Management and Leadership

Management is the process of accomplishing business or organizational goals through people and other organizational resources. Managers coordinate the work of an organization by planning what needs to be accomplished, organizing resources, leading people, and controlling activities so that the organization remains focused on its goals.

The Changing Role of Managers

The role of the manager continues to evolve. Modern managers are increasingly expected to work as communicators, team builders, coaches, and facilitators rather than simply giving orders. Organizations also draw managers from more varied backgrounds, and effective managers must be able to work with diverse groups of employees.

Regardless of title or background, the manager's job is to help people and resources work together toward organizational goals.

Planning: Deciding Where the Organization Is Going

Planning begins by determining where an organization wants to go and what it hopes to accomplish. Effective planning provides direction and gives managers a basis for later organizing, leading, and controlling activities.

Vision

A vision is a broad explanation of why an organization exists, where it is trying to go, and what it hopes to look like in the future. A strong vision gives the organization a sense of direction and purpose.

Mission Statement

A mission statement describes the organization's fundamental purposes. It should communicate what the organization does, why it exists, what it wants to achieve, the values it follows, and how it intends to benefit customers, employees, and other stakeholders.

Goals and Objectives

Goals describe what an organization or individual wants to attain. They are generally broad and long-term. Objectives are more specific, short-term actions that help accomplish those goals.

SWOT Analysis

Before deciding how to reach a goal, managers need to understand the organization's present situation. One commonly used planning tool is a SWOT analysis.

• Strengths — internal advantages the organization can build upon.
• Weaknesses — internal limitations that may need improvement.
• Opportunities — external conditions the organization may be able to use to its advantage.
• Threats — external conditions that could create problems or interfere with success.

Strengths and weaknesses focus primarily on conditions inside the organization, while opportunities and threats generally come from the external environment.

Types of Planning

Organizations plan at several different levels. Long-range organizational direction must eventually be translated into specific actions and daily work.

Strategic Planning

Strategic planning is generally performed by top management. It determines the major goals of the organization and the policies, procedures, strategies, and resources needed to achieve them.

Tactical Planning

Tactical planning develops detailed, shorter-term statements about what is to be done, who will do it, and how it will be accomplished. Tactical plans help turn broad strategies into specific objectives.

Operational Planning

Operational planning establishes the work standards and schedules needed to implement tactical objectives. Operational plans are closely connected with the organization's everyday activities.

Contingency Planning

Contingency planning means developing alternative courses of action in case the primary plan does not work. In simple terms, it is the organization's Plan B. Even well-designed plans can be affected by unexpected events, so managers should be prepared with alternatives.

Decision Making and Problem Solving

Decision making is choosing among two or more alternatives. Managers make decisions continually, from broad strategic choices to everyday operational issues. Good decision making requires identifying the situation, considering alternatives, evaluating those alternatives, and selecting an appropriate course of action.

Problem solving is closely related to decision making but is often less formal and requires quicker action to resolve the everyday problems that arise in an organization.

Levels of Management

Managers at different levels of an organization have different responsibilities and planning horizons.

Top Management

Top managers are the organization's highest-level executives. They include the president and other key executives and are primarily responsible for strategic planning and the organization's overall direction.

Middle Management

Middle managers may include general managers, division managers, branch managers, and plant managers. They translate broad strategies into tactical plans and coordinate the work needed to carry them out.

Supervisory Management

Supervisory or first-line managers work most directly with employees. They supervise day-to-day work and evaluate daily performance.

Managerial Skills

Successful managers need a combination of technical, human relations, and conceptual skills. The relative importance of each skill can change depending on the manager's level in the organization.

• Technical skills are the knowledge and ability to perform tasks in a specific discipline or department and to work with specialized equipment, processes, or software.
• Human relations skills involve communication, motivation, and the ability to work effectively with people to accomplish goals.
• Conceptual skills involve seeing the organization as a whole and understanding how its various parts relate to one another.

Supervisory managers often need strong technical skills because they work close to daily operations. As managers move higher in the organization, conceptual skills become increasingly important because they must consider the organization as a whole.

Staffing: Getting and Keeping the Right People

Staffing includes recruiting, hiring, motivating, and retaining the people needed to accomplish the company's objectives. Hiring the right employees is only the beginning. Organizations must also provide appropriate feedback, compensation, opportunities, and working conditions if they hope to retain good employees.

Staffing decisions should be based on the needs of the job and the qualifications of the employee rather than appearances, favors, or simply the amount of time a person has worked for the organization.

Leadership and Management

Management and leadership are related, but they are not identical. Managers coordinate resources and establish systems that help an organization function. Leaders help establish direction, communicate a vision, develop values, promote ethical behavior, embrace change, and encourage accountability.

Leadership Styles

There is no single leadership style that works best in every organization or situation. Effective leaders consider the people being led, the organization's goals and values, and the circumstances they face.

Autocratic Leadership

With autocratic leadership, the manager makes decisions without consulting others, particularly employees at lower levels of the organization. This style can permit fast decisions, although employees have less involvement in the decision-making process.

Participative or Democratic Leadership

With participative or democratic leadership, managers and employees work together to make decisions. Employees have an opportunity to contribute information and ideas to the process.

Free-Rein Leadership

With free-rein leadership, managers establish objectives and give employees considerable freedom to determine how those objectives will be accomplished. This approach requires employees who have the knowledge, ability, and motivation to work with less direct supervision.

Empowering Employees

Progressive leaders may empower employees by giving them the authority to make appropriate decisions without first consulting a manager. Empowerment can allow customer needs and workplace problems to be addressed more quickly and changes the manager's role from simply being a boss to also serving as a coach.

Enabling supports empowerment by giving employees the education, information, tools, and resources they need to make good decisions.

Knowledge Management

Knowledge management involves finding useful information, keeping it in an accessible place, and making it available to people throughout the organization. Effective knowledge management helps an organization preserve what employees have learned and reduces the need to repeatedly solve the same problems or “reinvent the wheel.”

Controlling: Making Sure the Plan Works

The controlling function helps management determine whether the organization is progressing toward its goals. Effective control begins with clear standards. Managers then measure actual performance, compare results with those standards, communicate results, and take corrective action when needed.

Financial information is often important to the control process, but money is not the only measure of success. Managers may also consider employee performance, customer satisfaction, quality, productivity, and the needs of other stakeholders.

Internal and External Customers

An organization's external customers include dealers who purchase products for resale and the ultimate customers who purchase products or services for their own use. Internal customers are individuals or departments within the organization that receive services or information from other individuals or departments.

Chapter 7 Review

Management connects an organization's goals with the people and resources needed to achieve them. Planning establishes direction, organizing coordinates resources, leading motivates and guides people, and controlling measures whether the organization is achieving its goals.

As you review this chapter, make sure you can distinguish among the different types of planning, identify the three levels of management and three major managerial skills, explain staffing, compare the three leadership styles, and describe how empowerment, knowledge management, and control contribute to organizational success.