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Chapter

1
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Managing

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Learning Objectives
After

studying Chapter 1, you will know:

the

major challenges of managing in the new era

the drivers of competitive advantage for your company
the functions of management and how they are evolving in
todays business environment
the nature of management at different organizational levels
the skills you need to be an effective manager
what to strive for as you manage your career

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Managing In The New Era

Managerial

practices will always separate effective from

ineffective organizations
Four key elements are new elements in business today
Internet

Globalization

New Era
Management

Knowledge
Management
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Collaboration
Across
Boundaries
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Managing In The New Era (cont.)

The

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Internet

communication

technologies are driving massive change

initial enthusiasm for e-business has dwindled

25% of publicly-held Web companies became profitable in 2002

most

profitable Web companies sell information-based

products that dont require shipping
old economy types now using the Internet as a tool to solidify
their future

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Managing In The New Era (cont.)

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Globalization
far

more than in the past, enterprises are global

competing globally is not easy

companies often overestimate the attractiveness of foreign

markets

even

small firms that do not operate on a global scale must

make strategic decisions based on international considerations

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face intense competition from high-quality foreign producers

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Managing In The New Era (cont.)

Knowledge

1-7

management

practices

aimed at discovering and harnessing an

organizations intellectual resources

unlock peoples expertise, skills, wisdom, and relationships

intellectual

capital is the collective brainpower of the

organization

Collaboration

across boundaries

capitalize

on the ideas of people outside the traditional

company boundaries

occurs between as well as within organizations

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e.g., must effectively capitalize on customers brains

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Managing For Competitive Advantage

Best

1-8

managers and companies deliver all four

Cost
Competitiveness

Innovation

Competitive
Advantage

Quality
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Speed
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Managing For Competitive Advantage

(cont.)

1-9

Innovation
the

introduction of new goods and services

comes from people

must be a strategic goal
must be managed properly

Quality
excellence

of a product, including its attractiveness, lack of

defects, reliability, and long-term durability
importance of quality has increased dramatically
catering to customers other needs creates more perceived
quality
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2003 The McGraw-Hill Companies, Inc. All rights reserved.

Managing For Competitive Advantage

(cont.)

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Speed
fast

and timely execution, response, and delivery of results

often separates winners from losers in world competition
requirement has increased exponentially
Cost

competitiveness

costs

are kept low enough so that you can realize profits and
price your products at levels that are attractive to consumers
key is efficiency - accomplishing goals by using resources wisely
and minimizing waste
little things can save big money

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cost cuts involve tradeoffs

2003 The McGraw-Hill Companies, Inc. All rights reserved.

The Functions Of Management

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Management
the

process of working with people and resources to

accomplish organizational goals
good managers must be:
effective - achieve organizational goals
efficient - achieve goals with minimum waste of resources

there

are timeless principles of management

still important for making managers and companies great

must add fresh thinking and new approaches

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2003 The McGraw-Hill Companies, Inc. All rights reserved.

The Functions Of Management (cont.)

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The

manager who does not devote adequate attention and

resources to all four functions will fail

Leading

Organizing

Controlling
Planning

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The Functions Of Management (cont.)

1 - 13

Planning
specifying

the goals to be achieved and deciding in advance

the appropriate actions taken to achieve those goals
delivering strategic value - planning function for the new era
a dynamic process in which the organization uses the brains of
its members and of stakeholders to identify opportunities to
maintain and increase competitive advantage
process intended to create more value for the customer

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The Functions Of Management (cont.)

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Organizing
assembling

and coordinating the human, financial, physical,

informational, and other resources needed to achieve goals
building a dynamic organization - organizing function for the
new era
viewing people as the most valuable resource
the future requires building flexible organizations

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The Functions Of Management (cont.)

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Leading
stimulating

people to be high performers

in the new era, managers must be good at mobilizing people to
contribute their ideas
Controlling
monitoring

progress and implementing necessary changes

makes sure that goals are met
new technology makes it possible to achieve more effective
controls
for the future, will have to be able to monitor continuous
learning and changing
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1 - 16

Management Levels
Top-level

managers (strategic managers)

senior

executives responsible for the overall management and

effectiveness of the organization
focus on long-term issues
emphasize the survival, growth, and effectiveness of the firm
concerned with the interaction between the organization and
its external environment
titles include Chief Executive Officer (CEO), Chief Operating
Officer (COO), company presidents and vice presidents

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Management Levels (cont.)

Middle-level

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managers (tactical managers)

located

between top-level and frontline managers in the

organizational hierarchy
responsible for translating strategic goals and plans into more
specific objectives and activities
traditional role was that of an administrative controller who
bridged the gap between higher and lower levels
provide operating skills and practical problem solving the
keep the company working

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Management Levels (cont.)

Frontline

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managers (operational managers)

lower-level

managers who supervise the operational activities

of the organization
directly involved with nonmanagement employees
increasingly being called on to be innovative and
entrepreneurial
titles include supervisor or sales manager
Working

leaders with broad responsibilities

in

small firms and large firms that have adapted to the times,
managers have strategic, tactical, and operational
responsibilities

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Transformation of Frontline
Management Roles and Tasks

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Changing roles

From operational implementers to aggressive

entrepreneurs

Primary value

Driving business performance by focusing on

productivity, innovation and growth within frontline
units

Key activities

Creating and pursuing new opportunities for the

business
Attracting and developing resources and
competencies
Managing continuous performance improvement
within the unit

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2003 The McGraw-Hill Companies, Inc. All rights reserved.

Transformation of Middle-Level
Management Roles and Tasks
Changing roles

From administrative controllers to supportive

coaches

Primary value

Providing the support and coordination to bring

large company advantage to the independent
frontline units

Key activities

Developing individuals and supporting their

activities

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Linking dispersed knowledge, skills, and best

practices across units
Managing the tension between short-term
performance and long-term ambition
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Transformation of Top-Level
Management Roles and Tasks

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Changing roles

From resource allocators to institutional leaders

Primary value

Creating and embedding a sense of direction,

commitment and challenge to people throughout
the organization

Key activities

Challenging embedded assumptions while

establishing a stretching opportunity horizon and
and performance standards
Institutionalizing a set of norms and values to
support cooperation and trust
Creating an overarching corporate purpose and
ambition

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1 - 22

Management Skills
Skill

- specific ability that results from knowledge,

information, and aptitude
Technical skill
ability

to perform a specialized task that involves a certain

method or process
managers at higher levels rely less on technical skills
Conceptual

and decision skills

ability to identify and resolve problems for the benefit of the

organization
assume greater importance as manager acquires more
responsibility

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Management Skills (cont.)

Interpersonal
ability

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and communication skills

to lead, motivate, and communicate effectively with

others

people skills

important

throughout your career at every level of

management

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You And Your Career

Jobs

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are no longer as secure for managers as they used to be

organizations

still try to develop and retain good employees

employee loyalty and commitment are still important
Companies

offering employability to workers tend to be

more successful
provide

training and other learning experiences

employees perform work with greater responsibility

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2003 The McGraw-Hill Companies, Inc. All rights reserved.

You And Your Career (cont.)

Be

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both a specialist and generalist

specialist

- expert in something

provide concrete, identifiable value to the firm

generalist

- knowing about a variety of business functions so

that you can understand work with different perspectives

Be

self-reliant

take

responsibility for yourself, your actions, and your career

regardless of where you work
think and act like an entrepreneur
look for opportunities to contribute in new ways
generate constructive change

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You And Your Career (cont.)

Be

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connected

establish

many good working relationships

be a team player with strong interpersonal skills
all business is a function of human relationships

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competitive advantage depends upon you and other people

2003 The McGraw-Hill Companies, Inc. All rights reserved.

Keys to Career Management

1.
2.
3.
4.
5.
6.
7.
8.

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Think of yourself as a business.

Define your product: What is your area of expertise?
Know your target market: To whom are you going to sell this?
Be clear on why your customer buys from you. What is your
value proposition - what are you offering that causes him to
use you?
As in any business, strive for quality and customer satisfaction, even
if your customer is just someone else in your organization - like
your boss.
Know your profession or field and whats going on there.
Invest in your own growth and development, the way a company
invests in research and development. What new products will you
be able to provide?
Be willing to consider changing your career.

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You And Your Career (cont.)

Actively

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manage your relationship with your organization

two

ways to think about the nature of the relationships

between you and your employer

view yourself as an employee

two-way, mutually-beneficial exchange relationship

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model for just getting by

contributions likely to be minimal
think about how you can contribute and act accordingly
figure out new ways to add value
organization likely provide full and fair rewards, support further
personal development, and offer more gratifying work environment
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Two Relationships: Which Will You

Choose?

#1
You as a passive employee

1 - 29

#2

You as an active contributor

in a productive relationship

Employer
You
You

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Your
Organization

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Managerial Action Is Your Opportunity

To Contribute

1 - 30

You

Your
Organization

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Managerial Actions
1. Delivering Strategic
Value
2. Building a Dynamic
Organization
3. Mobilizing People
4. Learning and
Changing
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You And Your Career (cont.)

Survive

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and thrive

be

prepared to move from project to project, team to team

be a master at something that the world values
develop a strong network of colleagues who can help with
current and future projects
have entrepreneurial skills that help you act as if you were
running your own business
love technology
market yourself
be willing to constantly improve and even reinvent yourself
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2003 The McGraw-Hill Companies, Inc. All rights reserved.