Chapter 12 – Management and Leadership
Manager’s roles are evolving
Resources: a general term that incorporates human resources, natural resources, and
Resources include the factors of production.
Management is becoming more progressive.
Successful management will demand a new kind of person: a skilled communicator and
team player as well as a planner, coordinator, organizer and supervisor.
Functions of management
Management: the process used to accomplish organizational goals through planning,
organizing, leading and controlling people and other organizational resources.
Planning: a management function that includes anticipating trends and determining the
best strategies and tactics to achieve organizational goals and objectives.
Planning teams: help monitor the environment, find business opportunities and watch for
Organizing: a management function that includes designing the structure of that
organization and creating conditions and systems in which everyone and everything work
together to achieve the organization’s goals and objectives.
Leading: creating a vision for the organization and guiding, training, coaching, and
motivating others to work effectively to achieve the organization’s goals and objectives.
Directing: telling employees exactly what to do. Generally occurs in smaller firms – leading
occurs in bigger firms.
Controlling: a management function that involves establishing clear standards to
determine whether or not an organization is progressing toward its goals and objectives,
rewarding people for doing a good job, and taking corrective action if they are not.
These four things are the heart of management.
Planning: creating a vision based on values
Planning involves setting the organizational vision, values, goals and objectives; it is rated
as the most valuable tool. Part of the planning process involves the creation of a vision for
Vision: an encompassing explanation of why the organization exists and where it’s trying
to head. Gives organization a sense of purpose.
Values: a set of fundamental beliefs that guide a business in the decisions they make.
Vision informs values, while values come alive through vision.
Mission statement: an outline of the fundamental purposes of an organization.
The organization’s self-concept
Company philosophy and goals
The nature of the company’s product or service
Goals: the broad, long-term accomplishments an organization wishes to attain.
Objectives: specific, short-term statements detailing how to achieve the organization’s
Planning answers several fundamental questions for businesses:
1. What is the situation now?
SWOT analysis: a planning tool used to analyze an organization’s strengths, weaknesses,
opportunities and threats.
Strengths and weaknesses include elements that are referred to as PRIMO-F: people,
resources, innovation, marketing, operations and finance.
Opportunities and threats include concepts referred to as PESTLE: political, economic,
social, technological, legal and environmental.
Using info from SWOT, a company can create an action plan to address the business
situation identified. A SWOT analysis is framed by the vision.
2. How can we get there from here?
Planning takes four forms: strategic, tactical, operational and contingency. Planning is a
Strategic planning: the process of determining the major goals of the organization and the
policies and strategies for obtaining and using resources to achieve those goals.
Tactical planning: the process of developing detailed, short-term statements about what
is to be done, who is to do it and how it is to be done.
Tactical planning is usually the responsibility of managers or teams of managers at lower
levels of the organization, where as strategic planning is the responsibility of the top
managers of the firm.
Operational planning: the process of setting work standards and schedules necessary to
implement the company’s tactical objectives.
Focuses on the specific responsibilities of supervisors, department managers and
individual employees. Can include operational budgets.
The operational plan is the department manager’s tool for daily and weekly operations.
Contingency planning: the process of preparing alternative courses of action that may be
used if the primary plans don’t achieve the organization’s objectives.