MIE 201 Chapter 6

A process designed to achieve an organization’s objectives by using its resources effectively and efficiently in a changing environment.

Having the intended result

Accomplishing the objectives with a minimum of resources

Those individuals in organizations who make decisions about the use of resources and who are concerned with planning, organizing, staffing, directing, and controlling the organization’s activities to reach its objectives.

The hiring of people to carry out the work of the organization.

The elimination of a significant number of employees from an organization.

To harmonize the use of resources so that the business can develop, produce, and sell products, managers engage in a series of activities: planning, organizing, directing, and controlling. These four functions are interrelated; managers may perform two or more of them at the same time.

The process of determining the organization’s objectives and deciding how to accomplish them, is the first function of management.; activities to achieve the organization’s objectives.

The statement of an organization’s fundamental purpose and basic philosophy.; Also called mission statement. Good mission statements are clear and concise statements that explain the organization’s reason for existence.

The result that a firm wishes to achieve. Has three components:

-An attribute sought, such as profits, customer satisfaction, or product quality

-A target to be achieved, such as the volume of sales or extent of management to be completed

-A time frame, which is the time period in which the goal is to be attained.

The ends or results desired by an organization, derive from the organization’s mission. May be elaborate or simple. Commonly relates to profit, competitive advantage, efficiency, and growth. The principal difference between objectives and goals is that objectives are generally stated in such a way that they are measurable.

There are three general types for meeting objectives: Strategic, Tactical, and Operational.

Those plans that establish the long-range objectives and overall strategy or course of action by which a firm fulfills its mission. A firm’s highest managers develop them. Generally cover periods of a year or longer.

Short-range plans designed to implement the activities and objectives specified in the strategic plan. Usually cover a period of a year or less. Help keep the organization on the course established in the course plan. Are designed to execute the overall strategic plan.

Very short-term plans that specify what actions individuals, work groups, or departments need to accomplish in order to achieve the tactical plan and ultimately the strategic plan. They apply to details in executing activities in one month, week, or even day.

An element in planning that deals with potential disasters such as product tampering, oil spills, fire, earthquake, computer virus, or airplane crash. Unfortunately, many businesses do not have updated ones to handle the types of crises that their companies might encounter. According to the Federal Emergency Management Agency (FEMA), approximately 40 percent of small businesses do not reopen after a disaster.

Steps: Create, Build, Form, Enlist, Enable, Generate, Sustain, Institute.

A sense of urgency

A guiding coalition

A strategic vision and initiatives

A volunteer army

Action by removing barriers

Short-term wins

Acceleration

Change

The structuring of resources and activities to accomplish objectives in an efficient and effective manner. Managers do this by reviewing plans and determining what activities are necessary to implement them, they divide work into small units and assign it to specific individuals, groups, or departments. Occurs continuously because change is inevitable.

Rarely are individuals in an organization able to achieve common goals without some form of structure.

Helps create synergy. Establishes lines of authority, improves communication, helps avoid duplication of resources, and can improve competitiveness by speeding up decision making.

The effect of a whole system equals more than that of its parts.

Motivating and leading employees to achieve organizational objectives. Good of this involves telling employees what to do and when to do it through the implementation of deadlines and then encouraging them to do their work (1). Also involves determining and administering appropriate rewards and recognition. All managers are involved in this, but it is especially for lower-level managers who interact daily with the employees operating the organization (2) .

For example (1) : As a sales manager, you would need to learn how to motivate salespersons, provide leadership, teach sales teams to be responsive to customer needs, and manage organizational issues as well as evaluate sales results.

For example (2): An assembly-line supervisor for Frito-Lay must ensure that her workers know how to use their equipment properly and have the resources needed to carry out their jobs safely and efficiently, and she must motivate her workers to achieve their expected output of packaged snacks.

The process of evaluating and correcting activities to keep the organization on course. Control involves five activities: (1) measuring performance, (2) comparing present performance with standards or objectives, (3) identifying deviations from the standards, (4) investigating the causes of deviations, and (5) taking corrective action when necessary.

Many organizations have many levels of management—top management, middle management, and first-line (or supervisory) management. These levels form a pyramid. As the pyramid shape implies, there are generally more middle managers than top managers and still more first-line managers. Very small organizations may only have one manager (typically, the owner), who assumes the responsibilities for all three levels. Large businesses have many managers at each level to coordinate the use of the organization’s resources. Managers at all three levels perform all four management functions, but the amount of time they spend on each function varies

The president and other top executives of a business, such as the chief executive officer (CEO), chief financial officer (CFO), and chief operations officer (COO), who have overall responsibility for the organization. Spend most of their time planning. They make the organization’s strategic decisions, decisions that focus on an overall scheme or key idea for using resources to take advantage of opportunities.

An important issue in today’s corporations. Effective managers at enlightened corporations have found that diversity is good for workers and for the bottom line. Putting together different kinds of people to solve problems often results in better solutions.

Those members of an organization responsible for the tactical planning that implements the general guidelines established by top management. Their responsibility is more narrowly focused than top managers. They are involved in the specific operations of the organization and spend more time organizing than other managers.

Those who supervise both workers and the daily operations of an organization. They are responsible for implementing the plans established by middle management and directing workers’ daily performance on the job.

Those who focus on obtaining needed funds for the successful operation of an organization and using those funds to further organizational goals.

Those who develop and administer the activities involved in transforming resources into goods, services, and ideas ready for the marketplace.

Those who handle the staffing function and deal with employees in a formalized manner.

Those who are responsible for planning, pricing, and promoting products and making them available to customers.

Those who are responsible for implementing, maintaining, and controlling technology applications in business, such as computer networks.

Those who manage an entire business or a major segment of a business; they are not specialists but coordinate the activities of specialized managers.

Specific Role:

• Figure: Ex. Attending award banquet

• Liaison: Ex. Coordinating production schedule with supply manager.

• Leadership: Ex. Conducting performance appraisal for subordinates

Specific Role:

• Monitor: Ex. Contacting government regulatory agencies

• Disseminator: Ex. Conducting meetings with subordinates to pass along safety policy

• Spokesperson: Ex. Meeting with consumer group to discuss product safety

Specific Role:

• Entrepreneur: Ex. Changing work process

• Disturbance handler: Ex. Deciding which unit moves into new facilities.

• Resource allocator: Ex. Deciding who receives new computer equipment

• Negotiator: Ex. Settling union grievance.

The specialized knowledge and training needed to perform jobs that are related to particular areas of management.

The ability to think in abstract terms and to see how parts fit together to form the whole.

The ability to identify relevant issues, recognize their importance, understand the relationships between them, and perceive the underlying causes of a situation.

When managers have identified critical factors and causes, they can take appropriate action. All managers need to think logically, but this skill is probably most important to the success of top-level managers. To be analytical, it is necessary to to think about a broad range of issues and to weigh different options before taking action. Because analytical skills are so important, questions that require analytical skills are often a part of job interviews.

The ability to deal with people, both inside and outside the organization.

The ability to influence employees to work toward organizational goals. Strong leaders manage and pay attention to the culture of their organization and the needs of their employees.

Make all the decisions and then tell employees what must be done and how to do it. They generally use their authority and economic rewards to get employees to comply with their directions. For example, Martha Stewart: She built up her media empire by paying close attention to every detail.

Involve their employees in decisions. The manager presents a situation and encourages his or her subordinates to express opinions and contribute ideas. The manager then considers the employees’ points of view and makes the decision.

Let their employees work without much interference. The manager sets performance standards and allows employees to find their own ways to meet them. For this style to be effective, employees must know what the standards are, and they must be motivated to attain them. This style of leadership can be a powerful motivator because it demonstrates a great deal of trust and confidence in the employee.

Many managers, however, are unable to use more than one style of leadership. Some are incapable of allowing their subordinates to participate in decision making, let alone make ant decisions. What leadership style is “best” depends on specific circumstances, and effective managers will strive to adapt their leadership style as circumstances warrant. Many organizations offer programs to develop good leadership skills. Warren Buffett, chair of Berkshire Hathaway, has developed dozens of exemplary with proven track records. Leadership continuity is important to all firms. When plans fail, very often leaders are held responsible for what goes wrong, For example, Wells Fargo CEO John Stumpf resigned before probably being fired for oversight of a bank that opened more than 3.5 million fake accounts for customers.

Style of leadership that has been gaining popularity. A bit different from the other three leadership styles because it is not exclusive. Both democratic and free-rein leaders could qualify as this depending upon how they conduct themselves among stakeholders. These leaders are passionate about the goals and mission of the company, display corporate values in the workplace, and form long-term relationships with stakeholders.

When employees are provided with the ability to take on responsibilities and make decisions about their jobs.

Leaders who wish to empower employees adopt system that support an employee’s ability to provide input and feedback on company decisions. This is a type of decision making that involves both manager and employee input, supports employee empowerment within the organization. One of the best ways to encourage this type of decision making is through employee and managerial training. Employees should be trained in leadership skills, including teamwork, conflict resolution, and decision making. Managers should also be trained in ways to empower employees to make decisions while also guiding employees through challenging situations in which the right decision might not be so clear.

A systematic approach using the following six steps usually leads to more effective decision making: (1) recognizing and defining the decision situation, (2) developing options to resolve the situation, (3) analyzing the options, (4) selecting the best option, (5) implementing the decision, and (6) monitoring the consequences of the decision.

Recognizing and defining the situation. The situation may be negative—for example, huge losses on a particular product—or positive—for example, an opportunity to increase sales.

Situations calling for small-scale decisions often occur without warning. Situations requiring large-scale decisions, however, generally occur after some warning signs. Effective managers pay attention to such signals. Declining profits, small-scale losses in previous years, inventory buildup, and retailers’ unwillingness to stock a product are signals that may foreshadow huge losses to come. If managers pay attention to such signals, problems can be contained.

Developing options to resolve the situation. Once the decision situation has been recognized and defined, the next step is to develop a list of possible courses of action. The best lists include both standard and creative plans. Brainstorming, a technique in which group members spontaneously suggest ideas to solve a problem, is an effective way to encourage creativity and explore a variety of options. As a general rule, more time and expertise are devoted to the development stage of decision making when the decision is of major importance. For example, after years of losses, Sears Holding Corp. has raised doubts about its ability to keep operating. Former CEO Edward Lampert reportedly ignored those around him as he cut money on advertising and inventory while raising prices. After filing for bankruptcy protection, Sears secured a loan of $350 million to keep the retailer operating while reorganizing. When the decision is of less importance, less time and expertise will be spent on this stage. Options may be developed individually, by teams, or through analysis of similar situations in comparable organizations.

Creativity is a very important part of selecting the most viable option. Creativity depends on new and useful ideas, regardless of where the originate or the method used to create them. The best option can range from a required solution to an identified problem or a volunteered solution to an observed problem by an outside work group member.

Analyzing the options…..

Selecting the best option. When all courses of action have been analyzed, management must select the best one. Selection is often a subjective procedure because many situations do not lend themselves to quantitative analysis. The best option always relates to analyzing risks and trade-offs. For example, how Amazon uses its Alexa virtual assistant involves many alternatives. A decision had to be made whether the voice-activated device could store bank accounts data and make payments with all the risk associated with the service. Nearly all options create dilemmas that create an assistant of only one option and reject all others; it may be possible to select and use a combination of several options.

Implementing the decision….

Monitoring the Consequences. After managers have implemented the decision, they must determine whether it has accomplished the desired result. Without proper monitoring, the consequences of decisions may not be known quickly enough to make efficient changes. If the desired result is achieved, management can reasonably conclude that it made a good choice. If the desired result in not achieved, further analysis is warranted. Was the decision simply wrong, or did the situation change? Should some other option have been implemented?

If the desired result is not achieved, management may discover that the situation was incorrectly defined from the beginning. That may require starting the decision-making process all over again. Finally, management may determine that the decision was good even though the desired results have not yet shown up, or it may determine a flaw in the decision’s implementation. In the latter case, management would not change the decision but would change the way in which it is implemented.

Management is not exact and calculated. There is no mathematical formula for managing an organization and achieving organizational goals, although many managers passionately wish for one. Managers plan, organize, direct, and control, but management expert John P. Kotter says even these functions can be boiled down to two basic activities:

1. Figuring out what to do despite uncertainty, great diversity, and an enormous amount of potentially relevant information.

2. Getting things done through a large and diverse set of people despite having little direct control over most of them.

A calendar, containing both specific and vague items, that covers short-term goals and long-term objectives.

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Building relationships and sharing information with colleagues who can help them achieve the items on their agendas. Managers spend much of their time communicating with a variety of people and participating in activities that, on the surface, do not seem to have much to do with the goals of their organization. Nevertheless, these activities are crucial to getting the job done.

Management

Organizing

Planning

Directing

Controlling

planning

organizing

directing

Management

Controlling

False

Top: President/CEO

Middle: Plant Manager

First-line: Foreman

planning

Having a diverse workforce

organizing

Financial managers

Directing

Liaison

Figure

Leader

controlling

conceptual

False

analytical skills

diversity often results in better solutions

leadership

financial

Democratic

Figurehead

Participative

conceptual

implement the decision.

Analytical

large