1. Chapter Seven Understanding the Management Process

2. Copyright © Houghton Mifflin Company. All rights reserved.7 - 2 Learning Objectives 1.Define what management is. 2.Describe the four basic management functions: planning, organizing, leading and motivating, and controlling. 3.Distinguish among the various kinds of managers, in terms of both level and area of management. 4.Identify the key management skills and the managerial roles. 5.Explain the different types of leadership. 6.Discuss the steps in the managerial decision- making process.

3. Copyright © Houghton Mifflin Company. All rights reserved.7 - 3 Learning Objectives (cont’d) 7.Describe how organizations benefit from total quality management. 8.Summarize what it takes to become a successful manager today.

4. Copyright © Houghton Mifflin Company. All rights reserved.7 - 4 What Is Management? The process of coordinating people and other resources to achieve the goals of an organization –Material resources The tangible physical resources an organization uses –Human resources The people who staff the organization and use the other resources to achieve the goals of the organization –Financial resources The funds the organization uses to meet its obligations to investors and creditors –Information resources The information about internal and external business environmental conditions that the firm uses to its competitive advantage

5. Copyright © Houghton Mifflin Company. All rights reserved.7 - 5 The Four Main Resources of Management

6. Copyright © Houghton Mifflin Company. All rights reserved.7 - 6 Basic Management Functions The Management Process

7. Copyright © Houghton Mifflin Company. All rights reserved.7 - 7 Planning –Establishing organizational goals and deciding how to accomplish them Mission –A statement of the basic purpose that makes an organization different from others Strategic planning –The process of establishing an organization’s major goals and objectives and allocating the resources to achieve them

8. Copyright © Houghton Mifflin Company. All rights reserved.7 - 8 Planning (cont’d) Establishing goals and objectives –Goal An end result that the organization is expected to achieve over a one-to-ten year period –Objective A specific statement detailing what the organization intends to accomplish over a shorter period of time –Properly set goals are Set at every level in the organization Consistent (supportive) with each other Optimized (balanced) to reduce conflicts between goals

9. Copyright © Houghton Mifflin Company. All rights reserved.7 - 9 Planning (cont’d) Establishing plans to accomplish goals and objectives –Plan An outline of the actions by which the organization intends to accomplish its goals and objectives –Strategy An organization’s broadest set of plans, a guide for major policy setting and decision making –Tactical plan A smaller-scale plan to implement a strategy –Operational plan A plan to implement a tactical plan –Contingency plan A plan of alternative courses of action if the organization’s other plans are disrupted or become ineffective

10. Copyright © Houghton Mifflin Company. All rights reserved.7 - 10 Organizing the Enterprise Organizing –The grouping of resources and activities to accomplish some end result in an efficient and effective manner Leading and Motivating –Leading Influencing people to work toward a common goal –Motivating Providing reasons for people to work in the best interests of the organization –Directing The combined processes of leading and motivating

11. Copyright © Houghton Mifflin Company. All rights reserved.7 - 11 Controlling Ongoing Activities Controlling –Evaluating and regulating ongoing activities to ensure that goals are achieved The Control Function

12. Copyright © Houghton Mifflin Company. All rights reserved.7 - 12 Kinds of Managers Levels of Management –Top manager—guides and controls the overall fortunes of the organization –Middle manager—implements the strategy and major policies developed by top management –First-line manager— coordinates and supervises the activities of operating employees The coordinated effort of all three levels of managers is required to implement the goals of any company

13. Copyright © Houghton Mifflin Company. All rights reserved.7 - 13 Areas of Management Financial Managers –Responsible for the organization’s financial resources Operations Managers –Manage the systems that convert resources into goods and services Marketing Managers –Responsible for facilitating the exchange of products between the organization and its customers or clients Human Resources Managers –Manage the organization’s human resources programs Administrative Managers (General Managers) –Not associated with any specific functional area; provide overall administrative guidance and leadership

14. Copyright © Houghton Mifflin Company. All rights reserved.7 - 14 Areas of Management Specialization Other areas may have to be added depending on the nature of the firm and the industry

15. Copyright © Houghton Mifflin Company. All rights reserved.7 - 15 What Makes Effective Managers? Key Management Skills –Technical skill (1 st line) A special skill needed to accomplish a specialized activity –Conceptual skill (Middle, Top) The ability to think in abstract terms Big picture –Interpersonal skill (All levels) The ability to deal effectively with other people

16. Copyright © Houghton Mifflin Company. All rights reserved.7 - 16 What Makes Effective Managers? (cont’d) Managerial Roles –Decisional roles Involve various aspects of management decision making –Entrepreneur, disturbance handler, resource allocator, negotiator –Interpersonal roles The manager deals with people –Figurehead, liaison, leader –Informational roles A manager either gathers or provides information –Monitor, disseminator, spokesperson

17. Copyright © Houghton Mifflin Company. All rights reserved.7 - 17 Leadership The ability to influence others Leadership vs. management –Voluntary cooperation v. coercion to change behavior Formal leadership –Legitimate power of position is the basis for authority Informal leadership –Not recognized formally by the organization

18. Copyright © Houghton Mifflin Company. All rights reserved.7 - 18 Styles of Leadership Authoritarian –Holds all authority and responsibility, with communication usually moving from top to bottom Laissez-faire –Gives authority to employees and allows subordinates to work as they choose with a minimum of of interference; communication flows horizontally among group members Democratic –Holds final responsibility but also delegates authority to others, who help determine work assignments; communication is active upward and downward

19. Copyright © Houghton Mifflin Company. All rights reserved.7 - 19 Which Leadership Style Is Best? Matching style to the situation Effective leadership depends on –Interaction among the employees –Characteristics of the work situation –The manager’s personality

20. Copyright © Houghton Mifflin Company. All rights reserved.7 - 20 Managerial Decision Making The act of choosing one alternative from among a set of alternatives Major steps in the managerial decision- making process

21. Copyright © Houghton Mifflin Company. All rights reserved.7 - 21 The Managerial Decision-Making Process Identifying the problem or opportunity –Problem The discrepancy between an actual condition and a desired condition –Opportunity A “positive” problem –Problem-solving impediments Preconceptions about the problem Focusing on unimportant matters while overlooking significant issues Analyzing symptoms rather than causes Failing to look ahead

22. Copyright © Houghton Mifflin Company. All rights reserved.7 - 22 Managerial Decision-Making Process (cont’d) Generating alternatives –Brainstorming Encouraging participants to come up with new ideas –“Blast! Then Refine” Reevaluating objectives, modifying them if necessary, and devising a new solution Selecting an alternative –Satisficing Choosing an alternative that is not the best possible solution, but one that adequately solves the problem

23. Copyright © Houghton Mifflin Company. All rights reserved.7 - 23 Managerial Decision-Making Process (cont’d) Implementing and evaluating the solution –Requires time, planning, preparation of personnel, and evaluation of the results –An effective decision removes the difference between the actual condition and the desired condition –If a problem still exists, managers may Decide to give the chosen alternative more time Adopt a different alternative Start the process all over again

24. Copyright © Houghton Mifflin Company. All rights reserved.7 - 24 Managing Total Quality Total Quality Management (TQM) –The coordination of efforts directed at Improving customer satisfaction Increasing employee participation Strengthening supplier partnerships Facilitating an organizational atmosphere of continuous quality improvement Issues Crucial to TQM –Top management commitment –Coordination of efforts

25. Copyright © Houghton Mifflin Company. All rights reserved.7 - 25 What It Takes to Become a Successful Manager Personal Skills –Oral communication –Written communication –Computer –Critical thinking Education and Experience –A solid academic background –Practical work experience

26. Copyright © Houghton Mifflin Company. All rights reserved.7 - 26 Wednesday or Thursday Class Quiz –Chapter 6 –Chapter 7 –Readings Course Website Textbook Website