FOB5e ch06 Student

6
Understanding the
Management
Process
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Learning Objectives
6-1 Define what management is.

6-2 Describe the four basic management functions:
planning, organizing, leading and motivating, and
controlling.
6-3 Distinguish among the various kinds of managers in
terms of both level and area of management.
6-4 Identify the key management skills of successful
managers.
6-5 Explain the different types of leadership.
6-6 Discuss the steps in the managerial decision-making
process.
6-7 Describe how organizations benefit from total quality
management.
What Is Management?
Management is the process of coordinating

people and other resources to achieve the goals
of an organization
Management Resources
 Material resources are the tangible, physical resources

an organization uses
 Human resources are the people
who staff an organization and use
the other resources to achieve
the goals of the organization
 Financial resources are the funds an organization uses
to meet its obligations to investors and creditors
 Information resources refers to the information about
the external business environment the firm uses to its
competitive advantage
Basic Management Functions
How well managers perform these key

management process functions determines
whether a business is successful
Planning
 Planning
• Establishing organizational goals and deciding
how to accomplish them
 Mission
• A statement of the basic purpose that makes
an organization different from others
 Strategic planning
• The process of establishing an organization’s
major goals and objectives and allocating the
resources to achieve them
Planning: Strategic Planning Process
 Establishing goals and objectives

• Goal
 An end result that an organization is expected to
achieve over a one- to ten-year period
• Objective
 A specific statement detailing what an organization
intends to accomplish over a shorter period of time
 Properly set goals are:
• Set at every level in the organization
• Consistent (supportive) with each other
• Optimized (balanced) to reduce conflicts
between goals
SWOT Analysis Components
 SWOT analysis is the identification and

evaluation of a firm’s:
• Strengths
• Weaknesses
• Opportunities
• Threats
 Core competencies
• Approaches and processes that a company performs
well and may give it an advantage over its
competitors
SWOT Analysis
Plans
 Plan: An outline of the actions by which an

organization intends to accomplish its goals and
objectives
 Strategic plan: An organization’s broadest plan, a
guide for major policy setting and decision making
 Tactical plan: A smaller-scale plan to implement a
strategy
 Operational plan: A plan to implement a tactical
plan
 Contingency plan: A plan of alternative courses of
action if the organization’s other plans are disrupted or
become ineffective
Types of Plans
Organizing the Enterprise
 Organizing
• The grouping of resources and activities to
accomplish some end result in an efficient and
effective manner
 Leading and motivating
• Leading
 Influencing people to work toward a common goal
• Motivating
 Providing reasons for people to work in the best
interests of an organization
• Directing
 The combined processes of leading and motivating
Controlling Ongoing Activities
 Controlling is the process of evaluating and

regulating ongoing activities to ensure that
goals are achieved
 Requires constant monitoring and adjusting
 Control function
• Set standards
• Measure performance
• Take corrective action
Kinds of Managers
 Levels of management
• Top manager—guides and
controls the overall fortunes
of an organization
• Middle manager—implements
the strategy and major policies
developed by top management
• First-line manager—coordinates
and supervises the activities of
operating employees
 The coordinated effort of all three levels of managers is
required to implement the goals of any company
Areas of Management Specialization
Organizational structure can be divided into areas

of specialization
 Finance
 Operations
 Marketing
 Human Resources
 Administration
 Other (R&D)
Areas of Management
Specialization Defined
 Financial managers
• Responsible for an organization’s financial resources
 Operations managers
• Manage the systems that convert resources into goods
and services
 Marketing managers
• Responsible for facilitating the exchange of products
between an organization and its customers or clients
 Human resources managers
• Manage an organization’s human resources programs
 Administrative managers (general managers)
• Not associated with any specific functional area; provide
overall administrative guidance and leadership
Key Skills of Successful Managers
 Conceptual skills
• Ability to think in abstract terms
 Analytic skills
• Ability to identify problems, generate alternative
solutions, and select the best solution
 Interpersonal skills
• Ability to deal effectively with other people
 Technical skills
• Needed to accomplish a specialized activity
Leadership
 Leadership is the ability to influence others

 Manager vs. Leader:
• A manager may have to depend on coercion
• A leader strives for voluntary cooperation
 Formal leadership
• Legitimate power of position is the basis for authority
 Informal leadership
• Not recognized formally by the organization
authority
Styles of Leadership
 Autocratic
• Task-oriented style; workers are told what to do and
how to do it, they have no say in the decision making
process
 Participative
• All members of a team are involved in identifying
essential goals and developing strategies to reach
those goals
 Entrepreneurial
• Personality-based, the manager seeks to inspire
workers with a vision of what can be accomplished
to benefit all stakeholders
Which Leadership Style Is Best?
 Matching style to the situation

 Effective leadership depends on:
• Interaction among the employees
• Characteristics of the work situation
• The manager’s personality
Managerial Decision Making
 Decision making is the act of choosing one

alternative from a set of alternatives
 Managers require a systematic method for
solving problems in a variety of situations
Managerial Decision-Making Process:
Identifying the Problem of Opportunity
 Problem
• The discrepancy between an actual condition
and a desired condition
 Opportunity
• A “positive” problem
 Problem-solving impediments
• Preconceptions about the problem
• Focusing on unimportant matters while
overlooking significant issues
• Analyzing symptoms rather than causes
• Failing to look ahead
Generating and Selecting Alternatives
 Techniques
• Brainstorming
 Encouraging participants to come up with new ideas
• “Blast! Then refine.”
 Reevaluating objectives, modifying them if necessary,
and devising a new solution to a recurring problem
• Trial and error
 Selecting an alternative
• Satisfice
 Choosing an alternative that is not the best possible
solution, but one that adequately solves the problem
Implementation and Evaluation
 Requires time, planning, preparation of
personnel, and evaluation of the results
 An effective decision removes the difference
between the actual condition and the desired
condition
 If a problem still exists, managers may:
• Decide to give the chosen alternative more time
• Adopt a different alternative
• Start the process all over again
Managing Total Quality
 Total Quality Management (TQM) is the

coordination of efforts directed at:
• Improving customer satisfaction
• Increasing employee participation
• Strengthening supplier partnerships
• Facilitating an organizational atmosphere of
continuous quality improvement
 Benchmarking: Evaluating another organization
that is superior in order to improve quality
 Issues crucial to TQM:
• Top management commitment
• Coordination of efforts

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6

6-1 Define what management is.

Management is the process of coordinating

 Material resources are the tangible, physical resources

How well managers perform these key

 Establishing goals and objectives

 SWOT analysis is the identification and

 Plan: An outline of the actions by which an

 Controlling is the process of evaluating and

Organizational structure can be divided into areas

 Leadership is the ability to influence others

 Matching style to the situation

 Decision making is the act of choosing one

 Total Quality Management (TQM) is the

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