Chapter SevenUnderstanding the Management Process

Learning ObjectivesDefine what management is.Describe the four basic management functions: planning, organizing, leading and motivating, and controlling.Distinguish among the various kinds of managers, in terms of both level and area of management.Identify the key management skills and the managerial roles.Explain the different types of leadership.Discuss the steps in the managerial decision-making process.

Learning Objectives (contd)Describe how organizations benefit from total quality management.Summarize what it takes to become a successful manager today.

What Is Management?The process of coordinating people and other resources to achieve the goals of an organizationMaterial resourcesThe tangible physical resources an organization usesHuman resourcesThe people who staff the organization and use the other resources to achieve the goals of the organizationFinancial resourcesThe funds the organization uses to meet its obligations to investors and creditorsInformation resourcesThe information about internal and external business environmental conditions that the firm uses to its competitive advantage

The Four Main Resources of Management

Basic Management FunctionsThe Management Process

PlanningPlanningEstablishing organizational goals and deciding how to accomplish themMissionA statement of the basic purpose that makes an organization different from othersStrategic planningThe process of establishing an organizations major goals and objectives and allocating the resources to achieve them

Planning (contd)Establishing goals and objectivesGoalAn end result that the organization is expected to achieve over a one-to-ten year periodObjectiveA specific statement detailing what the organization intends to accomplish over a shorter period of timeProperly set goals areSet at every level in the organizationConsistent (supportive) with each otherOptimized (balanced) to reduce conflicts between goals

Planning (contd)Establishing plans to accomplish goals and objectivesPlanAn outline of the actions by which the organization intends to accomplish its goals and objectivesStrategyAn organizations broadest set of plans, a guide for major policy setting and decision makingTactical planA smaller-scale plan to implement a strategyOperational planA plan to implement a tactical planContingency planA plan of alternative courses of action if the organizations other plans are disrupted or become ineffective

Organizing the EnterpriseOrganizingThe grouping of resources and activities to accomplish some end result in an efficient and effective mannerLeading and MotivatingLeadingInfluencing people to work toward a common goalMotivatingProviding reasons for people to work in the best interests of the organizationDirectingThe combined processes of leading and motivating

Controlling Ongoing ActivitiesControllingEvaluating and regulating ongoing activities to ensure that goals are achievedThe Control Function

Kinds of ManagersLevels of ManagementTop managerguides and controls the overall fortunes of the organizationMiddle managerimplements the strategy and major policies developed by top managementFirst-line managercoordinates and supervises the activities of operating employeesThe coordinated effort of all three levels of managers is required to implement the goals of any company

Areas of ManagementFinancial ManagersResponsible for the organizations financial resourcesOperations ManagersManage the systems that convert resources into goods and servicesMarketing ManagersResponsible for facilitating the exchange of products between the organization and its customers or clientsHuman Resources ManagersManage the organizations human resources programsAdministrative Managers (General Managers)Not associated with any specific functional area; provide overall administrative guidance and leadership

Areas of Management SpecializationOther areas may have to be added depending on the nature of the firm and the industry

What Makes Effective Managers?Key Management SkillsTechnical skillA special skill needed to accomplish a specialized activityConceptual skillThe ability to think in abstract termsInterpersonal skillThe ability to deal effectively with other people

What Makes Effective Managers? (contd)Managerial RolesDecisional rolesInvolve various aspects of management decision makingEntrepreneur, disturbance handler, resource allocator, negotiatorInterpersonal rolesThe manager deals with peopleFigurehead, liaison, leaderInformational rolesA manager either gathers or provides informationMonitor, disseminator, spokesperson

LeadershipThe ability to influence othersLeadership vs. managementFormal leadershipLegitimate power of position is the basis for authorityInformal leadershipNot recognized formally by the organization

Styles of LeadershipAuthoritarianHolds all authority and responsibility, with communication usually moving from top to bottomLaissez-faireGives authority to employees and allows subordinates to work as they choose with a minimum of of interference; communication flows horizontally among group membersDemocraticHolds final responsibility but also delegates authority to others, who help determine work assignments; communication is active upward and downward

Which Leadership Style Is Best?Matching style to the situationEffective leadership depends onInteraction among the employeesCharacteristics of the work situationThe managers personality

Managerial Decision MakingThe act of choosing one alternative from among a set of alternativesMajor steps in the managerial decision-making process

The Managerial Decision-Making ProcessIdentifying the problem or opportunityProblemThe discrepancy between an actual condition and a desired conditionOpportunityA positive problemProblem-solving impedimentsPreconceptions about the problemFocusing on unimportant matters while overlooking significant issuesAnalyzing symptoms rather than causesFailing to look ahead

Managerial Decision-Making Process (contd)Generating alternativesBrainstormingEncouraging participants to come up with new ideasBlast! Then RefineReevaluating objectives, modifying them if necessary, and devising a new solutionSelecting an alternativeSatisficingChoosing an alternative that is not the best possible solution, but one that adequately solves the problem

Managerial Decision-Making Process (contd)Implementing and evaluating the solutionRequires time, planning, preparation of personnel, and evaluation of the resultsAn effective decision removes the difference between the actual condition and the desired conditionIf a problem still exists, managers mayDecide to give the chosen alternative more timeAdopt a different alternativeStart the process all over again

Managing Total QualityTotal Quality Management (TQM)The coordination of efforts directed at Improving customer satisfactionIncreasing employee participationStrengthening supplier partnershipsFacilitating an organizational atmosphere of continuous quality improvementIssues Crucial to TQMTop management commitmentCoordination of efforts

What It Takes to Become a Successful ManagerPersonal Skills Oral communicationWritten communicationComputerCritical thinkingEducation and ExperienceA solid academic backgroundPractical work experience