8/19/2011. Management and Leadership INDRA KRISHNAMURTHY NOOYI AMERICA S MOST POWERFUL FEMALE MANAGERS

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1 Chapter Seven Management and Leadership McGraw-Hill/Irwin Copyright 2012 by The McGraw-Hill Companies, Inc. All rights reserved. INDRA KRISHNAMURTHY NOOYI Pepsi Profile Started at Pepsi after earning masters degrees from the Indian School of Management and Yale. Goal was to increase sales overseas, introduce good-foryou products and place more emphasis on food. She is a top manager using a boss-centered leadership style while still being a team player. 7-2 AMERICA S MOST POWERFUL FEMALE MANAGERS Name Indra Nooyi Irene Rosenfeld Pat Woertz Angela Braly Andrea Jung Oprah Winfrey Ellen Kullman Carol Bartz Ursula Burns Brenda Barnes Organization PepsiCo Kraft Foods Archer Daniel Midland Wellpoint Avon Harpo DuPont Yahoo! Xerox Sara Lee Profile Source: Fortune Magazine, accessed September

2 WHAT IS MANAGEMENT? Management -- The process used to accomplish organizational goals through planning, organizing, leading and controlling people and other organizational resources. Four Functions of Management LG2 7-4 TODAY S MANAGERS Younger and more progressive. - Growing numbers of women. - Fewer from elite universities. Emphasis is on teams and team building. Managers need to be skilled communicators and team players. Managers Roles Are Evolving LG1 7-5 RESPECT and HOW to GET IT Managers Roles Are Evolving LG1 Source: Entrepreneur, March

3 The BEST MANAGERS Name Age Organization David Axelrod 53 Obama Campaign Frank Blake 59 Home Depot Jamie Dimon 52 JPMorgan Larry Ellison 64 Oracle Takeo Fukui 64 Honda Mark Hurd 53 Hewlett-Packard Satoru Iwata 49 Nintendo Peter Loscher 51 Siemens Irene Rosenfeld 55 Kraft Foods Managers Roles Are Evolving LG1 Source: Bloomberg BusinessWeek, accessed September The WORST MANAGERS Name Organization What Went Wrong James Cayne Bear Stearns Played golf and bridge while the company collapsed. Richard Fuld Lehman Brothers Ignored warning signs and rewarded greed. Kerry Killinger Washington Mutual Bad lending standards led to bankruptcy. Philip Schoonover Circuit City Fired 3,400 experienced employees for cheaper replacements. Managers Roles Are Evolving LG1 Source: Bloomberg BusinessWeek, accessed September FOUR FUNCTIONS of MANAGEMENT Four Functions of Management LG2 1. Planning 2. Organizing 3. Leading 4. Controlling 7-9 3

4 WE NEED MANAGERS HERE (Reaching Beyond Our Borders) The lack of professional managers is keeping U.S. companies from expanding rapidly in global markets. Flexibility is the key to successfully expanding abroad. Developing products to appeal to another market is another way to be successful SHARING the VISION Vision -- More than a goal, it s a broad explanation of why the organization exists and where it s trying to go DEFINING THE MISSION Mission Statement -- Outlines the organization s fundamental purposes. It includes: - The organization s self concept. - Its philosophy. - Long term survival needs. - Customer needs. - Social responsibility. - Nature of the product or service

5 SETTING GOALS and OBJECTIVES Goals -- The broad, long-term accomplishments an organization wishes to attain. Objectives -- Specific, shortterm statements detailing how to achieve the organization s goals PLANNING ANSWERS FUNDAMENTAL QUESTIONS What is the situation now? SWOT Analysis -- Analyzes the organization s Strengths, Weaknesses, Opportunities and Threats. How can we get to our goal from here? - Strategic planning - Tactical planning - Operational planning - Contingency planning 7-14 SWOT MATRIX

6 STRATEGIC and TACTICAL PLANNING Strategic Planning -- Done by top management and determines the major goals of the organization and the policies, procedures, strategies and resources it will need to achieve them. Tactical Planning -- The process of developing detailed, short-term statements about what is to be done, who is to do it and how OPERATIONAL and CONTINGENCY PLANNING Operational Planning -- The process of setting work standards and schedules necessary to implement the company s tactical objectives. Contingency Planning -- The process of preparing alternative courses of action the firm can use if its primary plans don t work out PLANNING FUNCTIONS

7 I D RATHER be BLUE (Spotlight on Small Business) The original Blue Men manage over 500 employees; 70 are performers in 12 cities. Creators wrote a 132-page Blue Man manual helping them understand the importance of managing growth DECISION MAKING : Finding the Best Alternative -- Choosing among two or more alternatives RATIONAL DECISION-MAKING MODEL 1. Define the situation. 2. Describe and collect needed information. 3. Develop alternatives. 4. Develop agreement among those involved. 5. Decide which alternative is best. 6. Do what is indicated. : Finding the Best Alternative 7. Determine whether the decision was a good one and follow up

8 PROBLEM SOLVING : Finding the Best Alternative Problem Solving -- The process of solving the everyday problems that occur; less formal than decision making and needs quicker action. Problem-solving techniques include brainstorming and PMI -- Listing all the pluses for a solution in one column, all the minuses in another and the implications in a third PROGRESS ASSESSMENT What s the difference between goals and objectives? What does a company analyze when it does a SWOT analysis? What are the differences between strategic, tactical and operational planning? What are the seven Ds in decision making? Progress Assessment 7-23 ORGANIZATIONAL CHARTS Organizing: Creating a Unified System Organization Chart -- A visual device that shows relationships among people and divides the organization s work; it shows who reports to whom

9 LEVELS of MANAGEMENT Organizing: Creating a Unified System 7-25 MANAGEMENT LEVELS Organizing: Creating a Unified System Top Management -- The highest level, consists of the president and other key company executives who develop strategic plans. Middle Management -- Includes general managers, division managers, and branch and plant managers who are responsible for tactical planning and controlling. Supervisory Management -- Those directly responsible for supervising workers and evaluating daily performance TOP MANAGEMENT Chief Executive Officer (CEO) - Introduces change into an organization. Chief Operating Officer (COO) - Implements CEO s changes. Organizing: Creating a Unified System Chief Financial Officer (CFO) - Obtains funds, plans budgets, collects funds, etc. Chief Information Officer (CIO) - Gets the right information to the right people so decisions can be made

10 MANAGERIAL SKILLS Technical Skills -- The ability to perform tasks in a specific discipline or department. Human Relations Skills -- Skills that involve communication and motivation; they enable managers to work through and with people. Tasks and Skills at Different Levels of Management Conceptual Skills -- Skills that involve the ability to picture the organization as a whole and the relationship among its various parts SKILLS NEEDED at VARIOUS LEVELS of MANAGEMENT Tasks and Skills at Different Levels of Management 7-29 STAFFING Staffing: Getting and Keeping the Right People Staffing -- Recruiting, hiring, motivating and retaining the best people available to accomplish the company s objectives. Recruiting good employees is critical. Many people are not willing to work at companies unless they are treated well with fair pay

11 LAYOFF LEADERS Largest Layoff Announcements, 1993 to 2008 Company Employees Date IBM 60,000 July 1993 Citigroup 53,000 November 2008 Sears Roebuck 50,000 January 1993 U.S. Air Force 40,000 December 2005 Ford 35,000 January 2002 Kmart 35,000 January 2003 Boeing 31,000 September 2001 U.S. Postal Service 29,870 January 2002 Boeing 28,000 December 1998 DaimlerChrysler 26,000 January 2001 Staffing: Getting and Keeping the Right People Source: Bloomberg Businessweek, accessed September Leaders must: - Communicate a vision and rally others around that vision. - Establish corporate values. - Promote corporate ethics. - Embrace change. LEADERSHIP - Stress accountability and responsibility Leading: Providing Continuous Vision and Values ACCOUNTABILITY through TRANSPARENCY Leading: Providing Continuous Vision and Values. Transparency -- The presentation of the company s facts and figures in a way that is clear and apparent to all stakeholders

12 To SHARE or NOT to SHARE (Making Ethical Decisions) As a first-line manager, you have new information that your department head hasn t seen yet. The findings of the report indicate your manager s plans should fail. If they do fail, you could be promoted. Will you give your department head the report? What is the ethical thing to do? What might be the consequences? 7-34 LEADERSHIP STYLES Autocratic Leadership -- Making managerial decisions without consulting others. Participative or Democratic Leadership -- Managers and employees work together to make decisions. Free-Rein Leadership -- Managers set objectives and employees are free to do whatever is appropriate to accomplish those objectives. Leadership Styles 7-35 VARIOUS LEADERSHIP STYLES Leadership Styles

13 NATURAL BORN LEADERS? Four Types of Executives Leadership Styles Rationalists Humanists Politicists Culturists Source: CIO Magazine, EMPOWERMENT Empowering Workers Progressive leaders give employees the authority to make decisions on their own without consulting a manager. Customer needs are handled quickly. Manager s role becomes less of a boss and more of a coach. Enabling -- Giving workers the education and tools they need to make decisions WORK SMARTER How to Ease Pressure on Workers Manage output instead of hours. Train workers to be ready for a more complex corporate structure. Allow lower-level managers to make decisions. Use new technology to foster teamwork. Shift hiring emphasis to collaboration. Empowering Workers Source: Bloomberg BusinessWeek,

14 MANAGING KNOWLEDGE Managing Knowledge Knowledge Management -- Finding the right information, keeping the information in a readily accessible place and making the information known to every one in the firm FIVE STEPS of CONTROLLING Controlling: Making Sure it Works LG ARE YOU a MICROMANAGER? Do you have strategic initiatives that you have not addressed? Do you often check on employees for quality control? Do you often check on subordinates throughout the day? Do you rarely take vacations? Is there a lot of turnover? Controlling: Making Sure it Works LG6 Source: CFO Magazine,

15 MEASURING SUCCESS Traditional forms of measuring success are financial. A Key Criterion for Measurement: Customer Satisfaction LG6 Pleasing employees, stakeholders and customers (both internal and external) are important. External Customers -- Dealers, who buy products to sell to others, and ultimate customers (or end users), who buy products for their own use. Internal Customers -- Individuals and units within the firm that receive services from other individuals or units PROGRESS ASSESSMENT Progress Assessment How does enabling help achieve empowerment? What are the five steps in the control process? What s the difference between internal and external customers?