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 Management What is it?

McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. The process used to accomplish organizational goals through planning, organizing, leading and controlling people and other organizational resources. WHAT IS MANAGEMENT? 7-3

McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. 7-4 Management In simple terms…

McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. 7-5 Management Getting the work done through other people…

McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. 7-6 Management …without making them mad.

McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. The process used to accomplish organizational goals through planning, organizing, leading and controlling people and other organizational resources. WHAT IS MANAGEMENT? 7-7

McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. 7-8 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. 7-9 TODAY’S MANAGERS Younger and more progressive.   Growing numbers of women.   Fewer from elite universities. Emphasis is on teams and team building. Managers need to be skilled communicators and team players.

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

McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved Managing for the Future 1.Prepare for the unexpected 2.Faster reaction times 3.Flatter structure 4.Build teams 5.Grow globally 6.Develop cultural sensitivity 7.Invest in technology 8.Develop a family work atmosphere 9.Create vision 10.Enhance competencies

McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. Source: Bloomberg BusinessWeek, May 17, EDUCATION MATTERS Alma Maters of CEOs * Did not graduate from any college or university. 7-12

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

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

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

McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved Planning  Anticipating future trends and determining the best strategies and tactics to achieve organizational objectives  Key management function because other functions depend heavily on having a good plan

McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved Planning Setting Mission, Goals, and Objectives

McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved Create Mission Mission Why Organization Exists, Its Purpose

McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved Sharing the Vision Vision - - More than a goal, it’s a broad explanation of why the organization exists and where it’s trying to go.

McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved Mission Statement  Outline of the fundamental purposes of the organization  Should address:  Organization’s self-concept  Company philosophy and goals  Long-term survival  Customer needs  Social responsibility  Nature of company’s product or service

McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. Solano Community College Solano Community College prepares a diverse student population to participate successfully in today’s local and global Communities. 7-21

McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved Star Trek Enterprise

McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved Setting Goals & Objectives Goals -- The broad, long-term accomplishments an organization wishes to attain. Objectives -- Specific, short-term statements detailing how to achieve the organization’s goals.

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

McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved PLANNING ANSWERS FUNDAMENTAL QUESTIONS What Is The Situation Now? SWOT Analysis -- Analyzes the organization’s Strengths, Weaknesses, Opportunities and Threats. How Can We Get To Our Goal From Here? -Strategic Planning -Tactical Planning -Operational Planning -Contingency Planning

McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved SWOT Analysis A Continuous Process What is the situation now?

McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved SWOT Analysis Potential Internal STRENGTHS Potential Internal WEAKNESSES Potential External OPPORTUNITIES Potential External THREATS

McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. SWOT MATRIX 7-28

McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved Slide 2-34 Ben & Jerry’s: a SWOT analysis to get it growing again

McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved Planning Types How can we get to our goal from here?

McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved Planning Types -Strategic Planning -Tactical Planning -Operational Planning -Contingency Planning

McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved Planning Types Strategic Planning -- Done by top management and determines the major goals of the organization and the policies, procedures, strategies and resources it will need to achieve them. Tactical Planning -- The process of developing detailed, short-term statements about what is to be done, who is to do it and how.

McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved Planning Types Operational Planning -- The process of setting work standards and schedules necessary to implement the company’s tactical objectives. Contingency Planning -- The process of preparing alternative courses of action the firm can use if its primary plans don’t work out.

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

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 Strategic Tactical Operational

McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved DECISION MAKING Decision Making -- Choosing among two or more alternatives

McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. 1.Define the situation. 2.Describe and collect needed information. 3.Develop alternatives. 4.Develop agreement among those involved. 5.Decide which alternative is best. 6.Do what is indicated. 7.Determine whether the decision was a good one and follow up. RATIONAL DECISION-MAKING MODEL 7-37

McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. Source: Fortune, June 13, Keep global business issues in mind and be a citizen of the world. Identify and manage risks before they grow. Change strategies and models with the times. Skillfully manage relationships with governments as government involvement rises. WHAT MAKES a GREAT CEO Decision Making Skills of Top CEOs 7-38

McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved Decision Making: Finding the Best Alternative Define Describe Describe & Collect Organize & Analyze Organize & Analyze DevelopAlternativesImplement Monitor MonitorandFollow-up Decide

McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved DECISION MAKING Problem Solving -- The process of solving the everyday problems that occur; less formal than decision making and needs quicker action. Problem-solving techniques include brainstorming and PMI -- Listing all the pluses for a solution in one column, all the minuses in another and the implications in a third.

McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved Organizing Creating a Unified System

McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved Organizing Designing structure of the organization and creating conditions and systems in which everyone and everything work together to achieve organization’s goals and objectivesDesigning structure of the organization and creating conditions and systems in which everyone and everything work together to achieve organization’s goals and objectives Create Corporate HierarchyCreate Corporate Hierarchy Generate Organization ChartGenerate Organization Chart

McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. LEVELS of MANAGEMENT 7-43

McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved MANAGEMENT LEVELS Top Management -- The highest level, consists of the president and other key company executives who develop strategic plans. Middle Management -- Includes general managers, division managers, and branch and plant managers who are responsible for tactical planning and controlling. Supervisory Management -- Those directly responsible for supervising workers and evaluating daily performance.

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 MANAGEMENT LEVELS Chief Executive Officer (CEO)  Introduces change into an organization. Chief Operating Officer (COO)  Implements CEO’s changes. Chief Financial Officer (CFO)  Obtains funds, plans budgets, collects funds, etc. Chief Information Officer (CIO)  Gets the right information to the right people so decisions can be made.

McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved Management Skills Technical Skills -- The ability to perform tasks in a specific discipline or department. Human Relations Skills -- Skills that involve communication and motivation; they enable managers to work through and with people. Conceptual Skills -- Skills that involve the ability to picture the organization as a whole and the relationship among its various parts.

McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. Source: Fast Company, November THANK YOU The Most Basic Human Relations Skill Saying “thank you” has led to happier employees and greater profits for companies. Whom should a manager thank? 1.Interns - Doing lots of work for little money, they are the future of the company and industry. 2.Lawyers - Many do pro bono work, even for nonprofit companies. 3.The Little People - Mailroom, repair, and cleaning staff keep the office running day-to-day. 7-48

McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. SKILLS NEEDED at VARIOUS LEVELS of MANAGEMENT 7-49

McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. Visual devices that show relationships among people and divide the organization’s work; they also show who reports to whom. ORGANIZATIONAL CHARTS 7-50

McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved Organizing SBU’sSBU’s Cross-Functional Self- Managed TeamsCross-Functional Self- Managed Teams DiversityDiversity Heterogeneous vs. HomogeneousHeterogeneous vs. Homogeneous StaffingStaffing Recruit and RetainRecruit and Retain

McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. Recruiting, hiring, motivating and retaining the best people available to accomplish the company’s objectives. STAFFING Recruiting good employees is critical. Many people are not willing to work at companies unless they are treated well with fair pay. 7-52

McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved Leading Providing Continuous Vision & Values (Previously known as Directing)

McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved Leading Creating a vision for the organization and guiding, training, coaching, and motivating others to work effectively to achieve the organization’s goals

McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved Leadership Involves creating vision for others to follow, establishing corporate values and ethics, and transforming the way the organization does business in order to improve its effectiveness and efficiency

McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. Leaders must:  Communicate a vision and rally others around that vision.  Establish corporate values.  Promote corporate ethics.  Embrace change.  Stress accountability and responsibility. LEADERSHIP 7-56

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 VARIOUS LEADERSHIP STYLES

McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved Autocratic Making managerial decisions without consulting others.

McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved Participative (Democratic) Managers and employees work together to make decisions. Leader

McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved Free-rein Leader Managers set objectives and employees are free to do whatever is appropriate to accomplish those objectives.

McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved Leadership Styles   What is the best leadership style to use?   Depends   Who is being led   In what situations   Goals and objectives of the firm

McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved Empowering Workers  Empowerment   Giving employees the authority and the responsibility to respond quickly to customer requests  Enabling   Giving workers the education and tools they need to make decisions   Commensurate compensation

McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved Controlling Making Sure It Works

McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved Controlling Establishing clear standards to determine whether or not an organization is progressing toward its goals and objectives, rewarding people for doing a good job, and taking corrective action if they are not

McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved FIVE STEPS of CONTROLLING 1. Establish clear and realistic standards 4. Communicate results 5. If needed, take corrective action or give reward 2. Monitor and record performance - customer satisfaction 3. Compare results against standards Feedback: Are standards realistic?

McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved Managing Knowledge Knowledge Management Finding the right information, keeping the information in a readily accessible place and making the information known to every one in the firm.

McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved Managing Knowledge First step is determining what knowledge is most important Keep people from duplicating the work of gathering information every time a decision is made Key is learning how to process information and turn it into information that everyone can use

McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. Source: CFO Magazine, Do you have strategic initiatives that you have not addressed? Do you often check on employees for quality control? Do you often check on subordinates throughout the day? Do you rarely take vacations? Is there a lot of turnover? ARE YOU A MICROMANAGER? 7-69

McGraw-Hill/Irwin Understanding Business, 7/e © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. Traditional forms of measuring success are financial. Pleasing employees, stakeholders and customers is important. External Customers -- Dealers, who buy products to sell to others, and ultimate customers (or end users), who buy products for their own use. Internal Customers -- Individuals and units within the firm that receive services from other individuals or units. MEASURING SUCCESS 7-70

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 Management Challenges Finding/Training New Employees Growing Global Competition Finding/Serving New Customers Financing Long-Term Growth Dealing with Increased Regulation

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.