Chapter 6
Financial resources
The funds an organization uses to meet its obligations to investors and creditors.
Organizing
The grouping of resources and activities to accomplish some end result in an efficient and effective manner.
Taking corrective action
As necessary.
Administrative manager
(Also called a general manager) is not associated with any specific functional area but provides overall administrative guidance and leadership. Hospital administrators are an example of administrative managers. They do not specialize in operations, finance, marketing, or human resources management but instead coordinate the activities of specialized managers in all these areas. In many respects, most top managers are really administrative managers.
First-line manager
A manager who coordinates and supervises the activities of operating employees. First-line managers spend most of their time working with and motivating their employees, answering questions, and solving day-to-day problems. Most first-line managers are former operating employees who were promoted into management. Many of today's middle and top managers began their management careers on this first management level. Common titles for first-line managers include office manager, supervisor, and foreman.
Contigency plan
A plan that outlines alternative courses of action that may be taken if an organization's other plans are disrupted or become ineffective. Contingency plans may address disruptions caused by natural disasters, pandemics, criminal or ethical misconduct, hacking, political instability, or other unexpected activities. Also known as crisis plans, contingency plans can help halt the escalation of a disruptive situation and thereby minimize further harm to people, resources, or reputations.
Tactical plan
A smaller-scale plan developed to implement a strategy. Most tactical plans cover a one- to three-year period. If a strategic plan will take five years to complete, the firm may develop five tactical plans, one covering each year. Tactical plans may be updated periodically as dictated by conditions and experience. Their more limited scope permits them to be changed more easily than strategies.
Objective
A specific statement detailing what the organization intends to accomplish over a shorter period of time.
Mission
A statement of the basic purpose that makes that organization different from others.
Operational plan
A type of plan designed to implement tactical plans. Operational plans are usually established for one year or less and deal with how to accomplish the organization's specific objectives.
Setting standards
Against which performance can be compared.
Autocratic leadership
Also called authoritative leadership, is a hands-on, task-oriented leadership style. These leaders make decisions unilaterally, with little concern for employee opinions or knowledge. Employees are told exactly what is expected from them and given specific guidelines, rules, and regulations on how to achieve their tasks. Strict compliance is expected.
Interpersonal skills
Also known as soft skills or people skills, involve the ability to deal effectively with other people, both inside and outside an organization. Examples of interpersonal skills are the ability to listen to and build relationships with people, understand their needs and motives, and show genuine compassion. Conflict resolution, patience, and diplomacy are also useful skills for today's leaders.
Strategic Plan
An organization's broadest plan, developed as a guide for major policy setting and decision making.
Plan
An outline of the actions by which an organization intends to accomplish its goals and objectives.
Top manager
An upper-level executive who guides and controls an organization's overall fortunes. Top managers represent the smallest of the three groups. In terms of planning, they are generally responsible for developing the organization's mission. They also determine the firm's strategy. It takes years of hard work, long hours, and perseverance; talent; and no small share of good luck to reach the ranks of top management in large companies. Common job titles associated with top managers are president, vice president, chief executive officer (CEO), and chief operating officer (COO). These are often referred to as the "C-suite" because so many of the titles begin with the letter "C."
Core competencies
Approaches and processes that a company performs well that may give it an advantage over its competitors. These core competencies may help the firm attract financial and human resources that increase the firm's capacity to produce products that satisfy customers. Weaknesses refer to internal limitations a company faces in developing or implementing plans. At times, managers have difficulty identifying and understanding the negative effects of weaknesses in their organizations.
Optimization
As part of goal-setting, the manager responsible for both departments must strike a balance between conflicting goals. This balancing process is called optimization.
Communication skills
Both oral and written, involve the ability to speak, listen, and write effectively. Managers need both oral and written communication skills. Because a large part of a manager's day is spent conversing with others, the ability to speak and listen is critical. Oral communication skills are used when a manager makes sales presentations, conducts interviews, and holds press conferences. Written communication skills are important because a manager's ability to prepare letters, emails, memos, sales reports, and other written documents may spell the difference between success and failure. Computers, smartphones, and other high-tech devices make communication in today's businesses easier and faster. To manage an organization effectively and to stay informed, it is very important that managers understand how to use and maximize the potential of digital communication devices.
Human resources manager
Charged with managing an organization's human resources programs. This individual engages in human resources planning; designs systems for hiring, training, and evaluating the performance of employees; and ensures that the organization follows government regulations concerning employment practices.
Brainstorming
Commonly used in group discussions, encourages participants to produce many new ideas. During brainstorming, other group members are not permitted to criticize or ridicule.
Measuring actual performance
Comparing it with the standard.
Threats
Conditions or barriers that may prevent the firm from reaching its objectives.
If the problem still exists, managers may select one of the following choices:
Decide to give the chosen alternative more time to work. Adopt a different alternative. Start the problem identification process all over again.
Satisfice
Describes solutions that are only adequate and not ideal. When lacking time or information, managers often make decisions that "satisfice."
Goal
End result that an organization is expected to achieve over a one- to ten-year period.
Information
External environmental conditions—the economy, consumer markets, technology, politics, and cultural forces—are all changing so rapidly that a business must adapt to survive. To adapt to change, the business must gather information about competitors and changes to the industry in order to learn from the failures and successes of others.
Blast! Then refine
Group members tackle a recurring problem by erasing all previous solutions and procedures. The group then reevaluates its original objectives, modifies them if necessary, and devises new solutions.
Leadership
Has been defined broadly as the ability to influence others. Leadership is different from management in that a leader strives for voluntary cooperation, whereas a manager may have to depend on coercion to change employee behavior.
Major Steps in the Managerial Decision-Making Process
Identifying the problem or opportunity, generating alternatives, selecting an alternative, and implementing and evaluating the solution.
Both formal and informal leaders make use of several kinds of power:
Including the ability to grant rewards or impose punishments, the possession of expert knowledge, and personal attraction or charisma.
Technical skills
Involve specific skills needed to accomplish a specialized activity. For example, engineers and machinists need technical skills to do their jobs. First-line managers (and, to a lesser extent, middle managers) need to understand the technical skills relevant to the activities they manage in order to train subordinates, answer questions, and provide guidance, even though the managers may not perform the technical tasks themselves. In general, top managers do not rely on technical skills as heavily as managers at other levels. Still, understanding the technical side of a business is an aid to effective management at every level.
Conceptual skills
Involve the ability to think in abstract terms. Conceptual skills allow a manager to see the "big picture" and understand how the various parts of an organization or idea can fit together.
Participative leadership
Involves all members of a team identifying essential goals and developing strategies to reach those goals, is common in today's business organizations. Participative leaders consult workers before making decisions and make final decisions based on their support, though they retain final authority for decision making. This helps workers understand which goals are important and fosters a sense of ownership and commitment to reach them. Communication is open up and down the hierarchy. Coaching, collaborating, and negotiating are important skills for participative leaders.
Planning
Is establishing organizational goals and deciding how to accomplish them. It is often referred to as the "first" management function because all other management functions depend on planning.
Laissez-faire leadership
Known as free-rein leadership, is a hands-off leadership style. These leaders provide general direction along with tools and resources and then delegate responsibility and decision making to subordinates. As long as employees are satisfying expectations, these leaders expect them to apply their own skills and knowledge to furthering the goals of the organization.
Transactional leadership
Leadership style that emphasizes structure, monitoring employee performance, and using rewards and punishments to motivate subordinates to achieve organizational goals. These leaders tend to focus on the chain of command, productivity, and efficiency. They generally try to be considerate of subordinates because doing so can improve productivity. Transactional leadership is especially common in sports teams though it is often found in business organizations as well.
Authority
Legitimate power of position. To influence others to work toward the organization's objectives.
Middle manager
Make up the largest group of managers in most organizations. A manager who implements the strategy and major policies developed by top management. Middle managers develop tactical and operational plans, and they coordinate and supervise the activities of first-line managers. Titles at the middle-management level include division manager, department head, plant manager, and operations manager.
Operations manager
Manages the systems that convert resources into goods and services. Traditionally, operations management has been equated with manufacturing—the production of goods. However, in recent years, many of the techniques and procedures of operations management have been applied to the production of services and to a variety of nonbusiness activities. As with financial management, operations management has produced a large percentage of today's company CEOs and presidents.
Motivations
Obviously, different people do things for different reasons—that is, they have different motivations. Some are interested primarily in earning as much money as they can. Others may be spurred on by opportunities to get promoted.
Charismatic leadership
Personality dependent. These leaders influence, inspire, and motivate employees to perform due to their own innate charm and personality. They tend to be idealistic and forward-thinking and model behavior that reflects their high expectations.
Financial manager
Primarily responsible for an organization's financial resources. Accounting and investment are specialized areas within financial management. Because financing affects the operation of the entire firm, many CEOs and presidents of large companies are people who were first trained as financial managers.
Transformational leadership
Recognizes that today's competitive landscape requires challenging the status quo with new ideas. These leaders promote communication and transparency with high expectations while providing support and recognition to subordinates.
Opportunities
Refer to favorable conditions in the environment that could benefit the organization if properly exploited.
Marketing manager
Responsible for facilitating the exchange of products between an organization and its customers or clients. Specific areas within marketing are marketing research, product management, advertising, promotion, sales, and distribution. A sizable number of today's company presidents have risen from marketing management.
Analytic skills
The ability to identify problems correctly, generate reasonable alternatives, and select the "best" alternatives to solve problems. Top-level managers especially need these skills because they must discern the important issues from the less important ones, as well as recognize the underlying reasons for different situations.
Decision making
The act of choosing one alternative from a set of alternatives. In ordinary situations, decisions are made casually and informally. We encounter a problem, mull it over, settle on a solution, and go on. Managers, however, require a more systematic method for solving complex problems.
Problem
The discrepancy between an actual condition and a desired condition—the difference between what is occurring and what one wishes would occur.
Strategic Planning Process
The establishment of an organization's major goals and objectives and the allocation of resources to achieve them.
SWOT Analysis
The identification and evaluation of a firm's strengths, weaknesses, opportunities, and threats. Strengths and weaknesses are internal factors that affect a company's capabilities. Strengths refer to a firm's favorable characteristics and core competencies.
Human resources
The people that run the business.
Management
The process of coordinating people and other resources to achieve the goals of an organization.
Controlling
The process of evaluating and regulating ongoing activities to ensure that goals are achieved. The control function includes three steps. The first is setting standards against which performance can be compared. The second is measuring actual performance and comparing it with the standard. The third is taking corrective action as necessary.
Leading
The process of influencing people to work toward a common goal.
Motivating
The process of influencing people to work toward a common goal.
Material resources
The tangible, physical resources an organization uses.
Directing
Together, leading and motivating are often referred to as directing.
