This document is an excerpt from a textbook chapter on management that discusses: - The learning objectives of understanding management in the context of organizations and the role of working with people. - That management involves working with paradoxes and committing to excellence while recognizing different managerial jobs. - Tactical and operational controls that managers use including financial controls, budgets, supervision structure, and human resource controls. - The value chain approach and core competencies that allow companies to access new markets, create value, and differentiate from competitors.

1. MANAGEMENT
Meeting New Challenges
First Edition
J. Stewart Black
Lyman W. Porter
© 2000 Prentice-Hall, Inc.
www.prenhall.com

2. CHAPTER 1:
Introduction
© 2000 Prentice-Hall, Inc.
www.prenhall.com

3. Learning Objectives
After studying this chapter, you should be able to:
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 duality in management and how
working with paradoxes is at the core of
management in today’s environment.

4. Learning Objectives (cont.)
After studying this chapter, you should be able to:
Specify the nature and extent of
commitment required for managerial
excellence.
Explain why engaging in management
can be considered like looking into a
kaleidoscope.
Describe and compare the different
elements of managerial work and the
different managerial jobs.

5. Chapter 1: Introduction
Based on the Perspective assigned to your group,
answer the following.
1. What does this perspective tell us that
management is?
2. What does this perspective tell us that
management is not ?
3. How could this perspective help you become a
better manager?

6. Chapter 1: Introduction
Management is the process of assembling and
using resources (human, financial, material, &
information) in a goal-directed manner to
accomplish tasks in an organization.

7. Four Steps in the Control Process
1. Establish standards - specification of what
managers expect to achieve in a given
department, division, or organization.
2. Measure performance - determine outcomes
on strategy-relevant activities that the
organization performs.

8. Four Steps in the Control Process
3. Compare performance against standards -
determine how closely the actual results adhere
to the standards established in step 1. Three
comparisons to make are:
a. outcomes to standards
b. current outcome to previous outcomes
c. current outcome to industry averages

9. Four Steps in the Control Process
4. Evaluate results & take action - determine if a
gap exists, whether action is required to close
the gap, the the cause of the gap.
Usually the most difficult step because:
a. dependent on accuracy in steps 1 - 3.
b. action requires understanding of the
difference between causes and symptoms.
c. difficult to know when a gap becomes large
enough to warrant action and intervention.

10. Tactical Control
1. Financial Controls are achieved primarily
through financial ratio analysis. There are four
categories of financial ratios.
a. profitability - measures how profitably the
company’s assets are being used.
b. liquidity - measures whether the company is
able to pay its short-term financial obligations.
c. leverage - measures how much debt the
company is using to finance operations.
d. activity - measures how efficiently the
company is operating.

11. Tactical Control
2. Budgetary Controls are assignments of
responsibility for meeting financial targets and
evaluating how well those targets have been
met. A budget controls behavior by specifying
what expenses and revenues are expected for a
given time period.
3. Supervisory Structure serves as a control by
specifying the chain of command within an
organization. When reporting channels are clear
supervision is explicit, control is enhanced.

12. Tactical Control
4. Human Resource Controls occur in the four
HRM activities (refer to chp 12).
a. selection - specifies (controls) the skills &
abilities that will be hired into the organization.
b. training - enhances employees’ skills so that
standards are met more consistently.
c. appraisal - reinforces desired behaviors and
discourages undesired behaviors.
d. compensation - serves to reward & motivate
employees toward particular goals &
behaviors.

13. Operational Control
4. Human Resource Controls occur in the four
HRM activities (refer to chp 12).
a. selection - specifies (controls) the skills &
abilities that will be hired into the organization.
b. training - enhances employees’ skills so that
standards are met more consistently.
c. appraisal - reinforces desired behaviors and
discourages undesired behaviors.
d. compensation - serves to reward & motivate
employees toward particular goals & behaviors.

14. Value Chain Linkages at Southwest Airlines
Lessons from SWA’s value chain
1. Why has SWA ignored Denver, CO?
Answer: frequent snow makes
turnaround times difficult to maintain
2. Competitive advantage is about
choosing what activities to pursue
and what activities not to pursue.
3. Don’t be “all things to all people”
4. Choose activities that are self-
reinforcing.

15. The Core Competency Approach
Core Competence - a bundle of constituent skills
based on cross-functional learning within the
organization. The three tests for a core competence
are:
Market access - the competency must enable the
company to reach more customers & markets than it
would otherwise be able to reach.
Value creation - the competency must add
perceived value for the end consumer.
Competitor differentiation - the core competence
must be a source of distinction to its owner, and must
be difficult for competitors to imitate.