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

1 - 3 Last Class… Last class, we started with some questions… What is a manager? What does a manager do exactly? What qualities does a good manager possess? Mgr. vs. Leader…same? different? These are all questions that we will answer today.

1 - 4 Learning Objectives 1.Describe the basic functions of management 2.Identify where in an organization managers are located 3.Discuss the challenges people encounter as they become first-line managers 4.Describe the roles managers adopt to perform the basic functions of management 5.Outline the competencies managers must have to be effective

1 - 5 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

1 - 6 Management and Managers I asked a question last class. Managers/Leaders…Same? Different? Follow up question… Are good managers leaders? Are good leaders managers?

1 - 7 Leaders versus Managers Source: Adapted from “Leadership versus management: What’s the difference?”, The Journal for Quality and Participation, 2006 ProcessManagementLeadership 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

1 - 8 Leaders versus Managers Source: Adapted from “Leadership versus management: What’s the difference?”, The Journal for Quality and Participation, 2006 ManagementLeadership TacticalStrategic Approach

1 - 9 Leaders versus Managers Source: Adapted from “Leadership versus management: What’s the difference?”, The Journal for Quality and Participation, 2006 How do strategies and tactics differ? Which is portrayed below?

Functions of Management Controlling Planning & Strategizing Leading & Developing Organizing

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 Example?

Who Makes the Strategic Decisions? 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? Example?

Controlling The process of monitoring performance against goals, intervening when goals are not met, and taking corrective action Example? First step – Drafting plans Important aspect is creating incentives that align employees’ and organization’s interests

Benefits & Incentives 1.Performance Bonuses 2.Health Benefits 3.Performance-based Time Off 4.Education and Learning 5.Recognition and Awards 6.Retirement Planning and 401(k) 7.Promotion 8.Child Care and Elder Care Assistance

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.

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

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 Others? 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.

Types of Managers General Managers Functional Managers Frontline Managers

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. a.general; functional b.frontline; general c.functional; frontline d.general; frontline

Multi-divisional Management Hierarchy CEO Division R&DProduction Team MarketingSales Division Corporate-level general managers Business-level general managers Functional managers Frontline managers

Becoming a Manager From Specialist to Manager -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”

Management Roles Managerial roles Leader FigureheadLiaison Entrepreneur Disturbance handler Spokesperson Disseminator Monitor Negotiator Resource Allocator Informational roles Interpersonal roles Decisional roles

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

Informational Roles Collecting, Processing and Disseminating Roles: Monitor, disseminator, and spokesperson

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

Alan Mulalley, CEO Boeing Commercial Airplanes Decisional Roles: 1.After September 11 attacks, Mulalley had to renegotiate delivery of some 500 airplanes 2.Cut jet production by more than half 3.Fire 27,000 workers 4.During the downturn, he focused on cutting waste and streamlining his airplane production lines 5.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 Source: Best of 2005, Business Week, December 19, 2005

Management Competencies Skills Motivational Preferences Values Includes

Managerial Skills Conceptual Skills Technical Skills Human Skills

Managerial Values Enacted Values Espoused Values Shared Values Ethical Values

Managerial Motivation Desire to Compete Desire to Exercise Power Desire to be Distinct Desire to Take Action

International Context What does it take to be an international manager? -What issues do they face? -What skills should an intl. manager have? Compare what you see on the following slides to what we have already discussed.

Issues facing Managers in DMNCs Integrating large international acquisitions. Building and managing a worldwide logistics capability. Developing country-specific corporate strategies that take into account the political as well as economic imperatives. Forming and benefiting from collaborative arrangements around the world. Balancing the pressures for global integration and local demands. McGraw-Hill © 2003 The McGraw-Hill Companies, Inc. All rights reserved. Slide 11-2 INTERNATIONAL MANAGEMENT 5/e Beamish, Morrison, Inkpen and Rosenzweig

Skills of the Global Manager Ability to develop and use global strategic skills. Ability to manage change and transition. Ability to manage cultural diversity. Ability to design and function in flexible organization structures. Ability to work with others and in teams. Ability to communicate. Ability to learn and transfer knowledge in an organization. McGraw-Hill © 2003 The McGraw-Hill Companies, Inc. All rights reserved. Slide 11-3 INTERNATIONAL MANAGEMENT 5/e Beamish, Morrison, Inkpen and Rosenzweig

Ability to Develop and Use Global Strategic Skills Working knowledge of international relationships and foreign affairs, including global financial markets and exchange-rate movements. Balance between national responsiveness and exploitation of global economies of scale. “Think Globally, but Act Locally.” - Know and understand the global strategy, yet enact it within the context of their local environment. McGraw-Hill © 2003 The McGraw-Hill Companies, Inc. All rights reserved. Slide 11-4 INTERNATIONAL MANAGEMENT 5/e Beamish, Morrison, Inkpen and Rosenzweig

Ability to Manage Change and Transition Managers must be in agreement with the strategy Global managers will need the skills to manage the transitions from: -Independence/dependence to interdependence, -Control to coordination and cooperation, -Symmetry to differentiation. McGraw-Hill © 2003 The McGraw-Hill Companies, Inc. All rights reserved. Slide 11-5 INTERNATIONAL MANAGEMENT 5/e Beamish, Morrison, Inkpen and Rosenzweig

Ability to Manage Cultural Diversity McGraw-Hill © 2003 The McGraw-Hill Companies, Inc. All rights reserved. Slide 11-6 INTERNATIONAL MANAGEMENT 5/e Beamish, Morrison, Inkpen and Rosenzweig Cultural awareness is important in order to: -Obtain high product acceptance in light of the fact that culturally rooted differences have a significant impact on a product’s success in a global market. -Understand that the older the consumption pattern, the less likely a global product will be a success. -Recognize universal themes by segmenting according to similarities instead of geographical differences. Four distinct corporate attitude clusters: -Ethnocentrism (Home Country Orientation). -Polycentrism (Host Country Orientation). -Regiocentrism (Regional Orientation). -Geocentrism (World Orientation).

Ability to Design and to Function in Flexible Organizations McGraw-Hill © 2003 The McGraw-Hill Companies, Inc. All rights reserved. Slide 11-8 INTERNATIONAL MANAGEMENT 5/e Beamish, Morrison, Inkpen and Rosenzweig Abilities and characteristics needed by the global manager to function in flexible organizations will be: -High tolerance for ambiguity. -New levels of creativity and inventiveness in organizational design. -The ability to learn, be responsive, and be efficient, all simultaneously. -The ability to identify and implement diverse managerial behaviors and ideas for ongoing renewal of the organization. -The ability to coordinate complicated financial, human resource, marketing and manufacturing interdependencies, not only across functions, but also within each business activity. -The ability to recognize different manufacturing, marketing, and organizational problems and priorities across different locations and to accommodate these with new structures and processes.

Ability to Work with Others and in Teams McGraw-Hill © 2003 The McGraw-Hill Companies, Inc. All rights reserved. Slide 11-9 INTERNATIONAL MANAGEMENT 5/e Beamish, Morrison, Inkpen and Rosenzweig Teams used solely for communication or to provide advice and counsel still exist, but more and more firms are also using teams in different and more participative and powerful ways. Global teamwork can do more than provide improved market and technological intelligence. It can yield more flexible business planning, stronger commitment to achieving worldwide goals, and closer collaboration in carrying out strategic change. Teams that span internal organization boundaries or that span the company’s outside boundary (joint venture partners, suppliers, customers) are often required

Ability to Communicate McGraw-Hill © 2003 The McGraw-Hill Companies, Inc. All rights reserved. Slide INTERNATIONAL MANAGEMENT 5/e Beamish, Morrison, Inkpen and Rosenzweig Multilingual skills High levels of cross-cultural awareness and sensitivity. Sensitive communications will also -Build trust, -Build a strong corporate culture emphasizing shared, global value systems.

Ability to Learn and to Transfer Knowledge in an Organization McGraw-Hill © 2003 The McGraw-Hill Companies, Inc. All rights reserved. Slide INTERNATIONAL MANAGEMENT 5/e Beamish, Morrison, Inkpen and Rosenzweig Managerial/Individual level skills: -Curiosity -Broad Interests -Openness to experiences -Willingness to experiment and take risks Organizational skills: -Ability to coordinate, knowledge -Ability to transfer knowledge -Ability to use the knowledge gained rapidly and effectively.

Managing International Assignments McGraw-Hill © 2003 The McGraw-Hill Companies, Inc. All rights reserved. Slide INTERNATIONAL MANAGEMENT 5/e Beamish, Morrison, Inkpen and Rosenzweig The process of developing globally minded managers with the requisite skills involves: -Selection -Training -Repatriation

International Context What does it take to be an international manager? What did you notice in terms of similarities and differences between being a manager in a domestic context and that of an international one?

Personal Context Do you have what it takes to be a manager? Complete the following skills/aptitudes worksheet and discuss with your teammates the results. Also, can you learn to be a manager or are you only “born” a manager? What about a leader?