Articulate how the practice of management has evolved Differentiate among the three pillars of management: strategic positioning, organizational design, and individual leadership Describe the complementary components of management and leadership and the relative importance of technical, interpersonal, and conceptual, skills at various managerial levels in the organization Articulate how the practice of management has evolved © South-Western, a part of Cengage Learning

Explain the changing perspectives on the purpose of business and how the relationship between the firm and its business environment has changed over time Describe the stakeholder theory of management and how various stakeholder relationships are managed to enhance overall firm performance © South-Western, a part of Cengage Learning

The Challenge of Leadership Harnessing technological advances Managing and leading diverse workforces Responding to change and uncertainty Competing on a global scale Operating in a socially responsible manner © South-Western, a part of Cengage Learning

Figure 1.1 - The Pillars of Management © South-Western, a part of Cengage Learning

Strategy of an Organization Depends on: Nature and context of competitive and environmental landscape Skills and capabilities of the management team Understanding of contextual landscape depends on firm’s ability to: Recognize threats and opportunities Lead and organize resources to effectively compete in the marketplace © South-Western, a part of Cengage Learning

Management and Leadership Working with and through a group of people to accomplish a desired goal or objective in an efficient and effective manner Management Ability to drive change and innovation through inspiration and motivation Leadership © South-Western, a part of Cengage Learning

Figure 1.3 - The Roles of Leaders versus Managers © South-Western, a part of Cengage Learning

Leadership Skills Differ according to person’s level and responsibilities in the organization Technical skills are important early in career More strategic abilities are required as an individual advances in an organization Managers focus financial reporting, planning, recruiting of talent, and team development Middle-level managers focus on interpersonal skills ,developing teams, and using conceptual skills Senior executives set the vision and agenda for the organization as well as oversee strategic execution © South-Western, a part of Cengage Learning

Figure 1.4 - Importance and Relevance of Skills by Managerial Level © South-Western, a part of Cengage Learning

Different Styles of Leadership Leaders are: Extroverted / introverted Quick and impulsive / cautious Vain / humble An effective leader is not someone who uses specific leadership style But is someone whose style enables him or her to obtain results © South-Western, a part of Cengage Learning

Skills and Capabilities Managers have: Strategic abilities to recognize a situation Social skills to know what to do in the situation Behavioral skills to act Effective management requires: Development of broad set of skills Capabilities needed to act in a variety of situations © South-Western, a part of Cengage Learning

Figure 1.5 - From Big Picture Strategy to Individual Action © South-Western, a part of Cengage Learning

Changing Perspectives of Management Bureaucratic organization structure Proposed by Max Weber A clear differentiation of tasks and responsibilities Coordination through strict hierarchy of authority and decision rights Standardization of rules and procedures Vertical separation of planning and execution Plans are made in the upper ranks of an organization and executed in the lower ranks © South-Western, a part of Cengage Learning

Theories of Management A focus on how jobs, work, and incentive schemes could be designed to improve productivity using industrial engineering methods Scientific management The belief that organizations must be understood as systems of interdependent human beings who share a common interest in the survival and effective functioning of the firm Human relations movement A view of the firm where effective organizational structure is based on fit or alignment between the organization and various aspects in its environment Contingent view © South-Western, a part of Cengage Learning

Figure 1.6 - Major Historical Events in the Study of Organizations © South-Western, a part of Cengage Learning

Changing Perspectives on the Purpose of Business Business environment: The combination of all contextual forces and elements in the external and internal environment of a firm © South-Western, a part of Cengage Learning

Figure 1.7 - Changing Perceptions of the Business Environment © South-Western, a part of Cengage Learning

Changing Perspectives on the Purpose of Business A business framework where the firm is seen as a mechanism for converting raw materials into products to sell to customers Managerial view A business framework where the job of top managers is to produce the highest possible stock market valuation of the firm’s assets Shareholder view A business framework that attempts to organize and analyze multiple groups that interact with the firm Stakeholder view © South-Western, a part of Cengage Learning

Figure 1.8 - Stakeholder View of the Firm © South-Western, a part of Cengage Learning

Figure 1.9 - Stakeholder Mapping Process © South-Western, a part of Cengage Learning

Example of Stakeholder Mapping Process Environmental Protection Agency (EPA) Government Reducing carbon emissions Health of all affected individuals © South-Western, a part of Cengage Learning

Stakeholder Management Processes Senior leaders of a corporation meet with business unit managers to review progress toward specific goals Strategic review process A tool that managers use to scan the business horizon for key events and trends that will affect the business in the future Environmental scanning Forecasting the likely result that might occur when several events and stakeholders are linked together Scenario building © South-Western, a part of Cengage Learning

Predicting Stakeholder Responses and Activities The systematic assessment of the external environment to prepare for a possible range of alternative futures for the organization Contingency planning A tool where key variables are monitored and modeled to help predict a change that might occur in environment Trend analysis The ability to understand the impact of environmental factors on a firm and the ability to understand how to influence those same factors Contextual intelligence © South-Western, a part of Cengage Learning

Figure 1.10 - Building Contextual Intelligence © South-Western, a part of Cengage Learning

Figure 1.11 - How Contextual Forces Impact Uncertainty © South-Western, a part of Cengage Learning

KEY TERMS Bureaucratic organization structure Business environment Contextual intelligence Contingency planning Contingent view Environmental scanning Human relations movement Leadership Management Managerial view Scenario building Scientific management Shareholder view Stakeholder view Strategic review process Trend analysis © South-Western, a part of Cengage Learning