MGMT301:
Lesson 1: Being an Exceptional Manager
Introduction
In this lesson, we learn about what a manager does and the different skills required for success. The lesson describes the various functions of managers, types of managers in organizations, and ways these managers must continually adapt to meet the challenges of a global environment
Learning Objectives
At the conclusion of this lesson, you should be able to do the following things:
- Describe who managers are, the type of work they do, and why they are important to an organization.
- Know the four management functions: planning, organizing, leading, and controlling.
- Identify the roles managers perform and the skills they need to execute those roles effectively.
- Know why you should care about entrepreneurship, intrapreneurship, and management.
- Describe the challenges associated with managing today.
Lesson Readings and Activities
By the end of this lesson, make sure you have completed the readings and activities found in the Lesson 1 Course Schedule.
Four Functions of Managers
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In today's competitive environment, it has become increasingly important for businesses to be efficient and effective. Efficiency focuses on using resources wisely to achieve goals, while effectiveness aims to make the right decisions to attain goals. It is important not only to keep costs under control but also to provide a product or service that the customer desires. Organizations that set themselves apart from their competitors have a better chance of surviving in both the short and long runs. Managers are responsible for planning, organizing, leading, and controlling in a way that achieves the goals and objectives of the organization.
Generally speaking, there are three levels of managers: first-line, middle, and top. Each level will have responsibilities related to the four fundamental functions of planning, organizing, leading, and controlling. All managers perform all functions, but depending on the level, greater time, energy, and detailed focus may be spent on one function over another. For example, top managers may focus on the planning function because they are responsible for developing the long-range strategic direction of the firm.
First-line managers, on the other hand, may spend more time performing the leading function. First-line managers must act as supervisors because they supervise the nonmanagerial employees who are directly related to the short-term operational aspects of the company's product and/or service.
Most of us tend to think of managers in the role of supervision of employees (human resources). It is important to realize that there are other resources that managers must manage. Resources include people, skills, knowledge, machinery, computers, and information technology (IT), and financial capital. There are financial managers who are responsible for the financial resources of the firm. There are IT managers responsible for the firm's technology. In other words, managers are responsible for managing all of the organization’s resources in a way that achieves the firm's different objectives.
Before reading the next several pages about each of the managerial functions, watch this informational video to put each of the four functions into perspective with respect to one another.
SPEAKER: When we consider the four functions of management, regardless of the industry, they are the same. The four functions of management that we’re going to be looking at, for the purposes of this are, planning, organizing, leading, and controlling. One anchor that I’d like you to think about, and keep in mind, throughout each of the given functions of management, is the word, objectives. So let’s first talk about planning. As you can see, when you look at planning, we do this first, because we’re setting a direction for the organization. We’re actually setting up the objectives that will determine our actions throughout the organization. We’ll anchor them to our vision and mission.
We’ll anchor them, and hopefully build strategy to help achieve those objectives. When we look towards organizing, organizing is all about delegating, and organizing tasks and resources to then, wait for it – achieve the objective.
So within organizing, we’re looking at levels of decision making, of delegating, and setting ourselves up so that once we get the people in place, we can achieve our objectives, and we’ll head down the path of being successful as an organization achieving those objectives. So let’s get rid of organizing here. When we’re done organizing, we’re then into the leading process, and I say done, but I want you to think of the four functions of management very much as a process.
So we plan, we organize, and now we’re looking at leading. When we consider leading, it’s all about influencing employees, and their behaviour to what? You got it, to achieve the organizational objectives. So this is where we delve in and when we're thinking about leadership, we’re thinking about communications, we’re thinking about managing teams, inspiring people and, influencing their behaviours. Ironically, not all managers are leaders. Cause it might not be part of their function, or who they are.
But that’s a debate we can have in class. So we’re planning, we’re organizing, we’re leading, and last but not least, we’re controlling. When we look at controlling this will be the function we look at the least in this course. Please don’ t think that there is not importance there though, cause there is great importance in evaluation, in feedback, in identifying performance and performance and performance of appraisal of your people. But for purposes of this course, many of these pieces are covered off in your HR course.
So I want you to think of controlling, as establishing and implementing mechanisms and processes to ensure that the organization achieves its objectives. So there we have it, looks pretty good. Planning, organizing, leading, and controlling.
Often when you think of management and leadership, you see this leading in controlling as the majority of the tasks. But it’s because these two functions is what we see our managers doing. Often, when they close doors, or go into meetings, equal amounts of their time can be spent in this planning and organizing phases of things. Okay. So there we have it. Our four functions of management. I want you to think about who you’re going to be as a manager. What areas are you strong, where would you like to improve, and where do you see yourself within these given functions? Lots of room to grow, lots of great interesting areas to dig into. Have fun!
Planning
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So what exactly is involved in these various functions? Good question. Planning is something we all do on a regular basis. Think about how you plan your life. At some point, we may decide we are going to get a college education. Depending on how many degrees you want, it could take years to achieve that goal. Obtaining a college education would then be considered a long-range plan or goal. On the other hand, we also have to plan how we are going to utilize our financial resource: money. That process of deciding how much we will allocate to food, clothing, and other items throughout the month would represent a much shorter range plan.
When we put those two plans together, it is easy to see how one will impact the other. In our lives as well as in business, this flow is extremely important. In a business, top managers, such as the owners or a chief executive officer (CEO), must have vision.
Vision is the ability to see where the firm is going in the long run. The vision is the future toward which the company plans to move. Do you think Bill Gates envisioned today's Microsoft when he first started his company? Do you think he envisioned expanding overseas? Purchasing competitors? Diversifying into other products or services? These are all examples of long-range plans, which develop over time in response to the business’s vision. Once these long-range plans are determined, the other levels of management are responsible for making their plans. Their (short-term) plans must flow from the long-range plans and be designed to accomplish the objectives and goals that top management wants to achieve.
Organizing
The organizing function has to do with structuring the business and the jobs that work toward the goals the business is setting out to accomplish. You may do this structuring in your household, where each family member has certain responsibilities, and there may be a reporting relationship so that each member knows whom to report to with respect to their accomplishment or lack thereof. If one were to chart this, "Mom" or "Dad" would be in a box at the top, and the names of the children would be in boxes underneath and have a direct-line relationship to either Mom or Dad.
Obviously, most businesses have more than a few people, so the representation of the structure of the firm and decisions related to how it is organized become extremely important to the success of the firm. Organizing is important because it helps prevent duplication of tasks, which can be a cause for inefficiencies within the organization.
Leading
Leading is another function for which managers are responsible. Some managers are better at this function than others. While you may have had different bosses throughout your career, some, because of their attitude and energy, are able to get you pumped up about your work and responsibilities. In fact, you may enjoy going to work even if the work is difficult. These managers make us want to do the very best and make us feel good about doing it. These managers might be called transformational managers.
Leadership can occur at all levels of the organization. Often, famous CEOs will be in the news because they have developed a reputation for being great leaders. A great leader is characterized by the ability to utilize power, communication skills, vision, and persuasion in a way that motivates people in the organization to be the best that they can be and to truly care about the firm’s success.
Controlling
The last function of management tends to get a bad reputation, because many people think about control as that domineering manager, breathing down your neck and monitoring your every move (think of a micromanager for whom you may have worked). However, there are many different ways a manager can utilize the function of control to assist in achieving organizational goals. Developing a budgetary plan and evaluating whether the plan was accomplished or not can be considered control. In fact, planning and controlling go hand in hand.
Imagine that our class decides to start up a new custom T-shirt company. As part of our planning process, we decide we want to sell 1,000 T-shirts in our first month of operation. Obviously, the planning function prepares us to make and sell 1,000 T-shirts. So, we all go about doing our jobs:
- Pass out flyers in local neighborhoods and advertise in the local papers. Establish a social media presence and website with discounts (marketing).
- Order and pay for the supplies, make the T-shirts, and deliver/ship them (operations).
- Keep track of our expenses, sales volume, and so forth (budgeting).
At the end of the month, we determine that we only sold 800 T-shirts and lost money! What went wrong? Was it that we didn't plan correctly and overestimated what we could actually sell? Did the lower sales volume have something to do with our operations? We may have had too much raw material waste or high fuel expenses from delivering T-shirts. This process of measuring output (sales volume) against inputs (supplies, marketing, other expenses) is called control. If we did not perform this function, we would have a tough time figuring out where problems may exist—whether the problem lies with our planning process (overestimating) or an operational problem within our custom manufacturing business (leading and organizing).
Management Skills
What makes a successful manager? Different studies have been done to obtain insight into this question. Is it from formal education and training, being able to build relationships, or is it from "the school of hard knocks" (i.e., experience)? One would guess that the answer depends on who you ask. However, more companies today are requiring their managers to have a college degree, preferably in business. Businesses may also pay for an employee to go to college, since they know that an additional formal business education will help employees better understand the manager's roles and skills within a business.
There are three general classifications of skills a person should possess in order to be a good manager:
- Human skills: These skills relate to communicating with and motivating people. An engineer might be really good at designing or building a bridge but may not have good leadership skills if they cannot convince others about new design ideas.
- Technical skills: That same engineer probably has great technical skills and is very competent in the discipline, but if they cannot communicate with subordinates, they probably will not be an effective manager in the engineering department.
- Conceptual skills: These skills have to do with being able to see that a problem or opportunity exists and then developing steps to correct the problem or take advantage of the opportunity. Upper level managers especially need conceptual skills since they are responsible for vision and long-range planning. This is similar to being able to see the big picture and having the ability to distinguish between cause and effect.
Management Roles
In the late 1960s, a theorist named Henry Mintzberg did a study and observed executives at work. He found that managers performed many different activities in the course of a day. These activities were usually of short duration because the manager was constantly being interrupted. Mintzberg’s study helped change the predominant view that managers were reflective thinkers who carefully processed information before making decisions. He concluded that there were 10 different but highly interrelated roles that managers perform. He classified them into three sections:
- Interpersonal roles, such as leader, figurehead, and liaison, require the manager to symbolically represent the organization's mission, both inside and outside the company.
- Informational roles, such as spokesperson, disseminator, and monitor, require the manager to receive, collect, and disseminate information regarding the organization.
- Decisional roles, such as entrepreneur, disturbance handler, resource allocator, and negotiator, revolve around making choices about planning strategy and utilizing the organization's resources.
Entrepreneurship and Management
https://www.thememo.com/2016/02/05/toms-blake-mycoskie-investment-fund-toms-social-entrepreneurship-fund/
What is entrepreneurship and what does it have to do with managing organizations? As firms try to offer innovative products and services to customers, they need to come up with novel ideas. Entrepreneurs, such as Blake Mycoskie of TOMS (pictured in Figure 1.2), are individuals who see new opportunities and create businesses to attempt to realize the dream of new firm ownership. Entrepreneurs differ from managers in that they often have a higher tolerance for risk-taking, have exceptionally high levels of energy, have a high tolerance for uncertainty, are very self-confident, and have a strong internal locus of control. These are people who are sure they can make it happen. Managers may have similar qualities but do not experience the financial risk that entrepreneurs have taken.
From "Arthur Fry, inventor of the Post-it Note, with one on his forehead bearing a picture of a lightbulb," n.d., by Signe Dons, Wikimedia Commons (https://commons.wikimedia.org/w/index.php?curid=6277669). Public Domain
Intrapreneurs are individuals who work in larger firms but are given the opportunity through new venture creations (or product development spin-offs) to create innovative products for the firm. Arthur Fry is a good example. Fry began working at 3M in 1953 and in 1974 came up with an idea to marry a new adhesive to small pieces of paper he used as bookmarks. The Post-It Note was born. The company released Post-It Notes to the market in 1980 and 1 year later achieved $2 million in sales. Today, Post-It Notes come in 27 sizes and 57 colors and generate $1 billion in sales. Arthur Fry is an intrapreneur, and he's pictured with his famous invention in Figure 1.3.
Current Challenges
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Today, the concept of management is influenced by what happens in the world and society. There are several challenges that exceptional managers need to be attentive to in the 21st century. These challenges include the following:
- Managing a competitive advantage: As managers plan to be more efficient and effective than their competition, being exceptionally responsive by offering an innovative and high-quality product or service is a necessity. Given the global market, customers can choose our competition if we do not offer them a significantly different option.
- Managing diversity: In past generations, it was not common for women and other minorities to go to college. Today, the U.S. workforce is increasingly female, as well as more racially and ethnically diverse. Are there still inequalities in the workplace? Are women and minorities being prevented from moving up the management ladder? This concept is referred to as the glass ceiling. Even though almost half the workforce today consists of women (49%), studies show that only a very small percentage hold top management positions. For example, women currently hold 21 CEO positions (4.2%) at Fortune 500 companies. Also, women earn 78 cents for every dollar that men earn. Additionally, African Americans make up 22% of the workforce, or the largest minority group, while Hispanics (13%) and Asians (5%) make up the next-largest groups (Shropshire, 2015). It is important that a business provide equal opportunity and effectively manage diversity.
- Managing in a global environment: The political environment in many countries has been changing, which has allowed for an expansion in international trade. This globalization, along with technological innovations, has created what might be called a single global marketplace. In order to survive in this increasingly competitive environment, businesses have had to take radical steps. Restructuring or downsizing by getting rid of positions within the firm has been a current trend. Outsourcing—having another company (usually a foreign firm) perform certain activities that traditionally were done in house—is another popular way to reduce costs.
- Managing using technology: The internet, e-commerce, cloud computing, smartphones, and opportunities for videoconferencing have changed the way business is done. The effect is felt by both employees and customers. Firms need to be agile in offering all stakeholders opportunities to interact and purchase products/services using technology, which allows sharing of data.
- Managing ethics: While technology allows for many great aspects of doing business, it also allows unethical opportunities (like hacking and stealing data) to exist. Technology also allows for worldwide distribution of unethical acts. Think of the 2015 Ashley Madison hacking, which uncovered 32 million people who may have had extramarital affairs, or the 2013 hacking of Target stores, where the breach cost Target $10 million. Managers must be concerned with the ethical actions of both their employees and those outside the firm who may be trying to breach systems (CNN Wires, 2015).
- Managing for sustainability: Companies need to create products that service all stakeholders; this is often called the triple bottom line, as it focuses on people, the planet, and profits. Many companies today offer not only financial reports but also sustainability reports to share what they are doing with respect to these areas. See an example of these reports at Harley Davidson, the motorcycle manufacturer.
- Managing for meaningfulness: Do happy employees make productive employees? Is it absolute drudgery to manage others? Both managers and their employees want to thrive and contribute to the organization. Empowerment provides existing employees with additional responsibilities and tasks, something that is inevitable after downsizing. However, giving employees autonomy along with empowerment can serve many and allow for personal growth and development. Creating opportunities to link oneself and one's purpose to the goals of the organization may allow for meaningfulness to be found.
Many of these challenges will be discussed at more length throughout the course. Consider these issues as you respond to discussion boards and as you prepare to interview your leader towards the end of the class.
References
Catalyst Inc. (2016, February 3). Women CEOs of the S&P 500. Knowledge center. http://www.catalyst.org/knowledge/women-ceos-sp-500.
CNN Wires. (2015, August 19). Ashley Madison cheaters list now searchable online. Fox 2 News. http://fox2now.com/2015/08/19/ashley-madison-cheaters-list-now-searchable-online/