Management and Managers

MONGOLIAN STATE UNIVERSITY INSTITUTE OF ECONOMICS Management and managers A manager is a person who allocates human and material resources and directs the operations of a department or an entire organization. Managers represent only a fraction of the employees in large firms. Most employees do non managerial work. Computer programmers, machine operators, secretaries, graphic designers, and maintenance people –all are important, but they aren’t managers. What sets managers apart? Simply put, the difference is that managers are evaluated on how well others do their jobs. Furthermore, it is the responsibility of managers to try to determine and plan for the most effective and efficient way to achieve the organization’s goals. For American Airlines to reach its overall profitability goal, for example its managers have established five plans: (1) to reduce costs by buying fuel-efficient aircraft; (2) to reduce personnel by hiring only those who most needs; (3) to restructure the route system to build up an efficient connecting airports; (4) to maintain American’s number 1 position in customer service; (5) to expand marketing efforts by using customers for targeted promotion of vacations, car rentals, hotels, and the like. These plans are specific to American Airlines, but all managers face similar challenges. That is, they must find ways to motivate employees and to increase their company’s overall productivity, efficiency, service, quality, and innovativeness. Managers achieve an organization ‘s or departments objectives for the most part b arranging for others to do things not by performing all the tasks themselves. Management, then, is planning, organizing, leading, and controlling the people working in an organization and the on going set of tasks and activities they perform. The organization’s goals give direction to these tasks and activities. The term manager covers many types of people. These include managers of small businesses, chief executive officers of multinational corporations, plant managers, and production supervisors. Managers are also found in not for profit organizations, such as government agencies and religious groups, and trade associations. Levels of managements 1 TRANSLATED BY:P.TUUL

MONGOLIAN STATE UNIVERSITY INSTITUTE OF ECONOMICS Manager are classified by their level within the organization first line managers, middle managers, top managers. Figure 1.1 shows the three basic managements levels. First line managers: First line managers are directly responsible for the production of goods or services. They can be called sales managers, section chiefs, or production supervisors. Employees who report to them do the organization’s basic production work whether of goods or of services. This level of management is the link between the production or operations of each department and the rest of the organization. However, first line managers in most companies spend little time with higher management or with people from other organizations. Most of their time is spend side by side with the people they supervise. First line managers often lead hectic work lives full of interruptions. They communicate and solve problems within their own work areas. Other wise they work on the ‘’firing line’’. Middle managers: Small organizations can function successfully with only one level of management. As an organization grows, however, so do its problems. Some managers at large organizations must focus on coordinating employee activities, determining which products or services to provide, and deciding hoe to market these products or services to costumers. Top Top managers managers Middle managers Middle managers First line managers First line managers a b 2 TRANSLATED BY:P.TUUL

MONGOLIAN STATE UNIVERSITY INSTITUTE OF ECONOMICS Basic management levels: (a)The three basic management levels are traditionally presented as a pyramid, to reflect the higher proportion of lower level managers in most organizations. (b) Many companies have ‘’flattened’’ their structure to cut costs by eliminating many middle management jobs in the late 1980s and early 1990s. These are the problems of middle managers. They receive broad, overall strategies and policies from top managers and translate them into specific objectives and plans for first time managers to implement. Middle managers typically hold such titles as department head, plant manager, and safety director. They are responsible for directing and coordinating the activities of first line managers and, at times, such non managerial personnel as clerks, receptionists, and staff assistants. Top managers: Top managers are responsible for the overall direction and operations of an organization. Michael Eisner of Walt Disney Company and Sandra Kurtzig, founder and president of ASK Computers, are such managers. Typical titles of top managers are chief executive officer (CEO), president, chairman, division president, and executive vice president. Top managers develop objectives, policies, and strategies for the entry organization. They set the goals that are handed down through the hierarchy, eventually reaching each worker. Top managers often represent their organizations in community affairs, business deals, and government negotiations. They spend most of their time talking with other top managers in the company and with people outside the company. Functional and General Manager* Our brief descriptions of the three management levels ran help different managers perform. However, in large organizations managers are also distinguished by the scope of the activities they manage. Functional managers supervise employees with specialized skills in a single area of operation, such as accounting, personnel, payroll, finance, marketing, or production. A typical functional manager is the head of the payroll department. He or she doesn’t determine company wide employee salaries, as a general manager might, but does make sure that payroll checks are issued on time and in the correct amounts. 3 TRANSLATED BY:P.TUUL

MONGOLIAN STATE UNIVERSITY INSTITUTE OF ECONOMICS General managers: are responsible for the overall operations of a more complex unit, such as a company or a division, and usually oversee functional managers. Top managers are, by definition, general managers. Managerial function and roles Now that you’ve learned something about various types of managers, let’s consider what managers do their managerial function and how they do it the managerial roles they play. Managerial functions and roles are merely one way of describing a manager’s job. Functions and roles may overlap somewhat, but you need to understand both to appreciate the nature and scope of management. Managerial function: The successful manager does a good job of carrying our four basic managerial functions: planning, organizing, leading, and controlling. Most managers perform these functions simultaneously rather than in a rigid, preset order no achieve company objectives. Basic managerial functions: Planning defines objectives and ways to reach them. Organizing creates a structure of relationships for carrying out plans. Leading motivates the people in the organization to do the job. Controlling monitors performance and either correct it to match the original plans or alters the plans themselves. This point is illustrated graphically in Figure 1.2. In this section we will briefly examine these four functions without looking at their interrelationships. 4 TRANSLATED BY:P.TUUL

MONGOLIAN STATE UNIVERSITY INSTITUTE OF ECONOMICS Planning: Planning means defining goals and objectives for future performance and deciding on ways to reach them. Managers at Frito –Lay. Boeing, Coca cola, and Shell, among others, plan for three reasons: (1) to establish objectives (direction) for the organization, such as increased profit, expanded market share, and social responsibility; (2) to identify and commit the organizations resources to achieve those objectives; (3) to decide which activities are necessary to achieve them. Organizing: Once managers have prepared plans, they must translate those relatively abstract ideas in to reality. Organizing is the process of creating a structure of relationships among employees that will enable them to carry out managements plans and meet overall objectives. By organizing effectively, managers can better coordinate human and material resources. An organizations success depends largely on managements ability and utilize those resources efficiently and effectively. The organizing process involves setting up departments and job descriptions. In this sense, staffing proceeds directly from the planning and organizing functions. Leading: After management has made plans, created a structure, and hired the right personnel, someone must lead the organization. Some managers call this process directing or influencing. Whatever it’s called, leading involves communicating with and motivating others to perform the tasks necessary to achieve the organization’s objectives. And leading isn’t done after planning and organizing end; it is crucial to those functions, too. Controlling: Controlling is the process by which a person, group, or organization performance and takes corrective action. Company’s CEO, Michael Eisner, and the managers below him use cost controls to achieve profit goals. First they gather production information (for example, the number of hotel rooms built or the cost of making a movie); then they analyze this information in light of performance (the number of hotel rooms occupied or the movie’s financial success). Thus, the process of controlling is self regulating and often cyclical. ➢ Managers set standards of performance ➢ They measure current performance against those standards ➢ They take action to correct any deviations ➢ They may adjust the standards if necessary 5 TRANSLATED BY:P.TUUL

MONGOLIAN STATE UNIVERSITY INSTITUTE OF ECONOMICS Just as a thermostat sends signals to a heating system that room temperature is too high or too low, so a control system sends signals to managers that things aren’t working as planned and corrective action is needed. Managerial Roles Managers perform the four basic managerial functions while playing a variety of managerial roles. A role is an organized set of behaviors. Henry Mintzberg studied a variety of managerial jobs to arrive at the ten most common roles of managers. These fall into three categories: ➢ interpersonal ➢ informational ➢ decisional (see Figure 1.3) Before discussing each of the managerial roles, we need to make four points: 1. Every managers job consists of some combination of these roles 2. These roles often influence the characteristics of managerial work 3. These roles are highly interrelated; and 4. Relative importance of each role varies considerably by level and function. Figure 3.1 The manager’s role The ten managerial roles can be played at different times by the same manager and to different degrees depending on the level of management. INInTtEeRrpNeArTsoIOnNalArLolReOs:LES INFORMATION ROLES DECISIONAL ROLES - IntFeirgpuerreshoenaadl roles involve- Mroolneistorinvolve relationship-sEbnettrwepereennepuerople. - Leader - Disseminator - Disturbance handler - Liaison - Spoken person - Resource allocator - Negotiator 6 TRANSLATED BY:P.TUUL

MONGOLIAN STATE UNIVERSITY INSTITUTE OF ECONOMICS Interpersonal roles Interpersonal roles involve relationship between people. Managers relate directly to other people in their roles as 'figureheads, leaders, and liaisons. In the figurehead role, the most basic and simplest of all managerial roles, the manager represents the organization at ceremonial and symbolic functions. The supervisor who attends the wedding of a machine operator, the sales manager who takes an important customer to lunch—all are performing duties of the figurehead role necessary to an organization’s image and success. Although figurehead duties may not seem important, they are expected of managers because they symbolize managements concern for employees, customers, and the community. The leader role involves responsibility for directing and coordinating the activities, of subordinates in order to accomplish organizational objectives. Some aspect of the leader role has to do with staffing: hiring, promoting, and firing. Other aspect involves motivating subordinates to meet the organizations needs. Still other aspect relates to projecting a vision with which employees can identify. Computer led his firm into the personal computer industry with his dream of designing a product that ‘’ would make a difference’’ in the world. He created a new industry because he thought people should have a device that could provide them with the same information large corporations. Land focused on innovations in a single product market, instant photography. His motto was ‘’Don’t do anything that someone else can do’’. The liaison rule refers to managers' dealings with people outside the organiza- tion. These people include clients, government officials, customers, and supplier. In the liaison role, the manager seeks support from people who can affect the organizations success. Informational Roles: 7 TRANSLATED BY:P.TUUL

MONGOLIAN STATE UNIVERSITY INSTITUTE OF ECONOMICS Effective managers build networks of contacts. The many contacts made while performing figurehead and liaison roles give managers access to important information. Because of this contact, managers are the nerve centers of their organizations. Three roles—monitor, disseminator, and spokesperson—comprise the information aspects of managerial work. The monitor role involves seeking, receiving, and screening information. Like radar units, managers scan their environments for information that may affect their organization. Because much of the information received is oral (from gossip and hearsay, as well as from formal meetings.), managers must test it and decide whether to use it. In the disseminator role, the manager shares information with subordinates and other members of the organization. Some managers pass along special, or ‘’privileged’’, information to certain subordinates who would not ordinarily have access to it and who can be trusted not to let it go further. In practice, passing information along to subordinates can be time consuming and nonproductive. Successful managers do a good job deciding which and how much information will be useful. Finally, in the spokesperson role, managers send information to others, especially those outside the organization, about the official position of the company. The spokesperson role is growing in importance at least in part because the press and public are demanding more information. Many companies, in fact, have created a department of public information to handle such demands. Decisional Roles Managers use the information they receive lo decide when and how to commit their organization to new objectives and actions. Decisional roles are perhaps the most important of the three classes of roles. As entrepreneurs, disturbance handles, resource allocators, and negotiators, managers are at the core of the organization’s decision-making system. The entrepreneur role involves designing and starting a new project or enterprise. When Sam Walton founded Wal-Mart in 1962 and Sam’s Wholesale Clubs in 1983, his main objective was to offer quality goods at low prices. To achieve the low-price objective, Wal-Mart keeps inventory low, has few 8 TRANSLATED BY:P.TUUL

MONGOLIAN STATE UNIVERSITY INSTITUTE OF ECONOMICS managerial levels, and locates its stores mostly in small towns. Over a period of ten years, Wal-Mart has become the largest discounter in the United Stales. It has, more than 1400 stores in twenty-seven states and over S32 billion in annual sales as an entrepreneur, Walton was a designer and initiator of change in the discount retail industry. The entrepreneur role can also be played within an existing organization. For instance, Arthur Fry at 3M played this role when he invented Post-its self-stick notes. Managers play the disturbance handler role when dealing with problems and changes beyond their immediate control. Typical problems include strikes by labor, bankruptcy of major suppliers, and breaking of contracts by costumers. Sometimes disturbances arise because a poor manager ignores a situation until its rums into a crisis. However, even good managers can't possibly anticipate all the results, of their decisions or control the actions of others. In the summer of 1990, Saddam Hussein of Iraq invaded Kuwait. Oil prices skyrocketed overnight. Seeing Iraq's invasion of Kuwait as a threat to global peace, President Bush played a disturbance handler role. The resource allocator role involves choosing among competing demands for money, equipment, personnel, and a manager’s time. Managers have to ask themselves questions like these: What portion of the budget should be earmarked for advertising and what portion for improving an existing product line? Should a second shift of workers be added or overtime be paid to handle new orders? Disney’s Eisner, for example, tried to buy the rights to Miss Piggy, Kermit the Frog, and other Muppets for a reported $150 million, instead of spending those funds on more new hotels. Closely linked to the resource’s allocator role is the negotiator role. In this role, managers meet with individuals or groups to discuss differences and reach an agreement. Negotiations are an integral part of a manager’s job. They are especially tough, though, when a manager must deal with a manager must deal with people or groups (such as unions or political action committees) who don’t share all of the manager’s objectives. We have discussed the ten managerial roles separately and pointed out that in reality, they are interdependent and sometimes played out simultaneously. As CEO at 9 TRANSLATED BY:P.TUUL

MONGOLIAN STATE UNIVERSITY INSTITUTE OF ECONOMICS Perot Systems, H. Ross Perot certainly plays multiple roles. Some of this are identified in brackets in the following description of his activities. What managers really do Among the thousands of books and articles written about managers, relatively few examine what they actually do. These few give the impression that managers spend most of their time in air-conditioned offices reading reports and attending meeting, rushing to and from airports, entertaining importing customer, and solving complicated problems. To some extent this impression may be accurate for top managers. Is it true for first line and middle managers? A recent survey of more than 1400 managers, summarized in table 1.1, was designed two answer the questions. These managers were able to identify seven major tasks performed by all managers. Let’s take a few moments to see how the day to day work of managers differs at the three levels of management. Principle Duties of First Line Managers Newly appointed first-line managers have much to learn—and also u unlearn. The manager must instead gain satisfaction from the accomplishments of others. New first line managers learn to plan and schedule the work formerly laid out for them and not wait for others. In the process they must also learn how their group fist in to the total organization and how to share staff services with other managers. Table 1.1. Level of managements Key managements tasks First line Middle Top Managing individual performance 63 56 45 Instructing subordinates 40 36 27 Planning and allocating resources 47 66 61 Coordinating groups 39 51 54 Managing group department performance 22 48 43 Monitoring business environment 13 20 34 Representing one’s staff 51 55 53 10 TRANSLATED BY:P.TUUL

MONGOLIAN STATE UNIVERSITY INSTITUTE OF ECONOMICS First-line managers usually need strong technical skills to teach subordinates and supervise their day to day tasks. Effective first-line managers learn to ‘’lean on’’ their technical expertise. Sometimes, though. * first-line manager is a recent college graduate like yourself), responsible for the work of both hourly workers and professionals. This type of first-line manager is likely to ha\\c less hands-on experience. This isn't a problem if the manager has good interpersonal skills, which include the abilities to communicate with diverse types of people, to coach and counsel subordinates, and provide constructive feedback. In Table 1.1 you can see that managing individual performance was rated the single most important managerial task performed by first-line managers. Motivating and disciplining subordinates, keeping track of performance and providing feedback, and improving communications and individual productivity are all vital parts of that task. Since most of you will start your managerial careers as first line managers, the following insight will give you a look at how a typical first line manager spends her day. What have we learned from following Goldberg around for a day? First, she puts in long hours doing her job. Second, she has to plan, organize, and decide what to do. Her schedule gives her freedom to arrange her they in a way that best suits her abilities. Third, she spends time with her salespeople and gives them feedback on their performance. Fourth, she plays many different roles, including those of leader, liaison, spokesperson, disseminator, and resource allocator. Principle Duties of Middle Managers Many middle managers began their careers as first line managers. Typically, a middle manager has spent several years as a first line manager, gaining knowledge about the business and learning technical skills. Even so. promotion from first-line to middle management is often difficult and sometimes traumatic. The percentages in Table 1.1 show that there is, in fact, a greater difference between first line and middle than between middle and top management tasks. The heavier emphases on managing group performance and on allocating resources represent the most important differences between first-line and middle 11 TRANSLATED BY:P.TUUL

MONGOLIAN STATE UNIVERSITY INSTITUTE OF ECONOMICS managers. The middle manager is often involved in reviewing the work plans of various groups, helping them set priorities, and negotiating and coordinating their activities. Middle managers are involved in established target dates for work or services to be performed; developing evaluation criteria for performance; deciding which projects should he given money. personnel, and materials; and translating lop management's general objectives into specific operational plans, schedules, and procedures. Two ways middle managers accomplish their duties are through the delegation of authority to carry out top management decisions and the coordinate of schedules and resources with other managers. The major roles these managers play is interpersonal aid informational because they face problems that are people-centered, rather than technical. Middle managers are also removed from the technical aspects of production work. Lacking hands on experience, many of them must develop new skills to cope with top managers demands. One important skill is the ability to negotiate successful with first line managers to gain acceptance of top management’s objective. Another is the ability to achieve compromise and consensus in order to win support. Attending meetings with other middle managers and top managers demands oral communication skills that are better developed than those of first-line managers. And, finally, middle managers must be adept at developing their subordinates, opening lines of communication for them, and making them visible to other middle managers and to top managers. Principle Duties of Middle Managers Pressures and demands on top managers can be intense. Tightly scheduled workdays, heavy travel requirements, and work weeks of sixty or more hours are common. During a typical day a top manager disposes of thirty-six pieces of mail, handles five telephone calls an hour, and goes to eight meetings. A true break is a luxury: Coffee is swallowed on the run, and lunch is often eaten during meetings with other managers, business associates, community representatives, or government officials. When there is some free time, eager subordinates vie for a shaft of it. 12 TRANSLATED BY:P.TUUL

MONGOLIAN STATE UNIVERSITY INSTITUTE OF ECONOMICS A top manager may spend days and nights working for the company. One night is spent working late at the office and another entertaining business associates. On other nights the typical top manager goes to his or her home, not to relax, but to use it as a branch office. Many recreational activities and social events are arranged for business purposes. Thus, the top manager seldom stops thinking about the job or playing the roles it demands. Such an approach to time management may succeed in getting the work done, but it also creates stress in most families. The following Insight shows how one manager spends his day. Time Spent on the Managerial Functions Figure 1.4 compares the distribution of time in a typical day among the four bask: managerial functions by first-line, middle, and top managers. Note that first-line managers spend relatively little time planning and organizing. These functions ate performed a greater degree by middle and top managers. On the other hand, first-line managers spend 50 percents of their time leading (directing the actions of employees who actually do production work or deliver services) and 25 percent of their time controlling (making are pans arrive, settling disputes among, employees, scheduling vacations and overtime, and inspecting products). Middle managers, in contrast, spend much of their time planning, organizing, and leading lo enable first-line managers and their subordinates to work as efficiently as possible. Ordering parts, dealing with customer complaints, and voicing first-line managers' concerns to top managements are activities performed by middle man- agers. Top managers spend the most of their day (over 75 percent) planning and leading. Although middle managers spend almost half of their time leading, this time is focused on their subordinates. Top managers spend the bulk of their leading time with key people and organizations external to their own organization. Note that middle and top managers spend little rime directly controlling the behavior of others. A distribution of managerial time by function A typical managers day can vary considerably depending on level in the organization First line management Middle management Top management 13 TRANSLATED BY:P.TUUL

MONGOLIAN STATE UNIVERSITY INSTITUTE OF ECONOMICS Planning 1 hour Planning 1 1/2 hour Planning 2 hour Organizing 1 hour Organizing22/1hour Leading 4 hours Leading 3 hours Organizing 1 hour Controlling 2 hours Controlling 1 hours Leading 41/2 hours Controlling 1/2 hours Managerial skills Now you’ve learned about basic levels of management, what managers do, and what the 1990s hold in store for them. But you may still be wondering exactly what it takes to be an effective manager. Are there basic managerial skills you can develop? (Skills are abilities related to performance that are not necessarily inborn.) For the purpose of our discussion here we will managerial skills into four groups: technical, interpersonal, conceptual, and communication.\" In practice, however, n may be difficult to tell were one skill begins and another ends. Throughout this book. both within chapters and in Skill Building. Exercises at the end of each chapter, we will focus on the basic skills you should develop to be more effective as both a manager and a subordinate. The relative mix of skills required depends on the manager’s level, responsibilities, and function. For example, skills needed by the manager of a local 7- Eleven store ate likely to be quite different from those needed by the regional vice - president of Southland Corporation, which operates all 7-Eleven stores. As you will see, the store manager probably needs relatively high technical and interpersonal skills, whereas the regional vice president needs higher conceptual, interpersonal, and communication skills. Technical skills The ability to apple specific methods, procedures, and techniques in a specialized field. Technical skills involve the ability to apply specific methods, procedures, aid techniques in a specialized field. You can imagine the technical skills 14 TRANSLATED BY:P.TUUL

MONGOLIAN STATE UNIVERSITY INSTITUTE OF ECONOMICS needed by design engineers, market researchers, accountants, and compute programmers. Their skills are concrete and can usually be taught in college courses or on the job training programs. Managers use technical skills to varying degrees. They are highly concerned with identifying and developing the technical skills needed by others in the organization. Interpersonal Skills Interpersonal skills include the abilities to lead, motivate, manage conflict, and work with others. Whereas technical skills involve working with things (techniques or physical objects), interpersonal skills focus on working with people. Thinking up ways to enliven Convex computers annual company picnic is only one of CEO Bob Paluck’ s uses of international skills. One year, Bob slid face first in to six washtubs of raspberry Jell O. the annual bash is reflection of Paluck’s ‘’ work hard, play hard’’ motto, which so far seems to be paying off in high employee morale, motivation and productivity. Because every organization’s most valuable resource is people, interpersonal skills are a key part of every manager’s job, regardless of level (from supervisor to vice president) or function (from production to marketing and finance). A manager with excellent interpersonal skills encourages participation in decision making and lets subordinates express themselves without fear of humiliation. Managers who lack effective interpersonal skills can be rude, abrupt, and unsympathetic, making others feel inadequate and resentful. Conceptual Skills Conceptual Skills involve viewing the organization as a whole and applying one’s planning and thinking abilities. Managers with good Conceptual skills are able to see how the organizations various departments and functions relate to one another, how changes in one department can affect other departments. They use to diagnose and assess different types of management problems that might result. Conceptual skills are especially important to the managers decisional roles of entrepreneur, disturbance handler, resource allocator, and negotiator all of which require an ability to scan the environment for trends. 15 TRANSLATED BY:P.TUUL

MONGOLIAN STATE UNIVERSITY INSTITUTE OF ECONOMICS Conceptual skills are needed by all managers, but especially top managers. They must perceive changes in the organization’s environment and respond to them promptly by making the right decisions. For example, Citicorp is widely regarded as one of the most innovative banks in the world. It pioneered the negotiable certificate of deposit, was one of the first to use automated teller machines, has issue more credit cards than any other bank, and is the world’s largest private foreign lender. All because Walter B. Wriston, Citicorp’s recently retired CEO, had the foresight to steer the bank toward innovative ways of thinking about the problems that would be facing the world’s economy in the 1990s. Communication skills Communication skills are the abilities to send receive information, thoughts, feelings, and attitudes. The ten managerial roles, assume that managers have at least basic written, oral, and nonverbal (facial expressions, body posture) communication skills. Because managers spend a large portion of their time communicating, recruiters look for people who can communicate effectively. A common complaint is that professional programs in universities spend too much time developing student’s technical skills and not enough time developing their communications skills. In fact, the importance of good communication skills cannot be stressed enough. Relative importance of managerial skills The relative importance of the four types of managerial skills at each level of management is shown in figure 1.5. Note that communication skills are equally important at all management levels. In fact, basic communication skills are necessary to competently utilizes the other types of skills: interpersonal, technical and conceptual. A manager’s best ideas and intentions will have little impact if they cannot be communicated effectively to others. As illustrated in figure 1.5, the most striking difference among the levels of management is the shift from emphasis on technical skills to emphasis on conceptual skills. This is often a very difficult transitions for managers. First line managers may get promoted into middle management positions because they have excellent technical skills. These new managers often make the mistake of relying on their 16 TRANSLATED BY:P.TUUL

MONGOLIAN STATE UNIVERSITY INSTITUTE OF ECONOMICS technical skills, rather than learning new conceptual skills and developing their interpersonal skills. It is frequently because of this inattention to acquiring the necessary skills that middle managers fail to get promoted to top positions. The higher a manager’s position in the organization, the more he or she is making complex decisions. Top managers need conceptual abilities to recognize important factors in their business and how these interrelate. Figure 1.5 Relative importance of managerial skills by management level Interpersonal and communication skills are of equal importance to all levels of management. Technical skills are relatively more important to first line managers, and conceptual skills to top managers. Conceptual Communication Interpersonal Technical First line Middle Top managers managers managers Many of the responsible of top managers, such as resource allocation and overall business strategy, require a broad view. Without conceptual skills, managers cannot take actions that are in the best interests of the entire organization. Management a dynamic process The process of obtaining and organizing resources and of achieving objectives through other people that is, managing is dynamic rather than static. 17 TRANSLATED BY:P.TUUL

MONGOLIAN STATE UNIVERSITY INSTITUTE OF ECONOMICS Managerial thought evolves whenever new theories are presented or new practices are tried. If the theories seem to have merit or the practices appear to succeed, their use spreads to more and more organizations until, over a period of time, they become accepted ways of managing. The adoption of Japanese quality control methods by many U.S. firms is an example of evolution in management thought. In 1950 Edward Deming’s total quality control method was rejected by U.S. companies but found a warm reception in Japan. Deming’s method is more fully described in chapter 20, but its essence is that poor quality is unacceptable. Data should be gathered to stop errors during the production process, not at its end. Employees should be rewarded for stopping quality problems, not punished. To honor his contributions to their industries, the Japanese create the Deming Prize, awarded annually to the Japanese company that has attained the highest level of quality. An increasing number of U.S. managers are eager to experiment with new solutions to urgent problems created by various internal and external forces: high rates of inflation (environmental force); the explosion in computer technology, fueled by development and production of the silicon chip (environmental force); and public policy, expressed in laws and regulations aimed at improving the physical environment and the health and safety of consumers and workers (ethical social forces). Managers of companies affected by such forces face immediate challenges to traditional ways of thinking, planning, and acting. If they can’t adjust their decision making to these new realities, their companies will be unable to compete successfully and will decline. Perhaps the best example of an industry’s response to external forces is that of U.S. automakers. Their recent joint ventures with Japanese and South Korean competitors have lad managers to rethink company objects and ways of doing business. Ford and Mazda under took broad restructuring of their decisions making process. Chrysler and Mitsubishi built a whole new company. These organizations experienced change at all levels and in most internal functions to some degree; these changes, in turn.8 affected suppliers and the supplier’s decision-making process. Thus, constant change dives management a dynamic dimension. The success of managers and their companies depends largely on how well they can accommodate Change. 18 TRANSLATED BY:P.TUUL

MONGOLIAN STATE UNIVERSITY INSTITUTE OF ECONOMICS Chapter summary 1.The three basic levels of management are first line, middle and top. First line managers are directly responsible for the production of goods and services. They supervise workers and solve specific problems. Middle managers coordinate the work of several first line managers or direct the operations of a functional department. They translate top managements strategies into specific objectives and programs for implementation. Top managers establish overall organizational objectives and strategies and direct the activities of a whole organization or a major segment of it. Managers are also distinguished by the scope of their jobs. Functional managers work in particular department, such as accounting, marketing, or human resources. General managers are responsible for the overall operations of an organization. 2.The managerial functions-planning, organizing, leading, and controlling define what managers do. The managerial roles interpersonal, informational, decisional-define how managers do their jobs. Managers perform the functions while playing one or more roles. 3.Managers at different levels divide their time among the managerial functions quite differently. First line managers spend about three fourths of their time leading and controlling. Middle managers spend about two thirds of their time organizing and leading. Top managers spend most of their time planning and leading and very little time directly organizing and controlling the work of others. 4.The four types managerial skills are technical, interpersonal, conceptual, and communication. Technical skills are most important to first line managers, who have to deal directly with specific methods of production. Interpersonal skills are important at all levels of management, because managing is the process of motivating other people in order to get something done. Conceptual skills are especially important to top managers, who have to think in more abstract terms and see parts in relation to the whole. Communication skills are important to all managers. Such skills enable managers to lead and motivate and to make changes in the organization’s goals. 19 TRANSLATED BY:P.TUUL