1. PowerPoint Presentation by Charlie Cook Copyright © 2005 South-Western. All rights reserved. Chapter 1 Management and Managers

2. Copyright © 2005 South-Western. All rights reserved.1–2 Organizations versus Markets Organizations  Structural arrangements of people brought together to accomplish a goal or goals. Advantage  Have a hierarchy that performs similar tasks faster, more accurately, or at lower cost than a market, providing an efficient means of exchange. Markets  Where buyers and sellers congregate to bid on products or services. Advantage  Also facilitate exchange, but do so best in situations where a product is unique and its value and price are unclear.

3. Copyright © 2005 South-Western. All rights reserved.1–3 Organizations versus Markets (cont’d) Gauging the quality of an organization  Efficiency (i.e., productivity): using the minimum resources necessary to produce a product or service.  Effectiveness: ability of an organization to achieve a goal or goals.  Overall effectiveness is the degree to which organizations achieve multiple goals simultaneously.  Organizational performance: indicator of how efficiently an organization uses resources and effectively attains its stated goals.

4. Copyright © 2005 South-Western. All rights reserved.1–4 Organizations as Systems System defined  A collection of interrelated entities (subsystems) that operate interdependently to achieve common goals.  The entities of a system achieve more by working together than by each entity working independently. System consists of three subsystems:  Input  Processing  Output

5. Copyright © 2005 South-Western. All rights reserved.1–5 Organizations as Systems (cont’d) Subsystems  An input subsystem ensures that resources are available to produce the product or service.  A processing subsystem creates the good or service.  An output subsystem makes the product or service available to distributors or customers.

6. Copyright © 2005 South-Western. All rights reserved.1–6 Organizations as Systems (cont’d) Exhibit 1. 1 The IPO Model

7. Copyright © 2005 South-Western. All rights reserved.1–7 Organizations and the Economy Evolutionary activity  Economic activity that occurs over long periods of time; gradual activity allows the economy to expand or contract and organizations to become more efficient by weeding out the inefficient producers. Revolutionary activity  Occurs periodically to forever alter the nature of business transactions; occurs when a new innovation, such as new methods of production, are introduced into the economy.

8. Copyright © 2005 South-Western. All rights reserved.1–8 Organizations and the Economy (cont’d) Agrarian Economy (pre-1830) Industrial Revolution 1830–1950 Knowledge Economy 1955–present The Changing Economy

9. Copyright © 2005 South-Western. All rights reserved.1–9 Management and Managers Defined Management  Process of achieving organizational goals and objectives through efforts and contributions of others.  Uses the functions of planning, organizing, leading, and controlling to accomplish organizational goals. Managers  Individuals who use principles of management to guide, direct, or oversee the work and performance of others.

10. Copyright © 2005 South-Western. All rights reserved.1–10 The Process of Management Planning  Determines an organization’s objectives and establishes appropriate strategies for achieving them. Organizing  Creates a structure of task and authority relationships that supports attainment of organizational goals. Leading  Influences organization members to perform in ways that accomplish the organization’s objectives and goals. Control  Makes sure the organization’s actual performance conforms to planned performance.

11. Copyright © 2005 South-Western. All rights reserved.1–11 Types of Managers First-line management  Supervise the work of operative (nonmanagerial) employees. Middle management  Supervise and coordinate the work of lower-level managers in a subunit of the organization. Top management  Set direction for and oversee the operation of the entire firm.

12. Copyright © 2005 South-Western. All rights reserved.1–12 Types of Managers (cont’d) Exhibit 1. 2 Vertical Specialization

13. Copyright © 2005 South-Western. All rights reserved.1–13 Types of Managers (cont’d) Exhibit 1. 3 Horizontal Specialization

14. Copyright © 2005 South-Western. All rights reserved.1–14 Managerial Skills Technical skills  Ability to use specific knowledge, techniques, and resources in performing work. Analytical skills  Involve the ability to analyze or logically diagnose problems and develop solutions. Decision-making skills  Ability to make decisions by choosing between several equally viable alternatives greatly influenced by analytical skill.

15. Copyright © 2005 South-Western. All rights reserved.1–15 Managerial Skills (cont’d) Computer skills  Knowledge of business software used in daily business transactions such as e-mail, forecasting, budgeting, and the Internet. People skills  Ability to work with, communicate with, and understand others. Communication skills  Ability to communicate in ways that other people understand and to seek and use feedback from employees to ensure understanding.

16. Copyright © 2005 South-Western. All rights reserved.1–16 Managerial Skills (cont’d) Conceptual skills  Ability to see the big picture—the complexities and connections of the overall organization.  Understanding how each part of the organization fits and interacts with other parts in order to accomplish goals and operate in an ever-changing environment.

17. Copyright © 2005 South-Western. All rights reserved.1–17 Managerial Skills (cont’d) Exhibit 1. 4 Management Skills by Level

18. Copyright © 2005 South-Western. All rights reserved.1–18 Managerial Skills (cont’d)

19. Copyright © 2005 South-Western. All rights reserved.1–19 Managerial Skills (cont’d)

20. Copyright © 2005 South-Western. All rights reserved.1–20 Managerial Roles (Mintzberg) Interpersonal roles  Figurehead  Leader  Liaison Informational roles  Monitor  Disseminator  Spokesperson Decisional  Entrepreneurial  Disturbance handler  Resource allocator  Negotiator

21. Copyright © 2005 South-Western. All rights reserved.1–21 Contemporary Perspectives Mintzberg’s current view is that all managers work both inside and outside the organization.  Managers influence by managing information, by managing people, and by managing action. Senge suggests that managers would do well to use systems theory for problem diagnosis.  Managers who use a systems approach are more likely to find and develop solutions for business problems.