McGraw-Hill/Irwin© 2008 The McGraw-Hill Companies, Inc. All rights reserved. The Nature of Management 7 7

7-2

7-3 Management A process designed to achieve an organization’s objectives by using its resources effectively and efficiently in a changing environment

7-4 Managers Managers make decisions about the use of resources and are concerned with: –Planning –Organizing –Leading –Controlling the organization’s activities

7-5 The Functions of Management

7-6 Where Planning Starts Objectives –The ends or results desired by the organization and are derived from the organization’s mission Mission –The statement of an organization’s fundamental purpose and basic philosophy

7-7 Types of Plans Strategic plans –Establish long-range objectives and overall strategy Tactical plans –Designed to implement strategic objectives (usually one year or less) Operational plans –Specify actions to achieve tactical plans (very short-term)

7-8 Crisis Management Contingency Planning –Requires that managers plan for “when” rather than “if” a disaster occurs

7-9 Organizing Helps create synergy Establishes lines of authority Improves communication Helps avoid duplication of resources Can improve competitiveness by speeding up decision making

7-10 Staffing Managers must ensure that the organization has enough employees with appropriate skills to do the work. Managers must also determine: –What skills are needed for specific jobs –How to motivate and train employees to do their assigned jobs –How much to pay employees –What benefits to provide –How to prepare employees for higher-level jobs in the firm at a later date

7-11 Directing Motivating and leading employees to achieve organizational objectives –Recognition and appreciation are often the best motivators for employees.

7-12 Controlling Control involves five activities: 1.Measuring performance 2.Comparing present performance with standards or objectives 3.Identifying deviations from the standards 4.Investigating the causes of deviations, and taking corrective action when necessary 5.Correcting activities to keep the organization on course

7-13 The Levels of Management

7-14 The Ten Highest Paid CEOs

7-15 Importance of Management Functions to Managers in Each Level

7-16 Workforce Diversity

7-17 Areas of Management Financial management Production and operations management Human resources management Marketing management Administrative management Did You Know? Women represent only 15.7 percent of corporate officers and just 5.2 percent of all top earners.

7-18 Skills Needed by Managers Leadership skills Technical expertise Conceptual skills Analytical skills Human relations skills

7-19 Three Basic Styles of Leadership Democratic Autocratic Free-rein

7-20 Seven Tips for Successful Leadership 1.Build effective and responsive interpersonal relationships. 2.Communicate effectively—in person, print, , etc. 3.Build the team and enable employees to collaborate effectively. 4.Understand the financial aspects of the business. 5.Know how to create an environment in which people experience positive morale and recognition. 6.Lead by example. 7.Help people grow and develop. Source: Susan M. Heathfield, “Seven Tips About Successful Management,” What You Need to Know About.com (n.d.), (accessed October 31, 2006).

7-21 Where Do Managers Come From? Good managers are made, not born: –Promoting employees from within –Hiring managers from other organizations –Hiring managers graduating from colleges and universities

7-22 Steps in the Decision Making Process

7-23 The Reality of Management There are only two basic activities of management: 1.Figuring out what to do despite uncertainty, great diversity, and an enormous amount of potentially relevant information 2.Getting things done through a large and diverse set of people despite having little direct control over most of them

7-24 The Median Annual Salaries for Management Positions Computer/IT managers$85,240 Marketing managers$78,250 Financial managers$73,340 Human resources/labor managers$67,710 Production/operations managers$67,320 Medical/health services managers$61,370 Administrative managers$52,500

7-25 Solve the Dilemma 1.Evaluate Infinity’s current situation and analyze its strengths and weaknesses. 2.Evaluate the opportunities for Infinity, including using its current strategy and propose alternative strategies. 3.Suggest a plan for Infinity to compete successfully over the next ten years.

7-26 Explore Your Career Options In which types of industries or sectors are managers the most likely to be hired?

7-27 Additional Discussion Questions and Exercises 1.What is the difference between strategic plans and tactical plans? 2.Which of the five functions of management is most closely concerned with evaluation? 3.Which level of management is most likely to need technical skills? 4.Describe the individuals with whom managers are involved in networking. –What is the value of networking for managers?

7-28 Chapter 7 Quiz 1.Which of the following skills involves the ability to think creatively, to think in abstract parts, and to see how terms fit together to form a whole? a.analytical skills b.conceptual skills c.human relation skills d.technical skills 2.Which describes free-rein leaders? a.Leaders make all decisions and tell employees what to do and how to do it b.Leaders allow employees to get involved in decisions. c.Leaders allow top management to make all decisions and tell employees what to do and how to do it. d.Leaders let employees work without much interference.

7-29 Chapter 7 Quiz 3.An agenda is most closely associated with a.networking. b.technical expertise. c.a calendar. d.financial resources. 4.The ability to deal with people is known as (an) a.analytical skill. b.conceptual skill. c.human relation skill. d.technical skill.

7-30 Multiple Choice Questions about the Video 1.GM spends about _______ per car on health care and pensions a.$100 b.$10,000 c.$1,000 d.$2,500 2.Which of the following is NOT a measure that GM has taken to reduce costs? a.Layoffs b.Benefit reduction c.Board of Director pay cuts d.Pension increases