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Chapter Seven

Chapter 07

LEARNING GOALS

1. Describe the changes occurring today in the

management function.

Management
and
Leadership

2. Describe the four functions of management.

3. Relate the planning process and decision making
to the accomplishment of company goals.

McGraw-Hill/Irwin

Chapter Seven

7-2

Copyright 2013 by The McGraw-Hill Companies, Inc. All rights reserved.

Profile

JOHN MACKEY

LEARNING GOALS

Whole Foods Market

Worked at a vegetarian co-op

after attending the University
of Texas.

4. Describe the organizing function of management.

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

Opened SaferWay Natural

Foods with his girlfriend
before merging with a
competitor to create Whole
Foods.

6. Summarize the five steps of the control function of

management.

Now there are over 300

stores in the U.S. and U.K.
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Chapter Seven

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Four Functions
of Management

NAME that COMPANY

WHAT IS MANAGEMENT?

LG1

Management -- The process used to accomplish

Like many companies today, this company uses

social media to communicate with customers.
In one case, a customer complained on Twitter
when the company sent a Blackberry to replace
an iPhone that failed. The company responded
quickly with a replacement iPhone. The
customer then tweeted about the companys
great customer service.

organizational goals through planning, organizing,

leading and controlling people and other
organizational resources.

Name that company!

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Managers Roles
Are Evolving

Managers Roles
Are Evolving

TODAYS MANAGERS

LG1

RESPECT and HOW to GET IT

LG1

Younger and more

progressive.
- Growing numbers of women.
- Fewer from elite universities.

Emphasis is on teams and

team building.
Managers need to be skilled
communicators and team
players.
Source: Entrepreneur, www.entrepreneur.com, accessed June 2011.
7-7

Managers Roles
Are Evolving

Four Functions
of Management

EDUCATION MATTERS
Alma Maters of CEOs

LG1

LG2

Rank

School

# of CEOs

Who?

University of California

12

William Johnson - Heinz

School of Hard Knocks*

12

Steve Jobs - Apple

Harvard College

11

Steve Ballmer - Microsoft

University of Missouri

11

David Novak - Yum! Brands

University of Texas

11

Gary Kelly - Southwest Airlines

University of Wisconsin

11

Carol Bartz - Yahoo!

Dartmouth College

10

Enrique Salem - Symantec

Princeton

Andrea Jung - Avon Products

Indiana University

Donald Knauss - Clorox

Purdue University

Gregory Wasson - Walgreens

10

7-8

FOUR FUNCTIONS of
MANAGEMENT

1. Planning
2. Organizing
3. Leading
4. Controlling

* Did not graduate from any college or university.

Source: Bloomberg BusinessWeek, May 17, 2010.

7-9

Progress
Assessment

7-10

Planning &
Decision Making

PROGRESS ASSESSMENT

SHARING the VISION

LG3

What are some of the changes happening in

management today?

Vision -- More than a

goal, its a broad

Whats the definition of management used in this

chapter?

explanation of why the

organization exists and
where its trying to go.

What are the four functions of management?

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Planning &
Decision Making

Planning &
Decision Making

DEFINING THE MISSION

LG3

LG3

Mission Statement -- Outlines the organizations

Goals -- The broad, long-term

fundamental purposes. It includes:

-

SETTING
GOALS and OBJECTIVES

accomplishments an
organization wishes to attain.

The organizations selfconcept

Its philosophy
Longterm survival needs
Customer needs
Social responsibility
Nature of the product or service

Objectives -- Specific, shortterm statements detailing how

to achieve the organizations
goals.

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Planning &
Decision Making
LG3

7-14

Planning &
Decision Making

PLANNING ANSWERS
FUNDAMENTAL QUESTIONS

SWOT MATRIX

LG3

What is the situation now?

SWOT Analysis -- Analyzes the organizations
Strengths, Weaknesses, Opportunities and Threats.

How can we get to our goal from here?

-

Strategic planning
Tactical planning
Operational planning
Contingency planning

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Planning &
Decision Making

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Planning &
Decision Making

PLANNING FUNCTIONS

LG3

LG3

STRATEGIC and TACTICAL

PLANNING

Strategic Planning -- Done by top management

and determines the major goals of the organization
and the policies, procedures, strategies and
resources it will need to achieve them.

Tactical Planning -- The process of developing

detailed, short-term statements about what is to be
done, who is to do it and how.

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Planning &
Decision Making
LG3

JAPANESE CRISIS, TERRORISM,

and AMERICAN BUSINESS

OPERATIONAL and CONTINGENCY

PLANNING

(Reaching Beyond Our Borders)

Operational Planning -- The process of setting

Disasters point out the need for contingency and

disaster planning.

work standards and schedules necessary to

implement the companys tactical objectives.

Over 30 U.S. corporations get at least 15% of

sales from Japan. All were affected by the
earthquake.

Contingency Planning -The process of preparing

alternative courses of action
the firm can use if its primary
plans dont work out.

Man-made disasters, such as war and terrorism,

also disrupt the supply chain.

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Decision Making:
Finding the Best
Alternative

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Decision Making:
Finding the Best
Alternative

WHAT MAKES a GREAT CEO

LG3

LG3

Decision Making Skills of Top CEOs

Decision Making -- Choosing among two or more

Keep global business issues in mind and be a

citizen of the world.

DECISION MAKING

alternatives.

Identify and manage risks before they grow.

Change strategies and models with the times.
Skillfully manage relationships with governments
as government involvement rises.

Source: Fortune, June 13, 2011.

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Decision Making:
Finding the Best
Alternative
LG3

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Decision Making:
Finding the Best
Alternative

RATIONAL DECISION-MAKING
MODEL

PROBLEM SOLVING

LG3

1. Define the situation.

Problem Solving -- The process of solving the

2. Describe and collect needed information.

everyday problems that occur; less formal than

decision making and needs quicker action.

3. Develop alternatives.
4. Develop agreement among those involved.

Problem-solving techniques include

brainstorming and PMI -- Listing all the pluses for a

5. Decide which alternative is best.

solution in one column, all the minuses in another

and the implications in a third.

6. Do what is indicated.
7. Determine whether the decision was a good one
and follow up.
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Progress
Assessment

Organizing:
Creating a
Unified System

PROGRESS ASSESSMENT

ORGANIZATIONAL CHARTS

LG4

Whats the difference between goals and

objectives?

Organization Chart -A visual device that

shows relationships
among people and
divides the
organizations work; it
shows who reports to
whom.

What does a company analyze when it does a

SWOT analysis?
What are the differences between strategic,
tactical and operational planning?
What are the seven Ds in decision making?

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Organizing:
Creating a
Unified System

7-26

Organizing:
Creating a
Unified System

LEVELS of MANAGEMENT

LG4

MANAGEMENT LEVELS

LG4

Top Management -- The highest level, consists

of the president and other key company executives
who develop strategic plans.

Middle Management -- Includes general

managers, division managers, and branch and
plant managers who are responsible for tactical
planning and controlling.

Supervisory Management -- Those directly

responsible for supervising workers and evaluating
daily performance.
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Organizing:
Creating a
Unified System

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Organizing:
Creating a
Unified System

TOP MANAGEMENT

LG4

LG4

Chief Executive Officer (CEO)

- Introduces change into an organization.

Chief Operating Officer (COO)

- Implements CEOs changes.
Chief Financial Officer (CFO)
- Obtains funds, plans budgets, collects funds, etc.

Chief Information Officer (CIO)

- Gets the right information to the right people so
decisions can be made.

AMERICAS MOST POWERFUL

FEMALE MANAGERS

Rank

Name

Indra Nooyi

Organization
PepsiCo

Irene Rosenfeld

Kraft Foods

Patricia Woertz

Archer Daniel Midland

(ADM)

Angela Braly

WellPoint

Andrea Jung

Avon Products

Oprah Winfrey

Harpo and OWN

Ellen Kullman

DuPont

Ginni Rommetty

IBM

Ursula Burns

Xerox

10

Carol Bartz

Yahoo!

Source: Fortune Magazine, www.fortune.com, accessed June 2011.

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Tasks and Skills

at Different Levels
of Management

Tasks and Skills

at Different Levels
of Management

MANAGERIAL SKILLS

THANK YOU
The Most Basic Human Relations Skill

LG4

LG4

Technical Skills -- The ability to perform tasks in a

Saying thank you has led to happier employees

and greater profits for companies.

specific discipline or department.

Whom should a manager thank?

Human Relations Skills -- Skills that involve

communication and motivation; they enable
managers to work through and with people.

1. Interns - Doing lots of work for little money, they are

the future of the company and industry.

2. Lawyers - Many do pro bono work, even for nonprofit

Conceptual Skills -- Skills that involve the ability to

companies.

picture the organization as a whole and the

relationship among its various parts.

3. The little people - Mailroom, repair, and cleaning staff

keep the office running day-to-day.
Source: Fast Company, November 2010.
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Tasks and Skills

at Different Levels
of Management
LG4

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Staffing: Getting
and Keeping the
Right People

SKILLS NEEDED at VARIOUS

LEVELS of MANAGEMENT

STAFFING

LG4

Staffing -- Recruiting, hiring, motivating and

retaining the best people available to accomplish the
companys objectives.

Recruiting good
employees is critical.
Many people are not
willing to work at
companies unless they
are treated well with
fair pay.
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Staffing: Getting
and Keeping the
Right People

STAFFING is TRICKY BUSINESS

Leading: Providing
Continuous Vision
and Values.

LG4

Six Sins of Staffing

LG5

LEADERSHIP

Leaders must:

1. Dont hire someone because someone else says so.

- Communicate a vision
and rally others around
that vision.
- Establish corporate
values.
- Promote corporate
ethics.
- Embrace change.
- Stress accountability and
responsibility.

2. Dont get caught up in applicants appearances.

3. Dont give someone the wrong job.
4. Dont forget about feedback.
5. Dont give promotions just because its time.
6. Dont cheat your employees.
Source: CareerBuilder, www.careerbuilder.com, accessed June 2011.
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Leading: Providing
Continuous Vision
and Values.

To SHARE or NOT to SHARE

(Making Ethical Decisions)

LG5

As a first-line manager, you have new information

that your department head hasnt seen yet. The
findings of the report indicate your managers
plans should fail. If they do fail, you could be
promoted.

ACCOUNTABILITY through
TRANSPARENCY

Transparency -The presentation of

the companys facts
and figures in a way
that is clear and
apparent to all
stakeholders.

Will you give your department head the report?

What is the ethical thing to do?
What might be the consequences?
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Leadership
Styles

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Leadership
Styles

LEADERSHIP STYLES

LG5

VARIOUS LEADERSHIP STYLES

LG5

Autocratic Leadership -Making managerial decisions

without consulting others.

Participative or Democratic
Leadership -- Managers and
employees work together to
make decisions.

Free-Rein Leadership -Managers set objectives and

employees are free to do
whatever is appropriate to
accomplish those objectives.
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Leadership
Styles

USING SOCIAL MEDIA to

BUILD CUSTOMER SUPPORT

NATURAL BORN LEADERS?

Four Types of Executives

LG5

7-40

(Social Media in Business)

Rationalists

Humanists

Politicists

Culturists

Many companies use sites like Twitter and

Facebook to proactively and reactively
communicate with their customers.
Best Buy has 2,500 employees who read and
respond to consumer complaints on Twitter.
Many companies still arent implementing these
programs. This has led to many more complaints
via social media than positive support.

Source: CIO Magazine, www.cio.com.

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Empowering
Workers

Empowering
Workers

EMPOWERMENT

WORK SMARTER
How to Ease Pressure on Workers

LG5

LG5

Progressive leaders give employees the

authority to make decisions on their own without
consulting a manager.

Manage output instead of hours.

Train workers to be ready for a more complex
corporate structure.

Customer needs are handled quickly.

Allow lower-level managers to make decisions.

Managers role becomes less of a boss and

more of a coach.

Use new technology to foster teamwork.

Shift hiring emphasis to collaboration.

Enabling -- Giving workers the education and tools

they need to make decisions.

Source: Bloomberg BusinessWeek, www.businessweek.com.

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Managing
Knowledge

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Controlling:
Making Sure it
Works

MANAGING KNOWLEDGE

LG5

FIVE STEPS of CONTROLLING

LG6

Knowledge Management -Finding the right information,

keeping the information in a
readily accessible place and
making the information known
to everyone in the firm.

Tries to keep people from

reinventing the wheel.

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Controlling:
Making Sure it
Works

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A Key Criterion
for Measurement:
Customer
Satisfaction

ARE YOU a MICROMANAGER?

LG6

MEASURING SUCCESS

LG6

Traditional forms of measuring success are

financial.

Do you have strategic initiatives that you have

not addressed?
Do you often check on employees for quality
control?
Do you often check on subordinates throughout
the day?
Do you rarely take vacations?
Is there a lot of turnover?

Pleasing employees, stakeholders and customers

is important.
External Customers -- Dealers, who buy products
to sell to others, and ultimate customers (or end
users), who buy products for their own use.

Internal Customers -- Individuals and units within

the firm that receive services from other individuals or
units.

Source: CFO Magazine, www.cfo.com.

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Progress
Assessment

PROGRESS ASSESSMENT

How does enabling help achieve empowerment?

What are the five steps in the control process?
Whats the difference between internal and
external customers?

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