Understanding the Management Process

What Is Management? Management is the process of coordinating people and other resources to achieve the goals of an organization

Management Resources Material resources are the tangible, physical resources an organization uses Human resources are the people who staff an organization and use the other resources to achieve the goals of the organization Financial resources are the funds an organization uses to meet its obligations to investors and creditors Information resources refers to the information about the external business environment the firm uses to its competitive advantage

Today’s Managers Younger and more progressive. Growing numbers of women. Fewer from elite universities. Emphasis is on teams and team building. Managers need to be skilled communicators and team players.

Basic Management Functions How well managers perform these key management process functions determines whether a business is successful

Four Functions of Management: An Overview

The Planning Function The first step in creating a strategic plan is to establish a corporate purpose Planning: Establishing organizational goals and deciding how to go about accomplishing them Mission statement: A statement of the basic business purpose that make an organization different from others; Outlines the organization’s fundamental purposes. It includes: the organization’s self–concept its philosophy long–term survival needs customer needs social responsibility nature of the product or service Strategic planning: The process of establishing an organization’s major goals and objectives and allocating the resources to achieve them

Planning: Strategic Planning Process Without knowing “what” you want to be, how can you properly set your goals and objectives? Establishing goals and objectives Goal An end result that an organization is expected to achieve over a one- to ten-year period Objective A specific statement detailing what an organization intends to accomplish over a shorter period of time Properly set goals are: Set at every level in the organization Consistent (supportive) with each other Optimized (balanced) to reduce conflicts between goals

SWOT Analysis Components SWOT analysis is the identification and evaluation of a firm’s: Strengths Weaknesses Opportunities Threats Core competencies Approaches and processes that a company performs well and may give it an advantage over its competitors

SWOT Analysis

Types of Plans Plan: An outline of the actions by which an organization intends to accomplish its goals and objectives Types: Strategic plan: An organization’s broadest plan, a guide for major policy setting and decision making Tactical plan: A smaller-scale plan to implement a strategy Operational plan: A plan to implement a tactical plan Contingency plan: A plan of alternative courses of action if the organization’s other plans are disrupted or become ineffective

The Organizing Function The grouping of resources and activities to accomplish some end result in an efficient and effective manner Organizing an enterprise: Putting the pieces of the puzzle together We’ll learn more about Organizing in Ch. 7

The Leading and Motivating Function Influencing people to work toward a common goal Motivating Providing reasons for people to work in the best interests of an organization Directing The combined processes of leading and motivating Leaders must: Communicate a vision and rally others around that vision. Establish corporate values. Promote corporate ethics. Embrace change. Stress accountability and responsibility

Leadership Leadership is the ability to influence others Manager vs. Leader: A manager may have to depend on coercion A leader strives for voluntary cooperation Formal leadership Legitimate power of position is the basis for authority Informal leadership Not recognized formally by the organization authority

Styles of Leadership Autocratic Task-oriented style; workers are told what to do and how to do it, they have no say in the decision making process Participative (Democratic) All members of a team are involved in identifying essential goals and developing strategies to reach those goals Entrepreneurial (Free-Rein) Personality-based, the manager seeks to inspire workers with a vision of what can be accomplished to benefit all stakeholders…Managers set objectives and employees are free to do whatever is appropriate to accomplish those objectives

Which Leadership Style Is Best? Matching style to the situation Effective leadership depends on: Interaction among the employees Characteristics of the work situation The manager’s personality

The Controlling Function Controlling is the process of evaluating and regulating ongoing activities to ensure that goals are achieved Requires constant monitoring and adjusting Control function Set standards Measure performance Take corrective action Note: Learners can think of controlling in terms of a traffic cop who is constantly evaluating the situation and adjusting traffic flow to meet immediate needs.

Kinds of Managers Levels of management Top manager—guides and controls the overall fortunes of an organization Middle manager—implements the strategy and major policies developed by top management First-line manager—coordinates and supervises the activities of operating employees The coordinated effort of all three levels of managers is required to implement the goals of any company

Areas of Management Specialization Organizational structure can be divided into areas of specialization Finance Operations Marketing Human Resources Administration Other (R&D)

Areas of Management Specialization Defined Financial managers Responsible for an organization’s financial resources Operations managers Manage the systems that convert resources into goods and services Marketing managers Responsible for facilitating the exchange of products between an organization and its customers or clients Human resources managers Manage an organization’s human resources programs Administrative managers (general managers) Not associated with any specific functional area; provide overall administrative guidance and leadership

Key Skills of Successful Managers Conceptual skills Ability to think in abstract terms Analytic skills Ability to identify problems, generate alternative solutions, and select the best solution Interpersonal skills Ability to deal effectively with other people Technical skills Needed to accomplish a specialized activity

Managerial Decision Making Decision making is the act of choosing one alternative from a set of alternatives Managers require a systematic method for solving problems in a variety of situations

Managerial Decision-Making Process: Identifying the Problem of Opportunity The discrepancy between an actual condition and a desired condition Opportunity A “positive” problem Problem-solving impediments Preconceptions about the problem Focusing on unimportant matters while overlooking significant issues Analyzing symptoms rather than causes Failing to look ahead

Managerial Decision-Making Process: Generating and Selecting Alternatives Techniques Brainstorming Encouraging participants to come up with new ideas “Blast! Then refine.” Reevaluating objectives, modifying them if necessary, and devising a new solution to a recurring problem Trial and error Selecting an alternative Satisfice Choosing an alternative that is not the best possible solution, but one that adequately solves the problem

Managerial Decision-Making Process: Implementation and Evaluation Requires time, planning, preparation of personnel, and evaluation of the results An effective decision removes the difference between the actual condition and the desired condition If a problem still exists, managers may: Decide to give the chosen alternative more time Adopt a different alternative Start the process all over again

Managing Total Quality Total Quality Management (TQM) is the coordination of efforts directed at: Improving customer satisfaction Increasing employee participation Strengthening supplier partnerships Facilitating an organizational atmosphere of continuous quality improvement Benchmarking: Evaluating another organization that is superior in order to improve quality Issues crucial to TQM: Top management commitment Coordination of efforts