Chapter 7: Management Roles, Functions, and Skills
Chapter 7: Management Roles, Functions, and Skills
Overview and purpose
Management comprises the interrelated tasks of planning, organizing, leading, and controlling in pursuit of organizational goals.
To perform these tasks effectively, managers engage in interpersonal roles, information roles, and decisional roles.
A concise philosophy: management is about “getting things done, effectively and efficiently, with and through other people.”
Real-world example: Lisa Su, CEO of AMD, led a turnaround that moved AMD from near-collapse to a strong industry position by aligning strategy, talent, and execution. Key steps in her turnaround included refocusing product strategy, strengthening customer relationships, and simplifying the organization to improve communication and trust.
Learning objective alignment: Understand management roles, functions, and essential skills; recognize the potential of cognitive automation in management decision-making.
The Roles of Management (interpersonal, informational, decisional)
Management roles are the set of behaviors managers perform to achieve goals through others.
Interpersonal roles: leading, building relationships, and serving as a liaison inside and outside the organization (suppliers, regulators, customers, unions, community leaders).
Informational roles: collecting and disseminating information; higher-level managers rely on subordinates for data, but must establish reliable communication channels and listen actively; communication spans all media and forms, including social media, which is reshaping internal and external information flows.
Decisional roles: making a wide range of decisions, from routine hiring to crisis responses; trend toward pushing decision rights down the organization to accelerate workflow and service; cognitive automation can augment decision-making with AI.
Checkpoint learning objective 1: Explain the importance of management and identify the three vital roles (interpersonal, informational, decisional).
Summary alignment: Managers provide the environment and resources for employees to excel; decisions and behaviors influence stakeholders; poor management can harm morale and performance.
Planning Function
Definition: Planning is developing strategies, establishing goals and objectives, and translating them into action plans.
Strategic plans: long-range goals and the course of action to reach them, typically over a horizon of 2 to 5 years.
Six-step strategic planning process (Exhibit 7.1):
Define the organization’s purpose and values (mission, vision, values).
Perform a SWOT analysis.
Develop forecasts.
Analyze the competition.
Establish goals and objectives.
Develop action plans.
Defining mission, vision, and values
Mission statement: defines why the company exists and what it aims to accomplish for customers, investors, and stakeholders.
Vision statement: describes an ideal future the organization seeks to create.
Values statement: articulates the principles guiding decisions and behavior; supports ESG considerations.
Companies may use different terminology (mission vs. vision vs. purpose) but the function is to provide focus and direction.
SWOT analysis (Exhibit 7.2):
Strengths (internal, positive): e.g., strong brand, financial resources, patents, talent.
Weaknesses (internal, negative): e.g., obsolete facilities, limited funds, talent gaps.
Opportunities (external, positive): growth areas, new markets, partnerships.
Threats (external, negative): competitors, regulations, economic shifts, disruptions.
Purpose: identify internal capabilities and external factors to inform goals.
Forecasting (predicting the future): crucial but error-prone; two broad categories are:
Quantitative forecasts: based on historical data and statistical methods.
Qualitative forecasts: based on judgement and intuition.
Managers often combine both methods to handle knowns and unknowns.
Analyzing the competition: competitive context requires understanding rivals’ strengths/weaknesses to anticipate moves and guide strategy.
Establishing goals and objectives
Goal: broad, long-range target; Objective: specific, short-range target.
Example: AMD’s goal to make high-performance processors 30× more energy efficient within four years: ext{Energy efficiency}
ightarrow 30 imes ext{ baseline in 4 years}.SMART goals: Specific, Measurable, Attainable, Relevant, Time-bound.
Realism and flexibility: goals should be challenging yet achievable; adapt if conditions change.
Developing action plans
Plans are often hierarchical: strategic plan supported by R&D, manufacturing, marketing plans, etc.
An example: a product launch plan spans pre-launch ramp-up to post-launch activities (production, promotions, training, distribution).
Crafting solid plans and delivering on them can advance a manager’s career by demonstrating ability to coordinate resources and finish projects on time and on budget.
Mission/values alignment with ESG: stakeholders expect purpose beyond profit; values guide decisions and behavior; ESG framed expectations.
Key terms: planning, strategic plans, mission statement, values statement, goal, objective.
Forecasting paradox: the future is uncertain; plans must be robust yet adaptable.
Important to consider: your own personal SWOT when planning career paths, as a practical exercise.
AMD case connection: Su’s turnaround strategy illustrated the planning steps—clear purpose, strategic focus, forecasting market opportunities, aligning resources, and executing action plans.
The Organizing Function
Definition: organizing is arranging resources to carry out the organization’s plans.
Three levels of management in the organizing function: top, middle, first-line (the management pyramid, Exhibit 7.3).
Top managers
Broad authority; set structure, long-range plans, major policies, and external representation.
Titles: CEO, CFO, CIO, CMO, VP levels; they appoint upper-level executives and shape organization-wide direction.
Middle managers
Translate strategic plans into tactical plans for divisions or facilities; supervise other managers.
Titles: department manager, business unit manager; act as a bridge between top and first-line managers.
First-line managers
Supervise operational employees and implement plans; closest to day-to-day work; handle recruitment, hiring, and training; ensure alignment with culture and performance standards.
The organizing function helps ensure the right people have the right authority and resources to execute plans effectively.
Practical reflection: in many firms, middle management is viewed as a bottleneck; some structures flatten layers to improve agility, but middle managers often act as the glue that keeps operations cohesive (as noted by Zahira Jaser).
The management pyramid examples (Exhibit 7.3) illustrate typical titles across levels.
The Leading Function
Leading is the process of influencing and motivating people to work toward common goals.
Distinction: management (rational, planning and control) vs leadership (inspiration, vision, emotional influence).
Sources of power: management uses position power; leadership relies on personal power (expertise, charisma).
Types of intelligence for leaders
Cognitive intelligence: reasoning, problem-solving, memory; necessary for planning and decision-making.
Emotional intelligence: awareness and management of one’s own emotions and recognition of others’ emotions; enables regulating responses to minimize disruption and improve team well-being.
Social intelligence: social awareness and ability to function effectively in groups; includes understanding social dynamics and networks.
Developing an effective leadership style
Three basic leadership styles (Exhibit 7.4):
Autocratic: manager makes decisions; subordinates have limited input.
Democratic (participative): manager shares decision-making and seeks input; can facilitate coordinated changes.
Laissez-faire: manager provides support and guidance but lets employees chart their own course.
Situational leadership: adapt style to context; after strategic direction is set, empower employees to implement.
Coaching and mentoring
Coaching: short-term, problem-focused guidance to improve performance and solve problems.
Mentoring: long-term relationship, often with a senior manager guiding a junior employee; aims at career development and organizational integration.
Challenges: access to mentors, fair distribution of mentoring opportunities; programs should address equity and inclusivity (examples: targeted mentoring programs, sponsor training).
Managing change
Change often meets resistance; organizations must manage both proactive change (restructuring) and reactive change (new regulations, competition).
Kurt Lewin’s three-stage model: unfreeze, change, refreeze.
Key to success: involve affected people, listen to concerns, and adapt change plans accordingly; even technology-driven change should emphasize people, not just mechanics.
Building a positive organizational culture
Culture = shared values, norms, and practices; strong culture can improve decision quality and customer service, while negative culture reduces morale and performance.
The hybrid workplace and evolving social expectations increase the importance of inclusive, supportive cultures; remote/onsite integration is critical to avoid culture fragmentation.
Exhibit 7.5 provides questions to guide building an ideal culture (vision, values, leadership, people, stakeholders, communication, and performance).
Lisa Su’s leadership example: three-pronged strategy—(1) simplify product strategy to focus on a single processor platform, (2) deepen customer relationships (design wins with major customers), (3) simplify and focus the organization to improve communications and trust; results included regained market momentum and industry respect.
Critical thinking prompts (relate to leadership): Is management the same as leadership? Can a single leader embody multiple leadership styles? How does organizational culture influence leadership effectiveness?
The Controlling Function
Controlling is the process of keeping activities on track toward established goals; it can involve direct intervention or enabling support through policies and systems (servant leadership concept).
The Control Cycle (Exhibit 7.6): four steps
1) Establish performance standards based on the strategic plan.
2) Measure performance.
3) Compare performance to standards.
4) Respond as needed.Key performance indicators (KPIs): critical metrics used to gauge progress toward goals.
Benchmarking: comparing performance with industry leaders to identify improvement opportunities (e.g., comparing revenue per employee).
Balanced Scorecard: a multi-perspective approach to measuring performance across four domains: finances, customers, internal processes, and organizational capacity (talent, technology, culture).
Crisis management: proactive planning for extraordinary events; involves contingency plans and a clear communications plan; aims to keep stakeholders informed and maintain trust. Exhibit 7.7 provides crisis communication guidelines.
The control cycle can be formal (with explicit reports) or informal; its rigor depends on industry, function, and leadership style.
Important action: crisis communications should begin within minutes of a crisis; designate spokespersons, establish a news center, and maintain consistent messaging.
Essential Management Skills
Four skill categories (Interpersonal, Technical, Conceptual, Decision-making) with Administrative overlap:
Interpersonal skills: communication, relationship-building, motivation, leadership, negotiation, trust-building, innovation facilitation; communication is the most pervasive interpersonal skill.
Technical (administrative) skills: knowledge of tools, processes, and systems; essential at lower levels but still valuable for credibility at all levels.
Administrative skills: scheduling, researching, data analysis, project management; critical for directing an organization.
Conceptual skills: ability to visualize the organization, its systems, markets, and potential solutions as a coherent whole.
Decision-making skills: problem/opportunity recognition, option development, analysis, selection, implementation, monitoring; use a formal process but also rely on intuition when information is incomplete or time is limited (see Exhibit 7.8 for steps).
The six-step decision-making process (Exhibit 7.8):
Recognize and define the problem or opportunity.
Identify and develop options.
Analyze the options.
Select the best option.
Implement the decision.
Monitor and evaluate the results.
Combining data-driven analysis with intuition often yields better decisions, especially under time pressure or uncertainty.
The balance of cognitive, emotional, and social intelligence supports effective leadership and decision-making.
Critical thinking prompts (relate to ethics, trust, and risk): trust enhances interpersonal effectiveness; poorly defined problems increase decision risk.
It’s important to transition skills as you move up the hierarchy (less hands-on detail, more strategic focus).
Thriving in the Digital Enterprise: Cognitive Automation
Cognitive automation aims to augment human decision-making by handling data-heavy, routine, or pattern-based tasks, freeing humans to focus on strategic, creative, and interpersonal work.
Cognitive automation is collaborative rather than replacement-focused; it decomposes decisions into components that humans handle well and components that computers handle well.
Examples of cognitive automation capabilities (Exhibit 7.9):
Assembling teams with optimal collaboration history.
Matching assignments to individuals based on past performance.
Analyzing contracts and identifying risk or opportunities.
Identifying reputational threats and supply chain risks.
Assisting with research and case-history discovery for legal work.
Assessing staff and management performance.
Identifying prospective customers and the information needed for sales interactions.
With machine learning and deep learning, cognitive automation can improve objectivity and efficiency in decision-making while reducing ego-driven biases.
Potential impact: could free managers for more human-centric activities; the journey of AI adoption involves evaluating benefits and risks.
Critical thinking prompts (ethics and accountability): if cognitive automation makes a poor decision, who is responsible—the designers, the implementers, or the users?
Practical Reflections and Real-World Context
AMD case study reiterates how top management decisions shape organizational culture, resource allocation, and performance outcomes.
The role of values, mission, and ESG considerations in long-term strategic planning reflects broader societal expectations on businesses.
The evolving nature of organizational culture, especially with hybrid workplaces and increased diversity, requires deliberate culture-building efforts and continuous assessment (Exhibit 7.5).
Endnotes, Key Terms, and Quick References (summary for quick review)
Key terms to know: planning, strategic plans, mission statement, values statement, goal, objective; organizing; management pyramid; top/middle/first-line managers; leading; autocratic/democratic/laissez-faire leaders; employee empowerment; coaching; mentoring; organizational culture; benchmarking; crisis management; controlling; cognitive automation; balanced scorecard; decision-making skills; interpersonal, technical, administrative, conceptual skills.
Learning objectives recap:
LO1: Importance of management and three vital roles.
LO2: Planning function and strategic planning process.
LO3: Organizing function and differentiation of management levels.
LO4: Leading function, leadership styles, and organizational culture.
LO5: Controlling function and the four steps of the control cycle.
LO6: Four important types of managerial skills.
LO7: Potential of cognitive automation in management decision-making.
Practical prompts and exercises (e.g., SWOT analyses, mission/vision/value alignment, personal development planning, crisis planning, and ethics scenarios) are integrated throughout to reinforce concepts.
Connections to broader themes
The content links foundational management concepts (planning, organizing, leading, controlling) to real-world leadership challenges, including corporate turnarounds, strategic alignment, and culture-building.
It emphasizes the importance of adapting leadership style to context, investing in employee development (coaching/mentoring), and leveraging cognitive automation to improve decision quality while preserving human judgment.
Quick reference examples mentioned in the transcript
AMD’s turnaround under Lisa Su: refocus product platform, strengthen customer relationships, simplify the organization to improve communication and trust; outcome included restored competitiveness and market momentum.
Strategic planning horizon: typically 2–5 years.
The energy-efficiency goal for AMD processors: 30\times energy efficiency within 4 years.
The strategic planning steps visually represented in Exhibit 7.1 and SWOT/competitive analysis in Exhibits 7.2 and 7.3.
Final note
This chapter reinforces that management is a vital, socially influential profession with a strong impact on economies, stakeholders, and employees; effective management requires integrating planning, organizing, leading, and controlling with the right mix of interpersonal, informational, and decisional activities, all while adapting to digital advances and changing organizational cultures.