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6PART 1 MEETING THE CHALLENGES OF THE 21ST CENTURYTHE ORGANIZATIONAL CONTEXT OF MANAGEMENTLearning TMOrganizationA group of individuals who worktogether toward common goals.Management, as we have defined it, occurs within an organizational context. Themanagement processes, tools, and techniques that we will examine and discuss inthis book are those appropriate for managers who work in organizations. But whatis an organization?An organization is a group of individuals who work together toward commongoals. Organizations can be for profit, such as the business organizations with whichwe are all familiar (for example, Microsoft, Pizza Hut, Wal-Mart), or not for profit,such as churches, fraternities, and public universities. Whether they are for profitor not for profit, organizations have one characteristic in common: they are madeup of people. The efforts of these people must be coordinated if the organizationis to accomplish its goals.THE PROCESS OF MANAGEMENTAs mentioned previously, four major functions are associated with the process ofmanagement: (1) planning, (2) organizing, (3) leading, and (4) controlling. Figure 1.1 illustrates these functions and shows how they relate to the goals of the organization. These four functions form the foundation of this book, and each isexamined in detail in a separate part of the text (planning in Part 2, organizing inPart 3, leading in Part 4, and controlling in Part 5). Also keep in mind that, giventhe importance of leading to the success of managers today, we will address issuesof leadership throughout the text. A brief introduction of the four functions ofmanagement follows.PLANNING Managers at all levels of the organizational hierarchy must engagein planning. Planning involves setting goals and defining the actions necessary toachieve those goals. While top-level managers establish overall goals and strategy,managers throughout the hierarchy must develop operational plans for their workgroups that contribute to the efforts of the organization as a whole. All managersmust develop goals that are in alignment with and supportive of the overall strategy of the organization. In addition, they must develop a plan for administeringand coordinating the resources for which they are responsible so that the goals oftheir work groups can be achieved.ThomsonPlanningSetting goals and defining the actions necessary to achieve thosegoals.OrganizingThe process of determining thetasks to be done, who will dothem, and how those tasks willbe managed and coordinated.Figure 1.1ORGANIZING The managerial function of organizing involves determining thetasks to be done, who will do them, and how those tasks will be managed and co-The Process of dingControlling

7CHAPTER 1 MANAGEMENT AND MANAGERS: YESTERDAY, TODAY, AND TOMORROWordinated. Managers must organize the members of their work groups and organization so that information, resources, and tasks flow logically and efficientlythrough the organization. Issues of organizational culture and human resourcemanagement are also key to this function. Most important, the organization mustbe structured in light of its strategic and operational goals so that it can be responsive to changes in the business environment.LEADING Managers must also be capable of leading the members of their workLeadingMotivating and directing themembers of the organization sothat they contribute to theachievement of the goals of theorganization.ThomsonLearning TMgroups toward the accomplishment of the organization’s goals. To be effective leaders, managers must understand the dynamics of individual and group behavior, beable to motivate their employees, and be effective communicators. In today’s business environment, effective leaders must also be visionary—capable of envisioningthe future, sharing that vision, and empowering their employees to make the vision a reality. Only through effective leadership can the goals of the organizationbe achieved.Later in the chapter, we will explore a model of leadership that we believe tobe very appropriate for today’s managers. That model, called the 3Cs of Leadership, suggests that effective managers/leaders must: (1) be highly competent, thatis possess the necessary business acumen and skills to make good business decisions; (2) be of strong character, that is have integrity, behave ethically, and demonstrate qualities such as courage and persistence; and (3) have a commitment totheir community, that is be concerned about people and issues beyond themselves.While this model of leadership acknowledges the need for leaders to possess theknowledge, skills, and tools to make good management decisions, it suggests thatleaders be more than simply competent in business terms. It calls for leaders whounderstand the importance of character in leadership and who have a genuineconcern for others. You will learn more about this model of leadership in a subsequent section of this chapter.CONTROLLING Managers must monitor the performance of the organization,as well as their progress in implementing strategic and operational plans. Controlling requires identifying deviations between planned and actual results. Whenan organization is not performing as planned, managers must take corrective action. Such actions may involve pursuing the original plan more aggressively or adjusting the plan to the existing situation. Control is an important function in themanagerial process because it provides a method for ensuring that the organization is moving toward the achievement of its goals.With the four functions of management in mind, let’s move on to examine themanager. Managers are the people who plan, organize, lead, and control the activities of the organization so that its goals can be achieved. Over the years, researchers have examined managers in detail to find out who they are and what theydo. These studies can help us develop a general understanding of managers.WHAT WE KNOW ABOUT MANAGERSRegardless of your particular career interest, you may someday become a manager.Accountants become managers, salespeople become managers, and so do computer scientists and engineers. Some musicians are managers, as are some actors.In fact, even professors become managers. If you are successful in your chosen career and have administrative and leadership skills, you may be called upon to manage others.Much of the research on management has focused on who managers are andwhat they do.4 More specifically, many studies have examined the roles managersControllingMonitoring the performance ofthe organization, identifying deviations between planned and actual results, and taking correctiveaction when necessary.ManagersOrganizational members who areresponsible for planning, organizing, leading, and controlling theactivities of the organization sothat its goals can be achieved.

8PART 1 MEETING THE CHALLENGES OF THE 21ST CENTURYplay, the skills they need, and how they spend their time.5 Other studies have examined how roles, skills, and time allocation vary according to managerial leveland scope of responsibility.6 Let’s examine some of the more enlightening researchon the subject of managers.MANAGERIAL ROLESDefine the concept of management within an organizationalcontext and as a process.INTERPERSONAL ROLES The first set of roles identified by Mintzberg areinterpersonal roles. These roles, which arise directly from the manager’s formalauthority base, involve relationships with organizational members and other constituents. The three interpersonal roles played by the manager are those of figurehead, leader, and liaison.As the heads of organizational units, managers must perform certain dutiesthat are primarily ceremonial in nature. For example, managers may have to appear at community functions, attend social events, or host luncheons for important customers. In doing so, managers fulfill their role as figureheads.Because managers are largely responsible for the success or failure of their organizational units, they must also play the role of leaders within their work groups.In this capacity, managers work with and through their employees to ensure thatthe organization’s goals are met.Finally, managers must serve as organizational liaisons. They act as liaisons bothin working with individuals and work groups within the organization and in developing favorable relationships with outside constituents. Managers must be politically sensitive to important organizational issues so that they can developrelationships and networks both within and beyond their organizations.ThomsonInterpersonal rolesThe manager’s responsibility formanaging relationships with organizational members and otherconstituents.According to a widely referenced study by Henry Mintzberg, managers serve threeprimary roles: interpersonal, informational, and decision making.7 Figure 1.2 illustrates Mintzberg’s theory of managerial roles, and the following discussion describes each role in greater detail.8Learning TMLearning Objective 2Figure 1.2Mintzberg’s Managerial RolesFORMAL AUTHORITYAND STATUSINTERPERSONALROLES Figurehead Leader LiaisonINFORMATIONALROLES Monitor Disseminator SpokespersonDECISIONAL ROLES Entrepreneur DisturbanceHandler ResourceAllocator NegotiatorSOURCE: Reprinted by permission of Harvard Business Review. From “The Manager’s Job: Folklore and Fact,”Henry Mintzberg, Harvard Business Review, March–April 1990, 49–61. Copyright 1990 by the HarvardBusiness School Publishing Corporation; all rights reserved.

9CHAPTER 1 MANAGEMENT AND MANAGERS: YESTERDAY, TODAY, AND TOMORROWThomson AP/WIDE WORLD PHOTOSLearning TMINFORMATIONAL ROLES The second set ofmanagerial roles identified by Mintzberg are informational roles. In their informational roles, managersare responsible for ensuring that the people withwhom they work have sufficient information to dotheir jobs effectively. By the very nature of managerial responsibilities, managers become the communication centers of their units and are a communicationsource for other work groups within the organization.People throughout the organization depend uponthe management structure and the managers themselves to disseminate or provide access to the information they need to do their jobs.One of the informational roles a manager mustassume is that of monitor. As monitors, managerscontinually scan the internal and external environments of their organizations for useful information.Managers seek out information from their subordinates and liaison contacts and may receive unsolicited information from their networks of personal contacts. From this information,managers identify potential opportunities and threats for their work groups andorganizations.In their role as disseminators, managers share and distribute much of the information they receive as information monitors. As disseminators, managers passon important information to the members of their work groups. Depending on thenature of the information, managers may also withhold information from workgroup members. Most important, managers must ensure that their employees havethe information necessary to perform their duties efficiently and effectively.The final informational role played by managers is that of spokesperson. Managers must often communicate information to individuals outside their units andtheir organizations. For example, directors and shareholders must be advised aboutthe financial performance and strategic direction of the organization; consumergroups must be assured that the organization is fulfilling its social obligations; andgovernment officials must be satisfied that the organization is abiding by the law.9Manager’s often act as liasonsbetween individuals and workgroups as well as outside constituents.Informational rolesThe manager’s responsibility forgathering and disseminating information to the stakeholders ofthe organization.DECISIONAL ROLES Finally, managers play the role of decision maker. Intheir decisional roles, managers process information and reach conclusions. Information in and of itself is nearly meaningless if it is not used to make organizational decisions. Managers make those decisions. They commit their work groupsto courses of action and allocate resources so that the groups’ plans can be implemented.One of the decisional roles played by managers is that of entrepreneur. Recallthat in the monitor role, managers scan the internal and external environments ofthe organization for changes that may present opportunities. As an entrepreneur,the manager initiates projects that capitalize on opportunities that have been identified. This may involve developing new products, services, or processes.A second decisional role that managers play is that of disturbance handler. Regardless of how well an organization is managed, things do not always run smoothly.Managers must cope with conflict and resolve problems as they arise. This may involve dealing with an irate customer, negotiating with an uncooperative supplier,or intervening in a dispute between employees.As a resource allocator, the manager determines which projects will receive organizational resources. Although we tend to think primarily in terms of financialor equipment resources, other types of important resources are allocated to projects as well. Consider, for example, the manager’s time. When managers chooseDecisional rolesThe manager’s responsibility forprocessing information andreaching conclusions.

10PART 1 MEETING THE CHALLENGES OF THE 21ST CENTURYLearning TMto spend their time on a particular project, they are allocating a resource. Information is also an important resource. By providing access to certain information,managers can influence the success of a project.The final decisional role played by the manager is that of negotiator. Studiesof managerial work at all levels have found that managers spend a good portionof their time negotiating. Managers may negotiate with employees, suppliers, customers, or other work groups. Regardless of the work group, the manager is responsible for all negotiations necessary to ensure that the group is making progresstoward achieving the goals of the organization.SCOPE AND LEVELS OF MANAGERSLearning Objective 3Identify the roles managers play.SCOPE OF RESPONSIBILITY The nature of the manager’s job will dependon the scope of his or her responsibilities. Some managers have functional responsibilities, whereas others have general management responsibilities.Functional managers are responsible for work groups that are segmented according to function. For example, a manager of an accounting department is afunctional manager. So are the managers of a production department, a researchand development department, and a marketing department. Work groups segmented by function tend to be relatively homogeneous. Members of the group often have similar backgrounds and training and perform similar tasks. Functionalmanagers often have backgrounds similar to those of the people they manage.Their technical skills are usually quite strong, as they are typically promoted fromwithin the ranks of their work groups. The greatest challenge for these managerslies in developing an understanding of the relationship between their work groupsand the other work units within the organization. Equally important, functionalmanagers must convey information back to their work groups and ensure that themembers of their units understand their roles within the organization as a whole.In contrast to functional managers, general managers manage several differentdepartments that are responsible for different tasks. For example, the manager ofa supermarket is responsible for managing all the departments within the store.The produce manager, grocery manager, bakery manager, and floral manager allreport to the general manager. Because general managers manage diverse departments, their technical skills may not be as strong as the skills of the people theymanage. The manager of the supermarket, for example, may not know the difference between a chrysanthemum and a violet or have the faintest idea how croissants are made. Whatever general managers lack in technical skills, however, theymake up for in communication skills. General managers must coordinate and integrate the work of diverse groups of people. They are responsible for ensuringthat all the discrete parts of their organizations function together effectively so thatthe overall goals of the organization can be achieved.ThomsonFunctional managersManagers who are responsiblefor managing a work unit that isgrouped based on the functionserved.We have looked at the various roles that managers play within the organization.To this point, however, we have not distinguished among types of managers. Is ittrue that all managers are alike? No, it is not. Managers often differ with regard toboth the scope of their responsibilities and their level within the vertical structureof the organization.General managersManagers who are responsiblefor managing several different departments that are responsible fordifferent tasks.LEVELS OF MANAGEMENT Managers exist at various levels in the organiLearning Objective 4Discuss the scope of responsibilities of functional and generalmanagers.zational hierarchy. A small organization may have only one layer of management,whereas a large organization may have several. Consider, for example, the numberof levels of management in a single-unit family restaurant versus a large restaurantchain such as Chili’s. While the small family restaurant may have only one level ofmanagement (the owner), Chili’s has several layers, such as general store managers,area directors, and regional directors.

CHAPTER 1 MANAGEMENT AND MANAGERS: YESTERDAY, TODAY, AND TOMORROWThomsonLearning TMIn general, relatively large organizations have three levels of managers: firstline managers, middle managers, and top-level managers. Figure 1.3 illustrates thesemanagerial levels, as well as the “operatives,” or the individuals who are not in themanagerial ranks, but who actually deliver the product or service of the organization. The pyramid shape of the figure reflects the number of managers at eachlevel. Most organizations have more first-line managers than middle managers, andmore middle managers than top-level managers. As we will see later in this chapter, however, the trend of the 1990s was to reduce the number of employees in organizations in an effort to improve efficiency. The net effect of such downsizingwas a significant reduction in the number of middle managers within many corporate structures.The skills required of managers at different levels of the organizational hierarchy vary just as their job responsibilities vary. In other words, managers at different levels have different job responsibilities a

Southwest Airlines managed to not only survive during this tumul-tuous period, but actually reported increased passenger travel. South-west was the only airline to report a profit for the third quarter in 2001, and no employees were laid off as a result of September 11th. Herb Kelleher, cofounder o