Management and

Leadership

Chapter 07

McGraw-Hill/Irwin Copyright © 2013 by The McGraw-Hill Companies, Inc. All rights reserved.

1. Describe the changes occurring today in the management function.

2. Describe the four functions of management.

3. Relate the planning process and decision making to the accomplishment of company goals.

LEARNING GOALSChapter Seven

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4. Describe the organizing function of management.

5. Explain the differences between leaders and managers, and describe the various leadership styles.

6. Summarize the five steps of the control function of management.

LEARNING GOALSChapter Seven

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Profile

JOHN MACKEYWhole Foods Market

• Worked at a vegetarian co-op after attending the University of Texas.

• Opened SaferWay Natural Foods with his girlfriend before merging with a competitor to create Whole Foods.

• Now there are over 300 stores in the U.S. and U.K.

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Like many companies today, this company uses social media to communicate with customers. In one case, a customer complained on Twitter when the company sent a Blackberry to replace an iPhone that failed. The company responded quickly with a replacement iPhone. The customer then tweeted about the company ’s great customer service.

Name that company!

NAME that COMPANYChapter Seven

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Four Functionsof Management

• Management -- The process used to accomplish organizational goals through planning, organizing, leading and controlling people and other organizational resources.

WHAT IS MANAGEMENT?LG1

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Managers’ Roles Are Evolving

• Younger and more progressive.- Growing numbers of women.

- Fewer from elite universities.

• Emphasis is on teams and team building.

• Managers need to be skilled communicators and team players.

TODAY’S MANAGERSLG1

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Source: Entrepreneur, www.entrepreneur.com, accessed June 2011.

RESPECT and HOW to GET ITLG1

Managers’ Roles Are Evolving

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Source: Bloomberg BusinessWeek, May 17, 2010.

EDUCATION MATTERSAlma Maters of CEOs

LG1

Managers’ Roles Are Evolving

* Did not graduate from any college or university.

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Four Functionsof Management

1. Planning

2. Organizing

3. Leading

4. Controlling

FOUR FUNCTIONS of MANAGEMENTLG2

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Progress Assessment

• What are some of the changes happening in management today?

• What’s the definition of management used in this chapter?

• What are the four functions of management?

PROGRESS ASSESSMENT

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Planning & Decision Making

• Vision -- More than a goal, it’s a broad explanation of why the organization exists and where it’s trying to go.

SHARING the VISIONLG3

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• Mission Statement -- Outlines the organization’s fundamental purposes. It includes:

- The organization’s self–concept- Its philosophy- Long–term survival needs- Customer needs- Social responsibility- Nature of the product or service

DEFINING THE MISSIONLG3

Planning & Decision Making

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• Goals -- The broad, long-term accomplishments an organization wishes to attain.

• Objectives -- Specific, short-term statements detailing how to achieve the organization’s goals.

SETTING GOALS and OBJECTIVESLG3

Planning & Decision Making

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• What is the situation now?

SWOT Analysis -- Analyzes the organization’s Strengths, Weaknesses, Opportunities and Threats.

• How can we get to our goal from here?- Strategic planning- Tactical planning- Operational planning- Contingency planning

PLANNING ANSWERS FUNDAMENTAL QUESTIONSLG3

Planning & Decision Making

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SWOT MATRIXLG3

Planning & Decision Making

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PLANNING FUNCTIONSPlanning & Decision Making

LG3

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• Strategic Planning -- Done by top management and determines the major goals of the organization and the policies, procedures, strategies and resources it will need to achieve them.

• Tactical Planning -- The process of developing detailed, short-term statements about what is to be done, who is to do it and how.

STRATEGIC and TACTICAL PLANNINGLG3

Planning & Decision Making

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• Operational Planning -- The process of setting work standards and schedules necessary to implement the company’s tactical objectives.

OPERATIONAL and CONTINGENCY PLANNING

• Contingency Planning -- The process of preparing alternative courses of action the firm can use if its primary plans don’t work out.

LG3

Planning & Decision Making

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JAPANESE CRISIS, TERRORISM, and AMERICAN BUSINESS

(Reaching Beyond Our Borders)

• Disasters point out the need for contingency and disaster planning.

• Over 30 U.S. corporations get at least 15% of sales from Japan. All were affected by the earthquake.

• Man-made disasters, such as war and terrorism, also disrupt the supply chain.

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Decision Making: Finding the Best Alternative

• Decision Making -- Choosing among two or more alternatives.

DECISION MAKINGLG3

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Source: Fortune, June 13, 2011.

• Keep global business issues in mind and be a citizen of the world.

• Identify and manage risks before they grow.

• Change strategies and models with the times.

• Skillfully manage relationships with governments as government involvement rises.

WHAT MAKES a GREAT CEODecision Making Skills of Top CEOsLG3

Decision Making: Finding the Best Alternative

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1. Define the situation.

2. Describe and collect needed information.

3. Develop alternatives.

4. Develop agreement among those involved.

5. Decide which alternative is best.

6. Do what is indicated.

7. Determine whether the decision was a good one and follow up.

RATIONAL DECISION-MAKING MODELLG3

Decision Making: Finding the Best Alternative

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• Problem Solving -- The process of solving the everyday problems that occur; less formal than decision making and needs quicker action.

• Problem-solving techniques include brainstorming and PMI -- Listing all the pluses for a solution in one column, all the minuses in another and the implications in a third.

PROBLEM SOLVINGLG3

Decision Making: Finding the Best Alternative

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Progress Assessment

• What’s the difference between goals and objectives?

• What does a company analyze when it does a SWOT analysis?

• What are the differences between strategic, tactical and operational planning?

• What are the seven Ds in decision making?

PROGRESS ASSESSMENT

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Organizing: Creating a Unified System

• Organization Chart -- A visual device that shows relationships among people and divides the organization’s work; it shows who reports to whom.

ORGANIZATIONAL CHARTSLG4

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LEVELS of MANAGEMENTLG4

Organizing: Creating a Unified System

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• Top Management -- The highest level, consists of the president and other key company executives who develop strategic plans.

• Middle Management -- Includes general managers, division managers, and branch and plant managers who are responsible for tactical planning and controlling.

• Supervisory Management -- Those directly responsible for supervising workers and evaluating daily performance.

MANAGEMENT LEVELSLG4

Organizing: Creating a Unified System

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• Chief Executive Officer (CEO)- Introduces change into an organization.

• Chief Operating Officer (COO)- Implements CEO’s changes.

• Chief Financial Officer (CFO)- Obtains funds, plans budgets, collects funds, etc.

• Chief Information Officer (CIO)- Gets the right information to the right people so

decisions can be made.

TOP MANAGEMENTLG4

Organizing: Creating a Unified System

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Source: Fortune Magazine, www.fortune.com, accessed June 2011.

AMERICA’S MOST POWERFUL FEMALE MANAGERS

Organizing: Creating a Unified System

LG4

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• Technical Skills -- The ability to perform tasks in a specific discipline or department.

• Human Relations Skills -- Skills that involve communication and motivation; they enable managers to work through and with people.

• Conceptual Skills -- Skills that involve the ability to picture the organization as a whole and the relationship among its various parts.

MANAGERIAL SKILLSTasks and Skills at Different Levels of Management

LG4

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Source: Fast Company, November 2010.

THANK YOUThe Most Basic Human Relations Skill

LG4

• Saying “thank you” has led to happier employees and greater profits for companies.

• Whom should a manager thank?1. Interns - Doing lots of work for little money, they are

the future of the company and industry.

2. Lawyers - Many do pro bono work, even for nonprofit companies.

3. The little people - Mailroom, repair, and cleaning staff keep the office running day-to-day.

Tasks and Skills at Different Levels of Management

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SKILLS NEEDED at VARIOUS LEVELS of MANAGEMENTLG4

Tasks and Skills at Different Levels of Management

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Staffing: Getting and Keeping the Right People

• Staffing -- Recruiting, hiring, motivating and retaining the best people available to accomplish the company’s objectives.

STAFFINGLG4

• Recruiting good employees is critical.

• Many people are not willing to work at companies unless they are treated well with fair pay.

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Source: CareerBuilder, www.careerbuilder.com, accessed June 2011.

STAFFING is TRICKY BUSINESSSix Sins of StaffingLG4

Staffing: Getting and Keeping the Right People

1. Don’t hire someone because someone else says so.

2. Don’t get caught up in applicants’ appearances.

3. Don’t give someone the wrong job.

4. Don’t forget about feedback.

5. Don’t give promotions just because it’s time.

6. Don’t cheat your employees.

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Leading: Providing Continuous Vision and Values.

• Leaders must:

- Communicate a vision and rally others around that vision.

- Establish corporate values.

- Promote corporate ethics.

- Embrace change.- Stress accountability and

responsibility.

LEADERSHIPLG5

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As a first-line manager, you have new information that your department head hasn’t seen yet. The findings of the report indicate your manager’s plans should fail. If they do fail, you could be promoted.

Will you give your department head the report?

What is the ethical thing to do?

What might be the consequences?

To SHARE or NOT to SHARE(Making Ethical Decisions)

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• Transparency -- The presentation of the company’s facts and figures in a way that is clear and apparent to all stakeholders.

ACCOUNTABILITY through TRANSPARENCYLG5

Leading: Providing Continuous Vision and Values.

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Leadership Styles

• Autocratic Leadership -- Making managerial decisions without consulting others.

• Participative or Democratic Leadership -- Managers and employees work together to make decisions.

• Free-Rein Leadership -- Managers set objectives and employees are free to do whatever is appropriate to accomplish those objectives.

LEADERSHIP STYLESLG5

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VARIOUS LEADERSHIP STYLESLG5

Leadership Styles

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Source: CIO Magazine, www.cio.com.

NATURAL BORN LEADERS?Four Types of Executives

Rationalists Humanists

Politicists Culturists

LG5

Leadership Styles

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USING SOCIAL MEDIA to BUILD CUSTOMER SUPPORT

(Social Media in Business)

• Many companies use sites like Twitter and Facebook to proactively and reactively communicate with their customers.

• Best Buy has 2,500 employees who read and respond to consumer complaints on Twitter.

• Many companies still aren’t implementing these programs. This has led to many more complaints via social media than positive support.

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Empowering Workers

• Progressive leaders give employees the authority to make decisions on their own without consulting a manager.

• Customer needs are handled quickly.

• Manager’s role becomes less of a boss and more of a coach.

• Enabling -- Giving workers the education and tools they need to make decisions.

EMPOWERMENTLG5

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Source: Bloomberg BusinessWeek, www.businessweek.com.

• Manage output instead of hours.

• Train workers to be ready for a more complex corporate structure.

• Allow lower-level managers to make decisions.

• Use new technology to foster teamwork.

• Shift hiring emphasis to collaboration.

WORK SMARTERHow to Ease Pressure on WorkersLG5

Empowering Workers

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Managing Knowledge

• Knowledge Management -- Finding the right information, keeping the information in a readily accessible place and making the information known to everyone in the firm.

• Tries to keep people from reinventing the wheel.

MANAGING KNOWLEDGELG5

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Controlling: Making Sure it Works

FIVE STEPS of CONTROLLINGLG6

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Source: CFO Magazine, www.cfo.com.

• Do you have strategic initiatives that you have not addressed?

• Do you often check on employees for quality control?

• Do you often check on subordinates throughout the day?

• Do you rarely take vacations?

• Is there a lot of turnover?

ARE YOU a MICROMANAGER?LG6

Controlling: Making Sure it Works

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A Key Criterion for Measurement: Customer Satisfaction

• Traditional forms of measuring success are financial.

• Pleasing employees, stakeholders and customers is important.

• External Customers -- Dealers, who buy products to sell to others, and ultimate customers (or end users), who buy products for their own use.

• Internal Customers -- Individuals and units within the firm that receive services from other individuals or units.

MEASURING SUCCESSLG6

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Progress Assessment

• How does enabling help achieve empowerment?

• What are the five steps in the control process?

• What’s the difference between internal and external customers?

PROGRESS ASSESSMENT

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