Chapter 8Management, Leadership, and Internal

OrganizationLearning Goals

Define management and the skills necessary for managerial success.

Explain the role of vision and ethical standards.

Summarize the benefits of planning and distinguish strategic, tactical, and operational planning.

Describe the strategic planning process.

Contrast the types of business decisions and list the steps in the decision-making process.

Define leadership and compare different styles of leadership.

Discuss the meaning and importance of corporate culture.

Identify forms of depart-mentalization and types of organization structures.

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WHAT IS MANAGEMENT?

Management Process of achieving organizational objectives through people and other resources.

The Management Hierarchy

• Top management

• Develop long-range strategic plans for the organization.

• Middle management

• Focus on specific operations, products, or customer groups within an organization.

• Supervisory management

• Implement the plans developed by middle managers.

Skills Needed for Managerial Success

• Technical skills Manager’s ability to understand and use the techniques, knowledge, and tools and equipment of a specific discipline or department.

• Human skills Interpersonal skills that enable a manager to work effectively with and through people.

• Conceptual skills Ability to see the organization as a unified whole and to understand how each part of the overall organization interacts with other parts.

Managerial Functions

Planning

• Process of anticipating future events and conditions and determining courses of action for achieving organizational objectives.

Organizing

• Blending human and material resources through a formal structure of tasks and authority.

Directing

• Guiding and motivating employees to accomplish organizational objectives.

• Vital responsibility of supervisory managers.

Controlling

• Evaluating an organization’s performance to determine whether it is accomplishing its objectives.

SETTING A VISION AND ETHICAL STANDARDS FOR THE FIRM

Vision Perception of marketplace needs and the methods an organization can use to satisfy them.

• Must be focused yet adaptable to changes in the business environment.

• Long-term success is also tied to the ethical standards that top executives set.

• High ethical standard can also encourage, motivate, and inspire employees to achieve goals.

Starbucks Mission

IMPORTANCE OF PLANNING

Types of Planning

Strategic

• Determining the primary objectives of an organization and then acting and allocating resources to achieve those objectives.

Tactical

• Guides the activities required to implement overall strategies.

Operational

• Assigning employees and teams to carry out tactical plans.

Contingency

• Planning for unforeseen major accidents, natural disasters, and rapid economic downturns.

Planning at Different Organizational Levels

THE STRATEGIC PLANNING PROCESS

• Often makes the difference between success and failure.

MANAGERS AS DECISION MAKERSDecision making process of recognizing a problem or opportunity, evaluating

alternative solutions, selecting and implementing an alternative, and assessing the results.

Programmed and Nonprogrammed Decisions

• Programmed decision involves simple, common problems with predetermined solutions.

• Nonprogrammed decision involves a complex, unique problem or opportunity with important consequences for the organization.

How Managers Make Decisions

MANAGERS AS LEADERSLeadership Ability to direct or inspire people to attain

organizational goals.

• Involves the use of influence or power.

• Three traits are common among many leaders:

• Empathy

• Self-awareness

• Objectivity in dealing with others

Leadership Styles• Autocratic leadership Make decisions on own without consulting employees.

• Democratic leadership Involve employees in decisions, delegate assignments, ask employees for suggestions.

• Free-rein leadership Leave most decisions to employees.

Which Leadership Style Is Best?• No single style is always best.

• Experts have identified several important variables:

• The leader’s base of power

• The difficulty of tasks involved

• The characteristics of the employees

CORPORATE CULTURECorporate culture Organizations system of principles, beliefs, and values.

• Managerial philosophies, communications networks, and workplace environments and practices all influence corporate culture.

• Typically shaped by the leaders who founded and developed the company and by those who have succeeded them.

• Can be changed.

• Strong culture = everyone knows and supports the same principles, beliefs, and values.

• Weak or constantly shifting culture = lack of a clear sense of purpose.

Proctor & Gamble emphasizes their unique corporate culture.

Organizational StructuresOrganization Structured grouping of people working together to achieve

common goals.

DepartmentalizationDepartmentalization Process of dividing work activities into units within the

organization.

• Five major forms:

•  Product

•  Geographical

•  Customer

•  Functional

•  Process

Delegating Work AssignmentsDelegation Act of assigning work activities to subordinates.

• Employees receive both the responsibility and the necessary authority for completing the tasks.

• Employees have accountability, or responsibility for the results of the way they perform their assignments.

Span of Management

Span of management Number of subordinates, or direct reports, a supervisor manages.

Centralization and Decentralization

• Centralization Decision making is retained at the top of the management hierarchy.

• Decentralization Decision making is located at the lower levels.

Types of Organization Structures

Line Organizations

• Oldest and simplest form; direct flow of authority from CEO to subordinates.

Chain of command Set of relationships that indicates who directs which activities and who reports to whom.

• Ineffective in large- and medium-sized organizations.

Line-and-Staff Organizations

• Combines line departments and staff departments.

• Line departments participate directly in decisions that affect the core operations of the organization.

• Staff departments lend specialized technical support.

Committee Organizations

• Authority and responsibility are jointly in the hands of a group of individuals rather than a single manager.

• Tend to act slowly and conservatively.

• Often make decisions by compromising conflicting interests rather than choosing best alternative.

Matrix Organizations

• Project management structure that links employees from different parts of the organization to work together on specific projects .

• Employees report to a line manager and a project manager.

• Advantages: Flexibility, ability to focus on major problems or products.

• Challenges: Integrating skills of many specialists into a coordinated teams, employee frustration and confusion over reporting to two bosses.