copyright © 2003 by south-western. all rights reserved. chapter eight management, leadership, and...

Copyright © 2003 by South-Western. All Rights Reserved.

CHAPTER EIGHTCHAPTER EIGHT

MANAGEMENT, LEADERSHIP, AND MANAGEMENT, LEADERSHIP, AND THE INTERNAL ORGANIZATIONTHE INTERNAL ORGANIZATION

Text by Profs. Gene Boone & David KurtzText by Profs. Gene Boone & David KurtzMultimedia Presentation byMultimedia Presentation byProf. Milton PressleyProf. Milton PressleyThe University of New OrleansThe University of New [email protected]@uno.edu


• Define Define managementmanagement and three types of skills and three types of skills necessary for managerial successnecessary for managerial success

• Explain the role of vision in business successExplain the role of vision in business success• Summarize the major benefits of planning Summarize the major benefits of planning

and distinguish among strategic planning, and distinguish among strategic planning, tactical planning, and operational planningtactical planning, and operational planning

• Describe the strategic planning processDescribe the strategic planning process• Distinguish major types of business Distinguish major types of business

decisions and list the steps in the decision-decisions and list the steps in the decision-making processmaking process

LEARNING GOALSLEARNING GOALS


• Define Define leadershipleadership and compare different and compare different leadership stylesleadership styles

• Discuss the meaning and importance of Discuss the meaning and importance of corporate culturecorporate culture

• Describe the purposes of an organizational Describe the purposes of an organizational structurestructure

• Explain the five major forms of Explain the five major forms of departmentalization and the four main types departmentalization and the four main types of organization structuresof organization structures

LEARNING GOALSLEARNING GOALS


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CHAPTER OVERVIEWCHAPTER OVERVIEW• Examine how successful organizations use Examine how successful organizations use

management to turn visions into realitymanagement to turn visions into reality• Describe the levels of management, the skills Describe the levels of management, the skills

that managers at all levels in the organization that managers at all levels in the organization need, and the functions that managers performneed, and the functions that managers perform

• Discuss how planning helps managers to meet Discuss how planning helps managers to meet the challenges of a rapidly changing business the challenges of a rapidly changing business environmentenvironment

• Explore the types of decisions that managers Explore the types of decisions that managers make, the role of managers as leaders, and the make, the role of managers as leaders, and the importance of corporate cultureimportance of corporate culture

• Discuss organizingDiscuss organizing


WHAT IS MANAGEMENT?WHAT IS MANAGEMENT?• Management:Management: process of process of

achieving organizational objectives achieving organizational objectives through people and other resourcesthrough people and other resources

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Figure 8.1The Management Hierarchy


The Management HierarchyThe Management Hierarchy• Top management:Top management: the highest level of the highest level of

management -- includes such positions as management -- includes such positions as chief executive officer, chief financial chief executive officer, chief financial officer, and executive vice presidentofficer, and executive vice president• Devote most of their time to developing long-Devote most of their time to developing long-

range plansrange plans• Make decisions regarding new product Make decisions regarding new product

introduction, the purchase of other companies, or introduction, the purchase of other companies, or entry into new geographic marketsentry into new geographic markets

• Set a direction for their organization and inspire Set a direction for their organization and inspire the company’s employees to achieve their visionthe company’s employees to achieve their vision

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• Glass ceiling:Glass ceiling: invisible barrier that invisible barrier that resists the efforts of women in resists the efforts of women in moving up the corporate hierarchy moving up the corporate hierarchy beyond a certain pointbeyond a certain point

The Management HierarchyThe Management Hierarchy

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• Middle management:Middle management: second tier second tier in the management hierarchy – in the management hierarchy – includes positions like general includes positions like general managers, plant managers, division managers, plant managers, division managers, and branch managersmanagers, and branch managers• Attention focuses on specific Attention focuses on specific

operations, products, or customer operations, products, or customer groups within an organizationgroups within an organization


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• Supervisory management:Supervisory management: first- first-line management – includes line management – includes positions such as supervisor, line positions such as supervisor, line manager, and group or team leadermanager, and group or team leader

• Directly responsible for assigning Directly responsible for assigning nonmanagerial employees to nonmanagerial employees to specific jobs and evaluating their specific jobs and evaluating their performance every dayperformance every day


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Skills Needed for Managerial Skills Needed for Managerial SuccessSuccess• Technical skills:Technical skills: ability to ability to

understand and apply the understand and apply the techniques, knowledge, and tools techniques, knowledge, and tools and equipment of a specific and equipment of a specific discipline or departmentdiscipline or department

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Skills Needed for Managerial Skills Needed for Managerial SuccessSuccess• Human skills:Human skills: interpersonal skills interpersonal skills

that enable a manager to work that enable a manager to work effectively with and through peopleeffectively with and through people

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Skills Needed for Managerial Skills Needed for Managerial SuccessSuccess• Conceptual skills:Conceptual skills: ability to see ability to see

the organization as a unified whole the organization as a unified whole and to understand how each part of and to understand how each part of the overall organization interacts the overall organization interacts with other partswith other parts

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Special Skills for Overseas Special Skills for Overseas ManagersManagers• Must learn local languages, Must learn local languages,

cultural customs, and practices cultural customs, and practices and expectations of foreign and expectations of foreign business environmentsbusiness environments

• Awareness of differences among Awareness of differences among culturescultures

• Able to handle culture shockAble to handle culture shock© PhotoDisc


Managerial FunctionsManagerial Functions• Planning:Planning: process of anticipating process of anticipating

future events and conditions and future events and conditions and determining courses of action for determining courses of action for achieving organizational objectivesachieving organizational objectives

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Managerial FunctionsManagerial Functions• Organizing: Organizing: means by which means by which

managers blend human and material managers blend human and material resources through a formal structure resources through a formal structure of tasks and authorityof tasks and authority

• Directing:Directing: guiding and motivating guiding and motivating employees to accomplish employees to accomplish organizational objectivesorganizational objectives

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Managerial FunctionsManagerial Functions• Controlling: Controlling: evaluating an evaluating an

organization’s performance and organization’s performance and determining whether it is determining whether it is accomplishing its objectivesaccomplishing its objectives

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THE NEED FOR VISIONTHE NEED FOR VISION• Vision:Vision: perception of marketplace perception of marketplace

needs and the methods an needs and the methods an organization can use to satisfy themorganization can use to satisfy them• Helps to direct the company toward Helps to direct the company toward

opportunities . . . and differentiates it opportunities . . . and differentiates it from competitorsfrom competitors

• Helps unify the actions of far-flung Helps unify the actions of far-flung divisions, keep customers satisfied, divisions, keep customers satisfied, and sustains growthand sustains growth

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THE IMPORTANCE OF PLANNINGTHE IMPORTANCE OF PLANNING• Business plan:Business plan: takes the firm’s takes the firm’s

objectives and specifies the objectives and specifies the activities and resources activities and resources required to achieve themrequired to achieve them• Includes details about:Includes details about:

• The markets in which the firm plans The markets in which the firm plans to competeto compete

• Its financial resourcesIts financial resources• Competitive situation facing each Competitive situation facing each

of its productsof its products

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Types of PlanningTypes of Planning• Planning can be categorized by Planning can be categorized by

scope or breadthscope or breadth

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Types of PlanningTypes of Planning• Strategic planning:Strategic planning:

process of process of determining the determining the primary objectives of primary objectives of an organization and an organization and adopting courses of adopting courses of action in allocating action in allocating resources to achieve resources to achieve these objectivesthese objectives

STRATEGIC

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Types of PlanningTypes of Planning• Tactical planning:Tactical planning:

involves involves implementing the implementing the activities specified by activities specified by strategic plansstrategic plans

• Guides the current Guides the current and near-term and near-term activities required to activities required to implement overall implement overall strategiesstrategies

STRATEGICSTRATEGIC

TACTICAL

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Types of PlanningTypes of Planning• Operational Operational

planning:planning: creates creates the detailed standards the detailed standards that guide that guide implementation of implementation of tactical planstactical plans

• Involves choosing Involves choosing specific work targets specific work targets and assigning and assigning employees and teams employees and teams to carry out plansto carry out plans

STRATEGICSTRATEGIC

TACTICALTACTICAL

OPERATIONAL


Types of PlanningTypes of Planning• Adaptive planning: Adaptive planning:

developing courses of developing courses of action that are fluid action that are fluid and forward-looking and forward-looking enough to adapt to enough to adapt to changes in the changes in the business environmentbusiness environment

• Emphasizes focus Emphasizes focus and flexibilityand flexibility

STRATEGICSTRATEGIC

TACTICALTACTICAL

OPERATIONALOPERATIONAL

ADAPTIVE

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Figure 8.2 Figure 8.2 Adaptive Planning for Flexible Business NeedsAdaptive Planning for Flexible Business Needs


Types of PlanningTypes of Planning• Contingency planning:Contingency planning:

allows a firm to resume allows a firm to resume operations as quickly operations as quickly and as smoothly as and as smoothly as possible after a crisis possible after a crisis while openly while openly communicating with communicating with the public about the public about what happenedwhat happened

• Usually designates a Usually designates a chain of command for chain of command for crisis managementcrisis management

STRATEGICSTRATEGIC

TACTICALTACTICAL

OPERATIONALOPERATIONAL

ADAPTIVEADAPTIVE

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Planning at Different Planning at Different Organizational LevelsOrganizational Levels• Total time spent and the type of Total time spent and the type of

planning done differ according to planning done differ according to the level of managementthe level of management

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THE STRATEGIC PLANNING THE STRATEGIC PLANNING PROCESSPROCESS• Often makes the difference between Often makes the difference between

an organization’s success and failurean organization’s success and failure• Has formed the basis of many Has formed the basis of many

fundamental management decisionsfundamental management decisions• Typically a six step processTypically a six step process


Figure 8.3 Steps in the Strategic Planning Process


Defining the Organization’s Defining the Organization’s MissionMission• Mission statement:Mission statement: written written

explanation of an organization’s explanation of an organization’s business intentions and aimsbusiness intentions and aims• Enduring statement of company’s Enduring statement of company’s

purposepurpose• Guides the actions of people inside Guides the actions of people inside

the firmthe firm• Informs customers and stakeholders Informs customers and stakeholders

of the company’s underlying reason of the company’s underlying reason for existencefor existence

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Figure 8.4 Figure 8.4 A Symbol A Symbol for a for a Mission Mission StatementStatement


Assessing Competitive PositionAssessing Competitive Position• Involves an examination of the Involves an examination of the

factors that may help or hinder the factors that may help or hinder the organization in the futureorganization in the future

• SWOT analysis: SWOT analysis: organized method organized method of assessing a company’s internal of assessing a company’s internal strengths and weaknesses and its strengths and weaknesses and its external opportunities and threatsexternal opportunities and threats

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Figure 8.5 Elements of SWOT Analysis


Assessing Competitive PositionAssessing Competitive Position• Forecasting:Forecasting: process of estimating process of estimating

or predicting a company’s future or predicting a company’s future sales or incomesales or income

• Can focus on:Can focus on:• Short-term (under one year) Short-term (under one year) • Intermediate term (one to five years)Intermediate term (one to five years)• Long-term (over five years)Long-term (over five years)

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Setting Objectives for the Setting Objectives for the OrganizationOrganization• Objectives:Objectives: guideposts by guideposts by

which managers define the which managers define the organization’s desired organization’s desired performance in such areas as performance in such areas as profitability, customer service, profitability, customer service, growth, and employee growth, and employee satisfactionsatisfaction

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Creating Strategies for Creating Strategies for Competitive DifferentiationCompetitive Differentiation• Competitive differentiation:Competitive differentiation: unique unique

combination of a company’s abilities combination of a company’s abilities and approaches to place it ahead of and approaches to place it ahead of competitorscompetitors

• Sources of competitive differentiation Sources of competitive differentiation include:include:• Human resourcesHuman resources• Product innovationProduct innovation• TechnologyTechnology• Financial managementFinancial management © PhotoDisc


Figure 8.6 Sources of Competitive Advantage


Implementation: Turning Strategy Implementation: Turning Strategy Into ActionInto Action• Strategy put into action by identifying the Strategy put into action by identifying the

specific methods and deploying the specific methods and deploying the resources needed to implement the resources needed to implement the intended plansintended plans

• Managers draw heavily on their human Managers draw heavily on their human skills as they achieve objectives through skills as they achieve objectives through the efforts of their employeesthe efforts of their employees

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Monitoring and Adapting Monitoring and Adapting Strategic PlansStrategic Plans• Closely linked to implementationClosely linked to implementation• Involves establishing methods of Involves establishing methods of

securing feedback about actual securing feedback about actual performanceperformance

• Ongoing use of such tools as SWOT Ongoing use of such tools as SWOT analysis and forecasting can help analysis and forecasting can help management adapt objectives and management adapt objectives and functional plan as changes occurfunctional plan as changes occur

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MANAGERS AS DECISION MAKERSMANAGERS AS DECISION MAKERS• Decision making:Decision making: process of recognizing process of recognizing

a problem or opportunity, evaluating a problem or opportunity, evaluating alternative solutions, selecting and alternative solutions, selecting and implementing an alternative, and assessing implementing an alternative, and assessing the resultsthe results• Programmed decision: Programmed decision: involves simple, involves simple,

common, and frequently occurring problems common, and frequently occurring problems for which solutions have already been for which solutions have already been determineddetermined

• Nonprogrammed decision:Nonprogrammed decision: involves a involves a complex and unique problem or opportunity complex and unique problem or opportunity with important consequences for the with important consequences for the organizationorganization © PhotoDisc


How Managers Make DecisionsHow Managers Make Decisions• Many rely on intuition when they lack Many rely on intuition when they lack

enough information to determine the enough information to determine the probable outcome of a decisionprobable outcome of a decision• Narrowly, decision making involves Narrowly, decision making involves

choosing among two or more alternativeschoosing among two or more alternatives• More broadly, decision making involves a More broadly, decision making involves a

systematic, step-by-step process that helps systematic, step-by-step process that helps managers make effective choicesmanagers make effective choices

• Making good decisions involves taking Making good decisions involves taking risksrisks

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Figure 8.7 Steps in the Decision-Making Process


MANAGERS AS LEADERSMANAGERS AS LEADERS• Leadership:Leadership: ability to direct or inspire ability to direct or inspire

people to attain organizational goalspeople to attain organizational goals• Characteristics of a good leader often Characteristics of a good leader often

mentioned:mentioned:• EmpathyEmpathy• Self-awarenessSelf-awareness• ObjectivityObjectivity

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• Other traits of a good leader may Other traits of a good leader may include:include:• CourageCourage• Ability to inspireAbility to inspire• PassionPassion• CommitmentCommitment• FlexibilityFlexibility• InnovationInnovation• Willingness to experimentWillingness to experiment

MANAGERS AS LEADERSMANAGERS AS LEADERS

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Leadership StylesLeadership Styles• Autocratic leadership:Autocratic leadership: boss makes boss makes

decisions on their own without decisions on their own without consulting employeesconsulting employees

• Democratic leadership: Democratic leadership: involves involves subordinates in making decisionssubordinates in making decisions• Free-reign leadership: Free-reign leadership: leader leader

believes in minimal supervision, believes in minimal supervision, leaving most decisions to subordinates leaving most decisions to subordinates

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Figure 8.8 Comparison of

Leadership Styles


Leadership StylesLeadership Styles• Empowerment:Empowerment: practice in practice in

which managers lead employees which managers lead employees by sharing power, responsibility, by sharing power, responsibility, and decision making with themand decision making with them

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Which Leadership Style is Best?Which Leadership Style is Best?• Depends on function of the leader, Depends on function of the leader,

subordinates, and situationsubordinates, and situation• Some leaders can’t work well with high Some leaders can’t work well with high

participation of subordinatesparticipation of subordinates• Some employees lack the ability or Some employees lack the ability or

desire to assume responsibilitydesire to assume responsibility• Participative decision making may be Participative decision making may be

better when time pressure is not acutebetter when time pressure is not acute

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CORPORATE CULTURECORPORATE CULTURE• Corporate culture:Corporate culture: organization’s organization’s

system of principles, beliefs, and system of principles, beliefs, and valuesvalues

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STRUCTURE IN ORGANIZATIONSSTRUCTURE IN ORGANIZATIONS• Organization:Organization: structured grouping structured grouping

of people working together to of people working together to achieve common goalsachieve common goals

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Figure 8.9 Steps in the Organizing Process


STRUCTURE IN ORGANIZATIONSSTRUCTURE IN ORGANIZATIONS• Organization chart:Organization chart: visual visual

representation of a firm’s representation of a firm’s structure that illustrates job structure that illustrates job positions and functionspositions and functions


Figure 8.10 A Sample Organization Chart


DepartmentalizationDepartmentalization• Departmentalization: : process of process of

dividing work activities into units dividing work activities into units within the organizationwithin the organization

• Major forms of departmentalization Major forms of departmentalization subdivide work by:subdivide work by:• ProductProduct• Geographic AreaGeographic Area• CustomerCustomer• FunctionFunction• ProcessProcess

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• Product Product departmentalization: departmentalization: Organizes work units Organizes work units based on the goods and based on the goods and services offeredservices offered

Product

DepartmentalizationDepartmentalization


• Geographic Geographic departmentalization:departmentalization: units organized by units organized by geographic region within geographic region within a countrya country

• For a multinational firm, For a multinational firm, units organized by units organized by regions throughout the regions throughout the worldworld

ProductProduct


Geographic


• Customer Customer departmentalization:departmentalization: organization that offers a organization that offers a variety of goods and variety of goods and services targeted to services targeted to different types of different types of customers might customers might structure itself based on structure itself based on customers served customers served

ProductProduct


GeographicGeographic

Customer


• Functional Functional departmentalization: departmentalization: work units organized work units organized according to business according to business functions such as functions such as finance, marketing, finance, marketing, human resources, and human resources, and productionproduction

ProductProduct



CustomerCustomer

Functional


• Process Process departmentalization:departmentalization: units organized by work units organized by work processes required to processes required to complete production of complete production of goodsgoods

ProductProduct



CustomerCustomer

FunctionalFunctional

Process


Figure 8.11 Different Forms of Departmentalization within One Company


Delegating Work AssignmentsDelegating Work Assignments• Delegation:Delegation: act of assigning act of assigning

activities to subordinatesactivities to subordinates• Span of management (span of Span of management (span of

control): control): number of subordinates a number of subordinates a manager can supervise effectivelymanager can supervise effectively

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Delegating Work AssignmentsDelegating Work Assignments• Centralization:Centralization: retains retains

decision-making at the top of decision-making at the top of the management hierarchythe management hierarchy

• Decentralization: Decentralization: locates locates decision-making at lower levelsdecision-making at lower levels

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Types of Organization StructuresTypes of Organization Structures• Line organization:Line organization: establishes a establishes a

direct flow of authority from the direct flow of authority from the chief executive to subordinateschief executive to subordinates

• Chain of command: Chain of command: set of set of relationships that indicates who relationships that indicates who directs which activities and who directs which activities and who reports to whomreports to whom

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• Line-and-staff organization:Line-and-staff organization: combines the direct flow of combines the direct flow of authority of a line organization with authority of a line organization with staff departments that serve, advise, staff departments that serve, advise, and support the line departmentsand support the line departments

Types of Organization StructuresTypes of Organization Structures

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Figure 8.12 The Line-and-Staff Organization


• Line manager:Line manager: interacts directly interacts directly with the functions of production, with the functions of production, finance, or marketing – the finance, or marketing – the functions needed to produce and functions needed to produce and market goods and servicesmarket goods and services

• Staff manager: Staff manager: provides provides information, advice, or technical information, advice, or technical assistance to aid line managersassistance to aid line managers

Types of Organization StructuresTypes of Organization Structures

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Types of Organization StructuresTypes of Organization Structures• Committee organization:Committee organization: structure structure

that places authority and that places authority and responsibility jointly in the hands of responsibility jointly in the hands of a group of individuals rather than a a group of individuals rather than a single managersingle manager

• Matrix, or project management, Matrix, or project management, structure: structure: links employees from links employees from different parts of the organization to different parts of the organization to work together on specific projectswork together on specific projects

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Figure 8.13 The Matrix Organization


WHAT’S AHEADWHAT’S AHEAD• An examination of how firms An examination of how firms

recruit, select, train, evaluate, recruit, select, train, evaluate, and compensate employeesand compensate employees

• An explanation of motivationAn explanation of motivation• A discussion of how human A discussion of how human

resource managers apply resource managers apply theories of motivationtheories of motivation

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copyright © 2003 by south-western. all rights reserved. chapter eight management, leadership, and...

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