1. CHAPTER 1
THE MANAGEMENT PROCESS TODAY

2. Learning Objectives (1 of 2)
1-1. Describe what management is, why management is important, what managers do, and how managers utilize organizational resources efficiently and effectively to achieve organizational goals Distinguish among planning, organizing, leading, and controlling (the four principal managerial tasks), and explain how managers’ ability to handle each one can affect organizational performance Differentiate among three levels of management, and understand the tasks and responsibilities of managers at different levels in the organizational hierarchy.
After studying this chapter, students should be able to: LO 1-1 Describe what management is, why management is important, what managers do, and how managers use organizational resources efficiently and effectively to achieve organizational goals. LO 1-2 Distinguish among planning, organizing, leading, and controlling (the four principal managerial tasks), and explain how managers’ ability to handle each one affects organizational performance. LO 1-3 Differentiate among three levels of management, and understand the tasks and responsibilities of managers at different levels in the organizational hierarchy.

3. Learning Objectives (2 of 2)
1-4. Distinguish among three kinds of managerial skill, and explain why managers are divided into different departments to perform their tasks more efficiently and effectively Discuss some major changes in management practices today that have occurred as a result of globalization and the use of advanced information technology (IT) Discuss the principal challenges managers face in today’s increasingly competitive global environment.
LO 1-4 Distinguish among three kinds of managerial skill, and explain why managers are divided into different departments to perform their tasks more efficiently and effectively.
LO 1-5 Discuss some major changes in management practices today that have occurred as a result of globalization and the use of advanced information technology (IT).
LO 1-6 Discuss the principal challenges managers face in today’s increasingly competitive global environment.

4. What Is Management? (1 of 3)
The planning, organizing, leading, and controlling of human and other resources to achieve organizational goals effectively and efficiently
Being an unpredictable process, it is often hard to make the right decision. Even successful managers often make mistakes. To be effective, a manager must learn from his or her mistakes and continually try to find ways to improve the companies’ performance. Management, then, is the planning, organizing, leading, and controlling of human and other resources to achieve organizational goals efficiently and effectively.

5. What Is Management? (2 of 3)
Organizations
Collections of people who work together and coordinate their actions to achieve a wide variety of goals
Managers work in organization, collections of people who work together and coordinate their actions to achieve a wide variety of goals or desired future outcomes.

6. What Is Management? (3 of 3)
Managers
The people responsible for supervising the use of an organization’s resources to meet its goals
Resources
People, skills, know-how, experience, machinery, raw materials, computers and IT, financial capital, patents, loyal customers and employees
Managers are the people responsible for supervising and making the most of an organization’s human and other resources to achieve its goals. An organization’s resources include assets such as people and their skills, know-how, and experience; machinery; raw materials; computers and information technology; and patents, financial capital, and loyal customers and employees.

7. Achieving High Performance
Organizational Performance
A measure of how efficiently and effectively managers use available resources to satisfy customers and achieve organizational goals
Organizational performance increases in direct proportion to increases in efficiency and effectiveness.

8. Efficiency, Effectiveness, and Performance in an Organization
Figure 1.1 High-performing organizations are efficient and effective.
In the text, Burger King and UPS are given as examples. The company continues to seek more efficient fat fryers that not only reduce the amount of oil used in cooking, but also speed up the cooking of french fries. UPS develops new work routines to reduce delivery time, such as instructing drivers to leave their truck doors open when going short distances
Jump to Appendix 1 for long description.

9. Organizational Performance
Efficiency
A measure of how productively resources are used to achieve a goal
Organizations are efficient when managers minimize the amount of input resources (such as labor, raw materials, and component parts) or the amount of time needed to produce a given output of goods or services.

10. Why Study Management?
Individuals learn to understand the dynamic and complex nature of work and make decisions that are ethical and effective for an organization.
Understanding management helps the manager’s employer to succeed.
The economic benefits of becoming a good manager are impressive.
Learning management principles can help you make good decisions in non-work situations.
Managerial skills are in demand in this complicated modern work environment. Employees who can understand this new complexity, respond to environmental contingencies, and make decisions that are ethical and effective are highly valued in organizations. Studying management helps prepare individuals to accomplish each of these tasks.
People learn through the “school of hard knocks,” personal experience—theirs or others. The study of management opens up a person to the lessons others have learned.
The principles of management can guide good decision making in nonwork situations.

11. Four Tasks of Management
Figure 1.2
Managers accomplish goals by performing four essential managerial tasks: planning, organizing, leading, and controlling. The arrows linking these tasks in Figure 1.2 suggest the sequence in which managers typically perform. them.
Jump to Appendix 2 for long description.

12. Planning (1 of 2) Planning
Process of identifying and selecting appropriate goals and courses of action
To perform the planning task, managers identify and select appropriate organizational goals and courses of action; they develop strategies for how to achieve high performance.

13. Steps in the Planning Process
Decide which goals to pursue.
Decide what strategies to adopt to attain those goals.
Decide how to allocate organizational resources to pursue strategies that attain those goals.
How well managers plan and develop strategies determines how effective and efficient the organization is—its performance level

14. Planning (2 of 2) Strategy
Cluster of decisions about what goals to pursue, what actions to take, and how to use resources to achieve goals
The text cites the 2016 Rio Olympics: “In an effort to attract more Millennial viewers to the 2016 Rio Olympic Games, Comcast’s NBCUniversal teamed up with BuzzFeed and used the messaging app Snapchat to distribute Olympic-related content, attracting more than 35 million viewers over the two-week sporting event. The two companies recently announced that NBCUniversal made an additional $200 million investment in BuzzFeed, doubling the original investment it made in 2015, which would help expand and fund the growth of BuzzFeed’s news and entertainment network. This financial investment will not only help BuzzFeed grow, but it will also shape the company’s planning into an effective business strategy, which is a cluster of decisions concerning what organizational goals to pursue, what actions to take, and how to use resources to achieve that goal.”

15. Organizing (1 of 2) Organizing
Structuring working relationships in a way that allows organizational members to work together to achieve organizational goals
Organizing is structuring working relationships so organizational members interact and cooperate to achieve organizational goals. Organizing people into departments according to the kinds of job-specific tasks they perform lays out the lines of authority and responsibility between different individuals and groups.

16. Organizing (2 of 2) Organizational Structure
A formal system of task and reporting relationships that coordinates and motivates organizational members so that they work together to achieve organizational goals
Organizational structure is the outcome of organizing. Organizational structure determines how an organization’s resources can be best used to create goods and services.

17. Leading
Leading
Articulating a clear vision and energizing and enabling organizational members so they understand the part they play in achieving organizational goals
Leadership involves managers using their power, personality, influence, persuasion, and communication skills to coordinate people and groups so their activities and efforts are in harmony. Leadership revolves around encouraging all employees to perform at a high level to help the organization achieve its vision and goals. Another outcome of leadership is a highly motivated and committed workforce.

18. Controlling Controlling
Evaluating how well an organization is achieving its goals and taking action to maintain or improve performance
Outcome of the control process
Ability to measure performance accurately and regulate efficiency and effectiveness
The performance of individuals, departments, and the organization as a whole are monitored by managers to see whether they are meeting required standards.

19. TOPICS FOR DISCUSSION (1 of 5)
Describe the difference between efficiency and effectiveness, and identify real organizations that you think are, or are not, efficient and effective. [LO 1-1]
An organization’s performance is directly tied to the levels of efficiency and effectiveness exhibited by managers within the organization. Efficiency is described as a measure of how well or productively resources are used to achieve an organizational goal. Efficiency can be increased by minimizing inputs needed to achieve desired outputs. Effectiveness is a measure of the appropriateness of the goals chosen and the degree to which they are achieved. Organizations are more effective when managers choose appropriate goals and then achieve them.

20. Levels and Skills of Managers
Department
A group of people who work together and possess similar skills or use the same knowledge, tools, or techniques to perform their jobs
Within a department are employees with similar skills and experience, knowledge, tools, or techniques working together.

21. Levels of Management (1 of 2)
First-Line Managers
Responsible for the daily supervision of nonmanagerial employees
Middle Managers
Supervise first-line managers
Responsible for finding the best way to use resources to achieve organizational goals
First-line managers are often called supervisors. They supervise nonmanagerial employees. First-line managers work in all departments or functions of an organization.
Middle managers supervise the first-line managers and are responsible for finding the best way to organize human and other resources to achieve organizational goals. To increase efficiency, middle managers find ways to help first-line managers and nonmanagerial employees better use resources to reduce manufacturing costs or improve customer service.

22. Levels of Management (2 of 2)
Top Managers
Establish organizational goals, decide how departments should interact, and monitor the performance of middle managers
Top managers are responsible for the performance of all departments, overseeing cross-departmental responsibility. Top managers establish organizational goals, such as which goods and services. Decisions about departmental relationships are made by top managers, as well as monitoring the use of resources.
Copyright Mark Peterson/Redux Pictures NYC

23. Levels of Managers (1 of 2)
Figure 1.3
Three levels of management: first-line managers, middle managers, and top managers (including the CEO). Managers at each level have different but related responsibilities for using organizational resources to increase efficiency and effectiveness.

24. Jump to Appendix 3 for long description.
Relative Amount of Time That Managers Spend on the Four Managerial Tasks
Figure 1.4
Their place in the hierarchy determines the time managers spend planning and organizing resources—the further up in the hierarchy, the more time spent on these tasks.
Top managers devote most of their time to planning and organizing, the tasks so crucial to determining an organization’s long-term performance.
The lower the managers’ positions in the hierarchy, the more time the managers spend leading and controlling first-line managers or nonmanagerial employees
Jump to Appendix 3 for long description.

25. Levels of Managers (2 of 2)
Top Management Team
A group composed of the CEO, the COO, and the vice presidents of the most important departments of a company
The CEO oversees and monitors the functioning of the top management team.

26. TOPICS FOR DISCUSSION (2 of 5)
In what ways can managers at each of the three levels of management contribute to organizational efficiency and effectiveness? [LO 1-3]
Top management oversees first-line and middle managers, and also helps to set the vision and goals of the organization. To achieve those goals in an efficient and effective manner, top management coordinates departmental relationships, and monitors middle-managers’ performances. At this level, managers hold the ultimate responsibility of the success, or failure, of the organization.
Middle managers determine the most efficient and effective way to carry out the processes required to meet top management’s goals. They also oversee first-line managers. They assist first-line managers in resource usage, as well as finding ways to reduce costs and/or to improve customer relationships. A middle-manager relates to top management about the achievability of the organization’s goals.
First-line managers supervise the day-to-day performance of subordinates, working toward top management’s goals. First-line managers provide middle managers with information to enable them to make decisions on processes.

27. Managerial Skills Conceptual Skills Human Skills Technical Skills
The ability to analyze and diagnose a situation and distinguish between cause and effect
Human Skills
The ability to understand, alter, lead, and control the behavior of other individuals and groups
Technical Skills
The job-specific knowledge and techniques required to perform an organizational role
Research has shown that education and experience help managers acquire and develop three types of skills: conceptual, human, and technical. A manager’s education and experience inform his or her ability to recognize and develop skills that benefit the organization.

28. TOPICS FOR DISCUSSION (3 of 5)
Identify an organization that you believe is high performing and one you believe is low performing. Give five reasons why you think the performance levels of the two organizations differ so much. [LO 1-2, 1-4]
Students should think about local as well as national/international businesses. Franchises are an easy starting point: Chick-fil-A, McDonald’s. Chain stores are also good for class discussion—Walmart, Target, Forever 21. Students will have different ideas of high/low performance—revenue, profit, social responsibility.

29. Technical Skills Core Competency
Specific set of departmental skills, abilities, and experiences that allows one organization to outperform its competitors
Competitive advantage is achieved through departmental skills that create a core competency for an organization.

30. Types and Levels of Managers
Figure 1.5
Figure 1.5 shows how an organization groups managers into departments on the basis of their job-specific skills. It also shows that inside each department, a managerial hierarchy of first-line, middle, and top managers emerges.
Jump to Appendix 4 for long description.

31. Recent Changes in Management Practices (1 of 2)
Restructuring
Downsizing an organization by eliminating the jobs of large numbers of top, middle, or first-line managers and non-managerial employees
Restructuring can be done by eliminating product teams, shrinking departments, and reducing levels in the hierarchy, all of which result in the loss of large numbers of jobs of top, middle, or first-line managers, as well as nonmanagerial employees.

32. Recent Changes in Management Practices (2 of 2)
Outsourcing
Contracting with another company, usually abroad, to have it perform an activity the organization previously performed itself
Increases efficiency because it lowers operating costs, freeing up money and resources that can be used in more effective ways
Outsourcing usually occurs by hiring in low-cost countries, lowering operating costs, freeing up money and resources.

33. Empowerment and Self-Managed Teams (1 of 2)
Expansion of employees’ knowledge, tasks, and decision-making responsibilities
The second principal way managers have sought to increase efficiency and effectiveness is by empowering lower-level employees and moving to self-managed teams.

34. Empowerment and Self-Managed Teams (2 of 2)
A group of employees who assume responsibility for organizing, controlling, and supervising their own activities and monitoring the quality of the goods and services they provide
IT has facilitated the use of self-managed teams, groups of employees who assume collective responsibility for organizing, controlling, and supervising their own work activities. A self-managed team can often find ways to accomplish a task quickly and efficiently. The also often assume many tasks and responsibilities previously performed by first-line managers, allowing a company to better utilize its workforce.

35. Challenges for Management in a Global Environment
Rise of Global Organizations
Building a Competitive Advantage
Maintaining Ethical and Socially Responsible Standards
Managing a Diverse Workforce
Because the world has been changing more rapidly than ever before, managers and other employees throughout an organization must perform at higher and higher levels. In the last 20 years, rivalry between organizations competing domestically (in the same country) and globally (in countries abroad) has increased dramatically. The rise of global organizations, organizations that operate and compete in more than one country, has pressured many organizations to identify better ways to use their resources and improve their performance.
Utilizing IT and E-Commerce

36. Building Competitive Advantage (1 of 3)
Ability of one organization to outperform other organizations because it produces desired goods or services more efficiently and effectively than they do
Managers and organizations must learn to a competitive advantage in order to succeed.

37. Building Blocks of Competitive Advantage
Figure 1.6
The four building blocks of competitive advantage are superior efficiency, quality, innovation, and responsiveness to customers.

38. Building Competitive Advantage (2 of 3)
Innovation
Process of creating new or improved goods and services or developing better ways to produce or provide them
Managers must create an organizational setting in which people are encouraged to be innovative, to take risks, often doing so in small groups or teams.

39. Building Competitive Advantage (3 of 3)
Turnaround Management
The creation of a new vision for a struggling company based on a new approach to planning and organizing to make better use of a company’s resources and allow it to survive and prosper
Turnaround management involves developing radical new strategies—reducing the number of products sold or change how they are made and distributed, or close corporate and manufacturing operations to reduce costs.

40. Maintaining Ethical and Socially Responsible Standards
The pressure for a manager to increase organizational performance exists at all levels. Social responsibility centers on deciding what if any obligations a company has towards the people and groups affected by its activities.
Managers are under considerable pressure to make the best use of resources to increase the level at which their organizations perform. What obligations does a company have toward the people and groups affected by its activities—such as employees, customers, or the cities in which it operates?

41. Managing a Diverse Workforce
The challenge for a manager is to recognize the ethical need and legal requirement to treat human resources in a fair and equitable manner. Human resources (HRM) procedures and practices that are legal and fair must be put into place.
Today the age, gender, race, ethnicity, religion, sexual preference, and socioeconomic composition of the workforce presents new challenges for managers. To create a highly trained and motivated workforce, as well as to avoid lawsuits, managers must establish human resource management (HRM) procedures and practices that are legal and fair and do not discriminate against any organizational members.

42. Utilizing IT and E-Commerce (1 of 2)
Utilizing new information technology (IT) in an efficient and effective manner is an important challenge to managers. IT has enabled individual employees and self- managed teams by providing them with more information and allowing for virtual interactions.
Another important challenge for managers is to continually utilize efficient and effective new IT that can link and enable managers and employees to better perform their jobs—whatever their level in the organization. Increasingly, new kinds of IT enable not just individual employees but also self-managed teams by giving them important information and allowing virtual interactions around the globe using the Internet. Increased global coordination helps improve quality and increase the pace of innovation.

43. BE THE MANAGER
What kinds of organizing and controlling problems is Achieva suffering from? [LO 1-2]
It is very common for a company to be informal at the beginning. Everyone is excited by the new venture and in this case, its success. But the founders must now deal with the enormous growth, develop what they want as a culture; they need to take their roles seriously. They must take a look at the requirement for planning, organizing, leading and controlling the organization; they should assign managerial and technical roles to employees; and they need to develop an equitable performance appraisal and reward system for all employees. It also sounds like they must to look at their Human Resources function more closely as they are growing so fast and want to be sure to bring the right people on board.

44. TOPICS FOR DISCUSSION (5 of 5)
In what ways do you think managers’ jobs have changed the most over the last 10 years? Why have these changes occurred? [LO 1-6]
Five major challenges stand out for managers in today’s world.
Managers must now compete in a global market to build a competitive advantage. Low wages in other countries pressure organizations to come up with ways to increase efficiency or gain competitive advantage if their goal is to retain local employees.
Ethics have been challenged recently, as in the Wells Fargo scandal. Managers need to find ways to increase employees’ performances without compromising an organizations ethics.
Diversity is also a part of our modern world, bringing with it all of its advantages, and challenges. Diversity includes age, gender, race, ethnicity, religion, sexual preference, and socioeconomic situations. HR procedures need to be developed to address these challenges, avoiding legal complications, and producing a fair and equitable working environment.
Technological advances occur frequently, and constantly challenge management to keep up. But new technology not only challenges mangers, but can enhance their tasks by enabling the accumulation and translation of data. Students should discuss the impact of social media on managing, the increased pressure for a company to practice social responsibility and the availability of information.
Natural disasters such as hurricanes and wild fires have challenged companies, especially exemplified by occurrences in Even in 2016, $175 billion was lost to natural disasters worldwide. The cost for 2017 is still outstanding. Managers should ensure that there are processes for quick decision making, a chain of command that facilitates a fast response, the right people with the right skills are in place, and that bargaining and negotiating strategies are available for possible conflicts.
Discussions can revolve around not only how to address these challenges, but why these challenges have arisen.