A Manager’s Task
Managers influence all phases of modern organizations. Plant managers run manufacturing operations that produce the clothes we wear, the food we eat, and the automobiles we drive. Sales managers maintain a sales force that markets goods. Personnel managers provide organizations with a competent and productive workforce. The “jobs available” section in the classified advertisements of any major newspaper describes many different types of management activities and confirms the importance of management.
Managers are also important because they serve a very special purpose in our lives. They are the catalysts for new and exciting products of all kinds that keep our economy and standard of living moving forward. One such new product of today is the Transportable Exam Station (TES), which brings the doctor to you. Other such products include Apple’s new head-mounted iPhone, Microsoft’s new tablet called Surface, and Chevrolet’s new electric car called Volt.
In addition to understanding the significance to managers and society of managerial work and its related benefits, prospective managers need to know what the management task entails. The sections that follow introduce the basics of the management task through discussions of the roles and definitions of management, the management process as it pertains to management functions and organizational goal attainment, and the need to manage organizational resources effectively and efficiently.
Our society could neither exist as we know it today nor improve without a steady stream of managers to guide its organizations. Peter Drucker emphasized this point when he stated that effective management is probably the main resource of developed countries and the most needed resource of developing ones.2 In short, all societies desperately need good managers.
Management is important to society as a whole as well as vital to many individuals who earn their livings as managers. Government statistics show that management positions have increased from approximately 10 to 18 percent of all jobs since 1950. Managers come from varying backgrounds and have diverse educational specialties. Many people who originally train to be accountants, teachers, financiers, or even writers eventually make their livelihoods as managers. Although in the short term, the demand for managers varies somewhat, in the long term, managerial positions can yield high salaries, status, interesting work, personal growth, and intense feelings of accomplishment.
Over the years, CNNMoney has become well known for its periodic rankings of total compensation paid to top managers in the United States. Based on the 2013 CNNMoney compensation report, Table 1.1 shows the names of the 10 most highly paid chief executives, the company they worked for, and how much they earned. Their earnings include salary, stock, and stock options.
Table 1.1 The 10 Highest Compensated CEOs, 2013
Alternate View
| Ranking | CEO Name | Company Name | Paid ($ millions) |
|---|---|---|---|
| 1 | Larry Ellison | Oracle | 96.2 |
| 2 | Richard M. Bracken | HCA | 38.6 |
| 3 | Bob Iger | Walt Disney | 37.1 |
| 4 | Mark G. Parker | Nike | 35.2 |
| 5 | Philippe P. Dauman | Viacom | 33.4 |
| 6 | John J. Donahoe | eBay | 29.7 |
| 7 | Howard Schultz | Starbucks | 28.9 |
| 8 | Stephen I. Chazen | Occidental Petroleum | 28.5 |
| 9 | Ken Chenault | American Express | 28 |
| 10 | Louis C. Camilleri | Philip Morris International | 24.7 |
Source: “20 Top-Paid CEOs,” 2013 CNNMoney, http:/
An inspection of the list of highest paid executives in Table 1.1 reveals that the executives are all men. Based on the results of a recent survey at the Wall Street Journal, Figure 1.1 illustrates a broad salary gap between men and women. According to Figure 1.1, whereas women and men make up roughly the same proportion of the workforce, men hold a disproportionate number of higher-paying jobs. In addition, a recent study by the American Association of University Women indicated that the discrepancy between the pay of men versus the pay of women is a national phenomenon and is not isolated to a particular state or region.3
Figure 1.1 The salary gap between genders
Predictably, concerns that certain managers are paid too much have been raised. For example, consider the notable criticism in recent years regarding the high salary paid to Robert R. Nardelli, former CEO of Home Depot.4 Disapproval of the excessive compensation paid to Nardelli surfaced in the popular press as well as in statements by stockholders. An article in the Wall Street Journal, for example, questioned whether Nardelli was worth the amount he received.5 Nardelli had been paid $63.5 million during a five-year period at Home Depot, while company shares lost 6 percent of their value. In the end, as with any manager, Nardelli’s compensation should have been determined by how much value he added to the company. The more value he added, the more compensation he deserved. As a result of the growing criticism about Nardelli’s compensation and Nardelli’s resistance to modify his compensation level, he was fired.
Some evidence suggests that societal concern about management compensation goes well beyond one manager at one company.6 A recent Senate Commerce Committee meeting, for example, focused on trying to justify lavish pay programs for managers at companies such as Tyco International and American Airlines when the companies were in financial trouble and laying off employees. Senators seemed unified in questioning the logic that justifies the average CEO salary being more than 400 times higher than a production worker’s wages. This Senate Committee meeting should be an important signal that managers who do not exercise judicious self-control about their salaries may face future legislative control.
The Role of Management
Essentially, the role of managers is to guide organizations toward goal accomplishment. All organizations exist for certain purposes or goals, and managers are responsible for combining and using organizational resources to ensure that their organizations achieve their purposes. Management moves an organization toward its purposes or goals by assigning activities for organization members to perform. If the activities are designed effectively, the production of each individual worker will contribute to the attainment of organizational goals. Management strives to encourage individual activity that will lead to reaching organizational goals and to discourage individual activity that will hinder the accomplishment of those goals. Because the process of management emphasizes the achievement of goals, managers must keep organizational goals in mind at all times.7
Defining Management
Students of management should be aware that the term management can be, and often is, used in different ways. For instance, it can refer simply to the process that managers follow in order to accomplish organizational goals. It can also refer to a body of knowledge; in this context, management is a cumulative body of information that furnishes insights on how to manage. The term management can also refer to the individuals who guide and direct organizations or to a career devoted to the task of guiding and directing organizations. An understanding of the various uses and related definitions of the term will help you avoid miscommunication during management-related discussions.
As used most commonly in this text, management is the process of reaching organizational goals by working with and through people and other organizational resources. A comparison of this definition with the definitions offered by several contemporary management thinkers indicates broad agreement that management encompasses the following three main characteristics:
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It is a process or series of continuing and related activities.
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It involves and concentrates on reaching organizational goals.
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It reaches these goals by working with and through people and other organizational resources.
A discussion of each of these characteristics follows.
This manager works with people and other resources to achieve the organization’s goals.
Wavebreakmedia/Shutterstock
The Management Process: Management Functions
The four basic management functions—activities that make up the management process—are described in the following sections.
Planning
Planning involves choosing tasks that must be performed to attain organizational goals, outlining how the tasks must be performed, and indicating when they should be performed. Planning activity focuses on attaining goals. Through their plans, managers outline exactly what organizations must do to be successful. Planning is essential to getting the “right” things done.8 Planning is concerned with organizational success in the near future (short term) as well as in the more distant future (long term).9
Organizing
Organizing can be thought of as assigning the tasks developed under the planning function to various individuals or groups within the organization. Organizing, then, creates a mechanism to put plans into action. People within the organization are given work assignments that contribute to the company’s goals. Tasks are organized so that the output of individuals contributes to the success of departments, which, in turn, contributes to the success of divisions, which ultimately contributes to the success of the organization. Organizing includes determining tasks and groupings of work.10 Organizing should not be rigid, but adaptable and flexible to meet challenges as circumstances change.11
Influencing
Influencing is another of the basic functions within the management process. This function—also commonly referred to as motivating, leading, directing, or actuating—is concerned primarily with the people within organizations.12 Influencing can be defined as guiding the activities of organization members in appropriate directions. An appropriate direction is any direction that helps the organization move toward goal attainment. The ultimate purpose of influencing is to increase productivity. Human-oriented work situations usually generate higher levels of production over the long term than do task-oriented work situations because people find the latter type less satisfying.
Controlling
Controlling is the management function through which managers:
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Gather information that measures recent performance within the organization.
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Compare present performance to preestablished performance standards.
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From this comparison, determine whether the organization should be modified to meet preestablished standards.
Controlling is an ongoing process. Managers continually gather information, make their comparisons, and then try to find new ways of improving production through organizational modification.
History shows that managers commonly make mistakes when planning, organizing, influencing, and controlling. Figure 1.2 shows a number of such mistakes managers make related to each function. Studying this text carefully should help managers avoid making such mistakes.
Planning
Not establishing objectives for all important organizational areas
Making plans that are too risky
Not exploring enough viable alternatives for reaching objectives
Organizing
Not establishing departments appropriately
Not emphasizing coordination of organization members
Establishing inappropriate spans of management
Influencing
Not taking the time to communicate properly with organization members
Establishing improper communication networks
Being a manager but not a leader
Controlling
Not monitoring progress in carrying out plans
Not establishing appropriate performance standards
Not measuring performance to see where improvements might be made