*Chapter

Seven

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Management and Leadership

McGraw-Hill/Irwin

Copyright 2010 by the McGraw-Hill Companies, Inc. All rights reserved.

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INDRA KRISHNAMURTHY NOOYI
Pepsi
Profile

Started at Pepsi after earning masters degrees from the Indian School of Management and Yale. Goal was to increase sales overseas, introduce good-foryou products and place more emphasis on food. She is a top manager using a boss-centered leadership style while still being a team player.
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AMERICAS MOST POWERFUL FEMALE MANAGERS

Name Indra Nooyi Irene Rosenfeld Pat Woertz Anne Mulcahy Angela Braly Andrea Jung Susan Arnold Oprah Winfrey Brenda Barnes Organization PepsiCo Kraft Foods Archer Daniel Midland Xerox Wellpoint Avon Proctor & Gamble Harpo Sara Lee 52 55 55 55 47 50 54 54 54

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Profile

Age

Ursula Burns

Xerox

50

Source: Fortune Magazine, www.fortune.com, October 13, 2008.

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WHAT IS MANAGEMENT?
Four Functions of Management

LG2

Management -- The process used to accomplish

organizational goals through planning, organizing, leading and controlling people and other organizational resources.

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TODAYS MANAGERS
Younger and more progressive.
- Growing numbers of women. - Fewer from elite universities.

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Managers Roles Are Evolving

LG1

Emphasis is on teams and team building. Managers need to be skilled communicators and team players.
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RESPECT and HOW to GET IT
Managers Roles Are Evolving

LG1

Source: Entrepreneur, www.entrepreneur.com, March 2009.

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The BEST MANAGERS
Name David Axelrod Frank Blake Jamie Dimon Larry Ellison Takeo Fukui Mark Hurd Satoru Iwata Peter Loscher Irene Rosenfeld
Source: BusinessWeek, www.businessweek.com, January 19, 2009.

Managers Roles Are Evolving

LG1

Age 53 59 52 64 64 53 49 51 55

Organization Obama Campaign Home Depot JPMorgan Oracle Honda Hewlett-Packard Nintendo Siemens Kraft Foods

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The WORST MANAGERS
Name James Cayne Organization Bear Stearns
Managers Roles Are Evolving

LG1

What Went Wrong Played golf and bridge while the company collapsed. Ignored warning signs and rewarded greed. Bad lending standards led to bankruptcy. Fired 3,400 experienced employees for cheaper replacements.

Richard Fuld Kerry Killinger Philip Schoonover

Lehman Brothers Washington Mutual Circuit City

Source: BusinessWeek, www.businessweek.com, January 19, 2009.

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FOUR FUNCTIONS of MANAGEMENT

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Four Functions of Management

LG2

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

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WE NEED MANAGERS HERE
(Reaching Beyond Our Borders)

The lack of professional managers is keeping U.S. companies from expanding rapidly in global markets. Flexibility is the key to successfully expanding abroad. Developing products to appeal to another market is another way to be successful.

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SHARING the VISION
Planning & Decision Making

LG3

Vision -- More than a

goal, its a broad explanation of why the organization exists and where its trying to go.

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DEFINING THE MISSION
Planning & Decision Making

LG3

Mission Statement -- Outlines the organizations

fundamental purposes. It includes: The organizations selfconcept. Its philosophy. Longterm survival needs. Customer needs. Social responsibility. Nature of the product or service.

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SETTING GOALS and OBJECTIVES

Goals -- The broad, long-term
accomplishments an organization wishes to attain.

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Planning & Decision Making

LG3

Objectives -- Specific, shortterm statements detailing how to achieve the organizations goals.

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PLANNING ANSWERS FUNDAMENTAL QUESTIONS

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Planning & Decision Making

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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SWOT MATRIX
Planning & Decision Making

LG3

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STRATEGIC and TACTICAL PLANNING

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Planning & Decision Making

LG3

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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OPERATIONAL and CONTINGENCY PLANNING
Planning & Decision Making

LG3

Operational Planning -- The process of setting

work standards and schedules necessary to implement the companys tactical objectives.

Contingency Planning -The process of preparing alternative courses of action the firm can use if its primary plans dont work out.

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PLANNING FUNCTIONS
Planning & Decision Making

LG3

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ID RATHER be BLUE
(Spotlight on Small Business)

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The original Blue Men manage over 500 employees; 70 are performers in 12 cities.
Creators wrote a 132-page Blue Man manual helping them understand the importance of managing growth.

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DECISION MAKING

Decision Making: Finding the Best Alternative

LG3

Decision Making -- Choosing among two or more

alternatives.

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RATIONAL DECISION-MAKING MODEL

1. Define the situation.

Decision Making: Finding the Best Alternative

LG3

2. Describe and collect needed information.

3. Develop alternatives.
4. Develop agreement among those involved. 5. Decide which alternative is best. 6. Do what is indicated. 7. Determine whether the decision was a good one and follow up.
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PROBLEM SOLVING

Decision Making: Finding the Best Alternative

LG3

Problem Solving -- The process of solving the

everyday problems that occur; less formal than decision making and needs quicker action.

Problem-solving techniques include brainstorming and PMI -- Listing all the pluses for a
solution in one column, all the minuses in another and the implications in a third.

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PROGRESS ASSESSMENT
Whats the difference between goals and objectives?

Progress Assessment

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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ORGANIZATIONAL CHARTS

*Organizing:
Creating a Unified System LG4

Organization Chart -A visual device that shows relationships among people and divides the organizations work; it shows who reports to whom.

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LEVELS of MANAGEMENT

*Organizing:
Creating a Unified System LG4

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MANAGEMENT LEVELS

*Organizing:
Creating a Unified System 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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TOP MANAGEMENT
Chief Executive Officer (CEO)
- Introduces change into an organization.

*Organizing:
Creating a Unified System LG4

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.
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MANAGERIAL SKILLS

Tasks and Skills at Different Levels of Management

LG4

Technical Skills -- The ability to perform tasks in a

specific discipline or department.

Human Relations Skills -- Skills

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

Conceptual Skills -- Skills that

involve the ability to picture the organization as a whole and the relationship among its various parts.
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SKILLS NEEDED at VARIOUS LEVELS of MANAGEMENT

Tasks and Skills at Different Levels of Management

LG4

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STAFFING
Staffing -- Recruiting, hiring, motivating and

Staffing: Getting and Keeping the Right People

LG4

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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LAYOFF LEADERS
Largest Layoff Announcements, 1993 to 2008
Company IBM Citigroup Sears Roebuck U.S. Air Force Ford Kmart Boeing U.S. Postal Service Boeing DaimlerChrysler Employees 60,000 53,000 50,000 40,000 35,000 35,000 31,000 29,870 28,000 26,000 Date

Staffing: Getting and Keeping the Right People

LG4

July 1993 November 2008 January 1993 December 2005 January 2002 January 2003 September 2001 January 2002 December 1998 January 2001

Source: Businessweek, www.businessweek.com, December 1, 2008.

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LEADERSHIP
Leaders must:

Leading: Providing Continuous Vision and Values.

LG5

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

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ACCOUNTABILITY through TRANSPARENCY

Leading: Providing Continuous Vision and Values.

LG5

Transparency -- The presentation of the companys

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

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To SHARE or NOT to SHARE
(Making Ethical Decisions)

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.
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
Autocratic Leadership -Making managerial decisions without consulting others.

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Leadership Styles
LG5

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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VARIOUS LEADERSHIP STYLES
Leadership Styles
LG5

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NATURAL BORN LEADERS?
Four Types of Executives
Leadership Styles
LG5

Rationalists

Humanists

Politicists

Culturists

Source: CIO Magazine, www.cio.com.

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EMPOWERMENT
Empowering Workers
LG5

Progressive leaders give employees the authority to make decisions on their own without consulting a manager. Customer needs are handled quickly.
Managers role becomes less of a boss and more of a coach.

Enabling -- Giving workers the education and tools

they need to make decisions.
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WORK SMARTER
How to Ease Pressure on Workers
Empowering Workers
LG5

Manage output instead of hours.

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

Allow lower-level managers to make decisions. Use new technology to foster teamwork. Shift hiring emphasis to collaboration.
Source: BusinessWeek, www.businessweek.com.

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MANAGING KNOWLEDGE
Managing Knowledge
LG5

Knowledge Management -Finding the right information, keeping the information in a readily accessible place and making the information known to every one in the firm.

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FIVE STEPS of CONTROLLING

Controlling: Making Sure it Works

LG6

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ARE YOU a MICROMANAGER?

Controlling: Making Sure it Works

LG6

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?
Source: CFO Magazine, www.cfo.com.

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MEASURING SUCCESS

A Key Criterion for Measurement: Customer Satisfaction

Traditional forms of measuring success are financial.

LG6

Pleasing employees, stakeholders and customers (both internal and external) are 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.
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PROGRESS ASSESSMENT

Progress Assessment

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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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