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*Chapter

Seven

Management

and

Leadership

McGraw-Hill/IrwinCopyright © 2012 by The McGraw-Hill Companies, Inc. All rights reserved.

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*Profile

• Started at Pepsi after earning masters degrees

from the Indian School of Management and Yale.

INDRA KRISHNAMURTHY NOOYIPepsi

• Goal was to increase sales

overseas, introduce good-for-

you products and place more

emphasis on food.

• She is a top manager using a

boss-centered leadership

style while still being a team

player.

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Source: Fortune Magazine, http://www.fortune.com, accessed September 2010.

AMERICA’S MOST POWERFUL

FEMALE MANAGERS

Name Organization

Indra Nooyi PepsiCo

Irene Rosenfeld Kraft Foods

Pat Woertz Archer Daniel Midland

Angela Braly Wellpoint

Andrea Jung Avon

Oprah Winfrey Harpo

Ellen Kullman DuPont

Carol Bartz Yahoo!

Ursula Burns Xerox

Brenda Barnes Sara Lee

Profile

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*Four Functions

of Management

• Management -- The process used to accomplish

organizational goals through planning, organizing,

leading and controlling people and other

organizational resources.

WHAT IS MANAGEMENT?LG2

7-4

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*Managers’ Roles

Are Evolving

• Younger and more

progressive.

- Growing numbers of women.

- Fewer from elite universities.

• Emphasis is on teams and

team building.

• Managers need to be skilled

communicators and team

players.

TODAY’S MANAGERS

LG1

7-5

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Source: Entrepreneur, http://www.entrepreneur.com, March 2009.

RESPECT and HOW to GET IT Managers’ Roles

Are Evolving

LG1

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Source: Bloomberg BusinessWeek, http://www.businessweek.com, accessed September 2010.

The BEST MANAGERS

Name Age Organization

David Axelrod 53 Obama Campaign

Frank Blake 59 Home Depot

Jamie Dimon 52 JPMorgan

Larry Ellison 64 Oracle

Takeo Fukui 64 Honda

Mark Hurd 53 Hewlett-Packard

Satoru Iwata 49 Nintendo

Peter Loscher 51 Siemens

Irene Rosenfeld 55 Kraft Foods

Managers’ Roles

Are Evolving

LG1

7-7

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Source: Bloomberg BusinessWeek, http://www.businessweek.com, accessed September 2010.

The WORST MANAGERS

Name Organization What Went Wrong

James Cayne Bear Stearns Played golf and bridge

while the company

collapsed.

Richard Fuld Lehman Brothers Ignored warning signs

and rewarded greed.

Kerry Killinger Washington Mutual Bad lending standards

led to bankruptcy.

Philip Schoonover Circuit City Fired 3,400

experienced

employees for cheaper

replacements.

Managers’ Roles

Are Evolving

LG1

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*Four Functions

of Management

1. Planning

2. Organizing

3. Leading

4. Controlling

FOUR FUNCTIONS of

MANAGEMENTLG2

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• The lack of professional managers is keeping

U.S. companies from expanding rapidly in global

markets.

• Flexibility is the key to successfully expanding

abroad.

• Developing products to appeal to another market

is another way to be successful.

WE NEED MANAGERS HERE(Reaching Beyond Our Borders)

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*Planning &

Decision Making

• Vision -- More than a

goal, it’s a broad

explanation of why the

organization exists and

where it’s trying to go.

SHARING the VISION

LG3

7-11

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*Planning &

Decision Making

• Mission Statement -- Outlines the organization’s

fundamental purposes. It includes:

- The organization’s self–concept.

- Its philosophy.

- Long–term survival needs.

- Customer needs.

- Social responsibility.

- Nature of the product or service.

DEFINING THE MISSION

LG3

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*Planning &

Decision Making

• Goals -- The broad, long-term

accomplishments an

organization wishes to attain.

• Objectives -- Specific, short-

term statements detailing how

to achieve the organization’s

goals.

SETTING

GOALS and OBJECTIVESLG3

7-13

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*Planning &

Decision Making

• What is the situation now?

SWOT Analysis -- Analyzes the organization’s

Strengths, Weaknesses, Opportunities and Threats.

• How can we get to our goal from here?

- Strategic planning

- Tactical planning

- Operational planning

- Contingency planning

PLANNING ANSWERS

FUNDAMENTAL QUESTIONSLG3

7-14

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*Planning &

Decision Making

LG3

SWOT MATRIX

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*Planning &

Decision Making

• Strategic Planning -- Done by top management

and determines the major goals of the organization

and the policies, procedures, strategies and

resources it will need to achieve them.

• Tactical Planning -- The process of developing

detailed, short-term statements about what is to be

done, who is to do it and how.

STRATEGIC and TACTICAL

PLANNINGLG3

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*Planning &

Decision Making

• Operational Planning -- The process of setting

work standards and schedules necessary to

implement the company’s tactical objectives.

OPERATIONAL and CONTINGENCY

PLANNINGLG3

• Contingency Planning --The process of preparing

alternative courses of action

the firm can use if its primary

plans don’t work out.

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*Planning &

Decision Making

LG3

PLANNING FUNCTIONS

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• The original “Blue Men” manage over 500

employees; 70 are performers in 12 cities.

• Creators wrote a 132-page Blue Man manual helping

them understand the importance of managing growth.

I’D RATHER be BLUE(Spotlight on Small Business)

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*Decision Making:

Finding the Best

Alternative

• Decision Making -- Choosing among two or more

alternatives.

DECISION MAKING

LG3

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*Decision Making:

Finding the Best

Alternative

1. Define the situation.

2. Describe and collect needed information.

3. Develop alternatives.

4. Develop agreement among those involved.

5. Decide which alternative is best.

6. Do what is indicated.

7. Determine whether the decision was a good one

and follow up.

RATIONAL DECISION-MAKING

MODELLG3

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*Decision Making:

Finding the Best

Alternative

• Problem Solving -- The process of solving the

everyday problems that occur; less formal than

decision making and needs 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.

PROBLEM SOLVING

LG3

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*Progress

Assessment

• What’s the difference between goals and

objectives?

• What does a company analyze when it does a

SWOT analysis?

• What are the differences between strategic,

tactical and operational planning?

• What are the seven Ds in decision making?

PROGRESS ASSESSMENT

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*Organizing:

Creating a

Unified System

• Organization Chart --A visual device that

shows relationships

among people and

divides the organization’s

work; it shows who

reports to whom.

ORGANIZATIONAL CHARTS

LG4

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*Organizing:

Creating a

Unified System

LG4

LEVELS of MANAGEMENT

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*Organizing:

Creating a

Unified System

• Top Management -- The highest level, consists

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

daily performance.

MANAGEMENT LEVELS

LG4

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*Organizing:

Creating a

Unified System

• 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.

TOP MANAGEMENT

LG4

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• Technical Skills -- The ability to perform tasks in a

specific discipline or department.

MANAGERIAL SKILLSTasks and Skills

at Different Levels

of Management

LG4

• Human Relations Skills -- Skills

that involve communication and

motivation; they enable managers

to work through and with people.

• Conceptual Skills -- Skills that

involve the ability to picture the

organization as a whole and the

relationship among its various

parts.7-28

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*Tasks and Skills

at Different Levels

of Management

LG4

SKILLS NEEDED at VARIOUS

LEVELS of MANAGEMENT

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*Staffing: Getting

and Keeping the

Right People

• Staffing -- Recruiting, hiring, motivating and

retaining the best people available to accomplish the

company’s objectives.

• Recruiting good employees is critical.

• Many people are not willing to work at companies

unless they are treated well with fair pay.

STAFFING

LG4

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Source: Bloomberg Businessweek, http://www.businessweek.com, accessed September 2010.

LAYOFF LEADERSLargest Layoff Announcements, 1993 to 2008

Company Employees Date

IBM 60,000 July 1993

Citigroup 53,000 November 2008

Sears Roebuck 50,000 January 1993

U.S. Air Force 40,000 December 2005

Ford 35,000 January 2002

Kmart 35,000 January 2003

Boeing 31,000 September 2001

U.S. Postal Service 29,870 January 2002

Boeing 28,000 December 1998

DaimlerChrysler 26,000 January 2001

Staffing: Getting

and Keeping the

Right People

LG4

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*Leading: Providing

Continuous Vision

and Values.

• Leaders must:

- Communicate a vision and rally others around that

vision.

- Establish corporate values.

- Promote corporate ethics.

- Embrace change.

- Stress accountability and responsibility

LEADERSHIP

LG5

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*Leading: Providing

Continuous Vision

and Values.

• Transparency -- The presentation of the company’s

facts and figures in a way that is clear and apparent

to all stakeholders.

ACCOUNTABILITY through

TRANSPARENCYLG5

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As a first-line manager, you have new information

that your department head hasn’t seen yet. The

findings of the report indicate your manager’s

plans should fail. If they do fail, you could be

promoted.

Will you give your department head the report?

What is the ethical thing to do?

What might be the consequences?

To SHARE or NOT to SHARE(Making Ethical Decisions)

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*Leadership

Styles

• Autocratic Leadership --Making 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 free to do

whatever is appropriate to

accomplish those objectives.

LEADERSHIP STYLES

LG5

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*Leadership

Styles

LG5

VARIOUS LEADERSHIP STYLES

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Source: CIO Magazine, http://www.cio.com.

NATURAL BORN LEADERS?Four Types of Executives

Rationalists Humanists

Politicists Culturists

Leadership

Styles

LG5

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*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.

EMPOWERMENT

LG5

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Source: Bloomberg BusinessWeek, http://www.businessweek.com.

• Manage output instead of hours.

• Train workers to be ready for a more complex

corporate structure.

• Allow lower-level managers to make decisions.

• Use new technology to foster teamwork.

• Shift hiring emphasis to collaboration.

WORK SMARTERHow to Ease Pressure on Workers

Empowering

Workers

LG5

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*Managing

Knowledge

• Knowledge Management --Finding the right information,

keeping the information in a

readily accessible place and

making the information known

to every one in the firm.

MANAGING KNOWLEDGE

LG5

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*Controlling:

Making Sure it

WorksFIVE STEPS of CONTROLLING

LG6

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Source: CFO Magazine, http://www.cfo.com.

• Do you have strategic initiatives that you have

not addressed?

• Do you often check on employees for quality

control?

• Do you often check on subordinates throughout

the day?

• Do you rarely take vacations?

• Is there a lot of turnover?

ARE YOU a MICROMANAGER?Controlling:

Making Sure it

Works

LG6

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*A Key Criterion

for Measurement:

Customer

Satisfaction

• Traditional forms of measuring success are

financial.

• Pleasing employees, stakeholders and customers

(both internal and external) are 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.

MEASURING SUCCESS

LG6

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*Progress

Assessment

• How does enabling help achieve empowerment?

• What are the five steps in the control process?

• What’s the difference between internal and

external customers?

PROGRESS ASSESSMENT

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