Chapter Learning Objectives After studying this chapter you should be able to: Define management, describe the kinds of managers found in organizations, identify and explain the four basic management functions, describe the fundamental management skills, and comment on management as science and art. Justify the importance of history and theory to managers and explain the evolution of management thought through the classical, behavioral, and quantitative perspectives. Identify and discuss key contemporary management perspectives represented by the systems and contingency perspectives and identify the major challenges and opportunities faced by managers today. © 2014 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

Netflix & CEO Reed Hastings read pgs. 1-4 How old is Netflix? Why did Reed Hastings come up with the idea for Netflix? What industry business model inspired Hastings? What is the essence of Netflix business? DVD/streaming rentals or something else? What is the Netflix market capitalization today? First, can you define market capitalization? What role did awareness of technology play in the early success of the company? What about today? Rental by mail was an odd concept when Netflix launched it. It might be called a “disruptive” idea. What is good about disruptive ideas? What are the disadvantages? What is Hasting’s philosophy with regard to the Human Resource at Netflix? John Caddell was quoted as saying “Netflix is investing in technology and partnerships expressly designed to make their old business model obsolete”. Why would a company do this? Is it a good idea? Evaluate Hasting’s decision to “destroy a low-margin business in DVDs and grow a high-margin streaming service”. © 2014 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

An Introduction to Management Organization A group of people working together in structured and coordinated fashion to achieve a set of goals Types of Organizational Goals Profit-seeking National defense Discovery of knowledge Coordination Social needs Define “goal”: ___________________________________________ © 2014 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

What is Management? Engaging in a set of activities Planning and decision making, organizing, leading, and controlling Using an organization’s resources Human, financial, physical, and information Achieving organizational goals in an efficient and effective manner. © 2014 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 5

Basic Responsibility of Management EFFICIENTLY Using resources wisely and in a cost-effective way and EFFECTIVELY Making the right decisions and successfully implementing them © 2014 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 6

What is a Manager? Someone whose primary responsibility is to carry out the management process. Plans and makes decisions, organizes, leads, and controls human, financial, physical, and information resources. The Four Functions of Management are Planning (including decision making) Organizing Leading Controlling Can you define each of these? How well do you perform each? (see pages 27-28 – think about when you worked on a group project) © 2014 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

The Four Functions of Management FIGURE 1.2 The Management Process The Four Functions of Management © 2014 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

Where are the Managers? Organization Goals Resources Efficiency Human Financial Information Physical Efficiency Effectiveness 4 Functions Planning Organizing Leading Controlling 1. 2. 3. © 2014 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

Kinds of Managers by Level and Area FIGURE 1.1 Kinds of Managers by Level and Area Job Titles? Skills? Job Titles? Skills? Job Titles? Skills? © 2014 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

Kinds of Managers by Level Top Managers Executives who manage the organization’s overall goals, strategy, and operating policies. Middle Managers Largest group of managers in organizations Implement top management’s policies and plans. Supervise and coordinate lower-level managers’ activities. First-Line Managers Supervise and coordinate the activities of operating employees. © 2014 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

Kinds of Managers by Area Human Resources Managers Administrative Managers Specialist Managers Kinds of Managers by Area Marketing Managers Financial Managers Operations Managers © 2014 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

What Skills Do Managers Need? Interpersonal Fundamental Management Skills Technical Conceptual Communication Time Management Decision Making Diagnostic © 2014 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

Fundamental Management Skills Technical The skills required for work done in an organization. Interpersonal The ability to communicate with, understand, and motivate both individuals and groups. Conceptual The ability to think in the abstract. Diagnostic The ability to visualize the appropriate response to a situation. © 2014 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 17

Fundamental Management Skills (cont’d) Communication The ability both to convey and to receive ideas and information effectively from others. Decision-Making The ability to recognize and define problems and opportunities and then to select a course of action to solve problems and capitalize on opportunities. Time-Management The ability to prioritize work, to work efficiently, and to delegate appropriately. © 2014 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 17

Kinds of Managers by Level and Area FIGURE 1.1 Kinds of Managers by Level and Area Job Titles? Skills? Job Titles? Skills? Job Titles? Skills? © 2014 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

Management: Science or Art? The Science of Management Assumes problems can be approached using rational, logical, objective, and systematic ways. Requires technical, diagnostic, and decision-making skills and techniques. The Art of Management Requires a blend of intuition, experience, instinct, and personal insights. Requires conceptual, communication, interpersonal, and time-management skills to accomplish managerial tasks activities. © 2014 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 18

Management Issues & Challenges Globalization of product and service markets An increasingly diverse and globalized workforce An emphasis on ethics and social responsibility The use of quality as the basis for competition The shift to a predominately service-based economy Meeting the challenges of a recovering economy Creating new organizational structures to provide challenging, motivating, and flexible work environments The effects of new information technology on how work is done in organization © 2014 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

WHY? CHANGE Managers Today…... Embrace ambiguity Create organizations that are: Fast Flexible Adaptable Relationship-oriented Focus on: Leadership Staying connected to employees and customers Team building Developing a learning organization WHY? CHANGE © 2014 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

Revisiting Netflix Has Hasting’s been adaptive and change oriented? Is Netflix fast and flexible? Can an organization be fast and flexible without adaptive leaders? What is Netflix next big challenge? © 2014 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

Revisiting Netflix © 2014 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

Revisiting Netflix © 2014 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

Revisiting Netflix © 2014 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

Revisiting Netflix © 2014 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

Revisiting Netflix Why is Netflix so popular? The reason for Netflix’s popularity among online users is its original programming. In 2Q15, around 90% of Netflix subscribers viewed the company’s original content. The company has entered into an original content agreement with The Walt Disney Company (DIS) in which Disney’s ABC Studios produce content exclusively for Netflix. You can get a diversified exposure to Disney by investing in the Consumer Discretionary Select Sector SPDR ETF (XLY), which holds 7.64% of the stock. Netflix’s popularity among users has also been due to the company’s $8.99 plan that lets users access HD (high-definition) streaming on two screens concurrently. Netflix offers plans that range from $7.99–$11.99 per month, which is less than HBO Now. © 2014 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

Revisiting Netflix © 2014 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

Organizational Change & Adaptation Watch “Ben & Jerry’s Ice Cream” video clip on the course website What is Ben & Jerry’s world-wide marketplace presence? How does this relate to the need to change and adapt? Quality Control – Slicing cartons. How does this relate to the need to change and adapt? A customer states that what he likes about Ben & Jerry’s is the “Variation…it never gets boring”. How does this relate to the need to change and adapt? The Flavor Graveyard. How does this relate to the need to change and adapt? The R & D Test Kitchen. How does this relate to the need to change and adapt? How many new flavors does Ben & Jerry’s release each year? How does this relate to the need to change and adapt? Whose job is it to guide the organization through all these changes and adaptations? What happens if the changes are not made? What happens if changes are poorly implemented? © 2014 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.