Management and Leadership Chapter 07 McGraw-Hill/Irwin Copyright © 2013 by The McGraw-Hill Companies, Inc. All rights reserved.

1. Describe the changes occurring today in the management function. 2. Describe the four functions of management. 3. Relate the planning process and decision making to the accomplishment of company goals. 4. Explain the differences between leaders and managers, and describe the various leadership styles. 5. Summarize the five steps of the control function of management. LEARNING GOALS Chapter Seven 7-2

Four Functions of Management Management -- The process used to accomplish organizational goals through planning, organizing, leading and controlling people and other organizational resources. WHAT IS MANAGEMENT? LG1 7-3

Managers’ Roles Are Evolving 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. TODAY’S MANAGERS LG1 7-4

Four Functions of Management 1. Planning 2. Organizing 3. Leading 4. Controlling FOUR FUNCTIONS of MANAGEMENT LG2 7-5

Planning & Decision Making Vision -- More than a goal, it’s a broad explanation of why the organization exists and where it’s trying to go. Mission Statement -- Outlines the organization’s fundamental purposes. It includes: philosophy, self-concept; social responsibility; products/services SHARING the VISION…and MISSION LG3 7-6

Goals -- The broad, long-term accomplishments an organization wishes to attain. Objectives -- Specific, short- term statements detailing how to achieve the organization’s goals. SETTING GOALS and OBJECTIVES LG3 Planning & Decision Making 7-7

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 PLANNING ANSWERS FUNDAMENTAL QUESTIONS LG3 Planning & Decision Making 7-8

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. STRATEGIC and TACTICAL PLANNING LG3 Planning & Decision Making 7-9

Operational Planning -- The process of setting work standards and schedules necessary to implement the company’s tactical objectives. OPERATIONAL and CONTINGENCY PLANNING Contingency Planning -- The process of preparing alternative courses of action the firm can use if its primary plans don’t work out. LG3 Planning & Decision Making 7-10

Decision Making: Finding the Best Alternative Decision Making -- Choosing among two or more alternatives. DECISION MAKING LG3 7-11

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 LG3 Decision Making: Finding the Best Alternative 7-12

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. PROBLEM SOLVING LG3 Decision Making: Finding the Best Alternative 7-13

Organizing: Creating a Unified System Organization Chart -- A visual device that shows relationships among people and divides the organization’s work; it shows who reports to whom. ORGANIZATIONAL CHARTS LG4 7-14

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. MANAGEMENT LEVELS LG4 Organizing: Creating a Unified System 7-15

Source: Fortune Magazine, accessed June AMERICA’S MOST POWERFUL FEMALE MANAGERS Organizing: Creating a Unified System LG4 7-16

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. MANAGERIAL SKILLS Tasks and Skills at Different Levels of Management LG4 7-17

Staffing: Getting and Keeping the Right People Staffing -- Recruiting, hiring, motivating and retaining the best people available to accomplish the company’s objectives. STAFFING LG4 Recruiting good employees is critical. Many people are not willing to work at companies unless they are treated well with fair pay. 7-18

Leading: Providing Continuous Vision and Values. Leaders must:  Communicate a vision and rally others around that vision.  Establish corporate values.  Promote corporate ethics.  Embrace change.  Stress accountability and responsibility. LEADERSHIP LG5 7-19

Transparency -- The presentation of the company’s facts and figures in a way that is clear and apparent to all stakeholders. ACCOUNTABILITY through TRANSPARENCY LG5 Leading: Providing Continuous Vision and Values. 7-20

Leadership Styles Autocratic Leadership -- Making managerial decisions without consulting others. Participative or Democratic Leadership -- Managers and employees work together to make decisions. Free-Rein Leadership -- Managers set objectives and employees are free to do whatever is appropriate to accomplish those objectives. LEADERSHIP STYLES LG5 7-21

Source: CIO Magazine, NATURAL BORN LEADERS? Four Types of Executives RationalistsHumanists PoliticistsCulturists LG5 Leadership Styles 7-22

Empowering Workers Progressive leaders give employees the authority to make decisions on their own without consulting a manager. Customer needs are handled quickly. Manager’s role becomes less of a boss and more of a coach. Enabling -- Giving workers the education and tools they need to make decisions. EMPOWERMENT LG5 7-23

Source: Bloomberg BusinessWeek, Manage output instead of hours. Train workers to be ready for a more complex corporate structure. Allow lower-level managers to make decisions. Use new technology to foster teamwork. Shift hiring emphasis to collaboration. WORK SMARTER How to Ease Pressure on Workers LG5 Empowering Workers 7-24

Managing Knowledge Knowledge Management -- Finding the right information, keeping the information in a readily accessible place and making the information known to everyone in the firm. Tries to keep people from reinventing the wheel. MANAGING KNOWLEDGE LG5 7-25

Controlling: Making Sure it Works FIVE STEPS of CONTROLLING LG6 7-26

A Key Criterion for Measurement: Customer Satisfaction 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 LG6 7-27