MANAGEMENT SKILLS I: FOUNDATIONS OF MANAGEMENT (3rd Ed.
Chapter 1
Management Today
CHAPTER OUTLINE
I. WHAT IS MANAGEMENT?
A. Managers operate within an organization, a group of people who work together
to achieve a wide variety of goals or desired future outcomes.
B. Management is the planning, organizing, leading and controlling of human and
other resources to achieve organization goals effectively and efficiency
C. Achieving High Performance: A Manager’s Goal
1. Organizational performance is how effectively and efficiently a manger uses
resources to satisfy customers and reach organizational goals.
a. efficiency measures how well productively resources are used
b. effectiveness measures the appropriateness of goals chosen by a
manager
D. Why Study Management?
1. Managers decide how to allocate society’s most valuable resources
effectively
2. Studying management provides perspective on understanding and learning
to cope with bosses and coworkers.
3. Students of management have the potential to compete successfully for
interesting and well paying jobs.
a. As managerial responsibility increases and people move up the
organization hierarchy, salaries grow with responsibility.
b. Salaries paid to top managers and CEO are often quite large.
II. ESSENTIAL MANAGERIAL TASKS
A. Planning
1. Planning is the process manager’s use for identifying and electing
appropriate goals and actions for the organization.
2. Planning involves three steps, including deciding which organizational goals
and courses of actions to pursue; strategies to adopt and deciding how to
allocate organizational resources to attain those goals.
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MANAGEMENT SKILLS I: FOUNDATIONS OF MANAGEMENT (3rd Ed.)
3. The strategies determined during planning determines the effectiveness and
efficiency of an organization.
B. Organizing
1. Organizing is the task of structuring working relationships in a way that
allows organizational members to work together (effectively and efficiently)
to achieve organizational goals.
2. Organizational structure is the formal system of tasks and reporting
relationships that coordinates actions and motivates members to achieve
organizational goals.
C. Leading
1. Leading is the articulation of a clear organizational vision for the
organization’s members to accomplish through the energizing and enabling
of employees to understand what part he/she will play in achieving the goal.
2. Successful leadership requires managers to utilize their personal qualities
specifically power, personality, influence, persuasion, and communication.
D. Controlling
1. Controlling is the process of evaluating how well an organization has
achieved it goals, resulting in taking corrective actions to improve
performance or maintain results.
2. The desired outcome of the control function of
3. Management is the ability to measure performance
4. Accurately and regulate organizational efficiency and
5. Effectiveness.
III. LEVELS AND SKILLS OF MANAGERS
A. A department is a group of people who work together and possess similar skills
or knowledge, tools, or techniques to perform their job
B. Three levels of management
1. First line managers: Responsible for daily supervision of non-managerial
employees
a. Also often called supervisors
2. Middle Managers: Supervises the first line managers
a. Responsible for finding the best way to organize human and other
resources to achieve organizational goals.
3. Top Managers: Responsible for the performance of all departments and
ultimately responsible for the success or failure of an organization.
a. The CEO or Chief Executive Officer is a company’s most senior manager,
the highest in the organizational hierarchy
b. The COO or the Chief Operating Officer is used to refer to a top manager
who is being positioned to take over as CEO when the CEO leaves the
company.
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MANAGEMENT SKILLS I: FOUNDATIONS OF MANAGEMENT (3rd Ed.)
c. The Top Management Team is a group composed of the CEO, the COO
and the department heads responsible for helping the organization reach
its goals.
C. Managerial Skills
1. Education and experience help managers acquire the three types of skills to
be a successful manager.
a. Conceptual skills are demonstrated in the ability to analyze and diagnose
a situation and to distinguish between cause and effect.
i. Top managers require outstanding conceptual skills because their
primary responsibilities are planning and organizing
b. Human skills are the ability to understand, alter, lead and control the
behavior of other individuals and groups as well as the ability to
communicate, coordinate and motivate people into a cohesive team.
i. All levels of mangers strive to continuously hone and improve their
human skills.
c. Technical skills are the job specific skills and tasks required to perform a
particular type of work or occupation
i. The technical skills required by managers are dependent upon their
position within the organization.
2. Core competency is used to refer to a specific set of departmental skills,
knowledge and experience that allows one organization to outperform its
competitors.
3. Core competency gives an organization its competitive advantage, or the
skill, knowledge and experience that make an organization “superior” to
another.
4. Effective Managers need all three types of skills (conceptual, human, and
technical) to help their organization perform more efficiently and effectively.
IV. RECENT CHANGES IN MANAGEMENT PRACTICES
A. Restructuring and Outsourcing: Due to increased global competition and
advances in information technology (IT) the tasks and responsibilities of
managers have changed through restructuring and outsourcing to increase levels
of effectiveness and efficiency within organizations.
1. Restructuring is the simplifying, shrinking, or downsizing an organization’s
operation to lower operating costs.
a. Downsizing is the reduction of staffing and/or levels of the hierarchy.
b. IT has increased efficiency which often results in downsizing.
2. Outsourcing involves contracting with another company usually in a low-cost
country abroad, to have it perform a work activity the organization
previously preformed itself.
a. Outsourcing increases efficiency through lowering operating costs.
b. Low cost global competition has speeded up outsourcing in the 21st
century.
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MANAGEMENT SKILLS I: FOUNDATIONS OF MANAGEMENT (3rd Ed.)
3. Restructuring and outsourcing have created a decrease of 10-20% in the
number of employees in today’s large (for profit) organizations.
B. Empowerment and Self-Managed Teams
1. Empowerment is a management technique that gives employees more
authority and responsibility over the way they perform their work activities.
2. Lower level employee empowerment and movement towards self managed
teams is a strategy to increase efficiency and effectiveness.
a. A self managed team is a group of employees who assume collective
responsibility for organizing, controlling and supervising their own work
activities
3. Increased IT efficiency has allowed employee empowerment to become a
core competency within organizations.
V. CHALLENGES FOR MANAGEMENT IN A GLOBAL ENVIRONMENT
A. Global Organizations are organizations that operate and compete in more than
one country
1. In order to remain competitive in a global environment managers must face
five major challenges:
a. building a competitive advantage
b. maintaining ethical standards
c. managing a diverse work force
d. utilizing new information systems and technologies
e. practicing global crisis management
B. Building a competitive advantage
1. A competitive advantage is the ability of one organization to outperform
other organizations because it produces desired goods or services more
efficiently and effectively than its competitors.
2. The four building blocks of competitive advantage are superior:
a. efficiency
b. quality
c. speed/flexibility/innovation
d. responsiveness to customers
3. Organizations increase efficiency when they reduce the quantity of resources
(i.e. people, raw materials) they use to produce goods and services.
4. Increased pressure by global organizations has led to a thrust to improved
quality through total quality management or TQM
a. TQM is a technique of employee empowerment and control and
discussed further in Chapter 9
5. Speed /Flexibility/Innovation
a. Speed is how quickly an organization can bring a new product to market.
b. Flexibility is how easily an organization can change or alter the way an
activity is performed in response to competition
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MANAGEMENT SKILLS I: FOUNDATIONS OF MANAGEMENT (3rd Ed.)
c. Innovation is the process of creating new or improved goods and service
that customers want or developing better ways to produce or provide
goods and services.
6. Because the competition for customers is intense the need for organizations
to be responsive to the needs of their customers is vital.
a. Employee empowerment with increased level of authority and decision
making is a method to achieve high levels of customer service.
7. Turnaround Management is the creation of a new vision for a struggling
company using a new approach to planning and organizing to make a better
use of the company’s resources.
a. Once an organizational competitive advantage is challenged by
competitors a turnaround is often slow, complex and extremely difficult.
C. Maintaining Ethical and Socially Responsible Standards
1. Pressure for a manager to increase organizational performance exists at all
levels and can be healthy as it creates the motivation to find more effective
and efficient methods to perform planning, organizing, leading and
controlling
a. Too much pressure, however, can induce managers to behave
unethically towards others
2. Social Responsibility centers on deciding what if any obligations a company
has towards the people and groups affected by its activities such as
employees, customers and its surrounding community.
D. Managing a Diverse Workforce
1. The challenge for managers is to recognize the ethical need and legal
requirement to treat human resources in a fair and equitable manner.
2. Workers of variable ages, genders, races, ethnicities, religions, sexual
preferences and socioeconomic positions makeup today’s workforce.
3. To create a highly trained and motivate workforce, and to avoid lawsuits,
human resource management (HRM) procedures and practices must be put
into place.
4. Managers who value their diverse employees succeed best in promoting
performance over the long run
5. Diverse human resources can be used as a competitive advantage
a. Union Bank: Half the population of the work force is Asian, Black,
Hispanic or Gay
i. Created increase in business through the expansion of diverse
customer base
ii. Allowed for positive and healthy work environment
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MANAGEMENT SKILLS I: FOUNDATIONS OF MANAGEMENT (3rd Ed.)
E. IT and E-Commerce
1. New information technology (IT) has enabled and empowered individual
employees and self-managed teams by providing them with more
information and allowing for virtual interactions
a. IT superiority is a potential competitive advantage
F. Practicing Global Crisis Management
1. Global crisis management falls into three categories:
a. Natural Causes
b. Man Made Causes
c. International terrorism/geopolitical conflicts
2. Crisis management involves making choices about:
a. Creating teams to facilitate rapid decision making and communication
b. Establishing the organizational chain of command and reporting the
relationships necessary to mobilize a fast response
c. Recruiting and selecting the right people to lead and work in such teams
d. Developing bargaining and negotiating strategies to manage the conflicts
that arise whenever people in groups have different interests and
objectives.
3. The tools of management, planning, organizing, leading and controlling are
effective in both preventing and responding efficiently and effectively to a
crisis.
