Chapter Seven The Nature of Management
Managers Individuals in organizations who make decisions about the use of resources and who are concerned with planning, organizing, leading, and controlling the organization’s activities to reach its objectives.
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Chapter SevenThe Nature of ManagementManagementA process designed to achieve an organization’s objectives by using its resources effectively and efficiently in a changing environment.Managers Individuals in organizations who make decisions about the use of resources and who are concerned with planning, organizing, leading, and controlling the organization’s activities to reach its objectives.The Functions of ManagementManagersPlanning activities to achieve theorganization's objectivesOrganizing resources and activities to achieve the organization’s objectivesStaffing the organization with qualified peopleDirecting employees’ activities toward achievement of objectivesControlling the organization’s activities to keep it on courseWhere Planning StartsObjectives - The ends or results desired by the organization and are derived from the organization’s mission.Mission - The statement of an organization’s fundamental purpose and basic philosophy.Types of PlansOperational PlansTactical PlansStrategic PlansSpecify Actions to Achieve Tactical Plans (very short-term)Designed to Implement Strategic Objectives (usually one year or less)Establish Long-Range ObjectivesCrisis Management, or Contingency Planning, Requires that Managers Plan for “When” rather than “If” a Disaster Occurs.The Levels of ManagementFirst-Line Management Foreman, Supervisors, Office ManagersMiddle Management Plant Managers, Division Managers, Department ManagersTop Management President, CEO, Executive Vice PresidentsThe Top 5 Highest Paid CEOsMichael Dell Dell Computer $235,912KSanford Weill Citigroup $216,183KGerald Levin AOL Time Warner $164,183KJohn Chambers Cisco Systems $157,305KHenry Silverman Cendant $137,447KSource: “Forbes Top CEOs,” from (accessed July 9,2001)..CEOCompanyAnnual SalaryImportance of Management Functions to Managers in Each LevelPlanningPlanningPlanningOrganizingOrganizingOrganizingStaffingStaffingStaffingDirectingControllingDirectingDirectingControllingControllingTop ManagersMiddle ManagersFirst-Line ManagersLeast ImportantMost ImportantAreas of ManagementFinancial ManagementProduction and Operations ManagementHuman Resources ManagementMarketing ManagementAdministrative ManagementSkills Needed by ManagersLeadership SkillsTechnical ExpertiseConceptual SkillsAnalytical SkillsHuman Relations SkillsThree Basic Styles of LeadershipDemocraticAutocraticFree-reinOrganizations are Successful Because of Successful LeadersInvestor’s Business Daily’s 10 Secrets To Success:How you think is everything.Decide upon your true dreams and goals.Take action.Never stop learning.Be persistent and work hard.Learn to analyze details.Focus your time and money.Don’t be afraid to innovate; Be different.Be honest and dependable; Take responsibility: Otherwise Nos. 1-9 don’t matter.Source: “IBD’S 10 SECRETS TO SUCCESS,” Investor’s Business Daily, October 23, 2001, A6. LEADERSHIP: The Most Important Role of a CEOMotivate Employees 1 3Communicate Clear Vision 2 1Create Effective Growth Strategy 3 5Listen to Customer Needs 4 7Set Ethical Standards 5 6Build a Quality Management Team 6 4Boost Shareholder Wealth 7 2 THE MANAGER’SROLERANKINGAMONGCONSUMERSRANKINGAMONGEXECSSource: Wirthlin WorldwideWhere Do Managers Come From?Good Managers are Made, not Born:Promoting employees from withinHiring managers from other organizationsHiring managers graduating from colleges and universitiesSteps in the Management Decision Making ProcessRecognize and Define the Decision SituationDevelop OptionsAnalyze OptionsImplement the DecisionMonitor the ConsequencesSelect the Best OptionThe Reality of Management There are Only Two Basic Activities of Management:Figuring out what to do despite uncertainty, great diversity, and an enormous amount of potentially relevant information, and,Getting things done through a large and diverse set of people despite having little direct control over most of them. An Example of Managerial Decision Making: Influencing Employees’ PerformanceHuman Behavior Principles Effects of goal setting, rewarding behavior, and learningEmployee Characteristics Job skills and attitudesWork Characteristics Available technology and materials Time constraints Demand for outputDetermine Alternatives Retraining of employees Initiating work teams Developing individual per- formance reward systemEvaluate Alternatives Cost Feasibility of implementing Expected outcomeChoose Alternative Developing individual per- formance reward systemIdentify Rewards to be UsedSet Standards for PerformanceCommunicate Standards to EmployeesEnsure Employees are Adequately TrainedDetermine Method of Measuring PerformanceCollect Performance DataAdminister Rewards to Employees Reaching StandardsInformation GatheredUsing Information to Make DecisionImplementing DecisionThe Payoffs of ManagementManagement Position Median Annual SalaryGeneral Accounting $ 69,845HR Manager $ 74,900Building & Facilities $ 68,532Administrative Services $ 59,682Sales Promotion $ 68,750Customer Service $ 60,000Regional Sales $ 92,250Regional Marketing $ 83,380Operations $ 77,175Plant Manager $102,573 Solve the DilemmaEvaluate Infinity’s current situation and analyze its strengths and weaknesses.Evaluate the opportunities for Infinity, including using its current strategy and propose alternative strategies.Suggest a plan for Infinity to compete successfully over the next ten years.Explore Your Career OptionsIn which types of industries or sectors are managers the most likely to be hired?Additional Discussion Questions and Exercises1. What is the difference between strategic plans and tactical plans?2. Which of the five functions of management is most closely concerned with evaluation?3. Which level of management is most likely to need technical skills?4. Describe the individuals with whom managers are involved in networking. What is the value of networking for managers?Chapter 7 Quiz1. Which of the following skills involves the ability to think creatively, to think in abstract parts, and to see how terms fit together to form a whole? a. analytical skills b. conceptual skills c. human relation skills d. technical skills2. Which describes free-rein leaders? a. Leaders make all decisions and tell employees what to do and how to do it. b. Leaders allow employees to get involved in decisions. c. Leaders allow top management to make all decisions and tell employees what to do and how to do it. d. Leaders let employees work without much interference.Chapter 7 Quiz3. An agenda is most closely associated with a. networking. b. technical expertise. c. a calendar. d. financial resources.4. The ability to deal with people is known as (an) a. analytical skill. b. conceptual skill. c. human relation skill. d. technical skill.Multiple Choice Questions about the VideoWhat style of leadership does Gerstner likely use in empowering IBM employees? a. autocratic b. democratic c. dictator d. free rein e. socialisticIBM has renewed its commitment to mainframe computers and ______. a. customers b. suppliers c. middle management d. top management e. intranets
