Chapter Management, Leadership, and Employee Empowerment McGraw-Hill/Irwin McGraw-Hill/Irwin Understanding Business, 7/e Understanding Business, 7/e 7-1 © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. Management What is it? McGraw-Hill/Irwin McGraw-Hill/Irwin Understanding Business, 7/e Understanding Business, 7/e 7-2 © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. WHAT IS MANAGEMENT? • The process used to accomplish organizational goals through planning, organizing, leading and controlling people and other organizational resources. McGraw-Hill/Irwin McGraw-Hill/Irwin Understanding Business, 7/e Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. 7-3 Management In simple terms… McGraw-Hill/Irwin McGraw-Hill/Irwin Understanding Business, 7/e Understanding Business, 7/e 7-4 © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. Management Getting the work done through other people… McGraw-Hill/Irwin McGraw-Hill/Irwin Understanding Business, 7/e Understanding Business, 7/e 7-5 © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. Management …without making them mad. McGraw-Hill/Irwin McGraw-Hill/Irwin Understanding Business, 7/e Understanding Business, 7/e 7-6 © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. WHAT IS MANAGEMENT? • The process used to accomplish organizational goals through planning, organizing, leading and controlling people and other organizational resources. McGraw-Hill/Irwin McGraw-Hill/Irwin Understanding Business, 7/e Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. 7-7 Process Of Management Management Planning Employees Financial Products Feedback Resources Organizing Leading Achievement of Goals & Objectives Location Information McGraw-Hill/Irwin McGraw-Hill/Irwin Understanding Business, 7/e Understanding Business, 7/e Controlling 7-8 © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. TODAY’S MANAGERS • Younger and more progressive. - Growing numbers of women. - Fewer from elite universities. • Emphasis is on teams and team building. • Managers need to be skilled communicators and team players. McGraw-Hill/Irwin McGraw-Hill/Irwin Understanding Business, 7/e Understanding Business, 7/e 7-9 © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. Four Functions Of Management McGraw-Hill/Irwin McGraw-Hill/Irwin Understanding Business, 7/e Understanding Business, 7/e 7-10 © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. FOUR FUNCTIONS of MANAGEMENT McGraw-Hill/Irwin McGraw-Hill/Irwin Understanding Business, 7/e Understanding Business, 7/e 7-11 © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. Planning McGraw-Hill/Irwin McGraw-Hill/Irwin Understanding Business, 7/e Understanding Business, 7/e 7-12 © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. Planning Anticipating future trends and determining the best strategies and tactics to achieve organizational objectives Key management function because other functions depend heavily on having a good plan McGraw-Hill/Irwin McGraw-Hill/Irwin Understanding Business, 7/e Understanding Business, 7/e 7-13 © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. Planning Setting Mission, Goals, and Objectives McGraw-Hill/Irwin McGraw-Hill/Irwin Understanding Business, 7/e Understanding Business, 7/e 7-14 © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. Create Mission Mission Why Organization Exists, Its Purpose McGraw-Hill/Irwin McGraw-Hill/Irwin Understanding Business, 7/e Understanding Business, 7/e 7-15 © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. Mission Statement Outline of the fundamental purposes of the organization Should address: Organization’s self-concept Company philosophy and goals Long-term survival Customer needs Social responsibility Nature of company’s product or service McGraw-Hill/Irwin McGraw-Hill/Irwin Understanding Business, 7/e Understanding Business, 7/e 7-16 © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. Solano Community College Solano Community College prepares a diverse student population to participate successfully in today’s local and global Communities. McGraw-Hill/Irwin McGraw-Hill/Irwin Understanding Business, 7/e Understanding Business, 7/e 7-17 © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. Star Trek Enterprise McGraw-Hill/Irwin McGraw-Hill/Irwin Understanding Business, 7/e Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. 2-18 Setting Goals & Objectives • Goals -- The broad, long-term accomplishments an organization wishes to attain. • Objectives -Specific, short-term statements detailing how to achieve the organization’s goals. McGraw-Hill/Irwin McGraw-Hill/Irwin Understanding Business, 7/e Understanding Business, 7/e 7-19 © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. Questions of Planning 1) What is the situation now? 2) Where do we want to go? 3) How can we get to our goal from here? McGraw-Hill/Irwin McGraw-Hill/Irwin Understanding Business, 7/e Understanding Business, 7/e 7-20 © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. PLANNING ANSWERS FUNDAMENTAL QUESTIONS • What Is The Situation Now? SWOT Analysis -- Analyzes the organization’s Strengths, Weaknesses, Opportunities and Threats. • How Can We Get To Our Goal From Here? - Strategic Planning Tactical Planning Operational Planning Contingency Planning McGraw-Hill/Irwin McGraw-Hill/Irwin Understanding Business, 7/e Understanding Business, 7/e 7-21 © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. What is the situation now? SWOT Analysis A Continuous Process McGraw-Hill/Irwin McGraw-Hill/Irwin Understanding Business, 7/e Understanding Business, 7/e 7-22 © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. SWOT Analysis Potential Internal STRENGTHS Potential Internal WEAKNESSES Potential External OPPORTUNITIES Potential External THREATS McGraw-Hill/Irwin McGraw-Hill/Irwin Understanding Business, 7/e Understanding Business, 7/e 7-23 © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. How can we get to our goal from here? Planning Types McGraw-Hill/Irwin McGraw-Hill/Irwin Understanding Business, 7/e Understanding Business, 7/e 7-24 © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. Planning Types - Strategic Planning Tactical Planning Operational Planning Contingency Planning McGraw-Hill/Irwin McGraw-Hill/Irwin Understanding Business, 7/e Understanding Business, 7/e 7-25 © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. Planning Types • Strategic Planning -- Done by top management and determines the major goals of the organization and the policies, procedures, strategies and resources it will need to achieve them. • Tactical Planning -- The process of developing detailed, short-term statements about what is to be done, who is to do it and how. McGraw-Hill/Irwin McGraw-Hill/Irwin Understanding Business, 7/e Understanding Business, 7/e 7-26 © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. Planning Types • Operational Planning -- The process of setting work standards and schedules necessary to implement the company’s tactical objectives. • Contingency Planning -- The process of preparing alternative courses of action the firm can use if its primary plans don’t work out. McGraw-Hill/Irwin McGraw-Hill/Irwin Understanding Business, 7/e Understanding Business, 7/e 7-27 © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. Management Planning Levels & Time Spans Time Top Mgmt. Middle Mgmt. 2 Years + Strategic 1 Year, Quarter Tactical Lower Level Mgmt. Days, Weeks Operational McGraw-Hill/Irwin McGraw-Hill/Irwin Understanding Business, 7/e Understanding Business, 7/e 7-28 © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. DECISION MAKING • Decision Making -- Choosing among two or more alternatives McGraw-Hill/Irwin McGraw-Hill/Irwin Understanding Business, 7/e Understanding Business, 7/e 7-29 © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. Decision Making: Finding the Best Alternative Define Implement Describe & Collect Decide Monitor and Organize & Analyze Develop Alternatives Follow-up McGraw-Hill/Irwin McGraw-Hill/Irwin Understanding Business, 7/e Understanding Business, 7/e 7-30 © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. PROBLEM SOLVING • Problem Solving -- The process of solving the everyday problems that occur; less formal than decision making and needs quicker action. • Problem-solving techniques include brainstorming and PMI -- Listing all the pluses for a solution in one column, all the minuses in another and the implications in a third. McGraw-Hill/Irwin McGraw-Hill/Irwin Understanding Business, 7/e Understanding Business, 7/e 7-31 © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. Organizing Creating a Unified System McGraw-Hill/Irwin McGraw-Hill/Irwin Understanding Business, 7/e Understanding Business, 7/e 7-32 © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. Organizing • Designing structure of the organization and creating conditions and systems in which everyone and everything work together to achieve organization’s goals and objectives • Create Corporate Hierarchy • Generate Organization Chart McGraw-Hill/Irwin McGraw-Hill/Irwin Understanding Business, 7/e Understanding Business, 7/e 7-33 © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. Management Pyramid CEO, Top Comptroller, Vice Pres. Sales Mgrs Plant Mgrs. Mid-Level Front Line/Supervisory McGraw-Hill/Irwin McGraw-Hill/Irwin Understanding Business, 7/e Understanding Business, 7/e Supervisors Foremen 7-34 © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. MANAGEMENT LEVELS • Top Management -- The highest level, consists of the president and other key company executives who develop strategic plans. • Middle Management -- Includes general managers, division managers, and branch and plant managers who are responsible for tactical planning and controlling. • Supervisory Management -- Those directly responsible for supervising workers and evaluating daily performance. McGraw-Hill/Irwin McGraw-Hill/Irwin Understanding Business, 7/e Understanding Business, 7/e 7-35 © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. Top Management • Chief Executive Officer (CEO) - Introduces change into an organization. • Chief Operating Officer (COO) - Implements CEO’s changes. • Chief Financial Officer (CFO) - Obtains funds, plans budgets, collects funds, etc. • Chief Information Officer (CIO) - Gets the right information to the right people so decisions can be made. McGraw-Hill/Irwin McGraw-Hill/Irwin Understanding Business, 7/e Understanding Business, 7/e 7-37 © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. Management Skills • Technical Skills -- The ability to perform tasks in a specific discipline or department. • Human Relations Skills -- Skills that involve communication and motivation; they enable managers to work through and with people. • Conceptual Skills -- Skills that involve the ability to picture the organization as a whole and the relationship among its various parts. McGraw-Hill/Irwin McGraw-Hill/Irwin Understanding Business, 7/e Understanding Business, 7/e 7-38 © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. SKILLS NEEDED at VARIOUSLEVELS of MANAGEMENT McGraw-Hill/Irwin McGraw-Hill/Irwin Understanding Business, 7/e Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. THANK YOU The Most Basic Human Relations Skill • Saying “thank you” has led to happier employees and greater profits for companies. • Whom should a manager thank? 1. Interns - Doing lots of work for little money, they are the future of the company and industry. 2. Lawyers - Many do pro bono work, even for nonprofit companies. 3. The Little People - Mailroom, repair, and cleaning staff keep the office running day-to-day. Source: Fast Company, November 2010. McGraw-Hill/Irwin McGraw-Hill/Irwin Understanding Business, 7/e Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. 7-40 ORGANIZATIONAL CHARTS • Visual devices that show relationships among people and divide the organization’s work; they also show who reports to whom. McGraw-Hill/Irwin McGraw-Hill/Irwin Understanding Business, 7/e Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. 7-41 STAFFING • Recruiting, hiring, motivating and retaining the best people available to accomplish the company’s objectives. • Recruiting good employees is critical. • Many people are not willing to work at companies unless they are treated well with fair pay. McGraw-Hill/Irwin McGraw-Hill/Irwin Understanding Business, 7/e Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. 7-42 STAFFING is TRICKY BUSINESS Six Sins of Staffing 1. Don’t hire someone because someone else says so. 2. Don’t get caught up in applicants’ appearances. 3. Don’t give someone the wrong job. 4. Don’t forget about feedback. 5. Don’t give promotions just because it’s time. 6. Don’t cheat your employees. McGraw-Hill/Irwin McGraw-Hill/Irwin 7-43 Source: CareerBuilder, www.careerbuilder.com, accessed November © 20052014. The McGraw-Hill Companies, Inc., All Rights Reserved. Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. Understanding Business, 7/e Leading Providing Continuous Vision & Values (Previously known as Directing) McGraw-Hill/Irwin McGraw-Hill/Irwin Understanding Business, 7/e Understanding Business, 7/e 7-44 © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. Leading Creating a vision for the organization and guiding, training, coaching, and motivating others to work effectively to achieve the organization’s goals McGraw-Hill/Irwin McGraw-Hill/Irwin Understanding Business, 7/e Understanding Business, 7/e 7-45 © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. Leadership Styles Autocratic Participative (Democratic) Free-rein McGraw-Hill/Irwin McGraw-Hill/Irwin Understanding Business, 7/e Understanding Business, 7/e 7-47 © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. Autocratic Making managerial decisions without consulting others. McGraw-Hill/Irwin McGraw-Hill/Irwin Understanding Business, 7/e Understanding Business, 7/e 7-48 © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. Participative (Democratic) Leader Managers and employees work together to make decisions. McGraw-Hill/Irwin McGraw-Hill/Irwin Understanding Business, 7/e Understanding Business, 7/e 7-49 © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. Free-rein Leader Managers set objectives and employees are free to do whatever is appropriate to accomplish those objectives. McGraw-Hill/Irwin McGraw-Hill/Irwin Understanding Business, 7/e Understanding Business, 7/e 7-50 © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. Leadership Styles What is the best leadership style to use? Depends Who is being led In what situations Goals and objectives of the firm McGraw-Hill/Irwin McGraw-Hill/Irwin Understanding Business, 7/e Understanding Business, 7/e 7-51 © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. Empowering Workers Empowerment Giving employees the authority and the responsibility to respond quickly to customer requests Enabling Giving workers the education and tools they need to make decisions Commensurate compensation McGraw-Hill/Irwin McGraw-Hill/Irwin Understanding Business, 7/e Understanding Business, 7/e 7-52 © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. WORK SMARTER How to Ease Pressure on Workers • Manage output instead of hours. • Train workers to be ready for a more complex corporate structure. • Allow lower-level managers to make decisions. • Use new technology to foster teamwork. • Shift hiring emphasis to collaboration. McGraw-Hill/Irwin McGraw-Hill/Irwin 7-53 Source: Bloomberg BusinessWeek, www.businessweek.com,© accessed November 2014. 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. Understanding Business, 7/e Controlling Making Sure It Works McGraw-Hill/Irwin McGraw-Hill/Irwin Understanding Business, 7/e Understanding Business, 7/e 7-54 © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. Controlling Establishing clear standards to determine whether or not an organization is progressing toward its goals and objectives, rewarding people for doing a good job, and taking corrective action if they are not McGraw-Hill/Irwin McGraw-Hill/Irwin Understanding Business, 7/e Understanding Business, 7/e 7-55 © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. FIVE STEPS of CONTROLLING Feedback: Are standards realistic? 5. If needed, take corrective action or give reward 4. Communicate results 1. Establish clear and realistic standards 2. Monitor and record performance - customer satisfaction 3. Compare results against standards McGraw-Hill/Irwin McGraw-Hill/Irwin Understanding Business, 7/e Understanding Business, 7/e 7-56 © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. Managing Knowledge Knowledge Management Finding the right information, keeping the information in a readily accessible place and making the information known to every one in the firm. McGraw-Hill/Irwin McGraw-Hill/Irwin Understanding Business, 7/e Understanding Business, 7/e 7-57 © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. Managing Knowledge • First step is determining what knowledge is most important • Keep people from duplicating the work of gathering information every time a decision is made • Key is learning how to process information and turn it into information that everyone can use McGraw-Hill/Irwin McGraw-Hill/Irwin Understanding Business, 7/e Understanding Business, 7/e 7-58 © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved.