CHAP 7

The Internet, the rapid technological changes and the growing global market created the need for
a new type of management. Managers do no longer have to act like a ‘boss’ in the old-fashioned
sense of the word. They are more open for the employees’ input. The interaction between
employees and management make new innovations possible. Authority becomes more and more
decentralized and the main tasks of the managers is guiding, training, supporting and motivating
workers to make customers happy. Also, teamwork has become one of the most important tasks.
Management: is the process used to accomplish organizational goals through planning,
organizing, leading, and controlling people and other organizational resources.
The four main tasks of modern managers are explained shortly:
1. Planning: As a manager you have to anticipate trends and determining the best strategies
and tactics to achieve organizational goals. Besides, the manager has to emphasize the common
values in order to reach common goals.
2. Organizing: This is a management function that includes designing the structure of the
organization and creating conditions and systems in which everyone and everything work
together to achieve the objectives and goals of the organization.
3. Leading: This means that the manager has to create a vision for the organization and
communicating, guiding, training, coaching and motivating others to work effectively to achieve
the organization’s objectives and goals.
4. Controlling: A management function that involves establishing clear standards to determine
whether an organization is progressing toward its goals and objectives, rewarding people for
doing a good job, and taking corrective action if they are not.

Planning
A company needs common values to reach common goals. That is why it is important to have a
clear organizational vision. The vision explains why the organization exists and where it’s trying
to head. Goals are broad, long-term accomplishments to reach a vision. Goal-setting is often a
team process because goals need to be mutually agreed on by workers and management.The
objectives are specific, short-term statements that say how the company will achieve the goals. A
company often outlines its fundamental purposes such as vision, goals or objectives in the
mission statement.
A mission statement should include:
(1) long-term survival
(2) the organization’s self- concept
(3) company philosophy and goals
(4) customer needs
(5) social responsibility
(6) the nature of the company’s product or service
The following questions can help to define a mission:
- How is it now?
- What do we want?
- How can we realize that?
To complete a mission, company has to analyze strengths, weaknesses, opportunities and threats
(SWOT-analysis) and plan ahead carefully. The company begins such a process with an analysis
of the business environment in general. Then it identifies the strengths and weaknesses. As a
result of the environmental analysis, it identifies opportunities and threats.
Which forms of planning are there?
1) Strategic planning: determines the major goals major goals of the organization. It provides
the basic for the policies, procedures and strategies for obtaining and using recources to achieve
these goals. In this context, policies are broad guides to action and strategies determine the best
way to use recources.
2) Tactical planning: the process of developing detailed, short-term statements about what is to
be done, who is to do it and how it is to be done. On top of that, it involves setting annual budgets
and deciding on other details and activities necessary to meet the strategic objectives. Tactical
planning is mostly done by managers at lower levels of the firm. On the contrary, strategic
planning, is done by the top managers of the organization.
3) Operational planning: process of setting work standards and schedules necessary to
implement the firm’s tactical objectives. Strategic planning looks at the firm as a whole. On the
contrary, operational planning focuses on specific supervisors, managers and individual
employees.
4) Contingency planning: In case the primary plans fail, you have to have some back-up plans.
This describes the process of preparing those back-up plans.
Making decisions
The decision- making process goes according to the seven D’s:
1) Define the situation: What is the current status of the business and market?
2) Describe and collect needed information
3) Develop alternatives: Make more than one plan
4) Develop agreements among those involved: What are the demands of everyone involved?
5) Decide which alternative is best: How can you reach all demand?
6) Do what is indicated: Starting to put your plans into action.
7) Determine if you made the right decision: Do a follow up
Problem-solving techniques are (1) brainstorming, (2) PMI. PMI is making a list of all the pluses
for a solution in one colomn and the minuses in another. Finally, the implications stand in the
third column.
Organizing
There are three levels of management. First, top management develops the strategic planning.
Second, the middle management is responsible for tactical planning and controlling. Third, the
supervisory management is directly responsible for supervising workers and evaluating their
daily performance. The employees do not have managerial possibilities. They are called “non-
supervisory”.
A manager must have three types of skills. He/she has to have technical skills. This means that
he/she has or have the ability to perform tasks in a specific discipline. Second, he/she has to have
human relations skills. This means that you have to communicate with your people and motivate
them. Finally, conceptual skills involve the ability to picture the organization as a whole and the
relationships among its various parts.
A function that becomes increasingly important is staffing. This is a management function that
includes hiring, retaining and motivating the best people available to accomplish the company’s
objectives. With international trade, management has become global and people from different
generations, strengths, sexual orientation, abilities and religions, etc work together in a firm. This
requires the ability to manage diversity. Besides that management has to take into consideration
the needs and demands of the stakeholders (stakeholder-oriented management).
Leadership
For executives it is not enough to manage a company. They have to be leaders. The manager
plans and organizes. In the contrary, an executive has to give the employees a vision and makes
the employees understand the corporate values and ethics of that company. On top of that a
leader’s most important job may be to transform the way the company does business so that it’s
more effective and efficient.
There are different kinds of leadership:
- Autocratic: The manager takes decisions without consulting others. Effective in emergencies.
- Participative (democratic) leadership: Managers and employees collaborate to make decisions.
- Free-rein leadership: Managers set the objectives but leave employees the freedom how to
accomplish them. Often used with working with professionals.
Empowerment means giving employees the authority and responsibility to respond quickly to
requests of customers. Enabling is the term used to describe to give workers the education and
tools they need to make decisions. Directing is the opposite of empowerment. You give explicit
instructions to workers, telling them exactly what to do and how to meet the goals and objectives
of the company.
Knowledge management tries to find the right information, keeps the information in an readily
accessible place and makes the information known to everyone in the firm.
Controlling
1. Establish clear performance standards (ties planning -to control function. No standards, no
control)
2. Monitor and record actual performances (results)
3. Compare results against standards and plans (this is why the standards need to be clear,
otherwise you can’t record or compare the employees performances with them)
4. Communicate results to the employees (they have to know if they’re doing good or bad)
5. If needed, take corrective action. (and provide positive and negative feedback)
A new development is looking at the customer satisfaction as a measurement of success. This is
often combined with the more traditional standards: profit and return on investment.