1. Chapter 7
Management, Leadership, and
the Internal Organization
2. Learning Goals
1 Define management and the three types 5 Contrast the types of business
of skills necessary for managerial decisions and list the steps in the
success. decision-making process.
2 Explain the role of vision and ethical 6 Define leadership and compare
standards in business success. different styles of leadership.
3 Summarize the benefits of planning and 7 Discuss the meaning and
distinguish strategic, tactical, and importance of corporate culture.
operational planning.
8 Identify the five major forms of
4
Describe the strategic planning process. departmentalization and four main
types of organization structures.
3. W is Management?
hat
s Management is the process of achieving organizational
objectives through people and other resources.
4. Top Management
s Develop long-range
strategic plans for
the organization.
s Inspire executives
and employees to
achieve their vision
for the company’s
future.
5. Middle Management
s Focus on specific
operations, products,
or customer groups
within an organization.
s Responsible for
developing detailed
plans and procedures
to implement the firm’s
strategic plans.
6. Supervisory Management
s Implement the plans
developed by middle
managers.
s Responsible for non-
manager employees.
s Motivate workers to
accomplish daily,
weekly, and monthly
goals.
7. Skills Needed for Management
Success
s Technical skills
s Manager’s ability to understand and use the
techniques, knowledge, and tools and equipment of a
specific discipline or department.
s Human skills
s Interpersonal skills that enable a manager to work
effectively with and through people.
s Conceptual skills
s Ability to see the organization as a unified whole and
to understand how each part of the overall
organization interacts with other parts.
8. Managerial Functions
Planning Controlling
s Process of anticipating s Evaluating an
future events and organization’s
conditions and determining performance to
courses of action for determine whether it is
achieving organizational accomplishing its
objectives. objectives.
Organizing
s Blending human and 3. Establish performance
material resources through standards.
a formal structure of 4. Monitor actual
authority. performance.
Directing 5. Compare actual
performance with
s Guiding and motivating established standards.
employees to accomplish
organizational objectives. 6. Take corrective action if
required.
9. Setting a Vision and Ethical Standards
s Vision is the perception of marketplace needs
and the methods an organization can use to
satisfy them.
s Must be focused yet adaptable to changes
in the business environment.
s Long-term success is also tied to the ethical
standards that the top management team sets.
s High ethical standard can also encourage, motivate,
and inspire employees to achieve goals.
s Ethical company list
10. Importance of Planning
s There are different types and levels of plans.
s Organizations should have a comprehensive
planning framework.
s From mission statement to objectives and goals
s Narrow functional plans
s Plans outline the steps the company will take
to meet outlined goals and objectives.
14. Managers as Decision Makers
s Decision making is the process of recognizing a
problem or opportunity, evaluating alternative
solutions, selecting and implementing an alternative,
and assessing the results.
s Programmed decision involves simple, common
problems with predetermined solutions.
s Nonprogrammed decision involves a complex,
unique problem or opportunity with important
consequences for the organization.
16. Managers as Leaders
s Leadership is the ability to direct or inspire
people to attain certain goals.
s Involves the use of influence or power.
s Three traits are common among many leaders:
s Empathy
s Self-awareness
s Objectivity in dealing with others
17. Leadership Styles
s Autocratic Leadership
s Make decisions on own
without consulting
employees.
s Democratic Leadership
s Involve employees in
decisions, delegate
assignments, and ask
employees for suggestions.
s Free-Rein Leadership
s Leave most decisions to
employees.
18. Corporate Culture
s Corporate Culture:
Organization’s system of
principles, beliefs, and
values.
s Managers use symbols,
rituals, ceremonies, and
stories to reinforce
corporate culture.
19. Organizational Structures
s Organization: structured grouping of people
working together to achieve common goals.
s Three key elements:
s Human interaction
s Goal-directed activities
s Structure
21. Departmentalization
Process of dividing work activities into units within the organization.
s Product departmentalization: organized based on the
goods and services a company offers.
s Geographical departmentalization: organized by
geographical regions within a country or, for a multinational
firm, by region throughout the world.
s Customer departmentalization: organized by the different
types of customers the organization serves.
s Functional departmentalization: organized by business
functions such as finance, marketing, human resources, and
production.
s Process departmentalization: organized by work processes
necessary to complete production of goods or services.
23. Delegating W Assignments
ork
s Delegation is the act of assigning work activities to
subordinates.
s Providing employees with the responsibility and the necessary
authority for completing tasks.
s Employees have accountability, or responsibility for the results of
the way they perform their assignments.
s Authority and responsibility move down; accountability moves up.
s Span of management is the number of subordinates, or
direct reports, a supervisor manages.
s Centralization: decision making is retained at the top of
the management hierarchy.
s Decentralization: decision making is located at the lower
levels. Many firms believe it enhances their flexibility and
responsiveness to customer needs.
24. Types of Organizational Structures
Line Organizations
s Oldest and simplest form; direct flow of authority from
CEO to subordinates.
s Chain of command indicates who directs which
activities and who reports to whom.
Line-and-Staff Organizations
s Combines line departments and staff departments.
s Line departments participate directly in decisions that
affect the core operations of the organization.
s Staff departments lend specialized technical support.
26. Committee Organizations
s Authority and responsibility are in the
hands of a group of individuals.
s Often part of a line-and-staff structure.
s Often develop new products.
s Tend to act slowly and conservatively.
s Often make decisions by compromising
conflicting interests rather than
choosing best alternative.
27. Matrix Organizations
s Project management structure that links employees
from different parts of the organization to work
together on specific projects.
s Employees report to a line manager and a project
manager.
Advantages: Disadvantages:
s Flexibility in adapting to s Integrating skills of many
changes. specialists into a coordinated
s Focus on major problems team.
or products. s Team members’ permanent
functional managers must
s Outlet for employees’
adjust the employees’
creativity and initiative. regular workloads.
