14th edition

1. Chapter 7
Management, Leadership, and
the Internal Organization

2. Learning Goals
1 Define management and the three types 5 Contrast the types of business
of skills necessary for managerial decisions and list the steps in the
success. decision-making process.
2 Explain the role of vision and ethical 6 Define leadership and compare
standards in business success. different styles of leadership.
3 Summarize the benefits of planning and 7 Discuss the meaning and
distinguish strategic, tactical, and importance of corporate culture.
operational planning.
8 Identify the five major forms of
4
Describe the strategic planning process. departmentalization and four main
types of organization structures.

3. W is Management?
hat
s Management is the process of achieving organizational
objectives through people and other resources.

4. Top Management
s Develop long-range
strategic plans for
the organization.
s Inspire executives
and employees to
achieve their vision
for the company’s
future.

5. Middle Management
s Focus on specific
operations, products,
or customer groups
within an organization.
s Responsible for
developing detailed
plans and procedures
to implement the firm’s
strategic plans.

6. Supervisory Management
s Implement the plans
developed by middle
managers.
s Responsible for non-
manager employees.
s Motivate workers to
accomplish daily,
weekly, and monthly
goals.

7. Skills Needed for Management
Success
s Technical skills
s Manager’s ability to understand and use the
techniques, knowledge, and tools and equipment of a
specific discipline or department.
s Human skills
s Interpersonal skills that enable a manager to work
effectively with and through people.
s Conceptual skills
s Ability to see the organization as a unified whole and
to understand how each part of the overall
organization interacts with other parts.

8. Managerial Functions
Planning Controlling
s Process of anticipating s Evaluating an
future events and organization’s
conditions and determining performance to
courses of action for determine whether it is
achieving organizational accomplishing its
objectives. objectives.
Organizing
s Blending human and 3. Establish performance
material resources through standards.
a formal structure of 4. Monitor actual
authority. performance.
Directing 5. Compare actual
performance with
s Guiding and motivating established standards.
employees to accomplish
organizational objectives. 6. Take corrective action if
required.

9. Setting a Vision and Ethical Standards
s Vision is the perception of marketplace needs
and the methods an organization can use to
satisfy them.
s Must be focused yet adaptable to changes
in the business environment.
s Long-term success is also tied to the ethical
standards that the top management team sets.
s High ethical standard can also encourage, motivate,
and inspire employees to achieve goals.
s Ethical company list

10. Importance of Planning
s There are different types and levels of plans.
s Organizations should have a comprehensive
planning framework.
s From mission statement to objectives and goals
s Narrow functional plans
s Plans outline the steps the company will take
to meet outlined goals and objectives.

11. Planning at Different Organizational
Levels

12. The Strategic Planning Process

13. SW Analysis
OT

14. Managers as Decision Makers
s Decision making is the process of recognizing a
problem or opportunity, evaluating alternative
solutions, selecting and implementing an alternative,
and assessing the results.
s Programmed decision involves simple, common
problems with predetermined solutions.
s Nonprogrammed decision involves a complex,
unique problem or opportunity with important
consequences for the organization.

15. How Managers Make Decisions

16. Managers as Leaders
s Leadership is the ability to direct or inspire
people to attain certain goals.
s Involves the use of influence or power.
s Three traits are common among many leaders:
s Empathy
s Self-awareness
s Objectivity in dealing with others

17. Leadership Styles
s Autocratic Leadership
s Make decisions on own
without consulting
employees.
s Democratic Leadership
s Involve employees in
decisions, delegate
assignments, and ask
employees for suggestions.
s Free-Rein Leadership
s Leave most decisions to
employees.

18. Corporate Culture
s Corporate Culture:
Organization’s system of
principles, beliefs, and
values.
s Managers use symbols,
rituals, ceremonies, and
stories to reinforce
corporate culture.

19. Organizational Structures
s Organization: structured grouping of people
working together to achieve common goals.
s Three key elements:
s Human interaction
s Goal-directed activities
s Structure

20. Organizational Chart

21. Departmentalization
Process of dividing work activities into units within the organization.
s Product departmentalization: organized based on the
goods and services a company offers.
s Geographical departmentalization: organized by
geographical regions within a country or, for a multinational
firm, by region throughout the world.
s Customer departmentalization: organized by the different
types of customers the organization serves.
s Functional departmentalization: organized by business
functions such as finance, marketing, human resources, and
production.
s Process departmentalization: organized by work processes
necessary to complete production of goods or services.

22. Different Forms of Departmentalization

23. Delegating W Assignments
ork
s Delegation is the act of assigning work activities to
subordinates.
s Providing employees with the responsibility and the necessary
authority for completing tasks.
s Employees have accountability, or responsibility for the results of
the way they perform their assignments.
s Authority and responsibility move down; accountability moves up.
s Span of management is the number of subordinates, or
direct reports, a supervisor manages.
s Centralization: decision making is retained at the top of
the management hierarchy.
s Decentralization: decision making is located at the lower
levels. Many firms believe it enhances their flexibility and
responsiveness to customer needs.

24. Types of Organizational Structures
Line Organizations
s Oldest and simplest form; direct flow of authority from
CEO to subordinates.
s Chain of command indicates who directs which
activities and who reports to whom.
Line-and-Staff Organizations
s Combines line departments and staff departments.
s Line departments participate directly in decisions that
affect the core operations of the organization.
s Staff departments lend specialized technical support.

25. Line and Staff Organizations

26. Committee Organizations
s Authority and responsibility are in the
hands of a group of individuals.
s Often part of a line-and-staff structure.
s Often develop new products.
s Tend to act slowly and conservatively.
s Often make decisions by compromising
conflicting interests rather than
choosing best alternative.

27. Matrix Organizations
s Project management structure that links employees
from different parts of the organization to work
together on specific projects.
s Employees report to a line manager and a project
manager.
Advantages: Disadvantages:
s Flexibility in adapting to s Integrating skills of many
changes. specialists into a coordinated
s Focus on major problems team.
or products. s Team members’ permanent
functional managers must
s Outlet for employees’
adjust the employees’
creativity and initiative. regular workloads.

28. The Matrix Organization