Chapter 7: MANAGEMENT, LEADERSHIP, AND EMPLOYEE EMPOWERMENT

I. THE NEW APPROACH TO CORPORATE MANAGEMENT.

LEARNING GOAL 1. Explain the four functions of management and why the role of managers is changing.

A. A number of changes have prompted managers to reorganize their organizations and their approaches to management.

1. Changes are necessary because of GLOBAL COMPETITION, TECHNOLOGICAL CHANGE, and the growing IMPORTANCE OF PLEASING CUSTOMERS.

2. The NEED TO RESPOND BETTER TO CUSTOMERS is motivating businesses to reorganize to give more authority and responsibility to lower-level managers.

3. In response to foreign competition, American firms have restructured and changed their management styles to become more responsive.

4. Accelerating technological change increases the need for a new breed of worker, one who is more educated and has higher skill levels. HIGHER EDUCATED WORKERSdemand more freedom of operation and different managerial styles.

5. The start of the next century is shaping up as a time to get rid of old management styles and introduce a new way of operating.

6. Hundreds of firms have gone through sweeping organizational and managerial changes, becoming leaner and ready to take on world competition.

B. MANAGERS ARE NO LONGER JUST BOSSES.

1. Management has been defined as 'the art of getting things done through people.'

2. Bosses are changing from 'bossy' behavior to leading, guiding and coaching employees.

3. Managers in the future are much more likely to be working in teams.

4. This approach to management will demand that a manager be a skilled communicator and team player as well as a planner, coordinator, organizer, and supervisor.

C. THE DEFINITION AND FUNCTIONS OF CUSTOMER-ORIENTED MANAGEMENT.

1. MANAGEMENT is the process used to accomplish organizational goals through planning, organizing, directing, and controlling people and other organizational resources.

2. The FUNCTIONS OF MANAGEMENT are:

a. PLANNING includes anticipating future trends and determining the best strategies and tactics to achieve organizational goals and objectives

b. ORGANIZING includes designing the organization structure, attracting people to the organization, and creating conditions that ensure that everyone works together to achieve the organization's goals.

c. 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.

d. CONTROLLING is determining whether an organization is progressing toward its goals and objectives, and taking corrective action if it's not.

II. PLANNING: CREATING A VISION.

LEARNING GOAL 2. Relate the planning process to the accomplishment of corporate goals.

A. Planning is the management function that involves anticipating future trends and determining the best strategies and tactics to achieve organizational objectives.

1. PLANNING involves the setting of the organizational vision, goals, and objectives.

2. A VISION is more than a goal; it is the larger explanation of why the organization exists and where it is trying to head.

3. A MISSION STATEMENT outlines the fundamental purposes of the organization.

4. GOALS are the broad, long-term accomplishments an organization wishes to attain.

5. OBJECTIVES are specific, short-term statements detailing how to achieve the organizational goals.

6. Planning is a continuous process.

B. Planning answers THREE FUNDAMENTAL QUESTIONS:

1. WHAT IS THE SITUATION NOW?

2. WHERE DO WE WANT TO GO?

3. HOW CAN WE GET THERE FROM HERE?

C. TYPES OF PLANNING.

1. STRATEGIC (LONG-TERM) PLANNING determines the major goals of the organization and the policies and strategies for obtaining and using resources to achieve those goals.

a. Long-range planning is becoming more difficult because changes are occurring too fast for long-range thinking.

b. The long-range goal is to be flexible and responsive to the market.

c. Strategic planning is usually done by top management.

2. TACTICAL (SHORT-RANGE) PLANNING is the process of developing detailed, short-term decisions 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. OPERATIONAL PLANNING is setting of work standards and schedules necessary to implement the tactical objectives.

3. CONTINGENCY PLANNING is the preparation of alternative courses of action that may be used if the primary plans do not achieve the objectives of the organization.

a. It is wise to have alternative plans of action ready in anticipation of environmental changes.

b. The leaders of market-based companies stay flexible, listen for opportunities, and seize opportunities when they come.

III. ORGANIZING: CREATING A UNIFIED SYSTEM.

LEARNING GOAL 3. Describe the organizing function of management and illustrate how the function differs at various management levels.

A. After planning a course of action, managers must organize the firm to accomplish their goals.

1. When organizing, a manager develops a structure that relates all workers, tasks, and resources to each other called the ORGANIZATION STRUCTURE.

2. The ORGANIZATION CHART pictures who reports to whom and who is responsible for each task.

3. 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 and consists of the president and other key company executives who develop STRATEGIC PLANS.

a. Titles include CHIEF EXECUTIVE OFFICER (CEO), CHIEF OPERATING OFFICER (COO), and CHIEF FINANCIAL OFFICER (CFO.)

2. MIDDLE MANAGEMENT includes branch and plant managers, deans, and department heads who are responsible for TACTICAL PLANS.

3. SUPERVISORY (FIRST-LINE) MANAGEMENT includes people directly responsible for assigning specific jobs to workers and evaluating their daily performance.

C. THE CUSTOMER-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. Most 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 control.

D. ORGANIZATION INVOLVES MULTIPLE FIRMS.

1. 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.

2. In order for an organization to provide quality goods and services, it must develop close relationships with suppliers to provide world-class parts and materials.

3. Today firms throughout the world are linked by computers so that they operate as one.

4. SMALL BUSINESSES are key forces in shaping American business in this time of interfirm relationships.

E. EMPOWERING WORKERS.

1. For traditional organizations, directing involves giving assignments, explaining routines, clarifying policies, and providing feedback on performance.

2. In TRADITIONAL ORGANIZATIONS, all managers, from top managers to first-line supervisors, direct employees.

a. TOP MANAGERS are concerned with the broad overview of where the company is headed.

b. MIDDLE MANAGERS are responsible for directing employees to meet company objectives.

c. FIRST-LINE MANAGERS spend much of their time giving specific, detailed instructions to employees.

3. PROGRESSIVE MANAGERS in the future are less likely to be giving specific instructions to employees.

a. They are more likely to EMPOWER them to make decisions on their own.

b. EMPOWERMENT is a total quality term that means giving employees the authority and responsibility to respond quickly to customer requests.

c. ENABLING is the term used to describe giving workers the education and tools needed to assume their new decision-making roles.

4. SELF-MANAGED, CROSS-FUNCTIONAL TEAMS are groups of employees from various departments such as purchasing, marketing, and engineering.

IV. CONTROLLING.

LEARNING GOAL 4. Summarize the five steps of the control function of management.

A. The CONTROL FUNCTION is the heart of the management system because it provides the feedback that enables managers to adjust to any deviations from plans.

B. CONTROLLING CONSISTS OF THE FOLLOWING STEPS:

1. SETTING CLEAR PERFORMANCE STANDARDS

2. MONITORING AND RECORDING ACTUAL PERFORMANCE.

3. COMPARING RESULTS AGAINST PLANS AND STANDARDS

4. COMMUNICATING RESULTS AND DEVIATIONS TO THE EMPLOYEES INVOLVED.

5. TAKING CORRECTIVE ACTION WHEN NEEDED.

C. SETTING STANDARDS.

1. To measure results against standards, the standards must be SPECIFIC, ATTAINABLE, and MEASURABLE.

 2. Clear PROCEDURES FOR MONITORING performance should be established.

 D. NEW CRITERIA FOR MEASUREMENT: CUSTOMER SATISFACTION.

 1. The criteria for measuring success in a customer-oriented firm is CUSTOMER SATISFACTION OF BOTH INTERNAL AND EXTERNAL CUSTOMERS.

 a. INTERNAL CUSTOMERS are units within the firm that receive services from other units.

 b. EXTERNAL CUSTOMERS include dealers and ultimate customers who buy products for their own personal use.

 2. Other CRITERIA of organizational effective ness may include the firm's CONTRIBUTION TO SOCIETY or the ENVIRONMENT.

 E. A CORPORATE SCORECARD.

 1. A CORPORATE SCORECARD measures financial progress, return on investment, and profits, in addition to customer satisfaction.

 2. No company can prosper in the long run without a balanced approach that measures both financial growth and employee and customer satisfaction.

 3. Better controls make the company stronger.

 V. LEADERSHIP: VISION AND VALUES.

 LEARNING GOAL 5. Explain the differences between managers and leaders, and compare the characteristics and uses of the various leadership styles.

 A. LEADERSHIP involves creating vision for others to follow, establishing corporate values and ethics, and transforming the way the organization does business so it is more effective and efficient.

 B. LEADERS:

 1. Have a VISION and RALLY OTHERS around that vision.

 2. Establish CORPORATE VALUES.

 3. Emphasize CORPORATE ETHICS.

 4. DON'T FEAR CHANGE, but embrace it and create it.

 C. CREATING A LEARNING ORGANIZATION.

 1. A LEARNING ORGANIZATION is one skilled at crating, acquiring, interpreting, retaining, and transferring knowledge; and at purposefully modifying its behavior based on new technologies.

 2. Most companies are good at acquiring information but weaker at interpreting, retaining, and transferring knowledge-that's where leadership comes in.

 3. Some firms have added a CIO (CHIEF INFORMATION OFFICER) to their staffs.

 D. LEADERSHIP STYLES.

 1. Research studies have not been able to identify one set of TRAITS that are common to all leaders.

 2. There are also DIFFERENT LEADERSHIP STYLES:

 a. AUTOCRATIC LEADERSHIP involves making managerial decisions without consulting other, and implies power over others.

 b. PARTICIPATIVE or DEMOCRATIC LEADERSHIP consists of managers and employees working together to make decisions.

 c. LAISSEZ-FAIRE or FREE-REIN LEADER SHIP involves managers setting objectives and employees being relatively free to do whatever it takes to accomplish those objectives.

 d. Individual leaders rarely fit neatly into just one category.

 3. WHEN TO USE VARIOUS LEADERSHIP STYLES.

 a. The best leadership style to use depends on WHO IS BEING LED AND IN WHAT SITUATIONS.

 b. Any ONE MANAGER CAN USE A VARI ETY OF LEADERSHIP STYLES depending on whom he or she is dealing with and the situation.

 E. THE TREND TOWARD SELF-MANAGED TEAMS.

 1. The trend in the United States is toward self-managed teams and away from management, with its emphasis on planning, organizing, directing, and controlling.

 2. More planning, organizing, and controlling is being delegated to lower-level managers.

 3. This means that the trend will continue away from autocratic leadership toward laissez-faire leadership.

 4. It also means developing and training employees to assume greater responsibility.

 F. LEADERSHIP TEAMS.

 1. Intensified competition and globalization are making the present style of leadership obsolete.

 2. According to one study, within ten years only 14% of companies will be run by one leader-the majority will be run by TEAMS OF LEADERS.

 VI. TASKS AND SKILLS AT DIFFERENT LEVELS OF MANAGEMENT.

 LEARNING GOAL 6. Describe the three general categories of skills needed by top, middle, and first-line managers.

 A. The further up the managerial ladder a person moves, the greater the need for people who are visionaries, good planners, organizers, coordinators, communicators, morale builders, and motivators.

 B. Managers must have THREE CATEGORIES OF SKILLS:

 1. TECHNICAL SKILLS involve the ability to perform tasks of a specific department such as selling (marketing) or bookkeeping (accounting).

 2. CONCEPTUAL SKILLS refer to a manager's ability to picture the organization as a whole and the relationship of various parts to perform tasks such as planning, organizing, controlling, systems development, problem-analysis, decision-making, coordinating, and delegating.

 3. HUMAN RELATIONS SKILLS include leader ship, motivation, coaching, communication, morale-building, training and development, help and supportiveness, and delegating.

 4. FIRST-LEVEL MANAGERS need MORE TECHNICAL AND HUMAN RELATIONS SKILLS; whereas, TOP MANAGERS, need FEW TECHNICAL SKILLS AND GREATER CONCEPTUAL SKILLS.

 C. DELEGATING: BECOMING A TEAM LEADER.

 1. The most difficult task for most managers to learn is DELEGATING, assigning authority and accountability to others while retaining responsibility for results.

 2. TO DELEGATE EFFECTIVELY, A MANAGER MUST:

 a. SELECT THE APPROPRIATE PERSON TO DO THE JOB.

 b. ASSIGN THE TASK.

 c. GIVE THE AUTHORITY TO COMPLETE THE JOB.

 d. MAKE THOSE PEOPLE WHO ASSUME THE TASK RESPONSIBLE FOR GETTING IT COMPLETED ON TIME.

 3. Most progressive managers of the 21st century will be team leaders.

 a. They will set specific goals in cooperation with teams of workers and set up feedback and communication procedures.

 b. Employees will be given the freedom to decide how to complete specific tasks.

 D. DECISION MAKING: FINDING THE BEST ETHICAL ALTERNATIVE.

 1. DEFINE THE PROBLEM.

 2. DESCRIBE AND COLLECT NEEDED INFORMATION.

 3. DEVELOP ALTERNATIVES.

 4. DECIDE WHICH ALTERNATIVE IS BEST.

 5. DEVELOP AGREEMENT AMONG THOSE INVOLVED.

 6. DO WHAT IS INDICATED.

 7. DETERMINE WHETHER THE DECISION WAS A GOOD ONE AND FOLLOW UP.

 VII. LEARNING MANAGERIAL SKILLS.

 LEARNING GOAL 7. Illustrate the skills aspiring managers need to develop to be successful in the future.

 A. In all managerial jobs, oral communication, writing, computers, and human relations, are the skills in greatest demand.

 B. VERBAL SKILLS.

 1. The majority of a manager's job involves COMMUNICATING: talking, conducting meetings, making presentations, etc.

 2. One of the most important parts of communicating is LISTENING.

 C. WRITING SKILLS.

 1. Managers must communicate through memos, reports, letters, etc. To learn to write, you must practice writing.

 2. Today most E-mail and fax messages are set by the managers themselves.

 3. GOOD WRITING SKILLS are becoming increasingly important.

 D. COMPUTER SKILLS.

 1. Computers are as much a part of modern offices as typewriters were twenty years ago.

 2. The efficient manager must be able to SURF THE INTERNET to find needed facts and figures quickly.

 E. HUMAN RELATIONS SKILLS.

 1. Managers must not only get along with people, they must inspire and motivate them. Assume leadership positions in campus groups to gain experience.

 2. Managers have to know how to deal effectively with people from many different cultures.

 F. MANAGING DIVERSITY.

 1. MANAGING DIVERSITY means building systems and a culture that unites different people in a common pursuit without undermining their diversity.

 2. If people are to work on teams, they have to LEARN TO DEAL WITH PEOPLE WHO HAVE DIFFERENT PERSONALITIES, PRIORITIES, AND LIFESTYLES.

 3. HETEROGENEOUS (MIXED) GROUPS are more productive than HOMOGENOUS (SIMILAR) GROUPS in the workplace.

 4. It is often quite profitable to have employees who match the diversity of customers.

 G. TIME MANAGEMENT SKILLS.

 1. Managers must learn to control the many demands made upon their time.

 2. Time management skills learned now will help increase productivity at school and home as well as on the job.

 H. TECHNICAL SKILLS.

 1. You must choose some area of specialization.

 2. The most common areas among top managers are marketing, finance, production, law, and engineering.

 VIII. MANAGERS AND LEADERS ARE NEEDED EVERYWHERE.

 A. Studying management and leadership prepared people for a career in any organization.

 B. When selecting a career in management, a student has several decisions to make:

 1. What kind of organization is most desirable?

 2. What type of managerial position seems most interesting?

 3. What type of industry is most appealing?