chapter 1Management

McGraw-Hill/IrwinPrinciples of Management

© 2008 The McGraw-Hill Companies, Inc., All Rights Reserved.

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Learning Objectives

1. Describe the basic functions of management

2. Identify where in an organization managers are located

3. Discuss the challenges people encounter as they become first-line managers

4. Describe the roles managers adopt to perform the basic functions of management

5. Outline the competencies managers must have to be effective

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Management and Managers

• Management: The art of getting things done through people in the organization

• Managers give organizations a sense of purpose and direction

• Managers create new ways of producing and distributing goods and services

• Managers change how the world works through their actions

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Leaders versus Managers

Source: Adapted from “Leadership versus management: What’s the difference?”, The Journal for Quality and Participation, 2006

Process Management Leadership

Vision Establishment

* Plans and budgets* Develops process steps

and set timelines

* Set the direction and develops the vision

* Develops strategic plans to achieve the vision

Development and Networking

* Organizes and staffs* Maintain structure

* Aligns organization* Communicates the vision,

mission, and direction

Vision Execution

* Controls processes* Identifies problems

* Motivates and inspires* Energizes employees to

overcome barriers to change

Vision Outcome * Manages vision order and predictability

* Provides expected results

* Promotes useful and dramatic changes

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Functions of Management

Controlling

Planning & Strategizing

Leading & Developing

Organizing

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Planning & Strategizing

• Planning – a formal process whereby managers choose goals, identify actions, allocate responsibility for implementing actions, measuring the success of actions, and revising plans

• Planning is used to develop overall strategies

• A strategy is an action that managers take to attain the goals

• Planning goes beyond strategy development to include the regulation of a wide variety of organizational activities

• Strategizing – the process of thinking through on a continual basis what strategies an organization should pursue to attain its goals

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Who Makes the Strategic Decisions?

By Senior Groupincluding CEO

With Formal StrategicPlanning Process

By Business UnitLeaders

By CEO or Equivalent

By Others

Source: Improving Strategic Planning: A McKinsey Survey, The McKinsey Quarterly, September 2006

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Organizing

Organizing involves deciding:

• Who will perform the task?

• Where will decisions be made?

• Who reports to whom?

• How will different parts of the organization fit together to accomplish the common goal?

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Controlling

• The process of monitoring performance against goals, intervening when goals are not met, and taking corrective action

• First step – Drafting plans

• Important aspect is creating incentives that align employees’ and organization’s interests

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Benefits & Incentives

1. Performance Bonuses

2. Health Benefits

3. Performance-based Time Off

4. Education and Learning

5. Recognition and Awards

6. Retirement Planning and 401(k)

7. Promotion

8. Child Care and Elder Care Assistance

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Leading & Developing

• Leading – is the process of motivating, influencing, and directing others in the organization to work productively in pursuit of organization goals.

• Developing employees – the task of hiring, training, mentoring, and rewarding employees in an organization, including other managers.

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Skilled Leaders:

• Drive strategic thinking

• Have a plan for organization

• Proactively structure the organization

• Exercise control with a deft hand

• Use the right kind of incentives

• Get the best out of people

• Build a high-quality team

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America’s Best Leaders

• Steve Jobs, Apple, Pixar• Alan Mulally, Boeing Commercial Airplanes

• Terry Semel, Yahoo!• A.G. Lafley, Procter & Gamble• Kim Shin Bae, SK Telecom

Source: Best of 2005, Business Week, December 19, 2005

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Question

• Are the functions of management only for managers in organizations or can they apply to you as a student as well? Explain.

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Types of Managers

General Managers

Functional Managers

Frontline Managers

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Question

• Dr. John Alexander is the Chair of the Management Department at Global University with their main campus in New York, USA. The President of the university is Dr. Kim Kerry. John can be described as a ________ manager whereas Kim is a _______ manager.a. general; functional

b. frontline; general

c. functional; frontline

d. general; frontline

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Multi-divisional Management Hierarchy

CEO

Division Division Division Division

R&D Production Marketing Sales

Team

Team

Team

Corporate-level general managers

Business-level general managers

Functional managers

Frontline managers

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Becoming a Manager

• From Specialist to Manager

- Journey begins when people are successful at a specialist task that they were hired to do

- Need to be able to get things done through other people

• Mastering the Job

- Tends to be a large difference between expectations and reality- Workload is tremendous- Biggest challenge within the first year = “People challenges”

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Management Roles

Managerial roles

Leader

Figurehead Liaison

Entrepreneur

Disturbance handler Spokesperson

Disseminator

MonitorNegotiator

Resource Allocator

Informational roles

Interpersonal roles

Decisional roles

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Interpersonal Roles

• Roles that involve interacting with other people inside and outside the organization

• Management jobs are people-intensive

• Interpersonal roles: - Figureheads: Greet visitors, Represent the company at

community events, Serve as spokespeople, and Function as emissaries for the organization

- Leader: Influence, motivate, and direct others as well as strategize, plan, organize, control, and develop

- Liaison: Connect with people outside their immediate unit

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Informational Roles

• Collecting, Processing and Disseminating

• Roles: Monitor, disseminator, and spokesperson

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Decisional Roles

• Whereas interpersonal roles deal with people and informational roles deal with knowledge, decisional roles deal with action

• Decisional roles: - Entrepreneur: Managers must make sure their organizations

innovate, change, develop, and adopt- Disturbance handler: Addressing unanticipated problems as

they arise and resolving them expeditiously - Resource allocator: How best to allocate scarce resources- Negotiator: Negotiation is continual for managers

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Alan Mulalley, CEOBoeing Commercial Airplanes

• Decisional Roles:1. After September 11 attacks, Mulalley had to

renegotiate delivery of some 500 airplanes2. Cut jet production by more than half3. Fire 27,000 workers4. During the downturn, he focused on cutting waste

and streamlining his airplane production lines 5. He then bet the company’s future on a set of new

technologies that are now turning Boeing’s super efficient 787 Dreamliner into the hottest-selling new jetliner in history

Source: Best of 2005, Business Week, December 19, 2005

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Management Competencies

Skills

Motivational Preferences

ValuesIncludes

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Managerial Skills

Conceptual Skills

Technical Skills

Human Skills

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Managerial Values

•Enacted Values

•Espoused Values

•Shared Values

•Ethical Values

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Managerial Motivation

Desire to Compete

Desire to Exercise Power

Desire to be Distinct

Desire to Take Action