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LECTURE NOTES

I. II. The world keeps changing. Organizational environments become increasingly complex. What will it take to be a successful manager and leader? Management and Why We Study It. A. Management is defined as the process of administering and coordinating resources effectively, efficiently, and in an effort to achieve the goals of the organization. Or, as Mary Parker Follett defined it, the art of getting things done. 1. Effectiveness means that the organization pursues and achieves appropriate goals - doing the right things. 2. Efficiency refers to using the fewest inputs (people, money, etc.) to achieve the goals - doing things right. B. The Organizational Context of Management. 1. An organization is a group of individuals who work together toward a common goal. Organizations can be for-profit or not-for-profit. 2. Commonalities of all organizations: They all are made up of people. The efforts of the people must be coordinated in order for the organization to achieve its goals. C. The Process of Management. 1. Planning: Setting the overall mission and goals and defining the actions necessary to achieve the goals. 2. Organizing: This is defined as determining the tasks to be done, who will do them, and how they will be coordinated. 3. Leading: Involves inspiring the members of the organization to work toward the accomplishment of the organizations goals. 4. Controlling: Monitoring progress toward goals and identifying deviations between planned and actual results. III. What We Know about Managers. A. Managerial roles: According to a well-known study by Henry Mintzberg, managers serve three primary roles (Figure 1.2 in textbook): 1. Interpersonal Roles: The mangers responsibility for managing relationships with organizational members and other constituents. 2. Informational Roles: The managers responsibility for gathering and disseminating information to the stakeholders of the organization.

3. Decisional Roles: The managers responsibility for processing information and reaching decisions. Note: Refer to Figure 1.2 for more details. B. Scope and Levels of Managers. 1. Scope of responsibility. This refers to the nature of the managers job in terms of his or her focus. a. Functional managers are responsible for managing an organizational unit that is grouped based on the function served. Examples: -Finance Manager, Production Manager. b. General managers are responsible for supervising several different departments and coordinating their end results. Examples: a regional manager, a business unit manager. 2. Levels of Management. a. First-line managers supervise individuals who are directly responsible for producing the organizations products and services. They carry titles such as production supervisor, line manger, section chief, or account manager. b. Middle managers supervise first-line managers or staff departments. They have titles such as department head, product manager, or marketing manager. c. Top-level mangers provide the strategic direction for the organization. They carry titles such as chief executive officer (CEO), president, chief operations officer (COO), or executive vice-president. Note: Refer to Figure 1.3 for more details on the levels of managers and to Figure 1.4 for information on the skills that are common at each level of management. IV. Managing in the 21st Century. A. Change. 1. Hyperchange continues. This is a condition of rapid, dramatic, complex, and unpredictable change that has a significant effect on the economy and organizations. 2. The new economy. a. The expansion of individual opportunity. b. Disruptive energy that comes from ceaseless innovation. c. The transformative power of information and communication technologies. B. Environmental trends. 1. Advances in information technology that affect the way organizations operate.

a. The internet and other forms of globally connected networks. b. Electronic commerce. c. Mobile computing. Note: It would be interesting to discuss the debacle of the dot com companies during 2001 and 2002. Even with the downturns, those companies will continue to be a major factor in doing business. 2. Globalization of the marketplace. The amount of trade between countries continues to increase. Also, many companies continue to move operations to many other countries in order to gain some advantage and to gain new markets. Note: You could refer to the At the Forefront box here for an example of how Wal-Mart has become a global corporation. 3. Increasing predominance of entrepreneurial firms. Despite the importance of large organizations to the U.S. economy, entrepreneurial firms are important. a. Entrepreneurial firms are responsible for a disproportionate number of new products, services, and processes. b. Entrepreneurial activities place pressures on large, bureaucratic firms to be more innovative and proactive. c. Entrepreneurship provides opportunities for minorities and others who may face barriers in traditional corporate environments. 4. Growing importance of intellectual capital. For most of the 20th century, the critical factors of production were considered to be land, labor and raw materials. The job of managers was to take these inputs and create products that were more valuable than the sum of the parts. Production factors have changed however. Intellectual capital has become more important. According to Thomas Steward, there are three types of intellectual capital. a. Structural capital: The accumulated knowledge and know-how of the organization represented by the companys patents, trademarks and copyright, proprietary databases and systems. b. Customer capital: The value of established relationships with customers and suppliers. c. Human capital: The cumulative skills and knowledge of people in the organization. C. Organizational changes. Contemporary organizations are experiencing a number of important changes that revolve around achieving excellence. 1. A new model of leadership: Contemporary leaders need to be more flexible. They need to have three characteristics (The 3Cs Model of Leadership: a. Competence. Leaders need to have overall business knowledge and skills.

b. Character. Leaders need to have values and behaviors that elicit trust, commitment and followership. c. Community. The need to be aware of things beyond oneself and even beyond ones team and organization. A commitment to supporting the communities around them. 2. From hierarchy to collaborative work relationships. In an effort to be more responsive to the challenges of the 21st century, many organizations have moved away from traditional hierarchical organizational structures, and toward structures that favor the use of selfmanaged teams. 3. Increasing diversity in the workplace. Connected to the globalization of business has been the globalization of the labor market. Diversity refers to the heterogeneity of the population and workforce. 4. A new organizational model. Organizations that operate in rapidly changing markets need to be lean and flexible. V. The Contemporary Manager. A. The new manager profile must include managers thinking of themselves as team leaders, sponsors or internal consultants rather than the boss. B. Competencies of tomorrows managers and leaders must include: 1. The great communicator. 2. The individual coach. 3. The team player. 4. The technology master. 5. The problem solver. 6. The foreign ambassador. 7. The change agent. 8. The lifelong learner. Note: Encourage students to complete the exercise in the Now Apply It box. This is a good way to get them to think more directly about what it might take to be a manager and leader. VI. Implications for Leaders. Successful leaders must A. Keep abrades of changing conditions that affect the organization. B. Develop an understanding of the major environmental trends that are affecting organizations across the globe.

C. Be flexible and adaptable to organizational changes, as well as proactive in initiating change when appropriate. D. Understand the changing role of the manager within the corporate structure. E. Make the most of education and develop the skills and competencies necessary for managerial success. F. Focus on excellence and quality in everything. G. Take every opportunity to enhance leadership skills.

REVIEW QUESTIONS AND SUGGESTED ANSWERS


1. (Learning Objective 1) Distinguish between the concepts of management and leadership. Why has leadership become increasingly important in recent years? Management is defined as the overall process of administering and coordinating resources effectively and efficiently in order to achieve the organizations goals. It involves the functions of planning, organizing, leading, and controlling. Leadership involves guiding the work of individuals and groups toward accomplishment of goals. Effective leaders must understand the dynamics of individual and group behavior, be able to motivate employees, and be effective communicators. Some people suggest that managers tend to focus on the planning, organizing and controlling, or the management of things, rather than people. Leadership focuses on the people and should include the other functions as well. For purposes of studying management, it is good to say that a manager must be good at all things, including leadership. 2. (Learning Objective 2) Define the concept of management within an organizational context. Describe the major functions of the management process, and why they are important. Management is the process of administering and coordinating resources effectively, efficiently, and in an effort to achieve the goals of the organization. The functions of management include planning, organizing, leading, and controlling. All of these four functions are important because they contribute to the accomplishment of the organizations goals and objectives. Planning is important because it involves setting goals and defining the actions necessary to achieve those goals. Organizing involves determining the tasks to be done, who will do them, and how those tasks will be managed and coordinated. Leading is extremely important. Managers must be able to lead, which means motivating their employees to accomplish the organizations goals. Finally, controlling is important because it provides a mechanism for managers to identify deviations between planned and actual results 3. (Learning Objective 3) Describe the roles of the manager as outlined by Mintzberg. Interpersonal Roles: o Figurehead: performing ceremonial duties. o Leader: working with and through employees to meet organizational goals. o Liaison: establishing working relationships with individuals both inside and outside the organization. Informational Roles: o Monitor: gathering useful information from inside and outside of the organization. o Disseminator: distributing information as needed. o Spokesperson: communicating information to individuals or groups outside of the unit or organization. Decisional Roles: o Entrepreneur: initiating efforts to take advantage of opportunities. o Disturbance handler: resolves conflicts. o Resource allocator: determining which projects will receive organizational resources. o Negotiator: negotiating with employees, suppliers, customers and work groups.

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(Learning Objective 4) Describe the responsibilities of the functional manager. Describe the responsibilities of the general manager. How do the skills needed by each type of manager differ? A functional manager is responsible for a work group that is segmented according to function. For example, the manager of a marketing department is typically responsible for managing only the activities of that particular department. A general manager is typically responsible for managing several different departments that are involved in different tasks. For example, the manager of a grocery store will be responsible for the produce department, the meat department, the bakery, and so on. Because functional managers are responsible for supervising employees that are all working in the same area (e.g., marketing), they must have superior technical skills. General managers, who supervise employees across departments, need to have stronger human skills in order to coordinate these diverse groups.

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(Learning Objective 5) Distinguish among the three levels of managers in terms of the skills they need and the activities in which they are involved. Top managers need well-developed conceptual skills because they engage in planning activities for the organization. Middle managers need well-developed human skills because they work with employees in their own departments and coordinate activities across departments. First-line managers need welldeveloped technical skills as they are most closely involved with the employees who actually produce the goods or services provided by their organization.

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(Learning Objective 6) What are the underlying forces of the new economy? The expansion of individual opportunity. The new economy recognizes and supports the individual contributor in a way that the old economy system did not do. The disruptive energy that comes from ceaseless innovation. The old economy included more of a systematic approach. Things are less stable and predictable now so there is constant change in terms of seeking new innovation. The transformative power of information and communication technologies. There have been so many advances in information technology that allow organizations to improve information exchange and communication.

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(Learning Objective 7) What are the four environmental trends affecting organizations today? Explain how each of these trends may affect the job of the contemporary manager. The four environmental trends are advances in information technology, globalization of the marketplace, increasing predominance of entrepreneurial firms, and the growing importance of intellectual capital. The first trend, advances in information technology, will continually challenge managers to stay current and to use technology to their competitive advantage. The second trend, globalization, means that managers must broaden their thinking to appreciate the environmental changes that are taking place in their industries on a global rather than a strictly domestic level. In addition, managers must think global regardless of the size of their firm (particularly in a manufacturing setting). Many small firms are actively involved in exporting, which has provided the managers of these firms new markets for their products and services. The third trend, the increasing predominance of entrepreneurial firms, will challenge the managers of firms of all sizes to compete against entrepreneurial firms that are flexible and creative. The fourth trend, the growing importance of intellectual capital, represents the emergence of the new critical resource needed by organizations today. For most of the twentieth century, the critical factors of production were considered to be land, labor, and raw materials. The charge to managers was to use these production factors to create products that were more valuable than the sum of their parts.

Today, however, the key factors of production have changed somewhat: Intellectual capital has become the critical resource for the twentieth century manager. 8. (Learning Objective 8) Identify and discuss the organizational changes that are occurring today. What is the anticipated impact of these changes on the job of the contemporary manager? The role of the CEO is changing, and contemporary managers must learn to be participatory leaders rather than authoritarian managers. The growth in self-managed teams means that middle managers will appear more as team leaders than traditional mid-level managers. The increase in workplace diversity means that managers must learn to achieve group cohesiveness within heterogeneous groups. It also means that managers may have to set aside any stereotypes that they have of ethnic or racial groups. The new organizational models, which emphasize flexibility and innovation, mean that managers must be flexible themselves and be able to clearly define their organizations core competencies 9. (Learning Objective 9) Describe the manager of tomorrow in terms of both managerial style and the skill sets that will be necessary for success. In the future, managers will need to be much less authoritarian and more team oriented. The competencies that managers of tomorrow must possess are as follows: they must be able to communicate effectively at all levels of the organization; they must be able to work in teams; they must be proficient with new technology; they must be problem solvers; they must be foreign ambassadors on behalf of their firms (and industries); they must be change makers; and most importantly, they must be effective twenty-first century leaders.

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