Lecture
Outline
Getting to Know Oprah Winfrey: Businesswoman and TV personality. The opening profile focuses on Oprah Winfrey. Oprah is more a leader than a manager. Her management-by-instinct style enables employees to make operational decisions.
I. MANAGERIAL CHALLENGES.
LEARNING GOAL 1
Explain how the changes that are occurring in the business environment are affecting the management function.
A. The New business environment.
1. Today managers are under scrutiny as a result of numerous business scandals.
2. Most industries are experiencing constant change.
3. Today’s emphasis on speed in the global marketplace means managers must manage change effectively.
4. Accelerating technological change increases the need for a new breed of worker, one who is more educated and has higher skill levels.
a. HIGHER EDUCATED WORKERS demand more freedom of operation and different managerial styles.
b. Increasing workplace diversity is also creating management challenges.
c. Many jobs are being eliminated by DOWNSIZING or RIGHTSIZING.
B. MANAGERS’ ROLES ARE CHANGING.
1. Managers must practice the art of getting things done through organizational resources.
2. At one time, managers were called bosses, and their job was to tell people what to do.
3. Today managers must guide, train, support, motivate, and coach employees rather than telling them what to do.
4. Most modern managers emphasize teamwork and cooperation rather than discipline and order giving.
5. Traditional long-term contracts between management and employees are often no longer there.
6. Managers in the future are much more likely to be working in teams.
7. The new manager will have to be a skilled communicator and team player as well as a planner, coordinator, organizer, and supervisor.
II. FUNCTIONS OF MANAGEMENT.
LEARNING GOAL 2
Enumerate the four functions of management.
A. Management consultant Peter Drucker says managers:
1. Give direction to their organizations.
2. Provide leadership.
3. Decide how to use organizational resources to accomplish goals.
B. MANAGEMENT is the process used to accomplish organizational goals through planning, organizing, leading, and controlling people and other organizational resources.
C. PLANNING includes anticipating future trends and determining the best strategies and tactics to achieve organizational goals and objectives.
1. The trend today is to have planning teams monitor the environment.
2. Planning is a key management function because the other functions depend heavily on having a good plan.
D. ORGANIZING includes designing the structure of the organization and creating conditions and systems in which everyone and everything work together to achieve the organization’s goals and objectives.
1. Many organizations today are being designed around the customer.
2. Organizations must remain flexible and adaptable to respond to customers’ changing needs.
E. LEADING means creating a vision for the organization and guiding, training, coaching, and motivating others to work effectively to achieve the organization’s goals and objectives.
1. The trend is to empower employees, giving them as much freedom as possible.
2. This function was once known as directing; that is, telling employees exactly what to do.
3. In larger modern firms knowledge workers know their jobs better than managers do.
4. Leadership is still necessary to keep employees focused on the right tasks at the right time.
F. CONTROLLING involves 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.
G. The four functions are the heart of management.
III. PLANNING: CREATING A VISION BASED ON VALUES.
LEARNING GOAL 3
Relate the planning process and decision making to the accomplishment of company goals.
A. PLANNING involves the setting of the organizational vision, goals, and objectives.
1. A VISION is an encompassing explanation of why the organization exists and where it is trying to head; it is more than a goal.
2. A MISSION STATEMENT is an outline of the fundamental purposes of the organization.
a. A meaningful mission statement should address:
i. The organization’s self-concept.
ii. Company philosophy and goals.
iii. Long-term survival.
iv. Customer needs.
v. Social responsibility.
vi. The nature of the company’s product or service.
b. The text uses the example of Starbucks’ mission statement.
3. GOALS are the broad, long-term accomplishments an organization wishes to attain.
4. OBJECTIVES are specific, short-term statements detailing how to achieve the organizational goals.
5. Planning is a continuous process.
6. Planning answers THREE FUNDAMENTAL QUESTIONS:
a. What is the situation now?
b. Where do we want to go?
c. How can we get there from here?
7. SWOT analysis is a planning tool used to analyze an organization’s strengths, weaknesses, opportunities, and threats.
a. Strengths and weaknesses are internal to the firm.
b. Opportunities and threats are often external to the firm and cannot always be anticipated.
B. TYPES OF PLANNING.
1. STRATEGIC PLANNING is the process of determining the major goals of the organization and the
policies and strategies for obtaining and using resources to achieve those goals.
a. It provides the foundation for the policies, procedures, and strategies to achieve goals.
b. Strategies determine the best way to use resources.
c. Each firm faces unique challenges that affect strategic planning.
d. Long-range planning is becoming more difficult because changes are occurring too fast for long-range thinking.
e. Some companies are making shorter-term plans that allow for quick responses to customer needs.
2. TACTICAL PLANNING is the process of developing detailed, short-term statements about what is to be done, who is to do it, and how it is to be done.
a. Tactical planning is normally done by managers or teams of managers at lower levels of the organization.
b. An example of tactical planning is setting annual budgets.
3. OPERATIONAL PLANNING is the process of setting of work standards and schedules necessary to implement the company’s tactical objectives.
a. Operational planning focuses on specific supervisors and individual employees.
b. The operational plan is the department manager’s tool for daily operations.
4. CONTINGENCY PLANNING is the process of preparing alternative courses of action that may be used if the primary plans do not achieve the organization’s objectives.
a. It is wise to have alternative plans of action ready in anticipation of environmental changes.
b. CRISIS PLANNING, a part of contingency planning, involves reacting to sudden changes in the environment.
5. The leaders of market-based companies stay flexible, listen to customers, and seize opportunities when they come.
C. DECISION MAKING: FINDING THE BEST ALTERNATIVE.
1. All management functions involve decision making.
2. DECISION MAKING is choosing among two or more alternatives.
3. STEPS IN DECISION MAKING:
a. Define the problem.
b. Describe and collect needed information.
c. Develop alternatives.
d. Develop agreement among those involved.
e. Decide which alternative is best.
f. Do what is indicated (begin implementation.)
g. Determine whether the decision was a good one and follow up.
4. The best decisions are based on sound information.
5. Decision making is more an art than a science.
6. PROBLEM SOLVING is the process of solving the everyday problems that occur.
a. It is less formal than the decision-making process and calls for quicker action.
b. Companies can use BRAINSTORMING, coming up with as many solutions to a problem as possible in a short period of time with no censoring of ideas.
c. Another technique is PMI, listing all the pluses for a solution in one column, all the minuses in another, and the implications in a third column.
IV. ORGANIZING: CREATING A UNIFIED SYSTEM.
LEARNING GOAL 4
Describe the organizing function of management.
A. After planning a course of action, managers must organize the firm to accomplish their goals.
1. The ORGANIZATION CHART is a visual device that shows the relationship and divides the organization’s work; it shows who is accountable
for the completion of specific work and who reports to whom.
2. The corporate hierarchy illustrated on the organization chart includes top, middle, and first-line managers.
B. LEVELS OF MANAGEMENT.
1. TOP MANAGEMENT is the highest level of management, consisting of the president and other key company executives who develop STRATEGIC PLANS.
a. Titles include Chief Executive Officer (ceo), Chief Operating Officer (coo), Chief Financial Officer (cfo), and Chief Knowledge Officer (cko).
2. MIDDLE MANAGEMENT is the level of management that includes general managers, division managers, and branch and plant managers who are responsible for tactical planning and controlling.
3. SUPERVISORY MANAGEMENT includes managers who are directly responsible for supervising workers and evaluating their daily performance.
C. TASKS AND SKILLS AT DIFFERENT LEVELS OF MANAGEMENT.
1. Managers are usually workers with specific skills who are promoted–they are not trained as managers.
2. The further up the managerial ladder a person moves, the greater the need for people who are visionaries, planners, organizers, coordinators, communicators, morale builders, and motivators.
3. Managers must have THREE CATEGORIES OF SKILLS:
a. TECHNICAL SKILLS involve the ability to perform tasks in a specific discipline (such as selling a product) or department (such as marketing.)
b. HUMAN RELATIONS SKILLS involve communication and motivation; they enable managers to work through and with people.
c. CONCEPTUAL SKILLS involve the ability to picture the organization as a whole and the relationships among its various parts.
4. Skills by level:
a. FIRST-LEVEL MANAGERS need less conceptual skill and more technical and human relations skills.
b. TOP MANAGERS, need few technical skills and greater human relations and conceptual skills.
D. THE TREND TOWARD SELF-MANAGED TEAMS.
1. The trend in the United States is toward placing workers on cross-functional teams composed of people from various departments of the firm.
2. More planning, organizing, and controlling is being delegated to lower-level managers.
3. This trend means that 21st century managers must develop and train employees to assume greater responsibility.
4. Teamwork usually aids communication, improves cooperation, reduces internal competition, and maximizes the talents of all employees.
5. Chapter 8 deals with teams.
E. THE STAKEHOLDER-ORIENTED ORGANIZATION.
1. The firm must find the best way to organize to respond to the needs of customers and other stakeholders.
a. STAKEHOLDERS include anyone who is affected by the organization and its policies and products.
b. Smaller firms are more responsive than larger firms.
c. Many large firms are being restructured into smaller, more customer-focused units to become more responsive.
2. Companies are no longer organizing to make it easy for managers to have control; instead, they are organizing so that CUSTOMERS have the greatest influence.
3. In order for an organization to provide high-quality goods and services, it must develop close
relationships with suppliers to provide world-class parts and materials.
4. Today, the organization task is more complex because firms are forming partnerships, joint ventures, and other arrangements that make it necessary to organize the WHOLE SYSTEM.
5. Creating a unified system out of multiple organizations will be a major challenge of the 21st century.
F. STAFFING: GETTING AND KEEPING THE RIGHT PEOPLE.
1. STAFFING is the management function that includes hiring, motivating, and retaining the best people available to accomplish the company’s objectives.
a. In today’s high-tech world, recruiting good employees has become a critical important part of organizational success.
b. The firms with the most innovative and creative workers can develop quickly and successfully.
2. The text uses the example of Sun Microsystems’ recruiting techniques.
3. Once they are hired, good people must be retained.
a. People are not willing to work at companies unless they are treated well and get fair pay.
b. Staffing is becoming a bigger part of the managers’ job.
4. Chapter 11 is devoted to human resources issues.
G. MANAGING DIVERSITY.
1. MANAGING DIVERSITY means building systems and a culture that unite different people in a common pursuit without undermining their individual strengths.
2. If people are to work on teams, they have to learn to deal with people who have different personalities, priorities, and lifestyles.
3. Managing a diverse group of people often causes difficulties within a firm.
4. HETEROGENEOUS (MIXED) GROUPS are more productive than HOMOGENOUS (SIMILAR) GROUPS in the workplace.
5. It is profitable to have employees who match the diversity of customers.
6. Managers must learn to work with people from many different cultures.
7. Managing diversity also means working with minority business enterprises (MBE) to maintain a strong and diverse supplier network.
8. The text uses the example of American Airlines, which successfully manages diversity.
V. LEADING: PROVIDING CONTINUOUS VISION AND VALUES.
LEARNING GOAL 5
Explain the differences between leaders and managers, and describe the various leadership styles.
A. A person could be a good manager and not a good leader.
1. LEADERSHIP involves creating vision for others to follow, establishing corporate values and ethics, and transforming the way the organization does business in order to improve its effectiveness and efficiency.
2. MANAGEMENT is the carrying out of the leadership’s vision.
3. All organizations need leaders who can supply the vision as well as the moral and ethical foundation for growth.
4. Leaders must lead by doing, not just by saying; they must:
a. Communicate a vision and rally others around that vision.
b. Establish corporate values.
c. Promote corporate ethics.
d. Embrace change.
B. LEADERSHIP STYLES.
1. Research studies have not been able to identify one set of leadership TRAITS that are common to all leaders.
2. There are also DIFFERENT LEADERSHIP STYLES:
a. AUTOCRATIC LEADERSHIP involves making managerial decisions without consulting other; it is effective in emergencies and when dealing with unskilled workers.
b. PARTICIPATIVE (DEMOCRATIC) LEADERSHIP consists of managers and employees working together to make decisions.
i. Research has found that employee participation usually increases job satisfaction.
ii. Organizations that have successfully used this style include Wal-Mart, IBM, AT&T, and most smaller firms.
c. FREE-REIN LEADERSHIP involves managers setting objectives and employees being relatively free to do whatever it takes to accomplish those objectives; it is often successful when dealing with engineers or other professionals.