Chapter 1 — Managers and Managing

Learning Objectives

• Understand foundational aspects of man agement: definition, importance, managerial functions, and the use of resources to meet goals efficiently and effectively.

• Differentiate the four principal managerial functions—planning, organizing, leading, and controlling—and recognize their impact on performance.

• Identify three hierarchical levels of management and the specific tasks/responsibilities at each level.

• Distinguish the three major categories of managerial skill—conceptual, human, and technical—and explain why managers work in departments.

• Recognize how globalization and advanced technology reshape modern management practices.

• Outline principal challenges managers face in an increasingly competitive global environment.

A Manager’s Challenge – Airbnb in a Turbulent Economy

• CEO Brian Chesky’s pandemic response illustrates managerial decision-making under crisis conditions.

  • Consolidated departments to remove duplication.

  • Slashed budgets and laid off thousands to preserve cash.

  • Overall aim: keep Airbnb viable so it can continue to meet guest needs for lodging, working remotely, relaxation, and adventure.

• Demonstrates trade-off between short-term survival actions and long-term organizational health.

What Is Management?

• Organization: a collection of people coordinating actions to achieve a broad range of goals/desirable outcomes.

• Management: planning, organizing, leading, and controlling human & other resources to reach organizational goals efficiently and effectively.

Key Resource Categories

1. People – skills, know-how, experience.

2. Physical assets – machinery, buildings, raw materials.

3. Information technology – computers, data, communication systems.

4. Intellectual property – patents, trademarks.

5. Financial capital – cash, credit lines.

6. Intangibles – loyal customers & employees.

High Performance: The Dual Goal

• Primary purpose: deliver goods/services that customers value while balancing quality versus cost.

• Organizational performance = f (efficiency, effectiveness).

Metrics

• Efficiency: using minimal resources to achieve a given output.

  • Example: Wendy’s deep fryers need less oil & cook faster.

• Effectiveness: choosing the right goals & attaining them.

  • Example: McDonald’s reinstated all-day breakfast post-pandemic to satisfy demand.

• High-performing firms excel at both (see Figure 1.1).

Momentive Case (SurveyMonkey)

• CEO Zander Lurie boosted performance by:

  • Dropping underperforming business lines.

  • Expanding stronger units.

  • Preserving a collaborative, curiosity-driven culture.

Why Study Management?

• Career advantage: ability to navigate complexity, contingency, and ethical decision-making.

• Financial upside: U.S. general managers earn median 97,970; projected job-growth 4\%\text{–}7\% through 2031.

• Organizations depend on skilled managers for sustained success; studying exemplary practices increases both individual and organizational performance.

The Four Principal Functions of Management

1. Planning

• Decide on organizational goals, strategies, and resource allocations.

• Steps:

  1. Select goals.

  2. Design strategies to reach them.

  3. Allocate resources.

2. Organizing

• Create a structure of task & authority relationships so members work together effectively.

• Output = formal organizational structure.

• COVID-19 response at Airbnb required restructuring.

3. Leading

• Articulate a compelling vision; energize & enable members to understand their role in achieving it.

• Relies on power, personality, influence, persuasion, communication.

• Vision statement = short, inspirational description of desired future state.

4. Controlling

• Monitor performance, compare against standards, take corrective action.

• Operates at levels: individual, departmental, organizational.

• Outcome: accurate measurement + regulation of efficiency/effectiveness.

• Managers must choose which metrics to monitor.

Illustrative Company – Match Group

• CEO Bernard Kim (ex-Zynga) emphasizes:

  • Global expansion (e.g., Hinge → Germany, Hyperconnect → S. Korea).

  • Cost control while innovating new products/services.

  • Oversees subscriber base 16\,\text{million}+.

Mintzberg’s Managerial Roles

Decisional Roles

• Entrepreneur – allocate resources for innovation (e.g., global expansion).

• Disturbance Handler – resolve crises (oil spill, faulty products).

• Resource Allocator – set budgets, distribute resources, determine salaries.

• Negotiator – bargain with suppliers, unions; form alliances/joint projects.

Interpersonal Roles

• Figurehead – symbolic duties: outline goals, open HQ, state ethics.

• Leader – direct subordinates, mobilize support, set examples.

• Liaison – coordinate across departments; build external alliances.

Informational Roles

• Monitor – scan environment, evaluate manager performance.

• Disseminator – relay external & internal information to employees.

• Spokesperson – advocate for the organization to outsiders (ads, speeches).

Levels of Management & Organizational Hierarchy

• Department: group of people with similar skills/knowledge (e.g., manufacturing, accounting, sales).

1. First-Line Managers (Supervisors)

• Oversee non-managerial employees; focus on daily operations.

• Example: paint foreman supervising painters.

2. Middle Managers

• Supervise first-line managers; translate top-level goals into action; optimize resource use.

• Example: high-school principal, marketing manager.

3. Top Managers

• Hold cross-departmental responsibility; set overall goals, craft interaction among departments, monitor middle managers.

• Example: university president, CEO.

Relative Time Spent on Functions (Figure 1.4)

• Top managers: more time planning/organizing.

• First-line: more time leading/controlling operational tasks.

Types of Managerial Skills

1. Conceptual – diagnose situations; distinguish cause & effect; strategic thinking.

2. Human – understand, motivate, lead individuals & groups; critical for all levels.

3. Technical – job-specific expertise and methods; most vital for first-line managers, still important higher up.

Integrating Skills, Levels, & Functions (Figure 1.5)

• CEO must blend high conceptual skill with adequate human & technical knowledge across all departments (R&D, marketing, manufacturing, accounting, materials management).

• As managers rise, conceptual skills become more critical; technical skills, while still relevant, decrease in relative importance.

Contemporary Pressures & Challenges (Implied)

• Globalization: need for cross-border coordination (Airbnb, Match Group, Hinge Germany, Hyperconnect Korea).

• Technology: data analytics, IT resources, remote work accommodation.

• Ethical responsibility: figurehead role includes articulating and modeling high ethical standards.

• Competitive intensity: resource allocation & innovation are central (fat-efficient fryers, all-day breakfast, product pivots).

Ethical, Philosophical, and Practical Implications

• Downsizing vs. stakeholder welfare (Airbnb layoffs) highlights ethical tension in crisis management.

• Efficiency initiatives (e.g., fryers) tie to environmental sustainability and cost control—balance profit with social impact.

• Transparent communication (disseminator/spokesperson roles) fosters trust internally and externally.

Key Terms & Quick Definitions

• Organization: coordinated social unit with goals.

• Management: process of planning, organizing, leading, controlling resources.

• Efficiency: \frac{\text{outputs}}{\text{inputs}} ratio optimization.

• Effectiveness: degree to which chosen goals are the right ones & achieved.

• Organizational Structure: formal task/reporting system.

• Vision: concise statement of desired future state.

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