MGT Notes 8 27 Scholars link success of firms to lives of their CEOs A study of 75000 Danish companies many small tracked changes in firm profitability after deaths in the CEOs families Changes varied with the type of relative who died Narcissistic executives tended to take greater risks leading to bigger swings in probability of their companies Chapter 1 Management Management is an ongoing process about getting things done through human resources Two key concerns of management o Effectiveness doing the right things at the right time o Efficiency minimizing waste or reducing resource costs o Increase production and maintain level of resources more efficient o Maintain level of production but decrease resource cost more efficient o TEST How are these 2 key concerns related If I am efficient does that make me effective No Efficiency is means oriented Efficiency is not a guarantee of effectiveness but if you are effective you may be efficient o Market share goes up effectiveness goes up As cost goes up efficiency goes down o TEST Ford was doing the wrong things really well o TEST which scenario is better 1 Company that is effective but inefficient CORRECT 2 Company that is ineffective but efficient But both companies will not succeed Must be effective and efficient o What s the manager s most important resource Human resources o It is better to be effective but inefficient o Extra credit injellitance incompetence jealousy o Is management art or science Art science or both o Equifinality many roads to success o Leadership management styles Autocratic manager in charge Democratic get together as a group and decide Laissez faire o How did management become important and why is it still significant today The industrial revolution forever changed how work is performed Laborers and machinery skill level of labor goes down need managers for supervision The economic effects of the industrial revolution leading to the need for professional management Productivity goes up prices go down demand goes up and factories The Management Pyramid grow in size Capitalism o First line managers concerned with executing plans efficiency Managing people that were once coworkers laborers o Middle managers division head regional sales 2 I s interpret and integrate functions Keeps top and first line connecting Managing first line managers Come up with new products and services Resolve conflict Worst trait is highly agreeable because conflicts do not get resolved and decisions are not made Many middle managers have been eliminated to corporate downsize Four things that happen in cooperate downsizing Management levels are eliminated The mangers who remain are asked to do more work The company implements new computer information technology Staff management functions are farmed out to consulting firms o Top managers CEO CFO etc Decide what people are going to do and how they are going to do it They determine the strategy of the organization differentiation overall cost leadership focus Legitimize the organization to society showing society how they are giving something back good cooperate citizen by giving customers what they want and supporting community aspects Most effectiveness oriented o Survivor syndrome sad depressed guilty and anxious fearful of future cuts because friends have been cut burnout Extra Credit o TEST what happens when a firm downsizes o Operative employees labor MGT Notes 9 1 Which poor management scenario is most typically seen Ineffective but efficient Which is true concerning effectiveness and efficiency Efficient organizations tend Market share goes up which means effectiveness is going up Costs are going down to be effective ones as well efficiency goes up Efficiency costs relative to what you ve done in the past or costs relative to what Which level of management has at its primary functions interpreting and integrating middle managers First line managers responsible for implementing plans through operative employees labor Management of company comes from top and middle Other types of managers o Line responsible for activities that directly affect the transformation process Taking raw materials and resources and turning it into goods and services for customers All levels of the pyramid o Staff support and guide the line managers efforts through their special expertise give advice to line managers Staff managers are in the middle on the pyramid outside the line of authority o Functional responsible for one area of activity marketing manager o General responsible for many different areas of activity CEO More difficult Administrators vs Managers o An administrator is just another name for a manager who manages in the public or not for profit sector o A manager manages in the private or for profit sector o TEST The CEO of Syngenta Inc is a Top manager General manager Line manager ALL The Five Functions of Management collectively known as the management process o Planning what to do and how Goal setting and action planning Typically gap oriented opportunity or problem First thing you must do because it leads to the other functions o Organizing develop a structure for getting things done How we do it Divide work and coordinate the labor o Staffing got jobs and teams designed so now have to select right person for the job train them and recognize when they do well with bonuses fair pay and performance appraisal Termination is also staffing o Leading getting other people to go along with you willingly and harmoniously to accomplish organizational goals Directing communicating motivating resolving conflict o Controlling feedback on how well plans are going and progressing Monitor our organizational performance Compare actual performance with hoped for performance If actual performance is less than hoped for performance diagnose problem and take corrective action If actual performance is greater than or equal to hoped for performance party Lencioni 3 signs of miserable job o Irrelevance don t feel like job is important o Anonymity don t care about person o Immeasurement can t tell if you are making progress or getting better Injellitance most adversely affects which function of management Staffing A manager is conducting an annual performance appraisal with one of her employees what function Controlling TEST what functions does a top manager perform ALL EVERY MANAGER PERFORMS ALL 5 FUNCTIONS amount of time spent will be different Middle level managers main function is organizing Top level main