Chapter Seven Understanding the Management Process

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

Resources –Material resources physical inputs to production an organization uses –Human resources people who staff the organization and use the other resources to achieve the goals of the organization –Financial resources funds the organization uses to meet its obligations to investors and creditors –Information resources data about internal and external business environmental conditions that the firm uses to create a competitive advantage

Strategic Planning The process of establishing an organization’s major goals and allocating the resources to achieve them

Planning Establishing goals and objectives –Goal An end result that the organization is expected to achieve over a one-to-ten year period (get a degree in Business Administration) –Objective A specific statement detailing what the organization intends to accomplish over a shorter period of time (take Bus 1100 and get an A)

“Plan B” –Contingency plan A plan of alternative courses of action if the organization’s other plans are disrupted or become ineffective (If I don’t do well in Bus 1100, I’ll get a degree in Psychology)

Who’s Doing the Planning? Levels of Management -Top manager—guides and controls the overall fortunes of the organization-plan the future -Middle manager—implements the strategy and major policies developed by top management -First-line manager—coordinates and supervises the activities of operating employees-run today CEO, COO Dept head, plant mgr Supervisor, foreman

What Makes Effective Managers? Key Management Skills –Technical skill A special skill needed to accomplish a specialized activity-1 st line and mid mgrs –Conceptual skill The ability to think in abstract terms-top mgrs –Interpersonal skill The ability to deal effectively with other people -Needed by all mgrs

Leadership The ability to influence others Formal – uses legitimate power of position & corporate authority to influence others Informal – uses charisma & special knowledge to gain voluntary allegiance

Styles of Leadership 1) Authoritarian (UPS) -Manager holds all authority & responsibility -Top to bottom communication 2) Laissez-faire (Apple) -Manager delegates authority to employees -Allows subordinates to work with a minimal interference -Horizontal communication among work groups 3) Democratic (Saturn) -Manager holds final responsibility but delegates authority to others -Communication is active upward and downward So, which leadership style is best?

Which Leadership Style Is Best? none and all Match style to the situation Effective leadership depends on –Interaction among the employees –Characteristics of the work situation –The manager’s personality

The Managerial Decision-Making Process 1)Identifying the problem or opportunity –Problem The discrepancy between an actual condition and a desired condition-have low sales, want higher sales Opportunity A “positive” problem-have good sales, see a way to make more sales

Managerial Decision-Making 2)Generating alternatives –Brainstorming Encouraging participants to come up with new ideas to solve a problem –“Blast! Then Refine” Erase past solutions from choices and devise a new solution from scratch -- Trial and error Just do it an watch what happens

Managerial Decision-Making Process 3) Selecting an alternative –Satisficing Choosing an alternative that is not the best possible solution, but one that adequately solves the problem-needed when time/money or both are scarce

Managerial Decision-Making Process 4)Implementing your choice -Requires time, planning, preparation of personnel, and contingencies 5)Evaluating the solution –An effective decision removes the difference between the actual condition and the desired condition –If its not working give it more time change it scrap it