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CHAPTER 1 THE MANAGEMENT PROCESS TODAY

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Learning Objectives 1. Describe what management is, why management is important, what

managers do, and how managers utilize organizational resources efficiently and effectively to achieve organizational goals.

2. Distinguish among planning, organizing, leading, and controlling (the four principal managerial tasks), and explain how managers’ ability to handle each one can affect organizational performance.

3. Differentiate among three levels of management, and understand the tasks and responsibilities of managers at different levels in the organizational hierarchy.

4. Distinguish among three kinds of managerial skill, and explain why managers are divided into different departments to perform their tasks more efficiently and effectively.

5. Discuss some major changes in management practices today that have occurred as a result of globalization and the use of advanced information technology (IT).

6. Discuss the principal challenges managers face in today’s increasingly competitive global environment.

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What Is Management? 1

Management.

• The planning, organizing, leading, and controlling of human and other resources to achieve organizational goals effectively and efficiently.

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What Is Management? 3

Managers:

• The people responsible for supervising the use of an organization’s resources to meet its goals.

Resources:

• People, skills, know-how, experience, machinery, raw materials, computers and IT, financial capital, patents, loyal customers and employees.

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What Is Management? 2

Organizations.

• Collections of people who work together and coordinate their actions to achieve a wide variety of goals.

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Achieving High Performance

Organizational Performance.

• A measure of how efficiently and effectively managers use available resources to satisfy customers and achieve organizational goals.

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Efficiency, Effectiveness, and Performance in an Organization

Figure 1.1.

High- performing organizations are efficient and effective.

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Organizational Performance

Efficiency.

• A measure of how productively resources are used to achieve a goal.

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Why Study Management?

1. Individuals learn to understand the dynamic and complex nature of work and make decisions that are ethical and effective for an organization.

2. Understanding management helps the manager’s employer to succeed.

3. The economic benefits of becoming a good manager are impressive.

4. Learning management principles can help you make good decisions in non-work situations.

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Four Tasks of Management

Figure 1.2.

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Planning 1

Planning.

• Process of identifying and selecting appropriate goals and courses of action.

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Steps in the Planning Process

1. Decide which goals to pursue.

2. Decide what strategies to adopt to attain those goals.

3. Decide how to allocate organizational resources to pursue strategies that attain those goals.

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Planning 2

Strategy.

• Cluster of decisions about what goals to pursue, what actions to take, and how to use resources to achieve goals.

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Organizing 1

Organizing.

• Structuring working relationships in a way that allows organizational members to work together to achieve organizational goals.

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Organizing 2

Organizational Structure.

• A formal system of task and reporting relationships that coordinates and motivates organizational members so that they work together to achieve organizational goals.

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Leading

Leading.

• Articulating a clear vision and energizing and enabling organizational members so they understand the part they play in achieving organizational goals.

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Controlling

Controlling.

• Evaluating how well an organization is achieving its goals and taking action to maintain or improve performance.

Outcome of the control process.

• Ability to measure performance accurately and regulate efficiency and effectiveness.

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TOPICS FOR DISCUSSION 1

Describe the difference between efficiency and effectiveness, and identify real organizations that you think are, or are not, efficient and effective. [LO 1-1]

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Levels and Skills of Managers

Department.

• A group of people who work together and possess similar skills or use the same knowledge, tools, or techniques to perform their jobs.

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Levels of Management 1

First-Line Managers.

• Responsible for the daily supervision of nonmanagerial employees.

Middle Managers.

• Supervise first-line managers.

• Responsible for finding the best way to use resources to achieve organizational goals.

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Levels of Management 2

Top Managers.

• Establish organizational goals, decide how departments should interact, and monitor the performance of middle managers.

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Levels of Managers 1

Figure 1.3.

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Relative Amount of Time That Managers Spend on the Four Managerial Tasks

Figure 1.4.

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Levels of Managers 2

Top Management Team.

• A group composed of the CEO, the COO, and the vice presidents of the most important departments of a company.

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TOPICS FOR DISCUSSION 2

In what ways can managers at each of the three levels of management contribute to organizational efficiency and effectiveness? [LO 1-3]

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Managerial Skills

Conceptual Skills.

• The ability to analyze and diagnose a situation and distinguish between cause and effect.

Human Skills.

• The ability to understand, alter, lead, and control the behavior of other individuals and groups.

Technical Skills.

• The job-specific knowledge and techniques required to perform an organizational role.

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TOPICS FOR DISCUSSION 3

Identify an organization that you believe is high performing and one you believe is low performing. Give five reasons why you think the performance levels of the two organizations differ so much. [LO 1-2, 1-4]

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Technical Skills

Core Competency.

• Specific set of departmental skills, abilities, and experiences that allows one organization to outperform its competitors.

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Types and Levels of Managers

Figure 1.5.

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Recent Changes in Management Practices 1

Restructuring.

• Downsizing an organization by eliminating the jobs of large numbers of top, middle, or first- line managers and non-managerial employees.

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Recent Changes in Management Practices 2

Outsourcing.

• Contracting with another company, usually abroad, to have it perform an activity the organization previously performed itself.

• Increases efficiency because it lowers operating costs, freeing up money and resources that can be used in more effective ways.

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Empowerment and Self-Managed Teams 1

Empowerment.

• Expansion of employees’ knowledge, tasks, and decision-making responsibilities.

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Empowerment and Self-Managed Teams 2

Self-Managed Team.

• A group of employees who assume responsibility for organizing, controlling, and supervising their own activities and monitoring the quality of the goods and services they provide.

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Challenges for Management in a Global Environment

Utilizing IT and E-Commerce

Rise of Global Organizations

Building a Competitive Advantage

Maintaining Ethical and Socially Responsible Standards

Managing a Diverse Workforce

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Building Competitive Advantage 1

Competitive Advantage.

• Ability of one organization to outperform other organizations because it produces desired goods or services more efficiently and effectively than they do.

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Building Blocks of Competitive Advantage

Figure 1.6.

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Building Competitive Advantage 2

Innovation.

• Process of creating new or improved goods and services or developing better ways to produce or provide them.

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Building Competitive Advantage 3

Turnaround Management.

• The creation of a new vision for a struggling company based on a new approach to planning and organizing to make better use of a company’s resources and allow it to survive and prosper.

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Maintaining Ethical and Socially Responsible Standards

• The pressure for a manager to increase organizational performance exists at all levels.

• Social responsibility centers on deciding what if any obligations a company has towards the people and groups affected by its activities.

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Managing a Diverse Workforce

• The challenge for a manager is to recognize the ethical need and legal requirement to treat human resources in a fair and equitable manner.

• Human resources (HRM) procedures and practices that are legal and fair must be put into place.

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Utilizing IT and E-Commerce 1

• Utilizing new information technology (IT) in an efficient and effective manner is an important challenge to managers.

• IT has enabled individual employees and self- managed teams by providing them with more information and allowing for virtual interactions.

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BE THE MANAGER

What kinds of organizing and controlling problems is Achieva suffering from? [LO 1-2]

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TOPICS FOR DISCUSSION4(5 of 5)TOPICS FOR DISCUSSION4(5 of 5)

In what ways do you think managers’ jobs have changed the most over the last 10 years? Why have these changes occurred? [LO 1-6]

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