Identify and define the four key functions of management. Explain the differences between strategic, tactical, operational, and contingency planning. What is the purpose of the SWOT analysis? What types of information does this analysis provide? What is empowerment? How has the movement toward empowerment changed the role of the manager? Describe the three basic types of management skills, and relate these skills to the tasks performed by different levels of management.
Chapter 07 - Management and Leadership TEST PLANNING TABLE FOR CHAPTER Learning Objective Describe the changes occurring today in the management function Describe the four functions of management Relate the planning process and decision making to the accomplishment of company goals Describe the organizing function of management Explain the differences between leaders and managers, and describe the various leadership styles Summarize the five steps of the control function of management LL:1 Knows Basic Terms and Facts LL:2 Understands Concepts and Principles LL:3 Applies Principles 1,2,3,4,5,6,7,8, 156,157,158 9,10,11, 159,160 12,13, 161 14,15,16,17,18,19,20,21, 22,23, 162,163,164,165,166,167, 168 24,25, 169,170,171,172,173, 174 26,27,28,29, 175,176, 275 30,31,32,33,34,35,36,37, 38,39,40,41,42,43,44,45, 46,47,48,49,50,51,52,53, 54,55,56,57,58,59,60,61, 62,63, 177,178,179,180,181,182, 183,184,185,186,187,188, 189,190,191,192,193,194, 195,196 64,65,66,67,68,69, 197,198,199,200,201 70,71,72, 202,203,204,205,206, 207,208,209,210, 276,277, 285* 73,74,75,76,77,78,79,80, 81,82,83,84,85,86,87,88, 89,90,91,92, 211,212,213,214,215,216, 217,218,219,220,221,222, 223,224 93,94,95,96,97,98~, 225,226,227 99,100,101,102,103, 228,229,230,231,232, 233,234, 279, 285* 104,105,106,107,108,109, 110,111,112,113,114,115, 116,117,118,119,120,121, 122,123,124,125,126,127, 128,129, 235,236,237,238,239,240, 241,242,243,244,245 130,131~, 246,247,248,249,250, 251~ 132,133,134,135,136, 137,138,139, 252,253,254,255,256, 257,258,259,260, 278,280, 281*,282* 140,141,142,143,144,145, 146,147,148,149,150,151, 261,262,263,264,265 152, 266,267,268 153,154,155, 269,270,271,272,273,2 74, 284* Total number of test items: 285 True/false questions are in plain text Multiple choice questions are in bold text Questions on boxed material are in bold text with a tilde~ Essay questions are in bold underlined text Minicase questions are in bold with an asterisk* Chapter 07 7-1 Chapter 07 - Management and Leadership Management and Leadership Answer Key True / False Questions The main job of managers today is to watch over people to be sure they what the manager asks of them Answer: False AACSB: Reflective Thinking Bloom’s: Remember Learning Objective: 07-01 Describe the changes occurring today in the management function Level of Difficulty: Easy Topic: Definition of Management The best way to get people to what a manager wants is for the manager to reprimand those who don't things correctly Answer: False AACSB: Reflective Thinking Bloom’s: Remember Learning Objective: 07-01 Describe the changes occurring today in the management function Level of Difficulty: Easy Topic: Definition of Management Managers in progressive firms of all kinds tend to be friendly, and treat employees as partners Answer: True AACSB: Reflective Thinking Bloom’s: Remember Learning Objective: 07-01 Describe the changes occurring today in the management function Level of Difficulty: Easy Topic: Definition of Management Managers must earn the trust of their employees Answer: True AACSB: Reflective Thinking Bloom’s: Remember Learning Objective: 07-01 Describe the changes occurring today in the management function Level of Difficulty: Easy Topic: Definition of Management Because of their importance and skills, few managers lost their jobs in the recent economic crisis Answer: False AACSB: Reflective Thinking Bloom’s: Remember 7-2 Chapter 07 - Management and Leadership Learning Objective: 07-01 Describe the changes occurring today in the management function Level of Difficulty: Easy Topic: Definition of Management A modern manager's main job is to issue orders, then follow up to make sure employees as they were told Answer: False AACSB: Reflective Thinking Bloom’s: Remember Learning Objective: 07-01 Describe the changes occurring today in the management function Level of Difficulty: Easy Topic: Definition of Management Managers in progressive organizations tend to emphasize teamwork and cooperation rather than discipline and giving orders Answer: True AACSB: Reflective Thinking Bloom’s: Remember Learning Objective: 07-01 Describe the changes occurring today in the management function Level of Difficulty: Easy Topic: Definition of Management Despite all of the changes in the business environment, the basic way a manager performs his or her job has remained remarkably constant Answer: False AACSB: Reflective Thinking Bloom’s: Remember Learning Objective: 07-01 Describe the changes occurring today in the management function Level of Difficulty: Easy Topic: Definition of Management Given the lack of discipline and short attention spans of today's workers, modern managers must watch their workers closely, set strict rules, and vigorously enforce policies Feedback: Today's managers emphasize teamwork and cooperation rather than discipline and order giving Managers now guide, train, support, motivate and coach employees Answer: False AACSB: Reflective Thinking Bloom’s: Understand Learning Objective: 07-01 Describe the changes occurring today in the management function Level of Difficulty: Medium Topic: Definition of Management 7-3 Chapter 07 - Management and Leadership 10 In most high-tech industries, the best way to respond quickly to rapid technological changes is to keep most authority and responsibility in the hands of a few key managers who provide precise, detailed directions to the workers Feedback: Managers of high-tech firms realize that workers often know much more about technology than they Thus, most progressive managers emphasize teamwork and cooperation rather than discipline and order giving Answer: False AACSB: Reflective Thinking Bloom’s: Understand Learning Objective: 07-01 Describe the changes occurring today in the management function Level of Difficulty: Medium Topic: Definition of Management 11 Due to the fact that employees today often know much more about technology and the technical aspects of their jobs than their managers do, progressive managers emphasize teamwork and cooperation as a strategy for getting work done Feedback: Managers of high-tech firms realize that workers often know much more about technology than they Thus, most modern managers emphasize teamwork and cooperation rather than discipline and order giving Answer: True AACSB: Reflective Thinking Bloom’s: Understand Learning Objective: 07-01 Describe the changes occurring today in the management function Level of Difficulty: Medium Topic: Definition of Management 12 John is the general manager of a retail outlet By emphasizing teamwork and acting in a role of coach rather than boss, John is considered to be a modern manager Feedback: Most modern managers tend to be more progressive They choose to guide and support their employees instead of giving orders Answer: True AACSB: Knowledge Application Bloom’s: Apply Learning Objective: 07-01 Describe the changes occurring today in the management function Level of Difficulty: Hard Topic: Definition of Management 7-4 Chapter 07 - Management and Leadership 13 As an office manager, Sylvie consistently tells her employees what to do, watches over their tasks, and reprimands those who don't listen to her orders Sylvie is a modern manager Feedback: Most modern managers tend to be more progressive They choose to guide and support their employees instead of giving orders Answer: False AACSB: Knowledge Application Bloom’s: Apply Learning Objective: 07-01 Describe the changes occurring today in the management function Level of Difficulty: Hard Topic: Definition of Management 14 Managers make decisions about how to use organizational resources to accomplish goals Answer: True AACSB: Reflective Thinking Bloom’s: Remember Learning Objective: 07-02 Describe the four functions of management Level of Difficulty: Easy Topic: Functions of Management 15 Financing is one of the four key functions of management Answer: False AACSB: Reflective Thinking Bloom’s: Remember Learning Objective: 07-02 Describe the four functions of management Level of Difficulty: Easy Topic: Functions of Management 16 The four key management functions are planning, organizing, leading, and controlling Answer: True AACSB: Reflective Thinking Bloom’s: Remember Learning Objective: 07-02 Describe the four functions of management Level of Difficulty: Easy Topic: Functions of Management 17 One trend of the leading management function is to empower employees, giving them as much freedom as possible to become self-directed and self-motivated Answer: True AACSB: Reflective Thinking Bloom’s: Remember Learning Objective: 07-02 Describe the four functions of management Level of Difficulty: Easy Topic: Functions of Management 7-5 Chapter 07 - Management and Leadership 18 Leading is the management function of designing the structure of the organization so that everyone can function together Answer: False AACSB: Reflective Thinking Bloom’s: Remember Learning Objective: 07-02 Describe the four functions of management Level of Difficulty: Easy Topic: Functions of Management 19 As a management function, the main focus of controlling is to keep complete and up-todate records of the organization's financial transactions for tax and regulatory purposes Answer: False AACSB: Reflective Thinking Bloom’s: Remember Learning Objective: 07-02 Describe the four functions of management Level of Difficulty: Easy Topic: Functions of Management 20 The management function that involves guiding, training, and motivating others to work toward the achievement of an organization's goals is called leading Answer: True AACSB: Reflective Thinking Bloom’s: Remember Learning Objective: 07-02 Describe the four functions of management Level of Difficulty: Easy Topic: Functions of Management 21 In many smaller firms the manager's role is to direct the employees, telling them exactly what to Answer: True AACSB: Reflective Thinking Bloom’s: Remember Learning Objective: 07-02 Describe the four functions of management Level of Difficulty: Easy Topic: Functions of Management 22 Planning is the function of management that includes anticipating future trends and determining the best strategies and tactics to achieve an organization's goals and objectives Answer: True AACSB: Reflective Thinking Bloom’s: Remember Learning Objective: 07-02 Describe the four functions of management Level of Difficulty: Easy Topic: Functions of Management 7-6 Chapter 07 - Management and Leadership 23 Planning is a key management function because other management functions depend on having a good plan Answer: True AACSB: Reflective Thinking Bloom’s: Remember Learning Objective: 07-02 Describe the four functions of management Level of Difficulty: Easy Topic: Functions of Management 24 Managers focus on making efficient use of their organization's human resources, but leave decisions about the efficient use of other resources such as buildings, machinery, and supplies to engineers and accountants Feedback: Managers must practice the art of getting things done through organizational resources including people, financial resources, information and all types of equipment and assets Answer: False AACSB: Reflective Thinking Bloom’s: Understand Learning Objective: 07-01 Describe the changes occurring today in the management function Level of Difficulty: Medium Topic: Functions of Management 25 Today's progressive organizations are designed around the needs of the customer The idea is to organize systems to be responsive to customer needs Feedback: Organizing includes designing the structure of the organization and creating conditions and systems in which everyone and everything work together to achieve the organization's goals and objectives Answer: True AACSB: Reflective Thinking Bloom’s: Understand Learning Objective: 07-02 Describe the four functions of management Level of Difficulty: Medium Topic: Functions of Management 26 Beth has spent the last two hours going over some consumer surveys to see how well her company is achieving its goal of improving customer satisfaction Beth's efforts are an example of the controlling function of management Feedback: Controlling is the function concerned with determining whether or not an organization is progressing toward achieving its goals and objectives Answer: True AACSB: Knowledge Application Bloom’s: Apply Learning Objective: 07-02 Describe the four functions of management Level of Difficulty: Hard 7-7 Chapter 07 - Management and Leadership Topic: The Four Functions of Management 27 Jack, a manager with Tiny Tots Toy Company, has just participated in a meeting that looked at future trends in the toy industry, and identified new challenges and opportunities for Tiny Tots Jack's participation in this meeting was part of the organizing function of management Feedback: Jack's activities are part of the planning function Planning involves anticipating future trends and identifying business opportunities and challenges Answer: False AACSB: Analytical Thinking Bloom’s: Analyze Learning Objective: 07-02 Describe the four functions of management Level of Difficulty: Hard Topic: Functions of Management 28 Harold is a no-nonsense boss who believes that the best way for an organization to achieve its goals is for workers to follow their boss's orders Thus, he tells workers exactly what to and how to it Harold's approach is an example of directing Feedback: Directing involves telling workers exactly what to This approach is still common among managers in small companies, but managers in larger firms tend to rely more on leading rather than directing Answer: True AACSB: Knowledge Application Bloom’s: Apply Learning Objective: 07-02 Describe the four functions of management Level of Difficulty: Hard Topic: Functions of Management 29 Rita is a manager of a medium-sized service company She is currently involved in redesigning her department to ensure that employees and other resources can respond more quickly and efficiently to the needs of its customers Rita's efforts are part of the organizing function of management Feedback: Organizing involves designing the structure of the organization so that resources can efficiently achieve the organization's objectives One of the key objectives today is to find ways to organize businesses so that they please the customer Answer: True AACSB: Knowledge Application Bloom’s: Apply Learning Objective: 07-02 Describe the four functions of management Level of Difficulty: Hard Topic: Functions of Management 7-8 Chapter 07 - Management and Leadership 30 Planning involves setting the organizational vision, goals and objectives Answer: True AACSB: Reflective Thinking Bloom’s: Remember Learning Objective: 07-03 Relate the planning process and decision making to the accomplishment of company goals Level of Difficulty: Easy Topic: Functions of Management 31 Progressive managers consider planning to be of little importance in today's rapidly changing business environment Answer: False AACSB: Reflective Thinking Bloom’s: Remember Learning Objective: 07-03 Relate the planning process and decision making to the accomplishment of company goals Level of Difficulty: Easy Topic: The Importance of Planning 32 Goals tend to be broad and focus on the long term while objectives tend to be specific and more short term in their focus Answer: True AACSB: Reflective Thinking Bloom’s: Remember Learning Objective: 07-03 Relate the planning process and decision making to the accomplishment of company goals Level of Difficulty: Easy Topic: The Importance of Planning 33 A vision is a detailed set of specific steps that a firm must take to achieve its short-run objectives Answer: False AACSB: Reflective Thinking Bloom’s: Remember Learning Objective: 07-03 Relate the planning process and decision making to the accomplishment of company goals Level of Difficulty: Easy Topic: The Importance of Planning 34 A statement about why an organization exists and what it is trying to achieve is called the organization's directive Answer: False AACSB: Reflective Thinking Bloom’s: Remember Learning Objective: 07-03 Relate the planning process and decision making to the accomplishment of company goals Level of Difficulty: Easy Topic: The Importance of Planning 7-9 Chapter 07 - Management and Leadership 35 A vision is the overall explanation of why an organization exists and where it is trying to head Answer: True AACSB: Reflective Thinking Bloom’s: Remember Learning Objective: 07-03 Relate the planning process and decision making to the accomplishment of company goals Level of Difficulty: Easy Topic: The Importance of Planning 36 A vision gives the organization a sense of purpose and a set of values that unite employees toward a common destiny Answer: True AACSB: Reflective Thinking Bloom’s: Remember Learning Objective: 07-03 Relate the planning process and decision making to the accomplishment of company goals Level of Difficulty: Easy Topic: The Importance of Planning 37 A mission statement outlines the fundamental purposes of an organization Answer: True AACSB: Reflective Thinking Bloom’s: Remember Learning Objective: 07-03 Relate the planning process and decision making to the accomplishment of company goals Level of Difficulty: Easy Topic: The Importance of Planning 38 Today, a mission statement should also address social responsibility Answer: True AACSB: Reflective Thinking Bloom’s: Remember Learning Objective: 07-03 Relate the planning process and decision making to the accomplishment of company goals Level of Difficulty: Easy Topic: The Importance of Planning 39 Goals are broad, long-term accomplishments an organization wants to achieve Answer: True AACSB: Reflective Thinking Bloom’s: Remember Learning Objective: 07-03 Relate the planning process and decision making to the accomplishment of company goals Level of Difficulty: Easy Topic: The Importance of Planning 40 While goals are measurable, objectives are not Answer: False AACSB: Reflective Thinking Bloom’s: Remember Learning Objective: 07-03 Relate the planning process and decision making to the accomplishment of company goals 7-10 Chapter 07 - Management and Leadership AACSB: Reflective Thinking Bloom’s: Remember Learning Objective: 07-06 Summarize the five steps of the control function of management Level of Difficulty: Easy Topic: Functions of Management 265 include dealers, who buy products to sell to others, and ultimate customers who buy products for their own personal use A End users B External customers C Internal customers D Distribution centers Answer: B AACSB: Reflective Thinking Bloom’s: Remember Learning Objective: 07-06 Summarize the five steps of the control function of management Level of Difficulty: Easy Topic: Functions of Management 266 Ho Han has just spent two hours going over quality reports to determine whether his department is meeting quality standards he set for the current month Ho's efforts are part of the _ function of management A planning B organizing C directing D controlling Feedback: The controlling function of management involves checking to see whether the firm is making progress toward meeting its goals and objectives, and taking corrective action if necessary Answer: D AACSB: Reflective Thinking Bloom’s: Understand Learning Objective: 07-06 Summarize the five steps of the control function of management Level of Difficulty: Medium Topic: Functions of Management 7-89 Chapter 07 - Management and Leadership 267 Pam is a sales manager for Paradise Beauty Products She has told her sales people that she expects each of them to increase their customer contacts by at least 5% in the next month Pam has set a(n): A procedural policy B functional objective C policy guide D performance standard Feedback: In order to determine whether a firm is making progress toward its goals and objectives, managers must establish specific, attainable, and measurable standards This is what Pam has done Answer: D AACSB: Reflective Thinking Bloom’s: Understand Learning Objective: 07-06 Summarize the five steps of the control function of management Level of Difficulty: Medium Topic: Functions of Management 268 Which of the following is a clear performance standard? A Bring about a significant improvement in the morale of all workers B Decrease the number of products rejected due to manufacturing defects by 10% over the next months C Completely eliminate all customer complaints D Make secretaries more efficient Feedback: A good standard must be specific, measurable, and attainable The terms "significant improvement" and "more efficient" are too vague and a complete elimination of all complaints in one month is unlikely to be an attainable standard Answer: B AACSB: Reflective Thinking Bloom’s: Understand Learning Objective: 07-06 Summarize the five steps of the control function of management Level of Difficulty: Medium Topic: Functions of Management 7-90 Chapter 07 - Management and Leadership 269 Two years ago, Travis started his own restaurant supply company, serving the greater Chicago area Until recently, he has never concerned himself with establishing a formal control system Now, with a recession looming, he is experiencing cost-conscious restaurant owners He has decided that a formal control system is needed The first step Travis should take is: A draw up a formal organization chart B talk to his banker to set financial goals C devise a set of clear performance standards D design an accident report form so that he can keep accurate records of all accidents that occur Feedback: The first step in the controlling process is to set clear performance standards Answer: C AACSB: Analytical Thinking Bloom’s: Analyze Learning Objective: 07-06 Summarize the five steps of the control function of management Level of Difficulty: Hard Topic: Functions of Management 270 Idle Time Gaming, Inc., has established clear standards of performance for its latest video game that will involve physical challenges such as hand-eye coordination and the player’s ability to react quickly After a significant amount of testing, the results are compared to the previously established development standards If necessary, the engineering team will correct deficiencies before customers test the game These activities are part of the _ of management A organizing function B control function C leading function D planning function Feedback: The control function of management measures performance relative to the planned objectives and standards The process includes establishing clear standards, as well as comparing results against standards Answer: B AACSB: Knowledge Application Bloom’s: Apply Learning Objective: 07-06 Summarize the five steps of the control function of management 7-91 Chapter 07 - Management and Leadership Level of Difficulty: Hard Topic: Functions of Management 271 As a middle manager for her firm, Tori just finished comparing the results of a promotional campaign with the outcome expectations The next step in the control process is: A monitor and record actual performance B set up contingency plans C communicate results and deviations with management and employees involved D establish discipline committees to decide on dismissals Feedback: After comparing results to standards, the next step in the control process is to communicate results and deviations to the employees involved Answer: C AACSB: Knowledge Application Bloom’s: Apply Learning Objective: 07-06 Summarize the five steps of the control function of management Level of Difficulty: Hard Topic: Functions of Management 272 Harper is a sales rep for an eyeglass company The company is always on the cutting edge of trendy designs In her job, she frequently relies on the marketing department to provide her with information and materials When using customer satisfaction to judge the success of their company, Harper's managers should: A ignore Harper's satisfaction, since she is an employee rather than a customer B take Harper's satisfaction into account, because customers can be internal as well as external C consider Harper's satisfaction, but place less emphasis on it than on the satisfaction of a stockholder, since she is an external customer D consider Harper's satisfaction only if she has worked in the same job for at least two years Feedback: The criterion for measuring success in a customer-oriented firm is customer satisfaction However, customers are now defined broadly to include internal customers (people within the organization that receive services from others within the organization) as well as external (dealers and end users) Harper would be an example of an internal customer Answer: B AACSB: Analytical Thinking 7-92 Chapter 07 - Management and Leadership Bloom’s: Analyze Learning Objective: 07-06 Summarize the five steps of the control function of management Level of Difficulty: Hard Topic: Functions of Management 273 Customers who shop on Amazon find it helpful to read the customer reviews associated with products that others have purchased After making a purchase, the customer can go to Amazon’s website and post his/her opinion of the product recently purchased This strategy not only assists other customers with their decision making, it helps Amazon react more quickly to the performance of the products it sells Which of the following statements attests to the value of this service? A This action provides for complete transparency of company financial performance B This action supports a key criterion of the control function: the measurement of customer satisfaction C This action provides for better tactical planning, particularly the budgeting process D This action supports the premise of recruiting, hiring, and motivating the employees who believe in social media and other ways to reach customers Feedback: Companies measure their performance in a number of areas, including their financial performance, their areas of operation, their ability to perform learning for their employees, and customer satisfaction The use of social media and interactive online communication provides the company with current customer perception of products and services Answer: B AACSB: Analytical Thinking Bloom’s: Analyze Learning Objective: 07-06 Summarize the five steps of the control function of management Level of Difficulty: Hard Topic: Functions of Management 274 When establishing criteria to measure the success of a customer-oriented business, managers should: A limit their attention to financial measures such as profit and return on investment since these are the only objective and quantifiable measures available B focus most of their attention on measures of employee satisfaction, since without good employees the firm will not be competitive C focus primarily on financial measures, but pay some attention to nonfinancial concerns 7-93 Chapter 07 - Management and Leadership D recognize that, while financial measures are important and should be considered, the purpose of the firm is to satisfy both internal and external customers Feedback: Financial measures of success, such as profit and return on investment, are important and should not be ignored In fact, these measures have traditionally been the measures most frequently used to judge success Today, however, the purpose of a customeroriented firm is to please all of its stakeholders Thus, nonfinancial criteria also play an important role in measuring the success of a firm Answer: D AACSB: Analytical Thinking Bloom’s: Analyze Learning Objective: 07-06 Summarize the five steps of the control function of management Level of Difficulty: Hard Topic: Functions of Management 7-94 Chapter 07 - Management and Leadership Essay Questions 275 Identify and define the four key functions of management Answer: The four functions of management are planning, organizing, leading, and controlling Planning includes anticipating future trends and determining the best strategies and tactics to achieve organizational goals and objectives Organizing includes designing the structure of the organization and creating conditions and systems in which everyone and everything work together to achieve the organization's goals and objectives Leading is the function concerned with creating a vision for the organization and communicating, guiding, training, coaching, and motivating others to achieve the goals and objectives of the organization Leading today often involves empowering workers and giving them the freedom to become self-directed and self-motivated Controlling refers to establishing clear standards to determine whether an organization is progressing toward its goals and objectives, rewarding people for doing a good job, and taking corrective action if they are not Basically, it means measuring whether what actually occurs meets the organization's goals AACSB: Knowledge Application Bloom’s: Apply Learning Objective: 07-02 Describe the four functions of management Level of Difficulty: Hard Topic: Functions of Management 7-95 Chapter 07 - Management and Leadership 276 Explain the differences between strategic, tactical, operational, and contingency planning Answer: Strategic planning is long-range planning that determines major goals of the organization It provides the foundation for the policies, procedures, and strategies for obtaining and using resources to achieve those goals Strategic planning deals with such fundamental questions as which customers to serve, what products and services to sell, and the geographic areas in which the firm will compete Students may note that top managers are very involved in strategic planning Tactical planning is short-range planning that involves the process of developing detailed, short-term statements about what is to be done, who is to it, and how it is to be done Tactical planning involves setting annual budgets and deciding on other details which contribute to reaching strategic objectives Students may point out that lower-level managers are more heavily involved in tactical planning Operational planning involves setting the work standards and schedules necessary to implement the company's tactical objectives Whereas strategic planning looks at the organization as a whole, operational planning focuses on specific supervisors, department managers, and individual employees Contingency planning is the preparation of alternative courses of action that may be used if the primary plans not achieve the objectives of the organization Due to rapid changes that can occur in economic and competitive environments, it is wise to have alternative plans ready to be implemented Crisis planning is a part of contingency planning that involves reacting to sudden changes in the environment AACSB: Knowledge Application Bloom’s: Apply Learning Objective: 07-03 Relate the planning process and decision making to the accomplishment of company goals Level of Difficulty: Hard Topic: Functions of Management 7-96 Chapter 07 - Management and Leadership 277 What is the purpose of the SWOT analysis? What types of information does this analysis provide? Answer: SWOT analysis is an analysis of an organization's strengths, weaknesses, opportunities, and threats It is used to help managers answer several fundamental questions related to the planning function These questions include: What is the current situation facing the organization? What is the state of the business environment? What opportunities currently exist for meeting people's needs? What products and customers are most profitable? Why people buy (or not buy) our products? Who are our major competitors, and what threats they pose for our business? SWOT begins with an analysis of the general business environment It then identifies the strengths and weaknesses of the firm This part of SWOT involves internal analysis, which can normally be done fairly easily Then the analysis attempts to identify opportunities and competitive and environmental threats Since these are based on factors that are external to the firm, they are more difficult to assess Figure 7.2 lists several issues that SWOT analysis may examine AACSB: Knowledge Application Bloom’s: Apply Learning Objective: 07-03 Relate the planning process and decision making to the accomplishment of company goals Level of Difficulty: Hard Topic: Functions of Management 7-97 Chapter 07 - Management and Leadership 278 What is empowerment? How has the movement toward empowerment changed the role of the manager? Answer: Empowerment means giving employees the authority and responsibility to respond quickly to consumer requests In the past, managers often were bosses who issued orders and expected workers to carry them out With the trend toward empowered workers, the manager's role is changing The role of managers of empowered workers will be less that of boss and more that of coach, assistant, counselor and team member They will work to enable workers to perform their tasks by giving them the education, training, and resources they need to assume their self-directed responsibilities AACSB: Knowledge Application Bloom’s: Apply Learning Objective: 07-05 Explain the differences between leaders and managers, and describe the various leadership styles Level of Difficulty: Hard Topic: Empowering Workers 279 Describe the three basic types of management skills, and relate these skills to the tasks performed by different levels of management Answer: The three basic types of management skills are technical skills, human relations skills, and conceptual skills Technical skills are the skills needed to perform tasks in a specific discipline (such as selling a product or developing software) or department (such as marketing or information systems) Human relations skills involve communication and motivation; they enable managers to work through and with people Such skills also include those associated with leadership, coaching, morale building, delegating, training and development, and help and supportiveness Conceptual skills refer to the ability to picture the organization as a whole and the relationships among its various parts Conceptual skills are needed in planning, organizing, controlling, systems development, problem analysis, decision making, coordinating, and delegating First-line managers, who often must explain procedures and specific techniques to employees, and evaluate the performance of those employees, make extensive use of technical skills First-line managers seldom perform tasks requiring conceptual skills At higher levels of management, managers tend to rely more on conceptual skills to carry out their controlling and planning functions but seldom need technical skills Managers at all levels make use of human relations skills AACSB: Knowledge Application Bloom’s: Apply Learning Objective: 07-04 Describe the organizing function of management 7-98 Chapter 07 - Management and Leadership Level of Difficulty: Hard Topic: Types of Managers and Leadership Styles 280 Describe three different leadership styles and give an example of a situation in which each style could be most used effectively Answer: Students should identify the following leadership styles: Autocratic leadership involves making managerial decisions without consulting others Such a style is effective in emergencies and when absolute followership is needed—for example, when fighting fires Autocratic leadership is also effective sometimes with new, relatively unskilled workers who need clear direction and guidance Democratic (or participative) leadership encourages managers and employees to work together to make decisions Research has found that employee participation in decisions may not always increase effectiveness, but it usually increases job satisfaction Many progressive organizations are highly successful at using a democratic style of leadership that values traits such as flexibility, good listening skills, and empathy Companies such as IBM, Cisco, and AT&T have used this style successfully Free-rein leadership involves setting objectives and giving employees a significant amount of freedom to whatever it takes to accomplish those objectives Doctors often have this flexibility in hospitals, as other professionals such as engineers and lawyers, who often work on special projects or cases The traits needed by managers in such organizations include warmth, friendliness, and understanding AACSB: Knowledge Application Bloom’s: Apply Learning Objective: 07-05 Explain the differences between leaders and managers, and describe the various leadership styles Level of Difficulty: Hard Topic: Types of Managers and Leadership Styles 7-99 Chapter 07 - Management and Leadership Multiple Choice Questions Mini-Case Lauzy Fare left his position as senior vice president at Blue Skies Electronics a few weeks ago to become the new CEO of Idle Time Gaming Before joining the new company, Lauzy spent time studying Idle Time's competitive position and talking to employees in all divisions and at all levels of the organization Based on his findings, Lauzy believes that Idle Time has potential, but also faces some serious challenges if it expects to grow Lauzy found that when confronted by him, most of Idle Time's professional employees seemed almost afraid to express their opinions He learned that Otto Craddick, the previous CEO and founder of the company, viewed himself as the boss, and, as such, micromanaged every aspect of the business This discouraged employees from using their own initiative and ideas to solve problems For example, Otto required sales and service representatives to get his approval before they made any major commitments to customers Otto's policy prevented the organization from responding quickly to customer requests, so sales were lost Unlike his predecessor, Lauzy believes it is important for sales and service personnel to be able to deal with many types of customer requests without needing approval from top management He is confident that giving employees the authority and flexibility to deal with customers, and providing them with the training and resources to help them so, will improve morale within the company, create customer satisfaction, and grow revenues Lauzy also wants to make workers throughout the organization feel more appreciated He plans to continue meeting with them on a regular basis to seek their advice He hopes his work colleagues will eventually respond to his leadership style He has already encouraged middle managers to get employees more involved in decision making, and has suggested some problem-solving techniques the managers could try Although he thought that changing the rigidity of the company culture would be his first challenge at the new firm, Lauzy quickly realized that there were no standards in place to measure the progress of changes in internal morale, customer satisfaction, and profitability He has asked managers in those departments to spend more time setting performance standards and then monitoring actual performance Lauzy is confident that in a relatively short period of time internal changes will lead to good company performance As a member of top management, Lauzy performs a variety of important tasks 7-100 Chapter 07 - Management and Leadership 281 Otto, the previous CEO at Idle Time Gaming, relied on a(n) _ style of management A autocratic B iconoclastic C democratic D free-rein Feedback: Otto made decisions without consulting others, and expected subordinates to follow orders without question These are characteristics of the autocratic style of management Answer: A AACSB: Analytical Thinking Bloom’s: Analyze Learning Objective: 07-05 Explain the differences between leaders and managers, and describe the various leadership styles Level of Difficulty: Hard Topic: Types of Managers and Leadership Styles 282 Lauzy seems to prefer a(n) style of leadership A autocratic B democratic (or participative) C PMI D altruistic Feedback: Lauzy likes to listen to the opinions and ideas of subordinates and get them involved in decision making This indicates a democratic, or participative, style of leadership Answer: B AACSB: Analytical Thinking Bloom’s: Analyze Learning Objective: 07-05 Explain the differences between leaders and managers, and describe the various leadership styles Level of Difficulty: Hard Topic: Types of Managers and Leadership Styles 7-101 Chapter 07 - Management and Leadership 283 Lauzy favors problem-solving techniques that allow teams of workers to freely identify and discuss possible solutions to a problem without having their ideas censored Which of the following is a problem-solving technique that Lauzy is likely to suggest to his managers? A SWOT analysis B PERT analysis C brainstorming D controlling Feedback: Brainstorming is a problem-solving technique that encourages workers to come up with as many potential solutions to the problem as possible in a short time period without censoring the ideas Answer: C AACSB: Analytical Thinking Bloom’s: Analyze Learning Objective: 07-03 Relate the planning process and decision making to the accomplishment of company goals Level of Difficulty: Hard Topic: Functions of Management 284 Lauzy's decision to establish well-defined standards for monitoring performance means that he expects management to seriously engage in the _ function of management A research and development B verbalizing C organizing D controlling Feedback: Controlling is the process of measuring performance relative to objectives and standards and taking corrective action when necessary Answer: D AACSB: Analytical Thinking Bloom’s: Analyze Learning Objective: 07-06 Summarize the five steps of the control function of management Level of Difficulty: Hard Topic: Functions of Management 7-102 Chapter 07 - Management and Leadership 285 Which of the following statements best describes the relative importance of the various types of skills Lauzy will use to perform these tasks? The tasks Lauzy performs will require: A only technical skills B mainly conceptual skills and human relations skills C only human relations skills D mainly technical skills and human relations skills Feedback: As a top manager, Lauzy may have good technical skills, but will more often use conceptual and human relations skills in day-to-day activities The strategic planning, leadership, and other activities required of a CEO, however, will require him to use conceptual and human relations skills extensively Answer: B AACSB: Analytical Thinking Bloom’s: Analyze Learning Objective: 07-04 Describe the organizing function of management Level of Difficulty: Hard Topic: Types of Managers and Leadership Styles 7-103 ... Understand Learning Objective: 0 7-0 4 Describe the organizing function of management Level of Difficulty: Medium Topic: Types of Managers and Leadership Styles 7-2 2 Chapter 07 - Management and Leadership. .. Understand Learning Objective: 0 7-0 4 Describe the organizing function of management Level of Difficulty: Medium Topic: Types of Managers and Leadership Styles 7-2 3 Chapter 07 - Management and Leadership. .. Learning Objective: 0 7-0 4 Describe the organizing function of management Level of Difficulty: Easy Topic: Types of Managers and Leadership Styles 7-2 0 Chapter 07 - Management and Leadership 87 A person