Perspective mgmt..

Chapter 1 Introduction Learning Objectives After studying this chapter, you should be able to: Answer the question: What is management? Explain why management must be understood within the context of organizations and how organizations affect the practice of management. Describe the role of working with and through people in effective management. Explain managerial paradoxes and how dealing with them lies at the core of management. Specify the nature and extent of commitment required for managerial excellence. Define the term entrepreneurial mindset and explain its importance for managers. Describe and compare the different elements of managerial work and the different managerial roles. Discuss the skills necessary to be an effective manager. Managing Effectively: Three Critical Challenges

Managing Strategically to Meet the Challenges Importance of knowledge and intellectual capital Change requires managers to Manage within an organizational context Accomplish tasks with and through people Manage paradoxes Make a substantial commitment and manage in an entrepreneurial manner What is Management?

 It is a process A series of activities and operations, such as planning, deciding, and evaluating Of assembling and using sets of resources Human, financial, material and information In a goal-directed manner to accomplish tasks A purposeful activity In an organizational setting It is undertaken in organizations By people with different functions intentionally structured and coordinated to achieve common purposes Management Perspective 1: The Organizational Context Management occurs in organizations, not in isolation There are many different types of organizations Each organization has its own characteristics that influence effective management Effective managers must understand organizations Management Perspective 2: The Human Factor Effective managers must be adept at Assessing other peoples capabilities Matching peoples capabilities with appropriate responsibilities Motivating people Management Perspective 3: Managing Paradoxes Management requires simultaneously mastering multiple and potentially conflicting situations Integration and fragmentation Consistency & Flexibility Reflection & Action Global Perspective and Local Understanding Management Perspective 4: Entrepreneurial Mindset

 Managers must continuously search for and exploit new opportunities An entrepreneurial mindset requires a commitment to constantly learning new skills and acquiring new knowledge An entrepreneurial mindset also requires a commitment to adding value to other peoples efforts and to society What Managers Do? Managerial activities differ by The functions managers serve The roles in which managers operate The dimensions of each managers job Managerial Functions

Planning Planning involves Estimating future conditions and circumstances Making decisions based on these estimations about what work is to be done By the manager By all of those for whom she or he is responsible Organizing Organizing involves paying attention to The structure of relationships among positions The people occupying those positions

 Linking that structure to the overall strategic direction of the organization Directing (Leading) Directing is the process of influencing other people to attain organizational objectives Motivating others Interacting effectively in group and team situations Communicating in support of others efforts on behalf of achieving their work and organizational goals Controlling Regulating the work of those for whom a manager is responsible which may include Setting standards of performance in advance Monitoring ongoing (real-time) performance Assessing a completed performance Results of the control process (evaluation) are fed back into the planning process

Managerial Roles Interpersonal Roles Figurehead

Leader Liaison Informational Roles Monitor Disseminator Spokesperson Decisional Roles Entrepreneurial

Disturbance Handler Resource Allocator Negotiator

Managerial Job Dimensions Demands: Activities or duties that must be carried out Standards or levels of minimum performance that must be met. Constraints: Factors that limit the response of the manager Time Budgets Technology Attitudes of subordinates Legal regulations Choices: Discretionary behavior How work is to be done How much work is to be done Who will do the work What initiatives will be undertaken from almost infinite possibilities Two Managerial Jobs Demands Job A: Project Team Manager Develop new product with strong market appeal Hold formal weekly progress meeting with boss Frequent travel to other company sites Job B: Fast Foods Restaurant Manager Maintain attractive appearance of restaurant Keep employee costs as low as possible

 Meet standards for speed of service Constraints Job A: Project Team Manager 12 month deadline for product development Project budget limit of $1 million No choice in selecting team members

Job B: Fast Foods Restaurant Manager Most employees have limited formal education Few monetary incentives to reward outstanding performance Federal and state health and safety regulations

Choices
Job A: Project Team Manager The organizational structure of the project team Sequencing of project tasks Budget allocation

Job B: Fast Foods Restaurant Manager Selection of employee to promote to supervisor Scheduling of shifts and assignments Local advertising promotions

What Skills Do Managers Need? Interpersonal skills Sensitivity Persuasiveness Empathy Conceptual skills Logical reasoning Judgment Analytical abilities Technical skills Specialized knowledge (Including when and how to use the skills) Importance of Managerial Skills at Different Organizational Levels

Who Succeeds? Who Doesnt Potential managerial leaders share traits early on: Bright, with outstanding track records Have survived stressful situations

Those who dont quite make it: Have been successful, but generally only in one area or type of job. Frequently described as moody or volatile. May be able to keep their temper with superiors during crises but are hostile toward peers and subordinates.

Those who succeed: Have diverse track records, demonstrated ability in many different situations, and a breadth of knowledge of the business or industry. Maintain composure in stressful situations, are predictable during crises, are regarded as calm and confident.

Chp:-2 Strategic Management- A Journey.

Business Environment Demographics

 Tastes and preferences Change in nature of products & services. Advances in distribution and logistics. Competitors strategies. Technology. Change in Business policy: Process management to strategic management. Inbound Management to outbound Management. Behavioral to cultural Management. Product management to Value Management.

Evolution of Strategic Management Theories. 1950s- Peter Drucker MANAGEMENT BY OBJECTIVES. The Practice of Management Steps in MBO process.

1957- Philip Selznick Leadership in Administration-A sociological Interpretation. Promote Strategy-strategy deep into the organizational social structure. The idea of promote strategy led to the idea of SWOT analysis.

1962- Alfred Chandler. STRATEGY AND STRUCTURE. Strategy and Structure Structure follows strategy. 1965 Igor Ansoff CORPORATE STRATEGY. CORPORATE STRATEGY. The way that an organization plans to realize its goals and missions including the formulation and evaluation of all kinds of proposals and final proposals to be implemented. Ansoffs Grid: Strategic Grid.

1965 Igor Ansoff Gap Analysis Synergy Team work 1970-The size Paradigm. PIMS-Profit impact of Marketing Strategy. Market Share Investment Intensity Product quality Service quality. 1970s Future Shock: Alvin Toffler.

 As to much change in too short period of time with each generation the life span of social and technological norms become shorter. 1980-Competitive Advantage Competitive advantage The ability of a firm to win consistently over the long term in a competitive situation. Competitive advantage is created through the achievement of five qualities Superiority Inimitability Durability Non-substitutability Appropriability Five Qualities that Lead to Competitive Advantage Superiority Are you significantly better than your competitors? Inimitability Managers must create barriers that make it hard for others to copy their superiority advantages Culture Product design Marketing strategy And others Durability (long lasting) Legally protected Patents Copyrights Brand names Well-established At what things are you better?

 Brand image Reputation for quality Non-substitutability Can the customers need that you fulfill can be met by alternative means? Encyclopedias vs. information availability on the Internet Appropriability Can you actually capture the profits that can be made in the business? Supernormal returns Profits that are above the average for a comparable set of firms Primarily a function of greater-than-average cost-price margins Strategic Management Process: Setting Direction Strategic management process is a planning process in which managers 1. Set the organization's general direction and objectives 2. Formulate a specific strategy 3. Plan and carry out the strategys implementation 4. Monitor results and make necessary adjustments

Strategic intent: what the organization ultimately wants to be and do General identity, direction, and level of aspirations of the organization A key objective is to inspire Should paint a general picture of aspiration and engender a strong emotional response in just a few words Mission statement articulates the fundamental purpose of the organization Company philosophy Company identity, or self-concept Principal products or services Customers and markets Geographic focus Obligations to shareholders Commitment to employees Strategic objectives translate the strategic intent and mission of the firm into concrete and measurable goals Facilitates a firm's ability to Allocate resources appropriately Reach a shared understanding of priorities Delegate responsibilities Hold people accountable for results Strategic objectives address many issues, such as Revenue growth Profitability Customer satisfaction Market share Financial returns (e.g., return on equity, return on assets) Technological leadership Cash flow

Operating efficiency (e.g., costs per unit, expense per employee) Strategic Management Process: Formulating a Strategy Competitive strategy: determining how the company is going to compete and achieve its strategic objectives, mission, and ultimate strategic intent Generic strategies Techniques and tools Generic strategies Cost leadership Differentiation Scope Generic Strategies and Scope

Internal and external analysis Tools and concepts Environmental analysis Value proposition Organizational analysis Value chain

 Five primary activities Four support activities

Strategic Management- A Journey. 2 Value Proposition for Three Car Companies

VALUE CHAIN A set of key activities that directly produce or support the production of what a firm ultimately offers to customers. The Value Chain

Strategic Management Process: Formulating a Strategy Leveraging the value chain Determine where in your value chain you have the potential to add the greatest value Segment business activities, see the important linkages and make adjustments Resource-based approach Recognize and exploit internal strengths of the company

Strategic Management Process: Formulating a Strategy Core competencies 1990s Core competencies Are interrelated sets of activities that deliver competitive advantages in the shortterm and long-term Provide access to a wide variety of markets Significantly contribute to perceived customer benefits of the end products or services Are difficult for competitors to imitate Integrating Internal and External Analyses

SWOT Analysis Internal environment Strengths Weaknesses Tools Core competencies framework Resource analysis framework Value chain framework External environment Opportunities Threats Tools Product life cycle analysis Portfolio analysis Five forces framework Strategic Management Process: Strategy Implementation Seven Ss 1. Strategy Plan or course of action Allocation of firms resources to reach goals 2. Structure Basic grouping of reporting relationships and activities Linking of separate organizational entities 3. Shared Values Significant meanings or guiding concepts 4. Systems Formal processes and procedures

1. Management control systems 2. Performance measurement and reward systems 3. Planning and budgeting systems The ways people relate to them 5. Skills Organizational competencies Other capabilities residing in the organization 6. Style Leadership style of management Operating style of the organization Reflection of the norms people act upon 7. Staff Recruitment Selection Development Socialization Advancement of people in the organization Disruptiveness as strategy for competitive advantage. Disruptive Product innovation-Ipod. Disruptive Distribution- Tupperware. Disruptive business model using new technology-Amazon.com Disruptive business model by combining complementary offerings-Pantaloon. Disruptive entertainment: Twenty-twenty cricket. Success Factors for Disruptiveness Significant advantage to customer. Right use of technology. Right use of people. Proper planning.