Chapter 7
THE NEW BUSINESS ENVIRONMENT.
- A number of changes
have prompted managers to reorganize their organizations and their
approaches to management.
- The emergence of
the Internet has radically changed the nature of management.
- Managing change is
an important element of success.
- Changes are
necessary because of GLOBAL COMPETITION, TECHNOLOGICAL CHANGE, and
the growing IMPORTANCE OF PLEASING CUSTOMERS.
- Accelerating
technological change increases the need for a new breed of worker, one
who is more educated and has higher skill levels.
- HIGHER
EDUCATED WORKERS demand more
freedom of operation and different managerial styles.
- Increasing
workplace diversity is also creating management challenges.
- Many jobs are
being eliminated by DOWNSIZING or RIGHTSIZING.
- The Internet has
increased the power of consumers in the buyer-seller relationship.
- The business
environment has changed and managers need to change as well.
- MANAGERS ARE NO
LONGER BOSSES.
- Managers must
practice the art of getting things done through organizational resources.
- At one time,
managers were called bosses, and their job was to tell people what to do.
- Today managers must
guide, train, support, motivate, and coach employees rather than telling
them what to do.
- Most modern
managers emphasize teamwork and cooperation rather than discipline and
order giving.
- Managers must
confront the low unemployment rate in the U.S. in which employees have
many job options.
- Traditional
long-term contracts between management and employees are often no longer
there.
- Managers in the
future are much more likely to be working in teams.
- 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.
- FUNCTIONS OF
MANAGEMENT
Enumerate the
four functions of management.
- Management
consultant Peter Drucker says managers:
- Give direction to
their organizations.
- Provide
leadership.
- Decide how to use
organizational resources.
- MANAGEMENT
is the process used to accomplish organizational goals through planning,
organizing, directing, and controlling people and other organizational
resources.
- The FUNCTIONS OF
MANAGEMENT are
-
PLANNING
involves anticipating future trends and determining the best strategies
and tactics to achieve organizational goals and objectives
- 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.
- 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.
- CONTROLLING
is determining whether an organization is progressing toward its goals
and objectives, and taking corrective action if it’s not.
- The four functions
are the heart of management.
- PLANNING: CREATING A
VISION BASED ON VALUES.
- Relate the planning
process and decision making to the accomplishment of company goals.
- PLANNING
involves the setting of the organizational vision, goals, and objectives.
- A
VISION is more than a goal; it is the larger explanation of
why the organization exists and where it is trying to head.
- A MISSION
STATEMENT outlines the fundamental purposes of the organization; the
text uses the example of Aurora Foods’ four mission points.
- GOALS are the
broad, long-term accomplishments an organization wishes to attain.
- OBJECTIVES
are specific, short-term statements detailing how to achieve the
organizational goals.
- Planning is a
continuous process.
- Planning answers
THREE FUNDAMENTAL QUESTIONS:
- WHAT IS THE
SITUATION NOW?
- WHERE DO WE WANT
TO GO?
- HOW CAN WE GET
THERE FROM HERE?
- TYPES OF
PLANNING
- 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.
- It provides the
foundation for the policies, procedures, and strategies to achieve
goals.
- Long-range
planning is becoming more difficult because changes are occurring too
fast for long-range thinking.
- Some companies
are making shorter-term plans that allow for quick responses to customer
needs.
- Strategic
planning is usually done by top management.
- 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.
- Tactical planning
is normally done by managers or teams of managers at lower levels of the
organization.
- An example of
tactical planning is setting annual budgets.
- OPERATIONAL
PLANNING is setting of work
standards and schedules necessary to implement the tactical objectives.
- Operational
planning focuses on specific supervisors and individual employees.
- The operational
plan is the department manager’s tool for daily operations.
- CONTINGENCY
PLANNING is the process of
preparing alternative courses of action that may be used if the primary
plans do not achieve the objectives of the organization.
- It is wise to
have alternative plans of action ready in anticipation of environmental
changes.
- CRISIS
PLANNING, a part of
contingency planning, involves reacting to sudden changes in the
environment.
- The leaders of
market-based companies stay flexible, listen for opportunities, and seize
opportunities when they come.
- DECISION MAKING:
FINDING THE BEST
ALTERNATIVE.
- All management
functions involve decision making.
- DECISION MAKING
is choosing among two or more alternatives.
- STEPS IN
DECISION MAKING:
- DEFINE THE
PROBLEM.
- DESCRIBE AND
COLLECT NEEDED INFORMATION.
- DEVELOP
ALTERNATIVES.
- DECIDE WHICH
ALTERNATIVE IS BEST.
- DEVELOP
AGREEMENT AMONG THOSE INVOLVED.
- DO WHAT IS
INDICATED.
- DETERMINE
WHETHER THE DECISION WAS A GOOD ONE AND FOLLOW UP.
- The best decisions
are based on sound information.
- Decision making is
more an art than a science
- ORGANIZING: CREATING
A UNIFIED SYSTEM.
- After planning a
course of action, managers must organize the firm to accomplish their
goals.
- The ORGANIZATION
CHART is a visual device which 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.
- The corporate
hierarchy illustrated on the organization chart includes top, middle, and
first-line managers
- LEVELS OF
MANAGEMENT
- TOP MANAGEMENT
is the highest level of management and consists of the president and other
key company executives who develop STRATEGIC PLANS.
- Titles include
CHIEF EXECUTIVE OFFICER (CEO), CHIEF OPERATING OFFICER (COO),
and CHIEF FINANCIAL OFFICER (CFO.)
- MIDDLE
MANAGEMENT includes general
managers, division managers, and branch and plant managers who are
responsible for tactical planning and controlling.
- SUPERVISORY
(FIRST-LINE) MANAGEMENT
includes managers directly responsible for assigning specific jobs to
workers and evaluating their daily performance.
- THE TREND TOWARD
SELF-MANAGED TEAMS.
- The trend in the
United States is toward self-managed teams and away from management, with
its emphasis on planning, organizing, directing, and controlling.
- More planning,
organizing, and controlling is being delegated to lower-level managers.
- This trend means
that 21st century managers must develop employees to assume greater
responsibility.
- Chapter 8 deals
with teams.
- THE
STAKEHOLDER-ORIENTED ORGANIZATION
- The firm must find
the best way to organize to respond to the needs of customers and other
stakeholders.
- STAKEHOLDERS
include anyone who is affected by the organization and its policies and
products.
- Most large firms
are being restructured into smaller, more customer-focused units to
become more responsive.
- Companies are no
longer organizing to make it easy for managers to have control. Instead,
they are organizing so that CUSTOMERS have control.
- 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.
- 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.
- Creating a unified
system out of multiple organizations will be a major challenge of the 21st
century.
- STAFFING: GETTING
AND KEEPING THE RIGHT PEOPLE
- STAFFING
involves recruiting, hiring, motivating, and retaining the best people
available to accomplish the company’s objectives.
- Recruiting good
employees has always been an important part of organizational success.
- The firms with
the most innovative and creative works can develop quickly and
successfully.
- Once they are
hired, good people must be retained.
- A low national
unemployment rate means people no longer are willing to work at
companies unless they are treated well.
- Staffing is
becoming a bigger part of the managers’ job.
- Chapter 11 is
devoted to human resources issues.
- MANAGING DIVERSITY.
- MANAGING
DIVERSITY means building
systems and a culture that unites different people in a common pursuit
without undermining their diversity.
- If people are to
work on teams, they have to LEARN TO DEAL WITH PEOPLE WHO HAVE
DIFFERENT PERSONALITIES, PRIORITIES, AND LIFESTYLES.
- HETEROGENEOUS
(MIXED) GROUPS are more
productive than HOMOGENOUS (SIMILAR) GROUPS in the workplace.
- It is often quite
profitable to have employees who match the diversity of customers.
- Managers must learn
to work with people from many different cultures.
- Managing diversity
also means working with minority business enterprises (MBE) to maintain a
strong and diverse supplier network.
- The text uses the
example of American Airlines, which successfully manages diversity.
- LEADING: PROVIDING
CONTINUOUS VISION AND
VALUES.
Explain the
differences between leaders and managers, and describe the various leadership
styles.
- A person could be a
good manager and not a good leader.
- 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.
- MANAGEMENT
is the carrying out of the leadership’s vision.
- All organizations
need leaders who can supply the vision as well as the moral and ethical
foundation for growth.
- LEADERS MUST:
- Communicate a
vision and rally others around that vision.
- Establish corporate
values.
- Promote corporate
ethics.
- Embrace change
- LEADERSHIP STYLES
- Research studies
have not been able to identify one set of TRAITS that are common to
all leaders.
- There are also
DIFFERENT LEADERSHIP STYLES:
- AUTOCRATIC
LEADERSHIP involves making
managerial decisions without consulting other, and implies power over
others.
- PARTICIPATIVE
or DEMOCRATIC LEADERSHIP
consists of managers and employees working together to make decisions.
- LAISSEZ-FAIRE
or FREE-REIN LEADERSHIP
involves managers setting objectives and employees being relatively free
to do whatever it takes to accomplish those objectives.
- Individual
leaders rarely fit neatly into just one category
- Researchers
illustrate leadership as a continuum with varying amounts of employee
participation.
- WHEN TO USE
VARIOUS LEADERSHIP STYLES
CONCEPT CHECK .
- The best
leadership style to use depends on WHO IS BEING LED AND IN WHAT
SITUATIONS.
- Any ONE
MANAGER CAN USE A VARIETY OF LEADERSHIP STYLES depending on whom he
or she is dealing with and the situation.
- The successful
leader has the ability to use the leadership style that is most
appropriate to the situation and the employees involved.
- EMPOWERING
WORKERS.
- For traditional
organizations, directing involves giving assignments, explaining routines,
clarifying policies, and providing feedback on performance.
- PROGRESSIVE
LEADERS are less likely to be
giving specific instructions to employees.
- They are more
likely to EMPOWER them to make decisions on their own.
- EMPOWERMENT
is a total quality term that means giving employees the authority and
responsibility to respond quickly to customer requests.
- ENABLING
is the term used to describe giving workers the education and tools
needed to assume their new decision-making roles.
- MANAGING KNOWLEDGE
- Finding the right
information, keeping the information is a readily accessible place, and
making the information known to everyone in the firm is know as
KNOWLEDGE MANAGEMENT.
- Knowledge
management tries to keep people from duplicating the work of gathering
information every time a decision is made.
- Learning how to
process information and turn it into information that everyone can use is
key to managerial success.
- CONTROLLING: MAKING
SURE IT WORKS.
Summarize the five
steps of the control function of management.
- 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.
- CONTROLLING
CONSISTS OF THE FOLLOWING STEPS:
- Setting clear
PERFORMANCE STANDARDS
- MONITORING
and recording actual performance.
- COMPARING
RESULTS against plans and
standards.
- COMMUNICATING
RESULTS and deviations to
the employees involved.
- Providing
FEEDBACK and TAKING CORRECTIVE ACTION when needed.
- SETTING
STANDARDS
- To measure
results against standards, the standards must be SPECIFIC,
ATTAINABLE, and MEASURABLE.
- To measure
results against standards, the standards must be SPECIFIC,
ATTAINABLE, and MEASURABLE.
- NEW CRITERIA FOR
MEASUREMENT: CUSTOMER SATISFACTION.
- The criteria for
measuring success in a customer-oriented firm is CUSTOMER SATISFACTION
OF BOTH INTERNAL AND EXTERNAL CUSTOMERS.
- EXTERNAL
CUSTOMERS include dealers
and ultimate customers who buy products for their own personal use.
- INTERNAL
CUSTOMERS are individuals
and units within the firm that receive services from other units.
- One goal today is
to go beyond simply satisfying customers by "delighting" them with
unexpectedly good products and services.
- Other CRITERIA
of organizational effectiveness may include the firm’s CONTRIBUTION
TO SOCIETY or the ENVIRONMENT.
- THE CORPORATE
SCORECARD.
- A CORPORATE
SCORECARD measures financial progress, return on investment, and
profits, in addition to customer satisfaction.
- Most companies use
a balanced approach that measures both financial growth and employee and
customer satisfaction.
- TASKS AND SKILLS AT
DIFFERENT LEVELS OF
MANAGEMENT.
- 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.
- Managers must have
THREE CATEGORIES OF SKILLS:
- TECHNICAL SKILLS
involve the ability to perform tasks in a specific discipline (such as
selling a product) or department (such as marketing.)
- HUMAN RELATIONS
SKILLS involve communication
and motivation; they enable managers to work through and with people.
- CONCEPTUAL
SKILLS involve the ability to
picture the organization as a whole and the relationships among its
various parts.
- Skills by level:
- FIRST-LEVEL
MANAGERS need MORE
TECHNICAL AND HUMAN RELATIONS SKILLS.
- TOP MANAGERS,
need FEW TECHNICAL SKILLS AND GREATER CONCEPTUAL SKILLS.
- MANAGEMENT SKILLS
ARE TRANSFERABLE
- Studying management
and leadership prepared people for a career in any organization.
- When selecting a
career in management, a student has several decisions to make:
- When selecting a
career in management, a student has several decisions to make:
- What type of
managerial position seems most interesting?
- What type of
industry is most appealing?