PART 1: INTRODUCTION CHAPTER 1 - MANAGERS AND MANAGEMENT LEARNING OUTCOMES

After reading this chapter students will be able to: 1. Describe the difference between managers and operative employees. 2. Explain what is meant by the term management. 3. Differentiate between efficiency and effectiveness. 4. Describe the four primary processes of management. 5. Classify the three levels of managers and identify the primary responsibility of each group. 6. Summarize the essential roles performed by managers. 7. Discuss whether the managers job is generic. 8. Describe the four general skills necessary for becoming a successful manager. 9. Describe the value of studying management. 10. Identify the relevance of popular humanities and social science courses to management practices.

Opening Vignette
SUMMARY Hiroshi Okuda, Chairman of Toyota What distinguishes those organizations that succeed from those that dont are good managers. Good managers accomplish goals through and with the efforts of others and can adapt to the everchanging environment around them. Okuda led Toyota in a multi-part strategy to grow steadily in Japan, make significant inroads in the United States auto market, expand market share in the European market and become the automotive market leader in Southeast Asia. Then Toyotas world changed and while other markets shrank, the U.S. market grew. Toyota U.S. executives saw an immediate opportunity to enter the expanding U.S. market for full size pick-up trucks. Toyota Japan recommended a slow down approach consistent with consensus decision making. The U.S. executives invited Toyota executives from Japan to a Dallas

Part I - Introduction

Cowboys football game. When the Japanese executives saw a parking lot filled with pick-up trucks and sport utility vehicles, they got the message. Okuda and Toyota were willing to adapt to a changing environment. Hiroshi Okuda provides a good example of what a successful manager does. Successful managers today are as diverse as the companies they manage. They manage large corporations, small businesses, etc., while holding positions at the top, in the middle, and on the line overseeing employees, and doing their work in every country on the globe. Teaching tips 1. Make contact with 3-5 local companies or CEOs through the chamber of commerce, Kiwanis club, Better Business Bureau, etc. Try to see that the companies selected represent the variety of organizations found today: large corporations, small businesses, government agencies, hospitals, museums, schools, and such nontraditional organizations as cooperatives. 2. Choose 3-5 volunteers or 3-5 teams to visit these local companies and conduct brief 30-minute interviews with the CEOs. 3. As a class, using this chapter, brainstorm what questions, 5-7 at the most, each team or interviewer should ask. Sample questions for discussion starters could include: How is change affecting your organization today? What is the biggest challenge your organization faces regarding change? What strategies do you use to implement needed changes? What, if anything, about your organization would you refuse to change? In management class we talk about the responsibility of managers who direct the work of others and operatives who work directly on a job or task and have no responsibility for overseeing the work of others. How would you describe the value of each of these (i.e., managers and operatives) to your organization? What is the most unique or unusual responsibility or role held by a manager within your organization? When you are hiring a manager, what 3-5 skills or competencies do you believe are most critical in a candidate? 4. Have the interviewers report back to class what they learned. 5. As a class, discuss how their discoveries fit or do not fit course content.
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I.

WHO ARE MANAGERS, AND WHERE DO THEY WORK? A. Introduction 1. Managers work in an organization. 2. An organization is a systematic arrangement of people brought together to accomplish some specific purpose. a) Your college or university is an organization. B. What Three Common Characteristics Do All Organizations Share? 3. Every organization has a purpose and is made up of people who are grouped in some fashion. a) See Exhibit 1-1. b) This distinct purpose is typically expressed in terms of a goal or set of goals. 4. Second, purposes or goals can only be achieved through people. 5. Third, all organizations develop a systematic structure that defines and limits the behavior of its members. a) Developing structure may include creating rules and regulations, giving some members supervisory control, forming teams, etc. 6. The term organization refers to an entity that has a distinct purpose, has people or members, and has a systematic structure. C. How Are Managers Different from Operative Employees? 7. Organizational members fit into two categories: operatives and managers. a) Operatives work directly on a job and have no oversight responsibility of others. b) Managers direct the activities of other people in the organization. 1) Customarily classified as top, middle, or first line, they supervise both operative employees and lower-level managers. 2) See Exhibit 1-2. 3) Some managers also have operative responsibilities themselves. 8. The distinction between operatives and managers is that managers have employees who report directly to them.
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D. What Titles Do Managers Have in Organizations? 9. First-line managers are usually called supervisors. a) They are responsible for directing the day-to-day activities of operative employees. b) In your college, the department chair would be a first-line supervisor. 10. Middle managers represent levels of management between the first-line supervisor and top management. a) They manage other managers and possibly some operative employees. b) They are responsible for translating the goals set by top management into specific details. 11. Top managers, like Hiroshi Okuda, are responsible for making decisions about the direction of the organization and establishing policies that affect all organizational members. a) Examples: Hiroshi Okuda, Oracles Lawrence Ellison, Hewlett-Packards Carly Fiorina, and KB Homes Daniel Warmenhoven. Teaching Notes _______________________________________________________________________ _____________________________________________________________________________________ _____________________________________________________________________________________ _____________________________________________________________________________________ _____________________________________________________________________________________ II. WHAT IS MANAGEMENT, AND WHAT DO MANAGERS DO? A. How Do We Define Management? 12. Managers, regardless of title, share several common elements. 13. Managementthe process of getting things done effectively and efficiently, through and with other people. a) The term process in the definition represents the primary activities managers perform. 14. Effectiveness and efficiency deal with what we are doing and how we are doing it. a) Efficiency means doing the task right and refers to the relationship between inputs and outputs. b) Effectiveness means doing the right task, and in an organization that translates into goal attainment. c) See Exhibit 1-3.
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15. Efficiency and effectiveness are interrelated. a) Its easier to be effective if one ignores efficiency. b) Good management is concerned with both attaining goals (effectiveness) and doing so as efficiently as possible. c) Organizations can be efficient and yet not be effective. d) High efficiency is associated more typically with high effectiveness. 16. Poor management is most often due to both inefficiency and ineffectiveness. B. What Are the Management Processes? 17. Henri Fayol defined the management process in terms of five management functions. a) They plan, organize, command, coordinate, and control. b) In the mid-1950s, two professors used the terms planning, organizing, staffing, directing, and controlling as the framework for the most widely sold management textbook. 18. The most popular textbooks now condense these processes to the basic four: planning, organizing, leading, and controlling. a) See Exhibit 1-4. b) These processes are interrelated and interdependent. 19. Planning encompasses defining an organizations goals, establishing an overall strategy for achieving those goals, and developing a comprehensive hierarchy of plans to integrate and coordinate activities. a) Setting goals creates a proper focus. 20. Organizingdetermining 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. 21. Directing and coordinating people is the leading component of management. a) Leading involves motivating employees, directing the activities of others, selecting the most effective communication channel, or resolving conflicts among members. 22. Controlling. a) To ensure that things are going as they should, a manager must monitor the organizations performance. b) Actual performance must be compared with the previously set goals.
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c) Any significant deviations must be addressed. d) The monitoring, comparing, and correcting is the controlling process. 23. The process approach is clear and simple but may not accurately describe what managers do. a) Fayols original applications represented observations from his experiences. 24. In the late 1960s, Henry Mintzberg provided empirical insights into the managers job. Teaching Notes _______________________________________________________________________ _____________________________________________________________________________________ _____________________________________________________________________________________ _____________________________________________________________________________________ _____________________________________________________________________________________ _____________________________________________________________________________________ C. What Are Management Roles? 25. Henry Mintzberg undertook a careful study of five chief executives at work. a) Mintzberg found that the managers he studied engaged in a large number of varied, unpatterned, and short-duration activities. b) There was little time for reflective thinking. c) Half of these managers activities lasted less than nine minutes. 26. Mintzberg provided a categorization scheme for defining what managers do on the basis of actual managers on the jobMintzbergs managerial roles. 27. Mintzberg concluded that managers perform ten different but highly interrelated roles. a) These ten roles are shown in Exhibit 1-5. b) They are grouped under three primary headings. c) Interpersonal relationships. 1) The transfer of information. 2) Decision making. D. Is the Managers Job Universal? 28. The importance of the managerial roles varies depending on the managers level in the organization. a) The differences are of degree and emphasis but not of activity.
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b) As managers move up, they do more planning and less direct overseeing of others. 1) See Exhibit 1-6. c) The amount of time managers give to each activity is not necessarily constant. d) The content of the managerial activities changes with the managers level. 1) Top managers are concerned with designing the overall organizations structure. 2) Lower-level managers focus on designing the jobs of individuals and work groups. 29. Profit versus Not-for-Profit. a) The managers job is mostly the same in both profit and not-for-profit organizations. b) All managers make decisions, set objectives, create workable organization structures, hire and motivate employees, secure legitimacy for their organizations existence, and develop internal political support in order to implement programs. c) The most important difference is measuring performance, profit, or the bottom line. d) There is no such universal measure in not-for-profit organizations. e) Making a profit for the owners of not-for-profit organizations is not the primary focus. f) There are distinctions, but the two are far more alike than they are different. 30. Size of Organization. a) Definition of small business and the part it plays in our society. 1) There is no commonly agreed-upon definition. b) Small businessany independently owned and operated profit-seeking enterprise that has fewer than 500 employees. c) Statistics on small business. 1) 98 percent of all nonfarm businesses in the United States. 2) Employ over 60 percent of the private work force. 3) Dominate such industries as retailing and construction. 4) Will generate half of all new jobs during the next decade. 5) Where the job growth has been in recent years. (a) Companies with fewer than 500 employees have created more than 2 million jobs annually.
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(b) Small business start-ups increasing in countries such as China, Japan, Korea, Taiwan, and Great Britain. d) Managing a small business is different from that of managing a large one. 1) See Exhibit 1-7. 2) The small business managers most important role is that of spokesperson. 3) 4) In a large organization, the managers most important job is deciding which organizational units get what available resources and how much of them. The entrepreneurial role is least important to managers in large firms.

5) A small business manager is more likely to be a generalist. 6) 7) The large firms managers job is more structured and formal than in small firms. Planning is less carefully orchestrated in the small business.

8) The small business organizational design will be less complex and structured. 9) Control in the small business will rely more on direct observation.

e) We see differences in degree and emphasis, but not in activities. 31. Management concepts and national borders. a) Studies that have compared managerial practices between countries have not generally supported the universality of management concepts. 1) In Chapter 2, we will examine some specific differences between countries. b) Most of the concepts we will be discussing primarily apply to the United States, Canada, Great Britain, Australia, and other English-speaking democracies. c) Concepts may need to be modified when working with India, China, Chile, or other countries whose economic, political, social, or cultural environments differ greatly from that of the so-called free-market democracies. 32. Making decisions and dealing with change. a) Managers make decisions and are agents of change. 1) Almost everything managers do requires them to make decisions. 2) The best managers are the ones who can identify critical problems, assimilate the appropriate data, make sense of the information, and decide the best course of action to take for resolving the problem.
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b) Successful managers acknowledge the rapid changes around them and are flexible. 1) Successful managers recognize the potential effect of technological improvements on a work units performance. 2) They also realize that people often resist change. c) Managers need to be in a position to sell the benefits of the change while simultaneously helping their employees deal with the uncertainty and anxiety that changes may bring. d) We'll look at how managers act as agents of change in greater detail in Chapter 7. Teaching Notes _______________________________________________________________________ _____________________________________________________________________________________ _____________________________________________________________________________________ _____________________________________________________________________________________ _____________________________________________________________________________________ _____________________________________________________________________________________ E. What Skills and Competencies Do Successful Managers Possess? 33. In the 1970s, management researcher Robert L. Katz found that managers must possess four critical management skills. 34. Management skillsthose abilities or behaviors that are crucial to success in a managerial position. a) Two levelsgeneral skills and specific skills. 35. General Skills. a) Conceptual skills refer to the mental ability to analyze and diagnose complex situations. 1) They help managers see how things fit together and facilitate making good decisions. 2) Interpersonal skills encompass the ability to work with, understand, mentor, and motivate other people, both individually and in groups.

b) Technical skills are abilities to apply specialized knowledge or expertise. 1) Top-level managersthese abilities are related to knowledge of the industry and a general understanding of the organizations processes and products. 2) Middle and lower-level managersthese abilities are related to the specialized knowledge required in the areas with which they work.

c) Political skills are related to the ability to enhance ones position, build a power base, and establish the right connections. 1) Managers with good political skills tend to be better at getting resources, receive higher evaluations, and get more promotions.
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Teaching Notes _______________________________________________________________________ _____________________________________________________________________________________ _____________________________________________________________________________________ _____________________________________________________________________________________ 36. Specific Skills. a) Research has also identified six sets of behaviors that explain a little bit more than 50 percent of a managers effectiveness. 1) Controlling the organizations environment and its resources. 2) Organizing and coordinating. 3) Handling information. 4) Providing for growth and development. 5) Motivating employees and handling conflicts. 6) Strategic problem solving. 37. Management Competencies. a) The most recent approach to defining the managers job. b) These are defined as a cluster of related knowledge, skills, and attitudes related to effective managerial performance. c) One of the most comprehensive competency studies has come out of the United Kingdom. 1) The management charter initiative (MCI). 2) Based on an analysis of what effective managers should be able to do, the MCI sets generic standards of management competence.

3) There are two sets of standards. (a) Management I is for first-level managers. (b) Management II is for middle managers. (c) Standards for top management are under development. 4) Exhibit 1-8 lists standards for middle management. (a) For each area of competence, there is a related set of specific elements that define effectiveness in that area. d) The MCI standards are attracting global interest.
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Teaching Notes _______________________________________________________________________ _____________________________________________________________________________________ _____________________________________________________________________________________ _____________________________________________________________________________________ III. HOW MUCH IMPORTANCE DOES THE MARKETPLACE PUT ON MANAGERS? A. Introduction 38. Good managers can turn straw to gold. 39. Managers tend to be more highly paid than operatives. a) As a managers authority and responsibility expand, so typically does his or her pay. b) Large toy-manufacturing firms such as Mattel and Fisher Price pay their managers considerably more than their non-managers as a measure of the importance placed on effective management skills. 40. However, not all managers make six-figure incomes. 41. What could you expect to earn as a manager? a) It depends on level in the organization, education and experience, the type of business, comparable pay standards in the community, and managerial effectiveness. b) Most first-line supervisors earn between $30,000 and $55,000 a year. c) Middle managers often start near $45,000 and top out at around $120,000. d) Senior managers in large corporations can earn $1 million a year or more. e) In 2001 the average cash compensation (salary plus annual bonus) for 727 of the top two executives at the 363 largest U.S. corporations was well over $2 million. f) In many cases, this compensation was also enhanced by other means, such as stock options. g) The top 20 of these individuals (CEOs from Oracle, Lehman Brothers, Coca-Cola, and Citigroup) averaged more than $112 million in total compensation (including their stock options). h) Management compensation reflects the market forces of supply and demand. i) Some controversy surrounds the large dollar amounts paid to these executives (see Ethical Dilemma in Management).

Teaching Notes _______________________________________________________________________ _____________________________________________________________________________________ _____________________________________________________________________________________ _____________________________________________________________________________________

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_____________________________________________________________________________________ _____________________________________________________________________________________

Ethical Dilemma in Management Are U.S. Executives Overpaid? SUMMARY Are we paying U.S. executives too much? There are two sides to the issue. Support for paying this amount is the fact that these executives have tremendous organizational responsibilities. They have to manage todays environment, keep moving into the future, and their jobs are six to seven days a week, often ten to fourteen hours a day. On the other hand, most of the research done on executive salaries questions the linkage to performance. American company executives are some of the highest paid people in the world. Even when performance problems lead to dismissal, some executives are paid phenomenal severance packagessometimes as much as $50 million. U.S. executives make two to five times the salaries of their foreign counterparts. That is interesting when you consider that a number of executives in Japanese and European organizations perform better. U.S. CEOs make more than 500 times as much as the average employee.

Do you believe that U.S. executives are overpaid? What's your opinion?

Teaching suggestions 1. Before leading this discussion consider assigning students the task of researching CEO pay of two groups of companies, small caps and large caps to see if there are any significant differences. Select five large caps and assign a student team to research each one. Select five small caps and assign a student team to research each one. 2. Second, research or ask students to research the makeup of the boards of selected companies whose CEOs are very highly paid. [There is some evidence of the linkage of CEO and the makeup of the board, i.e., the more CEOs and executives on a company board, the higher the pay.]

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3. A final item to research is the performance of the companies over the last three years and then match that to the pattern of CEO performance and CEO pay. 4. This type of personal research will give the students substance to work with rather than an opinion shaped by headlines. IV. WHY STUDY MANAGEMENT? A. Reasons 42. We all have a vested interest in improving the way organizations are managed. a) We interact with them every day of our lives. 1) Examples of problems that can largely be attributed to poor management. b) Those that are poorly managed often find themselves with a declining customer base and reduced revenues. 43. The reality that once you graduate from college and begin your career, you will either manage or be managed. a) An understanding of the management process is foundational for building management skills. b) You will almost certainly work in an organization, be a manager, or work for a manager. c) You neednt aspire to be a manager in order to gain something valuable from a course in management. 44. Management embodies the work and practices from individuals from a wide variety of disciplines. V. HOW DOES MANAGEMENT RELATE TO OTHER DISCIPLINES? A. Introduction 45. College courses frequently appear to be independent bodies of knowledge resembling a group of silos. 46. There is typically a lack of connectedness between core business courses and between courses in business and the liberal arts. 47. A number of management educators have begun to recognize the need to build bridges by integrating courses across the college curriculum. 48. Weve integrated topics around the humanities and social science courses you may have taken to help you see how courses in disciplines such as economics, psychology, sociology, political science, philosophy, and speech communications relate to topics in management.
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49. The big picture is often lost when management concepts are studied in isolation. B. What Can Students of Management Gain From Humanities and Social Science Courses? 50. Anthropology. a) The study of societies which helps us learn about human beings and their activities. b) Anthropologists work on cultures and environments has helped managers better understand differences in fundamental values, attitudes, and behavior between people. 51. Economics. a) Concerned with the allocation and distribution of scarce resources. b) Provides an understanding of the changing economy and the role of competition and free markets in a global context. 52. Philosophy. a) Philosophy courses inquire into the nature of things, particularly values and ethics. b) Ethical concerns go directly to the existence of organizations and what constitutes proper behavior within them. Teaching Notes _______________________________________________________________________ _____________________________________________________________________________________ _____________________________________________________________________________________ _____________________________________________________________________________________ _____________________________________________________________________________________ 53. Political Science. a) It studies the behavior of individuals and groups within a political environment. b) Specific topics of concern include structuring of conflict, allocating power, and manipulating power for individual self-interest. c) Capitalism is just one form of an economic system. d) The economies based on socialistic concepts are not free markets but government owned. Organizational decision makers essentially carry out dictates of government policies. 1) Efficiency had little meaning in such economies. e) Management is affected by a nations form of government, whether it allows its citizens to hold property, by the ability to engage in and enforce contracts, and by the appeal mechanisms available to redress grievances. 54. Psychology.
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a) The science that seeks to measure, explain, and sometimes change the behavior of humans. b) Psychologists study and attempt to understand individual behavior, and is leading the way in providing managers with insights into human diversity. c) Psychology courses are also relevant to managers in terms of gaining a better understanding of motivation, leadership, trust, employee selection, performance appraisals, and training techniques. 55. Sociology. a) Sociology studies people in relation to their fellow human beings. b) Sociologists investigate how societal changes such as globalization, cultural diversity, gender roles, and varying forms of family life affect organizational practices. C. A Concluding Remark 56. Weve attempted to provide some insight into need-to-integrate courses you have taken in your college pursuits because what you learn in humanities and social science courses can assist you in becoming better prepared to manage in todays dynamic marketplace. Teaching Notes _______________________________________________________________________ _____________________________________________________________________________________ _____________________________________________________________________________________ _____________________________________________________________________________________ _____________________________________________________________________________________ _____________________________________________________________________________________ _____________________________________________________________________________________ _____________________________________________________________________________________ _____________________________________________________________________________________

Review, Comprehension, Application

Chapter Summary 1. Managers direct the activities of others in an organization. They have such titles as supervisor, department head, dean, division manager, vice president, president, and chief executive officer. Operatives are nonmanagerial personnel. They work directly on a job or task and have no responsibility for overseeing the work of others. Management refers to the process of getting activities completed efficiently with and through other people. The process represents the primary activities of planning, organizing, leading, and controlling. Efficiency is concerned with minimizing resource costs in the completion of activities. Effectiveness is concerned with getting activities successfully completedthat is, goal attainment. The four primary processes of management are planning (setting goals), organizing (determining how to achieve the goals), leading (motivating employees), and controlling (monitoring activities).
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3. 4.

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5. The three levels of management are first-line supervisors, middle managers, and top managers. Firstline supervisors are the lowest level of management and are typically responsible for directing the day-to-day activities of operative employees. Middle managers represent the levels of management between the first-line supervisor and top management. These individuals, who manage other managers and possibly some operative employees, are primarily responsible for translating the goals set by top management into specific details that lower-level managers can perform. Top managers, at or near the pinnacle of the organization, are responsible for making decisions about the direction of the organization and establishing policies that affect all organizational members. 6. Henry Mintzberg concluded that managers perform 10 different roles or behaviors. He classified them into three sets. One set is concerned with interpersonal relationships (figurehead, leader, liaison). The second set is related to the transfer of information (monitor, disseminator, spokesperson). The third set deals with decision making (entrepreneur, disturbance handler, resource allocator, negotiator). 7. Management has several generic properties. Regardless of level in an organization, all managers perform the same four activities; however, the emphasis given to each function varies with the managers position in the hierarchy. Similarly, for the most part, the managers job is the same regardless of the type of organization he or she is in. The generic properties of management are found mainly in the worlds democracies. One should be careful in assuming that management practices are universally transferable outside so-called free-market democracies. 8. The four critical types of skills necessary for becoming a successful manager are: conceptual (the ability to analyze and diagnose complex situations); interpersonal (the ability to work with and understand others); technical (applying specialized knowledge); and political (enhancing ones position and building a power base). 9. People in all walks of life have come to recognize the important role that good management plays in our society. For those who aspire to managerial positions, the study of management provides the body of knowledge that will help them to be effective managers. For those who do not plan on careers as managers, the study of management can give them considerable insight into the way their bosses behave and into the internal activities of organizations. 10. Management does not exist in isolation. Rather, management practices are directly influenced by research and practices in such fields as anthropology (learning about individuals and their activities); economics (understanding allocation and distribution of resources); philosophy (developing values and ethics); political science (understanding behavior of individuals and groups in a political setting); psychology (learning about individual behavior); and sociology (understanding relationships among people). Companion Website We invite you to visit the Robbins/DeCenzo Companion Website at www.prenhall.com/robbins for this chapters Internet resources, including an online study guide, Internet exercises, and In the News with full text articles provided by XanEdu. Reading for Comprehension 1. What is an organization? Why are managers important to an organizations success? Answer An organization is a systematic arrangement of people brought together to accomplish some specific purpose. All organizations share three common characteristics. 1) Every organization has a purpose and is made up of people who are grouped in some fashion. 2) No purpose or goal can
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be achieved by itself, therefore organizations have members. 3) All organizations develop a systematic structure that defines and limits the behavior of its members. Organizationan entity that has a distinct purpose, has people or members, and has a systematic structure. Managers direct the activities of other people in the organization. Customarily classified as top, middle, or first line, they supervise both operative employees and lower-level managers. First-line managers are responsible for directing the day-to-day activities of operative employees. Middle managers manage other managers and possibly some operative employees. They are responsible for translating the goals set by top management into specific details. Top managers are responsible for making decisions about the direction of the organization and establishing policies that affect all organizational members. 2. What four common activities comprise the process approach to management? Briefly describe each of them. Answer The management process can be condensed to four basics: planning, organizing, leading, and controlling. See Exhibit 1-4. These processes are interrelated and interdependent. Planningencompasses defining an organizations goals, establishing an overall strategy for achieving those goals, and developing comprehensive plans to integrate and coordinate. Organizingdetermining 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. Leadingmanagers motivate employees, direct the activities of others, select the most effective communication channel, or resolve conflicts among members. Controllingto ensure that things are going as they should, a manager must monitor performance. The monitoring, comparing, and correcting is the controlling process. 3. What are the four general skills and the six specific skills that affect managerial effectiveness? Answer General Skills Conceptual skills refer to the mental ability to analyze and diagnose complex situations. They help managers see how things fit together and facilitate making good decisions. Interpersonal skills encompass the ability to work with, understand, mentor, and motivate other people, both individually and in groups. Technical skills are abilities to apply specialized knowledge or expertise. Political skills are related to the ability to enhance one's position, build a power base, and establish the right connections. Specific Skills Research has also identified six sets of behaviors that explain a little bit more than 50 percent of a managers effectiveness. Controlling the organizations environment and its resources. Organizing and coordinating. Handling information. Providing for growth and development. Motivating employees and handling conflicts. Strategic problem solving. 4. How does a managers job change with his/her level in the organization? Answer The differences are of degree and emphasis but not of activity. As managers move up, they do more planning and less direct overseeing of others. See Exhibit 1-6. The amount of time managers give to each activity is not necessarily constant. The content of the managerial activities changes with
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the managers level. Top managers are concerned with designing the overall organizations structure. Lower-level managers focus on designing the jobs of individuals and work groups. 5. What value do courses in anthropology, economics, philosophy, political science, psychology, and sociology have for managers? Give an example of one application to management practice that comes from each of these disciplines. Answer Students examples of application will vary but should take into consideration the following practicalities: Anthropology. Anthropologists work on cultures and environments has helped managers better understand differences in fundamental values, attitudes, and behavior between people. Economics. It provides an understanding of the changing economy and the role of competition and free markets in a global context. Philosophy. Philosophy courses inquire into the nature of things, particularly values and ethics. Ethical concerns go directly to the existence of organizations and what constitutes proper behavior within them. Political Science. Specific topics of concern include structuring of conflict, allocation of power, and how people manipulate power for individual self-interest. Management is affected by a nations form of government, whether it allows its citizens to hold property, by the ability to engage in and enforce contracts, and by the appeal mechanisms available to redress grievances. Psychology. Psychology courses are also relevant to managers in terms of gaining a better understanding of motivation, leadership, trust, employee selection, performance appraisals, and training techniques. Sociology. Sociologists investigate how societal changes such as globalization, cultural diversity, gender roles, and family life are affecting organizational practices. Linking Concepts to Practice 1. Are all effective organizations also efficient? Discuss. If you had to choose between being effective or being efficient, which one would you say is more important? Why? Answer Management is the process of getting things done, effectively and efficiently, through and with other people. Effectiveness and efficiency deal with what we are doing and how we are doing it. Efficiency means doing the task right and refers to the relationship between inputs and outputs. Effectiveness means doing the right task, which translates into goal attainment. Efficiency and effectiveness are interrelated. Its easier to be effective if one ignores efficiency. Good management is attaining goals (effectiveness) and doing so as efficiently as possible. Organizations can be efficient and yet not be effective. High efficiency is associated more typically with high effectiveness. Poor management is most often due to both inefficiency and ineffectiveness or to effectiveness achieved through inefficiency. To address the question of which is more important, maybe it depends. Doing the right tasks may keep a business in businesskeep the doors open and meet payroll. Doing the wrong tasks may close the doors and send everyone home. Suppose you are the owner and manager of a CPA firm. Over the years, your organization has developed a long-term relationship with a number of customers who come to you each year to prepare their income tax return. If you chose to emphasize efficiency over effectiveness, what might happen? You might create an infrastructure that at least in the short run would be very efficient. Suppose you have one person
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handle a customers tax return preparation from start to finish (sounds like a silo). You could have your accountants specialize in the type of customers they work with so they could become even more efficient in completing the tax returns (well talk about job specialization more in the history module and chapter five). You could create a compensation system where accountants who could document their ability to complete tax returns in less time were rewarded. Lets come back to this concept in a minute. What if you chose to emphasize effectiveness over efficiency? Suppose that it is one of your organizations goals to guarantee accurate preparation of income tax returns. You may decide to send all employees to training to learn the most up-to-date advice available regarding tax law. You may also see that all of your employees have training each year in any changes being implemented by the Internal Revenue Service. You might also create an infrastructure that would seem to be less efficient. For example, you might require that each tax return be reviewed by three separate accountants, one of whom must be a senior accountant, before it is released to the customer. You may require all accountants to work with a wide variety of tax returns so they will develop a broader base of expertise. In the first example (the efficient office), everything might move quickly from start to finish but your control system may be weak. When customers begin to be audited by the IRS and learn that your efficient operation was not necessarily effective (tax returns are not correct according to tax law and IRS requirements), your customer base may quickly disappear and your ability to continue in business could be at risk. In the second example (the effective office), everything and everyone may be very knowledgeable and thorough and correct. . .and expensive. When your customers begin to figure out that your charges are higher than those paid by some of their friends for similar services, your customer base may quickly disappear and your ability to continue in business could be at risk. As an effective manager can you afford to separate effectiveness and efficiency? Probably not. You need to pursue the right goals (effectiveness) and you need to use resources wisely (efficiency). Since the two are so closely interrelated, understanding the fine balance between them is an important part of how you become an effective manager. 2. Contrast planning, organizing, leading, and controlling with Henry Mintzbergs ten roles. Answer Students responses can be abbreviated by comparing Exhibit 1-4 and Exhibit 1-6. See the suggested answer for #4 below. 3. Is your college instructor a manager? Discuss in terms of both planning, organizing, leading, and controlling, and Mintzbergs managerial roles. Answer A college instructor is both an individual contributor and a manager. He/she is an operative in that he/she produces the product of the university. But he/she is also a manager in that he/she must manage the class and students. In terms of: Planningthe instructor defines class goals, establishes the semester plan for achieving them, and develops lesson plans to integrate and coordinate these efforts. Organizingnot as much, as he/she is primarily responsible for execution but may need to if he/she uses class participation. Leadingshould be relatively obvious, motivating students, direct the activities of others, select the most effective communication channel, or resolve conflicts among members.
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Controllingah grading!

For the sake of space, suggestions will be limited to Mintzbergs three primary categories. Interpersonalthe roles of leader and liaison. Informationalmonitor and disseminator. Decisionaldisturbance handler and resource allocator. 4. In what ways would the activities of an owner of an automotive repair shop that employs two people and the president of the Ford Motor Companys job be similar? In what ways would they be different? Answer Managing the shop is different from managing the company. Refer to Exhibit 1-7. The shop managers most important role is that of spokesperson. The presidents most important job is deciding which organizational units get what available resources and how much of them. The entrepreneurial role is least important to the president. The shop owner is more likely to be a generalist. The presidents job is more structured and formal than in small firms. In the shop planning is less carefully orchestrated, the shops design is less complex and structured, and control in the shop will rely more on direct observation. We see differences in degree and emphasis, but not in activities. 5. Some individuals today have the title of project leader. They manage projects of various size and duration and must coordinate the talents of many people to accomplish their goals, but none of the workers on their projects report directly to them. Can these project leaders really be considered managers if they have no employees over whom they have direct authority? Discuss. Answer Less because they manage processes. They still perform the four basic functions of managers, but of processes, not people. This fact is reflected in compensation structures, such as the Hay Consulting Groups compensation strategy for managers.

Management Workshop
Team Skill-Building Exercise A New Beginning Purpose: This exercise will give students opportunities to connect with other students in the class, reflect on this course, and set personal goals, as well as have an exposure to the type of exercise used in team building. Time: 50 minutes. [Time is approximate. The use of odd times, 7 minutes, is to help students focus on the time they have for each step.] Instructions: 1. Explain to students that this exercise will provide them an opportunity to give you some feedback on what they want from this course. 2. Before beginning the exercise, pass out your syllabus and give a brief overview of the classmajor assignments and events, your objectives, and your expectations. 3. Ask students to review the five questions in the text and take 10 minutes to record their own answers to each question. 4. Call time and match the students into pairs. Consider using some unique, fun method of pairingby birth month, home state, color they are wearing, etc. This method is simply more interesting and forces students to move around the room, stimulating some blood flow and waking them up. :-)
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5. Students instructions from the text. One of the more unnerving aspects of beginning a new semester is gaining an understanding of what is expected in each class. By now, your instructor has probably provided you with a course syllabus, which gives you some necessary information about how the class will function. Understandably, this information is important to you. Yet, there is another componentgiving your instructor some indication of what you want or expect from the class. Specifically, there are some data that can be useful for providing insight into your taking this class. To collect these data, you will need to answer some questions. First, take out a piece of paper and place your name at the top. Then respond to the following: What do I want from this course? Why is this class important to me? How does this course fit into my career plans? How do I like an instructor to run the class? What do I think is my greatest challenge in taking this class?

Instructions: (continued) 6. Ask students to take 15 minutes, 7 minutes apiece to share their responses to these questions with each other. Call time at 7 minutes to switch primary speaker in the pair. 7. Based on this discussion, tell the students to take another 7 minutes to develop a brief 1-minute introduction and their partners brief responses to the questions. 8. Call time. 9. Create five columns on the board where you will record a few key words identifying the substance of student responses to the questions. 10. Ask for volunteers. Have 5-10 students report and then ask if anyone wants to make sure they get to share their partners responses. [You can review responses from the entire class or from as few as three partners, depending on the time you wish to spend on this exercise.] Understanding Yourself Before you can develop other people, you need to understand your present strengths. To assist in this learning process, we encourage you to complete the following self-assessments from the Prentice-Hall Self-Assessment Library 2.0: How Motivated Am I to Manage? (#45) Am I Well Suited for a Career as a Global Manager? (#46)

After you complete these assessments, we suggest that you print out the results and store them as part of your portfolio of learning.

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Part I - Introduction

Developing Your Mentoring Skill Guidelines for Mentoring Others A mentor is someone in the organization usually more experienced and in a higher level position who sponsors or supports another employee (frequently called a protg). A mentor can teach, guide, and encourage. Some organizations have formal mentoring programs, but even if your organization does not, mentoring should be an important skill for you to develop. Steps in Practicing the Skill Summary Communicate honestly and openly with your protg. Encourage honest and open communication from your protg. Treat the relationship with the protg as a learning opportunity. Take the time to get to know your protg.

Practicing the Skill 1. Select someone you know in an organizational setting (e.g., a relative, neighbor, or friend). This could be a service organization at your university, a profit or not-for-profit organization in the community, a church you attend, an organization where you work, or even an organization where you would like to work. Ask the person you selected if they would spend thirty minutes to an hour teaching you an organizational skill. This could be how to perform a particular operation in one department of the organization, how to process a form used by the organization, a procedure used when a visitor comes on site, etc. 2. Next teach your protg an organizational skill youve mastered (could relate to the same organization as in Step 1 or could be related to a separate organization). 3. Write a brief set of notes about each mentoring experience. 4. Be sure to record what you learned from your protg and how you might have improved your own learning opportunity. 5. Could you have prepared ahead of time? How would that have helped you learn better? 6. In assessing your performance as a mentor, evaluate your skill in organizing and presenting the necessary information. Did your protg ask questions you could not immediately answer? How did you handle these? How do you think you could have done better? In-Class Teaching Tips for Using Practicing the Skill
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1. Students should select someone they are comfortable with to serve as their mentor. As a class, brainstorm a list of 3-7 characteristics they would look for in a mentor. Examples could include: Thorough understanding of process or skill to be taught; Able to communicate well (i.e., not seen as condescending or aloof; easy to understand); Seems approachable or seems to like helping others; Knows the company, its products/services, and processes well; Has time, or is willing to make time, to work with the protg; Is respected by others in the company; etc.

Recommend students include their preferred criteria in priority order when they write a description of their experience of being mentored. 2. Encourage students to ask the mentor to teach the student something the student finds particularly interesting. 3. Students should then ask their mentor, or someone else, to serve as their protg to allow the student to experience the role of mentor. As a class, discuss similarities and differences between serving in the role of mentor and the role of protg. Brainstorm a list of 3-7 characteristics they would look for in a protg: Examples could include: Has both a desire and ability to learn; Accepts feedback well; Has time, or is willing to make time, to work with the mentor; etc.

4. Encourage students to select a skill or process to teach that they really know well. Form students into small groups in class and have them brainstorm, discuss, and share ideas of what skills/processes they could teach. Ask that each student report out 1-3 skills they think they could teach someone else.

5. Ask students to prepare 3-5 minute oral summaries of their mentoring experience to present in class.

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Part I - Introduction

Developing Your Diagnostic and Analytical Skills

Managing Macronix International Miin Wu was educated in the United States at MIT and Stanford University. He began his career in California at Intel. After several years of working at this high-tech company, he felt that he was ready to move on. Wu made his vision of how to make better computer chips a reality in 1989 when he founded Macronix International, Ltd., in Taiwans Hsinchu Science Park. Macronix designs, develops, manufacturers, and sells such products as integrated circuits, flash memory, and several logic products. As the founder of the company, he knew that to fulfill his mission, he needed to surround himself with high-quality people. He did this by offering several workers an opportunity to join him in Taiwan, giving them a piece of the company. Many of these individuals gave up comfortable and stable jobs in the U.S. chip industry for a chance to help Wu succeed. He knew that long-term success came from identifying opportunities and staking out a growth plan, so he created alliances with other companies and invested heavily in research and development, spending nearly 16 percent of the companys revenues on product development. He constantly seeks ways to re-create the organization, making it possible for employees to do the best job they can while facing the fewest obstacles. Wu knows that he must grow and nurture his people, providing them opportunities to develop so theyll stay knowledgeable and able to respond to change. Have Miin Wus efforts proven successful for Macronix International? The answer appears to be yes. Company sales in 2001 exceeded $825 million, with gross profits nearing $212 millionbetter than a 25-percent gross margin. These results, and Miin Wus positioning of the company to reach $1 billion in sales in the next few years, have earned Macronix the honor of being one of Taiwans thriving hightech companies and recipient of the 2001 Golden Silicon Award. Responding to the Case 1. Describe how Miin Wu performs planning, organizing, leading, and controlling activities in dealing 1) with other companies and 2) dealing with his employees. Cite examples.
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Answer Students responses will be unique but should address the following principles. Planning encompasses defining an organization's goals, establishing an overall strategy for achieving those goals, and developing comprehensive plans to integrate and coordinate. So he needs to create strategies that will address each challenge, including having a vision of how to make a better computer chip and identifying the company purpose of designing, developing, manufacturing, and selling such products as integrated circuits, flash memory, and several logic products. 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. He has chosen to hire high-quality people and to identify opportunities and then take out a growth plan for meeting those opportunities. Leading involves motivating employees, directing the activities of others, selecting the most effective communication channel, or resolving conflicts among members. He has worked to intentionally create a work environment that removes barriers for employees and promotes enthusiasm. He has also invested heavily in research and development, investing nearly 16 percent of the companys revenues on product development. Controllingensures that things are going as they should, a manager must monitor performance. Actual performance must be compared with the previously set goals. He has monitored the companys achievements such as company sales exceeding $825 million in 2001, with gross profits nearing $212 million which is better than a 25-percent gross margin. He is tracking the companys progress toward a goal of reaching $1 billion in sales in the next few years and based on current performance, appears to have set a reachable goal. 2. What management roles does Miin Wu play in dealing 1) with other companies, and 2) dealing with his employees? Cite examples. Answer The ten possible roles are shown in Exhibit 1-5. They are grouped under three primary headings. Due to space, this suggested answer will only cover the three main categories. Interpersonal relationships a) Wu needs to continue to represent the company to those outside the organization, building alliances with other companies as needed. b) Wu needs to continue to provide a work environment where barriers for employee productivity are minimal and where employees have opportunities to be enthusiastic and successful in their work. He needs to continue his efforts to grow and nurture his employees. c) Given the volatility of the microchip market, maintaining a self-developed network of outside contacts and informers who provide favors and information may be critical to the companys strategy survival. The transfer of information a) Employees need to be informed, whether it is a memo/newsletter from the president, meetings, or videos. b) Customers need to know that the company is not just still there, but is strong, constantly evolving as their needs change, and committed to their values. The companys distinctives need to be communicated due to the competition. c) Same as b.

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Part I - Introduction

Decision making a) His primary role will continue to be identifying needed changes, i.e., making necessary decisions to help the company remain competitive, identifying opportunities to explore new growth and development, and helping recreate the company to meet the needed changes. b) He will probably continue to be involved as a resource allocator and negotiator. c) Roles as disturbance handler do not currently seem to be dominant, given the companys current performance and their relationships with outside organizations. 3. Describe how lessons learned from disciplines such as economics, philosophy, and sociology could be of benefit to Miin Wu. Answer Economics It could help him to decide what markets to explore, where to open and close stores as he understands the changing economy. Philosophy As ethical concerns are central to this company, this could be a key discipline for him, helping him understand how his external constituencies might perceive company behavior. Sociology This discipline can help the firm track key issues for their constituents, especially the environmentalists. Enhancing Your Communication Skills 1. Develop a 3-4 page response to the following question: Are U.S. executives overpaid? Present both sides of the argument and include supporting data. Conclude your discussion by defending and supporting one of the two arguments youve presented. 2. Describe how the president of your college fulfills the 10 managerial roles identified by Henry Mintzberg (refer to Exhibit 1-5, pp. 9). In your discussion, provide specific references to actual activities by your colleges presidentnot just the identifiable activities weve listed in the exhibit. 3. Schedule a meeting with three faculty membersone who teaches economics, one who teaches psychology, and one who teaches political science. Ask each of them how their respective courses relate to todays business environment, and what are the most critical elements from their courses that a business student should understand. Write up your findings in a 3-4 page report.

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