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

2. LEARNING GOALS
Chapter Seven
Describe the changes occurring today in the management function.
Describe the four functions of management.
Relate the planning process and decision making to the accomplishment of company goals.
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3. LEARNING GOALS Describe the organizing function of management.
Chapter Seven
Describe the organizing function of management.
Explain the differences between leaders and managers, and describe the various leadership styles.
Summarize the five steps of the control function of management.
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4. JOHN MACKEY Whole Foods Market
Profile
Worked at a vegetarian co-op after attending the University of Texas.
Opened SaferWay Natural Foods with his girlfriend before merging with a competitor to create Whole Foods.
Now there are over 300 stores in the U.S. and U.K.
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5. NAME that COMPANY
Chapter Seven
Like many companies today, this company uses social media to communicate with customers. In one case, a customer complained on Twitter when the company sent a Blackberry to replace an iPhone that failed. The company responded quickly with a replacement iPhone. The customer then tweeted about the company’s great customer service.
Name that company!
Company: Best Buy
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6. WHAT IS MANAGEMENT?
Four Functions
of Management
LG1
Management -- The process used to accomplish organizational goals through planning, organizing, leading and controlling people and other organizational resources.
See Learning Goal 1: Describe the changes occurring today in the management function.
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7. TODAY’S MANAGERS Younger and more progressive.
Managers’ Roles Are Evolving
LG1
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.
See Learning Goal 1: Describe the changes occurring today in the management function.
As the demographic make-up of this country changes, the typical manager is changing. Today more managers are women and fewer are from elite universities. Managers today act more like facilitators than supervisors.
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8. RESPECT and HOW to GET IT
Managers’ Roles Are Evolving
LG1
See Learning Goal 1: Describe the changes occurring today in the management function.
Respect and How to Get It
This slide presents the results from a study conducted by
Ask students: Why do you respect or not respect a manager? (This question is certainly going to develop a discussion among students in class.)
Ask the students: In your opinion why did sound business strategy and ethical practices rank so high in the study?
Source: Entrepreneur, accessed June 2011.
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9. EDUCATION MATTERS Alma Maters of CEOs
Managers’ Roles Are Evolving
LG1
Rank
School
# of CEOs
Who? 1
University of California 12
William Johnson - Heinz 2
School of Hard Knocks*
Steve Jobs - Apple 3
Harvard College 11
Steve Ballmer - Microsoft 4
University of Missouri
David Novak - Yum! Brands 5
University of Texas
Gary Kelly - Southwest Airlines 6
University of Wisconsin
Carol Bartz - Yahoo! 7
Dartmouth College 10
Enrique Salem - Symantec 8
Princeton
Andrea Jung - Avon Products 9
Indiana University
Donald Knauss - Clorox
Purdue University
Gregory Wasson - Walgreen’s
See Learning Goal 1: Describe the changes occurring today in the management function.
Education Matters
This slide shows the schools that have educated the most CEOs among S&P 500 companies.
Ask students: Are you surprised by the number of CEOs that didn’t finish college? What qualities must those CEOs have without formal education behind them? What school did you expect to see on the list that’s missing? What schools are you surprised to see?
* Did not graduate from any college or university.
Source: Bloomberg BusinessWeek, May 17, 2010.
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10. FOUR FUNCTIONS of MANAGEMENT
LG2
Planning
Organizing
Leading
Controlling
See Learning Goal 2: Describe the four functions of management.
Planning: Anticipating trends and determining the best strategies and tactics to achieve organizational goals and objectives.
Organizing: Designing the structure of the organization and creating conditions and systems in which everyone and everything works together to achieve goals.
Leading: Creating a vision for the organization and communicating, guiding, training, coaching, and motivating others to achieve goals and objectives in a timely manner.
Controlling: Establishing clear standards to determine whether an organization is progressing toward its goals and objectives, rewarding people for good work and taking corrective action if they are not performing.
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11. PROGRESS ASSESSMENT
Progress Assessment
What are some of the changes happening in management today?
What’s the definition of management used in this chapter?
What are the four functions of management?
Some of the changes in management today include: Managers are more facilitators than bosses; managers tend to emphasize team-building; managers tend to be younger, fewer attended elite schools, and more are women; and managers will conduct more business globally.
Management is the process to accomplish organizational goals through planning, organizing, leading, and controlling people and other organizational resources.
The four functions of management are planning, organizing, leading, and controlling.
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12. SHARING the VISION
Planning & Decision Making
LG3
Vision -- More than a goal, it’s a broad explanation of why the organization exists and where it’s trying to go.
See Learning Goal 3: Relate the planning process and decision making to the accomplishment of company goals.
Creating vision for the company is not merely setting a goal, but rather creating a sense of purpose for the organization.
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13. DEFINING THE MISSION
Planning & Decision Making
LG3
Mission Statement -- Outlines the organization’s fundamental purposes. It includes:
The organization’s self–concept
Its philosophy
Long–term survival needs
Customer needs
Social responsibility
Nature of the product or service
See Learning Goal 3: Relate the planning process and decision making to the accomplishment of company goals.
The mission statement is the foundation for setting specific goals and objectives within the organization.
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14. SETTING GOALS and OBJECTIVES
Planning & Decision Making
LG3
Goals -- The broad, long-term accomplishments an organization wishes to attain.
Objectives -- Specific, short- term statements detailing how to achieve the organization’s goals.
See Learning Goal 3: Relate the planning process and decision making to the accomplishment of company goals.
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15. PLANNING ANSWERS FUNDAMENTAL QUESTIONS
Planning & Decision Making
LG3
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
See Learning Goal 3: Relate the planning process and decision making to the accomplishment of company goals.
SWOT is an acronym for Strengths, Weaknesses, Opportunities, and Threats. As part of the internal analysis, the organization identifies the potential strengths that it can capitalize upon and potential weaknesses that it should improve upon. An organization, as part of an external environmental analysis, identifies the opportunities (factors that an organization can take advantage of) and threats (factors that an organization should avoid or minimize the impact of). An interesting exercise for the students – have them perform a SWOT analysis on themselves (At least the strengths and weaknesses part should be an eye opening experience for them.)
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16. SWOT MATRIX Planning & Decision Making LG3
See Learning Goal 3: Relate the planning process and decision making to the accomplishment of company goals.
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17. PLANNING FUNCTIONS Planning & Decision Making LG3
See Learning Goal 3: Relate the planning process and decision making to the accomplishment of company goals.
This slide covers the key areas of planning by business managers. Students should be reminded that planning requires preparation to be successful. More effort put into planning, will result in greater achievement. All planning should be in writing with an estimation of time and cost. Gantt charts are often used to compare planned results with actual accomplishments. Even the best prepared plans sometimes miss the unexpected problems. Managers should always be prepared to act in the event a plan fails. Poor contingency planning may result in significant problems for a company.
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18. STRATEGIC and TACTICAL PLANNING
Planning & Decision Making
LG3
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.
See Learning Goal 3: Relate the planning process and decision making to the accomplishment of company goals.
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19. OPERATIONAL and CONTINGENCY PLANNING
Planning & Decision Making
LG3
Operational Planning -- The process of setting work standards and schedules necessary to implement the company’s tactical objectives.
Contingency Planning -- The process of preparing alternative courses of action the firm can use if its primary plans don’t work out.
See Learning Goal 3: Relate the planning process and decision making to the accomplishment of company goals.
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20. JAPANESE CRISIS, TERRORISM, and AMERICAN BUSINESS (Reaching Beyond Our Borders)
Disasters point out the need for contingency and disaster planning.
Over 30 U.S. corporations get at least 15% of sales from Japan. All were affected by the earthquake.
Man-made disasters, such as war and terrorism, also disrupt the supply chain.
See Learning Goal 3: Relate the planning process and decision making to the accomplishment of company goals.
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21. DECISION MAKING
Decision Making: Finding the Best Alternative
LG3
Decision Making -- Choosing among two or more alternatives.
See Learning Goal 3: Relate the planning process and decision making to the accomplishment of company goals.
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22. WHAT MAKES a GREAT CEO Decision Making Skills of Top CEOs
Decision Making: Finding the Best Alternative
LG3
Keep global business issues in mind and be a citizen of the world.
Identify and manage risks before they grow.
Change strategies and models with the times.
Skillfully manage relationships with governments as government involvement rises.
See Learning Goal 3: Relate the planning process and decision making to the accomplishment of company goals.
What Makes a Great CEO
Since the world seems to be changing at a faster pace, it’s important for CEOs to change their processes.
No longer can managers think small: they must think globally and plan for anything and everything.
Source: Fortune, June 13, 2011.
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23. RATIONAL DECISION-MAKING MODEL
Decision Making: Finding the Best Alternative
LG3
Define the situation.
Describe and collect needed information.
Develop alternatives.
Develop agreement among those involved.
Decide which alternative is best.
Do what is indicated.
Determine whether the decision was a good one and follow up.
See Learning Goal 3: Relate the planning process and decision making to the accomplishment of company goals.
Managers don’t always go through this seven step process. However, they must always make sound decisions. It is easier said than done. As an interesting exercise, you can ask the students, working in a group, to go through a simple process of identifying an automobile to purchase using these steps. Everyone’s input should be obtained in the group. They either can select a group manager or all can have an equal say/vote. Both scenarios should produce different, but interesting experiences for students.
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24. PROBLEM SOLVING
Decision Making: Finding the Best Alternative
LG3
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.
See Learning Goal 3: Relate the planning process and decision making to the accomplishment of company goals.
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25. PROGRESS ASSESSMENT
Progress Assessment
What’s the difference between goals and objectives?
What does a company analyze when it does a SWOT analysis?
What are the differences between strategic, tactical and operational planning?
What are the seven Ds in decision making?
1. Goals are broad, long-term accomplishments an organization wishes to attain. Objectives are specific, short-term statements detailing how the organization will achieve the organization’s goals.
2. In today’s rapidly changing business environment, managers must think of planning as a continuous process. The SWOT analysis is an important part of the planning process as it evaluates an organization’s strengths, weaknesses, opportunities and threats.
3. Strategic planning is the process top management uses to determine the major goals of the organization, and the policies, procedures, strategies, and resources the organization will need to achieve them. Tactical planning is the process of developing detailed, short-term statements about what is to be done, who is to do it, and how. This type of planning is typically completed by managers at lower levels of the organization whereas strategic planning is done by the top managers. The final type of planning is operational. Operational planning is the process of setting work schedules and standards necessary to complete the organization’s tactical objectives. This type of planning is the department manager’s tool for daily and weekly operations.
4. The seven Ds in decision making are:
Define the situation
Describe and collect needed information
Develop alternatives
Develop agreement among these involved
Decide which alternative is best
Do what is indicated and start the implementation
Determine whether the decision was a good one and follow up
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26. ORGANIZATIONAL CHARTS
Organizing: Creating a Unified System
LG4
Organization Chart -- A visual device that shows relationships among people and divides the organization’s work; it shows who reports to whom.
See Learning Goal 4: Describe the organizing function of management.
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27. LEVELS of MANAGEMENT Organizing: Creating a Unified System LG4
See Learning Goal 4: Describe the organizing function of management.
This slide shows a good visual of management levels within a corporation. Note the pyramid shape and the type of job positions that are in each level. It’s important for the student to know the necessary skill levels that each position in the pyramid requires. A Top-Level Manager needs good conceptual skills and to be able to effectively communicate goals to the entire corporation. Middle-level managers typically develop the strategies for goal attainment and develop the tactics necessary to achieve stated goals. Middle managers require good analytical skills and the ability to communicate. First-line managers are responsible for execution of business goals. Technical skills and good communications skills are necessary.
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28. MANAGEMENT LEVELS
Organizing: Creating a Unified System
LG4
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.
See Learning Goal 4: Describe the organizing function of management.
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29. TOP MANAGEMENT Chief Executive Officer (CEO)
Organizing: Creating a Unified System
LG4
Chief Executive Officer (CEO)
Introduces change into an organization.
Chief Operating Officer (COO)
Implements CEO’s changes.
Chief Financial Officer (CFO)
Obtains funds, plans budgets, collects funds, etc.
Chief Information Officer (CIO)
Gets the right information to the right people so decisions can be made.
See Learning Goal 4: Describe the organizing function of management.
Sometimes the CIO is referred to as the Chief Knowledge Officer (CKO).
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30. AMERICA’S MOST POWERFUL FEMALE MANAGERS
Organizing: Creating a Unified System
AMERICA’S MOST POWERFUL FEMALE MANAGERS
LG4
Rank
Name
Organization 1
Indra Nooyi
PepsiCo 2
Irene Rosenfeld
Kraft Foods 3
Patricia Woertz
Archer Daniel Midland (ADM) 4
Angela Braly
WellPoint 5
Andrea Jung
Avon Products 6
Oprah Winfrey
Harpo and OWN 7
Ellen Kullman
DuPont 8
Ginni Rommetty
IBM 9
Ursula Burns
Xerox 10
Carol Bartz
Yahoo!
See Learning Goal 4: Describe the organizing function of management.
America’s Most Powerful Female Managers
This slide illustrates the rising number of women that are in positions of power in Fortune 500 companies.
What characteristics do some women have that help them manage people?
Source: Fortune Magazine, accessed June 2011.
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31. MANAGERIAL SKILLS
Tasks and Skills
at Different Levels of Management
LG4
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.
See Learning Goal 4: Describe the organizing function of management.
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32. THANK YOU The Most Basic Human Relations Skill
Tasks and Skills
at Different Levels of Management
LG4
Saying “thank you” has led to happier employees and greater profits for companies.
Whom should a manager thank?
Interns - Doing lots of work for little money, they are the future of the company and industry.
Lawyers - Many do pro bono work, even for nonprofit companies.
The little people - Mailroom, repair, and cleaning staff keep the office running day-to-day.
See Learning Goal 4: Describe the organizing function of management.
Thank You
Customers, staff and outside support are hard to keep happy. Who’d have thought a simple act our moms taught us would be so useful?
A 10-year study by Adrian Gostick and Chester Elton found that among a survey of 200,000 managers and employees “thank yous” correlate with higher profits yet 30% still don’t say it.
Ask students: Why is a simple “thank you” such a powerful managerial tool?
Source: Fast Company, November 2010.
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33. SKILLS NEEDED at VARIOUS LEVELS of MANAGEMENT
Tasks and Skills
at Different Levels of Management
SKILLS NEEDED at VARIOUS LEVELS of MANAGEMENT
LG4
See Learning Goal 4: Describe the organizing function of management.
The further up the managerial ladder one moves, the less important technical job skills become, and the more important conceptual skills are.
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34. STAFFING
Staffing: Getting and Keeping the Right People
LG4
Staffing -- Recruiting, hiring, motivating and retaining the best people available to accomplish the company’s objectives.
Recruiting good employees is critical.
Many people are not willing to work at companies unless they are treated well with fair pay.
See Learning Goal 4: Describe the organizing function of management.
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35. STAFFING is TRICKY BUSINESS Six Sins of Staffing
Staffing: Getting and Keeping the Right People
STAFFING is TRICKY BUSINESS Six Sins of Staffing
LG4
Don’t hire someone because someone else says so.
Don’t get caught up in applicants’ appearances.
Don’t give someone the wrong job.
Don’t forget about feedback.
Don’t give promotions just because it’s time.
Don’t cheat your employees.
See Learning Goal 4: Describe the organizing function of management.
Staffing is Tricky Business
As we’ve discussed, getting and keeping the right staff is not an easy task.
This slide shows what managers should NOT do while staffing.
Ask students: Why do you think a manager should not promote a long-time employee because it’s time or they owe a favor? What’s so important about feedback?
Source: CareerBuilder, accessed June 2011.
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36. LEADERSHIP Leaders must:
Leading: Providing Continuous Vision and Values.
LG5
Leaders must:
Communicate a vision and rally others around that vision.
Establish corporate values.
Promote corporate ethics.
Embrace change.
Stress accountability and responsibility.
See Learning Goal 5: Explain the differences between leaders and managers, and describe the various leadership styles.
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37. To SHARE or NOT to SHARE (Making Ethical Decisions)
As a first-line manager, you have new information that your department head hasn’t seen yet. The findings of the report indicate your manager’s plans should fail. If they do fail, you could be promoted.
Will you give your department head the report?
What is the ethical thing to do?
What might be the consequences?
See Learning Goal 5: Explain the differences between leaders and managers, and describe the various leadership styles.
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38. ACCOUNTABILITY through TRANSPARENCY
Leading: Providing Continuous Vision and Values.
ACCOUNTABILITY through TRANSPARENCY
LG5
Transparency -- The presentation of the company’s facts and figures in a way that is clear and apparent to all stakeholders.
See Learning Goal 5: Explain the differences between leaders and managers, and describe the various leadership styles.
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39. LEADERSHIP STYLES
Leadership Styles
LG5
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.
See Learning Goal 5: Explain the differences between leaders and managers, and describe the various leadership styles.
Research tells us which leadership style is best depends on what the goals and values of the firm are, who’s being led, and in what situations. A successful leader in one organization may not be successful in another.
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40. VARIOUS LEADERSHIP STYLES
LG5
See Learning Goal 5: Explain the differences between leaders and managers, and describe the various leadership styles.
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41. NATURAL BORN LEADERS? Four Types of Executives
Leadership Styles
LG5
Rationalists
Humanists
Politicists
Culturists
See Learning Goal 5: Explain the differences between leaders and managers, and describe the various leadership styles.
Four Leadership Types
Ask the students: Does your personality reveal how you think and work? Can it be improved? (Tests such as Myers-Briggs profile individuals’ personalities.)
Williams and Deal, authors of When Opposites Dance: Balancing the Manager and Leader Within, identify four types of managers:
Rationalists, who value sound thinking and work through organizational structure to accomplish tasks.
Politicists, who view group dynamics from a power perspective and are adept at politics.
Humanists, who are attuned to organizational moods and regard people as a company’s top asset.
Culturists, who consider culture the preeminent force in an organization and communicate through stories, ceremonies and rituals.
3. Williams and Deal conclude that while people are predisposed to think and act in certain ways, the best executives combine different personality attributes. (Source: CIO, November 1, 2003)
Source: CIO Magazine,
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42. USING SOCIAL MEDIA to BUILD CUSTOMER SUPPORT (Social Media in Business)
Many companies use sites like Twitter and Facebook to proactively and reactively communicate with their customers.
Best Buy has 2,500 employees who read and respond to consumer complaints on Twitter.
Many companies still aren’t implementing these programs. This has led to many more complaints via social media than positive support.
See Learning Goal 5: Explain the differences between leaders and managers, and describe the various leadership styles.
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43. EMPOWERMENT
Empowering Workers
LG5
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.
See Learning Goal 5: Explain the differences between leaders and managers, and describe the various leadership styles.
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44. WORK SMARTER How to Ease Pressure on Workers
Empowering Workers
LG5
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.
See Learning Goal 5: Explain the differences between leaders and managers, and describe the various leadership styles.
Work Smarter
Managing in today’s complex environment is about leading not supervising.
This slide gives students insight into the process of empowering employees to work smarter.
Ask students: What are the benefits of empowering employees to work smarter? (Employees who are empowered should be more motivated and able to handle more complex tasks.)
Source: Bloomberg BusinessWeek,
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45. MANAGING KNOWLEDGE
Managing Knowledge
LG5
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.
See Learning Goal 5: Explain the differences between leaders and managers, and describe the various leadership styles.
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46. FIVE STEPS of CONTROLLING
Controlling: Making Sure it Works
LG6
See Learning Goal 6: Summarize the five steps of the control function of management.
This slide presents the five steps of the control function. It should be pointed out to the students that the whole control process is based on clear standards. The control function completes the management function loop that starts with planning. Accounting and finance are often the foundations for control systems, because they provide the numbers management needs to evaluate progress.
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47. ARE YOU a MICROMANAGER?
Controlling: Making Sure it Works
LG6
Do you have strategic initiatives that you have not addressed?
Do you often check on employees for quality control?
Do you often check on subordinates throughout the day?
Do you rarely take vacations?
Is there a lot of turnover?
See Learning Goal 6: Summarize the five steps of the control function of management.
Are You a Micromanager?
This slide presents a list of questions a manager can ask himself/herself to determine if he/she is a micromanager.
If you answer yes to any of these five questions, you are a micromanager. Managers can ask a trusted employee for honest feedback.
Ask the students: Have they ever worked for a micromanager? How did it make them feel and how did other employees feel?
Do the students have the tendency of thinking that if they want something done right, they must do it themselves or constantly check on others’ work in a team situation? (It may indicate some of the micromanaging tendencies.)
Source: CFO Magazine,
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48. MEASURING SUCCESS
A Key Criterion
for Measurement: Customer Satisfaction
LG6
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.
See Learning Goal 6: Summarize the five steps of the control function of management.
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49. PROGRESS ASSESSMENT How does enabling help achieve empowerment?
What are the five steps in the control process?
What’s the difference between internal and external customers?
1. Enabling is the key to successfully empowering employees. Enabling means giving workers the education and the tools they need to make decisions.
2. Controlling incorporates: (1) setting clear standards, (2) monitoring and recording performance, (3) comparing performance with plans and standards, (4) communicating results and deviations to employees, and (5) providing positive feedback for a job well done and taking corrective action when necessary.
3. Not all customers come from outside the organization. Internal customers are defined as individuals and business units within the firm that receive services from other individuals or units. For example, the field salespeople are the internal customers of the marketing research units that prepare market reports for them. External customers are more traditional and include dealers, who buy products and sell to others, and ultimately customers, who buy products for their own personal use.
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