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Understanding Business, 6/e
William G. Nickels
James M. McHugh
Susan M. McHugh
Chapter 7: Management, Leadership, and Employee Empowerment
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eLearning Session

The PROFILE at the beginning of this chapter is "Getting to Know JOHN CHAMBERS of CISCO SYSTEMS." Chambers is CEO of Cisco System, a company on the cutting edge of technology.

  1. THE NEW BUSINESS ENVIRONMENT.

    2. Explain how the changes that are occurring in the business environment are affecting the management function.

    1. A number of changes have prompted managers to reorganize their organizations and their approaches to managementPower Point Presentation.
      1. The emergence of the Internet has radically changed the nature of management.
      2. Managing change is an important element of success.
      3. Changes are necessary because of GLOBAL COMPETITION, TECHNOLOGICAL CHANGE, and the growing IMPORTANCE OF PLEASING CUSTOMERS.
        1. Accelerating technological change increases the need for a new breed of worker, one who is more educated and has higher skill levels.Concept Check CONCEPT CHECK
        2. HIGHER EDUCATED WORKERS demand more freedom of operation and different managerial styles.
        3. Increasing workplace diversity is also creating management challenges.
        4. Many jobs are being eliminated by DOWNSIZING or RIGHTSIZING.
      4. The Internet has increased the power of consumers in the buyer-seller relationship.
      5. The business environment has changed and managers need to change as well.
    2. MANAGERS ARE NO LONGER BOSSES.
      1. Managers must practice the art of getting things done through organizational resources.
      2. At one time, managers were called bosses, and their job was to tell people what to do.
      3. Today managers must guide, train, support, motivate, and coach employees rather than telling them what to do.
      4. Most modern managers emphasize teamwork and cooperation rather than discipline and order giving.
      5. Managers must confront the low unemployment rate in the U.S. in which employees have many job options.
      6. Traditional long-term contracts between management and employees are often no longer there.
      7. Managers in the future are much more likely to be working in teams.
      8. This approach to management will demand that a manager be a skilled communicator and team player as well as a planner, coordinator, organizer, and supervisor.
    3. FUNCTIONS OF MANAGEMENT Power Point Presentation

      4. Enumerate the four functions of management.

      1. Management consultant Peter Drucker says managers:
        1. Give direction to their organizations.
        2. Provide leadership.
        3. Decide how to use organizational resources.
      2. MANAGEMENT is the process used to accomplish organizational goals through planning, organizing, directing, and controlling people and other organizational resources.
      3. The FUNCTIONS OF MANAGEMENT are
        1. PLANNINGKey Term involves anticipating future trends and determining the best strategies and tactics to achieve organizational goals and objectives
        2. ORGANIZING includes designing the organization structure, attracting people to the organization, and creating conditions that ensure that everyone works together to achieve the organization’s goals.
        3. LEADING means creating a vision for the organization and guiding, training, coaching, and motivating others to work effectively to achieve the organization’s goals and objectives.Concept Check CONCEPT CHECK
        4. CONTROLLING is determining whether an organization is progressing toward its goals and objectives, and taking corrective action if it’s not. Concept Check CONCEPT CHECK
      4. The four functions are the heart of management.
  2. PLANNING: CREATING A VISION BASED ON VALUES.
    1. Relate the planning process and decision making to the accomplishment of company goals.
    2. PLANNING involves the setting of the organizational vision, goals, and objectives.
      1. A VISION is more than a goal; it is the larger explanation of why the organization exists and where it is trying to head. Key Term
      2. A MISSION STATEMENT outlines the fundamental purposes of the organization; the text uses the example of Aurora Foods’ four mission points.
      3. GOALS are the broad, long-term accomplishments an organization wishes to attainConcept Check CONCEPT CHECK .
      4. OBJECTIVES are specific, short-term statements detailing how to achieve the organizational goals.
      5. Planning is a continuous process.
    3. Planning answers THREE FUNDAMENTAL QUESTIONS:
      1. WHAT IS THE SITUATION NOW?
      2. WHERE DO WE WANT TO GO?
      3. HOW CAN WE GET THERE FROM HERE?
    4. TYPES OF PLANNINGPower Point Presentation
      1. STRATEGIC (LONG-TERM) PLANNING determines the major goals of the organization and the policies and strategies for obtaining and using resources to achieve those goals.
        1. It provides the foundation for the policies, procedures, and strategies to achieve goals.
        2. Long-range planning is becoming more difficult because changes are occurring too fast for long-range thinking.
        3. Some companies are making shorter-term plans that allow for quick responses to customer needs.
        4. Strategic planning is usually done by top management.
      2. TACTICAL (SHORT-RANGE) PLANNING is the process of developing detailed, short- term decisions about what is to be done, who is to do it, and how it is to be done.
        1. Tactical planning is normally done by managers or teams of managers at lower levels of the organization.
        2. An example of tactical planning is setting annual budgets.
      3. OPERATIONAL PLANNING is setting of work standards and schedules necessary to implement the tactical objectives.
        1. Operational planning focuses on specific supervisors and individual employees.
        2. The operational plan is the department manager’s tool for daily operations.
      4. CONTINGENCY PLANNING is the process of preparing alternative courses of action that may be used if the primary plans do not achieve the objectives of the organization.
        1. It is wise to have alternative plans of action ready in anticipation of environmental changes.
        2. CRISIS PLANNING, a part of contingency planning, involves reacting to sudden changes in the environment.
      5. The leaders of market-based companies stay flexible, listen for opportunities, and seize opportunities when they come.
    5. DECISION MAKING: FINDING THE BEST ALTERNATIVEPower Point Presentation.
      1. All management functions involve decision making.
      2. DECISION MAKING is choosing among two or more alternatives.
      3. STEPS IN DECISION MAKING:
        1. DEFINE THE PROBLEM.
        2. DESCRIBE AND COLLECT NEEDED INFORMATION.
        3. DEVELOP ALTERNATIVES.
        4. DECIDE WHICH ALTERNATIVE IS BEST.
        5. DEVELOP AGREEMENT AMONG THOSE INVOLVED.
        6. DO WHAT IS INDICATED.
        7. DETERMINE WHETHER THE DECISION WAS A GOOD ONE AND FOLLOW UP.
      4. The best decisions are based on sound information.
      5. Decision making is more an art than a scienceConcept Check CONCEPT CHECK .
  3. ORGANIZING: CREATING A UNIFIED SYSTEM. Power Point Presentation

    4. Describe the organizing function of management, including staffing and diversity management.

    1. After planning a course of action, managers must organize the firm to accomplish their goals.
      1. The ORGANIZATION CHART is a visual device which shows the relationship and divides the organization’s work: it shows who is accountable for the completion of specific work and who reports to whom.
      2. The corporate hierarchy illustrated on the organization chart includes top, middle, and first-line managers
    2. LEVELS OF MANAGEMENT
      1. TOP MANAGEMENT is the highest level of management and consists of the president and other key company executives who develop STRATEGIC PLANS.
        1. Titles include CHIEF EXECUTIVE OFFICER (CEO), CHIEF OPERATING OFFICER (COO), and CHIEF FINANCIAL OFFICER (CFO.)
      2. MIDDLE MANAGEMENT includes general managers, division managers, and branch and plant managers who are responsible for tactical planning and controlling.
      3. SUPERVISORY (FIRST-LINE) MANAGEMENT includes managers directly responsible for assigning specific jobs to workers and evaluating their daily performance.
    3. THE TREND TOWARD SELF-MANAGED TEAMS.
      1. The trend in the United States is toward self-managed teams and away from management, with its emphasis on planning, organizing, directing, and controlling.
      2. More planning, organizing, and controlling is being delegated to lower-level managers.
      3. This trend means that 21st century managers must develop employees to assume greater responsibility.
      4. Chapter 8 deals with teams.
    4. THE STAKEHOLDER-ORIENTED ORGANIZATION
      1. The firm must find the best way to organize to respond to the needs of customers and other stakeholders.
        1. STAKEHOLDERS include anyone who is affected by the organization and its policies and products.
        2. Most large firms are being restructured into smaller, more customer-focused units to become more responsive.
      2. Companies are no longer organizing to make it easy for managers to have control. Instead, they are organizing so that CUSTOMERS have control.
      3. In order for an organization to provide quality goods and services, it must develop close relationships with suppliers to provide world-class parts and materials.
      4. Today, the organization task is more complex because firms are forming partnerships, joint ventures, and other arrangements that make it necessary to organize the WHOLE SYSTEM.
      5. Creating a unified system out of multiple organizations will be a major challenge of the 21st century.
    5. STAFFING: GETTING AND KEEPING THE RIGHT PEOPLE
      1. STAFFING involves recruiting, hiring, motivating, and retaining the best people available to accomplish the company’s objectives.
        1. Recruiting good employees has always been an important part of organizational success.
        2. The firms with the most innovative and creative works can develop quickly and successfully.
      2. Once they are hired, good people must be retained.
        1. A low national unemployment rate means people no longer are willing to work at companies unless they are treated well.
        2. Staffing is becoming a bigger part of the managers’ job.
      3. Chapter 11 is devoted to human resources issues.
    6. MANAGING DIVERSITYConcept Check CONCEPT CHECK .
      1. MANAGING DIVERSITY means building systems and a culture that unites different people in a common pursuit without undermining their diversity.
      2. If people are to work on teams, they have to LEARN TO DEAL WITH PEOPLE WHO HAVE DIFFERENT PERSONALITIES, PRIORITIES, AND LIFESTYLES.
      3. HETEROGENEOUS (MIXED) GROUPS are more productive than HOMOGENOUS (SIMILAR) GROUPS in the workplace.
      4. It is often quite profitable to have employees who match the diversity of customers.
      5. Managers must learn to work with people from many different cultures.
      6. Managing diversity also means working with minority business enterprises (MBE) to maintain a strong and diverse supplier network.
      7. The text uses the example of American Airlines, which successfully manages diversity.
  4. LEADING: PROVIDING CONTINUOUS VISION AND VALUES.

    5. Explain the differences between leaders and managers, and describe the various leadership styles.

    1. A person could be a good manager and not a good leader.
      1. LEADERSHIP involves creating vision for others to follow, establishing corporate values and ethics, and transforming the way the organization does business so it is more effective and efficient.
      2. MANAGEMENT is the carrying out of the leadership’s vision.
      3. All organizations need leaders who can supply the vision as well as the moral and ethical foundation for growth.
    2. LEADERS MUST:
      1. Communicate a vision and rally others around that vision.
      2. Establish corporate values.
      3. Promote corporate ethics.
      4. Embrace change
    3. LEADERSHIP STYLES Power Point Presentation
      1. Research studies have not been able to identify one set of TRAITS that are common to all leaders.
      2. There are also DIFFERENT LEADERSHIP STYLES:
        1. AUTOCRATIC LEADERSHIP involves making managerial decisions without consulting other, and implies power over others.
        2. PARTICIPATIVE or DEMOCRATIC LEADERSHIP consists of managers and employees working together to make decisions.
        3. LAISSEZ-FAIRE or FREE-REIN LEADERSHIP involves managers setting objectives and employees being relatively free to do whatever it takes to accomplish those objectives.
        4. Individual leaders rarely fit neatly into just one category
      3. Researchers illustrate leadership as a continuum with varying amounts of employee participation.
      4. WHEN TO USE VARIOUS LEADERSHIP STYLESConcept Check CONCEPT CHECK .
        1. The best leadership style to use depends on WHO IS BEING LED AND IN WHAT SITUATIONS.
        2. Any ONE MANAGER CAN USE A VARIETY OF LEADERSHIP STYLES depending on whom he or she is dealing with and the situation.
        3. The successful leader has the ability to use the leadership style that is most appropriate to the situation and the employees involved.
    4. EMPOWERING WORKERS.
      1. For traditional organizations, directing involves giving assignments, explaining routines, clarifying policies, and providing feedback on performance.
      2. PROGRESSIVE LEADERS are less likely to be giving specific instructions to employees.
        1. They are more likely to EMPOWER them to make decisions on their own.
        2. EMPOWERMENT is a total quality term that means giving employees the authority and responsibility to respond quickly to customer requests.
        3. ENABLING is the term used to describe giving workers the education and tools needed to assume their new decision-making roles.
    5. MANAGING KNOWLEDGE
      1. Finding the right information, keeping the information is a readily accessible place, and making the information known to everyone in the firm is know as KNOWLEDGE MANAGEMENT.
      2. Knowledge management tries to keep people from duplicating the work of gathering information every time a decision is made.
      3. Learning how to process information and turn it into information that everyone can use is key to managerial success.
  5. CONTROLLING: MAKING SURE IT WORKS.

    6. Summarize the five steps of the control function of management.

    1. The CONTROL FUNCTION is the heart of the management system because it provides the feedback that enables managers to adjust to any deviations from plans.
      1. CONTROLLING CONSISTS OF THE FOLLOWING STEPS:
        1. Setting clear PERFORMANCE STANDARDS
        2. MONITORING and recording actual performance.
        3. COMPARING RESULTS against plans and standards.
        4. COMMUNICATING RESULTS and deviations to the employees involved.
        5. Providing FEEDBACK and TAKING CORRECTIVE ACTION when needed.
      2. SETTING STANDARDS
        1. To measure results against standards, the standards must be SPECIFIC, ATTAINABLE, and MEASURABLE.
        2. To measure results against standards, the standards must be SPECIFIC, ATTAINABLE, and MEASURABLE.
    2. NEW CRITERIA FOR MEASUREMENT: CUSTOMER SATISFACTION.
      1. The criteria for measuring success in a customer-oriented firm is CUSTOMER SATISFACTION OF BOTH INTERNAL AND EXTERNAL CUSTOMERS.
        1. EXTERNAL CUSTOMERS include dealers and ultimate customers who buy products for their own personal use.
        2. INTERNAL CUSTOMERS are individuals and units within the firm that receive services from other units.
      2. One goal today is to go beyond simply satisfying customers by "delighting" them with unexpectedly good products and services.
      3. Other CRITERIA of organizational effectiveness may include the firm’s CONTRIBUTION TO SOCIETY or the ENVIRONMENT.
    3. THE CORPORATE SCORECARD.
      1. A CORPORATE SCORECARD measures financial progress, return on investment, and profits, in addition to customer satisfaction.
      2. Most companies use a balanced approach that measures both financial growth and employee and customer satisfaction.
  6. TASKS AND SKILLS AT DIFFERENT LEVELS OF MANAGEMENTPower Point Presentation.

    7. Differentiate the skills needed at each level of management.

    1. The further up the managerial ladder a person moves, the greater the need for people who are visionaries, good planners, organizers, coordinators, communicators, morale builders, and motivators.
    2. Managers must have THREE CATEGORIES OF SKILLS:
      1. TECHNICAL SKILLS involve the ability to perform tasks in a specific discipline (such as selling a product) or department (such as marketing.)
      2. HUMAN RELATIONS SKILLS involve communication and motivation; they enable managers to work through and with people.
      3. CONCEPTUAL SKILLS involve the ability to picture the organization as a whole and the relationships among its various parts.
      4. Skills by level:
        1. FIRST-LEVEL MANAGERS need MORE TECHNICAL AND HUMAN RELATIONS SKILLS.
        2. TOP MANAGERS, need FEW TECHNICAL SKILLS AND GREATER CONCEPTUAL SKILLS.
    3. MANAGEMENT SKILLS ARE TRANSFERABLE
      1. Studying management and leadership prepared people for a career in any organization.
      2. When selecting a career in management, a student has several decisions to make:
        1. When selecting a career in management, a student has several decisions to make:
        2. What type of managerial position seems most interesting?
        3. What type of industry is most appealing?




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