McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. Chapter 77 Management, Leadership, and Employee Empowerment 7-1

McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. 7-2 CEOs’ Economic Background Source: INC 500 Almanac

McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. 7-3 New Management Approaches- Why? Global CompetitionGlobal Competition Business ScandalsBusiness Scandals Constant ChangeConstant Change Better Educated WorkersBetter Educated Workers Downsizing/RightsizingDownsizing/Rightsizing

McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. 7-4 Management Activities Leading Leading Motivating Motivating Decision Making Decision Making Managing Information & Time Managing Information & Time

McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. 7-5 Required Management Skills  Technical Skills  Human Relations Skills  Conceptual Skills

McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. 7-6 Management Functions 1.Planning - Strategic - Tactical - Operational - Contingency 2.Organizing 3.Leading 4.Controlling

McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. 7-7 Process Of Management Resources EmployeesFinancialProductsLocationInformation Management PlanningOrganizingLeadingControlling Feedback Achievement of Goals & Objectives

McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. 7-8 Planning: Create Vision  Set Vision, Goals, Objectives  Vision/Mission- Why Organization Exists, Purpose of Organization  Goals- Broad, Long-Term Aims  Objectives- Specific, Short- Term Statements  Continuous Process (SWOT)

McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. 7-9 Questions of Planning 1)What is the situation now? 2)Where do we want to go? 3)How can we get there from here?

McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved Planning Functions

McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved Management Planning Levels & Time Spans Time Top Mgmt. 2 Years + Middle Mgmt. 1 Year, Quarter Lower Level Mgmt. Days, Weeks

McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved Decision Making: Process Define Describe Describe Develop Alternatives Develop Alternatives Develop Agreement Develop AgreementDo Determine Determine Decide

McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved Management Pyramid Top Mid-Level Front Line/Supervisory CEO,Comptroller, Vice Pres. Sales Mgrs Plant Mgrs. SupervisorsForemen

McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved CEO Education Source: INC 500 Almanac

McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved Organizing oSelf-Managed Teams oStakeholders oStaffing oDiversity

McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved Successful Leadership  Vision  Communicate  Corporate Values & Ethics  Don’t Fear Change

McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved Leadership Styles  Autocratic  Participative (Democratic)  Free-rein

McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved Autocratic: Close Supervision

McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved Participative (Democratic)

McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved Free-rein Leader

McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved Reasons for Empowering Non- Supervisory Employees  Increased competition and more demanding customers  Loosening of formal organizational structures  Fewer, busier managers  Predominance of knowledge workers  Growing focus on projects & teams

McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved Manager’s Empowerment Checklist Do employees understand your plans and goals? Do employees understand your plans and goals? Are employees encouraged to utilize these plans and goals as a basis for day-to-day work? Are employees encouraged to utilize these plans and goals as a basis for day-to-day work? Does information to employees come soon enough for them to make intelligent decisions about their work? Does information to employees come soon enough for them to make intelligent decisions about their work? Are communication & cooperation encouraged? Are communication & cooperation encouraged? Can questions be asked freely and are individual initiative & creativity encouraged? Can questions be asked freely and are individual initiative & creativity encouraged?

McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved Sources of Management Information Outside Sources Inside Sources Manager Subordinates & Teams Superiors Meetings & Seminars Mgmt. Info. Sys. Grapevine Customers & Suppliers Other Managers Academics & Consultants Financial Institutions Publications, Conferences

McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved How Productive are Managers? Distracted- 40% Low Focus, High Energy Effective- 10% High Focus, High Energy Disengaged- 20% High Focus, Low Energy Procrastinator- 30% No Focus, No Energy Source: Southwest Airlines Spirit, “Enterprise Advisory”, May 2002

McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved Tips for New Managers Be objective. Be objective. Listen to your employees. Listen to your employees. Be the role model. Be the role model. Be willing to delegate. Be willing to delegate. Respect your employees. Respect your employees. Develop employees’ trust. Develop employees’ trust. Audit performance. Audit performance. Recognize your limits. Recognize your limits.

McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved Controlling Set StandardsSet Standards –Specific –Attainable –Measurable Customer SatisfactionCustomer Satisfaction –Internal –External Monitor/RecordMonitor/Record Compare Plan & Standards to ResultsCompare Plan & Standards to Results Communicate to EmployeesCommunicate to Employees Corrective Action???Corrective Action??? Corporate ScorecardCorporate Scorecard

McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved Management Challenges  Finding/Training New Employees  Growing Global Competition  Finding/Serving New Customers  Financing Long-Term Growth  Dealing with Increased Regulation