CHAPTER 1 : MANAGERS AND MANAGING

Learning objectives:

 Describe what management is, why management is important, what managers do, and how
managers use organizational resources efficiently and effectively to achieve organizational
goals.

 Distinguish among planning, organizing, leading, and controlling (the four principal
managerial tasks), and explain how managers’ ability to handle each one affects
organizational performance.

 Differentiate among three levels of management, and understand the tasks and
responsibilities of managers at different levels in the organizational hierarchy.

 Distinguish among three levels of managerial skill, and explain why managers are divided
into different departments to perform their tasks more efficiently and effectively.

 Discuss some major changes in management practices today that have occurred as a result
of globalization and the use of advanced information technology (IT).

 Discuss the principal challenges managers face in today’s increasingly competitive global
environment.

WHAT IS MANAGEMENT?

• Organizations
• Organizations are collections of people who work together and coordinate their actions to achieve a
wide variety of goals or desired future outcomes.
• All managers work in organizations.
• Managers
• Managers are the people responsible for supervising the use of an organization’s resources to meet
its goals.
• Management
1. Management includes the planning, organizing, leading, and controlling of human and other resources to
achieve organizational goals effectively and efficiently.
2. What difference can a manager make? Satya Nadella, Microsoft CEO
• Resources
• Include assets such as:
• People and their skills, know-how, and experience.

• Machinery.

• Raw materials.

• Computers and information technology.

• Patents, financial capital, and loyal customers and employees.

1
ACHIEVING HIGH PERFORMANCE GOAL : A MANAGER’S GOAL

• Organizational performance
• A measure of how efficiently and effectively managers use available resources to satisfy customers
and achieve organizational goals

• Microsoft’s corporate mission revised by CEO Satya Nadella to reflect current technological trends,
resulting in increased employee moral, product quality, and stock market values

• Efficiency
• A measure of how well or how productively resources are used to achieve a goal

• UPS instructing drivers to leave truck doors open when going short distances to reduce
delivery times

• Effectiveness
• A measure of the appropriateness of the goals an organization is pursuing and the degree to which
the organization achieves those goals

• Microsoft’s restructure eliminating internal competition, resulting in increased employee

morale and performance.

Figure 1.1 Efficiency, Effectiveness, and Performance in an Organization

High-performing organizations are efficient and effective.

Jump to Appendix 1 for description

2
WHY STUDY MANAGEMENT?
• Individuals generally learn through personal experience or the experiences of others. By studying
management in school, you are exposing yourself to the lessons others have learned.

i. The economic benefits of becoming a good manager are also impressive. In the United States, general
managers earn a median wage of $99,310 with a projected growth rate in job openings of 5 % to 9%
between now and 2026.

ii. Learning management principles can help you make good decisions in nonwork contexts.

Figure 1.2 Four Tasks of Management

3
STEPS IN THE PLANNING PROCESS

• Deciding which goals the organization will pursue

• Deciding what strategies to adopt to attain those goals

• Deciding how to allocate organizational resources.

Managers identify and select appropriate organizational goals and develop strategies for how to achieve high
performance.

Organizing Leading Controlling

Organizing

• Structuring working relationships so organizational members interact and cooperate to achieve

organizational goals. Managers deciding how best to organize resources, particularly human
resources.

Organizational structure

1. A formal system of task and reporting relationships that coordinates and motivates organizational
members so that they work together to achieve organizational goals.

2. ER director Daley works closely with team, increasing efficiency and improving customer satisfaction.

Leading

• Articulating a clear vision and energizing and enabling organizational members so they understand
the part they play in achieving organizational goals.

• An organization’s vision is a short, succinct, and inspiring statement of the organization’s

future state.

• Involves managers using their power, personality, influence, persuasion, and communication skills to
coordinate people and groups.

Controlling

• Evaluating how well an organization is achieving its goals and taking action to maintain or improve
performance

1. Ex; Managers monitor performance of individuals, departments, and the organization as a

whole to determine if they are meeting performance standards.
2. The outcome of the control process is the ability to measure performance accurately and
regulate organizational efficiency and effectiveness.
3. Managers must decide which goals to measure.

Example : Mercy Medical Center

Erin Daley is the ER director for Mercy Medical Center in Massachusetts.

Improving ER department efficiency and quality of care while keeping costs within budget can be daunting.

4
 Managers like Erin Daley must develop strategies and processes where hospitals can move patients through
the system faster while improving patient satisfaction.

MANAGERIAL ROLE IDENTIFIED

Table 1.1 Managerial Roles Identified by Mintzberg

Type of Role Specific Role Example of Role Activities

Entrepreneur Commit organizational resources to develop innovative
goods and services; decide to expand internationally to
obtain new customers for the organization’s products.

Disturbance Handler Move quickly to take corrective action to deal with

unexpected problems facing the organization from the
external environment, such as a crisis like an oil spill, or from
the internal environment, such as producing faulty goods or
Decisional services.
Resource Allocater Allocate organizational resources among different tasks and
departments of the organization; set budgets and salaries of
middle and first-level managers.
Negotiator Work with suppliers, distributors, and labor unions to reach
agreements about the quality and price of input, technical,
and human resources; work with other organizations to
establish agreements to pool resources to work on joint
projects.
Figurehead Outline future organizational goals to employees at
company meetings; open a new corporate headquarters
building; state the organization’s ethical guidelines and the
principles of behavior employees are to follow in their
dealings with customers and suppliers.
Leader Provide an example for employees to follow; give direct
commands and orders to subordinate; make decisions
concerning the use of human and technical resources;
Interpersonal mobilize employee support for specific organizational goals.

Liaison Coordinate the work of managers in different departments;

establish alliances between different organizations to share
resources to produce new goods and services; reach
agreements about the quality and price of input, technical,
and human resources; work with other organizations to
establish agreements to pool resources to work on joint
projects.
Monitor Evaluate the performance of managers in different tasks,
and take corrective action to improve their performance;
watch for changes occurring in the external and internal
environments that may affect the organization in the future.
Disseminator Inform employees about changes taking place in the
Informational
external and internal environments that will affect them and
the organization; communicate to employees the
organization’s vision and purpose.

5
 Spokeperson Launch a national advertising campaign to promote new
goods and services; give a speech to inform the local
community about the organization’s future intentions.

LEVELS AND SKILLS OF MANAGERS

Department
1. A group of managers and employees who work together and possess similar skills or use
the same knowledge, tools, or techniques.
2. Example: the manufacturing, accounting, engineering, or marketing department.
Figure 1.3 levels of management

CEO

Top Managers

Middle Managers

First-line Managers

1. First-line managers (often called supervisors)

1. Responsible for the daily supervision of the nonmanagerial employees

1. Paint foreman overseeing a crew of painters at a University

2. Middle managers
1. Supervises first-line managers
2. Responsible for finding the best way to use resources to achieve organizational goals
1. High school principal or a marketing manager
3. Top managers
1. Responsible for the performance of all departments
2. Establish organizational goals
3. Decide how different departments should interact
4. Monitor how well middle managers in each department use resources to achieve goals
5. Ex: President of a university

6
 Figure 1.4 Relative Amount of Time Managers Spend on the Four Managerial Tasks

MANAGERIAL SKILLS
Conceptual skills
1. The ability to analyze and diagnose a situation and distinguish between cause and effect
Human skills
1. The ability to understand, alter, lead, and control the behavior of other individuals and
groups
Technical skills
1. Job-specific skills required to perform a particular type of work or occupation at a high
level
Figure 1.5 : Types and Levels of Managers

7
Core Competency
1. Specific set of departmental skills, abilities, knowledge and experience that allows one organization
to outperform its competitors
2. Skills for a competitive advantage
1. Google’s core competency, research and development, allows them to develop innovative
products and services (computerized glasses, self-driving cars).
Restructuring and Outsourcing
Restructuring
1. Downsizing an organization by eliminating the jobs of large numbers of top, middle, and first-line
managers and nonmanagerial employees
Outsourcing
1. Contracting with another company, usually in a low-cost country abroad, to perform a work activity
the company previously performed itself
Empowerment
1. Empowerment involves giving employees more authority and responsibility over how they perform
their work activities.
2. Example: Valve Corporation has no managers, no hierarchy or top-down control. Employees pick
their own projects.

8
Challenges for Management in a Global Environment
1. Building a competitive advantage
2. Maintaining ethical and socially responsible standards
3. Managing a diverse workforce
4. Utilizing new technologies
5. Practicing global crisis management

Building Competitive Advantage

Competitive advantage

1. Ability of one organization to outperform other organizations because it produces desired

goods or services more efficiently and effectively than its competitors

Innovation

1. The process of creating new or improved goods and services or developing better ways to
produce or provide them
Figure 1.6 Building Blocks of Competitive Advantage

innovation

competitive responsiveness
quality
advantage to customers

efficiency

9
 Maintaining Ethical and Socially Responsible Standards

Managers are under considerable pressure to make the best use of resources.

Too much pressure may induce managers to behave unethically and even illegally.

1. Wells Fargo Scandal “Eight is great”

Managing a Diverse Workforce

To create a highly trained and motivated workforce, managers must establish human resource
management (HRM) procedures that are legal and fair and do not discriminate against organizational
members.

1. Accenture uses a diverse workforce to its advantage.

Utilizing New Technologies

An efficient and effective IT system may improve an organization’s performance.

1. UPS uses ORION

1. A GPS system that optimizes drivers’ routes

Practicing Global Crisis Management

1. Create teams to facilitate rapid decision- making and communication.

2. Establish the organizational chain of command and reporting relationships necessary to mobilize a
fast response.

3. Recruit and select the right people to lead and work in such teams.

4. Develop bargaining and negotiating strategies to manage the conflicts that arise.

Turnaround Management

1. Creation of a new vision for a struggling company using a new approach to planning and
organizing to make better use of a company’s resources to allow it to survive and eventually
prosper

1. Apple’s Steve Jobs excelled at turnaround management.

10
Appendix 1 Figure 1.1 Efficiency, Effectiveness, and Performance in an Organization, Text Alternative

Figure 1.1, Efficiency, Effectiveness, and Performance in an Organization

1. Low efficiency/high effectiveness: Manager chooses the right goals to pursue, but does a poor job of
using resources to achieve these goals. Result: A product that customers want, but that is too
expensive for them to buy.

2. Low efficiency/ low effectiveness: Manager chooses wrong goals to pursue and makes poor use of
resources. Result: A low-quality product that customers do not want.

3. High efficiency / high effectiveness: Manager chooses the right goals to pursue and makes good use
of resources to achieve these goals. Result: A product that customers want at a quality and price
they can afford.

4. High efficiency / low effectiveness : Manager chooses inappropriate goals, but makes good use of
resources to pursue these goals. Result: A high-quality product that customers do not want.

Appendix 2 Figure 1.2 Four Tasks of Management, Text Alternative

Four Tasks of Management:

Planning: Choose appropriate organizational goals and courses of action to best achieve those goals.

Organizing: Establish task and authority relationships that allow people to work together to achieve
organizational goals.

Leading: Motivate, coordinate, and energize individuals and groups to work together to achieve
organizational goals.

Controlling: Establish accurate measuring and monitoring systems to evaluate how well the organization
has achieved its goals.

Appendix 3 Levels and Skills of Managers (2 of 2), Text Alternative

The graphic shows the relative importance of planning, organizing, leading, and controlling—the four
principal managerial tasks.

The importance of the task depends on the manager’s position in the managerial hierarchy. First-line
managers show the greatest importance in leading. Middle managers lean slightly less on importance in
leading than first-line managers, and more in planning. Top managers have a great responsibility in
planning, followed by organizing, leading, and then controlling. First-line managers have the least amount
of importance in controlling.

Appendix 4 Figure 1.5: Types and Levels of Managers (2 of 2)

A pyramid shows the types and levels of managers. All managers, except the CEO, have relations with the
following departments: research and development, marketing and sales, manufacturing, accounting, and
materials management.

First-line managers are at the base of the pyramid.

11
Middle managers supervise first-line managers and are supervised by top managers.

The top managers report directly to the C E O, who oversees all managers.

12