Chapter 4 Managing for Business Success

five step control process

(1) establish standards; (2) measure performance; (3) compare actual performance with standards, and identify any deviations; (4) determine the reason for deviations; and (5) take corrective action if needed

strategic-planning process steps:

-Write a mission statement that tells customers, employees, and others why your organization exists. -Identify core values or beliefs that will guide the behavior of members of the organization. -Assess the company's strengths, weaknesses, opportunities, and threats. -Establish goals and objectives, or performance targets, to direct all the activities that you'll perform to achieve your mission. -Develop and implement tactical and operational plans to achieve goals and objectives.

disadvantage of product division

A downside is that it results in higher costs as corporate support services (such as accounting and human resources) are duplicated in each of the four divisions.

Leader (directing)

And because your note-taking venture is supposed to be better off with you in charge, you need to be a leader who can motivate your people to do well

About a year ago you began using the five-step control process in your organization. At the beginning of the process, you set standards by which performance would be measured. Now, three months later, you measured performance and compared actual performance with standard performance and identified a deviation. The reason for the deviation could be:

Any of these options

goals and objectives change over time

As a firm reassesses its place in its business environment, it rethinks not only its mission but also its approach to fulfilling it

Organizations face the risk of encountering crises that require immediate attention. Rather than wait until such a crisis occurs and then scramble to figure out what to do, many organizations practice crisis management. In spite of crisis management training, which company will be remembered for its chief executive officer's (CEO) poor job at crisis management?

BP

reporting relationships

Because four managers report to you, you'll be connected to four positions; that is, you'll have four direct "reports"

A plan enables a manager to take a business concept beyond the idea stage. Executing a plan includes all of the following steps EXCEPT:

Brainstorming alternative approaches to achieve your goals

disadvantages of functional organization

But homogeneity also has drawbacks: it can hinder communication and decision making between units and even promote interdepartmental conflict

Departmentalization

Depending on the organization and the size of the work units, they may be called divisions, departments, or just plain groups. Traditional groupings of jobs result in different organizational structures, and for the sake of simplicity, we'll focus on two types—functional and divisional organizations.

You are the manager of a Crocs shoe store in Honolulu. Business is booming so you hire a new worker to unload boxes of shoes and stack them in the storage room. You estimate that the worker can unload and place 25 boxes in an hour. After a few weeks, you do a time check on the worker and find that he can unload only 15 boxes an hour, 10 below what you expected. What should you do now?

Determine the reason for the 10-box deviation and take corrective action if needed

disadvantage of specialization

Doing the same thing over and over bores people and will eventually leave employees dissatisfied with their jobs. Before long, you'll notice decreased performance and increased absenteeism and turnover.

Let's say you are the chief executive officer (CEO) of Trimpers, an amusement park. Trimpers has only one location and provides only one service - amusement rides. You have three people reporting to you: the vice president of marketing, the vice president of finance, and the vice president of operations. Each of these three individuals has two people reporting to them. Your company's organization chart would most likely be drawn up using a:

Functional structure

Let's say you are a manager in a large organization. Which of the following best describes the functions you will perform?

Planning, organizing, directing, and controlling

When a manager measures results and compares the actual results with the planned results, the manager is performing the __________________ function.

Set goals, create objectives, develop tactical plans, operationalize plans

An organization will have a number of goals and related objectives

Some will focus on financial measures, such as profit maximization and sales growth. Others will target operational efficiency or quality control. Still others will govern the company's relationships with its employees, its community, its environment, or all three.

what is the challenge of divisional organization?

The challenge is to find the most appropriate way of structuring operations to achieve overall company goals. Toward this end, divisions can be formed according to products, customers, processes, or geography.

Centralization

The first option, in which most decision making is concentrated at the top

specialization

The first step in designing an organizational structure is twofold: -Identifying the activities that need to be performed in order to achieve organizational goals. -Breaking down these activities into tasks that can be performed by individuals or groups of employees.

decentralization

The second option, which spreads decision making throughout the organization

advantages of functional organization

The structure is simple to understand and enables the staff to specialize in particular areas; everyone in the marketing group would probably have similar interests and expertise

operational plans

The tactical plan is then broken down into various operational plans that provide detailed action steps to be taken by individuals or groups to implement the tactical plan and, consequently, the strategic plan. Operational plans cover only a brief period—say, a week or a month.

middle managers

They report to top management and oversee the activities of first-line managers. They're responsible for developing and implementing activities and allocating the resources needed to achieve the objectives set by top management.

lines of authority

You can learn a lot about a firm's reporting and authority relationships by looking at its organization chart.T o whom does a particular person report? Does each person report to one or more supervisors? How many people does a manager supervise? How many layers are there, for example, between the top managerial position and the lowest managerial level?

Organize

You have to organize things if you want your plan to become a reality. You have to put people and other resources in place to make things happen

restructuring

altering existing organizational structures to become more competitive under conditions that have changed

organizational structure

an arrangement of positions that's most appropriate for your company at a specific point in time.

responsibility and authority

as the organization grows, you'll have to assign responsibility for performing certain tasks to other people. the duty to perform a task—won't be enough to get the job done. You'll need to grant subordinates the authority they require to complete a task—that is, the power to make the necessary decisions. (And they'll also need sufficient resources.)

You work as a chef at an expensive Italian restaurant. The chef tends to make decisions without seeking input from the other chefs. He expects the chefs to take responsibility for performing the required tasks without undue explanation. Most of those working in the kitchen dislike working for the head chef who follows a(n) ___________________________leadership style.

autocratic

The vertical connecting lines in an organization chart show the firm's ________________________ which shows the authority relationships among people working at different levels of the organization (that is to say, they show who reports to whom).

chain of command

top manager titles

chief executive officer (CEO), chief financial officer (CFO), chief operating officer (COO), president, and vice president.

When a manager measures results and compares the actual results with the planned results, the manager is performing the __________________ function.

controlling

Successful managers

decide where they want to be and then figure out how to get there

first-line manager titles

department head, group leader, office manager, foreman, and supervisor.

is narrow or wide span of control better?

depends on a number of factors, including frequency and type of interaction, proximity of subordinates, competence of both supervisor and subordinates, and the nature of the work being supervised

mission statement

describes the purpose of your organization—the reason for its existence. It tells the reader what the organization is committed to doing. It can be very concise(Mary kay inc.) or very detailed (Harley-Davidson)

job specialiazation

dividing tasks into jobs

external factors ( could influence the company in either a positive or a negative way)

economic conditions, competition, emerging technologies, laws and regulations, and customer's' expectations

geographical division

enables companies that operate in several locations to be responsive to customers at a local level

customer division

enables them to better serve their various categories of customers.

Plan

enables you to take your business concept beyond the idea stage. It does not, however, get the work done

advantage of geographical division

enhances the ability to respond to changes in a firm's environment.

efficient

ensuring that activities were performed in the right way and used the fewest possible resources

effective

ensuring that the right things got done and that they all contributed to the success of the enterprise.

world's most popular core values:

ethics/integrity, accountability, respect for others, and open communication

Transactional Leadership

exercise authority based on their rank in the organization. They let subordinates know what's expected of them and what they will receive if they meet stated objectives. They focus their attention on identifying mistakes and disciplining employees for poor performance

detailed mission statement includes

explains what the company is committed to doing, who its customers are, what its focus is, what goods or services it provides, and how it serves its customers

You work on the "Peeps" production line at Just Born. Your boss is likely a ______________________ manager.

first-line

Democratic style

generally seek input from subordinates while retaining the authority to make the final decisions. They're also more likely to keep subordinates informed about things that affect their work.

process division

goods move through several steps during production

departmentalization

grouping jobs into units

Functional Organization

groups together people who have comparable skills and perform similar tasks. This form of organization is fairly typical for small to medium-size companies, which group their people by business functions. Each unit is headed by an individual with expertise in the unit's particular function

disadvantage of geographical division

if services must be duplicated across units, costs will be higher. In addition, some companies have found that units tend to focus on their own needs and goals at the expense of the organization as a whole.

execution

involves managers at all levels.

Phil Knight, founder of Nike, earned a reputation as a ________________________leader by adopting a hands-off approach and providing very little direction to his subordinates.

laissez-faire

good leaders

learn how to adjust their styles to fit both the situation and the individuals being directed.

goals

major accomplishments that the company wants to achieve over a long period (say, five years)

Manger's job

making a group of people more effective and efficient with you than they would be without you

Laissez-faire style

managers adopt a "hands-off" approach and provide relatively little direction to subordinates. They may advise employees but usually give them considerable freedom to solve problems and make decisions on their own.

Contingency Planning

managers identify those aspects of the business that are most likely to be adversely affected by change. Then, they develop alternative courses of action in case an anticipated change does occur

environmental analysis

matching the strengths of your business with the opportunities available to it

product division

means that a company is structured according to its product lines. Each division has its own research and development group, its own manufacturing operations, and its own marketing team. This allows individuals in the division to focus all their efforts on the products produced by their division

span of control

measures the number of people reporting to a particular manager

Transformational Leadership

mentor and develop subordinates, providing them with challenging opportunities, working one-on-one to help them meet their professional and personal needs, and encouraging people to approach problems from new perspectives. They stimulate employees to look beyond personal interests to those of the group. (more effective)

When the Chief Executive Officer (CEO) of Mary Kay, Inc. indicates that the company's purpose is "to enrich the lives of women around the world," the CEO is quoting the company's:

mission statement

wide span of control (taller)

more layers between the top and the bottom. added layers of management can slow down communication and decision making, causing the organization to become less efficient and productive. many direct reports.

tactical plan

more manageable, shorter-term components. These plans specify the activities and allocation of resources (people, equipment, money) needed to implement the overall strategic plan over a given period. Often, a long-range strategic plan is divided into several tactical plans; a five-year strategic plan, for instance, might be implemented as five one-year tactical plans.

divisional organization

most large companies are structured as divisional organizations made up of several smaller, self-contained units, or divisions, which are accountable for their own performance. Each division functions autonomously because it contains all the functional expertise (production, marketing, accounting, finance, human resources) needed to meet its objectives

strengths

motivated workforce, state-of-the-art technology, impressive managerial talent, or a desirable location

narrow span of control (flat)

only a few layers of management (can be more workload) few direct reports

middle manager titles

operations manager, division manager, plant manager, and branch manager.

managers want to capitalize on -------- by taking advantage of organizational ------. Likewise, they want to protect the organization from both external threats and internal weaknesses.

opportunities, strengths

weaknesses

poor workforce, obsolete technology, incompetent management, or poor location

controlling

process of comparing actual to planned performance and taking necessary corrective action

directing

providing focus and direction to others and motivating them to achieve organizational goals

the organization chart

represent that structure in an organization chart: a diagram delineating the interrelationships of positions within the organization.

top managers

responsible for the health and performance of the organization. They set the objectives, or performance targets, designed to direct all the activities that must be performed if the company is going to fulfill its mission

advantage of specialization

results in jobs that are easier to learn.

top level executives

routinely scan the external environment for opportunities and threats, and they redirect company efforts when needed. They spend a considerable portion of their time planning and making major decisions. They represent the company in important dealings with other businesses and government agencies, and they promote it to the public

Crisis Management

set up teams trained to deal with emergencies. Members gather information quickly and respond to the crisis while everyone else carries out his or her normal duties. The team also keeps the public, the employees, the press, and government officials informed about the situation and the company's response to it.

objectives

shorter-term performance targets that direct the activities of the organization toward the attainment of a goal. They should be clearly stated, attainable, and measurable: they should give target dates for the completion of tasks and stipulate who's responsible for taking necessary actions.

core values

small set of guiding principles that you identify as crucial to your company. fundamental beliefs about what's important and what is and isn't appropriate in conducting company activities. affect the overall planning processes and operations. guide the behavior of every individual in the organization

Attending college is expensive. To cover your tuition and other costs, you work part-time as an assistant manager at the local one-screen movie theater. You have held this position for three years. Recently, you notice that the line of those buying tickets has been moving slowly. Since you just read about the five-step control process, you decide to use this approach to fix the "slow-line" problem. Your first step is to decide how many minutes each worker should take to service a ticket buyer. The figure you arrive at is called a(n)________________________.

standard

strategic planning

step one and is the process of establishing an overall course of action. To begin this process, you should ask yourself a couple of very basic questions: Why, for example, does the organization exist? What value does it create?

swot

strengths, weaknesses, opportunities, threats

first-line managers

supervise employees and coordinate their activities to make sure that the work performed throughout the company is consistent with the plans of both top and middle management. They're less involved in planning than higher-level managers and more involved in day-to-day operations. It's at this level that most people acquire their first managerial experience.

Autocratic style

tend to make decisions without soliciting input from subordinates. They exercise authority and expect subordinates to take responsibility for performing the required tasks without undue explanation.

interpersonal skills

the ability to get along with and motivate other people—are critical for managers in mid level positions. These managers play a pivotal role because they report to top-level managers while overseeing the activities of first-line managers. More than most other managers, they must use "people skills" to foster teamwork, build trust, manage conflict, and encourage improvement.

conceptual skills

the ability to reason abstractly and analyze complex situations. Senior executives are often called on to "think outside the box"—to arrive at creative solutions to complex, sometimes ambiguous problems. They need both strong analytical abilities and strong creative talents.

chain of command

the authority relationships among people working at different levels of the organization. That is to say, they show who reports to whom. (vertical connecting lines in organization chart)

technical skills

the ones you need to perform specific tasks—and you'll use them extensively during your early career. (You'll probably be hired for your first job based on these) . Technical skills will come in handy when you move up to a first-line managerial job and oversee the task performance of subordinates. Technical skills, though developed through job training and work experience, are generally acquired during the course of your formal education.

delegating authority

the process of entrusting work to subordinates. many managers are reluctant to delegate. As a result, they not only overburden themselves with tasks that could be handled by others, but they also deny subordinates the opportunity to learn and develop new skills.

Management

the process of planning, organizing, directing, and controlling resources to achieve specific goals

what is the purpose of specialization?

to improve efficiency

control

to know whether things are in fact going well, you'll have to control your operations—that is, measure the results and compare them with the results that you laid out in your plan

Managers use planning...

to set goals and determine the best way to achieve them. As a result of the planning process, everyone in the organization knows what should be done, who should do it, and how it should be done.

So-called ___________________ leaders mentor and develop subordinates and provide them with challenging opportunities. They work one-to-one with subordinates to help them meet their professional and personal needs.

transformational

informal communications

unofficial relationships among members of an organization

communication skills

you'll often be judged on your ability to communicate, both orally and in writing. Whether you're talking informally or making a formal presentation, you must express yourself clearly and concisely