Chapter 8: Leadership, Organization, and Production to Satisfy Customers
October 6 2011
Managers’ Roles are Evolving
- Managers must practise the art of getting things done through organizational resources.
- Resources general term that incorporates human resources (employees), natural resources(raw materials),
and financial resources(money).
- Resources include the factors of production. Every business has scarce resources, and managements are about
deciding how to effectively use these scarce resources.
- At one time, managers were called bosses and their job consisted of telling people what to do and watching over
them to be sure they did it. They were more proficient and knew more than the employees they supervised.
- Managers now are more educated to guide, train, support, motivate and coach employees rather than tell them
what to do.
- Managers realize that workers often know much more about technology than they do, so they emphasize
teamwork and co-operation rather than discipline and giving orders.
- Traditional long-term contracts between management and employees – and the accompanying trust – are often
no longer there.
- Increases the difficulty of the management task because mangers must earn the trust of their employees, which
includes rewarding them and finding other ways to encourage them to stay in the firm.
Functions of Management
- Managers give direction to their organizations, provide leadership, and decide how to use organizational
resources to accomplish goals.
- Managers today must deal with conflict resolution, create trust in an atmosphere where turst has been badly
shaken, and help create balance between work lives and family lives.
- 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 objects.
- Planning is a key management function because the other management functions depend heavily on having a
- Organizing a management function that includes designing the structure of the organization and creating
conditions and systems in which everyone and everything work together to achieve the organization’s goals and
- The organization must remain flexible and adaptable because customer needs change, and organization must
either change along with them or risk losing their business.
- 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.
- This trend is to empower employees, giving them as much freedom as possible to become self-directed and self-
- Was once known as directing; that is telling employees exactly what to do.
- 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.
Planning: Creating a vision based on values
- Planning, the first managerial function, involves setting the organizational vision, values, goals and objectives.
- Part of the planning process involves the creation of a vision for the organization.
- A vision an encompassing explanation of why the organization exists and where it’s trying to head. Gives the
organization a sense of purpose.
- Values a set of fundamental beliefs that guide a business in the decisions they make.
Guide strategic planning through day-to-day decisions by being mindful of how all stakeholders
will be treated.
- Vision informs values, while values come alive through vision.
- A mission Statement an outline of the fundamental purposes of an organization.
- A meaningful mission statement should address:
The organization’s self-concept
Company’s philosophy and goals
The nature of the company’s product or service.
- The mission statement becomes the foundation for specific goals and selecting and motivating employees
- Goals the broad, long-term accomplishments an organization wishes to attain.
- Objectives specific, short-term statements detailing how to achieve the organization’s goals.
- SWOT Analysis a planning tool used to analyze an organization’s strengths, weaknesses, opportunities, and
- The strengths and weaknesses include elements that are referred to as PRIMO-F: people, resources, innovation
and ideas, marketing, operations, and finance.
- 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. - At the strategic planning stage, the company decides which customers to serve, what goods or services to sell,
and the geographic areas in which the firms will compete.
- 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.
Normally the responsibility of the top managers of the firm.
Involves setting annual budgets and deciding on other details and activities necessary to meet
the strategic objectives.
- 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
Is the tool for 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.
The economic and competitive environments change so rapidly that its wise to have alternative
plans of action ready in anticipation of such changes.
- A company should be able to mitigate the potential damage and financial loss resulting from an unforeseen
emergency or catastrophe.
- The main goals of developing an HRE contingency plan are ensuring business continuity, reducing risk to
employees and their dependents, and maintaining productivity as well as minimizing the possibility of litigation.
- Planning is a key management function because the other management functions depend on having good plans.
- The idea is to stay flexible, listen to customers, and seize opportunities when they come, whether or not those
opportunities were expected.
- A vision(“Where we are going…”), in combination with values (HOW we treat our stakeholders…)…”), and the
mission statement (“Our purpose IS…”), provides direction for the company.
- A company’s objectives (WHAT we want to accomplish) are linked to its strategy (HOW we will accomplish the
Decision Making: Finding the Best Alternative
- Decision Making choosing among two or more alternatives.
- The steps to the rational decision-making mode:
Define the Situation
Describe and collect needed information
Develop agreement among those involved.
Decide which alternative is best
Do what is indicated (begin implementation).
Determine whether the decision was a good one and follow up.
- Problem solving the process of solving the everyday problems that occur. Problem solving is less formal than
decision making and usually calls for quicker action.
Problem solving teams are made up of two or more workers who are given an assignment to
solve a specific problem.
Techniques include brainstorming and PMI. - Brainstorming coming up with as many solutions to a problem as possible in a short period of time with no
censoring of ideas.
- PMI Listing all the Pluses for a solution in one column, all the Minuses in another, and the Interesting in a
Organizing: Creating a Unified System
- Organizing means allocating resources(such as funds for various departments), assigning tasks, and establishing
procedures for accomplishing the organizational objectives.
- When organizing, the manager develops a structure/framework called the organization structure that relates all
workers, tasks and resources to each other.
- Organization chart a visual device that shows relationships among people and divides the organization’s
work; it shows who is accountable for the completion of specific work and who reports to whom.
- Top Management (the highest level of management). Consists of the president and other key company
executives who develop strategic plans.
- Terms likely to see are often Chief executive officer(CEO), chief operating officer(COO), chief financial
officer(CFO), and chief information officer(CIO).
- CEO is the president of the firm and is responsible for introducing change into the organization and all top-level
- COO is responsible for putting those changes into effect. Includes structuring work, controlling operations, and
rewarding people to ensure that everyone strives to carry out the leader’s vision.
- CFO is responsible for obtaining funds, planning budgets, collecting funds, and so on.
- The CIO or CKO is responsible for getting the right information to other managers so they can make correct
- Middle Manag