Business in a Changing World

Transcription

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2 Business in a Changing World Chapter 7 Managerial Decision Making McGraw-Hill/Irwin Copyright 2009 by the McGraw-Hill Companies, Inc. All rights reserved. 2

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4 Vivace Espresso All things coffee Local Seattle establishment espresso roasting and preparation specialists 7-4

5 The Importance of Management Management planning, organizing, staffing, directing, & controlling Achieving objectives requires skilled management 7-5

6 The Importance of Management Management Process designed to achieve an organization s objectives by using its resources effectively & efficiently in a changing environment. 7-6

7 The Importance of Management What Managers Do Make decisions utilization of resources achieve objectives: Planning Organizing Staffing Directing Controlling 7-7

8 The Importance of Management New Product Development Boeing Airline s 787 Dreamliner 892 $169 million each $145 billion total sales 57 global customers 7-8

9 The Importance of Management Resource acquisition & coordination Resources People Raw materials Equipment Money Information 7-9

10 Management Functions 7-10

11 Management Functions Planning Process of determining the organization s objectives and deciding how to accomplish them. 7-11

12 Management Functions Planning Objectives results desired by organization Mission organization s purpose and philosophy 7-12

13 Management Functions Objectives Common & Elaborate Organizational Objectives -- Profit, competitive advantage, efficiency, growth Service, ethics, community responsibility 7-13

14 Management Functions Plans Strategic Plans Tactical Plans Operational Plans 7-14

15 Management Functions Strategic Plans Executive level managers Establish the long-range objectives & overall strategy to fulfill firm s mission 2-10 years forward-looking Sustainability diversification, divestiture, mergers & acquisitions, 7-15

16 Management Functions Tactical Plans Short-range strategy implementation 1 year or less Environmental change Periodically reviewed & updated 7-16

17 Management Functions Operational Plans Very short-term actionable, specific Individuals, work groups, departments 1 month, 1 week, 1 day Achieve tactical plans 7-17

18 Management Functions Crisis Management Contingency Planning Focus on potential disasters Product tampering Oil spills Fire, earthquake, terrorist attack Unethical/illegal employee activity 7-18

19 Management Functions Crisis/Contingency Planning Crisis Management Teams Ashland Oil J.J. Heinz Johnson & Johnson 7-19

20 Management Functions Organizing Structuring of resources & activities to accomplish objectives efficiently & effectively. 7-20

21 Management Functions Organizing Importance Creates synergy Establishes lines of authority Improves communication Improves competitiveness 7-21

22 Management Functions Staffing Hiring people to carry out the work of the organization. 7-22

23 Management Functions Staffing Importance Recruiting Determine skills Motivate & train Compensation levels 7-23

24 Management Functions Downsizing Elimination of significant numbers of employees (rightsizing, trimming the fat) 7-24

25 Management Functions Directing Motivating and leading employees to achieve organizational objectives. 7-25

26 Management Functions -- Directing Motivation Incentives(raise, promotion) Employee involvement (cost reduction, customer service, new products) Recognition and appreciation 7-26

27 Management Functions Controlling Process of evaluating and correcting activities to keep organization on course, 7-27

28 Management Functions Controlling Five Activities Measuring performance Comparing performance against standards Identifying deviations from standards Investigating causes of deviations Taking corrective action 7-28

29 Types of Management Levels of Management Top management Middle management First-line/supervisory management 7-29

30 Types of Management Top Management President Chief Executive Officer (CEO) Chief financial officer (CFO) Chief operations officer (COO) 7-30

31 Levels of Management Rank CEO Company Total Compensation ($ millions) 1. Lawrence J. Ellison Oracle $ Frederic M. Poses Trane $ Aubrey K. McClendon Chesapeake Energy $ Angelo R. Mozilo Countrywide Financial $ Howard D. Schultz Starbucks $98.60 The 5 Highest Paid CEO s in

32 Types of Management Middle Management Responsible for tactical planning Implement general guidelines established by top management 7-32

33 Types of Management First-Line Management Supervise workers Oversee daily operations Directing and controlling primary functions 7-33

34 Areas of Management Finance Production Operations Human Resources Marketing Administration 7-34

35 Areas of Management Financial Management Focus on obtaining money necessary for the successful operations and using funds to further organizational goals. 7-35

36 Areas of Management Production & Operations Management Develop & administer activities to transform resources into goods, services, and ideas for the marketplace. 7-36

37 Areas of Management Human Resources Management Handle staffing function and deal with employees in a formalized manner 7-37

38 Areas of Management Marketing Management Responsible for planning, pricing, and promoting products and making them available to customers 7-38

39 Areas of Management Information Technology (IT) Management Responsible for implementing, maintaining, and controlling technology applications in business (computer networks) 7-39

40 Areas of Management Administrative Managers Manage an entire business or major segment of the business. Coordinate activities of specialized managers. 7-40

41 Skills Needed by Managers Leadership Technical expertise Conceptual skills Analytical skills Human relations skills 7-41

42 Managerial Skills Leadership Ability to influence employees to work toward organizational goals. 7-42

43 Managerial Skills Seven Tips for Successful Leadership 7-43

44 Skills Needed by Managers Autocratic Leaders Decision makers, tell employees Democratic Leaders Involve employees in decisions Free-rein leaders Employees work without interference 7-44

45 Most Admired Companies & CEO s Company Apple Berkshire Hathaway General Electric Google Toyota Motor Chief Executive Officer Steve Jobs Warren Buffett Jeffrey Immelt Eric Schmidt Katsuaki Watanabe America s Most Admired Companies,

46 Management Going Green Compact Fluorescent Light Bulbs: A Bright Idea CFL s use 75 percent less energy. Technical Consumer Products, Inc. largest provider of CFL s in the United States. 7-46

47 Decision Making 7-47

48 The Realities of Management According to J.P. Kotter, management functions boil down to: 1. Figuring out what to do despite uncertainty, diversity, and a great deal of potentially relevant information. 2. Getting things done through a large and diverse set of people despite having little direct control over them. 7-48