MIE 201 Chapter 6

Management

A process designed to achieve an organization’s objectives by using its resources effectively and efficiently in a changing environment.

Effectively

Having the intended result

Efficiently

Accomplishing the objectives with a minimum of resources

Managers

Those individuals in organizations who make decisions about the use of resources and who are concerned with planning, organizing, staffing, directing, and controlling the organization’s activities to reach its objectives.

Staffing

The hiring of people to carry out the work of the organization.

Downsizing

The elimination of a significant number of employees from an organization.

Functions of Management

To harmonize the use of resources so that the business can develop, produce, and sell products, managers engage in a series of activities: planning, organizing, directing, and controlling. These four functions are interrelated; managers may perform two or more of them at the same time.

Planning

The process of determining the organization’s objectives and deciding how to accomplish them, is the first function of management.; activities to achieve the organization’s objectives.

Organizing

Directing

Controlling

Mission

The statement of an organization’s fundamental purpose and basic philosophy.; Also called mission statement. Good mission statements are clear and concise statements that explain the organization’s reason for existence.

Goal

The result that a firm wishes to achieve. Has three components:

-An attribute sought, such as profits, customer satisfaction, or product quality

-A target to be achieved, such as the volume of sales or extent of management to be completed

-A time frame, which is the time period in which the goal is to be attained.

Objectives

The ends or results desired by an organization, derive from the organization’s mission. May be elaborate or simple. Commonly relates to profit, competitive advantage, efficiency, and growth. The principal difference between objectives and goals is that objectives are generally stated in such a way that they are measurable.

Plans

There are three general types for meeting objectives: Strategic, Tactical, and Operational.

Strategic Plans

Those plans that establish the long-range objectives and overall strategy or course of action by which a firm fulfills its mission. A firm’s highest managers develop them. Generally cover periods of a year or longer.

Tactical Plans

Short-range plans designed to implement the activities and objectives specified in the strategic plan. Usually cover a period of a year or less. Help keep the organization on the course established in the course plan. Are designed to execute the overall strategic plan.

Operational Plans

Very short-term plans that specify what actions individuals, work groups, or departments need to accomplish in order to achieve the tactical plan and ultimately the strategic plan. They apply to details in executing activities in one month, week, or even day.

Crisis Management (Contingency Planning)

An element in planning that deals with potential disasters such as product tampering, oil spills, fire, earthquake, computer virus, or airplane crash. Unfortunately, many businesses do not have updated ones to handle the types of crises that their companies might encounter. According to the Federal Emergency Management Agency (FEMA), approximately 40 percent of small businesses do not reopen after a disaster.

Kotter’s 8-Step Change Model

Steps: Create, Build, Form, Enlist, Enable, Generate, Sustain, Institute.

Create

A sense of urgency

Build

A guiding coalition

Form

A strategic vision and initiatives

Enlist

A volunteer army

Enable

Action by removing barriers

Generate

Short-term wins

Sustain

Acceleration

Institute

Change

Organizing

The structuring of resources and activities to accomplish objectives in an efficient and effective manner. Managers do this by reviewing plans and determining what activities are necessary to implement them, they divide work into small units and assign it to specific individuals, groups, or departments. Occurs continuously because change is inevitable.

Rarely are individuals in an organization able to achieve common goals without some form of structure.

Helps create synergy. Establishes lines of authority, improves communication, helps avoid duplication of resources, and can improve competitiveness by speeding up decision making.

Synergy

The effect of a whole system equals more than that of its parts.

Directing

Motivating and leading employees to achieve organizational objectives. Good of this involves telling employees what to do and when to do it through the implementation of deadlines and then encouraging them to do their work (1). Also involves determining and administering appropriate rewards and recognition. All managers are involved in this, but it is especially for lower-level managers who interact daily with the employees operating the organization (2) .

For example (1) : As a sales manager, you would need to learn how to motivate salespersons, provide leadership, teach sales teams to be responsive to customer needs, and manage organizational issues as well as evaluate sales results.

For example (2): An assembly-line supervisor for Frito-Lay must ensure that her workers know how to use their equipment properly and have the resources needed to carry out their jobs safely and efficiently, and she must motivate her workers to achieve their expected output of packaged snacks.

How does a manager/leader empower workers? (not in book)

KOUZES & POSNER**** (& RECORDING ON MOODLE)

Controlling

The process of evaluating and correcting activities to keep the organization on course. Control involves five activities: (1) measuring performance, (2) comparing present performance with standards or objectives, (3) identifying deviations from the standards, (4) investigating the causes of deviations, and (5) taking corrective action when necessary.

Levels of Management

Many organizations have many levels of management—top management, middle management, and first-line (or supervisory) management. These levels form a pyramid. As the pyramid shape implies, there are generally more middle managers than top managers and still more first-line managers. Very small organizations may only have one manager (typically, the owner), who assumes the responsibilities for all three levels. Large businesses have many managers at each level to coordinate the use of the organization’s resources. Managers at all three levels perform all four management functions, but the amount of time they spend on each function varies

Top Managers/ Management

The president and other top executives of a business, such as the chief executive officer (CEO), chief financial officer (CFO), and chief operations officer (COO), who have overall responsibility for the organization. Spend most of their time planning. They make the organization’s strategic decisions, decisions that focus on an overall scheme or key idea for using resources to take advantage of opportunities.

Workforce Diversity

An important issue in today’s corporations. Effective managers at enlightened corporations have found that diversity is good for workers and for the bottom line. Putting together different kinds of people to solve problems often results in better solutions.

Middle Managers

Those members of an organization responsible for the tactical planning that implements the general guidelines established by top management. Their responsibility is more narrowly focused than top managers. They are involved in the specific operations of the organization and spend more time organizing than other managers.

First-line Managers

Those who supervise both workers and the daily operations of an organization. They are responsible for implementing the plans established by middle management and directing workers’ daily performance on the job.

Financial Managers

Those who focus on obtaining needed funds for the successful operation of an organization and using those funds to further organizational goals.

Production and Operations Managers

Those who develop and administer the activities involved in transforming resources into goods, services, and ideas ready for the marketplace.

Human Resources Manager

Those who handle the staffing function and deal with employees in a formalized manner.

Marketing Managers

Those who are responsible for planning, pricing, and promoting products and making them available to customers.

Information Technology (IT) Managers

Those who are responsible for implementing, maintaining, and controlling technology applications in business, such as computer networks.

Administrative Manager

Those who manage an entire business or a major segment of a business; they are not specialists but coordinate the activities of specialized managers.

Managerial Roles:

Interpersonal

Specific Role:

• Figure: Ex. Attending award banquet

• Liaison: Ex. Coordinating production schedule with supply manager.

• Leadership: Ex. Conducting performance appraisal for subordinates

Managerial Roles:

Informational

Specific Role:

• Monitor: Ex. Contacting government regulatory agencies

• Disseminator: Ex. Conducting meetings with subordinates to pass along safety policy

• Spokesperson: Ex. Meeting with consumer group to discuss product safety

Managerial Roles:

Decisional

Specific Role:

• Entrepreneur: Ex. Changing work process

• Disturbance handler: Ex. Deciding which unit moves into new facilities.

• Resource allocator: Ex. Deciding who receives new computer equipment

• Negotiator: Ex. Settling union grievance.

Technical Expertise

The specialized knowledge and training needed to perform jobs that are related to particular areas of management.

Conceptual Skills

The ability to think in abstract terms and to see how parts fit together to form the whole.

Analytical Skills

The ability to identify relevant issues, recognize their importance, understand the relationships between them, and perceive the underlying causes of a situation.

When managers have identified critical factors and causes, they can take appropriate action. All managers need to think logically, but this skill is probably most important to the success of top-level managers. To be analytical, it is necessary to to think about a broad range of issues and to weigh different options before taking action. Because analytical skills are so important, questions that require analytical skills are often a part of job interviews.

Human Relations Skills

The ability to deal with people, both inside and outside the organization.

Leadership

The ability to influence employees to work toward organizational goals. Strong leaders manage and pay attention to the culture of their organization and the needs of their employees.

Autocratic Leaders

Make all the decisions and then tell employees what must be done and how to do it. They generally use their authority and economic rewards to get employees to comply with their directions. For example, Martha Stewart: She built up her media empire by paying close attention to every detail.

Democratic Leaders

Involve their employees in decisions. The manager presents a situation and encourages his or her subordinates to express opinions and contribute ideas. The manager then considers the employees’ points of view and makes the decision.

Free-Rein Leaders

Let their employees work without much interference. The manager sets performance standards and allows employees to find their own ways to meet them. For this style to be effective, employees must know what the standards are, and they must be motivated to attain them. This style of leadership can be a powerful motivator because it demonstrates a great deal of trust and confidence in the employee.

Leadership Styles

Many managers, however, are unable to use more than one style of leadership. Some are incapable of allowing their subordinates to participate in decision making, let alone make ant decisions. What leadership style is “best” depends on specific circumstances, and effective managers will strive to adapt their leadership style as circumstances warrant. Many organizations offer programs to develop good leadership skills. Warren Buffett, chair of Berkshire Hathaway, has developed dozens of exemplary with proven track records. Leadership continuity is important to all firms. When plans fail, very often leaders are held responsible for what goes wrong, For example, Wells Fargo CEO John Stumpf resigned before probably being fired for oversight of a bank that opened more than 3.5 million fake accounts for customers.

Authentic Leadership

Style of leadership that has been gaining popularity. A bit different from the other three leadership styles because it is not exclusive. Both democratic and free-rein leaders could qualify as this depending upon how they conduct themselves among stakeholders. These leaders are passionate about the goals and mission of the company, display corporate values in the workplace, and form long-term relationships with stakeholders.

Employee Empowerment

When employees are provided with the ability to take on responsibilities and make decisions about their jobs.

Participative Decision Making

Leaders who wish to empower employees adopt system that support an employee’s ability to provide input and feedback on company decisions. This is a type of decision making that involves both manager and employee input, supports employee empowerment within the organization. One of the best ways to encourage this type of decision making is through employee and managerial training. Employees should be trained in leadership skills, including teamwork, conflict resolution, and decision making. Managers should also be trained in ways to empower employees to make decisions while also guiding employees through challenging situations in which the right decision might not be so clear.

Decision Making Systematic Approach

A systematic approach using the following six steps usually leads to more effective decision making: (1) recognizing and defining the decision situation, (2) developing options to resolve the situation, (3) analyzing the options, (4) selecting the best option, (5) implementing the decision, and (6) monitoring the consequences of the decision.

The First Step in Decision Making

Recognizing and defining the situation. The situation may be negative—for example, huge losses on a particular product—or positive—for example, an opportunity to increase sales.

Situations calling for small-scale decisions often occur without warning. Situations requiring large-scale decisions, however, generally occur after some warning signs. Effective managers pay attention to such signals. Declining profits, small-scale losses in previous years, inventory buildup, and retailers’ unwillingness to stock a product are signals that may foreshadow huge losses to come. If managers pay attention to such signals, problems can be contained.

Second Step in Decision Making

Developing options to resolve the situation. Once the decision situation has been recognized and defined, the next step is to develop a list of possible courses of action. The best lists include both standard and creative plans. Brainstorming, a technique in which group members spontaneously suggest ideas to solve a problem, is an effective way to encourage creativity and explore a variety of options. As a general rule, more time and expertise are devoted to the development stage of decision making when the decision is of major importance. For example, after years of losses, Sears Holding Corp. has raised doubts about its ability to keep operating. Former CEO Edward Lampert reportedly ignored those around him as he cut money on advertising and inventory while raising prices. After filing for bankruptcy protection, Sears secured a loan of $350 million to keep the retailer operating while reorganizing. When the decision is of less importance, less time and expertise will be spent on this stage. Options may be developed individually, by teams, or through analysis of similar situations in comparable organizations.

Creativity is a very important part of selecting the most viable option. Creativity depends on new and useful ideas, regardless of where the originate or the method used to create them. The best option can range from a required solution to an identified problem or a volunteered solution to an observed problem by an outside work group member.

Third Step in Decision Making

Analyzing the options…..

Fourth Step in Decision Making

Selecting the best option. When all courses of action have been analyzed, management must select the best one. Selection is often a subjective procedure because many situations do not lend themselves to quantitative analysis. The best option always relates to analyzing risks and trade-offs. For example, how Amazon uses its Alexa virtual assistant involves many alternatives. A decision had to be made whether the voice-activated device could store bank accounts data and make payments with all the risk associated with the service. Nearly all options create dilemmas that create an assistant of only one option and reject all others; it may be possible to select and use a combination of several options.

Fifth Step in Decision Making

Implementing the decision….

Sixth Step in Decision Making

Monitoring the Consequences. After managers have implemented the decision, they must determine whether it has accomplished the desired result. Without proper monitoring, the consequences of decisions may not be known quickly enough to make efficient changes. If the desired result is achieved, management can reasonably conclude that it made a good choice. If the desired result in not achieved, further analysis is warranted. Was the decision simply wrong, or did the situation change? Should some other option have been implemented?

If the desired result is not achieved, management may discover that the situation was incorrectly defined from the beginning. That may require starting the decision-making process all over again. Finally, management may determine that the decision was good even though the desired results have not yet shown up, or it may determine a flaw in the decision’s implementation. In the latter case, management would not change the decision but would change the way in which it is implemented.

Management in Practice

Management is not exact and calculated. There is no mathematical formula for managing an organization and achieving organizational goals, although many managers passionately wish for one. Managers plan, organize, direct, and control, but management expert John P. Kotter says even these functions can be boiled down to two basic activities:

1. Figuring out what to do despite uncertainty, great diversity, and an enormous amount of potentially relevant information.

2. Getting things done through a large and diverse set of people despite having little direct control over most of them.

Agenda

A calendar, containing both specific and vague items, that covers short-term goals and long-term objectives.

Managers spend as much as ______ percent of their time working with others—not only with subordinates but with bosses, people outside their hierarchy at work, and people outside the organization itself. In these interactions, they discuss anything and everything remotely connected with their business.

75

Networking

Building relationships and sharing information with colleagues who can help them achieve the items on their agendas. Managers spend much of their time communicating with a variety of people and participating in activities that, on the surface, do not seem to have much to do with the goals of their organization. Nevertheless, these activities are crucial to getting the job done.

Which discipline encompasses the process of planning, organizing, leading, and controlling people and organizational resources in order to accomplish the goals of the organization?

Management

Which are considered the four primary functions of management?

Organizing

Planning

Directing

Controlling

The process of determining the organization's objectives and deciding how to accomplish them is the management function known as ______.

planning

The structuring of resources and activities to accomplish objectives in an efficient and effective manner describes the management function of ______.

organizing

Fatima is manager for a retail organization. Her favorite part of the job is working one-on-one with employees, motivating them to excel, and encouraging them in their work. Fatima enjoys the _____ function of her management job.

directing

______ can be defined as a process designed to achieve an organization's objectives by using its resources effectively and efficiently in a changing environment.

Management

Jasmine needs to correct a quality control issue with her company's product. Clear standards for quality exist, and she has measured present performance against these standards. Jasmine has discovered a deviation where the company is not meeting the standard and is now investigating the causes of those deviations. What function of management is Jasmine involved in?

Controlling

Although managers engage in four primary activities—planning, organizing, directing, and controlling—the activities are not interrelated; a manager can only perform one activity at a time.

False

Based on the information in Figure 6.2, match the position on the right with its level in the management hierarchy on the left.

Top: President/CEO

Middle: Plant Manager

First-line: Foreman

Considered the first function of management, _____is the process of determining the organization's objectives and deciding how to accomplish them.

planning

When it comes to solving problems in the workplace, which of the following leads to better solutions?

Having a diverse workforce

Managers are engaged in the ______ function of management when they review plans and determine what activities are necessary to implement them; then, divide the work into small units and assign it to specific individuals, groups, or departments.

organizing

Refer to Table 6.3 Which type of manager is responsible for obtaining the money needed for the successful operation of the organization?

Financial managers

_____ is the part of management that involves motivating and leading employees to achieve organizational objectives.

Directing

Refer to Table 6.4 The interpersonal type of managerial role includes which three specific roles?

Liaison

Figure

Leader

The process of evaluating and correcting activities to keep the organization on course is known as _____.

controlling

Skills that involve the ability to picture the organization as a whole and the relationship among its various parts are called _____ skills.

conceptual

Based on the information in Figure 6.2, there are typically more top managers than middle managers in a company.

False

Knowing how to sort large amounts of information in order to find relevant facts to resolve a problem or issue is an example of the use of ______.

analytical skills

Companies that assemble people from different backgrounds to solve problems facing the firm are realizing that ______.

diversity often results in better solutions

Managers who have the ability to influence employees to work toward organizational goals have the skill of _____.

leadership

Refer to Table 6.3 Liberty Engineering Corp. is contemplating opening a new plant in the Southeast United States. The company needs to know if it has the capital to make such an investment and if so, will it affect the organization's overall goals. This type of decision would fall under the responsibility of a ______ manager.

financial

Kara started working as manager for a high-tech firm. Her team was composed of workers knowledgeable in many areas. She soon realized that she needs all the advice she can get from her team. What style of leadership will be the most effective for Kara to use with her new team?

Democratic

Refer to Table 6.4 When a manager attends an awards banquet, he or she is acting in which interpersonal role?

Figurehead

What type of decision making, involves both manager and employee, supports employee empowerment within an organization?

Participative

A person using ______ skills has the ability to think in abstract terms and see how parts fit together to form the whole.

conceptual

When using a systematic approach to decision making, once a company has selected the best option, it would then

implement the decision.

______ skills refer to the ability to identify relevant issues and recognize their importance, understand the relationships between them, and perceive the underlying cause of the situation.

Analytical

Managers at ABC company have noticed declining profits for one of its products. This is an example of a warning sign of a potentially Blank______-scale decision.

large