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Chap007
1. Chapter 07
Management
and
Leadership
McGraw-Hill/Irwin Copyright Š 2013 by The McGraw-Hill Companies, Inc. All rights reserved.
2. Chapter Seven
LEARNING GOALS
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.
7-2
3. Chapter Seven
LEARNING GOALS
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.
7-3
4. Profile
JOHN MACKEY
Whole 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.
7-4
5. Chapter Seven
NAME that COMPANY
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
companyâs great customer service.
Name that company!
7-5
6. Four Functions
of Management
WHAT IS MANAGEMENT?
LG1
⢠Management -- The process used to
accomplish organizational goals through planning,
organizing, leading and controlling people and
other organizational resources.
7-6
7. Managersâ Roles
Are Evolving
TODAYâS MANAGERS
LG1
⢠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.
7-7
8. Managersâ Roles
Are Evolving
RESPECT and HOW to GET IT
LG1
Source: Entrepreneur, www.entrepreneur.com, accessed June 2011.
7-8
9. Managersâ Roles
Are Evolving
EDUCATION MATTERS
Alma Maters of CEOs
LG1
* Did not graduate from any college or university.
Source: Bloomberg BusinessWeek, May 17, 2010.
7-9
10. Four Functions
of Management FOUR FUNCTIONS of
LG2 MANAGEMENT
1. Planning
2. Organizing
3. Leading
4. Controlling
7-10
11. Progress
Assessment PROGRESS ASSESSMENT
⢠What are some of the changes happening in
management today?
⢠Whatâs the definition of management used in this
chapter?
⢠What are the four functions of management?
7-11
12. Planning &
Decision Making SHARING the VISION
LG3
⢠Vision -- More than a
goal, itâs a broad
explanation of why the
organization exists and
where itâs trying to go.
7-12
13. Planning &
Decision Making DEFINING THE MISSION
LG3
⢠Mission Statement -- Outlines the
organizationâs fundamental purposes. It includes:
- The organizationâs selfâconcept
- Its philosophy
- Longâterm survival needs
- Customer needs
- Social responsibility
- Nature of the product or service
7-13
14. Planning &
Decision Making SETTING
LG3
GOALS and OBJECTIVES
⢠Goals -- The broad, long-
term accomplishments an
organization wishes to attain.
⢠Objectives -- Specific,
short-term statements detailing
how to achieve the
organizationâs goals.
7-14
15. Planning &
Decision Making PLANNING ANSWERS
LG3 FUNDAMENTAL QUESTIONS
⢠What is the situation now?
SWOT Analysis -- Analyzes the organizationâs
Strengths, Weaknesses, Opportunities and Threats.
⢠How can we get to our goal from here?
- Strategic planning
- Tactical planning
- Operational planning
- Contingency planning
7-15
18. Planning &
STRATEGIC and TACTICAL
Decision Making
LG3 PLANNING
⢠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.
7-18
19. Planning &
OPERATIONAL and CONTINGENCY
Decision Making
LG3 PLANNING
â˘
⢠Contingency Planning
-- The process of preparing
alternative courses of action
the firm can use if its primary
plans donât work out.
7-19
20. 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.
7-20
21. Decision Making:
Finding the Best
Alternative
DECISION MAKING
LG3
⢠Decision Making -- Choosing among two or
more alternatives.
7-21
22. Decision Making:
Finding the Best
Alternative WHAT MAKES a GREAT CEO
LG3 Decision Making Skills of Top CEOs
⢠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.
Source: Fortune, June 13, 2011.
7-22
23. Decision Making:
RATIONAL DECISION-MAKING
Finding the Best
Alternative
LG3 MODEL
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.
7-23
24. Decision Making:
Finding the Best
Alternative PROBLEM SOLVING
LG3
⢠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.
7-24
25. Progress
Assessment PROGRESS ASSESSMENT
⢠Whatâs 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?
7-25
26. Organizing:
Creating a
Unified System
ORGANIZATIONAL CHARTS
LG4
⢠Organization Chart
-- A visual device that
shows relationships
among people and
divides the organizationâs
work; it shows who
reports to whom.
7-26
28. Organizing:
Creating a
Unified System
MANAGEMENT LEVELS
LG4
⢠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.
7-28
29. Organizing:
Creating a
Unified System
TOP MANAGEMENT
LG4
⢠Chief Executive Officer (CEO)
- Introduces change into an organization.
⢠Chief Operating Officer (COO)
- Implements CEOâs 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.
7-29
30. Organizing:
Creating a
Unified System
AMERICAâS MOST POWERFUL
LG4 FEMALE MANAGERS
Source: Fortune Magazine, www.fortune.com, accessed June 2011.
7-30
31. Tasks and Skills
at Different Levels
of Management MANAGERIAL SKILLS
LG4
⢠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.
7-31
32. Tasks and Skills
at Different Levels
of Management THANK YOU
The Most Basic Human Relations Skill
LG4
⢠Saying âthank youâ 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.
Source: Fast Company, November 2010.
7-32
33. Tasks and Skills
at Different Levels
of Management SKILLS NEEDED at VARIOUS
LG4 LEVELS of MANAGEMENT
7-33
34. Staffing: Getting
and Keeping the
Right People STAFFING
LG4
⢠Staffing -- Recruiting, hiring, motivating and
retaining the best people available to accomplish the
companyâs objectives.
⢠Recruiting good
employees is critical.
⢠Many people are not
willing to work at
companies unless they
are treated well with
fair pay.
7-34
35. Staffing: Getting
and Keeping the
Right People STAFFING is TRICKY BUSINESS
LG4 Six Sins of Staffing
1. Donât hire someone because someone else says so.
2. Donât get caught up in applicantsâ appearances.
3. Donât give someone the wrong job.
4. Donât forget about feedback.
5. Donât give promotions just because itâs time.
6. Donât cheat your employees.
Source: CareerBuilder, www.careerbuilder.com, accessed June 2011.
7-35
36. Leading: Providing
Continuous Vision
and Values. LEADERSHIP
LG5
⢠Leaders must:
- Communicate a vision
and rally others around
that vision.
- Establish corporate
values.
- Promote corporate
ethics.
- Embrace change.
- Stress accountability and
responsibility.
7-36
37. To SHARE or NOT to SHARE
(Making Ethical Decisions)
As a first-line manager, you have new information
that your department head hasnât seen yet. The
findings of the report indicate your managerâs
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?
7-37
38. Leading: Providing
Continuous Vision
and Values. ACCOUNTABILITY through
LG5 TRANSPARENCY
⢠Transparency --
The presentation of
the companyâs facts
and figures in a way
that is clear and
apparent to all
stakeholders.
7-38
39. Leadership
Styles LEADERSHIP STYLES
LG5
⢠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.
7-39
41. Leadership
Styles
NATURAL BORN LEADERS?
LG5 Four Types of Executives
Rationalists Humanists
Politicists
Source: CIO Magazine, www.cio.com.
7-41
42. 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 arenât implementing these
programs. This has led to many more complaints
via social media than positive support.
7-42
43. Empowering
Workers EMPOWERMENT
LG5
⢠Progressive leaders give employees the
authority to make decisions on their own without
consulting a manager.
⢠Customer needs are handled quickly.
⢠Managerâs role becomes less of a boss and more
of a coach.
⢠Enabling -- Giving workers the education and
tools they need to make decisions.
7-43
44. Empowering
Workers
WORK SMARTER
LG5 How to Ease Pressure on Workers
⢠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.
Source: Bloomberg BusinessWeek, www.businessweek.com.
7-44
45. Managing
Knowledge MANAGING KNOWLEDGE
LG5
⢠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.
7-45
47. Controlling:
Making Sure it
Works
ARE YOU a MICROMANAGER?
LG6
⢠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?
Source: CFO Magazine, www.cfo.com.
7-47
48. A Key Criterion
for Measurement:
Customer
Satisfaction
MEASURING SUCCESS
LG6
⢠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.
7-48
49. Progress
Assessment PROGRESS ASSESSMENT
⢠How does enabling help achieve empowerment?
⢠What are the five steps in the control process?
⢠Whatâs the difference between internal and
external customers?
7-49
Hinweis der Redaktion
Company: Best Buy
See Learning Goal 1: Describe the changes occurring today in the management function.
See Learning Goal 1: Describe the changes occurring today in the management function. As the demographic make-up of this country changes, the typical manager is changing. Today more managers are women and fewer are from elite universities. Managers today act more like facilitators than supervisors.
See Learning Goal 1: Describe the changes occurring today in the management function. Respect and How to Get It This slide presents the results from a study conducted by www.entrepreneur.com. Ask students: Why do you respect or not respect a manager? (This question is certainly going to develop a discussion among students in class.) Ask the students: In your opinion why did sound business strategy and ethical practices rank so high in the study?
See Learning Goal 1: Describe the changes occurring today in the management function. Education Matters This slide shows the schools that have educated the most CEOs among S&P 500 companies. Ask students: Are you surprised by the number of CEOs that didn ât finish college? What qualities must those CEOs have without formal education behind them? What school did you expect to see on the list thatâs missing? What schools are you surprised to see?
See Learning Goal 2: Describe the four functions of management. Planning: Anticipating trends and determining the best strategies and tactics to achieve organizational goals and objectives. Organizing: Designing the structure of the organization and creating conditions and systems in which everyone and everything works together to achieve goals. Leading: Creating a vision for the organization and communicating, guiding, training, coaching, and motivating others to achieve goals and objectives in a timely manner. Controlling: Establishing clear standards to determine whether an organization is progressing toward its goals and objectives, rewarding people for good work and taking corrective action if they are not performing.
Some of the changes in management today include: Managers are more facilitators than bosses; managers tend to emphasize team-building; managers tend to be younger, fewer attended elite schools, and more are women; and managers will conduct more business globally. Management is the process to accomplish organizational goals through planning, organizing, leading, and controlling people and other organizational resources. The four functions of management are planning, organizing, leading, and controlling.
See Learning Goal 3: Relate the planning process and decision making to the accomplishment of company goals. Creating vision for the company is not merely setting a goal, but rather creating a sense of purpose for the organization.
See Learning Goal 3: Relate the planning process and decision making to the accomplishment of company goals. The mission statement is the foundation for setting specific goals and objectives within the organization.
See Learning Goal 3: Relate the planning process and decision making to the accomplishment of company goals.
See Learning Goal 3: Relate the planning process and decision making to the accomplishment of company goals. SWOT is an acronym for Strengths, Weaknesses, Opportunities, and Threats. As part of the internal analysis, the organization identifies the potential strengths that it can capitalize upon and potential weaknesses that it should improve upon. An organization, as part of an external environmental analysis, identifies the opportunities (factors that an organization can take advantage of) and threats (factors that an organization should avoid or minimize the impact of). An interesting exercise for the students â have them perform a SWOT analysis on themselves (At least the strengths and weaknesses part should be an eye opening experience for them.)
See Learning Goal 3: Relate the planning process and decision making to the accomplishment of company goals.
See Learning Goal 3: Relate the planning process and decision making to the accomplishment of company goals. This slide covers the key areas of planning by business managers. Students should be reminded that planning requires preparation to be successful. More effort put into planning, will result in greater achievement. All planning should be in writing with an estimation of time and cost. Gantt charts are often used to compare planned results with actual accomplishments. Even the best prepared plans sometimes miss the unexpected problems. Managers should always be prepared to act in the event a plan fails. Poor contingency planning may result in significant problems for a company.
See Learning Goal 3: Relate the planning process and decision making to the accomplishment of company goals.
See Learning Goal 3: Relate the planning process and decision making to the accomplishment of company goals.
See Learning Goal 3: Relate the planning process and decision making to the accomplishment of company goals.
See Learning Goal 3: Relate the planning process and decision making to the accomplishment of company goals.
See Learning Goal 3: Relate the planning process and decision making to the accomplishment of company goals. What Makes a Great CEO Since the world seems to be changing at a faster pace, itâs important for CEOs to change their processes. No longer can managers think small: they must think globally and plan for anything and everything.
See Learning Goal 3: Relate the planning process and decision making to the accomplishment of company goals. Managers don ât always go through this seven step process. However, they must always make sound decisions. It is easier said than done. As an interesting exercise, you can ask the students, working in a group, to go through a simple process of identifying an automobile to purchase using these steps. Everyoneâs input should be obtained in the group. They either can select a group manager or all can have an equal say/vote. Both scenarios should produce different, but interesting experiences for students.
See Learning Goal 3: Relate the planning process and decision making to the accomplishment of company goals.
1. Goals are broad, long-term accomplishments an organization wishes to attain. Objectives are specific, short-term statements detailing how the organization will achieve the organization âs goals. 2. In today âs rapidly changing business environment, managers must think of planning as a continuous process. The SWOT analysis is an important part of the planning process as it evaluates an organizationâs strengths, weaknesses, opportunities and threats. 3. Strategic planning is the process top management uses to determine the major goals of the organization, and the policies, procedures, strategies, and resources the organization will need to achieve them. Tactical planning is the process of developing detailed, short-term statements about what is to be done, who is to do it, and how. This type of planning is typically completed by managers at lower levels of the organization whereas strategic planning is done by the top managers. The final type of planning is operational. Operational planning is the process of setting work schedules and standards necessary to complete the organization âs tactical objectives. This type of planning is the department managerâs tool for daily and weekly operations. 4. The seven Ds in decision making are: Define the situation Describe and collect needed information Develop alternatives Develop agreement among these involved Decide which alternative is best Do what is indicated and start the implementation Determine whether the decision was a good one and follow up
See Learning Goal 4: Describe the organizing function of management.
See Learning Goal 4: Describe the organizing function of management. This slide shows a good visual of management levels within a corporation. Note the pyramid shape and the type of job positions that are in each level. It âs important for the student to know the necessary skill levels that each position in the pyramid requires. A Top-Level Manager needs good conceptual skills and to be able to effectively communicate goals to the entire corporation. Middle-level managers typically develop the strategies for goal attainment and develop the tactics necessary to achieve stated goals. Middle managers require good analytical skills and the ability to communicate. First-line managers are responsible for execution of business goals. Technical skills and good communications skills are necessary.
See Learning Goal 4: Describe the organizing function of management.
See Learning Goal 4: Describe the organizing function of management. Sometimes the CIO is referred to as the Chief Knowledge Officer (CKO).
See Learning Goal 4: Describe the organizing function of management. Americaâs Most Powerful Female Managers This slide illustrates the rising number of women that are in positions of power in Fortune 500 companies. What characteristics do some women have that help them manage people?
See Learning Goal 4: Describe the organizing function of management.
See Learning Goal 4: Describe the organizing function of management. Thank You Customers, staff and outside support are hard to keep happy. Who âd have thought a simple act our moms taught us would be so useful? A 10-year study by Adrian Gostick and Chester Elton found that among a survey of 200,000 managers and employees âthank yousâ correlate with higher profits yet 30% still donât say it. Ask students: Why is a simple âthank youâ such a powerful managerial tool?
See Learning Goal 4: Describe the organizing function of management. The further up the managerial ladder one moves, the less important technical job skills become, and the more important conceptual skills are.
See Learning Goal 4: Describe the organizing function of management.
See Learning Goal 4: Describe the organizing function of management. Staffing is Tricky Business As we âve discussed, getting and keeping the right staff is not an easy task. This slide shows what managers should NOT do while staffing. Ask students: Why do you think a manager should not promote a long-time employee because it âs time or they owe a favor? Whatâs so important about feedback?
See Learning Goal 5: Explain the differences between leaders and managers, and describe the various leadership styles.
See Learning Goal 5: Explain the differences between leaders and managers, and describe the various leadership styles.
See Learning Goal 5: Explain the differences between leaders and managers, and describe the various leadership styles.
See Learning Goal 5: Explain the differences between leaders and managers, and describe the various leadership styles. Research tells us which leadership style is best depends on what the goals and values of the firm are, who âs being led, and in what situations. A successful leader in one organization may not be successful in another.
See Learning Goal 5: Explain the differences between leaders and managers, and describe the various leadership styles.
See Learning Goal 5: Explain the differences between leaders and managers, and describe the various leadership styles. Four Leadership Types Ask the students: Does your personality reveal how you think and work? Can it be improved? (Tests such as Myers-Briggs profile individuals â personalities.) Williams and Deal, authors of When Opposites Dance: Balancing the Manager and Leader Within , identify four types of managers: Rationalists, who value sound thinking and work through organizational structure to accomplish tasks. Politicists, who view group dynamics from a power perspective and are adept at politics. Humanists, who are attuned to organizational moods and regard people as a company âs top asset. Culturists, who consider culture the preeminent force in an organization and communicate through stories, ceremonies and rituals. 3. Williams and Deal conclude that while people are predisposed to think and act in certain ways, the best executives combine different personality attributes. (Source: CIO , November 1, 2003)
See Learning Goal 5: Explain the differences between leaders and managers, and describe the various leadership styles.
See Learning Goal 5: Explain the differences between leaders and managers, and describe the various leadership styles.
See Learning Goal 5: Explain the differences between leaders and managers, and describe the various leadership styles. Work Smarter Managing in today âs complex environment is about leading not supervising. This slide gives students insight into the process of empowering employees to work smarter. Ask students: What are the benefits of empowering employees to work smarter? (Employees who are empowered should be more motivated and able to handle more complex tasks.)
See Learning Goal 5: Explain the differences between leaders and managers, and describe the various leadership styles.
See Learning Goal 6: Summarize the five steps of the control function of management. This slide presents the five steps of the control function. It should be pointed out to the students that the whole control process is based on clear standards. The control function completes the management function loop that starts with planning. Accounting and finance are often the foundations for control systems, because they provide the numbers management needs to evaluate progress.
See Learning Goal 6: Summarize the five steps of the control function of management. Are You a Micromanager? This slide presents a list of questions a manager can ask himself/herself to determine if he/she is a micromanager. If you answer yes to any of these five questions, you are a micromanager. Managers can ask a trusted employee for honest feedback. Ask the students: Have they ever worked for a micromanager? How did it make them feel and how did other employees feel? Do the students have the tendency of thinking that if they want something done right, they must do it themselves or constantly check on othersâ work in a team situation? (It may indicate some of the micromanaging tendencies.)
See Learning Goal 6: Summarize the five steps of the control function of management.
1. Enabling is the key to successfully empowering employees. Enabling means giving workers the education and the tools they need to make decisions. 2. Controlling incorporates: (1) setting clear standards, (2) monitoring and recording performance, (3) comparing performance with plans and standards, (4) communicating results and deviations to employees, and (5) providing positive feedback for a job well done and taking corrective action when necessary. 3. Not all customers come from outside the organization. Internal customers are defined as individuals and business units within the firm that receive services from other individuals or units. For example, the field salespeople are the internal customers of the marketing research units that prepare market reports for them. External customers are more traditional and include dealers, who buy products and sell to others, and ultimately customers, who buy products for their own personal use.
