GENERAL MANAGEMENT.pdf - GENERAL MANAGEMENT Introduction to General Management WH AT\u2019 S IN IT F OR M E Reading this chapter will help you do the

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Unformatted text preview: GENERAL MANAGEMENT Introduction to General Management WH AT’ S IN IT F OR M E ? Reading this chapter will help you do the following: 1. Learn who managers are and about the nature of their work. 2. Know why you should care about leadership, entrepreneurship, and strategy. 3. Know the dimensions of the planning-organizing-leading-controlling (P-O-L-C) framework. 4. Learn how economic performance feeds social and environmental performance. 5. Understand what performance means at the individual and group levels. 6. Create your survivor’s guide to learning and developing General management. We‘re betting that you already have a lot of experience with organizations, teams, and leadership. You‘ve been through schools, in clubs, participated in social or religious groups, competed in sports or games, or taken on full- or part-time jobs. Some of your experience was probably pretty positive, but you were also likely wondering sometimes, ―Isn‘t there a better way to do this?‖ After participating in this course, we hope that you find the answer to be ―Yes!‖ While management is both art and science, with our help you can identify and develop the skills essential to better managing your and others‘ behaviors where organizations are concerned. Before getting ahead of ourselves, just what is management, let alone Generalmanagement? A manager‘s primary challenge is to solve problems creatively, and you should view management as ―the art of getting things done through the efforts of other people.‖ [1] The Generalmanagement, then, are the means by which you actually manage, that is, get things done through others— individually, in groups, or in organizations. Formally defined, the Generalmanagement are the activities that ―plan, organize, and control the operations of the basic elements of [people], materials, machines, methods, money and markets, providing direction and coordination, and giving leadership to human efforts, so as to achieve the sought objectives of the enterprise.‖ [2] For this reason, Generalmanagement are often discussed or learned using a framework called P-O-L-C, which stands for planning, organizing, leading, and controlling. Managers are required in all the activities of organizations: budgeting, designing, selling, creating, financing, accounting, and artistic presentation; the larger the organization, the more managers are needed. Everyone employed in an organization is affected by management principles, processes, policies, and practices as they are either a manager or a subordinate to a manager, and usually they are both. Managers do not spend all their time managing. When choreographers are dancing a part, they are not managing, nor are office managers managing when they personally check out a customer‘s credit. Some employees perform only part of the functions described as managerial—and to that extent, they are mostly managers in limited areas. For example, those who are assigned the preparation of plans in an advisory capacity to a manager, to that extent, are making management decisions by deciding which of several alternatives to present to the management. However, they have no participation in the functions of organizing, staffing, and supervising and no control over the implementation of the plan selected from those recommended. Even independent consultants are managers, since they get most things done through others—those others just happen to be their clients! Of course, if advisers or consultants have their own staff of subordinates, they become a manager in the fullest sense of the definition. They must develop business plans; hire, train, organize, and motivate their staff members; establish internal policies that will facilitate the work and direct it; and represent the group and its work to those outside of the firm. [1] We draw this definition from a biography of Mary Parker Follett (1868–1933) written by P. Graham, Mary Parker Follett: Prophet of Management (Boston: Harvard Business School Press, 1995). Follett was an American social worker, consultant, and author of books on democracy, human relations, and management. She worked as a management and political theorist, introducing such phrases as “conflict resolution,” “authority and power,” and “the task of leadership.” [2] The fundamental notion of Generalmanagement was developed by French management theorist Henri Fayol (1841–1925). He is credited with the original planning-organizing-leading-controlling framework (P-O-L-C), which, while undergoing very important changes in content, remains the dominant management framework in the world. See H. Fayol, General and Industrial Management (Paris: Institute of Electrical and Electronics Engineering, 1916). 1.1 Who Are Managers? L EA RNIN G OBJE CTIVE S 1. Know what is meant by “manager”. 2. Be able to describe the types of managers. 3. Understand the nature of managerial work. Managers We tend to think about managers based on their position in an organization. This tells us a bit about their role and the nature of their responsibilities. The following figure summarizes the historic and contemporary views of organizations with respect to managerial roles. [1] In contrast to the traditional, hierarchical relationship among layers of management and managers and employees, in the contemporary view, top managers support and serve other managers and employees (through a process called empowerment), just as the organization ultimately exists to serve its customers and clients. Empowerment is the process of enabling or authorizing an individual to think, behave, take action, and control work and decision making in autonomous ways. In both the traditional and contemporary views of management, however, there remains the need for different types of managers. Top managers are responsible for developing the organization‘s strategy and being a steward for its vision and mission. A second set of managers includes functional, team, and general managers. Functional managers are responsible for the efficiency and effectiveness of an area, such as accounting or marketing. Supervisory or team managers are responsible for coordinating a subgroup of a particular function or a team composed of members from different parts of the organization. Sometimes you will hear distinctions made between line and staff managers. A line manager leads a function that contributes directly to the products or services the organization creates. For example, a line manager (often called a product, or service manager) at Procter & Gamble (P&G) is responsible for the production, marketing, and profitability of the Tide detergent product line. A staff manager, in contrast, leads a function that creates indirect inputs. For example, finance and accounting are critical organizational functions but do not typically provide an input into the final product or service a customer buys, such as a box of Tide detergent. Instead, they serve a supporting role. A project manager has the responsibility for the planning, execution, and closing of any project. Project managers are often found in construction, architecture, consulting, computer networking, telecommunications, or software development. A general manager is someone who is responsible for managing a clearly identifiable revenue-producing unit, such as a store, business unit, or product line. General managers typically must make decisions across different functions and have rewards tied to the performance of the entire unit (i.e., store, business unit, product line, etc.). General managers take direction from their top executives. They must first understand the executives‘ overall plan for the company. Then they set specific goals for their own departments to fit in with the plan. The general manager of production, for example, might have to increase certain product lines and phase out others. General managers must describe their goals clearly to their support staff. The supervisory managers see that the goals are met. Figure 1.3 The Changing Roles of Management and Managers The Nature of Managerial Work Managers are responsible for the processes of getting activities completed efficiently with and through other people and setting and achieving the firm‘s goals through the execution of four basic management functions: planning, organizing, leading, and controlling. Both sets of processes utilize human, financial, and material resources. Of course, some managers are better than others at accomplishing this! There have been a number of studies on what managers actually do, the most famous of those conducted by Professor Henry Mintzberg in the early 1970s. [2] One explanation for Mintzberg‘s enduring influence is perhaps that the nature of managerial work has changed very little since that time, aside from the shift to an empowered relationship between top managers and other managers and employees, and obvious changes in technology, and the exponential increase in information overload. After following managers around for several weeks, Mintzberg concluded that, to meet the many demands of performing their functions, managers assume multiple roles. A role is an organized set of behaviors, and Mintzberg identified ten roles common to the work of all managers. As summarized in the following figure, the ten roles are divided into three groups: interpersonal, informational, and decisional. The informational roles link all managerial work together. The interpersonal roles ensure that information is provided. The decisional roles make significant use of the information. The performance of managerial roles and the requirements of these roles can be played at different times by the same manager and to different degrees, depending on the level and function of management. The ten roles are described individually, but they form an integrated whole. The three interpersonal roles are primarily concerned with interpersonal relationships. In the figurehead role, the manager represents the organization in all matters of formality. The top-level manager represents the company legally and socially to those outside of the organization. The supervisor represents the work group to higher management and higher management to the work group. In the liaison role, the manager interacts with peers and people outside the organization. The top-level manager uses the liaison role to gain favors and information, while the supervisor uses it to maintain the routine flow of work. The leader role defines the relationships between the manager and employees. Figure 1.4 Ten Managerial Roles The direct relationships with people in the interpersonal roles place the manager in a unique position to get information. Thus, the three informational roles are primarily concerned with the information aspects of managerial work. In the monitor role, the manager receives and collects information. In the role of disseminator, the manager transmits special information into the organization. The top-level manager receives and transmits more information from people outside the organization than the supervisor. In the role of spokesperson, the manager disseminates the organization‘s information into its environment. Thus, the top-level manager is seen as an industry expert, while the supervisor is seen as a unit or departmental expert. The unique access to information places the manager at the center of organizational decision making. There are four decisional roles managers play. In the entrepreneur role, the manager initiates change. In the disturbance handler role, the manager deals with threats to the organization. In the resource allocator role, the manager chooses where the organization will expend its efforts. In the negotiator role, the manager negotiates on behalf of the organization. The top-level manager makes the decisions about the organization as a whole, while the supervisor makes decisions about his or her particular work unit. The supervisor performs these managerial roles but with different emphasis than higher managers. Supervisory management is more focused and short-term in outlook. Thus, the figurehead role becomes less significant and the disturbance handler and negotiator roles increase in importance for the supervisor. Since leadership permeates all activities, the leader role is among the most important of all roles at all levels of management. So what do Mintzberg‘s conclusions about the nature of managerial work mean for you? On the one hand, managerial work is the lifeblood of most organizations because it serves to choreograph and motivate individuals to do amazing things. Managerial work is exciting, and it is hard to imagine that there will ever be a shortage of demand for capable, energetic managers. On the other hand, managerial work is necessarily fast-paced and fragmented, where managers at all levels express the opinion that they must process much more information and make more decisions than they could have ever possibly imagined. So, just as the most successful organizations seem to have well-formed and well-executed strategies, there is also a strong need for managers to have good strategies about the way they will approach their work. This is exactly what you will learn through Generalmanagement. K EY TA KE AWA Y Managers are responsible for getting work done through others. We typically describe the key managerial functions as planning, organizing, leading, and controlling. The definitions for each of these have evolved over time, just as the nature of managing in general has evolved over time. This evolution is best seen in the gradual transition from the traditional hierarchical relationship between managers and employees, to a climate characterized better as an upside-down pyramid, where top executives support middle managers and they, in turn, support the employees who innovate and fulfill the needs of customers and clients. Through all four managerial functions, the work of managers ranges across ten roles, from figurehead to negotiator. While actual managerial work can seem challenging, the skills you gain through Generalmanagement—consisting of the functions of planning, organizing, leading, and controlling— will help you to meet these challenges. E XERC ISES 1. Why do organizations need managers? 2. What are some different types of managers and how do they differ? 3. What are Mintzberg’s ten managerial roles? 4. What three areas does Mintzberg use to organize the ten roles? 5. What four general managerial functions do Generalmanagement include? 6. [1] S. Ghoshal and C. Bartlett, The Individualized Corporation: A Fundamentally New Approach to Management (New York: Collins Business, 1999). 7. [2] H. Mintzberg, The Nature of Managerial Work (New York: Harper & Row, 1973). 1.2 Leadership, Entrepreneurship, and Strategy L EA RNIN G OBJE CTIVE S 1. Know the roles and importance of leadership, entrepreneurship, and strategy in Generalmanagement. 2. Understand how leadership, entrepreneurship, and strategy are interrelated. The Generalmanagement are drawn from a number of academic fields, principally, the fields of leadership, entrepreneurship, and strategy. Leadership If management is defined as getting things done through others, then leadership should be defined as the social and informal sources of influence that you use to inspire action taken by others. It means mobilizing others to want to struggle toward a common goal. Great leaders help build an organization‘s human capital, then motivate individuals to take concerted action. Leadership also includes an understanding of when, where, and how to use more formal sources of authority and power, such as position or ownership. Increasingly, we live in a world where good management requires good leaders and leadership. While these views about the importance of leadership are not new (see ―Views on Managers Versus Leaders‖), competition among employers and countries for the best and brightest, increased labor mobility (think ―war for talent‖ here), and hyper competition puts pressure on firms to invest in present and future leadership capabilities. P&G provides a very current example of this shift in emphasis to leadership as a key principle of management. For example, P&G recruits and promotes those individuals who demonstrate success through influence rather than direct or coercive authority. Internally, there has been a change from managers being outspoken and needing to direct their staff, to being individuals who electrify and inspire those around them. Good leaders and leadership at P&G used to imply having followers, whereas in today‘s society, good leadership means followership and bringing out the best in your peers. This is one of the key reasons that P&G has been consistently ranked among the top ten most admired companies in the United States for the last three years, according to Fortune magazine. [1] Whereas P&G has been around for some 170 years, another winning firm in terms of leadership is Google, which has only been around for little more than a decade. Both firms emphasize leadership in terms of being exceptional at developing people. Google has topped Fortune‘s 100 Best Companies to Work for the past two years. Google‘s founders, Sergey Brin and Larry Page, built a company around the idea that work should be challenging and the challenge should be fun. [2] Google‘s culture is probably unlike any in corporate America, and it‘s not because of the ubiquitous lava lamps throughout the company‘s headquarters or that the company‘s chef used to cook for the Grateful Dead. In the same way Google puts users first when it comes to online service, Google espouses that it puts employees first when it comes to daily life in all of its offices. There is an emphasis on team achievements and pride in individual accomplishments that contribute to the company‘s overall success. Ideas are traded, tested, and put into practice with a swiftness that can be dizzying. Observers and employees note that meetings that would take hours elsewhere are frequently little more than a conversation in line for lunch and few walls separate those who write the code from those who write the checks. This highly communicative environment fosters a productivity and camaraderie fueled by the realization that millions of people rely on Google results. Leadership at Google amounts to a deep belief that if you give the proper tools to a group of people who like to make a difference, they will. Views on Managers Versus Leaders My definition of a leader…is a man who can persuade people to do what they don’t want to do, or do what they’re too lazy to do, and like it. Harry S. Truman (1884–1972), 33rd president of the United States You cannot manage men into battle. You manage things; you lead people. Grace Hopper (1906–1992), Admiral, U.S. Navy Managers have subordinates—leaders have followers. Chester Bernard (1886–1961), former executive and author of Functions of the Executive The first job of a leader is to define a vision for the organization…Leadership is the capacity to translate vision into reality. Warren Bennis (1925–), author and leadership scholar A manager takes people where they want to go. A great leader takes people where they don’t necessarily want to go but ought to. Rosalynn Carter (1927–), First Lady of the United States, 1977–1981 Entrepreneurship It‘s fitting that this section on entrepreneurship follows the discussion of Google. Entrepreneurship is defined as the recognition of opportunities (needs, wants, problems, and challenges) and the use or creation of resources to implement innovative ideas for new, thoughtfully planned ventures. Perhaps this is obvious, but an entrepreneur is a person who engages in the process of entrepreneurship. We describe entrepreneurship as a process because it often involves more than simply coming up with a good idea— someone also has to convert that idea into action. As an example of both, Google‘s leaders suggest that its...
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