Part 3
Managing for Quality and Competitiveness
Chapter 6
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Part 3
CHAPTER 6
The Nature of Management
CHAPTER 7
Organization, Teamwork, and Communication
CHAPTER 8
Managing Service and Manufacturing Operations
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Learning Objectives
LO 6-1 Define management, and explain its role in the
achievement of organizational objectives.
LO 6-2 Describe the major functions of management.
LO 6-3 Distinguish among three levels of management
and the concerns of managers at each level.
LO 6-4 Specify the skills managers need in order to be
successful.
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Management and Managers
Management
– A process designed to achieve an organization’s
objectives by using its resources effectively and
efficiently in a changing environment
• Effectively means having the intended result
• Efficiently means accomplishing the objectives with a
minimum of resources
Managers
– Those individuals in organizations who make
decisions about the use of resources and who are
concerned with planning, organizing, staffing,
directing and controlling the organization’s activities
to reach its objectives
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The Importance of Management
Every organization must acquire resources to
effectively pursue objectives and coordinate use to
turn out final goods and services
Employees
♦ Important in helping a firm attain its objectives
♦ Staffing and downsizing
Acquiring Suppliers
♦ Ensuring that products are made available to customers
♦ In global markets firms enlist hundreds of diverse suppliers
Financial resources
♦ To pay for essential activities
♦ Owners, shareholders, banks, and other financial institutions
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Management Functions
Planning
– Planning activities to achieve the organization’s objectives
Organizing
– Organizing resources and activities to achieve the
organization’s objectives
Directing
– Directing employees’ activities toward achievement of
objectives
Controlling
– Controlling the organization’s activities to keep it on course
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Planning
Planning is the process of determining the organization’s
objectives and deciding how to accomplish them; the first
function of management
Mission is the statement of an organization’s
fundamental purpose and basic philosophy
Goals are the results the company wants to achieve
Objectives are measurable statements on common
issues such as profit, competitive advantage,
efficiency and growth
Plans specify what should be done, by whom,
where, when and how
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Organizing
The structuring of resources and activities to accomplish
objectives in an efficient and effective manner
Helps create synergy
Establishes lines of authority
Improves communication
Helps avoid duplication of resources
Improves competitiveness by speeding up decision
making
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Directing
Motivating and leading employees to achieve
organizational objectives
Telling employees what to do and when to do it using
deadlines, then encourage them to do their work
Determining and administering rewards and recognition
Providing incentives but recognition and appreciation are
often the best motivators
Ask workers to contribute ideas for reducing costs,
making equipment more efficient, improving customer
service, or even developing new products
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Controlling
The process of evaluating and correcting activities to
keep the organization on course
Measuring performance
Comparing performance with standards or objectives
Identifying deviations from the standards
Investigating the causes of deviations
Taking corrective action when necessary
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Strategic Plans
Those plans that establish long-range
objectives and overall strategy or course of
action by which a firm fulfills its mission
Generally cover periods ranging from one year
or longer
– Plans to add products
– Purchase companies
– Sell unprofitable segments of the business
– Issue stock
– Move into international markets
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Operational Plans
• Very short-term plans that specify actions individuals, work
groups, or departments need to accomplish in order to
achieve the tactical plan and ultimately the strategic plan
• Apply to details in executing activities quickly
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Tactical Plans
• Short-range plans (one year or less) designed to
implement the activities and objectives specified in the
strategic plan
• Keep the firm on course established in the strategic plan
• An ever-changing market requires firms to develop short-
run or tactical plan to deal with the changing environment
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Levels of Management
As the pyramid shape implies, there are generally more middle
managers than top managers, and still more first-line managers
Jump to Appendix 1 for long image description
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Top Management
The president and other top executives of a business,
such as the chief executive officer (CEO), chief
financial officer (CFO), and chief operations officer
(COO), who have overall responsibility for the
organization
In publically-owned corporations, the CEO’s boss is
board of directors
Compensation committees work directors and CEOs
to keep pay in line with performance
Workforce diversity is good for workers and for the
bottom line
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Middle Managers
Those members of an organization responsible for
the tactical planning that implements the general
guidelines established by top management
Have more focused responsibilities and spend more
time organizing than other managers
In business, plant managers, division mangers and
department mangers make up middle management
The ranks of middle managers have been shrinking
as more companies downsize to be more productive
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First-Line Managers
Those who supervise both workers and the daily
operations of an organization
Responsible for implementing plans established by
middle management and directing workers’ daily
performance
Spend most of their time directing and controlling
Commonly called foreman, supervisor and office
service manager
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Managerial Roles
Decisional Informational
Entrepreneur Monitor
Disturbance handler Disseminator
Resource allocator Spokesperson
Negotiator Interpersonal
Figure
Leader
Liaison
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Technical Expertise
Technical Expertise
– Specialized knowledge and training needed to
perform jobs related to particular areas of
management
– Needed most by first-line managers and least critical
to top-level managers
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Conceptual Skills
Conceptual Skills
– Ability to think in abstract terms and see how parts fit
together to form the whole
– Needed most by top level managers
– Evaluate where the company will be in the future
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Financial Manager
Financial managers are responsible for obtaining the
necessary funding for organizations to succeed, both in the
short term and in the long term
© NAN104/iStockphoto
This financial manager of a city hedge fund
analyzes data from financial charts. 21
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Analytical Skills
Analytical Skills
– Ability to identify relevant issues, recognize their
importance, understand relationships between them
and perceive underlying causes of a situation
– Most important to the success of top level managers
– Resolving ethical issues often requires analytical
skills
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Human Relations Skills
Human Relations Skills
– Ability to deal with people, both inside and outside
the organization
– Those who can relate, communicate well, understand
the needs, and show a true appreciation for others
are more successful
– Important in organizations that provide services, such
as hospitals, airlines and banks
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Requirements for Successful Leadership
Leadership is the ability to influence employees to
work toward organizational goals
1. Communicate objectives and expectations.
2. Gain the respect and trust of stakeholders.
3. Develop shared values.
4. Acquire and share knowledge.
5. Empower employees to make decisions.
6. Be a role model for appropriate behavior.
7. Provide rewards and take corrective action to achieve goals.
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Leadership Styles
Autocratic Leaders
• Make all the decisions then tell employees what must
be done and how to do it
Democratic Leaders
• Involve employees in decisions
Free-rein Leaders
• Let employees work without much interference;
setting performance standards and letting employees
find their own way to meet them
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Authentic Leadership
Authentic Leaders
• Different from the other three leadership styles
because it is not exclusive
• Both democratic and free-rein leaders could qualify
as authentic leaders
• Passionate about goals and mission of company,
display corporate values in the workplace, form long-
term relationships with stakeholders
• Former CEO of Ford Alan Mulally is frequently cited
as an authentic leader
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Employee Empowerment
When employees are provided with the ability to take
on responsibilities and make decisions about their jobs
Participative corporate culture is beneficial -
employees feel they are taking an active role in the
firm’s success
Leaders must adopt systems that support
employee’s ability to provide input and feedback on
the company
Manager should be trained to empower employees
to make decisions even in challenging situations
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