1. Understanding the Management Process
Chapter Six
Understanding the Management Process

2. Learning Objectives Define management
Describe the four basic management functions: planning, organizing, leading/motivating, and controlling
Distinguish between various kinds of managers, with regard to level and area of management
Identify key management skills and managerial roles
Discuss different types of leadership
Analyze the steps in the managerial decision-making process

3. Learning Objectives
Describe how organizations benefit from total quality management
Summarize the criteria for becoming a successful manager today

4. CEO Pay Compared to Average Worker Pay
Source: Trends in CEO Pay, accessed 2/8/09.

5. 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

6. The Four Main Resources of Management

7. Basic Management Functions
The Management Process

8. 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

9. Planning Establishing goals and objectives Goals/Objectives
An end result that the organization is expected to achieve over a period of time
Long-term versus short-term
Properly set goals are
Set at every level in the organization
Consistent (supportive) with each other
Optimized (balanced) to reduce conflicts between goals

10. 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

11. Controlling Ongoing Activities
Evaluating and regulating ongoing activities to ensure that goals are achieved
Control function

12. Kinds of Managers Levels of management
Top manager—guides and controls the overall fortunes of the organization; responsible for the performance of all departments
Middle manager—implements the strategy and major policies developed by top management; responsible for finding the best way(s) to organize human and other resources to achieve organizational goals
First-line manager—coordinates and supervises the activities of operating (nonmanagerial) employees
The coordinated effort of all three levels of managers is required to implement the goals of any company

13. Areas of Management Specialization
Financial 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

14. Areas of Management Specialization
Other areas may have to be added depending on the nature of the firm and the industry

15. 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

16. What Makes Effective Managers?
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

17. Rules for Leaders Audit your company cultures
Stay informed—informed people don’t fear change
Beware of “aspirational” accounting (e.g. Enron)
Empower your people — turn them loose
Prevent erosion of human assets
Be generous with what you know
Source: “25 Rules for Leaders, 2006,” Fast Company,

18. Class Exercise
For each skill, provide an example of how a manager could use it in a real-world situation.
Technical skill
Conceptual skill
Interpersonal skill

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

20. 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 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

21. Debate Issue: Should Managers Use the Authoritarian Leadership Style?
YES
Some employees need the close supervision that authoritarian leaders provide.
When authoritarian leadership is used, communication moves from top (supervisor) to bottom (employees).
An authoritarian leader assigns workers to specific tasks and expects precise results, so workers know exactly what is expected. NO
Workers resent the close supervision that results from the authoritarian leadership style.
The democratic and laissez-faire leadership styles allow workers to communicate with the supervisor and other members of their group.
Authoritarian leaders stifle the workers’ creativity and their ability to solve problems.

22. 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

23. CEOs’ Top Concerns
Source: Data from The Conference Board 2006; Challenge survey of 658 CEOs and chairmen.

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

25. Managerial Decision Making
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

26. Managerial Decision-Making Process
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

27. Managerial Decision-Making Process
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

28. Managing Total Quality
Total Quality Management (TQM)
The coordination of efforts directed at
Improving customer satisfaction
Increasing employee participation
Strengthening supplier partnerships
Facilitating an organizational atmosphere of continuous quality improvement
Issues crucial to TQM
Top management commitment
Coordination of efforts

29. What It Takes to Become a Successful Manager
Personal skills
Oral communication
Written communication
Computer skills
Critical thinking
Education and experience
A solid academic background
Practical work experience

30. Chapter Quiz People in an organization are what type of resources?
Material
Informational
Inventory
Human
Financial
In executing their functions, managers must first
organize activities.
establish goals.
motivate employees.
evaluate activities.
select employees.

31. Chapter Quiz
Roles such as entrepreneur, disturbance handler, and resource allocator are types of _______ roles.
interpersonal
informational
decisional
leadership
ownership
One type of leadership style is
laissez-faire.
CEO.
entrepreneur.
negotiator.
bureaucratic.

32. Chapter Quiz
All of the following are reasons for a greater focus on quality by U.S. firms except
competition from foreign firms.
customers that are more demanding.
unpredictability on Wall Street.
poorer financial performance.
reduced market share.

33. Answers to Chapter Quiz
People in an organization are what type of resources?
Material
Informational
Inventory
Human (Correct)
Financial
In executing their functions, managers must first
organize activities.
establish goals. (Correct)
motivate employees.
evaluate activities.
select employees.

34. Answers to Chapter Quiz
Roles such as entrepreneur, disturbance handler, and resource allocator are types of _____________roles.
interpersonal
informational
decisional (Correct)
leadership
ownership
One type of leadership style is
laissez-faire. (Correct)
CEO.
entrepreneur.
negotiator.
bureaucratic.

35. Answers to Chapter Quiz
All of the following are reasons for a greater focus on quality by U.S. firms except
competition from foreign firms.
customers that are more demanding.
unpredictability on Wall Street. (Correct)
poorer financial performance.
reduced market share.