BUS110 Chapter 7 - Management and Leadership

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*Chapter Seven

Management and

Leadership

Copyright © 2010 by the McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin

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*Profile

• Started at Pepsi after earning masters degrees from the Indian School of Management and Yale.

INDRA KRISHNAMURTHY NOOYIPepsi

• Goal was to increase sales overseas, introduce good-for-you products and place more emphasis on food.

• She is a top manager using a boss-centered leadership style while still being a team player.

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Source: Fortune Magazine, www.fortune.com, October 13, 2008.

AMERICA’S MOST POWERFUL FEMALE MANAGERS

Name Organization Age

Indra Nooyi PepsiCo 52

Irene Rosenfeld Kraft Foods 55

Pat Woertz Archer Daniel Midland 55

Anne Mulcahy Xerox 55

Angela Braly Wellpoint 47

Andrea Jung Avon 50

Susan Arnold Proctor & Gamble 54

Oprah Winfrey Harpo 54

Brenda Barnes Sara Lee 54

Ursula Burns Xerox 50

Profile

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*Four Functionsof Management

• Management -- The process used to accomplish organizational goals through planning, organizing, leading and controlling people and other organizational resources.

WHAT IS MANAGEMENT?LG2

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*Managers’ Roles Are Evolving

• Younger and more progressive.- Growing numbers of women.

- Fewer from elite universities.

• Emphasis is on teams and team building.

• Managers need to be skilled communicators and team players.

TODAY’S MANAGERS

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Source: Entrepreneur, www.entrepreneur.com, March 2009.

RESPECT and HOW to GET IT Managers’ Roles Are Evolving

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Source: BusinessWeek, www.businessweek.com, January 19, 2009.

The BEST MANAGERS

Name Age Organization

David Axelrod 53 Obama Campaign

Frank Blake 59 Home Depot

Jamie Dimon 52 JPMorgan

Larry Ellison 64 Oracle

Takeo Fukui 64 Honda

Mark Hurd 53 Hewlett-Packard

Satoru Iwata 49 Nintendo

Peter Loscher 51 Siemens

Irene Rosenfeld 55 Kraft Foods

Managers’ Roles Are Evolving

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Source: BusinessWeek, www.businessweek.com, January 19, 2009.

The WORST MANAGERS

Name Organization What Went Wrong

James Cayne Bear Stearns Played golf and bridge while the company collapsed.

Richard Fuld Lehman Brothers Ignored warning signs and rewarded greed.

Kerry Killinger Washington Mutual Bad lending standards led to bankruptcy.

Philip Schoonover Circuit City Fired 3,400 experienced employees for cheaper replacements.

Managers’ Roles Are Evolving

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*Four Functionsof Management

1. Planning

2. Organizing

3. Leading

4. Controlling

FOUR FUNCTIONS of MANAGEMENT

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• The lack of professional managers is keeping U.S. companies from expanding rapidly in global markets.

• Flexibility is the key to successfully expanding abroad.

• Developing products to appeal to another market is another way to be successful.

WE NEED MANAGERS HERE(Reaching Beyond Our Borders)

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*Planning & Decision Making

• Vision –

• Broad explanation of why the organization exists and where it’s trying to go (futuristic).

SHARING the VISION

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• Mission Statement –

• Outlines organization’s fundamental purposes.

- The organization’s self–concept.- Its philosophy.- Long–term survival needs.- Customer needs.- Social responsibility.- Nature of the product or service.

DEFINING THE MISSION

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• Goals –

• Broad, long-term accomplishments an organization wishes to attain.

• Objectives –

• Specific, short-term statements detailing how to achieve goals.

SETTING GOALS and OBJECTIVES

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• What is the situation now?

SWOT Analysis -- Analyzes the organization’s Strengths, Weaknesses, Opportunities and Threats.

• How can we get to our goal from here?- Strategic planning- Tactical planning- Operational planning- Contingency planning

PLANNING ANSWERS FUNDAMENTAL QUESTIONS

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SWOT MATRIX

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WalMart SWOT AnalysisStrengths•powerful retail brand •reputation for value for money, convenience and wide range of products •core competence involving its use of information technology to support its international logistics system.

Opportunities•acquire, merge with, or form strategic alliances with other global retailers•continue with its current strategy of large, super centers.

Weaknesses•huge span of control – makes it difficult to enforce its philosophy. •may not have the flexibility of some of its more focused competitors. •Although global, it has a presence in relatively few countries worldwide.

Threats•prime target of competition, locally and globally. •exposure to political problems in the countries that you operate in. •Intense price competition is a threat.

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Disclaimer: This case study has been compiled from information freely available from public sources. It is merely intended to be used for educational purposes only.

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PLANNING FUNCTIONS

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*Decision Making: Finding the Best Alternative

• Problem Solving – • Solving everyday problems that occur; less formal

than decision making and needs quicker action.

• Problem-solving Techniques --• Brainstorming and PMI –

• List all pluses for a solution in one column, all minuses in another and implications in a third.

PROBLEM SOLVING

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*Organizing: Creating a Unified System

• Organization Chart -- Visual device that shows relationships among people and divides the organization’s work; it shows who reports to whom.

ORGANIZATIONAL CHARTS

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LEVELS of MANAGEMENT

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• Top Management – • Highest level, consists of the president and

other key company executives who develop strategic plans.

• Middle Management – • General managers, division managers, and

branch and plant managers who are responsible for tactical planning and controlling.

• Supervisory Management – • Directly responsible for supervising workers and

evaluating daily performance.

MANAGEMENT LEVELS

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• Chief Executive Officer (CEO)- Introduces change into an organization.

• Chief Operating Officer (COO)- Implements CEO’s changes.

• Chief Financial Officer (CFO)- Obtains funds, plans budgets, collects funds, etc.

• Chief Information Officer (CIO)- Gets the right information to the right people so

decisions can be made.

TOP MANAGEMENT

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• Technical Skills -- The ability to perform tasks in a specific discipline or department.

MANAGERIAL SKILLS Tasks and Skills at Different Levels of Management

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• Human Relations Skills -- Skills that involve communication and motivation; they enable managers to work through and with people.

• Conceptual Skills -- Skills that involve the ability to picture the organization as a whole and the relationship among its various parts.

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*Tasks and Skills at Different Levels of Management

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SKILLS NEEDED at VARIOUS LEVELS of MANAGEMENT

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*Leading: Providing Continuous Vision and Values.

• Leaders must:

- Communicate a vision and rally others around that vision.

- Establish corporate values.

- Promote corporate ethics.

- Embrace change.

- Stress accountability and responsibility.

LEADERSHIP

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*Leadership Styles

• Autocratic Leadership – “Self”Making managerial decisions without consulting others.

• Participative or Democratic Leadership – “Others”Managers and employees work together to make decisions.

• Free-Rein Leadership – “Laissez-faire”Managers set objectives; employees are free to do whatever is appropriate to accomplish those objectives.

LEADERSHIP STYLES

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*Leadership Styles

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VARIOUS LEADERSHIP STYLES

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*Empowering Workers

• Empowerment -- Progressive leaders give employees authority to make decisions on their own without consulting a manager.

• Customer needs are handled quickly.

• Manager’s role becomes less of a boss and more of a coach.

• Enabling -- Giving workers the education and tools they need to make decisions.

EMPOWERMENT and ENABLING

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Source: BusinessWeek, www.businessweek.com.

• Manage output instead of hours.

• Train workers to be ready for a more complex corporate structure.

• Allow lower-level managers to make decisions.

• Use new technology to foster teamwork.

• Shift hiring emphasis to collaboration.

WORK SMARTERHow to Ease Pressure on Workers

Empowering Workers

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*Managing Knowledge

• Knowledge Management -- Finding the right information, keeping the information in a readily accessible place and making the information known to every one in the firm.

MANAGING KNOWLEDGE

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*Controlling: Making Sure it Works

FIVE STEPS of CONTROLLING

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Source: CFO Magazine, www.cfo.com.

• Do you have strategic initiatives that you have not addressed?

• Do you often check on employees for quality control?

• Do you often check on subordinates throughout the day?

• Do you rarely take vacations?

• Is there a lot of turnover?

ARE YOU a MICROMANAGER?Controlling: Making Sure it Works

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*A Key Criterion for Measurement: Customer Satisfaction

• Traditional forms of measuring success are financial.

• Pleasing employees, stakeholders and customers (both internal and external) are important.

• External Customers -- Dealers, who buy products to sell to others, and ultimate customers (or end users), who buy products for their own use.

• Internal Customers -- Individuals and units within the firm that receive services from other individuals or units.

MEASURING SUCCESS

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REVIEW ONLY

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*Progress Assessment

• What’s the difference between goals and objectives?

• What does a company analyze when it does a SWOT analysis?

• What are the differences between strategic, tactical and operational planning?

• What are the seven Ds in decision making?

PROGRESS ASSESSMENT

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*Staffing: Getting and Keeping the Right People

• Staffing -- Recruiting, hiring, motivating and retaining the best people available to accomplish the company’s objectives.

• Recruiting good employees is critical.

• Many people are not willing to work at companies unless they are treated well with fair pay.

STAFFING

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Source: Businessweek, www.businessweek.com, December 1, 2008.

LAYOFF LEADERSLargest Layoff Announcements, 1993 to 2008

Company Employees Date

IBM 60,000 July 1993

Citigroup 53,000 November 2008

Sears Roebuck 50,000 January 1993

U.S. Air Force 40,000 December 2005

Ford 35,000 January 2002

Kmart 35,000 January 2003

Boeing 31,000 September 2001

U.S. Postal Service 29,870 January 2002

Boeing 28,000 December 1998

DaimlerChrysler 26,000 January 2001

Staffing: Getting and Keeping the Right People

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*Leading: Providing Continuous Vision and Values.

• Transparency -- The presentation of the company’s facts and figures in a way that is clear and apparent to all stakeholders.

ACCOUNTABILITY through TRANSPARENCY

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As a first-line manager, you have new information that your department head hasn’t seen yet. The findings of the report indicate your manager’s plans should fail. If they do fail, you could be promoted.

Will you give your department head the report?

What is the ethical thing to do?

What might be the consequences?

To SHARE or NOT to SHARE(Making Ethical Decisions)

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Source: CIO Magazine, www.cio.com.

NATURAL BORN LEADERS?Four Types of Executives

Rationalists Humanists

Politicists Culturists

Leadership Styles

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*Progress Assessment

• How does enabling help achieve empowerment?

• What are the five steps in the control process?

• What’s the difference between internal and external customers?

PROGRESS ASSESSMENT

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• The original “Blue Men” manage over 500 employees; 70 are performers in 12 cities.

• Creators wrote a 132-page Blue Man manual helping them understand the importance of managing growth.

I’D RATHER be BLUE(Spotlight on Small Business)

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BUS110 Chapter 7 - Management and Leadership

Business

Transcript of BUS110 Chapter 7 - Management and Leadership