Using Management Skills to Build Using Management Skills to Build Business RelationshipsBusiness Relationships

Chapter 7

Chapter 7 Learning GoalsChapter 7 Learning Goals

1.1. WWhat is the role of management?2.2. WWhat are the four types of planning?3.3. WWhat are the primary responsibilities

of managers in organizing activities?4.4. HHow do leadership styles influence a

corporate culture?5.5. HHow do organizations control

activities?

Chapter 7 Learning Goals Chapter 7 Learning Goals (cont’d.)(cont’d.)

6.6. WWhat roles do managers take on in different organizational settings?

7.7. WWhat set of managerial skills is necessary for managerial success?

8.8. WWhat trends will affect management in the future?

Learning Goal 1Learning Goal 1

• WWhat is the role of management?– Management is the

• Process of guiding development, maintenance, and allocation of resources to attain organizational goals

– Managers are• Responsible for developing and carrying out this

management process– Primary functions of Managers

• Planning• Organizing• Leading• Controlling

ManagementManagement::The process of guiding the development, maintenance, and allocation of resources to attain organizational goals

Quality of ManagementQuality of Management

Ratings made by Fortune magazine:Most admired Most admired quality of management:

– Philip Morris– General Electric– Cisco Systems

LeastLeast admired admired quality of management::– Oxford Health Plans– Cabletron Systems– Trump Hotels & Casinos

Source: Fortune, Mar. 1, 1999, p. 70.

Four Activities of ManagementFour Activities of Management

1.1. Planning

2. 2. Organizing

3. 3. Leading

4. 4. Controlling

Learning Goal 2Learning Goal 2

• WWhat are the four types of planning?– Strategic planningStrategic planning

• Creating long-range (one to five years), broad goals• Determining necessary resources to accomplish goals

– Tactical planningTactical planning• Has a shorter time frame (less than one year)• Specific objectives that support the broader strategic goals

– Operational planningOperational planning• Creates specific standards, methods, policies, and procedures

used in specific functional areas of organization– Contingency plansContingency plans

• Identify alternative courses of action for unusual or crisis situations

Four Types of PlanningFour Types of Planning

1.1. Strategic Planning

2.2. Tactical Planning

3.3. Operational Planning

4.4. Contingency Planning

1.1. Planning

• long-range, broad goals

• to implement a strategic plan; shorter term and more specific

• creating very specific policies and procedures

• alternative actions for unusual or crisis situations

Contingency PlanningContingency Planning

Some types of contingency planning that were used in preparation for the Year 200 computer bug:– Cities stocked gasoline & diesel fuelstocked gasoline & diesel fuel for

emergency vehicles– Hotel chains stocked food & waterstocked food & water for guests if

needed– Stores devised paper & pen backupspaper & pen backups for credit

card processing– The Red Cross set up a national Disaster Disaster

Operations CenterOperations Center

Learning Goal 3Learning Goal 3

• WWhat are the primary responsibilities of managers in organizing activities?– Organizing involves

• Coordinating and allocating a firm’s resources in order to carry out its plans

• Developing a structure for the people, positions, departments, and activities within the firm by:

– Dividing up tasks (division of labordivision of labor)– Grouping jobs and employees (departmentalizationdepartmentalization)– Assigning authority and responsibilities (delegationdelegation)

Levels of ManagementLevels of Management2.2. Organizing

Top Management

Middle Management

Supervisory Management

CEOVice President

Division Heads,Regional Managers

Supervisors,Team Leaders,

Foremen

Strategic Plans

Tactical Plans

Operational Plans

Sources of Power for Leaders:Sources of Power for Leaders:3.3. Leading

Type of Power: Derived from:

1. LegitimateLegitimate position in organization

2. RewardReward control over rewards

3. CoerciveCoercive control over punishments

4. ExpertExpert extensive knowledge5. ReferentReferent charisma, respect,

admiration

– 95% of nurses in a research study were willing to follow doctors’ orders to administer a clearly unsafe dosage of medicine to patients (Source: Hofling et al., 1966, Journal of Nervous and Mental Disease, v. 143, pp. 171-180)

– 46% of nurses in another study admitted to a time that they complied with a doctor’s order that they thought was unsafe(Source: Krackow & Blass, 1995, Journal of Social Behavior and Personality, v. 10, pp. 585-594)

Automatic Deference to Automatic Deference to ExpertExpert & & LegitimateLegitimate Power can be Harmful Power can be Harmful

Learning Goal 4Learning Goal 4

• HHow do leadership styles influence a corporate culture– Corporate cultureCorporate culture is the set of attitudes,

values, and standards of behavior that distinguishes one organization from another

• Evolves over time• Based on the accumulated history of the

organization, including the vision of the founders• Dominant leadership style within the organization

also determines corporate culture

Leadership StylesLeadership Styles

1. AutocraticAutocraticdirective, controlling

2. ParticipativeParticipativedemocratic, consensual, consultive

3. Free-reinFree-rein (Laissez-Faire)members have freedom, leaders give ideas and

information

3.3. Leading

Learning Goal 5Learning Goal 5

• HHow do organizations control activities?– Controlling is the process of assessing the

organization’s progress toward accomplishing its goals by:

• Setting performance standards (goals)• Measuring performance• Comparing actual performance to established

performance standards• Taking corrective action, if necessary• Using information gained from the process to set

future performance standards

5-stage Cycle of Controlling5-stage Cycle of Controlling

1.1. Set performance standards2.2. Measure performance3. 3. Compare performance to standards4. 4. Take corrective action, if needed5. 5. Use information gathered to set

future performance standards

4.4. Controlling

Measuring PerformanceMeasuring Performance

Federal Express uses 3 quantitative measures of performance:

Service Quality IndexService Quality Indexmeasurements made on every shipment

Customer Satisfaction IndexCustomer Satisfaction Indexcustomer ratings

Process Quality IndicatorsProcess Quality Indicatorsmeasures taken on individual operating units (ex.,

delivery truck performance)

4.4. Controlling

Source: Neff & Citrin: Lessons from the Top, 1999, pp. 277-283.

Learning Goal 6Learning Goal 6

• WWhat roles do managers take on in different organizational settings?– Informational role

• Manager may act as an information gatherer, an information distributor, or a spokesperson for the company

– Interpersonal role• Manager may need to act as a figurehead, a company

leader, or a liaison– Decisional role

• Manager may have to think like an entrepreneur, make decisions about resource allocation, help resolve conflicts, or negotiate compromises

Managerial RolesManagerial Roles

Type of role: Activities:1. InformationalInformational information gathering,

disseminating, spokesperson

2. InterpersonalInterpersonal figurehead, leader, liaison

3. DecisionalDecisional entrepreneur, resource allocation, resolve conflicts, negotiate

The Interpersonal RoleThe Interpersonal Role

• Jack Welch, CEO of GE, estimates he spends 60% or more60% or more of his time on ‘people stuff’

(Source: Neff & Citrin: Lessons from the Top, 1999, p. 345).

The Decision-Making ProcessThe Decision-Making Process

1. Define the problem

2. Search for solutions

3. Select one or more alternatives

4. Put plan into action

to see if problem is solved5. Follow up

Learning Goal 7Learning Goal 7

• WWhat set of managerial skills is necessary for managerial success?– Technical skillsTechnical skills

• Specialized areas of knowledge and expertise• Ability to apply knowledge

– Human Relations skillsHuman Relations skills• Understand human behavior• Communicate effectively with others• Motivate individuals to accomplish their objectives

– Conceptual skillsConceptual skills• Ability to view the organization as a whole• Understand how the various parts are interdependent• Assess how the organization relates to its external environment

Managerial Skills Managerial Skills

1.1. Technical Skillsspecialized knowledge and expertise

2. 2. Human Relations Skillsinterpersonal skills

3. 3. Conceptual Skillsunderstanding the big picture

4. 4. Global Management Skillsability to operate in diverse environments

Learning Goal 8Learning Goal 8

• WWhat trends will affect management in the future?– Increasing employee empowerment

• Increased autonomy and discretion to make their own decisions• Control of the resources needed to implement decisions

– Increasing use of information technology• Managers can make quicker, better-informed decisions• Keeps organization members connected

– Growing need for global management skills• Managers must

– adapt to a new culture– learn a new language– manage a diverse workforce– operate in a foreign economic system

Trends in ManagementTrends in Management

Increased employee empowerment Increased role of information

technology Increase in global management

Empowering EmployeesEmpowering Employees

Things needed to empower employees, according to Don Fites, CEO of Caterpillar:

• Give them decision-making authoritydecision-making authority• Develop a culture & climateculture & climate that support it• OrganizeOrganize the business to support it• RewardReward employees based on performance

Source: Neff & Citrin: Lessons from the Top, 1999, pp. 123-128.