Using Management Skills to Build Business Relationships Chapter 7

Chapter Overview Activities of Management Roles of Managers Managerial Skills Trends in Management

Management: The process of guiding the development, maintenance, and allocation of resources to attain organizational goals

Quality of Management Ratings made by Fortune magazine: Most admired Most admired quality of management: –Philip Morris –General Electric –Cisco Systems Leastadmired : Least admired quality of management: –Oxford Health Plans –Cabletron Systems –Trump Hotels & Casinos Source: Fortune, Mar. 1, 1999, p. 70.

Four Activities of Management Planning Organizing Leading Controlling

Four Types of Planning Strategic Planning Tactical Planning Operational Planning Contingency Planning Planning long-range, broad goals to implement a strategic plan; shorter term and more specific creating very specific policies and procedures alternative actions for unusual or crisis situations

Contingency Planning Some types of contingency planning that were used in preparation for the Year 200 computer bug: stocked gasoline & diesel fuel –Cities stocked gasoline & diesel fuel for emergency vehicles stocked food & water –Hotel chains stocked food & water for guests if needed paper & pen backups –Stores devised paper & pen backups for credit card processing Disaster Operations Center –The Red Cross set up a national Disaster Operations Center

Levels of Management Organizing Top Management Middle Management Supervisory Management CEO Vice President Division Heads, Regional Managers Supervisors, Team Leaders, Foremen Strategic Plans Tactical Plans Operational Plans

Sources of Power for Leaders: Leading Type of Power:Derived from: Legitimate 1. Legitimate position in organization Reward 2. Reward control over rewards Coercive 3. Coercive control over punishments Expert 4. Expert extensive knowledge Referent 5. Referent charisma, respect, admiration

–95% of nurses in a research study were willing to follow doctors’ orders to administer a clearly unsafe dosage of medicine to patients (Source: Hofling et al., 1966, Journal of Nervous and Mental Disease, v. 143, pp ) –46% of nurses in another study admitted to a time that they complied with a doctor’s order that they thought was unsafe (Source: Krackow & Blass, 1995, Journal of Social Behavior and Personality, v. 10, pp ) Automatic Deference to Expert & Legitimate Power can be Harmful

Leadership Styles Autocratic 1. Autocratic directive, controlling Participative 2. Participative democratic, consensual, consultive Free-rein 3. Free-rein (Laissez-Faire) members have freedom, leaders give ideas and information Leading

5-stage Cycle of Controlling Set performance standards Measure performance Compare performance to standards Take corrective action, if needed Use information gathered to set future performance standards Controlling

Measuring Performance Federal Express uses 3 quantitative measures of performance: Service Quality Index measurements made on every shipment Customer Satisfaction Index customer ratings Process Quality Indicators measures taken on individual operating units (ex., delivery truck performance) Controlling Source: Neff & Citrin: Lessons from the Top, 1999, pp

Managerial Roles Type of role:Activities: Informational 1. Informational information gathering, disseminating, spokesperson Interpersonal 2. Interpersonal figurehead, leader, liaison Decisional 3. Decisional entrepreneur, resource allocation, resolve conflicts, negotiate

The Interpersonal Role 60% or moreJack Welch, CEO of GE, estimates he spends 60% or more of his time on ‘people stuff’ ( Source: Neff & Citrin: Lessons from the Top, 1999, p. 345).

The Decision-Making Process 1. Define the problem 2. Search for solutions 3. Select one or more alternatives 4. Put plan into action to see if problem is solved 5. Follow up

Managerial Skills Technical Skills specialized knowledge and expertise Human Relations Skills interpersonal skills Conceptual Skills understanding the big picture Global Management Skills ability to operate in diverse environments

Trends in Management  Increased employee empowerment  Increased role of information technology  Increase in global management

Empowering Employees Things needed to empower employees, according to Don Fites, CEO of Caterpillar: decision-making authorityGive them decision-making authority culture & climateDevelop a culture & climate that support it OrganizeOrganize the business to support it RewardReward employees based on performance Source: Neff & Citrin: Lessons from the Top, 1999, pp