Understanding the Management Process Chapter Seven Understanding the Management Process

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

Basic Management Functions The Management Process

Planning Planning Mission Strategic 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

Planning (cont’d) Establishing goals and objectives Goal Objective 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

Planning (cont’d) Establishing plans to accomplish goals and objectives 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

Organizing the Enterprise 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

Controlling Ongoing Activities Evaluating and regulating ongoing activities to ensure that goals are achieved The Control Function

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

Areas of Management Financial Managers Operations 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

What Makes Effective Managers? Key Management Skills Technical skill A special skill needed to accomplish a specialized activity Conceptual skill The ability to think in abstract terms Interpersonal skill The ability to deal effectively with other people

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

The ability to influence others Leadership vs. management Formal leadership Legitimate power of position is the basis for authority Informal leadership Not recognized formally by the organization

Styles of Leadership Authoritarian Laissez-faire Democratic 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

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

Managerial Decision Making The act of choosing one alternative from among a set of alternatives Major steps in the managerial decision-making process

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

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

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

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