Using Management Skills to Build Business Relationships Chapter 7
Chapter Overview 1. Activities of Management 2. Roles of Managers 3. Managerial Skills 4. Trends in Management
Management: The process of guiding the development, maintenance, and allocation of resources to attain organizational goals
Quality of Management Ratings made by Fortune magazine: Most admired quality of management: – Philip Morris – General Electric – Cisco Systems Least admired quality of management: – Oxford Health Plans – Cabletron Systems – Trump Hotels & Casinos Source: Fortune, Mar. 1, 1999, p. 70.
Four Activities of Management 1. Planning 2. Organizing 3. Leading 4. Controlling
1. Planning Four Types of Planning 1. Strategic Planning • long-range, broad goals 2. Tactical Planning • to implement a strategic 3. Operational Planning 4. Contingency Planning plan; shorter term and more specific • creating very specific policies and procedures • alternative actions for unusual or crisis situations
Contingency Planning Some types of contingency planning that were used in preparation for the Year 200 computer bug: – Cities stocked gasoline & diesel fuel for emergency vehicles – Hotel chains stocked food & water for guests if needed – Stores devised paper & pen backups for credit card processing – The Red Cross set up a national Disaster Operations Center
2. Organizing Levels of Management Top Management Middle Management Supervisory Management CEO Vice President Division Heads, Regional Managers Supervisors, Team Leaders, Foremen Strategic Plans Tactical Plans Operational Plans
3. Leading Sources of Power for Leaders: Type of Power: Derived from: 1. Legitimate position in organization 2. Reward control over rewards 3. Coercive control over punishments 4. Expert extensive knowledge 5. Referent charisma, respect,
Automatic Deference to Expert & Legitimate Power can be Harmful – 95% of nurses in a research study were willing to follow doctors’ orders to administer a clearly unsafe dosage of medicine to patients (Source: Hofling et al. , 1966, Journal of Nervous and Mental Disease, v. 143, pp. 171 -180) – 46% of nurses in another study admitted to a time that they complied with a doctor’s order that they thought was unsafe (Source: Krackow & Blass, 1995, Journal of Social Behavior and Personality, v. 10, pp. 585 -594)
3. Leading Leadership Styles 1. Autocratic directive, controlling 2. Participative democratic, consensual, consultive 3. Free-rein (Laissez-Faire) members have freedom, leaders give ideas and information
4. Controlling 5 -stage Cycle of Controlling 1. Set performance standards 2. Measure performance 3. Compare performance to standards 4. Take corrective action, if needed 5. Use information gathered to set future performance standards
4. Controlling Measuring Performance Federal Express uses 3 quantitative measures of performance: Service Quality Index measurements made on every shipment Customer Satisfaction Index customer ratings Process Quality Indicators measures taken on individual operating units (ex. , delivery truck performance) Source: Neff & Citrin: Lessons from the Top, 1999, pp. 277 -283.
Managerial Roles Type of role: 1. Informational Activities: 2. Interpersonal 3. Decisional figurehead, leader, liaison information gathering, disseminating, spokesperson entrepreneur, resource allocation, resolve conflicts, negotiate
The Interpersonal Role • Jack Welch, CEO of GE, estimates he spends 60% or more of his time on ‘people stuff’ (Source: Neff & Citrin: Lessons from the Top, 1999, p. 345).
The Decision-Making Process 5. Follow up to see if problem is solved 4. Put plan into action 3. Select one or more alternatives 2. Search for solutions 1. Define the problem
Managerial Skills 1. Technical Skills specialized knowledge and expertise 2. Human Relations Skills interpersonal skills 3. Conceptual Skills understanding the big picture 4. Global Management Skills ability to operate in diverse environments
Trends in Management Increased employee empowerment Increased role of information technology Increase in global management
Empowering Employees Things needed to empower employees, according to Don Fites, CEO of Caterpillar: • Give them decision-making authority • Develop a culture & climate that support it • Organize the business to support it • Reward employees based on performance Source: Neff & Citrin: Lessons from the Top, 1999, pp. 123 -128.
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