management, leadership, and the internal organizationbus.msjc.edu/portals/22/caren/16ed/ch07.pdf ·...

Management, Leadership, and the

Internal Organization

www.wileybusinessupdates.com

Copyright John Wiley & Sons, Inc.

Copyright © 2013 Pearson Education, Inc.

Publishing as Prentice Hall

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Chapter 7

http://www.wileybusinessupdates.com/

Learning Objectives

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Contrast the types of business decisions and

list the steps in the decision-making process.

Define leadership and compare different styles

of leadership.

Discuss the meaning and importance of

corporate culture.

Identify the five major forms of

departmentalization and four main types of

organization structures.

Define management and the three types of skills

necessary for managerial success.

Explain the role of vision and ethical standards in

business success.

Summarize the benefits of planning and distinguish

strategic, tactical, and operational planning.

Describe the strategic planning process.

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Copyright 2015 John Wiley & Sons, Inc.

What is Management?

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Management is the process of achieving organizational objectives

through people and other resources


Top Management

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Develop long-range strategic

plans for the organization.

Inspire executives and

employees to achieve their

vision for the company’s

future.

Intense and demanding

Middle Management

Focus on specific operations,

products, or customer groups

within an organization

Responsible for developing

detailed plans and procedures

to implement the firm’s strategic

plans.

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Supervisory Management

Implement the plans

developed by middle

managers.

Responsible for non-

managerial employees.

Motivate workers to

accomplish daily, weekly, and

monthly goals.

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Skills Needed for Management Success

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Technical Skills

Manager’s ability to understand and use the techniques, knowledge,

tools, and equipment of a specific discipline or department.

Human Skills

Interpersonal skills that enable a manager to work effectively with and

through people.

Conceptual Skills

Ability to see the organization as a unified whole and to understand

how each part of the overall organization interacts with other parts.


Managerial Functions

Planning

Process of anticipating future events

and conditions and determining

courses of action for achieving

organizational objectives.

Organizing

Blending human and material

resources through a formal structure of

authority.

Directing

Guiding and motivating employees to

accomplish organizational objectives.

Controlling

Evaluating an organization’s

performance to determine whether it is

accomplishing its objectives.

Establish performance standards.

Monitor actual performance.

Compare actual performance with

established standards.

Take corrective action if required.

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Setting a Vision

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A vision is a founder’s perception of marketplace needs and the methods

an organization can use to satisfy them.

Vision serves as the target for a firm’s actions

Vision helps direct the company toward opportunities

Vision differentiates a company from its competitors

A vision must be focused yet adaptable to changes

in the business environment.


Setting Ethical Standards

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Ethical standards are critical to a firm’s relationships with:

customers

suppliers

the general public

Ethical standards are set in compliance with:

industry regulations

federal regulations

New standards are set in response to unethical actions by managers

(Sarbanes-Oxley)

The ethical tone set by top management can encourage, motivate and

inspire employees

Most Ethical Companies FORTUNE Magazine


http://www.forbes.com/sites/susanadams/2014/03/20/the-worlds-most-ethical-companies/

Importance of Planning

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Planning is categorized by scope and breadth

long range

short range and very narrow

Planning can be divided into:

Strategic

Tactical

Operational

Contingency

Organizations should have a comprehensive planning framework

Plans outline the steps the company will take to meet outlined goals and objectives.


Planning at Different

Management Levels 12


The Strategic Planning Process

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Defining the Organization’s Mission

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The first step in strategic planning is to translate the firm’s vision into a

mission statement

A mission statement is a written explanation of an organization’s

business intentions and aims

A statement of a firm’s purpose

Highlighting scope of operations, markets served and differentiators

Guides actions of employees

Publicizes company’s reason for existence


Assessing Competitive Position

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To determine the firm’s current or potential position in the

marketplace, a SWOT analysis is conducted.

By systematically evaluating:

Strengths

Weaknesses

Opportunities

Threats,

a company can develop the best strategies for gaining a

competitive advantage


SWOT Analysis

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Setting Objectives for the Organization

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Objectives set guideposts by which managers define the

organization’s desired performance in the following areas:

New product development

Sales

Customer service

Growth

Environmental and social responsibility

Employee satisfaction


Additional Steps in the Strategic

Planning Process

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Creating strategies for competitive

differentiation

Implementing the strategy

Monitoring and adapting strategic plans


Managers as Decision Makers

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Decision making is the process of recognizing a problem or

opportunity, evaluating alternative solutions, selecting and

implementing an alternative, and assessing the results.

Programmed decision involves simple, common problems with

predetermined solutions.

Nonprogrammed decision involves a complex, unique problem or

opportunity with important consequences for the organization.


How Managers Make Decisions

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Managers as Leaders

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Leadership is the ability to direct or inspire people to attain certain goals.

Three traits are common among many leaders:

Empathy

Self-awareness

Objectivity in dealing with others

Leadership involves the use of influence or power from the following

sources:

A leader’s position in the company

A leader’s experience and expertise

A leader’s personality


Leadership Styles

Autocratic Leadership

Make decisions on own without consulting

employees

Democratic Leadership

Involve employees in decisions, delegate

assignments, and ask employees for

suggestions

Free-Rein Leadership

Leave most decisions to employees

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Corporate Culture

Corporate Culture : Organization’s

system of principles, beliefs, and

values.

Managers use symbols, rituals,

ceremonies, and stories to reinforce

corporate culture.

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Organizational Structures

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Organization: structured grouping of people working together to achieve

common goals.

Three key elements:

Human interaction

Goal-directed activities

Structure

Steps in the organizing process:


Organization Chart

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Departmentalization

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Process of dividing work activities into units within the organization

Product departmentalization: organized based on the goods and services a company

offers.

Geographical departmentalization: organized by geographical regions within a

country or, for a multinational firm, by region throughout the world.

Customer departmentalization: organized by the different types of customers the

organization serves

Functional departmentalization: organized by business functions such as finance,

marketing, human resources, and production.

Process departmentalization: organized by work processes

necessary to complete production of goods or services


Forms of Departmentalization

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Delegating Work Assignments

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Delegation - assigning work activities to subordinates

Providing employees with the responsibility and the necessary authority

Employees have accountability, or responsibility for the results of the way they perform

their assignments.

Authority and responsibility move down

Accountability moves up

Span of management is the number of subordinates, or direct reports, a supervisor

manages.

Centralization: decision making is retained at the top of the management

hierarchy.

Decentralization: decision making is located at the lower levels. Many firms

believe it enhances their flexibility and responsiveness to customer needs.


Types of Organizational Structures

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Line Organization

Oldest and simplest form; direct flow of authority from CEO to subordinates

Chain of command indicates who directs which activities and who reports to

whom.

Line-and-Staff Organizations

Combines line departments and staff departments

Line departments participate directly in decisions that affect the core

operations of the organization

Staff departments lend specialized technical support


Line-and-Staff Organizations

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Committee Organizations

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Authority and responsibility are in the hands of a group of

individuals.

Often part of a line-and-staff structure.

Often develop new products.

Tend to act slowly and conservatively.

Often make decisions by compromising conflicting interests

rather than choosing best alternative.


Matrix Organizations

Advantages

Flexibility in adapting to changes

Focus on major problems or products

Outlet for employee’s creativity and

initiative

Disadvantages

Integrating skills of many

specialists into a coordinated team

Team members’ permanent

functional managers must adjust

the employees’ regular workloads

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A structure that links employees from different parts of the organization to work

together on specific projects

Employees report to a line manager and a project manager.

The Matrix Organization

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management, leadership, and the internal organizationbus.msjc.edu/portals/22/caren/16ed/ch07.pdf ·...

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