Process and Components of Management

Sudhanshu khatri

Manager As A Person

Personality Traits

Personality Traits: Characteristics that influence how people think, feel and behave on and off the job.

Include tendencies to be enthusiastic, demanding, easygoing, nervous, etc. Each trait can be viewed on a continuum, from low to high.

There is no wrong trait, but rather managers have a complex mix of traits.

The Big Five Traits:

I
Low Extroversion High

II
Low Negative Affectivity High

III
Low Agreeableness High

IV
Low Conscientiousness High

V
Low

Openness to Experience

High

The Big Five

Extroversion:

people are positive and feel good about themselves and the world.
Managers high on this trait are sociable, friendly.

Negative

Affectivity: people experience negative moods, are critical, and distressed.

Managers are often critical and feel angry with others and themselves.

Agreeableness:

people like to get along with others. people tend to be careful,

Managers are likable, and care about others.

Conscientiousness:

persevering. Openness to Experience: people are original, with broad interests.

Traits and Managers

Successful managers vary widely on the Big Five.

It is important to understand these traits since it helps explain a managers approach to planning, leading, organizing, etc.

Managers should also be aware of their own style and try to tone down problem areas.

Internal Locus of Control: People believe they are responsible for their fate.

See their actions are important to achieving goals.

External Locus of Control: People believe outside forces are responsible for their fate.

Their actions make little difference in achieving outcomes.

Managers need an Internal Locus of Control!

Other Traits

Self-Esteem: Captures the degree to which people feel good about themselves and abilities.

High self-esteem causes people to feel they are competent, and capable. Low self-esteem people have poor opinions of themselves and abilities.

Need for Achievement: extent to which people have a desire to perform challenging tasks and meet personal standards. Need for Affiliation: the extent to which people want to build interpersonal relationships and being liked. Need for Power: indexes the desire to control or influence others.

Values

Values: describe what managers try to achieve through work and how to behave.

These are personal convictions about life-long goals (terminal values) and modes of conduct (instrumental values). A persons value system reflects how important their values are as a guiding principle in life. Terminal values important to managers include:

Sense of Accomplishment, equality, self-respect. hard-working, broadminded, capable.

Instrumental values include:

Terminal and Instrumental Values

TERMINAL VALUES
INSTRUMENTAL VALUES

Prosperous life Exciting life Sense of Accomplishment A world at peace Salvation Self-respect Pleasure Wisdom True friendship Equality

Ambitious Broadminded Capable Cheerful Clean Helpful Honest Obedient Loving Responsible

Attitudes

Attitudes: collection of feelings about something.

Job Satisfaction: feelings about a workers job.

Satisfaction tends to rise as manager moves up in the organization. Organizational Citizenship Behaviors: actions not required of managers but which help advance the firm. Managers with high satisfaction perform these extra mile tasks. Organizational Commitment: beliefs held by people toward the organization as a whole. Committed managers are loyal and proud of the firm. Commitment can differ around the world.

Moods

Moods: encompass how a manager feels while managing.

Positive moods provide excitement, elation and enthusiasm. Negative moods lead to fear, stress, nervousness.

Moods can depend on a person's basic outlook as well as on current situations.

Managers need to realize how they feel affects how they treat others and how others respond to them.

Workers prefer to make suggestions to mangers who are in a good mood.

Perceptions

Perception is the process through which people select, organize and interpret input.

Managers decisions are based on their perception.

Managers need to ensure perceptions are accurate.

Managers are all different and so are their perceptions of a situation.

Perceptions depend on satisfaction, moods, and so forth.

A managers past experience can influence their outlook on a new project.

Good managers try not to prejudge new ideas based on the past.

Career Management
Managers need to consider both personal career management as well as the careers of other workers in the firm.

Ethical practice: managers need to ensure worker promotions are based on outcomes, not friendships.

This means all workers are treated equally.

Accommodation of other demands: Workers have many things in their lives besides work. Managers need to consider these issues as well.

The dual career couple is the norm. Workers have family commitments.

Manager As A Planer

The Planning Process

Planning is the process used by managers to identify and select goals and courses of action for the organization. The organizational plan that results from the planning process details the goals to be attained. The pattern of decisions managers take to reach these goals is the organizations strategy.

Three Stages of the Planning Process

Determining the Organizations mission and goals (Define the business)

Strategy formulation (Analyze current situation & develop strategies)

Strategy Implementation (Allocate resources & responsibilities to achieve strategies)

Planning Process Stages

Organizational mission: defined in the mission statement which is a broad declaration of the overriding purpose.

The mission statement identifies product, customers and how the firm differs from competitors.

Formulating strategy: managers analyze current situation and develop strategies needed to achieve the mission. Implementing strategy: managers must decide how to allocate resources between groups to ensure the strategy is achieved.

Planning at General Electric

Corporate Level

CEO
Corporate Office

Business Level GE Aircraft GE Lighting GE Motors GE Plastics NBC

Functional Level Manufacturing Marketing

Accounting R&D

Planning Levels

Corporate-level: decisions by top managers.

Considers on which businesses or markets to be in. Provides a framework for all other planning.

Business-level: details divisional long-term goals and structure.

Identifies how this business meets corporate goals. Shows how the business will compete in market.

Functional-level: actions taken by managers in departments of manufacturing, marketing, etc.

These plans state exactly how business-level strategies are accomplished.

Characteristics of Plans

Time horizon: refers to how far in the future the plan applies.

Long-term plans are usually 5 years or more. Intermediate-term plans are 1 to 5 years.

Corporate and business level plans specify long and intermediate term. Functional plans focus on short to intermediate term.

Short-term plans are less than 1 year.

Most firms have a rolling planning cycle to amend plans constantly.

Who Plans?

Corporate level planning is done by top managers.

Also approve business and functional level plans. Top managers should seek input on corporate level issues from all management levels.

Business and functional planning is done by divisional and functional managers.

Both management levels should also seek information from other levels. Responsibility for specific planning may lie at a given level, but all managers should be involved.

Why Planning is Important

Planning determines where the organization is now and where it will be in the future. Good planning provides:

Participation: all managers are involved in setting future goals. Sense of direction & purpose: Planning sets goals and strategies for all managers. Coordination: Plans provide all parts of the firm with understanding about how their systems fit with the whole. Control: Plans specify who is in charge of accomplishing a goal.

Determining Mission and Goals

This is the first step of the planning process and is accomplished by:
A. Define the business: seeks to identify our customer and the needs we can and should satisfy.

This also pinpoints competitors.

B. Establishing major goals: states who will compete in the business.

Should stretch the organization to new heights. Goals must also be realistic and have a time period in which they are achieved.

Strategy Formulation

Managers analyze the current situation to develop strategies achieving the mission. SWOT analysis: a planning to identify:

Organizational Strengths and Weaknesses.

Strengths: manufacturing ability, marketing skills. Weaknesses: high labor turnover, weak financials.
Opportunities: new markets. Threats: economic recession, competitors

Environmental Opportunities and Threats.

Planning & Strategy Formulation

Corporate-level strategy develop a plan of action maximizing long-run value SWOT analysis identifies strengths & weaknesses inside the firm and opportunities & threats in the environment.

Business-level strategy a plan of action to take advantage of opportunities and minimize threats
Functional-level strategy a plan of action improving departments ability to create value

Manager As A Decision Maker

Managerial Decision Making

Decision making: the process by which managers respond to opportunities and threats by analyzing options, and making decisions about goals and courses of action. Decisions in response to opportunities: managers respond to ways to improve organizational performance. Decisions in response to threats: occurs when managers are impacted by adverse events to the organization.

The Classical Model

Classical model of decision making: a prescriptive model that tells how the decision should be made.

Assumes managers have access to all the information needed to reach a decision. Managers can then make the optimum decision by easily ranking their own preferences among alternatives.

Unfortunately, mangers often do not have all (or even most) required information.

The Classical Model

List alternatives & consequences Assumes all information is available to manager

Assumes manager can process information Rank each alternative from low to high Assumes manager knows the best future course of the organization

Select best alternative

The Administrative Model

Administrative Model of decision making: Challenged the classical

assumptions that managers have and process all the information.

As a result, decision making is risky.

Bounded rationality: There is a large number of alternatives and information is vast so that managers cannot consider it all.

Decisions are limited by peoples cognitive abilities.

Incomplete information: most managers do not see all alternatives and decide based on incomplete information.

Decision Making Steps

Recognize need for a decision
Frame the problem Generate & assess alternatives Choose among alternatives

Implement chosen alternative

Learn from feedback

Decision Making Steps

1. Recognize need for a decision: Managers must first realize that a decision must be made.

Sparked by an event such as environment changes.

2. Generate alternatives: managers must develop feasible alternative courses of action.

If good alternatives are missed, the resulting decision is poor. It is hard to develop creative alternatives, so managers need to look for new ideas.

3. Evaluate alternatives: what are the advantages and disadvantages of each alternative?

Managers should specify criteria, then evaluate.

Decision Making Steps

4. Choose among alternatives: managers rank alternatives and decide.

When ranking, all information needs to be considered.

5. Implement choose alternative: managers must now carry out the alternative.

Often a decision is made and not implemented.

6. Learn from feedback: managers should consider what went right and wrong with the decision and learn for the future.

Without feedback, managers never learn from experience and make the same mistake over.

Group Decision Making

Many decisions are made in a group setting.

Groups tend to reduce cognitive biases and can call on combined skills, and abilities.

There are some disadvantages with groups: Group think: biased decision making resulting from group members striving for agreement.

Usually occurs when group members rally around a central mangers idea (CEO), and become blindly committed without considering alternatives. The group tends to convince each member that the idea must go forward.

Organizational Learning & Creativity

Organizational Learning: Managers seek to improve members ability to understand the organization and environment so as to raise effectiveness.

The learning organization: managers try to improve the peoples ability to behave creatively to maximize organizational learning .

Creativity: is the ability of the decision maker to discover novel ideas leading to a feasible course of action.

A creative management staff and employees are the key to the learning organization.

Building Group Creativity

Brainstorming: managers meet face-to-face to generate and debate many alternatives.

Group members are not allowed to evaluate alternatives until all alternatives are listed. Be creative and radical in stating alternatives. When all are listed, then the pros and cons of each are discussed and a short list created.

Production blocking is a potential problem with brainstorming.

Members cannot absorb all information being presented during the session and can forget their own alternatives.

Building Group Creativity

Nominal Group Technique: Provides a more structured way to generate alternatives in writing.

Avoids the production blocking problem. Similar to brainstorming except that each member is given time to first write down all alternatives he or she would suggest. Alternatives are then read aloud without discussion until all have been listed. Then discussion occurs and alternatives are ranked.

Building Group Creativity

Delphi Technique: provides for a written format without having all managers meet faceto-face.

Problem is distributed in written form to managers who then generate written alternatives. Responses are received and summarized by top managers. These results are sent back to participants for feedback, and ranking. The process continues until consensus is reached.

Delphi allows distant managers to participate.