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CHAPTER 1 THE MANAGEMENT PROCESS TODAY ©McGraw-Hill Education. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw-Hill Education. Learning Objectives (1 of 2) 1-1. Describe what management is, why management is important, what managers do, and how managers utilize organizational resources efficiently and effectively to achieve organizational goals. 1-2. Distinguish among planning, organizing, leading, and controlling (the four principal managerial tasks), and explain how managers’ ability to handle each one can affect organizational performance. 1-3. Differentiate among three levels of management, and understand the tasks and responsibilities of managers at different levels in the organizational hierarchy. ©McGraw-Hill Education. Learning Objectives (2 of 2) 1-4. Distinguish among three kinds of managerial skill, and explain why managers are divided into different departments to perform their tasks more efficiently and effectively. 1-5. Discuss some major changes in management practices today that have occurred as a result of globalization and the use of advanced information technology (IT). 1-6. Discuss the principal challenges managers face in today’s increasingly competitive global environment. ©McGraw-Hill Education. What Is Management? (1 of 3) Management The planning, organizing, leading, and controlling of human and other resources to achieve organizational goals effectively and efficiently ©McGraw-Hill Education. What Is Management? (2 of 3) Organizations Collections of people who work together and coordinate their actions to achieve a wide variety of goals ©McGraw-Hill Education. What Is Management? (3 of 3) Managers The people responsible for supervising the use of an organization’s resources to meet its goals Resources People, skills, know-how, experience, machinery, raw materials, computers and IT, financial capital, patents, loyal customers and employees ©McGraw-Hill Education. Achieving High Performance Organizational Performance A measure of how efficiently and effectively managers use available resources to satisfy customers and achieve organizational goals ©McGraw-Hill Education. Efficiency, Effectiveness, and Performance in an Organization Figure 1.1 High-performing organizations are efficient and effective. Jump to Appendix 1 for long description. ©McGraw-Hill Education. Organizational Performance Efficiency A measure of how productively resources are used to achieve a goal ©McGraw-Hill Education. Why Study Management? 1. Individuals learn to understand the dynamic and complex nature of work and make decisions that are ethical and effective for an organization. 2. Understanding management helps the manager’s employer to succeed. 3. The economic benefits of becoming a good manager are impressive. 4. Learning management principles can help you make good decisions in non-work situations. ©McGraw-Hill Education. Four Tasks of Management Figure 1.2 Jump to Appendix 2 for long description. ©McGraw-Hill Education. Planning (1 of 2) Planning Process of identifying and selecting appropriate goals and courses of action ©McGraw-Hill Education. Steps in the Planning Process 1. Decide which goals to pursue. 2. Decide what strategies to adopt to attain those goals. 3. Decide how to allocate organizational resources to pursue strategies that attain those goals. ©McGraw-Hill Education. Planning (2 of 2) Strategy Cluster of decisions about what goals to pursue, what actions to take, and how to use resources to achieve goals ©McGraw-Hill Education. Organizing (1 of 2) Organizing Structuring working relationships in a way that allows organizational members to work together to achieve organizational goals ©McGraw-Hill Education. Organizing (2 of 2) Organizational Structure A formal system of task and reporting relationships that coordinates and motivates organizational members so that they work together to achieve organizational goals ©McGraw-Hill Education. Leading Leading Articulating a clear vision and energizing and enabling organizational members so they understand the part they play in achieving organizational goals ©McGraw-Hill Education. Controlling Controlling Evaluating how well an organization is achieving its goals and taking action to maintain or improve performance Outcome of the control process Ability to measure performance accurately and regulate efficiency and effectiveness ©McGraw-Hill Education. TOPICS FOR DISCUSSION (1 of 5) Describe the difference between efficiency and effectiveness, and identify real organizations that you think are, or are not, efficient and effective. [LO 1-1] ©McGraw-Hill Education. Levels and Skills of Managers Department A group of people who work together and possess similar skills or use the same knowledge, tools, or techniques to perform their jobs ©McGraw-Hill Education. Levels of Management (1 of 2) First-Line Managers Responsible for the daily supervision of nonmanagerial employees Middle Managers • Supervise first-line managers • Responsible for finding the best way to use resources to achieve organizational goals ©McGraw-Hill Education. Levels of Management (2 of 2) Top Managers Establish organizational goals, decide how departments should interact, and monitor the performance of middle managers ©McGraw-Hill Education. Copyright Mark Peterson/Redux Pictures NYC Levels of Managers (1 of 2) Figure 1.3 ©McGraw-Hill Education. Relative Amount of Time That Managers Spend on the Four Managerial Tasks Figure 1.4 Jump to Appendix 3 for long description. ©McGraw-Hill Education. Levels of Managers (2 of 2) Top Management Team A group composed of the CEO, the COO, and the vice presidents of the most important departments of a company ©McGraw-Hill Education. TOPICS FOR DISCUSSION (2 of 5) In what ways can managers at each of the three levels of management contribute to organizational efficiency and effectiveness? [LO 1-3] ©McGraw-Hill Education. Managerial Skills Conceptual Skills The ability to analyze and diagnose a situation and distinguish between cause and effect Human Skills The ability to understand, alter, lead, and control the behavior of other individuals and groups Technical Skills The job-specific knowledge and techniques required to perform an organizational role ©McGraw-Hill Education. TOPICS FOR DISCUSSION (3 of 5) Identify an organization that you believe is high performing and one you believe is low performing. Give five reasons why you think the performance levels of the two organizations differ so much. [LO 1-2, 1-4] ©McGraw-Hill Education. Technical Skills Core Competency Specific set of departmental skills, abilities, and experiences that allows one organization to outperform its competitors ©McGraw-Hill Education. Types and Levels of Managers Figure 1.5 Jump to Appendix 4 for long description. ©McGraw-Hill Education. Recent Changes in Management Practices (1 of 2) Restructuring Downsizing an organization by eliminating the jobs of large numbers of top, middle, or first-line managers and non-managerial employees ©McGraw-Hill Education. Recent Changes in Management Practices (2 of 2) Outsourcing Contracting with another company, usually abroad, to have it perform an activity the organization previously performed itself Increases efficiency because it lowers operating costs, freeing up money and resources that can be used in more effective ways ©McGraw-Hill Education. Empowerment and Self-Managed Teams (1 of 2) Empowerment Expansion of employees’ knowledge, tasks, and decision-making responsibilities ©McGraw-Hill Education. Empowerment and Self-Managed Teams (2 of 2) Self-Managed Team A group of employees who assume responsibility for organizing, controlling, and supervising their own activities and monitoring the quality of the goods and services they provide ©McGraw-Hill Education. Challenges for Management in a Global Environment Rise of Global Organizations Building a Competitive Advantage Maintaining Ethical and Socially Responsible Standards Managing a Diverse Workforce Utilizing IT and E-Commerce ©McGraw-Hill Education. Building Competitive Advantage (1 of 3) Competitive Advantage Ability of one organization to outperform other organizations because it produces desired goods or services more efficiently and effectively than they do ©McGraw-Hill Education. Building Blocks of Competitive Advantage Figure 1.6 ©McGraw-Hill Education. Building Competitive Advantage (2 of 3) Innovation Process of creating new or improved goods and services or developing better ways to produce or provide them ©McGraw-Hill Education. Building Competitive Advantage (3 of 3) Turnaround Management The creation of a new vision for a struggling company based on a new approach to planning and organizing to make better use of a company’s resources and allow it to survive and prosper ©McGraw-Hill Education. Maintaining Ethical and Socially Responsible Standards The pressure for a manager to increase organizational performance exists at all levels. Social responsibility centers on deciding what if any obligations a company has towards the people and groups affected by its activities. ©McGraw-Hill Education. Managing a Diverse Workforce The challenge for a manager is to recognize the ethical need and legal requirement to treat human resources in a fair and equitable manner. Human resources (HRM) procedures and practices that are legal and fair must be put into place. ©McGraw-Hill Education. Utilizing IT and E-Commerce (1 of 2) Utilizing new information technology (IT) in an efficient and effective manner is an important challenge to managers. IT has enabled individual employees and selfmanaged teams by providing them with more information and allowing for virtual interactions. ©McGraw-Hill Education. BE THE MANAGER What kinds of organizing and controlling problems is Achieva suffering from? [LO 1-2] ©McGraw-Hill Education. TOPICS FOR DISCUSSION (5 of 5) In what ways do you think managers’ jobs have changed the most over the last 10 years? Why have these changes occurred? [LO 1-6] ©McGraw-Hill Education. APPENDICES Long descriptions of images ©McGraw-Hill Education. Appendix 1: Efficiency, Effectiveness, and Performance in an Organization The graphic is divided into four sections. 1. Low efficiency and high effectiveness: Manager chooses the right goals to pursue, but does a poor job of using resources to achieve these goals. Result: A product that customers want, but that is too expensive for them to buy. 2. High efficiency and high effectiveness: Manager chooses the right goals to pursue and makes good use of resources to achieve these goals. Result: A product that customers want at a quality and price that they can afford. 3. Low efficiency and low effectiveness: Manager chooses wrong goals to pursue and makes poor use of resources. Result: A low-quality product that customers do not want. 4. High efficiency and low effectiveness: Manager chooses inappropriate goals, but makes good use of resources to purse these goals. Result: A high-quality product that customers do not want. Copyright McGraw-Hill Education. Permission required for reproduction or display. Return to slide. ©McGraw-Hill Education. Appendix 2: Four Tasks of Management The graphic shows the four task of managements as a circular process. Planning. Choose appropriate organizational goals and courses of action to best achieve those goals. Organizing. Establish task and authority relationships that allow people to work together to achieve organization goals. Leading. Motivate, coordinate, and energize individuals and groups to work together to achieve organizational goals. Controlling. Establish accurate measuring and monitoring systems to evaluate how well the organization has achieved its goals. Copyright McGraw-Hill Education. Permission required for reproduction or display. Return to slide. ©McGraw-Hill Education. Appendix 3: Relative Amount of Time That Managers Spend on the Four Managerial Tasks Graphic shows the relative amount of time that managers spend on the four managerial tasks. For planning, top managers spend the most time on this followed by middle managers and then first-line managers. The same is true for organizing, although this task is more evenly distributed. For leading, first-line managers spend the most time on this task, followed by middle managers, and then top managers. Controlling is similar to organizing in its distribution. Copyright McGraw-Hill Education. Permission required for reproduction or display. Return to slide. ©McGraw-Hill Education. Appendix 4: Types and Levels of Managers The pyramid shows the C E O at the pinnacle, below that are top managers, middle managers, and first-line managers at the base. It is also divided by research and development, marketing and sales, manufacturing, accounting, and materials. Managers are grouped into departments on the basis of their skills. Each department contains the hierarchy of C E O, top managers, middle managers, and first-line managers. Copyright McGraw-Hill Education. Permission required for reproduction or display. Return to slide. ©McGraw-Hill Education.