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Learning Objectives

• LO 7.1: Describe management.

• LO 7.2: Explain the role of vision and ethical standards in business success.

• LO 7.3: Summarize the importance of planning and the three types of planning.

• LO 7.4: Describe the strategic planning process.

• LO 7.5: Contrast the two major types of business decisions, and list the steps in the decision-making process.

• LO 7.6: Define leadership, and compare different leadership styles.

• LO 7.7: Discuss the meaning and importance of corporate culture.

• LO 7.8: Identify the five major forms of departmentalization and the four main types of organizational structures.

Management Overview

• Management: The process of achieving organizational goals through people and resources.

  • Management Hierarchy: Structured levels of management within an organization (Top, Middle, Supervisory).

Levels of Management

Top Management

• Develops long-range strategic plans.

• Inspires executives and employees for the company’s future.

Middle Management

• Focuses on specific operations, products, or customer groups.

• Responsible for detailed plans and procedures for implementing strategic plans.

Supervisory Management

• Implements plans developed by middle managers.

• Responsible for non-managerial employees; motivates workers to accomplish day-to-day goals.

Skills for Managerial Success

• Technical Skills: Understanding and utilizing specific tools and techniques related to a department.

• Human Skills: Interpersonal skills to work effectively with people.

• Conceptual Skills: Ability to see the organization as a whole and understand interactions between different parts.

Managerial Functions

1. Planning: Looking forward to future events and deciding courses of action to achieve goals.

2. Organizing: Blending human and material resources through a formal structure.

3. Directing: Guiding and motivating employees toward organizational goals.

4. Controlling: Assessing performance against goals through four steps:

   • Setting performance standards

   • Monitoring actual performance

   • Comparing actual performance with standards

   • Making necessary corrections.

Vision and Ethics

• Vision: The ability to perceive marketplace needs and necessary actions to satisfy them, must be adaptable.

• Long-term success is linked to ethical standards set by top management, encouraging high ethical behavior.

Importance of Planning

• Organizations should have a comprehensive framework for planning, ensuring every step aligns with overall objectives.

  • Broad/Long-Range Planning: Includes mission statements and strategic objectives.

  • Narrow/Short-Range Planning: Details for specific employees or areas.

Types of Planning at Management Levels

• Strategic Planning: Top management; setting long-term objectives and strategies.

• Tactical Planning: Middle management; quarterly plans, policies, and procedures.

• Operational Planning: Supervisory management; daily/weekly plans and departmental rules.

• Contingency Planning: Primarily top management; ongoing plans for emergencies.

The Strategic Planning Process

• Involves a structured approach, analyzing the internal and external environment to formulate objectives.

SWOT Analysis

• SWOT: Strengths, Weaknesses, Opportunities, Threats framework used to develop strategies for competitive advantage.

Decision Making in Management

• Decision Making: Processes for identifying problems, assessing solutions, and implementing plans.

  • Programmed Decision: Simple/common problems with established solutions.

  • Nonprogrammed Decision: Complex problems requiring unique solutions.

Leadership in Management

• Leadership: The ability to motivate and direct others towards goals using influence or power.

  • Common traits include empathy, self-awareness, and objectivity.

Leadership Styles

• Autocratic Leadership: Leader makes decisions alone.

• Democratic Leadership: Involves employees in decision-making.

• Free-Rein Leadership: Minimal supervision, trusting employee's decision-making abilities.

Corporate Culture

• Corporate Culture: Collection of principles, beliefs, and values within an organization; strengthened through symbols, rituals, ceremonies, and stories.

Organizational Structure

• Definition: Group of people structured together to achieve common goals.

  • Key elements: Human interaction, goal-directed activities, and an efficient structure.

Departmentalization

• Definition: Dividing work activities into units within the organization.

  • Types include:

  • Product Departmentalization: Based on products offered.

  • Geographical Departmentalization: Based on regions.

  • Customer Departmentalization: Based on different customer types.

  • Functional Departmentalization: Based on business functions like finance, marketing, etc.

  • Process Departmentalization: Based on production processes.

Different Forms of Organizational Structures

• Line Organizations: Simple structure with direct authority flow.

• Line-and-Staff Organizations: Combines line departments with staff departments for specialized support.

• Committee Organizations: Decision-making authority in groups; often slow in decision-making.

• Matrix Organizations: Links employees from different areas for specific projects.

Delegating Work Assignments

• Delegation: Assigning work and authority to employees while ensuring accountability.

  • Centralization: Decision-making retained at top levels.

  • Decentralization: Shifts decision-making to lower levels, enhancing flexibility and responsiveness.