WEEK 2- INTRODUCTION TO MANAGEMENT

DEFINITION OF MANAGEMENT

Management is the process of working with people and resources to accomplish organizational goals.

THE DIFFERENCE BETWEEN GOOD MANAGERS/EFFECTIVE MANAGERS

Good Managers

Good managers do things both effectively and efficiently

The best managers maintain a clear focus on both effectiveness and efficiency.

Effective Managers

To be efficient is to achieve goals with minimal waste of resources.

To make the best possible use of money, time materials and people

WHAT IS PLANNING

Planning includes the goals which need to be achieved and deciding in advance the appropriate action needed to achieve those goals.

These activities include analyzing current situations, anticipating the future, determining objectives, deciding in what types of activities the company will engage, choosing corporate and business strategies and determining the resources needed to achieve the organizational goals.

TO ACHIEVE ORGANIZATIONAL GOALS

Executives today must adapt to changing conditions but also apply with discipline the fundamental management principles

To effectively create value requires fully considering a new and changing set of stakeholders and issues, including the government, the natural environment , globalization and the dynamic economy in which ideas are king and entrepreneurs are both formidable competitors and potential collaborators.

Today and in the future managers must be good at mobilizing people to contribute their ideas.

Managers must empower and motivate people

 

THE DIFFERENCE BETWEEN ORGANIZING AND LEADING

• Organizing means the assembling and coordinating the human, financial, physical, informational, and other resources needed to achieve goals.

• Organizing activities include the following:

a) attracting people to the organization

b) specifying job responsibilities

c) grouping jobs into work units

d) assembling and allocating resources

e) creating conditions that people and things work together to achieve maximum success.

• The organizing function’s goal is to build a dynamic organization.

 

Leading involves the following: Mobilizing your people Stimulating people to be high

performers. This includes motivating and communicating with employees, individually and in groups.

Take place in teams, departments, and divisions, as well as at the tops of large organizations.

Organizing Leading

WHAT IS CONTROLLING?

What does controlling do:

Controlling means learning and changing. Controlling monitors performance and implements necessary

changes. Managers make sure that the organization’s resources are being used as planned and that the organization is meeting its goals for quality and safety.

Control must include monitoring. The controlling functions make sure that goals are met; it asks and

answers the question, “Are our actual outcomes consistent with our goals?”

 Successful organizations pay close attention to the controlling function. The key managerial challenges involve continually learning and changing. Controls must still be in place.

THE DIFFERENT ORGANIZATIONAL LEVELS

Top Level Middle Level Frontline

Top managers strategize and lead.

The CEO (Chief executive officer) is primary strategic manager of the firms and has authority over everyone else.

Middle managers bring strategies to life.They are also called tactical managers.

Frontline managers are the vital link to employees.

These include the senior executives and are responsible for its overall management.

They are often referred to as strategic mangers.

They focus on long term issues and emphasize the survival, growth and overall effectiveness of the organization.

They are responsible for translating the general goals and plans developed by the strategic managers into more specific objectives and activities.

They are also known as operational managers who supervise the operations of the organization.

They often have titles such as supervisor or manager.

They are concerned with the organization as a whole but also with the interaction between the organization and its external environment.

This interaction requires managers to work extensively with outside individuals and organization.

Middle managers take corporate objectives and break them down into business unit targets.

They are directly involved with non-management employees, implementing the specific plans developed with middle managers.

 Top level managers set overall direction by formulating strategy and controlling resources but now also organizational leaders.

They put together separate business plans from the below them for higher- level corporate review and serve as linchpins of internal communication, interpreting and broadcasting top management’s priorities downward and channeling and translating information from the front line upward.

This is a critical role because they are the link between management and non-management personnel.

THE DIFFERENCE BETWEEN MANAGER ROLES/MANAGER SKILLS

Interpersonal- leader, liaison and figurehead

Informational- monitor, disseminator and spokesperson

Decisional – Entrepreneur, disturbance handler and negotiator

• Technical skills- ability to perform a specialized task that involves a certain method or process. These skills are most important early in your career.

• Interpersonal and communication skills-influence the manager’s ability to work well with people. These skills are often called people skills. Interpersonal skills are important throughout your career, at every level of management.

• Conceptual and decision skills- involves the ability to identify and resolve problems for the benefit of the organization and everyone concerned. These skills become more important than technical skills as you rise higher in the company.

Manager Roles Manager Skills

EMOTIONAL INTELLIGENCE/SPECIALIST/GENERALIST

Understanding your self- strengths and limitations

Managing yourself- emotions, making good decisions, seeking and utilizing feedback and exercising self-control

Dealing effectively with others- listening, showing empathy, motivating, and leading

• Today you need to be a specialist and generalist

• You need to be an expert in something- Specialist. This gives you special skills that provide concrete identifiable value to your firm and customers.

 Knowing enough about a variety of business disciples to be able to think strategically and work with different perspectives- Generalist

 You need to be self reliant and take full responsibility for yourself, your actions and career

• You need to be connected- having many good working relationships and interpersonal contacts and being a team player with strong interpersonal skills.

Emotional Intelligence Specialist/Generalist

HOW TO ACTIVELY MANAGE YOUR RELATIONSHIP WITH YOUR ORGANIZATION

 

1st- where you view yourself as an employee where you allow your employer to tell you what to do

2nd-is a 2 way relationship in which you and your organization both benefit from one another. You think about how you can contribute.

WHAT ARE ORGANIZATIONS AND HOW ARE THEY AFFECTED

Organizations are:

Opened systems.

How are they affected:

They are affected by and affect their external environments.

  They take inputs goods or services from their environment and use them to create products

and services that are outputs in their environment

External environment clients or customers .

  The organization exists in its competitive environment which is composed of the firms and

its rivals, suppliers, customers new entrants and substitutes or complementary products. Macro-environment- which includes, legal, political, economic, technological,

demographic, and social and natural factors that affect all organizations

THE COMPETITIVE ENVIRONMENT AND WHAT THEY NEED TO IDENTIFY FIRST

All managers are affected by the components of the macro environment. The competitive environment includes revelry among current competitors and the impact of new entrants, substitute and complementary products, suppliers, and customers. 

Competitors come from all over the world

Competitors within the industry must first deal one another.

You need to consider first who is the competition?

Small domestic firms Strong regional competitors Big new domestic companies

exploring new markets Overseas firms New entries, such a firms

offering products on the web

Competitive Environment Competitors- First Step

THE SECOND STEP

2nd Step

Competitors use tactics such as price reductions, new product introductions, and advertising campaigns to gain advantage over their rivals.

Competition is most intense when there are direct competitors (including foreign contenders), industry growth is slow and the product or service cannot be differentiated.

THE NEW ENTRANTS AND THE MAJOR BARRIERS

New entrants arise when barriers to entry are low

  If many factors prevent

new companies from entering an industry, the threat to established firms is less serious. If there are few such barriers to entry, the threat of new entrants is greater.

Government policy Capital requirements Brand identification Cost disadvantages Distribution channels

New Entrants Barriers

SOME PRODUCTS ARE SUBSTITUTES

A substitute is a potential threat. Customers use it as an alternative.

Technological advances and economic efficiencies are among the ways that firms can develop substitutes for existing products.

Companies need to think about potential substitutes that may be viable in the future

Besides identifying and planning for substitutes, companies must consider complements for their products.

A company needs to watch for new complements that can change the competitive landscape.

SUPPLIERS AND THEIR FORMS

Suppliers provide your resources

Suppliers provide resources needed for production, and those resources may come in several forms.

People Raw materials Information Financial market

In some industries suppliers include labor unions. Organizations are at a disadvantage if they become overly

dependent on any powerful supplier. A supplier is powerful if the buyer has few other sources of supply or the supplier has many other buyers. 

SUPPLY CHAIN

In recent years companies have improved their competitiveness and profitability through supply chain management., the management of the entire network of facilities and people that obtain raw materials from outside the organization, transform them into products and distribute them to customers.

With the emergence of the Internet, customers look for products built to their specific needs and preferences and they want them delivered quickly at lowest available price. This requires the supply chain to be not only efficient but also flexible sot that the organization’s output can quickly respond to changes in demand.

Today, the goal of effective supply chain management is to have the right product in the right quantity available at the right place at the right cost.

Choosing the right supplier is an important strategic decision. Suppliers can affect manufacturing time, product quality, cost and inventory levels.

WHAT DO CUSTOMERS DO AND WHAT DO THEY WANT

Ultimately determine your success

They demand lower prices, higher quality, unique product specifications or better service.

The Internet has empowered customers. It provides an easy source of information both about product features and pricing. Internet users informally create and share messages about a product.

Customer services means giving customers what they want or need, the way they want it, the first time.

Speed of filling and delivering normal orders

Willingness to meet emergency need

Merchandise delivered in good condition

Readiness to take back defective goods and resupply quickly

Availability of installation and repair service sand parts

Service changes- free or priced separately

Customers Customer Service

TECHNOLOGY

A company can not be successful without incorporating technology.

As technology evolves, new industries , markets and competitive niches develop. Advances in technology also permit companies to enter markets that would otherwise be unavailable to them.

New technologies provide new production techniques. New technologies provide new ways to manage and communicate.

Computerized management information systems (MISs) make information available where it is needed. Computers monitor productivity and note performance deficiencies.

Telecommunications allow conferences to take place without requiring people to travel to the same location

DEMOGRAPHICS

Describe your employees and customers Are measures of various characteristics of the people who make up

groups of other social units. Workgroups, organizations, countries, markets, and societies can be described by referring to demographic measure such as age, gender, family size, income, education, occupation.

Managers must consider workforce demographics in formulating their human resource strategies. The education and skill level of the workforce are another demographic factor. Immigration is another influence. Immigration is one reason the labor force in the future will be more ethnically diverse.

A more diverse workforce has many advantages. They must recruit, retain, train, motivate and effectively utilize people of diverse demographic backgrounds who have the skills to achieve the company’s mission.

SOCIAL ISSUES

Societal trends regarding how people think and behave have major implications for management of the labor force, corporate social actions, and strategic decisions about products and markets. How companies respond to these and other social issues may affect their reputation in the market place, which in turn may help or hinder their competiveness.

THE ECONOMY AFFECTS A COMPANY’S VALUE

The economic environment affects managers’ ability to function effectively and influences their strategic choices.

Interest and inflation rates affect the availability and cost of capital, growth opportunities, prices, costs, and consumer demand for products.

Unemployment rates affect labor availability and the wages the firm must pay, a well as product demand.

Steeply rising energy and health costs have limited companies’ ability to hire and raised the cost of doing business.

An important economic influence is the stock market.

GOVERNMENT REGULATIONS

OSHA- Occupational Safety and Health Administration ICC- Interstate Commerce Commission FAA- Food and Drug Administration EEOC- Equal Employment Opportunity Commission NLRB- National Labor Relations Board OFCCP- Office of Federal Contract Compliance

Programs EPA- Environmental Protection Agency SEC- Securities and Exchange Commission regulates

U.S. financial markets to protect investors.

EVOLUTION OF MANAGEMENT  

Over the past century, managements’ modern practice has grown out of the following:

Influence of social Economic and Political forces. It has also grown from the influence of many

researchers and practitioners such as Frederick Taylor, Elton Mayo and W. Edwards Deming.

HAWTHORNE STUDIES

The Hawthorne studies if you would that took place here in Chicago in the 1930s.

Beginning in 1924 a group of researchers from MIT and Harvard led by Professor Elton Mayo began conducting experiments at Western Electric’s Hawthorne Plant in Cicero, IL.

They didn’t know it at the time but their research would span nine years before they could come to a conclusion.

ELTON MAYO

The Hawthorne Studies (also known as the Hawthorne Experiments) were conducted from 1927 to 1932 at the Western Electric Hawthorne Works in Cicero, Illinois (a suburb of Chicago). 

ELTON MAYO This is where professor

Elton Mayo examined the impact of work conditions in employee productivity

Elton Mayo examined the physical and environmental influences of the workplace (e.g. brightness of lights, humidity) and later, moved into the psychological aspects (e.g. breaks, group pressure, working hours, managerial leadership) and their impact on employee motivation as it applies to productivity.

In essence, the Hawthorne Effect, as it applies to the workplace, can be summarized as "Employees are more productive because the employees know they are being studied." Elton Mayo's experiments showed an increase in worker productivity was produced by the psychological stimulus of being singled out, involved, and made to feel important.

MAYO According to Mayo “We were trying to find out what

circumstances in the workplace had the greatest affect on worker output. We experimented with changes in lighting, the number of hours the employees worked, rest periods, incentive pay and hot lunches. It seemed that none of these factors had any direct link to output. But we found that when being interviewed the workers lost their shyness and fear. They began to feel valued by their coworkers and supervisors. Our studies showed that good social relationships in the workplace is what produces more output.”

DR. DEMING

Dr. Deming's famous 14 Points. The points cultivate a fertile soil in which a

more efficient workplace, higher profits, and increased productivity may grow.

DR. DEMING

He devoted much of his life to spreading his message of continuous improvement and statistical process control to improve quality.

Deming thought it was necessary to integrate the theories that came earlier into an approach in which all dimensions of the organization and its environment are considered as part of one system.

DR. DEMING- 14 POINTS Create and communicate to all employees a

statement of the aims and purposes of the company. Adapt to the new philosophy of the day; industries

and economics are always changing. Build quality into a product throughout production. End the practice of awarding business on the basis of

price tag alone; instead, try a long-term relationship based on established loyalty and trust.

Work to constantly improve quality and productivity. Institute on-the-job training. Teach and institute leadership to improve all job

functions.

DEMING 14 PTS Drive out fear; create trust. Strive to reduce intradepartmental conflicts. Eliminate exhortations for the work force;

instead, focus on the system and morale. (a) Eliminate work standard quotas for

production. Substitute leadership methods for improvement.(b) Eliminate MBO. Avoid numerical goals. Alternatively, learn the capabilities of processes, and how to improve them.

Remove barriers that rob people of pride of workmanship

Educate with self-improvement programs. Include everyone in the company to accomplish

the transformation.

DR. DEMING 14 POINTS As a result of his experience in the steel mills

of Philadelphia, Taylor concluded that the productivity problem of the day was due to lack of management attention to workers.

This contradicted the beliefs of most businessmen in the early 1900’s who blamed the productivity problem on the general laziness of workers.

Taylor’s theory was based mainly on his observations of soldiering among steel mill workers.

Soldiering is the systematic slow down in work by laborers in order to keep their employers ignorant of how fast the work can be done.

TAYLOR Taylor believed that the deceptive practice of soldiering

existed for three reasons. First management didn’t know how much work could be

done. Second many laborers thought if they worked too fast,

they would work themselves out of a job. Third workers didn’t know how to do their jobs

efficiently to begin with. Taylor blamed these problems on poor management.

According to Taylor, the role of management is to: 1) Develop the one best way to perform any task. 2) Scientifically select, train, teach and develop each

worker. 3) Cooperate with workers and provide an incentive to

insure that the work is done according to the one best way.

4) Divide the work and the responsibility equally between management and labor.

TWO IMPORTANT QUOTES FROM PETER DRUCKER

“Management means, in the last analysis, the substitution of thought for brawn and muscle, of knowledge for folklore and tradition, and of cooperation for force.”

“The essence of business is outside itself.”

TWO IMPORT QUOTES FROM PETER DRUCKER

“Management means, in the last analysis, the substitution of thought for brawn and muscle, of knowledge for folklore and tradition, and of cooperation for force.”

In the last thought that you will have about Management means you have to thinking is more important than using physical labor and the knowledge that you acquire is more important than old tales that is passed on from one generation to another and that cooperation amongst people is more value than forcing them to do things.

“The essence of business is outside itself.”

The most important part of business are the external things that happen.