Read Chapter 6 - Understanding the Management Process
Read Chapter 6 - Understanding the Management Process
Management can be one of the most exciting, challenging, and rewarding professions. The men and women who manage businesses play an important part in shaping the world in which we live.
WHAT IS MANAGEMENT? Management is the process of coordinating people and other resources to achieve the goals of the organization. Most organizations use four kinds of resources. (See Figure 6-1.)
Material resources are the tangible, physical resources an organization uses.
Human resources—people—are probably the organization’s most important assets.
Financial resources are the funds the organization uses to meet its obligations to investors and creditors.
Informational resources enable an organization to gather information about competitors and industry changes.
It is important to realize that these four types of resources are only general categories. Within each category are hundreds or thousands of more specific resources.
BASIC MANAGEMENT FUNCTIONS. Managers simultaneously use the following functions to achieve the goals of the organization: planning, organizing, leading and motivating employees, and controlling. Figure 6-2 provides a visual framework for discussion of these management functions.
Management must set goals for the organization. Planning is establishing goals and deciding how to accomplish them. An organization’s mission is a statement of the basic purpose that makes an organization different from others.
Strategic Planning Process. The strategic planning process involves establishing an organization’s major goals and objectives and allocating resources to achieve them.
Goals are set at every level of the organization.
Goals must be consistent across an organization, although some conflict may exist among levels within the organization. The process of balancing conflicting goals is called optimization.
SWOT Analysis. SWOT analysis is the identification and evaluation of a firm’s strengths, weaknesses, opportunities, and threats. Strengths and weaknesses are internal factors that affect a company’s capabilities. Strengths refer to a firm’s favorable characteristics and core competencies. Core competencies are approaches and processes that a company performs well and may give it an advantage over its competitors. Weaknesses refer to internal limitations a company faces in developing or implementing plans. Opportunities and threats are external factors. Opportunities refer to favorable conditions in the environment that could benefit the organization if exploited. Threats are conditions or barriers that may prevent the firm from reaching its objectives. Examples of strengths, weaknesses, opportunities, and threats are outlined in Figure 6-3.
KEY SKILLS OF SUCCESSFUL MANAGERS. Managers need a variety of skills including conceptual, analytic, interpersonal, technical, and communication skills. (See Figure 6-8.)
Communication Skills. Communication skills, both oral and written, include the ability to speak, listen, and write effectively.
Leadership has been broadly defined as the ability to influence others. Leadership is different from management in that a leader strives for voluntary cooperation, whereas a manager may depend on coercion to change employee behavior.
Formal and Informal Leadership. Formal leaders have legitimate power of position; they have authority within an organization to influence others to work toward the organization’s objectives. Informal leaders usually have no authority and may or may not exert their influence in support of the organization.
Conceptual Skills. Conceptual skills involve the ability to think in abstract terms. Conceptual skills allow the manager to see the “big picture.” They tend to be used more by top managers than by middle or first-line managers.
Analytic Skills. Analytic skills are used to identify problems correctly, generate reasonable alternatives, and select the “best” alternatives to solve problems.
Interpersonal Skills. Interpersonal skills involve the ability to deal effectively with other people, both inside and outside the organization.
Technical Skills. Technical skills include the specific skills needed to accomplish a specialized activity. First-line managers (and, to a lesser extent, middle managers) need the technical skills relevant to the activities they manage in order to train subordinates, answer questions, and provide guidance.
Styles of Leadership. For many years, finding a consensus on the most important leadership traits was difficult. In recent years, the emphasis has been on styles of leadership.
Autocratic leadership is a task-oriented leadership style in which workers are told what to do with specific guidelines and rules. Unilateral decisions are made with no input from employees.
Participative leadership includes workers in the decision-making process. Employees have a higher level of commitment to reaching goals. Participative leaders can be classified into three groups.
Consultative leaders discuss issues with workers but retain the final authority for decision making.
Consensus leaders seek input from almost all workers and make final decisions based on their support.
Democratic leaders give final authority to the group.
Which Leadership Style Is the Best?
Experts agree that no best leadership style exists. Each of these styles has advantages and disadvantages.
MANAGING TOTAL QUALITY. The management of quality is a high priority in many organizations today. Total quality management (TQM) is the coordination of efforts directed at improving customer satisfaction, increasing employee participation, strengthening supplier partnerships, and facilitating an organizational atmosphere of continuous quality improvement. For effective total quality management, managers must address the following components:
Customer Satisfaction. Ways to improve customer satisfaction include producing higher-quality products, providing better customer service, and showing customers that the company really cares about them.
Employee Participation. Employee participation can be increased by allowing employees to contribute to decisions, to develop self-managed work teams, and to assume responsibility and accountability for improving the quality of their work.
Strengthening Supplier Partnerships. Developing good working relationships with suppliers helps ensure that the right supplies and materials will be delivered on time at a lower cost.
Continuous Quality Improvement. A program based on continuous improvement has proven to be the most effective long-term approach.
Leadership styles are situational. The most effective style involves a balance between employees, the work situation, and the manager’s personality.
MANAGERIAL DECISION MAKING. Decision making is the act of choosing one alternative from a set of alternatives. Managerial decision making involves four steps. (See Figure 6-9.)
Identifying the Problem or Opportunity. A problem is the discrepancy between an actual condition and a desired condition—the difference between what is occurring and what one wishes to occur.
A problem may be “negative” or “positive.” A positive problem may be viewed as an “opportunity.”
Sometimes managers mistakenly analyze symptoms rather than underlying causes of a problem.
Effective managers learn to look ahead so that they are prepared when decisions must be made.
Generating Alternatives. After a problem has been defined, the next task is to generate alternatives. Certain techniques, such as brainstorming and trial and error, can be used to generate alternatives.
Selecting an Alternative. A final decision is influenced by a number of considerations, including financial constraints, human and informational resources, time limits, legal obstacles, and political factors.
The word satisfice describes solutions that are only adequate and not ideal.
Implementing and Evaluating the Solution. Implementation of a decision requires time, planning, preparation of personnel, and evaluation of the results.
Managers must usually deal with unforeseen consequences as well, even when they have carefully considered the alternatives.
If the chosen course of action removes the difference between the actual conditions and the desired conditions, it is judged to be effective.
If the problem still exists, managers may try the following:
Decide to give the chosen alternative more time to work.
Adopt a different alternative.
Start the problem identification process all over again.