Management: Key Concepts

Management Key Concepts

• Organizations consist of people working together and coordinating efforts to achieve specific goals
• A goal is a desired achievement that the organization aims for
• Management involves using organizational resources to achieve goals thru planning, organizing, leading, and controlling

Additional Key Concepts

• Resources are organizational assets, including people, machinery, raw materials, information, skills, and financial capital
• Managers are responsible for supervising the use of an organization's resources to meet its goals

Achieving High Performance

• Organizations must provide goods or services desired by customers to achieve high performance
• David Johnson of Campbell Soup manages the firm to provide quality food products
• Healthcare administrators seek to provide healing from sickness
• McDonald's restaurants provide burgers, fries, and shakes

Organizational Performance

• Organizational performance measures how efficiently and effectively managers use resources to satisfy customers and achieve goals
• Efficiency measures how well resources are used to achieve a goal, managers minimize resource input to attain goals
• Effectiveness measures the appropriateness of chosen goals and the degree to which they are achieved
• Organizations are more effective when managers choose the correct goals and then achieve them

Managerial Functions

• Henri Fayol, CEO of a large mining company in the late 1800s, first described the four managerial functions
• Managers at all levels must perform each of the functions of: planning, organizing, leading and controlling

Four Functions of Management

• Planning involves choosing goals
• Organizing involves working together
• Leading involves coordinating
• Controlling involves monitoring and measuring

Planning

• Planning is the process managers use to identify and select appropriate goals and courses of action for an organization
• Three steps to good planning are: determining which goals to pursue, how the goal should be attained, and how resources should be allocated
• The planning function determines the organization's effectiveness, efficiency, and strategy

Organizing

• Managers create a structure of working relationships between members that best allows them to work together to achieve goals
• Managers group people into departments according to tasks performed
• Lines of authority and responsibility for members are laid out
• An organizational structure is the outcome that coordinates and motivates employees to achieve goals

Leading

• Managers determine direction, state a clear vision, and make employees understand their role in attaining goals
• Leadership involves using power, influence, vision, persuasion and communication skills
• Outcomes of leading involve high levels of motivation and commitment

Controlling

• Managers evaluate how well the organization is achieving its goals and takes corrective action to improve performance
• Managers monitor individuals, departments, and the organization to determine if desired performance has been reached, and increase action as required
• The outcome of the controlling function is the accurate measurement of performance and regulation of efficiency and effectiveness

Management Levels

• Organizations often have three levels of managers: first-line, middle, and top managers
• First-line managers are responsible for day-to-day operations and supervise the people performing the activities required to make the good or service
• Middle managers supervise first-line managers and find the best way to use departmental resources to achieve goals
• Top managers are responsible for the performance of all departments, have cross-departmental responsibility, establish organizational goals, and monitor middle managers

Restructuring

• Top-level management uses restructuring methods to save costs
• Downsizing is when jobs are eliminated at all levels
• Downsizing can lead to higher efficiency, but often results in customer complaints and low morale

Management Trends

• Empowerment expands employee tasks and responsibilities with supervisor to empower resource allocation decisions
• Self-managed teams authorize groups of employees to supervise their own actions
• Teams can monitor members and work quality

Managerial Roles

• Mintzberg described managerial roles as sets of specific tasks performed based on position
• Roles are directed inside and outside the organization
• Three broad role categories: interpersonal, informational, and decisional

Interpersonal Roles

• Coordinate and interact with employees and provide direction to the organization
• Figurehead role symbolizes the organization and what it is trying to achieve
• Leader roles train, counsel, mentor, and encourage high employee performance
• A liaison role links and coordinates people inside and outside the organization to help it achieve its goals

Informational Roles

• Tasks needed to obtain and transmit information for management of the organization
• Monitor role analyzes information from inside and outside the environment
• Disseminator role transmits information to influence employee attitudes and behavior
• Spokeperson role is used to positively influence how people respond to the organization

Decisional Roles

• Methods managers use to plan strategy and utilize resources to achieve goals
• Entrepreneurial role involves deciding upon new projects or programs to initiate and invest
• Disturbance handler role assumes responsibility for handling unexpected events
• Resource allocator role assigns resources between functions and divisions and sets budgets of lower managers
• Negotiator role seeks to negotiate solutions with other managers, unions, customers, or shareholders

Managerial skills

• Three skill sets that managers need to perform effectively include conceptual, human, and technical skills
• Conceptual skills involve the ability to analyze and diagnose a situation and find the cause and effect
• Human skills involve the ability to understand, alter, lead, and control people’s behavior
• Technical skills involve job-specific knowledge required to perform a task
• Marketing, accounting, and manufacturing are examples.
• All three skills are enhanced through formal training, reading, and practice

Management Challenges

• Increasing number of global organizations
• Building competitive advantage through superior efficiency, quality, innovation, and responsiveness
• Increasing performance while remaining ethical managers
• Managing an increasingly diverse work force
• Using new technologies