Management, Leadership, and Internal Organization

Chapter 8

Define management and the skills necessary for managerial success.

Explain the role of vision and ethical standards.

Summarize the benefits of planning and distinguish strategic, tactical, and operational planning.

Describe the strategic planning process.

Contrast the types of business decisions and list the steps in the decision-making process.

Define leadership and compare different styles of leadership.

Discuss the meaning and importance of corporate culture.

Identify forms of departmentalization and types of organization structures.

Learning Goals

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Management is the process of achieving organizational objectives through people and other resources.

What is Management?

• Develop long-range strategic plans for the organization.

• Inspire executives and employees to achieve their vision for the company’s future.

Top Management

• Focus on specific operations, products, or customer groups within an organization.

• Responsible for developing detailed plans and procedures to implement the firm’s strategic plans.

Middle Management

• Implement the plans developed by middle managers.

• Responsible for non-manager employees.

• Motivate workers to accomplish daily, weekly, and monthly goals.

Supervisory Management

→Technical skills Manager’s ability to understand and use the techniques,

knowledge, and tools and equipment of a specific discipline or department.

→Human skills Interpersonal skills that enable a manager to work effectively

with and through people.

→Conceptual skills Ability to see the organization as a unified whole and to

understand how each part of the overall organization interacts with other parts.

Skills Needed for Management

Success

Managerial Functions

Planning• Process of determining

courses of action for achieving organizational objectives.

Organizing• Blending human and material

resources through a formal structure of authority.

Directing• Guiding and motivating

employees to accomplish organizational objectives.

Controlling• Evaluating an organization’s

performance to determine whether it is accomplishing its objectives.

1) Establish performance standards.

2) Monitor actual performance.

3) Compare actual performance with established standards.

4) Take corrective action if required.

• Vision is the perception of marketplace needs and the methods an organization can use to satisfy them.

– Must be focused yet adaptable to changes in the business environment.

• Long-term success is also tied to the ethical standards that top executives set.

– High ethical standard can also encourage, motivate, and inspire employees to achieve goals.

Setting A Vision and

Ethical Standards for Them

Importance of Planning

• There are different types and levels of plans

• Organizations should have a comprehensive planning framework.– From mission statement to objectives and goals

– Narrow functional plans

• Plans outline the steps the company will take to meet outlined goals and objectives.

Planning at Different Organizational

Levels

The Strategic Planning Process

SWOT Analysis

• Decision making is the process of recognizing a problem or opportunity, evaluating alternative solutions, selecting and implementing an alternative, and assessing the results.

• Programmed decision involves simple, common problems with predetermined solutions.

• Nonprogrammed decision involves a complex, unique problem or opportunity with important consequences for the organization.

Managers as Decision Makers

How Managers Make Decisions

• Leadership is the ability to direct or inspire people to attain organizational goals.

• Involves the use of influence or power.

• Three traits are common among many leaders:– Empathy

– Self-awareness

– Objectivity in dealing with others

Managers as Leaders

Autocratic LeadershipMake decisions on own without

consulting employees.

Free-Rein Leadership

Leave most decisions to employees.

Democratic LeadershipInvolve employees in decisions, delegate assignments and ask

employees for suggestions.

Leadership Styles

Corporate Culture

Managerial philosophies, communications networks, and

workplace environments and practices all influence corporate

culture.

Corporate Culture Organizations system of

principles, beliefs, and values.

Organizational Structures

• Organization: structured grouping of people working together to achieve common goals.

• Three key elements:– Human interaction– Goal-directed activities– Structure

Organizational Chart

• Product departmentalization: organized based on the goods and services a company offers.

• Geographical departmentalization: organized by geographical regions within a country or, for a multinational firm, by region throughout the world.

• Customer departmentalization: organized by the different types of customers the organization serves.

• Functional departmentalization: organized by business functions such as finance, marketing, human resources, and production.

• Process departmentalization: organized by work processes necessary to complete production of goods or services.

Departmentalization

Different Forms of

Departmentalization

• Delegation is the act of assigning work activities to subordinates.– The responsibility and the necessary authority for completing the tasks.

– Employees have accountability, or responsibility for the results of the way they perform their assignments.

– Authority and responsibility move down; accountability moves up.

• Span of management is the number of subordinates, or direct reports, a supervisor manages.

• Centralization: decision making is retained at the top of the management hierarchy.

• Decentralization: decision making is located at the lower levels. Many firms believe it enhances their flexibility and responsiveness to customer needs.

Delegating Work Assignments

Line Organizations• Oldest and simplest form; direct flow of authority from CEO

to subordinates.

• Chain of command indicates who directs which activities and who reports to whom.

Types of Organization

Structures

Line-and-Staff Organizations• Combines line departments and staff departments.

• Line departments participate directly in decisions that affect the core operations of the organization.

• Staff departments lend specialized technical support.

Line and Staff Organizations

• Authority and responsibility are in the hands of a group of individuals.

• Often part of a line-and-staff structure.

• Often develop new products.

• Tend to act slowly and conservatively.

• Often make decisions by compromising conflicting interests rather than choosing best alternative.

Committee Organizations

• Project management structure that links employees from different parts of the organization to work together on specific projects.

• Employees report to a line manager and a project manager.

Matrix Organizations

Advantages:• Flexibility in adapting to

changes.

• Focus on major problems or products.

• Outlet for empoyees’ creativity and initiative.

Challenges:• Integrating skills of many

specialists into a coordinated team.

• Employee frustration and confusion over reporting to two bosses.

The Matrix Organizations