JOHN R. SCHERMERHORN, JR.

MANAGEMENT
12th Edition
Chapter 1

The Management
Process
©2013 John Wiley & Sons, Inc. All rights reserved. 1-1
Planning Ahead — Chapter 1 Study Questions

1. What are the challenges of working in the new

economy?
2. What are organizations like in the new
workplace?
3. Who are the managers and what do they do?
4. What is the management process?
5. How do you learn managerial skills and
competencies?

©2013 John Wiley & Sons, Inc. All rights reserved. 1-2
Chapter 1 Learning Dashboard
1. Working today
1. Talent
2. Technology
3. Globalization
4. Ethics
5. Diversity
6. Careers
2. Organizations
1. What is an organization?
2. Organizations as systems
3. Organizational performance
4. Changing nature of organizations

©2013 John Wiley & Sons, Inc. All rights reserved.

 Chapter 1 Learning Dashboard
3. Managers
1. What is a manager?
2. Levels of managers
3. Types of managers
4. Managerial performance
5. Changing nature of managerial work
4. The Management Process
1. Functions of Management
2. Managerial roles and activities
3. Managerial agendas and networking
5. Learning How to Manage
1. Essential managerial skills
2. Developing managerial potential

©2013 John Wiley & Sons, Inc. All rights reserved. 4

 Takeaway
Place Slide Title Text1:Here
Working Today

• Talent
– People and their talents are the ultimate
foundations of organizational performance
– Intellectual capital is the collective brainpower or
shared knowledge of a workforce that can be
used to create value
– A knowledge worker’s mind is a critical asset to
employers and adds to the intellectual capital of
an organization

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 Takeaway
Place Slide Title Text1:Here
Working Today

Intellectual capital equation:

Commitment Competency
Intellectual
Capital

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 Takeaway
Place Slide 1:Here
Title Text Working Today
• Technology
– Tech IQ is a person’s ability to use technology to
stay informed:
• Checking inventory, making a sales transaction,
ordering supplies
• Telecommuting
• Virtual teams
• Effective use of online resources
– Databases
– Job searches
– Recruiting
– Social Media

©2013 John Wiley & Sons, Inc. All rights reserved. 1-7
 Takeaway
Place Slide Title Text1:Here
Working Today

Globalization
– The worldwide interdependence of resource
flows, product markets, and business
competition that characterize our economy
– Job migration occurs when firms shift jobs from
one country to another

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 Takeaway
Place Slide Title Text1:Here
Working Today

Ethics
– Code of moral principles that set standards of
conduct of what is “good” and “right”
in one’s behavior

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 Takeaway
Place Slide Title Text1:Here
Working Today

Ethical expectations for modern businesses:

– Integrity and ethical leadership at all levels
– Social responsibility
– Sustainability

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 Takeaway
Place Slide 1:Here
Title Text Working Today

Diversity
– Workforce diversity reflects differences with
respect to gender, age, race, ethnicity, religion,
sexual orientation, and able-bodiedness
– A diverse and multicultural workforce both
challenges and offers opportunities to employers

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 Takeaway
Place Slide Title Text1:Here
Working Today

How diversity bias can occur in the workplace:

– Prejudice
– Discrimination
– Glass ceiling effect

©2013 John Wiley & Sons, Inc. All rights reserved. 1-12
 Takeaway
Place Slide 1:Here
Title Text Working Today

Careers
– Organizations consist of three types of workers,
sometimes referred to as a shamrock
organization:
Permanent
full time
workers

Temporary Freelance
part-time or contract
workers workers

©2013 John Wiley & Sons, Inc. All rights reserved. 1-13
 Takeaway
Place Slide Title Text1:Here
Working Today

• Free-agent economy
– People change jobs more often, and many work
on independent contracts
• Self-management
– Ability to understands oneself, exercise
initiative, accept responsibility, and learn from
experience

©2013 John Wiley & Sons, Inc. All rights reserved. 1-14
 Takeaway
Place Slide Title Text2: Organizations
Here

Organization
– A collection of people working together to
achieve a common purpose
– Organizations provide useful goods and/or
services that return value to society and satisfy
customer needs

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Place Slide Title Text Here

Figure 1.1 Organizations as open

systems interact with their environment

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 Takeaway
Place Slide Title Text2: Organizations
Here

Organizational performance
– “Value creation” is a very important notion for
organizations
– Value is created when an organization’s
operations adds value to the original cost of
resource inputs
– When value creation occurs:
• Businesses earn a profit
• Nonprofit organizations add wealth to society

©2013 John Wiley & Sons, Inc. All rights reserved. 1-17
 Takeaway
Place Slide Title Text2: Organizations
Here

Organizational performance

Performance Performance
Productivity
effectiveness efficiency
• An overall • An output • An input
measure of the measure of task measure of the
quantity and or goal resource costs
quality of work accomplishment associated with
performance goal
with resource accomplishment
utilization taken
into account

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Place Slide Title Text Here
Figure 1.2 Productivity and the
dimensions of organizational
performance

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 Takeaway
Place Slide Title Text2: Organizations
Here

Workplace changes that provide a context for

studying management …
Focus on valuing human capital

Demise of “command-and-control”

Emphasis on teamwork

Preeminence of technology

Importance of networking

New workforce expectations

Priorities on sustainability

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Place SlideTakeaway 3: Managers
Title Text Here

Importance of human resources and managers

– People are not ‘costs to be controlled ’
– High performing organizations treat people as
valuable strategic assets
– Managers must ensure that people are treated as
strategic assets

©2013 John Wiley & Sons, Inc. All rights reserved. 1-21
 Takeaway
Place Slide 3: Managers
Title Text Here

• Manager
– Directly supports, activates and is responsible for
the work of others
– The people who managers help are the ones
whose tasks represent the real work of the
organization

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 Takeaway
Place Slide 3: Managers
Title Text Here

Levels of management
– Board of directors make sure the organization is
run right
– Top managers are responsible for performance of
an organization as a whole or for one of its major
parts
– Middle managers oversee large departments or
divisions
– Team leaders supervise non-managerial workers

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Place Slide Title Text Here
Figure 1.3 Management levels in a typical
business and non-profit organizations

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 Takeaway
Place Slide 3: Managers
Title Text Here

Types of managers
• Line managers are responsible for work activities that directly
affect organization’s outputs
• Staff managers use technical expertise to advise and support
the efforts of line workers
• Functional managers are responsible for a single area of
activity
• General managers are responsible for more complex units
that include many functional areas
• Administrators work in public and nonprofit organizations

©2013 John Wiley & Sons, Inc. All rights reserved. 1-25
 Takeaway
Place Slide 3: Managers
Title Text Here

Managerial performance and accountability

– Accountability is the requirement to show
performance results to a supervisor
– Effective managers help others achieve high
performance and satisfaction at work

©2013 John Wiley & Sons, Inc. All rights reserved. 1-26
 Takeaway
Place Slide 3: Managers
Title Text Here

Corporate Governance
– Board of directors hold top management
responsible for organizational performance

Financial Ethical
performance Sustainability
performance

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Place SlideTakeaway 3: Managers
Title Text Here

Quality of work life (QWL)

– An indicator of the overall quality of human
experiences in the workplace

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Place SlideTakeaway 3: Managers
Title Text Here

QWL indicators:

• Fair pay
• Safe working conditions
• Opportunities to learn and use new skills
• Room to grow and progress in a career
• Protection of individual rights
• Pride in work itself and in the organization

©2013 John Wiley & Sons, Inc. All rights reserved. 1-29
 Takeaway
Place Slide 3: Managers
Title Text Here

The organization as an upside-down pyramid

– Each individual is a value-added worker
– A manager’s job is to support workers’ efforts
– The best managers are known for helping and
supporting
– Customers at the top served by workers who are
supported by managers

©2013 John Wiley & Sons, Inc. All rights reserved. 1-30
Place Slide Title Text Here
Figure 1.4 The organization viewed as an
upside-down pyramid

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PlaceTakeaway
Slide Title4:Text
The Here
Management Process

• Managers achieve high performance for their

organizations by best utilizing its human and
material resources
• Management is the process of planning, organizing,
leading, and controlling the use of resources to
accomplish performance goals
• All managers are responsible for the four functions
• The functions are carried on continually

©2013 John Wiley & Sons, Inc. All rights reserved. 1-32
Place Slide Title Text Here

Figure 1.5 Four functions of management

©2013 John Wiley & Sons, Inc. All rights reserved. 1-33
PlaceTakeaway
Slide Title4:Text
The Here
Management Process

Functions of management
– Planning
• The process of setting objectives and determining
what actions should be taken to accomplish them
– Organizing
• The process of assigning tasks, allocating resources,
and coordinating work activities

©2013 John Wiley & Sons, Inc. All rights reserved. 1-34
PlaceTakeaway
Slide Title4:Text
The Here
Management Process

Functions of management …
– Leading
• The process of arousing people’s enthusiasm to work
hard and direct their efforts to achieve goals
– Controlling
• The process of measuring work performance and
taking action to ensure desired results

©2013 John Wiley & Sons, Inc. All rights reserved. 1-35
 Takeaway 4: The Management Process

Mintzberg’s 10 Managerial Roles

©2013 John Wiley & Sons, Inc. All rights reserved.

PlaceTakeaway
Slide Title4:Text
The Here
Management Process

Characteristics of managerial work

– long hours
– intense pace
– fragmented and varied tasks
– many communication media
– filled with interpersonal relationships

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PlaceTakeaway
Slide Title4:Text
The Here
Management Process

Managerial agendas and networks

– Agenda setting
• Develops action priorities for accomplishing goals and plans
– Networking
• Process of creating positive relationships with people who can
help advance agendas
– Social capital
• Capacity to get things done with help

©2013 John Wiley & Sons, Inc. All rights reserved. 1-38
PlaceTakeaway
Slide Title5:Text
Learning
Here How to Manage

• Learning
– The change in a behavior that results from
experience
• Lifelong learning
– The process of continuously learning from
daily experiences and opportunities

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Place Slide Title Text Here

Figure 1.6 Katz’s Essential Managerial

Skills

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Place Slide Title Text Here
Figure 1.7 Learning model for developing
managerial skills and competencies

©2013 John Wiley & Sons, Inc. All rights reserved. 1-41
Place Slide Title Text Here
JOHN R. SCHERMERHORN, JR.
MANAGEMENT
12th Edition

Chapter 2

History of Management
Thought
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Planning
Place Ahead
Slide — Chapter
Title Text Here 2 Study Questions

1. What can be learned from classical management

thinking?
2. What insights come from behavioral management
approaches?
3. What are the foundations of modern management
thinking?

©2013 John Wiley & Sons, Inc. All rights reserved. 1-43
 Chapter
Place Slide 2 Learning
Title Text Here Dashboard

1. Classical Management Approaches

1. Scientific management
2. Administrative principles
3. Bureaucratic organization
2. Behavioral Management Approaches
1. Follett’s organizations as communities
2. The Hawthorne studies
3. Maslow’s theory of human needs
4. McGregor’s Theory X and Theory Y
5. Argyris’s theory of adult personality

©2013 John Wiley & Sons, Inc. All rights reserved. 1-44
 Chapter
Place Slide 2 Learning
Title Text Here Dashboard

3. Modern Management Foundations

1. Quantitative analysis and tools
2. Organization as systems
3. Contingency thinking
4. Quality management
5. Knowledge management and organizational learning
6. Evidence-based management

©2013 John Wiley & Sons, Inc. All rights reserved. 1-45
Place Slide Title Text Here
Figure 2.1 Major branches in the classical approach
to management

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PlaceTakeaway 1: Classical
Slide Title Management Approaches
Text Here

• Four guiding principles of scientific management

(Frederick Taylor)
1. Develop for every job a “science” that includes rules of
motion, standardized work implements, and proper
working conditions.
2. Carefully select workers with the right abilities for the
job.
3. Carefully train workers to do the job and give them the
proper incentives to cooperate with the job “science.”
4. Support workers by carefully planning their work and
by smoothing the way as they go about their jobs.

©2013 John Wiley & Sons, Inc. All rights reserved. 47 1-47
PlaceTakeaway 1: Classical
Slide Title Management Approaches
Text Here

• Scientific management (the Gilbreths)

– Motion study
• Science of reducing a job or task to its basic physical
motions
– Eliminating wasted motions improves
performance

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PlaceTakeaway 1: Classical
Slide Title Management Approaches
Text Here

• Practical lessons from scientific management

– Make results-based compensation a performance
incentive
– Carefully design jobs with efficient work methods
– Carefully select workers with the abilities to do
these jobs
– Train workers to perform jobs to the best of their
abilities
– Train supervisors to support workers so they can
perform jobs to the best of their abilities

©2013 John Wiley & Sons, Inc. All rights reserved. 1-49
PlaceTakeaway 1: Classical
Slide Title Management Approaches
Text Here

• Administrative principles (Henri Fayol) —

rules/duties of management:

Foresight Organization Command Coordination Control

to fit diverse
to make sure
to lead, select, efforts
to provide and things happen
and evaluate together and
to complete a mobilize according to
workers to get ensure
plan of action resources to plan and to
the best work information is
for the future implement the take necessary
toward the shared and
plan corrective
plan problems
action
solved

©2013 John Wiley & Sons, Inc. All rights reserved. 1-50
PlaceTakeaway 1: Classical
Slide Title Management Approaches
Text Here

• Administrative principles (Henri Fayol)

– Scalar chain
• there should be a clear and unbroken line of
communication from the top to the bottom of the
organization
– Unity of command
• each person should receive orders from only one boss
– Unity of direction
• one person should be in charge of all activities with the
same performance objective

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PlaceTakeaway 1: Classical
Slide Title Management Approaches
Text Here

• Bureaucratic organization (Max Weber)

– Bureaucracy
• An ideal, intentionally rational, and very efficient form
of organization
• Based on principles of logic,
order, and legitimate
authority

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PlaceTakeaway 1: Classical
Slide Title Management Approaches
Text Here

• Characteristics of bureaucratic organizations:

– Clear division of labor
– Clear hierarchy of authority
– Formal rules and procedures
– Impersonality
– Careers based on merit

©2013 John Wiley & Sons, Inc. All rights reserved.

53 1-53
PlaceTakeaway 1: Classical
Slide Title Management Approaches
Text Here

• Possible disadvantages of bureaucracy:

– Excessive paperwork or “red tape”
– Slowness in handling problems
– Rigidity in the face of shifting needs
– Resistance to change
– Employee apathy

©2013 John Wiley & Sons, Inc. All rights reserved. 1-54
Place Slide Title Text Here
Figure 2.2 Foundations in the behavioral or
human resource approaches to management
Organizations as
communities
Mary Parker
Follett Theory X and
Hawthorne
Theory Y
studies
Douglas
Elton Mayo
McGregor

Human resource
Theory of approaches
Personality and
human needs Assumption:
organization
Abraham People are social Chris Argyris
Maslow and self-
actualizing

©2013 John Wiley & Sons, Inc. All rights reserved. 1-55
 Takeaway
Place 2: Behavioral
Slide Title Text HereManagement Approaches

• Organizations as communities
– Mary Parker Follett
– Groups and human cooperation:
• Groups allow individuals to combine their talents for a greater
good
• Organizations are cooperating “communities” of managers and
workers
• Manager’s job is to help people cooperate and achieve an
integration of interests

©2013 John Wiley & Sons, Inc. All rights reserved. 1-56
 Takeaway
Place 2: Behavioral
Slide Title Text HereManagement Approaches

• Organizations as communities
– Forward-looking management insights:
Making every
employee an owner • precursor of employee ownership,
creates a sense of profit sharing, and gain-sharing
collective responsibility

Business problems
involve a variety of • precursor of systems thinking
inter-related factors

Private profits relative • precursor of managerial ethics

to public good and social responsibility

©2013 John Wiley & Sons, Inc. All rights reserved. 1-57
 Takeaway
Place 2: Behavioral
Slide Title Text HereManagement Approaches

• Hawthorne studies
– Initial study examined how economic incentives
and physical conditions affected worker output
– No consistent relationship found
– “Psychological factors” influenced results

©2013 John Wiley & Sons, Inc. All rights reserved. 1-58
 Takeaway
Place 2: Behavioral
Slide Title Text HereManagement Approaches

• Hawthorne studies (cont.)

– Social setting and human relations
• Manipulated physical work conditions to assess impact
on output
• Designed to minimize the “psychological factors” of
previous experiment
• Mayo and colleagues concluded:
– New “social setting” led workers to do good job
– Good “human relations” = higher productivity

©2013 John Wiley & Sons, Inc. All rights reserved. 1-59
 Takeaway
Place 2: Behavioral
Slide Title Text HereManagement Approaches

• Hawthorne studies (cont.)

– Employee attitudes and group processes
• Some things satisfied some workers but not others
• People restricted output to adhere to group norms

©2013 John Wiley & Sons, Inc. All rights reserved. 1-60
 Takeaway
Place 2: Behavioral
Slide Title Text HereManagement Approaches

• Lessons from the Hawthorne Studies:

– Social and human concerns are keys to
productivity
– Hawthorne effect — people who are singled out
for special attention perform as expected

©2013 John Wiley & Sons, Inc. All rights reserved. 1-61
 Takeaway
Place 2: Behavioral
Slide Title Text HereManagement Approaches

• Maslow’s theory of human needs

– A need is a physiological or psychological
deficiency a person feels compelled to satisfy
– Need levels:
• Physiological
• Safety
• Social
• Esteem
• Self-actualization

©2013 John Wiley & Sons, Inc. All rights reserved. 1-62
Place Slide Title Text Here
Figure 2.3 Maslow’s hierarchy of human needs

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 Takeaway
Place Slide2:Title
Behavioral Management Approaches
Text Here

• Maslow’s theory of human needs

– Deficit principle
• A satisfied need is not a motivator of behavior
– Progression principle
• A need becomes a motivator once the preceding
lower-level need is satisfied
– Both principles cease to operate at self-
actualization level

©2013 John Wiley & Sons, Inc. All rights reserved. 1-64
 Takeaway
Place 2: Behavioral
Slide Title Text HereManagement Approaches

• McGregor’s Theory X assumes that workers:

– Dislike work
– Lack ambition
– Are irresponsible
– Resist change
– Prefer to be led

©2013 John Wiley & Sons, Inc. All rights reserved. 1-65
 Takeaway
Place 2: Behavioral
Slide Title Text HereManagement Approaches

• McGregor’s Theory Y assumes that workers

are:
– Willing to work
– Capable of self control
– Willing to accept responsibility
– Imaginative and creative
– Capable of self-direction

©2013 John Wiley & Sons, Inc. All rights reserved. 1-66
 Takeaway
Place 2: Behavioral
Slide Title Text HereManagement Approaches

• Implications of Theory X and Theory Y:

– Managers create self-fulfilling prophecies
– Theory X managers create situations where
workers become dependent and reluctant
– Theory Y managers create situations where
workers respond with initiative and high
performance
• Central to notions of empowerment and self-
management

©2013 John Wiley & Sons, Inc. All rights reserved. 1-67
 Takeaway
Place 2: Behavioral
Slide Title Text HereManagement Approaches

• Argyris’s theory of adult personality

– Classical management principles and practices
inhibit worker maturation and are inconsistent
with the mature adult personality
– Psychological success occurs when people define
own goals

©2013 John Wiley & Sons, Inc. All rights reserved. 1-68
 Takeaway
Place 2: Behavioral
Slide Title Text HereManagement Approaches

• Argyris’s theory of adult personality

– Management practices should accommodate the
mature personality by:
• Increasing task responsibility
• Increasing task variety
• Using participative decision making

©2013 John Wiley & Sons, Inc. All rights reserved. 1-69
PlaceTakeaway 3: Modern
Slide Title Management Foundations
Text Here

• Foundations for continuing developments in

management

Quantitative analysis and tools

Systems view of organizations

Contingency thinking

Commitment to quality and performance

Knowledge management and learning organizations

Evidence-based management

©2013 John Wiley & Sons, Inc. All rights reserved. 1-70
PlaceTakeaway 3: Modern
Slide Title Management Foundations
Text Here

• Management science or operations research

Quality
control
Inventory Queuing
management theory

Supply chain Linear

management programming

The scientific
applications of
mathematical
Value chain techniques to Network
analysis management models
problems

©2013 John Wiley & Sons, Inc. All rights reserved. 1-71
PlaceTakeaway 3: Modern
Slide Title Management Foundations
Text Here

• Quantitative Analysis and Tools

• Analytics – the use of large data bases and
mathematics to solve problems and make informed
decisions using systematic analysis
• Typical quantitative approach to managerial problem-
solving
– Problem encountered, it is systematically analyzed,
appropriate mathematical models and computations
applied, optimal solution identified

©2013 John Wiley & Sons, Inc. All rights reserved. 1-72
PlaceTakeaway 3: Modern
Slide Title Management Foundations
Text Here

• Organizations as Systems
– System
• Collection of interrelated parts that function together
to achieve a common purpose
– Subsystem
• A smaller component of a larger system
– Open systems
• Organizations that interact with their environments in
the continual process of transforming resource inputs
into outputs

©2013 John Wiley & Sons, Inc. All rights reserved. 1-73
Place Slide Title Text Here
Figure 2.4 Organizations as complex networks of
interacting subsystems

©2013 John Wiley & Sons, Inc. All rights reserved. 1-74
PlaceTakeaway 3: Modern
Slide Title Management Foundations
Text Here

• Contingency thinking
– Tries to match managerial responses with
problems and opportunities
unique to different situations
– No “one best way” to manage
– Appropriate way to manage
depends on the situation

©2013 John Wiley & Sons, Inc. All rights reserved. 1-75
PlaceTakeaway 3: Modern
Slide Title Management Foundations
Text Here

• Quality management
– Managers and workers in progressive
organizations are quality conscious
• Quality and competitive advantage are linked
– Total quality management (TQM)
• Comprehensive approach to continuous quality
improvement for a total organization
• Creates context for the value chain

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PlaceTakeaway 3: Modern
Slide Title Management Foundations
Text Here

– Continuous improvement
• Continual search for new ways to improve quality
• Something always can and should be improved
– ISO certification
• Global quality benchmark
• Refine and upgrade quality to meet ISO standards

©2013 John Wiley & Sons, Inc. All rights reserved. 1-77
PlaceTakeaway 3: Modern
Slide Title Management Foundations
Text Here

• Knowledge Management and Organizational

Learning
– Knowledge management is the process of using
intellectual capital for competitive advantage
– Portfolio of intellectual assets include patents,
intellectual property rights, trade secrets, and
accumulated knowledge of the entire workforce

©2013 John Wiley & Sons, Inc. All rights reserved. 1-78
PlaceTakeaway 3: Modern
Slide Title Management Foundations
Text Here

• Learning organizations
– Organizations that are able to continually learn
and adapt to new circumstances
– Core ingredients include:

Encourage Information
Teamwork Empowerment Participation
learning sharing

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PlaceTakeaway 3: Modern
Slide Title Management Foundations
Text Here

• Evidence-Based Management
– Making management decisions on “hard facts”
about what really works

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PlaceTakeaway 3: Modern
Slide Title Management Foundations
Text Here

• Evidence-Based Positive Human Resource

Management Practices
– Employment security
– Selective hiring
– Self-managing teams
– High pay based on merit
– Training and development
– Reduced status distinctions
– Shared information

©2013 John Wiley & Sons, Inc. All rights reserved. 1-81
Place Slide Title Text Here
JOHN R. SCHERMERHORN, JR.
MANAGEMENT
12th Edition

Chapter 7

The Decision-Making
Process
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Planning
Place Ahead
Slide — Chapter
Title Text Here 7 Study Questions

1. What is the role of information in the management

process?
2. How do managers use information to make
decisions?
3. What are the steps in the decision-making
process?
4. What are the current issues in managerial decision
making?

©2013 John Wiley & Sons, Inc. All rights reserved. 1-83
 Chapter
Place Slide 7 Learning
Title Text Here Dashboard

1. Information, Technology, and Management

1. What is useful information?
2. Information systems and business intelligence
3. Information needs in organizations
4. How information technology is changing organizations
2. Information and Managerial Decisions
1. Managers as information processors
2. Managers as problem solvers
3. Types of managerial decisions
4. Decision conditions

©2013 John Wiley & Sons, Inc. All rights reserved. 1-84
 Chapter
Place Slide 7 Learning
Title Text Here Dashboard

3. The Decision-Making Process

1. Step 1 – Identify and Define the Problem
2. Step 2 – Generate and Evaluate Alternative Courses of Action
3. Step 3 – Decide on a Preferred Course of Action
4. Step 4 – Implement the Decision
5. Step 5 – Evaluate Results
6. At All Steps – Check Ethical Reasoning
4. Issues in Managerial Decision Making
1. Decision errors and traps
2. Creativity in decision making

©2013 John Wiley & Sons, Inc. All rights reserved. 1-85
 Takeaway
Place Slide1:Title
Information, Technology, & Management
Text Here

Information, Technology, & Management

– Managers must have
• Technological competency
– Ability to understand new technologies and to use them to
their best advantage
• Information competency
– Ability to locate, gather, organize, and display information for
decision making and problem solving
• Analytical competency
– Ability to evaluate and analyze information to make actual
decisions and solve real problems

©2013 John Wiley & Sons, Inc. All rights reserved. 1-86
 Takeaway
Place Slide1:Title
Information, Technology, & Management
Text Here

What is useful information?

– Data
• Raw facts and observations
– Information
• Data made useful and meaningful for decision
making
– Information drives management functions

©2013 John Wiley & Sons, Inc. All rights reserved. 1-87
 Takeaway
Place Slide1:Title
Information, Technology, & Management
Text Here

• Characteristics of useful information:

– Timely
– High quality
– Complete
– Relevant
– Understandable
• Analytics: systematic gathering and
processing of data to make it useful as
information

©2013 John Wiley & Sons, Inc. All rights reserved. 1-88
 Takeaway
Place Slide1:Title
Information, Technology, & Management
Text Here

Information systems and business intelligence

– Management information systems
• Use IT to collect, organize, and distribute data for use
in decision making
– Business intelligence
• Taps information systems to extract and report data in
organized ways that are helpful to decision makers

©2013 John Wiley & Sons, Inc. All rights reserved. 1-89
 Takeaway
Place Slide1:Title
Information, Technology, & Management
Text Here

Executive dashboards
• Visually update and display key
performance indicators and information
on a real-time basis

©2013 John Wiley & Sons, Inc. All rights reserved. 1-90
 Takeaway
Place Slide1:Title
Information, Technology, & Management
Text Here

Information needs in organizations

– Information exchanges with the external
environment:
• Gather intelligence information
• Provide public information
– Information exchanges within the organization:
• Facilitate decision making
• Facilitate problem solving

©2013 John Wiley & Sons, Inc. All rights reserved. 1-91
 Takeaway 1: Information, Technology, & Management
Place Slide Title Text Here

Implications of IT for
Implications of IT within
relationships with external
organizations:
environment:
• Helps with customer • Facilitation of
relationship management communication and
• Helps organizations with information sharing
supply chain management • Operating with fewer
• Helps in monitoring middle managers
outsourcing and other • Flattening of organizational
business contracts structures
• Faster decision making
• Increased coordination and
control

©2013 John Wiley & Sons, Inc. All rights reserved. 1-92
Place Slide Title Text Here
Figure 7.1 Internal and external information
needs in organizations

©2013 John Wiley & Sons, Inc. All rights reserved. 1-93
Place Slide Title Text Here
Figure 7.2 Information technology is breaking
barriers and changing organizations

©2013 John Wiley & Sons, Inc. All rights reserved. 1-94
 Takeaway
Place Slide 2: Information
Title and Managerial Decisions
Text Here

Information and Managerial Decisions

– Managers as Information Processors
• Continually gather, give, and receive
information
• Now as much electronic as it is face to face
• Always on, always connected

©2013 John Wiley & Sons, Inc. All rights reserved. 1-95
Place Slide Title Text Here
Figure 7.3 The manager as an information-
processing nerve center

©2013 John Wiley & Sons, Inc. All rights reserved. 1-96
 Takeaway
Place Slide 2: Information
Title and Managerial Decisions
Text Here

Problem solving
– The process of identifying a discrepancy between actual
and desired performance and taking action to resolve it

Performance Performance
Decision
threat opportunity
A choice among Situation offers
Something is
possible the chance for a
wrong or has
alternative better future if
the potential to
courses of the right steps
go wrong
action are taken

©2013 John Wiley & Sons, Inc. All rights reserved. 1-97
 Takeaway
Place Slide 2: Information
Title and Managerial Decisions
Text Here

Problem-solving approaches or styles:

Problem avoiders Problem solvers Problem seekers

• Inactive in information • Reactive in gathering • Proactive in
gathering and solving information and anticipating problems
problems solving problems and opportunities and
taking appropriate
action to gain an
advantage

©2013 John Wiley & Sons, Inc. All rights reserved. 1-98
 Takeaway
Place Slide 2: Information
Title and Managerial Decisions
Text Here

Systematic versus intuitive thinking

Systematic Intuitive
thinking thinking
• approaches • approaches
problems in a problems in a
rational, step-by- flexible and
step, and spontaneous
analytical fashion fashion

©2013 John Wiley & Sons, Inc. All rights reserved. 1-99
 Takeaway
Place Slide 2: Information
Title and Managerial Decisions
Text Here

Multidimensional thinking applies both

intuitive and systematic thinking
– Effective multidimensional thinking
requires skill at strategic opportunism

©2013 John Wiley & Sons, Inc. All rights reserved. 1-100
 Takeaway
Place Slide 2: Information
Title and Managerial Decisions
Text Here

Managers use different cognitive styles

©2013 John Wiley & Sons, Inc. All rights reserved. 1-101
 Takeaway
Place Slide 2: Information
Title and Managerial Decisions
Text Here

Types of problems
– Structured problems are ones that are familiar,
straightforward, and clear with respect to
information needs
– Programmed decisions apply solutions that are
readily available from past experiences to solve
structured problems

©2013 John Wiley & Sons, Inc. All rights reserved. 1-102
 Takeaway
Place Slide 2: Information
Title and Managerial Decisions
Text Here

Types of problems
– Unstructured problems are ones that are
full of ambiguities and information
deficiencies
– Nonprogrammed decisions apply a specific
solution to meet the demands of a unique
problem
– Commonly faced by higher-level
management
©2013 John Wiley & Sons, Inc. All rights reserved. 1-103
 Takeaway
Place Slide 2: Information
Title and Managerial Decisions
Text Here

Crisis decision making

– A crisis involves an unexpected problem
that can lead to disaster if not resolved
quickly and appropriately

©2013 John Wiley & Sons, Inc. All rights reserved. 1-104
 Takeaway
Place Slide 2: Information
Title and Managerial Decisions
Text Here

Rules for crisis management:

• Figure out what is going on

• Remember that speed matters
• Remember that slow counts, too
• Respect the danger of the unfamiliar
• Value the skeptic
• Be ready to “fight fire with fire ”

©2013 John Wiley & Sons, Inc. All rights reserved. 1-105
 Takeaway
Place Slide 2: Information
Title and Managerial Decisions
Text Here

Managers make decisions with various amounts of information

Certain environment

• offers complete information on possible action

alternatives and their consequences

Risk environment

• lacks complete information but offers probabilities of

the likely outcomes for possible action alternatives

Uncertain environment

• lacks so much information that it is difficult to assign

probabilities to the likely outcomes of alternatives

©2013 John Wiley & Sons, Inc. All rights reserved. 1-106
Place Slide Title Text Here
Figure 7.4 Three environments for managerial
decision making and problem solving

©2013 John Wiley & Sons, Inc. All rights reserved. 1-107
Place Slide Title Text Here
Figure 7.5 Steps in managerial decision making and
problem solving

©2013 John Wiley & Sons, Inc. All rights reserved. 1-108
 Takeaway
Place 3 : The
Slide Title TextDecision-Making
Here Process

Step 1 — Identify and define the problem

– Focuses on information gathering, information
processing, and deliberation
– Decision objectives should be established
– Common mistakes in defining problems:
• Defining the problem too broadly or too narrowly
• Focusing on symptoms instead of causes
• Choosing the wrong problem

©2013 John Wiley & Sons, Inc. All rights reserved. 1-109
 Takeaway
Place 3 : The
Slide Title TextDecision-Making
Here Process

Step 2 — Generate and Evaluate Alternative

Courses of Action
– Potential solutions are formulated and more
information is gathered, data are analyzed, the
advantages and disadvantages of alternative
solutions are identified
– Approaches for evaluating alternatives:
• Stakeholder analysis
• Cost-benefit analysis

©2013 John Wiley & Sons, Inc. All rights reserved. 1-110
 Takeaway
Place 3 : The
Slide Title TextDecision-Making
Here Process

Step 2 — Generate and Evaluate Possible

Courses of Action (cont.)
– Criteria for evaluating alternatives:
• Benefits
• Costs
• Timeliness
• Acceptability
• Ethical soundness

©2013 John Wiley & Sons, Inc. All rights reserved. 1-111
 Takeaway
Place 3 : The
Slide Title TextDecision-Making
Here Process

Step 2 — Generate and Evaluate

Possible Courses of Action (cont.)
– Common mistakes:
• Abandoning the search for alternatives
too quickly

©2013 John Wiley & Sons, Inc. All rights reserved. 1-112
 Takeaway
Place 3 : The
Slide Title TextDecision-Making
Here Process

Step 3 — Decide on a Preferred Course

of Action
– Two different approaches
• Behavioral model leads to satisficing
decisions
• Classical model leads to optimizing decisions

©2013 John Wiley & Sons, Inc. All rights reserved. 1-113
Place Slide Title Text Here
Figure 7.6 Differences in the classical and behavioral
decision-making models

©2013 John Wiley & Sons, Inc. All rights reserved. 1-114
 Takeaway
Place 3 : The
Slide Title TextDecision-Making
Here Process

Step 4 — Implement the Decision

– Involves taking action to make sure the solution
decided upon becomes a reality
– Managers need to have willingness and ability to
implement action plans
– Lack-of-participation error should be avoided

©2013 John Wiley & Sons, Inc. All rights reserved. 1-115
 Takeaway
Place 3 : The
Slide Title TextDecision-Making
Here Process

Step 5 — Evaluate Results

– Involves comparing actual and desired results
– Positive and negative consequences of chosen
course of action should be examined
– If actual results fall short of desired results, the
manager returns to earlier steps in the decision-
making process

©2013 John Wiley & Sons, Inc. All rights reserved. 1-116
 Takeaway
Place 3 : The
Slide Title TextDecision-Making
Here Process

At all steps, check ethical reasoning!

– Ask these spotlight questions

Utility • Does the decision satisfy all constituents

or stakeholders?

Rights • Does the decision respect the rights and

duties of everyone?

Justice • Is the decision consistent with the

canons of justice?

Caring • Is the decision consistent with my

responsibilities to care?

©2013 John Wiley & Sons, Inc. All rights reserved. 1-117
 Takeaway
Place 4: Issues
Slide Title Textin Managerial
Here Decision Making

Issues in decision making

– How do decision errors happen?
– Heuristics are strategies for simplifying
decision making

©2013 John Wiley & Sons, Inc. All rights reserved. 1-118
 Takeaway
Place 4: Issues
Slide Title in Managerial
Text Here Decision Making

Availability Bias
• Bases a decision on recent information or events

Representativeness Bias
• Bases a decision on similarity to other situations

Anchoring and Adjustment Bias

• Bases a decision on incremental adjustment from a prior decision point

Framing Error
• Trying to solve a problem in the context in a positive or negative context

Confirmation Error
• Focusing on information that confirms a decision already made

Escalating Commitment
• Continuing a course of action even though it is not working

©2013 John Wiley & Sons, Inc. All rights reserved. 1-119
 Takeaway
Place 4: Issues
Slide Title in Managerial
Text Here Decision Making

Creative Decision making:

– Creativity is the generation of a novel idea or
unique approach that solves a problem or crafts
an opportunity
• Big-C creativity occurs when extraordinary things are
done by exceptional people
• Little-C creativity occurs when average people come
up with unique ways to deal with daily events and
situations

©2013 John Wiley & Sons, Inc. All rights reserved. 1-120
 Takeaway
Place 4: Issues
Slide Title Textin Managerial
Here Decision Making

Personal creativity drivers

Task
Motivation
Task Creativity
Expertise Skills

Creativity

©2013 John Wiley & Sons, Inc. All rights reserved. 1-121
 Takeaway
Place 4: Issues
Slide Title Textin Managerial
Here Decision Making

Situational creativity drivers

Management
Support

Team Organizational
Creativity
Skills Culture

Creativity

©2013 John Wiley & Sons, Inc. All rights reserved. 1-122
Place Slide Title Text Here
JOHN R. SCHERMERHORN, JR.
MANAGEMENT
12th Edition

Chapter 8

Fundamentals of
Planning
©2013 John Wiley & Sons, Inc. All rights reserved. 1-123
Planning
Place Ahead
Slide — Chapter
Title Text Here 8 Study Questions

1. Why and how do managers plan?

2. What types of plans do managers use?
3. What are the useful planning tools and
techniques?
4. How can plans be well implemented?

©2013 John Wiley & Sons, Inc. All rights reserved. 1-124
 Chapter
Place Slide 8 Learning
Title Text Here Dashboard

1. Why and How Managers Plan

1. Importance of planning
2. The planning process
3. Benefits of planning

2. Types of Plans Used by Managers

1. Long-range and short-range plans
2. Strategic and tactical plans
3. Operational plans

©2013 John Wiley & Sons, Inc. All rights reserved. 1-125
 Chapter
Place Slide 8 Learning
Title Text Here Dashboard

3. Planning Tools and Techniques

1. Forecasting
2. Contingency planning
3. Scenario planning
4. Benchmarking
5. Use of staff planners

4. Implementing Plans to Achieve Results

1. Goal setting
2. Goal alignment
3. Participation and involvement

©2013 John Wiley & Sons, Inc. All rights reserved. 1-126
 Takeaway
Place 1: Why
Slide Title Textand How Managers Plan
Here

• Planning
– The process of setting objectives and
determining how to accomplish them
• Objectives and goals
– Identify the specific results or desired outcomes
that one intends to achieve
• Plan
– A statement of action steps to be taken in order
to accomplish the objectives

©2013 John Wiley & Sons, Inc. All rights reserved. 1-127
 Takeaway
Place 1: Why
Slide Title Textand How Managers Plan
Here

• Steps in the planning process:

– Define your objectives
– Determine where you stand vis-à-vis objectives
– Develop premises regarding future conditions
– Analyze alternatives and make a plan
– Implement the plan and evaluate results

©2013 John Wiley & Sons, Inc. All rights reserved. 1-128
Place Slide Title Text Here
Figure 8.1 The roles of planning and controlling
in the management process

©2013 John Wiley & Sons, Inc. All rights reserved. 1-129
 Takeaway
Place 1: Why
Slide Title Textand How Managers Plan
Here

• Benefits of planning:
– Improves focus and flexibility
– Improves action orientation
– Improves coordination and control
– Improves time management

©2013 John Wiley & Sons, Inc. All rights reserved. 1-130
 Takeaway
Place 1: Why
Slide Title Textand How Managers Plan
Here

• Personal time management tips:

– DO say “no” to requests that distract from what
you should be doing
– DON’T get bogged down in details that can be
addressed later
– DO screen telephone calls, emails, and meeting
requests

©2013 John Wiley & Sons, Inc. All rights reserved. 1-131
 Takeaway
Place 1: Why
Slide Title Textand How Managers Plan
Here

• More personal time management tips:

– DON’T let drop-in visitors instant messaging use
up your time
– DO prioritize your important and urgent work
– DON’T become calendar bound by letting others
control your schedule
– DO follow priorities; do most important and
urgent work first

©2013 John Wiley & Sons, Inc. All rights reserved. 1-132
 Takeaway
Place 2: Types
Slide Title TextofHere
Plans Used by Managers

• Types of plans
– Long-term plans look three or more
years into the future
– Short-term plans typically cover one
year or less

©2013 John Wiley & Sons, Inc. All rights reserved. 1-133
 Takeaway
Place 2: Types
Slide Title TextofHere
Plans Used by Managers

Most of us
• 3 month time
frame

A few of us
• 1 year time frame
Very few of us
• 20 year time frame

©2013 John Wiley & Sons, Inc. All rights reserved. 1-134
 Takeaway
Place 2: Types
Slide Title TextofHere
Plans Used by Managers

• Strategic plans — set broad, comprehensive,

and longer-term action directions for the
entire organization
• Vision – clarifies purpose of the organization
and what it hopes to be in the future

©2013 John Wiley & Sons, Inc. All rights reserved. 1-135
 Takeaway
Place 2: Types
Slide Title TextofHere
Plans Used by Managers

• Tactical plan – helps to implement all or parts of the

strategic plan
• Functional plans – indicate how different operations
within the organization will help accomplish the
overall strategy
• Production plans
• Financial plans
• Facilities plans
• Logistics plans
• Marketing plans
• Human resource plans

©2013 John Wiley & Sons, Inc. All rights reserved. 1-136
 Takeaway
Place 2: Types
Slide Title TextofHere
Plans Used by Managers

• Operational plans — identify short-term activities to

implement strategic plans
– Policies are standing plans the communicate guidelines
for decisions
– Procedures are rules that describe actions to be taken in
specific situations
– Budgets are plans the commit resources to projects or
activities
• Zero based budgets allocate resources as if each
budget were brand new

©2013 John Wiley & Sons, Inc. All rights reserved. 1-137
PlaceTakeaway 3: Planning
Slide Title Text HereTools and Techniques

• Forecasting
– Attempts to predict the future
– Qualitative forecasting uses expert opinions
– Quantitative forecasting uses mathematical
models and statistical analysis of historical data
and surveys

©2013 John Wiley & Sons, Inc. All rights reserved. 1-138
PlaceTakeaway 3: Planning
Slide Title Text HereTools and Techniques

• Contingency planning
– Identifying alternative courses of action to take
when things go wrong
– Contingency plans anticipate changing conditions
– Contingency plans contain trigger points

©2013 John Wiley & Sons, Inc. All rights reserved. 1-139
PlaceTakeaway 3: Planning
Slide Title Text HereTools and Techniques

• Scenario planning
– A long-term version of contingency planning
– Identifying alternative future scenarios
– Plans made for each future scenario
– Increases organization’s flexibility and
preparation for future shocks

©2013 John Wiley & Sons, Inc. All rights reserved. 1-140
PlaceTakeaway 3: Planning
Slide Title Text HereTools and Techniques

• Benchmarking
– Use of external and internal comparisons to plan
for future improvements
– Adopting best practices: things people and
organizations do that lead to superior
performance
– Staff planners assist in all steps of the planning
process

©2013 John Wiley & Sons, Inc. All rights reserved. 1-141
 Takeaway
Place Slide 4: Implementing
Title Text HerePlans to Achieve Results

©2013 John Wiley & Sons, Inc. All rights reserved. 1-142
Place Slide Title Text Here
Figure 8.2 A sample hierarchy

©2013 John Wiley & Sons, Inc. All rights reserved. 1-143
 Takeaway
Place Slide 4: Implementing
Title Text HerePlans to Achieve Results

• Goal Alignment Between Team Leader and

Team Member
– Jointly plan: set objectives, set standards, choose
actions
– Individually set: perform tasks (member), provide
support (leader)
– Jointly control: review results, discuss
implications, renew cycle

©2013 John Wiley & Sons, Inc. All rights reserved. 1-144
 Takeaway
Place Slide 4: Implementing
Title Text HerePlans to Achieve Results

• Participatory Planning
– unlocks the motivational potential of goal setting
– management by objectives (MBO) promotes
participation
– when participation is not possible, workers will
respond positively if supervisory trust and
support exist

©2013 John Wiley & Sons, Inc. All rights reserved. 1-145
Place Slide Title Text Here
Figure 8.3 How participation and involvement help
build commitment to plans

©2013 John Wiley & Sons, Inc. All rights reserved. 1-146
Place Slide Title Text Here
JOHN R. SCHERMERHORN, JR.
MANAGEMENT
12th Edition

Chapter 9

Fundamentals of
Control
©2013 John Wiley & Sons, Inc. All rights reserved. 1-147
Planning
Place Ahead
Slide — Chapter
Title Text Here 9 Study Questions

1. Why and how do managers exercise control?

2. What are the steps in the control process?
3. What are the common control tools and
techniques?

©2013 John Wiley & Sons, Inc. All rights reserved. 1-148
 Chapter
Place Slide 9 Learning
Title Text Here Dashboard

1. Managerial Control
1. Importance of controlling
2. Types of controls
3. Internal and external control

2. The Control Process

1. Establish objectives and standards
2. Measure actual performance
3. Compare results with objectives
4. Take corrective action

©2013 John Wiley & Sons, Inc. All rights reserved. 1-149
 Chapter
Place Slide 9 Learning
Title Text Here Dashboard

3. Control Tools and Techniques

1. Project management and control
2. Inventory control
3. Breakeven analysis
4. Financial controls
5. Balanced scorecards

©2013 John Wiley & Sons, Inc. All rights reserved. 1-150
 Takeaway
Place Slide 1: Managerial
Title Text Here Control

• Controlling
– The process of measuring performance and taking action
to ensure desired results
– Has a positive and necessary role in the management
process
– Ensures that the right things happen, in the right way, at
the right time
– Benefit: Organizational learning (Example: After-action
review)

©2013 John Wiley & Sons, Inc. All rights reserved. 1-151
Place Slide Title Text Here
Figure 9.1 The role of controlling in the management
process

©2013 John Wiley & Sons, Inc. All rights reserved. 1-152
 Takeaway
Place Slide 1: Managerial
Title Text Here Control

• Feedforward controls
– Employed before a work activity begins
– Ensures that:
• Objectives are clear
• Proper directions are established
• Right resources are available
– Goal is to solve problems before they occur

©2013 John Wiley & Sons, Inc. All rights reserved. 1-153
 Takeaway
Place Slide 1: Managerial
Title Text Here Control

• Concurrent controls
– Focus on what happens during work process
– Monitor ongoing operations to make sure they are
being done according to plan
– Goal is to solve problems as they occur

©2013 John Wiley & Sons, Inc. All rights reserved. 1-154
 Takeaway
Place Slide 1: Managerial
Title Text Here Control

• Feedback controls
– Take place after work is completed
– Focus on quality of end results
– Goal is to solve problems after they occur
and prevent future ones

©2013 John Wiley & Sons, Inc. All rights reserved. 1-155
Place Slide Title Text Here
Figure 9.2 Feedforward, concurrent, and feedback
controls.

©2013 John Wiley & Sons, Inc. All rights reserved. 1-156
 Takeaway
Place Slide 1: Managerial
Title Text Here Control

• Internal and external control

– Internal control
• Allows motivated individuals and groups to exercise
self-discipline in fulfilling job expectations
– External control
• Occurs through personal supervision and the use of
formal administrative systems

©2013 John Wiley & Sons, Inc. All rights reserved. 1-157
 Takeaway
Place Slide 1: Managerial
Title Text Here Control

• Self-control
– Internal control that occurs through self-
discipline in fulfilling work and personal goals and
responsibilities

©2013 John Wiley & Sons, Inc. All rights reserved. 1-158
 Takeaway
Place Slide 1: Managerial
Title Text Here Control

• Bureaucratic control
– Influences behavior through authority, policies,
procedures, job descriptions, budgets, and day-
to-day supervision
• Clan control
– Influences behavior through norms and
expectations set by the organizational culture

©2013 John Wiley & Sons, Inc. All rights reserved. 1-159
 Takeaway
Place Slide 1: Managerial
Title Text Here Control

• Market Control
– Influence of market competition on the behavior
of organizations and their members

©2013 John Wiley & Sons, Inc. All rights reserved. 1-160
Place Slide Title Text Here
Figure 9.3 Four steps in the control process

©2013 John Wiley & Sons, Inc. All rights reserved. 1-161
 Takeaway
Place Slide 2: The
Title Text Control Process
Here

• Step 1 — establishing objectives and

standards
– Output standards
• Measure performance results in terms of quantity,
quality, cost, or time
– Input standards
• Measure effort in terms of amount of work expended
in task performance

©2013 John Wiley & Sons, Inc. All rights reserved. 1-162
 Takeaway
Place Slide 2: The
Title Text Control Process
Here

• Step 2 — measuring actual performance

– Goal is accurate measurement of actual
performance results and/or performance efforts
– Must identify significant differences between
actual results and original plan
– Effective control requires measurement

©2013 John Wiley & Sons, Inc. All rights reserved. 1-163
 Takeaway
Place Slide 2: The
Title Text Control Process
Here

• Step 3 — comparing results with objectives

and standards
– Need for action = Desired Performance –
Actual Performance
– Comparison methods:
• Historical comparison
• Relative comparison
• Engineering comparison

©2013 John Wiley & Sons, Inc. All rights reserved. 1-164
 Takeaway
Place Slide 2: The
Title Text Control Process
Here

• Step 4 — taking corrective action

– Taking action when a discrepancy exists between
desired and actual performance
– Management by exception
• Giving attention to situations showing the greatest
need for action
• Types of exceptions
– Problem situation
– Opportunity situation

©2013 John Wiley & Sons, Inc. All rights reserved. 1-165
 Takeaway
Place 3: Control
Slide Title Tools and Techniques
Text Here

• Project Management
– Overall planning, supervision, and control of
projects
• Projects – unique one-time events that occur within a
defined time period
• Gantt chart – graphic display of scheduled tasks
required to complete a project
• CPM/PERT – combination of the critical path method
and program evaluation and review technique

©2013 John Wiley & Sons, Inc. All rights reserved. 1-166
Place Slide Takeaway 3: Gantt Chart
Title Text Here

©2013 John Wiley & Sons, Inc. All rights reserved. 1-167
 Takeaway
Place Slide 3: Here
Title Text CPM/PERT Chart

©2013 John Wiley & Sons, Inc. All rights reserved. 1-168
 Takeaway
Place 3: Control
Slide Title Tools and Techniques
Text Here

• Inventory control
– Ensures that inventory is only big enough to meet
immediate needs
– Economic order quantity
• Places new orders when inventory levels fall to predetermined
points
– Just-in-time scheduling
• Routes materials to workstations just in time for use

©2013 John Wiley & Sons, Inc. All rights reserved. 1-169
 Takeaway
Place 3: Control
Slide Title Tools and Techniques
Text Here

• Breakeven analysis
– Breakeven point
• Occurs where revenues just equal costs
– Breakeven analysis
• Performs what-if calculations under different revenue and cost
conditions

©2013 John Wiley & Sons, Inc. All rights reserved. 1-170
Place Slide Title Text Here
Figure 9.4 Use of breakeven analysis to make
informed “what-if” decisions

©2013 John Wiley & Sons, Inc. All rights reserved. 1-171
Place Slide Title Text Here
Figure 9.5 Basic foundations of a balance sheet and
income statement

©2013 John Wiley & Sons, Inc. All rights reserved. 1-172
 Takeaway
Place 3: Control
Slide Title Tools and Techniques
Text Here

• Basic Financial Ratios

– Liquidity
• The ability to generate cash to pay bills
– Leverage
• The ability to earn more in returns than the cost of debt
– Asset management
• The ability to use resources efficiently and operate at minimum
cost
– Profitability
• The ability to earn revenues greater than costs

©2013 John Wiley & Sons, Inc. All rights reserved. 1-173
 Takeaway
Place 3: Control
Slide Title Tools and Techniques
Text Here

• Balanced Scorecard
• Factors used to develop scorecard goals and
measures:
– Financial performance
– Customer Satisfaction
– Internal process improvement
– Innovation and learning

©2013 John Wiley & Sons, Inc. All rights reserved. 1-174
 Leaders and Leadership

Brain Storming Session

May, 2018

Mohsen El Shammaa, PhD 175

 Agenda
1. Definition of leaders.
2. Six traits that differentiate leaders from non-
leaders.
3. Globalization and the modern business
environment.
4. Management in the 21st Century.
5. Quotations.
6. The art of leadership.
Moshe El Shammaa, PhD 176
 Agenda (cont’d):
7. Comparing management and leadership.
8. What leadership involves?
9. The behavioral theories of leadership.
10. How to choose a leadership pattern?
11. ?

Moshe El Shammaa, PhD 177

 Leaders and Leadership
▪ Definition of Leaders:

“People who are able to influence others and

who possess managerial authority.”

Mohsen El Shammaa, PhD 178

 Leaders and Leadership
▪ Six traits that differentiate leaders from
non-leaders:
1. Drive.
2. Desire to lead.
3. Honesty and integrity.
4. Self-confidence.
5. Intelligence.
6. Job relevant knowledge.

Mohsen El Shammaa, PhD 179

 Leaders and Leadership

Not all leaders are managers, nor are all

managers leaders.

Mohsen El Shammaa, PhD 180

 Leaders and Leadership

Managers are people who do things right,

but leaders are people who do the right
things.

Mohsen El Shammaa, PhD 181

 Leaders and Leadership
▪ Globalization and the modern business
environment:
➢ Challenges.
➢ Development of ICT has created a global
business environment.
➢ Sophistication of customers.
➢ Intense competition, rapid product
development and innovation, and creation of
new markets.
➢ Elimination of trade barriers.
Mohsen El Shammaa, PhD 182
 Leaders and Leadership
▪ Management in the 21st Century:
➢ Information oriented.
➢ Flexible.
➢ Responsive.
➢ Innovative.

Mohsen El Shammaa, PhD 183

 Leaders and Leadership
▪ Management in the 21st Century (cont’d):
➢ Strategic thinking and planning.
➢ Customer-focused.
➢ Analytical.
➢ Profitable.

Mohsen El Shammaa, PhD

184
 Leaders and Leadership
▪ What some leaders say:

“I am more afraid of an army of a hundred

sheep lead by a lion, than a hundred lions
led by a sheep.”

(Ancient Roman Commander)

Mohsen El Shammaa, PhD 185

 Leaders and Leadership
▪ The Art of Leadership:
The Basics of leadership in the 21st century:

1. Develop a clear vision and a specified

mission for your organization.
2. Set a clear strategy for your objectives.
3. Create your plans to coincide with your
strategy.
4. Manage information.

Mohsen El Shammaa, PhD 186

 Leaders and Leadership
▪ The Art of Leadership (cont’d):
The Basics of leadership in the 21st century (cont’d):

5. Build then execute your business decisions.

6. Work in a flat organization.
7. Become a coach and not a boss!
8. Give empowerment.

Mohsen El Shammaa, PhD 187

 Leaders and Leadership
▪ The Art of Leadership (cont’d):
The Basics of leadership in the 21st century (cont’d):

9. Set measurable objectives.

10. Look for results.
11. Use the modern technological tools.
12. Develop your people.

Mohsen El Shammaa, PhD 188

 Leaders and Leadership
▪ Comparing Management & Leadership:

❑ Directio
n:
Management Leadership

• Planning & • Creating vision &

budgeting. strategy.
• Keeping an eye on • Keeping an eye on
bottom line. horizon.

Mohsen El Shammaa, PhD 189

 Leaders and Leadership
▪ Comparing Management & Leadership
(cont’d):
❑ Alignment:

Management Leadership

• Organizing & staffing. • Creating shared

• Directing & culture & values.
controlling. • Helping others grow.
• Creating boundaries. • Reducing boundaries

Mohsen El Shammaa, PhD 190

 Leaders and Leadership
▪ Comparing Management & Leadership
(cont’d):
❑ Relationship
s:
Management Leadership
• Focusing on • Focusing on people,
objectives, producing/ inspiring & motivating
selling goods & followers.
services based on • Based on personal
position power. power.
• Acting as a boss. • Acting as a coach,
facilitator.
Mohsen El Shammaa, PhD 191
 Leaders and Leadership
▪ Comparing Management & Leadership
(cont’d):
❑ Personal Qualities:

Management Leadership

• Emotional • Emotional connections

distance. (Heart).
• Expert mind. • Open mind.
• Talking. • Listening (Communication).
• Conformity. • Non conformity (Courage).
• Insight into • Insight into self (Character).
organization.
Mohsen El Shammaa, PhD 192
 Leaders and Leadership
▪ Comparing Management & Leadership
(cont’d):
❑ Outcomes:

Management Leadership

• Maintains stability, • Creates change and

creates culture culture of integrity.
efficiency.

Mohsen El Shammaa, PhD 193

 Leaders and Leadership
▪ What leadership involves?

Influence Intention
Personal
Responsibility
Leader and Integrity
Followers

Shared Change
Purpose

Mohsen El Shammaa, PhD 194

 Leaders and Leadership
▪ The behavioral theories of leadership:
Theories that isolate behaviors that differentiate
effective leaders from ineffective leaders. These are:

1. Autocratic style of leadership.

2. Democratic style of leadership.
3. Laissez faire style of leadership.

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 Leaders and Leadership
▪ The behavioral theories of leadership
(cont’d):
1. Autocratic style of leadership:

The term used to describe a leader who

centralizes authority, dictates work
methods, makes unilateral decisions, and
limits employee participation.

Mohsen El Shammaa, PhD 196

 Leaders and Leadership
▪ The behavioral theories of leadership
(cont’d):
2. Democratic style of leadership:

The term used to describe a leader who

involves employees in decision making,
delegates authority, encourages
participation in deciding work methods and
goals, and uses feedback to coach
employees.

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 Leaders and Leadership
▪ The behavioral theories of leadership
(cont’d):
3. Laissez faire style of leadership:

The term used to describe a leader who

gives employees complete freedom to
make decisions and to decide on work
methods.

Mohsen El Shammaa, PhD 198

 Leaders and Leadership
Employee-centered leadership

Boss-centered leadership

Autocrat
Participative Laissez
icof
Use
faire
authority
Consultati Democrati
ve c
Areas of freedom for
subordinates
Manager Manager
Manager Manager
Manager Manager presents permits
presents defines
makes Manager presents problem, subordinates
tentative limits;
decision & “sells” ideas & gets to function
decision asks group
announces decision invites suggestions, within limits
subject to to make
it questions makes defined by
change decision
decision superior
Source: Adapted and reprinted by permission of the Harvard Business Review. An Exhibit from “How to Choose a Leadership
Pattern” by [Link] and [Link], May-June 1973 by the President and Fellows of Harvard College, all rights
reserved. 199
 Leaders and Leadership

Whom do you want to be, a manager

or a leader ?!

Mohsen El Shammaa, PhD 200

 Leaders and Leadership

“ Be the leaders of change”

(Dr. Mohsen El Shamaa)

Mohsen El Shammaa, PhD 201

 Thank you

Mohsen El Shammaa, PhD 202