
specialization.
This transparency illustrates the four major steps in the managerial
decision-making process.
This transparency is a chapter outline.
This transparency is an exercise that can be used for class
discussion. Suggested answers for this exercise appear at the end of
this chapter in this instructor’s manual.
This transparency is a debate issue that can be used for class
discussion.
This transparency is a chapter quiz consisting of five multiple-choice
questions. (Answers are: 1. b; 2. d; 3. e; 4. d; and 5. b.)
This transparency illustrates the levels of management: top, middle,
and first-line.
This transparency depicts areas of management specialization:
marketing, administration, finance, operations, human resources, and
others.
This transparency presents a definition of management.
This transparency provides a definition of conceptual, technical, and
interpersonal skills.
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Chapter 7: Understanding the Management Process
COMPREHENSIVE LECTURE OUTLINE
Transparency 7.A—Chapter Outline
Transparency 7.D—Chapter Quiz
Inside Business: There Are No “Yah-Whos” at Yahoo!
Video Segment 7.A—Overview (Time 1:56)
Undoubtedly, management is one of the most exciting, challenging, and rewarding professions. The
men and women who manage business firms play an important part in shaping the world we live in.
I.
WHAT IS MANAGEMENT?
A. Management is the process of coordinating people and other resources to achieve the goals
of the organization.
Transparency 7.G
B.
Most organizations use four kinds of resources. (See Figure 7.1.)
Transparency Figure 7.1
1.
2.
3.
II.
Material resources are the tangible, physical resources an organization uses.
Human resources—people—are probably the organization’s most important resources.
Financial resources are the funds the organization uses to meet its obligations to
investors and creditors.
4. Information enables the organization to know what is changing and how it is changing.
Then the company can adapt to change.
C. It is important to realize that the four types of resources described above are only general
categories of resources. Within each category are hundreds or thousands of more specific
resources, from which management must choose those that can best accomplish its goals.
BASIC MANAGEMENT FUNCTIONS
A. A number of management functions must be performed if any organization is to succeed.
1. First, goals must be established for the organization, and plans must be developed to
achieve those goals. Next, managers must organize people and other resources into a
logical and efficient “well-oiled machine.” Then managers must lead employees so that
they are motivated to work effectively to help achieve the goals of the organization.
Finally, managers need to maintain adequate control to ensure that the organization is
working steadily toward its goals.
2. Management functions do not occur according to some rigid timetable. At any given
time, managers may engage in a number of functions simultaneously.
3. Figure 7.2 provides a visual framework for discussion of these management functions.
Transparency Figure 7.2
B.
Planning. Management must set goals for the organization. Planning is establishing goals
and deciding how to accomplish them.
1. An organization’s mission is a statement of the basic purpose that makes this
organization different from others.
2. Strategic planning is the process of establishing an organization’s major goals and
objectives and allocating the resources to achieve them.
3. Establishing Goals and Objectives. A goal is an end result that the organization is
expected to achieve over a one- to ten-year period.
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Chapter 7: Understanding the Management Process
4.
C.
D.
E.
An objective is a specific statement detailing what the organization intends to
accomplish over a shorter period of time.
a) Goals and objectives can deal with a variety of factors, such as sales, company
growth, costs, customer satisfaction, and employee morale.
b) Goals can also span various periods of time.
c) Goals developed for different departments may conflict with one another. The
optimization of conflicting goals requires insight and ability.
5. Establishing Plans to Accomplish Goals and Objectives. Once goals have been set
for the organization, managers must develop plans for achieving them. A plan is an
outline of the actions by which the organization intends to accomplish its goals and
objectives. Every organization should develop several types of plans.
a) An organization’s strategy is its broadest set of plans and is developed as a guide
for major policy setting and decision making. The Internet has introduced new
challenges to traditional strategic thinking.
b) A tactical plan is a smaller-scale (and usually shorter-range) plan developed to
implement a strategy. Most tactical plans cover a one- to three-year period.
c) An operational plan is a type of plan designed to implement tactical plans.
d) A contingency plan is a plan that outlines alternative courses of action that may
be taken if the organization’s other plans are disrupted or become ineffective.
Organizing the Enterprise. Organizing is the grouping of resources and activities to
accomplish some end result in an efficient and effective manner.
Leading and Motivating. Leading is the process of influencing people to work toward a
common goal. Motivating is the process of providing reasons for people to work in the best
interests of the organization. Together, leading and motivating are often referred to as
directing.
Controlling Ongoing Activities. Controlling is the process of evaluating and regulating
ongoing activities to ensure that goals are achieved. The control function includes three
steps. (See Figure 7.3.)
Transparency Figure 7.3
1. The first step is setting standards with which performance can be compared.
2. The second step is measuring actual performance and comparing it with the standard.
3. The third step is taking corrective action as necessary.
III. KINDS OF MANAGERS
Managers can be classified along two dimensions: level within the organization and area of
management.
A.
Levels of Management. There are three general levels of management. (See Figure 7.4.)
Transparency Figure 7.4, Transparency 7.E
1.
Top Managers. A top manager is an upper-level executive who guides and controls
the overall fortunes of the organization.
Video Segment 7.B Concept: Top Management (Time 3:18)
2.
Middle Managers. A middle manager is a manager who implements the strategy
developed by top managers.
Video Segment 7.C Concept: Middle Management (Time 3:21)
3.
First-Line Managers. A first-line manager is a manager who coordinates and
supervises the activities of operating employees.
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Chapter 7: Understanding the Management Process
B.
Areas of Management. An organizational structure can be divided more or less vertically
into areas of management specialization. (See Figure 7.5.)
Transparency Figure 7.5, Transparency 7.F
1.
Financial Managers. A financial manager is primarily responsible for the
organization’s financial resources.
2. Operations Managers. An operations manager manages the systems that convert
resources into goods and services.
3. Marketing Managers. A marketing manager is responsible for facilitating the
exchange of products between the organization and its customers or clients.
4. Human Resources Managers. A human resources manager is charged with
managing the organization’s human resources programs.
5. Administrative Managers. An administrative manager (also called a general
manager) is not associated with any specific functional area but provides overall
administrative guidance and leadership.
IV. WHAT MAKES EFFECTIVE MANAGERS?
A. In general, effective managers are those who possess certain important skills and are able to
use these skills in a number of managerial roles.
B. Key Management Skills. The skills that typify effective managers tend to fall into three
categories.
Transparency 7.B, Transparency 7.H
1.
C.
Technical Skills. A technical skill is a specific skill needed to accomplish a specialized activity. First-line managers (and, to a lesser extent, middle managers) need the
technical skills relevant to the activities they manage.
2. Conceptual Skills. Conceptual skill is the ability to think in abstract terms. Conceptual
skills allow the manager to see the “big picture.” They appear to be more crucial for
top managers than for middle or first-line managers.
3. Interpersonal Skills. An interpersonal skill is the ability to deal effectively with other
people, both inside and outside the organization.
Managerial Roles. Research suggests that managers must, from time to time, act in ten
different roles if they are to be successful. These ten roles can be grouped into three broad
categories.
1. Decisional Roles. A decisional role involves various aspects of management decision
making.
a) In the role of entrepreneur, the manager is the voluntary initiator of change.
b) In the role of disturbance handler, the manager handles disturbances such as a
strike.
c) In the role of resource allocator, the manager might decide which departmental
budgets to cut and which expenditure requests to approve.
d) In the role of negotiator, the manager might settle a dispute such as one between
a manager and his or her subordinate.
2. Interpersonal Roles. An interpersonal role involves dealing with people.
a) The manager may be called to serve as a figurehead.
b) The manager may play the role of liaison by serving as a go-between for two
groups.
c) The manager often has to serve as a leader.
3. Informational Roles. An informational role involves gathering or providing
information.
a) In the role of monitor, the manager actively seeks information that may be of
value to the organization.
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Chapter 7: Understanding the Management Process
b)
c)
V.
7
In the role of disseminator, the manager transmits key information to those who
can use it.
In the role of spokesperson, the manager provides information to people outside
the organization, such as the press and the public.
LEADERSHIP
A. Leadership has been broadly defined as the ability to influence others.
Adapting to Change: What Makes a Great Leader?
1.
2.
B.
C.
A leader has power and can use it to affect the behavior of others.
Leadership is different from management in that a leader strives for voluntary
cooperation, whereas a manager may depend on coercion to change employee
behavior.
Formal and Informal Leadership. Formal leaders have legitimate power of position; that
is, they hold authority from an organization and influence others to work for the organization’s objectives. Informal leaders usually have no authority and may or may not exert their
influence in support of the organization.
Styles of Leadership. In the last few decades, several styles of leadership have been
identified.
Transparency 7.C
1.
D.
The authoritarian leader holds all authority and responsibility, with communication
usually moving from top to bottom.
2. The laissez-faire leader waives responsibility and allows subordinates to work as they
choose with a minimum of interference. Communication flows horizontally among
group members.
3. The democratic leader holds final responsibility but also delegates authority to others,
who participate in determining work assignments. Communication moves both upward
and downward.
Which Managerial Leadership Style Is Best?
1. Each of these styles has advantages and disadvantages.
2. The style that is most effective depends on the interaction among the subordinates, the
characteristics of the work situation, and the manager’s personality.
What People Are Saying
Leadership should be born out of the understanding of the needs of those who would be affected by it.
—Marian Anderson
VI. MANAGERIAL DECISION MAKING
A. Decision making is the act of choosing one alternative from among a set of alternatives.
Managerial decision making involves four steps. (See Figure 7.6.)
Transparency Figure 7.6
B.
Identifying the Problem or Opportunity. A problem is the discrepancy between an actual
condition and a desired condition—the difference between what is occurring and what one
wishes to occur.
1. A problem may be “negative” or “positive.” A positive problem may be viewed as an
“opportunity.”
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Chapter 7: Understanding the Management Process
Sometimes managers’ preconceptions of the problem prevent them from seeing the
situation as it actually is.
3. Effective managers learn to look ahead so that they are prepared when decisions must
be made.
Generating Alternatives. After a problem has been suitably defined, the next task is to
generate alternatives. Certain techniques, such as brainstorming, can be used to generate
alternatives.
Selecting an Alternative. A final decision is influenced by a number of considerations,
including financial constraints, human and informational resources, time limits, legal
obstacles, and political factors.
Implementing and Evaluating the Solution. Implementation of a decision requires time,
planning, preparation of personnel, and evaluation of the results.
2.
C.
D.
E.
Exploring Business: Making Decisions Under Pressure
1.
Managers must usually deal with unforeseen consequences as well, even when they
have carefully considered the alternatives.
2. If the chosen course of action removes the difference between the actual conditions and
the desired conditions, it is judged effective.
3. If the problem still exists, managers may
a) Decide to give the chosen alternative more time to work.
b) Adopt a different alternative.
c) Start the problem identification process all over again.
VII. MANAGING TOTAL QUALITY
A. The management of quality is a high priority in some organizations today.
B. Total quality management (TQM) is the coordination of efforts directed at improving customer satisfaction, increasing employee participation, strengthening supplier partnerships,
and facilitating an organizational atmosphere of continuous quality improvement.
Talking Technology: How to Manage a Successful Tech Company
C.
D.
E.
For effective total quality management, managers must address each of the following
components:
1. Customer satisfaction. Ways to improve customer satisfaction include producing
higher-quality products, providing better customer service, and showing customers that
the company really cares about them.
2. Employee participation. Employee participation can be increased by allowing
employees to contribute to decisions, to develop self-managed work teams, and to
assume responsibility and accountability for improving the quality of their work.
3. Strengthening supplier partnerships. Developing good working relationships with
suppliers can help to ensure that the right supplies and materials will be delivered on
time at a lower cost.
4. Continuous quality improvement. This should not be viewed as achievable through one
single program that has a target objective. A program based on continuous improvement has proven to be the most effective long-term approach.
Although many factors influence the effectiveness of TQM program, two issues are critical.
1. Top management must make a strong commitment to a total quality management
program by treating quality improvement as a top priority and giving it frequent
attention.
2. Management must coordinate the specific elements of a TQM program so that they
work in harmony with each other.
Although not all U.S. companies have TQM programs, these programs provide many
benefits.
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Chapter 7: Understanding the Management Process
1.
9
Overall financial benefits include lower operating costs, higher return on sales and on
investment, and an improved ability to use premium pricing rather than competitive
pricing.
2. Additional benefits include faster development of innovations, improved ability to
compete in global markets, higher levels of customer retention, an enhanced reputation, and a more productive and better-satisfied work force.
VIII. WHAT IT TAKES TO BECOME A SUCCESSFUL MANAGER TODAY
A. Although management can be a very rewarding career, managers must invest time and hard
work to achieve the impressive salaries and perks that may come with the job.
B. A Day in the Life of a Manager. Organizations don’t pay managers to look good behind
expensive wooden desks. Organizations pay for performance.
1. A manager’s heavy workload requires that managers work long hours and most don’t
get paid overtime for work in excess of forty hours a week.
2. Typically, the number of hours increases as managers move up the corporate ladder.
C. Make no mistake about it: Today’s managers work hard in tough, demanding jobs. The pace
is hectic.
D. Personal Skills Required for Success. In addition to technical, conceptual, and
interpersonal skills, managers need oral communication skills, written communication skills,
computer skills, and critical-thinking skills.
E. The Importance of Education and Experience. Although most experts agree that
management skills must be learned on the job, the concepts that you learn in business
courses lay the foundation for a successful career.
1. Successful completion of college courses or obtaining a degree can open doors to job
interviews and career advancement.
2. In addition, practical work experience obtained through summer jobs and part-time
jobs during the school year can also help job applicants “beef up” their resume.
Video Segment 7.D Case: VIPdesk Is At Your Service (Time 4:19)
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10
Chapter 7: Understanding the Management Process
RETURN TO INSIDE BUSINESS
There Are No “Yah-Whos” at Yahoo!
1.
Which of the basic management functions are co-founders Filo and Yang emphasizing?
Which functions is CEO Semel emphasizing?
Filo and Yang are emphasizing the basic management functions of planning, leading, and
motivating. Yang, for example, serves as a company strategist (planning), spokesperson (leading),
and cheerleader (motivating). Filo oversees technological research and development (leading).
Semel is clearly involved in planning, organizing, and controlling, although he is likely to work
closely with Filo, Yang, and other executives on leading and motivating as well.
2.
Why is leadership especially important for a business such as Yahoo! that operates in a fastchanging technological industry?
Yahoo! needs the hard work and commitment of every employee and manager to avoid falling
victim to speedier competitors or unexpected technological developments. Strong leadership can
inspire the company’s managers and employees to strive for peak performance despite the
pressure of constant change. Moreover, the leaders of Yahoo! can use their charisma to encourage
dedication and innovation. They can also use their organizational power to provide support and
rewards for those who help Yahoo! achieve its goals.
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Chapter 7: Understanding the Management Process
11
REVIEW QUESTIONS
1.
Define the term manager without using the word management in your definition.
A manager is one who coordinates the resources of an organization so as to achieve the primary
goals of that organization.
2.
What is the mission of a neighborhood restaurant? Of the Salvation Army? What might be
reasonable objectives for these organizations?
For a neighborhood restaurant, the mission is to provide food to the public at a profit. For the
Salvation Army, the mission is to provide food to the public without consideration of a profit.
Objectives are specific statements detailing what the organization intends to accomplish over a
shorter period of time. For the restaurant, objectives might deal with reducing the amount of time
that customers must wait before receiving their food or increasing the number of customers that
are served during a specific period of time. For the Salvation Army, objectives might include
increasing the number of donations that are received each year or reducing operating expenses
that are required to pay the monthly bills.
3.
What does the term optimization mean?
Optimization is a process that a manager uses to obtain some sort of balance between conflicting
goals among work groups.
4.
How do a strategy, a tactical plan, and an operational plan differ? What do they all have in
common?
A strategy is an organization’s broadest set of plans, developed as a guide for major policy setting
and decision making. It is generally designed to achieve the long-term goals of the organization. A
tactical plan is a smaller-scale plan developed to implement the strategy. Most tactical plans cover
a one- to three-year period. An operational plan is a type of plan designed to implement tactical
plans. It is usually established for one year or less and deals with how to accomplish the
organization’s specific objectives. What all three of these types of plans have in common is that
they are outlines of actions by which the organization intends to accomplish its goals and
objectives.
5.
What exactly does a manager organize, and for what reason?
A manager organizes the firm’s resources to achieve the primary goals of the organization.
6.
Why are leadership and motivation necessary in a business in which people are paid for
their work?
Leading is the process of influencing people to work for a common goal. Motivating is the process
of providing reasons for people to work in the best interests of the organization. Different people
do things for different reasons. Some workers are motivated by money, whereas others are
motivated by recognition, increased responsibility, and/or a host of other factors. Therefore, the
manager must determine which factors motivate his or her subordinates.
7.
Explain the steps involved in the control function.
The control function involves the following three steps: setting standards or specific goals to
which performance can be compared; measuring the actual performance and comparing it with the
standard; and taking corrective action as necessary.
8.
How are the two perspectives on kinds of managers—that is, level and area—different from
each other?
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12
Chapter 7: Understanding the Management Process
The level of management refers to the degree of responsibility. The area involves the various
types of specialization.
9.
In what ways are management skills related to the roles managers play? Provide a specific
example to support your answer.
Effective managers must use three types of skills: technical, conceptual, and interpersonal. These
skills enable managers to perform successfully in the broad roles of making decisions (decisional),
working with people (interpersonal), and providing information (informational). For example,
interpersonal roles are the roles in which managers deal with people. Interpersonal skills enable
managers to relate to people, understand their needs and motives, and show genuine empathy.
10. Compare and contrast the major styles of leadership.
The authoritarian leader holds all authority and responsibility, with communication usually
moving from top to bottom. At the other extreme is the laissez-faire leader, who waives
responsibility and allows subordinates to work as they choose with a minimum of interference.
Communication flows horizontally among group members. The democratic leader holds final
responsibility but also delegates authority to others, who participate in determining work
assignments. Communication is active both upward and downward.
11. Discuss what happens during each of the four steps of the managerial decision-making
process.
Decision-making is the process of developing a set of possible alternative solutions and choosing
one alternative from among that set. The first step, identifying the problem or opportunity, is
essential to solving the problem. The second step, generating alternatives, requires that managers
be open to fresh, innovative ideas as well as to more obvious answers. The third step, selecting an
alternative, requires that a manager reach a final decision. The fourth step, implementing the
solution, requires time, planning, and preparation of personnel.
12. What are the major benefits of a total quality management program?
The major benefits are higher levels of customer satisfaction, increased employee participation,
improved relationships with suppliers, lower overall costs, higher market shares, and higher
profits.
13. What personal skills should a manager possess in order to be successful?
To be successful, a manager must possess oral communication skills, written communication
skills, computer skills, and critical-thinking skills.
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Chapter 7: Understanding the Management Process
13
DISCUSSION QUESTIONS
1.
Does a healthy firm (one that is doing well) have to worry about effective management?
Explain.
A healthy firm must worry about effective management because, if it doesn’t, it will probably not
remain solvent for long. A firm must continually plan for future goals and potential difficulties.
Without a plan, it may be unable to survive even a minor difficulty. The firm must also
continually reevaluate its organizational structure to determine if any changes are required to
adapt the organization to new circumstances. In addition, it must continually lead and motivate its
work force. If the work force has no leadership and becomes unmotivated, the firm will suffer.
Finally, a firm will find it impossible to remain effective if it fails to control ongoing activities.
2.
Which of the management functions, skills, and roles do not apply to the owner-operator of
a sole proprietorship?
The function of leading and motivating doesn’t apply because the owner-operator has no one to
lead or motivate. The owner-operator usually does not have the role of leader because, once again,
there is no one to lead. The owner-operator usually will not be in the role of disseminator because
there is no one to give information to.
3.
Which leadership style might be best suited to each of the three general levels of management within an organization?
The leadership style best suited to top management is that of laissez-faire management because
upper-level managers are usually talented people who work best with very little supervision. They
are usually self-directed and self-disciplined and thus can direct their efforts toward problems that
only they can deal with. Middle managers could make the most effective use of the democratic
style of leadership. Since they are managers of managers, they need to allow for and actively
solicit the input of their subordinates. First-line managers need to be authoritarian or democratic,
depending on the type of job to be accomplished and the type of workers to be supervised. If the
job is mundane and the workers are unskilled, the authoritarian approach would probably be most
successful. However if the job is complicated and the workers are highly skilled, a democratic
approach would be much more appropriate.
4.
According to this chapter, the leadership style that is most effective depends on the
interaction among the employees, the characteristics of the work situation, and the
manager’s personality. Do you agree or disagree? Explain your answer.
Each of the leadership styles described in this chapter—authoritarian, laissez-faire, and
democratic—can be effective in the right situation. In addition to the work situation, the
interaction among the employees and the manager’s personality can influence the effectiveness of
a leadership style in a given situation.
5.
Do you think that people are really as important to an organization as this chapter seems to
indicate?
People are the most important aspect of any firm. Without people, the organization could not
accomplish its goals. Even in this day of automation and industrial robots, people are necessary,
albeit in varying capacities.
6.
As you learned in this chapter, managers often work long hours at a hectic pace. Would this
type of career appeal to you? Explain your answer.
While students’ answers may vary, you may want to use their answers to this question to reinforce
the need for good managers and the potential rewards for individuals who can “manage.”
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14
Chapter 7: Understanding the Management Process
COMMENTS ON VIDEO CASE 7
Suggestions for using this video case are provided in the Pride/Hughes/Kapoor Video Guide.
VIPdesk Is At Your Service
1.
At what management level would you expect a chief strategy officer to be positioned in
VIPdesk’s hierarchy?
The title chief strategy officer implies that this manager would be head of this department. It also
implies that the manager will be responsible for setting the company’s strategy. Therefore this
position would be among the top-management positions at VIPdesk.
2.
Why would operations managers be particularly important in a business such as VIPdesk?
In a personal service business such as VIPdesk—even one that serves customers over the
Internet—operations managers are needed to keep everything running smoothly. Customers
expect prompt, professional, and courteous service, which is the output of VIPdesk’s operations.
Therefore, an operations manager is essential for supervising the technology, equipment, and
other resources that VIPdesk requires in the course of delivering satisfying customer service.
3.
Based on what you know about VIPdesk, identify one potential threat for which you believe
Naylor should have a contingency plan. Explain your answer.
Students may offer various responses. One sample answer: Naylor needs a contingency plan to
deal with the potential threat of a major computer or telecommunications disruption. Such a
disruption would hamper VIPdesk from providing the timely, quality service to which customers
are accustomed. A contingency plan for this threat might consist of having backup files for all
computerized information stored in a separate location for use during an emergency. The plan
might also identify supplemental telecommunications vendors or equipment to be used in the
event of a major disruption to the regular service. Ask students to explain why the threats they cite
are important enough to warrant contingency plans.
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Chapter 7: Understanding the Management Process
15
BUILDING SKILLS FOR CAREER SUCCESS
1.
Exploring the Internet
Suggestions for using each Exploring the Internet exercise are contained on the Houghton Mifflin
website for Pride/Hughes/Kapoor. By using a website, we can replace outdated material with the
most up-to-date material available. For more information visit the Business site at Houghton
Mifflin’s College Division home page at http://college.hmco.com/business/instructors/.
2.
Developing Critical Thinking Skills
Have several students each bring to class a copy of a company’s mission statement that they have
downloaded from the Internet. Prepare enough copies for each student in the class. In the discussion, follow the instructions in the exercise. Focus on the philosophy of the company and its
concern for employees, customers, and shareholders.
Ask students to summarize the culture of each company. Emphasize that a mission statement is a
direct reflection of a firm’s management culture.
3.
Building Team Skills
The students will realize how difficult it is to write a meaningful mission statement that reflects
the purpose of the company and, at the same time, expresses concern for its employees,
customers, and owners. The process must start with an understanding of why a company is in
business.
Remind the students that mission statements are important because they direct activities within
companies. Personnel in companies spend many hours developing mission statements that all
employees can understand and live by in their jobs. It is a process that should not be taken lightly
and should have the input of as many employees as possible. Every job in a company should help
fulfill the mission statement or the job should be abolished.
4.
Researching Different Careers
Career objectives must be specific. They must answer the following questions. What is to be
accomplished? When will it be completed? Who will do the activity? Where will the activity
occur? How will it be measured? What criteria will be used for measurement?
The student’s objectives must be both realistic and accomplishable. Students find it is more
challenging to set short-term objectives, where progress is rewarded more often, than to set longterm objectives where rewards seem too far away.
5.
Improving Communication Skills
Encourage students to prepare a plan of action that focuses on the key points in the exercise.
Students readily will evaluate their skills but often fail to prepare a plan for improving their skills
or changing their behavior. Some students believe improvement will come without making any
effort. Unless students take the time to prepare a plan of action—writing it on paper, keeping it in
full view, and working on it—nothing will change. Students must take responsibility for their own
personal improvement and development. The process starts with wanting to change.
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16
Chapter 7: Understanding the Management Process
QUIZ I
True-False Questions
Select the correct answer.
1.
T
F
Of the four main resources available to management, perhaps the most important is the
organization’s financial resources.
2.
T
F
Strategic planning is the process of establishing an organization’s major goals and
objectives and allocating the resources to achieve them.
3.
T
F
Middle-level managers are generally responsible for developing an organization’s
mission.
4.
T
F
When a manager allocates resources between different departments, he or she is acting
in a decisional role.
5.
T
F
Of the three styles of leadership, the most effective is the democratic style.
Multiple-Choice Questions
Circle the letter before the most accurate answer.
6.
Tangible, physical resources that a manufacturer uses in carrying out its business are known as
what type of resource?
a.
b.
c.
d.
e.
7.
Specific statements detailing what the organization intends to accomplish as it goes about its
mission are known as its
a.
b.
c.
d.
e.
8.
Human
Inventory
Material
Financial
Informational
objectives.
goals.
contingency plans.
strategy.
policy.
Which one of the following is not considered an area of specialization in management?
a.
b.
c.
d.
e.
Finance
Marketing
Inventory
Human resources
Administration
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Chapter 7: Understanding the Management Process
9.
A manager performing the functions of figurehead, liaison, or leader would be fulfilling a(n)
__________ role.
a.
b.
c.
d.
e.
informational
interpersonal
diagnostic
administrative
decisional
10. Leadership is
a.
b.
c.
d.
e.
synonymous with management.
the ability to influence others.
characterized by legitimate power.
coordinating people to achieve the goals of the company.
the ability to coerce employees into changing their behavior.
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17
18
Chapter 7: Understanding the Management Process
QUIZ II
True-False Questions
Select the correct answer.
1.
T
F
The informational resource should include information generated outside an
organization, such as by the economy, consumer markets, and technology.
2.
T
F
The most fundamental type of goal in an organization is its mission.
3.
T
F
The administrative manager is charged with managing an organization’s human
resource program.
4.
T
F
Understanding the technical side of things is an effective management aid at every
level.
5.
T
F
The common leadership styles are autocratic, democratic, and existential.
Multiple-Choice Questions
Circle the letter before the most accurate answer.
6.
Steel, glass, and fiberglass would most likely be material resources for
a.
b.
c.
d.
e.
7.
The process of providing reasons for people to work in an organization’s best interests is called
a.
b.
c.
d.
e.
8.
planning.
organizing.
leading.
motivating.
controlling.
Part of Susan’s responsibilities is to create a work schedule for her employees and to motivate
them. What type of manager is she?
a.
b.
c.
d.
e.
9.
the Mayo Clinic.
the University of Florida.
Citicorp.
General Motors.
Kroger.
Front-line
Middle
Top
Control
First-line
If Mike Smith, a buyer for Ford, negotiates with a supplier on the price of a wheel, he is in a(n)
__________ role.
a.
b.
c.
d.
e.
decisional
interpersonal
technical
conceptual
informational
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Chapter 7: Understanding the Management Process
10. Under an authoritarian leader, communication
a.
b.
c.
d.
e.
usually moves from bottom to top.
usually moves from top to bottom.
does not occur.
flows horizontally at the top only.
flows horizontally among group members.
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19
20
Chapter 7: Understanding the Management Process
ANSWER KEY FOR QUIZZES
Quiz I
True-False
1.
F
2.
T
3.
F
4.
T
5.
F
Multiple-Choice
6.
c
7.
a
8.
c
9.
b
10. b
Quiz II
True-False
1.
T
2.
T
3.
F
4.
T
5.
F
Multiple-Choice
6.
d
7.
d
8.
e
9.
a
10. b
CLASS EXERCISE—TRANSPARENCY 7.B
Technical skill is a specific skill needed to accomplish a specialized activity. A manager uses technical
skills when he or she shows an employee how to operate a piece of machinery.
Conceptual skill is the ability to think in abstract terms. A manager uses conceptual skills when trying
to resolve a conflict between two different work groups.
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Chapter 7: Understanding the Management Process
Interpersonal skill is the ability to deal effectively with other people. A manager uses interpersonal
skills when he or she evaluates employees.
CHAPTER QUIZ—TRANSPARENCY 7.D
1.
b
2.
d
3.
e
4.
d
5.
b
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21