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Chapter 6: The Nature of

The Importance of

Management Functions 2

Contents Types of Management 3

Skills Needed by 4

Decision Making 5

The Importance of
Trần Yến Linh
The importance of Management

• Management

a process designed to achieve an

organization’s objectives by using its
resources effectively and efficiently in a
changing environment
• Effectively

• means having the intended

• Efficiently

• means accomplishing the

objectives with a minimum of
The importance of Management

• Managers
• make decisions about the use of the
organization’s resources and are
concerned with planning, organizing,
staffing, directing, and controlling the
organization’s activities so as to reach its
• The decision to introduce new products in
order to reach objectives is often a key
management duty.
Every organization must acquire resources to effectively pursue its
objectives and coordinate their use to turn out a final good or service

People Raw Equipment r

Money Information

Management Functions

Trần Thị Hoàng Châu

Warren Buffett Jeff Bezos Bill Gates
Chairman and CEO of Berkshire Principal founder of
Hathaway Founder and CEO of Amazon Microsoft Corporation

Controlling Organizing


Directing Staffing

The first function

Determining the organization’s objectives

Creating a detailed action plan

What ? Where ?
When ? Who ?
How ?

Wh- Questions
Management Functions

• Mission

• A declaration of an organization’s
fundamental purpose and basic philosophy.
• A clear mission statement can provide the
basic foundation for the development of a
strong organizational culture, a good
marketing plan, and a coherent business
“Your mission statement outlines why your
company exists. It doesn’t have to be all fancy-
pants, just a clear statement of what you do.”
― Amber Hurdle, The Bombshell Business
Woman: How to Become a Bold, Brave, and
Successful Female Entrepreneur
• “A mission statement broadly charts
the future direction of an
organization. A mission statement is
a constant reminder to its
employees of why the organization
exists and what the founders
envisioned when they put their
fame and fortune at risk to breathe
life into their dreams.”
― Fred R. David, Strategic
Management: Concepts and Cases

• To bring inspiration and innovation to every

athlete* in the world.
*If you have a body, you are an athlete.

• “Vinamilk commits to bring the communities the best-quality

nutrition source that conveys our respectability, love and
responsibilities for the people, life and society”

• “Our mission is to organize the world’s information and make

it universally accessible and useful.”
• Goals

• The result that a

company wishes to
• A company almost
always has multiple goals
Three components of Goal

An attribute sought

A target to be achieved GOAL

A time frame
• Company goals should be specific in order to make
better decisions in organization
• For example:
• A company goal stating: “ Tracker Jacker Company will
be profitable” [NOT SPECIFIC]
• A better way to state that goal is: “ Tracker Jacker
Company will attain a 10 percent net profit margin by
the end of 2014, based on sales of 100,000 units.”

• A computer on every desk and in every home ( 1980 )


• Yamaha wo tsubusu! We will destroy Yamaha! ( 1970s )

• By 2020 no one should be killed or seriously
injured in a new Volvo car ( 2008)
( Big Hairy Audacious Goals )

• A term that James Collins and Jerry Porras coined in their 1994
book Built to Last: Successful Habits of Visionary Companies.
• A 10-to-20-year goal which is audacious, likely to be
externally questionable, but not internally regarded as
Why having a BHAG(s) is critical to visionary company ?

• A BHAG motivates employees to reach higher

• In the long-run, everything tends to be more “ Elastic ”
• JKF’s Man on the Moon in Ten Years
• “I believe that this nation should
commit itself to achieving the
goal, before this decade is out, of
landing a man on the moon
and returning him safely to the
earth.” - President John F.
• That goal was achieved on July 20,
• Objectives

 The ends or results desired by an


 The principal difference between goals

and objectives is that objectives are
generally stated in such a way that they
are measurable
Common objectives
1 2
3 4
Profit competitive
Efficiency Growth
advantage are objectives relate
objectives genally stated in
to an
involve making
terms of organization’s
the best use of
percentage of ability to adapt
sales increase
organization’s and to get new
and market products to the
share, with the marketplace in a
goal of timely fashion
those figures


Tactical plan

Strategic plans
Major considerations:
Developed by a SWOT factors, the
firm’s highest changing business
managers. environment and


Long-range Overall strategy or

course of action
The differences
Short-range plans between the strategic
(usually for 6 and tactical plans result
months to 1 year) in different activities in
the short term versus
the long term

Designed to
implement the Must be periodically
activities and
objectives reviewed and
specified in the updated
strategic plan
Very short-term
plans (usually for 1
month to 3 months)


Designed to achieve
the tactical plan and
Actions individuals, work ultimately the
groups or departments strategic plan
need to accomplish
 Crisis management (Contingency
planning) Very short-term plans (usually for
1 month to 3 months)
• Actions individuals, work groups or
departments need to accomplish
• Designed to achieve the tactical plan and
ultimately the strategic plan
“ We have also established a
mature business continuity
management (BCM) system
that provides a contingency
plan for emergencies such as
for earthquakes or outbreaks
of war. This system allows us
to quickly restore customer
networks and resume stable
operations following critical
emergencies, thus helping
safeguard lives and property ”
- Huawei

• The structuring of resources and activities to

accomplish objectives in an efficient and effective
• Managers organize by reviewing plans and
determining what activities are necessary to
implement them
• Then, they divide the work into small units and
assign it to specific individuals, groups or
“The only difference between a “For every minute spent in
mob and a trained army is organizing, an hour is earned” -
organization.”-Calvin Coolidge Benjamin Franklin
Organizing is important for several reasons

• Creating cooperative interaction

• Delegating authority
• Improving communication
• Avoiding duplication of resources
• Improving competitiveness by speeding up
decision making

• Staffing is commonly associated with hiring and

promoting employees
Determining what skills are needed for specific jobs
Training and motivating employees
Performance appraisal ( Performance Evaluation )
o Downsizing
• The elimination of a significant • The painful consequences of
number of employees from an downsizing and outsourcing
organization • The remaining employees often feel
• Many firms downsize by insecure, angry and sad  Their
outsourcing production, sales and productivity may decline
technical positions to companies in • After a downsizing situation, an
other countries with lower labor effective manager will promote
costs optimism and positive thinking and
• Downsizing has helped numerous minimize criticism and fault-finding
firms reduce costs quickly and • Truthfulness about what has
become more profitable happened and about future
expectations is essential

 Motivating and leading employees to achieve

organizational objectives
 Good directing involves
• Telling employees what to do and when to do it
through the implementation of deadlines, and then
encouraging them to do their work.
• Determining and administering appropriate rewards
and recognition
• "People may take a
job for more money,
but they often leave
it for more
recognition." -Bob

• The process of evaluating and correcting activities

to keep the organization on course
• Control involves five activities:
1. Measuring performance
2. Comparing present performance with standards or
3. Identifying deviations from the standards
4. Investigating the causes of deviations
5. Taking corrective action when necessary
• Controlling and planning are closely linked
• Planning establishes goals and standards
• By monitoring performance and comparing it
with standards, managers can determine
whether performance is on target

Types of
Trần Phương Quỳnh Nga
President, CEO,
Executive vice

Middle Management
Plant Managers, Division
Managers, Department

First-line Management
Foremen, Supervisors,
Office Managers
Top management

Chief executive officer (CEO), chief financial

officer (CFO) and chief operations officer
(COO)overall responsibility for the
Ex: Mark Zuckerberg-CEO and founder of Facebook.
• Sheryl Sandberg- Facebook’s chief operating officer.
The COO reports to the CEO and is often considered to be number
two in command.
• In public corporations, even chief executive officers (CEO) have a boss
- the film’s board of directors.
• In government, top management refers to the president, a
government, a mayor or city manager. In education, a chancellor of a
university or a superintendent of education.
• Top-level managers
spend most of their time
planning. They make the
organization’s strategic
decisions, focus on an
overall scheme or key
idea in using resources
to take advantage
• Top managers generally have many years of varied experience and
command top salaries. In addition to salaries, include bonuses, term
incentive awards, stock and stock options.
• Ex: Larry Ellison
(Oracle Company)
78,4 millions $.
• Workforce diversity is an important issue in today’s corporations.
• Sodexo Inc. topped DiversityInc’s list as the most diverse
company of 2014.
Middle Management

• Middle managers are responsible for strategic

planning to implement the direction of top managers.
• In business, plant managers, division managers and
department managers make up middle management.
• The ranks of middle managers have been shrinking as
more and more companies downsize to be more

Quỳnh Nga
First-line Management

• Who supervise both workers and the daily operations of an

• Common titles for first-line managers are foreman, supervisor or
office service manager.
Areas of Management
• At each level, there are managers who specialize
in the basic functional areas of business such as:
finance, production and operation, human
resources, marketing, information technology(IT),
• Each of these management areas is important to a
business’s success.
For instance, a firm cannot survive without someone obtaining
needed financial resources or staff (human resources managers).

Skills Needed by
Phạm Như Ngọc
TABLE 6.4 Managerial Roles
Type of Role Specific Role Examples of Role Activities
Decisional Entrepreneur Commit organizational resources to develop innovative goods and services; decide to expand internationally
to obtain new customers for the organization’s products.
Disturbance handler Move quickly to take corrective action to deal with unexpected problems facing the organization from the
external environment, such as a crisis like an oil spill, or from the internal environment, such as producing
faulty goods or services.
Resource allocator Allocate organizational resources among different functions and departments of the organization; set budgets
and salaries of middle and first-level managers.
Negotiator Work with suppliers, distributors, and labor unions to reach agreements about the quality and price of input,
technical, and human resources; work with other organizations to establish agreements to pool resources to
work on joint projects.
Informational Monitor Evaluate the performance of managers in different functions and take corrective action to improve their
performance; watch for changes occurring in the external and internal environment that may affect the
organization in the future.
Disseminator Inform employees about changes taking place in the external and internal environment that will affect them
and the organization; communicate to employees the organization’s vision and purpose.
Spokesperson Launch a national advertising campaign to promote new goods and services; give a speech to inform the local
community about the organization’s future intentions.
Interpersonal Figurehead Outline future organizational goals to employees at company meetings; open a new corporate headquarters
building; state the organization’s ethical guidelines and the principles of behavior employees are to follow in
their dealings with customers and suppliers.
Leader Provide an example for employees to follow; give direct commands and orders to subordinates; make
decisions concerning the use of human and technical resources; mobilize employee support for specific
organizational goals.
Liaison Coordinate the work of managers in different departments; establish alliances between different organizations
to share resources to produce new goods and services.
Skills Leadership

Technical Expertise

The specialized
knowledge and training
needed to perform jobs
that are related to
particular areas of
The ability to identify
relevant issues, recognize
their importance,
understand the
relationships between
them, and perceive the
underlying causes of a
The ability to
deal with
people, both
inside and
outside the
The ability to
influence employees
to work toward
organizational goals.
TABLE 6.5 Seven Tips for Successful Leadership
• Build effective and responsive interpersonal relationships.
• Communicate effectively—in person, print, e-mail, etc.
• Build the team and enable employees to collaborate effectively.
• Understand the financial aspects of the business.
• Know how to create an environment in which people experience
positive morale and recognition.
• Lead by example.
• Help people grow and develop.

Source: Susan M. Heathfield, “Seven Tips About Successful Management,”, (accessed February 25, 2010)
Autocratic Democratic
leaders leaders

Autocratic leaders

make all the

decisions and then
tell employees what
must be done and
how to do it


Democratic leaders
Involve their employees in

Advantages Disadvantages
• It often has solutions • Delay in decision
for complex problems. • Requirement of
• It encourages a educated employees
creative environment.
• It builds strong teams.
Let their employees
work without much
interference. The
manager sets
performance standards
and allows employees to
find their own ways to
meet them

Decision Making

Nguyễn Thị Thanh Bình

Steps in decision making process

Analyze options

Select the best option

Develop options

Implement the decision

Recognize and define

the decision situation

Monitor the
Recognizing and Defining the
Decision Situation

Developing Options

 Develop a list of possible courses of action

Analyzing Options

- When assessing appropriateness, the decision maker should consider whether

the proposed option adequately addresses the situation
- When analyzing the consequences of an option, managers should consider its
impact on the situation and on the organization as a whole
Selecting the Best Option

Selection is often a
subjective procedure
It is not always necessary to
select only one option and
reject all others
Implementing the Decision

Management should be ready to deal with the unexpected consequences

Monitoring the Consequences

After managers have

implemented the
decision, they must
determine whether it
has accomplished the
desired result If the desired result
is achieved,
management can If the desired result is
reasonably conclude not achieved, further
that it made a good analysis is warranted
Figuring out what to do despite
uncertainty, great diversity, and an
enormous amount of potentially
relevant information

Getting things done through a

large and diverse set of people
despite having little direct control
over most of them

1. Management is a process designed to achieve an organization’s
objectives by using its resource ……………… (accomplishing the
objectives with the minimum of resources) and …………….. (having the
intended result).

A efficiently; effectively

B effectively; efficiently
C quickly; competently
D competently; quickly
2. All of the following are typical resources that must be acquired by
each organization in the pursuit of its objectives except

A. people

B. Raw materials and equipment

C. Money

D. Laws and regulations

3. All of the following are functions of management except

A.Staffing B. Organizing

C. Advertising D. Directing
4. Determining an organization’s objectives and deciding how to
accomplish them are part of the management function known as

A. Planning B. Organizing

C. Controlling D. Directing
A. Planning B. Organizing

C. Controlling D. Directing
6. Controlling is a process of ……………… and …………….. activities
to keep the organization on course.

A. motivating; leading

B. structuring; accomplishing

C. hiring; training

D. evaluating; correcting
A. Identify deviations from the standard

B. Measure the actual performance

C. Investigate the causes of any deviations

D. Ask your employees to fix any problems
8. Decisions regarding adding new products, acquiring companies, and
moving into foreign markets would most typically be made by

B. Middle
A. Top managers

C. First-line managers D. A production

9. Foreman, supervisor, office manager are examples of

A. Middle
B. Top managers

C. First-line
D. Executive levels
10. When Henry allows his employees to do their work with
little interference, his leadership style is

A. Autocratic B. Free-rein

C. Democratic D. Authenic