Chapter Seven
Understanding the
Management
Process
What Is Management?
The process of coordinating people and other
resources to achieve the goals of an
organization
Resources
– Material resources
• physical inputs to production an organization uses
– Human resources
• people who staff the organization and use the other
resources to achieve the goals of the organization
– Financial resources
• funds the organization uses to meet its obligations to
investors and creditors
– Information resources
• data about internal and external business environmental
conditions that the firm uses to create a competitive
advantage
Strategic Planning
The process of establishing an
organization’s major goals and
allocating the resources to achieve
them
Planning
• Establishing goals and objectives
– Goal
• An end result that the organization is expected
to achieve over a one-to-ten year period (get a
degree in Business Administration)
– Objective
• A specific statement detailing what the
organization intends to accomplish over a
shorter period of time (take Bus 1100 and get
an A)
“Plan B”
– Contingency plan
• A plan of alternative courses of action if
the organization’s other plans are
disrupted or become ineffective
(If I don’t do well in Bus 1100, I’ll get a
degree in Psychology)
Who’s Doing the Planning?
CEO, COO
Dept head, plant mgr
Levels of Management
-Top manager—guides and
controls the overall fortunes of
the organization-plan the future
-Middle manager—implements
the strategy and major policies
developed by top management
Supervisor, foreman
-First-line manager—coordinates
and supervises the activities of
operating employees-run today
What Makes Effective Managers?
Key Management Skills
– Technical skill
• A special skill needed to accomplish a
specialized activity-1st line and mid mgrs
– Conceptual skill
• The ability to think in abstract terms-top mgrs
– Interpersonal skill
• The ability to deal effectively with other people
-Needed by all mgrs
Leadership
The ability to influence others
Formal – uses legitimate power of position &
corporate authority to influence others
Informal – uses charisma & special
knowledge to gain voluntary
allegiance
Styles of Leadership
1) Authoritarian (UPS)
-Manager holds all authority & responsibility
-Top to bottom communication
2) Laissez-faire (Apple)
-Manager delegates authority to employees
-Allows subordinates to work with a minimal interference
-Horizontal communication among work groups
3) Democratic (Saturn)
-Manager holds final responsibility but delegates authority
to others
-Communication is active upward and downward
So, which leadership style is best?
Which Leadership Style Is Best?
none and all
• Match style to the situation
• Effective leadership depends on
– Interaction among the employees
– Characteristics of the work situation
– The manager’s personality
The Managerial Decision-Making Process
1) Identifying the problem or opportunity
– Problem
•
The discrepancy between an actual condition
and a desired condition-have low sales, want
higher sales
Opportunity
•
A “positive” problem-have good sales, see a
way to make more sales
Managerial Decision-Making
2) Generating alternatives
– Brainstorming
Encouraging participants to come up with
new ideas to solve a problem
– “Blast! Then Refine”
Erase past solutions from choices and
devise a new solution from scratch
--
Trial and error
Just do it an watch what happens
Managerial Decision-Making Process
3) Selecting an alternative
– Satisficing
• Choosing an alternative that is not the
best possible solution, but one that
adequately solves the problem-needed
when time/money or both are scarce
Managerial Decision-Making Process
4) Implementing your choice
-
Requires time, planning, preparation
of personnel, and contingencies
5) Evaluating the solution
–
An effective decision removes the difference
between the actual condition and the desired
condition
– If its not working
• give it more time
• change it
• scrap it