Managers and Managing

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CMEC01 12/8/06 8:50 Page 1

Chapter

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Managers and Managing
LEARNING OBJECTIVES
After studying this chapter, you should be able to: ✓ Describe what management is, why management is important, what managers do, and how managers utilise organisational resources efficiently and effectively to achieve organisational goals. ✓ Distinguish among planning, organising, leading and controlling (the four principal managerial functions), and explain how managers’ ability to handle each one can affect organisational performance. ✓ Differentiate among levels of management, and understand the responsibilities of managers at different levels in the organisational hierarchy. ✓ Identify the roles managers perform, the skills they need to execute those roles effectively, and the way new information technology is affecting these roles and skills. ✓ Discuss the principal challenges managers face in today’s increasingly competitive global environment.

A Manager’s Challenge
The Rise of Siemens
Werner von Siemens was born in Germany in a small town near Hannover in December 1816. No one could then know that the fourth child of a poor farmer’s family would become the founder of one of the world’s best-known companies. While showing ample potential in science and engineering, Werner was denied a university education due to the financial constraints of his family. He thus chose the security of the Army

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CMEC01 12/8/06 8:50 Page 2

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CHAPTER 1: MANAGERS AND MANAGING

as a profession. It was quickly noticed that he was inventive and apt at engineering problems and this aptitude also translated into business acumen. During his time in the army, Werner and his brother registered their first patent and sold the rights to it – leaving them financially comfortable and allowing Werner to research further into his main interest – telegraphy. This field was at the time relatively underdeveloped, but Werner showed truly managerial foresight in predicting it to be the ‘technology of the future’. Through developing a superior product, Werner finally opened his first business with a skilled mechanical engineer, Johann Georg Halske, in Berlin in 1847. The success of this company was rapid and Werner soon had to dedicate his entire time to the business. Werner realised that the technology that Telegraphen-Bau-Anstalt Siemens & Halske was providing would predominantly be bought by governments and large corporations. Thus, in order to advance the company, Werner internationalised and opened the first two offices outside Prussia (then a distinct part of the German empire), showing entrepreneurial spirit ahead of his time. The first international office opened was in London in 1850 with a second office in St Petersburg in 1855 and a third in Austria three years later. To maintain close control over the foreign subsidiaries, Werner’s brothers managed the branches in London and St Petersburg. Within 10 years of operating, Siemens had already become a truly global company due to Werner’s instinct and managerial abilities to spot developing and new markets. Werner continued his innovation and astute management of the business. His biggest success was the invention of the dynamo-machine, with which he coined the term ‘electrical engineering’. However, it was not just Werner’s innovations or his entrepreneurial spirit that made the company what it is today. Werner was a manager who cared for his employees, noticing that ‘the firm could only be made to develop satisfactorily if one could further its interest by ensuring that all employees work together in a cheerful and efficient manner’. Werner negotiated social benefits that were ahead of their time. Siemens & Halske had a company pension scheme by 1872, a 9-hour working day (the norm was 10–12 for labour) and a profit-sharing scheme called ‘stocktaking bonus’ which was launched in 1866. After Werner’s retirement the company re-formed as a stock corporation in 1897 and developed to be one of the largest...
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