M Business 5th Edition Ferrell Solutions Manual Full Chapter PDF

M Business 5th Edition Ferrell
Solutions Manual
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Part 3
Chapter 6
Managing for
Quality and
Competitiveness
© 2017 by McGraw-Hill Education. This is proprietary material solely for authorized instructor
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CHAPTER 6
The Nature of Management
CHAPTER 7
Organization, Teamwork, and Communication
CHAPTER 8
Managing Service and Manufacturing Operations
© 2017 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner.
This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part. 2
Learning Objectives
LO 6-1 Define management, and explain its role in the
achievement of organizational objectives.
LO 6-2 Describe the major functions of management.
LO 6-3 Distinguish among three levels of management

and the concerns of managers at each level.
LO 6-4 Specify the skills managers need in order to be

successful.
LO 6-5 Summarize the systematic approach to decision

making used by many business managers.
Management and Managers
• Management
– A process designed to achieve an organization’s
objectives by using its resources effectively and efficiently
in a changing environment
 Effectively means having the intended result
 Efficiently means accomplishing the objectives with a
minimum of resources
• Managers
– Those individuals in organizations who make decisions
about the use of resources and who are concerned with
planning, organizing, staffing, directing and controlling the
organization’s activities to reach its objectives
The Importance of Management
• Every organization must acquire resources to effectively pursue
objectives and coordinate use to turn out final goods and services
 Employees
♦ Important in helping a firm attain its objectives
♦ Recruit, train, compensate, and provide benefits to foster loyalty
 Acquiring Supplies
♦ Ensuring that products are made available to customers
♦ In global markets firms enlist hundreds of diverse suppliers
 Financial resources
♦ To pay for essential activities
♦ Owners, shareholders, banks, and other financial institutions
Management Functions
• Planning
– Planning activities to achieve the organization’s objectives
• Organizing
– Organizing resources and activities to achieve the
organization’s objectives
• Staffing
– Staffing the organization with qualified people
• Directing
– Directing employees’ activities toward achievement of
objectives
• Controlling
– Controlling the organization’s activities to keep it on course
Planning
• Planning is the process of determining the organization’s
objectives and deciding how to accomplish them; the first
function of management
 Mission is the statement of an organization’s
fundamental purpose and basic philosophy
 Objectives are measurable statements on common
issues such as profit, competitive advantage,
efficiency and growth
 Goals are the results the company wants to achieve
 Plans specify what should be done, by whom,
where, when and how
Strategic Plans
» Those plans that establish long-range objectives and
overall strategy or course of action by which a firm
fulfills its mission
» Generally cover periods ranging from one year or longer
– Plans to add products
– Purchase companies
– Sell unprofitable segments of the business
– Issue stock
– Move into international markets
Tactical Plans
– Short-range plans (one year or less) designed to
implement the activities and objectives specified in
the strategic plan
– Keep the firm on course established in the strategic
plan
– An ever-changing market requires firms to develop
short-run or tactical plan to deal with the changing
environment
Operational Plans
– Very short-term plans that specify actions individuals,
work groups, or departments need to accomplish in
order to achieve the tactical plan and ultimately the
strategic plan
– Apply to details in executing activities quickly
Retail Store Example (1 of 2)
 A retailing store with a five-year strategic plan to invest
$5 billion in 500 new retail stores may develop 5
tactical plans (each covering 1 year) specifying:
► How much to spend to set up each new store
► Where to locate
► When to open each new store
Retail Store Example (2 of 2)
 Tactical plans are designed to execute the overall
strategic plan
► They are easier to adjust or abandon if changes in
the environment or the company’s performance so
warrant
 Operational plans may specify the schedule for:
► Opening 1 new store
► Hiring and training new employees
► Obtaining merchandise
► Opening for actual business
Crisis Management or
Contingency Planning
• An element in planning that deals with potential disasters
such as product tampering, oil spills, fire, earthquake,
computer virus
 ~51% of companies have outdated disaster recovery and
business continuity plans
 Herbalife does businesses in 90 countries, and contingency
plans must often be made for fluctuating exchange rates
Organizing
• The structuring of resources and activities to accomplish
objectives in an efficient and effective manner
 Helps create synergy
 Establishes lines of authority
 Improves communication
 Helps avoid duplication of resources
 Improves competitiveness by speeding up decision
making
Staffing
• Hiring people to carry out the work of the organization
 Managerial duties
 Recruiting
 Determining what skills are needed for specific
jobs
 Motivating and training employees
 Determining pay and benefits
 Preparing employees for higher-level jobs
Monster.com and Staffing
 Some companies choose to recruit people to hire
through online job websites such as Monster.com
 Monster.com is one of the world’s largest employment
websites
 Using websites like Monster.com falls under the staffing
function of management
Downsizing
• The elimination of a significant number of employees
from an organization
 Production, sales and technical positions can be
outsourced to countries with lower labor costs
 Downsizing helps companies reduce costs quickly
 This involves loss of jobs and lowered morale for
remaining employees
 An effective manager will promote optimism and
positive thinking while minimizing criticism and fault-
finding
Directing
• Motivating and leading employees to achieve
organizational objectives
 Telling employees what to do and when to do it using
deadlines, then encourage them to do their work
 Determining and administering rewards and recognition
 Providing incentives but recognition and appreciation are
often the best motivators
 Ask workers to contribute ideas for reducing costs,
making equipment more efficient, improving customer
service, or even developing new products
Controlling
• The process of evaluating and correcting activities to
keep the organization on course
 Measuring performance
 Comparing performance with standards or
objectives
 Identifying deviations from the standards
 Investigating the causes of deviations
 Taking corrective action when necessary
Levels of Management
• As the pyramid shape implies, there are generally more
middle managers than top managers, and still more first-
line managers
Time Spent on Management
Functions
Top Management
• The president and other top executives of a business,
such as the chief executive officer (CEO), chief financial
officer (CFO), and chief operations officer (COO), who
have overall responsibility for the organization
 In publically-owned corporations, CEO’s boss is
board of directors
 Compensation committees work directors and CEOs
to keep pay in line with performance
 Workforce diversity is good for workers and for the
bottom line
CEO Compensation
Five Rules of Successful
Diversity Recruiting
 Get everyone involved
 Showcase your diversity
 Work with diversity groups within your community
 Spend money
 Sell, sell, sell – and measure your return on investment
 A diverse workforce is better at making decisions
regarding issues related to consumer diversity
Middle Managers
• Those members of an organization responsible for the
tactical planning that implements the general guidelines
established by top management
 Have more focused responsibilities and spend more
time organizing than other managers
 In business, plant managers, division mangers and
department mangers make up middle management
 The ranks of middle managers have been shrinking
as more companies downsize to be more productive
First-Line Managers
• Those who supervise both workers and the daily
operations of an organization
 Responsible for implementing plans established by
middle management and directing workers’ daily
performance
 Spend most of their time directing and controlling
 Commonly called foreman, supervisor and office
service manager
Areas of Management (1 of 2)
• Financial Manager
– Focus on obtaining the money needed for the successful
operation of the organization and using that money in
accordance with organizational goals
• Production and Operations Manager
– Develop and administer the activities involved in
transforming resources into goods, services, and ideas
ready for the marketplace
• Human Resources Manager
– Handle the staffing function and deals with employees in
a formalized manner
Areas of Management (2 of 2)
• Marketing Manager
– Responsible for planning, pricing, and promoting
products and making them available to customers
through distribution
• Information Technology (IT) Manager
– Responsible for implementing, maintaining, and
controlling technology applications in business, such as
computer networks
• Administrative Manager
– Manage an entire business or a major segment of a
business; do not specialize in a particular function
Managing Automation and Robots
in the Workplace
• As digital technology and automation came to the
forefront in business operations, many thought the
managerial function would no longer be necessary—
however, the opposite has proven to be true
 Technical and leadership skills valued more highly among
today’s managers as their former roles of overseeing
employees on a production line have declined
 These duties are now delegated to employees who oversee
the operations of the machines on the production lines
Managerial Roles
• Decisional • Informational
 Entrepreneur  Monitor
 Disturbance handler  Disseminator
 Resource allocator  Spokesperson
 Negotiator • Interpersonal
 Figure
 Leader
 Liaison
Technical Expertise
• Technical Expertise
– Specialized knowledge and training needed to
perform jobs related to particular areas of
management
– Needed most by first-line managers and least critical

to top-level managers
Conceptual Skills
• Conceptual Skills
– Ability to think in abstract terms and see how parts fit
together to form the whole
– Needed most by top level managers
– Evaluate where the company will be in the future
Financial Manager
 Financial managers are
responsible for obtaining
the necessary funding for
organizations to succeed,
both in the short term and
in the long term
 This financial manager
of a city hedge fund
analyzes data from
financial charts
Analytical Skills
• Analytical Skills
– Ability to identify relevant issues, recognize their
importance, understand relationships between them
and perceive underlying causes of a situation
– Most important to the success of top level managers
– Resolving ethical issues often requires analytical

skills
Human Relations Skills
• Human Relations Skills
– Ability to deal with people, both inside and outside
the organization
– Those who can relate, communicate well,

understand the needs, and show a true appreciation
for others are more successful
– Important in organizations that provide services,

such as hospitals, airlines and banks
Seven Tips for Successful Leadership
• Leadership is the ability to influence employees to work
toward organizational goals
 Communicate objectives and expectations.
 Gain the respect and trust of stakeholders.
 Develop shared values.
 Acquire and share knowledge.
 Empower employees to make decisions.
 Be a role model for appropriate behavior.
 Provide rewards and take corrective action to achieve goals.
Leadership Styles
 Autocratic Leaders
 Make all the decisions then tell employees what must be
done and how to do it
 Democratic Leaders
 Involve employees in decisions
 Free-rein Leaders
 Let employees work without much interference; setting
performance standards and letting employees find their
own way to meet them
Authentic Leadership
 Authentic Leaders
 Different from the other three leadership styles
because it is not exclusive
 Both democratic and free-rein leaders could qualify
as authentic leaders
 Passionate about goals and mission of company,
display corporate values in the workplace, form long-
term relationships with stakeholders
 Kim Jordan of New Belgium Brewing is an authentic
leader
Employee Empowerment
• When employees are provided with the ability to take on
responsibilities and make decisions about their jobs
 Participative corporate culture is beneficial - employees

feel they are taking an active role in the firm’s success
 Leaders must adopt systems that support employee’s
ability to provide input and feedback on the company
 Manager should be trained to empower employees to
make decisions even in challenging situations
Leadership in Teams
 Today, decisions made by teams are becoming the norm
 Effective way for encouraging employee empowerment
 Decision making in teams is collective
 Most effective teams are when all employees are
encouraged to contribute their ideas and recommendations
 Outspoken employees dominate the team and engage in

groupthink, in which team members go with the majority
rather than what they think is the right decision
 Training employees how to listen to one another and
provide relevant feedback helps prevent
Steps in the Decision-Making Process
 Recognize and
define the decision
situation
 Develop options
 Analyze options
 Select the best
option
 Implement the
decision
 Monitor the
consequences
Recognizing and Defining the
Decision Situation
The first step in decision making is recognizing
and defining the situation
 Situations may be positive or negative
 Situations calling for small-scale decisions occur
without warning
 Large-scale decisions generally occur after some
warning signs
 Once a situation is recognized, management must
define it
Developing Options and
Analyzing Options
The second step in the decision making
process is developing options
 A list of possible courses of action should include
both standard and creative plans
The third step in the decision making
process is analyzing options
 Management must look at practicality and
appropriateness of each option
 Consider whether proposed option adequately
addresses the situation
Selecting the Best Option,
Implementing the Decision
The fourth step in the decision making
process is selecting the best option
 Often a subjective procedure
The fifth step in the decision making process
is implementing the decision
 This step can be fairly simple, or very complex,
depending on the nature of the decision
 Prepare for unexpected consequences
Monitoring the Consequences
The sixth step in the decision making
process is monitoring the consequences
 Has the implementation of the decision
accomplished the desired result?
 Is yes, then the decision was sound
 If no, then more analysis is warranted
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M Business 5th Edition Ferrell

LO 6-2 Describe the major functions of management.

LO 6-3 Distinguish among three levels of management

LO 6-4 Specify the skills managers need in order to be

LO 6-5 Summarize the systematic approach to decision

– Apply to details in executing activities quickly

► How much to spend to set up each new store

► When to open each new store

 Disturbance handler  Disseminator

 Resource allocator  Spokesperson

– Needed most by first-line managers and least critical

– Needed most by top level managers

– Evaluate where the company will be in the future

– Most important to the success of top level managers

– Resolving ethical issues often requires analytical

– Those who can relate, communicate well,

– Important in organizations that provide services,

 Gain the respect and trust of stakeholders.

 Develop shared values.

 Acquire and share knowledge.

 Empower employees to make decisions.

 Be a role model for appropriate behavior.

 Provide rewards and take corrective action to achieve goals.

 Participative corporate culture is beneficial - employees

 Outspoken employees dominate the team and engage in

 If no, then more analysis is warranted

The Foundation’s business office is located at 809 North 1500 West,

Section 4. Information about Donations to

The Foundation is committed to complying with the laws regulating

While we cannot and do not solicit contributions from states where

International donations are gratefully accepted, but we cannot make

Section 5. General Information About Project

Project Gutenberg™ eBooks are often created from several printed

This website includes information about Project Gutenberg™,

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