(Solution Manual) Contemporary Management

Jones, George, 11

Business

Solution Manual

11th Edition

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Solution Manual for Contemporary Management, The downloadable file consists of 734 pages, and the total size of the file is 3.78 MB. Purchase now only for highly discounted price.

Author(s): Jones, George

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Copyright © 2020 McGraw-Hill Education. All rights reserved. No rep roduction or distribution without the prior written consent of McGraw-Hill Education. CHAPTER 1 Managers and Managing CHAPTER CONTENTS Learning Objectives 2 Key Definitions/ Terms 2 Chapter Resources 4 Chapter Overview 4 Lecture Outline 4 Lecture Enhancers 20 Management in Action 22 Building Management Skills 28 Managing Ethically 31 Small Group Breakout E xercise 32 Be the Manager 34 Case in the News 35 (Contemporary Management, 11e Gareth Jones, Jennifer George) (Solution Manual all Chapters)CHAPTER 1 Ma nagers an d Managing 2 Copyright © 20 20 McGraw -Hill Education. All rights reserved. No rep roduction or distrib ution without the prior writt en consent of McGraw -Hill Education. LEARNING OBJECTIVES LO1-1. Describe w hat management is, why management is important, what managers do, and how ma nagers utilize organizational resour ces efficiently and effectively t o achieve organizational goals. LO1-2. Distinguish among planning, organizing, leading and controlling (the fo ur principle manag erial tasks), and explain how managers’ ability to handle each one affec ts organizational perf ormance. LO1-3. Differentiate among the three levels of management , and u nderstand the tasks and responsibilities of managers at different leve ls of the organiza tional hierarchy. LO1-4. Distinguish between three kinds of managerial skill, and explain why mangers are divided into different department s to perform their tasks more efficiently and effectively. LO1-5. Discuss some major changes in m anagement practice s today that have occurred as a result of globalization an d the use of advanced information technology (IT). LO1-6. Discuss the principle challenges managers face in today’s increasingly competitive global environment . KEY DEFINITIONS/TE RMS Competitive ad vantage: The ability of one organization to outperform oth er organizations because it produces the desired goods or services more efficiently and effectively than they do. Conceptual skills: The ability to analyze and diagnose a situation and to distinguis h between cause and effect. Controlling: Evaluating how we ll an organization is achieving its goals and taking action to maintain or improve performance; one of the four principle tasks of management. Core competency: The specific set of departmental skill s, knowledge , and experience that allows one organization to outperform another. Department: A group of people who work together and possess similar skills or use the same knowledge, tools, or techniques to perform their jobs. Effectivene ss: A measure of t he appropriateness of the goals an organization is pursuin g and the degree to which the organi zation achieves those goals. Efficiency: A measure of how well or how productively resources are used to achieve a goal. CHAPTER 1 Ma nagers an d Managing 3 Copyright © 20 20 McGraw -Hill Education. All rights reserved. No rep roduction or distrib ution without the prior writt en consent of McGraw -Hill Education. Empowerment: The expans ion of employees’ knowledge, tasks, and decision -making responsibilities. First-line manager: A manager who is r esponsible for the daily supervision of non -managerial employees. Global organizations: Organizations that operate and compete in more than one country. Human ski lls: The ability to understand, alter, lead , and control t he behavior of other individuals and groups. Innovation: The process of creating new or improved goods and services or developing better ways to produce or provide them. Leading: Articulating a clea r vision and energizing and enabling organizational member s so that they understand the part t hey play in achieving organizational goals; one of the four principle tasks of management. Management: The planning, organizing, leading , and co ntrolling of human and other resources to achieve organizational goals effic iently and effectively. Middle manag er: A manager who supervises first -line managers and is responsible for finding the best way to use resources to achieve organizational goals. Organizational perf ormance: A measure of how efficiently and effectively a ma nager uses resources to satisfy cust omers and achieve organizational goals. Organizational structure: A formal system of task and reporting relationships that coordinates and motiv ates organizationa l members so they work together to achieve organizational goals. Organizations: Collections of people who work together and coordinate their actions to achieve a wide variety of goals or desired future outcomes. Organizing: Structuring wo rking relationship s in a way that allows organizational members to work toge ther to achieve organizational goals ; one of the four principal tasks of management. Outsourcing: Contracting with another company, usually abroad, to have it perform an activity the organization pr eviously performed itself. Planning: Identifying and selec ting appropriate goals; one of the f our principle tasks of management. Restructuring: Downsizing an organization by eliminati ng the jobs of large numbers of top, middle, and first -line managers and non-managerial employees. Self-managed team: A group of em ployees who assume responsibility fo r organizing, controlling , and supervising their own activities and monitoring the quality of the goods and services they provide. Strategy: A cluster of decision s about what goals to pursue, what actions to take, and ho w to use resources to achieve goals. Technical skills: The job -specific knowledge and techniques required to perform an organizational role. Top manager: A manager , who establishe s organizational g oals, decides how departments should interact, and monito rs the performance of middle manager s. Top management team: A group composed of the CEO, the COO, and the vice president s most CHAPTER 1 Ma nagers an d Managing 4 Copyright © 20 20 McGraw -Hill Education. All rights reserved. No rep roduction or distrib ution without the prior writt en consent of McGraw -Hill Education. responsible for achieving organizational goals . Turna round management: The creation of a new vision for a struggling company base d on a new approach to planning and organizing to make better use of a company’s resources and allow it to survive and prosper. CHAPTER RESOURCES Below are links to resources for t his chapter . Text Reference Connect In-Class Activity A Manager ’s Challenge : Satya Nadella Re boots Microsoft Case Analysis: CEO at Apple Management Challenges Manager as a Person: Making ER Visits as Painless as Pos sible Case Analysis: The Outsider at Ford Management Insight: Succeeding as a City Manager Case Analysis: Crisis Management Managing Globall y: Auto Production Thrives in Mexico Ethics in Action: Fallout Continues from Wells Fargo Scandal CHAPTER OVERVIEW Chapter 1 examines what management is , including what managers do, and how they use resources to achieve organizational goals. The chapter highligh ts the four main functions of management ( planning, organizing, leading , and controlling ), exploring the leve ls of management ( first-line, middle , and top ) as wel l as the importance of three types of managerial skills ( conceptual, human , and technical ). The chapter concludes with a discus sion of the major changes and challenges brought forth by increased globaliz ation and advancement in information technology and c ompetition faced by managers today. LECTURE OUTLINE PowerPoint slides include additional material that can be used to expand the lecture. They are listed in appro priate places throughout the outline. CHAPTER 1 Ma nagers an d Managing 5 Copyright © 20 20 McGraw -Hill Education. All rights reserved. No rep roduction or distrib ution without the prior writt en consent of McGraw -Hill Education. TEX T REFERE NCE A MANAGER ’S CHALLENGE Satya Nadella Reb oots Microsoft Wha t difference can a manager make? A fter the success of its Windows operating system and Office software suite, Microsoft struggled to find a sourc e of new growth. While earnings continu ed to ri se, an unmoving stock price suggested that in vestors no longer s aw a rosy future.1 This changed wh en Microsoft made Satya Nadella its third chief executive officer (CEO ): Satya brought a fresh vision . Microso ft had accomplished its mission of a personal computer on every desk and in every home, runn ing Micr osoft’s sof tware . Nadella int roduced a new mi ssion: to “create technology so that other s can create more technology,” enabling people and organizations to a ccomplish more. This is a view of techn ology be ing beneficial —for example, opening ways for people w ith disabil ities to participa te in the world more fully. With this new vision, Nadella brought Microsoft a new kind of leadership, based on empathy. Empath y includes listening carefully for cust omer nee ds—information essential for providing releva nt produc ts and services. Nadella ask s employees to u se empathy with one another, too. Leading by example, he conducts town -hall meetings online, inviting employees to give live feedback by submitting an onymous emojis, which he reviews to gauge employee concerns. H e also is known for listenin g attentively to employees’ ideas. Nadella counsels emplo yees to adopt a growth mindset rather than a fixed mind set and encour ages acceptance of and creative solutio ns to mi stakes. He values diversity and is committed to providing opp ortunities and a welc oming climate fo r a diverse workforce, including members w ith disabilities. These efforts have paid off in increased employee m orale, product quality and even the mar ket valu e of Microsoft stock. I. WHAT IS MANAGEME NT? LO1-1: Descr ibe what management i s, why managemen t is important, what managers do, and how managers utilize organizational resources efficiently and effectively to achieve organizational goals. SLIDE 4, 5, 6 What I s Management ? • All managers work i n organizations. • Organizations are c ollections of pe ople who work together and coordinate their act ions to achieve a wide variety of goals or desired future outcom es. • Managers are the people responsible for supervis ing and making the most of an organizatio n’s human and othe r resources to ach ieve its goals. • Management is the planning, organizing, leading and controlling of human and other resources to achieve organiz ation goals effectively and efficien tly. • An organiza tion’s resources inclu de assets such as pe ople and their sk ills, know -how, an d experience; ma chinery; raw materials; computers and informati on technology; and patents, financial capital, and loyal custome rs and employees. CHAPTER 1 Ma nagers an d Managing 6 Copyright © 20 20 McGraw -Hill Education. All rights reserved. No rep roduction or distrib ution without the prior writt en consent of McGraw -Hill Education. A. Achieving High Performance: A Manager’s Goal SLIDE 7 & 8 Achieving High Per forma nce SLIDE 9 Figure 1.1 : Efficiency, Effectiveness, and Performance in an Organiz ation SLIDE 10 & 11 Why Study Management? TEXT REFERENCE MANAGER AS A PERSON Makin g ER Visi ts as Painless a s Possible Erin Daley, the ER director for Mercy Medical Cente r in Massachusetts h as impro ved results in the ER s o much that Mercy has received a wards (for superior care of patients experiencing strokes) and im proved pati ent satisfaction w hile staying wit hin budget. Daley, who admits she loves everything about emerge ncy medicine, rose t hrough t he ranks in the Mercy E R. After starting out as staff nurse, she spent 10 years in the ER, moving up to charge nurse, t hen clinica l nurse s upervisor , and finally , nurse manager. Her supervisory and management positions helped her gain experience in hirin g, scheduling and final ly overall productivity. As ER Director, Daley’s appr oach involved working with her team to identi fy every step in t he path p atients take thr ough the ER and eliminating any wasted steps so they could impr ove efficiency. The ER creat ed separate tracks for patients with different levels o f medical need. One tr ack was dedicated to those who could be treat ed and re leased wi thout tyi ng up a bed, fre eing beds for those who needed them. The more acute patient track had access to bed s more q uickly. The team also b egan to treat the “whole patient ,” which meant providin g education about their conditions and altering treatment and ongoing r ecovery. • One of the most important goals that organizations and their members try to achieve is to provide some kind of good or s ervice that customers value or desire. • Organizational perform ance is a measure of how efficiently and effe ctively a m anager uses resources to satisfy customers and achieve organizational goals. o Efficiency is a measure of how producti vely resources are used to achieve a goal. o A manager’ s responsibility is to ensure t hat an organization and its members perform a s efficient ly as pos sible all the ac tivities needed to provide goods and services to customers. o Effectiveness is a meas ure of t he appropriateness of the goals that managers have selected for the organization to pursue and the degree to which the organizati on achieves those go als. B. Why Stu dy Management? CHAPTER 1 Ma nagers an d Managing 7 Copyright © 20 20 McGraw -Hill Education. All rights reserved. No rep roduction or distrib ution without the prior writt en consent of McGraw -Hill Education. • Because managers decide how to use many of a so ciety’s most valuabl e resour ces, they directly impa ct the wellbeing of a society and the people in it. Understan ding what managers do and how they do it is o f central i mportance to understandin g how a society creates wealth and affluence for its citizens. • Studying management reveals how to understand other people at work and make decis ions and take actions that win the attention and support of the boss and cow orkers, resolve conf licts between th em, achieve team goals, and thus , increase performance. • A perso n who has been worki ng for s everal years and then r eturns to school for an MBA ca n usually, after earning the degre e, find a more interesting, satisfying job t hat pays significa ntly more than t he previous jobs. o Salaries increase rapidly as people move up t he organizational hi erarchy. o Salaries paid to top m anagers are enormous. II. ESSENTIAL MANAGERIAL TASKS LO1-2: Distinguish among planning, organizing, leadin g, and co ntrolling (the four princ iple managerial tasks), and explain how managers’ ability to ha ndle each one affect s organi zational performance. SLIDE 12 Figure 1.2 Four Tasks of Management SLIDE 13 Steps in the Plannin g Process SLIDE 14 & 15 Organizin g SLIDE 16 Leading SLIDE 17 & 18 Controlli ng SLIDE 19 Example: Mercy Me dical Center SLIDE 20, 21, 22 Managerial Roles Iden tified • Managers accomplish the company objectives by performing four essential managerial tasks: plannin g, organizing, leading, and co ntroll ing. A. Planning • To perform the planning task, managers identify and se lect appropriate organizational goals and co urses of action; they develop strategies for how to achieve high performance. CHAPTER 1 Ma nagers an d Managing 8 Copyright © 20 20 McGraw -Hill Education. All rights reserved. No rep roduction or distrib ution without the prior writt en consent of McGraw -Hill Education. • The three steps involved i n planning are: o Deciding which goals the organization will pursu e o Deciding what strategies to adopt to attai n those goals o Deciding how to allo cate organ izational resources to pursue the strategies that attain those goals • The outcome of planning is a strate gy, a cluster of decisions abo ut wha t goals to pursue, what acti ons to take, and how to use resources to ach ieve goals. o A low-cost strategy is a way of obtaining customers by making decisions that allow an organization to produce goods or services more che aply than its compe titors, so it can charge lower prices than the y do. o A differentiation strategy is a way o f obtaining cust omers by making de cisions th at allow an organization to produce new, exciting, and unique goods or services (not contained in Chapte r 1). • Planning str ategy is complex a nd difficult, especially beca use planning is done under uncertainty when the result is u nknown , so that ei ther succe ss or failure is a possible outcome of the planning process. B. Organizing • Organizing is structuring w orking relationshi ps so organization al members interact and cooper ate to achieve organizational goals. • The o utcome of organi zing is the creati on of an organizational structure , a formal system of task and reporting relationships that coordinates and motiva tes members so they work together to achieve organizational goals. C. Leading • An organization’s vision is a short, succinc t, and inspiring s tatement o f what the organization intends to become and the goals it is seeking to achieve. • Leading is the articul ation of a clear v ision and energizi ng and enabling organizational members so they understand the part they play in achievin g organizational g oals. • Lead ership involves managers using their power, personality, influence, persuasion, and communication skills to coordinate people and groups so their activities and effor ts are in harmony. D. Controlling • Controlli ng is the process of evaluating how well an o rganization is achieving it s goals and taking corrective actions to maintain or improve performance. CHAPTER 1 Ma nagers an d Managing 9 Copyright © 20 20 McGraw -Hill Education. All rights reserved. No rep roduction or distrib ution without the prior writt en consent of McGraw -Hill Education. • The outcome of the control process is t he ability to measure perf ormance accurately and regulate organizationa l efficiency and effectiveness. • To exercise c ontrol managers must decide which goals to measure —perhaps goals pertaining to productivity, quality and responsiveness to customers —and the n they must design contro l systems that will provide the information n ecessary to assess performance —that is, determ ine to what degree the goals have been met. • The controlling task also helps managers evaluate how well t hey are performing the other three t asks of manage ment —planning, organizing, and leading —and ta ke corrective action. E. Per forming Managerial Tasks: Mi ntzberg’s Typology • Henry Mintzberg, by following managers and observing what they actually do hour-by- hour and day -by-day, identified 10 ki nds of specifi c roles, or sets of job responsibilities, that capture the dynamic nature of managerial work . • He group ed these roles according to whether the responsibility was primarily decisional, interpersonal, or infor mational; they are described in Tabl e 1.1: o Decisio nal: ▪ Entrepreneur ▪ Disturbance Handler ▪ Resourc e Allocator ▪ Negotiator o Interp ersonal: ▪ Figurehea d ▪ Leader ▪ Liaison o Informational: ▪ Monitor ▪ Disseminator ▪ Spokesperson CHAPTER 1 Ma nagers an d Managing 10 Copyright © 20 20 McGraw -Hill Education. All rights reserved. No rep roduction or distrib ution without the prior writt en consent of McGraw -Hill Education. CONNECT CASE Analysis CEO at Apple SUMMARY The brief case describes the journe y of Steve Jobs to acquire management skills necessary for him t o successfu lly lead his ow n company. Although Jobs was known for his innovation and ability to select new products for market, his abr asive management style at one point resulted in his ouster from Apple, the company he helped found. Only after subsequent experience in other ventur es did he gain much needed management skills, which resulted in his being invited back to lead Apple again. ACTIVITY Lead a class act ivity using electronic polling (i>clicker -type) or group response such as Kahoot! (free online education q uiz response sy stem students can a ccess wit h their phones or computers, see https:/ /kahoot.com for info) to increas e ability to identify the four functions of management. Prepare a PowerPoint, Kahoot! or easel with severa l brief descrip tions/examples (one to five words) each of planning, organizing, leading and controlling. ( Note : Kahoo t! is especially fun for the clas s as it incorporates an element of friendly, fun competition. They create screen names, Micky M ouse if the y want, as long as it’s unobjectio nable, an d can see their rankings on the leader board as the game progresses) CLASS DISCUSSION Lead the class on whi ch activity they think is the m ost important of the four functions. (Of course, all functions are necessa ry for organiza tional success, but the disc ussion encourages students to make and defend a choice.) This discussion ca n be held with the entire class o r start in small groups and tra nsition to the entire class. III. LEVELS AND SKILLS OF MANAGER S • To perfo rm the four man agerial tasks effic iently an d effectively, organizations group or differentiate their managers in two main ways —by level in hierarchy an d by type of skill. • Organizati ons differentiate managers according to their level or rank in t he organiza tion’s hierarch y of authority. The three le vels of managers are first -line managers, middle managers, and top manager s—arranged in a hierarchy. • Organiz ations group managers into dif ferent departments (or functions) according to their specific jo b-related s kills, expertis e, and experiences, such as a manager’s engineering skills, marketing expertise, or sales experience. o A department is a group of people who work together and possess similar skills or knowledge, tools, or techniques to perform the ir jobs. A. Levels of Manage ment LO1-3: Differ entiate a mong three levels of management, and understand the tasks and responsibili ties of managers at different leve ls in the organizational hiera rchy. CHAPTER 1 Ma nagers an d Managing 11 Copyright © 20 20 McGraw -Hill Education. All rights reserved. No rep roduction or distrib ution without the prior writt en consent of McGraw -Hill Education. SLIDE 23, 27 Levels and Skills of Managers SLIDE 24 FIGURE 1.3 Levels o f Managemen t SLIDE 25, 26 Level s of Man agement • Organ izations normall y have three levels of management: first -line managers, middle managers, and top ma nagers (Figure 1.3). • At the b ase o f the managerial hierarchy are first-line managers , often called supervisors. They are respons ible for daily supervision of the nonmanageri al employees who perform the specific activities necessary to produce goods and ser vices. • Supervising the first -line managers are middle managers , responsible for finding the best way to use resource s to achieve organiz ational goals. • Top ma nagers establish organizational goals, decide how departments should interact, and monitor the perf ormance of middle managers. T hey h ave cross -departmental respons ibility. o The chief executive officer (CEO) is a comp any’s most s enior an d import ant manager, the one all othe r top managers report to. o The term chief operating officer (COO) often refers to th e top manager who is being gr oomed to take over as CEO when the current CEO becomes the chair of the board, retires, or leaves t he compa ny. o Toge ther the CEO and COO are resp onsible for developing good working relationships among the top managers of various departments; usually these t op managers have the title “vice pr esident.” o A central concern of the CEO is the creati on of a smoo thly fun ctioning top manageme nt team, a group composed of the CEO, the COO, and the vice presidents most responsible for achievi ng organizational goals. • The relative importance of planning, or ganizing, leading, and controlling —the four principa l managerial tasks —to any pa rticular mana ger depends on t he manager’s position in the managerial hierarchy. o The amount of time managers spen d planning and organizing res ource s to maintain and improve orga nizational performance increases as they ascend the hierarchy (Figure 1. 4). B. Man agerial Skill s LO1-4: Distin guish between three kinds of managerial skills, and explain why managers are divide d into different departments to pe rform their tasks more efficie ntly and effectively. CHAPTER 1 Ma nagers an d Managing 12 Copyright © 20 20 McGraw -Hill Education. All rights reserved. No rep roduction or distrib ution without the prior writt en consent of McGraw -Hill Education. SLIDE 28 Managerial Skills SLIDE 29 Figure 1.5: Types a nd Lev els of Manager s SLIDE 30 Core Co mpetency • Both education and experience enable managers to r ecognize and develop the personal skills th ey need to put organi zational resources to their best use. • Research has shown that ed ucation and experience help m anagers acquire and develop three types of skills: conceptual, human, and technical. • Conceptual ski lls are demonstrated in the genera l ability to analyze and diagn ose a situation and to distinguish between cause and effect. o Top managers r equire the best co nceptual skills because their primary responsibilities are planning and organizing. o Formal educatio n and training are important in he lping man agers develop concept ual skills. o Today , continuing management education and training, including training in advanc ed information t echnology (IT), are an integral step in building managerial skills , because new the ories and techniques are constantl y being d eveloped to improve org anizational effectiveness. o Organizations may also wish to develo p a parti cular manag er’s ab ilities in a specific skill area. • Human skills include the general ability to understand, alter, le ad, and control the behavior of ot her indiv iduals and groups. o The ability to communicate, coordinate, and motivate people, a nd to mold individuals int o a coh esive team, dist inguishes effective from ineffective managers. o These skills can be learned th rough education , training, and expe rienc e. • Techni cal skills are the job-specific skills required to perform a particular type of work or occupati on at a hig h level . o The array of t echnical skills managers need depends on their position in their organizations. o Managers and employees who posse ss the same ki nds of technical skills typically become members o f a specific department. o Figure 1.5 s hows how an organiza tion gr oups managers into department s on the basis of their job -specific skills. • The term core competency is often used to refer to the specific set of departmental skills, knowledge, and experience that allows one organization to outpe rform its competitor s. o Depa rtmental skills that create a core competency give an organization a CHAPTER 1 Ma nagers an d Managing 13 Copyright © 20 20 McGraw -Hill Education. All rights reserved. No rep roduction or distrib ution without the prior writt en consent of McGraw -Hill Education. competitive advantage . • Effective managers need all three ty pes o f skills —conceptual, human, and technical —to help their org anizations perform more efficiently a nd effect ively. • Deve loping new and improved skills throu gh education and training has become a priority for both aspiring managers and the organizations th ey wo rk for. TEXT REFERENCE MANAGEMENT INSIGHT Succeeding as a City Manager Businesses are not the only orga nizations t hat nee d people with ma nagement skil ls. Governments are an important sector of the economy that also employs managers. Many cities, for exam ple, have a government structure in which an elected city c ouncil hires a manager to oversee the work of the city go vernmen t. A city manage r faces the c hallenge of serving a diverse group of citizens while also maintaining productive relationships wit h the elected officials who hired him or her. Jim Schutz recalls that when he became city manager of San Rafae l, Californ ia, he faced a steep learning curve. On any given day, the issues he faced included personnel matters, budget shortfalls, emergencies i nvolv ing the p olice and fire departments , and publicly aired comp laints from unhappy residents. Schu tz faced the challen ges of his job with a s ervice -oriente d approach aimed at seeing the positives in the community. He discovered that the key to his success was the abi lity to work with people , and he continually had to work to build support for new ideas that req uired spend ing tax dollars or chan ging policies. Preparation for the job of city manager often involves an advanced degree and experience working in lo cal gover nment. A group of public managers in Massachusetts decid ed to pool their experience to create a “boot camp” traini ng program for new city manage rs aimed at improving human skills such as working effectively with government colleagues, taking a lea dership r ole in the community , and developing a network for career support. City managers have f ound that sharing ex perienc es at the “boot camp” is a val uable way to build skills for their complex jobs. CONNECT CASE ANALYSIS The Outsider at Ford SUMMARY Today’s competitive global environment presents many challenges to managers. One of the main ch allenges is building a comp etitive adv antag e by increasing efficiency and customer responsiveness. This case analysis details the challenges fa ced by former For d Motor C ompany CEO Alan R. Mulally. Contains seven assignable multiple-choice questions from le arning ob jectives 01 -01, 01 -03, 01 -04 and 0 1-05. ACTIVITY Have class form small groups and discuss how effectiveness is different from efficien cy. Each group sh ould come up with an example of both to share with the class. CHAPTER 1 Ma nagers an d Managing 14 Copyright © 20 20 McGraw -Hill Education. All rights reserved. No rep roduction or distrib ution without the prior writt en consent of McGraw -Hill Education. CLASS DISCUSSION Have groups sha re their findings an d examp les. (An easy to understand example is to use fire fighters. When they train to climb ladders in all their gear and pr actice carrying re scued v ictims back down to the ground that builds efficiency. When they learn to lean the ladd er agains t the corre ct wall , that is ef fectiveness.) CHAPTER 1 Ma nagers an d Managing 15 Copyright © 20 20 McGraw -Hill Education. All rights reserved. No rep roduction or distrib ution without the prior writt en consent of McGraw -Hill Education. IV. RECENT CHANGES IN MANAGEMENT PRACTICES LO1-5: Discuss some major changes in managemen t practices today that ha ve occurred as a result of globalization and the use of adv anced information technolog y (IT). • Two major f actors t hat have led to these changes are global competition and advances in information technology (IT). SLIDE 31 Restructuring and Out sourcing A. Restructuring a nd Outsourcing • Restructuring involves simplifying, shrinking, or downs izing an orga nizatio n’s operation to lower operati ng costs. It downs izes an orga nization by eliminating the jobs of large numbers of top, middle, and first -line managers and nonmanageri al employees. • Mode rn IT’s ability to improve efficiency has increased t he amount of downsiz ing in recent years because IT makes it possible for fewer e mplo yees to perform a given task. • Outsourcing involves contracting with another company, u sually in a low -cost country abroad, to have it perform a work activity the organizati on previously perfor med itse lf. o Outsourcing increa ses efficiency bec ause it lowe rs operating costs, freeing up money and resources that can be used in more effective ways —for example, t o develop new prod ucts. o The need to respond to low -cost global competit ion has speed ed outs ourcing dramatically in the 20 00s. In 2015, near ly 2.4 milli on U .S. jobs were outsourced offshore. • Large for -profit organizations today typically empl oy 10% to 20% f ewer people than they did 10 years ago because of restructuring and out sourcing. C. Empowerme nt and S elf-Managed Teams SLIDE 32 Empowerment • Empowerment is a management technique that involves giving employees more authority and responsibilit y over how they perform their wor k activities. It is the expansion of employees’ knowl edge , tasks, a nd dec ision -making responsibilities. • IT is being incre asingly used to empower employees because it expands employees’ job knowledge and increases the scope of their job res ponsibilities. • IT also facilitates the use of a self-managed team , a group of employ ees wh o assume collective responsibi lity for organizin g, controlli ng, and supervising their own work activities. CHAPTER 1 Ma nagers an d Managing 16 Copyright © 20 20 McGraw -Hill Education. All rights reserved. No rep roduction or distrib ution without the prior writt en consent of McGraw -Hill Education. V. CHALLENGES FOR MANAGEMENT IN A GLOBAL E NVIRONMENT LO1-6: Discuss the pr inciple challenges managers face in today’s increasin gly competitive global envir onment . SLIDE 33 Challenges for Managi ng in a Glob al Environment • The rise of global organizations , organizations that operate and compete in more than one country, has pressured many organizations to identify b etter ways to us e their resources and improv e their performance. • Five major challenges stand out for managers in today’s world: o Building a competitive advantage o Maintaining ethical stand ards o Managing a diverse work force o Utilizing new information systems a nd technologies o Practicing global crisis man agement SLIDE 34 Building Competitive Adv antage SLIDE 35 Figure 1.6 Building Blocks of Competitive Advantage SLIDE 36 Turnaround Management A. Building Com petitive Advantage • Competitive advantage is the ability of one organiz ation to outperform other organiz ations because it produces desired goods or services more efficiently and effectivel y than its competitors. • The four b uilding blocks of competitive adva ntage are superior: o Efficiency o Quality o Speed, flexibility, and innovati on o Responsiveness to custome rs (Fig. 1.6) • Organi zations increase their efficiency when they reduce the quantity of re sources they use to produce goods or services. o Many organization s are training their workforces in the new skills and techniques needed to operate heavily comp uterized assembly plants. • One major thrust to improving quality has been to introduce the quality -enhancing techniques known as total quality managem ent (TQM). CHAPTER 1 Ma nagers an d Managing 17 Copyright © 20 20 McGraw -Hill Education. All rights reserved. No rep roduction or distrib ution without the prior writt en consent of McGraw -Hill Education. o Emplo yees involved in TQM are often organized into quality control teams and are responsible for finding new and better ways to perform their jobs; they also must monitor and evaluate the quali ty of the goods they produce. • Toda y companies can wi n or lose th e competitive race depending on their speed —how fast they can bring new pro ducts to market —or their fle xibility —how easily they can change or alter the way they perform their activities to re spond to actions of their competit ors. o Companies tha t have speed and flexibility are agile competitors: Their managers have superior planni ng and organizing ab ilities; they can think ahea d, decide what to do, and then speedily mobilize their resources to r espond to a changing environment. • Innovation , the pr ocess of cre ating new or improved goods and services that customer s want or developing better ways to produ ce or pr ovide goods and serv ices, poses a special challenge. o Managers must create an organizationa l setting in which people are enc ouraged to be inno vative. • Orga nizations compete for customers with their products and services, so traini ng employees to be r esponsiv e to c ustomers’ need s is vital for all organizations, but particularly for service organiz ations. o Many organizations are em powering their cus tomer servic e em ployees and giving them the authority to take the lead in providing hig h-quality customer s ervice. • Someti mes the best e fforts of managers to revitalize their organization’s fortunes fail; and faced with bankruptcy, the dir ectors of these co mpanies are forced to appoint a new CEO who has a history of success in rebuilding a co mpany. o Turnaround ma nagement is the creation of a new vision for a struggling company based on a new approach to plann ing and organizing , to make bette r use of a company ’s resources and allow it to survive and prosper. • Achieving a competitive advantage req uires that managers use all their s kills and expertise, as well as their companies’ other resources, to find new and im proved ways to improve efficienc y, quality, innova tion, and re spon siveness to customers. Management Challenges In-Class Activity Have stu dents talk in small groups t o brainstorm answers to the question: What is the most difficult challenge of a manager? Briefly review the rules of brain storming (someone t akes notes to capture ideas, all ideas are recorded —no ideas are too c razy, make no va lue judgments —good o r bad, e veryone should be heard). After brainstorming, groups refine their choice and agree on the t op problem. CHAPTER 1 Ma nagers an d Managing 18 Copyright © 20 20 McGraw -Hill Education. All rights reserved. No rep roduction or distrib ution without the prior writt en consent of McGraw -Hill Education. Whil e groups are br ainstorming, write the four principal managerial tasks (planning, organiz ing, leading and controlling) on the board as column heading s. As groups report out their top problems, ask the group and the class to try to determin e which of the four categories the problem fits (y ou may need to use some probing questions to nudge the m to the correct conclusion .) Write an abbreviated v ersion o f the problem under the appropriate heading. Continue until all problems are boarded. Bri efly discuss the results (which category had the mo st entries, possible reasons for the outcome, etc.). C onclude with an observation that the course should e nable th em to better understand how to handle the problems. (Note to instructor: if you take a pic ture of the board or copy it dow n, you can refer to it later in the semester to introduce appropriate managerial topics. This could also be a good list to re view at the end of the semester .) SLIDE 37 Maintaining Ethical and Socially Responsible Standards B. Maintaining Ethical and Socially Responsible Standards • Managers at all levels, especially a fter the recent economic crisis, are un der considerable pre ssure to make the best use of resources to i ncrease the level at which their organizations perform. • Pressure to increase performance can be healthy fo r an organization , because it leads managers to question how the organization is worki ng, and it encourage s them t o find new and better ways to plan, organize, lead, an d control. • Howev er, too much pressure may induce managers to behave unethically, and eve n illegally, when dealing with peop le and group s inside and outside the organization. • The issue of social responsi bility centers on deciding what obli gations a company has toward the p eople and groups affected by its activities —such as employees, customers , or the cities in which it operat es. SLIDE 38 Managing a Diverse Workforce C. Manag ing a Diverse Workfo rce • A major challenge for managers everywhere is t o recognize the ethical need and legal CHAPTER 1 Ma nagers an d Managing 19 Copyright © 20 20 McGraw -Hill Education. All rights reserved. No rep roduction or distrib ution without the prior writt en consent of McGraw -Hill Education. requirement to treat h uman resources fairly and equitably. • Today the age, gender, race, ethnicity, religion, sexual preference, and s ocioeconomic composition of the w orkforce present new challenges for managers. • To cr eate a highly trained and motiva ted workforce, and to avoid l awsui ts, managers must establish human resource management (HRM) procedures and practices that are legal and fa ir and do not discriminate agains t any or ganizational members. • Managers who value th eir diverse employees succeed be st in promoting pe rformance over the long run. • Today more organizat ions are realizing that people are their most important resource and that developing a nd protecting human resource s is the most important challenge for manag ers in a competitive global envi ronment. SLIDE 39 Utilizin g New Technologies D. Utili zing IT and E-Commerce • Increasingly, new kinds of IT enable not just individual employees but al so self - managed team s by giving them i mportant information and allowing virtual interactions around the globe using the Internet. • Increased g lobal coordination helps impr ove q uality and increase the pace of innovation. SLIDE 40 Practicing Global Crisis M anagement E. Practic ing Glob al Crisis Management • The causes of global crises or dis asters fall into two main categories: o Natural causes —crises that arise because of natu ral causes, inclu ding hurricanes, tsunamis, ea rthqu akes, famines, and diseases. o Human causes —human -created crises result from factors such as industrial pollution, poor a ttention to worker and workplace safety, global warming, the destru ction of the natura l habitat or envi ronment, and geopo litical tensions and terrorism. • Crisis management i nvolves making impor tant cho ices about how to: o Create teams to faci litate rapid deci sion making and communication o Establish the organizational chain of command and report the relationship s necessary to mob ilize a fast res ponse o Recruit and select the right people to lead and w ork in s uch teams o Develop bargaining and neg otiating strategies to manage the conflicts that arise CHAPTER 1 Ma nagers an d Managing 20 Copyright © 20 20 McGraw -Hill Education. All rights reserved. No rep roduction or distrib ution without the prior writt en consent of McGraw -Hill Education. whenever people in groups hav e different interests and objectives CHAPTER 1 Ma nagers an d Managing 21 Copyright © 20 20 McGraw -Hill Education. All rights reserved. No rep roduction or distrib ution without the prior writt en consent of McGraw -Hill Education. CONNECT CASE ANALYS IS Crisis Manage ment SUMMARY As a way to examine crisis management, the case discusses the outcome of the investi gation into the 2010 Massey coal mine exp losion that killed twenty -nine miners. Massey’s management was de termined to be at fault and the exp losion preventab le. ACTIVITY Review and present the Tylenol cyanide murders https:/ /www.pbs.org/newshour/health/tylenol -murders -1982 . CLASS DISC USSION Discuss ho w the Tylenol murd ers were handled by the company (Johnson & Johnson also issued a volun tary recall of the medication to protect consumers). Ask the clas s to recall more recent natural or manmade disasters and how they were handled. Depend ing on what is su ggested by the cla ss, the discussi on can include how the disaster co uld have been preven ted, mit igated, and handled better , and whether crisis mana gement was successfu l, and why. TEXT REFERENCE MANAGING GLOBALLY Auto Production Thrives in Mexico As qua lity issues contin ue to dominate a nd workers’ wages increase in part s of Asia, most nota bly in C hina, global auto companies are looking for other loc ations to build new production facilities. In recent years, many of the world’s automake rs have decided t o build new produc tion facilities in Mexico f or several reasons. The re are plenty of loc ations i n Mexico that would be suitable to build new, state -of-the-art facilitie s—for a reasonable price. New facilities are also close to shipping por ts, which expedit es transportation. All moves are not one -way, however. According to the advocacy group , Reshori ng Initiative, Ford is bringing more jobs back to Amer ica than any U.S. company other than Walmart. Ford recently announced it would shift production of several Ecoboost engines from Spain to Oh io in an eff ort to reduce shipping costs and improve productio n quality. TEXT REFERENCE ETHICS IN ACTION Fallout C ontinues from Well s Fargo Scandal Employees were encouraged to sign up customers for vari ous products and services —checking accounts, credit cards, loa ns, mortgages, overdraf t protection, and ot hers—which would allow the bank to charge fees for CHAPTER 1 Ma nagers an d Managing 22 Copyright © 20 20 McGraw -Hill Education. All rights reserved. No rep roduction or distrib ution without the prior writt en consent of McGraw -Hill Education. each of th e customer’s accou nts. And for several years, this cross selling approach was seen as a so lid business strategy that worked w ell for the bank ing giant, a t one point helping to make Wells Fargo th e world’ s most valuable bank. However, sales pressure soon pus hed employees to open fake accounts to help their sales numbers. Over five years, employe es opened 3.5 mil lion fake checking and credit card accounts to meet sales quotas and keep their jobs. From 2015 , when the scandal was first exposed, the company has f aced the consequences of their high sales pressure and unethical practices. Federal regu lators fined the company $185 milli on and forced it to pay $14 2 million to customers it had defrauded. Its CEO, John Stumpf, “retired effective immediately,” after test ifying before Congress. Prior to leaving her post in February 2018, Federal Reserve Cha ir Janet Yellen i ssued a cease and desist order preventing Wells Fargo from growing i ts assets and forcin g them t o replace four of its board members within a year. Unsur prisingly, sales and numbers of accounts continued to be down, even into 2018. LECTU RE ENHANCERS Lectu re Enhancer 1. 1 WHY COMPANIES FAIL CEOs often attempt to explain po or corporate perform ance wit h external environmental factors outside of their cont rol, such as a bad economy, market turbulence, or competitive subterfuge. A close study of corporate failu re, however, sugge sts that most co mpanies flou nder because of manage rial error, accordin g to a r ecent article in Fortune . By failure, the article’s au thors are referring to any type of dramatic fall from grace, which may or may not result in bankruptcy. Often these failures are years in th e making and are unique to the com pany’s own industry and culture. Below is a list of some of the mistakes made by c orporate leaders that often lead to the downfall of their organizations. Softened by Su ccess : A number of studies show that people are less likely to m ake optimal decisions after prolonged peri ods of s uccess. NASA, Enron, Lucent, and WorldCom had all reached the mountaintop before they ran into trouble. See No Evil : Author Jim Collins says that a litmus test of greatness with in a company is its willingn ess to confront brutal facts head -on inste ad of tr ying to explain them away. Andy Grove and Gordon Moore of Intel passed this test. While watching their competitors change memory chips into a cheap commodity, t hey made the decis ion to exit the chip busines s and enter the microp rocessor business. H owever, Polaroid and Xerox failed. Both were slow to confront the changing world around them and face the fact that their business models were no long er sustainable. CHAPTER 1 Ma nagers an d Managing 23 Copyright © 20 20 McGraw -Hill Education. All rights reserved. No rep roduction or distrib ution without the prior writt en consent of McGraw -Hill Education. Fearing the Boss Mo re Than the Comp etition : Sometimes CEOs don’t get the information they need be cause their subordinates are afraid to tell them the t ruth. Although it may not be CEOs ’ intent, sometimes a subtle signal, such as sour expre ssion or curt resp onse, can signal t hat bad news is not welcome. An example is Samsung Chairman Lee Kun He e’s 1997 decision to take the company into the automobile busi ness. Knowing that this industry was crowded and plagued with overcapacity, many of Sams ung’s top managers silently opposed this decision bu t were unwill ing to confront their forceful leader. Sa msung Mo tors closed after its first year of production. Liste ning to Wall Street more than to employees : During the late 1990’s, Lucent’s CEO was delivering the top -line growth that Wal l Street wanted, and in retur n, Wall Street lavish ed the company with attentio n. But as McGinn continued to perform for investors, h e failed to listen to his own scientists, who feared the company was missing out on an i mportant new techn ology, and his own salespeople, wh o realized th at sales targets were becoming increasing ly unrea listic. Strategy Du Jour : When companies run into tro uble, the desire for a quick fix can become overwhelming. The frequent result is illustr ated by a descript ion of A&P by auth or Jim Collins. “A&P vacillat ed, shifting from one strategy to another , always looking for a single stroke to quickly solve its prob lems. It held pep rallies, launched programs, grabbed fads, fired CEOs, hired CEOs, and hired them again.” Lurching from one silver bullet s olution to an other, the company ne ver gained any tract ion. Taken from the Why Companies Fail , by Ram Charan and Jer ry Useem, published in the May 27, 2002 issue of Fortune Magazine. Lecture Enhancer 1.2 WHY GOOD EMPLOYEE S CAN BE BAD MANAG ERS You have a good employee , a hard worker, tech nically proficient. You prom ote him, and it turns out to be a bad decision. You have promoted your best technical employee, and in the process, lose a good employee and g ain a poor manager . How does this ha ppen? Good tech nical employee s can make good mana gers, of course, but many do not. Good technical specialists —engineers, account ants, computer gurus, financial analysts, statistical experts —are more likely to have intro vert personalities . Introverts prefe r to work alone. They revel in painstaking details , meaningful paperwo rk, tedi ous activities, and precision. They can focus for hours on extracting meaningful data from mounds of information. The presence of ambiguity an d clutter motivate s them to find the “perfect soluti on.” CHAPTER 1 Ma nagers an d Managing 24 Copyright © 20 20 McGraw -Hill Education. All rights reserved. No rep roduction or distrib ution without the prior writt en consent of McGraw -Hill Education. The trai ts that make technic al experts successfu l actual ly get in the way of managing others. The world of the w orker encourages them to seek precision and order. By contras t, the management role is messy, complicate d, and ambiguous. Additionally, th e sense of pri de and reward for completing a task is m issing. Relationship complexities are more dynamic than ta sk co mplexities. Management analysis must account for distasteful political elements, egos, pride, insecurit ies, envy, hurt fe elings, and pett y conflicts. To make the successfu l transition to lead ership, technical experts learn to rely more upon their instincts, insights, intuitions, and tolerance for human equations, underlying values, and the ir “feel” for thi ngs. Rational anal ysis is still im portant; it jus t is not sufficient. MANAGEMENT IN ACTIO N Notes for Topics for Discussion and Action DISCUSSION 1. Desc ribe the difference between efficiency and effectiveness and identify real organizati ons you think are, or are not, effic ient and/or effe ctive. An orga nization’s performan ce is directly tied to the l evels of efficiency and effectiveness exhibited by manag ers within the organization. Efficiency is described as a measure of how well or prod uctively resources are used to achie ve an organizati onal goal. Effi ciency can be increa sed by minimizing in puts nee ded to achieve desired outputs. Effectiveness is a measu re of the appropriateness of the goals chosen and the degree to which they are achiev ed. Organizations are more effective when managers c hoose appropria te goals and then ac hieve them. 2. In what ways can managers at each of the three levels of manag ement contribute to organizational efficiency and effectiveness? Efficiency is a measure o f how well or prod uctively resources are used to ach ieve a goal. Fi rst- line managers ca n contribute to orga nization al efficiency by instituting quality control proce dures. Production should be monitored to ensure that the goods and services are produced without defects to p revent wasted mate rials, returned merchandise, an d/or unsatisfied cus tomers. The first -line manag er should be very familiar with how his or her emp loyees complete their tasks and responsibilities, meeting with them on a regular basis to d iscuss alternative methods that coul d save time and materials. Midd le managers can cont ribute to organizati onal eff iciency by finding ways to help first -line manager s and employees better utilize resources in order to CHAPTER 1 Ma nagers an d Managing 25 Copyright © 20 20 McGraw -Hill Education. All rights reserved. No rep roduction or distrib ution without the prior writt en consent of McGraw -Hill Education. reduce manufacturing costs or improve the way services a re provided to cus tomers. They are responsible fo r ensuring that empl oyees are properly t rained a nd are equipped with the necessary skills and have acces s to the most efficient technology and machinery. Top managers can contribute to orga nizational efficie ncy by ensuring th at departments t hroughout the c ompany are cooperati ng with each other i n the mo st efficient manner. It is important for them to d etermi ne if it is more economical to provide certain resources in -house (such as marketing, legal, accounting ) or outsource the se functions to external agenci es. Effectiveness i s a measure of the a ppropria teness of the goals chosen and the degree to which they are achieved. First -line managers can contribute to organizational effectiveness by informing their emp loyees of the expe ctations and goa ls that are set for them and discus sing the best way to fulfill those goals and expectations. In addition, he or she mi ght include the employees in setting appropriate goals that they both feel are obtain able. The first -line manager should periodically giv e feedback to his or her employees to let them know if they are on the right track in meeting pre -set goals and e xpecta tions. Middle managers can contribute to organizational effectiveness by evaluating w hether or not the goals that an orga nization is pursuing are appropri ate, and by sugges ting ways in which t hey coul d be changed. Top managers can contribute to or ganizatio nal effectiveness by establishing appropriate organizational goals. They are responsi ble for deciding w hich goods and ser vices the compan y should produce. In addition, they must monitor their middle m anagers throughout the organization to ensure t hat they are making the most effective use of their resources to accomplish goals. 3. Identif y an organization that you believe i s high performin g and one you beli eve is low perfor ming. Give five reas ons why you think the performance levels of the two org anization s differ so much. (Note to instructor: Due to the nature of this question, individua l answers may vary widely. Examples of factors affec ting performance a re listed.) Orga nizations that opera te at di fferent performance levels (high vs. low perfor ming organizations) may have many different factors affecting their performance: • The high perf orming organizatio n has managers who interact with a nd motivate employ ees, while the lo w performing organiz ation ha s managers who are aloof and do not interact wi th or mot ivate employees directly, perhaps negatively affecting morale. • The high performing or ganization has man agers who set diff icult but achiev able goals for their employees. A low performing organi zation m ay not set goals, or the ones they do set are v ague and difficult to attain. • In a high performing organization, bonuses or rewards are direct ly tied to the com pany’s performance . In a low perfo rming organization , bonuses or rewa rds are tied to othe r criter ia, which may or may not include performance.