Chapter 1: Introduction to Management (page 2-25)
Management: the art of getting things done through people.
Managers can also give organizations a sense of purpose and direction
Wal-Mart’s founder Sam Walton was fond of saying, “managers can motivate ordinary people to do extraordinary
Managers can transform organizations; they can create new ways of producing and distributing goods and services,
which in turn means they can change how the world works through their actions.
The 5 main functions of management according to Fayol, in the early 20 century are:
A modified version of Fayols list is still widely used. This list identifies four management functions:
A formal process whereby managers:
1. Choose goals
2. Identify actions to attain those goals
3. Allocate responsibility for implementing actions to specific individuals or units
4. Measure the success of actions by comparing actual results against the goals
5. Revise plans accordingly.
Strategy: an action that managers take to attain the goals of an organization.
Planning however, goes beyond strategy development to include the regulation of a wide variety of organizational
activities. Managers plan expenditures every year in a budgeting process.
This includes drawing up plans for:
Building new factories
Opening new offices
Implementing new information systems
Improving inventory control systems
Introducing new products
Launching new marketing campaigns
Rolling out employee benefits programs
Dealing with crises
**Managers often make sure that these plans are linked to the strategy of the enterprise Strategizing: the process of thinking through on a continual basis what strategies an organization should pursue to
attain its goals.
Strategizing involves more than planning—it involves constantly thinking through strategic alternatives.
Whereas planning is a formal process for generating the strategies of an organization, strategies can also arise in
the absence of planning.
Being aware of and analyzing what competitors are doing
Thinking about how changes in the external environment, such as changes in technology or government
regulations, impact the organization
Weighing the pros and cons of alternative strategies
Anticipating how competitors might respond to these strategies
Choosing a course of action
The process of deciding:
Who within an organization will perform what tasks
Where decisions will be made
Who reports to whom
How different parts of the organization will coordinate their activities to pursue a common goal
In business, organizing typically involves dividing the enterprise into subunits based on functional tasks such as:
Then deciding how much decision-making authority to give each subunit
Organizing is part of planning and strategizing: strategy is implemented through organization.
Controlling: the process of monitoring performance against goals, intervening when goals are not met, and taking
Without control systems to verify that performance is hitting goals, an organization can veer off course.
Controlling is also linked to planning and strategizing and to organizing. Drafting plans is the first step in controlling an
Controlling requires managers to compare performance against the plans to monitor how successful an organization
is at implementing a strategy.
**An important aspect of controlling is creating incentives that align the interests of individual employees with those
of the organization, helping to ensure that everyone is pulling in the same direction
Incentive: A factor, monetary or nonmonetary, that motivates individuals to pursue a particular course of action. With the right incentives in place, employees will work productively and control their own behavior, which reduces
the need for close personal supervision and other intrusive control methods.
Leading: the process of motivating, influencing, and directing others in the organization to work productively in
pursuit of organization goals.
The task of:
Employees in an organization, including other manager
***people are the most important asset of an organization.
Leading also entails articulating a grand strategic vision for an organization and becoming a tireless advocate for that
As all effective leaders recognize, leading also involves:
Listening to others, learning from them, and empowering them to pursue actions that benefit the organization.
Human Capital: the knowledge, skills, and capabilities embedded in individuals.
human capital can be a source of competitive advantage.
Hring and promoting the right people are among the most important management tasks because they have lasting
consequences for the organization and are difficult to reverse. A lot of managers fail at hiring the right staff.
Leading and developing employees are in many ways the core connection among planning and strategizing,
organizing, controlling, and creating incentives.
Drive strategic thinking (strategizing) deep within the organization while articulating their own vision for the
Have a plan for their organization and push others to develop plans.
Structure the organization proactively to implement their chosen strategy.
Exercise control with a deft hand, never seeming too overbearing or demanding, while at the same time never
taking their eyes off the ball.
Put the right kinds of incentives in place.
Get the best out of people by persuading them that a task is worthy of their effort.
Build a high-quality team of other managers and employees through which they can work to get things done.
Without skilled leaders strategy may fail;
The organization may become bureaucratic
Control may be lost
Employees will lack incentives and motivation
The organization may suffer insufficient human capital.
Types of Managers:
Corporate-Level General Managers:
Chief Executive Officer (CEO), leads the entire enterprise. In a multidivisional enterprise, the CEO formulates
strategies that span businesses deciding, for example, whether to enter new businesses through acquisitions or
whether to exit a business area. The CEO decides how the enterprise should be organized into different divisions and signs off on major strategic initiatives proposed by the heads of divisions. The CEO exercises control over
divisions, monitoring their performance and deciding what incentives to give divisional heads. Finally, the CEO helps
develop the human capital of the enterprise.
the CEO of a corporation also manages relationships with the people who own the company – its shareholders. The
CEO reports to the board of directors, whose primary function is to make sure the strategy of the company is
consistent with the best interests of shareholders. The CEO also normally sits on the board and spends considerable
time describing company strategy to shareholders.
Other chief officers help the CEO make decisions. Those include: Chief financial officer (CFO), who is responsible for
the overall financing of the corporation. It may also include a chief operating officer (COO) who makes sure
operations are run efficiently within the company, and in some high-technology enterprises a chief technology officer
(CTO) is responsible for developing new technologies and products within the corporation.
General Managers (business level rather than corporate level):
Managers responsible for the overall performance of an organization or one of its major self-contained subunits or
Head the different divisions—motivating, influencing, and directing their subordinates and are responsible for
Translate the overall strategic vision for the corporation into concrete strategies and plans for their units
Organize operations within their division, deciding how best to divide tasks into functions and departments and
how to coordinate those subunits so that strategy can be successfully implemented
Control activities within their divisions, monitoring performance against goals, intervening to take corrective action
when necessary, and developing human capital.
Functional Managers (specialized):
Managers responsible for leading a particular function or a subunit within a function.
Responsible for a task, activity, or operation such as accounting, marketing, sales, R&D, production, information
technology, or logistics.
Although they are not responsible for the overall performance of the organization, functional managers
nevertheless have a major strategic role: to develop functional strategies and draft plans in their areas that help fulfill
the strategic objectives set by business and corporate-level general managers.
Functional managers provide most of the information that makes it possible for business and corporate-level
general managers to formulate realistic and attainable strategies.
Strategy implementation: the execution of corporate and business-level strategies.
Heads of functions are responsible for developing human capital within their organizations.
They also organize their functions into subunits such as departments or teams; exercise control over those
subunits; set goals; monitor performance; provide feedback; and make adjustments if necessary.
Frontline Managers (execute plans):
Managers who manage employees who are themselves not managers.
Frontline managers must have the skills to deal with employees and customers alike.
They lead their teams and units, and strategize about the best way to do things in their units and about the best
strategies for their functions and the company.
They organize tasks within their teams, monitor the performance of their subordinates, and try to develop the skills
of their subordinates.
In some cases they can influence the destiny of an entire organization.
Typically, CEOs start out as specialists (Functional Managers). A good general manager typically starts off as a
frontline manager. This enables him/her to oversee exactly how things are done at the smallest level in the
organization which will help in their careers as general managers. Mastering the Job:
Initially new managers believed that their job is to exercise formal authority and be the “boss.” They also think they
would be able to continue doing the technical work they had been doing, “only with more power and control.” This
New managers struggle with the fast-paced nature of the job
They are in constant demand from subordinates, peers, and their own bosses. There was little time for quiet
There are many issues requiring attention during a typical day.
They can no longer only perform a functional task, now they have to process a significant amount of mail, deal with
personal issues, and meet with peers and their own bosses, customers, suppliers, and so on.
On average they process 36 pieces of mail each day, attend eight meetings, and take a tour through the building or
A day in the life of an average manager is fragmented, full of different tasks, characterized by constant
interruptions, and involves significant interpersonal networking.
Formal authority was a limited source of power: the most demanding issues managers encounter in their first year
on the job all have to do with “people challenges.”
They have to learn how to influence subordinates, peers, and their own bosses to get things done
They had to establish trust and credibility with their subordinates, peers, and bosses before they could influence
Being known as a star individual contributor is rarely enough; managers earn trust and credibility largely through
interpersonal interactions on the job.
Managers have two sets of responsibilities:
1. Agenda setting for their teams
2. Network building within the organization
Specific behaviors associated with the task of management. Managers adopt these roles to accomplish the basic
functions of management.
Mintzberg developed a list of roles that he grouped into three
categories: interpersonal roles, informational roles, and decisional
I) Interpersonal roles: deal with people
II) Informational roles: deal with knowledge
III) Decisional roles: deal with action
NOTE: Managing is an integrated activity, so these roles are rarely
I. I) Interpersonal Roles:
Roles that involve interacting with other people inside and outside
the organization. Management jobs are people- intensive: Research suggests that managers spend somewhere
between 66 and 80 percent of their time in the company of others
Managers get things done through their network of interpersonal relationships.
1) Figurehead: Managers at all levels are figureheads. They greet visitors, represent the company at community events, serve as
spokespeople, and function as emissaries for the organization.
Even functional and frontline managers perform these figurehead roles. They welcome new staff, help their teams
celebrate performance milestones, give performance awards to employees, accompany senior executives or outside
visitors on tours through the work area, and so on.
Managers behave as leaders to influence, motivate, and direct others within organizations and to strategize, plan,
organize, control, and develop
Managers connect with people outside their immediate units. These may be the managers of other units within the
organization or people outside the organization, such as suppliers, buyers, and strategic partners. An important
purpose of such liaisons is to build a network of relationships.
II) Informational Roles:
Concerned with collecting, processing, and disseminating information. Managers collect information from various
sources both inside and outside the organization, process that information, and distribute it to others who need it.
Managers spend 40 percent of their time in these tasks.
Managers rely on both formal and informal channels to collect the information required for effective monitoring.
Formal channels include the organization’s own internal accounting information systems and data provided by
important external agencies.
Informal channels include the manager’s own personal ne