Chapter Seven
The Nature of Management
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Management
A process designed to
achieve an
organization’s objectives
by using its
resources effectively and
efficiently
in a changing
environment.
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Managers
Individuals in organizations who
make decisions about the use of
resources and who are concerned
with planning, organizing, leading,
and controlling the organization’s
activities to reach its objectives.
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The Functions of
Management
Managers
Planning
activities to
achieve the
organization's
objectives
Organizing
resources and
activities to
achieve the
organization’s
objectives
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Staffing
the
organization
with qualified
people
Directing
employees’
activities
toward
achievement
of objectives
Controlling
the
organization’s
activities
to keep it
on course
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Where Planning Starts
• Objectives - The ends or results
desired by the organization and are
derived from the organization’s
mission.
• Mission - The statement of an
organization’s fundamental purpose
and basic philosophy.
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Types of Plans
Operational
Plans
Tactical
Plans
Strategic
Plans
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Specify Actions to
Achieve Tactical Plans
(very short-term)
Designed to Implement
Strategic Objectives
(usually one year or less)
Establish Long-Range
Objectives
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Crisis Management, or
Contingency Planning,
Requires that Managers
Plan for “When” rather
than “If” a Disaster Occurs.
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The Levels of Management
Top
Management
President, CEO,
Executive
Vice Presidents
Middle Management
Plant Managers, Division Managers,
Department Managers
First-Line Management
Foreman, Supervisors, Office Managers
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The Top 5 Highest Paid CEOs
Annual Salary
CEO
Company
1.
Michael Dell
Dell Computer
$235,912K
2.
Sanford Weill
Citigroup
$216,183K
3.
Gerald Levin
AOL Time Warner
$164,183K
4.
John Chambers
Cisco Systems
$157,305K
5.
Henry Silverman
Cendant
$137,447K
Source: “Forbes Top CEOs,” from http://www.forbes.com (accessed July 9,2001)..
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Importance of Management Functions
to Managers in Each Level
Top
Managers
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Middle
Managers
Controlling
Directing
Staffing
Organizing
Planning
Controlling
Directing
Staffing
Organizing
Planning
Controlling
Directing
Staffing
Organizing
Least
Important
Planning
Most
Important
First-Line
Managers
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Areas of Management
• Financial Management
• Production and Operations
Management
• Human Resources Management
• Marketing Management
• Administrative Management
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Skills Needed by Managers
•
•
•
•
•
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Leadership Skills
Technical Expertise
Conceptual Skills
Analytical Skills
Human Relations
Skills
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Three Basic Styles
of Leadership
• Democratic
• Autocratic
• Free-rein
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Organizations are Successful
Because of Successful Leaders
•
Investor’s Business Daily’s 10 Secrets To Success:
1.
2.
3.
4.
5.
6.
7.
8.
9.
How you think is everything.
Decide upon your true dreams and goals.
Take action.
Never stop learning.
Be persistent and work hard.
Learn to analyze details.
Focus your time and money.
Don’t be afraid to innovate; Be different.
Be honest and dependable; Take responsibility: Otherwise Nos. 1-9
don’t matter.
Source: “IBD’S 10 SECRETS TO SUCCESS,”
Investor’s Business Daily, October 23, 2001, A6.
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LEADERSHIP: The Most
Important Role of a CEO
THE
MANAGER’S
ROLE
Motivate Employees
Communicate Clear Vision
Create Effective Growth Strategy
Listen to Customer Needs
Set Ethical Standards
Build a Quality Management Team
Boost Shareholder Wealth
RANKING
AMONG
CONSUMERS
RANKING
AMONG
EXECS
1
2
3
4
5
6
7
3
1
5
7
6
4
2
Source: Wirthlin Worldwide
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Where Do Managers Come From?
• Good Managers are Made, not Born:
– Promoting employees from within
– Hiring managers from other
organizations
– Hiring managers graduating from
colleges and universities
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Steps in the Management
Decision Making Process
Recognize and
Define the
Decision Situation
Develop
Options
Analyze
Options
Select the
Best Option
Implement
the Decision
Monitor the
Consequences
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The Reality of Management
There are Only Two Basic
Activities of Management:
1. Figuring out what to do despite
uncertainty, great diversity, and an
enormous amount of potentially relevant
information, and,
2. Getting things done through a large and
diverse set of people despite having little
direct control over most of them.
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An Example of Managerial Decision Making:
Influencing Employees’ Performance
Information
Gathered
Human Behavior Principles
Effects of goal setting,
rewarding behavior, and
learning
Employee Characteristics
Job skills and attitudes
Work Characteristics
Available technology
and materials
Time constraints
Demand for output
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Using Information
to Make Decision
Implementing
Decision
Determine Alternatives
Retraining of employees
Initiating work teams
Developing individual performance reward system
Evaluate Alternatives
Cost
Feasibility of implementing
Expected outcome
Choose Alternative
Developing individual performance reward system
Identify Rewards to be Used
Set Standards for Performance
Communicate Standards to
Employees
Ensure Employees are
Adequately Trained
Determine Method of
Measuring Performance
Collect Performance Data
Administer Rewards to
Employees Reaching
Standards
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The Payoffs of Management
• Management Position
Median Annual Salary
General Accounting
$ 69,845
HR Manager
$ 74,900
Building & Facilities
$ 68,532
Administrative Services
$ 59,682
Sales Promotion
$ 68,750
Customer Service
$ 60,000
Regional Sales
$ 92,250
Regional Marketing
$ 83,380
Operations
$ 77,175
Plant Manager
$102,573
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Solve the Dilemma
1. Evaluate Infinity’s current situation and
analyze its strengths and weaknesses.
2. Evaluate the opportunities for Infinity,
including using its current strategy and
propose alternative strategies.
3. Suggest a plan for Infinity to compete
successfully over the next ten years.
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Explore Your Career Options
In which types of industries or sectors
are managers the most likely to be
hired?
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Additional Discussion Questions
and Exercises
1. What is the difference between strategic plans and
tactical plans?
2. Which of the five functions of management is most
closely concerned with evaluation?
3. Which level of management is most likely to need
technical skills?
4. Describe the individuals with whom managers are
involved in networking. What is the value of
networking for managers?
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Chapter 7 Quiz
1. Which of the following skills involves the ability to think
creatively, to think in abstract parts, and to see how terms fit
together to form a whole?
a. analytical skills
b. conceptual skills
c. human relation skills
d. technical skills
2. Which describes free-rein leaders?
a. Leaders make all decisions and tell employees what to do
and how to do it.
b. Leaders allow employees to get involved in decisions.
c. Leaders allow top management to make all decisions and
tell employees what to do and how to do it.
d. Leaders let employees work without much interference.
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Chapter 7 Quiz
3. An agenda is most closely associated with
a. networking.
b. technical expertise.
c. a calendar.
d. financial resources.
4. The ability to deal with people is known as (an)
a. analytical skill.
b. conceptual skill.
c. human relation skill.
d. technical skill.
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Multiple Choice Questions
about the Video
1.
What style of leadership does Gerstner likely use in
empowering IBM employees?
a.autocratic
b. democratic
c. dictator
d. free rein
e. socialistic
2.
IBM has renewed its commitment to mainframe computers
and ______.
a. customers
b. suppliers
c. middle management
d. top management
e. intranets
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