Introduction to Business

Chapter- 7
Fundamentals of Management
Contents:
1 What is Management?
2 Objectives
3 Importance of objectives.
4 Types of objectives.
5 Management functions.
6 Levels of management.
7 Management roles.
8 Core management skills

1. WHAT IS MANAGEMENT?
Everyone seems to have an opinion about the meaning of management. Unfortunately, the
opinions are usually stated in complex terms and shed little light on what management is.
Perhaps the most succinct description of management was offered by early management
scholar and theorist Mary Parker Follett. She stated that management is the art of getting
things done through people." In other words, the manager coordinates the work of others to
accomplish goals that might not be achievable by an individual. Thus, management will be
defined as the application of planning, organizing, staffing. directing, and controlling
functions in the most efficient manner possible to accomplish meaningful organizational
objectives.
The theme of our definition of management is that a central person (a manager such as
Chuck Knight at Emerson Electric or Chuck Daly, coach of the Detroit Pistons basketball
team) must-by using such skills as decision making. communication, and objective setting-
coordinate the work activities of others to achieve organizational objectives. Research has
highlighted a direct relationship between the clarity of organizational objectives and business
success. The successful management team develops clear objectives and enthusiastically
undertakes programs and projects to accomplish them.

2. A VARIETY OF OBJECTIVES
Objectives are desired results or targets to be reached by a certain time. Objectives are
specific, state what is to be accomplished, and indicate when it will be achieved. On the other
hand, goals are broadly stated general guidelines that an organization or individual seeks to
achieve. A college student's goal may be to earn a degree in business administration. An
objective would be to earn a bachelor's degree in business administration by June 1994 with
an overall grade point average of at least 3.5.

Organizational objectives
The overall objective of the firm: Ford’s push toward QUALITY.

Departmental objectives

The production department’s objective at Ford is to improve

quality by 10 percent each year for the next three years.

Figure 7.1 Subunit objectives

Cascade A team of Ford employees on the assembly line sets an
Approach objective to cut costs by 18 percent over three years.

Individual objectives

A Ford employee Dan Chubrich sets an objective to

Attend the quality control training program.

One procedure for setting objectives is called the cascade approach, in which objectives are
set from the top level of management down (see Figure 7.1). (The "cascade" analogy
emphasizes flowing from the top to the bottom.) This process provides direction to lower-
level managers as the goals are converted to objectives from the top down:
1. A clear statement of organizational purpose is issued. The mission statement identifies the
scope and uniqueness of the organization. (A unique mission statement that of BBA Group, a
$1.6 billion, 25,000 employees' British firm-is presented in Figure 7.2. The firm builds a
range of products, including industrial textiles and automotive components.)
2. Long-range goals are developed from this statement.
3. The long-range goals are converted into specific performance objectives.
4. Objectives are then developed for each subunit in each department.
5. Within the subunits, challenging but attainable personal objectives are set.
Most organizations pursue multiple objectives. Some are short-run targets, while others are
based on a longer time span. The manager developing a strategy or a program for maximizing
objectives must set priorities among sometimes conflicting objectives. Retail firms such as
Wal-Mart, Kmart, Sears Roebuck, and Eckerd Drug Stores emphasize shorter-run objectives,
while organizations such as the Edison public utility. Eli Lilly Research, and development
laboratory teams aim at longer-term results.
BBA-A CORPORATE PHILOSOPHY
The inertia of history is a powerful influence on corporate philosophy, BBA, in its 103
years of existence, has strayed little from:
i. Yorkshire paternalism.
ii. Weaving of heavy textiles.
iii. Friction technology via woven or pressed resin media.
The philosophy of BBA for the next few years will be to adapt rather than abandon the
inert.

Management
(a) Grit and gumption are preferable to inertia and intellect.
(b) The Victorian work ethic is not an antique.
(c) One man can only serve one master, to whom he is responsible for a minimum number
of succinctly defined tasks.
(d) Most companies owned or yet to be acquired possess adequate people waiting to be
transformed by dedicated leadership.
(e) The effectiveness of an organization is in inverse proportion to the number of
hierarchical layers

Markets
We shall concentrate in markets where:
(a) The products are in a state of maturity or decline, "Sunset Industries."
(b) The scale of our presence in a market segment will allow price leadership.
(c) The capital cost of market entry is high.
(d) Fragmentation of ownership on the supply side facilitates rapid earnings growth by
acquisition of contribution flows.

Money
(a) The longer run belongs to Oscar Wilde, who is dead.
(b) The key macro and micro variables of our business are so dynamic that poker becomes
more predictable than planning and reactivity more profitable than rumination.
(c) Budgets are personal commitments made by management to their superiors,
subordinates, shareholders and their self-respect.
(d) The cheapest producer will win.
(e) The investment of money on average return of less than three points above market
should be restricted to Ascot.
(f) Gearing should not exceed 40 percent. The location from which funds emanate should
be matched to the location from which the profit stream permits their service.
(g) We are not currency speculators, even when we win.
(h) Tax is a direct cost to the business and, accordingly, should be eschewed.
(i) Victorian thrift is not an antique.
(j) Nothing comes free: cheap assets are often expensive utilities.

Monday
Our tactic is to:
(a) Increase the metabolic rate of BBA through directed endeavour.
(b) Increase profit margins by drastic cost reduction.
(c) Massage and thereby extend the life cycle of the products in which we are engaged.
(d) Become market dominant in our market niches by:
i. Out-producing the competition.
ii. Transforming general markets where we are nobody to market niches where we are
somebody.
iii. Buying competitors.
(e) Use less money in total and keep more money away from the tax man and the usurer.
(f) Avoid the belief that dealing is preferable to working.
(g) Go home tired.

Maybe
(a) The replication of our day-to-day tactic provides long-term growth.
(b) We need to address "Monday" this week and what our reaction will be to what may be
on "Monday" for the next three years.
(c) Three years is, in the current environment, the limit of man's comprehension of what
may be.
(d) Long-term growth necessitates
i. Resource- notably men and money.
ii. Sustained performance rather than superficial genius.
Source: Reprinted by permission of HARVARD BUSINESS REVIEW. An exhibit from
"Mirrors and Windows (from The Gray Area)." by Andrew Campbell, July-August
1989. Copyright © 1989 by the President and Fellows of Harvard College; all rights
reserved.
-------------------------------------------------------------------------------------------------------------------------

3. Objectives are important for several reasons:

a. To focus attention on the organization's mission. Objectives give specific
purpose to the organization. Managers initiate actions designed. to bring an
organization's resources to bear on the objectives.
b. To help integrate the work of the organization. Objectives provide a means for
setting priorities and resolving conflict between departments and subunits.
c. help measure an organization's performance. Objectives provide a target to
be achieved and a benchmark of how well the firm is doing.
Organizations have multiple sets of objectives. Four important levels of objectives
are organizational, departmental, subunit, and individual.

Types of Objectives: Organizational Objectives

The overall objectives of a firm are the responsibility of the top management group-
typically the chief executive officer and staff, with the assistance and concurrence of
the board of directors. In short, they represent the thinking of the executive level of
management. Top managers, however, cannot act without having a great deal of
information and intelligence passed up the line from the levels below.
Ford Motor Co. provides a good example of the role played by organizational
objectives. After losing over $3 billion early in the decade. Ford became the
comeback story of the 1980s, the world's most profitable car company. Ford
established the highest quality objectives in the industry and pushed the
responsibility for meeting these objectives down into the ranks of workers. The
objective set in 1980 was to increase Ford's market share during the decade by at
least 5 percent. This objective for market share was specific and clearly
communicated.³ By January 1, 1991, Ford had increased its share by three
percentage points to 23 percent, while General Motors had shrunk nine percentage
points to 35 percent. The push for quality in all Ford products has earned the firm a
solid reputation in the marketplace.

Departmental Objectives
The Northeast Insurance Company relies on its sales force to sell policies. In 1990
the sales team decided to set an objective of capturing at least 8 percent of the
Chicago-Calumet regional market by 1995. The ambitious five-year objective means
the sales department will have to increase its market share from 3.6 percent to 8
percent in only five years. An increase in market share means that someone else's
business must be taken away, a hard task in the insurance industry.
Subunit Objectives
The operations department of Scott Manufacturing, Inc., is divided into three teams.
Each team, which includes technicians, operators, and material handling personnel,
has an informal leader and a team nickname-Wildcats, Pirates, and Copperheads.
These teams compete to be the most productive group in the department without
sacrificing product quality.
Each team sets objectives for specific quantities and quality, and it outlines a plan
for achieving the objectives and a set of target dates. At Scott the subunit sets
objectives; the organizational and departmental objectives described above are
usually first set within the framework of a formal organization.
Individual Objectives
Dan Chubrich has been employed at Ford's Chicago assembly plant for 15 years.
Dan's boss wants him to become certified as a quality control inspector. Dan wants
to attend the quality control training program but has put it off for six years in a row.
Whenever he planned to attend the program, some personal problem (such as too
much unfinished work or a family crisis) prevented him from taking the course.
After one of his closest friends attended the program, Dan finally began to outline
a set of objectives. He has established July as the starting date to enrol in the
program. He will also have to help his boss find someone to operate his spot on the
line while he attends the program. Dan's individual objectives are somewhat different
than Ford's overarching organizational objective. However, they are just as important
and challenging.
Objectives serve as targets for both managers at the top of an organization and
those who work with operating employees. They are the specific guide posts around
which the entire management group focuses. If the objectives are clear, challenging,
meaningful, and measurable, the organization will have the standards to judge
whether managers are efficiently performing the functions of management.
4. MANAGEMENT FUNCTIONS
Given our definition of management, exactly how do managers go about man aging
in an office, on a shop floor, or in a committee meeting? What do they do to help
accomplish objectives? Management theorists (e.g., Henn Fayol, Mary Parker
Follett, and Chester Barnard) have identified five primary functions of managers.
These functions (planning, organizing, staffing, directing, and con trolling), first
formally discussed over 80 years ago, still characterize the activities of most
managers. Although the amount of time spent on each varies. these five categories
pinpoint the variety of work performed by managers. Let's look at each one.
A. Planning
Former President Dwight Eisenhower once said, "Plans are nothing, planning is
everything." When managers plan, they project a course of action for the future.
They will attempt to perform a systematic set of business actions aimed at achieving
objectives. Thus planning essentially means deciding in advance what is to be done.
Of course, plans alone do not bring about desired results: but without a plan and a
set of objectives, managerial actions are likely to produce confusion. Planning is a
task that each manager must do every day.
The work of planning is basically mental. It requires thinking things through
logically. Managers should think before acting and act in light of facts rather than
best guesses. For example, experts analysing the decline in the quality and
competence of the work of NASA point to excessive guessing and poor planning.
The space agency has been accused of exaggerating promises, guessing about
costs, and not correcting flawed designs. The Challenger disaster, the flawed mirror
in the $1.5 billion Hubble telescope, and design problems with the $37 billion space
station point to such problems as faulty planning.
One reason for such business failures as the Ford Edsel (Ford lost over $350
million), the Penn Central Railroad, and Daniel Boone Chicken was faulty planning,
or no planning at all. In the early 1970s, the Daniel Boone Chicken franchise tried to
compete head-on with Kentucky Fried Chicken but failed to secure proper sites or to
train store managers. In addition, the business couldn't secure the money needed to
properly operate the fast-food stores over the long haul. The managers at Daniel
Boone made incorrect assumptions. failed to properly scan the environment, and did
not spend enough time on planning. On the other hand, the management team of
Chaparral Steel spent a lot of time on planning, as the Business Action relates.
There are many reasons why a manager must plan. Planning helps provide the
coordination needed to do the job. It helps ensure that things will get done; it can
also show the manager when things may not get done and why they were not done
right. Planning also helps the manager determine who will do what job, how long the
job will take, and what resources are needed to get the job done.
Despite its numerous advantages, some managers still do not plan. Some reasons
managers have given for not planning include:
# "It is risky." Developing a plan involves setting targets. When targets or objectives
are stated, a manager's performance can be monitored and evaluated.
# "It is costly." Planning takes time, energy, and creative thinking. Some managers
are not willing to absorb these expenses.
# "It is difficult." Planning involves complex decisions, having people from different
backgrounds develop a common and interdependent approach, patience to wait for
results, and a commitment to a program of often new and untested activities.
Although these reasons are often valid, intense competition forces firms to plan.
They must because companies can no longer count on having a solid lead over their
competitors. Too much is changing in the business environment for any manager to
put off planning.

b. Organizing
The organizing function of management consists of grouping people and assigning
activities so that the job tasks and the mission can be properly carried out. The
establishment of the managerial hierarchy, which we discuss later, is the foundation
of the organizing function.

c. Staffing
Selection, placement, training, development, and compensation of subordinates
make up the staffing function. A manager's staffing activities also include the
evaluation and appraisal of performance. Specific details about this function are
covered in Chapter Eleven.
Some managers see staffing activities as the sole responsibility of the
personnel/human resource department. But because managers are directly affected
by staffing decisions, they should become involved. Line managers can be aided by
the personnel/human resource department but typically should not give up the final
responsibility for staffing.

D. Directing
As the managerial function that initiates action, directing means issuing directives,
assignments, and instructions. Directing also means building an effective group of
subordinates who are motivated to perform. It means getting subordinates to work to
accomplish objectives. Directing can be accomplished through leadership, the
process of influencing the activities of an individual or group toward the
accomplishment of an objective.
The directing function is a part of any manager's job, but the time and effort
managers spend in directing vary with their position in the managerial hierarchy, the
number of assigned subordinates, and the type of job activities being performed, For
example, the supervisor in a McKesson's distribution centre in Milwaukee spends
most of the day directing subordinates, whereas the president of McKesson's spends
significantly greater 'time in more abstract and general activities.
Generally speaking, managers may choose from many directing styles. Two such
styles of direction are autocratic and democratic leadership.
Autocratic leadership, the close style of supervision, means providing sub
ordinates with detailed job instructions. The manager structures or specifies exactly
what is to be done and when the work is due. Managers using this style delegate as
little authority as possible. Autocratic managers assume they should do the planning
and make the necessary decisions.
Some employees respond positively to the autocratic style. Others tend to lose
interest and lack initiative when working for an autocratic manager. In some cases,
individuals or even groups of subordinates may actively resist and develop hostilities
toward the autocratic manager.
Under certain circumstances and with specific employees, autocratic direction may
be necessary. Employees with skill deficiencies, lack of experience, or certain
personality traits want firm and structured direction. For example, the new employee
who is unsure of the job, his or her skills, and the manager's expectations would
probably respond positively to an autocratic style. Some employees feel that general
supervision is no supervision at all.
The opposite of autocratic direction is democratic leadership, or general
supervision (also referred to as participative). In this style, the manager consults with
subordinates about job activities, problems, and corrective actions. Managers using
the general approach seek help, and ideas. Democratic leader ship does not lessen
managers' formal authority; decision-making power still rests with them. With an
experienced, skilled, and intelligent group of employees, a manager would likely
benefit from using a democratic style that encourages participation.
For democratic management to be successful, the manager must be enthusiastic
and honest in using it, and the employees must want it. If a worker believes a boss
"knows best," the person is not likely to be motivated to perform better under the
general supervision style.
Probably the best reason for considering the democratic style is that subordinates
who participate in a job-related decision are apt to be more enthused about
performing the job. Those allowed to take part in decision making generally support
the final decisions enacted. They try hard to make the decision a success.
With laissez-faire leadership, the supervisor avoids power and responsibility. He
or she exists as a contact person who provides information and guidance that can be
helpful in accomplishing objectives. The laissez-faire, or free-rein, supervisor may
give task assignments and offer support when requested but stays out of the group's
way. Such a style may be appropriate when, for ex ample, a person who is a liberal
arts or business graduate (i.e., has minimum technical knowledge) is managing a
group of engineers.
e. Controlling
The managerial function of checking to determine whether employees are following
plans and progress is being made, and of taking action to reduce discrepancies, is
called controlling. The core idea of control is to modify behaviour and performance
when deviations from plans are discovered.
Planning, organizing, staffing, and directing are the initial steps for getting the job
done. Controlling is concerned with making certain that plans are correctly
implemented. Supervisors who delegate their responsibility should take care to
control because the ultimate responsibility for the delegated work is theirs. The
process of control has four basic steps:
1. Set standards for time, quality, quantity, and so on.
2. Measure performance (results).
3. Compare performance to standards.
4. Make necessary modifications.
A standard indicates to employees what is expected. Ideally standards are
measurable and easy to understand. For example, a management team may set a
standard for producing two acceptable units a day or for achieving industrial sales of
$50.000 a month. But how are standards set for an accountant or personnel
manager? Standards in these and other staff areas often are somewhat fuzzy
attempts to determine the important functions in the departments.
An important part of a manager's job is to monitor performance so that problems
can be pinpointed. Once managers assess performance and compare it to the
standards set earlier, they can begin a course of action. Of course, too much
measurement can be expensive and can alienate the people being monitored. Each
person involved in the control checks needs to understand his or her importance.
The Japanese pride themselves on having sound quality control monitoring
systems. Yet, in 1990, Matsushita, Sony, Isuzu, and Yamaha all had recalls. The
Japanese quality edge could be seriously damaged in the international marketplace
if the control system of these firms is not put back into top working order.
Managers often develop clear standards and monitor results, yet fail to make the
necessary corrections. If standards are not being met, the manager must search for
the problem, find it, and correct it. In the centralized planning systems now being
dismantled in Eastern Europe, managers failed to search for problems and correct
them. An old Soviet story associated with the five year plans tells of the plant
manager who needed an accountant. He asked each applicant for the position, "How
much is two and two?" He gave the job to the applicant who answered, "How much
do you need it to be. Comrade Manager?" Adapting a result to fit the standards is the
complete opposite of using control to improve performance.
The control process at Del Ray Electronics (a small firm in Florida) is spelled out in
Figure 7.3. An important phase of organizational control is the feedback that occurs.
If performance is acceptable, no modification may be needed; if performance is
unacceptable, objectives will not be met, so modifications are needed.
Planning, organizing, staffing, directing, and controlling- these five functions must
be carried out in all firms, large or small, in the United States or in Europe, profit or
non-profit. The Boston Celtics basketball team, Procter & Gamble, Ben & Jerry's Ice
Cream, and Nick's Shoe Hospital all have managers who plan, organize, staff, direct,
and control. As firms grow in size, they tend to have layers, or levels, of managers.
At each level, these functions are carried out to some degree.

5. LEVELS OF MANAGEMENT
As enterprises grow from an owner to a group to a corporation, a number of
managerial levels are created and they begin to take on a shape. Three distinct
levels of management-executive, middle, and first-line-are usually portrayed as a
managerial hierarchy. This hierarchy depicts what is called a chain of command,
or simply a channel of communication, coordination, and control. The first-line
manager reports to a middle-level manager, who reports to an executive-level
manager.
Figure 7.4 is a pyramid diagram of a managerial hierarchy. The pyramid is used for
many medium- and large-sized businesses because it can show the number of
managers at each level and the authority relationships among them.
Three levels of management are shown in the pyramid: executive, middle. and
first-line. Executive-level managers have more authority in decision making than
middle-line managers; middle managers have more authority in decision making
than first-line managers. Some titles typically associated with the various levels are
also shown in Figure 7.4.

A. Executive
At the top of the management pyramid sits the president or chief executive officer
(Sam Walton, Chuck Knight) and other managers engaged primarily in charting the
overall mission, strategy, and objectives of the business. The executive management
team must be skilled in planning product distribution. recruiting key personnel, and
developing plans. In addition, executive-level managers often are asked to represent
the organization in community activities, dealings with the government, and seminars
and the like at educational institutions. They function externally for the business and
are important spokes. persons for everything the company is attempting to
accomplish.
The obligations and responsibilities of executive managers in large organizations
large. are many. Consequently, the monetary rewards are often relatively The pay of
executive-level managers-including base salary, bonus, and other monetary
considerations-is often in six figures. The effective executive is usually very mobile;
each year at least one out of five moves to a new geographic location. Many
executive-level managers move from one company to another. Thus, the question is
not whether the executive-level manager will move but where and when.

Levels of Management:
The managerial Hierarchy
Executive-level management
President
Chief executive officer (CEO)
Partner (accounting)
Vice president of financial operations
Director of research & development
Chancellor (university)

Middle-level management
Plant manager
Dean (university)
Project director
Regional coordinator (sales)

First line-level management

First-line supervisor
Product manager
Chairperson of department (university)
FIGURE 7.4
Middle
The middle level of the management hierarchy includes plant supervisors, col lege
deans, project directors, and regional sales coordinators. These managers receive
the broad overall strategies, missions, and objectives from executive level managers
and translate them into specific action programs. The emphasis is on implementing
the broad organizational plans. Basically, the middle manager is a conduct between
the top policymakers (executive management) and the supervisory personnel
responsible for producing products and/or services so that the company achieves its
objectives.

First-Line
The third level of management, the first-line or supervisory level, is directly
responsible for the minute details needed to coordinate the work of non-managers.
Supervisors must work directly with employees and motivate them to perform
satisfactorily. The supervisor in a factory, the departmental chairperson in a college,
and the product manager in a marketing department must translate overall corporate
goals into action plans. This management level is the link between managers and
non-managers. Organizational objectives eventually meet the test of reality at the
supervisory level.
The cornerstone that separates the three levels of managers from non-managers is
decision making. Managers at any level, performing any managerial function and
applying any management principle, must make decisions. Executive-level
managers must determine the overall direction of the company. The middle manager
must decide how to implement the overall plan at the supervisory level: How should
the plan be communicated? How should supervisors be motivated? When should the
supervisor be informed about the overall plans? The first-line supervisor must decide
how to motivate employees and reward the best performers.

Operating Employees
The managerial hierarchy in Figure 7.4 shows only managers. The majority of
employees (the operating employees) in medium- and large-sized business
organizations do non-managerial work. The bank teller waits on customers, the
salesperson sells dresses to a customer, and the machinist works on equipment that
produces the units the company sells. Therefore, the organization pyramid is
complete only with a base that shows all the employees who are not performing
managerial duties.

6. WHAT DO MANAGERS DO WITH THEIR TIME?

Once we understand the management hierarchy, we can examine what managers do with
their time. As shown in Figure 7.5, managers at different levels generally focus on different
tasks. One study found that executive concentrate a significant portion of their workday on
planning, managing and coping with change, and organizing; first-line managers focus
primarily on directing operating employees. They spend far less time in such conceptually
oriented areas as planning and in developing change programs.
Another study of managerial time examined how time was used by middle level managers
in various departments. Four departments were examined: production, marketing, finance,
and personnel/human resource management. Four management functions were used,
including planning, organizing, con trolling, and a miscellaneous "other" category. The study
found distinct uses of time across functions, as illustrated in Table 7.1. Production,
marketing, and finance managers all spend the greatest percentage of their time in
controlling activities. Personnel/human resource managers, however, spend the largest
proportion of their time on planning activities. The diversity in time use between level of
management and function of management has been confirmed by different researchers over
the years.

Management Functions

Department Planning Organizing Controlling Other

Production 17% 19% 46% 18%
Marketing 14 17 53 16
Finance 15 12 60 13
Personnel/human resources 33 26 20 21
TABLE: 7.1
Source: Adapted from J. Horne and T. Lupton, "The Work Activities of Middle Managers: An
Exploratory Study. Journal of Management Studies, 1965, pp. 14-33. Reprinted with the
permission of Basil Blackwell Ltd.
--------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------

Annual Weekly Total per Value per Value per

Salary Salary Benefits' week Hour Minute
$ 30,000 $ 600 $ 240 $ 840 $ 21 $ 0.35
40,000 800 320 1,120 28 0.47
50,000 1,000 400 1,400 35 0.58
75,000 1,500 600 2,100 52 0.88
100,000 2,000 800 2,800 70 1.17
TABLE: 7.2
'Approximately 40 percent of weekly salary.
Assume a 40-hour week.
--------------------------------------------------------------------------------------------------------------------------

In discussing how time is spent, a less formal portrait of time use also can give us insights.
The Business Action about "the 24-hour day" discusses CEOs and their quest to develop
time management tactics. In most cases, the day is just not long enough for everything to be
done and for everyone to visit with the CEO. Time management is important to managers
not only because they have so much to do but also because wasting time can be very costly,
as Table 7.2 shows.
--------------------------------------------------------------------------------------------------------------------------

6. MANAGEMENT ROLES
In carrying out the five major management functions, managers perform various
roles. A role is a set of expected behaviours. For example, a man may play the role
of a father. As such he serves as a role model; he is expected to be kind.
understanding, helpful, and a good example to his child. Similarly, a manager is
expected to serve a number of roles and to be a good role model.
First, managers perform a number of interpersonal activities by virtue of their
position in the managerial hierarchy. Second, the communications that flow to and
from managers make it necessary for them to process information. Third, the fact
that a manager is a conductor and communicator mean decisions must be made;
managers are the key decision makers in organizations. These aspects of managing
are referred to as roles, or behaviours associated with the position.
 A. Interpersonal Roles
The manager must be in frequent contact with others to fulfil the organization's
objectives. Part of these activities requires the manager to lead subordinates.
Leadership is essential for influencing employees' behaviour and performance. Each
time a manager influences an employee to work a little harder, to have confidence in
the organization, or to report minor problems before they become major ones, he or
she is acting as a conduit from management to the operating employee. An
important feature of influencing others is, of course, the ability to communicate
confidence and mutual respect.
b. Information Roles
The manager is the nerve centre, or focal point, of a group. He or she should have
a total picture of the group, its strengths and weaknesses and its needs. With this
knowledge, managers process information flowing to and from the group, feeding it
the relevant information. For example, the manager may receive word that a
community action group will file a legal suit against the company for polluting the
environment. This information may be considered premature or inaccurate by the
organization's executives, who may ask managers to discuss this with their
subordinates. Managers would need to assure the subordinates that, to date, no
legal action had been taken and that the problem would be handled by top
management. The manager also would inform the group of the organization's official
position on the rumour.

c.Decision Roles
Managers must accept responsibility for decision making. The manager must take
bits of information from various sources, interject a personal opinion, consider the
present situation, analyse the resources available, and then tie this all together
before reaching a decision. The exact mix of factors that must be considered before
reaching a decision differs for every situation.

7. CORE MANAGEMENT SKILLS

Management skill is the ability to use knowledge, behaviours, and aptitudes to
perform a task. Skills are learned and developed with experience, training, and
practice. Management writers have attempted to define the skills used by successful
managers. Robert Katz classified management skills as technical, human relations,
and conceptual. Technical skills are those involved in making a product or
providing a service. Katz points out that technical skills are especially important at
the first-line management level. Human relations skills involve relating and
interacting with subordinates, peers, superiors, and customers or clients.
Conceptual skills are the manager's ability to organize and integrate information to
better understand the organization as a whole. Conceptual skills are especially
important at the executive level of management.
 Henry Mintzberg provided a broader classification. He expanded the human
relations skill to include three categories and the conceptual skills to include five
categories. Table 7.3 provides a comparison of the Katz and Mintzberg classification
systems.

Needed Managerial Skills at Sohio

Skill, Ranked by Description
Relation to Success
--------------------------------------------------------- ---------------------------------------------------------
1. Problem solving Looks beyond the obvious; takes practical
concerns into account; determines
accuracy of information and effects of
alternatives.

2. Initiative Makes up mind quickly; recognizes when

decision is needed, takes charge quickly,
presses for a decision; independently
identifies problem areas.

3. Adaptability Copes with change; adapts to new

assignments, switches strategies rapidly,
revises plans.

4. Planning Formulates plans; imposes order in

ambiguous situations; identifies key tasks
and critical steps.

5. Reasoning Organizes information; handles abstract

concepts; extracts important data; identifies
subtle relationships.

6. Thoroughness Pays careful attention to detail; checks and

rechecks accuracy; produces accurate
work; notices even minor problems.

Varies his or her approach to others;

7. Interpersonal sensitivity
adapts communication style to the
audience; shows sensitivity to others;
delegates when appropriate; gives
recognition to the accomplishments of
others.
8. Impact
Commands attention and respect;
influences events; takes charge in groups;
presents convincing arguments.
9. Discussion participation
 Participates actively in group discussions;
speaks up without being called on;
10. Quantitative analysis expresses ideas in one-on-one meetings.

Utilizes quantitative data effectively; applies

extensive knowledge of quantitative
techniques to work; tackles problems by
11. Written communications using quantitative techniques.
Writes concise, organized, easy-to-read
reports; edits others' work substantively;
writes clear and meaningful technical
reports.
12. Oral communications
Makes effective formal presentations;
presents oral material in an interesting way;
speaks with a polished style.
TABLE: 7.4
Source: Adapted from V. R. Boehm and Larry M. King, "What Do Managers Really Do?"
(Paper presented by V. R. Boehm at the Annual Meeting of the AACSB Graduate
Admissions Council, Toronto, June 1981).

Studies of Management Skills

Virginia Boehm conducted an extensive study of managerial skills by assessing 1,000
managers from all levels at Sohio Corporation. She wanted to determine which skills should
be emphasized in selection and training at Sohio. Boehm asked each manager to describe
what skills and abilities he or she used to accomplish the job objectives. In addition, each
manager was rated on overall job performance. The results are summarized in Table 7.4,
with those skills most related to success listed first (e.g., problem solving: initiative,
adaptability).
Boehm's results show that interpersonal skills were only of moderate importance in this
sample. Six of the top 10 skills relate to problem solving and change. When the study was
conducted, however, the company was growing rapidly. Change was therefore a fact of
everyday life for managers. Under these conditions, successful managers had to possess
skills to cope with managing uncertainty.
Robert Burnaska conducted a number of studies at General Electric. He attempted to
determine which early career experiences led to managers' success. Four early-career
factors were found to be associated with success: (1) technical ability, (2) realistic job
expectations, (3) having a mentor, and (4) challenging work assignments. New employees
tend to overestimate their skills, abilities, and knowledge: they also assume they will be
given challenging job tasks. However, assignments for new employees are often rather
routine. Thus, Burnaska recommends career counselling so that unrealistic assumptions and
expectations are kept to a minimum. An astute, knowledgeable manager can serve as a
mentor, a role model who provides orientation, emotional support, coaching, and insight to
new employees. The mentor can also provide technical help and organizational hints to
minimize improper behaviour and unacceptable performance. Finally, receiving challenging
work assignments early in a career-being exposed to challenging work and successfully
accomplishing it-results in recognition, enriched confidence, and the establishment of
challenging objectives.
8. Core Management Skills & their Characteristics
Decision-Making/ Communication Interpersonal Objectives/
Problem-Solving Goal- Setting
Identities problems. Write clearly and Shows empathy. Establishes
concisely. meaningful,
challenging & clear
objectives.
Creates feasible Speak effectively. Uses power & Sets priorities.
alternatives. influence fairly.
Selects an optimal Listen carefully. Projects a positive Evaluates success
alternative. image to others. of objectives/ goals
approach.
Delegates Has computer skills. Lead effectively. Uses objectives/
goals as standards
to establish reward
program.
Makes decisions Behave ethically.
under risk and/or
certainty.
Evaluates Resolve conflict.
alternatives use to
solve problem.
Table 7.5
----------------------------------------------------------------------------------------------------------------

The Katz and Mintzberg classifications and the Boehm and Burnaska research results point
to four core management skills that you will have to learn. practice, and become proficient in
to be a successful manager. These skills. highlighted in Table 7.5, are decision-
making/problem-solving skills, communication skills, interpersonal skills, and objective/goal-
setting skills. Whether we discuss a small convenience shopping store (e.g., 7-Eleven, Circle
K) or an organization with thousands of employees (e.g. J. C. Penney), these skills are
important.

Decision-Making/Problem Solving Skills

Tony Vallone owns and manages a seafood restaurant in Baltimore. He has to solve price,
customer complaint, personnel, staffing, supplier delivery, maintenance, and advertising
problems almost every day. If there were no problems to solve, there would be no need for
Tony to manage. Decision making and problem solving involve the type of activities listed in
Table 7.5: identifying problems, creatively generating alternative solutions, selecting a
specific alternative, delegating authority to implement a solution, making decisions under
uncertain and risky circumstances, and evaluating the success or failure of the alternative
selected. These specific skill activities must be applied by managers at all levels in the
management hierarchy.

Communication Skills
Surveys show consistently that both managers and nonmanagers must possess
communication skills. The majority of time a manager spends applying the functions of
management is spent communicating with others via memo, speaking, listening, or use of
the computer. Managers in the 1990s are expected to give speeches, make inspirational
talks to employees, and write clear memos. letters, and reports. Computers are here to stay,
so managers will also have to use the computer efficiently. They don't have to be computer
programmers, but they will have to know how to use computer software to make their job
easier.
According to Madelyn Burley-Allen, author of Listening: The Forgotten Skill, a survey of
Fortune 1,000 company presidents indicated that listening is a major problem for most
people. For example, managers report that subordinates' failure to receive critical
information and to accept and/or carry out responsibilities is a major problem in business.
Both of these failures imply deficient listening skills. With regard to all communications,
listening takes about 40 percent of a manager's time (speaking is 35 percent, reading is 16
percent, and writing is 9 percent). We tend to equate listening with hearing, but this is not
correct. Good listening means being aware of what you hear, accurately receiving the
information you hear, and combining the information you hear in a way that is useful to you.
Connections will help you determine your current level of listening skills. You're probably like
most people, good in some areas but need to improve in others.

Interpersonal Skills
Interpersonal relations in the work environment are the primary glue in a successful
organization. Talking, listening, cajoling, facilitating, and showing concern are all important in
developing relationships with people. Using power and influence skilfully and serving as a
referee are also crucial parts of the manager's network of interpersonal relationships. A
manager's ability to empathize affects subordinates' behaviour and attitudes significantly.
Empathy is a skill with two main characteristics: accurately perceiving the content of another
person's message and giving attention to the message's emotional components. Positive
changes in behaviour and attitude and interpersonal growth are associated with the
superior's show of empathy in an interaction.
The act of managing isn't the simple process of sitting down to plan, thinking about
actions, allocating resources, and controlling through monitoring. Because people are
involved, it is interpersonal, one-on-one, a person talking to a group, a person watching
someone's eyes or gathering cues to form an impression. Whenever people are involved,
managers must use their interpersonal skills.
 Jerre Stead, president of Square D, the Illinois-based electric product company, knows
how important interpersonal skills are in managing.18 He has worked at listening, talking,
and observing. Yet he feels that many of his sub ordinates still do not open up and provide
the complete story. Until he is able to win their total confidence, Mr. Stead has to work extra
hard to develop a more trusting interaction pattern. In a fragmented, action-packed day, he
still tries to improve his interpersonal style.

Objective/Goal-Setting Skills
The fourth skill area-setting objectives and goals--is concerned with establishing
organizational, departmental, subunit, and individual objectives. Carefully set and attended-
to objectives (specific targets) and goals (general targets) can affect individuals' motivation
and performance. Carefully set objectives/goals are meaningful, challenging, and clearly
established. Priorities must be set and an evaluation program developed. The evaluation
program must then be used as the basis for creating an equitable, timely, and clearly
communicated reward system.
The four core management skills apply to managers at each level in the management
hierarchy. These skills are used to perform the planning, organizing, staffing, directing, and
controlling functions of management. How well managers do their jobs depends on how
proficient they are in these skills; deficiency in any area diminishes the manager's chance of
success. Learning, practicing, receiving feedback on, and observing (through videotaping in
training programs) these skills will help shape and refine them so that optimal results are
achieved.
Managers can make a difference in organizational performance. The way they work, use
their skills, and apply the functions of management affects the actions of others and the
accomplishments of businesses. Since managers are human, they may make mistakes, err
in judgment. act unethically, and behave selfishly or insensitively. When this happens,
people on the receiving end of such behaviour get hurt, and objectives may be jeopardized.
At other times, managerial behaviour is very positive. Managers anticipate errors, help a
floundering employee, create career opportunities for others, behave ethically, and act
decisively. When this happens, people working with a manager blossom and gain self-
confidence, and organizational objectives are accomplished.