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Nickels_12e_UB_PPT_Student_Ch07.pptxChapter 7
Management and Leadership
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Learning Objectives
LO 7-1 Describe the changes occurring today in the management function.
LO 7-2 Describe the four functions of management.
LO 7-3 Relate the planning process and decision making to the accomplishment of company goals.
LO 7-4 Describe the organizing function of management.
LO 7-5 Explain the differences between leaders and managers, and describe the various leadership styles.
LO 7-6 Summarize the five steps of the control function of management.
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Managers’ Roles Are Evolving
LO 7-1
Managers Today
Tend to be collaborative
Emphasize teams and team building
Guide, train, support, motivate, and coach employees
Need to be skilled communicators and team players
Need to be globally prepared
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The Four Functions of Management
LO 7-2
Management Functions
Planning
Organizing
Leading
Controlling
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Figure 7.1 What Managers Do 1 of 2
LO 7-2
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Figure 7.1 What Managers Do 2 of 2
LO 7-2
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Planning and Decision Making 1 of 6
LO 7-3
Vision — More than a goal; an encompassing explanation of why the organization exists and where it’s trying to go.
Mission statement — An outline of the fundamental purposes of an organization, including:
The organization’s self-concept
Its philosophy
Long-term survival needs
Customer needs
Social responsibility
Nature of the product or service
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Planning and Decision Making 2 of 6
LO 7-3
Goals — The broad, long-term accomplishments an organization wishes to attain.
Objectives — Specific, short-term statements detailing how to achieve the organization’s goals.
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Planning and Decision Making 3 of 6
LO 7-3
Planning Answers Fundamental Questions:
What is the situation now?
SWOT analysis — A planning tool used to analyze an organization’s strengths, weaknesses, opportunities, and threats.
How can we get to our goal from here?
Strategic planning
Tactical planning
Operational planning
Contingency planning
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Figure 7.2 SWOT Matrix
LO 7-3
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Figure 7.3 Planning Functions
LO 7-3
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Planning and Decision Making 4 of 6
LO 7-3
Strategic planning — Determining the major goals of the organization and the policies and strategies for obtaining and using resources to achieve those goals.
Tactical planning — Developing detailed, short-term statements about what is to be done, who is to do it, and how it is to be done.
Operational planning — Setting work standards and schedules necessary to implement the company’s tactical objectives.
Contingency planning — Preparing alternative courses of action that may be used if the primary plans don’t achieve the organization’s objectives.
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Planning and Decision Making 5 of 6
LO 7-3
Decision Making: Finding the Best Alternative
Decision making — Choosing among two or more alternatives.
Rational decision-making model
Define the situation.
Describe and collect needed information.
Develop alternatives.
Decide which alternative is best.
Do what is indicated.
Determine whether the decision was a good one, and follow up.
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Planning and Decision Making 6 of 6
LO 7-3
Decision Making: Finding the Best Alternative continued
Problem solving — The process of solving the everyday problems that occur; less formal than decision making and usually calls for quicker action.
Problem-solving techniques include brainstorming and PMI — Listing all the pluses for a solution in one column, all the minuses in another, and the implications in a third column.
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Organizing: Creating a Unified System 1 of 4
LO 7-4
Management Levels
Top management — Highest level, consisting of the president and other key company executives who develop strategic plans
Middle management — Includes general managers, division managers, and branch and plant managers who are responsible for tactical planning and controlling
Supervisory management — Those directly responsible for supervising workers and evaluating their daily performance
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Figure 7.4 Levels of Management
LO 7-4
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Organizing: Creating a Unified System 2 of 4
LO 7-4
Top Management
Chief executive officer (CEO) — Introduces change into an organization.
Chief operating officer (COO) — Implements CEO’s changes.
Chief financial officer (CFO) — Obtains funds, plans budgets, collects funds, etc.
Chief information officer (CIO) — Gets the right information to the right people so decisions can be made.
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Organizing: Creating a Unified System 3 of 4
LO 7-4
Tasks and Skills at Different Levels of Management
Technical skills
The ability to perform tasks in a specific discipline or department.
Human relations skills
Communication and motivation; they enable managers to work through and with people.
Conceptual skills
The ability to picture the organization as a whole and the relationship among its various parts.
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Figure 7.5 Skills Needed at Various Levels of Management
LO 7-4
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Organizing: Creating a Unified System 4 of 4
LO 7-4
Staffing: Getting and Keeping the Right People
Staffing — Hiring, motivating, and retaining the best people available to accomplish the company’s objectives.
Staffing is critical, especially in the Internet and high-tech areas.
Many people are not willing to work at companies unless they are treated well with fair pay.
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Leading: Providing Continuous Vision and Values 1 of 4
LO 7-5
Leaders must:
Communicate a vision and rally others around that vision.
Establish corporate values.
Promote corporate ethics.
Embrace change.
Stress accountability and responsibility.
Transparency — The presentation of the company’s facts and figures in a way that is clear and apparent to all stakeholders.
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Leading: Providing Continuous Vision and Values 2 of 4
LO 7-5
Leadership Styles
Autocratic leadership
Make managerial decisions without consulting others.
Participative or democratic leadership
Managers and employees work together to make decisions.
Free-rein leadership
Managers set objectives and employees are relatively free to do whatever it takes to accomplish those objectives.
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Figure 7.6 Various Leadership Styles
LO 7-5
Source: Robert Tannenbaum and Warren Schmidt, “How to Choose a Leadership Pattern,” Harvard Business Review, May/June 1973.
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Leading: Providing Continuous Vision and Values 3 of 4
LO 7-5
Empowering Workers
Progressive leaders give employees the authority to make decisions on their own without consulting a manager.
Customer needs are handled quickly.
Manager’s role becomes less of a boss and more of a coach.
Enabling — Giving workers the education and tools they need to make decisions.
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Leading: Providing Continuous Vision and Values 4 of 4
LO 7-5
Managing Knowledge
Knowledge management
Finding the right information, keeping the information in a readily accessible place, and making the information known to everyone in the firm.
This tries to keep people from reinventing the wheel.
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Controlling: Making Sure It Works
LO 7-6
Control Function
Measures performance relative to planned objectives
Rewards people for work well done
Takes necessary corrective action
A Key Criterion for Measurement: Customer Satisfaction
Traditional forms of measuring success are financial.
Pleasing employees, stakeholders, and customers is important.
External customers — Dealers, who buy products to sell to others, and ultimate customers (or end users), who buy products for their own use.
Internal customers — Individuals and units within the firm that receive services from other individuals or units.
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Figure 7.7 The Control Process
LO 7-6
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Appendix of Long Image Descriptions
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Appendix 1 Figure 7.1 What Managers Do 1 of 2
Planning:
Setting organizational goals
Developing strategies to reach those goals
Determining resources needed
Setting precise standards
Leading:
Guiding and motivating employees to work effectively to accomplish organizational goals and objectives
Giving assignments
Explaining routines
Clarifying policies
Providing feedback on performance
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Appendix 2 Figure 7.1 What Managers Do 2 of 2
Organizing:
Allocating resources, assigning tasks, and establishing procedures for accomplishing goals
Preparing a structure (organization chart) showing lines of authority and responsibility
Recruiting, selecting, training, and developing employees
Placing employees where they’ll be most effective
Controlling:
Measuring results against corporate objectives
Monitoring performance relative to standards
Rewarding outstanding performance
Taking corrective action when necessary
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Appendix 3 Figure 7.2 SWOT Matrix
Potential Internal Strengths:
Core competencies in key areas
An acknowledged market leader
Well-conceived functional area strategies
Proven management
Cost advantages
Better advertising campaigns
Potential Internal Weaknesses:
No clear strategic direction
Obsolete facilities
Subpar profitability
Lack of managerial depth and talent
Weak market image
Too narrow a product line
Potential External Opportunities:
Ability to serve additional customer groups
Expand product lines
Ability to transfer skills/technology to new products
Falling trade barriers in attractive foreign markets
Complacency among rival firms
Ability to grow due to increases in market demand
Potential External Threats:
Entry of lower-cost foreign competitors
Rising sales of substitute products
Slower market growth
Costly regulatory requirements
Vulnerability to recession and business cycles
Changing buyer needs and tastes
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Appendix 4 Figure 7.3 Planning Functions
Strategic planning: The setting of broad, long-range goals by top managers
Tactical planning: The identification of specific, short-range objectives by lower-level managers
Operational planning: The setting of work standards and schedules
Contingency planning: Backup plans in case primary plans fail
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Appendix 5 Figure 7.4 Levels of Management
From top to bottom:
Top management includes the president and vice presidents
Middle management includes plant managers, division heads, and branch managers
Supervisory (first-line) management includes supervisors, foremen, department heads, and section leaders
Nonsupervisory includes employees
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Appendix 6 Figure 7.5 Skills Needed at Various Levels of Management
Top managers rely mostly on conceptual skills, then human relations skills, then technical skills.
Middle managers need a good mix of technical, human relations, and conceptual skills.
First-line managers rely mostly on technical skills, then human relations skills, then conceptual skills.
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Appendix 7 Figure 7.6 Various Leadership Styles
The continuum runs from boss-centered leadership to subordinate-centered leadership. Boss-centered leadership shows a large amount of authority used by managers, while subordinate-centered leadership shows a large area of freedom for employees. Along the continuum, a manager’s authority decreases as it moves toward subordinate-centered leadership, while an employee’s freedom increases.
From the most boss-centered to the most subordinate-centered, the leadership styles are as follows:
Autocratic leadership: A manager makes a decision and announces it, the manager then “sells” the decision, and then the manager presents ideas and invites questions.
Participative/democratic leadership: A manager presents tentative decisions subject to change; the manager presents a problem, gets suggestions, and makes a decision; and the manager defines limits and asks the group to make the decision.
Free rein leadership: A manager permits employees to function within limits defined by their superior.
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Appendix 8 Figure 7.7 The Control Process
Step 1: Establish clear standards
Step 2: Monitor and record performance
Step 3: Compare results against standards
Step 4: Communicate results
Step 5: If needed, take corrective action
Feedback results in determining if standards are realistic, and the process may begin again at step 1.
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