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Chapter

1 The Management Process

Essentials of

ContemporaryManagement

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What Is Management?

ManagementThe planning, organizing, leading, and controlling

of human and other resources to achieveorganizational goals effectively and efficiently.

Managers

The people responsible for supervising the use ofan organizations resources to meet its goals.

Resources are organizational assetsPeople Skills Knowledge Information

Raw materials Machinery Financial capital

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Efficiency, Effectiveness, and Performance in an Organization

Efficiency A measure of how well orproductively resources are used to achieve agoal. (Doing the good thing)

Effectiveness A measure of the

appropriateness of the goals an organizationis pursuing and of the degree to which theorganization achieves those goals. (Doing theright thing.)

PerformanceThe evaluation of employeesjob performance and contributions to theirorganization.

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Efficiency, Effectiveness, and Performance in an Organization

Figure 1.1

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Organizational Performance

Organizational PerformanceA measure of how efficiently and effectively

managers are using organizational resources tosatisfy customers and achieve goals.

Efficiency

A measure of how well or productively resourcesare used to achieve a goal.

EffectivenessA measure of the appropriateness of the goals an

organization is pursuing and the degree to whichthey are achieved.

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Why Study Management?

Proper management directly impactsimprovements in the well-being of a society.

Studying management helps people to

understand what management is and

prepares them accomplish managerial

activities in their organizations.

Studying management opens a path to a well-

paying job and a satisfying career.

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Four Functions of Management

Figure 1.2

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Managerial Functions

Henri FayolFirst outlined the four managerial functions in his

bookGeneral Industrial Management.

Managers at all levels in all organizations perform

each of the functions of planning, organizing,leading, and controlling.

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Planning

Identifying and selecting appropriate goalsand courses of action for an organization.

The planning function determines how effective andefficient the organization is and determines the

strategy of the organization.

Three Steps in the Planning Process:

Deciding which goals to pursue.

Deciding what courses of action to adopt.Deciding how to allocate resources.

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Management Key Concepts

OrganizationPeople working together and coordinating their

actions to achieve specific goals.

Goal

A desired future condition that the organizationseeks to achieve.

Strategy

A cluster of decisions about what goals to pursue,what actions to take, and how to use resources toachieve goals.

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Organizing

Structuring working relationships in a way thatallows organizational members to worktogether to achieve organizational goals.

Organizational Structure

A formal system of task and reporting relationshipsthat coordinates and motivates organizationalmembers.

Creating organizational structure:

Grouping employees into departments according tothe tasks performed.

Laying out lines of authority and responsibility fororganizational members.

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Leading

Articulating a clear vision to follow, andenergizing and enabling organizational

members so they understand the part they

play in attaining organizational goals.

Leadership involves using power, influence, vision,persuasion, and communication skills.

The outcome of leadership is highly motivated andcommitted organizational members.

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Controlling

Evaluating how well an organization isachieving its goals and taking action to

maintain or improve performance.

Monitoring individuals, departments, and the

organization to determine if desired performancestandards have been reached.

Taking action to increase performance as required.

The outcome of control is the ability to measureperformance accurately and to regulate theorganization for efficiency and effectiveness.

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Types of Managers

Levels of ManagementFirst-line managers

Responsible for day-to-day operations. Supervise people

performing activities required to make the good or service.

Middle managers

Supervise first-line managers. Are 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.

Establish organizational goals and monitor middle

managers.

Form top management team along with the CEO and COO.

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Levels of Management

Figure 1.3

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Relative Amount of Time That ManagersSpend on the Four Managerial Functions

Figure 1.4

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IT and Managerial Roles and Skills

Information Technology (IT) is increasinglyused to help managers adopt a cross-departmental view of their organization.

Managerial Role

The set of specific tasks that a person is expectedto perform because of the position he or she holdsin the organization.

Roles are defined into three role categories

(as identified by Mintzberg):Interpersonal Informational Decisional

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Decisional Roles

Roles associated with methods managers usein planning strategy and utilizing resources:

Entrepreneurdeciding which new projects orprograms to initiate and to invest resources in.

Disturbance handlermanaging an unexpectedevent or crisis.

Resource allocatorassigning resources betweenfunctions and divisions, setting the budgets of

lower managers.

Negotiatorreaching agreements between othermanagers, unions, customers, or shareholders.

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Informational Roles

Roles associated with the tasks needed toobtain and transmit information in the process

of managing the organization:

Monitoranalyzing information from both the

internal and external environment.

Disseminatortransmitting information toinfluence the attitudes and behavior of employees.

Spokespersonusing information to positivelyinfluence the way people in and out of theorganization respond to it.

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Interpersonal Roles

Roles that managers assume to providedirection and supervision to both employees

and the organization as a whole:

Figureheadsymbolizing the organizations

mission and what it is seeking to achieve.

Leadertraining, counseling, and mentoring highemployee performance.

Liaisonlinking and coordinating the activities ofpeople and groups both inside and outside theorganization.

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Being a Manager

Brevity

High Variety Fragmentation

Managerial

Problems

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Managerial Skills

Conceptual SkillsThe ability to analyze and diagnose a situation and

distinguish between cause and effect.

Human Skills

The ability to understand, alter, lead, and controlthe behavior of other individuals and groups.

Technical Skills

The specific knowledge and techniques required toperform an organizational role.

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Skill Types Needed by Managerial Level

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Challenges for Managementin a Global Environment

Increasing Number of Global Organizations.

Building a Competitive Advantage.

Maintaining Ethical Standards.

Managing a Diverse Workforce.

Utilizing Information Technology and E-

commerce.

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Building a Competitive Advantage

Increasing EfficiencyReducing the quantity of resources used to produce

goods and services.

Increasing Quality

Introducing Total Quality Management (TQM) toimprove quality.

Increasing Speed, Flexibility, and Innovation

Adapting to bring new products to market faster.

Increasing Responsiveness to Customers

Empowering employees to deal with customers.

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Building Blocks of Competitive Advantage

Figure 1.5

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Maintaining Ethical Standards

Factors Influencing Behaviors:External pressures from stockholders for increased

organizational financial performance.

Internal pressures from top management on lower-

level managers to increase the organizationscompetitive performance and profitability.

Societal, cultural, and environment demands on theorganization.

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Managing a Diverse Workforce

The Increasing Diversity of the Workforce Non-Discriminatory Employment Practices

Performance-Enhancing Benefits of a Diverse

Workforce

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Utilizing Information Technology (IT)and E-commerce

Benefits of IT and E-commerce

Makes more and better information about theorganization available to outsiders

Empowers employees at all organizational levels

Helps managers carry out their roles moreeffectively and efficiently

Increases awareness of competitive opportunities

Makes the organization more responsive to itscustomers

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Learning Objectives

After studying the chapter, you should be able to:Describe what management is, why management is

important, what managers do, and how managersutilize organizational resources efficiently and

effectively to achieve organizational goals.

Distinguish among planning, organizing, leading,and controlling (the four managerial functions), andexplain how managers ability to handle each one can

affect organizational performance.

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Learning Objectives (contd)

Differentiate among three levels of management,and understand the responsibilities of managers atdifferent levels in the organizational hierarchy.

Identify the roles managers perform, the skills

they need to execute those roles effectively and theway new information technology is affecting theseroles and skills.

Discuss the principal challenges managers face in

todays increasingly competitive global environment.