Confirming pages
Like Ursula Burns, today’s managers must rely on a very dif-
ferent kind of leadership (Chapter 10) that empowers and
motivates people (Chapter 11). Far more than in the past, great
work must be done via great teamwork (Chapter 12), both
within work groups and across group boundaries. Underlying
these processes will be effective interpersonal and organiza-
tional communication (Chapter 13).
1.4 | Controlling Means Learning
and Changing
Planning, organizing, and leading do not guarantee success.
The fourth function, controlling, is about monitoring perfor-
mance and making necessary changes in a timely manner. By
controlling, managers make sure the organization’s resources
are being used as planned and the organization is meeting its
goals for quality and safety.
Control must include monitoring. If you have any doubts
that this function is important, consider some control break-
downs that caused catastrophic problems for workers, the
environment, and local economies. Consider the explosion of
Transocean Ltd.’s Deepwater Horizon oil rig in the Gulf of
Mexico on April 20, 2010, which killed 11 workers. Some
argue that this worst offshore oil spill in U.S. history could
have been prevented if tighter controls were in place. One
recent report suggested that the rig’s crew failed to react to
multiple warning signs: “. . . the crew deviated from stan-
dard well-control and well-abandonment protocols by test-
ing for pressure during the removal of the drilling mud,
instead of prior to it, an operation that resulted in the drill-
ing pipe being present in the blowout preventer at the time
of the blowout, keeping it from closing properly to
contain the outburst.”15 This was not the only oil
well to go out of control in the Gulf of Mex-
ico. According to an interview with William
Reilly, former head of the U.S. Environmen-
tal Protection Agency, there have been
“79 losses of well control” during the
2000–2009 period.16 He suggests
that greater controls need to
be put in place by both the
U.S. government and the oil
companies.17
Other lapses in control can hurt
customers. A 2008–2009 out-
break of salmonella infections—
which can cause fever, diarrhea,
stomach cramps, and even death—
was traced to peanut butter Ursula M. Burns, Chair and CEO of Xerox.
products produced by two Peanut Corp.
of America processing plants in Georgia and Texas.18 Process-
ing the peanuts generally kills salmonella and other germs, so
the likely culprit was contamination of jars or equipment. The
outbreak caused 714 illnesses and nine deaths across 46 states.19
8 PART 1 | Introduction
bat2952X_ch01_001-023.indd 8
Pelicans affected by an oil spill.
More recently, salmonella found in Cargill Inc. ground turkey
products is thought to have sickened approximately 100 people
in over 30 states.20
When managers implement their plans,
they often find that things are not working
out as planned. The controlling function
makes sure that goals are met. It asks and
answers the question, “Are our actual out-
comes consistent with our goals?” It then
makes adjustments as needed. Elon Musk,
chief executive officer of the premium
electric car firm Tesla Motors, has applied
this function to make needed changes at
that firm. Like many start-ups, Tesla has
hit a few potholes along the way. Con-
flicts with the firm’s founder and
technical problems during develop-
ment pushed back the launch of the
company’s first car by more than a
year, causing cash flow problems.
Musk was forced to close one
office and lay off nearly 25 per-
cent of the company’s workforce.
But Musk also raised $55 million
of capital from investors, and since
production started in 2008, there
are now 1,650 Roadsters being driven
in 31 countries.21
Successful organizations, large and
small, pay close attention to the con-
trolling function. But today and for the
future, the key managerial challenges
are far more dynamic than in the past;
they involve continually learning and changing. Controls must
still be in place, as described in Chapter 14. But new technolo-
gies and other innovations (Chapter 15) make it possible to
achieve controls in more effective ways, to help all people
18/07/12 9:17 PM
 Confirming pages

controlling the
management function of
enough time and energy to devel- monitoring performance
oping your abilities with all four and making needed
changes
functions. You can be a skilled
planner and controller, but if you top-level managers
organize your people improperly senior executives
or fail to inspire them to perform responsible for the
at high levels, you will not be real- overall management
izing your potential as a manager. and effectiveness of the
Likewise, it does no good to be organization
the kind of manager who loves
to organize and lead but doesn’t
really understand where to go or how to determine whether
Elon Musk, Chairman, CEO, and Product Architect of Tesla Motors, you are on the right track. Good managers don’t neglect any
speaks during a panel discussion at a Future in Review (FiRe) conference. of the four management functions. You should periodically ask
yourself whether you are devoting adequate attention to all of
them.
throughout a company and across company boundaries
The four management functions apply to your career and
change in ways that forge a successful future.
other areas of your life, as well. You must find ways to create
Exhibit 1.2 provides brief definitions of the four functions of value; organize for your own personal effectiveness; mobilize
management and the respective chapters in which these func- your own talents and skills as well as those of others; monitor
tions are covered in greater detail. your performance; and constantly learn, develop, and change
for the future. As you proceed through this book and this
1.5 | Managing Requires course, we encourage you to engage in the material and apply
All Four Functions the ideas to your other courses (e.g., improve your teamwork
skills), your part-time and full-time jobs (e.g., learn how to
As a manager in the ever-changing global economy, your typi- motivate coworkers and “wow” your customers), and use the
cal day will not be neatly divided into the four functions. You ideas for your own personal development by becoming an
will be doing many things more or less simultaneously.22 Your effective manager.
days will be busy and fragmented, with interruptions, meet-
ings, and firefighting. If you work with heavy digital users
who constantly send texts and e-mails, then your workdays LO2
will require even more stop-and-go moments.23 There will be
Understand what managers at different organizational levels do
plenty of activities that you wish you could be doing but can’t
seem to get to. These activities will include all four manage-
ment functions.
Some managers are particularly interested in, devoted to, FOUR DIFFERENT LEVELS
or skilled in one or two of the four functions. Try to devote
OF MANAGERS
E X H I B I T 1 . 2 The Four Functions of Management Organizations—particularly large organizations—have many
levels. In this section, you will learn about the types of manag-
Function Brief Definition See Chapters ers found at four different organizational levels:
Planning Systematically making 4, 5, and 6 • Top-level manager.
decisions about which
goals and activities to • Middle-level manager.
pursue. • Frontline manager.
Organizing Assembling and 7, 8, and 9 • Team leader.
coordinating resources
needed to achieve goals.
2.1 | Top Managers Strategize
Leading Stimulating high 10, 11, 12, and 13
performance by and Lead
employees. Top-level managers are the organization’s senior execu-
Controlling Monitoring performance 14 and 15 tives and are responsible for its overall management. Top-level
and making needed managers, often referred to as strategic managers, focus on the
changes. survival, growth, and overall effectiveness of the organization.

CHAPTER 1 | Managing Effectively in a Changing World 9

bat2952X_ch01_001-023.indd 9 18/07/12 9:17 PM

 Confirming pages

In a recent nationwide survey, employees had mixed reviews

of their manager’s leadership skills. As a result, a manager
who excels in leadership is especially valuable.24
Percentage of employees who say . . .

They relate positively to

77%
their boss.

Their boss is competent. 50%

Their boss rewards them

30%
for accomplishments.

Their boss is a good role

29%
model and mentor.

They feel motivated by

22%
their boss.

0 20 40 60 80 100
Percent

maintaining the success of its salty snacks

Indra Nooyi of and sweet drinks, and the other focusing
PepsiCo Pushes on a multifaceted sustainability initia-
tive called “Performance with Purpose.”
for Sustainable, Nooyi believes a major driver for the next
level of PepsiCo’s success will come from
“Healthier” “delivering sustainable growth by invest-
Growth ing in a healthier future for people and our
planet.”
At first this may seem like a major

A t a typical college, you wouldn’t have

to look far before seeing someone
with a bag of Doritos and a can of Pepsi.
These two products, along with Classic
Lay’s, Cheetos, Fritos, and Mountain Dew,
are some of the best sellers from PepsiCo.
While these products are still very impor-
tant to the financial success of the com-
pany, Indra Nooyi, the Indian-born CEO,
is encouraging the company to follow a
dual-growth strategy: one focusing on
change in direction for a company that
has made billions of dollars from selling
sweet drinks and snack foods, but Nooyi
doesn’t see it that way. Perhaps concerned
about the growing societal concerns about
PepsiCo, in partnership with Waste
unhealthful foods and drinks that are seen
Management, has rolled out hundreds of
as contributing to the childhood and adult Dream Machine kiosks around the United
obesity problem in the United States and States to recycle cans and bottles. In return
elsewhere, she believes strongly that it will provide for career training, education,
“ethics and growth are not just linked, but and job creation for returning U.S. veterans
inseparable.” with disabilities.

10 PART 1 | Introduction

bat2952X_ch01_001-023.indd 10 18/07/12 9:17 PM

 Confirming pages

Top managers are concerned not only with the organization as
a whole but also with the interaction between the organization
and its external environment. This interaction often requires
managers to work extensively with outside individuals and
organizations.
The chief executive officer (CEO) is one type of top-level man-
ager found in large corporations. This individual is the primary
strategic manager of the firm and has authority over every-
one else. Others include the chief operating officer (COO),
company presidents, vice presidents, and members of the top
management team. As companies have increasingly leveraged
technology and knowledge management to help them achieve
and maintain a competitive advantage, they created the posi-
tion of chief information officer (CIO). A relatively new top
manager position, chief ethics officer, has emerged in recent
years. Kathleen Edmond holds that position for Best Buy. Her
role is to “develop, market and support programs and strate-
gies designed to support the enterprise’s business initiatives
and promote honest and ethical business conduct in its daily
operations.”25
Traditionally, the role of top-level managers has been to set
overall direction by formulating strategy and controlling
resources. But now more top managers are called on to be not
only strategic architects but also true organizational leaders.
Like Indra Nooyi of PepsiCo, leaders must create and articulate
a broader corporate purpose with which people can identify—
and one to which people will enthusiastically commit.
middle-level
managers
managers located in
2.2 | Middle the middle layers of the
Managers Bring organizational hierarchy,
reporting to top-level
Strategies to executives
Life
As the name implies, middle-level
managers are located in the organi-
zation’s hierarchy below top-level management and above the
frontline managers and team leaders. Sometimes called tactical
managers, they are responsible for translating the general goals
and plans developed by strategic managers into more specific
objectives and activities.
Traditionally the role of the middle manager is to be an admin-
istrative controller who bridges the gap between higher and
lower levels. Today middle-level managers break corporate
objectives down into business unit targets; put together sepa-
rate business unit plans from the units below them for higher-
level corporate review; and serve as nerve centers of internal
communication, interpreting and broadcasting top manage-
ment’s priorities downward and channeling and translating
information from the front lines upward.
As a stereotype, the term middle manager connotes mediocre,
unimaginative people defending the status quo. Companies
have been known to cut them by the thousands, and television
often portrays them as incompetent (such as Michael Scott of
NBC’s The Office).26 But middle managers are closer than top

Two major components of PepsiCo’s
sustainability strategy include
1. Human sustainability: The company is
encouraging people to live balanced and
healthy lives through nonprofit initiatives
and by expanding its product and drink
lines to include more healthful choices.
For example, Baked Lays have zero trans
fats, and Propel Zero is water enhanced
with vitamins and antioxidants.
2. Environmental sustainability: PepsiCo
sells millions of products worldwide
in packages, containers, or bottles. To
reduce the impact on natural resources,
the company is reducing water usage,
increasing recycling levels, and minimiz-
ing its carbon footprint. In 2010 PepsiCo
launched a recycling partnership with
Waste Management, Greenopolis, and
Keep America Beautiful with the goal of
increasing beverage container recycling
to 50 percent by 2018.
Even for a CEO, change is not easy.
Some Wall Street analysts and critics feel
Nooyi should focus less on health and well-
ness, and more on PepsiCo’s “sugary and
DISCUSSION QUESTIONS
• Indra Nooyi, as CEO of PepsiCo, faces
some unique challenges as she advocates
a dual-focus strategy for her company.
Describe your reaction to her dual-focus
strategy and whether you think it will help
PepsiCo succeed in the future.
• To what degree do you think a “Perfor-
mance with Purpose” strategy would be
applicable to other organizations (using
examples)? How could leaders of other
organizations modify the strategy so it
salty product portfolio.” However, with
total soft drink consumption in the United
States dropping by 16 percent over the past
decade, there’s certainly room for both “fun
for you” and “good for you” products and
beverages at this forward-looking company.
would fit their particular organizational
cultures and industries?
SOURCES: See PepsiCo’s 2010 Annual Report
at http://www.pepsico.com; “Bottoms Up!”
Newsweek, October 10 and 17, 2011 (double issue),
p. 29; A. Rappeport, “Pepsi Chief Faces Challenge
of Putting Fizz Back into Brand,” Financial Times,
March 21, 2011, p. 19; A. Bary, “Sweet or Salty,
PepsiCo Tastes Success,” Barron’s 91, no. 32
(August 8, 2011), pp. 15–17; V. Bauerlein, “CEO
Indra Nooyi Stands by Strategy to Promote ‘Good
for You’ Foods,” The Wall Street Journal, June
28, 2011, p. B1.

CHAPTER 1 | Managing Effectively in a Changing World 11

bat2952X_ch01_001-023.indd 11 18/07/12 9:17 PM

 Confirming pages

managers to day-to-day operations, customers, frontline man- 2.4 | Team Leaders Facilitate

agers, team leaders, and employees, so they know the prob-
lems. They also have many creative ideas—often better than
their bosses’. Good middle managers provide the operating
skills and practical problem solving that keep the company
working.27
Team Effectiveness
A relatively new type of manager, known as a team leader,
engages in a variety of behaviors to achieve team effective-
ness.30 The use of teams (discussed in Chapter 12) has
increased as organizations shift from hierarchical to flatter
structures that require lower-level employees to make more
decisions.31 While both team leaders and frontline manag-
ers tend to be younger managers with entrepreneurial skills,
frontline managers have direct managerial control over their
nonmanagerial employees. This means that frontline manag-
ers may be responsible for hiring, training, scheduling, com-
pensating, appraising, and if necessary, firing employees in
order to achieve their goals and create new growth objectives
for the business.

In comparison, team leaders are more like project facilitators or

coaches. Their responsibilities include organizing the team and
establishing its purpose, finding resources to help the team get
its job done, removing organizational impediments that block
the team’s progress, and developing team members’ skills and
abilities.32 In addition, a good team leader creates and supports
a positive social climate for the team, challenges the team, pro-
vides feedback to team members, and encourages the team to
be self-sufficient.33 Beyond their internally focused responsi-
Actor Steve Carell plays Michael Scott, the likeable, but often incompetent bilities, team leaders also need to represent the team’s interests
manager on NBC’s The Office. with other teams, departments, and groups within and outside
of the organization. In this sense, the team leader serves as the
2.3 | Frontline Managers are the spokesperson and champion for the team when dealing with
external stakeholders.
Vital Link to Employees
Frontline managers, or operational managers, are lower-
level managers who execute the operations of the organiza-
tion. These managers often have titles such as supervisor or
sales manager. They are directly involved with nonmanage-
ment employees, implementing the specific plans developed
with middle managers. This role is critical because operational
managers are the link between management and nonmanage-
ment personnel. Your first management position probably will
fit into this category.
Traditionally, frontline managers were directed and controlled
from above to make sure that they successfully implemented
operations to support the company strategy. But in leading
companies, their role has expanded. Operational execution
remains vital, but in leading companies, frontline managers
are increasingly called on to be innovative and entrepreneurial,
managing for growth and new business development.
Managers on the front line—usually newer, younger
managers—are crucial to creating and sustaining quality, inno-
vation, and other drivers of financial performance.28 In out-
standing organizations, talented frontline managers are not
only allowed to initiate new activities but are expected to do so
by their top and middle-level managers. And they receive the
freedom, incentives, and support to do so.29

12 PART 1 | Introduction

bat2952X_ch01_001-023.indd 12 18/07/12 9:17 PM

 Confirming pages

frontline managers
lower-level managers
who supervise the
Team leaders are expected to help their teams achieve impor- 2. Informational roles:
operational activities of the
tant projects and assignments. In some ways, a team leader’s • Monitor—Seeking information organization
job can be more challenging than frontline and other types of to develop a thorough under-
managers’ jobs because team leaders often lack direct control standing of the organization team leaders
(e.g., hiring and firing) over team members. Without this direct and its environment. employees who are
control, team leaders need to be creative in how they inspire, • Disseminator—Sharing infor- responsible for facilitating
motivate, and guide their teams to achieve success. mation between different successful team
people like employees and performance
Exhibit 1.3 elaborates on the changing roles and activities of managers; sometimes inter-
managers at different levels within the organization. You will preting and integrating diverse
learn about each of these aspects of management throughout perspectives.
the course. • Spokesperson—Communicating on behalf of the organiza-

2.5 | Three Roles That All tion about plans, policies, actions, and results.

Managers Perform 3. Decisional roles:

• Entrepreneur—Searching for new business opportunities
The trend today is toward less hierarchy and more teamwork.
and initiating new projects to create change.
In small firms—and in large companies that have adapted to
these highly competitive times—managers have strategic, tacti- • Disturbance handler—Taking corrective action during cri-
ses or other conflicts.
cal, operational responsibilities and team responsibilities. They
are complete businesspeople; they have knowledge of all busi- • Resource allocator—Providing funding and other resources
ness functions, are accountable for results, and focus on serv- to units or people; includes making major organizational
decisions.
ing customers both inside and outside their firms. All of this
requires the ability to think strategically, translate strategies • Negotiator—Engaging in negotiations with parties inside
into specific objectives, coordinate resources, and do real work and outside the organization.
with lower-level people. Even though this study was done decades ago and focused on top
Today’s best managers can do it all; they are adaptive and agile, executives, it remains highly descriptive of what all types of man-
and are “working leaders.”34 They focus on relationships with agers do today. As you review the list, you might ask yourself,
other people and on achieving “Which of these activities do I enjoy most (and least)? Where do
results. They don’t just make deci-
sions, give orders, wait for others to E X H I B I T 1 . 3 Transformation of Management Roles and Activities
produce, and then evaluate results.
They get their hands dirty, do hard Team Frontline Middle-Level Top-Level
work themselves, solve problems, Leaders Managers Managers Managers
and create value. Changing Roles From operational From operational From From resource
implementer to implementers administrative allocators to
What does all of this mean in prac- facilitator of team to aggressive controllers institutional
tice? How do managers spend their effectiveness. entrepreneurs. to supportive leaders.
time—what do they actually do? A controllers.
classic study of top executives found Key Activities Structuring teams Attracting and Linking dispersed Establishing high
that they spend their time engaging and defining their developing knowledge and performance
in 10 key activities, falling into three purpose. resources. skills across units. standards.
broad categories or roles: 35 Finding resources Creating and Managing the Institutionalizing
and removing pursuing tension between a set of norms
1. Interpersonal roles: obstacles so new growth short-term to support
• Leader—Staffing, training, teams can opportunities for purpose and long- cooperation and
and motivating people to accomplish their the business. term ambition. trust.
achieve organizational goals. goals.
• Liaison—Maintaining a net- Developing team Managing Developing Creating an
work of outside contacts and members’ skills continuous individuals and overarching
so teams can be improvement supporting their corporate
alliances that provide infor-
self-managing. within the unit. activities. purpose and
mation and favors. ambition.
• Figurehead—Performing sym-
Sources: Adapted from F. P. Morgeson, D. S. DeRue, and E. P. Karam, “Leadership in Teams: A Functional
bolic duties on behalf of the Approach to Understanding Leadership Structures and Processes,” Journal of Management 36, no. 1 (January 2010),
organization, like greeting pp. 5–39; J. R. Hackman and R. Wageman, “A Theory of Team Coaching,” Academy of Management Review 30,
important visitors and attend- no. 2 (April 2005), pp. 269–87; and C. Bartlett and S. Goshal, “The Myth of the Generic Manager: New Personal
ing social events. Competencies for New Management Roles,” California Management Review 40, no. 1 (Fall 1997), pp. 92–116.

CHAPTER 1 | Managing Effectively in a Changing World 13

bat2952X_ch01_001-023.indd 13 18/07/12 9:18 PM