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Chapter

1 Managing

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Learning Objectives

 After studying Chapter 1, you will know:

 the major challenges of managing in the new era
 the drivers of competitive advantage for your company

 the functions of management and how they are evolving in

today’s business environment

 the nature of management at different organizational levels

 the skills you need to be an effective manager

 what to strive for as you manage your career

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Managing In The New Era

 Managerial practices will always separate effective from

ineffective organizations
 Four key elements are new elements in business today

Internet Globalization

New Era
Management

Collaboration
Knowledge
Across
Management
“Boundaries”
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Managing In The New Era (cont.)

 The Internet
 communication technologies are driving massive change
 initial enthusiasm for e-business has dwindled

 25% of publicly-held Web companies became profitable in 2002

 most profitable Web companies sell information-based
products that don’t require shipping
 old economy types now using the Internet as a tool to solidify

their future

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Managing In The New Era (cont.)

 Globalization

 farmore than in the past, enterprises are global

 competing globally is not easy

 companies often overestimate the attractiveness of foreign

markets
 even small firms that do not operate on a global scale must
make strategic decisions based on international considerations
 face intense competition from high-quality foreign producers

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Managing In The New Era (cont.)

 Knowledge management
 practices aimed at discovering and harnessing an
organization’s intellectual resources
 unlock people’s expertise, skills, wisdom, and relationships
 intellectualcapital is the collective brainpower of the
organization
 Collaboration across “boundaries”
 capitalize
on the ideas of people outside the traditional
company “boundaries”
 occurs between as well as within organizations
 e.g., must effectively capitalize on customers’ brains
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Managing For Competitive Advantage

 Best managers and companies deliver all four

Cost
Innovation
Competitiveness

Competitive
Advantage

Quality Speed

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Managing For Competitive Advantage
(cont.)
 Innovation

 the introduction of new goods and services

 comes from people
 must be a strategic goal

 must be managed properly

 Quality

 excellence of a product, including its attractiveness, lack of

defects, reliability, and long-term durability
 importance of quality has increased dramatically

 catering to customers’ other needs creates more perceived

quality
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Managing For Competitive Advantage
(cont.)
 Speed

 fastand timely execution, response, and delivery of results

 often separates winners from losers in world competition

 requirement has increased exponentially

 Cost competitiveness
 costs are kept low enough so that you can realize profits and
price your products at levels that are attractive to consumers
 key is efficiency - accomplishing goals by using resources wisely

and minimizing waste

 little things can save big money

 cost cuts involve tradeoffs

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The Functions Of Management

 Management

 theprocess of working with people and resources to

accomplish organizational goals
 good managers must be:

 effective - achieve organizational goals

 efficient - achieve goals with minimum waste of resources

 there are timeless principles of management

 still important for making managers and companies great
 must add fresh thinking and new approaches

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The Functions Of Management (cont.)

 The manager who does not devote adequate attention and

resources to all four functions will fail

Leading

Organizing Controlling

Planning

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The Functions Of Management (cont.)

 Planning

 specifying the goals to be achieved and deciding in advance

the appropriate actions taken to achieve those goals
 delivering strategic value - planning function for the new era

 a dynamic process in which the organization uses the brains of

its members and of stakeholders to identify opportunities to
maintain and increase competitive advantage
 process intended to create more value for the customer

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The Functions Of Management (cont.)

 Organizing

 assembling and coordinating the human, financial, physical,

informational, and other resources needed to achieve goals
 building a dynamic organization - organizing function for the

new era
 viewing people as the most valuable resource
 the future requires building flexible organizations

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The Functions Of Management (cont.)

 Leading

 stimulating people to be high performers

 in the new era, managers must be good at mobilizing people to

contribute their ideas

 Controlling

 monitoring progress and implementing necessary changes

 makes sure that goals are met

 new technology makes it possible to achieve more effective

controls
 for the future, will have to be able to monitor continuous

learning and changing

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Management Levels

 Top-level managers (strategic managers)

 senior executives responsible for the overall management and
effectiveness of the organization
 focus on long-term issues

 emphasize the survival, growth, and effectiveness of the firm

 concerned with the interaction between the organization and

its external environment

 titles include Chief Executive Officer (CEO), Chief Operating

Officer (COO), company presidents and vice presidents

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Management Levels (cont.)

 Middle-level managers (tactical managers)

 located between top-level and frontline managers in the
organizational hierarchy
 responsible for translating strategic goals and plans into more

specific objectives and activities

 traditional role was that of an administrative controller who

bridged the gap between higher and lower levels

 provide operating skills and practical problem solving the

keep the company working

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Management Levels (cont.)

 Frontline managers (operational managers)

 lower-level managers who supervise the operational activities
of the organization
 directly involved with nonmanagement employees

 increasingly being called on to be innovative and

entrepreneurial
 titles include supervisor or sales manager

 Working leaders with broad responsibilities

 in small firms and large firms that have adapted to the times,
managers have strategic, tactical, and operational
responsibilities
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Transformation of Frontline
Management Roles and Tasks
Changing roles • From operational implementers to aggressive
entrepreneurs
Primary value • Driving business performance by focusing on
productivity, innovation and growth within frontline
units

Key activities • Creating and pursuing new opportunities for the

business
• Attracting and developing resources and
competencies
• Managing continuous performance improvement
within the unit
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Transformation of Middle-Level
Management Roles and Tasks
Changing roles • From administrative controllers to supportive
coaches
Primary value • Providing the support and coordination to bring
large company advantage to the independent
frontline units

Key activities • Developing individuals and supporting their

activities
• Linking dispersed knowledge, skills, and best
practices across units
• Managing the tension between short-term
performance and long-term ambition
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Transformation of Top-Level
Management Roles and Tasks
Changing roles • From resource allocators to institutional leaders

Primary value • Creating and embedding a sense of direction,

commitment and challenge to people throughout
the organization

Key activities • Challenging embedded assumptions while

establishing a stretching opportunity horizon and
and performance standards
• Institutionalizing a set of norms and values to
support cooperation and trust
• Creating an overarching corporate purpose and
ambition
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Management Skills

 Skill- specific ability that results from knowledge,

information, and aptitude
 Technical skill

 ability
to perform a specialized task that involves a certain
method or process
 managers at higher levels rely less on technical skills

 Conceptual and decision skills

 ability to identify and resolve problems for the benefit of the
organization
 assume greater importance as manager acquires more

responsibility
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Management Skills (cont.)

 Interpersonal and communication skills

 ability to lead, motivate, and communicate effectively with
others
 people skills
 importantthroughout your career at every level of
management

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You And Your Career

 Jobs are no longer as secure for managers as they used to be

 organizationsstill try to develop and retain good employees
 employee loyalty and commitment are still important

 Companies offering “employability” to workers tend to be

more successful
 providetraining and other learning experiences
 employees perform work with greater responsibility

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You And Your Career (cont.)

 Be both a specialist and generalist

 specialist - expert in something
 provide concrete, identifiable value to the firm
 generalist - knowing about a variety of business functions so
that you can understand work with different perspectives
 Be self-reliant
 takeresponsibility for yourself, your actions, and your career
regardless of where you work
 think and act like an entrepreneur

 look for opportunities to contribute in new ways

 generate constructive change

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You And Your Career (cont.)

 Be connected
 establish many good working relationships
 be a team player with strong interpersonal skills

 all business is a function of human relationships

 competitive advantage depends upon you and other people

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Keys to Career Management

1. Think of yourself as a business.

2. Define your product: What is your area of expertise?
3. Know your target market: To whom are you going to sell this?
4. Be clear on why your customer buys from you. What is your
“value proposition” - what are you offering that causes him to
use you?
5. As in any business, strive for quality and customer satisfaction, even
if your customer is just someone else in your organization - like
your boss.
6. Know your profession or field and what’s going on there.
7. Invest in your own growth and development, the way a company
invests in research and development. What new products will you
be able to provide?
8. Be willing to consider changing your career.
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You And Your Career (cont.)

 Actively manage your relationship with your organization

 two ways to think about the nature of the relationships
between you and your employer
 view yourself as an employee
 model for just getting by
 contributions likely to be minimal
 two-way, mutually-beneficial exchange relationship
 think about how you can contribute and act accordingly
 figure out new ways to add value

 organization likely provide full and fair rewards, support further

personal development, and offer more gratifying work environment

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Two Relationships: Which Will You
Choose?

#1 #2
You as a passive employee You as an active contributor
in a productive relationship

Employer

Your
You
Organization
You

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Managerial Action Is Your Opportunity
To Contribute

You

Managerial Actions
1. Delivering Strategic
Value
2. Building a Dynamic
Your Organization
Organization 3. Mobilizing People
4. Learning and
Changing
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You And Your Career (cont.)

 Survive and thrive

 be prepared to move from project to project, team to team
 be a master at something that the world values

 develop a strong network of colleagues who can help with

current and future projects

 have entrepreneurial skills that help you act as if you were

running your own business

 love technology

 market yourself

 be willing to constantly improve and even reinvent yourself

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