Chapter Three

Managers and Managing

McGraw-Hill/Irwin
Contemporary Management, 5/e
Copyright © 2008 The McGraw-Hill Companies, Inc. All rights reserv
 Learning Objectives

1. Describe what management is, why management is

important, what managers do, and how managers
utilize organizational resources efficiently and
effectively to achieve organizational goals

2. Distinguish among planning, organizing, leading,

and controlling (the four principal managerial tasks),
and explain how managers’ ability to handle each
one affects organizational performance

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 Learning Objectives

3. Differentiate among three levels of management, and

understand the tasks and responsibilities of managers
at different levels in the organizational hierarchy

4. Distinguish between three kinds of managerial skill,

and explain why managers are divided into different
departments to perform their tasks more efficiently and
effectively.

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 Learning Objectives

5. Discuss some major changes in management

practices today that have occurred as a result of
globalization and the use of advanced information
technology (IT).
6. Discuss the principal challenges managers face in
today’s increasingly competitive global environment

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 What is Management?

• All managers work in organizations

• Organizations – collections of people
who work together and coordinate their
actions to achieve a wide variety of goals

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 Question?

What is a person responsible for

supervising the use of an
organization’s resources to meet its
goals?
A. Team leader
B. Manager
C. President
D. Resource allocator

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 Managers

Managers –
– The people responsible for supervising the
use of an organization’s resources to meet
its goals

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 What is Management?

The planning, organizing, leading, and

controlling of human and other resources
to achieve organizational goals effectively
and efficiently

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 What is Management?

– Resources include people, skills, know-how

and experience, machinery, raw materials,
computers and IT, patents, financial capital,
and loyal customers and employees

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 Organizational Performance

A measure of how efficiently and effectively

managers use available resources to
satisfy customers and achieve
organizational goals

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Figure 1.1
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 Organizational Performance

Efficiency
– A measure of how well or how productively
resources are used to achieve a goal
Effectiveness
– A measure of the appropriateness of the
goals an organization is pursuing and the
degree to which they are achieved.

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 Why study management?

1. The more efficient and effective use of

scarce resources that organizations
make of those resources, the greater
the relative well-being and prosperity of
people in that society

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 Why study management?

2. Helps people deal with their bosses

and coworkers
3. Opens a path to a well-paying job and
a satisfying
career

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 Managerial Tasks

• Managers at all levels in all

organizations perform each of the four
essential managerial tasks of planning,
organizing, leading, and controlling

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Four Functions of Management

Figure 1.2 1-16

 Planning

Process of identifying and selecting

appropriate organizational goals and
courses of action

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 Steps in the Planning Process

• Deciding which goals the organization

will pursue
• Deciding what courses of action to
adopt to attain those goals
• Deciding how to allocate organizational
resources

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 Planning

• Complex, difficult activity

• Strategy to adopt is not always
immediately clear
• Done under
uncertainty

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 Organizing

Task managers perform to create a

structure of working relationships that
allow organizational members to interact
and cooperate to achieve organizational
goals

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 Organizing

• Involves grouping people into

departments according to the kinds of
job-specific tasks they perform
• Managers lay out lines of authority and
responsibility
• Decide how to coordinate organizational
resources

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 Organizational Structure

A formal system of task and reporting

relationships that coordinates and
motivates members so that they work
together to achieve organizational goals

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 Leading

Articulating a clear organizational vision for

its members to accomplish, and energize
and enable employees so that everyone
understands the part they play in
achieving organizational goals

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 Leading

• Leadership involves using power,

personality, and influence, persuasion,
and communication skills

• Outcome of leadership is highly

motivated and committed workforce

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 Controlling

• Task of managers is to evaluate how

well an organization has achieved its
goals and to take any corrective actions
needed to maintain or improve
performance
– The outcome of the control process is the ability to
measure performance accurately and regulate
organizational efficiency and effectiveness

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 Decisional Roles

Roles associated with methods managers use in planning

strategy and utilizing resources.
– Entrepreneur—deciding which new projects or programs to
initiate and to invest resources in.
– Disturbance handler—managing an unexpected event or
crisis.
– Resource allocator—assigning resources between
functions and divisions, setting the budgets of lower
managers.
– Negotiator—reaching agreements between other
managers, unions, customers, or shareholders.

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 Interpersonal Roles

Roles that managers assume to provide direction and

supervision to both employees and the organization as
a whole.
– Figurehead—symbolizing the organization’s mission
and what it is seeking to achieve.
– Leader—training, counseling, and mentoring high
employee performance.
– Liaison—linking and coordinating the activities of
people and groups both inside and outside the
organization.

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 Informational Roles

Roles associated with the tasks needed to obtain and

transmit information in the process of managing the
organization.
– Monitor—analyzing information from both the internal
and external environment.
– Disseminator—transmitting information to influence the
attitudes and behavior of employees.
– Spokesperson—using information to positively
influence the way people in and out of the organization
respond to it.

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Levels of Management

Figure 1.3
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 Areas of Managers

Department
– A group of managers and employees who
work together and possess
similar skills
or use the same
knowledge, tools,
or techniques

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 Levels of Management

• First line managers - Responsible for daily

supervision of the non-managerial employees who
perform many of the specific activities necessary
to produce goods and services

• Middle managers - Supervise first-line

managers. Responsible for finding the best way to
organize human and other resources to achieve
organizational goals

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 Levels of Management

• Top managers –
• Responsible for the performance of all departments
and have cross-departmental responsibility.
• Establish organizational goals and monitor middle
managers
• Decide how different departments should interact
• Ultimately responsible for the success or failure of
an organization

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 Levels of Management

• Chief executive officer (CEO) is

company’s most senior and important
manager
• Central concern is creation of a smoothly
functioning top-management team
– CEO, COO, Department heads

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Relative Amount of Time That Managers Spend on
the Four Managerial Functions

Figure 1.4 1-34

 Question?

What skill is the ability to understand, alter,

lead, and control the behavior of other
individuals and groups?
A. Conceptual
B. Human
C. Technical
D. Managerial

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 Managerial Skills

• Conceptual skills
– The ability to analyze and diagnose a situation and
distinguish between cause and effect.
• Human skills
– The ability to understand, alter, lead, and control
the behavior of other individuals and groups.
• Technical skills
– Job-specific skills required to perform a particular
type of work or occupation at a high level.

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Skill Types Needed

Figure 1.5 1-37

 Core Competency

Specific set of departmental skills, abilities,

knowledge and experience that allows
one organization to outperform its
competitors

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 Restructuring

• Involves simplifying, shrinking, or

downsizing an organization’s operations
to lower operating costs

– Can reduce the morale of remaining

employees

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 Outsourcing

• Contracting with another company, usually in

a low cost country abroad, to perform a work
activity the company previously performed
itself
• Increases efficiency by lowering operating
costs, freeing up money and resources that
can now be used in more effective ways

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 Empowerment

Involves giving
employees more
authority and
responsibility over
the way they perform
their work activities

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 Self-managed teams

Groups of employees who assume

collective responsibility for organizing,
controlling, and supervising their own
work activities

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 Discussion Question

What is the biggest challenge for

management in a Global Environment?
A. Building a Competitive Advantage
B. Maintaining Ethical Standards
C. Managing a Diverse Workforce
D. Global Crisis Management

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 Challenges for Management in
a Global Environment

• Rise of Global Organizations.

• Building a Competitive Advantage
• Maintaining Ethical Standards
• Managing a Diverse Workforce
• Utilizing Information Technology and
Technologies
• Global Crisis Management

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 Building Competitive Advantage

• Competitive Advantage – ability of one

organization to outperform other
organizations because it produces
desired goods or services more
efficiently and effectively than its
competitors

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Building Blocks of Competitive Advantage

Figure 1.6
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 Building Competitive Advantage

• Increasing efficiency
– Reduce the quantity of resources used to
produce goods or services
• Increasing Quality
– Improve the skills and abilities of the
workforce
– Introduce total quality management

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 Building Competitive Advantage

• Increasing speed, flexibility, and

innovation
– How fast a firm can bring new products to
market
– How easily a firm can change or alter the
way they perform their activities

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 Building Competitive Advantage

• Innovation
– Process of creating new or improved goods
and services that customers want
– Developing better ways to produce or
provide goods and services

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 Turnaround Management

• Difficult and complex management task

• Done under conditions of great
uncertainty
• Risk of failure is greater for a troubled
company
• More radical restructuring necessary

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 Maintaining Ethical and Socially
Responsible Standards

• Managers are under considerable

pressure to make the best use of
resources
• Too much pressure may induce
managers to behave unethically, and
even illegally

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 Managing a Diverse Workforce

• To create a highly trained and motivated

workforce managers must establish
HRM procedures that are legal, fair and
do not discriminate against
organizational members

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 Global Crisis Management

May be the result of:

• Natural causes
• Manmade causes
• International terrorism
• Geopolitical conflicts

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