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Business Management assistance. Please see attached documentation for information. essentialofcontemporary.pdfpart2.pdf Unformatted Attachment Preview PART 1 1 The Management Process Today Learning Objectives LO 1-1 Describe what management is, why management is important, what managers do, and how managers use organizational resources efficiently and effectively to achieve organizational goals. LO 1-4 Distinguish among three kinds of managerial skill, and explain why managers are divided into different departments to perform their tasks more efficiently and effectively. LO 1-2 Distinguish among planning, organizing, leading, and controlling (the four principal managerial tasks), and explain how managers’ ability to handle each one affects organizational performance. LO 1-5 Discuss some major changes in management practices today that have occurred as a result of globalization and the use of advanced information technology (IT). LO 1-3 Differentiate among three levels of management, and understand the tasks and responsibilities of managers at different levels in the organizational hierarchy. LO 1-6 Discuss the principal challenges managers face in today’s increasingly competitive global environment. ©Sam Edwards/age fotostock RF After studying this chapter, you should be able to: BuzzFeed founder and CEO Jonah Peretti considers his global media company a learning-driven culture, providing a continuous loop of information and data to consumers that generates 7 billion views each month. ©Manuel Blondeau/AOP Press/Corbis/Getty Images MANAGEMENT SNAPSHOT BuzzFeed Shares Content on a Global Scale How Does Technology Affect the Way Managers Manage? I f you are one of the millions of people across the planet who read content produced by global media giant BuzzFeed on a variety of social media platforms, you understand that news and other information are meant to be shared. This idea is what prompted BuzzFeed’s founder and CEO, Jonah Peretti, to create an organization that doesn’t stand still, sometimes moving at the speed of light to create content, collect data about who is sharing the information, and then tailor the content to specific audiences around the world. According to its website, BuzzFeed is a cross-­ platform, global network for news and entertainment that generates 7 billion views each month. The company creates and distributes content for a global audience in 7 languages and 11 different editions, across more than 30 social platforms, including Facebook, Twitter, Tumblr, Vine, Snapchat, Instagram, Pinterest, YouTube, and others.1 A former teacher and cofounder of The Huffington Post, Peretti is fascinated with information and the rich history of Paramount Pictures, a studio and business model that Peretti tries to emulate. This is because Paramount owned its production studio, owned the contracts of its own cast of talent, and its own distribution channel (movie theaters), which gave the entertainment icon the ability to adapt quickly as business changed over the last century. Peretti and his management team use a model similar to Paramount’s, owning all the key components of a media business: a global news operation, its own video production studio, a complex dataanalytics operation, an in-house creative agency, and a diverse distribution channel. With 18 offices and more than 1,300 employees worldwide, BuzzFeed thrives on developing and controlling the original content it produces across various platforms.2 A few years ago, Peretti made an interesting observation that helped him and his managers shift the company’s focus quickly. He figured out that most people did not want to leave their social apps to go and find information. Instead of steering web traffic strictly to BuzzFeed’s website, Peretti decided the company would publish content, images, and videos on digital platforms where people spend the most time.3 Peretti considers his company a “learning-driven” culture and a continuous loop of information and data. All of the original articles and videos created by BuzzFeed staff are the inputs that drive the data-­analytics operation, which informs company management how Buzz­ Feed should create and distribute the advertising it produces for many of the world’s top brands. 3 A key component of the company’s business model is using branded “native” advertising—­information designed to have the look and feel of the content it runs beside on a social platform. One of BuzzFeed’s most popular videos for Purina brand Friskies cat food (“Dear K ­ itten”) has been viewed on YouTube more than 27 ­million times. The company recently entered into a deal to produce “native” ads in collaboration with GroupM, a division of one of the world’s largest advertising agencies. The collaboration has already led to ­videos for many different clients, including Nike and Target, with more video production in development.4 To keep the video approach fresh, BuzzFeed employees are organized into teams of no more than seven members that work on a specific type of video. To ensure that no one gets complacent (or bored), the entire staff is reorganized into different teams every three months. Company management believes this strategy keeps the creative process fresh—and fun. Advertising and viral videos can be exciting at BuzzFeed, but there’s serious news, too. The BuzzFeed news group includes hundreds of reporters and editors who cover politics, business, investigative journalism, and entertainment. The news group at BuzzFeed has published several high-profile stories that have received millions of digital reads and several journalism awards for their investigative work.5 With its data-analytics group tracking and collecting information that helps shape content and provide a deeper understanding about its global audience, BuzzFeed has undertaken a data initiative called Hive, which promises to shift the company’s business model yet again and challenge managers and employees to become even more agile. One goal of Hive is to track every editorial idea across all of BuzzFeed’s many platforms. For example, consider a recipe for slow-cooked chicken. On the web, the recipe is described in seven easy steps. On Facebook, the recipe becomes a 46-­second video, and then a 15-second video clip on Instagram with instructions written as a comment. Next the recipe is posted with two images on Pinterest—and a link back to the Facebook video. Hive promises to keep Peretti’s “continuous information loop” in constant motion.6 Videos, news, native ads, entertainment, images, and big data—all in a day’s work for the BuzzFeed managers who guide this media juggernaut, which was recently named one of 2016’s most innovative companies by Fast Company magazine.7 Overview Managing a company is a complex activity, and ­effective managers like Jonah Peretti face many challenges from within and outside their organizations. Management is an unpredictable process. Making the right decision is often difficult, and even ­successful managers often make mistakes. But the most effective managers learn from their mistakes and continually try to find ways to improve their companies’ performance. In this chapter we look at what managers do and what skills and abilities they must develop to manage their organizations successfully. We also identify the different kinds of managers that organizations need and the skills and abilities they must develop to succeed. Finally, we identify some challenges managers must address if their organizations are to grow and prosper. What Is Management? When you think of a manager, what kind of person comes to mind? Do you think of an executive like Jonah Peretti, who helps direct his company? Or do you see a manager at a fast-food restaurant, who deals directly with employees and customers, or the person you answer to if you have a part-time job? What do all these people have in common? First, they all work in 4 5 The Management Process Today organizations Collections of people who work together and coordinate their actions to achieve a wide variety of goals or desired future outcomes. management The planning, organizing, leading, and controlling of human and other resources to achieve organizational goals efficiently and effectively. LO 1-1 Describe what management is, why management is important, what managers do, and how managers utilize organizational resources efficiently and effectively to achieve organizational goals. organizations. Organizations are collections of people who work together and coordinate their actions to achieve a wide variety of goals or desired future outcomes. Second, as managers, they are the people responsible for supervising and making the most of an organization’s human and other resources to achieve its goals. Management, then, is the planning, organizing, leading, and controlling of human and other resources to achieve organizational goals efficiently and effectively. An organization’s resources include assets such as people and their skills, know-how, and experience; machinery; raw materials; computers and information technology; and patents, financial capital, and loyal customers and employees. Achieving High Performance: A Manager’s Goal One of the most important goals that organizations and their members try to achieve is to provide some kind of good or service that customers value or desire. Jonah Peretti’s principal goal is to manage BuzzFeed so that it creates a continuous stream of new content—videos, news, and other information that consumers are willing to read and share on a variety of social platforms or “native” advertising that the world’s top brands are willing to pay for. Likewise, the principal goal of fast-food managers is to produce tasty and convenient food that customers enjoy and come back to buy again and again. Organizational performance is a measure of how efficiently and effectively managers use available resources to satisfy customers and achieve organizational goals. Organizational performance increases in direct proportion to increases in efficiency and effectiveness (see Figure 1.1). What are efficiency and effectiveness? Figure 1.1 EFFICIENCY Efficiency, Effectiveness, and Performance in an Organization LOW EFFECTIVENESS HIGH LOW HIGH Low efficiency/ High effectiveness High efficiency/ High effectiveness Manager chooses the right goals to pursue, but does a poor job of using resources to achieve these goals. Result: A product that customers want, but that is too expensive for them to buy. Manager chooses the right goals to pursue and makes good use of resources to achieve these goals. Result: A product that customers want at a quality and price that they can afford. Low efficiency/ Low effectiveness High efficiency/ Low effectiveness Manager chooses the wrong goals to pursue and makes poor use of resources. Result: A low-quality product that customers do not want. Manager chooses inappropriate goals, but makes good use of resources to pursue these goals. Result: A high-quality product that customers do not want. High-performing organizations are efficient and effective. 6 Chapter One organizational performance Efficiency is a measure of how productively resources are used to achieve a goal. Organizations are efficient when managers minimize the amount of input resources (such as labor, raw materials, and component parts) or the amount of time needed to produce a given output of goods or services. For example, Burger King develops ever more efficient fat fryers that not only reduce the amount of oil used in cooking, but also speed up the cooking of french fries. UPS develops new work routines to reduce delivery time, such as instructing drivers to leave their truck doors open when going short distances. To encourage efficiency, Jonah Peretti decided to share BuzzFeed’s original content on multiple social media platforms instead of steering traffic to the company’s own website. In this way, content can be tailored to specific audiences, and its global reach increases exponentially. In addition, with its sophisticated data-analytics process, BuzzFeed can track how and where its content (including videos and advertising) is being viewed. Recent estimates put the average number of BuzzFeed monthly content views at 7 billion.8 Effectiveness is a measure of the appropriateness of the goals that managers have selected for the organization to pursue and the degree to which the organization achieves those goals. Organizations are effective when managers choose appropriate goals and then achieve them. Some years ago, for example, managers at ­McDonald’s decided on the goal of providing breakfast service to attract more customers. The choice of this goal has proved smart. Over recent years, sales of breakfast food accounted for more than 30\% of McDonald’s revenues. In 2015, in an effort to increase sales, McDonald’s management decided to offer breakfast items all day long, a strategy that has been successful and well received by customers.9 High-performing organizations, such as Apple, McDonald’s, Walmart, Intel, Home Depot, Accenture, and Habitat for Humanity are simultaneously efficient and effective. Effective managers are those who choose the right organizational goals to pursue and have the skills to utilize resources efficiently. A measure of how efficiently and effectively a manager uses resources to satisfy customers and achieve organizational goals. efficiency A measure of how well or how productively resources are used to achieve a goal. effectiveness A measure of the appropriateness of the goals an organization is pursuing and the degree to which the organization achieves those goals. Why Study Management? The dynamic and complex nature of modern work means that managerial skills are in demand. Organizations need individuals like you who can understand this complexity, respond to environmental contingencies, and make decisions that are ethical and effective. Studying management helps equip individuals to accomplish each of these tasks. In a broader sense, individuals generally learn through personal experience (think the “school of hard knocks”) or through the experiences of others. By studying management in school, you are exposing yourself to the lessons others have learned. The advantage of such social learning is that you are not bound to repeat the mistakes others have made in the past. Furthermore, by studying and practicing the behaviors of good managers and high-performing companies, you will equip yourself to help your future employer succeed. The economic benefits of becoming a good manager are also impressive. In the United States, general managers earn a median annual wage of $97,730, with a projected growth rate in job openings of 5\% to 8\% between now and 2024.10 Finally, learning management principles can help you make good decisions in nonwork situations. If you’re coaching a child’s soccer team, organizing a ­charity 7 The Management Process Today 5K run, planning your financial budget, or starting a new business, good management principles will help you understand others, make quality decisions, and improve your overall personal success. Essential Managerial Tasks LO 1-2 Distinguish among planning, organizing, leading, and controlling (the four principal managerial tasks), and explain how managers’ ability to handle each one affects organizational performance. planning Identifying and selecting appropriate goals; one of the four principal tasks of management. The job of management is to help an organization make the best use of its resources to achieve its goals. How do managers accomplish this objective? They do so by performing four essential managerial tasks: planning, organizing, leading, and controlling. The arrows linking these tasks in Figure 1.2 suggest the sequence in which ­managers typically perform them. French manager Henri Fayol first outlined the nature of these managerial activities around the turn of the 20th century in General and Industrial Management, a book that remains the ­classic statement of what managers must do to create a high-performing organization.11 Managers at all levels and in all departments—whether in small or large companies, for-profit or not-for-profit organizations, or organizations that operate in one country or throughout the world—are responsible for performing these four tasks, which we look at next. How well managers perform these tasks determines how efficient and effective their organizations are. Planning To perform the planning task, managers identify and select appropriate organizational goals and courses of action; they develop strategies for how to achieve high performance. The three steps involved in planning are (1) deciding which goals the organization will pursue, (2) deciding what strategies to adopt to attain Figure 1.2 Four Tasks of Management Planning Choose appropriate organizational goals and courses of action to best achieve those goals. Controlling Establish accurate measuring and monitoring systems to evaluate how well the organization has achieved its goals. Leading Motivate, coordinate, and energize individuals and groups to work together to achieve organizational goals. Organizing Establish task and authority relationships that allow people to work together to achieve organizational goals. 8 strategy A cluster of decisions about what goals to pursue, what actions to take, and how to use resources to achieve those goals. Chapter One those goals, and (3) deciding how to allocate organizational resources to pursue the strategies that attain those goals. How well managers plan and develop strategies determines how effective and efficient the organization is—its performance level.12 As an example of planning in action, consider BuzzFeed’s collaborations and partnerships with “traditional” media outlets such as advertising agencies and television networks. Because of its strong reputation for effective “native” advertising on digital platforms and its data-metrics expertise, BuzzFeed partnered with GroupM, the media-buying unit of advertising conglomerate WPP, to create branded content for clients such as Unilever and Target. As part of the deal, GroupM was the first ad agency to use Pound, BuzzFeed’s proprietary data system that provides insight into how content is shared among various digital platforms.13 In an effort to attract more Millennial viewers to the 2016 Rio Olympic Games, Comcast’s NBCUniversal teamed up with BuzzFeed and used the messaging app Snapchat to distribute Olympic-related content, attracting more than 35 million viewers over the two-week sporting event. The two companies recently announced that NBCUniversal made an additional $200 million investment in BuzzFeed, doubling the original investment it made in 2015, which would help expand and fund the growth of BuzzFeed’s news and entertainment network.14 This financial investment will not only help BuzzFeed grow, but it will also shape the company’s planning into an effective business strategy, which is a cluster of decisions concerning what organizational goals to pursue, what actions to take, and how to use resources to achieve those goals. Planning strategy is complex and difficult, especially because planning is done under uncertainty when the result is unknown so that either success or failure is a possible outcome of the planning process. Managers take major risks when they commit organizational resources to pursue a particular strategy. Organizing organizing Structuring working relationships in a way that allows organizational members to work together to achieve organizational goals; one of the four principal tasks of management. organizational structure A formal system of task and reporting relationships that coordinates and motivates organizational members so they work together to achieve organizational goals. Organizing is structuring wor ... Purchase answer to see full attachment