Management: the Essentials

PART I: INTRODUCTION CHAPTER 1 – MANAGERS AND MANAGEMENT LEARNING OUTCOMES

1. After reading this chapter students will be able to:
2. Tell who managers are and where they work.
3. Define management.
4. Describe what managers do.
5. Explain why it‘s important to study management.
6. Describe the factors that are reshaping and redefining management.

Opening Vignette – The Man Behind an African Megabrand

SUMMARY

Herman Mashaba, along with two business partners, founded the South African Black Like Me cosmetics brand in 1985. They manufactured the product at night and spent the daytime cold selling it.

Because of Mashaba‘s selling skills and his good business sense, the brand experienced huge growth. Mashaba and his partners worked hard to organize their distribution network, grow their market share, gain customer confidence, and improve the product line. Teaching Tips: 1. What are some examples of good managers? Are they fair, good communicators, approachable, etc? 1-1 Copyright ©2011

Part I – WHO ARE MANAGERS, AND WHERE DO THEY WORK?

Introduction

Managers work in an organization.

An organization is a deliberate arrangement of people brought together to accomplish some specific purpose. Your college or university is an organization.

What Three Common Characteristics Do All Organizations Share?

Every organization has a purpose and is made up of people who are grouped in some fashion.

This distinct purpose is typically expressed in terms of a goal or set of goals. Second, purposes or goals can only be achieved through people. Third, all organizations develop a systematic structure that defines and limits the behavior of its members. Developing structure may include creating rules and regulations, giving some members supervisory control, forming teams, etc. . The term organization refers to an entity that has a distinct purpose, has people or members, and has a systematic structure. How Are Managers Different from Non-Managerial Employees? Organizational members fit into two categories: operatives and managers. Non-managerial employees work directly on a job or task and have no oversight responsibility of others. Managers direct the activities of other people in the organization. Customarily classified as top, middle, or first line, they supervise both nonmanagerial employees and lower-level managers. Some managers also have operative responsibilities themselves.

The distinction between non-managers and managers is that managers have employees who report directly to them. Right or Wrong? One survey indicated that some 44 percent of people lie about their work history. Another survey found that 93 percent of hiring managers who found a lie on a job candidate‘s resume did not hire that person.

1. Why do you think lying about your academic credentials is considered wrong?
2. What ethical issues does this bring up?
3. Which is worse? Lying about your academic credentials or lying about your work history?

Why? Teaching tip All lies speak directly to the character of the candidate and his/her overall integrity. 1-2 Copyright ©2011 Pearson Education Chapter 1 – Managers and Management D. What Titles Do Managers Have?

Top managers are responsible for making decisions about the direction of the organization and establishing policies that affect all organizational members.

1. Examples: Herman and Connie Mashaba, Google‘s Larry Page, Kenneth Chenault of American Express.
2. Top managers have titles including vice president, managing director, chief operating officer, chancellor, etc. 2.
3. Middle managers represent levels of management between the first-line supervisor and top management.
4. They manage other managers and possibly some non-managerial employees.
5. They are responsible for translating the goals set by top management into specific details.

First-line managers are usually called supervisors, team leaders, coaches, etc.

WHAT IS MANAGEMENT?

How Do We Define Management? 1. Managers, regardless of title, share several common elements. 2. Management—the process of getting things done effectively and efficiently, through and with other people. a) The term ? process? in the definition represents the primary activities managers perform. . Effectiveness and efficiency deal with what we are doing and how we are doing it. a) Efficiency means doing the task right and refers to the relationship between inputs and outputs. Management is concerned about minimizing resource costs. b) Effectiveness means doing the right task, and in an organization that translates into goal attainment. c) See Exhibit 1-3. 4. Efficiency and effectiveness are interrelated. a) It‘s easier to be effective if one ignores efficiency. b) Good management is concerned with both attaining goals (effectiveness) and doing so as efficiently as possible. ) Organizations can be efficient and yet not be effective. d) High efficiency is associated more typically with high effectiveness. 5. Poor management is most often due to both inefficiency and ineffectiveness or to effectiveness achieved through inefficiency. 1-3 Copyright ©2011 Pearson Education Part I – Introduction From the Past to the Present The terms management or manager come from a number of sources. One source says that the word manager originated in 1588 to describe one who manages. The specific use of the word as ? one who conducts a house of business or public institution? s said to have originated in 1705. Another source says that the origin (1555–1565) is from the word maneggiare, which meant ? to handle or train horses,? and was a derivative of the word mano, which is from the Latin word for hand, manus. That origin arose from the way that horses were guided, controlled, or directed where to go—that is, through using one‘s hand. The words management and manager are more appropriate to the early twentieth century. Peter Drucker, the late management writer, studied and wrote about management for more than 50 years. The word ? anagement‘ was first popularized by Frederick Winslow Taylor.? In 1911, Taylor‘s book Principles of Scientific Management was published. Its contents were widely embraced by managers around the world. The book described the theory of scientific management: the use of scientific methods to define the ? one best way? for a job to be done. He spent more than two decades passionately pursuing the ? one best way? for such jobs to be done. Based on his groundbreaking studies of manual workers using scientific principles, Taylor became known as the ? father? of scientific management.

Some of these techniques like the analysis of basic work that must be performed, and time-and-motion studies are still used today. Teaching Notes _____________________________________________________________________________________ _____________________________________________________________________________________ _____________________________________________________________________________________ _____________________________________________________________________________________ _____________________________________________________________________________________ III.

WHAT DO MANAGERS DO? 1. Henri Fayol defined the management process in terms of five management functions. a) They plan, organize, command, coordinate, and control. b) In the mid-1950s, two professors used the terms ? planning,? ?organizing,? ?staffing,? ?directing,? and ? controlling? as the framework for the most widely sold management textbook. A. The Four Management Functions a) See Exhibit 1-4; planning, organizing, leading, and controlling. b) These processes are interrelated and interdependent. 1.

Planning encompasses defining an organization‘s goals, establishing an overall strategy for achieving those goals, and developing a comprehensive hierarchy of plans to integrate and coordinate activities. a) Setting goals creates a proper focus. 2. Organizing—determining what tasks are to be done, who is to do them, how the tasks are grouped, who reports to whom, and where decisions are to be made. 3. Directing and coordinating people is the leading component of management. a) Leading involves motivating employees, directing the activities of others, selecting the most effective communication channel, or resolving conflicts among members. -4 Copyright ©2011 Pearson Education Chapter 1 – Managers and Management 4. Controlling. a) To ensure that things are going as they should, a manager must monitor the organization‘s performance. b) Actual performance must be compared with the previously set goals. c) Any significant deviations must be addressed. d) The monitoring, comparing, and correcting are the controlling process. 5. The process approach is clear and simple but may not accurately describe what managers do. a) Fayol‘s original applications represented mere observations from his experiences in the French mining industry. 6.

In the late 1960s, Henry Mintzberg provided empirical insights into the manager‘s job. B. What Are Management Roles? 1. Henry Mintzberg undertook a careful study of five chief executives at work. a) Mintzberg found that the managers he studied engaged in a large number of varied, unpatterned, and short-duration activities. b) There was little time for reflective thinking (due to interruptions). c) Half of these managers‘ activities lasted less than nine minutes. 2. Mintzberg provided a categorization scheme for defining what managers do on the basis of actual managers on the job—Mintzberg‘s managerial roles. . Mintzberg concluded that managers perform ten different but highly interrelated roles. a) These ten roles are shown in Exhibit 1-5. b) They are grouped under three primary headings: 1) Interpersonal relationships. 2) Informational 3) Decisional C. What Skills do Managers Need? a) Conceptual skills – used to analyze and diagnose complex situations. b) Interpersonal skills – involved with working well with other people both individually and in groups. c) Technical skills – job-specific knowledge and techniques needed to perform work tasks. ) Political skills – to build a power base and establish the right connections. 1-5 Copyright ©2011 Pearson Education Part I – Introduction Developing Your Political Skill About the Skill Research has shown that people differ in their political skills. Those who are politically skilled are more effective in their use of influence tactics. Political skill also appears to be more effective when the stakes are high. Finally, politically skilled individuals are able to exert their influence without others detecting it, which is important in being effective so that you‘re not labeled political.

A person‘s political skill is Steps in Practicing the Skill 1. 2. 3. 4. Develop your networking ability. Work on gaining interpersonal influence. Develop your social astuteness. Be sincere. Practicing the Skill Select each of the components of political skill and spend one week working on it. Write a brief set of notes describing your experiences—good and bad. Were you able to begin developing a network of people throughout the organization or did you work at developing your social astuteness maybe by starting to recognize and interpret people‘s facial expressions and the meaning behind those expressions?

What could you have done differently to be more politically skilled? Once you begin to recognize what‘s involved with political skills, you should find yourself becoming more connected and politically adept. D. Is the Manager’s Job Universal? 1. The importance of the managerial roles varies depending on the manager‘s level in the organization. a) The differences are of degree and emphasis but not of activity. b) As managers move up, they do more planning and less direct overseeing of others. 1) See Exhibit 1-6. c) The amount of time managers give to each activity is not necessarily constant. ) The content of the managerial activities changes with the manager‘s level. 1) Top managers are concerned with designing the overall organization‘s structure. 2) Lower-level managers focus on designing the jobs of individuals and work groups. 2. Profit versus Not-for-Profit. a) The manager‘s job is mostly the same in both profit and not-for-profit organizations. b) All managers make decisions, set objectives, create workable organization structures, hire and motivate employees, secure legitimacy for their organization‘s existence, and develop internal political support in order to implement programs. ) The most important difference is measuring performance, profit, or the ? bottom line.? d) There is no such universal measure in not-for-profit organizations. e) Making a profit for the ? owners? of not-for-profit organizations is not the primary focus. f) There are distinctions, but the two are far more alike than they are different. 3. Size of Organization. 1-6 Copyright ©2011 Pearson Education Chapter 1 – Managers and Management a) Definition of small business and the part it plays in our society. 1) There is no commonly agreed-upon definition. ) Small business—any independently owned and operated profit-seeking enterprise that has fewer than 500 employees. c) Statistics on small business. 1) 98 percent of all nonfarm businesses in the United States. 2) Employ over 60 percent of the private work force. 3) Dominate such industries as retailing and construction. 4) Will generate nearly three-fourths of all new jobs in the economy. 5) Where the job growth has been in recent years. (a) Companies with fewer than 500 employees have created more than 2 million jobs (b) Small business start-ups witnessed in countries such as China, Japan, Korea, Taiwan, and Great Britain. ) Managing a small business is different from that of managing a large one. 1) See Exhibit 1-7. 2) The small business manager‘s most important role is that of spokesperson (outwardly focused). 3) In a large organization, the manager‘s most important job is deciding which organizational units get what available resources and how much of them (inwardly focused). 4) The entrepreneurial role is least important to managers in large firms. 5) A small business manager is more likely to be a generalist. ) The large firm‘s manager‘s job is more structured and formal than the manager in a small firm. 7) Planning is less carefully orchestrated in the small business. 8) The small business organizational design will be less complex and structured. 9) Control in the small business will rely more on direct observation. e) We see differences in degree and emphasis, but not in activities. 4. Management concepts and national borders. a) Studies that have compared managerial practices between countries have not generally supported the universality of management concepts. ) In Chapter 2, we will examine some specific differences between countries. b) Most of the concepts we will be discussing primarily apply to the United States, Canada, Great Britain, Australia, and other English-speaking democracies. 1-7 Copyright ©2011 Pearson Education Part I – Introduction c) Concepts may need to be modified when working with India, China, Chile, or other countries whose economic, political, social, or cultural environments differ greatly from that of the so-called free-market democracies.

Teaching Notes _____________________________________________________________________________________ _____________________________________________________________________________________ _____________________________________________________________________________________ _____________________________________________________________________________________ _____________________________________________________________________________________ _____________________________________________________________________________________ IV. WHY STUDY MANAGEMENT? A. Reasons 1.

We all have a vested interest in improving the way organizations are managed. a) We interact with them every day of our lives. 1) Examples of problems that can largely be attributed to poor management. b) Those that are poorly managed often find themselves with a declining customer base and reduced revenues. 2. The reality that once you graduate from college and begin your career, you will either manage or be managed. a) An understanding of the management process is foundational for building management skills. b) You will almost certainly work in an organization, be a manager, or work for a manager. ) You needn‘t aspire to be a manager in order to gain something valuable from a course in management. 3. Management embodies the work and practices from individuals from a wide variety of disciplines. a) Organizations that are well managed develop a loyal following and are prosperous. B. What Can Students of Management Learn from Other Courses? 1. College courses frequently appear to be independent bodies of knowledge. 2. There is typically a lack of connectedness between core business courses and between courses in business and the liberal arts. . A number of management educators have begun to recognize the need to build bridges by integrating courses across the college curriculum. 4. We‘ve integrated topics around the humanities and social science courses you may have taken to help you see how courses in disciplines such as economics, psychology, sociology, political science, philosophy, and speech communications relate to topics in management. 5. The big picture is often lost when management concepts are studied in isolation. 6. Anthropology. ) The study of societies, which helps us learn about human beings and their activities. 1-8 Copyright ©2011 Pearson Education Chapter 1 – Managers and Management b) Anthropologists‘ work on cultures and environments has helped managers better understand differences in fundamental values, attitudes, and behavior between people. 7. Economics. a) Concerned with the allocation and distribution of scarce resources. b) Provides an understanding of the changing economy and the role of competition and free markets in a global context. . Philosophy. a) Philosophy courses inquire into the nature of things, particularly values and ethics. b) Ethical concerns go directly to the existence of organizations and what constitutes proper behavior within them. 9. Political Science. a) It studies the behavior of individuals and groups within a political environment. b) Specific topics of concern include structuring of conflict, allocating power, and manipulating power for individual self-interest. c) Capitalism is just one form of an economic system. ) The economies based on socialistic concepts are not free markets but government owned. Organizational decision makers essentially carry out dictates of government policies. 1) Efficiency had little meaning in such economies. e) Management is affected by a nation‘s form of government, whether it allows its citizens to hold property, by the ability to engage in and enforce contracts, and by the appeal mechanisms available to redress grievances. 10. Psychology. a) The science that seeks to measure, explain, and sometimes change the behavior of humans. ) Psychologists study and attempt to understand individual behavior, and is leading the way in providing managers with insights into human diversity. c) Psychology courses are also relevant to managers in terms of gaining a better understanding of motivation, leadership, trust, employee selection, performance appraisals, and training techniques. 11. Sociology. a) Sociology studies people in relation to their fellow human beings. b) Sociologists investigate how societal changes such as globalization, cultural diversity, gender roles, and varying forms of family life affect organizational practices.

C. A Concluding Remark We‘ve attempted to provide some insight into need-to-integrate courses you have taken in your college pursuits because what you learn in humanities and social science courses can assist you in becoming better prepared to manage in today‘s dynamic marketplace. 1-9 Copyright ©2011 Pearson Education Part I – Introduction V. WHAT FACTORS ARE RESHAPING AND REDIFINING MANAGEMENT? A. Introduction a) Managers are dealing with changing workplaces, ethical and trust issues, global economic uncertainties, and changing technology.

B. Why Are Customers Important to the Manager’s Job? 1. Without them, companies wouldn’t survive. 2. Employee attitudes and behaviors play a big role in customer satisfaction. 3. Managers must create a customer responsive organization C. Why Is Innovation Important to the Manager’s Job? 1. Not being innovative in today’s world is risky. 2. Gallup polls indicate that the single most important variable in employee productivity and loyalty is the quality of the relationship between employees and their direct supervisors.

Teaching Notes _____________________________________________________________________________________ _____________________________________________________________________________________ _____________________________________________________________________________________ _____________________________________________________________________________________ _____________________________________________________________________________________ _____________________________________________________________________________ ________

REVIEW AND APPLICATIONS CHAPTER SUMMARY 1. 1 Tell who managers are and where they work. Managers are individuals who work in an organization directing and overseeing the activities of other people. Managers are usually classified as top, middle, or first-line. Organizations, which are where managers work, have three characteristics: goals, people, and a deliberate structure. 1. 2 Define management. Management is the process of getting things done, effectively and efficiently, with and through other people. 1. 3 Describe what managers do.

What managers do can be described using three approaches: functions, roles, and skills. The functions approach says that managers perform four functions: planning, organizing, leading, and controlling. Mintzberg‘s roles approach says that what managers do is based on the 10 roles they use at work, which are grouped around interpersonal relationships, the transfer of information, and decision making. The skills approach looks at what managers do in terms of the skills they need and use. These four critical skills are conceptual, interpersonal, technical, and political.

All managers plan, organize, lead, and control although how they do these and how much they do these may vary according to level in the organization, whether the organization is profit or not-for-profit, the size of the organization, and the geographic location of the organization. 1-10 Copyright ©2011 Pearson Education Chapter 1 – Managers and Management 1. 4 Explain why it’s important to study management. One reason it‘s important to study management is that all of us interact with organizations daily so we have a vested interest in seeing that organizations are well managed.

Another reason is the reality that in your career you will either manage or be managed. By studying management you can gain insights into the way your boss and fellow employees behave and how organizations function. 1. 5 Describe the factors that are reshaping and redefining management. In today‘s world, managers are dealing with changing workplaces, ethical and trust issues, global economic uncertainties, and changing technology. Two areas of critical importance to managers are delivering high-quality customer service and encouraging innovative efforts.

To check your understanding of outcomes 1. 1 – 1. 5, go to mymanagementlab. com and try the chapter questions. UNDERSTANDING THE CHAPTER 1. What is an organization and why are managers important to an organization’s success? 2. Are all effective organizations also efficient? Discuss. If you had to choose between being effective or being efficient, which one would you say is more important? Why? 3. Using any of the popular business periodicals (such as BusinessWeek, Fortune, Wall Street Journal, Fast Company), find examples of managers doing each of the four management functions.

Write up a description and explain how these are examples of that function. 4. Is your course instructor a manager? Discuss in terms of planning, organizing, leading, and controlling. Also discuss using Mintzberg’s managerial roles approach. 5. Is there one best “style” of management? Why or why not? 6. Is business management a profession? Why or why not? Do some external research in answering this question. 7. Why are managers important to organizations? 8. Using current business periodicals, find five examples of managers you would describe as master managers.

Write a paper describing these individuals as managers and why you think they deserve this title. 9. An article by Gary Hamel in the February 2009 issue of Harvard Business Review addresses how management must be reinvented to be more relevant to today’s world. Get a copy of that article. Choose one of the 25 grand challenges identified. Discuss what it is and what it means for the way that organizations are managed. UNDERSTAND YOURSELF How Motivated Am I to Manage? 1-11 Copyright ©2011 Pearson Education Part I – Introduction Not everyone is motivated to perform managerial functions.

This self-assessment instrument taps six components that have been found to be related to managerial success, especially in larger organizations. These components include a favorable attitude toward authority, a desire to compete, a desire to exercise power, assertiveness, desire for a distinctive position, and a willingness to engage in repetitive tasks. INSTRUMENT Complete this instrument by identifying your degree of agreement or disagreement. Use the following rating scale: 1 = Strongly disagree 2 = Moderately disagree 3 = Slightly disagree 4 = Neither agree or disagree 5 = Slightly agree 6 = Moderately agree 7 = Strongly agree 1.

I have a generally positive attitude toward those holding positions of authority over me. 2. I enjoy competition and striving to win for myself and my work group. 1234567 1234567 3. I like to tell others what to do and have no problem with imposing sanctions to enforce my directives. 1234567 4. I like being active, assertive, and protecting the members of my work group. 1234567 5. I enjoy the idea of standing out from the group, behaving in a unique manner, and being highly visible. 1234567 6. I am willing to perform routine, day-to-day administrative tasks and duties.

SCORING KEY To calculate your score, add up your responses to the six items. 1234567 1-12 Copyright ©2011 Pearson Education Chapter 1 – Managers and Management ANALYSIS AND INTERPRETATION Scores on this instrument will range between 6 and 42. Arbitrary cut-offs suggest that scores of 6–18 indicate low motivation to manage; 19–29 is moderate motivation; and 30 and above is high motivation to manage. What meaning can you draw from your score? It provides you with an idea of how comfortable you would be doing managerial activities.

Note, however, that this instrument emphasizes tasks associated with managing in larger and more bureaucratic organizations. A low or moderate score may indicate that you‘re more suited to managing in a small firm, in a more flexible unstructured organization, or in entrepreneurial situations. Overview As the analysis notes, not everyone is motivated to perform managerial functions. The instrument looks at six components shown to be related to managerial success, especially in larger organizations. If you receive a high score, the bureaucracy is for you; a low score shows that small entrepreneurial firms are more suited to you.

This instrument is interesting in light of the evolution of even larger organizations to working as teams or in a virtual reality. Because of the changing nature of organizations from learning organizations to flat structures, the approach to management is altered to one of coaching rather than directing. Whether one is drawn to being a manager will depend largely on the structure of the organization. Teaching Notes A relevant issue is the reality that concept of manager is quite different in a knowledge-based world than it has been in the last 4,000 or so years.

Managers are to orchestrate, but the individuals or teams are more self-managing than in any time in human history that we know of. The concept of manager means that one needs knowledge that is special to being a manager. For years, whether you knew about managing or not, the road to promotion and more money was, and for many organizations still is, being a manager. Many people love their specialty and truly hate managing. They may miss their hands-on work that they went to school to acquire, they may just not be suited to manage, or they may be afraid because they know nothing about managing and do not know how to do it.

These and a host of other issues have made managing a complex and difficult issue for many managers. Some companies have solved the problem by creating two tracks: one for managers and one for those who wish to remain in their technical field. Each can be promoted and receive more pay, thus enabling a choice. This system is seemingly better for both the individual and the organization. The individual is more likely to like her or his work and have a stronger commitment to the company, and the organization taps into those