Management

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CHAPTER

1

Managers and Managing

Learning Objectives
After studying this chapter, you should be able to:
LO1-1 Describe what management is, why management is important, what managers do, and how managers utilize organizational resources efficiently and effectively to achieve organizational goals. LO1-2 Distinguish among planning, organizing, leading, and controlling (the four principal managerial tasks), and explain how managers’ ability to handle each one affects organizational performance. LO1-3 Differentiate among three levels of management, and understand the tasks and responsibilities of managers at different levels in the organizational hierarchy. LO1-4 Distinguish between three kinds of managerial skill, and explain why managers are divided into different departments to perform their tasks more efficiently and effectively. LO1-5 Discuss some major changes in management practices today that have occurred as a result of globalization and the use of advanced information technology (IT). LO1-6 Discuss the principal challenges managers face in today’s increasingly competitive global environment.

Management

part 1

A MANAGER’S CHALLENGE
Steve Jobs has Changed His Approach to Management

What is high-performance management? In 1976 Steven P. Jobs sold his Volkswagen van, and his partner Steven Wozniak sold his two programmable calculators, and they used the proceeds of $1,350 to build a circuit board in Jobs’s garage. So popular was the circuit board, which developed into the Apple II personal computer (PC), that in 1977 Jobs and Wozniak founded Apple Computer to make and sell it. By 1985 Apple’s sales had exploded to almost $2 billion, but in the same year Jobs was forced out of the company he founded. Jobs’s approach to management was a big part of the reason he lost control of Apple. Jobs saw his main task as leading the planning process to develop new and improved PCs. Although this was a good strategy, his management style was often arbitrary and overbearing. For example, Jobs often played favorites among the many project teams he created. His approach caused many conflicts and led to fierce competition, many misunderstandings, and growing distrust among members of the different teams. Jobs’s abrasive management style also brought him into conflict with John Sculley, Apple’s CEO. Employees became unsure whether Jobs (the chairman) or Sculley was leading the company. Both managers were

Apple’s CEO Steve Jobs proudly shows off his company’s new i Pad tablet computer in March 2010. More than 1 million i Pads were sold within a month.

so busy competing for control of Apple that the task of ensuring its resources were being used efficiently was neglected. Apple’s costs soared, and its performance and profits fell. Apple’s directors became convinced Jobs’s management style was the heart of the problem and asked him to resign. After he left Apple, Jobs started new ventures. First he founded PC maker NEXT to develop a powerful new PC that would outperform Apple’s PCs. Then he founded Pixar, a computer animation company, which become a huge success after it made blockbuster movies such as Toy Story and Finding Nemo, both distributed by Walt Disney. In both these companies Jobs developed a clear vision for managers to follow, and he built strong management teams to lead the project teams developing the new PCs and movies. Jobs saw his main task as planning the companies’ future product development strategies. However, he left the actual tasks of leading and organizing to managers below him. He gave them the autonomy to put his vision into practice. In both companies he encouraged a culture of collaboration and innovation to champion creative thinking. Meanwhile Apple was struggling to compete against Michael Dell’s new, low-cost PCs loaded with Microsoft’s Windows software. Its performance was plummeting, and to help his old company survive, in 1996 Jobs convinced Apple to buy NEXT for $400 million...
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