Who Are Managers?

Manager
Someone who works with and through
other people by coordinating their work
activities in order to accomplish
organizational goals
Types of Managers
First-line Managers
Are at the lowest level of management and
manage the work of nonmanagerial employees
Middle Managers
Manage the work of first-line managers
Top Managers
Are responsible for making organization-wide
decisions and establishing plans and goals that
affect the entire organization
Exhibit 1.1 Managerial Levels

Top
Managers
Middle Managers
First-Line Managers
Nonmanagerial Employees
Organization
A consciously coordinated social
unit, composed of two or more
people, that functions on a
relatively continuous basis to
achieve a common goal or set of
goals.
Definition of Management:

Management is the process of designing and

maintaining an environment in which
individuals, working together in groups,
efficiently accomplish selected aims
Definitions of Effectiveness and
Efficiency
Productivity implies effectiveness and
efficiency in individual and organizational
performance
Effectiveness is the achievement of
objectives
Efficiency is the achievement of the ends
with the least amount of resources (time,
money, etc.)
Managerial Concerns

Efficiency
 “Doing things right”
 Getting the most output for the least input

Effectiveness
 “Doing the right things”
 Attaining organizational goals
Managers (or administrators)
Individuals who achieve goals through other
people.

Managerial Activities
• Make decisions
• Allocate resources
• Direct activities of others to
attain goals
What Do Managers Do?
Functional Approach
Planning
Organizing
Leading
Controlling
Planning
A process that includes defining
goals, establishing strategy, and
developing plans to coordinate
activities.
Organizing
Determining what tasks are to be
done, who is to do them, how the
tasks are to be grouped, who reports
to whom, and where decisions are to
be made.
Leading
A function that includes motivating
employees, directing others,
selecting the most effective
communication channels, and
resolving conflicts.
Controlling
Monitoring activities to ensure they are
being accomplished as planned and
correcting any significant deviations.
Management Functions
Planning Organizing Leading Controlling
Lead to
Defining goals, Determining Directing and Monitoring
establishing what needs motivating all activities Achieving the
strategy, and to be done, involved parties to ensure organization ’s
developing how it will and resolving that they are stated
subplans to be done, and conflicts accomplished purpose
coordinate who is to do it as planned
activities
What Do Managers Do? (cont’d
Mintzberg’s Management Roles Approach
Interpersonal roles
 Figurehead, leader, liaison
Informational roles
 Monitor, disseminator, spokesperson
Decisional roles
 Entrepreneur, disturbance handler, resource allocator,
negotiator
What Do Managers Do? (cont’d)
Skills Approach
Technical skills
Human skills
Conceptual skills
Technical skills
The ability to apply specialized
knowledge or expertise.

Human skills
The ability to work with,
understand, and motivate other
people, both individually and in
groups.

Conceptual Skills
The mental ability to analyze and
diagnose complex situations.
Exhibit 1.4 Skills Needed at
Different Management Levels

Top Conceptual
Managers
Skills
Middle Human
Managers Skills

Lower-level Technical
Managers Skills

Importance
What Is An Organization?
An Organization Defined
A deliberate arrangement of people to
accomplish some specific purpose
Common Characteristics of
Organizations
Have a distinct purpose (goal)
Are composed of people
Have a deliberate structure
Exhibit 1.6 The Changing
Organization
Traditional New Organization
 Stable  Dynamic
 Inflexible  Flexible
 Job-focused  Skills-focused
 Work is defined by job  Work is defined in terms of tasks
positions to be done
 Individual-oriented  Team-oriented
 Permanent jobs  Temporary jobs
 Command-oriented  Involvement-oriented
 Managers always make  Employees participate in decision
decisions making
 Rule-oriented  Customer-oriented
 Relatively homogeneous  Diverse workforce
workforce  Workdays have no time
 Workdays defined as 9 to 5 boundaries
 Hierarchial relationships  Lateral and networked
 Work at organizational facility relationships
during specific hours  Work anywhere, anytime
Management: Definition
Acc to Harold Koontz: Management is the
art of getting things done through & with an
formally organized group
Acc to Henry Fayol: To manage is to
forecast & plan, to organize, to compound, to
co-ordinate and to control
PODSCORB:
- Planning, Organizing, Directing, Staffing,
Controlling, Co-ordinating, Reporting &
Budgeting
Features of Management
Art as well as Science
Management is an activity
Management is a continuous process
Management achieving pre-determined
objectives
Organized activities
Management is a factor of production
Management as a system
Management is a discipline
Features of Management
Management is a distinct entity
Management aims at maximising profit
Management is a purposeful activity
Management is a profession
Universal application
Management is getting things done
Management is needed at all levels
Importance of
Management
Management meet the challenge of change
Accomplishment of group goals
Effective utilization of resources
Effective functioning of business
Resource Development
Sound organization Structure
Management directs the organization
Integrates various interests
Stability
Importance of
Management
Innovation
Co-ordination and team-spirit
Tackling problems
A tool for Personality Development
Henry Fayol (1841-1925)
Was a french industrialist
Given :
Elements of Management- Planning, Organizing,
Commanding, Co-ordination & Control
Qualities of Manager: Physical, Mental, Moral,
General Education, Special Knowledge &
Experience
Principles of Management
Principles of
Management
Division of work
Authority & responsibilty
Discipline
Unity of command
Unity of direction
Subordinate of individual interest to group
interest
Remuneration of personnel
Centralization
Scalar Chain
Principles of
Management
Order
Equity
Stability of tenure of personnel
Initiative
Espirit De Corps
What Is Planning?
Planning
 Managerial function that involves:
 Defining the organization’s goals
 Establishing an overall strategy for achieving
those goals
 Developing a comprehensive set of plans to
integrate and coordinate organizational work
 Types of planning
 Informal: not written down, short-term focus;
specific to an organizational unit
 Formal: written, specific, and long-term focus,
involves shared goals for the organization
Purposes of Planning

Provides direction
Reduces uncertainty
Minimizes waste and redundancy
Sets the standards for controlling
Planning and Performance
The Relationship Between Planning and
Performance
 Formal planning is associated with:
 Higher profits and returns on assets
 Other positive financial results

 The quality of planning and implementation affects

performance more than the extent of planning
 The external environment can reduce the impact of
planning on performance
How Do Managers Plan?
Elements of Planning
Goals (also objectives)
 Desired outcomes for individuals, groups, or entire
organizations
 Provide direction and performance evaluation criteria

Plans
 Documents that outline how goals are to be
accomplished
 Describe how resources are to be allocated
Steps in Planning
1. Being Aware of Opportunities
2. Establishing Objectives or Goals
3. Developing Premises
4: Determining Alternative Courses
5. Evaluating Alternative Courses
6. Selecting a Course
7. Formulating Derivative Plans
8. Quantifying Plans by Budgeting
Types of Plans
Types of Plans
BREADTH
Strategic Plans
 Apply to the entire organization
 Establish the organization’s overall goals
 Seek to position the organization in terms of its
environment
 Cover extended periods of time
Operational Plans
 Specify the details of how the overall goals are to
be achieved
 Cover short time period
Types of Plans (cont’d)
 TIME FRAME
 Long-Term Plans
 Time frames extending beyond three years
 Short-Term Plans
 Time frames of one year or less

 SPECIFICITY
 Specific Plans
 Clearly defined and leave no room for
interpretation
 Directional Plans
 Flexible plans that set out general guidelines,
provide focus, yet allow discretion in
implementation
Exhibit 3.4 Specific Vs.
Directional Plans
Types of Plans (cont’d)
FREQUENCY OF USE
Single-use Plan
A one-time plan specifically designed to meet
the needs of a unique situation
Standing Plans
Ongoing plans that provide guidance for
activities performed repeatedly
Types of Plans
Plans can be classified as
(1) mission or purposes,
(2) objectives or goals,
(3) strategies,
(4) policies,
(5) procedures,
(6) rules,
(7) programs, and
(8) budgets
Types of Plans
The mission, or purpose, identifies the basic
purpose or function or tasks of an enterprise or
agency or any part of it
Objectives, or goals, are the ends toward
which activity is aimed
Strategy is the determination of the basic
long‑term objectives of an enterprise and the
adoption of courses of action and allocation of
resources necessary to achieve these goals
Policies are general statements or
understandings that guide or channel thinking
in decision making
Procedures are plans that establish a
required method of handling future activities
Types of Plans – cont.
Rules spell out specific required actions or
nonactions, allowing no discretion
Programs are a complex of goals, policies,
procedures, rules, task assignments, steps to be
taken, resources to be employed, and other
elements necessary to carry out a given course of
action
 A budget is a statement of expected results
expressed in numerical terms
Developing Plans
Contingency Factors in Planning
Degree of environmental uncertainty
 Stable environment: specific plans
 Dynamic environment: specific but flexible
plans
Length of future commitments
 Current
plans affecting future commitments
must be sufficiently long-term to meet the
commitments
Approaches to
Establishing Goals

Traditional Goal Setting

Broad goals are set at the top of
the organization
Goals are then broken into
subgoals for each organizational
level
Goals are intended to direct, guide,
and constrain from above
Approaches to
Establishing Goals
(cont’d)
Management By Objectives (MBO)
Specific performance goals are jointly
determined by employees and managers
Progress toward accomplishing goals is
periodically reviewed
Rewards are allocated on the basis of
progress toward the goals
Key elements of MBO:
 Goal specificity, participative decision making, an
explicit performance/evaluation period, feedback
 Steps in a Typical MBO
Program

Develop Action Plans Review Objectives and Give Rewards for

Jointly Set Objectives
to Achieve Objectives Provide Feedback Achieved Objectives

Overall objectives Managers and

and strategies of employees work on
organization action plans together

Objectives allocated to Action plans

divisional and implemented
departmental units

Specific objectives
collaboratively set
with employees
Does MBO Work?
Reason for MBO Success
Top management commitment and
involvement
Potential Problems with MBO
Programs
Not as effective in dynamic
environments that require constant
resetting of goals
Overemphasis on individual
accomplishment may create problems
with teamwork
Benefits of Management by
Objectives
Clear goals:
 Motivate
 Improve managing through results-
oriented planning
 Clarify organizational roles, structures
and the delegation of authority
 Encourage personal commitment to
their own and organizational goals.
 Facilitate effective controlling,
measuring results, and leading to
corrective actions
Failures of Management
by Objectives
List some failures and limitations of MBO
What would you do to overcome the failures?
Criticisms of Planning
Planning may create rigidity
Plans cannot be developed for dynamic
environments
Formal plans cannot replace intuition and
creativity
Planning focuses managers’ attention on
today’s competition, not tomorrow’s survival
Formal planning reinforces today’s success,
which may lead to tomorrow’s failure
Organizational Strategy
Strategic Management
The set of managerial decisions and
actions that determines the long-run
performance of an organization
The Strategic Management Process
External Analysis

• opportunities

• threats

Identify the

organization's Formulate Implement Evaluate

SWOT Analysis
current mission, goals, Strategies Strategies Results
and strategies

Internal Analysis

• strengths

• weaknesses
Strategic Management Process
Step 1: Identify the Organization’s Current
Mission, Objectives, and Strategies
 Mission: the firm’s reason for being
 The scope of its products and services
 Goals: the foundation for further planning
 Measurable performance targets

Step 2: Conduct an Internal Analysis

 Assessing organizational resources, capabilities,
activities, and culture:
 Strengths (core competencies) create value for
the customer and strengthen the competitive
position of the firm
 Weaknesses (things done poorly or not at all) can
place the firm at a competitive disadvantage
Strategic Management Process
(cont’d)

Step 3: Conduct an External Analysis

 The environmental scanning of specific and
general environments
 Focuses on identifying opportunities and threats

Steps 2 and 3 combined are called a SWOT

analysis. (Strengths, Weaknesses,
Opportunities, and Threats)
Strategic Management Process
(cont’d)

Step 4: Formulate Strategies

Develop and evaluate strategic alternatives
Select appropriate strategies for all levels in
the organization that provide relative
advantage over competitors
Match organizational strengths to
environmental opportunities
Correct weaknesses and guard against
threats
Strategic Management Process
(cont’d)

Step 5: Implement Strategies

Implementation: effectively fitting
organizational structure and activities to the
environment
The environment dictates the chosen strategy;
effective strategy implementation requires an
organizational structure matched to its
requirements
Step 6: Evaluate Results
How effective have strategies been?
What adjustments, if any, are necessary?
 Levels of Organizational Strategy

Corporate Multibusiness
Level Corporation

Business Strategic Strategic Strategic

Level Business Unit 1 Business Unit 2 Business Unit 3

Functional Research and Manufacturing Marketing Human Finance

Level Development Resources
Types of Organizational Strategies
Corporate-level Strategy
The company’s grand strategy for the
entire organization and its strategic
business units
Types of Grand Strategies
Growth: expansion into new products and
markets
Stability: maintenance of the status quo
Retrenchment: addresses organizational
weaknesses that are leading to
performance declines
Combination: simultaneous pursuit of two
Corporate-Level Strategies
Growth Strategy
Seeking to increase the organization’s
business by expansion into new products
and markets
Stability Strategy
A strategy that seeks to maintain the
status quo to deal with the uncertainty of
a dynamic environment, when the
industry is experiencing slow- or no-
growth conditions, or if the owners of the
firm elect not to grow for personal reasons
Corporate-Level Strategies (cont’d)
Retrenchment Strategy
Reduces the company’s activities or
operations
Retrenchment strategies include:
 Cost reductions
 Closing underperforming units

 Closing entire product lines or services

Corporate-Level Strategies (cont’d)

Combination Strategy
Simultaneous pursuit by the
organization of two or more of growth,
stability, and retrenchment strategies
Business-Level Strategy
Business-Level Strategy
A strategy that seeks to determine how an
organization should compete in each unit
within the organization to create a
competitive advantage
Competitive advantage
 An organization’s distinctive competitive edge that is
sourced and sustained in its core competencies
 Forces in an Industry Analysis
(Five Forces Model Given by:
Porter

New
Entrants

Threat of
New Entrants
Bargaining
Power of
Intensity of Buyers
Rivalry Among
Suppliers Current Buyers
Competitors
Bargaining
Power of
Suppliers
Threat of
Substitutes

Substitutes
Five Competitive Forces
Threat of New Entrants
The ease or difficulty with which new
competitors can enter an industry
Threat of Substitutes
The extent to which switching costs and
brand loyalty affect the likelihood of
customers adopting substitute products
and services
Bargaining Power of Buyers
The degree to which buyers have the
market strength to hold sway over and
influence competitors in an industry
Five Competitive Forces (cont’d)
Bargaining Power of Suppliers
The relative number of buyers to
suppliers and threats from substitutes
and new entrants affect the buyer-
supplier relationship
Current Rivalry
Intensity among rivals increases when
industry growth rates slow, demand
falls, and product prices descend
Functional-Level Strategy
Functional-level strategies support the
business-level strategy
i.e., Marketing, human resources,
research and development, and finance all
support the business-level strategy
Problems occur when employees or
customers don’t understand a company’s
strategy
Benchmarking
The search for the best practices among
competitors and noncompetitors that lead to
their superior performance
By analyzing and copying these practices,
firms can improve their performance
Decision Making
Decision making is defined as the selection
of a course of action from among alternatives
Decision Making Process
1. Identification of a problem
2. Identification of decision criteria
3. Allocation of weights to criteria
4. Development of alternatives
5. Analysis of alternatives
6. Selection of an alternative
7. Implementation of the alternative
8. Evaluating decision effectiveness
Limited, or "Bounded,"
Rationality
Limitations of information, time, and certainty
limit rationality, even though a manager tries
earnestly to be completely rational
Satisficing is picking a course of action that
is satisfactory or good enough under the
circumstances
Development of Alternatives and the
Limiting Factor
A limiting factor is something that stands in
the way of accomplishing a desired objective
The principle of the limiting factor: By
recognizing and overcoming those factors that
stand critically in the way of a goal, the best
alternative course of action can be selected
Simon’s model of decision
making
 Contribution of Herbert Simon
 The decision making process can be broken
into series of three sequential steps:
3. Intelligent activity
4. Design activity
5. Choice activity
Intelligent activity refers to the initial phase
of searching the environment for conditions
calling for decisions.

Design activity refers to the phase of

inventing, developing, and analyzing possible
course of action to take place.

Choice activity refers to the final phase of

actual choice selecting a particular course of
action from those available.
Marginal Analysis
Marginal analysis is to compare additional
revenues and the additional cost arising from
increasing output
Cost Effectiveness
Analysis
Cost effectiveness analysis seeks the best
ratio of benefit and cost
Selecting an Alternative: Three
Approaches
When selecting from among alternatives,
managers can use:
2. Experience,
3. Experimentation, and
4. Research and analysis.
Programmed And Nonprogrammed
Decisions

Programmed decisions are used for

structured or routine work
Nonprogrammed decisions are used for
unstructured, novel, and ill‑defined
situations of a nonrecurring nature
Creativity and Innovation
Creativity refers to the ability and power to
develop new ideas
Innovation means the use of new ideas
The Creative Process
 The creative process is seldom simple
and linear
 It generally consists of four
overlapping and interacting phases:

3. Unconscious scanning
4. Intuition
5. Insight
6. Logical formulation or verification
Rules for Brainstorming
1. No ideas are criticized
2. The more radical the ideas are, the better
3. The quantity of idea production is
stressed
4. The improvement of ideas by others is
encouraged