chapter 1: the changing environment for management
TRANSCRIPT
Fast-Track Management & Organizational Behavior
Chapter 1: The Changing Environment for
Management
This chapter will discuss:Understanding the concept of
management Appreciating what managers do & why
it is importantConsidering the role of management in
a global environment Being aware of the basic management
functions of planning, decision-making, organizing, leadership & controlling
The Critical Nature of ManagementWhy is General Motors an example of poor
management?By 1985, out of touch with the motor vehicle
industry Evolving customer demands Modern theories of business practice Change to a mixed demographic of customers &
workers Managers all white, middle-aged men Most new ideas rejected
GM sold 54% of the vehicles sold in the U.S. in ‘54; by 2010, that market share had fallen to 17½%. In 2007 alone, GM lost nearly $40 billion!
Many clues disregarded --
GM Lessons: What Management IgnoredCustomer complaints about qualityMileage concerns as gasoline prices rose
steadily higher beginning in the ‘70sTechnological innovationSize, particularly for urban driving &
parkingSafetyPriceWomen as an increasingly important
customer
What is Management?Coordinates & directs the activities of employees &
members of other constituent groups to accomplish the organization’s goals efficiently & effectivelyEfficiency means deriving the highest degree of
output of goods & services from the fewest units of input Various tools & techniques
Effectiveness is concerned with the accomplishment of an organization’s goals
Mission statement: announcement to the stakeholders (those groups affected by the organization) of the broad purpose & intentions
Let’s look at some mission statements --
Mission StatementsGM is a multinational corporation engaged in
socially responsible operations, worldwide. It is dedicated to provide products & services of such quality that our customers will receive superior value while our employees & business partners will share in our success & our stockholders will receive a sustained superior return on their investmentWhat does this tell us about the mission of
GM?Vague – could apply to any business!
Contrast with McDonald’s, Google, Walt Disney
Thoughtful Mission StatementsMcDonald's vision is to be the world's best quick
service restaurant experienceBeing the best means providing outstanding quality,
service, cleanliness, & value, so that we make every customer in every restaurant smile
Google's mission is to organize the world's information & make it universally accessible and useful
Walt Disney Company's objective is to be one of the world's leading producers and providers of entertainment and information, using its portfolio of brands to differentiate its content, services & consumer products
Goals & ObjectivesManagement works from this “mission” to
develop goals -- specific statements on how the mission will be accomplished: profitability, sales, new product development, maintaining the company’s credit rating, energy conservation, diversity actions, world-class manufacturing
Objectives are specific expectations for a company or a significant business segmentRequires measurement using specific
quantities; e.g., “increase sales by 15,000 units or 20%”
A stretch or an expansion from normal results
Management-by-Objectives (MBOs) ISpecific units of a company are assigned
their share of the company’s objectivesThen translated into specific assignments for
each senior manager & onto their subordinatesProblems in the Use of MBOs
Relevance of the goals, objectives & MBOs: can become an end in themselves without regard to changing business conditions
Quantity not quality: MBOs measure quantity but do not measure the quality of performance
Validity of objectives: who knows if a set of MBOs is the right set of objectives?
M Management-by-Objectives (MBOs) IIChange in Goals/Objectives/MBOs: during the
course of a year, downsizing, reassignments & new business initiatives may change management's allocation of resources
Irrelevance of Aggregated MBO Results: MBOs only work in situations when an employee has fairly close control over his or her accomplishments or failures
Soft MBO Targets: an employee may soften his or her objectives to assure success in meeting or exceeding the MBO expectations
The Functions of ManagementPlanning: setting goals, developing
strategies to achieve goals that have been accepted by the companycoordinating & integrating the use of resources
Decision-making: uses knowledge & analysis to select a course of action among various alternatives
Organizing: managers structure work so that the company’s goals can be accomplished
Directing (or leading): accomplishing work through the managers & employees of a company
Controlling: determines if a business is producing results consistent with plans
The Five Management Functions
PlanningDecision-Making
Organ-izing Directing
Controll-ing
RESULT IN
Set goals, establish strategies, develop plans
Determine critical factor in problem, analyze alter-natives, make decision
Resolve needs to achieve goals, how strategies will be done, who will do these tasks
Motivate, lead and act to complete tasks through employees
Monitor activities to determine that plans are accom-plished, and make necessary adjust-ments
ACCOMP-LISHING THE ORGANI-ZATION’S MISSION AND GOALS
Figure 1-2
Skill Requirements of ManagersFirst-line (supervisory) managers typically are
responsible for employees who have an objective essential to accomplish the organization’s goalsRequire technical skills (job-specific techniques);
some human relations skills Mid-level (middle) managers have
responsibility for several first-line managersRequire technical skills (job-specific techniques)
& human relations skills (directing workers)Senior managers are the organization’s leaders
Need fewer technical & significantly greater conceptual skills (thinking through difficult, often new situations) than mid-level managers
Primary Skills
ConceptualHuman
Resources
Technical
Secondary Skills
Analytical Technical
Human Resourc
esPlannin
gDecision-Making
Organizing
Directing
Controll-ing
1st-Level Mid-Level
Senior Level
Figure 1-3
Manager Skills Sets (by primary and secondary skills required)
Other Concerns of Senior Managers I
Technology. How do we deal with robotization & automation, mass customization, information technologies including mobile computing, contacts from & demands by customers for immediate responses including pricing, etc.?
Ethics & Law. World governments have passed laws & regulations that seriously constrain the freedom of companies to utilize their resources
Global Competition. The development of the industrial age may have started in the West, but competitors now exist in nearly part of the globe
Other Concerns of Senior Managers II
Security Threats. There are various security threats that can attack an organization to destroy, steal & eavesdrop on confidential information
Sustainability & Stakeholder ExpectationsSustainability is the ability of a business to
accomplish its mission & goals while being socially, environmentally & socially responsible
Stakeholders of a company include all of the constituencies that may be affected by corporate decisions, including employees, investors, vendors, vendors, customers, the public & government
Discussion & Review Questions
How do managers contribute value to their organizations?Could organizations effectively & efficiently function without
managers to provide the various activities associated with management?
What is efficiency? What is effectiveness?Why do organizations publish mission statements, & how do
they assist in managing?What is a management goal? An objective? What does it
mean to “manage by objectives” (MBOs)?Are there any problems in using MBOs? If there are
problems, why are MBOs used?What are the specific functions of management & how do
they differ?How do the responsibilities of first-line, middle & senior
managers vary?