week 1 discussion Tom's

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CHAPTER 1

Managers and Managing

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Chapter 1 examines what management is, including what managers do and how they use resources to achieve organizational goals. The chapter highlights the four main functions of management (planning, organizing, leading, and controlling), exploring the levels of management (first-line, middle, and top) as well as the importance of three types of managerial skills (conceptual, human, and technical). The chapter concludes with a discussion of the major changes and challenges brought forth by increased globalization and advancement in information technology and competition faced by managers today.

Learning Objectives (1 of 2)

Describe what management is, why management is important, what managers do, and how managers use organizational resources efficiently and effectively to achieve organizational goals.

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

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

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Learning Objectives (2 of 2)

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

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

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

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What Is Management? (1 of 3)

Organizations

Organizations are collections of people who work together and coordinate their actions to achieve a wide variety of goals or desired future outcomes.

All managers work in organizations.

Managers

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

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When you think of a manager, what kind of person comes to mind? Do you think of Apple CEO, Tim Cook, who helps direct his company? Or do you see a Jimmy John’s franchise manager, who engages directly with employees and customers?

Regardless of how we view managers, they all share important characteristics.

First, they all work in organizations.

Second, they are the people responsible for supervising and making the most of an organization’s human and other resources to achieve its goals.

They must have an understanding of the organization, finance, communication, and the specific market.

What Is Management? (2 of 3)

Management

Management includes the planning, organizing, leading, and controlling of human and other resources to achieve organizational goals effectively and efficiently.

What difference can a manager make? Satya Nadella, Microsoft CEO

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It involves both problem-solving and decision-making.

Management is about the organization – how to focus tasks.

Mangers are about motivating and inspiring their subordinates.

What Is Management? (3 of 3)

Resources

Include assets such as:

People and their skills, know-how, and experience.

Machinery.

Raw materials.

Computers and information technology.

Patents, financial capital, and loyal customers and employees.

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Items that can be used by a person or organization in order to function successfully

Achieving High Performance: A Manager’s Goal (1 of 2)

Organizational performance

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

Microsoft’s corporate mission revised by CEO Satya Nadella to reflect current technological trends, resulting in increased employee moral, product quality, and stock market values

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One of the most important goals that organizations and their members try to achieve is to provide some kind of good or service that customers value or desire.

It takes a balance of the quality needs of customers against the pressure to be cost-effective.

Achieving High Performance: A Manager’s Goal (2 of 2)

Efficiency

A measure of how well or how productively resources are used to achieve a goal

UPS instructing drivers to leave truck doors open when going short distances to reduce delivery times

Effectiveness

A measure of the appropriateness of the goals an organization is pursuing and the degree to which the organization achieves those goals

Microsoft’s restructure eliminating internal competition, resulting in increased employee morale and performance.

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Figure 1.1 Efficiency, Effectiveness, and Performance in an Organization

High-performing organizations are efficient and effective.

Jump to Appendix 1 for description

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Efficiency, Effectiveness, and Performance in an Organization

Organizational performance is a measure of how efficiently and effectively managers

use available resources to satisfy customers and achieve organizational goals.

Organizational performance increases in direct proportion to increases in efficiency and effectiveness.

Why Study Management? (1 of 2)

Individuals generally learn through personal experience or the experiences of others.

By studying management in school, you are exposing yourself to the lessons others have learned.

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Why Study Management?

Because managers decide how to use many of a society’s most valuable resources, they directly impact the well-being of a society and the people in it. Understanding what managers do and how they do it is of central importance to understanding how a society creates wealth and affluence for its citizens.

Studying management reveals how to understand other people at work and make decisions and take actions that win the attention and support of the boss and coworkers, solve conflicts between them, achieve team goals, and, thus, increase performance.

Why Study Management? (2 of 2)

The economic benefits of becoming a good manager are also impressive. In the United States, general managers earn a median wage of $99,310 with a projected growth rate in job openings of 5 % to 9% between now and 2026.

Learning management principles can help you make good decisions in nonwork contexts.

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Figure 1.2 Four Tasks of Management

Jump to Appendix 2 for description

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Four Tasks of Management

Planning:

Choose appropriate organizational goals and courses of action to best achieve those goals.

Organizing:

Establish task and authority relationships that allow people to work together to achieve organization goals.

Leading:

Motivate, coordinate, and energize individuals and groups to work together to achieve organizational goals.

Controlling:

Establish accurate measuring and monitoring systems to evaluate how well the organization has achieved its goals.

Steps in the Planning Process

Deciding which goals the organization will pursue

Deciding what strategies to adopt to attain those goals

Deciding how to allocate organizational resources.

Managers identify and select appropriate organizational goals and develop strategies for how to achieve high performance.

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The outcome of planning is a strategy, a cluster of decisions about what goals to pursue, what actions to take, and how to use resources to achieve goals.

Planning strategy is complex and difficult, especially because planning is done in the midst of uncertainty, when the result is unknown, so that either success or failure is a possible outcome of the planning process.

Organizing (1 of 2)

Organizing

Structuring working relationships so organizational members interact and cooperate to achieve organizational goals

Managers deciding how best to organize resources, particularly human resources

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Organizing people into departments according to the kinds of job-specific tasks they perform lays out the lines of authority and responsibility

Organizing (2 of 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

ER director Daley works closely with team, increasing efficiency and improving customer satisfaction

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The outcome of organizing is the creation of an organizational structure, a formal system of task and reporting relationships that coordinates and motivates members so they work together to achieve organizational goals.

Leading

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

An organization’s vision is a short, succinct, and inspiring statement of the organization’s future state.

Involves managers using their power, personality, influence, persuasion, and communication skills to coordinate people and groups

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An organization’s vision is a short, succinct, and inspiring statement of what the organization intends to become and the goals it is seeking to achieve.

Controlling (1 of 2)

Controlling

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

Managers monitor performance of individuals, departments, and the organization as a whole to determine if they are meeting performance standards

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See the Manager as a Person in the text: Making ER visits as Painless as Possible.

Erin Daley is the ER director of a Massachusetts medical center. Erin Daley has used her experience as an ER nurse, supervisor, and manager to inform her performance as director. She has improved patient satisfaction, made the system move faster, cut the rate of patients who leave before being seen by a doctor, and led Mercy to awards for superior care for patients who experience strokes.

Controlling (2 of 2)

The outcome of the control process is the ability to measure performance accurately and regulate organizational efficiency and effectiveness.

Managers must decide which goals to measure.

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To exercise control, managers must decide which goals to measure—perhaps goals pertaining to productivity, quality and responsiveness to customers—and then they must design control systems that will provide the information necessary to assess performance—that is, determine to what degree the goals have been met.

The controlling task also helps managers evaluate how well they themselves are performing the other three tasks of management—planning, organizing, and leading—and take corrective action.

Example: Mercy Medical Center

Erin Daley is the ER director for Mercy Medical Center in Massachusetts.

Improving ER department efficiency and quality of care while keeping costs within budget can be daunting.

Managers like Erin Daley must develop strategies and processes where hospitals can move patients through the system faster while improving patient satisfaction.

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This can be found in the Manager as a Person feature in the text.

Making ER Visits as Painless as Possible.

Managerial Roles Identified (1 of 3)

Type of Role	Specific Role	Examples of Role Activities
Decisional	Entrepreneur	Commit organizational resources to develop innovative goods and services; decide to expand internationally to obtain new customers for the organization’s products.
Decisional	Disturbance handler	Move quickly to take corrective action to deal with unexpected problems facing the organization from the external environment, such as a crisis like an oil spill, or from the internal environment, such as producing faulty goods or services.
Decisional	Resource allocator	Allocate organizational resources among different tasks and departments of the organization; set budgets and salaries of middle and first-level managers.
Decisional	Negotiator	Work with suppliers, distributors, and labor unions to reach agreements about the quality and price of input, technical, and human resources; work with other organizations to establish agreements to pool resources to work on joint projects.

Table 1.1 Managerial Roles Identified by Mintzberg

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Decisional managerial roles identified by Mintzberg:

Entrepreneur: Commit organizational resources to develop innovative goods and services; decide to expand internationally to obtain new customers for the organization’s products.

Disturbance handler: Move quickly to take corrective action to deal with unexpected problems facing the organization from the external environment, such as a crisis like an oil spill, or from the internal environment, such as producing faulty goods or services.

Resource allocator: Allocate organizational resources among different tasks and departments of the organization; set budgets and salaries of middle and first-level managers.

Negotiator: Work with suppliers, distributors, and labor unions to reach agreements about the quality and price of input, technical, and human resources; work with other organizations to establish agreements to pool resources to work on joint projects.

Managerial Roles Identified (2 of 3)

Type of Role	Specific Role	Examples of Role Activities
Interpersonal	Figurehead	Outline future organizational goals to employees at company meetings; open a new corporate headquarters building; state the organization’s ethical guidelines and the principles of behavior employees are to follow in their dealings with customers and suppliers.
Interpersonal	Leader	Provide an example for employees to follow; give direct commands and orders to subordinate; make decisions concerning the use of human and technical resources; mobilize employee support for specific organizational goals.
Interpersonal	Liaison	Coordinate the work of managers in different departments; establish alliances between different organizations to share resources to produce new goods and services; reach agreements about the quality and price of input, technical, and human resources; work with other organizations to establish agreements to pool resources to work on joint projects.

Table 1.1 Managerial Roles Identified by Mintzberg

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Interpersonal managerial roles identified by Mintzberg:

Figurehead: Outline future organizational goals to employees at company meetings; open a new corporate headquarters building; state the organization’s ethical guidelines and the principles of behavior employees are to follow in their dealings with customers and suppliers.

Leader: Provide an example for employees to follow; give direct commands and orders to subordinates; make decisions concerning the use of human and technical resources; mobilize employee support for specific organizational goals.

Liaison: Coordinate the work of managers in different departments; establish alliances between different organizations to share resources to produce new goods and services.

Managerial Roles Identified (3of 3)

Type of Role	Specific Role	Examples of Role Activities
Informational	Monitor	Evaluate the performance of managers in different tasks, and take corrective action to improve their performance; watch for changes occurring in the external and internal environments that may affect the organization in the future.
Informational	Disseminator	Inform employees about changes taking place in the external and internal environments that will affect them and the organization; communicate to employees the organization’s vision and purpose.
Informational	Spokesperson	Launch a national advertising campaign to promote new goods and services; give a speech to inform the local community about the organization’s future intentions.

Table 1.1 Managerial Roles Identified by Mintzberg

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Informational managerial roles identified by Mintzberg:

Monitor: Evaluate the performance of managers in different tasks and take corrective action to improve their performance; watch for changes occurring in the external and internal environments that may affect the organization in the future.

Disseminator: Inform employees about changes taking place in the external and internal environments that will affect them and the organization; communicate to employees the organization’s vision and purpose.

Spokesperson: Launch a national advertising campaign to promote new goods and services; give a speech to inform the local community about the organization’s future intentions.

Levels and Skills of Managers (1 of 2)

Department

A group of managers and employees who work together and possess similar skills or use the same knowledge, tools, or techniques

Example: the manufacturing, accounting, engineering, or marketing department

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To perform the four managerial tasks efficiently and effectively, organizations group or differentiate their managers in two main ways—by level in hierarchy and by type of skill.

Organizations differentiate managers according to their level or rank in the organization’s hierarchy of authority. The three levels of managers are first-line managers, middle managers, and top managers—arranged in a hierarchy.

Organizations group managers into different departments (or functions) according to their specific job-related skills, expertise, and experiences, such as a manager’s engineering skills, marketing expertise, or sales experience.

A department is a group of people who work together and possess similar skills or knowledge, tools, or techniques to perform their jobs.

Figure 1.3 Levels of Management

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Levels of management

Organizations normally have three levels of management: first-line managers, middle managers, and top managers (see Figure 1.3 ).

Levels of Management (1 of 2)

First-line managers (often called supervisors)

Responsible for the daily supervision of the nonmanagerial employees

Paint foreman overseeing a crew of painters at a University

Middle managers

Supervises first-line managers

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

High school principal or a marketing manager

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At the base of the managerial hierarchy are first-line managers, often called supervisors. They are responsible for daily supervision of the nonmanagerial employees who perform the specific activities necessary to produce goods and services.

Supervising the first-line managers are middle managers, responsible for finding the best way to use resources to achieve organizational goals.

Levels of Management (2 of 2)

Top managers

Responsible for the performance of all departments

Establish organizational goals

Decide how different departments should interact

Monitor how well middle managers in each department use resources to achieve goals

President of a university

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Top managers establish organizational goals, decide how departments should interact, and monitor the performance of middle managers. They have cross-departmental responsibility.

The chief executive officer (CEO) is a company’s most senior and important manager, the one all other top managers report to.

The term chief operating officer (COO) often refers to the top manager who is being groomed to take over as CEO.

Together the CEO and COO are responsible for developing good working relationships among the top managers of various departments; usually these top managers have the title “vice president.”

A central concern of the CEO is the creation of a smoothly functioning top management team, a group composed of the CEO, the COO, and the vice presidents most responsible for achieving organizational goals.

The relative importance of planning, organizing, leading, and controlling—the four principal managerial tasks—to any particular manager depends on the manager’s position in the managerial hierarchy.

Levels and Skills of Managers (2 of 2)

Figure 1.4 Relative Amount of Time Managers Spend on the Four Managerial Tasks

Access the text alternative for these images.

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Figure 1.4 Relative Amount of Time Managers Spend on the Four Managerial Tasks

The amount of time managers spend planning and organizing resources to maintain and improve organizational performance increases as they ascend the hierarchy (see Figure 1.4 ).

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

Job-specific skills required to perform a particular type of work or occupation at a high level

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Both education and experience enable managers to recognize and develop the personal skills they need to put organizational resources to their best use. Research has shown that education and experience help managers acquire and develop three types of skills: conceptual, human, and technical.

Conceptual skills are demonstrated in the general ability to analyze and diagnose a situation and to distinguish between cause and effect.

Top managers require the best conceptual skills because their primary responsibilities are planning and organizing.

Formal education and training are important in helping managers develop conceptual skills.

Human skills include the general ability to understand, alter, lead, and control the behavior of other individuals and groups.

The ability to communicate, to coordinate, and to motivate people, and to mold individuals into a cohesive team, distinguishes effective from ineffective managers.

These skills can be learned through education and training, as well as through experience.

Technical skills are the job-specific skills required to perform a particular type of work or occupation at a high level.

The array of technical skills managers need depends on their position in their organizations.

Managers and employees who possess the same kinds of technical skills typically become members of a specific department.

Figure 1.5 shows how an organization groups managers into departments on the basis of their job-specific skills.

Figure 1.5: Types and Levels of Managers

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Figure 1.5 shows how an organization groups managers into departments on the basis of their job-specific skills.

These managers work together on similar tasks in departments.

Core Competency

Core competency

Specific set of departmental skills, abilities, knowledge and experience that allows one organization to outperform its competitors

Skills for a competitive advantage

Google’s core competency, research and development, allows them to develop innovative products and services (computerized glasses, self-driving cars).

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The term core competency is often used to refer to the specific set of departmental skills, knowledge, and experience that allows one organization to outperform its competitors.

Departmental skills that create a core competency give an organization a competitive advantage.

Effective managers need all three types of skills—conceptual, human, and technical—to help their organizations perform more efficiently and effectively.

Developing new and improved skills through education and training has become a priority for both aspiring managers and the organizations they work for.

Restructuring and Outsourcing

Restructuring

Downsizing an organization by eliminating the jobs of large numbers of top, middle, and first-line managers and nonmanagerial employees

Outsourcing

Contracting with another company, usually in a low-cost country abroad, to perform a work activity the company previously performed itself

Restructuring can reduce the morale of remaining employees.

Modern IT’s ability to improve efficiency has increased the amount of downsizing in recent years, because IT makes it possible for fewer employees to perform a given task.

Outsourcing increases efficiency by lowering operating costs and freeing up money and resources that can now be used in more effective ways.

Empowerment

Empowerment involves giving employees more authority and responsibility over how they perform their work activities.

Example: Valve Corporation has no managers, no hierarchy or top-down control. Employees pick their own projects.

Self-managed team - Groups of employees who assume collective responsibility for organizing, controlling, and supervising their own work activities

B. Empowerment and Self-Managed Teams

Empowerment is a management technique that involves giving employees more authority and responsibility over how they perform their work activities. It is the expansion of employees’ knowledge tasks, and decision-making responsibilities.

Increasingly, IT is being used to empower employees, because it expands employees’ job knowledge and increases the scope of their job responsibilities.

IT also facilitates the use of a self-managed team, a group of employees who assume collective responsibility for organizing, controlling and supervising their own work activities.

Challenges for Management in a Global Environment

Building a competitive advantage

Maintaining ethical and socially responsible standards

Managing a diverse workforce

Utilizing new technologies

Practicing global crisis management

The rise of global organizations, organizations that operate and compete in more than one country, has pressured many organizations to identify better ways to use their resources and improve their performance.

Five major challenges stand out for managers in today’s world:

Building a competitive advantage

Maintaining ethical standards

Managing a diverse work force

Utilizing new information systems and technologies

Practicing global crisis management

Building Competitive Advantage

Competitive advantage

Ability of one organization to outperform other organizations because it produces desired goods or services more efficiently and effectively than its competitors

Innovation

The process of creating new or improved goods and services or developing better ways to produce or provide them

The four building blocks of competitive advantage are superior:

Efficiency

Quality

Speed, flexibility, and innovation

Responsiveness to customers

Figure 1.6 Building Blocks of Competitive Advantage

Figure 1.6 Building Blocks of Competitive Advantage:

Increasing efficiency

Reducing the quantity of resources used to produce goods or services

Increasing Quality

Improving the skills and abilities of the workforce

Introducing total quality management

Increasing speed, flexibility, and innovation

How fast a firm can bring new products to market

How easily a firm can change or alter the way they perform their activities

Innovation:

Process of creating new or improved goods and services that customers want

Developing better ways to produce or provide goods and services

Turnaround Management

Turnaround management

Creation of a new vision for a struggling company using a new approach to planning and organizing to make better use of a company’s resources to allow it to survive and eventually prosper

Apple’s Steve Jobs excelled at turnaround management.

Sometimes the best efforts of managers to revitalize their organization’s fortunes fail, and faced with bankruptcy, the directors of these companies are forced to appoint a new CEO who has a history of success in rebuilding a company.

Achieving a competitive advantage requires that managers use all their skills and expertise, as well as their companies’ other resources, to find new and improved ways to improve efficiency, quality, innovation, and responsiveness to customers.

Maintaining Ethical and Socially Responsible Standards

Managers are under considerable pressure to make the best use of resources.

Too much pressure may induce managers to behave unethically and even illegally.

Wells Fargo Scandal “Eight is great”

Managers at all levels, especially after the recent economic crisis, are under considerable pressure to make the best use of resources to increase the level at which their organizations perform.

Pressure to increase performance can be healthy for an organization because it leads managers to question how the organization is working, and it encourages them to find new and better ways to plan, organize, lead, and control.

However, too much pressure may induce managers to behave unethically, and even illegally, when dealing with people and groups inside and outside the organization.

The issue of social responsibility centers on deciding what obligations a company has toward the people and groups affected by its activities—such as employees, customers, or the cities in which it operates.

Managing a Diverse Workforce

To create a highly trained and motivated workforce, managers must establish human resource management (HRM) procedures that are legal and fair and do not discriminate against organizational members.

Accenture uses a diverse workforce to its advantage.

A major challenge for managers everywhere is to recognize the ethical need and legal requirement to treat human resources fairly and equitably.

Today the age, gender, race, ethnicity, religion, sexual preference, and socioeconomic composition of the workforce present new challenges for managers.

To create a highly trained and motivated workforce and to avoid lawsuits, managers must establish human resource management (HRM) procedures and practices that are legal and fair and do not discriminate against any organizational members.

Managers who value their diverse employees succeed best in promoting performance over the long run.

Today more organizations are realizing that people are their most important resource and that developing and protecting human resources is the most important challenge for managers in a competitive global environment.

Utilizing New Technologies

An efficient and effective IT system may improve an organization’s performance.

UPS uses ORION

A GPS system that optimizes drivers’ routes

A major challenge for managers everywhere is to recognize the ethical need and legal requirement to treat human resources fairly and equitably.

Today the age, gender, race, ethnicity, religion, sexual preference, and socioeconomic composition of the workforce present new challenges for managers.

To create a highly trained and motivated workforce, and to avoid lawsuits, managers must establish human resource management (HRM) procedures and practices that are legal and fair and do not discriminate against any organizational members.

Managers who value their diverse employees succeed best in promoting performance over the long run.

Practicing Global Crisis Management

Create teams to facilitate rapid decision- making and communication.

Establish the organizational chain of command and reporting relationships necessary to mobilize a fast response.

Recruit and select the right people to lead and work in such teams.

Develop bargaining and negotiating strategies to manage the conflicts that arise.

The causes of global crises or disasters fall into two main categories:

Natural causes—crises that arise because of natural causes, including hurricanes, earthquakes, famines, and diseases.

Human causes—human-created crises result from factors such as industrial pollution, poor attention to worker and workplace safety, global warming, and the destruction of the natural habitat or environment, and geopolitical tensions and terrorism.

Crisis management involves making important choices about how to:

Create teams to facilitate rapid decision-making and communication.

Establish the organizational chain of command and reporting the relationships necessary to mobilize a fast response.

Recruit and select the right people to lead and work in such teams.

Develop bargaining and negotiating strategies to manage the conflicts that arise whenever people in groups have different interests and objectives.