The Management Process

The Management Process
Chapter Six The Management Process Copyright © Cengage Learning. All rights reserved.

CEO Pay Compared to Average Worker Pay
What happened to worker pay as compared to the pay of managers? MANAGERS GET PAID ALMOST 5X HIGHER THAN WORKERS….MANAGERS NEED TO BE COMPENSATED BASED ON PERFORMANCE…HENCE THE DELINE IN 2006 DURING THE FINANCIAL CRISIS. Source: Trends in CEO Pay, accessed 2/8/09. Copyright © Cengage Learning. All rights reserved.

Copyright © Cengage Learning. All rights reserved.
What Is Management? The process of coordinating resources to achieve the goals of an organization Material resources Human resources Financial resources Information resources MATERIAL RESOURCES: TANGIBLE AND PHYSICAL RESOURCES AN ORGANIZATION USES HUMAN RESOURCES: THE PEOPLE OF THE ORGANIZATION …PROBALY THE ORGANIZATION’S MOST IMPORTANT RESOURCE FINANCIAL RESOURCES: THE FUNDS THE ORGANIZATION USES TO MEET ITS OBLIGATIONS TO INVESTORS AND CREDITORS INFORMATIONAL RESOURCES: ENABLES THE ORGANIZATION TO KNOW WHAT IS CHANGING AND HOW ITS CHANGING. THE COMPANY USES INFORMATION TO AFAPT TO CHANGE Just have someone read and move on. Copyright © Cengage Learning. All rights reserved.

The Four Main Resources of Management
Copy diagram. Copyright © Cengage Learning. All rights reserved.

Basic Management Functions
The Management Process THESE ARE THE DIFFERENT FUNCTIONS THAT MANAGEMENT PERFORMS ON A DAILY BASIS. THESE FUNCTIONS ARE PLANNING, ORGANIZING, LEADING AND MOTIVATING, AND CONTROLLING THESE FUNCTIONS ARE NOT EXCLUSIVE TO TIME…IF CONTROLLING CAN BE MODIFIED….MANAGERS GO BACK TO PLANNING (CAN BE ENGAGED SIMEOULTANEOUSLY) Copy diagram. Why is this an example of a process? Copyright © Cengage Learning. All rights reserved.

Planning Planning Establishing organizational goals and deciding how to accomplish them Mission A statement of the basic purpose that makes an organization different from others Strategic planning The process of establishing an organization’s major goals and objectives and allocating the resources to achieve them Copyright © Cengage Learning. All rights reserved.

Establishing goals and objectives
An end result that the organization is expected to achieve over a one- to ten-year period Objective A specific statement detailing what the organization intends to accomplish over a shorter period of time GOALS AND OBJECTIVES CAN DEAL WITH A VARIETY OF FACTORS SUCH AS: SALES, COMPANY GROWTH, COSTS, CUSTOMER SATISFACTION, AND EMPLOYEE MORALE GOALS SPAN OVER A PERIOD OF TIME GOALS DEVELOPED BY DIFFERENT DEPARTMENTS MAY CONFLICT WITH ONE ANOTHER. THE PROCESS OF BALANCING CONFLICTING GOALS IS KNOWN AS OPTIMIZATION How is a goal different than an objective? Copyright © Cengage Learning. All rights reserved.

Planning Establishing plans to accomplish goals and objectives Plan An outline of the actions by which the organization intends to accomplish its goals and objectives Strategic plan An organization’s broadest plan, a guide for major policy setting and decision making Tactical plan A smaller-scale plan to implement a strategy Operational plan A plan to implement a tactical plan Contingency plan A plan of alternative courses of action if the organization’s other plans are disrupted or become ineffective CONTINGENCY PLAN: WHAT DO WE DO IF SOMETHING HAPPENS? Have students read. Why so many different types of plans? Copyright © Cengage Learning. All rights reserved.

Types of Plans STRATEGIC PLANS: SETTING POLICY SET UP BY BODS DESIGNED TO ACHIEVE LONG TERM GOALS TACTICAL PLANS: UPDATED PERIODICALLY AS TECHNOLOGY CONSTANTLY CHANGES SMALLER SCALE STRATEGIC PLAN OPERATIONAL PLANS: DESIGNED TO IMPLIMENT TACTICAL PLANS DESCRIBES HOW TO ACCOMPLISH SPECIFIC OBJECTIVES (IN 1 YEAR OR LESS) CONTINGENCY PLANS: OUTLINE ALTERNATIVE ACTION IF OTHER PLANS ARE DISRUPTED OR DEEM INEFFECTIVE USED IN CONJUNCTION WITH THE OTHER PLANS Copyright © Cengage Learning. All rights reserved.

ORGANIZING, LEADING, AND MOTIVATING
Directing ORGANIZING: THE GROUPING OF RESOURCES AND ACTIVITIES TO ACCOMPLISH SOME END RESULT IN AN EFFICIENT AND EFFECTIVE MANNER LEADING: THE PROCESS OF INFLUENCING PEOPLE TO WORK TOWARDS A COMMON GOAL MOTIVATING: THE PROCESS OF PROVIDING REASONS FOR PEOPLE TO WORK AND IN THE BEST INTERESTS OF THE ORGANIZATION. (DIFFERENT THINGS MOTIVATE DIFFERENT PEOPLE). DIRECTING: THE PROCESS OF LEADING AND MOTIVATING TOGETHER Copyright © Cengage Learning. All rights reserved.

Controlling Ongoing Activities
. CONTROLLING: THE PROCESS OF EVALUATING AND REGULATING ONGOING ACTIVITIES TO ENSUE THAT GOALS ARE ACHIEVED THE CONTROLLING FUNCTION CONTAINS 3 STEPS: SETTING STANDARDS: WHERE PERFORMANCE CAN BE COMPARED MEASURING ACTUAL PERFORMANCE TO PROJECTIONS: MEASURING ACTUAL WITH THE STANDARDS (EXCEED OR FALL SHORT) TAKING CORRECTIVE ACTION: TAKING ACTIONS NESSISARY TO RAISE STANDARDS OR PERFORMANCE Copyright © Cengage Learning. All rights reserved.

Kinds of Managers Levels of management Top manager—guides and controls the overall fortunes of the organization Middle manager—implements the strategy and major policies developed by top management First-line manager—coordinates and supervises the activities of operating employees The coordinated effort of all three levels of managers is required to implement the goals of any company Give an example of each in the school? Copyright © Cengage Learning. All rights reserved.

How would you title? Financial managers Responsible for the organization’s financial resources (money) Operations managers Manage the systems that convert resources into goods and services Marketing managers Responsible for facilitating the exchange of products between the organization and its customers or clients Human resources managers Manage the organization’s human resources programs (employees) Administrative managers (general managers) Not associated with any specific functional area; provide overall administrative guidance and leadership Copy underlined only. Copyright © Cengage Learning. All rights reserved.

Areas of Management Specialization
Other areas may have to be added depending on the nature of the firm and the industry Copyright © Cengage Learning. All rights reserved.

How would you title? Technical skill A special skill needed to accomplish a specialized activity Conceptual skill The ability to think in abstract terms Interpersonal skill The ability to deal effectively with other people Copy underlined only Copyright © Cengage Learning. All rights reserved.

What Makes Effective Managers?
Technical skill A special skill needed to accomplish a specialized activity Conceptual skill The ability to think in abstract terms Interpersonal skill The ability to deal effectively with other people Copyright © Cengage Learning. All rights reserved.

Managerial Roles Fill in the blanks _________ roles Entrepreneur, disturbance handler, resource allocator, negotiator Figurehead, liaison, leader ___________________ roles Monitor, disseminator, spokesperson Copyright © Cengage Learning. All rights reserved.

Managerial Roles Copy underlined Decision-making roles Entrepreneur, disturbance handler, resource allocator, negotiator Interpersonal roles Figurehead, liaison, leader Informational roles Monitor, disseminator, spokesperson Copyright © Cengage Learning. All rights reserved.

How would you title? Audit your company cultures. Stay informed—informed people don’t fear change. Beware of “aspirational” accounting. (Enron) Empower your people—turn them loose. Prevent erosion of human assets. Be generous with what you know. Source: “25 Rules for Leaders, 2006,” Fast Company, Copyright © Cengage Learning. All rights reserved.

Guidelines for Leaders
Audit your company cultures. Stay informed—informed people don’t fear change. Beware of “aspirational” accounting. (Enron) Empower your people—turn them loose. Prevent erosion of human assets. Be generous with what you know. Why for each? Source: “25 Rules for Leaders, 2006,” Fast Company, Copyright © Cengage Learning. All rights reserved.

Class Exercise For each skill, provide an example of how a manager could use it in a real-world situation. Technical skill Conceptual skill Interpersonal skill Copyright © Cengage Learning. All rights reserved.

Leadership Formal Power(management) Legitimate power of position is the basis for authority Informal Power (leadership) May not recognized formally by the organization authority LEADERSHIP: THE ABILITY TO INFLUENCE OTHERS TO WORK FOR A COMMON GOAL How is leadership different from management? Do they have to be two different people? Explain. Copyright © Cengage Learning. All rights reserved.

How would you title? Authoritarian Holds all authority and responsibility, with communication usually moving from top to bottom Laissez-faire Gives authority to employees and allows subordinates to work as they choose with a minimum of interference; communication flows horizontally among group members Democratic Holds final responsibility but also delegates authority to others, who help determine work assignments; communication is active upward and downward Copyright © Cengage Learning. All rights reserved.

Styles of Leadership Authoritarian (Theory X) Holds all authority and responsibility, with communication usually moving from top to bottom Laissez-faire Gives authority to employees and allows subordinates to work as they choose with a minimum of interference; communication flows horizontally among group members Democratic (Theory Y) Holds final responsibility but also delegates authority to others, who help determine work assignments; communication is active upward and downward Copyright © Cengage Learning. All rights reserved.

Debate Issue: Should Managers Use the Authoritarian Leadership Style?
YES Some employees need the close supervision that authoritarian leaders provide. When authoritarian leadership is used, communication moves from top (supervisor) to bottom (employees). An authoritarian leader assigns workers to specific tasks and expects precise results, so workers know exactly what is expected. NO Workers resent the close supervision that results from the authoritarian leadership style. The democratic and laissez-faire leadership styles allow workers to communicate with the supervisor and other members of their group. Authoritarian leaders stifle the workers’ creativity and their ability to solve problems. Copyright © Cengage Learning. All rights reserved.

Managerial Decision Making
IDENTIFYING THE PROBLEM OR OPPORTUNITY: THE DESCREPANCY BETWEEN AN ACTUAL CONDITION AND A DESIRED CONDITION. A POSITIVE PROBLEM MAY POSE AN OPPORTUNITY SOMETIMES MANAGERS HAVE HUBERIS: THEY SEE A SITUATION AS IT REALLY ISN’T GOOD MANAGERS KNOW CERTAIN SITUATIONS AND HOW TO HANDLE THEM GENERATING ALTERNATIVES: CERTAIN TECHNIQUES, SUCH AS BRAINSTORMING AND TRIAL AND ERROR, CAN BE USED TO GENERATE ALTERNATIVES SELECTING AN ALTERNATIVE: FINAL DECISIONS ARE INFLUENCED BY A NUMBER OF CONSIDERATIONS, INCLUDING FINANCIAL CONSTRAINTS, HUMAN AND INFORMATIONAL RESOURCES, TIME LIMITS, LEGAL OBSTICALS, AND POLITICAL FACTORS IMPLIMENTING AND EVALUATING A SOLUTION: MANAGERS NEED TO DEAL WITH THE UNFORSEEN CONSEQUENCES OF A SITUATION, EVEN WHEN ALTERNATIVES HAVE BEEN CONSIDERED. IF THE ACTION REMOVES THE DISCREPANCY BETWEEN ACTUAL AND DESIRED CONDITIOPNS, A MANAGER WILL USUALLY CHOOSE THIS COURSE OF ACTION. IF A PROBLEM STILL EXISTS, MANAGERS MAY: DECIDE TO GIVE THE ALTERNATIVE MORE TIME TO WORK (IE GM NOT ADAPTING) ADOPT A DIFFERENT ALTERNATIVE START THE PROBLEM SOLVING PROCESS OVER AGAIN Copyright © Cengage Learning. All rights reserved.

Managing Total Quality
Total Quality Management (TQM) The coordination of efforts directed at Improving customer satisfaction Increasing employee participation Strengthening supplier partnerships Facilitating an organizational atmosphere of continuous quality improvement CUSTOMER SATISFACTION: HIGHER QUALITY PRODUCTS AND SERVICES COMPANY THAT CARES ABOUT CUSTOMERS EMPLOYEE PARTICIPATION: ALLOW EMPLOYEES TO CONTRIBUTE TO DECISION MAKING…HAVE THEM ASSUME ACCOUNTABILITY AND RESPONSIBILITY FOR THEIR ACTIONS. THIS INCREASES EMPLOYEE MORAL AND MOTIVATION STRENGTHENING PARTNER RELATIONSHIPS: GOOD WORKING RELATIONSHIPS WITH SUPPLIERS CAN HELP ENSURE THE RIGHT SUPPLIES AND MATERIALS TO BE DELIVERED IN A TIMLEY MANNER AS WELL AS THE RIGHT MATERIALS BEING DELIVERED. CONTININOUS QUALITY IMPOROVEMENT: ACHIEVABLE THROUGH ONE SINGLE PROGRAM THAT HAS A TARGET OBJECTIVE. CONTINIOUS IMPROVEMENT PROGRAMS FOR LONG TERM GOAL ACHIEVEMENT What happens if you aren’t committed to Total Quality Management? Copyright © Cengage Learning. All rights reserved.

What It Takes to Become a Successful Manager
Personal skills Oral communication Written communication Computer skills Critical thinking Education and experience A solid academic background Practical work experience What do you think of this list? Copyright © Cengage Learning. All rights reserved.

Chapter Quiz People in an organization are what type of resources? Material Informational Inventory Human Financial In executing their functions, managers must first organize activities. establish goals. motivate employees. evaluate activities. select employees. Copyright © Cengage Learning. All rights reserved.

Chapter Quiz Roles such as entrepreneur, disturbance handler, and resource allocator are types of _______ roles. interpersonal informational decisional leadership ownership One type of leadership style is laissez-faire. CEO. entrepreneur. negotiator. bureaucratic. Copyright © Cengage Learning. All rights reserved.

Chapter Quiz (cont’d) All of the following are reasons for a greater focus on quality by U.S. firms except competition from foreign firms. customers that are more demanding. unpredictability on Wall Street. poorer financial performance. reduced market share. Copyright © Cengage Learning. All rights reserved.

Answers to Chapter Quiz
People in an organization are what type of resources? Material Informational Inventory Human (Correct) Financial In executing their functions, managers must first organize activities. establish goals. (Correct) motivate employees. evaluate activities. select employees. Copyright © Cengage Learning. All rights reserved.

Answers to Chapter Quiz (cont’d)
Roles such as entrepreneur, disturbance handler, and resource allocator are types of _____________roles. interpersonal informational decisional (Correct) leadership ownership One type of leadership style is laissez-faire. (Correct) CEO. entrepreneur. negotiator. bureaucratic. Copyright © Cengage Learning. All rights reserved.

Answers to Chapter Quiz (cont’d)
All of the following are reasons for a greater focus on quality by U.S. firms except competition from foreign firms. customers that are more demanding. unpredictability on Wall Street. (Correct) poorer financial performance. reduced market share. Copyright © Cengage Learning. All rights reserved.

The Management Process

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