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PART 1
SETTING THE CONTEXT
FOR MANAGEMENT
Chapter 1
INTRODUCTION
TO
MANAGEMENT
© 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Learning Objectives
• Differentiate among the three pillars of managing
organizations: strategic positioning, organizational
design, and individual leadership.
• Describe the complementary components of
management and leadership and the relative
importance of technical, interpersonal, and conceptual
skills at various managerial levels in the organization.
• Articulate how the practice of management has evolved.
© 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Learning Objectives
• Explain the changing perspectives on the purpose of
business and how the relationship between the firm and
its business environment has changed over time.
• Describe the stakeholder theory of management and
how various stakeholder relationships are managed to
enhance overall firm performance.
© 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
The Challenge of Leadership
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Managing and leading diverse workforces
Competing on a global scale
Operating in a socially responsible manner
Responding to change and uncertainty
Harnessing technological advances
© 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Figure 1.1 - The Pillars of Management
© 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Management and Leadership
• Management
– The act of working with and through a group of people
to accomplish a desired goal or objective in an
efficient and effective manner
• Leadership
– The ability to drive change and innovation through
inspiration and motivation
© 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Figure 1.3 - The Roles of Leaders versus Managers
© 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Figure 1.4 - Importance and Relevance of Skills by Managerial Level
© 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Figure 1.5 - From Big Picture Strategy to Individual Action
© 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Historical Perspectives on Business
• Bureaucratic organization structure
– Proposed by Max Weber
– A clear differentiation of tasks and responsibilities
– Coordination through strict hierarchy of authority and
decision rights
– Standardization of rules and procedures
– Vertical separation of planning and execution
• Plans are made in the upper ranks of an organization and
executed in the lower ranks
© 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Theories of Management
• Scientific management
– A focus on how jobs, work, and incentive schemes could
be designed to improve productivity using industrial
engineering methods
• Human relations movement
– The belief that organizations must be understood as
systems of interdependent human beings who share a
common interest in the survival and effective functioning of
the firm
• Contingent view
– A view of the firm where effective organizational structure
is based on fit or alignment between the organization and
various aspects of its environment
© 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Changing Perspectives on the
Purpose of Business
Business environment: The
combination of all contextual forces
and elements in the external and
internal environments of a firm
© 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Changing Perspectives on
the Purpose of Business
• Managerial view
– A business framework where the firm is seen as a
mechanism for converting raw materials into products to
sell to customers
• Shareholder view
– A business framework where the job of top managers is to
produce the highest possible stock market valuation of the
firm’s assets
• Stakeholder view
– A business framework that identifies and analyzes multiple
groups that interact with the firm and attempts to align
organizational practices to satisfy the needs of these
various groups
© 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Figure 1.9 - Various Stakeholders of the Firm
© 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Figure 1.10 - Stakeholder Mapping Process
© 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Stakeholder Management Processes
• Strategic review process
– The process by which senior leaders of a corporation
meet with business unit managers to review progress
toward specific goals
• Environmental scanning
– A tool that managers use to scan the business
horizon for key events and trends that will affect the
business in the future
• Scenario building
– Forecasting the likely result that might occur when
several events and stakeholders are linked together
© 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Predicting Stakeholder Responses
and Activities
• Contingency planning
– The systematic assessment of the external environment to
prepare for a possible range of alternative futures for the
organization
• Trend analysis
– A tool where key variables are monitored and modeled to
help predict a change that might occur in the environment
• Contextual intelligence
– The ability to understand the impact of environmental
factors on a firm and the ability to understand how to
influence those same factors
© 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Figure 1.11 - Building Contextual Intelligence
© 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Figure 1.12 - How Contextual Forces Impact Uncertainty
© 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
KEY TERMS
Bureaucratic organization
structure
Business environment
Contextual intelligence
Contingency planning
Contingent view
Environmental scanning
Human relations movement
Leadership
Management
Managerial view
Scenario building
Scientific management
Shareholder view
Stakeholder view
Strategic review process
Trend analysis
VUCA
© 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.