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Title: Management / authors, Danny Samson; Richard L. Daft.
First published as Management by Dryden Press in 2000. Authorised Edition: 3rd Asia Pacific ed.
adaptation of the fifth edition by the Dryden Press, Orlando, Florida. Publisher: South Melbourne, Vic.: Cengage Learning Australia, 2008.
Adaptation first published in 2003. ISBN: 9780170136709 (pbk.)
Second edition published in 2005. Notes: Includes index. Bibliography.
This edition published in 2008. Target Audience: For tertiary age.
Subjects: Industrial management--Textbooks.
Other Authors/Contributors: Daft, Richard.
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PART ONE
INTRODUCTION
TO MANAGEMENT
Australia is often described as a country that plays above its weight when it comes to sporting achievement an accurate
description, as we saw most recently in the Australian teams achievements at the Sydney 2000 and then Athens 2004
Olympics and the 2007 Cricket World Cup. Similar can be said for New Zealand in respect of its tremendous rugby
union accomplishments.
Whether it is rugby or cricket or business management, innovation is perhaps the ultimate competitive battleground.
Innovative tactics in sport can take the opposition by surprise and create a winning advantage, just as the new product iPod
was a creative innovation which is a big winner for Apple.
Most people can relate to sporting excellence and the levels achieved by elite athletes because they have played sports
themselves. But what do sporting efforts and achievements have to do with management?
According to Rod McQueen,* who was coach and manager of the Wallabies, the team that took Australian rugby
union to its unprecedented domination of the sport from 1990 to 2000, the answer is that sporting success and business
management success come from the same roots. McQueen says* his success with the Wallabies resulted from his use
of the same strategies and tactics that have driven his own success in his business display and services organisation. He
had the Wallabies plan by conducting StrengthsWeaknessesOpportunitiesThreats (SWOT) analyses of competitors.
McQueen also motivated his staff, and the Wallabies, by using innovative management techniques that developed from the
bottom up, increasing motivation and ownership of these ideas.
What is the ultimate goal of a sportsperson, a team or a manager? Doing everything they can to achieve success by
planning and implementing strategies and tactics that lead to that success. In management, as in sport, there are strong
connections between actions what you do and outcomes how well you do.
This explains why so many high achievers in sport go on to achieve success in business or government. Examples
abound, and there are too many leaders who were once great athletes for this to be a coincidence. Perhaps the common
factor is sheer drive and ambition or, as Rod McQueen puts it, the same human and organisational factors and
techniques that work when innovation and high levels of performance are needed, whatever the activity.
In Part One, we look at the skills and roles of managers, and the history and new models of management.
*McQueen, R. (2001). One Step Ahead, Random House: Sydney.
CHAPTER1
Learning objectives
After studying this chapter, you should be able to:
1 describe the four management functions and the type of management activity associated with each
2 explain the difference between efficiency and effectiveness and their importance for
organisational performance
3 describe management types and the horizontal and vertical differences between them
4 describe conceptual, human and technical skills, and their relevance for managers and employees
5 define 10 roles that managers perform in organisations
6 understand the personal challenges involved in becoming a new manager in an organisation in
todays world
7 discuss the management competencies needed to deal with todays turbulent environment,
including issues such as diversity, globalisation and rapid change
8 explain the leadership skills needed for effective crisis management.
Chapter outline
Current challenges for managers What is it like to be a manager?
Challenges for government Making the leap: becoming a new manager
Challenges for business Manager activities: adventures in multitasking
Challenges for the individual employee Manager roles
Managers who make a difference Managing in small businesses and not-
The definition of management for-profit organisations
The four management functions Management and the new workplace
Planning Forces on organisations
Organising The innovative response
Leading New management competencies
Controlling Turbulent times: managing crises and
Organisational performance unexpected events
Management skills Stay calm
Conceptual skills Be visible
Human skills Put people before business
Technical skills Tell the truth
When skills fail Know when to get back to business
Management types Australias managers: improving from a
Vertical differences low base
Horizontal differences Manager strengths
Manager weaknesses
THE CHANGING PARADIGM OF

MANAGEMENT
Management problem
In the 21st century, perhaps a management mantra should be to expect the unexpected.
Times are turbulent, and for managers trying to successfully run their organisations, not
only do they experience ongoing changes with new technologies and market trends, but
large discontinuities and even crises are increasingly common. Here are some recent high
profile examples, but indeed these types of unexpected crises are occurring in virtually
all businesses on an increasing basis:
Middle managers at Pan Pharmaceuticals went to work one day to find that business
was anything but as usual. They were shocked to find that their products were found
to be contaminated, completely recalled on a worldwide basis, and that the company
was later dissolved, costing them their jobs. How could one possibly plan for this?
Massive losses occurred at the National Australia Bank, and scandals ranging from
board level to those in the treasury operation, led to dramatic loss of reputation,
profits and business market share, causing its share price to fall, and driving board
members, including the managing director, to resign. The bank had previously been
the absolute market leader; however, loss of control led to damage to the tune of TAKE A MOMENT
hundreds of millions of dollars and a huge fall from grace. Talented executives left
and the newly appointed CEO was stranded. Many others lost their jobs as a result of How can managers cope with
this high profile crisis. the turbulence and crisis that
Long established building products company, James Hardie, had expanded into the
occur more and more in todays
USA and was doing well until it was hit with very large claims related to the asbestos
workplaces? By definition,
in its older products, which it no longer manufactured. The company quite suddenly
and dramatically was under siege, with boycotts, reputation down the gurgler, and a conventional planning techniques
very large financial liability needed to pay for the claims of illness and death caused do not cope with such events,
by its asbestos-laden products. because they are aimed at
managing during relatively stable
conditions. Think about the
situation facing senior managers
at Pan Pharmaceuticals, National
Australia Bank, or James Hardie
when their various crises hit. What
management style and systems
do you think would enable the
kind of rapid, flexible response
needed to accomplish seemingly
impossible goals amid chaos and
confusion? Jot down two or three
elements that you think might
play a role.
4 PART ONE Introduction to management
In todays turbulent world, managing in times of crisis and confusion is becoming a critical
skill for managers in all kinds of organisations. Certainly, the examples of Pan, National
Bank and James Hardie are exceptional, but many managers deal with uncertainty and
crisis to a lesser extent on an almost daily basis. The floods in the winter of 2007 left many
small businesses in the main street of Newcastle, NSW in severe crisis, with their stock and
fittings ruined, and their financial position in tatters. Consider the strife and confusion in
the music industry, where traditional recording labels and music stores are battling with
the iPod and iTunes phenomenon, and with online file sharing services that let people
download music for free. The once-hot Tower Records declared bankruptcy due to the steep
decline in music sales through traditional stores. Managers in all organisations deal with
uncertainty and unexpected events, whether it is something as small as the loss of a key
employee or something as large and dramatic as a plant explosion. Moreover, the frequency
and intensity of crises have increased over the past couple of decades, with a sharp increase
in the rate of intentional acts such as product tampering, workplace violence, or terrorism.
Solid management skills and actions are the key to helping any organisation weather a crisis
and remain healthy, inspired, and productive.
The nature of management is to cope with diverse and far-reaching challenges. Managers
have to keep pace with ever-advancing technology, find ways to incorporate the Internet
and e-business into their strategies and business models, and strive to remain competitive
in the face of increasingly tough global competition, uncertain environments, cutbacks in
personnel and resources, and massive worldwide economic, political, and social shifts. The
growing clout, expertise, and efficiency of China and India, in particular, have many of
Australias and New Zealands companies very worried. To gain or keep a competitive edge,
companies have renewed their emphasis on innovation, shifting away from a relentless focus
on controlling costs towards investing in the future. In a recent global survey of nearly 1000
executives, 86 per cent agreed that innovation is more important than cost reduction for
long-term success.
The shift towards new ways of working, enabled by technology, puts additional demands
on todays managers. Many employees are always on the move, juggling laptops, mobile
phones, and Blackberrys to keep in electronic touch with customers, teammates, and
managers who may have limited face-to-face contact. In the new world of work, managers
need a new approach that relies less on command and control and more on coordination
and communication. The field of management is undergoing a revolution that asks managers
to do more with less, to engage whole employees, to see change rather than stability as the
nature of things, and to inspire vision and cultural values that allow people to create a truly
collaborative and productive workplace. This approach differs significantly from a traditional
mind-set that emphasises tight top-down control, employee separation and specialisation,
and management by impersonal measurement and analysis.
Making a difference as a manager today and tomorrow requires integrating solid,
tried-and-true management skills with innovative approaches that emphasise the human
touch, enhance flexibility, and engage employees hearts and minds as well as their bodies.
Successful departments and organisations dont just happen they are managed to be that
way. For example, the success of rock groups from the Rolling Stones to U2 to Green Day
relies not just on good songs, musical talent, and performance skills but also on solid business
management. We always said it would be pathetic to be good at the music and bad at the
business, said Paul McGuinness, U2s band manager. The Irish rock band is still selling out
CHAPTER 1 The changing paradigm of management
5
concerts and moving millions of albums a year after nearly three decades by paying attention
to some business basics, such as forming a partnership with Apple for a special edition iPod
and collaborating with iTunes to produce the industrys first downloadable version of a box set
(Carr, 2005). Managers in every organisation have the opportunity to make a difference.
This textbook introduces and explains the process of management and the changing ways
of thinking about the world that are becoming critical for managers of today and tomorrow.
By reviewing the actions of some successful and not-so-successful managers, you will learn
the fundamentals of management. By the end of this chapter, you will already recognise some
of the skills managers use to keep organisations on track, and you will begin to understand
how managers can achieve astonishing results through people. By the end of this book,
you will understand fundamental management skills for planning, organising, leading, and
controlling a department or an entire organisation. In the remainder of this chapter, we
will define management and look at the ways in which roles and activities are changing for
todays managers. The final section of the chapter talks about a new kind of workplace that
has evolved as a result of changes in technology, globalisation, and other forces, and examines
how managers can meet the challenges of this new environment.
Current challenges for managers

Managers have both challenges and opportunities, whatever the size and industry or sector
that they work in. We can consider the new challenges of the workplace at three levels:
government, business and individual.
Challenges for government

Imagine the vast range of challenging issues managers face in the three levels of government
in Australia federal, state and municipal (local shire or council). Consider the challenges of
providing competitive services and sound policy frameworks on such difficult issues as health
care, education, transport, economic management, local services defence and protection,
environmental management and a host of others. What regulations should govern the
growing telecommunications industry and the competition between mobile phone suppliers?
What safety standards should apply in the chemical industry, and what hygiene standards in
the food industry? An issue may be specific, such as what to do about the acute shortage of
capacity for aircraft movement in Sydney (the second Sydney airport problem), what to do
about the drought, the water shortage and climate change, or it may be a more general issue,
such as how to fund health care as our population continues to age.
The list of challenges for government at all three levels is virtually endless. Most
involve allocating limited resources between alternatives, where conflicting objectives and
tradeoffs between interest groups need to be considered. Although most of the challenges
of government are managerial challenges, many are also policy challenges. Some are purely
policy issues without much direct monetary cost to the government; for example, should the
government preserve or relax the existing four pillars policy in our banking industry, which
prevents mergers or acquisitions between the big banks (ANZ, Commonwealth, National
and Westpac) and limits competition? Another hot policy issue in Australia is the native title
debate: Australian mining companies claim that their exploration activities, and hence the
next generation of wealth-producing mines, are being delayed or curtailed by the uncertainty
and lack of resolution in this debate.
The acts of terrorism in the USA, Bali and elsewhere challenged the Australian
government to quickly formulate policy and act decisively, both in shoring up Australias
security systems and in supporting the anti-terrorist efforts of its allies.
Governments in Asia have also faced many challenges, including dealing with economic
uncertainty. Countries such as Singapore are lifting their economic activity after a painful
recession. In addition, Asian governments are responding to the critical levels of air, water
and land pollution that have occurred as they have industrialised. Asias 3.5 billion people are
breathing toxins at unacceptable levels, with 12 of the worlds 15 worst-polluted cities being
in Asia. The past two decades of growth and increased prosperity in Asia have led to these
outcomes, which are not sustainable in the long term. The estimated total costs of pollution
in China are as high as 10 per cent of gross domestic product (GDP). Hotels in Hong Kong
have banded together to improve their energy consumption and reduce their pollutants.
Pollution from forest burning in Indonesia is impacting the air and reducing tourism in both
Indonesia and Malaysia.
Governments have many challenges in regulating the way that business does business.
In Australia, New Zealand and elsewhere, government regulators are constantly working to
ensure that businesses do not unfairly take advantage of consumers, workers or competitors.
Governments make and implement laws against unfair trading, paying below minimum wage
levels, unsafe work places or practices, pollution, nondisclosure of information, monopolistic
practices and cartel behaviours, misinforming consumers and a host of other things. Managers
within government have great responsibility on their shoulders in advising politicians and
interpreting and implementing policies. Managers in industry must ensure that their firms
continuously comply with literally hundreds of laws.
Challenges for business

The challenge of pollution control and sustainable development is not just for governments,
but clearly also for the business sector and for individuals as consumers. For example,
the tourism industry of a region or country can be significantly affected by air pollution,
undrinkable water and other environmental problems. In Australia, the MurrayDarling
River system has been compromised and continues to be threatened, and salinity and water
shortage are widespread problems in the farming sector. Vast resources are needed to address
these problems, and farming businesses will need to work cooperatively with governments
for decades to come (Finer, 2001).
Many Australian businesses now sell their products and services overseas as well as
domestically, and many Australian managers have consequently been exposed to the sharp
competitive forces of the Asian, American and European marketplaces in which they
do business. They have learned a great deal as a result. Even more important has been
the translation of that learning into improved and widespread knowledge, practices and
behaviour in Australian-based organisations. Further, many Australian businesses are not
just buying and selling their raw materials and products and services outside Australia, but
are also establishing operations outside Australia. These include retailers, banks, mining
companies, manufacturers, distributors, software houses, Internet-based businesses and a
variety of other enterprises.
In the business sector, large enterprises such as Telstra, Coles and the big banks each
employ tens of thousands of people and are constantly faced with the challenge of managing
the enormous costs of these labour forces. Managers who do not do what their bosses and
7
boards expect do not last in their positions, such as the Telstra CEO, Ziggy Switkowski, who
agreed to finish his term as CEO in 2005 due to disagreements with his board of directors. A
similar situation occurred in the USA in 2005 when high-profile female role model, Carly
Fiorina, was forced to leave her chief executive leadership role at Hewlett-Packard, one of
the worlds most powerful companies, due to disagreements with the HP board of directors.
The challenge is smaller in scale, but similar, in the local milk bar, petrol station, 7-Eleven
or McDonalds. In essence, this challenge is to continually generate enough revenue to pay
all the firms costs for labour, rent, materials, energy, advertising and other expenses, while
also producing a profit for the business owner that will be a sufficient return on investment.
And while doing all this, managers must ensure that they and their companies comply with
a myriad of laws: tax laws, labour standards, reporting of information, pollution control,
consumer protection and many others.
In 2001, insurers RACV and NRMA combined their service departments and increased
their premiums in order to ensure their profitability. But such profitability is far from guaranteed
in business. While RACV and NRMA were working on cost reduction and revenue strategies
that were largely successful, another major insurer, HIH, became insolvent. Major and
minor companies that get their strategies wrong can destroy value and jobs, as we saw in the
cases of Ansett, HIH, OneTel, James Hardie, Pan Pharmaceuticals, and National Australia
Bank. Managers in businesses are charged with the responsibilities of creating value for their
shareholders and employing staff to create that value. Their challenges are to design products
and services; support these with production facilities, equipment, computers and software; hire
and keep the right people; and successfully market their offerings to customers.
And the strategies and decisions that governments, businesses and individuals make
increasingly are being taken in the face of uncertainty. A 2004 study of senior executives
conducted at London Business School found that decision making, negotiation skills and
agility in dealing with people and customers were key to what makes for successful leaders
and managers at all levels. And we must remember how easy it is to fall off the log of success:
just consider the National Australia Bank. It went from being a darling of the Australian
market and the leader in its industry in the 1990s under the leadership of Don Argus to
being a scandal-ridden company with a falling share price after Mr Argus passed on the reins
of leadership to a successor. This led to shareholders losing about a quarter of their wealth,
and the embarrassing resignations of the board chairman, board members and the managing
director. Many employees were sadly shed in the related tightening associated with this
major Australian corporate crisis in 2004. This company clearly shows how even the mightiest
companies can fall from grace when leaders and managers get it wrong. Under Don Argus,
the bank grew its share price 600 per cent, moved towards globalisation and increased annual
profits from A$500 million to over A$3 billion. Its market leadership was unquestioned for a
decade. Under the next CEO, overseas assets were sold, the bank had to pull back from the
global model that it had aspired to, and shareholders suffered badly. Management missteps
can occur in any sized business, in any industry, and customers, shareholders and regulators
are generally unforgiving in todays frenetic world of business.
Challenges for the individual employee

For the individual who wants to exchange work for money in the labour market, the challenge
of getting and keeping a job is to demonstrate the skills, attitude and continuing performance
of output that are valuable to the employer and justify the costs of employment. In a business
environment that has spent the last decade shedding labour and seen high unemployment in
the economy, individual competitiveness for jobs is a continuing challenge, and the notion
of job security is for most of us a thing of the past. This poses a challenge to individuals:
planning their next job. A career becomes a series of employment relationships. Most
university graduates will have many different roles and jobs over their working life. How
do we, as individuals wanting to achieve a good return on the human capital we invest in
our work, maximise our competitiveness in achieving and retaining a series of suitable jobs?
Individuals must value-add to the organisations that employ them. The challenge of being
individually competitive in the workplace follows the challenge of being competitive in
school, and getting into a suitable course at university, then graduating and getting a job
that meets expectations.
For governments, companies and individuals, the challenge of being competitive
never stops!
Managers who make a difference

The turbulence and change in todays competitive business environment has led to a
revolution in the field of management. A new kind of leader is needed who can guide
organisations through this turbulence a strong leader who recognises the complexity of
todays world and realises there are no perfect answers. Unanticipated crises must somehow
be prepared for. The revolution asks managers to see change rather than stability as the
nature of things, and to create vision and cultural values that allow people to foster a truly
collaborative workplace, even under the most difficult conditions. Consider the international
tourism industry once severe acute respiratory disease (SARS) hit in China and elsewhere.
Hotel operators in Queenstown (New Zealand), Alice Springs (Australia) and Kuala Lumpur
(Malaysia) all suffered, as did every airline in the world. This unpredictable event had a wide
and deep impact, as did the major terrorism acts in New York, Bali and Spain. How can a
manager forecast or at least prepare for what might happen next in their industry?
This new management approach is very different from a traditional mind-set that
emphasises fixed, tight, top-down control, employee separation and specialisation, and
management by impersonal measurement and analysis. Australian enterprises that want to
be part of a successful and positive economic future are responding to this revolution towards
a new management paradigm, or way of thinking.
Making a difference as a manager today and tomorrow requires a different approach from
yesterday. Successful departments and organisations do not just happen they are managed to
be that way. Managers in every organisation face major challenges and have an opportunity
to make a difference.
Lee Iacocca made a difference at Chrysler when he rescued it from bankruptcy by reducing
internal costs, developing new products and gaining concessions from lenders, the union
and government. In the role of CEO at the National Australia Bank (NAB), Don Argus
made a difference by transforming the organisation from a local Australian bank to a global
financial services provider, with substantial businesses in Europe, the USA, New Zealand
and Asia. Massive investments, new technology and numerous reorganisations had to be
smoothly and efficiently accomplished to make all that happen, and ultimately it all had to
be done at a profit, because keeping shareholders satisfied by giving them a good return on
their investment is a must. Argus led the organisation through an unprecedented period of
9
profitable growth and left very big shoes for his successor, Frank Cicutto, to fill. The challenge
of 15 per cent annual profit growth that Argus set and achieved during his years at the helm of
the NAB ultimately proved too difficult to sustain. The strategies that Argus set in place for
growth and globalising were adjusted by Cicutto, who sold a significant NAB business in the
USA (Homeside) and reduced the banking groups commitment in that country. He did this
to pursue a new and different focus for developing the organisation. The financial challenges
Cicutto faced in 2001 led to his announcing a major reorganisation of the company in order
to reduce costs, after admitting to having underestimated the strength of competitive force
in its USA Homeside business and writing down the value of that asset by more than A$3
billion (Kavanagh, 2001). Then trading losses and boardroom brawls brought the whole
company into strife and significantly damaged its reputation and share price.
AUSTRALIAN MANAGER PROFILE

Don Argus, Chief Executive Officer (199099), National Australia Bank
Don Argus became CEO of the National Australia Bank in October performance levers to pull. In pursuing this challenge we realised that
1990. The bank had balance sheet footings of A$129 billion, an a process had to be seen as a value chain. By its contribution to the
after-tax profit of A$767 million and a market capitalisation of A$7.1 creation or delivery of a product or service, each step in the process
billion. The share price was A$5.86. In 1999, Argus reported: As I should add value to the preceding steps. Our organisation is only
close my chapter of the National Australia Bank history we now have as effective as its processes and if you are going to get continuous
balance sheet footings of A$340 billion, we generated an after-tax improvement, understanding processes and process management
profit of A$2511 million and we now have a market capitalisation is critical because it requires actions that are often counter-cultural
exceeding A$41 billion with a share price of over A$29. Our average in traditional hierarchies. There is no doubt in my mind that process
compound profit growth year on year has been 16 per cent. improvement programs, efficiently implemented, reap hard benefits
Arguss skills as a manager included bringing a sense of integrity such as the resolution of critical business issues and the improvement
and ethics to the organisation, but above all, his key capability was of systems as well as soft benefits, such as cross-functional
to think strategically and not get bogged down in the detail that teamwork and the establishment of a customer-focused continuous
confronted him each day. He created and led a team of some 40 key improvement culture.
global executives who worked around him to implement the vision There is no express highway on this journey, but little changes
and strategy that he created. implemented extraordinarily well will develop the right momentum.
When reflecting on his role, Argus commented: At the time of (Mr Argus has since gone on to the role of chairman of the board of
commencing my stewardship of the bank we were beginning to feel the worlds biggest diversified mining company BHP Billiton. He has
the impact of managing globally with different social cultures, and it led the board of this company through a major period of growth and
became very obvious that we needed a rally call for the Group if we shareholder wealth creation.)
were to pursue a common strategy and achieve the objectives we SOURCE: Contributed by Don Argus.
set. In conjunction with our people we developed a vision, a mission
and a values statement, but this was not enough as we confronted
an industry being challenged by a technology revolution, an industry
that was very bureaucratic, spawned from a regulated environment;
and an industry where customer demands were changing rapidly. We
needed to invest in new distribution footprints, but at the same time
Don Argus, a leading figure in
preserving productivity gains so essential to maintaining a competitive Australian banking throughout
edge as we confronted the changes. the 1990s, saw his stewardship
With that sort of challenge we had to create an infrastructure for of the National Australia Bank
as an opportunity to position
systemic and continuous improvement of performance. Everyone in the organisation as a global
the organisation recognised the challenge, but few understood which player in the world of finance.
Graeme Boyles made a difference when he was production manager at Trico, a

manufacturer of windscreen wipers in Clayton, a suburb of Melbourne. The company was
losing its customers and losing money, too, when Boyles led a manufacturing and cultural
turnaround over a 10-year period. Using just-in-time manufacturing techniques, this
company is now competitive enough to be exporting to Asia and the USA. If the company
had been closed down as has happened to many Australian manufacturing companies that
find themselves uncompetitive more than 100 jobs would have been lost and another group
of people, including Boyles, would have joined the unemployment queues. The turnaround
has led to two decades of job creation, local wealth creation, and exports instead of imports
which is a positive both for the Australian economy and for Boyles, who was promoted to
managing director. However, even after a long and distinguished career with Trico, a global
reorganisation in 2001 led to Boyless early retirement (Boyles, 2002).
Chanut Piyaoui made a difference by changing the somewhat unsavoury reputation of
Thai hotels as places of entertainment, as she delicately phrased it. With little initial capital,
Chanuts vision and management skills created Thailands leading hotel chain. Asiamoney
magazine ranked her Dusit Thani Group as one of the 100 best-managed companies in Asia
(Kraar, 1991).
These managers are not unusual. Every day, managers solve difficult problems, turn
organisations around and achieve astonishing performances. To be successful, every
organisation needs skilled managers.
CASE STUDY
Air New Zealands budget air travel strategy in a volatile world
A
The new century started well for Air New Zealand, but in the USA, war in Iraq and the outbreak of SARS in
then rapidly turned disastrous. In April 2000, an alliance parts of Asia. Business-class travel was drastically curtailed.
with Singapore Airlines was formalised. In June 2000, Air Adding to the woes, a new breed of budget airlines
New Zealand completed the purchase of Ansett Holdings, threatened the economy class travel of full-service carriers
the owner of Australias second-largest airline. This made such as Air New Zealand.
Air New Zealand one of the worlds top 20 airlines. Over New strategic directions were needed and came first with
A$1 billion had been spent acquiring Ansett. Within 18 the launch of Freedom Air. This no-frills airline offered
months, Ansett was placed into voluntary administration. domestic travel between New Zealands main cities and later
The competitive strategy of becoming a global airline extended the budget operation to trans-Tasman flights. In
went into tailspin when Singapore Airlines indicated it November 2002, Air New Zealand launched a new express
was no longer interested in further investment in Air New class on its domestic air service. This saw the scrapping
Zealand. The airline survived only when the New Zealand of business class, complimentary meals and beverages. In
Government stepped in and became its major owner. return, fares were reduced by up to 50 per cent, although the
The simultaneous collapse of Air New Zealands main lowest fares were available through Internet booking only.
domestic competitor, Qantas New Zealand, paradoxically Airport waiting times were reduced through kiosk-style
added to the pressures facing the airline. With no serious check-in stations for Air New Zealand passengers. Freedom
competitor left for air travel within New Zealand, the way Air was withdrawn from domestic New Zealand routes
was open for a new budget airline to enter the market and to concentrate on low-cost travel to Australian tourist
take significant market share from the high-cost incumbent. destinations. In October 2003, a Tasman express service
These specific Air New Zealand challenges came when on Air New Zealand flights between New Zealand and
air travel was in near collapse following the terrorist attacks Australia reduced fares by an average of 25 per cent with
11
the introduction of online booking and caf-style catering Air New Zealands four-year strategy for growth aiming
in place of designer cuisine. A Pacific express service for at securing it as the airline of choice when flying to, from
Pacific Island destinations was introduced in 2004. or within New Zealand emphasises everyday low fares,
These strategies have helped Air New Zealand back advanced online booking facilities, fast check-in and
from the brink of collapse. Passenger numbers expanded boarding times, improved flight frequencies and loyalty
in response to the express-class services sufficient to bring recognition (with air dollars to replace air points for
a profit in 2003. Internet ticket sales accounted for over a frequent flyers). The risk is that its service level becomes
third of domestic bookings after 12 months. In June 2004, stuck in the middle between low-cost budget carriers such
Air New Zealand was sufficiently confident to announce as Pacific Blue and full-service airlines. Air New Zealand
an order for 10 new aircraft to service international routes. does not match true budget airlines whose low price,
Reflecting on the turnaround, the Air New Zealand CEO no-frills operations are based on:
Ralph Norris noted that: Surviving in a fast-moving and no complimentary in-flight catering
commercially brutal environment requires strategic bravery cabin crews doubling up as cleaners, offering speedy
taking calculated risks to remain ahead of the wave of turnaround times at airports
change Lowering fares and simplifying the product keeping aircraft in use; for example, by staying out of the
offering ahead of the competition is not the usual behaviour market for connecting flights that multiply risks of delays
of an incumbent market leader. He also cautioned that the using secondary airports and only one type of aircraft to
airline was still under substantial competitive threat. reduce operation costs
New entrants including Pacific Blue, Virgins low saving selling costs by cutting out travel agents
fare international carrier, and Emirates have intensified high staff loyalty to charismatic founder entrepreneurs
competition on the key trans-Tasman routes. In 2003, such as Richard Branson at Virgin Airlines and Stelios
Air New Zealands share of that market fell below 30 per Haji-Ioannou of EasyJet.
cent for the first time. The airline has identified a strategic At the same time, on domestic and short-haul
alliance with Qantas as vital for its long-term future, but international travel, express class has lost some aspects of its
competition authorities in Australia and New Zealand have distinctive, high-quality, in-flight service.
refused to approve a tie-up of their countrys largest carriers. SOURCE: Air New Zealand. Annual Report 2003.
Contributed by Martin Perry, Massey University.
The definition of management

When John Stewart took over the top job as CEO of National Australia Bank, his challenge
was to rescue it and turn around its poor fortunes and negative trajectory. He needed to
regain control, gain the confidence of his senior executive team and indeed all staff, and
devise and implement strategies and tactics that would succeed. He also had to spend a lot
of time and effort convincing customers, journalists and share market analysts and investors
that his plan would work.
What are the key behaviours and characteristics of successful managers like John Stewart,
who has indeed turned the fortunes of the National Australia Bank around? Managers create
the systems, conditions, and environment that enable organisations to survive and thrive
beyond the tenure of any specific supervisor or manager. Jack Welch was CEO of General definition of
management
Electric through 20 amazingly successful years, and some observers worried that GE would
falter without him. Yet the leadership transition to Jeff Immelt in 2001 was as smooth
as silk, and in 200506 GE once again topped Fortune magazines list of Most Admired
Companies, as well as ranking number one on the Financial Times most respected survey,
and Barrons ranking of most admired companies. People who have studied GE arent
surprised. The company has thrived for more than a century because managers throughout
the years created the right environment and conditions: a shared sense of purpose and pride,
a passion for change and willingness to take risks, and most importantly an obsession with
people and making them the best they can be. The obsession with developing leaders at all
levels began in the late 1800s with CEO Charles Coffin, who emphasised that GEs most
important product was not lightbulbs or transformers, but managerial talent. Every manager
at GE is required to spend a huge amount of time on human resources issues recruiting,
training, appraising, mentoring, and developing leadership talent for the future (Colvin,
2006; Morris, 2006).
One management scholar, Mary Parker Follett, described management as the art of getting
John Stewart, CEO of the National Bank, has things done through people (Stoner & Freeman, 1989). Peter Drucker, a noted management
revitalised and re-energised the organisation
in the eyes of all its stakeholders, particularly theorist, explains that managers give direction to their organisations, provide leadership and
customers, shareholders and employees by decide how to use organisational resources to accomplish goals (Drucker, 1974). Getting
putting all the unfortunate losses behind
him, getting back to basics and driving new things done through people and other resources, and providing direction and leadership, are
improvement initiatives into the organisation in what managers do. These activities apply not only to top executives such as Don Argus or
a comprehensive three-year plan.
John Stewart, but also to a team supervisor in a local Coles or Woolworths supermarket. The
same applies to the leader of a cleaning crew, a supervisor in a bottling plant or a director of
marketing for Coca-Cola. Moreover, management often is considered universal because it
uses organisational resources to accomplish goals and attain high performance in all types of
profit and not-for-profit organisations.
Thus, our definition of management is as follows:
management Management is the attainment of organisational goals in an effective and efficient
The attainment of organisational goals in manner through planning, organising, leading and controlling organisational resources.
an effective and efficient manner through
planning, organising, leading and controlling Two important ideas are expressed in this definition: (1) the four functions of planning,
organisational resources. organising, leading and controlling; and (2) the attainment of organisational goals in an
effective and efficient manner. Managers use a multitude of skills to perform these functions.
Managements conceptual, human and technical skills are discussed later in this chapter.
Exhibit 1.1 illustrates the way managers use resources to attain organisational goals. Although
some management theorists identify additional management functions, such as staffing,
EX H I B I T 1.1
communicating or decision making, those additional functions are discussed as subsets of
The process of
management the four primary functions in Exhibit 1.1. Chapters of this book are devoted to the multiple
Management functions
Planning
Select goals and
ways to attain them
Resources Performance
Human Controlling Organising Attain goals
Financial Monitor activities Assign Products
Raw materials and make corrections responsibility for task Services
Technological accomplishment Efficiency
Information Effectiveness
Leading
Use influence to
motivate employees
13
activities and skills associated with each function, as well as to the environment, global TAKE A MOMENT
competitiveness and ethics, which influence how managers perform these functions. The
next section begins with a brief overview of the four functions. As a new manager, remember
that management means getting
The four management functions things done through other people.

You cant do it all yourself. As
The functions of planning, organising, leading and controlling are integral to the role of a manager, your job is to create
a manager. the environment and conditions
that engage other people in goal
Planning accomplishment. What behaviours
would help you to accomplish this?
Planning defines where the organisation wants to be in the future and how to get there.
Planning means defining goals for future organisational performance and deciding on the tasks
and use of resources needed to attain them. At Time Warner, Inc., the marketing chiefs of
the various divisions HBO, Time Inc., Turner Broadcasting, Warner Bros., AOL, New Line
Cinema, and Time Warner Cable get together every three weeks to talk about future
planning
projects and how the divisions can work together to make them more successful. Thanks to The management function concerned with
careful planning, for example, almost every division was involved in promoting the final film defining goals for future organisational
performance and deciding on the tasks and
in The Lord of the Rings trilogy (Anders, 2002). resource use needed to attain them.
Allan Linney, proprietor of Linneys Jewellery Business, operates retail outlets in Perth
and Broome in Western Australia. He is known in Australia and elsewhere for his award-
winning pearl and diamond designer jewellery. When Allan set up a business in 1972, the
high margins available to a successful jewellery designer allowed him to get away with a lack planning
of planning, and he did not manage his costs as carefully as he might have liked. But once
he studied the costs in his business a business that employs 26 people and has revenue of
more than A$5 million he found that many of his costs were neither well measured nor
under control. For example, he found that for the first 10 months of the year he worked
just to break even, the profit coming from the other two months. He now has a detailed list
of costings, including staff amenities, business publication subscriptions, freight, computer
expenses, consumables, wages, insurance, business trips and so on. The principle is that if
you measure your costs in detail, you have a better chance of managing them and keeping
them under control (Kennedy, 1996).
Just as Allan Linney must plan his business actions and strategies, large businesses must
do exactly the same. When John Ellice-Flint returned to Australia in 2001 after 26 years of
working for Unocal in the USA, he took control of Santos, a large South Australian oil and
gas exploration and production company. He found that Santos had drilled but not developed
more than 125 gas wells, incurring a cost of more than A$150 million without return.
As CEO, he produced and has implemented an eight-point plan: reservoir optimisation,
acquisitions, exploration, gas commercialisation, cost cutting, infrastructure improvements,
value-chain innovation and cultural change. As a result, Santos, which is Australias second-
biggest oil business (after Woodside), is increasing its revenues and profits nicely (Brown,
1999). By 2006, Santos had increased its revenues to $2.7 billion and was also Australias
biggest gas producer. Ellis-Flint resigned as chief executive in March 2008.
In the turbulent business environment of the new millennium, planning becomes an
even more important part of doing business effectively, even though it must be admitted
that no one can plan for a completely unexpected event. Effective managers and staff make
contingency plans by trying to imagine scenarios that may occur and being prepared for
them. An example would be to increase the proportion of casual staff, so the company can
react more quickly to cut costs during a downturn; however, this strategy may have other
costs in the areas of employee loyalty and motivation. Good planning must be more than just
aspirational statements such as how many can we make and sell? Good planning involves
understanding the enterprises environment and how it is changing, forecasting changes as
best you can, and considering how to position the enterprise to make its market offerings
(products and services) attractive. Good planning then overlaps with organising: working out
the details of the resources necessary to achieve all this, and how they will be marshalled.
Beverley Honig, managing director of Melbourne-based professional services provider
Honeylight Enterprises, is a very successful manager who values planning. As she puts
it, Excellent results stem from a combination of skilled management, strategic thought
and a good dose of general common sense. How many organisations today look into the
complexities of situations, while forgetting these basic fundamentals of good business
management? Strategic management involves both planning and action. So why then do
many managers act without plans, and others plan without seeing their plans through? It is
not enough to aim you must also hit! (Honig, 1999).
CASE STUDY
India: A hot bed of competition for mobile phones
Fortune magazines The most important strategy for Mittal in achieving

Asian Businessman such growth and doing so at a profit was not to try
of the Year (2007) and do it all himself. Learning from what happened
was Sunil Mittal who in China, Mittal realised that many well-established
has achieved a 20 per foreign companies were very keen to get a foothold in the
cent market share in potentially huge and rapidly growing markets in India.
the booming mobile Mittal took good business advantage of that. He did deals
phone market of India. with Ericsson of Sweden, Siemens of Germany, IBM of
His company, Bharti USA and Nokia of Finland which brought him excellent
Tele-Ventures, has quality of technology and service standards and also
outgrown traditional brought strong leadership and management systems. By
large Indian firms bringing in technology and service providers and having
Tata and Reliance. a solid and reliable backing to his business, Mittal was
The growth in the able to focus on marketing and sales growth rather than
mobile phone market being preoccupied with service and technology and the
has been little short of product challenges which would be very substantial in an
incredible in India. Mittal had to hire some 20 000 people independent start-up. He clearly started with some of the
to serve over 30 million customers with mobile phone worlds best technology and infrastructure providers. Mittal
services and is reporting some $4 billion in revenue which has gone against conventional wisdom in making these
is eightfold growth in just four years. Profit earnings of strategic partnerships a central element of his business
some $1 billion are extraordinary in this industry because strategy. Mittal has used his business knowledge to expand
of the investments required and indeed this is accomplished from mobile phones into other industries. He is using his
when major rivals are all making losses. Bhartis shares have brand and reputation to do similarly in these industries as
risen 500 per cent in four years and Mittal is one of Indias he did in telecommunications. He has launched a joint
richest men. venture with Frances AXA to sell life insurance in India
15
and an independent business venture is moving fresh fruit attention and business. While possibilities of a full merger
and vegetables from India to European supermarkets. A appeal to some shareholders but not to others, billions of
recent announcement was to team up with Americas dollars are at stake. Interestingly, mobile phones are rapidly
Wal-Mart and drive forward in retailing. Mittal takes great becoming much more than just a medium for communication
advantage of these mature companies systems in each of his using voice and SMS messaging. Email and Internet access
business ventures. Such joint ventures provide an excellent and even increasingly widespread consumer advertising is
match of Mittals reputation and marketing knowledge in occurring in the worlds mobile phone markets. A new trend
the local Indian market and the back office excellence of in the USA and Europe and coming to virtually every mobile
Wal-Mart. This is not really different from AXAs back phone market is the possibility of customising mobile phone
office management of insurance and Nokias, Siemens, advertisements such as those by Coca-Cola, Canon, BMW,
IBMs and Ericssons expertise in mobile phones. Mittal has Pepsi and Nike, knowing their individual demographic
shown great shrewdness and business acumen in tying up properties. Mobile telephony is likely to get a reasonable slice
these global giants and leveraging their knowledge in the of the $800 billion advertising expenditure on a global basis.
fast growing market of India. Mittal has built a formidable empire in one of the worlds hot
Sunil Mittals Bharti competes fiercely with Vodafone and growth markets with the aim of growing as these technology
at the same time shares the 70 000 telecom tower network trends develop.
that they had separately established but now collaborate on SOURCES: Helper, M. (5 March 2007). Advertising Goes Mobile. Fortune, 14;
Elliot, J. (5 March 2007). Friends, Foes and Future Phone Mates. Fortune, 12;
with something approaching 60 million customers. These two Levinsteen, J. (22 January 2007). Businessman of the Year:
companies have been competing fiercely for the customers Asia. Fortune, 359.
Organising
Organising typically follows planning and reflects the way the organisation tries to
accomplish the plan. Organising involves the assignment of tasks, the grouping of tasks into organising
departments, and the allocation of resources to departments. For example, Hewlett-Packard, The management function concerned
with assigning tasks, grouping tasks into
National Australia Bank and Xerox all have undergone structural reorganisations to departments, and allocating resources to
accommodate their changing plans. Semco, a Brazilian company making industrial pumps, departments.
mixers, propellers and other products, reorganised from a highly structured, autocratic
business into a company run on trust, freedom and democracy. Six people rotate as CEO,
each putting in six-month stints. Employees set their own work schedules, organising
themselves to accomplish their tasks. Semcos loose organisation has been so successful that
executives from Mobil, IBM and hundreds of other organisations have travelled to So organising
Paulo to study Semco and see the operation at first hand (Semler, 1993, 1989). Honeywells
managers reorganised new product development staff into tiger teams consisting of
marketing, engineering and design employees. The new structural design reduced the time
required to produce a new thermostat from four years to 12 months (Bussey & Sease, 1988).
Many organisations today are following Honeywells lead by reorganising into teams that
have more responsibility for self-management.
Leading
Providing leadership is becoming an increasingly important management function. Leading is leading
the use of influence to motivate employees to achieve organisational goals. Leading means The management function that involves the use
of influence to motivate employees to achieve
creating a shared culture and values, communicating goals to employees throughout the the organisations goals.
organisation, and infusing employees with the desire to perform at a high level. Leading
involves motivating entire departments and divisions as well as

those individuals working immediately with the manager.
Well-known managers such as Don Argus and Lee Iacocca are
exceptional leaders. They are able to communicate their vision
throughout the organisation and energise employees into action.
However, one does not have to be well known to be an exceptional
leader. Many managers work quietly to provide strong leadership
within departments, teams, not-for-profit organisations and small
businesses, as well as in major corporations. For example, Charlie
Bell had been with McDonalds for all of his working life some
26 years having joined as a part-time kitchen hand in Kingsford,
Sydney at the age of 15. From that humble beginning, he became
Teamwork is an important way of organising managing director of the Australian operations of the company, and was then asked to run
work processes. Some teams are permanent
and meet regularly, while others are project the AsiaPacific division. He ran the whole of the McDonalds European division, growing at
teams that meet to accomplish a task and the rate of some 500 stores per year, and generating more than A$1.15 billion per annum of
then disband. Teams can be composed
of people drawn from any part of the operating income. Bells leadership emphasised communication, people skills and motivation,
organisation, from the factory shopfloor and was massively successful. Bell led McDonalds Europe into an era in which, he believed,
through to the boardroom.
people are time-poor, so convenience and value for money are critical to strategy (Hannan,
2001). His success propelled him into the top job at McDonalds, global chief executive, at a
time when it needed to change, introduce new products and compete like never before in its
mature markets. He subsequently left the company due to his ill health, and died of cancer in
2005, but not before leaving a legacy of the highest ideals of service orientation, dedication
and new strategies in the company.
In times of uncertainty, international competition and growing diversity in the workforce,
the ability of leaders to shape culture, communicate goals and motivate employees is critical
to business success. Beverley Honig of Honeylight Enterprises sees this as an exciting
challenge to the professional development of todays managers: We all have skills and talent.
What is rare is the courage to apply that talent to the unknown place where it leads, and
so develop as both a manager and an individual. Change is daunting for the unimaginative
manager, and an opportunity for the ambitious one (Bartlett & Ghoshal, 1995a).
Controlling
controlling Controlling is the fourth function in the management process. Controlling means monitoring
The management function concerned with employees activities, determining whether the organisation is on target towards its goals, and
monitoring employees activities, keeping the
organisation on track towards its goals, and making corrections as necessary. Managers must ensure that the organisation is moving
making corrections as needed. towards its goals. New trends towards empowerment and trust of employees have led many
organisations to place less emphasis on top-down control and more emphasis on training
employees to monitor and correct themselves. At ISS (International Service System), the
Danish company that grew from a local office-cleaning contractor to a US$2 billion
controlling multinational business, the entire control system is built on the belief that people at all levels
will make the right decisions if they are provided with the appropriate information. Front-line
employees are thoroughly trained to measure their own performance against company
standards and make corrections needed. Ongoing training programs at Accenture (formerly
Andersen Consulting) instil into every employee the firms core values and standards of
expected performance, enabling the firm to give its employees great freedom without
endangering the firms high standards.
17
However, managers must realise that what works in one organisation or one situation
may not work in another. The Mars (Uncle Bens) pet-food operations in Australia are
responsible for most of the major brands of pet food (such as Pal) in Australias supermarkets.
The company runs an open-styled culture: at Uncle Bens head office in Wodonga, Victoria,
even the most senior executives sit near sales clerks in a single, large, open-plan office area.
However, an example of a managerial control in Mars is that everyone, without exception,
clocks on when they arrive at work each day. It works for them, and is a part of the way Mars
organises all around the world (Newton & Castledine, 1999). The challenge to managers is
to find the right mix between employee empowerment and maintaining adequate control.
As head of operations at financial services company Perpetual, David Bryant manages
140 staff. He has learned that rather than trying to do it all himself, he should concentrate
on lifting the performance of his substantial group of staff. In his industry, like most, a key
part of being a good manager is to balance mentoring and motivating the staff with keeping
solid control over the business operation. As an up-and-coming management professional,
Bryant says that to keep himself motivated, he must have challenges and opportunities in
front of him. These are usually to develop the business further, but underneath this the
existing operations must be fundamentally sound and efficient, meaning that they must be
in control (Walters, 2001).
While many companies are trimming their sails and seeking conservative positions and
strategies following the turmoil and terrorism of 2001, Peter Lau and his staff at Giordano are
doing pretty much the opposite. Lau claims to have been waiting for a downturn as a time to
gain market advantage. Born in Hong Kong and trained in accounting in Canada, Lau took
Giordano from 360 clothing outlets in Asia to more than 1000, while generating an impressive
US$100 million profit from US$ 850 million of sales. He repositioned the brand and company
from cut price to middle market, and appealed to the growing middle class of Asia. Lau cut
costs and halved inventory turnover time from 52 days to 26. This means extremely rapid
turnover of stock, so new fashions can be offered, stockholding costs are reduced, and the
risk of being caught with redundant garments is minimised. Lau plans to aggressively expand
Giordano while others are closing stores around Asia (Asiaweek.com, 2001).
Organisational failure can occur when managers are not serious about control or lack control
information. Australian banks lose money every week due to employee fraud. At BP Australia,
a fraud of more than A$1 million was perpetrated by employees something only possible
because of a lack of control procedures (Vear, 1998). And from a shareholders perspective, how
do those who invested their life savings in Bond Corporation or in the business activities of the
late Christopher Skase feel about the losses they incurred? These so-called entrepreneurs of
the 1980s each built corporate empires in Australia, mostly with other peoples money. Many
who invested or lent money to these businessmen in good faith lost it in circumstances that
led Alan Bond to serve a few years in jail, and caused Skase to flee Australia to a country from
which extradition was extremely difficult. Did their companies have good managerial control
systems to prevent the misuse of shareholders funds? Similar problems have been occurring
in New Zealand, Malaysia, Japan, China, the USA and elsewhere.
Although the detection of fraud is certainly not the primary motivation for wanting to
have good control systems in an organisation, it is an important consideration. In every
country it is a concern for managers, and shareholders as well. While good managerial
controls can never absolutely guarantee performance or security of assets, they are a critical
ingredient of sound management.
The corporate collapses of 2002, which saw the end of companies such as Enron and
WorldCom, were a catalyst for corporate America to undergo a fundamental rethink of its
control systems for 2003 and beyond. A similar thing has happened in Australia where we
have had Ansett, HIH Insurance and other high-profile bankruptcies, and corporate scandals
such as at the National Bank. These incidents have major implications for the future.
Technology can help in control processes. New information technology is also helping
managers provide needed organisational control without strict top-down constraints.
Companies such as Cisco Systems and Oracle use the Internet and other information
technology to coordinate and monitor virtually every aspect of operations, which enables
managers to keep tabs on performance without maintaining daily authoritarian control
over employees. Cisco employees have amazing freedom to make decisions and take action,
but they also know that top managers keep a close eye on whats going on throughout the
company with just a few mouse clicks.
Organisational performance
The other part of our definition of management is the attainment of organisational goals
in an efficient and effective manner. Management is important because organisations are
important. In an industrialised society where complex technologies dominate, organisations
organisational bring together knowledge, people and raw materials to perform tasks no individual could do
performance
alone. Without organisations, how could thousands of airline flights a day be accomplished
without accident? How could electricity be produced from large dams or coal-fired generators,
millions of cars be manufactured, or hundreds of films, videos and compact discs be made
available for our entertainment? Organisations pervade our society. Many students will work
in an organisation perhaps Coles or Woolworths supermarkets, BP or Shell petrol stations,
or McDonalds. Students are already members of several organisations: university or TAFE,
churches, sporting clubs or social organisations. Students also deal with organisations every
day to get or renew a drivers licence, be treated in a hospital emergency room, buy food
from a supermarket, eat in a restaurant or buy new clothes. Managers are responsible for these
organisations and for seeing that resources are used wisely to attain organisational goals.
organisation Our formal definition of an organisation is a social entity that is goal directed and deliberately
A social entity that is goal directed and structured. A social entity is made up of two or more people. Goal directed means being
deliberately structured.
designed to achieve some outcome, such as make a profit (all companies such as manufacturers
and banks seek this), win pay increases for members (the unions), meet spiritual needs (any
church) or provide social satisfaction (clubs). Being deliberately structured means that tasks
are divided, and responsibility for their performance is assigned to organisation members.
This definition applies to all organisations, whether profit-making or not-for-profit.
Based on our definition of management, the managers responsibility is to coordinate
resources in an effective and efficient manner to accomplish the organisations goals.
effectiveness Organisational effectiveness is the degree to which the organisation achieves a stated goal. It
The degree to which the organisation achieves means that the organisation succeeds in accomplishing what it tries to do. Organisational
a stated goal.
effectiveness means providing a product or service that customers value. Organisational
efficiency efficiency refers to the amount of resources used to achieve an organisational goal. It is based
The use of minimal resources raw materials, on how much raw materials, money and people are necessary for producing a given volume
money and people to produce a desired
volume of output. of output. Efficiency can be calculated as the amount of resources used to produce a product
or service.
19
Both efficiency and effectiveness can be high in the one

organisation. For example, at the ORICA Botany site in
Sydney a large petrochemical complex that makes basic
plastics and related chemicals needed for everyday life,
such as soap and plastic bags productivity was low due
to the poor management relationship with plant operating
staff and maintenance workers. After a long and difficult
strike, a new management approach succeeded in bringing
the workforce into alignment with management goals
and nearly all workers were put into staff and salaried
positions. New cooperative working arrangements led to
dramatic improvements in efficiency more than 100
per cent in many parts of the business. These efficiency
improvements went hand in hand with improvements in
areas such as quality and service, and delivery reliability. Toyota has made massive investments in
its Altona car plant in Victoria, where it
The improved customer satisfaction led to higher sales volumes and the achievement of produces Camry and Aurion models for the
business effectiveness as measured by the goals of significantly improved cash flow and Australian market and for export. Managing
this complex operation provides many
profitability (Howie & Moore, 1995). challenges for managers. Thousands of parts
Similarly, the Australian automotive industry has spent 20 years reinventing itself in and components must be brought together
to produce vehicles that are as close as
terms of its efficiency and effectiveness. All the car assemblers in Australia principally possible to perfectly assembled. One of
Ford, General Motors Holden and Toyota have increased their labour efficiency from low these challenges is how best to combine
labour input with sophisticated technologies,
levels in the 1980s to those approaching internationally competitive standards, involving such as the robots shown here, in order
productivity increases of more than 50 per cent over five or 10 years (Thomas, 1999). To to maximise the productivity and quality of
the operation. In 2008, Toyotas quality
achieve this, they have had to work closely with numerous component suppliers who make in Australia is as good as or better than
their parts. At the same time, they have made their cars much more to the taste and liking anywhere else in the world, but it is still
challenged by its cost position and lack of
of consumers. Increased customer satisfaction has kept them in business and helped achieve market scale in Australia.
their effectiveness goals of survival and profitability. With their increased efficiency and
effectiveness, they are all beginning or expanding export programs. It is important to note
that such organisations can never afford to sit back and enjoy their success for long. Fierce
levels of international competition mean that no matter how much better they are than
before, they must constantly strive to improve their Quality, Cost, Delivery (QCD) profile.
If they do not, they will quickly lose market share, sales and profits, and ultimately will be
closed down. This is the marketplace challenge for managers and all others who work in our
organisations. All markets require our organisations to continually work at levels today that
are simultaneously faster, better, cheaper than yesterday.
Exactly the same challenge facing the Australian car industry faced Don Argus and
his colleagues at the helm of the National Australia Bank. This chapters Australian
Manager Profile box describes some of the challenges met by Don Argus while he was
CEO. He succeeded and his successor failed. Other players have entered the Australian
financial services market General Electric and Merrill Lynch, for example bringing
with them enormous scale and experience of worlds best products and business
practices.
In service businesses, as in manufacturing, executives know they cannot implement
business improvement, efficiency and effectiveness gains without the active help and drive
of their whole workforce. This applies to Michael Luscombe, new CEO of the Woolworths
group, and his 150 000 plus employees, as much as it does to an owner of a small business
that employs three people offering hair styling services in almost every suburban shopping
centre in the world. This challenge is never-ending for a manager.
Some research has shown that family-owned companies, or those dominated by one
individual, are better performers. Companies such as Westfield Holdings and Harvey Norman
have achieved superlative returns on investment over the past few years, outperforming
many large publicly listed companies in their industry. Other notable family companies that
have been very successful in Australia include Rebel Sport, WH Soul Pattinson, Village
Roadshow, Blackmores, Aristocrat Leisure, Hoyts, Hills Industries, News Corporation,
Southern Star Group, and Publishing and Broadcasting Ltd. Over a seven-year period, these
companies shares outperformed the All Ordinaries (stock exchange index) by more than
performance 300 per cent (Ferguson, 1998). Yet for many investors, painful memories remain of what can
The organisations ability to attain its goals by go wrong when companies are dominated by a single individual or family. The companies of
using resources in an efficient and effective Alan Bond and Christopher Skase are striking examples.
manner
Management skills
A managers job is complex and multidimensional and, as we shall see throughout this
book, requires a range of skills. Although some management theorists propose a long list of
skills, the necessary skills for managing a department or an organisation can be summarised
in just three categories: conceptual, human and technical (Katz, 1974). As illustrated by
Exhibit 1.2, the application of these skills changes as managers move up in the organisation.
Although the degree of each skill necessary at different levels of an organisation may vary,
all managers must possess skills in each of these important areas to perform effectively.
EX H I B I T 1.2
Relationship of
conceptual, human
and technical skills to
management level
Management Level
Top managers
Middle managers Conceptual skills Human skills Technical skills
First-line managers
Non-managers (personnel)
Conceptual skills
conceptual skill Conceptual skill is the cognitive ability to see the organisation as a whole and the relationship
The cognitive ability to see the organisation as among its parts. Conceptual skill involves the managers thinking, information-processing
a whole and the relationship among its parts.
and planning abilities. It involves knowing where ones department fits into the total
organisation and how the organisation fits into the industry, the community, and the broader
business and social environment. It means the ability to think strategically to take the
broad, long-term view.
Conceptual skills are needed by all managers, but are especially important for managers
at the top. They must perceive significant elements in a situation, and broad conceptual
patterns. For example, Microsoft, the giant software company, reflects the conceptual skills of
its founder and chairman, Bill Gates. General business goals are clearly stated and effectively
21
communicated throughout the company, contributing to Microsofts leadership reputation

and billion-dollar revenues. While actively participating in and coordinating small units
devoted to functional areas such as programming and marketing, Gates spreads his concept
for Microsoft by delegating to a cadre of strong managers. As Scott Oki, senior vice-president
for sales and marketing, pointed out: Each part of the company has a life of its own now, but
Bill is the glue that holds it all together (Schlender, 1990).
As managers move up the hierarchy, they must develop conceptual skills, or their
promotability will be limited. A senior engineering manager who is mired in technical
matters rather than thinking strategically will not perform well at the top of the organisation.
Many of the responsibilities of top managers such as decision making, resource allocation,
and innovation require a broad view.
Human skills
Human skill is the managers ability to work with and through other people and to work human skill
effectively as a group member. This skill is demonstrated in the way a manager relates to The ability to work with and through other
people and to work effectively as a group
other people, including the ability to motivate, facilitate, coordinate, lead, communicate and member.
resolve conflicts. A manager with human skills allows subordinates to express themselves
without fear of ridicule and encourages participation. The ANZ Bank is a company that relies
heavily on the quality of its people for its success. This bank has taken tremendous strides
forward in the past 10 years, led by its very human and personable (recently retired) CEO,
John McFarlane, who has introduced a whole new culture of making the ANZ people
friendly to its staff. Staff satisfaction at the ANZ has risen from 49 per cent to 85 per cent,
with a resultant rise in customer satisfaction, and increased profitability.
A manager with human skills likes other people and is liked by them. Yet it is more
than a like-ability factor that sets successful managers apart from the rest. They must have
good judgement for decisions such as hiring and setting company policy, which are just as
important a capability as being able to get on with people. Imagine if John McFarlane at
ANZ was the worlds most likeable person, but lacked sound judgement: would this make
for a good CEO or, indeed, a manager at any level? Clearly not. Mr McFarlane retired at
the end of 2007 and new CEO Michael Smith has taken on the challenge of continuing to
drive this initiative forward.
In recent years, awareness of the importance of human skills has increased. Such books
as In Search of Excellence and A Passion for Excellence were among the first to stress the need
for managers to take care of the human side of the organisation. As globalisation, workforce
diversity and competition for highly skilled knowledge workers increase, human skills become
even more crucial. Ken Alvares, who runs worldwide human resources for Sun Microsystems,
says: Our goal is to keep people so busy having fun every day that they dont even listen when
the headhunters call. Its working Suns turnover of hard-to-find engineers is about two-
thirds lower than the competitions (Hof et al., 1996). A recent survey by Fortune magazine
found that managers human skills are important to employee motivation and retention as
well as to overall organisational performance. A primary factor in attracting, motivating and
retaining talented workers at companies such as Coles, ANZ, NAB, Fletcher Challenge in
New Zealand, Qantas and AXA is top management that makes employees feel valued and
inspired, and promotes close working relationships that are fun (Fisher, 1998). Effective
managers are cheerleaders, facilitators, coaches and nurturers. Jack H. Grossman, a professor
emeritus at the Kellstadt Graduate School of Business at DePaul University in the USA, uses
the metaphor of a master gardener to stress the importance of human skills. What does it
take to grow good flowers, fruits, and vegetables? he asks. It takes good soil, and thats what
a manager tries to create by being sensitive, nurturing, and trying to bring out the best in
people (Grant, 1998; Lieber, 1998).
To encourage Singaporean workers who make paging devices to collaborate with a sister
plant in Florida, Motorola managers flew the workers to a Colorado resort for bonding and
team-building exercises. Excellent managers do not take people for granted. When IBM first
set up its Australian manufacturing facility in rural Wangaratta, it hired farm workers to
assemble sophisticated golf-ball typewriters. To achieve the necessary skills in the workforce,
three months of training in Canada was arranged for these workers, some of whom had
never previously been more than 100 kilometres from Wangaratta. One worker inquired
about whether they would be going home every weekend. That workforce went on to be a
successful, loyal and long-serving group of team players using state-of-the-art surface-mount
technology to assemble electronic circuit boards and PCs (McCune, 1997).
John Lees and then his successor, Stephen Grant, of the Transport Accident Commission
(TAC) are examples of managers with good human skills. Upon taking up the chief
executive reins at TAC, Lees measured employee satisfaction in the organisation using a
formal questionnaire that was filled out by all staff. One weakness in the organisation was
communications: staff did not feel informed about where the organisation was headed, and
nor did they feel that communication and feedback up to higher levels of the organisation
was going well. So he took appropriate action, including markedly increasing the frequency,
TAKE A MOMENT quality and degree of informativeness of the internal newsletter of his organisation. He also
instituted a practice of regular meetings with groups of staff, over coffee and lunch, to hear
Complete the experiential
what was on their minds and keep in touch with the daily heartbeat of the organisation.
challenge on page 42 that pertains
to management skills. Reflect on This was not rocket science, but when the same survey questions were put to employees a year
the strength of your preferences later, they assessed the communications in the organisation as very much improved. These
among the three skills and the practices were so successful that when Lees moved on to work in the USA, the new CEO,
implications for you as a manager. Stephen Grant, continued and enhanced them. Grant built on the established foundation to
develop a style of organisation that is clearly about getting things done through people.
Technical skills
technical skill Technical skill is the understanding of and proficiency in the performance of specific tasks.
The understanding of and proficiency in the Technical skill includes mastery of the methods, techniques and equipment involved in
performance of specific tasks.
specific functions such as engineering, manufacturing or finance. Technical skill also includes
specialised knowledge, analytical ability and the competent use of tools and techniques to
solve problems in a specific discipline. Geoff Castledine, manufacturing plant manager at the
Uncle Bens plant in Wodonga, Victoria, needed a variety of technical skills to make a good
judgement and decision about putting in a new cooker for the pet food. The company
produces more than two million cans of pet food every day at this site, and Castledine needed
engineering skills, marketing and sales forecasting skills, financial skills and production
management skills to be integrated by his team of managers in order to make a sound decision
(Newton & Castledine, 1999).
When skills fail

During turbulent times, managers really have to stay on their toes and use all their skills
and competencies to benefit the organisation and its stakeholders employees, customers,
23
investors, the community, and so forth. In recent years, numerous, highly publicised
examples showed us what happens when managers fail to effectively and ethically
apply their skills to meet the demands of an uncertain, rapidly changing world. Recent
examinations of struggling organisations and executives offer a glimpse into the mistakes
managers often make in a turbulent environment (Finkelstein, 2003; Slocum et al. 2002).
Perhaps the biggest blunder is managers failure to comprehend and adapt to the rapid
pace of change in the world around them. For example, even though Xeroxs PARC
research centre practically invented the personal computer, top managers resisted getting
into the computer business until it was too late to even get in the game, much less have a
chance at winning. A related problem is top managers who create a climate of fear in the
organisation, so that people are afraid to tell the truth. Thus, bad news gets hidden and
important signals from the marketplace are missed. Other critical management missteps
include poor communication skills and failure to listen; treating people only as instruments
to be used; suppressing dissenting viewpoints; and the inability to build a management team
characterised by mutual trust and respect.
Management types
Managers use conceptual, human and technical skills to perform the four management
functions of planning, organising, leading and controlling in all organisations large and small,
manufacturing and service, profit and not-for-profit. But not all managers jobs are the same.
Managers are responsible for different departments, work at different levels in the hierarchy
and meet different requirements for achieving high performance. For example, Gail Kelly has
made her name as a CEO in building St George Bank into having a very high reputation for
good customer service, profitability and growth, and has now taken on the major challenge
of moving into the same role in the bigger and more complex Westpac Bank.
In a much smaller business (Dryen Australia), Peter Dryen has assumed the top job of
CEO in the business his father, George, started 40 years ago. Peter has all the same types of
responsibilities as Ms Kelly has at Westpac, ranging from employee safety and motivation,
through customer satisfaction to the financial bottom line, as well as many types of legal
compliance. The difference, of course, is in the scale and the resources that are involved in
these executives challenges and opportunities.
Vertical differences
An important determinant of the managers job is hierarchical level. Three levels in
organisational hierarchy are illustrated in Exhibit 1.3. Top managers are at the top of the top manager
hierarchy and are responsible for the entire organisation. They have such titles as managing A manager who is at the top of the
organisational hierarchy and is responsible for
director, chairperson, executive director, chief executive officer (CEO) and general manager. the entire organisation.
Top managers are responsible for setting organisational goals, defining strategies for achieving
them, monitoring and interpreting the external environment, and making decisions that
affect the entire organisation. They look towards the long-term future and concern themselves
with general environmental trends and the success of the organisation as a whole. Among
the most important responsibilities for top managers are communicating a shared vision for
the organisation, shaping corporate culture and nurturing an entrepreneurial spirit that can
help the company keep pace with rapid change. Today, more than ever before, top managers
must engage the unique knowledge, skills and capabilities of each employee (Bartlett &
Ghoshal, 1995b).
middle manager Middle managers work at middle levels of the organisation and are responsible for business
A manager who works at the middle levels of
the organisation and is responsible for major units and major departments. Examples of middle manager positions are department head,
departments. division head, manager of quality control, and director of the research lab. Middle managers
typically have two or more management levels beneath them. They are responsible for
implementing the strategies and policies defined by top managers. Middle managers generally
are concerned with the near future and are expected to establish good relationships with peers
around the organisation, encourage teamwork and resolve conflicts.
The middle managers job has changed dramatically over the past two decades. During the
1980s and early 1990s, many organisations became lean and efficient by laying off middle
managers and slashing middle management levels. Traditional pyramidal organisation charts
were flattened to allow information to flow quickly from top to bottom and decisions to be
made with greater speed. The shrinking middle management is illustrated in Exhibit 1.3. For
example, Kodak cut middle management by 30 per cent and reduced its middle management
levels from seven to three. GE Medical Systems also went from seven layers of management
to three between 1985 and 1995 (Rogers, 2001; Thomas, 2001; Wall Street Journal, 1998;
Hymowitz, 1990).
However, although middle management levels have been reduced, there is a renewed
vitality in the middle managers job as companies recognise the need for a new type of
manager. The Association of Executive Search Consultants reports that searches for middle
managers increased 58 per cent in 1997 (Wall Street Journal, 1998). Todays middle manager,
rather than managing the flow of information up and down the hierarchy, is responsible for
EX H I B I T 1.3
Management
levels in the
organisational
hierarchy
CEO
Top managers
General
Corporate Manager,
or Group Adminis-
Head tration
Business Unit Head

General Administrator
People at these Manager
levels may also Middle managers
have horizontal Department Manager
project manager
Product Line or Information
responsibility
Service Manager Services Manager
Functional Head
First-line
Production, Sales, MIS, HRM,
managers
R&D Supervisor Accounting Supervisor
Non-managerial employees
Line jobs Staff jobs
SOURCE: Adapted from Bonoma & Lawler, 1989.
25
creating a horizontal network since most work is now organised around teams, processes
and projects. People who succeed as middle managers in todays world are those who are
constructively critical of the status quo, have a high degree of personal power based on good
relationships throughout the organisation, are versatile and adaptable, and possess solid
interpersonal skills, including the ability to empathise with others and help others grow
and excel (Huy, 2003; Colvin, 1998; Wall Street Journal, 1998; McCune, 1997). The value
of todays middle manager has become evident in organisations that have suffered major
crises, where middle managers mobilised employees and successfully executed disaster plans
or took it upon themselves to perform amazing acts that helped the organisation get up and
running again.
Middle managers status has also escalated because of the growing use of teams and projects
in todays organisations. Strong project managers are in white-hot demand throughout the
corporate world. A project manager is responsible for a temporary work project that involves project manager
the participation of people from various functions and levels of the organisation, and perhaps A manager responsible for a temporary work
project that involves the participation of other
from outside the company as well. Todays middle manager may work with a variety of people in the organisation.
projects and teams at the same time, some of which cross geographical and cultural, as well
as functional, boundaries. In this environment, middle managers need new skills: the ability
to inspire and motivate; negotiating skills; a willingness to listen and the ability to
communicate clearly; conscientiousness and integrity; and the ability to manage change and
conflict (McCune, 1997).
First-line managers are directly responsible for the production of goods and services. They first-line manager
are the first or second level of management and have such titles as supervisor, line manager, A manager who is at the first or second
management level and is directly responsible
section chief and office manager. They are responsible for groups of non-management for the production of goods and services.
employees. Their primary concern is the application of rules and procedures to achieve
efficient production, and to provide technical assistance and motivate subordinates. The time
horizon at this level is short, with the emphasis on accomplishing day-to-day goals.
Horizontal differences
The other major difference in management jobs occurs horizontally across the organisation.
Functional managers are responsible for departments that perform a single functional task and functional manager
have employees with similar training and skills. Functional departments include advertising, A manager who is responsible for a
department that performs a single functional
sales, finance, human resources, manufacturing and accounting. Line managers are responsible task and has employees with similar training
for the manufacturing and marketing departments that make or sell the product or service. and skills.
Staff managers are in charge of departments such as finance and human resources that support
line departments.
General managers are responsible for several departments that perform different functions. general manager
A general manager is responsible for a self-contained division, such as a Myer department A manager who is responsible for several
departments that perform different functions.
store, and for all of the functional departments within it. Project managers also have general
management responsibility, because they coordinate people across several departments to
accomplish a specific project.
Project management is a vital role in todays flatter, de-layered organisations, and it
enables middle managers to contribute significantly to corporate success. As William
Kelvie, chief information officer for the US Federal National Mortgage Association,
said: Automation and empowerment take away the need to have managers oversee the
day-to-day work. Everything has become projects (Stewart, 1995). Companies as diverse
as consumer products and aerospace firms use project managers to coordinate people from
marketing, manufacturing, finance and production when a new product is developed.

As companies continue to reduce hierarchical levels and move towards flatter, more
horizontal structures, more people with project management skills will be needed. Project
managers need significant human skills, because they coordinate diverse people to attain
project goals.
What is it like to be a manager?

So far we have described the way managers at various levels perform four basic functions
that help ensure that organisational resources are used to attain high levels of performance.
These tasks require conceptual, human and technical skills. Unless someone has actually
performed managerial work, it is hard to understand exactly what managers do hour by hour,
day by day. The managers job is so diverse that a number of studies have been undertaken
in an attempt to describe exactly what happens. The question of what managers actually
do to plan, organise, lead and control was first answered by Henry Mintzberg, who followed
managers around and recorded all their activities (Mintzberg, 1994, 1973). He developed
a description of managerial work that included three general characteristics and 10 roles.
Subsequent research supported his categorisation (Kaplan, 1984; Stewart, 1984; Kotter,
1982; McCall et al., 1978).
More recently, research looked at what managers like to do. The research found
that both male and female managers most enjoy activities such as leading others,
networking, and leading innovation. Activities managers like least include, controlling
subordinates, handling paperwork, and managing time pressures. Interestingly, managers
in five different countries showed substantial agreement among these preferences (Konrad
et al., 2001). Many new managers in particular find the intense time pressures of
management, the load of administrative paperwork, and the challenge of directing others
to be quite stressful as they adjust to their new roles and responsibilities. Indeed, the
initial leap into management can be one of the scariest moments in a persons career
(Slayter, 2002).
Making the leap: becoming a new manager

Many people who are promoted into a manager position have little idea what the job actually
entails and receive little training about how to handle their new role. Its no wonder that,
among managers, the first-line supervisors tend to experience the most job burnout and
attrition (Belker & Topchik, 2005; Webber, 1991; Falvey, 1989; Lorsch & Mathias, 1987;
London, 1985; Dougherty, 1984; Badawy, 1982).
Organisations often promote the star performers those who demonstrate individual
expertise in their area of responsibility and have an ability to work well with others both
to reward the individual and to build new talent into the managerial ranks. But making the
shift from individual contributor to manager is often tricky. You can become overwhelmed
by the challenge of supervising former peers, keeping up with paperwork, and understanding
financial and operational issues (White, 2005). New managers struggle every day with the
transition to their new jobs. One study followed a group of 19 managers over the first year
of their managerial careers and found that one key to success is to recognise that becoming
a manager involves more than learning a new set of skills. Rather, becoming a manager
means a profound transformation in the way people think of themselves, called personal
27
From Individual Identity To Manager Identity

Specialist, performs specific tasks Generalist, coordinates diverse tasks
EX H I B I T 1.4
Making the leap
from individual
Gets things done through own efforts Gets things done through others performer to
An individual actor A network builder manager
Works relatively independently Works in highly interdependent manner
SOURCE: Based on Exhibit 1.1, Transformation of identity, in Hill, Linda A. (2003). Becoming a Manager: Mastery of a New
Identity, 2nd edn, Boston MA: Harvard Business School Press, p. 6.
identity, which includes letting go of deeply held attitudes and habits and learning new ways
of thinking (Hill, 2003).
Exhibit 1.4 outlines the transformation from individual performer to manager. The
individual performer is a specialist and a doer. His or her mind is conditioned to think in
terms of performing specific tasks and activities as expertly as possible. The manager, on the
other hand, has to be a generalist and learn to coordinate a broad range of activities. Whereas
the individual performer strongly identifies with his or her specific tasks, the manager has to
identify with the broader organisation and industry. In addition, the individual performer gets
things done mostly through his or her own efforts, and develops the habit of relying on self
rather than others. The manager, though, gets things done through other people. Indeed, one
of the most common mistakes new managers make is wanting to do all the work themselves
rather than delegating to others and developing others abilities (Belker & Topchik, 2005;
White, 2005). To be a successful manager means thinking in terms of building teams and
networks, becoming a motivator and organiser within a highly interdependent system of
people and work. Although the distinctions may sound simple in the abstract, they are
anything but. In essence, becoming a manager means becoming a new person and viewing
oneself in a completely new way.
Many new managers have to make the transformation in a trial by fire, learning on the job
as they go, but organisations are beginning to be more responsive to the need for new manager
training. The cost to organisations of losing good employees who cant make the transition
is greater than the cost of providing training to help new managers cope, learn, and grow. In
addition, some of todays organisations are using great care in selecting people for managerial
positions, including ensuring that each candidate understands what management involves
and really wants to be a manager. For example, FedEx offers a training course for aspiring
managers called Is Management for Me? A career as a manager can be highly rewarding,
but it can also be stressful and frustrating.
Manager activities: adventures in multitasking

One of the most interesting findings about managerial activities is how busy managers are
and how hectic the average workday can be. Managerial activity is characterised by variety,
fragmentation and brevity (Mintzberg, 1971). The managers involvements are so widespread
and voluminous that there is little time for quiet reflection. The average time spent on
any one activity is less than nine minutes. Managers shift gears quickly. Significant crises
are interspersed with trivial events in no predictable sequence (Deutschman, 1992). An
example of just two typical hours for general manager Janet Jones follows. Note the frequent
interruptions and the brevity and variety of tasks.
7.30 a.m. Janet arrives at work and begins to plan her day.
7.37 a.m. An employee, Matthew Cook, stops in Janets office to discuss a dinner party
the previous night and to review the costbenefit analysis for a proposed
microcomputer.
7.45 a.m. Janets secretary, Pat, motions for Janet to pick up the telephone: Janet, they
had serious water damage at the city office last night. A pipe broke, causing
about $50 000 damage. Everything will be back in shape in three days. Thought
you should know.
8 a.m. Pat brings in the mail. She also asks for instructions for typing a report Janet
gave her yesterday.
8.14 a.m. Janet gets a phone call from the accounting manager, who is returning a call
from the day before. They talk about an accounting report.
8.25 a.m. A Mr Nance is ushered in. Mr Nance complains that a sales manager mistreats
his employees and something must be done. Janet rearranges her schedule to
investigate this claim.
9 a.m. Janet returns to the mail. One letter is from an irate customer. Janet dictates a
helpful, restrained reply. Pat brings in phone messages.
9.15 a.m. Janet receives an urgent phone call from John Baldwin. They discuss lost
business, unhappy staff and a potential promotion (Saunders & Jones, 1990;
Kotter, 1982).
The manager performs a great deal of work at a relentless pace (Mintzberg, 1971).
Managers work also requires great energy. The managers observed by Mintzberg processed
36 pieces of mail each day, attended eight meetings, and took a tour through the building
or plant. As soon as a managers daily calendar is set, unexpected disturbances erupt. New
meetings are required. During time away from the office, executives catch up on work-related
reading and paperwork. Now with email and mobile phones everywhere, managers can be
contacted by an ever-increasing group of people, who want immediate answers, from inside
and outside the organisation.
In recent years, many managers jobs have become even tougher. Management can be
rewarding, but it can also be frustrating and stressful, as discussed in this chapters Managers
Shoptalk box. As the job of a manager becomes
increasingly tough, a certain degree of staying
power is essential for success.
The USA-based Federal Express (FedEx) group has set a

benchmark for delivery of packages and information. Organising
more than 200 000 employees and contractors in an industry with
millions of customers is a huge management challenge. FedEx
continues to grow larger and more powerful around the world,
and could not have built this strong global network unless its
people wanted to do whatever it takes to deliver for customers.
Staff satisfaction is central to its understanding of the best way
to create satisfied customers, and happy customers generate
financial returns to reward shareholders. FedEx claims: Our
exceptional people make the difference.
29
MANAGERS SHOPTALK
Do you really want to be a manager?
Is management for you? Becoming a manager is considered by most being a manager, says that the first time she had to fire someone,
people to be a positive, forward-looking career move and, indeed, she agonised for weeks over how to do it. New managers are
life as a manager offers appealing aspects. However, it also holds often astonished at the amount of time it takes to handle people
many challenges, and not every person will be happy and fulfilled problems. Kelly Cannell, who quit her job as a manager, puts it
in a management position. Here are some of the issues would-be this way: Whats the big deal [about managing people]? The big
managers should consider before deciding they want to pursue a deal is that people are human To be a good manager, you have
management career: to mentor them, listen to their problems, counsel them, and at the
The increased workload. It isnt unusual for managers to work end of the day you still have your own work on your plate Dont
7080 hours per week, and some work even longer hours. A man- take the responsibility lightly, because no matter what you think,
agers job always starts before a shift and ends hours after the managing people is not easy.
shift is over. When Ray Sarnacki was promoted to manager at an Being caught in the middle. Except for those in the top echelons,
aerospace company, he found himself frustrated by the incessant managers find themselves acting as a backstop, caught between
travel, endless paperwork, and crowded meeting schedule. He upper management and the workforce. Even when managers
eventually left the job and found happiness in a position earning disagree with the decisions of top executives, they are responsible
about one-fifth of his peak managerial salary. for implementing them.
The challenge of supervising former peers. This issue can be For some people, the frustrations of management arent worth it.
one of the toughest for new managers. They frequently struggle to For others, management is a fulfilling and satisfying career choice
find the right approach, with some trying too hard to remain one and the emotional rewards can be great. One key to being happy as a
of the gang, and others asserting their authority too harshly. In manager may be carefully evaluating whether you can answer yes to
almost all cases, the transition from a peer-to-peer relationship to the question, Do I really want to be a manager?
a manager-to-subordinate one is challenging and stressful. SOURCES: White, Erin (21 November 2005). Learning to Be the Boss. Wall Street
Journal: B1; Sandberg, Jared (27 July 2005). Down Over Moving Up: Some New Bosses
The headache of responsibility for other people. A lot of people Find They Hate Their Jobs. Wall Street Journal: B1; Row, Heath (FebruaryMarch
get into management because they like the idea of having power, 1998). Is Management for Me? That Is the Question. Fast Company: 502; Schellhardt,
Timothy D. (4 April 1997). Want to Be a Manager? Many People Say No, Calling Job
but the reality is that many managers feel overwhelmed by the Miserable. Wall Street Journal: A1, A4; Murray, Matt (25 July 2000). Managing your
responsibility of hiring, supervising, and disciplining others. Laura Career the Midcareer Crisis: Am I in This Business to Become a Manager?
Kelso, who today thrives on the fast pace and responsibility of Wall Street Journal: B1.
NEW MANAGER SELF-TEST

Manager role and reality
Rate each of the following items based on what you think is the appropriate emphasis for that
task to your success as a new manager of a department. First, read each item and check either
High Priority or Low Priority. Second, go through the list again and change answers as needed
so that four items are scored as High Priority and four are scored as Low Priority.
High Low
Priority Priority
1 Spend 50 per cent or more of your time in the care and feeding of people.
2 Make sure people understand that you are in control of the department.
3 Use lunches to meet and network with peers in other departments.
4 Implement the changes you believe will improve department performance.
5 Spend as much time as possible talking with and listening to

subordinates.
6 Make sure jobs get out on time.
7 Reach out to your boss to discuss his expectations for you and your
department.
8 Make sure you set clear expectations and policies for your department.
INTERPRETATION: A big surprise for most new managers is that important than holding on to old work skills, or emphasising
they are much less in control of things than they expected. New control and task outcomes. Successful outcomes typically will
managers typically expect to have power, to be in control, and occur if relationships are solid. Bad relationships may undercut
to be personally responsible for departmental outcomes. In fact the new managers efforts.
they are dependent on subordinates more than vice-versa, because SCORING: All eight items in the list may be important, but the
they are now evaluated on the work of other people rather than odd-numbered items are considered more important than the even-
on their own work. They have to let go of their identity as an numbered items for long-term success as a new manager. If you
individual performer and immerse themselves into the dynamics checked three or four of the odd-numbered items, consider yourself
of their department. After a year or so they learn that more than ready for a management position. A successful new manager discovers
half their time is spent networking and building relationships that a lot of time has to be spent in the care and feeding of people.
with other people, especially direct reports. People who fail in
their job as new manager typically do so because they had poor SOURCES: Adapted from research findings reported in Hill, Linda A. (2003).
Becoming a Manager: How New Managers Master the Challenges of Leadership,
working relationships with subordinates, peers, or their boss, 2nd edn, Boston, MA: Harvard Business School Press;
or they misjudged management philosophy or cultural values. Gabarro, John J. (1987). The Dynamics of Taking Charge.
Developing good relationships in all directions is typically more Boston, MA: Harvard Business School Press.
TAKE A MOMENT Life on speed dial

The manager performs a great deal of work at an unrelenting pace (Mintzberg, 1973).
Are you ready to step into a job Managers work is fast paced and requires great energy. The managers observed by Mintzberg
as a new manager? Consider the processed 36 pieces of mail each day, attended eight meetings, and took a tour through the
hectic pace and varied activities
building or plant. Technology, such as email, instant messaging, cellphones, and laptops,
managers perform. Are you
prepared to make a personal
intensifies the pace. It isnt unusual for a manager to receive hundreds of email messages a
transformation from individual day, and be available on a 24/7 basis to his or her staff and key customers.
performer to accomplishing work
by engaging and coordinating
Manager roles
other people. Take the New As mentioned previously, Mintzbergs observations and subsequent research indicate that
Manager Self-Test to see whether diverse manager activities can be organised into 10 roles (Hales, 1986; Kurke & Aldrich,
your priorities align with the 1983; Pavett & Lau, 1983). A role is a set of expectations for a managers behaviour. Exhibit
demands placed on a new 1.5 provides examples of each of the 10 roles. These roles are divided into three conceptual
managers job.
categories: informational (managing by information), interpersonal (managing through
people) and decisional (managing through action). Each role represents activities managers
undertake to accomplish the functions of planning, organising, leading and controlling.
role
Although it is necessary to separate the components of the managers job to understand the
A set of expectations of ones behaviour.
different roles and activities of a manager, it is important to remember that the real job of
management cannot be practised as a set of independent parts; all the roles interact in the
real world of management. As Mintzberg says: The manager who only communicates or only
conceives never gets anything done, while the manager who only does ends up doing it all
alone (Mintzberg, 1994).
31
Category Role Activity

EX H I B I T 1.5
Seek and receive information, scan periodicals and reports, maintain Ten manager roles
Informational Monitor personal contacts
Forward information to other organisation members; send memos and
Disseminator reports, make phone calls
Spokesperson Transmit information to outsiders through speeches, reports, memos
Perform ceremonial and symbolic duties such as greeting visitors,

Interpersonal Figurehead signing legal documents
Direct and motivate subordinates; train, counsel and communicate
Leader with subordinates
Maintain information links both inside and outside organisation; use
Liaison mail, phone calls, meetings
Initiate improvement projects; identify new ideas, delegate idea
Decisional Entrepreneur responsibility to others
Disturbance Take corrective action during disputes or crises; resolve conflicts among
handler subordinates; adapt to environmental crises
Resource Decide who gets resources; schedule, budget, set priorities

allocator
Represent department during negotiation of union contracts, sales,
Negotiator purchases, budgets; represent departmental interests
SOURCES: Adapted from Mintzberg, 1973; Mintzberg, 1971.
Informational roles
Informational roles describe the activities used to maintain and develop an information
network. General managers spend about 75 per cent of their time talking to other people.
The monitor role involves seeking current information from many sources. The manager
acquires information from others and scans written materials to stay well informed. Lewis
Platt, when chairman of Hewlett-Packard, spent about 20 per cent of his time talking
directly with customers, asking what the company was doing right and what it needed to
do better (Branch, 1997). The disseminator and spokesperson roles are just the opposite: the
manager transmits current information to others, both inside and outside the organisation,
who can use it. With the trend towards empowerment of lower-level employees, many
managers are sharing as much information as possible. One colourful example of the
spokesperson role is Mick Jagger of the Rolling Stones. The rock band is run like a large,
multinational organisation with Jagger as the CEO. Jagger surrounds himself not only with
talented artists, but also with sophisticated and experienced business executives. Yet it is
Jagger who typically deals with the media and packages the bands image for a worldwide
audience (Serwer, 2002).
Interpersonal roles
Interpersonal roles pertain to relationships with others and are related to the human skills
described earlier. The figurehead role involves handling ceremonial and symbolic activities
for the department or organisation. The manager represents the organisation in his or her
formal managerial capacity as the head of the unit. The presentation of employee awards
by a division manager at McDonalds is an example of the figurehead role. The leader role
encompasses relationships with staff, including motivation, communication and influence.
The liaison role pertains to the development of information sources both inside and outside
the organisation. An example is a face-to-face discussion between a controller and plan

supervisor to resolve a misunderstanding about the budget.
Decisional roles
Decisional roles pertain to those events about which the manager must make a choice and
take action. These roles often require conceptual as well as human skills. The entrepreneur
role involves the initiation of change. Managers are constantly thinking about the future
and how to get there (Jonas et al., 1990). Managers become aware of problems and search
for improvement projects that will correct them. One manager studied by Mintzberg had
improvement projects going simultaneously. The disturbance handler role involves resolving
conflicts among staff or between the managers department and other departments. For
example, the division manager for a large furniture manufacturer became involved in a
personal dispute between two section heads, and one section head was let go because he
did not fit the team. The resource allocator role pertains to decisions about how to allocate
people, time, equipment, budget and other resources to attain desired outcomes. The
manager must decide which projects receive budget allocations, which of several customer
complaints receive priority, and even how to spend his or her own time. The negotiator
role involves formal negotiations and bargaining to attain outcomes for the managers unit
of responsibility. For example, the manager meets and formally negotiates with others a
supplier about a late delivery, the controller about the need for additional budget resources,
or the union about a worker grievance during the normal workday.
The relative emphasis a manager puts on these 10 roles depends on a number of factors, such
as the managers position in the hierarchy, natural skills and abilities, type of organisation,
or departmental goals to be achieved. Other factors, such as changing environmental
conditions, may also determine which roles are more important for a manager at any
given time. A top manager may regularly put more emphasis on the roles of spokesperson,
figurehead, and negotiator. However, the emergence of new competitors may require more
attention to the monitor role, or a severe decline in employee morale and direction may
mean that the CEO has to put more emphasis on the leader role. A marketing manager
may focus on interpersonal roles because of the importance of personal contacts in the
marketing process, whereas a financial manager may be more likely to emphasise decisional
roles such as resource allocator and negotiator. Despite these differences, all managers carry
out informational, interpersonal, and decisional roles to meet the needs of the organisation.
Managers stay alert to needs both within and outside the organisation to determine what
roles are most critical at various times.
Managing in small businesses and

not-for-profit organisations
Small businesses are growing in importance. Hundreds of small businesses are opened every
month by people who have found themselves squeezed out of large organisations during
downsizing, or who voluntarily leave the corporate world to seek a slower pace and a healthier
balance between work and family life. Many small businesses are started by women, who find
limited opportunities for advancement in large organisations.
As even the smallest businesses become increasingly complicated due to globalisation,
government regulation and customer demands for better quality at lower prices, managerial
33
dexterity becomes critical to success. One survey on trends and future developments in small
business found that nearly half of the respondents saw inadequate management skills as a
threat to their organisations, as compared with less than 25 per cent in larger organisations
(Welles, 1995).
One interesting finding is that managers in small businesses tend to emphasise
different roles from those emphasised by managers in large organisations. Managers in
small organisations often see their most important role as spokesperson, because they
must promote the small, growing business to the outside world. The entrepreneur role
is also very important in small businesses because managers must be creative and help
their organisations develop new ideas to be competitive. Small-business managers tend to
rate lower on the role of leader and on the information-processing roles compared with
counterparts in large organisations.
Not-for-profit organisations also represent a major application of management talent.
The Salvation Army, the Girl Guides, universities, hospitals, public schools, orchestras
and art museums all require excellent management. Sometimes managers in not-for-profit
organisations have been leaders in creating a sense of purpose and mission that motivates
employees, empowering workers to try new ideas and trimming excessively vertical hierarchies
(Ryval, 1991; Byrne, 1990). We might expect managers in not-for-profit organisations to
place more emphasis on the roles of figurehead (to deal with the public), leader (to motivate
employees with fewer financial incentives) and resource allocator (to distribute government
resources that often are assigned top down).
As the world of small and not-for-profit organisations becomes increasingly complex,
managers should carefully integrate the three categories of roles: they must simultaneously
manage by information, manage through people, and manage through action to keep
their organisations healthy. In addition, because nonprofit organisations do not have a
conventional bottom line, managers often struggle with the question of what constitutes
results and effectiveness. Whereas it is easy to measure dollars and cents, the metrics of
success in nonprofits are much more ambiguous. Managers have to measure intangibles such
as improve public health, make a difference in the lives of the disenfranchised, or increase
appreciation for the arts. This intangible nature also makes it more difficult to gauge the
performance of employees and managers. An added complication is that managers often
depend on volunteers and donors, who cannot be supervised and controlled in the same way
a business manager deals with employees.
Management and the new workplace

Over the past decade or so, the central theme being discussed in the field of management has
been the pervasiveness of dramatic change. Rapid environmental shifts are causing fundamental
transformations that have a dramatic impact on the managers job. These transformations are
reflected in the transition to a new workplace, as illustrated in Exhibit 1.6.
The primary characteristic of the new workplace is that it is centred around bits rather than
atoms information and ideas rather than machines and physical assets. Low-cost computing
power means that ideas, documents, movies, music, and all sorts of other data can be zapped
around the world at the speed of light. The digitisation of business has radically altered the
nature of work, employees, and the workplace itself (The Economist, 2006; Barkema et al.,
2002; Harvey & Buckley, 2002; Tetenbaum, 1998).
The New Workplace The Old Workplace

EX H I B I T 1.6
Characteristics
The transition to a
new workplace Resources Bitsinformation Atomsphysical assets
Work Flexible, virtual Structured, localised
Workers Empowered employees, free agents Loyal employees
Forces on Organisations
Technology Digital, e-business Mechanical
Markets Global, including Internet Local, domestic
Workforce Diverse Homogeneous
Values Change, speed Stability, efficiency
Events Turbulent, more frequent crises Calm, predictable
Management Competencies
Leadership Dispersed, empowering Autocratic
Focus Connection to customers, Profits
employees
Doing Work By teams By individuals
Relationships Collaboration Conflict, competition
Design Experimentation, learning Efficient performance
organisation
The old workplace is characterised by routine, specialised tasks, and standardised control
procedures. Employees typically perform their jobs in one specific company facility, such as
an automobile factory located in Detroit or an insurance agency located in Des Moines. The
organisation is coordinated and controlled through the vertical hierarchy, with decision-
making authority residing with upper-level managers.
In the new workplace, by contrast, work is free-flowing and flexible. The shift is most
obvious in e-commerce and high-tech organisations, which have to respond to changing
markets and competition at a seconds notice. However, numerous other organisations, such
as McKinsey & Company, and Nokia, are also incorporating mechanisms to enhance speed
and flexibility. Empowered employees are expected to seize opportunities and solve problems
as they emerge. Structures are flatter, and lower-level employees make decisions based on
widespread information and guided by the organisations mission and values (Ellis, 2003).
Knowledge is widely shared rather than hoarded by managers, and people throughout the
company keep in touch with a broader range of colleagues via advanced technology. The
workplace is organised around networks rather than rigid hierarchies, and work is often virtual,
with managers having to supervise and coordinate people who never actually come to work
in the traditional sense. Thanks to modern information and communications technology,
employees can perform their jobs from home or another remote location, at any time of
the day or night (Edwards 2005). Flexible hours, telecommuting, and virtual teams are
increasingly popular ways of working that require new skills from managers. Using virtual
teams allows organisations to use the best people for a particular job, no matter where they
are located, thus enabling a fast, innovative response to competitive pressures. Teams may
also include outside contractors, suppliers, customers, competitors, and interim managers who
are not affiliated with a specific organisation but work on a project-by-project basis. The
valued worker is one who learns quickly, shares knowledge, and is comfortable with risk,
change, and ambiguity.
Forces on organisations
The most striking change affecting organisations and management is technology. Consider
that computing power has roughly doubled every 18 months over the past 30 years while the
35
cost has declined by half or more every 18 months (Barkema et al., 2002). In addition, the
Internet, which was little more than a curiosity to many managers as recently as a decade
ago, has transformed the way business is done. Many organisations use digital networking
technologies to tie together employees and company partners in far-flung operations.
Organisations are increasingly shifting significant chunks of what were once considered
core functions to outsiders via outsourcing, joint ventures, and other complex alliances.
Companies are becoming interconnected, and managers have to learn how to coordinate
relationships with other organisations and influence people who cant be managed and
commanded in traditional ways.
The Internet and other new technologies are also tied closely to globalisation. Global
interconnections bring many opportunities, but they also bring new threats, raise new risks,
and accelerate complexity and competitiveness. Think about the trend towards outsourcing to
low-cost providers in other countries. US companies have been sending manufacturing work
to other countries for years to cut costs. Now, high-level knowledge work is also being
outsourced to countries such as India, Malaysia, and South Africa. Indias Wipro Ltd, for
example, writes software, performs consulting work, integrates back-office solutions, performs
systems integration, and handles technical support for some of the biggest corporations in
the USA and it does it for 40 per cent less than comparable US or Australian companies
can do the work (Hammonds, 2003).
Diversity of the population and the workforce is another fact of life for all organisations. The
general population, and thus of the workforce, is growing more ethnically and racially diverse.
In addition, generational diversity is a powerful force in todays workplace, with employees of
all ages working together on teams and projects in a way rarely seen in the past.
The innovative response

In the face of these transformations, organisations are learning to value change, innovation, and
speed over stability and efficiency. The fundamental paradigm during much of the 20th century
was a belief that things can be stable. In contrast, the new paradigm recognises change and
chaos as the natural order of things (Tetenbaum, 1998). Events in todays world are turbulent
and unpredictable, with both small and large crises occurring on a more frequent basis.
One way managers are addressing the complexity of todays world is through a renewed
emphasis on innovation. With the power of the Internet, for example, companies have
lost much of their ability to control information to consumers and the public, so they are
forced to innovate with increasingly better products and services to remain competitive.
The intense competition brought about by globalisation also spurs companies to keep pace
with new technologies and innovative management practices (Reingold, 2004). A recent
report from a group of leading scientists, executives, and educators points to the growing
innovation strength of countries such as China and India, which are poised to lead the world
in innovation. Between the years of 1991 and 2003, research and development spending in
China exceeded that in the USA by billions of dollars (OBrien, 2005).
New management competencies

In the face of these transitions, managers must rethink their approach to organising,
directing, and motivating employees. Todays best managers give up their command-
and-control mind-set to focus on coaching and providing guidance, creating organisations
that are fast, flexible, innovative, and relationship-oriented. In many of todays best
companies, leadership is dispersed throughout the organisation, and managers empower others
to gain the benefit of their ideas and creativity.
As discussed earlier in the chapter, not all managers jobs are the same. Managers rely
on varied skills and perform different activities depending on their hierarchical level and
job responsibilities. For all managers, however, human skills are becoming increasingly
important. Critical skills for top-level managers in todays world include the ability to create
an exciting and demanding work environment, and to inspire confidence in and support for
the organisation and its leadership. Middle managers have to learn to build relationships,
empower others, promote cooperation and manage conflict. First-line supervisors need
the ability to motivate workers from day to day and sustain employee energy towards the
completion of organisational goals (Bartlett & Ghoshal, 1997). Thus, although managers
at different levels play different roles and rely on different skills, some management
competencies are important to all managers in the new world of organisations.
Rather than focusing single-mindedly on profits, todays managers recognise the
importance of staying connected to customers and employees on a daily basis. They remain
flexible and adaptable, able to respond quickly to customer and employee needs. Rather
than simply issuing orders, managers are finding ways to benefit from employees insight
by giving them the freedom to make decisions and solve problems. Leadership is dispersed
throughout the organisation, and managers share rather than hoard power. The model of
managers controlling workers no longer applies to the extent that it used to in a world of
rapidly changing technology, diversity and global competition. Instead, managers act as
coaches and facilitators, getting everyone involved and committed. Everyone is given a
chance to be a leader. At AES Corporation, a US power producer, teams of coal handlers
and maintenance workers handle a variety of tasks: operations, purchasing, human resources,
public relations and even corporate finance. CEO Dennis W. Bakke believes giving workers
freedom and responsibility is the best way to increase the companys brainpower (Markels,
1995). Team-building skills also are crucial for todays managers. Teams of front-line workers
who work directly with customers have become the basic building blocks of organisations.
In addition, although the CEO of an organisation still plays an important role, the focus is
rather on putting together a diverse, effective top-management team. For todays managers,
the ability to build cohesive teams in an environment of diversity and dispersed decision
making is paramount (Barner, 1996).
In other words, success today depends on the strength and quality of relationships. New
ways of working and managing emphasise cooperation and collaboration across functions and
hierarchical levels, as well as with other organisations. Some competition can be healthy for an
organisation, but ideas about the nature of competition are changing. Rather than emphasising
the struggle to beat a competitor, managers direct employees energy towards being the best
that they can be. An environment of teamwork and community that fosters collaboration and
mutual support gives employees opportunities to think, learn and grow (Peak, 1997).
An important management challenge in the new workplace is to build a learning organisation
by creating an organisational climate that values experimentation and risk taking, applies
current technology, tolerates mistakes and failure, and rewards non-traditional thinking and
the sharing of knowledge. Everyone in the organisation participates in identifying and solving
problems, enabling the organisation to continuously experiment, improve, and increase its
capability. The role of managers is not to make decisions, but to create learning capability,
where everyone is free to experiment and learn what works best.
37
Turbulent times: managing crises and

unexpected events
Many managers may dream of working in an organisation and a world where life seems
relatively calm, orderly and predictable, but their reality is one of increasing turbulence and
disorder. Todays managers and organisations face various levels of crisis every day everything
from the loss of computer data, to charges of harassment or discrimination, to a factory fire,
to workplace violence. However, these organisational crises have been compounded by crises
on a more global level. Consider a few of the major events that have affected our companies
within the last few years: the bursting of the dot-com bubble, which led to the failure of
thousands of companies and the rapid decline of technology stocks; the New York 911 and
Bali terrorism events that caused organisations and governments to review and upgrade their
security measures; the crash of high-flying HIH, OneTel, Ansett and others due to a complex
series of either unethical and illegal accounting (in one case) or simply management missteps,
and the subsequent investigations of numerous other corporations for similar financial
shenanigans; and SARS, which impacted on travel, tourism, student travel and education and
many other domains. These and other events have brought the uncertainty and turbulence of
todays world clearly to the forefront of everyones mind, and crisis management has become
a critical skill for every manager.
In Australia in spring 2007, the incidence of horse flu threatened the horse racing industry
spring carnival, and managers had to change all their plans to deal with this crisis and its
potential impacts. Dealing with the unexpected has always been part of the managers job,
but our world has become so fast, interconnected and complex that unexpected events
happen more frequently and often with greater and more painful consequences. All of the
new management skills and competencies we have discussed are important to managers in
such an environment. In addition, crisis management places further demands on todays
managers. Some of the most recent thinking on crisis management suggests the importance
of five leadership skills (Bartlett & Ghoshal, 1997).
1 Stay calm. 4 Tell the truth.
2 Be visible. 5 Know when to get back to business.
3 Put people before business.
Stay calm
A leaders emotions are contagious, so leaders have to stay calm, focused and optimistic about
the future. Perhaps the most important part of a managers job in a crisis situation is to absorb
peoples fears and uncertainties. Leaders have to suppress their own fears, doubts and pain to
encourage others. Although they acknowledge the difficulties, they remain rock-steady and
hopeful, which gives comfort, inspiration and hope to others.
Be visible
When peoples worlds have become ambiguous and uncertain, they need to feel that someone
is in control. The Monday following the 11 September 2001 terrorist attacks, the outgoing
CEO of Young & Rubicam Advertising shook hands with every employee as they entered
headquarters. Crisis is a time when leadership cannot be delegated. When Russian President
Vladimir Putin continued his holiday after the sinking of the submarine Kursk in August
2000, his reputation diminished worldwide (Beaudan, 2002).
Put people before business

The companies that weather a crisis best, whether the crisis is large or small, are those in
which managers make people and human feelings their top priority. As Ray ORourke,
managing director for global corporate affairs at Morgan Stanley, put it following 11
September, even though we are a financial services company, we didnt have a financial
crisis on our hands; we had a human crisis. After that point, everything was focused on our
people (Argenti, 2002).
Tell the truth

Managers should get as much information from as many diverse sources as they can, do their
best to determine the facts, and then be open and straightforward about whats going on.
Following the 2001 collapse of Enron Corp. and charges of unethical and possibly illegal
activities, top managers at Enron compounded the crisis by destroying documents, refusing
to be straightforward with employees and the media, and stonewalling investigators.
Know when to get back to business

Although managers should first deal with the physical and emotional needs of people, they
also need to get back to business as soon as possible. The company has to keep going, and
theres a natural human tendency to want to rebuild and move forward. The rejuvenation of
the business is a sign of hope and an inspiration to employees. Moments of crisis also present
excellent opportunities for looking forward and using the emotional energy that has emerged
to build a better company.
Australias managers: improving from

a low base
Each year, the World Economic Forum and the Institute for Management Development in
Europe rank countries in terms of their competitiveness. On the management criterion,
defined by the World Economic Forum as the extent to which enterprises are managed
in an innovative, profitable and responsible manner, Australia ranked eighteenth out of
41 countries in 1994. This was behind such nations as Japan, Hong Kong, New Zealand,
Australias managers
Malaysia, Chile, Norway, the UK, Germany, the Netherlands and the USA.
In 1994, the Australian government commissioned the Karpin task force to examine and
recommend on how to improve the leadership and management of Australian enterprises.
The task force published its report in 1995 (Enterprising Nation: Report of the Industry
Task Force on Leadership and Management Skills, 1995). The task force estimated that
there are approximately one million managers in Australia, in businesses ranging from very
small to relatively large. The findings showed that the typical Australian manager has certain
strengths and weaknesses.
Manager strengths
Australian managers were:
hardworking
egalitarian
open, genuine and direct
39
honest and ethical

innovative
independent thinkers
flexible, adaptable and resourceful (around products and processes)
technically sound.
Manager weaknesses
However, Australian managers also:
took a short-term view

lacked strategic perspective
lacked open-mindedness and showed rigidity towards learning
were complacent
were poor at teamwork and empowerment
showed inability to cope with differences
had poor people skills
lacked self-confidence.
The Karpin inquiry was also concerned about how Australian managers were perceived
internationally. In a survey of more than 500 Asian managers, the Karpin task force
ascertained that Australian managers were perceived as being relatively low on the following
important managerial qualities:
ability to look well into the future

acceptance of responsibility
management skills
entrepreneurial skills
leadership skills
cross-cultural skills.
Asian managers ranked their Australian counterparts generally below managers from
Germany, Japan, Taiwan, the UK and the USA on scales associated with these measures.
Further, Australian managers tended to be poorly qualified relative to managers from
other major nations. Between 65 and 80 per cent of managers from France, Germany,
Japan and the USA had university degrees. In Australia, only 29 per cent of Australian
managers held a bachelors degree, and 60 per cent of Australias managers had no formal
educational qualifications beyond secondary school. The task force also found that
management development was generally not perceived to be a major strategic issue in most
Australian enterprises. Management development was generally delegated to human resource
departments rather than being considered a key responsibility of line managers. Managers
were traditionally developed within narrow functional confines, without due regard for the
development of broader skills, and up to 90 per cent of Australian industry had no access to
any form of systematic management development.
The Karpin task force identified five key challenges that had to be addressed in order to
improve Australias competitiveness in its global context. These were:
developing a positive enterprise culture through education and training

upgrading vocational education, training and business support
harnessing the talents of diversity

achieving best practice management development
reforming management education.
The task force provided a vision statement called Australia 2010 to encourage improved
productivity and profitability in enterprises through a concerted commitment to continual
improvement. By 2010, Australian enterprises and their managers should be focused on:
knowledge
the ability to learn, change and innovate in the new marketplace, as the accepted man-
ager selection criteria, rather than gender, ethnicity or even prior experience
the learning organisation as a standard philosophy for many Australian enterprises, and
as a major way to cope with change and turbulence
managers creating conditions conducive to learning for both individuals and the enter-
prise as a whole, both across individual business units and between enterprises and their
external environments
employees being more motivated and skilled
quality acting as a guiding light within all organisations, with a customer-first mentality
being all-pervasive.
It was expected that most Australian enterprises would earn higher rates of return on
investment than in 1995 and successfully defend and expand their position in the global
marketplace. Many Australian enterprises would be benchmarked as achieving worlds best
practice in their operations, with some setting worlds best practice standards.
Much of the data reported by the Karpin task force about Australian managers painted a
rather gloomy picture. However, the data was based on research during the early 1990s. The
past few years have seen a flurry of activity in management development, and in the increasing
competence of Australias managers at all levels towards international best practices. The
Australian dollar was floated in only 1983 and the Australian economy was opened up to the
world relatively recently, through the reduction of substantial tariff protection and import
quotas in the second half of the 1990s. The advent of the Internet from about 1996 and its
dramatic growth from 1998 onwards has had a major impact on lowering the tyranny of
distance that kept the Australian island nation somewhat separate, protected and distant
from the rest of the world. This has led to a substantial improvement in the international
exposure of Australias managers and in their outlook and behaviours. Australias economy
has been regarded by the OECD as being one of the most robust in the world over the past
decade, and New Zealands case is similar. As small economies, these countries have done
extremely well in terms of growth and stability despite global crises. Some of this success
must be attributed to sound and improving leadership and managerial skills throughout. New
Zealands economy (and currency) has performed very well in recent years, given its size and
the challenges that come with having a small domestic market. Australias mining industry
boom and the success of New Zealands primary sector and service industries have seen them
achieve low unemployment and solid growth, even though their manufacturing industries
have significantly offshored.
Indeed, it is an exciting time to be entering the field of management. In the rest of this
book, you will learn much more about Australian, New Zealand and AsiaPacific enterprises,
the learning organisation, managing in turbulent times, responding with innovation
capabilities, and the new and dynamic roles managers are playing in the 21st century.
41
CASE STUDY
JJames Hardie bouncing back
The James Hardie company, a major building materials firm the building materials industry has grown in North America.
operating primarily in Australia and USA, is emerging from In the last 15 years James Hardie has grown this US business
the painful experience of having produced and been found base from a zero start to almost $1.3 billion. After the shock
liable for damaging its staff with asbestos in its products. and reputation damage of the asbestos law suits, which also
The enormous liability which James Hardie was forced to led to a lot of turnover in its board and executive team, a
set aside to pay for the damage that the asbestos products renewed James Hardie is building once again, having learned
caused is of the order of $3 billion. James Hardie has an expensive lesson.
significantly grown its American fibre cement operations as SOURCE: Byrne, Henry (29 May 2007). Australian Financial Review, p. 14.
SUMMARY
This chapter introduced a number of important concepts and than vertical hierarchies, and work is often virtual. These changing
described the changing nature of management. High performance characteristics result from forces such as advances in technology and
requires the efficient and effective use of organisational resources e-business, globalisation, increased diversity, and a growing emphasis
through the four management functions of planning, organising, on innovation, change, and speed over stability and efficiency.
leading and controlling. To perform the four functions, managers Managers need new skills and competencies in this new environment.
need three skills conceptual, human and technical. Conceptual Leadership is dispersed and empowering. Customer relationships
skills are more important at the top of the hierarchy; human skills are are critical, and most work is done by teams that work directly
important at all levels; and technical skills are most important for with customers. In the new workplace, managers focus on building
first-line managers. relationships, which may include customers, partners, and suppliers.
Becoming a manager requires a shift in thinking and can be In addition, they strive to build learning capability throughout the
a challenging transition. New managers often struggle with the organisation.
challenges of coordinating a broad range of people and activities, And moreover, unpredictable crises are increasingly becoming
delegating to and developing others, and relating to former a part of what managers must deal with. At James Hardie, Pan
peers in a new way. Two characteristics of managerial work were Pharmaceuticals, and National Australia Bank, when the crises hit,
explained in the chapter: (1) Managerial activities involve variety, managers needed to react fast, decisively and correctly, or pay a large
fragmentation, and brevity; and (2) managers perform a great price, both personally and on behalf of their organisations. Each of
deal of work at an unrelenting pace. Managers are expected to those three organisations lost significant ground through less than
perform activities associated with 10 roles: the informational roles excellent actions in dealing with their respective major challenges.
of monitor, disseminator, and spokesperson; the interpersonal This new managerial competence, of dealing effectively with large
roles of figurehead, leader, and liaison; and the decisional roles discontinuous shifts or crises, which is required in managers these
of entrepreneur, disturbance handler, resource allocator, and days, would have seen these organisations cope better than they did.
negotiator. In all three cases, loss of reputation, market share and profitability
These management characteristics apply to small businesses, were immense.
entrepreneurial start-ups, and nonprofit organisations just as they Leadership during crises and unexpected events is becoming
do in large corporations. In addition, they are being applied in a important for all organisations in todays complex world. Managers
new workplace and a rapidly changing world. In the new workplace, in crisis situations should stay calm, be visible, put people before
work is free-flowing and flexible to encourage speed and adaptation, business, tell the truth, and know when to get back to business.
and empowered employees are expected to seize opportunities and Human skills become critical during times of turbulence
solve problems. The workplace is organised around networks rather and crisis.
DISCUSSION QUESTIONS
1 How do you feel about having a managers responsibility in evaluation gives you high marks for your technical skills but low
todays world characterised by uncertainty, ambiguity, and sudden marks when it comes to people skills. Do you think people skills
changes or threats from the environment? Describe some skills can be learned, or do you need to rethink your career path? If
and qualities that are important to managers under these people skills can be learned, how would you go about it?
conditions. 7 Discuss some of the ways organisations and jobs changed over
2 Assume you are a project manager at a biotechnology company, the past 10 years. What changes do you anticipate over the next
working with managers from research, production, and marketing 10 years? How might these changes affect the managers job and
on a major product modification. You notice that every memo you the skills a manager needs to be successful?
receive from the marketing manager has been copied to senior 8 How do the responsibilities of the CEO of a large company, such
management. At every company function, she spends time talking as John Stewart at the National Australia Bank, differ from those
to the big shots. You are also aware that sometimes when you in a small company?
and the other project members are slaving away over the project, 9 How would the managerial work of senior executives such as
she is playing golf with senior managers. What is your evaluation George and Peter Dryen (who own and run Dryen Australia, a
of her behaviour? As project manager, what do you do? company of some 40-plus people) differ from a manager at
3 Jeff Immelt of GE said that the most valuable thing he learned middle level in a government department or business?
in business school was that there are 24 hours in a day, and you 10 What is the difference between efficiency and effectiveness?
can use all of them. Do you agree or disagree? What are some of Which is more important for performance? Can an organisation
the advantages to this approach to being a manager? What are succeed in both simultaneously?
some of the drawbacks? 11 If managerial work is characterised by variety, fragmentation and
4 Why do some organisations seem to have a new CEO every year or brevity, how do managers perform basic management functions
two, whereas others have top leaders who stay with the company such as planning, which would seem to require reflection and
for many years (e.g., Jack Welchs 20 years as CEO at General analysis?
Electric)? What factors about the manager or about the company 12 A professor once told her students: The purpose of a management
might account for this difference? course is to teach students about management, not to teach
5 What similarities do you see among the four management them to be managers. Do you agree or disagree with this state-
functions of planning, organising, leading and controlling? Do ment? Discuss.
you think these functions are related that is, is a manager who 13 How could the teaching of management change to prepare future
performs well in one function likely to perform well in the others? managers to deal with workforce diversity? With empowerment?
6 You are a bright, hard-working entry-level manager who fully Do you think diversity and empowerment will have a substantial
intends to rise up through the ranks. Your performance impact on organisations in the future? Explain.
MANAGEMENT IN PRACTICE: EXPERIENTIAL CHALLENGE
Management aptitude questionnaire 1 When I have a number of tasks or homework to do,

Rate each of the following questions according to the following I set priorities and organise the work
scale: around deadlines. 12345
2 Most people would describe me as a good
1 I am never like this.
listener. 12345
2 I am rarely like this.
3 When I am deciding on a particular course of
3 I am sometimes like this.
action for myself (such as hobbies to pursue,
4 I am often like this.
languages to study, which job to take, special
5 I am always like this.
projects to be involved in), I typically consider
CHAPTER 1 The changing paradigm of management 43
the long-term (three years or more) implications 13 When solving problems, I would much rather
of what I would choose to do. 12345 analyse some data or statistics than meet with a
4 I prefer technical or quantitative courses group of people. 12345
rather than those involving literature, 14 When I am working on a group project and
psychology, or sociology. 12345 someone doesnt pull a fair share of the load,
5 When I have a serious disagreement with I am more likely to complain to my friends
someone, I hang in there and talk it out until rather than confront the slacker. 12345
it is completely resolved. 12345 15 Talking about ideas or concepts can get me really
6 When I have a project or assignment, I really enthused or excited. 12345
get into the details rather than the big picture 16 The type of management course for which this
issues. 12345 book is used is really a waste of time. 12345
7 I would rather sit in front of my computer than 17 I think it is better to be polite and not to hurt
spend a lot of time with people. 12345 peoples feelings. 12345
8 I try to include others in activities 18 Data or things interest me more than people. 12345
or discussions. 12345
9 When I take a course, I relate what I am Scoring and interpretation
learning to other courses I took or concepts
Subtract your scores for questions 6, 10, 14, and 17 from the number
I learned elsewhere. 12345
6, and then add the total points for the following sections:
10 When somebody makes a mistake, I want to correct
the person and let her or him know the proper 1, 3, 6, 9, 12, 15 Conceptual skills total score _____
answer or approach. 12345 2, 5, 8, 10, 14, 17 Human skills total score _____
11 I think it is better to be efficient with my time 4, 7, 11, 13, 16, 18 Technical skills total score _____
when talking with someone, rather than worry about These skills are three abilities needed to be a good manager.
the other persons needs, so that I can get on with Ideally, a manager should be strong (though not necessarily equal) in
my real work. 12345 all three. Anyone noticeably weaker in any of the skills should take
12 I know my long-term vision of career, family, courses and read to build up that skill.
and other activities and have thought it NOTE: This exercise was contributed by
over carefully. 12345 Dorothy Marcic.
MANAGEMENT IN PRACTICE: ETHICAL CHALLENGE
Can management afford to look the other way? The complaints ranged from inappropriate and derogatory remarks to
John Graham had been with Shellington Pharmaceuticals for 18 subsequently dropped charges of sexual harassment. What was more
years. After a tour of duty in the various plants and seven years disturbing was that the amount, as well as the severity, of complaints
overseas, John was back at headquarters, looking forward to his had increased with each of Jacobs 10 years with Shellington.
new role as director of AsiaPacific marketing. When John questioned the company CEO about the issue, he
Two weeks into his new job, John received some unsettling news was told: Yeah, hes had some problems, but you just cant replace
about one of the managers under his supervision. Over a casual lunch someone like him with such a great eye for new products. Youre a
conversation, the director of human resources, Rose Anastasiou, bottom-line man; you understand why we let these things slide. Not
mentioned that John should expect a phone call about Roger Jacobs, sure how to handle the situation, John met briefly with Jacobs and
manager of new product development. Jacobs had a history of being reminded him to keep the teams morale up.
pretty horrible to his employees, she said, and one disgruntled Just after the meeting, Rose Anastasiou from HR called to let
employee had asked to speak to someone in senior management. After John know the problem shed mentioned over lunch had been sorted
lunch, John did some follow-up work. Jacobs performance reviews out. However, she warned that another employee had now come
had been stellar, but his personnel file also contained a large number forward demanding that her complaints be addressed by senior
of notes documenting charges of Jacobs mistreatment of employees. management.
What do you do? Jacobs, and make Jacobs aware that the documented history over
1 Ignore the problem. Jacobs contributions to new product the past 10 years has put him on thin ice.
development are too valuable to risk losing him, and the prob- 3 Meet with Jacobs and the employee to try to resolve the current
lems over the past 10 years have always worked themselves out issue; then start working with Rose Anastasiou from HR and other
anyway. Theres no sense starting something that could make you senior managers to develop stronger policies regarding sexual
look bad. harassment and treatment of employees, including clear-cut
2 Launch a full-scale investigation of employee complaints about procedures for handling complaints.
SOURCE: Based on Wallace, 1992.
CASE STUDY Electra-Quik Products
Barbara Russell, a manufacturing manager, walked into the monthly the way retail stores received the merchandise they needed when
company-wide meeting with a light step and a feeling of hopeful- they needed it. The team thrived, and trust blossomed among the
ness she hadnt felt in a long time. The companys new, dynamic members. They even spent nights and weekends working to complete
CEO was going to announce a new era of empowerment at Electra- their report. They were proud of their ideas, which they believed
Quik, an 80-year-old publicly held company that had once been a were innovative but easily achievable: permit a manager to follow a
leading manufacturer and retailer of electrical products and supplies. product from design through sales to customers; allow salespeople
In recent years, the company has experienced a host of problems: to refund up to $500 worth of merchandise on the spot; make
market share was declining in the face of increased foreign and information available to salespeople about future products; and swap
domestic competition; new product ideas were few and far between; sales and manufacturing personnel for short periods to let them get
departments such as manufacturing and sales barely spoke to one to know one anothers jobs.
another; morale was at an all-time low; and many employees were When the team presented their report to department heads,
actively seeking other jobs. Everyone needed a dose of hope. Martin Griffin was enthusiastic. But shortly into the meeting he
Martin Griffin, who had been hired to revive the failing company, had to excuse himself because of a late-breaking deal with a major
briskly opened the meeting with a challenge: As we face increasing hardware store chain. With Martin absent, the department heads
competition, we need new ideas, new energy, new spirit to make this rapidly formed a wall of resistance. The director of human resources
company great. And the source for this change is you each one of complained that the ideas for personnel changes would destroy
you. He then went on to explain that under the new empowerment the carefully crafted job categories that had just been completed.
campaign, employees would be getting more information about The finance department argued that allowing salespeople to make
how the company was run and would be able to work with other $500 refunds would create a gold mine for unethical customers and
employees in new and creative ways. Martin proclaimed a new salespeople. The legal department warned that providing information
era of trust and cooperation at Electra-Quik. Barbara found this to salespeople about future products would invite industrial spying.
exciting; but as she looked around the room, she saw many of the The team members were stunned. As Barbara mulled over the
other employees, including her friend Harry, rolling their eyes. latest turn of events, she considered her options: keep her mouth
Just another pile of corporate crap, Harry said later. One minute shut; take a chance and confront Martin about her sincerity in
they try downsizing, the next re-engineering. Then they dabble in making empowerment work; push slowly for reform and work for
restructuring. Now Martin wants to push empowerment. Garbage like gradual support from the other teams; or look for another job and
empowerment isnt a substitute for hard work and a little faith in leave a company she really cared about. Barbara realised there would
the people who have been with this company for years. We made it be no easy choices and no easy answers.
great once, and we can do it again. Just get out of our way. Harry
had been a manufacturing engineer with Electra-Quik for more than QUESTIONS
20 years. Barbara knew he was extremely loyal to the company, but 1 How might top management have done a better job changing
he and a lot of others like him were going to be an obstacle to Electra-Quik into a learning organisation? What might they do
the empowerment efforts. now to get the empowerment process back on track?
Top management assigned selected managers to several 2 Can you think of ways Barbara Russell could have avoided the
problem-solving teams to come up with ideas for implementing the problems her team faced in the meeting with department heads?
empowerment campaign. Barbara loved her assignment as team 3 If you were Barbara Russell, what would you do now? Why?
leader of the manufacturing team, working on ideas to improve
SOURCE: Based on Rothstein, 1995.
45
VIDEO CASE Original Penguin rides out turbulence
Penguins have always been cool. But golf shirts with a little flapping Kolbe also fulfils all the roles of a top manager. He
bird printed on them experienced a lull in their coolness. In fact, considers himself a hands-on manager, communicating
their popularity remained frozen for two decades largely because they constantly with his staff and keeping himself involved in every
were worn by ageing golfers. Now the penguins are back, flapping detail so I dont lose sight of things. He develops relationships
furiously and, many would argue, coolly not just on golf shirts with employees so that they can work well together. My job is
but also on a wide array of mens and womens clothing and acces- really the A to Z in assembling a team of people who can focus on
sories, including shirts, shoes, hats, belts, neckties, handbags and certain pieces of that business and deliver on the strategic goals
even bathing suits. These items represent the extreme makeover of for the company, he explains. I feel very fortunate to have such a
a 50-year-old brand of clothing called Original Penguin. Now owned good team. He makes decisions about where to take the brand. Right
by Perry Ellis International, the Original Penguin brand of clothing now, he has his sights set on a more upmarket target. He envisions
is experiencing rejuvenation thanks largely to Penguins vice-presi- his customers as comfortable suburbanites who want high-quality,
dent, Chris Kolbe. fashionable casual clothing. But he doesnt worry too much about
Kolbe knows that thawing out an old brand is a daunting task direct competitors in the clothing industry. Instead, he focuses on
under the best circumstances. But the fashion industry is particularly how Original Penguin can compete for consumer dollars. Im acting
difficult the pace is dizzying, and the turbulence is sometimes president of a very small division a start-up company attached to
terrifying. Kolbes activities as a manager are clearly characterised a larger company, Kolbe observes. So I really took on the A to Z of
by variety, fragmentation and brevity. For example, in a single day, running a brand or running a company, from the creative vision
Kolbe may be expecting several hundred samples from sources around of the brand, to marketing the brand, to the business operations and
the globe to arrive in time for a fashion show. He may have to decide sales of the brand.
whether to extend credit to a retailer or whether to drop one retailer As for that turbulence? Kolbe shrugs it off. In every business there
in favour of another. He may have to review advertising copy, return are roadblocks. So your ability to focus on the roadblock or work around
calls from fashion magazines, thumb through swatches of fabric, the roadblock sometimes comes down to your ability to be successful.
welcome sales reps arriving for a meeting, and fix his own computer. This is true even when the roadblock happens to be a shipment of
We are always way behind and scrambling, he says with a chuckle. womens flip-flops that hasnt arrived in time for the fashion show.
But Kolbe thrives on these activities because he is convinced that
the time is right for his penguins to regain their place in the market QUESTIONS
among other legendary figures such as alligators and polo ponies 1 Describe the conceptual skills you think Chris Kolbe needs for his
and he intends to make it happen. job as vice-president of Original Penguin.
Because the Penguin division is a tiny component of the 2 Suppose those flip-flops or other components of the upcoming
much larger Perry Ellis company, Kolbe serves all the management fashion show dont arrive in time. Describe how Kolbe might
functions of planning, organising, leading and controlling often manage the situation.
during the course of one work day. I take personal responsibility and 3 What do you think is the most difficult part of Kolbes job? Why?
accountability for everything that has the Penguin brand on it, SOURCES: www.originalpenguin.com (accessed 30 July 2004); Fashion UK, 2004;
Kolbe notes. Swanson 2004; Thomson, 2004; Sugi, 2003.
BIZ FLIX VIDEO CASES 8 Mile
Jimmy B-Rabbit Smith, Jr. (Eminem) wants to be a successful rapper start so he rides the city bus to work and arrives late. The second
and to prove that a white man can create moving sounds. He works part occurs after he is beaten by Papa Doc (Anthony Mackie) and
days at a plant run by the North Detroit Stamping Company and Papa Docs gang. Jimmys mother (Kim Basinger) returns to their
pursues his music at night, sometimes on the plants grounds. The trailer and tells him she won $3,200 at bingo. The film continues to
films title refers to Detroits northern city boundary which divides its end with Jimmys last battle (a rapper competition).
Detroits white and African American populations. This film gives a
gritty look at Detroits hip-hop culture in 1995 and Jimmys desire to
be accepted by it. Eminems original songs Lose Yourself and 8 Mile WHAT TO WATCH FOR AND
received Golden Globe and Academy Award nominations. ASK YOURSELF
This scene is an edited composite of two brief sequences 1 What is your perception of the quality of Jimmys job and his
involving the stamping plant. The first half of the scene appears work environment?
early in the film as part of The Franchise sequence. The second half 2 What is the quality of Jimmys relationship with Manny, his
appears in the last 25 minutes of the film as part of the Papa Doc foreman (Paul Bates)? Does it change? If so, why?
Payback sequence. In the first part of the scene, Jimmys car wont 3 How would you react to this type of work experience?
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THE CHANGING PARADIGM OF

Current challenges for managers

Challenges for government

Challenges for business

Challenges for the individual employee

Managers who make a difference

AUSTRALIAN MANAGER PROFILE

Graeme Boyles made a difference when he was production manager at Trico, a

The definition of management

The four management functions things done through other people.

Fortune magazines The most important strategy for Mittal in achieving

involves motivating entire departments and divisions as well as

Both efficiency and effectiveness can be high in the one

Middle managers Conceptual skills Human skills Technical skills

communicated throughout the company, contributing to Microsofts leadership reputation

When skills fail

Business Unit Head

SOURCE: Adapted from Bonoma & Lawler, 1989.

marketing, manufacturing, finance and production when a new product is developed.

What is it like to be a manager?

Making the leap: becoming a new manager

From Individual Identity To Manager Identity

Works relatively independently Works in highly interdependent manner

Manager activities: adventures in multitasking

The USA-based Federal Express (FedEx) group has set a

NEW MANAGER SELF-TEST

3 Use lunches to meet and network with peers in other departments.

4 Implement the changes you believe will improve department performance.

5 Spend as much time as possible talking with and listening to

TAKE A MOMENT Life on speed dial

Category Role Activity

Spokesperson Transmit information to outsiders through speeches, reports, memos

Perform ceremonial and symbolic duties such as greeting visitors,

Resource Decide who gets resources; schedule, budget, set priorities

the organisation. An example is a face-to-face discussion between a controller and plan

Managing in small businesses and

Management and the new workplace

The New Workplace The Old Workplace

The innovative response

New management competencies

Turbulent times: managing crises and

Put people before business

Tell the truth

Know when to get back to business

Australias managers: improving from

honest and ethical

took a short-term view

ability to look well into the future

developing a positive enterprise culture through education and training

harnessing the talents of diversity

MANAGEMENT IN PRACTICE: EXPERIENTIAL CHALLENGE

Management aptitude questionnaire 1 When I have a number of tasks or homework to do,

MANAGEMENT IN PRACTICE: ETHICAL CHALLENGE

CASE STUDY Electra-Quik Products

VIDEO CASE Original Penguin rides out turbulence

BIZ FLIX VIDEO CASES 8 Mile