Management, Leadership, and the Internal Organization 7 Chapter Sections 5-8 Management, Leadership, and the Internal Organization

Managers as Decision Makers Decision making is the process of recognizing a problem or opportunity, evaluating alternative solutions, selecting and implementing an alternative, and assessing the results. Programmed Non-programmed In addition to decisions in the planning process, managers make a variety of decisions every day, all day long. Some decisions are common while many can be more challenging. Managers will often delegate work to employees, but delegation requires responsibility, accountability, and authority.

Managers vs. Leaders Managers manage tasks Leaders lead people

Managers as Leaders Delegation is the act of assigning work activities to subordinates. Providing employees with the responsibility and the necessary authority for completing tasks. Employees have accountability, or responsibility for the results of the way they perform their assignments. Authority and responsibility move down; accountability moves up. Empowerment is giving employees shared authority, responsibility, and decision making with their managers In addition to decisions in the planning process, managers make a variety of decisions every day, all day long. Some decisions are common while many can be more challenging. Managers will often delegate work to employees, but delegation requires responsibility, accountability, and authority.

Leadership Styles Autocratic Leadership Democratic 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 There is no perfect leadership style, and leadership does not mean tight control. Leadership styles range from autocratic leaders who make all the decisions to free-rein leaders who let employees make all of the decisions. An important trend in leadership is empowerment, a practice in which managers lead employees by sharing power, responsibility, and decision making with them.

Corporate Culture Corporate Culture: Organization’s system of principles, beliefs, and values. Managers use symbols, rituals, ceremonies, and stories to reinforce corporate culture. Corporate culture is typically shaped by the leaders who founded and developed the company and by those who have succeeded them. Corporate culture can be changed, but that is challenging. Strong culture is where everyone knows and supports the same principles, beliefs, and values. A weak or constantly shifting culture has a lack of a clear sense of purpose. Search Business (or Corporate) Culture

Span of management, centralization, and decentralization 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. There are a variety of concepts that managers must think about as they build their organizational structures. Managers must also think about how many people report to each manager. In some organizations, the span of management is wide. Depending on the type of subordinates, managers must think about their span of management. Managers must also think about who can make decisions. Is decision-making centralized among top management or is it shared throughout the organization? Decentralization allows organizations to operate more flexibly and responsively to customers.

Organizational Structures Organization: structured grouping of people working together to achieve common goals. Departmentalization: process of dividing work activities into units within the organization Organization structure is the process of blending human and material resources through a formal structure of tasks and authority.

Departmentalization 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. Departmentalization is the process of dividing work activities into units within the organization. There are five major ways in which companies departmentalize. Companies choose a structure based on their organization and its goals.

Different Forms of Departmentalization Many companies combine the different types of departmentalization to build their structure.

Types of Organization Structures Line Organizations 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 (legal, marketing, human resources) Line organizations have a clear and simple chain of command. Organizations with staff functions have departments/employees that support line departments. Staff may include legal, marketing, or human resource support to an organization.

Line and Staff Organizations Note the support functions of the staff. They do not have direct authority over the plant operations, but they support the department.

Committee Organizations 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. A committee structure empowers all of the members instead of a single manager. Some committees act slowly and conservatively. Some committees include a diverse group of employees from across the company with different skills and expertise.

The Matrix Organization Page 211 The matrix organization links employees from different parts of the organization to work together on specific projects.

Matrix Organizations Project management 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. Disadvantages: Integrating skills of many specialists into a coordinated team. Team members’ permanent functional managers must adjust the employees’ regular workloads. Advantages: Flexibility in adapting to changes. Focus on major problems or products. Outlet for employees’ creativity and initiative. In the matrix organization, employees have two managers. The matrix organization has become popular at high-technology and multinational corporations. The major benefits come from its flexibility.

View End of Chapter Video Read and Discuss “Hit & Miss” on page 204 Discuss Together - Review Question #7 on page 214

Leadership Assignment Do the following with a partner: Review Questions #8 & 9 on page 214 (type the questions & answers) Research a business leader and prepare a biographical essay. Try to determine their management/leadership style.