The document outlines the management process, defining management as coordinating resources to achieve organizational goals, which include material, human, financial, and information resources. It details basic management functions such as planning, organizing, leading, and controlling, and emphasizes the importance of goal-setting and strategic planning. Additionally, it highlights the various levels of management, essential managerial skills, decision-making processes, and the significance of leadership styles in effective management.

1. Chapter Seven
Understanding the
Management
Process

2. 7 - 2
What Is Management?
• The process of coordinating people and other
resources to achieve the goals of an
organization
– Material resources
• The tangible physical resources an organization uses
– Human resources
• The people who staff the organization and use the other
resources to achieve the goals of the organization
– Financial resources
• The funds the organization uses to meet its obligations to
investors and creditors
– Information resources
• The information about internal and external business
environmental conditions that the firm uses to its
competitive advantage

3. 7 - 3
Basic Management Functions
• The Management Process

4. 7 - 4
Planning
• Planning
– Establishing organizational goals and deciding
how to accomplish them
• Mission
– A statement of the basic purpose that makes an
organization different from others
• Strategic planning
– The process of establishing an organization’s
major goals and objectives and allocating the
resources to achieve them

5. 7 - 5
Planning (cont’d)
• Establishing goals and objectives
– Goal
• An end result that the organization is expected to
achieve over a one-to-ten year period
– Objective
• A specific statement detailing what the organization
intends to accomplish over a shorter period of time
– Properly set goals are
• Set at every level in the organization
• Consistent (supportive) with each other
• Optimized (balanced) to reduce conflicts between goals

6. 7 - 6
Planning (cont’d)
• Establishing plans to accomplish goals and
objectives
– An outline of the actions by which the organization
intends to accomplish its goals and objectives
• Strategy
• An organization’s broadest set of plans, a guide for major
policy setting and decision making
• Tactical plan
• A smaller-scale plan to implement a strategy
• Operational plan
• A plan to implement a tactical plan
• Contingency plan
• A plan of alternative courses of action if the organization’s
other plans are disrupted or become ineffective

7. 7 - 7
Organizing the Enterprise
• Organizing
– The grouping of resources and activities to
accomplish some end result in an efficient and
effective manner
• Leading and Motivating
– Leading
• Influencing people to work toward a common goal
– Motivating
• Providing reasons for people to work in the best interests
of the organization
– Directing
• The combined processes of leading and motivating

8. 7 - 8
Controlling Ongoing Activities
• Controlling
– Evaluating and regulating ongoing
activities to ensure that goals are achieved
• The Control Function

9. 7 - 9
Kinds of Managers
• Levels of Management
– Top manager—guides and
controls the overall fortunes of
the organization
– Middle manager—implements
the strategy and major policies
developed by top management
– First-line manager—
coordinates and supervises the
activities of operating
employees
• The coordinated effort of all
three levels of managers is
required to implement the
goals of any company

10. 7 - 10
Areas of Management
• Financial Managers
– Responsible for the organization’s financial resources
• Operations Managers
– Manage the systems that convert resources into goods and
services
• Marketing Managers
– Responsible for facilitating the exchange of products
between the organization and its customers or clients
• Human Resources Managers
– Manage the organization’s human resources programs
• Administrative Managers (General Managers)
– Not associated with any specific functional area; provide
overall administrative guidance and leadership

11. 7 - 11
What Makes Effective Managers?
• Key Management Skills
– Technical skill
• A special skill needed to accomplish a
specialized activity
– Conceptual skill
• The ability to think in abstract terms
– Interpersonal skill
• The ability to deal effectively with other people

12. 7 - 12
What Makes Effective Managers? (cont’d)
• Managerial Roles
– Decisional roles
• Involve various aspects of management
decision making
– Entrepreneur, disturbance handler, resource
allocator, negotiator
– Interpersonal roles
• The manager deals with people
– Figurehead, liaison, leader
– Informational roles
• A manager either gathers or provides
information
– Monitor, disseminator, spokesperson

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Leadership
• The ability to influence others
• Leadership vs. management
• Formal leadership
– Legitimate power of position is the basis for
authority
• Informal leadership
– Not recognized formally by the
organization

14. 7 - 14
Styles of Leadership
• Authoritarian
– Holds all authority and responsibility, with
communication usually moving from top to bottom
• Laissez-faire
– Gives authority to employees and allows
subordinates to work as they choose with a
minimum of of interference; communication flows
horizontally among group members
• Democratic
– Holds final responsibility but also delegates
authority to others, who help determine work
assignments; communication is active upward and
downward

15. 7 - 15
Which Leadership Style Is Best?
• Matching style to the situation
• Effective leadership depends on
– Interaction among the employees
– Characteristics of the work situation
– The manager’s personality

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Managerial Decision Making
• The act of choosing one alternative from
among a set of alternatives
• Major steps in the managerial decision-
making process

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The Managerial Decision-Making Process
• Identifying the problem or opportunity
– Problem
• The discrepancy between an actual condition
and a desired condition
– Opportunity
• A “positive” problem
– Problem-solving impediments
• Preconceptions about the problem
• Focusing on unimportant matters while
overlooking significant issues
• Analyzing symptoms rather than causes
• Failing to look ahead

18. 7 - 18
Managerial Decision-Making Process (cont’d)
• Generating alternatives
– Brainstorming
• Encouraging participants to come up with new
ideas
– “Blast! Then Refine”
• Reevaluating objectives, modifying them if
necessary, and devising a new solution
• Selecting an alternative
– Satisficing
• Choosing an alternative that is not the best
possible solution, but one that adequately
solves the problem

19. 7 - 19
Managerial Decision-Making Process (cont’d)
• Implementing and evaluating the
solution
– Requires time, planning, preparation of
personnel, and evaluation of the results
– An effective decision removes the
difference between the actual condition
and the desired condition
– If a problem still exists, managers may
• Decide to give the chosen alternative more time
• Adopt a different alternative
• Start the process all over again

20. 7 - 20
What It Takes to Become a Successful
Manager
• Personal Skills
– Oral communication
– Written communication
– Computer
– Critical thinking
• Education and Experience
– A solid academic background
– Practical work experience