CHAPTER 1
INNOVATIVE MANAGEMENT FOR A CHANGING WORLD
CHAPTER OUTLINE
Are You Ready to Be a Manager?
I. Why Innovative Management Matters
II. The Definition of Management
III. The Four Management Functions
A. Planning
V. Management Skills
A. Conceptual Skills
B. Human Skills
C. Technical Skills
C. Manager Roles
VIII. Managing in Small Businesses and Nonprofit Organizations
IX. State-of-the-Art Management Competencies
ANNOTATED LEARNING OBJECTIVES
After studying this chapter, students should be able to:
1. Describe the four management functions and the type of management activity associated with
each.
The management functions are planning, organizing, leading, and controlling. Planning means
defining goals for future organizational performance and deciding on the tasks and use of
2 • Chapter 1
2. Explain the difference between efficiency and effectiveness and their importance for
organizational performance.
Organizational effectiveness is the degree to which the organization achieves a stated objective.
3. Describe conceptual, human, and technical skills and their relevance for managers.
Conceptual skill is the mental ability to see the organization as a whole and the relationships
among its parts. It is the manager’s thinking and planning ability. Conceptual skills are needed
4. Describe management types and the horizontal and vertical differences between them.
The management types under vertical differences are the top managers, middle managers, project
managers, and first-line managers. Top managers are at the top of the organizational hierarchy
5. Define ten roles that managers perform in organizations.
A role is a set of expectations for a manager’s behavior. The ten roles are divided into three
conceptual categories: informational (managing by information), interpersonal (managing
through people), and decisional (managing through action).
Innovative Management for a Changing World • 3
6. Appreciate the manager’s role in small businesses and nonprofit organizations.
Managers in small businesses tend to emphasize different roles from those of managers in large
7. Understand the personal challenges involved in becoming a new manager.
Becoming a new manager requires a profound transformation in the way a person thinks of
8. Discuss the innovative competencies needed to be an effective manager in today’s
environment.
In recent years, rapid environmental shifts have caused a fundamental transformation in what is
required of effective managers. Technological advances and the rise of virtual work, global
4 • Chapter 1
keeping tabs,” they employ an empowering leadership style. Much work in done in teams rather
LECTURE OUTLINE
ARE YOU READY TO BE A MANAGER?
In a world of rapid change, unexpected events, and uncertainty, organizations need managers
I. WHY INNOVATIVE MANAGEMENT MATTERS
Innovations in products, services, management systems, productions processes, corporate values,
II. THE DEFINITION OF MANAGEMENT Exhibit 1.1
Management is the attainment of organizational goals in an effective and efficient manner
Discussion Question #8: A college professor told her students, “The purpose of a management
course is to teach students about management, not to teach them to be managers.” Do you agree
or disagree with this statement? Discuss.
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1. THE FOUR MANAGEMENT FUNCTIONS Exhibit 1.2
A. Planning
Innovative Management for a Changing World • 5
2. Planning is the management function concerned with identifying goals for future
B. Organizing
1. Organizing is the management function concerned with assigning tasks, grouping
tasks into departments, delegating authority, and allocating resources across the
1. Leading is the management function that involves the use of influence to motivate
D. Controlling
1. Controlling is the management function concerned with monitoring employees’
activities, keeping the organization on track toward its goals, and making corrections
3. ORGANIZATIONAL PERFORMANCE
An organization is a social entity that is goal directed and deliberately structured. Social entity
means two or more people. Goal directed means the organization is designed to achieve some
outcome or goal such as make a profit. Deliberately structured means tasks are divided, and
responsibility for their performance is assigned to organization members.
6 • Chapter 1
Discussion Question #5: Think about Toyota’s highly publicized safety problems. One observer
said that a goal of efficiency had taken precedent over a goal of quality within Toyota. Do you
think managers can improve both efficiency and effectiveness simultaneously? Discuss. How do
you think Toyota’s leaders should respond to the safety situation?
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4. MANAGEMENT SKILLS Exhibit 1.3
E. Conceptual Skills
1. Conceptual skill is the cognitive ability to see the organization as a whole and the
relationships among its parts. It involves knowing where one’s team fits into the total
2. Conceptual skill is especially important for top managers. Many of the
1. Human skill is the manager’s ability to work with and through other people and to
C. Technical Skills
1. Technical skill is the understanding of and proficiency in the performance of specific
tasks. This includes mastery of the methods, techniques, and equipment involved in
D. When Skills Fail Exhibit 1.4
1. During turbulent times, managers must use all their skills and competencies to benefit
the organization and its stakeholders.
Innovative Management for a Changing World • 7
Discussion Question #1: How do you feel about having management responsibilities in today’s
world, characterized by uncertainty, ambiguity, and sudden changes or threats from the
environment? Describe some skills and qualities that are important to managers in these
5. MANAGEMENT TYPES Exhibit 1.5
A. Vertical Differences
For first-level managers, the main concern is facilitating employee performance. Middle
managers, though, are concerned less with individual performance and more with linking
1. Top managers are at the top of the organizational hierarchy and are responsible for
the entire organization, with titles such as president, chairperson, executive director,
CEO, and executive vice president. They are concerned with long-range planning.
Responsibilities of top managers include:
a. setting organizational goals;
8 • Chapter 1
g. nurturing an entrepreneurial spirit.
2. Middle managers work at the middle levels of the organization and are responsible
for business units and major departments, with titles such as department head,
division head, manager of quality control, and director of the research lab. They are
concerned with near-future planning.
a. The middle manager’s job has changed dramatically over the past two decades.
Many organizations improved efficiency by laying off middle managers and
slashing middle management levels.
3. Project managers are responsible for temporary work projects that involves the
participation of people from various functions and levels of the organization, and
perhaps from outside the company as well.
4. First-line managers are at the first or second management level and are directly
responsible for the production of goods and services, with titles such as supervisor,
Discussion Question #2: Assume you are a project manager at a biotechnology company,
working with managers from research, production, and marketing on a major product
modification. You notice that every memo you receive from the marketing manager has been
copied to senior management. At every company function, she spends time talking to the big
shots. You are also aware that sometimes when you and the other project members are slaving
away over the project, she is playing golf with senior managers. What is your evaluation of her
behavior? As project manager, what do you do?
Innovative Management for a Changing World • 9
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B. Horizontal Differences
1. Horizontal differences in management jobs occur across the organization in the
different functional areas such as advertising, sales, finance, human resources,
manufacturing, and accounting.
Discussion Question #6: You are a bright, hard-working entry-level manager who fully intends
to rise up through the ranks. Your performance evaluation gives you high marks for your
technical skills, but low marks when it comes to people skills. Do you think people skills can be
learned, or do you need to rethink your career path? If people skills can be learned, how would
you go about doing it?
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III. WHAT IS IT LIKE TO BE A MANAGER?
A. Making the Leap: Becoming a New Manager Exhibit 1.6
1. Becoming a manager involves a profound transformation in the way people think of
themselves, called personal identity, that includes letting go of deeply held attitudes
and learning new ways of thinking. Specific aspects of this transformation include
changing one’s identity:
10 • Chapter 1
B. Manager Activities
Most new managers are unprepared for the variety of activities managers routinely
perform.
1. Adventures in Multitasking
a. Managerial activity is characterized by variety, fragmentation, and brevity. The
NEW MANAGER SELF-TEST: MANAGING YOUR TIME
This exercise helps students determine whether they are better suited to work as
specialists or individual contributors, or as generalists—managers who get things done
through others.
2. Life on Speed Dial
a. Managers perform a great deal of work at an unrelenting pace, requiring great
energy. Most top executive routinely work at least 12 hours a day and spend 50
percent or more of their time traveling.
3. Where Does a Manager Find the Time?
a. Time is a manager’s most valuable resource, and one characteristic that identifies
successful managers is that they know how to use time effectively to accomplish
Innovative Management for a Changing World • 11
Discussion Question #7: If managerial work is characterized by variety, fragmentation, and
brevity, how do managers perform basic management functions such as planning, which would
seem to require reflection and analysis?
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C. Manager Roles Exhibit 1.7, 1.8
1. A role is a set of expectations for a manager’s behavior. Managers’ activities can be
organized into ten roles. The ten roles are divided into three categories:
informational, interpersonal, and decisional.
2. Informational roles include the functions used to maintain and develop an
information network.
a. The monitor role involves seeking current information from many sources.
3. Interpersonal roles refer to relationships with others and are related to human skills.
a. The figurehead role involves the handling of ceremonial and symbolic functions
4. Decisional roles come into play when managers must make choices. These roles
often require both conceptual and human skills.
a. The entrepreneur role involves the initiation of change. Managers seek ways to
12 • Chapter 1
Discussion Question #4: Why do some organizations seem to have a new CEO every year or
two, whereas others have top leaders who stay with the company for many years (e.g., Jack
Welch’s 20 years as CEO at GE)? What factors about the manager or about the company might
account for this difference?
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IV. MANAGING IN SMALL BUSINESSES AND NONPROFIT ORGANIZATIONS
Small businesses are growing in importance. Hundreds of small businesses open every month,
but the environment for small business today is highly complicated.
Nonprofit organizations also represent a major application of management talent. The functions
of planning, organizing, leading, and controlling apply just as in other organizations. Managers
in nonprofit organizations direct their efforts toward generating some kind of social impact.
An added complication is that managers often depend on volunteers and donors who cannot be
supervised and controlled in the same way that a business manager deals with employees.
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Innovative Management for a Changing World • 13
6. STATE-OF-THE-ART MANAGEMENT COMPETENCIES Exhibit 1.9
1. Technological advances and the rise of virtual work, global market forces, and
2. Instead of being a controller, today’s effective manager is an enabler who helps
people do and be their best. Managers help people get what they need, remove
3. Much work is done in teams rather than by individuals, so team leadership skills are
crucial.
4. People in many organizations work at scattered locations, so managers can’t monitor
behavior continually. In addition, managers sometimes are coordinating the work of
.
Discussion Question #9: Discuss some of the ways organizations and jobs changed over the past
ten years. What changes do you anticipate over the next ten years? How might these changes
affect the manager’s job and the skills that a manager needs to be successful?
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Suggested Answers to End-of-Chapter Discussion Questions
14 • Chapter 1
1. How do you feel about having a manager’s responsibility in today’s world characterized by
uncertainty, ambiguity, and sudden changes or threats from the environment? Describe some
skills and qualities that are important to managers under these conditions.
Students should understand that even with the high levels of uncertainty, ambiguity, and sudden
changes or threats present in today’s environment, managers still have at least some useful
2. Assume you are a project manager at a biotechnology company, working with managers
from research, production, and marketing on a major product modification. You notice that
every memo you receive from the marketing manager has been copied to senior management.
At every company function she spends time talking to the big shots. You are also aware that
sometimes when you and the other project members are slaving away over the project, she is
playing golf with senior managers. What is your evaluation of her behavior? As project
manager, what do you do?
The marketing manager seems to want to move up the management hierarchy as quickly as
possible. There are two behaviors illustrating this desire. Sending copies of memos to senior
3. Jeff Immelt of GE said that the most valuable thing he learned in business school was that
“there are 24 hours in a day, and you can use all of them.” Do you agree or disagree?
What are some of the advantages to this approach to being a manager? What are some of
the drawbacks?
Innovative Management for a Changing World • 15
4. Why do some organizations seem to have a new CEO every year or two, whereas others have
top leaders who stay with the company for many years (e.g., Jack Welch’s 20 years as CEO
at General Electric)? What factors about the manager or about the company might account
for this difference?
Today’s firms are challenged by continuous change and chaos, and compete in a dynamic
environment that is in continuous motion. The CEOs are confronted with continuous pressure to
get results that will satisfy stockholder needs. When they fall short, they are replaced due to
5. Think about Toyota’s highly publicized safety problems. One observer said that a goal of
efficiency had taken precedent over a goal of quality within Toyota. Do you think managers
can improve both efficiency and effectiveness simultaneously? Discuss. How do you think
Toyota’s leaders should respond to the safety situation?
Organizational effectiveness is the degree to which the organization achieves a stated goal, or
succeeds in accomplishing what it tries to do. Organizational efficiency refers to the amount of
resources used to achieve an organizational goal. It is based on the how much raw materials,
16 • Chapter 1
6. You are a bright, hard-working entry-level manager who fully intends to rise up through the
ranks. Your performance evaluation gives you high marks for your technical skills but low
marks when it comes to people skills. Do you think people skills can be learned, or do you
need to rethink your career path? If people skills can be learned, how would you go about
it?
Although some people seem to be naturally more adept at people skills, just as some are
naturally more adept at technical skills or conceptual skills, people skills can be learned and there
7. If managerial work is characterized by variety, fragmentation, and brevity, how do managers
perform basic management functions such as planning, which would seem to require
reflection and analysis?
Planning is not necessarily a solitary, reflective activity, although there are certainly times when
such focused planning is important. Many managers do their planning intuitively during the
8. A college professor told her students, “The purpose of a management course is to teach
students about management, not to teach them to be managers.” Do you agree or disagree
with this statement? Discuss.
Some students may believe that a college course will give them the necessary skills and abilities
to be a manager. Others, especially those with management experience, will realize that they can
Innovative Management for a Changing World • 17
9. Discuss some of the ways organizations and jobs changed over the past ten years. What
changes do you anticipate over the next ten years? How might these changes affect the
manager’s job and the skills a manager needs to be successful?
In the new workplace, work is free-flowing and flexible to encourage speed and adaptation, and
empowered employees are expected to seize opportunities and solve problems. The workplace is
organized around networks rather than vertical hierarchies, and work is often virtual. These
10. How might the teaching of a management course be designed to help people make the
transition from individual performer to manager in order to prepare them for the challenges
they will face as new managers?
Management courses can be designed to emphasize the use of technology, the importance of
Apply Your Skills: Experiential Exercise
Management Aptitude Questionnaire
Students should complete the questionnaire using the 5-point Likert scale.
The scale is designed to give a general idea (it is not validated) of the three management skills of
conceptual, human and technical skills. Such a scale can be used as a kind of “mirror” to the
18 • Chapter 1
1. Why do you think the three skills are all needed to be an effective manager? Give examples
of times when each one is used.
Conceptual skills are used to understand large issues and problems, to develop vision and
strategies, and to see relationships between one set of problems and others. Examples are
2. What do you think the ideal ranking would be of the three skills for an effective manager?
There is no one right answer for this, since it depends on the type and level of management.
Apply Your Skills: Small Group Breakout
Your Best and Worst Managers
This exercise helps students understand how different management styles affect their behavior
and motivation, ultimately impacting performance.
Apply Your Skills: Ethical Dilemma
Can Management Afford to Look the Other Way?
1. Ignore the problem. Jacobs’s contributions to new product development are too valuable to
risk losing him, and the problems over the past ten years have always worked themselves out
anyway. No sense starting something that could make you look bad.
Option 1 is the solution management has been taking for ten years, but it is taking Shellington
2. Launch a full-scale investigation of employee complaints about Jacobs, and make Jacobs
aware that the documented history over the past ten years has put him on thin ice.
temporarily disrupt company operations and hurt Shellington’s new product development.
3. Meet with Jacobs and the employee to try to resolve the current issue, and then start working
with Sally Barton and other senior managers to develop stronger policies regarding sexual
Innovative Management for a Changing World • 19
harassment and treatment of employees, including clear-cut procedures for handling
complaints.
Option 3 is probably the most expedient way to deal with the current problem as well as to
Apply Your Skills: Case for Critical Analysis
SmartStyle Salons
1. What positive and negative managerial characteristics does Jamika possess?
A manager’s job requires a range of skills that includes conceptual, human, and technical skills.
During turbulent times, managers really have to stay on their toes and apply all their skills and
2. How do these traits help or hinder her potential to get to the top position at Riverwood Mall
Salon?
Jamika’s failure to clarify direction or performance expectation from her employees Holly and
3. How do you think Jamika should have handled each of the incidents with Marianne? Holly
and Carol Jean? Victoria?
Jamika should not have displayed the outburst of anger when Marianne informed her about Holly
On the Job Video Cases Answers
Camp Bow Wow
20 • Chapter 1
1. List the three broad management skill categories and explain which skills are needed most for
each of the Camp Bow Wow leaders highlighted in the video.
Three general categories of management skills are conceptual skills, human skills, and technical
skills. Conceptual skill, which is the most important skill category for top managers, is the
2. Which activities at Camp Bow Wow require high efficiency? Which activities require high
effectiveness?
Effectiveness is the degree to which the organization achieves a stated goal; efficiency refers to
the amount of resources used to achieve an organizational goal. A high performance company is
3. List two activities that leaders at Camp Bow Wow perform daily, and identify which of the ten
managerial roles discussed in the chapter figure prominently for each.
Answers will vary, but Candace Stathis performs the interpersonal roles of figurehead and liaison