2.3.2 Functions of Management
2.3.3 Firm Vision or Mission
Agribusiness Functions of Management
Overview
Qualities of a Successful Business Manager
Learning Objective
6a Discuss qualities of a successful agribusiness manager.
Being a Manager
Managers are in constant action. Virtually every study of managers in action has found that they “switch frequently from task to task, changing their focus of attention to respond to issues as they arise, and engaging in a large volume of tasks of short duration.”
Managers, in fact, spend very little time by themselves. Contrary to the image offered by management textbooks, they are rarely alone drawing up plans or worrying about important decisions. Instead, they spend most of their time interacting with others—both inside and outside the organization. If casual interactions in hallways, phone conversations, one-on-one meetings, and larger group meetings are included, managers spend about two-thirds of their time with other people.
Henry Mintzberg observed CEOs on the job to get some idea of what they do and how they spend their time. He found, for instance, that they averaged 36 written and 16 verbal contacts per day, almost every one of them dealing with a distinct or different issue. Most of these activities were brief, lasting less than nine minutes. In the same vein, Lee Sproull’s study revealed that, during the course of a day, managers engaged in 58 different activities with an average duration of just nine minutes.
John Kotter’s study found that the average manager spent just 25% of his time working alone, and that time was spent largely at home, on airplanes, or commuting. Kotter’s study reveals that successful general managers spend most of their time with others, including subordinates, their bosses, and numerous people from outside the organization. Few of them spent less than 70% of their time with others, and some spent up to 90% of their working time this way.
Kotter also found that the breadth of topics in manager’s discussions with others was extremely wide, with unimportant or irrelevant issues taking time alongside important business matters. His study revealed that managers rarely make “big decisions” during these conversations and rarely give orders in a traditional sense. They often react to others’ initiatives and spend substantial amounts of time on unplanned activities that aren’t pre-scheduled. He found that managers will spend most of their time with others in short, disjointed conversations: “It is not at all unusual for a general manager to cover ten unrelated topics in a five-minute conversation.”
Interruptions also appear to be a natural part of the job. Rosemary Stewart found that the managers she studied were working uninterrupted for half an hour only nine times during the four weeks she studied them. As Mintzberg has pointed out, “Unlike other workers, the manager does not leave the telephone or the meeting to get back to work. Rather, these contacts are his work.”
The interactive nature of management means that most management work is conversational. Managers spend about two-thirds to three-quarters of their time in verbal activity. These verbal conversations, according to Robert Eccles and Nitin Nohria, are the means by which managers gather information, stay on top of things, identify problems, negotiate shared meanings, develop plans, put things in motion, give orders, assert authority, develop relationships, and spread gossip. In short, they are what the manager’s daily practice is all about. When managers are in action, they are talking and listening.
The 3 Core Management Roles
In Mintzberg’s seminal study of managers and their jobs, he found there are three core management roles: interpersonal, informational, and decisional.
Interpersonal Roles
Managers are required to interact with a substantial number of people in the course of a workweek. They host receptions; take clients and customers to dinner; meet with business prospects and partners; conduct hiring and performance interviews; and form alliances, friendships, and personal relationships with many others. Numerous studies have shown that such relationships are the richest source of information for managers because of their immediate and personal nature. The interpersonal role of managers arises directly from formal authority and involves basic interpersonal relationships.
Managers fill the figurehead role. Managers are responsible for the work of the people in their unit, and their actions in this regard are directly related to their role as a leader. The influence of managers is most clearly seen, according to Mintzberg, in the leader role. Formal authority vests them with great potential power. Leadership determines, in large part, how much power they will realize. Additionally, as the head of an organizational unit, every manager must perform some ceremonial duties. In Mintzberg’s study, chief executives spent 12% of their contact time on ceremonial duties and 17% of their incoming mail dealt with acknowledgments and requests related to their status. For instance, a company president who deals with charity or philanthropic requests is engaging in the ceremonial duties that come with being a figurehead.
The impact of a leadership role of managers can be seen in some famous examples of managers who had huge impacts on business success. When Lee Iacocca took over Chrysler Corporation (now DaimlerChrysler) in the 1980s, the once-great auto manufacturer was in bankruptcy, teetering on the verge of extinction. Iacocca formed new relationships with the United Auto Workers, reorganized the senior management of the company, and—perhaps most importantly—convinced the U.S. federal government to guarantee a series of bank loans that would make the company solvent again. The loan guarantees, the union response, and the reaction of the marketplace were due in large measure to Iacocca’s leadership style and personal charisma. More recent examples include the return of Starbucks founder Howard Schultz to re-energize and steer his company, and Amazon CEO Jeff Bezos’s ability to innovate during a downturn in the economy.
Managers also fill the liaison role, which falls under the larger interpersonal umbrella. Popular management literature has had little to say about the liaison role until recently. This role, in which managers establish and maintain contacts outside the vertical chain of command, becomes especially important in view of the finding of virtually every study of managerial work that managers spend as much time with peers and other people outside of their units as they do with their own subordinates. Surprisingly, they spend little time with their own superiors. In Rosemary Stewart’s study, 160 British middle and top managers spent 47% of their time with peers, 41% of their time with people inside their unit, and only 12% of their time with superiors.
Informational Roles
Managers are required to gather, collate, analyze, store, and disseminate many kinds of information. As monitors, managers are constantly scanning the environment for information, talking with liaison contacts and subordinates, and receiving unsolicited information, much of it as a result of their network of personal contacts. A good portion of this information arrives in verbal form, often as gossip, hearsay, and speculation.
In doing so, they become information resource centers, often storing huge amounts of information in their own heads, moving quickly from the role of gatherer to the role of disseminator in minutes. Although many business organizations install large, expensive management information systems to perform many of those functions, nothing can match the speed and intuitive power of a well-trained manager’s brain for information processing. Not surprisingly, most managers prefer it that way.
In the disseminator role, managers pass privileged information directly to subordinates, who might otherwise have no access to it. Managers must not only decide who should receive such information, but how much of it, how often, and in what form. Increasingly, managers are being asked to decide whether subordinates, peers, customers, business partners, and others should have direct access to information 24 hours a day without having to contact the manager directly.
In the spokesperson role, managers send information to people outside of their organizations. An example of fulfilling a spokesperson role is when an executive makes a speech to lobby for an organizational cause, or a supervisor suggests a product modification to a supplier. Increasingly, managers are also being asked to deal with representatives of the news media, providing both factual and opinion-based responses that will be printed or broadcast to vast unseen audiences, often directly or with little editing. The risks in such circumstances are enormous, but so too are the potential rewards in terms of brand recognition, public image, and organizational visibility.
Decisional Roles
Ultimately, managers are charged with the responsibility of making decisions on behalf of both the organization and the stakeholders with an interest in it. Such decisions are often made under circumstances of high ambiguity and with inadequate information. Often, the other two managerial roles—interpersonal and informational—will assist a manager in making difficult decisions in which outcomes are not clear and interests are often conflicting.
In the role of entrepreneur, managers seek to improve their businesses: adapt to changing market conditions and react to opportunities as they present themselves. Managers who take a longer-term view of their responsibilities are among the first to realize that they will need to reinvent themselves, their product and service lines, their marketing strategies, and their ways of doing business as older methods become obsolete and competitors gain advantage.
While the entrepreneur role describes managers who initiate change, the disturbance or crisis handler role depicts managers who must involuntarily react to conditions. Crises can arise because bad managers let circumstances deteriorate or spin out of control, but just as often good managers find themselves in the midst of a crisis that they could not have anticipated but must react to just the same.
The decisional role of resource allocator involves managers making decisions about who gets what, how much, when, and why. Resources, including funding, equipment, human labor, office or production space, and even the boss’s time are all limited, and demand inevitably outstrips supply. Managers must make sensible decisions about such matters while still retaining, motivating, and developing the best of their employees.
Managers spend considerable amounts of time in the role of negotiator. Negotiations happen over budget allocations, labor and collective bargaining agreements, and other formal dispute resolutions. In the course of a week, managers will often make dozens of decisions that are the result of brief but important negotiations between and among employees, customers and clients, suppliers, and others with whom managers must deal.
Increased Emphasis on Leader and Entrepreneurial Roles
The entrepreneur role is gaining importance. Managers must increasingly be aware of threats and opportunities in their environment. Threats include technological breakthroughs on the part of competitors, obsolescence in a manager’s organization, and dramatically shortened product cycles. Opportunities might include product or service niches that are underserved, out-of-cycle hiring opportunities, mergers, purchases, or upgrades in equipment, space, or other assets. Managers who are carefully attuned to the marketplace and competitive environment will look for opportunities to gain an advantage.
The leader role is also more prominent these days. Managers must be more sophisticated as strategists and mentors. A manager’s job involves much more than simple caretaking in a division of a large organization. Unless organizations are able to attract, train, motivate, retain, and promote good people, they cannot possibly hope to gain advantage over the competition. Thus, as leaders, managers must constantly act as mentors to those in the organization with promise and potential. When organizations lose a highly capable worker, all else in their world will come to a halt until they can replace that worker. Even if they find someone ideally suited and superbly qualified for a vacant position, they must still train, motivate, and inspire that new recruit, and live with the knowledge that productivity levels will be lower for a while than they were with their previous employee.
Role Recap
A visual recap of all the roles discussed in this section is illustrated in Figure 2.3.1c.
Attributions
Title Image: " Farmland seen from the air" by Mrwrite at English Wikipedia, Wikimedia Commons is in the Public Domain
Description: Public Domain Farmland seen from an airliner. The circles you can see are irrigated crops being grown, they are called pivots. Center-pivot irrigation (sometimes called central pivot irrigation), also called circle irrigation, is a method of crop irrigation in which equipment rotates around a pivot. A circular area centered on the pivot is irrigated, often creating a circular pattern in crops when viewed from above.
"Principles of Management" by David S. Bright, Anastasia H. Cortes, OpenStax is licensed under CC BY 4.0
Access for free at https://openstax.org/books/principles-management/pages/1-1-what-do-managers-do
Functions of Management
Learning Objectives
6b Discuss the four functions of management.
Efficiency and Management
A manager’s time is fragmented. Managers have acknowledged from antiquity that they never seem to have enough time to get all those things done that need to be done. In the latter years of the twentieth century, however, a new phenomenon arose: demand for time from those in leadership roles increased, while the number of hours in a day remained constant. And their work is not always easily delegated to others. This results in small allotments of time for each task they must complete and each role they must fill.
Values compete and the various roles are in tension. Managers clearly cannot satisfy everyone. Employees want more time to do their jobs; customers want products and services delivered quickly and at high-quality levels. Supervisors want more money to spend on equipment, training, and product development; shareholders want returns on investment maximized. A manager caught in the middle cannot deliver to each of these people what each most wants; decisions are often based on the urgency of the need and the proximity of the problem.
Managers take on heavy loads. In recent years, many North American and global businesses were reorganized to make them more efficient, nimble, and competitive. For the most part, this reorganization meant decentralizing many processes along with the wholesale elimination of middle management layers. Many managers who survived such downsizing found that their number of direct reports had doubled. Classical management theory suggests that seven is the maximum number of direct reports a manager can reasonably handle. Today, high-speed information technology and remarkably efficient telecommunication systems mean that many managers have as many as 20 or 30 people reporting to them directly.
Efficiency is essential. With less time than they need, with time fragmented into increasingly smaller units during the workday, with the workplace following many managers out the door and even on vacation, and with many more responsibilities loaded onto managers in downsized, flatter organizations, efficiency has become the core management skill of the twenty-first century.
4 Functions of Managers:Plan, Organize, Direct, and Control
What responsibilities do managers have in organizations? According to our definition, managers are involved in planning, organizing, directing, and controlling. Managers have described their responsibilities that can be aggregated into nine major types of activity. These include:
- Long-range planning. Managers occupying executive positions are frequently involved in strategic planning and development.
- Controlling. Managers evaluate and take corrective action concerning the allocation and use of human, financial, and material resources.
- Environmental scanning. Managers must continually watch for changes in the business environment and monitor business indicators, such as returns on equity or investment, economic indicators, business cycles, and so forth.
- Supervision. Managers continually oversee the work of their subordinates.
- Coordinating. Managers often must coordinate the work of others both inside the work unit and outside.
- Customer relations and marketing. Certain managers are involved in direct contact with customers and potential customers.
- Community relations. Contact must be maintained and nurtured with representatives from various constituencies outside the company, including state and federal agencies, local civic groups, and suppliers.
- Internal consulting. Some managers make use of their technical expertise to solve internal problems, acting as inside consultants for organizational change and development.
- Monitoring products and services. Managers get involved in planning, scheduling, and monitoring the design, development, production, and delivery of the organization’s products and services.
Not every manager engages in all of these activities. Rather, different managers serve different roles and carry different responsibilities, depending upon where they are in the organizational hierarchy.
Variations in Mangerial Work
Although each manager may have a diverse set of responsibilities, including those mentioned above, the amount of time spent on each activity and the importance of that activity will vary considerably. The two most salient perceptions of a manager are (1) the manager’s level in the organizational hierarchy and (2) the type of department or function for which he/she/they is responsible. Let us briefly consider each of these.
Management by Level
We can distinguish three general levels of management: executive management, middle management, and first-line management:
- Executive managers are at the top of the hierarchy and are responsible for the entire organization, especially its strategic direction.
- Middle managers, who are at the middle of the hierarchy, are responsible for major departments and may supervise other lower-level managers.
- First-line managers supervise rank-and-file employees and carry out day-to-day activities within departments.
Figure 2.3.2a shows the differences in managerial activities by hierarchical level. Senior executives will devote more of their time to conceptual issues, while front-line managers will concentrate their efforts on technical issues. For example, top managers rate high on such activities as long-range planning, monitoring business indicators, coordinating, and internal consulting. Lower-level managers, by contrast, rate high on supervising because their responsibility is to accomplish tasks through rank-and-file employees. Middle managers rate near the middle for all activities.
Managerial Skills
We can distinguish three types of managerial skills: technical, human relations, conceptual.
- Technical skills. Managers must have the ability to use the tools, procedures, and techniques of their special areas. An accountant must have expertise in accounting principles; whereas, a production manager must know operations management. These skills are the mechanics of the job.
- Human relations skills. Human relations skills involve the ability to work with people and understand employee motivation and group processes. These skills allow the manager to become involved with and lead his group.
- Conceptual skills. These skills represent a manager’s ability to organize and analyze information in order to improve organizational performance. They include the ability to see the organization as a whole and to understand how various parts fit together to work as an integrated unit. These skills are required to coordinate the departments and divisions successfully so that the entire organization can pull together.
As shown in Figure 2.3.2b, different levels of these skills are required at different stages of the managerial hierarchy. That is, success in executive positions requires far more conceptual skill and less use of technical skills in most (but not all) situations; whereas, first-line managers generally require more technical skills and fewer conceptual skills. Note, however, that human relations skills, or people skills, remain important for success at all three levels in the hierarchy.
Management by Department or Function
In addition to level in the hierarchy, managerial responsibilities also differ with respect to the type of department or function. There are differences found for quality assurance, manufacturing, marketing, accounting and finance, and human resource management departments. For instance, manufacturing department managers will concentrate their efforts on products and services, controlling, and supervising. Marketing managers, in comparison, focus less on planning, coordinating, and consulting and more on customer relations and external contact. Managers in both accounting and human resource management departments rate high on long-range planning, but they will spend less time on the organization’s products and service offerings. Managers in accounting and finance are also concerned with controlling and monitoring performance indicators, while human resource managers provide consulting expertise, coordination, and external contacts. The emphasis on and intensity of managerial activities varies considerably by the department the manager is assigned to.
At a personal level, knowing that the mix of conceptual, human, and technical skills changes over time and that different functional areas require different levels of specific management activities can serve at least two important functions. First, if you choose to become a manager, knowing that the mix of skills changes over time can help you avoid a common complaint that often young employees want to think and act like a CEO before they have mastered being a first-line supervisor. Second, knowing the different mix of management activities by functional area can facilitate your selection of an area or areas that best match your skills and interests.
In many firms, managers are rotated through departments as they move up in the hierarchy. In this way they obtain a well-rounded perspective on the responsibilities of the various departments. In their day-to-day tasks they must emphasize the right activities for their departments and their managerial levels. Knowing what types of activity to emphasize is at the core of the manager’s job.
Attributions
"Principles of Management" by David S. Bright, Anastasia H. Cortes, OpenStax is licensed under CC BY 4.0
Access for free at: https://openstax.org/books/principles-management/pages/1-3-major-characteristics-of-the-managers-job
Firm Vision or Mission?
Learning Objectives
6e Define and distinguish firm vision and mission.
Conveying the Purpose of a Business
The first step in the process of developing a successful strategic position should be part of the founding of the firm itself. When entrepreneurs decide to start a business, they usually have a reason for starting it, a reason that answers the question “What is the point of this business?” Even if an entrepreneur initially thinks of starting a business in order to be their own boss, they must also have an idea about what their business will do. And that idea about what a business will do should be conveyed through a vision and a mission, but these two things do slightly differ.
Vision Statement
A vision statement is an expression of what a business’s founders want that business to accomplish. The vision statement is usually very broad, and it does not even have to mention a product or service. The vision statement does not describe the strategy a firm will use to follow its vision—it is simply a sentence or two that states why the business exists.
Mission Statement
While a firm’s vision statement is a general statement about its values, a firm’s mission statement is more specific. The mission statement takes the why of a vision statement and gives a broad description of how the firm will try to make its vision a reality. A mission statement is still not exactly a strategy, but it focuses on describing the products a firm plans to offer or the target markets it plans to serve.
Clearing Up Confusion
An interesting thing to note about vision and mission statements is that many companies confuse them, calling a very broad statement their mission. For example, Microsoft says that its mission is “to help people around the world realize their full potential.” By the description above, this would be a good vision statement. However, Microsoft’s official vision statement is to “empower people through great software anytime, anyplace, and on any device.” Although the second statement is also quite broad, it does say how Microsoft wants to achieve the first statement, which makes it a better mission statement than their vision statement.
Figure 2.3.3a gives examples of vision and mission statements for the Walt Disney Company and for Ikea. Notice that in both cases, the vision statement is very broad and is not something a business could use as a strategy because there’s simply not enough information to explain what kind of business each might be. The mission statements, on the other hand, describe the products and services each company plans to offer and the customers each company plans to serve in order to fulfill their vision.
Why are vision and mission statements important to a firm’s strategy for developing a competitive advantage? To put it simply, you can’t make a plan or strategy unless you know what you want to accomplish. Vision and mission statements together are the first building blocks in defining why a firm exists and in developing a plan to accomplish what the firm wants to accomplish.
Attributions
"Principles of Management" by David S. Bright, Anastasia H. Cortes, OpenStax is licensed under CC BY 4.0
https://openstax.org/books/principles-management/pages/9-2-firm-vision-and-mission