Foundations of
Business 3e
Pride, Hughes, &
Kapoor
Understanding the Management Process
Chapter
6
© 2013 South-Western, a part of Cengage Learning. All rights reserved.
Chapter 6 | Slide 2
Learning Objectives
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 of successful
managers.
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.
© 2013 South-Western, a part of Cengage Learning. All rights reserved.
Chapter 6 | Slide 3
The Four Main Resources
of Management
Managers coordinate an organization’s resources
to achieve the goals of the organization.
© 2013 South-Western, a part of Cengage Learning. All rights reserved.
Chapter 6 | Slide 4
What Is Management?

The process of coordinating people and other
resources to achieve the goals of an organization
• Material resources
– The tangible physical resources an organization uses
• Human resources
– The people who staff an organization and use the other
resources to achieve the goals of the organization
• Financial resources
– The funds an organization uses to meet its obligations to
investors and creditors
• Information resources
– The information about external business environmental
conditions that a firm uses to its competitive advantage
© 2013 South-Western, a part of Cengage Learning. All rights reserved.
Chapter 6 | Slide 5
Basic Management Functions
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Chapter 6 | Slide 6
Planning

Planning
• Establishing organizational goals and deciding how
to accomplish them

Mission
• A statement of the basic purpose that makes
an organization different from others

Strategic planning
• The process of establishing an organization’s
major goals and objectives and allocating the
resources to achieve them
© 2013 South-Western, a part of Cengage Learning. All rights reserved.
Chapter 6 | Slide 7
Planning (cont.)

Establishing goals and objectives
• Goal
–
An end result that an organization is expected to
achieve over a one- to ten-year period
• Objective
–
A specific statement detailing what an organization
intends to accomplish over a shorter period of time
• Properly set goals are
–
–
–
Set at every level in the organization
Consistent with (supportive of) each other
Optimized (balanced) to reduce conflicts between goals
© 2013 South-Western, a part of Cengage Learning. All rights reserved.
Chapter 6 | Slide 8
Planning (cont.)

SWOT analysis
• The identification and evaluation of a firm’s
–
–
–
–

Strengths
Weaknesses
Opportunities
Threats
Core competencies
• Approaches and processes that a company
performs well and may give it an advantage over
its competitors
© 2013 South-Western, a part of Cengage Learning. All rights reserved.
Chapter 6 | Slide 9
Elements and Examples of SWOT Analysis
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Chapter 6 | Slide 10
Planning (cont.)

Types of plans
• Plan
– An outline of the actions by which an organization intends to
accomplish its goals and objectives
• Strategic plan
– An organization’s broadest plan, a guide for major policy
setting and decision making
• Tactical plan
– A smaller-scale plan to implement a strategy
• Operational plan
– A plan to implement a tactical plan
• Contingency plan
– A plan of alternative courses of action if the organization’s
other plans are disrupted or become ineffective
© 2013 South-Western, a part of Cengage Learning. All rights reserved.
Chapter 6 | Slide 11
Types of Plans
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Chapter 6 | Slide 12
Organizing the Enterprise

Organizing
• The grouping of resources and activities to
accomplish some end result in an efficient
and effective manner

Leading and motivating
• Leading
–
Influencing people to work toward a common goal
• Motivating
–
Providing reasons for people to work in the best
interests of an organization
• Directing
–
The combined processes of leading and motivating
© 2013 South-Western, a part of Cengage Learning. All rights reserved.
Chapter 6 | Slide 13
The Control Function

Controlling
• Evaluating and regulating ongoing activities
to ensure that goals are achieved

Control function
© 2013 South-Western, a part of Cengage Learning. All rights reserved.
Chapter 6 | Slide 14
Kinds of Managers

Levels of management
• Top manager—guides and
controls the overall fortunes
of an organization
• Middle manager—implements
the strategy and major policies
developed by top management
• First-line manager—coordinates
and supervises the activities of
operating employees

The coordinated effort of all three levels of managers
is required to implement the goals of any company.
© 2013 South-Western, a part of Cengage Learning. All rights reserved.
Chapter 6 | Slide 15
Areas of Management Specialization

Other areas may have to be added, depending on
the nature of the firm and the industry.
© 2013 South-Western, a part of Cengage Learning. All rights reserved.
Chapter 6 | Slide 16
Areas of Management Specialization (cont.)

Financial managers
• Responsible for an organization’s financial resources

Operations managers
• Manage the systems that convert resources into goods
and services

Marketing managers
• Responsible for facilitating the exchange of products
between an organization and its customers or clients

Human resources managers
• Manage an organization’s human resources programs

Administrative managers (general managers)
• Not associated with any specific functional area; provide
overall administrative guidance and leadership
© 2013 South-Western, a part of Cengage Learning. All rights reserved.
Chapter 6 | Slide 17
Key Skills of Successful Managers
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Chapter 6 | Slide 18
Key Skills of Successful Managers (cont.)

Key management skills
• Conceptual skills
–
Ability to think in abstract terms
• Analytic skills
–
Ability to identify problems, generate alternative
solutions, and select the best solution
• Interpersonal skills
–
Ability to deal effectively with other people
• Technical skills
–
Needed to accomplish a specialized activity
© 2013 South-Western, a part of Cengage Learning. All rights reserved.
Chapter 6 | Slide 19
Key Skills of Successful Managers (cont.)

Key management skills (cont.)
• Communication skills
• Ability to speak, listen, and write effectively
© 2013 South-Western, a part of Cengage Learning. All rights reserved.
Chapter 6 | Slide 20
Leadership

The ability to influence others

Leadership versus management

Formal leadership
• Legitimate power of position is the
basis for authority

Informal leadership
• Not recognized formally by the
organization authority
© 2013 South-Western, a part of Cengage Learning. All rights reserved.
Chapter 6 | Slide 21
Styles of Leadership

Autocratic
• A task-oriented style. Workers are told what to do
and how to do it, and they have no say in the
decision-making process.

Participative
• All members of a team are involved in identifying
essential goals and developing strategies to reach
those goals.

Entrepreneurial
• A personality-based style. The manager seeks to
inspire workers with a vision of what can be
accomplished to benefit all stakeholders.
© 2013 South-Western, a part of Cengage Learning. All rights reserved.
Chapter 6 | Slide 22
Which Leadership Style Is Best?

Matching style to the situation

Effective leadership depends on
• Interaction among the employees
• Characteristics of the work situation
• The manager’s personality
© 2013 South-Western, a part of Cengage Learning. All rights reserved.
Chapter 6 | Slide 23
Tips for Successful Leadership
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Chapter 6 | Slide 24
Managerial Decision Making

The act of choosing one alternative from
among a set of alternatives

Major steps in the managerial
decision-making process
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Chapter 6 | Slide 25
Managerial Decision Making (cont.)

Identifying the problem or opportunity
• Problem
–
The discrepancy between an actual condition and
a desired condition
• Opportunity
–
A “positive” problem
• Problem-solving impediments
–
–
–
–
Preconceptions about the problem
Focusing on unimportant matters while overlooking
significant issues
Analyzing symptoms rather than causes
Failing to look ahead
© 2013 South-Western, a part of Cengage Learning. All rights reserved.
Chapter 6 | Slide 26
Managerial Decision Making (cont.)

Generating alternatives
• Brainstorming
–
Encouraging participants to come up with new ideas
• “Blast! then refine”
–
Reevaluating objectives, modifying them if necessary, and
devising a new solution to a recurring problem
• Trial and error

Selecting an alternative
• Satisficing
–
Choosing an alternative that is not the best possible
solution, but one that adequately solves the problem
© 2013 South-Western, a part of Cengage Learning. All rights reserved.
Chapter 6 | Slide 27
Managerial Decision Making (cont.)

Implementing and evaluating the solution
• Requires time, planning, preparation of personnel,
and evaluation of the results
• An effective decision removes the difference
between the actual condition and the
desired condition
• If a problem still exists, managers may
–
–
–
Decide to give the chosen alternative more time
Adopt a different alternative
Start the process all over again
© 2013 South-Western, a part of Cengage Learning. All rights reserved.
Chapter 6 | Slide 28
Managing Total Quality

Total Quality Management (TQM)
• The coordination of efforts directed at
–
–
–
–


Improving customer satisfaction
Increasing employee participation
Strengthening supplier partnerships
Facilitating an organizational atmosphere of
continuous quality improvement
Benchmarking—evaluating another
organization that is superior in order to
improve quality
Issues crucial to TQM
• Top management commitment
• Coordination of efforts
© 2013 South-Western, a part of Cengage Learning. All rights reserved.
Chapter 6 | Slide 29