FHF Copyright © 2011 by The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin

part CHAPTER 8 Managing Service and Manufacturing Operations CHAPTER 7 Organization, Teamwork, and Communication 3 CHAPTER 6 The Nature of Management FHF 6-2

[] FHF Management Is... A process designed to achieve an organization’s objectives by using its resources effectively & efficiently in a changing environment 6-3

FHF What Managers Do Make decisions (utilize resources) achieve objectives Planning Organizing Staffing Directing Controlling 6-4

FHF The Importance of Management  Resource acquisition and coordination  Resources : People Raw materials Equipment Money Information 6-5

FHF Management Functions Planning Process of determining the organization’s missions, goals, and objectives and deciding how to accomplish them.  Mission  Organization’s statement of purpose and basic philosophy  Goals  The results that a firm wishes to achieve– almost always have multiple goals  Objectives  Results desired by organization 6-6

FHF The Mission Statement What business are we in? 1. Who are we? 2. Who are our customers? 3. What is our operating philosophy? 4. What are our core competencies and competitive advantages? 5. What are our responsibilities with respect to being good stewards of environmental, financial and human resources? 6-7

FHF GoalsGoals  A firm almost always has multiple goals  Should be specific  Components of a goal: An attribute sought A target to be achieved A time frame 6-8

FHF Common Organizational Objectives The desired end results Profit Competitive advantage Efficiency Growth Service Ethics Community responsibility 6-9

FHF Planning as a Function of Management  Strategic  Tactical  Operational 6-10

FHF Strategic Plans Duty of executive-level managers Establish the long-range objectives & overall strategy to fulfill firm’s mission  2-10 years forward-looking  Diversification, issuing stock, mergers & acquisitions, going international  Must account for organization’s capabilities and resources, business environment and objectives 6-11

FHF Short-range  Strategy implementation Time frame of 1 year or less Environmental changes Periodically reviewed & updated Tactical Plans 6-12

FHF Operational Plans Very short-term  Actionable, specific Individuals, work groups, departments 1 month, 1 week, 1 day Help to achieve tactical plans 6-13

FHF Crisis Management Contingency Planning Focus on potential disasters  Product tampering  Oil spills  Fire, earthquake, terrorist attack  Unethical/illegal employee activity  Communication is very important during a crisis 6-14

FHF Management Functions Organizing Structuring of resources & activities to accomplish objectives efficiently & effectively  Importance: Creates synergy Establishes lines of authority Improves communication Improves competitiveness 6-15 …continued on next page

FHF Management Functions Staffing Hiring people to carry out the work of the organization  Importance: Recruiting Determine skills Motivate & train Compensation levels 6-16 …continued on next page

FHF Management Functions Directing Motivating and leading employees to achieve organizational objectives  Motivation Incentives (raise, promotion) Employee involvement (cost reduction, customer service, new products) Recognition and appreciation …continued on next page 6-17

FHF Management Functions Controlling Process of evaluating and correcting activities to keep organization on course  Five activities of controlling: 1. Measuring performance 2. Comparing performance against standards 3. Identifying deviations from standards 4. Investigating causes of deviations 5. Taking corrective action 6-19

FHF Top Managers  President  Chief Executive Officer (CEO)  Chief Financial Officer (CFO)  Chief Operations Officer (COO) 6-20

FHF Middle Management  Responsible for tactical planning  Implement general guidelines established by top management  Responsibility is more narrowly focused than top managers 6-21

FHF First Line Management  Supervise workers  Oversee daily operations  Directing and controlling are primary functions 6-22

FHF Areas of Management  Finance  Production  Operations  Human Resources  Marketing  Administration 6-23

[] FHF Financial Management 6-24 Focus on obtaining money necessary for the successful operations and using these funds to further organizational goals

[] FHF Production & Operations Management 6-25 Develop & administer activities to transform resources into goods, services and ideas for the marketplace.

[] FHF Human Resources Management 6-26 Handle staffing function and deal with employees in a formalized manner

[] FHF Marketing Management Responsible for planning, pricing and promoting products and making them available to customers 6-27

[] FHF Information Technology (IT) Management Responsible for implementing, maintaining and controlling technology applications in business (such as computer networks) 6-28

FHF Administrative Managers  Manage an entire business or major segment of the business  Coordinate activities of specialized managers 6-29

FHF Skills Needed by Managers  Leadership  Technical expertise  Conceptual skills  Analytical skills  Human relations skills 6-30

FHF Types of Leaders Autocratic Leaders  Decision makers, “tell” employees what to do Democratic Leaders  Involve employees in decisions Free-Rein leaders  Employees work with minimal interference 6-31

FHF Technical Expertise  The specialized knowledge and training required to perform jobs related to a manager’s area.  Computer expertise is a skill for nearly all managers 6-32

FHF Conceptual Skills  Are the ability to think in abstract terms and to see how parts come together to form the whole.  The ability to think creatively Needed by all managers Especially important for top managers 6-33

FHF Analytical Skills  The ability to identify relevant issues and recognize their importance, understand the relationships between them and perceive the underlying causes of a situation  Most important to top-level managers  Required in complex situations where the solution is unclear 6-34

FHF Human Relations Skills  The ability to deal with people inside and outside the organization  Managers with good HR skills are generally more successful 6-35