Lecture Business: A changing world - Chapter 7: Managerial decision-making

After reading this chapter, you will be able to: Define management and explain its role in the achievement of organizational objectives, describe the major functions of management, distinguish among three levels of management and the concerns of managers at each level, specify the skills managers need in order to be successful, summarize the systematic approach to decision making used by many business managers, recommend a new strategy to revive a struggling business.

Chapter Seven Managerial Decision­Making     © 2003 McGraw­Hill Ryerson Limited  Management A process designed to achieve an organizations objectives by using its resources effectively and efficiently in a changing environment 7-1     © 2003 McGraw­Hill Ryerson Limited  The Functions of Management 7-2 Managers Planning activities to achieve the organization's objectives   Organizing resources and activities to achieve the organization’s objectives   © 2003 McGraw­Hill Ryerson Limited  Staffing the organization with qualified people Directing employees’ activities toward achievement of objectives Controlling the organization’s activities to keep it on course Types of Plans Operational Plans 7-3   Specify actions to achieve tactical plans (very short­term) Tactical Plans Designed to implement strategic objectives (usually one year or less) Strategic Plans Establish long­range objectives   © 2003 McGraw­Hill Ryerson Limited  Levels of Management Top Management President, CEO, Executive Vice Presidents 7-4 Middle Management Plant Managers, Division Managers, Department Managers First­Line Management Forepersons, Supervisors, Office Managers     © 2003 McGraw­Hill Ryerson Limited  Importance of Management Functions to Managers in Each Level 7-6   Top Managers Middle Managers   © 2003 McGraw­Hill Ryerson Limited  First­Line Managers Controlling Directing Staffing Organizing Planning Controlling Directing Staffing Organizing Planning Controlling Directing Staffing Organizing Least Important Planning Most Important Factors in Organizations That Cause  Differences in Management Activities Profit versus Nonprofit Organization s 7-7 Industry Level of Management Organizationa l Culture Organizationa l Size Management Activities     © 2003 McGraw­Hill Ryerson Limited  Area of Management Areas of Management • • • • • 7-8   Financial Production and Operations Human Resources Marketing Administrative   © 2003 McGraw­Hill Ryerson Limited  Favorite Executive Recreation 7-9 Golf Reading Team sports 21% 14% 10% What chief financial officers at large corporations say is their favourite activity   â2003McGrawưHillRyersonLimited Source:Accountemps SkillsNeededbyManagers 7-10   Leadership Technical Expertise Conceptual Analytical Human Relations   © 2003 McGraw­Hill Ryerson Limited  Leading vs. Managing Personality Style 7-13a • • • • • •   Managers Persistent Toughưminded Hardưworking Intelligent Analytical Tolerant â2003McGrawưHillRyersonLimited • Leaders Imaginative Passionate Non­conforming Risk­taking Source: “Leading vs. Managing ­ They’re Two Different Animals,” Online Women’s Business Center, October 19, 1998 Leading vs. Managing Attitudes Toward Goals 7-13b   Managers • Impersonal • Almost passive • Reactive â2003McGrawưHillRyersonLimited Leaders Personal Promoteandshape ideas Active Source: “Leading vs. Managing ­ They’re Two Different Animals,” Online Women’s Business Center, October 19, 1998 Leading vs. Managing Relations With Others 7-13c   Managers • Collaborative • Low level of  emotional  involvement   © 2003 McGraw­Hill Ryerson Limited  Leaders • Relate to people in intuitive,  empathetic ways Source: “Leading vs. Managing ­ They’re Two Different Animals,” Online Women’s Business Center, October 19, 1998 Steps in the Decision Making Process 7-14   Recognize and define the decision situation Develop options Analyze options Select the best option Implement the decision Monitor the consequences â2003McGrawưHillRyersonLimited J.P.KottersTwoBasic ManagementFunctions Figuringoutwhattododespite uncertainty,greatdiversity,andan enormousamountofpotentially relevantinformation • Getting things done through a large and  diverse set of people despite having  little direct control over most of them     © 2003 McGraw­Hill Ryerson Limited  Solve the Dilemma Evaluate Infinity’s current situation and  analyze its strengths and weaknesses.  Evaluate the opportunities for Infinity,  including using its current strategy and  propose alternative strategies. Suggest a  plan for Infinity to compete successfully  over the next ten years 7-15     © 2003 McGraw­Hill Ryerson Limited  Explore Your Career Options 7-16 In which types of industries or sectors  are managers the most likely to be  hired?     © 2003 McGraw­Hill Ryerson Limited  An Example of Managerial Decision Making:  Influencing Employees’ Performance Using Information to Make Decision 7-17 Information Gathered Human Behavior Principles Effects of goal setting,  rewarding behaviour, and  learning Employee Characteristics Job skills and attitudes Work Characteristics Available technology and materials Time constraints Demand for output   Determine Alternatives Retraining of employees Initiating work teams Developing individual per­ formance reward system Evaluate Alternatives Cost Feasibility of implementing Expected outcome Choose Alternative Developing individual per­ formance reward system   © 2003 McGraw­Hill Ryerson Limited  Implementing Decision Identify Rewards to be Used Set Standards for Performance Communicate Standards to  Employees Ensure Employees are  Adequately Trained Determine Method of  Measuring Performance Collect Performance Data Administer Rewards to  Employees Reaching  Standards What is your management  action style? Action Style Choices for Managers 7-18a   Inactive Re­active Pro­active Who is leading? co­workers chance you Can subordinates depend on leader (trust)? No­cannot predict what will happen yes­can expect late, disorganized, often negative behavior yes­can feel safe because they trust action even when they disagree   © 2003 McGraw­Hill Ryerson Limited  Source: “What Is Your Management Action Style?” from the Online Women’s Business Center, http://www.onlinewbc.org/docs/ manage/style.html, October 19,1998 What is your management  action style? 7-18b Action Style Choices for Managers   Inactive Re­active Pro­active Quality of training for subordinates? little, if any negative because it's given to correct action already taken organized; gives what is expected to do job, time to practice, and re­evaluate Productivity level? random low good   © 2003 McGraw­Hill Ryerson Limited  Source: “What Is Your Management Action Style?” from the Online Women’s Business Center, http://www.onlinewbc.org/docs/ manage/style.html, October 19,1998 Additional Discussion  Questions and Exercises What is the difference between strategic plans and tactical  plans? 7-19 Which of the five functions of management is most closely  concerned with evaluation? Which level of management is most likely to need technical  skills? Describe the individuals with whom managers are involved  in networking. What is the value of networking for  managers?     © 2003 McGraw­Hill Ryerson Limited  Chapter 7 Quiz 7-20a Which of the following skills involves the ability to think creatively, to think  in abstract parts, and to see how terms fit together to form a whole? a analytical skills b conceptual skills c human relation skills d technical skills Which describes free­rein leaders? a Leaders make all decisions and tell employees what to do and how to do it b Leaders allow employees to get involved in decisions c Leaders allow top management to make all decisions and tell employees  what to do and how to do it d Leaders let employees work without much interference     © 2003 McGraw­Hill Ryerson Limited  Chapter 7 Quiz 7-20b An agenda is most closely associated with a networking b technical expertise c a calendar d financial resources The ability to deal with people is know as a analytical skills b conceptual skills c humanrelationskills d technicalskills â2003McGrawưHillRyersonLimited PrinciplesofFair Information Accountability of organizations • Identifying the purpose of information  collected • Consent of the information provider • Limiting collection of information • Limiting the use, retention and disclosure of  informationcollected â2003McGrawưHillRyersonLimited PrinciplesofFair Information •   Accuracy Safeguards Openness Individual access Challenging compliance   © 2003 McGraw­Hill Ryerson Limited  ... Management Organizationa l Culture Organizationa l Size ManagementActivities â2003McGrawưHillRyersonLimited Areaof Management AreasofManagement • • • 7-8   Financial Production and Operations... © 2003 McGraw­Hill Ryerson Limited  Chapter 7 Quiz 7-2 0b An agenda is most closely associated with a networking b technical expertise c a calendar d financial resources The ability to deal with people is know as a analytical skills... Leading vs. Managing Attitudes Toward Goals 7-1 3b   Managers • Impersonal • Almost passive • Reactive   © 2003 McGraw­Hill Ryerson Limited  Leaders • Personal • Promote and shape  ideas • Active