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Chapter 1

MGT 300 Chapter Notes - Chapter 1: Turnaround Management, Chief Executive Officer, Core Competency

Course Code
MGT 300

of 3
Chapter 1- Management and Managing
Tuesday, August 25, 2015
MGT 300
Organizations are collections of people who work together and coordinate their actions to achieve a
wide variety of goals or desired future outcomes.
These people are responsible for supervising and making the most of an organization's human and
other resources to achieve its goals
Management is the planning, organizing, leading, and controlling of human and other resources to
achieve organizational goals efficiently and effectively
Important goal: provide some kind of good or service that customers value or desire
Organizational performance is a measure of how efficiently and effectively mangers use available
resources to satisfy customer and achieve organizational goals
Efficiency is a measure of how productively resources are used to achieve a goal
Efficient when managers minimize the amount of input resources or the amount of time needed
to produce a given output of goods
Effectiveness is a measure of the appropriateness of the goals that managers have selected for the
organization to pursue and the degree to which the organization achieves those goals
1. Resources are valuable and scarce, so the more efficient and effective use that organizations can
make of those resources, the greater the relative wellbeing of people
2. Almost all of us encounter managers because most people have jobs and bosses
3. Everyone is in competition for a job that pays well and provides an interesting and satisfying
The job of management is to help an organization make the best use of its resources to achieve its
goal. This is done by performing four essential managerial tasks
1. Planning
Three steps involved in planning:
Deciding which goals the organization will pursue
Deciding what strategies to adopt to attain those goals
Deciding how to allocate organizational resources to pursue the strategies that attain those goals
Strategy: a cluster of decisions concerning what organizational goals to pursue, what actions to take,
and how to use resources to achieve those goals
A low-cost strategy is a way of obtaining customer by making decisions that allow an organization
to produce goods or services more cheaply than its competitors so it can charge lower prices than
they do
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2. Organizing is structuring working relationships so organizational members interact and cooperate
to achieve organizational goals
Organizational structure, a formal system of task and reporting relationships that coordinates and
motivates members so they work together to achieve organizational goals
3. Leading: managers articulate a clear organizational vision (short, succinct, and inspiring statement
of what the organization intends to become) for the organization's members to accomplish. They
energize and enable employees so he or she understands the part they play
4. Controlling : the task of managers is to evaluate how well an organization has achieved its goals
and to take any corrective actions needed to maintain or improve performance
Outcome of control process is the ability to measure performance accurately and regulate
organizational efficiency and effectiveness
Quick, immediate reactions to situations are an important aspect of managerial action
To perform the four managerial tasks efficiently and effectively, organizations group or differentiate
their managers in two main ways: by level in hierarchy and by type of skill
o First-line managers: often called supervisors. Responsible for daily supervision of the
nonmanagerial employees
o Middle managers: responsible for finding the best way to organize human and other resources to
achieve organizational goals
o Top managers : responsible for the performance of all departments. They have cross-
departmental responsibility. Page 15
Chief executive officer is a company's most important manager, the one all other top managers
report to
A department is a group of managers and employees who work together because they possess similar
skills and experience or use the same kind of knowledge, tools, or techniques to perform their jobs
p. 13 Managerial Roles Identified by Mintzberg
Top management team: a group composed to the CEO, the COO, and the vice presidents most
responsible for achieving organizational goals
1. Conceptual skills are demonstrated in the general ability to analyze and diagnose a situation and
to distinguish between cause and effect
2. Human skills include the general ability to understand, alter, lead, and control the behavior of
other individuals and groups
3. Technical skills are the job-specific skills required to perform a particular type of work or
occupation at a high level
Core competency is often used to refer to the specific set of departmental skills, knowledge, and
experience that allows one organization to outperform its competitors
Important in gaining a competitive edge
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*one of the biggest problems that people who start small businesses confront is their lack of
appropriate conceptual and human skills
*global competition and advances in IT have created changes
Restructuring involves simplifying, shrinking, or downsizing an organization's operating costs p.18
Outsourcing involves contracting with another company, usually in a low-cost country abroad, to have it
perform a work activity the organization previously performed itself
Empowerment is a management technique that involves giving employees more authority and
responsibility over how they perform their work activities
Self-managed team: a group of employees who assume collective responsibility for organizing,
controlling, and supervising their own work activities
Global organizations: operate and compete in more than one country p. 21
Competitive advantage is the ability of one organization to outperform other organizations because it
produces desired goods or services more efficiently and effectively than its competitors p. 22
Responsiveness to customers
Innovation: the process of creating new or improved goods or services or developing better ways to
produce or provide them
Turnaround management: creation of a new vision for a struggling company based on a new approach
to planning and organizing to make better use of a company's resources and allow it to survive and
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