Chapter 6 Understanding the Management Process

① Define what management is.

② Describe the four basic management functions: planning, organizing, leading and motivating, and controlling.

③ Distinguish among the various kinds of managers in terms of both level and area of management.

④ Identify the key management skills of successful managers.

⑤ Explain the different types of leadership.

⑥ Discuss the steps in the managerial decision-making process.

⑦ Describe how organizations benefit from total quality management.

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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 an organization and use the other

resources to achieve the goals of the organization

• Financial resources• The funds an organization uses to meet its obligations to

investors and creditors

• Information resources• The information about external business environmental

conditions that a firm uses to its competitive advantage

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FIGURE 6-1

The Four Main Resources of Management

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Managers coordinate an organization’s resources to achieve the goals of the organization.

FIGURE 6-2

Basic Management Functions

The Management Process

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Planning

• 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

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Planning (cont’d)

• Establishing goals and objectives

• Goal• An end result that an organization is expected to achieve over a one- to ten-year period

• Objective• A specific statement detailing what an organization intends to accomplish over a shorter

period of time

• Properly set goals are• Set at every level in the organization• Consistent (supportive) with each other• Optimized (balanced) to reduce conflicts

between goals

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Planning (cont’d)

• SWOT analysis• The identification and evaluation of a firm’s

•Strengths•Weaknesses•Opportunities•Threats

• Core competencies• Approaches and processes that a company performs well and may give it an

advantage over its competitors

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FIGURE 6-3

Elements and Examples of SWOT Analysis

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Planning (cont’d)

• Types of plans

• Plan• An outline of the actions by which an organization intends to

accomplish its goals and objectives

• Strategic plan• An organization’s broadest plan, a guide for major policy setting and

decision making

• Tactical plan• A smaller-scale plan to implement a strategy

• Operational plan• A plan to implement a tactical plan

• Contingency plan• A plan of alternative courses of action if the organization’s other

plans are disrupted or become ineffective

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Types of Plans

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FIGURE 6-4

Organizing the Enterprise• Organizing

• 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 an

organization

• Directing• The combined processes of leading and motivating

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FIGURE 6-5

Controlling Ongoing Activities

• Controlling• Evaluating and regulating ongoing

activities to ensure that goals are achieved

• Control function

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FIGURE 6-6

Kinds of Managers

• Levels of management• Top manager—guides and controls

the overall fortunes of an organization

• Middle manager—implements the strategy and major policies developed by top management

• First-line manager—coordinates and supervises the activities of operating employees

• The coordinated effort of all three levels of managers is required to implement the goals of any company

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FIGURE 6-7

Areas of Management Specialization

• Other areas may have to be added, depending on the nature of the firm and the industry

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Areas of Management Specialization

• Financial managers• Responsible for an 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

an organization and its customers or clients

• Human resources managers• Manage an organization’s human resources programs

• Administrative managers (general managers)• Not associated with any specific functional area; provide

overall administrative guidance and leadership

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FIGURE 6-8

Key Skills of Successful Managers

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Key Skills of Successful Managers (cont’d)

• Key management skills

• Conceptual skills• Ability to think in abstract terms

• Analytic skills• Ability to identify problems, generate alternative solutions, and select the best solution

• Interpersonal skills• Ability to deal effectively with other people

• Technical skills• Needed to accomplish a specialized activity

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Key Skills of Successful Managers (cont’d)

• Key management skills (cont’d)• Technical skills

• Needed to accomplish a specialized activity

• Communication skills

• Ability to speak, listen, and write effectively

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Leadership

• The ability to influence others

• Leadership versus management

• Formal leadership• Legitimate power of position is the

basis for authority

• Informal leadership• Not recognized formally by the

organization authority

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Styles of Leadership

• Autocratic

• Task-oriented style; workers are told what to do and how to do it, they have no say in the decision making process

• Participative

• All members of a team are involved in identifying essential goals and developing strategies to reach those goals

• Entrepreneurial

• Personality-based, the manager seeks to inspire workers with a vision of what can be accomplished to benefit all stakeholders

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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

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FIGURE 6-9

Managerial Decision Making

• The act of choosing one alternative from among a set of alternatives

• Major steps in the managerial decision-making process

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Managerial Decision Making (cont’d)

• 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

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Managerial Decision Making (cont’d)

• 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 to a recurring problem

• Trial and error

• Selecting an alternative

• Satisficing• Choosing an alternative that is not the best possible

solution, but one that adequately solves the problem

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Managerial Decision Making (cont’d)

• 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

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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

• Benchmarking – evaluating another organization that is superior in order to improve quality

• Issues crucial to TQM

• Top management commitment• Coordination of efforts

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