Using Management Skills

to Build Business
Relationships
Chapter 7
Chapter 7 Learning Goals
1. What is the role of management?
2. What are the four types of planning?
3. What are the primary responsibilities of
managers in organizing activities?
4. How do leadership styles influence a
corporate culture?
5. How do organizations control activities?
Chapter 7 Learning Goals (cont’d.)
6. What roles do managers take on in
different organizational settings?
7. What set of managerial skills is
necessary for managerial success?
8. What trends will affect management in
the future?
Learning Goal 1
• What is the role of management?
– Management is the
• Process of guiding development, maintenance, and
allocation of resources to attain organizational goals
– Managers are
• Responsible for developing and carrying out this
management process
– Primary functions of Managers
• Planning
• Organizing
• Leading
• Controlling
Management:
The process of guiding the
development, maintenance, and
allocation of resources to attain
organizational goals
 Quality of Management
Ratings made by Fortune magazine:
Most admired quality of management:
– Philip Morris
– General Electric
– Cisco Systems
Least admired quality of management:
– Oxford Health Plans
– Cabletron Systems
– Trump Hotels & Casinos
Source: Fortune, Mar. 1, 1999, p. 70.
 Four Activities of
Management
1. Planning
2. Organizing
3. Leading
4. Controlling
Learning Goal 2
• What are the four types of planning?
– Strategic planning
• Creating long-range (one to five years), broad goals
• Determining necessary resources to accomplish goals
– Tactical planning
• Has a shorter time frame (less than one year)
• Specific objectives that support the broader strategic goals
– Operational planning
• Creates specific standards, methods, policies, and procedures
used in specific functional areas of organization
– Contingency plans
• Identify alternative courses of action for unusual or crisis situations
 1. Planning
Four Types of Planning
1. Strategic Planning • long-range, broad goals

2. Tactical Planning • to implement a strategic

plan; shorter term and
more specific
3. Operational • creating very specific
Planning policies and procedures

4. Contingency • alternative actions for

Planning unusual or crisis
situations
 Contingency Planning
Some types of contingency planning that
were used in preparation for the Year 200
computer bug:
– Cities stocked gasoline & diesel fuel for
emergency vehicles
– Hotel chains stocked food & water for guests if
needed
– Stores devised paper & pen backups for credit
card processing
– The Red Cross set up a national Disaster
Operations Center
Learning Goal 3

• What are the primary responsibilities of

managers in organizing activities?
– Organizing involves
• Coordinating and allocating a firm’s resources in
order to carry out its plans
• Developing a structure for the people, positions,
departments, and activities within the firm by:
– Dividing up tasks (division of labor)
labor
– Grouping jobs and employees (departmentalization)
departmentalization
– Assigning authority and responsibilities (delegation)
delegation
 2. Organizing
Levels of Management

Top Management CEO Strategic Plans

Vice President

Division Heads,
Middle Management Tactical Plans
Regional Managers

Supervisors,
Supervisory Operational
Team Leaders,
Management Foremen Plans
3. Leading
Sources of Power for Leaders:
Type of Power: Derived from:
1. Legitimate position in organization
2. Reward control over rewards
3. Coercive control over punishments
4. Expert extensive knowledge
5. Referent charisma, respect,
admiration
Automatic Deference to Expert &
Legitimate Power can be Harmful
– 95% of nurses in a research study were willing to follow
doctors’ orders to administer a clearly unsafe dosage of
medicine to patients (Source: Hofling et al., 1966, Journal of Nervous
and Mental Disease, v. 143, pp. 171-180)
– 46% of nurses in another study admitted to a time that
they complied with a doctor’s order that they thought
was unsafe
(Source: Krackow & Blass, 1995, Journal of Social Behavior and Personality,
v. 10, pp. 585-594)
Learning Goal 4
• How do leadership styles influence a
corporate culture
– Corporate culture is the set of attitudes, values,
and standards of behavior that distinguishes one
organization from another
• Evolves over time
• Based on the accumulated history of the organization,
including the vision of the founders
• Dominant leadership style within the organization also
determines corporate culture
3. Leading

Leadership Styles
1. Autocratic
directive, controlling
2. Participative
democratic, consensual, consultive
3. Free-rein (Laissez-Faire)
members have freedom, leaders give ideas and
information
Learning Goal 5

• How do organizations control activities?

– Controlling is the process of assessing the
organization’s progress toward accomplishing
its goals by:
• Setting performance standards (goals)
• Measuring performance
• Comparing actual performance to established
performance standards
• Taking corrective action, if necessary
• Using information gained from the process to set
future performance standards
4. Controlling

5-stage Cycle of Controlling

1. Set performance standards

2. Measure performance
3. Compare performance to standards
4. Take corrective action, if needed
5. Use information gathered to set
future performance standards
 4. Controlling
Measuring Performance
Federal Express uses 3 quantitative measures of
performance:
Service Quality Index
measurements made on every shipment
Customer Satisfaction Index
customer ratings
Process Quality Indicators
measures taken on individual operating units (ex.,
delivery truck performance)

Source: Neff & Citrin: Lessons from the Top, 1999, pp. 277-283.
Learning Goal 6

• What roles do managers take on in different

organizational settings?
– Informational role
• Manager may act as an information gatherer, an
information distributor, or a spokesperson for the
company
– Interpersonal role
• Manager may need to act as a figurehead, a company
leader, or a liaison
– Decisional role
• Manager may have to think like an entrepreneur, make
decisions about resource allocation, help resolve
conflicts, or negotiate compromises
 Managerial Roles
Type of role: Activities:
1. Informational information gathering,
disseminating,
spokesperson
2. Interpersonal figurehead, leader, liaison
3. Decisional entrepreneur, resource
allocation, resolve
conflicts, negotiate
 The Interpersonal Role

• Jack Welch, CEO of GE, estimates

he spends 60% or more of his time
on ‘people stuff’

(Source: Neff & Citrin: Lessons from the Top, 1999, p. 345).
The Decision-Making
Process
5. Follow up
to see if problem is solved

4. Put plan into action

3. Select one or more alternatives

2. Search for solutions

1. Define the problem

Learning Goal 7
• What set of managerial skills is necessary for
managerial success?
– Technical skills
• Specialized areas of knowledge and expertise
• Ability to apply knowledge
– Human Relations skills
• Understand human behavior
• Communicate effectively with others
• Motivate individuals to accomplish their objectives
– Conceptual skills
• Ability to view the organization as a whole
• Understand how the various parts are interdependent
• Assess how the organization relates to its external environment
 Managerial Skills
1. Technical Skills
specialized knowledge and expertise
2. Human Relations Skills
interpersonal skills
3. Conceptual Skills
understanding the big picture
4. Global Management Skills
ability to operate in diverse environments
Learning Goal 8
• What trends will affect management in the
future?
– Increasing employee empowerment
• Increased autonomy and discretion to make their own decisions
• Control of the resources needed to implement decisions
– Increasing use of information technology
• Managers can make quicker, better-informed decisions
• Keeps organization members connected
– Growing need for global management skills
• Managers must
– adapt to a new culture
– learn a new language
– manage a diverse workforce
– operate in a foreign economic system
 Trends in Management

 Increased employee empowerment

 Increased role of information
technology
 Increase in global management
 Empowering Employees

Things needed to empower employees,

according to Don Fites, CEO of
Caterpillar:
• Give them decision-making authority
• Develop a culture & climate that support it
• Organize the business to support it
• Reward employees based on performance
Source: Neff & Citrin: Lessons from the Top, 1999, pp. 123-128.