Foundations of Business 3e Pride, Hughes, & Kapoor

Understanding the Management Process Chapter 6

Learning Objectives Define what management is. Describe the four basic management functions: planning, organizing, leading and motivating, and controlling. Distinguish among the various kinds of managers in terms of both level and area of management. Identify the key management skills of successful managers. Explain the different types of leadership. Discuss the steps in the managerial decision-making process. Describe how organizations benefit from total quality management.

Question What resources are each of you using to accomplish the educational goals you have set for yourself and the educational goals set by your family?

The Four Main Resources of Management Managers coordinate an organization’s resources to achieve the goals of the organization.

What Is Management? The process of coordinating people and other resources to achieve the goals of an organization Material resources The tangible physical resources an organization uses Human resources The people who staff an organization and use the other resources to achieve the goals of the organization Financial resources The funds an organization uses to meet its obligations to investors and creditors Information resources The information about external business environmental conditions that a firm uses to its competitive advantage

Basic Management Functions

Management Function 1 Planning Planning Purpose To establish organizational goals and deciding how to accomplish them Mission Statement A statement of the basic purpose that makes an organization different from others Strategic planning The process of establishing an organization’s major goals and objectives and allocating the resources to achieve them. These are long term and abstract

Name the mission statement “Our mission is to organize the world's information and make it universally accessible and useful.” GOOGLE “Our company strives to be a worldwide leader in automotive and automotive-related products and services as well as in newer industries such as aerospace, communications and financial services. Our mission is to improve continually our products and services to meet our customers’ needs, allowing us to prosper as a business and to provide a reasonable return for our stockholders, the owners of our business.” FORD MOTOR COMPANY

Name the mission statement “Our mission is to be our customers' favorite place and way to eat.” McDonald’s “Our mission: to inspire and nurture the human spirit – one person, one cup and one neighborhood at a time.” Starbucks This group of companies strives to be the global leader in the sporting goods industry with brands built on a passion for sports and a sporting lifestyle. Adidas

Establishing using goals and objectives Planning (cont.) Establishing using 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 with (supportive of) each other Optimized (balanced) to reduce conflicts between goals

Goals vs. Objectives Evaluate the following statements. Are these statements goals or objectives. 1. I plan to be a success in business. (goal) 2. I plan to graduate in four years with a 3.5 or better GPA (objective). 3. I plan to become a world-class tennis player and win Wimbledon next year (unrealistic objective).

Planning (cont.) SWOT analysis Core competencies 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

Elements and Examples of SWOT Analysis

Four types of plans formulated by managers A plan is… Planning (cont.) Four types of plans formulated by managers A plan is… An outline of the actions by which an organization intends to accomplish its goals and objectives Strategic plan An organization’s broadest plan, a guide for major policy setting and decision making (let’s be the best) Tactical plan A smaller-scale plan to start implementing long term strategies (lets get the best coach, and build new stadium) Operational plan A day to day plan to implement the tactical plan (daily practice) Contingency plan A plan of alternative courses of action if the organization’s other plans are disrupted or become ineffective (plan B)

Contingency Plan Exercise What do we do if? Week long power failure at York College in January.

Types of Plans

Management Function 2 : Organizing the Enterprise The grouping of resources and activities to accomplish some end result in an efficient and effective manner Developing the Chain of Command Job Descriptions Organizational Charts Covered in detail in chapter 7

Management Function 3 Leading and Motivating Leading (inspiring) Influencing people to work toward a common goal Motivating (positive and negative) Providing reasons for people to work in the best interests of an organization Directing The combined processes of leading and motivating http://www.youtube.com/watch?v=ESxXO42HvDQ&feature=r elated

Management Function 4 The Control Function Controlling Evaluating and regulating ongoing activities to ensure that goals are achieved Control function “Quality Control”

Let look at: 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 Other areas may have to be added, depending on the nature of the firm and the industry.

Areas of Management Specialization (cont.) 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

Question: Who was your favorite coach? Was the team successful? How? Did everyone like the coach? Why What leadership qualities did they possess?

Key Skills of Successful Managers

Key Skills of Successful Managers (cont.) Key management skills 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 Communication skills Ability to speak, listen, and write effectively

How valuable is good management? Highest-Paid CEOs, 2010 Rank Name Company Pay ($mil) 1 H. Lawrence Culp, Jr. Danaher 141.36 2 Lawrence J. Ellison Oracle 130.23 3 Aubrey K. McClendon Chesapeake Energy 114.29 4 Ray R. Irani Occidental Petroleum 103.07 5 David C. Novak Yum Brands 76.49 6 John C. Martin Gilead Sciences 60.40 7 Sol J. Barer Celgene 59.31 8 Keith A. Hutton XTO Energy 54.78 9 Richard C. Adkerson Freeport Copper 48.75 10 Jen-Hsun Huang Nvidia 31.40 http://www.businessinsider.com/15-highest-paid-ceos-in-america-2013-10?op=1

What is Leadership? Leadership is the ability to influence others How is leadership and management different? Shepherds verses Cowboys Formal leadership Legitimate power of position is the basis for authority Informal leadership Not recognized formally by the organization authority

Types or Styles of Leadership Autocratic Leadership A task-oriented style. Workers are told what to do and how to do it, and they have no say in the decision-making process. Participative Leadership All members of a team are involved in identifying essential goals and developing strategies to reach those goals. Entrepreneurial Leadership A personality-based style. The manager seeks to inspire workers with a vision of what can be accomplished to benefit all stakeholders.

Debate Issue: Should Managers Use the Autocratic Leadership Style? Yes Some employees need the close supervision that autocratic leaders provide. When autocratic leadership is used, communication moves from top (supervisor) to bottom (employees). An autocratic leader assigns workers to specific tasks and expects precise results, so workers know exactly what is expected. No Workers resent the constraints that result from the autocratic leadership style. The participative leadership style allows workers to communicate with the supervisor and other members of their group. Autocratic leaders stifle the workers’ creativity and their ability to solve problems.

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

Tips for Successful Leadership

Managerial Decision Making Process The act of choosing one alternative from among a set of alternatives Major steps in the managerial decision-making process

Managerial Decision Making (cont.) Identifying the problem or opportunity Problem 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 (cont.) Generating alternatives 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 Satisficing Choosing an alternative that is not the best possible solution, but one that adequately solves the problem

Managerial Decision Making (cont.) Implementing and evaluating the solution 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

Chapter Quiz People in an organization are what type of resource? Material Informational Inventory Human Financial

Chapter Quiz In executing their functions, managers must first organize activities. establish goals. motivate employees. evaluate activities. select employees.

Chapter Quiz Roles such as entrepreneur, disturbance handler, and resource allocator are types of _______ roles. interpersonal informational decisional leadership ownership

Chapter Quiz One type of leadership style is laissez-faire. CEO. entrepreneur. negotiator. bureaucratic.

Chapter Quiz All of the following are reasons for a greater focus on quality by U.S. firms except competition from foreign firms. customers that are more demanding. unpredictability on Wall Street. poorer financial performance. reduced market share.