Chapter 8

Management, Leadership, and Internal

l s Organization
a G o
g
Lea rnin
Contrast the types of business
5
Define management and decisions and list the steps in the
1 decision-making process.
the skills necessary for
managerial success. Define leadership and compare
6
Explain the role of vision and different styles of leadership.
2
ethical standards. Discuss the meaning and
7
importance of corporate
3 Summarize the benefits of
planning and distinguish strategic, culture.
tactical, and operational planning.
8 Identify forms of depart-
Describe the strategic planning mentalization and types of
4 organization structures.
process.
WHAT IS MANAGEMENT?
Management Process of achieving organizational objectives through people and other resources.

The Management Hierarchy

• Top management
• Develop long-range strategic plans for the organization.
• Middle management
• Focus on specific operations, products, or customer groups within
an organization.
• Supervisory management
• Implement the plans developed by middle managers.
Skills Needed for Managerial Success
• Technical skills Manager’s ability to understand and use the techniques,
knowledge, and tools and equipment of a specific discipline or department.
• Human skills Interpersonal skills that enable a manager to work effectively with
and through people.
• Conceptual skills Ability to see the organization as a unified whole and to
understand how each part of the overall organization interacts with other parts.
Managerial Functions
Planning
• Process of anticipating future events and conditions and determining courses of
action for achieving organizational objectives.
Organizing
• Blending human and material resources through a formal structure of tasks and
authority.
Directing
• Guiding and motivating employees to accomplish organizational objectives.
• Vital responsibility of supervisory managers.
Controlling
• Evaluating an organization’s performance to determine whether it is
accomplishing its objectives.
SETTING A VISION AND ETHICAL STANDARDS FOR THE FIRM
Vision Perception of marketplace needs and the methods
an organization can use to satisfy them.
• Must be focused yet adaptable to changes
in the business environment.
• Long-term success is also tied to the ethical
standards that top executives set.
• High ethical standard can also encourage, motivate,
and inspire employees to achieve goals.

Starbucks Mission
IMPORTANCE OF PLANNING
Types of Planning
Strategic
• Determining the primary objectives of an organization and then acting and allocating resources to achieve those objectives.
Tactical
• Guides the activities required to implement overall strategies.
Operational
• Assigning employees and teams to carry out tactical plans.
Contingency
• Planning for unforeseen major accidents, natural disasters, and rapid economic downturns.
Planning at Different Organizational Levels
THE STRATEGIC PLANNING
PROCESS
• Often makes the difference between success and failure.
MANAGERS AS DECISION MAKERS
Decision making process of recognizing a problem or opportunity, evaluating
alternative solutions, selecting and implementing an alternative, and assessing
the results.

Programmed and Nonprogrammed

Decisions
• Programmed decision involves simple, common problems with predetermined
solutions.
• Nonprogrammed decision involves a complex, unique problem or opportunity
with important consequences for the organization.
How Managers Make Decisions
MANAGERS AS LEADERS
Leadership Ability to direct or inspire people to attain
organizational goals.
• Involves the use of influence or power.
• Three traits are common among many leaders:
• Empathy
• Self-awareness
• Objectivity in dealing with others
Leadership Styles
• Autocratic leadership Make decisions on own without consulting employees.
• Democratic leadership Involve employees in decisions, delegate assignments, ask employees for suggestions.
• Free-rein leadership Leave most decisions to employees.

Which Leadership Style Is Best?

• No single style is always best.
• Experts have identified several important variables:
• The leader’s base of power
• The difficulty of tasks involved
• The characteristics of the employees
CORPORATE CULTURE
Corporate culture Organizations system of principles, beliefs, and values.
• Managerial philosophies, communications networks, and workplace environments and practices all influence corporate culture.
• Typically shaped by the leaders who founded and developed the company and by those who have succeeded them.
• Can be changed.
• Strong culture = everyone knows and supports the same principles, beliefs, and values.
• Weak or constantly shifting culture = lack of a clear sense of purpose.

Proctor & Gamble emphasizes their unique corporate culture.

Organizational Structures
Organization Structured grouping of people working together to achieve
common goals.
Departmentalization
Departmentalization Process of dividing work activities into units within the
organization.
• Five major forms:
• Product
• Geographical
• Customer
• Functional
• Process
Delegating Work Assignments
Delegation Act of assigning work activities to subordinates.
• Employees receive both the responsibility and the necessary authority for completing the tasks.
• Employees have accountability, or responsibility for the results of the way they perform their
assignments.
Span of Management
Span of management Number of subordinates, or direct reports, a supervisor manages.
Centralization and Decentralization
• Centralization Decision making is retained at the top of the management hierarchy.
• Decentralization Decision making is located at the lower levels.
Types of Organization Structures
Line Organizations
• Oldest and simplest form; direct flow of authority from CEO to subordinates.
Chain of command Set of relationships that indicates who directs which
activities and who reports to whom.
• Ineffective in large- and medium-sized organizations.
Line-and-Staff Organizations
• Combines line departments and staff departments.
• Line departments participate directly in decisions that affect the core
operations of the organization.
• Staff departments lend specialized technical support.
Committee Organizations
• Authority and responsibility are jointly in the hands of
a group of individuals rather than a single manager.
• Tend to act slowly and conservatively.
• Often make decisions by compromising conflicting
interests rather than choosing best alternative.
Matrix Organizations
• Project management structure that links employees from different parts of the organization to work together on specific projects.
• Employees report to a line manager and a project manager.
• Advantages: Flexibility, ability to focus on major problems or products.
• Challenges: Integrating skills of many specialists into a coordinated teams, employee frustration and confusion over reporting to two bosses.