*Chapter

Seven

*
Management
and
Leadership

McGraw-Hill/Irwin

Copyright 2010 by the McGraw-Hill Companies, Inc. All rights reserved.

INDRA KRISHNAMURTHY NOOYI

Pepsi

*
Profile

Started at Pepsi after earning masters degrees

from the Indian School of Management and Yale.
Goal was to increase sales
overseas, introduce good-foryou products and place more
emphasis on food.
She is a top manager using a
boss-centered leadership
style while still being a team
player.
7-2

AMERICAS MOST POWERFUL

FEMALE MANAGERS

Name

Organization

Age

Indra Nooyi

PepsiCo

52

Irene Rosenfeld

Kraft Foods

55

Pat Woertz

Archer Daniel Midland

55

Anne Mulcahy

Xerox

55

Angela Braly

Wellpoint

47

Andrea Jung

Avon

50

Susan Arnold

Proctor & Gamble

54

Oprah Winfrey

Harpo

54

Brenda Barnes

Sara Lee

54

Ursula Burns

Xerox

50

Source: Fortune Magazine, www.fortune.com, October 13, 2008.

Profile

7-3

*
WHAT IS MANAGEMENT?

Four Functions
of Management

LG2

Management -- The process used to accomplish

organizational goals through planning, organizing,

leading and controlling people and other
organizational resources.

7-4

TODAYS MANAGERS

Managers Roles
Are Evolving

LG1

Younger and more

progressive.
- Growing numbers of women.
- Fewer from elite universities.

Emphasis is on teams and

team building.
Managers need to be skilled
communicators and team
players.
7-5

RESPECT and HOW to GET IT

Managers Roles
Are Evolving

LG1

Source: Entrepreneur, www.entrepreneur.com, March 2009.

7-6

The BEST MANAGERS

Managers Roles
Are Evolving

LG1

Name

Age

Organization

David Axelrod

53

Obama Campaign

Frank Blake

59

Home Depot

Jamie Dimon

52

JPMorgan

Larry Ellison

64

Oracle

Takeo Fukui

64

Honda

Mark Hurd

53

Hewlett-Packard

Satoru Iwata

49

Nintendo

Peter Loscher

51

Siemens

Irene Rosenfeld

55

Kraft Foods

Source: BusinessWeek, www.businessweek.com, January 19, 2009.

7-7

The WORST MANAGERS

Managers Roles
Are Evolving

LG1

Name

Organization

What Went Wrong

James Cayne

Bear Stearns

Richard Fuld

Lehman Brothers

Kerry Killinger

Washington Mutual

Philip Schoonover

Circuit City

Played golf and bridge

while the company
collapsed.
Ignored warning signs
and rewarded greed.
Bad lending standards
led to bankruptcy.
Fired 3,400
experienced
employees for cheaper
replacements.

Source: BusinessWeek, www.businessweek.com, January 19, 2009.

7-8

FOUR FUNCTIONS of
MANAGEMENT

Four Functions
of Management

LG2

1. Planning
2. Organizing
3. Leading
4. Controlling

7-9

WE NEED MANAGERS HERE

(Reaching Beyond Our Borders)

The lack of professional managers is keeping

U.S. companies from expanding rapidly in global
markets.
Flexibility is the key to successfully expanding
abroad.
Developing products to appeal to another market
is another way to be successful.

7-10

SHARING the VISION

Planning &
Decision Making

LG3

Vision
Broad explanation of
why the organization
exists and where its
trying to go (futuristic).

7-11

DEFINING THE MISSION

Planning &
Decision Making

LG3

Mission Statement
Outlines organizations fundamental purposes.
-

The organizations selfconcept.

Its philosophy.
Longterm survival needs.
Customer needs.
Social responsibility.
Nature of the product or service.
7-12

SETTING
GOALS and OBJECTIVES
Goals

Planning &
Decision Making

LG3

Broad, long-term
accomplishments an
organization wishes to
attain.

Objectives
Specific, short-term
statements detailing how to
achieve goals.
7-13

PLANNING ANSWERS
FUNDAMENTAL QUESTIONS

Planning &
Decision Making

LG3

What is the situation now?

SWOT Analysis -- Analyzes the organizations

Strengths, Weaknesses, Opportunities and Threats.

How can we get to our goal from here?

-

Strategic planning
Tactical planning
Operational planning
Contingency planning

7-14

SWOT MATRIX

Planning &
Decision Making

LG3

7-15

WalMart SWOT Analysis

Strengths

Weaknesses

powerful retail brand

reputation for value for
money, convenience and wide
range of products
core competence involving its
use of information technology
to support its international
logistics system.

huge span of control makes

it difficult to enforce its
philosophy.
may not have the flexibility of
some of its more focused
competitors.
Although global, it has a
presence in relatively few
countries worldwide.

Opportunities
acquire, merge with, or
form strategic alliances
with other global retailers
continue with its current
strategy of large, super
centers.

Threats

prime target of competition,

locally and globally.
exposure to political problems
in the countries that you
operate in.
Disclaimer: This case study has been compiled from information
freely available
fromcompetition
public sources. It is merely
Intense
price
is a
intended to be used for educational purposes only.
threat.
7-16

PLANNING FUNCTIONS

Planning &
Decision Making

LG3

7-17

PROBLEM SOLVING

Decision Making:
Finding the Best
Alternative

LG3

Problem Solving

Solving everyday problems that occur; less formal

than decision making and needs quicker action.

Problem-solving Techniques - Brainstorming and PMI

List all pluses for a solution in one column, all

minuses in another and implications in a third.

7-18

ORGANIZATIONAL CHARTS

*Organizing:

Creating a
Unified System
LG4

Organization Chart -Visual device that shows

relationships among
people and divides the
organizations work; it
shows who reports to
whom.

7-19

LEVELS of MANAGEMENT

*Organizing:

Creating a
Unified System
LG4

7-20

MANAGEMENT LEVELS

*Organizing:

Creating a
Unified System
LG4

Top Management

Highest level, consists of the president and

other key company executives who develop
strategic plans.

Middle Management

General managers, division managers, and

branch and plant managers who are responsible
for tactical planning and controlling.

Supervisory Management

Directly responsible for supervising workers and

evaluating daily performance.
7-21

TOP MANAGEMENT

*Organizing:

Creating a
Unified System
LG4

Chief Executive Officer (CEO)

- Introduces change into an organization.

Chief Operating Officer (COO)

- Implements CEOs changes.

Chief Financial Officer (CFO)

- Obtains funds, plans budgets, collects funds, etc.

Chief Information Officer (CIO)

- Gets the right information to the right people so

decisions can be made.
7-22

MANAGERIAL SKILLS

Tasks and Skills

at Different Levels
of Management

LG4

Technical Skills -- The ability to perform tasks in a

specific discipline or department.

Human Relations Skills -- Skills

that involve communication and
motivation; they enable managers
to work through and with people.

Conceptual Skills -- Skills that

involve the ability to picture the

organization as a whole and the
relationship among its various
parts.
7-23

SKILLS NEEDED at VARIOUS

LEVELS of MANAGEMENT

Tasks and Skills

at Different Levels
of Management

LG4

7-24

LEADERSHIP

Leading: Providing
Continuous Vision
and Values.

LG5

Leaders must:

- Communicate a vision and rally others around that

vision.
- Establish corporate values.
- Promote corporate ethics.
- Embrace change.
- Stress accountability and responsibility.

7-25

LEADERSHIP STYLES
Autocratic Leadership Self

Making managerial decisions without

consulting others.

Leadership
Styles
LG5

Participative or Democratic
Leadership Others
Managers and employees work
together to make decisions.

Free-Rein Leadership Laissezfaire

Managers set objectives; employees
are free to do whatever is appropriate
to accomplish those objectives.

7-26

VARIOUS LEADERSHIP STYLES

Leadership
Styles
LG5

7-27

EMPOWERMENT and ENABLING Empowering

Workers

LG5

Empowerment -- Progressive leaders give

employees authority to make decisions on their

own without consulting a manager.
Customer needs are handled quickly.
Managers role becomes less of a boss and more
of a coach.

Enabling -- Giving workers the education and

tools they need to make decisions.

7-28

WORK SMARTER

How to Ease Pressure on Workers

Empowering
Workers
LG5

Manage output instead of hours.

Train workers to be ready for a more complex
corporate structure.
Allow lower-level managers to make decisions.
Use new technology to foster teamwork.
Shift hiring emphasis to collaboration.

Source: BusinessWeek, www.businessweek.com.

7-29

MANAGING KNOWLEDGE

Managing
Knowledge
LG5

Knowledge Management -Finding the right information,

keeping the information in a
readily accessible place and
making the information known
to every one in the firm.

7-30

FIVE STEPS of CONTROLLING

Controlling:
Making Sure it
Works

LG6

7-31

ARE YOU a MICROMANAGER?

Controlling:
Making Sure it
Works

LG6

Do you have strategic initiatives that you have not

addressed?
Do you often check on employees for quality
control?
Do you often check on subordinates throughout
the day?
Do you rarely take vacations?
Is there a lot of turnover?
Source: CFO Magazine, www.cfo.com.

7-32

MEASURING SUCCESS

A Key Criterion
for Measurement:
Customer
Satisfaction

Traditional forms of measuring success are

financial.

LG6

Pleasing employees, stakeholders and customers

(both internal and external) are important.
External Customers -- Dealers, who buy products
to sell to others, and ultimate customers (or end
users), who buy products for their own use.

Internal Customers -- Individuals and units within

the firm that receive services from other individuals or

units.

7-33

REVIEW ONLY

PROGRESS ASSESSMENT

*Progress

Assessment

*
Whats the difference between goals and
objectives?
What does a company analyze when it does a
SWOT analysis?
What are the differences between strategic,
tactical and operational planning?
What are the seven Ds in decision making?
7-35

STAFFING

Staffing: Getting
and Keeping the
Right People

LG4

Staffing -- Recruiting, hiring, motivating and

retaining the best people available to accomplish the

companys objectives.

Recruiting good employees is critical.

Many people are not willing to work at companies
unless they are treated well with fair pay.

7-36

LAYOFF LEADERS

Staffing: Getting
and Keeping the
Right People

Largest Layoff Announcements, 1993 to 2008

LG4

Company

Employees

Date

IBM

60,000

July 1993

Citigroup

53,000

November 2008

Sears Roebuck

50,000

January 1993

U.S. Air Force

40,000

December 2005

Ford

35,000

January 2002

Kmart

35,000

January 2003

Boeing

31,000

September 2001

U.S. Postal Service

29,870

January 2002

Boeing

28,000

December 1998

DaimlerChrysler

26,000

January 2001

Source: Businessweek, www.businessweek.com, December 1, 2008.

7-37

ACCOUNTABILITY through
TRANSPARENCY

Leading: Providing
Continuous Vision
and Values.

LG5

Transparency -- The presentation of the companys

facts and figures in a way that is clear and apparent
to all stakeholders.

7-38

To SHARE or NOT to SHARE

(Making Ethical Decisions)

As a first-line manager, you have new information

that your department head hasnt seen yet. The
findings of the report indicate your managers
plans should fail. If they do fail, you could be
promoted.
Will you give your department head the report?
What is the ethical thing to do?
What might be the consequences?
7-39

NATURAL BORN LEADERS?

Four Types of Executives

Rationalists

Humanists

Politicists

Culturists

Leadership
Styles
LG5

Source: CIO Magazine, www.cio.com.

7-40

PROGRESS ASSESSMENT

*Progress

Assessment

*
How does enabling help achieve empowerment?
What are the five steps in the control process?
Whats the difference between internal and
external customers?

7-41

ID RATHER be BLUE

(Spotlight on Small Business)

The original Blue Men manage over 500 employees;

70 are performers in 12 cities.

Creators wrote a 132-page Blue Man manual helping

them understand the importance of managing growth.

7-42