Chapter 07 – Management and Leadership
7-16
critical thinking
exercise 7-2
CAREER SWOT ANALYSIS
SWOT analysis, the key tool in the strategic planning process,
can also be applied to career planning. (See the complete exer-
cise on page 7.65 of this manual.)
PPT 7-17
Planning Functions
TEXT FIGURE 7.3
Planning Functions
PLANNING FUNCTIONS
7-17
LO 7-3
PPT 7-18
Strategic and Tactical Planning
STRATEGIC and TACTICAL
PLANNING
7-18
LO 7-3
• Strategic Planning — Done by top management
and determines the major goals of the organization
and the policies, procedures, strategies and resources
it will need to achieve them.
• Tactical Planning — The process of developing
detailed, short-term statements about what is to be
done, who is to do it and how.
Chapter 07 – Management and Leadership
7-17
spond quickly to customer needs.
2. TACTICAL PLANNING is the process of devel-
oping detailed, short-term statements about
what is to be done, who is to do it, and how it is
to be done.
a. Tactical planning is normally done by man-
agers at LOWER LEVELS of the organiza-
tion.
b. An example of tactical planning is setting
annual budgets.
3. OPERATIONAL PLANNING is the process of
setting of work standards and schedules neces-
sary to implement the company’s tactical objec-
tives.
a. Operational planning focuses on specific su-
pervisors and individual employees.
b. The OPERATIONAL PLAN is the depart-
ment manager’s tool for daily operations.
4. CONTINGENCY PLANNING is the process of
preparing alternative courses of action that may
be used if the primary plans don’t achieve the
organization’s objectives.
a. An organization needs to have alternative
plans ready for environmental changes.
b. CRISIS PLANNING, a part of contingency
planning, involves reacting to sudden
changes in the environment.
5. Market-based companies stay flexible, listen to
customers, and seize opportunities when they
Chapter 07 – Management and Leadership
7-18
PPT 7-19
Operational and Contingency
Planning
• Operational Planning — The process of setting
work standards and schedules necessary to
implement the company
’
s tactical objectives.
OPERATIONAL and CONTINGENCY
PLANNING
7-19
LO 7-3
• Contingency
Planning — The process
of preparing alternative
courses of action the firm
can use if its primary
plans don
’
t work out.
critical thinking
exercise 7-3
CRISIS MANAGEMENT
This exercise explores management reaction to rapid, unex-
pected change. (See the complete exercise on page 7.67 of this
manual.)
Chapter 07 – Management and Leadership
7-19
come.
a. Instead of creating detailed strategic plans,
leaders of these companies often simply set
direction.
6. The opportunities, however, must fit into the
company’s overall goals and objectives.
C. DECISION MAKING: FINDING THE BEST AL-
TERNATIVE
1. All management functions involve DECISION
MAKING, choosing among two or more alterna-
tives.
2. The RATIONAL DECISION-MAKING MODEL is
a series of steps managers often follow to make
logical, intelligent, and well-founded decisions.
3. STEPS IN DECISION MAKING:
a. Define the situation.
b. Describe and collect needed information.
c. Develop alternatives.
d. Decide which alternative is best.
e. Do what is indicated (begin implementation).
f. Determine whether the decision was a good
one and follow up.
4. Sometimes decisions have to be made ON THE
SPOT with little information available.
5. PROBLEM SOLVING is the process of solving
the everyday problems that occur; it is less for-
mal than the decision-making process and calls
for quicker action.
Chapter 07 – Management and Leadership
7-20
PPT 7-20
Decision Making
DECISION MAKING
7-20
LO 7-3
• Decision Making — Choosing among two or more
alternatives.
PPT 7-21
What Makes a Great CEO
WHAT MAKES a GREAT CEO
Decision Making Skills of Top CEOs
7-21
LO 7-3
• Keep global business issues in mind and be a
citizen of the world.
• Identify and manage risks before they grow.
• Change strategies and models with the times.
• Skillfully manage relationships with governments
as government involvement rises.
Source:Fortune,
www.fortune.com,accessedNovember2014.
PPT 7-22
Rational Decision-Making Model
RATIONAL DECISION-MAKING
MODEL
7-22
LO 7-3
1. Define the situation.
2. Describe and collect needed information.
3. Develop alternatives.
4. Decide which alternative is best.
5. Do what is indicated.
6. Determine whether the decision was a good one
and follow up.
lecture enhancer 7-5
DECISION-MAKING TIPS
This lecture enhancer gives some tips for enhancing decision
making. (See the complete lecture enhancer on page 7.61 of
this manual.)
critical thinking
exercise 7-4
EVALUATING ALTERNATIVE
COURSES
Because of shrinking market share and declining profits,
Monmouth Thermics, a subsidiary of a large conglomerate,
needs a recovery plan. (See the complete exercise on page
7.68 of this manual.)
Chapter 07 – Management and Leadership
7-21
a. Companies can use BRAINSTORMING,
coming up with as many solutions to a prob-
lem as possible in a short period of time with
no censoring of ideas.
b. Another technique is PMI, listing all the Plus-
es for a solution in one column, all the Mi-
nuses in another, and the Implications in a
third column.
learning objective 4
Describe the organizing function of management.
IV. ORGANIZING: CREATING A UNIFIED SYSTEM
A. After planning a course of action, managers must
ORGANIZE the firm—allocate resources—to ac-
complish their goals.
1. LEVELS OF MANAGEMENT
a. TOP MANAGEMENT is the highest level of
management, consisting of the president
and other key company executives who de-
velop STRATEGIC PLANS.
i. Titles include Chief Executive Officer
(CEO), Chief Operating Officer (COO),
Chief Financial Officer (CFO), and Chief
Information Officer (CIO).
ii. The CEO is responsible for all top-level
decisions in the firm.
iii. CEOs are responsible for introducing
change into an organization.
iv. The COO is responsible for putting those
changes into effect.
v. The CFO is responsible for obtaining
Chapter 07 – Management and Leadership
7-22
PPT 7-23
Problem Solving
PROBLEM SOLVING
7-23
LO 7-3
• Problem Solving — The process of solving the
everyday problems that occur; less formal than
decision making and needs quicker action.
• Problem-solving techniques include brainstorming
and PMI — Listing all the pluses for a solution in one
column, all the minuses in another and the
implications in a third.
test
prep
PPT 7-24
Test Prep
TEST PREP
7-24
• What is the difference between goals and
objectives?
• What does a company analyze when it does a
SWOT analysis?
• What are the differences between strategic,
tactical and operational planning?
• What are the six Ds in decision making?
PPT 7-25
Levels of Management
TEXT FIGURE 7.4
Levels of Management
LEVELS of MANAGEMENT
7-25
LO 7-4
PPT 7-26
Management Levels
MANAGEMENT LEVELS
7-26
LO 7-4
• Top Management — The highest level, consists of
the president and other key company executives who
develop strategic plans.
• Middle Management — Includes general managers,
division managers, and branch and plant managers
who are responsible for tactical planning and
controlling.
• Supervisory Management — Those directly
responsible for supervising workers and evaluating
daily performance.
bonus case 7-1
EDUCATING EXECUTIVES ABOUT
SOCIAL MEDIA
It used to be that top management knew all. Now, reverse
mentoring is gaining in popularity as younger employees are
teaching executives about social media. (See the complete
case, discussion questions, and suggested answers beginning
on page 7.73 of this manual.)
Chapter 07 – Management and Leadership
7-23
funds, planning budgets, collecting
funds, and so on.
vi. The CIO or CKO is responsible for get-
ting the right information to managers so
they can make good decisions. CIOs are
more important than ever.
b. MIDDLE MANAGEMENT is the level of
management that includes general manag-
ers, division managers, and branch and
plant managers who are responsible for tac-
tical planning and controlling.
c. SUPERVISORY MANAGEMENT includes
managers who are directly responsible for
supervising workers and evaluating their dai-
ly performance; they are also known as first-
line managers.
B. TASKS AND SKILLS AT DIFFERENT LEVELS OF
MANAGEMENT
1. Managers are usually are not trained to be man-
agers—they are workers with specific skills who
are promoted.
2. The higher a person moves up in the managerial
ladder, the more he or she needs to be a vision-
ary, planner, communicator, and motivator.
3. Managers must have THREE CATEGORIES OF
SKILLS:
a. TECHNICAL SKILLS involve the ability to
perform tasks in a specific discipline (such as
selling a product) or department (such as mar-
keting).
Chapter 07 – Management and Leadership
7-24
lecture enhancer 7-6
THE 21ST-CENTURY CEO
The real economic change in our recovery will be the new
crop of CEOs in American business. (See the complete lecture
enhancer on page 7.62 of this manual.)
PPT 7-27
Top Management
TOP MANAGEMENT
7-27
LO 7-4
• Chief Executive Officer (CEO)
– Introduces change into an organization.
• Chief Operating Officer (COO)
– Implements CEO
’
s changes.
• Chief Financial Officer (CFO)
– Obtains funds, plans budgets, collects funds, etc.
• Chief Information Officer (CIO)
– Gets the right information to the right people so
decisions can be made.
PPT 7-28
America’s Most Powerful Female
Managers
Source:FortuneMagazine,www.fortune.com,accessedNovember2014.
AMERICA’S MOST POWERFUL
FEMALE MANAGERS
7-28
Rank Name Organization
1 Ginni Rometty IBM
2Mary Barra GM
3 Indra Nooyi PepsiCo
4Marillyn Hewson Lockheed Martin
5Meg Whitman Hewlett-Packard
6 Irene Rosenfeld Mondelez International
7Patricia Woertz Archer Daniels Midland
8Abigail Johnson Fidelity
9Ellen Kullman DuPont
10 Sheryl Sandberg Facebook
LO 7-4
critical thinking
exercise 7-5
THE MOST POWERFUL WOMEN IN
BUSINESS
Each year Fortune magazine lists the most powerful women in
business. This exercise directs students to research the listing
for the current year. (See the complete exercise on page 7.69
of this manual.)
Chapter 07 – Management and Leadership
7-25
b. HUMAN RELATIONS SKILLS involve
communication and motivation; they enable
managers to work through and with people.
c. CONCEPTUAL SKILLS involve the ability to
picture the organization as a whole and the
relationships among its various parts.
4. SKILLS BY LEVEL:
a. FIRST-LINE MANAGERS need fewer con-
ceptual skills and more technical and human
relations skills.
b. TOP MANAGERS need fewer technical
skills and more human relations and concep-
tual skills.
5. Although managers need to have all three skills,
the need for each skill varies at different levels.
C. STAFFING: GETTING AND KEEPING THE RIGHT
PEOPLE
1. To get the right kind of people, the firm has to of-
fer the right kind of incentives.
2. STAFFING is a management function that in-
cludes hiring, motivating, and retaining the best
people available to accomplish the company’s
objectives.
a. In today’s high-tech world, RECRUITING
GOOD EMPLOYEES is a critical important
part of organizational success (text exam-
ples: Google, Microsoft, Sony).
b. Firms with the most innovative and creative
workers can develop quickly and successful-
Chapter 07 – Management and Leadership
7-26
PPT 7-29
Managerial Skills
MANAGERIAL SKILLS
7-29
LO 7-4
• Technical Skills — The ability to perform tasks in a
specific discipline or department.
• Human Relations Skills — Skills that involve
communication and motivation; they enable managers
to work through and with people.
• Conceptual Skills — Skills that involve the ability to
picture the organization as a whole and the relationship
among its various parts.
PPT 7-30
Skills Needed at Various Levels of
Management
TEXT FIGURE 7.5
Skills Needed at Various Levels of
Management
SKILLS NEEDED at VARIOUS
LEVELS of MANAGEMENT
7-30
LO 7-4
lecture enhancer 7-7
LEARNING MANAGEMENT SKILLS
Another way of classifying specific management skills is pre-
sented here. (See the complete lecture enhancer on page 7.62
of this manual.)
PPT 7-31
Thank You
THANK YOU
The Most Basic Human Relations Skill
7-31
LO 7-4
• Saying “thank you” has led to happier employees
and greater profits for companies.
• Whom should a manager thank?
1. Interns – Doing lots of work for little money, they are the
future of the company and industry.
2. Lawyers – Many do pro bono work, even for nonprofit
companies.
3. The little people – Mailroom, repair, and cleaning staff
keep the office running day-to-day.
Source:FastCompany,www.fastcompany.com,accessedNovember2014.
critical thinking
exercise 7-6
RATE YOUR MANAGEMENT SKILLS
This exercise expands the classification of management skills
(based on Lecture enhancer 7-7 above) and asks students to
rate themselves. (See the complete exercise on page 7.70 of
this manual.)
Chapter 07 – Management and Leadership
7-27
ly.
3. Once they are hired, good people must be RE-
TAINED.
a. Unless they are treated well and get fair pay,
employees will leave for other companies.
b. Staffing is becoming a bigger part of the
managers’ job.
4. Chapter 11 is devoted to human resources is-
sues.
learning objective 5
Explain the differences between leaders and managers, and describe the various
leadership styles.
V. LEADING: PROVIDING CONTINUOUS VISION
AND VALUES
A. A person can be a good manager and not a good
leader.
1. LEADERSHIP involves:
a. Creating vision for others to follow
b. Establishing corporate values and ethics
c. Transforming the way the organization does
business in order to improve its effective-
ness and efficiency
2. MANAGEMENT involves carrying out the lead-
ership’s vision.
3. Leaders must LEAD BY DOING, not just by say-
ing; they must:
a. Communicate a vision and rally others
around that vision
Chapter 07 – Management and Leadership
7-28
PPT 7-32
Back to School
for Top Manag-
ers
BACK to SCHOOL for
TOP MANAGERS
7-32
• Business leaders need to study international
political, legal, and regulatory systems.
• Each local market requires their own set of global
standards.
• Some companies, like Coca-Cola, Nestle, and
IBM have done a noteworthy job of assessing and
understanding global challenges.
PPT 7-33
Staffing
• Staffing — Recruiting, hiring, motivating and
retaining the best people available to accomplish the
company
’
s objectives.
STAFFING
7-33
LO 7-4
• Recruiting good
employees is critical.
• Many people are not
willing to work at
companies unless they
are treated well with fair
pay.
PPT 7-34
Staffing Is Tricky Business
Source:CareerBuilder,www.careerbuilder.com,accessedNovember2014.
STAFFING is TRICKY BUSINESS
Six Sins of Staffing
7-34
LO 7-4
1. Don’t hire someone because someone else says so.
2. Don’t get caught up in applicants’ appearances.
3. Don’t give someone the wrong job.
4. Don’t forget about feedback.
5. Don’t give promotions just because it
’
s time.
6. Don’t cheat your employees.
PPT 7-35
Leadership
LEADERSHIP
7-35
LO 7-5
• Leaders must:
– Communicate a vision
and rally others around
that vision.
– Establish corporate
values.
– Promote corporate ethics.
– Embrace change.
– Stress accountability and
responsibility.
Chapter 07 – Management and Leadership
7-29
b. Establish corporate values
c. Promote corporate ethics
d. Embrace change
e. Stress accountability and responsibility
i. Leaders need to be held accountable for
their actions.
ii. TRANSPARENCY is the presentation of
the company’s facts and figures in a way
that is clear and apparent to all stake-
holders.
iii. The government is trying to make com-
panies more transparent.
4. All organizations need leaders.
B. LEADERSHIP STYLES
1. Research studies have not been able to identify
one set of LEADERSHIP TRAITS that are
common to all leaders.
2. There are also DIFFERENT LEADERSHIP
STYLES:
a. AUTOCRATIC LEADERSHIP is a leader-
ship style that involves making managerial
decisions without consulting others; it is ef-
fective in emergencies and when dealing
with unskilled workers.
b. PARTICIPATIVE (DEMOCRATIC) LEAD-
ERSHIP is a leadership style that consists of
managers and employees working together
to make decisions.
Chapter 07 – Management and Leadership
7-30
lecture enhancer 7-8
MANAGED TO DEATH: JAPAN’S
ECONOMIC DECLINE
Once a country of strong corporate leadership, Japan has been
trapped in stagnation with leaders refusing to go against the
“Way.” (See the complete lecture enhancer on page 7.64 of
this manual.)
MAKING
ethical
decisions
PPT 7-36
What Do You Tell
the Team?
WHAT DO YOU TELL the TEAM?
7-36
As a first-line manager, you have new information
that your department head hasn’t seen yet. The
findings of the report indicate your manager’s
plans should fail. If they do fail, you could be
promoted.
Will you give your department head the report?
What is the ethical thing to do?
What might be the consequences?
PPT 7-37
Accountability through
Transparency
ACCOUNTABILITY through
TRANSPARENCY
7-37
LO 7-5
• Transparency — The
presentation of the
company
’
s facts and
figures in a way that is
clear and apparent to all
stakeholders.
PPT 7-38
Leadership Styles
LEADERSHIP STYLES
7-38
LO 7-5
• Autocratic Leadership —
Making managerial decisions
without consulting others.
• Participative or Democratic
Leadership — Managers and
employees work together to
make decisions.
• Free-Rein Leadership —
Managers set objectives and
employees are free to do
whatever is appropriate to
accomplish those objectives.