© 2008 The McGraw-Hill Companies, Inc., All Rights Reserved. 1 chapter Management McGraw-Hill/Irwin Principles of Management © 2008 The McGraw-Hill Companies, Inc., All Rights Reserved.

Learning Objectives Describe the basic functions of management Identify where in an organization managers are located Discuss the challenges people encounter as they become first-line managers Describe the roles managers adopt to perform the basic functions of management Outline the competencies managers must have to be effective

Management and Managers Management: The art of getting things done through people in the organization Managers give organizations a sense of purpose and direction Managers create new ways of producing and distributing goods and services Managers change how the world works through their actions See Learning Objective 1: Describe the basic functions of management. See text page: 4

Leaders versus Managers Process Management Leadership Vision Establishment * Plans and budgets * Develops process steps and set timelines * Set the direction and develops the vision * Develops strategic plans to achieve the vision Development and Networking * Organizes and staffs * Maintain structure * Aligns organization * Communicates the vision, mission, and direction Vision Execution * Controls processes * Identifies problems * Motivates and inspires * Energizes employees to overcome barriers to change Vision Outcome * Manages vision order and predictability * Provides expected results * Promotes useful and dramatic changes See Learning Objective 1: Describe the basic functions of management. Leaders versus Managers This slide offers difference between leaders and managers. Often students wonder whether leaders and managers are the same or are there any differences. This study suggest that understanding the differences between leadership and management can ensure that employees know when and how to apply each set of characteristics for given processes. What this article argues is that, in a nutshell, management is tactical and all about coping with the here and now whereas leadership is strategic and about coping with the future. In light of this article and what students have heard and seen, ask the students: should organizations hire managers or leaders? Are managers supposed to be leaders as well? Why or why not? (All students should understand that all managers should be leaders but all leaders are not managers. Leading is an important function of management. All managers to some extent, within organizational and job parameters should engage in leading.) (Source: Adapted from “Leadership versus management: What’s the difference?”, The Journal for Quality and Participation, 2006) Source: Adapted from “Leadership versus management: What’s the difference?”, The Journal for Quality and Participation, 2006

Functions of Management Planning & Strategizing Controlling Organizing See Learning Objective 1: Describe the basic functions of management. See text page: 4 Leading & Developing

Planning & Strategizing Planning – a formal process whereby managers choose goals, identify actions, allocate responsibility for implementing actions, measuring the success of actions, and revising plans Planning is used to develop overall strategies A strategy is an action that managers take to attain the goals Planning goes beyond strategy development to include the regulation of a wide variety of organizational activities Strategizing – the process of thinking through on a continual basis what strategies an organization should pursue to attain its goals See Learning Objective 1: Describe the basic functions of management. See text pages: 4-5

Who Makes the Strategic Decisions? See Learning Objective 1: Describe the basic functions of management. Who Makes the Strategic Decisions? This slide presents the results from McKinsey Quarterly Survey of Business Executives representing 796 responses from a worldwide panel of executives. Majority (52%) of the respondents indicated that at their company, senior group including the CEO makes the important strategic decisions. 23% indicated that with formal strategic planning process, these important strategic decisions are made. It should be pointed out to the students that the bottom line evident from this slide is that these decisions are primarily made by the senior managers including the CEO. Source: Improving Strategic Planning: A McKinsey Survey, The McKinsey Quarterly, September 2006 Source: Improving Strategic Planning: A McKinsey Survey, The McKinsey Quarterly, September 2006

Organizing Organizing involves deciding: Who will perform the task? Where will decisions be made? Who reports to whom? How will different parts of the organization fit together to accomplish the common goal? See Learning Objective 1: Describe the basic functions of management. See text page: 5

Controlling The process of monitoring performance against goals, intervening when goals are not met, and taking corrective action First step – Drafting plans Important aspect is creating incentives that align employees’ and organization’s interests See Learning Objective 1: Describe the basic functions of management. See text page: 6

Benefits & Incentives Performance Bonuses Health Benefits Performance-based Time Off Education and Learning Recognition and Awards Retirement Planning and 401(k) Promotion Child Care and Elder Care Assistance See Learning Objective 1: Describe the basic functions of management. Benefits & Incentives This slide presents a basket of benefits and incentives that an organization may offer to its employees. Ask the students – what is the difference between benefits and incentives? (Benefits do not sustain motivation to perform. They are entitlements that everyone gets it in the organization. Incentives are more performance-based and therefore drives the performance.) Ask the students – which of these are benefits and which are incentives? (Benefits – 2, 4, 6, and 8. Other items are or can be performance-based incentives) Ask the students – what would they like as incentives for performance?

Leading & Developing Leading – is the process of motivating, influencing, and directing others in the organization to work productively in pursuit of organization goals. Developing employees – the task of hiring, training, mentoring, and rewarding employees in an organization, including other managers. See Learning Objective 1: Describe the basic functions of management. See text pages: 6-7

Skilled Leaders: Drive strategic thinking Have a plan for organization Proactively structure the organization Exercise control with a deft hand Use the right kind of incentives Get the best out of people Build a high-quality team See Learning Objective 1: Describe the basic functions of management. See text page: 7

America’s Best Leaders Steve Jobs, Apple, Pixar Alan Mulally, Boeing Commercial Airplanes Terry Semel, Yahoo! A.G. Lafley, Procter & Gamble Kim Shin Bae, SK Telecom See Learning Objective 1: Describe the basic functions of management. America’s Best Leaders This slide presents the five of the best leaders in Business Week’s Best of 2005. Ask the students – How many have heard of these leaders? (Majority will identify Steve Jobs due to Apple/iPods and Terry Semel because of Yahoo! They may not have heard of Terry Semel but should be very familiar with Yahoo!) Steve Jobs has had the broader impact both from the tech viewpoint (Apple’s nano iPods and mini Macs) as well as the creative viewpoint (Pixar’s animated movies and deals with Disney). Alan Mulalley gets credit not only for rescuing the fabled commercial airplane division during its darkest hours (after September 11 attacks when the orders declined significantly and about 27,000 employees had to be fired) but for putting it back on the path to prosperity (focused on streamlining the operations, new line of planes 787 and redesigning the 747 line to compete with Airbus). Working in the shadow of Google, Yahoo! Under the leadership of Terry Semel quietly keeps moving along, building one of the Internet’s most diverse businesses, selling everything from splashy display ads and search ads to online music subscriptions and high-speed Internet access. Revenues slated to climb 42% this year to $3.7 billion. Procter & Gamble’s Lafley transformed a stodgy, insular culture into one that is nimbler and more open—P&G now gets 35% of its product ideas from outside companies or inventors. The company also had 5 of the top 10 best-selling consumer-product launches in 2005. Lafley has led one of the biggest turnarounds. Kim Shin Bae as CEO of South Korea’s largest mobile service provider, SK telecom, is implementing strategies at the company resulting in growth that defy expectations (video on demand, online games, news feeds, online music stores, etc.) Source: Best of 2005, Business Week, December 19, 2005 Source: Best of 2005, Business Week, December 19, 2005

Question Are the functions of management only for managers in organizations or can they apply to you as a student as well? Explain. See Learning Objective 1: Describe the basic functions of management. Question This should be an interesting application exercise for students to understand that these functions apply to them as well as any one. One or more function may be more or less dominant depending upon the situation.

Types of Managers General Managers Functional Frontline See Learning Objective 2: Identify where in an organization managers are located. See text pages: 7-8

Question Dr. John Alexander is the Chair of the Management Department at Global University with their main campus in New York, USA. The President of the university is Dr. Kim Kerry. John can be described as a ________ manager whereas Kim is a _______ manager. general; functional frontline; general functional; frontline general; frontline See Learning Objective 2: Identify where in an organization managers are located. Answer: B

Multi-divisional Management Hierarchy Corporate-level general managers See Learning Objective 2: Identify where in an organization managers are located. See text page: 8-10 Business-level general managers Functional managers Frontline managers

Becoming a Manager From Specialist to Manager Mastering the Job Journey begins when people are successful at a specialist task that they were hired to do Need to be able to get things done through other people Mastering the Job Tends to be a large difference between expectations and reality Workload is tremendous Biggest challenge within the first year = “People challenges” See Learning Objective 3: Discuss the challenges people encounter as they become first time managers. See text pages: 10-12

Management Roles Interpersonal roles Managerial roles Leader Figurehead Liaison Negotiator Managerial roles Monitor Resource Allocator See Learning Objective 4: Describe the roles managers adopt to perform the basic functions of management. See text page: 12 Disseminator Disturbance handler Spokesperson Informational roles Decisional roles Entrepreneur

Interpersonal Roles Roles that involve interacting with other people inside and outside the organization Management jobs are people-intensive Interpersonal roles: Figureheads: Greet visitors, Represent the company at community events, Serve as spokespeople, and Function as emissaries for the organization Leader: Influence, motivate, and direct others as well as strategize, plan, organize, control, and develop Liaison: Connect with people outside their immediate unit See Learning Objective 4: Describe the roles managers adopt to perform the basic functions of management. See text pages: 13-14

Informational Roles Collecting, Processing and Disseminating Roles: Monitor, disseminator, and spokesperson See Learning Objective 4: Describe the roles managers adopt to perform the basic functions of management. See text page: 14

Decisional Roles Whereas interpersonal roles deal with people and informational roles deal with knowledge, decisional roles deal with action Decisional roles: Entrepreneur: Managers must make sure their organizations innovate, change, develop, and adopt Disturbance handler: Addressing unanticipated problems as they arise and resolving them expeditiously Resource allocator: How best to allocate scarce resources Negotiator: Negotiation is continual for managers See Learning Objective 4: Describe the roles managers adopt to perform the basic functions of management. See text page: 15

Alan Mulalley, CEO Boeing Commercial Airplanes Decisional Roles: After September 11 attacks, Mulalley had to renegotiate delivery of some 500 airplanes Cut jet production by more than half Fire 27,000 workers During the downturn, he focused on cutting waste and streamlining his airplane production lines He then bet the company’s future on a set of new technologies that are now turning Boeing’s super efficient 787 Dreamliner into the hottest-selling new jetliner in history See Learning Objective 4: Describe the roles managers adopt to perform the basic functions of management. Alan Mulalley, CEO This slide presents the decision roles by Alan Mulalley, CEO of Boeing Commercial Airplanes immediately after the September 11 attacks that threw the industry in a tailspin. Ask the students to identify the specific decisional roles. Negotiator Disturbance handler Entrepreneurial and resource allocator. RESULT: Successful turnaround at Boeing and Mulalley named one of the best leaders of 2005 Source: Best of 2005, Business Week, December 19, 2005 Source: Best of 2005, Business Week, December 19, 2005

Management Competencies Motivational Preferences See Learning Objective 5: Outline the competencies managers must have to be effective. See text page: 16 Values Skills Includes

Managerial Skills Conceptual Skills Technical Human See Learning Objective 5: Outline the competencies managers must have to be effective. See text pages: 16-17

Managerial Values Enacted Values Espoused Values Shared Values Ethical Values See Learning Objective 5: Outline the competencies managers must have to be effective. See text pages: 19-20

Managerial Motivation Desire to Compete Desire to Exercise Power Desire to be Distinct Desire to Take Action See Learning Objective 5: Outline the competencies managers must have to be effective. See text page: 20