1. FERRELL | HIRT | FERRELL
Copyright © 2013 by The McGraw-Hill Companies, Inc. All rights reserved.
McGraw-Hill/Irwin

2. CHAPTER 6 The Nature of Management
PART 3
CHAPTER 6 The Nature of Management
CHAPTER 7 Organization, Teamwork, and Communication
CHAPTER 8 Managing Service and Manufacturing Operations
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3. Management Is...
A process designed to achieve an organization’s objectives by using its resources effectively & efficiently in a changing environment
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4. What Managers Do Make decisions (utilize resources) achieve objectives
Planning
Organizing
Staffing
Directing
Controlling
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5. The Importance of Management
Crucial for a successful business
CEO Gary Kelly has helped make Southwest Airlines the most profitable airline in the United States
His strong management skills have helped the company be a success
Philosophy:
Treat employees and customers well
Smart expansion
Careful planning and strategizing
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6. The Importance of Management
Resource acquisition and coordination
Resources:
People
Raw materials
Equipment
Money
Information
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7. Management Functions
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8. Management Functions Planning
Process of determining the organization’s missions, goals, and objectives and deciding how to accomplish them.
Mission
Organization’s statement of purpose and basic philosophy
Goals
The results that a firm wishes to achieve– almost always have multiple goals
Objectives
Results desired by organization
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9. The Mission Statement What business are we in? Who are we?
Who are our customers?
What is our operating philosophy?
What are our core competencies and competitive advantages?
What are our responsibilities with respect to being good stewards of environmental, financial and human resources?
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10. Goals A firm almost always has multiple goals Should be specific
Components of a goal:
An attribute sought
A target to be achieved
A time frame
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11. Common Organizational Objectives
The desired end results
Profit
Competitive advantage
Efficiency
Growth
Service
Ethics
Community responsibility
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12. Planning as a Function of Management
Strategic
Tactical
Operational
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13. Strategic Plans Duty of executive-level managers
Establish the long-range objectives & overall strategy to fulfill firm’s mission
2-10 years forward-looking
Diversification, issuing stock, mergers & acquisitions, going international
Must account for organization’s capabilities and resources, business environment and objectives
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14. Tactical Plans Short-range Time frame of 1 year or less
Strategy implementation
Time frame of 1 year or less
Environmental changes
Periodically reviewed & updated
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15. Operational Plans Very short-term Actionable, specific
Individuals, work groups, departments
1 month, 1 week, 1 day
Help to achieve tactical plans
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16. Crisis Management Contingency Planning
Focus on potential disasters
Product tampering
Oil spills
Fire, earthquake, terrorist attack
Unethical/illegal employee activity
Communication is very important during
a crisis
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17. Adapting to a New Business Environment
Environmental uncertainties have changed
how companies plan for and manage crises
General Electric
Struggled during the downturn; lost AAA credit rating
Changed its focus to clean energy, new healthcare tech
Capture government stimulus funding
Focus on socially responsible industries
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18. Management Functions Organizing
Structuring of resources & activities to accomplish objectives efficiently & effectively
Importance:
Creates synergy
Establishes lines of authority
Improves communication
Improves competitiveness
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19. Management Functions Staffing
Hiring people to carry out the work of the organization
Importance:
Recruiting
Determine skills
Motivate & train
Compensation levels
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20. Management Functions Downsizing
The elimination of significant numbers of employees
Rightsizing
Trimming the fat
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21. Management Functions Directing
Motivating and leading employees to achieve organizational objectives
Motivation
Incentives (raise, promotion)
Employee involvement (cost reduction, customer service, new products)
Recognition and appreciation
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22. Management Functions Controlling
Process of evaluating and correcting activities to keep organization on course
Five activities of controlling:
Measuring performance
Comparing performance against standards
Identifying deviations from standards
Investigating causes of deviations
Taking corrective action
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23. Levels of Management Top management Middle management
First-line/supervisory management
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24. Top Managers President Chief Executive Officer (CEO)
Chief Financial Officer (CFO)
Chief Operations Officer (COO)
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25. Middle Management Responsible for tactical planning
Implement general guidelines established by top management
Responsibility is more narrowly focused than top managers
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26. First Line Management Supervise workers Oversee daily operations
Directing and controlling are primary functions
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27. Areas of Management Finance Production Operations Human Resources
Marketing
Administration
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28. Financial Management
Focus on obtaining money necessary for the successful operations and using these funds to further organizational goals
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29. Production & Operations Management
Develop & administer activities to transform resources into goods, services and ideas for the marketplace.
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30. Human Resources Management
Handle staffing function and deal with employees in a formalized manner
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31. Managing Talent
Responses of managers when asked if they are worried about their high-potential talent being recruited by competitors
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32. Marketing Management
Responsible for planning, pricing and promoting products and making them available to customers
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33. Information Technology (IT) Management
Responsible for implementing, maintaining and controlling technology applications in business (such as computer networks)
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34. Administrative Managers
Manage an entire business or major segment of the business
Coordinate activities of specialized managers
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35. Skills Needed by Managers
Leadership
Technical expertise
Conceptual skills
Analytical skills
Human relations skills
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36. 7 Tips for Successful Leadership
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37. Types of Leaders Autocratic Leaders Democratic Leaders
Decision makers, “tell” employees what to do
Democratic Leaders
Involve employees in decisions
Free-Rein leaders
Employees work with minimal interference
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38. Technical Expertise
The specialized knowledge and training required to perform jobs related to a manager’s area.
Computer expertise is a skill for nearly all managers
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39. Conceptual Skills
Are the ability to think in abstract terms and to see how parts come together to form the whole.
The ability to think creatively
Needed by all managers
Especially important for top managers
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40. Analytical Skills
The ability to identify relevant issues and recognize their importance, understand the relationships between them and perceive the underlying causes of a situation
Most important to top-level managers
Required in complex situations where the solution is unclear
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41. Human Relations Skills
The ability to deal with people inside and outside the organization
Managers with good HR skills are generally more successful
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42. Where Do Managers Come From?
Good managers are not born; they are made
Internal promotion
Know the company
But may limit innovation
Hiring from other organizations
Better for innovation
Do not know the company as well
Hiring straight from colleges
Lack of experience
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43. Decision Making
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44. The Reality of Management
Not a cut-and-dried process
Managers spend a lot of time:
Establishing and updating an agenda
A calendar that covers short-term goals and long-term objectives
Networking
Building relationships and sharing information with colleagues who can help managers achieve the items on their agendas
Confronting the complex challenges of today’s business world
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