Chapter 01 - The Management Process Today

Chapter 01
The Management Process Today

CHAPTER CONTENTS

Learning Objectives 1-2

Key Definitions/Terms 1-2
Chapter Overview 1-4
Lecture Outline 1-4
Lecture Enhancers 1-12
Management in Action 1-13
Building Management Skills 1-19
Managing Ethically 1-22
Small Group Breakout Exercise 1-22
Be the Manager 1-24
Case in the News 1-25
Connect Features 1-27
Manager’s Hot Seat 1-27
Self-Assessment(s) 1-27
PowerPoint Slides 1-27

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 Chapter 01 - The Management Process Today

LEARNING OBJECTIVES

LO 1-1. Describe what management is, why management is important, what

managers do, and how managers use organizational resources
efficiently and effectively to achieve organizational goals.

LO 1-2. Distinguish among planning, organizing, leading and controlling

(the four principal managerial tasks), and explain how managers’
ability to handle each one affects organizational performance.

LO 1-3. Differentiate among three levels of management and understand

the tasks and responsibilities of managers at different levels in the
organizational hierarchy.

LO 1-4. Distinguish among three kinds of managerial skill, and explain

why managers are divided into different departments to perform
their tasks more efficiently and effectively.

LO 1-5. Discuss some major changes in management practices today that

have occurred as a result of globalization and the use of advanced
information technology (IT).

LO 1-6. Discuss the principal challenges managers face in today’s

increasingly competitive global environment.

KEY DEFINITIONS/TERMS

competitive advantage: The ability of one controlling: Evaluating how well an organization is
organization to outperform other organizations achieving its goals and taking action to maintain or
because it produces the desired goods or services improve performance; one of the four principal tasks
more efficiently and effectively than they do. of management.
conceptual skills: The ability to analyze and core competency: The specific set of departmental
diagnose a situation and to distinguish between cause skills, knowledge and experience that allows one
and effect. organization to outperform another.

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Chapter 01 - The Management Process Today

department: A group of people who work together outsourcing: Contracting with another company,
and possess similar skills or use the same knowledge, usually abroad, to have it perform an activity the
tools, or techniques to perform their jobs. organization previously performed itself.
effectiveness: A measure of the appropriateness of planning: Identifying and selecting appropriate
the goals an organization is pursuing and of the goals; one of the four principal tasks of management.
degree to which the organization achieves those
restructuring: Downsizing an organization by
goals.
eliminating the jobs of large numbers of top, middle,
efficiency: measure of how well or productively and first-line managers and non-managerial
resources are used to achieve a goal. employees.
empowerment: The expansion of employees’ self-managed teams: A group of employees who
knowledge, tasks, and decision-making assume responsibility for organizing, controlling and
responsibilities. supervising their own activities and monitoring the
quality of the goods and services they provide.
first-line manager: A manager who is responsible
for the daily supervision of non-managerial strategy: A cluster of decisions about what goals to
employees. pursue, what actions to take and how to use resources
to achieve goals.
global organizations: Organizations that operate and
compete in more than one country. technical skills: The job-specific knowledge and
techniques required to perform an organizational role.
human skills: The ability to understand, alter, lead
and control the behavior of other individuals and top manager: A manager who establishes
groups. organizational goals, decides how departments
should interact, and monitors the performance of
innovation: The process of creating new or improved
middle managers.
goods and services or developing better ways to
produce or provide them. top management team: A group composed of the
CEO, the COO, and the vice presidents of the most
leading: Articulating a clear vision and energizing
important departments.
and enabling organizational members so that they
understand the part they play in achieving turnaround management: The creation of a new
organizational goals; one of the four principal tasks vision for a struggling company based on a new
of management. approach to planning and organizing to make better
use of a company’s resources to allow it to survive
management: The planning, organizing, leading and
and prosper.
controlling of human and other resources to achieve
organizational goals efficiently and effectively.
middle manager: A manager who supervises first-
line managers and is responsible for finding the best
way to use resources to achieve organizational goals.
organizational performance: A measure of how
efficiently and effectively a manager uses resources
to satisfy customers and achieve organizational goals.
organizational structure: A formal system of task
and reporting relationships that coordinates and
motivates organizational members so they work
together to achieve organizational goals.
organizations: Collections of people who work
together and coordinate their actions to achieve a
wide variety of goals or desired future outcomes.
organizing: Structuring working relationships in a
way that allows organizational members to work
together to achieve organizational goals; one of the
four principal tasks of management.

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 Chapter 01 - The Management Process Today

CHAPTER OVERVIEW

Chapter 1 examines what management is, including what managers do and how they use resources to
achieve organizational goals. The chapter highlights the four main functions of management (planning,
organizing, leading and controlling) as well as exploring the levels of management (first line, middle and
top) as well as the importance of three types of managerial skills (conceptual, human and technical). The
chapter concludes with a discussion of the major changes and challenges brought forth by increased
globalization and advancement in information technology and competition faced by managers today.

LECTURE OUTLINE

NOTE ABOUT POWERPOINT SLIDES

A list of the PowerPoint slides can be found at the end of this chapter.

Management Snapshot
Buzzfeed Shares Content on a Global Scale
How Does Technology Affect the Way Managers Manage?

BuzzFeed is a cross-platform, global network for news and entertainment that generates 7 billion views each
month. The company creates and distributes content for a global audience in seven languages and 11
different editions, across more than 30 social platforms. The idea that news and other information are meant
to be shared prompted Jonah Peretti, founder and CEO, to consider his global media company a learning-
driven culture. 

Drawing inspiration from the history of Paramount Pictures, Peretti created a vertically integrated
organization that owned owning all the key components of a media business: a global news operation, its
own video production studio, a complex data-analytics operation, an in-house creative agency, and a diverse
distribution channel. BuzzFeed thrives on developing and controlling the original content it produces across
various platforms.

Rather than compete with other social platforms for users, Peretti decided to publish content on the platforms
without trying to drive users to a separate Buzzfeed site. The company uses small teams to keep the video
approach fresh and to maintain the look and feel of the content it runs beside on a social platform. The teams
change every three months to keep the creative process fresh and fun.

Buzzfeed’s data analytics arm tracks and collects information on its users and has a data initiative called
HIVE that is expected to keep the company and its business model nimble. For example, HIVE tracks the
success of editorial ideas and their success. As a testament to their success, Buzzfeed was recently named
one of 2016’s most innovative companies by Fast Company magazine.

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Chapter 01 - The Management Process Today

LO 1-1: Describe what

I. What Is Management? management is, why
management is important,
1. Managers operate within an organization, a collection of what managers do, and how
people who work together and coordinate their actions to managers utilize
achieve a wide variety of goals or desired future outcomes. organizational resources
efficiently and effectively to
achieve organizational goals.
2. Management is the planning, organizing, leading and
controlling of human and other resources to achieve
organizational goals effectively and efficiently.

A. Achieving High Performance: A Manager’s Goal

1. Organizational performance is a measure of how

effectively and efficiently a manager uses resources to satisfy
customers and reach organizational goals.

a. Efficiency measures how well or how productively

resources are used to achieve a goal.

b. Effectiveness measures the appropriateness of the goals

an organization is pursuing and the degree to which the
organization is achieving those goals.

B. Why Study Management?

1. Managers understand the complexity of modern work,

respond to environmental contingencies, and make decisions
that are ethical and effective.

2. Studying management helps a person avoid the mistakes

made by managers in the past.

3. Students of management have the potential to compete

successfully for interesting and well-paying jobs.

II. Essential Managerial Tasks

A. Planning LO 1-2: Distinguish among

1. To perform the planning task, managers identify and select planning, organizing, leading
appropriate organizational goals and courses of action; they and controlling (the four
develop strategies for how to achieve high performance. principal managerial tasks),
and explain how managers’
2. The three steps involved in planning are: ability to handle each one
o Deciding which goals the organization will pursue affects organizational
o Deciding what strategies to adopt to attain those goals performance
o Deciding how to allocate organizational resources to
pursue the strategies that attain those goals

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Chapter 01 - The Management Process Today

3. The outcome of planning is a strategy, a cluster of

decisions about what goals to pursue, what actions to take,
and how to use resources to achieve goals.
o A low-cost strategy is a way of obtaining customers
by making decisions that allow an organization to
produce goods or services more cheaply than its
TEXT REFERENCE
competitors so it can charge lower prices than they do.
o A differentiation strategy is a way of obtaining
Manager as a Person: Hitting
customers by making decisions that allow an the Mark at Alcon
organization to produce new, exciting, and unique Entertainment
goods or services.
4. Planning strategy is complex and difficult, especially Scott Parish is the chief
because planning is done under uncertainty when the result financial officer and chief
is unknown so that either success or failure is a possible operating officer of Alcon
outcome of the planning process. Entertainment, an
entertainment production
B. Organizing
company based in Los
Angeles. He began in the film
1. Organizing is structuring working relationships in a way industry working at an
that allows organizational members to work together to achieve administrative job, which
organizational goals. enabled him to learn about the
craft. Over the years, he rose
in management until he
2. Organizational structure is the formal system of task and became a member of Alcon’s
reporting relationships that coordinates and motivates top team. He is credited with
organizational members so they work together to achieve helping Alcon develop from a
organizational goals. boutique film company into a
large production facility that
C. Leading creates films, television shows,
and music.
1. Leading is articulating a clear vision and energizing and
enabling organizational members so they understand the part Parish and Alcon’s leadership
they play in achieving organizational goals. team often take years to
develop a film project from
2. Leadership involves managers using their power, inception to completion.
personality, influence, persuasion, and communication skills to During this process, Parish
coordinate people and groups so their activities and efforts are must obtain funding for
in harmony. projects that can cost from $40
million to $80 million. After
D. Controlling securing funding, Parish builds
the teams for producing and
1. Controlling is evaluating how well an organization is marketing the project. Many
achieving its goals and taking action to maintain or improve difficulties need to be
performance. addressed, including balancing
the needs of Hollywood
2. The desired outcome of the control function of management superstars with the interests of
is the ability to measure performance and regulate the company. In addition to
organizational efficiency and effectiveness. developing film projects,
Parish is helping lead Alcon in
an industry—the entertainment

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Chapter 01 - The Management Process Today

III. Levels and Skills of Managers business—that is being

transformed by technological
A department is a group of people who work together and possess change. The company is
similar skills or use the same knowledge, tools, or techniques to providing more content
perform their jobs. digitally, yet the ease of
transferring digital content has
A. Levels of management made digital piracy more
prevalent. Alcon's approach to
dealing with this managerial
1. First-line managers: Responsible for daily supervision of
problem has been to attempt to
non-managerial employees; also called supervisors.
mitigate the distribution and
use of pirated content. High-
2. Middle managers: Supervise the first-line managers and are
level managers like Parish
responsible for finding the best way to organize human and
must help their companies
other resources to achieve organizational goals.
create profit in rapidly
changing circumstances, and
3. Top managers: Responsible for the performance of all to do so they need to be able to
departments and ultimately responsible for the success or represent the interests of their
failure of an organization. organizations to the public and
to external stakeholders.

a. The CEO, or Chief Executive Officer, is a company’s

most senior manager, the highest in the organizational
hierarchy LO 1-3: Differentiate among
three levels of management
b. The COO, or the Chief Operating Officer, is a top and understand the tasks and
manager who is being groomed to take over as CEO when responsibilities of managers
the CEO leaves the company. at different levels in the
organizational hierarchy.
c. The top management team is a group composed of the
CEO, the COO, and the vice presidents most responsible
for achieving organizational goals.

B. Managerial skills

1. Education and experience help managers acquire the three

types of skills required to be a successful manager.
LO 1-4: Distinguish among
a. Conceptual skills are demonstrated in the ability to three kinds of managerial
analyze and diagnose a situation and to distinguish between skill, and explain why
cause and effect. Top managers require outstanding managers are divided into
conceptual skills because their primary responsibilities are different departments to
planning and organizing perform their tasks more
efficiently and effectively.
b. Human skills are the ability to understand, alter, lead
and control the behavior of other individuals and groups as

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Chapter 01 - The Management Process Today

well as the ability to communicate, coordinate and motivate

people into a cohesive team.

c. Technical skills are the job-specific knowledge and

techniques required to perform a particular type of work or
occupation at a high level. The technical skills required by
managers are dependent upon their position within the
organization.

2. Core competency is a specific set of departmental skills,

knowledge and experience that allows one organization to
outperform its competitors.

3. Core competency gives an organization its competitive

advantage, or the skill, knowledge, and experience that make
an organization outperform other organizations.

4. Effective managers need all three types of skills (conceptual,

human, and technical) to help their organization perform more
efficiently and effectively.

IV. Recent Changes in Management Practices LO 1-5: Discuss some major

changes in management
A. Restructuring and Outsourcing practices today that have
Due to increased global competition and advances in information occurred as a result of
technology (IT) the tasks and responsibilities of managers have globalization and the use of
changed through restructuring and outsourcing to reduce the advanced information
number of employees on the payroll and make more productive use technology (IT).
of the remaining workforce.

1. Restructuring is the simplifying, shrinking, or downsizing

an organization’s operation to lower operating costs.
TEXT REFERENCE
MANAGING GLOBALLY:
a. Restructuring can be done by eliminating product teams, Mexico Attracts Global
shrinking departments, and reducing levels of the Automakers
hierarchy.
Mexico has become a very
b. IT makes it possible for fewer employees to perform a attractive location for automakers.
particular work task. It has a large workforce, is close
to large shipping ports and offers
2. Outsourcing involves contracting with another company low cost labor, including highly
usually in a low-cost country abroad, to have it perform a work skilled engineers at a fraction of
the cost of engineers in the US.
activity the organization previously performed itself.
(Starting salaries for Mexican
engineers is estimated to be about
a. Outsourcing increases efficiency through lowering one fourth that of US based
operating costs. engineers.) Hourly workers are
similarly affordable, since
b. Low cost global competition has speeded up outsourcing Mexican laborers are paid about
in the 21st century. $8 per hour compared to $58 or
$52 per hour in the US and

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Chapter 01 - The Management Process Today

Germany respectively. This

3. Restructuring and outsourcing have created a decrease of 10- amounts to a cost savings that is
20% in the number of employees in today’s large (for profit) impossible for automakers to
ignore.
organizations. The argument is that the managers and
employees who have lost their jobs will find employment in
Another advantage to
new and growing U.S. companies where their skills and
manufacturing in Mexico is its
experience will be better utilized. proximity to the US is
advantageous because of the
B. Empowerment and Self-Managed Teams reduction in shipping and
transportation costs to reach US
1. Empowerment is a management technique that gives consumers.
employees more authority and responsibility over the way they
perform their work activities. President Trump made a
campaign promise to bring
manufacturing jobs back to the
2. Lower-level employee empowerment and movement towards
US and has threatened to impose
self-managed teams is a strategy to increase efficiency and a border tax on imports. That
effectiveness. A self-managed team is a group of employees threat may have influenced Ford
who assume collective responsibility for organizing, controlling when they scrapped plans to build
and supervising their own work activities a $1.6 billion assembly plant in
Mexico.
3. Increased IT efficiency has fostered employee empowerment
because it expands an employee’s job knowledge and increases
the scope of an employee's job responsibilities.
LO 1-6: Discuss the
principal challenges
V. Challenges for Management in a Global managers face in today’s
Environment increasingly competitive
global environment
Global organizations are organizations that operate and compete
in more than one country. In order to remain competitive in a
global environment managers must face five major challenges:
a. building a competitive advantage
b. maintaining ethical standards TEXT REFERENCE
c. managing a diverse work force
ETHICS IN ACTION: Wells
d. utilizing new information systems and technologies
Fargo Scandal Hurts Everyone
e. practicing global crisis management
“Eight is great” was the former
A. Building competitive advantage CEO of Wells Fargo’s mantra. He
was referring to the cross-selling
1. A competitive advantage is the ability of one organization campaign. The sales tactic
to outperform other organizations because it produces desired boosted the bank to early success,
goods or services more efficiently and effectively than its but growing sales pressure and
competitors. unrealistic sales quotas ultimately
resulted in employees opening
nearly 2 million fake checking
2. The four building blocks of competitive advantage are and credit card accounts.
superior efficiency, quality, innovation, and responsiveness to
customers. Branch managers and others
complained to top management to
a. Organizations increase efficiency when they reduce the no avail. Ultimately the Los
quantity of resources (such as people and raw materials) Angeles Times published an

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Chapter 01 - The Management Process Today

they use to produce goods and services. article about the practice that go
the attention of the city’s
b. Increased pressure by global organizations has led to a attorney, who filed a civil
complaint in 2015.
thrust to improved quality through total quality
management or TQM.
Fallout from the scandal included
the immediate resignation of its
CEO and cost the bank customers
c. Companies can win or lose the competitive race and damaged their reputation.
depending on their speed and flexibility.

i. Speed is how quickly an organization can bring a

new product to market.

ii. Flexibility is how easily an organization can change

or alter the way an activity is performed in response to
competition

d. Innovation is the process of creating new or improved

goods and services that customers want or developing
better ways to produce or provide goods and services.

d. Because the competition for customers is intense, the

need for organizations to train employees to be responsive
to the needs of their customers is vital.

3. Turnaround Management is the creation of a new vision

for a struggling company using a new approach to planning and
organizing to make a better use of the company’s resources. An
organization often needs turnaround management because of
poor management for a continuing period or because a
competitor has introduced a new product or technology that is
more attractive to customers.

B. Maintaining Ethical and Socially Responsible Standards

1. Pressure for a manager to increase organizational

performance exists at all levels.

a. Pressure can be healthy as it creates the motivation to

find more effective and efficient methods to perform
planning, organizing, leading and controlling.

b. Too much pressure, however, can induce managers to

behave unethically towards others.

2. Social responsibility centers on deciding what if any

obligations a company has towards the people and groups
affected by its activities such as employees, customers and its
surrounding community.

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Chapter 01 - The Management Process Today

C. Managing a Diverse Workforce

1. The challenge for managers is to recognize the ethical need

and legal requirement to treat human resources in a fair and
equitable manner.

2. Today the age, gender, race, ethnicity, religion, sexual

preference, and socioeconomic composition of the workforce
presents new challenges for managers.

3. To create a highly trained and motivate workforce, and to

avoid lawsuits, human resource management (HRM)
procedures and practices that are legal and fair must be put into
place.

4. Managers who value their diverse employees succeed best in

promoting performance over the long run

5. Diverse human resources can be used as a competitive

advantage

D. Utilizing New Technologies

1. An important challenge for managers is to continually

utilize efficient and effective new IT that can link and
enable managers and employees to better perform their jobs
—whatever their level in the organization.

2. New information technology (IT) has enabled individual

employees and self-managed teams by providing them with
more information and allowing for virtual interactions.

3. IT superiority is a potential competitive advantage.

E. Practicing Global Crisis Management

1. Global disasters fall into two categories: natural causes
and human causes. Natural disasters include earthquakes,
hurricanes, tsunamis, wildfires and diseases. Losses in 2016
from natural disasters cost $175 billion but insurance only
covered $50 billion. Human disasters such as industrial
pollution, unsafe employee conditions, geopolitical tensions
and terrorism reflect increased globalization.

2. Crisis management has four basic choices:

a. Create teams for rapid decision-making and
communication.
b. Establish a chain of command and reporting structure
for fast response.

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Chapter 01 - The Management Process Today

c. Recruit and select the right people for the teams.

d. Develop bargaining and negotiating strategies to
manage conflicts among individuals with different
interests.

LECTURE ENHANCERS
Lecture Enhancer 1.1
WHY COMPANIES FAIL

CEOs often attempt to explain poor corporate performance with external environmental factors outside of
their control, such as a bad economy, market turbulence, or competitive subterfuge. A close study of
corporate failure, however, suggests that most companies flounder because of managerial error, according
to a recent article in Fortune magazine. By failure, the article’s authors are referring to any type of
dramatic fall from grace, which may or may not result in bankruptcy. Often these failures are years in the
making and are unique to the company’s own industry and culture. Below is a list of some of the mistakes
made by corporate leaders that often lead to the downfall of their organizations.

1. Softened by Success: A number of studies show that people are less likely to make optimal
decisions after prolonged periods of success. NASA, Enron, Lucent, and WorldCom all had
reached the mountaintop before they ran into trouble.

2. See No Evil: Author Jim Collins says that a litmus test of greatness within a company is its
willingness to confront brutal facts head-on instead of trying to explain them away. Andy Grove
and Gordon Moore of Intel passed this test. While watching their competitors change memory
chips into a cheap commodity, they made the decision exit the chip business and enter the
microprocessor business. However, Polaroid and Xerox failed. Both were slow to confront the
changing world around them and face the fact that their business models were no longer
sustainable.

3. Fearing the Boss More Than the Competition: Sometimes CEOs don’t get the information they
need because their subordinates are afraid to tell them the truth. Although it may not be CEOs’
intent, sometimes a subtle signal, such as a sour expression or a curt response, can signal that bad
news is not welcome. An example is Samsung Chairman Lee Kun Hee’s 1997 decision to take
the company into the automobile business. Knowing that this industry was crowded and plagued
with overcapacity, many of Samsung’s top managers silently opposed this decision but were
unwilling to confront their forceful leader. Samsung Motors failed after its first year of
production.

4. Listening to Wall Street more than to employees: During the late 1990’s, Lucent’s CEO Richard
McGinn was delivering the top-line growth that Wall Street wanted, and in return, Wall Street
lavished the company with attention. But as McGinn continued to perform for investors, he failed
to listen to his own scientists, who feared the company was missing out on an important new
technology, and his own salespeople, who realized that sales targets were becoming increasingly
unrealistic.

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Chapter 01 - The Management Process Today

5. Strategy Du Jour: When companies run into trouble, the desire for a quick fix can become
overwhelming. The frequent result is illustrated by a description of A&P by author Jim Collins.
“A&P vacillated, shifting from one strategy to another, always looking for a single stroke to
quickly solve its problems. It held pep rallies, launched programs, grabbed fads, fired CEOs,
hired CEOs, and hired them again.” Lurching from one silver bullet solution to another, the
company never gained any traction.

Taken from Why Companies Fail, by Ram Charan and Jerry Useem, published in the May 27, 2002
issue of Fortune magazine.

Lecture Enhancer 1.2

WHY GOOD EMPLOYEES CAN BE BAD MANAGERS
You have a good employee, a hard worker, technically proficient. You promote him and it turns out
to be a bad decision. You have promoted your best technical employee, and in the process, lose a good
employee and gain a poor manager. How does this happen?
Good technical employees can make good managers, of course, but many do not. Good technical
specialists—engineers, accountants, computer gurus, financial analysts, statistical experts—are more
likely to have introvert personalities. Introverts prefer to work alone. They revel in painstaking details,
meaningful paperwork, tedious activities, and precision. They can focus for hours on extracting
meaningful data from mounds of information. The presence of ambiguity and clutter motivates them to
find the “perfect solution.”
The traits that make technical experts successful actually get in the way of managing others. The
world of the worker encourages them to seek precision and order. By contract, the management role is
messy, complicated, and ambiguous. Additionally, the sense of pride and reward for completing a task is
missing.
Relationship complexities are more dynamic than task complexities. Management analysis must
account for distasteful political elements, egos, pride, insecurities, envy, hurt feelings, and petty conflicts.
To make the successful transition to leadership, technical experts learn to rely more upon their instincts,
insights, intuitions, tolerance for human equations, underlying values, and their “feel” for things. Rational
analysis is still important; it just is not sufficient.

MANAGEMENT IN ACTION

Notes for Topics for Discussion and Action

DISCUSSION
1. Describe the difference between efficiency and effectiveness and identify real organizations you think
are, or are not, efficient and/or effective.

An organization’s performance is directly tied to the levels of efficiency and effectiveness exhibited by
managers within the organization. Efficiency is described as a measure of how well or productively
resources are used to achieve an organizational goal. Efficiency can be increased by minimizing inputs
needed to achieve desired outputs. Effectiveness is a measure of the appropriateness of the goals chosen
and the degree to which they are achieved. Organizations are more effective when managers choose
appropriate goals and then achieve them.

2. In what ways can managers at each of the three levels of management contribute to organizational
efficiency and effectiveness?

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Chapter 01 - The Management Process Today

Efficiency is a measure of how well or productively resources are used to achieve a goal. First-line
managers can contribute to organizational efficiency by instituting quality control procedures.
Production should be monitored to ensure that the goods and services are produced without defects to
prevent wasted materials, returned merchandise, and/or unsatisfied customers. The first-line manager
should be very familiar with how his or her employees complete their tasks and responsibilities, meeting
with them on a regular basis to discuss alternative methods that could save time and materials. Middle
managers can contribute to organizational efficiency by finding ways to help first-line manager and
employees better utilize resources in order to reduce manufacturing costs or improve the way services are
provided to customers. They are responsible for ensuring that employees are properly trained and are
equipped with the necessary skills and have access to the most efficient technology and machinery. Top
managers can contribute to organizational efficiency by ensuring that departments throughout the
company are cooperating with each other in the most efficient manner. It is important for them to
determine if it is more economical to provide certain resources in-house (such as marketing, legal,
accounting) or to outsource these functions to external agencies.

Effectiveness is a measure of the appropriateness of the goals chosen and the degree to which they are
achieved. First-line managers can contribute to organizational effectiveness by informing their
employees of the expectations and goals that are set for them and discuss the best way to fulfill those
goals and expectations. In addition, he or she might include the employees in setting appropriate goals
that they both feel are obtainable. The first-line manager should periodically give feedback to his or her
employees to let them know if they are on the right track in meeting preset goals and expectations.
Middle managers can contribute to organizational effectiveness by evaluating whether or not the goals
that an organization is pursuing are appropriate and for suggesting ways in which they could be changed.
Top managers can contribute to organizational effectiveness by establishing appropriate organizational
goals. They are responsible for deciding which goods and services the company should produce. In
addition, they must monitor their middle managers throughout the organization to ensure that they are
making the most effective use of their resources to accomplish goals.

3. Identify an organization that you believe is high performing and one you believe is low performing.
Give five reasons why you think the performance levels of the two organizations differ so much.

(Note to instructor: Due to the nature of this question, individual answers may vary widely. Examples of
factors affecting performance are listed.)

Organizations that operate at different performance levels (high vs. low performing organizations) may
have many different factors affecting their performance:
(1) The high-performing organization has managers who interact with and motivate employees, while the
low-performing organization has managers who are aloof and do not interact with or motivate employees
directly, perhaps negatively affecting morale.
(2) The high-performing organization has managers who set difficult but achievable goals for their
employees. A low-performing organization may not set goals, or the ones they do set are vague and
difficult to attain.
(3) In a high-performing organization, bonuses or rewards are directly tied to the company’s performance.
In a low-performing organization, bonuses or rewards are tied to other criteria, which may or may not
include performance.

(4) High-performing organization managers are able to delegate authority, and hold employees
responsible for meeting organizational goals. Managers from low-performing organizations may not be
able to effectively delegate authority or hold employees responsible for achieving goals.

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Chapter 01 - The Management Process Today

(5) Managers who solicit feedback from employees on how to manage the organization efficiently and
effectively and use this information wisely will likely have a higher performing organization than
managers who refuse to listen to their employees’ suggestions for improving organizational performance.
(6) Managers in high-performing organizations tend to take a “hands-on” approach to management, for
example, visiting a production line and learning the day-to-day operations of an organization. Managers
in low-performing organizations tend to not take this approach, preferring to hear about problems or
situations through indirect communication with employees.
(7) High-performing organizations have managers who are able to choose appropriate goals to pursue,
decide what courses of action to adopt to attain those goals, and allocate resources to attain those goals. In
other words, these managers plan effectively. Low-performing organizations may have managers who
lack the ability to plan effectively.
(8) Managers in high-performing organizations know how to organize, or how to establish relationships
within the organization that allow employees to work together toward achieving organizational goals.
Managers in low-performing organizations may be ineffective in establishing these important
relationships within their organization.
(9) Leading involves determining direction, articulating a clear vision for employees to follow, and
energizing and enabling employees so they understand the part they play in achieving organizational
goals. High-performing organizations have effective leaders, while low-performing organizations have
ineffective leaders who are unable to encourage employees to perform at a high level.
(10) High-performing organizations have managers who are proficient at controlling, or evaluating how
well the organizations achieve their goals, and are capable of taking corrective action to maintain and
improve performance. Low-performing organizations may have managers who are unable to evaluate and
adapt to changing performance needs.

4. What are the building blocks of competitive advantage? Why is obtaining a competitive advantage an
important to managers?

The four building blocks of competitive advantage are: 1) increasing efficiency, 2) increasing quality, 3)
increasing speed, flexibility and innovation, and 4) responsiveness to customers.

Organizations can increase efficiency by reducing the resources they use to produce their goods or
services. Organizations can increase the quality of the goods and services they produce by implementing
monitoring and evaluating procedures to reduce the amount of defective products that transfer to the
customer. Organizations can increase innovation by encouraging employees to think creatively to create
new products or methods of completing tasks. Also, organizations need to take risks to follow through in
implementing the best employee ideas. Organizations can increase responsiveness to customers by
providing customer service to address the needs of the customer during and subsequent to their purchase.

Obtaining competitive advantage is an important aspect of management today because organizations exist
in a more global environment than ever before. Within most industries, organizations compete with other
companies that are able to provide the same goods and services for less money because they utilize
resources in other countries, such as human resources in third world or other low labor cost countries
where workers are typically paid a third of what American laborers receive.

5. In what ways do you think managers’ jobs have changed the most over the last 10 years? Why have
these changes occurred?

The roles that managers have to fulfill today are quite different from the ones they have traditionally
occupied. Many unique challenges face today's managers, including changes in the workforce, the
environment, and organizational cultures themselves.

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Chapter 01 - The Management Process Today

One of the most intriguing challenges concerns the human resources in organizations. The workforce is
becoming increasingly diverse in terms of age, gender, race, ethnicity, religion and socioeconomic
background. Managers must find ways to treat people fairly, while at the same time effectively utilizing
the different perspectives and contributions that a diversified workforce offers. Managers have been
forced to comply with legislation such as the American with Disabilities Act and Affirmative Action
which prevent discrimination in the workplace and encourage the hiring of employees from
underrepresented groups.

In addition to diversity, managers must now learn to compete on an increasingly global scale. The
breakdown of barriers between formerly distinct economies has forced companies to improve
performance in order to compete successfully with companies around the world. Managers can learn to
keep their competitive advantage by achieving superior efficiency, increasing quality, increasing
innovation, and increasing responsiveness to customers. In order to achieve these goals, managers must
encourage creativity in finding new ways to use resources efficiently, empower their employees to
monitor and evaluate quality, reward risk taking, and encourage employees to provide outstanding
customer service.

The nature of a manager’s job has also changed in response to the shift in industry concentration of the
United States from manufacturing to a more service-oriented emphasis. This has caused a modification in
the nature of the work performed and mandated a greater emphasis on personal relations and leadership
skills.

In addition, managers need to take advantage of the technological advances that offer opportunities to
increase responsiveness to customers, improve quality, facilitate communication, and increase the rate of
innovation. Organizations that can harness the power of these new technologies and information systems
to increase performance will maintain a competitive advantage in an increasingly complex business
environment.

ACTION
6. Choose an organization such as a school or a bank; visit it; then list the different kinds of
organizational resources it uses. How do managers use these resources to maintain and improve its
performance?

(Note to instructor: Due to the nature of this question, individual answers may vary widely. An example
of a school is listed.)

In order to provide the best educational environment for its students, George Washington High School
makes use of a tremendous amount of organizational resources both from within and outside of the
school. From within the school these resources include department heads (e.g., social studies, math,
science, English, etc.) that closely manage the teachers in their department; the roster office that handles
scheduling; counseling and psychological services that provide testing and guidance for students; the
athletic department that provides organized and competitive sports for students to participate; the
custodial and maintenance workers that handle the physical needs of the building such as cleaning,
heating and repairs; secretaries that help with administration functions; the public address system for
communication; computers for teaching and organizing; financial resources given to them by their school
district to purchase books, supplies and equipment; and the cafeteria that provides meals for both students
and teachers.

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Chapter 01 - The Management Process Today

G.W.H.S. also utilizes resources external to the organization, they include parents (i.e., the home and
school association), the surrounding community and organizations within the community, the local police
department, private organizations and businesses that provide funding, mentorship to students and
internships for students. As in most cities and towns, G.W.H.S. falls under the jurisdiction of the local
School District which provides personnel and other human resource services, administrative support,
training, curriculum support, information technology, research, and further facilitates maintenance. The
organizational resources obtained from all sources are essential to the successful operations of this school
as well as any public or private institution.

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Chapter 01 - The Management Process Today

7. Visit an organization and talk to first-line, middle, and top managers about their respective
management roles in the organization and what they do to help the organization be efficient and effective.

(Note to instructor: Due to the nature of this question, individual answers may differ widely, though
students should address the following points in their answers.)

Managers at various levels within an organization have different but related types of responsibilities for
utilizing organizational resources to increase efficiency and effectiveness. First-line managers have the
day-to-day responsibility of supervising human resources, the employees or non-managerial employees
who actually perform the activities necessary to produce goods and services. Given the knowledge of
day-to-day operations that first-line managers have, they are often in good positions to make suggestions
to middle managers on how processes can be made more effective and efficient.

Middle managers supervise the first-line managers and have the added responsibility to find the best way
to combine human and other resources to achieve organizational goals. Middle managers increase
efficiency by finding ways to help first-line managers and employees better utilize resources in order to
reduce manufacturing costs, or improve the way services are provided to customers. To increase
effectiveness, middle managers are responsible for evaluating whether or not the goals that an
organization is pursuing are appropriate and for suggesting ways in which they should be changed. Since
achieving these goals efficiently is the main focus, middle managers try to find the best ways to use
organizational resources. They also nurture and develop the organizational skills necessary for an
organization to be efficient and effective.

Top managers are at the apex of the managerial pyramid. They are responsible for supervising all the
departments in an organization, and deciding how the different departments can cooperate and work
together to achieve organizational goals. They are ultimately responsible for the success or failure of an
organization. Top managers are responsible for establishing appropriate organizational goals and
monitoring the performance of each department in achieving those goals. Most of their time is devoted to
planning and organizing resources to maintain and improve efficiency and effectiveness, which determine
an organization’s long-term performance.

8. Ask a middle or top manager, perhaps someone you already know to give examples of how he or she
performs the management functions of planning, organizing, leading and controlling. How much time
does he or she spend in performing each task?

(Note to instructor: Due to the nature of this question, individual answers may differ widely. A sample
answer is given here.)

Mark Jayton is a production manager at clothing manufacturing company. In our discussion he informed
me that he performs all four management functions in varying degrees. He spends time at the end of each
month, quarter and year planning departmental budgets, goals, and strategies for the upcoming period.
Once these strategic tools are completed, he must disseminate the information to both his superiors and
his subordinates. He spends time organizing on a weekly basis, when he must determine which project
team should work on which production line and in what order the projects should be completed. By
organizing he needs to ensure that he is using his human and material resources to their full capacity.
Mark spends some time each day leading his employees. He must motivate them to produce quality work
and listen to their concerns and problems on a regular basis. Mark performs the controlling function on a
constant basis as he monitors the performance of his department at all levels so that he is able to be
proactive in dealing with any issues or problems that could arise.

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Chapter 01 - The Management Process Today

9. Try to find a cooperative manager who will allow you to follow him or her around for a day. List the
roles the manager plays and how much time he or she spends performing them.

Peter Johnson is a manager of a real-estate office. Performing this job requires Peter to perform many of
Mintzberg’s roles that encompass the managerial functions of planning, organizing, leading and
controlling organizational resources. Peter acts as a figurehead; a person who symbolizes an organization
and what it is seeking to achieve. He establishes for his field agents the appropriate ways to behave in an
organization with his professional manner and enthusiasm. This role requires constant attention, and is
exhibited in his personality and mannerisms. Much of Peter’s time is devoted to acting as a leader for his
employees, motivating his employees to perform at a higher level by training, counseling, and mentoring
them. Another main part of Peter’s job is in the liaison role, linking and coordinating activities of people
and groups both inside and outside the organization.

Disseminating information is also an integral part of Peter’s job. By acting as a monitor, Peter analyzes
information to effectively organize and control resources, while his role as a disseminator involves
sharing this information with his employees to influence their work and behavior. Finally, Peter does play
some decisional roles within his organization, working as a resource allocator who decides how to
allocate people and other resources, and a negotiator, who manages solutions between groups with
competing interests.

AACSB: Analytic
AACSB: Reflective Thinking

BUILDING MANAGEMENT SKILLS

Thinking about Managers and Management

(Note to instructor: Due to the nature of these questions, student responses may vary. The following are
examples.)

1. Think of your direct supervisor. Of what department is he or she a member and at what level of
management is this person?

Jonathon Lewis is an audit manager at a large accounting firm. His position is considered middle-
management since he reports to the partners of the firm but is responsible for managing the supervisors
who closely monitor the staff associates on a day-to-day basis.

2. How would you characterize your supervisor’s approach to management? For example, which
particular management tasks and roles does this person perform most often? What kinds of management
skills does the manager have?

Jonathon performs the four functions of management to different degrees. He is involved in

planning when he determines strategies for soliciting customers and recruiting new employees.
He also determines which of his supervisors and staff associates would be best suited to work
with certain clients. He needs to allocate his staff appropriately so that all of his client needs are
met in a timely manner. Jonathon performs the organizing function by choosing team members
who will work together to achieve the goals that he has set forth for them. He needs to coordinate
the efforts of the support staff, such as the tax department, whose services are essential in
completing the project. When beginning a new project, Jonathon exercises his leadership skills

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Chapter 01 - The Management Process Today

by holding meetings with his entire staff to communicate his goals for the project and delegating
responsibilities to appropriate team members. His confident nature coupled with his accounting
expertise motivates his team to enthusiastically tackle the challenges that he sets forth for them.
He continues to control the project by holding weekly meetings with his team to assess the
progress and provide the necessary feedback. He reviews the work that they have completed and
makes recommendations for any necessary changes. At this point he determines whether his
team is on schedule with the budget and if necessary how they can better manage their time.

Jonathon performs many of the interpersonal, informational and decisional roles coined by Mintzberg.
Within the interpersonal roles he is required to act as a figurehead, leader and liaison among and
between his team members. He performs informational roles by monitoring technical and client-specific
information, disseminating the necessary information to his clients and staff, and acting as a spokesperson
when he represents the firm at many meetings, presentations and recruiting events. While performing
decisional roles he must act as an entrepreneur in determining what lines of business are best to solicit, a
disturbance handler when any unforeseen events effect the progress of his team, a resource allocator in
determining which employee should work on which project, and a negotiator when he must negotiate
with other managers when there is a scheduling conflict involving his team members.

Jonathon possesses tremendous technical and human skills. His technical skills include his ever-
increasing accounting expertise as well as his up-to-date knowledge of the issues facing his clients and
their industry. He exercises his human skills every time he interacts with supervisors, staff associates,
partners, support staff and clients.

3. Do you think the tasks, roles, and skills of your supervisor are appropriate for the particular job he or
she performs? How could this manager improve his or her task performance? How can IT affect this?

Jonathon possesses the functions, roles and skills that are necessary for him to effectively manage his
project teams while satisfying the customer and soliciting new business on a regular basis. However, he
could work on his conceptual skills. At times he has trouble seeing the big picture when it comes to
managing the careers of his employees. He is very good at ensuring that he has the best people on his
team and that they are equipped with the technical skills needed for that project, but is lacking when it
comes to the development needed for them to progress to the next level. He has a habit of handling the
more technically difficult aspects of the project himself, instead of involving team members so that they
will become more proficient in those areas.

Clearly, Jonathan needs to do a better job of empowering his employees. He should consider delegating
additional technical tasks to teams of employees, serving as their coach instead of providing direct
supervision, and using IT to monitor the progress of those teams.

4. How did your supervisor’s approach to management affect your attitudes and behavior? For example,
how well did you perform as a subordinate and how motivated were you?

As a result of the functions he performed, the skills he possessed and the roles he fulfilled, I found that
Jonathon’s management style had a positive effect on my attitudes and my work performance. I was very
motivated to provide top quality work and eager to please a well-respected figurehead in my organization.
To make up for any deficiency in Jonathon’s conceptual skills of “seeing the big picture,” I found myself
feeling more responsible for my future growth and development. This did not prevent me from
performing to my full potential, it merely meant that I needed to spend my own time and energy to ensure
that I gained the additional skills and knowledge that I did not learn while working on Jonathon’s
projects.

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Chapter 01 - The Management Process Today

5. Think about the organization and its resources. Do its managers utilize organizational resources
effectively? Which resources contribute most to the organization’s performance?

Being a service-oriented organization made it necessary to ensure that organizational resources were
utilized most effectively and efficiently. In a service organization the “human” resources are the most
valuable resources that the company possesses. The accounting firm has an entire department devoted to
the scheduling functions of employees to project teams in response to managers’ requests. In addition,
they have an in-house educational department that spends a great deal of time and money on employee
training and development.

6. Describe the way the organization treats its human resources. How does this treatment affect the
attitudes and behaviors of the workforce?

To a great extent this accounting firm values its most precious resource, its employees. They organize
social functions on a regular basis during the busiest times of the year to reward employees for hard work
and provide some relaxation. In addition, employees are rewarded monetarily for overtime worked and
receive bonuses annually which are based on performance. Problems do arise when managers are
extremely demanding of their project teams and require them to meet unreasonable budgets. As a result,
employees feel that their personal obligations and needs are neglected. Fortunately, the human resource
department monitors the hours worked by all employees and consults with managers when their teams are
working an exorbitant number of hours. In response to the professional nature of the firm and the high
regard given to employees most of the time, a large percentage of employees are extremely motivated and
self-driven.

7. If you could give your manager one piece of advice or change one management practice in the
organization, what would it be?

I would suggest to Jonathon that he take a more proactive role in the management of his subordinate’s
careers. By looking at the “big picture” he can help them to develop, which would enable smoother
transitions as their careers progressed. If he would include subordinates in the more difficult tasks of the
project they could benefit tremendously while gaining the experience and exposure necessary to enter the
future ranks of management.

8. How attuned is the organization to the need to increase efficiency, quality, innovation, or
responsiveness to customers? How well do you think the organization performs its prime goals of
providing the goods or services that customers want or need the most?

The managers at this accounting firm are constantly faced with pressure from upper management to
increase efficiency while increasing the quality of the services rendered. Since time budgets are extremely
important and used as a measurement of success, actual hours spent are measured against budgeted hours
on a regular basis. Managers are open to suggestions from supervisors and staff associates about how to
provide the same service in a more timely fashion, as long as the intended purpose is served and quality is
not compromised. Managers are responsible for reviewing the work performed by their project teams and
require that errors and omissions are attended to on a timely basis. In a service-oriented environment it is
essential that the organization be responsive to customer needs. Therefore, any successful manager is
constantly in touch with his or her clients and keeps abreast of any issue that will affect his or her client’s
financial or economic health.

AACSB: Reflective Thinking

AACSB: Analytic

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Chapter 01 - The Management Process Today

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Chapter 01 - The Management Process Today

MANAGING ETHICALLY

Think about an example of unethical behavior that you observed in the past. The incident could be
something you experienced as an employee or a customer or something you observed informally.

1. Either by yourself or in a group, give three reasons why you think the behavior was unethical. For
example, what rules or norms were broken? Who benefited or was harmed by what took place? What was
the outcome for the people involved?

Responses to this set of questions will differ, based upon the varying experiences of students. Examples
of unethical behavior might include observing an employee intentionally mislead customers to generate
sales, padding expense accounts, falsifying credentials on a resume, or accepting expensive gifts from
suppliers eager to improve business relationships with their client. Dishonesty is unacceptable regardless
of the circumstance. Employees should be careful to avoid conflicts of interest that may cause others to
question their integrity. Although those involved in such unethical situations may perhaps benefit in the
short run, in the long run they harm not only their customers and their companies, but also themselves.

2. What steps might a manager take to prevent such unethical behavior and encourage people to behave
in an ethical way?

Establishing an organizational code of ethics and making all employees aware of it can encourage ethical
behavior. It is also important that managers always engage in ethical conduct, so that they can lead by
example.

AACSB: Ethics
AACSB: Reflective Thinking

SMALL GROUP BREAKOUT EXERCISE

Opening a New Restaurant

1. Decide what each partner’s managerial role in the restaurant will be. For example, who will be
responsible for the necessary departments and specific activities? Describe your management hierarchy.

(Note to instructor: Due to the nature of this question, individual answers may differ widely, though
students should address the following points in their answers.)

Students should address the roles of first-line managers, middle managers, and top managers. Supervisors
should be hired to directly supervise the wait staff and the kitchen staff for morning, afternoon, and
evening shifts.

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Chapter 01 - The Management Process Today

A middle manager should be hired to supervise all first-line managers and to find the best way to utilize
resources to help the restaurant achieve its goals. The middle manager will be responsible for purchasing
and finding the best ways to make use of restaurant resources. The middle manager will also evaluate
whether or not the goals of the restaurant are appropriate and will suggest ways in which they should be
changed. For example, if there are many family-style restaurants in the area, the middle manager will
establish goals for making this restaurant superior to its competitors by implementing a low-cost strategy
or otherwise differentiating the restaurant. The middle manager will also be responsible for training,
motivating, and rewarding the kitchen, wait staff, and supervisors.

The primary investors should serve as top managers who are responsible for the performance the
restaurant and its staff. Top management will make decisions about menu decisions, price setting,
marketing, and how the different employees and supervisors should cooperate and help one another to
achieve the restaurant’s goals.

2. Which building blocks of competitive advantage do you need to establish to help your restaurant
succeed? What criteria will you use to evaluate how successful you are managing the restaurant?

Success of a new restaurant will require a competitive advantage. This restaurant will need to provide
food service more efficiently and effectively than its competitors if it is going to survive. The restaurant
will need to achieve superior efficiency, quality, innovation, and responsiveness to customers.

Middle managers can increase efficiency by finding suppliers who have competitive prices and who are
flexible in their ordering processes. Management can also increase efficiency by effectively training
kitchen staff and wait staff to perform at a high level.

Quality in food and service will also help ensure the success of the restaurant. Wait staff should be
encouraged to be friendly and professional, while kitchen staff should be encouraged to use high quality
ingredients and methods for preparing food. The restaurant must be kept clean and attractive to provide a
pleasant dining experience.

In addition to providing quality food and service, employees should be empowered to be creative and to
develop better ways of doing things. Weekly or biweekly staff meetings should make use of employee
suggestions for promoting new menu items or increasing customer feedback.

Responsiveness to customers is vital to service organizations such as restaurants. The success of the
restaurant depends on the staff to provide quality food and service at reasonable cost. Employees should
be empowered to do whatever it takes to satisfy customers and make their dining experiences pleasant.

To evaluate the success of the restaurant, management should examine financial success, occupancy
numbers, customer feedback, employee satisfaction, and media reviews. Evaluating both qualitative and
quantitative measures of success will allow management to maintain, or if necessary, revise,
organizational goals and procedures.

3. Discuss the most important issues that must be made about (a) planning, (b) organizing, (c) leading,
and (d) controlling to allow you or your partners to utilize organizational resources effectively and build
a competitive advantage.

Management must plan, which involves deciding which goals an organization should pursue, what
courses of action to adopt to attain those goals, and how to allocate organizational resources to attain
those goals. The partners need to decide if they will focus on food quality, low prices, speed of service, or
uniqueness of style in the restaurant.

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Chapter 01 - The Management Process Today

In organizing, or establishing the structure of working relationships between organizational members that
best allows them to work together to achieve organizational goals, management must decide how to
structure the reporting system and hierarchy of authority so that problems can be solved quickly.
Employees need to know to whom they can turn to give suggestions and make their voices heard.

In leading, management must coordinate the behaviors of all restaurant staff, resulting in a high level of
motivation and commitment from everyone. A fair and adequate compensation system and bonuses tied
to good performance would likely result in high performance and commitment.

In controlling, management must decide how they will evaluate how well the organization is achieving its
goals. Sales and customer satisfaction would seem to be adequate measures of this aspect of managing.

4. For each managerial task, list the issues to solve and those roles which will contribute the most to your
restaurant’s success.

(Note to instructor: Due to the nature of this question, student responses may vary. The following are
examples.)

Planning: Choosing the strategy regarding which organizational goals to pursue, what actions to take, and
how to use available resources to achieve desired goals.

Organizing: The creation of an organizational structure, the formal system of task and reporting
relationships that coordinates and motivates employees so that they work together to achieve an
organization’s goals.

Leading: Determining direction and articulating a clear vision for employees to follow.

Controlling: Requires establishing a method to measure goals and design the information and control
systems to measure those goals.

AACSB: Reflective Thinking

AACSB: Analytic

BE THE MANAGER

Questions:
1. What kinds of organizing and controlling problems is Achieva suffering from?
It is very common when a company starts out to be very informal. Everyone is excited by the new venture
and in this case, its success. But the founders must now deal with the enormous growth and develop what
they want as a culture; they need to take their roles seriously. They must take a look at the requirements
for planning, organizing, leading and controlling the organization; they should assign managerial and
technical roles to employees; and they need to develop an equitable performance appraisal and reward
system for all employees. It also sounds like they must to look at their Human Resources function more
closely as they are growing so fast and want to be sure to bring the right people on board.

2. What kinds of management changes need to be made to solve them?

The founders should recognize that management of the firm is now essential by developing some sort of
organizational chart, assign all those with managerial roles either a title or some acknowledgement of
their duties and responsibilities, and let everyone know how they are to interact and coordinate to
continue to be successful.

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AACSB: Analytic
AACSB: Reflective Thinking

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 Chapter 01 - The Management Process Today

Bloomberg CASE IN THE NEWS

Case Synopsis: United Blunder Prompts Airlines to Throw Cash at Their Problems

After two years of record profits, due to increased fees, low fuel prices and cost cuts, airlines are
facing complaints of poor customer service. After United faced a social media storm for
dragging a passenger off an overbooked flight, it reached a settlement with the passenger and
agreed it would pay up to $10,000 to passengers who agree to give up their seats on overbooked
flights. Delta soon followed suit and Southwest said it would stop overbooking flights.

According to industry analysts, the practice of overbooking helps save the airlines hundreds of
millions of dollars. However, the cost of the practice is unhappy customers.

United has lagged behind other airlines and has been trying to turn the company around. This
incident sent them heading in the wrong direction. Since customers also form their opinions
about airlines by how they are treated by employees, the strain of cost-cutting does little to
improve morale. To address that issue, American Airlines offered their pilots and flight
attendants a mid-contract raise. They took that action to both help customer service and preempt
any employees who might jump to another airline at the end of their contract.

The airlines are all weighing the cost of keeping customers happy – along with their
shareholders. Image is important and the pressure to improve image is another priority along
with overall profitability.

Questions
1. What steps should the United CEO have taken in the aftermath of the passenger-dragging
incident to address the social media firestorm? 

Student answers may vary. Since this was a public relations fiasco, obtaining advice from a top
notch public relations firm would have been an excellent start. According to the text, companies
should take the following steps to manage crises: (1) create teams to facilitate rapid decision
making and communication; (2) establish an organizational chain of command and reporting
relationships to mobilize a fast response; (3) recruit and select the right people to lead and work
in such teams; and (4) develop bargaining and negotiating strategies to manage conflicts that
arise whenever people and groups have different interests and objectives. 

2. How can first-line managers ensure that customer service is a top priority for all employees? 

Student answers may vary. According to the text, many organizations are empowering their
customer service employees and giving them the authority to take the lead in providing high-
quality customer service. Empowering nonmanagerial employees and creating self-managed
teams changes the role of first-line managers and leads to more efficient use of organizational
resources. 

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McGraw-Hill Education.
Chapter 01 - The Management Process Today

3. In addition to the economic fallout, what other impact could the United Airlines incident
have on the company’s managers? On its employees? 

Student answers may vary. Negative press can be demoralizing to employees and managers,
which can lead to poor decisions and increase the chance of employee turnover.

4. What management strategies should airlines employ to retain current customers and attract
new passengers? 

The company should use innovation to improve customer service while also improving
efficiency. This will help United Airlines satisfy customers while keeping costs down. This dual
approach would help retain existing customers and attract new passengers. Most companies use
small teams to make improvements in innovation.

AACSB: Analytic
AACSB: Reflective Thinking

SMALL GROUP BREAKOUT EXERCISE

Have students talk in small groups to brainstorm answers to the question: What is the most
difficult challenge of a manager?
Briefly review the rules of brainstorming (someone takes notes to capture ideas, all ideas are
recorded – no ideas are too crazy, make no value judgments either good or bad, everyone should
be heard). After brainstorming, groups refine their choice and agree on the top problem.
While groups are brainstorming, write the 4 principal managerial tasks (planning, organizing,
leading & controlling) on the board as column headings.

As groups report their top problems, ask the group and the class to try to determine which of the
four categories the problem fits (you may need to use some probing questions to nudge them to
the correct conclusion). Write an abbreviated version of the problem under the appropriate
heading.

Continue until all problems are boarded. Briefly discuss the results (which category had the most
entries, possible reasons for the outcome, etc.). Conclude with an observation that the course
should enable them to better understand how to handle the problems.
(Note to instructor: if you take a picture of the board or copy it down, you can refer to it later in
the semester as appropriate to introduce appropriate managerial topics. This could also be a good
list to review at the end of the semester.)

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McGraw-Hill Education.
 Chapter 01 - The Management Process Today

CONNECT FEATURES

MANAGER’S HOT SEAT (MHS)

There is no recommended MHS for Chapter 1.

SELF-ASSESSMENT(S)
There is no recommended self-assessment for Chapter 1.

POWERPOINT SLIDES

These Instructor’s PowerPoint slides can be used to supplement the lecture material.

SLIDE 1 Chapter Title

SLIDE 2 Learning Objectives: LO 1-1 – LO 1-3
SLIDE 3 Learning Objectives: LO 1-4 – LO 1-6
SLIDE 4 What is Management?
SLIDE 5 What is Management?
SLIDE 6 What is Management?
SLIDE 7 Achieving High Performance
SLIDE 8 Figure 1.1: Efficiency, Effectiveness, and Performance in an Organization
SLIDE 9 Organizational Performance
SLIDE 10 Why Study Management?
SLIDE 11 Figure 1.2 – Four Tasks of Management
SLIDE 12 Planning
SLIDE 13 Steps in the Planning Process
SLIDE 14 Planning
SLIDE 15 Organizing
SLIDE 16 Organizing
SLIDE 17 Leading
SLIDE 18 Controlling
SLIDE 19 Topics for Discussion
SLIDE 20 Levels and Skills of Managers
SLIDE 21 Levels of Management
SLIDE 22 Levels of Management
SLIDE 23 Figure 1.3-Levels of Managers
SLIDE 24 Figure 1.4-Relative Amount of Time That Managers Spend on the Four Managerial Tasks
SLIDE 25 Levels of Managers
SLIDE 26 Topics for Discussion
SLIDE 27 Managerial Skills
SLIDE 28 Topics for Discussion
SLIDE 29 Technical Skills
SLIDE 30 Figure 1.5-Types and Levels of Managers
SLIDE 31 Recent Changes in Management Practices

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McGraw-Hill Education.
Chapter 01 - The Management Process Today

SLIDE 32 Recent Changes in Management Practices

SLIDE 33 Empowerment and Self-Managed Teams
SLIDE 34 Empowerment and Self-Managed Teams
SLIDE 35 Challenges for Management …
SLIDE 36 Building Competitive Advantage
SLIDE 37 Building Blocks of Competitive Advantage
SLIDE 38 Building a Competitive Advantage
SLIDE 39 Building Competitive Advantage
SLIDE 40 Maintaining Ethical and Responsible Standards
SLIDE 41 Managing a Diverse Workforce
SLIDE 42 Utilizing IT and E-Commerce
SLIDE 43 Be the Manager
SLIDE 44 Topics for Discussion

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McGraw-Hill Education.