CHAPTER 1

MANAGING IN A DYNAMIC ENVIRONMENT

LEARNING OBJECTIVES
After studying this chapter, you should be able to:

1  Define managers and management.

2  Explain what managers do.

3  Describe the competencies used in managerial work and assess your current
competency levels.

OUTLINE

1  Define managers and management.

I. Managers and Management

1. Managerial Competencies—sets of knowledge, skills, behaviors, and attitudes
that a person needs to be effective in a wide range of managerial jobs and various
types of organizations.
a. Competency—refers   to   combinations   of   knowledge,   skills,   behaviors,   and
attitudes that contribute to personal effectiveness.
b. The   six   key   managerial   competencies   are:   communication,   planning   and
administration,   teamwork,   strategic   action,   global   awareness,   and   self­
management.
2. Organization—a   coordinated   group   of   people   who   function   to   achieve   a
particular goal.   
a.  Effective   managers   must   pay   attention   to   what   goes   on   both   inside   and
outside their organizations.
b.  All organizations strive to achieve specific goals, but they don’t all have the
same goals.
c. Regardless of an organization’s specific goals, the job of managers is to help
the organization achieve those goals.

1
2 Chapter 1: Managing in a Dynamic Environment

3. Manager—a person who plans, organizes, directs, and controls the allocation of
human,   material,   financial,   and   information   resources   in   pursuit   of   the
organization’s goals.
a. The many different types of managers include: department managers, product
managers,   account   managers,   plant   managers,   division   managers,   district
managers, and task force managers.
b. What all managers have in common is responsibility for the efforts of a group
of people who share a goal and access to resources that the group can use in
pursuing its goal.
c. You don’t have to be called a manager to be a manager; some managers have
unique and creative titles, such as chief knowledge officer (a person in charge
of   training   and   development)   and   chief   information   officer   (a   person   in
charge of information systems).
d. Most   employees   contribute   to   organizations   through   their   own   individual
work, not by directing other employees.
e. The   difference   between   managers   and   individual   contributors   is   that
managers are evaluated on how well the people they direct do their jobs.
4. Management—the   tasks   or   activities   involved   in   managing   an   organization:
planning, organizing, leading, and controlling.
a. The   scope   of   activities   performed   by   functional   managers   is   relatively
narrow, whereas  the scope of activities  performed by general managers  is
quite broad.
b. Functional   Managers—supervise   employees   having   expertise   in   one   area,
such   as   accounting,   human   resources,   sales,   finance,   marketing,   or
production.
1. Functional   managers   have   a   great   deal   of   experience   and   technical
expertise in the areas of operation they supervise.
2. Their success as managers is due in part to the detailed knowledge they
have   about   the   work   being   done   by   the   people   they   supervise,   the
problems those people are likely to face, and the resources they need to
perform well.
c. General Managers—are responsible for the operations  of a more complex
unit, such as a company or a division.
1. They usually oversee the work of functional managers.

 
Chapter 1: Managing in a Dynamic Environment 3

2. General   managers   must   have   a   broad   range   of   well­developed

competencies to do their jobs well.

 
4 Chapter 1: Managing in a Dynamic Environment

2  Explain what managers do.

II.  What Managers Do
1.  The amount of time a manager spends on each functions depends on their 
particular job.  
2.  General Managerial Functions—what managers do—the functions they
perform.
a.  Planning—involves   determining   organizational   goals   and   means   to   reach
them.
1.  To establish an overall direction for the organization’s future. 
2.  To identify an commit the organization’s resources to achieving its
goals. 
3.  To decide which tasks must be done to reach those goals. 
b.  Organizing—the process of deciding where decisions will be made, who will
perform what jobs and tasks, and who will report to whom in the company.
1. By   organizing   effectively,   managers   can   better   coordinate   human,
material, and information resources.
c. Leading—involves communicating with and motivating others to perform the
tasks necessary to achieve the organization’s goals.
1. Leading isn’t done only after planning and organizing end; it is a crucial
element of those functions.
d. Controlling—the   process   by   which   a   person,   group,   or   organization
consciously monitors performance and takes corrective action.
1. The   control   process   includes   the   following   steps:   set   standards   of
performance, measure current performance against those standards, take
corrective  action  to correct  any deviations,  and adjust  the  standards  if
necessary.
3.  Levels of Management—how managers are classified within an organization.
a.  A small organization usually has only one level of management—often the
founder or the owner or an executive director. 
b. First­Line   Managers—directly   responsible   for   the   production   of   goods   or
services.
Examples: sales managers, section heads, production supervisors.

 
Chapter 1: Managing in a Dynamic Environment 5

1. Employees who report to first­line managers do the organization’s basic
production work—whether of goods or of services.
2. This   level   of   management   is   the   link   between   the   operations   of   each
department and the rest of the organization.
3. First­line   managers   spend   little   time   with   higher   management   or   with
people from other organizations.
4. First­line   managers   spend   most   of   their   time   with   the   people   they
supervise and with other first­line managers.
5.  First­line managers spend relatively little time planning and organizing;
most of their time is spent leading and controlling.
6.  First­line   managers   usually   need   strong   technical   expertise   to   teach
subordinates and supervise their day­to­day tasks.  
c. Middle Managers—responsible for setting objectives that are consistent with
top management’s goals and translating them into specific goals and plans for
first­line managers to implement.
Examples: department heads, plant managers, directors of finance.
1. Responsible   for   directing   and   coordinating   the   activities   of   first­line
managers and nonmanagerial personnel.
2.  These managers review the work plans of various groups, help them set
priorities, and negotiate and coordinate their activities.
3.  Middle managers are involved in establishing target dates for products or
services to be completed; developing evaluation criteria for performance;
deciding which projects should be given money, personnel, and materials;
and translating top management’s general goals into specific operational
plans, schedules, and procedures.  
4. Middle   managers   carry   out   top   management’s   directions   primarily   by
delegating  authority  and by coordinating  schedules  and resources  with
their managers.
5. Middle managers must be adept at developing their subordinates, opening
lines   of   communication   for   them,   and   making   them   visible   to   other
middle managers and to top managers.
c. Top   Managers—responsible   for   the   overall   direction   and   operation   of   an
organization.

 
6 Chapter 1: Managing in a Dynamic Environment

Examples:   chief   executive   officer,   president,   division   president,   executive

vice­president.
1. Top   managers   develop   goals,   policies,   and   strategies   for   the   entire
organization.
2. They set the goals that are handed down through the hierarchy, eventually
reaching each worker.
3. They represent their organizations in community affairs, business deals,
and government negotiations.
4. Top managers spend over 75 percent of their day planning and leading;
they spend little time directly controlling the work of others.
5. Top   managers   spend   most   of   their   leading   time   with   key   people   and
organizations outside their own organizations; and they must respond to
crises that create image problems for their organization.

3  Describe the competencies used in managerial work and assess your current
competency levels.

III. Managerial Competencies

1. Communication Competency—refers to the effective transfer and exchange of
information that leads to understanding between yourself and others.
a. Communication   competency   includes   informal   communication,   formal
communication, and negotiation.
b. Besides speaking and writing, communication involves listening, observing
body language, and picking up on the subtle cues that people sometimes use
to modify the meaning of their words.
c.  Communication is the most fundamental competency; unless you can express
yourself   and   understand   others   in   written,   oral,   and   nonverbal
communication,   you   can’t   use   the   other   competencies   effectively   to
accomplish tasks through other people.
d.  Through frequent informal communication, managers in all countries lay the
groundwork for collaboration within and outside their organizations.
e.  Formal communications, such as newsletters, often are used to inform people
of relevant events and activities and to keep people up to date on the status of
ongoing projects.
f.  Formal communication can also take place at a more personal level, as during
conversations with suppliers and clients.  

 
Chapter 1: Managing in a Dynamic Environment 7

2. Planning and Administration Competency—involves deciding what tasks need
to be done, determining how they can be done, allocating resources to enable
them to be done, and then monitoring progress to ensure that they are done.
a. The planning and administration competency includes: information gathering,
analysis,   and   problem   solving;   planning   and   organizing   projects;   time
management; and budgeting and financial management.
b. Planning and organizing projects usually means working with employees to
clarify broad objectives, discuss resource allocations, and agree to completion
dates.
3. Teamwork Competency—accomplishing tasks through small groups of people
who are collectively responsible and whose job requires coordination.  
a. Managers   in   companies   that   utilize   teams   can   become   more   effective   by
designing   teams   properly,   creating   a   supportive   team   environment,   and
managing team dynamics appropriately.
b. Teamwork involves taking the lead at times, supporting others who are taking
the lead at other times, and collaborating with others in the organization on
projects that don’t even have a designated team leader.
c. Team design involves formulating goals to be achieved, defining tasks to be
done, and identifying the staffing needs to accomplish those tasks.
d. All members  of a  team  should  have the  competencies  needed  to create  a
supportive environment where team members are empowered to take actions
based on their best judgment, without always seeking approval first from the
team leader or project manager.
e. Managing team dynamics is necessary for effective teamwork. This includes
understanding   the   strengths   and   weaknesses   of   team   members   and   using
conflict and dissent to enhance the quality of decisions.
4. Strategic Action Competency—understanding the overall mission and values of
the company and ensuring that employers’ actions match with them.
a. Strategic   action   competency   includes:   understanding   the   industry,
understanding the organization, and taking strategic action.
b. Managers need to see their organization as a system of interrelated parts that
include understanding how departments, functions, and divisions relate to one
another and how a change in one can affect others.

 
8 Chapter 1: Managing in a Dynamic Environment

5. Global   Awareness   Competency—performing   managerial   work   for   an

organization that utilizes human, financial, informational, and material resources
from multiple countries and serves markets that span multiple cultures.
a. This competency includes cultural knowledge and understanding, and cultural
openness and sensitivity.
b.  Because business is becoming global, many managers are now expected to
develop a knowledge and an understanding of at least a few other cultures.
c.  Openness and sensitivity involve recognizing that culture makes a difference
in how people think and act.  You can’t assume that everyone will think and
act like you.  
c. An   open   attitude   about   cultural   differences   and   a   sensitivity   to   them   are
especially important for anyone who must operate across cultural boundaries.
6. Self­Management Competency—taking responsibility for your life at work and
beyond.
a. Self­management   competency   includes:   integrity   and   ethical   conduct,
personal drive and resilience, balancing work/life issues, and self­awareness
and development.
b. Self­awareness   and   development   includes   both   task­related   learning   and
learning about yourself.
c. Research   shows   that   people   who   take   advantage   of   the   development   and
training   opportunities   that   employers   offer   learn   much   from   them   and
advance more quickly than those who don’t take advantage of them.
d. A  derailed  manager   is  one  who has   moved  into  a  position  of  managerial
responsibility  but   has   little   chance   of  future  advancement   or  gaining   new
responsibilities because of failure to develop competencies.

MATCHING

Directions: Select the term that best identifies the statement listed below. Place the letter of the 
correct term in the space provided.

A. Teamwork Competency K. General Manager
B. Organization L. Supportive Environment
C. Leading M. Global Awareness Competency
D. Derailed Manager N. Top Manager
E. Organizing O. Openness and Sensitivity

 
Chapter 1: Managing in a Dynamic Environment 9

F. Management P. Strategic Action Competency
G. Controlling Q. Planning
H. Middle Manager R. Functional Manager
I. Formal Communication S. Managerial Competencies
J. Communication Competency T. First­Line Manager
____ 1. Is   your   ability   to   transfer   and   exchange   effectively   information   that   leads   to
understanding between yourself and others.
____ 2. Manager   who   is   responsible   for   the   overall   direction   and   operations   of   an
organization.
____ 3. Accomplishing   outcomes   through   small   groups   of   people   who   are   collectively
responsible and whose work requires coordination.
____ 4. Involves recognizing that culture makes a difference in how people think and act
and actively considering how another culture might differ from your own. 
____ 5. Tasks involve setting objectives that are consistent with top management’s goals
and translating them into specific goals for lower managers to implement.
____ 6. Any structured group of people brought together to achieve certain goals that the
same individual could not reach alone.
____ 7. Manager who supervises employees having specialized skills in a single area of
operation.
____ 8. This involves deciding where decisions will be made, who will perform what job
and tasks, and who will report to whom in the company. 
____ 9. Manager directly responsible for the production of goods or services.
____ 10. The   process   by   which   a   person,   group,   or   organization   consciously   monitors
performance and takes corrective action.
____ 11. This is where all team members are empowered to take actions based on their best
judgement, without always seeking approval first from the team leader or project
manager.  
____ 12. Planning,   organizing,   leading,   and   controlling   the   people   working   in   an
organization and the ongoing set of tasks and activities they perform.
____ 13. Performing managerial  work for an organization  that  utilizes  human, financial,
informational, and material resources from multiple countries and serves markets
that span multiple cultures.
____ 14. The managerial function of communicating with and motivating others to perform
the tasks necessary to achieve the organization’s goals.

 
10 Chapter 1: Managing in a Dynamic Environment

____ 15. Manager   responsible   for   the   overall   operations   of   a   complex   unit   such   as   a
company or a division.
____ 16. Such   as   a   newsletter,   is   often   used   to   inform   people   of   relevant   events   and
activities and to keep people up to date on the status of ongoing projects.   
____ 17. Understanding the overall mission and values of the company and ensuring that
employees’ actions match with them.
____ 18. Determining organizational goals and means to reach them.
____ 19. Is one who has moved into a position of managerial responsibility but has little
chance of future advancement or gaining new responsibilities.  
____ 20. Clusters of knowledge, skills, behaviors, and attitudes that a manager needs to be
effective in a wide range of managerial jobs and organizations.

TRUE OR FALSE

Directions: Write True or False in the space provided.

1 
____ 1. The   need   for   managers   to   have   charisma   is   one   of   the   key   managerial
competencies.
____ 2. Managers are not found in nonprofit organizations such as hospitals, orchestras,
and government agencies.
____ 3. An organization  is any structured group of people brought together  to achieve
certain goals that the same individuals could not reach alone.
____ 4. Management is the process of planning, organizing, leading, and controlling the
people working in an organization and the ongoing set of tasks and activities they
perform.
____ 5. The scope of activities performed by general managers is relatively narrow, and
general managers have a great deal of experience and technical expertise in the
areas of operation they supervise.

 
Chapter 1: Managing in a Dynamic Environment 11

2 
____ 6. Planning   involves   creating   a   structure   by   setting   up   departments   and   job
descriptions.
____ 7. Leading is a crucial element of the planning and organizing functions.
____ 8. Karen Zaler is a bakery manager who spends most of her time with the bakery
employees. She is considered a first­line manager.
____ 9. Doug Relston is a plant manager for the Relston Carpet Manufacturer who spends
his   time   reviewing   the   work   plans   of   various   groups,   developing   evaluation
criteria for performance, and deciding which projects should be given resources.
He is considered a top manager.
____ 10. Top managers spend 25 percent of their day planning and leading.

3 
____ 11. Herb Kelleher, CEO of Southwest Airlines, visits with employees on the job and
parties with them after hours. He listens to his employees and observes their body
language; thus he is utilizing the communication competency.
____ 12. Of   the   six   managerial   competencies,   teamwork   competency   is   the   most
fundamental.
____ 13. Time   management   and   problem   solving   are   dimensions   of   the   planning   and
administration competency.
____ 14. A well­designed team is capable of high performance, but it needs a supportive
environment to achieve its full potential.
____ 15. Strategic action competency is a competency that only top managers need to gain.
____ 16. Managers today are expected to develop a knowledge and an understanding of at
least a few other cultures.
 

MULTIPLE CHOICE

Directions: Select the best answer in the space provided.

1 
____ 1. All of the following are key managerial competencies except:
a. teamwork.
b. self­management.

 
12 Chapter 1: Managing in a Dynamic Environment

c. global awareness.
d. ethics.

 
Chapter 1: Managing in a Dynamic Environment 13

____ 2. Any structured group of people working together to achieve certain goals that the
same individuals could not reach alone is a(n) _________.
a. goal
b. organization
c. network group
d. management team
____ 3. Which of the following job titles typically represents the role of a manager?
a. coach
b. stockbroker
c. chief knowledge officer
d. a. and c.
____ 4. The head of the payroll department for the Target store in Reston, Virginia, is a
_________ manager.
a. network
b. general
c. matrix
d. functional

2 
____ 5. The four functions of management are:
a. scheduling, leading, planning, and organizing.
b. planning, controlling, employing, and leading.
c. organizing, planning, controlling, and managing.
d. organizing, planning, leading, and controlling.
____ 6. _________ is the process of deciding where decisions  will be made, who will
perform what jobs and tasks, and who will report to whom in the company.
a. Organizing
b. Planning
c. Networking
d. Controlling
____ 7. Which of the following is not a step in the control process?
a. create more structure
b. take action to correct deviations
c. set standards of performance
d. adjust the standards if necessary
____ 8. John Morson works in the construction industry and supervises the crews for the
metal framing and wall­building activities and he sometimes operates machinery

 
14 Chapter 1: Managing in a Dynamic Environment

and participates in the building process. John is considered to be a _________
manager.
a. first­line
b. top
c. general
d. middle
____ 9. Which of the following is a false statement regarding first­line managers?
a. First­line managers in most companies spend little time with higher 
management or with people from other organizations.
b. First­line managers may be called sales managers, section heads, or production
supervisors.
c. First­line managers spend a great deal of time planning and organizing.
d. First­line managers need strong technical expertise.
____ 10. _________  managers   set  objectives   that   are  consistent  with   top  management’s
goals and translate them into specific goals and plans for first­line managers to
implement.
a. General
b. Middle
c. Executive
d. Functional
____ 11. Margie Miller spends most of her time planning and leading while at work. She is
considered a _________ manager.
a. first­line
b. top
c. middle
d. strategic

3 
____ 12. Jack   Welch,   General   Electric’s   CEO,   believes   that   to   beat   competitors   and
maximize   the   company’s   profitability   GE   must   improve   quality   control.   As   a
manager, Jack builds  strong interpersonal relationships  with a diverse range of
people   and   solicits   feedback   from   employees.   Nevertheless,   Jack   recently
informed his managers that they wouldn’t have a future with the company if they
failed to produce results. Jack is exhibiting the _________ competency.
a. strategic action
b. planning and administration
c. communication

 
Chapter 1: Managing in a Dynamic Environment 15

d.  global awareness

____    13. Which of the following competencies is typified by managerial negotiation skills?
a.  planning and administration
b.  teamwork
c.  organization
d.  communication
____ 14. This managerial competency includes: information gathering, time management,
financial management, and problem solving.
a. strategic action
b. planning and administration
c. organization
d. managerial effectiveness
____ 15. Team design involves _________.
a. formulating goals to be achieved
b. defining tasks to be done
c. identifying the staffing needed to accomplish tasks
d. All of the above.
____ 16. Understanding the overall mission and values of the company and ensuring that
employee’s actions match with them involves the _________ competency.
a. global awareness
b. strategic alliance
c. strategic action
d. teamwork
____ 17. An open attitude about cultural differences and a sensitivity to them are important
for mastering the _________ competency.
a. global awareness
b. leadership
c. multicultural
d. communication
____ 18. Which   of   the   following   statements   is   true   regarding   self­management
competency?
a. Companies today are much more concerned with prospective employees’ 
technical skills and aptitude than their integrity.
b. Research shows that people who take advantage of the development and 
training opportunities that employers offer learn much from them and advance 
more quickly.

 
16 Chapter 1: Managing in a Dynamic Environment

c. A derailed manager is one who has little managerial responsibility in a high 
risk functional area.
d. Successful managers normally devote all their attention to their careers and 
neglect their personal lives.

ESSAY QUESTIONS

1 
1. Explain the difference between functional and general managers.

2 
2. Identify and discuss the four basic managerial functions.

12
3. Define management and managers. Discuss the duties and responsibilities of first­line 
managers, middle managers, and top managers.

13
4. Define managerial competencies and explain the six key managerial competencies.

CHAPTER 1
MANAGING IN A DYNAMIC ENVIRONMENT

 
Chapter 1: Managing in a Dynamic Environment 17

MATCHING SOLUTIONS

1. J ­ Communication Competency
2. N ­ Top Manager
3. A ­ Teamwork Competency
4. O ­ Openness and Sensitivity 
5. H ­ Middle Manager
6. B ­ Organization
7. R ­ Functional Manager
8. E ­ Organizing
9. T ­ First­Line Manager
10. G ­ Controlling
11. L ­ Supportive Environment
12. F ­ Management
13. M ­ Global Awareness Competency
14. C ­ Leading
15. K ­ General Manager
16. I ­ Formal Communication
17. P ­ Strategic Action Competency
18. Q ­ Planning
19. D ­ Derailed Manager
20. S ­ Managerial Competencies

TRUE/FALSE SOLUTIONS

Question Answer Page Explanation

1. False   4–5 Managerial   competencies  are   sets   of   knowledge,

skills, behaviors, and attitudes that a person needs to
be effective in a wide range of managerial jobs and
various   types   of   organizations.   The   six   key
managerial   competencies   are:   communication,
planning   and   administration,   teamwork,   strategic
action, global awareness, and self­management.
2. False 5–6 Profit­oriented   businesses   are   one   type   of
organizational setting in which managers are found,
but   they   also   are   found   in   organizations   such   as:
hospitals,   schools,   museums,   sports   teams,   stores,
amusement parks, restaurants, orchestras, community

 
18 Chapter 1: Managing in a Dynamic Environment

clubs and groups, government agencies, and others. A
manager is a person who plans, organizes, directs, and
controls the allocation of human, material, financial,
and   information   resources   in   pursuit   of   the
organization’s goals.
3. True
4. True
5. False     8 Functional   managers  supervise   employees   having
expertise   in   one   area,   such   as   accounting,   human
resources,   sales,   finance,   marketing,   or   production.
For example, the head of a payroll department  is a
functional   manager.   Usually,   functional   managers
have   a   great   deal   of   experience   and   technical
expertise   in   the   areas   of   operation   they   supervise.
General managers  are responsible for the operations
of   a   more   complex   unit,   such   as   a   company   or   a
division. Usually they oversee the work of functional
managers.
6. False     9 Planning  involves   determining   organizational   goals
and   means   to   reach   them.  Organizing  involves
creating a structure by setting up departments and job
descriptions.
7. True 
8. True

 
Chapter 1: Managing in a Dynamic Environment 19

9. False 13–14 Middle   managers  set   objectives   that   are   consistent

with top management  goals  and translate  them  into
specific   goals   and   plans   for   first­line   managers   to
implement.   Middle   managers   typically   have   titles
such as department head, plant manager, and director
of   finance.   Middle   managers   often   are   involved   in
reviewing the work plans of various groups, helping
them set priorities, and negotiating and coordinating
their   activities.   They   are   involved   in   establishing
target dates for products or services to be completed;
developing   evaluation   criteria   for   performance;
deciding   which   projects   should   be   given   money,
personnel,   and   materials;   and   translating   top
management’s general goals into specific operational
plans, schedules, and procedures.  Top managers  are
responsible for the overall direction of the company.
Typical   titles   of   top   managers   are   chief   executive
officer,   president,   division   president,   and   executive
vice­president.

  10. False 14 Top   managers   spend   most   of   their   day   (over   75

percent)  planning  and leading.  They spend most  of
their leading time with key people and organizations
outside their own organization.
11. True
12. False 15 The six managerial competencies are: communication
competency,   planning   and   administration
competency,  teamwork competency,  strategic  action
competency, global awareness competency, and self­
management   competency.   They   are   all   important.
However,   communication   is   the   most   fundamental
because   unless   you   can   express   yourself   and
understand   others   in   written,   oral,   and   nonverbal
communication, you can’t use the other competencies
effectively to accomplish tasks through other people.
13. True 

 
20 Chapter 1: Managing in a Dynamic Environment

14. True

 
Chapter 1: Managing in a Dynamic Environment 21

15. False 21 Strategic   action   competency  involves   understanding

the overall mission and values of the company and
ensuring   that   employees’   actions   match   with   them.
Strategic   action   competency   includes   understanding
the   industry,   understanding   the   organization,   and
taking strategic action. All managers, but especially
top managers, need strategic action competency.
16. True

  

MULTIPLE CHOICE SOLUTIONS

Question Answer Page Explanation

1. d 5 Managerial   competencies  are   sets   of   knowledge,

skills, behaviors, and attitudes that a person needs to
be effective in a wide range of managerial jobs and
various   types   of   organizations.   The   six   key
managerial   competencies   are:   communication,
planning   and   administration,   teamwork,   strategic
action, global awareness, and self­management.
2. b 6 An organization is a coordinated group of people who
function to achieve a particular goal.
3. d 7 A manager is a person who plans, organizes, directs,
and   controls   the   allocation   of   human,   material,
financial, and information resources in pursuit of the
organization’s goals. Some managers have unique and
creative   titles,  such  as  chief  knowledge   officer  and
chief information officer. People with the job titles of
chief   executive   officer   (CEO),   president,   managing
director,   supervisor,   and   coach   also   have   the
responsibility for helping a group of people achieve a
common   goal,   so   they   too   are   managers.   Most
employees   contribute   to   organizations   through   their
own   individual   work,   not   by   directing   other
employees.   Journalists,   computer   programmers,

 
22 Chapter 1: Managing in a Dynamic Environment

insurance   agents,   machine   operators,   newscasters,

graphic   designers,   sales   associates,   stockbrokers,
accountants,   and   lawyers   are   essential   to   achieving
their organizations’ goals, but many people with these
job titles aren’t managers.
4. d 8 Functional   managers  supervise   employees   having
expertise   in   one   area,   such   as   accounting,   human
resources,   sales,   finance,   marketing,   or   production.
General managers  are responsible for the operations
of   a   more   complex   unit,   such   as   a   company   or   a
division. Usually they oversee the work of functional
managers.
5. d 9 The   four   basic   functions   of   management   are:
planning, organizing, leading, and controlling.
6. a 9 Organizing is the process of deciding where decisions
will be made, who will perform what jobs and tasks,
and who will report to whom in the company.
7. a 10 Controlling  is the process by which a person, group,
or   organization   consciously   monitors   performance
and   takes   corrective   action.   In   the   control   process,
managers:   set   standards   of   performance,   measure
current   performance   against   those   standards,   take
action   to   correct   any   deviations,   and   adjust   the
standards if necessary.
8. a 12–13 First­line   managers  are   directly   responsible   for   the
production of goods and services. They spend most of
their   time   with   the   people   they   supervise   and   with
other first­line managers. This level of management is
the link between  the operations  of each department
and the rest of the organization.
9. c 12–13 First­line   managers  are   directly   responsible   for   the
production of goods and services. First­line managers
spend relatively little time planning and organizing.
Most of their time is spent leading and controlling.
10. b 13 Middle   managers  are   responsible   for   setting
objectives that are consistent with top management’s

 
Chapter 1: Managing in a Dynamic Environment 23

goals   and   translating   them   into   specific   goals   and

plans for first­line managers to implement.
11. b 13–14 Top   managers  set   the   overall   direction   of   an
organization. They spend most of their day (over 75
percent) planning and leading.
12. c 15–16 The  communication   competency  involves   the
effective   transfer   and   exchange   of   information   and
understanding   between   yourself   and   others.   It
includes   informal   communication,   formal
communication, and negotiation.

 
24 Chapter 1: Managing in a Dynamic Environment

  13. d 15–16 Communication competency  is the ability to transfer

and   exchange   effectively   information   that   leads   to
understanding   between   you   and   others.   It   includes
informal/formal   communication   and   negotiation
skills.  
14. b 17 Planning   and   administration   competency  involves
deciding what tasks need to be done, determining how
they can be done, allocating resources to enable them
to be done, and then monitoring progress to ensure
that they are done. Included is this competency are:
information gathering, analysis, and problem solving;
planning and organizing projects; time management;
and budgeting and financial management.
15. d 19 Designing   the   team   is   the   first   step   for   any   team
project and usually is the responsibility of a manager
or   team   leader.   Team   design   involves   formulating
goals to be achieved, defining tasks to be done, and
identifying   the   staffing   needed   to   accomplish   those
tasks.
16. c 20 Strategic   action   competency  involves   understanding
the overall mission and values of the company and
ensuring   that   employees’   actions   match   with   them.
Strategic action competency includes: understanding
the   industry,   understanding   the   organization,   and
taking strategic actions.

17. a 22–24 Global   awareness   competency  includes   performing

managerial   work   for   an   organization   that   utilizes
human,   financial,   informational,   and   material
resources from multiple countries and serves markets
that   span   multiple   cultures.   An   open   attitude   about
cultural   differences   and   a   sensitivity   to   them   are
especially   important   for   anyone   who   must   operate
across cultural boundaries.
18. b 25 Self­management   competency  means   taking
responsibility   for   your   life   at   work   and   beyond.
Organizations   expect   their   employees   to   show
integrity and act ethically. A derailed manager is one

 
Chapter 1: Managing in a Dynamic Environment 25

who   has   moved   into   a   position   of   managerial

responsibility   but   has   little   chance   of   future
advancement or gaining new responsibilities. Future
managers   won’t   succeed   unless   they   can   balance
work and life demands.

ESSAY SOLUTIONS

[Page 8]

1. Functional   managers  supervise   employees   having   expertise   in   one   area,   such   as

accounting, human resources, sales, finance, marketing, or production. For example, the
head of a payroll department is a functional manager. Usually, functional managers have a
great deal of experience and technical expertise in the areas of operation they supervise.
General managers  are responsible for the operations of a more complex unit, such as a
company or a division. Usually they oversee the work of functional managers. General
managers must have a broad range of well­developed competencies to do their jobs well.

[Pages 9–10]

2. Planning involves determining organizational goals and means to reach them. Managers
plan for three reasons: (1) to establish an overall direction for the organization’s future,
such as increased profit, expanded market share, and social responsibility; (2) to identify
and commit the organization’s resources to achieving its goals; and (3) to decide which
tasks must be done to reach those goals.
Organizing  is the process of deciding where decisions will be made, who will perform
what   jobs   and   tasks,   and   who   will   report   to   whom   in   the   company.   By   organizing
effectively, managers can better coordinate human, material, and informational resources.
Leading  involves   communicating   with   and   motivating   others   to   perform   the   tasks
necessary to achieve the organization’s goals. Leading isn’t done only after planning and
organizing end; it is a crucial element of those functions.
Controlling is the process by which a person, group, or organization consciously monitors
performance and takes corrective action. A management control system sends signals to
managers that things aren’t working out as planned and that corrective action is needed.

[Pages 7, 12–14]

3. Management  refers   to   the   tasks   or   activities   involved   in   managing   an   organization:

planning,   organizing,   leading,   and   controlling.   A  manager  is   a   person   who   plans,

 
26 Chapter 1: Managing in a Dynamic Environment

organizes,   directs,   and   controls   the   allocation   of   human,   material,   financial,   and
information resources in pursuit of the organization’s goals.
First­line managers are directly responsible for the production of goods or services. They
may be called sales managers, section heads, or production supervisors. This  level of
management is the link between the operations of each department and the rest of the
organization. Most of their time is spent with the people they supervise and with other
first­line   managers.   First­line   managers   spend   relatively   little   time   planning   and
organizing. Most of their time is spent leading and controlling. They usually need strong
technical expertise to teach subordinates and supervise their day­to­day tasks.

 
Chapter 1: Managing in a Dynamic Environment 27

                 Middle managers  are responsible for setting objectives  that are consistent with top

management’s   goals   and   translating   them   into   specific   goals   and   plans   for   first­line
managers   to   implement.   They   typically   have   titles   such   as   department   head,   plant
manager, and director of finance. They are responsible for directing and coordinating the
activities of first­line managers and nonmanagerial personnel. They review the work plans
of various groups, help them set priorities, and negotiate and coordinate their activities.
Top managers  are responsible for the overall direction of the company. They develop
goals,   policies,   and   strategies   for   the   entire   organization.   Typical   titles   are:   CEO,
president, and executive vice president. They spend most of their day (over 75 percent)
planning and leading.

[Pages 4, 14–25]

4. Managerial competencies  are sets of knowledge, skills, behaviors, and attitudes  that a

person needs to be effective in a wide range of managerial jobs and various types of
organizations.
The six key managerial competencies are:
a. Communication competency refers to the effective transfer and exchange of 
information that leads to understanding between yourself and others. It includes: 
informal communication, formal communication, and negotiation. Of the six 
managerial competencies, it is the most fundamental.
b. Planning and administration competency involves deciding what tasks need to be 
done, determining how they can be done, allocating resources to enable them to be 
done, and then monitoring progress to ensure that they are done. Included in this 
category are: information gathering, analysis, and problem solving; planning and 
organizing projects; time management; and budgeting and financial management.
c. Teamwork competency requires accomplishing tasks through small groups of people
who are collectively responsible and whose job requires coordination. Managers in 
companies that utilize teams can become more effective by: designing teams 
properly, creating a supportive team environment, and managing team dynamics 
appropriately.
d. Strategic action competency involves understanding the overall mission and values 
of the company and ensuring that employees’ actions match with them. It includes: 
understanding the industry, understanding the organization, and taking strategic 
actions.
e. Global awareness competency means performing managerial work for an 
organization that utilizes human, financial, and material resources from multiple 

 
28 Chapter 1: Managing in a Dynamic Environment

countries and serves markets that span multiple cultures. It includes: cultural 
knowledge and understanding, and cultural openness and sensitivity.
f. Self­management competency refers to taking responsibility for your life at work 
and beyond. It includes: integrity and ethical conduct, personal drive and resilience, 
balancing work/life issues, and self­awareness and development.