Management

Management Key Concepts

• Organization: People working together and coordinating their actions to achieve specific goals.

• Goal: A desired future condition that the organization seeks to achieve.

• Management: The process of using organizational resources to achieve the organization’s goals by...– Planning, Organizing, Leading, and Controlling

Four Functions of Management

PlanningChoose Goals

OrganizingWorking together

LeadingCoordinate

ControllingMonitor & measure

Four Functions of Management

Management Levels• Organizations often have 3 levels of managers:

First-line Managers: responsible for day-to-day operation. They supervise the people performing the activities required to make the good or service.

Middle Managers: Supervise first-line managers. They are also responsible to find the best way to use departmental resources to achieve goals.

Top Managers: Responsible for the performance of all departments and have cross-departmental responsibility. They establish organizational goals and monitor middle managers.

Top Managers

Middle Managers

First-line Managers

Non-management

Three Levels of Management

Managerial Roles

• Described as:– A role is a set of specific tasks a person

performs because of the position they hold.

• There are 3 broad role categories: 1. Interpersonal 2. Informational 3. Decisional

Managerial SkillsThere are three skill sets that managers need to perform effectively:

1. Conceptual skills: the ability to analyze and diagnose a situation and find the cause and effect.

2. Human skills: the ability to understand, alter, lead, and control people’s behavior.

3. Technical skills: the job-specific knowledge required to perform a task. Common examples include marketing, accounting, and manufacturing.

All three skills are enhanced through formal training, reading, and practice.

Skill Type Needed by Manager Level

Forces in the Organizational Environment

Distributors

FirmSuppliers

Competitors

Customers

GeneralEnvironment

EconomicForces

GlobalForces

SocioculturalForces

DemographicForces

TechnologicalForces

Political &Legal Forces

The Industry Life Cycle

Birth Growth Shakeout Maturity Decline

Managerial Decision Making

• Decision making: the process by which managers respond to opportunities and threats by analyzing options, and making decisions about goals and courses of action.

• Decisions in response to opportunities: managers respond to ways to improve organizational performance.

• Decisions in response to threats: occurs when managers are impacted by adverse events to the organization.

Types of Decision Making

• Programmed Decisions: routine, almost automatic process.

– Managers have made decision many times before.– There are rules or guidelines to follow.– Example: Deciding to reorder office supplies.

• Non-programmed Decisions: unusual situations that have not been often addressed.

– No rules to follow since the decision is new.– These decisions are made based on information,

and a manger’s intuition, and judgment. – Example: Should the firm invest in a new

technology?

The Classical Model

• Classical model of decision making: a prescriptive model that tells how the decision should be made.

– Assumes managers have access to all the information needed to reach a decision.

– Managers can then make the optimum decision by easily ranking their own preferences among alternatives.

• Unfortunately, mangers often do not have all (or even most) required information.

Decision Making Steps

Recognize need for a decision

Frame the problem

Generate & assess alternatives

Choose among alternatives

Implement chosen alternative

Learn from feedback

The Planning Process

Planning is the process used by managers to identify and select goals and courses of action for the organization.•The organizational plan that results from the planning process details the goals to be attained.•The pattern of decisions managers take to reach these goals is the organization’s strategy.

Planning Levels

• Corporate-level: decisions by top managers.– Considers on which businesses or markets to be in.– Provides a framework for all other planning.

• Business-level: details divisional long-term goals and structure.– Identifies how this business meets corporate goals.– Shows how the business will compete in market.

• Functional-level: actions taken by managers in departments of manufacturing, marketing, etc.– These plans state exactly how business-level

strategies are accomplished.

Planning at General Electric

CorporateLevel

CEO

Corporate Office

BusinessLevel GE

AircraftGE

LightingGE

MotorsGE

PlasticsNBC

FunctionalLevel

Manufacturing

Marketing

Accounting

R & D

Characteristics of Plans

• Time horizon: refers to how far in the future the plan applies.– Long-term plans are usually 5 years or

more.– Intermediate-term plans are 1 to 5 years.

• Corporate and business level plans specify long and intermediate term.

– Short-term plans are less than 1 year.• Functional plans focus on short to intermediate

term.

Who Plans?

• Corporate level planning is done by top managers.– Also approve business and functional level plans.– Top managers should seek input on corporate

level issues from all management levels.

• Business and functional planning is done by divisional and functional managers.– Both management levels should also seek

information from other levels.– Responsibility for specific planning may lie at a

given level, but all managers should be involved.

Designing Organizational Structure

• Organizing: the process by which managers establish working relationships among employees to achieve goals.– Organizational Structure: formal system of

task & reporting relationships showing how workers use resources.

– Organizational design: managers make specific choices resulting in a given organizational structure.

• Successful organizational design depends on the organization’s unique situation.

Organizational Control

• Managers must monitor & evaluate:– Are we efficiently converting inputs into

outputs?• Must accurately measure units of inputs and

outputs.– Is service quality improving?

• Are we competitive with other firms?– Are employees responsive to customers?

• customer service is increasingly important.– Are our managers innovative in outlook?

• Does the control system encourage risk-taking?

Control Systems

Formal, target-setting, monitoring, evaluation and feedback systems to provide managers with information to determine if strategy and structure are working effectively and efficiently.

• A good control system should:– be flexible so managers can respond as needed.– provide accurate information about the organization.– provide information in a timely manner.

Control Types– Feed forward: use in the input stage of the

process.– Managers anticipate problems before they

arise.– Managers can give rigorous specifications to

suppliers to avoid quality – Concurrent: gives immediate feedback on how

inputs are converted into outputs.– Allows managers to correct problems as

they arise.– Managers can see that a machine is

becoming out of alignment and fix it.– Feedback: provides after the fact information

managers can use in the future.– Customer reaction to products are used to

take corrective action in the future.

The Control Process

1. Establish standards, goals, or targets against which performance is to be evaluated.• Standards must be consistent with strategy, for a low

cost strategy, standards should focus closely on cost.–Managers at each level need to set their own

standards.2. Measure actual performance: managers can

measure outputs resulting from worker behavior or they can measure the behavior themselves.• The more non-routine the task, the harder to measure.

–Managers then measure the behavior (come to work on time) not the output.

The Control Process

3. Compare actual performance against chosen standards.• Managers must decide if performance

actually deviates.–Often, several problems combine creating

low performance.4. Evaluate result and take corrective action.

– Perhaps the standards have been set too high.–Workers may need additional training, or

equipment.

Components of a HRM System

Recruitment& Selection

Labor Relations

Pay &Rewards

PerformanceAppraisal &Feedback

Training &Development

Types of Training

– Classroom Instruction: workers acquire skills in classroom.

– On-the-Job Training: learning occurs in the work setting as worker does the job.

– Apprenticeships: worker contracts with a master worker to learn a skill.

Career Stages

Preparationfor Work

OrganizationEntry

Early Mid-career

Mid-career

LateCareer

Stress & Performance

High

Low

Leve

l of P

erfo

rman

ce

Low HighPositive Stress Negative StressLevel of Stress

Motivation

• Defined as the psychological forces within a person that determine:

1) direction of behavior in an organization;2) the effort or how hard people work;3) the persistence displayed in meeting goals.

– Intrinsic Motivation: behavior performed for its own sake.• Motivation comes from performing the work.

– Extrinsic Motivation: behavior performed to acquire rewards.• Motivation source is the consequence of an action.

Needs

Conflict and Organizational Performance

Level of ConflictLowLow High

Low

High

Leve

l of O

rgan

izatio

nal

Perf

orm

ance

B

A C

Management Styles

Manager Vs. Leader

Manager Vs. Leader

Manager Vs. Leader

Manager Vs. Leader

Let’s go and build stronger team!