CHAPTER 1

MANAGING IN A DYNAMIC ENVIRONMENT

LEARNING OBJECTIVES
After studying this chapter, you should be able to:

v1 v

Define managers and management.

v2 v

Describe what managers do.

v3 v

Understand the competencies used in managerial work and begin to practice them.

v4 v

Describe the changing context of managerial work.

OUTLINE
v1 v

Define managers and management.

I.

Managers and Management

1. Managerial Competenciessets of knowledge, skills, behaviors, and attitudes
that a person needs to be effective in a wide range of managerial jobs and various
types of organizations.1
a. Competencyrefers to combinations of knowledge, skills, behaviors, and
attitudes that contribute to personal effectiveness.
b. The six key managerial competencies are: communication, planning and
administration, teamwork, strategic action, global awareness, and selfmanagement.2
2. Organizationany structured group of people brought together to achieve
certain goals that individuals could not reach alone.
a. Effective managers must pay attention to what goes on both inside and
outside their organizations.
b. Regardless of an organizations specific goals, the job of managers is to help
the organization achieve those goals.
3. Managera person who plans, organizes, directs, and controls the allocation of
human, material, financial, and information resources in pursuit of the
organizations goals.
a. The many different types of managers include: department managers, product
managers, account managers, plant managers, division managers, district
managers, and task force managers.
b. What managers have in common is responsibility for the efforts of a group of
people who share a goal and access to resources that the group can use in
pursuing its goal.
1

Chapter 1: Managing in a Dynamic Environment

c. You dont have to be called a manager to be a manager; some managers have unique
and creative titles, such as chief knowledge officer (a person in charge of training
and development) and chief information officer (a person in charge of information
systems).
d. Most employees contribute to organizations through their own individual work, not
by directing other employees.
e. The difference between managers and individual contributors is that managers are
evaluated on how well the people they direct do their jobs.
f. Managers must find ways to keep employees motivated.
4. Managementthe tasks or activities involved in managing an organization: planning,
organizing, leading, and controlling.
a. The scope of activities performed by functional managers is relatively narrow,
whereas the scope of activities performed by general managers is quite broad.
b. Functional Managerssupervise employees having expertise in one area, such as
accounting, human resources, sales, finance, marketing, or production.
1. Functional managers have a great deal of experience and technical expertise in
the areas of operation they supervise.
2. Their success as managers is due in part to the detailed knowledge they have
about the work being done by the people they supervise, the problems those
people are likely to face, and the resources they need to perform well.
c. General Managersare responsible for the operations of a more complex unit, such
as a company or a division.
1. They usually oversee the work of functional managers.
2. General managers must have a broad range of well-developed competencies to
do their jobs well.

v2 v
II.

Describe what managers do.

What Managers Do
1. General Managerial Functionswhat managers dothe functions they perform.
a. Planninginvolves defining organizational goals and proposing ways to reach them.
b. Organizingthe process of creating a structure of relationships that will enable
employers to carry out managements plans and meet organizational goals.
1. By organizing effectively, managers can better coordinate human, material, and
information resources.
c. Leadinginvolves communicating with and motivating others to perform the tasks
necessary to achieve the organizations goals.
1. Leading isnt done only after planning and organizing end; it is a crucial element
of those functions.

3Chapter 1: Managing in a Dynamic Environment

d. Controllingthe process by which a person, group, or organization consciously

monitors performance and takes corrective action.
1. The control process includes the following steps: set standards of performance,
measure current performance against those standards, take corrective action to
correct any deviations, and adjust the standards if necessary.
2. Levels of Managementhow managers are classified within an organization.
a. First-Line Managersdirectly responsible for the production of goods or services.
Examples: sales managers, section heads, production supervisors.
1. Employees who report to first-line managers do the organizations basic
production workwhether of goods or of services.
2. This level of management is the link between the operations of each department
and the rest of the organization.
3. First-line managers spend little time with higher management or with people
from other organizations.
4. First-line managers spend most of their time with the people they supervise and
with other first-line managers.
5. First-line managers spend relatively little time planning and organizing; most of
their time is spent leading and controlling.
b. Middle Managersreceive broad, general strategies and policies from top managers
and translate them into specific goals and plans for first-line managers to implement.
Examples: department heads, plant managers, directors of finance.
1. Responsible for directing and coordinating the activities of first-line managers
and nonmanagerial personnel.
2. These managers review the work plans of various groups, help them set
priorities, and negotiate and coordinate their activities.
3. Middle managers carry out top managements directions primarily by delegating
authority and by coordinating schedules and resources with their managers.
4. Middle managers must be adept at developing their subordinates, opening lines
of communication for them, and making them visible to other middle managers
and to top managers.
c. Top Managersare responsible for the overall direction and operation of an
organization.
Examples: Chief executive officer, president, division president, executive vicepresident.
1. Top managers develop goals, policies, and strategies for the entire organization.
2. They set the goals that are handed down through the hierarchy, eventually
reaching each worker.

Chapter 1: Managing in a Dynamic Environment

3. They represent their organizations in community affairs, business deals, and

government negotiations.
4. Top managers spend over 75 percent of their day planning and leading; they
spend little time directly controlling the work of others.
5. Top managers spend most of their leading time with key people and
organizations outside their own organizations; and they must respond to crises
that create image problems for their organization.

v3 v
III.

Understand the competencies used in managerial work and begin to practice them.

Managerial Competencies
1. Communication Competencyrefers to the effective transfer and exchange of
information that leads to understanding between yourself and others.
a. Communication competency includes
communication, and negotiation.

informal

communication,

formal

b. Besides speaking and writing, communication involves listening, observing body

language, and picking up on the subtle cues that people sometimes use to modify the
meaning of their words.
c. Communication is the most fundamental competency; unless you can express
yourself and understand others in written, oral, and nonverbal communication, you
cant use the other competencies effectively to accomplish tasks through other
people.
d. Through frequent informal communication, managers in all countries lay the
groundwork for collaboration within and outside their organizations.
e. Formal communications such as newsletters often are used to inform people of
relevant events and activities and to keep people up to date on the status of ongoing
projects.
2. Planning and Administration Competencyinvolves deciding what tasks need to be
done, determining how they can be done, allocating resources to enable them to be done,
and then monitoring progress to ensure that they are done.
a. The planning and administration competency includes: information gathering,
analysis, and problem solving; planning and organizing projects; time management;
and budgeting and financial management.
b. Planning and organizing projects usually means working with employees to clarify
broad objectives, discuss resource allocations, and agree to completion dates.
3. Teamwork Competencyaccomplishing outcomes through small groups of people
who are collectively responsible and whose work is interdependent.
a. Managers in companies that utilize teams can become more effective by designing
teams properly, creating a supportive team environment, and managing team
dynamics appropriately.

5Chapter 1: Managing in a Dynamic Environment

b. Teamwork as a competency involves taking the lead at times, supporting others who
are taking the lead at other times, and collaborating with others in the organization
on projects that dont even have a designated team leader.
c. Team design involves formulating goals to be achieved, defining tasks to be done,
and identifying the staffing needs to accomplish those tasks.
d. All members of a team should have the competencies needed to create a supportive
environment where team members are empowered to take actions based on their best
judgment, without always seeking approval first from the team leader or project
manager.
e. Managing team dynamics is necessary for effective teamwork. This includes
understanding the strengths and weaknesses of team members and using conflict and
dissent to enhance the quality of decisions.
4. Strategic Action Competencyunderstanding the overall mission and values of the
company and ensuring that your actions and those of the people you manage are aligned
with the companys mission and values.
a. Strategic action competency includes: understanding the industry, understanding the
organization, and taking strategic action.
b. Managers need to understand the organization as a system of interrelated parts that
include comprehending how departments, functions, and divisions relate to one
another and how a change in one can affect others.
5. Global Awareness Competencyperforming managerial work for an organization that
utilizes human, financial, informational, and material resources from multiple countries
and serves markets that span multiple cultures.
a. This competency includes cultural knowledge and understanding and cultural
openness and sensitivity.3
b. Because business is becoming global, many managers are now expected to develop a
knowledge and an understanding of at least a few other cultures.
c. An open attitude about cultural differences and a sensitivity to them are especially
important for anyone who must operate across cultural boundaries.
6. Self-Management Competencytaking responsibility for your life at work and
beyond.
a. Self-management competency includes: integrity and ethical conduct, personal drive
and resilience, balancing work/life issues, and self-awareness and development.
b. Self-awareness and development includes both task-related learning and learning
about yourself.
c. Research shows that people who take advantage of the development and training
opportunities that employers offer learn much from them and advance more quickly
than those who dont take advantage of them.

Chapter 1: Managing in a Dynamic Environment

d. A derailed manager is one who has moved into a position of managerial

responsibility but has little chance of future advancement or gaining new
responsibilities because of failure to develop competencies.

v4 v
IV.

Describe the changing context of managerial work.

ManagementA Dynamic Process

1. Malcolm Baldrige Quality AwardCongress created this award by passing the
Malcolm Baldrige National Quality Improvement Act of 1987 in an attempt to create
standards for measuring total quality in both small and large service and manufacturing
companies.
a. In 1950, W. Edwards Demings total quality control method was rejected by U.S.
companies but was received warmly in Japan; thus, the Japanese created the Deming
Prize, awarded annually to the Japanese company that has attained the highest level
of quality.
b. In Europe, the International Organization for Standardization (ISO) issues
certification standards for excellence in quality, and if their products meet the
specified high standard they can then display the EC mark as a seal of approval.
2. Restructuring of Organizationsin the 1990s mergers and acquisitions have been a
major source of corporate restructuring.
a. Downsizingthe process of reducing the size of a firm by laying off workers or
retiring workers early.
1. The primary objectives of downsizing include: cutting costs, spurring
decentralization and speeding up decision making, cutting bureaucracy and
eliminating layers of hierarchy, and improving customer relations.
2. According to a study by the Conference Board, about 72 percent of companies
have fewer middle managers today than they did five years ago.
3. Self-Managed Work Teamsbring workers and first-line managers together to make
joint decisions to improve the way they do their jobs.4
a. Workers that first-line managers supervise are less willing to put up with
authoritarian management, they want their jobs to be more creative, challenging,
fun, and satisfying and want to participate in decisions affecting their work.
4. Outsourcingletting other organizations perform a needed service and/or manufacture
needed parts or products.
5. Modular Corporationa company whose operating functions are performed by other
companies.
a. The modular corporation is most common in three industries: apparel, auto
manufacturing, and electronics.5 The most commonly outsourced function is
production.
b. Decisions about what to outsource and what to keep in-house may be one of the
most important strategic decisions being made by managers today.

7Chapter 1: Managing in a Dynamic Environment

c. As organizations downsize and outsource functions, they become flatter and smaller.
6. Network Form of Organizationa weblike structure that links several firms through
strategic alliances.
a. Network forms of organizations are prevalent in high-tech industries, where they
allow older, established firms to gain access to the hot new discoveries being made
by scientists in universities and in small, creative organizations.
b. Strategic Alliancetwo or more firms agreeing to cooperate in a venture that is
expected to benefit all the participants.
1. Being competitive increasingly requires establishing and managing strategic
alliances with other firms.
7. A Changing Workforce: Older and More Diverse
a. Between 1990 and 2000, the number of people aged thirty-five to forty-seven will
increase by 38 percent, and the number between forty-eight and fifty-three will
increase by 67 percent.
b. Workforce Diversityrefers to the mix of people from various backgrounds in
todays labor force.
1. More women are working, and there is more diversity in terms of national
heritage.
c. Multicultural Organizationsan organization with a workforce that includes the full
mix of cultures found in the population at large and is committed to utilizing fully
their capabilities.
1. Managers are challenged to develop creative approaches to managing employers
with highly diverse backgrounds.
8. Changing Technologytechnology changes jobs in all types of industries.
a. In the United States, more than 9 million people work in the high-tech sector,
developing, producing, and delivering new electronic and communications-related
products.
b. High-tech employees contributed 27 percent of the growth in the U.S. gross
domestic product (GDP) during the mid-1990s.6
c. New technologies are changing jobs in all types of industries where numerous
people are working full or part time at home, connected to an office by means of a
computer, modem, and fax machine.
9. Globalizationtechnological advances in transportation and communications have
spurred the growth of international commerce.
a. Many firms that succeeded with their initial foreign ventures continued to evolve to
the point of becoming transnational.
b. Transnational Firmhas headquarters in several nations, and no single national
culture is dominant in the firm.7

Chapter 1: Managing in a Dynamic Environment

c. One implication of globalization for managers is that more and more employees will
be sent on overseas assignments.
d. The most frequent destinations for U.S. employees are Asia and Europe, and the next
most popular are North, Central, and South America.

MATCHING
Directions: Select the term that best identifies the statement listed below. Place the letter of the correct
term in the space provided.
A.
B.
C.
D.
E.
F.
G.
H.
I.
J.

Teamwork Competency
Organization
Leading
Multicultural Organization
Outsourcing
Management
Controlling
Network Form of Organization
Transnational Firm
Modular Corporation

K. General Manager
L. Strategic Alliance
M. Global Awareness Competency
N. Top Manager
O. Downsizing
P. Strategic Action Competency
Q. Planning
R. Functional Manager
S. Managerial Competencies
T. First-Line Manager

____

1.

A company whose operating functions are performed by other companies.

____

2.

Manager who is responsible for the overall direction and operations of an organization.

____

3.

Accomplishing outcomes through small groups of people who are collectively

responsible and whose work is interdependent.

____

4.

The process of reducing the size of a firm by laying off workers or retiring workers early.

____

5.

A weblike structure that links several firms through strategic alliances.

____

6.

Any structured group of people brought together to achieve certain goals that the same
individual could not reach alone.

____

7.

Managers who supervise employees having specialized skills in a single area of

operation.

____

8.

Letting other organizations perform a service and/or manufacture parts or a product.

____

9.

Manager directly responsible for the production of goods or services.

____

10.

The process by which a person, group, or organization consciously monitors performance

and takes corrective action.

____

11.

Two or more firms agreeing to cooperate in a venture that is expected to benefit all the
participants.

____

12.

Planning, organizing, leading, and controlling the people working in an organization and
the ongoing set of tasks and activities they perform.

9Chapter 1: Managing in a Dynamic Environment

____

13.

Performing managerial work for an organization that utilizes human, financial,

informational, and material resources from multiple countries and serves markets that
span multiple cultures.

____

14.

The managerial function of communicating with and motivating others to perform the
tasks necessary to achieve the organizations goals.

____

15.

Manager responsible for the overall operations of a complex unit such as a company or a
division.

____

16.

An organization that has headquarters in several nations, and no single national culture is
dominant in the firm.8

____

17.

Understanding the overall mission and values of the company and ensuring that your
actions and those of the people you manage are aligned with the companys mission and
values.

____

18.

Defining goals and proposing ways to reach them.

____

19.

An organization with a workforce that includes the full mix of cultures found in the
population at large and is committed to utilizing fully their capabilities.

____

20.

Clusters of knowledge, skills, behaviors, and attitudes that a manager needs to be

effective in a wide range of managerial jobs and organizations.

TRUE OR FALSE
Directions: Write True or False in the space provided.

v1 v
____

1.

The need for managers to have charisma is one of the key managerial competencies.

____

2.

Managers are not found in nonprofit organizations such as hospitals, orchestras, and
government agencies.

____

3.

An organization is any structured group of people brought together to achieve certain

goals that the same individuals could not reach alone.

____

4.

Management is the process of planning, organizing, leading, and controlling the people
working in an organization and the ongoing set of tasks and activities they perform.

____

5.

The scope of activities performed by general managers is relatively narrow, and general
managers have a great deal of experience and technical expertise in the areas of operation
they supervise.

____

6.

Planning involves creating a structure by setting up departments and job descriptions.

____

7.

Leading is a crucial element of the planning and organizing functions.

____

8.

Karen Zaler is a bakery manager who spends most of her time with the bakery
employees. She is considered a first-line manager.

v2 v

10

Chapter 1: Managing in a Dynamic Environment

____

9.

Doug Relston is a plant manager for the Relston Carpet Manufacturer who spends his
time reviewing the work plans of various groups, developing evaluation criteria for
performance, and deciding which projects should be given resources. He is considered a
top manager.

____

10.

Top managers spend 25 percent of their day planning and leading.

____

11.

Herb Kelleher, CEO of Southwest Airlines, visits with employees on the job and parties
with them after hours. He listens to his employees and observes their body language; thus
he is utilizing the communication competency.

____

12.

Of the six managerial competencies, teamwork competency is the most fundamental.

____

13.

Time management and problem solving are dimensions of the planning and
administration competency.

____

14.

A well-designed team is capable of high performance, but it needs a supportive

environment to achieve its full potential.

____

15.

Strategic action competency is a competency that only top managers need to gain.

____

16.

Managers today are expected to develop a knowledge and an understanding of at least a

few other cultures.

____

17.

The U.S. equivalent of the Deming Prize is the Martin Luther King Quality Award.

____

18.

Spurring decentralization and speeding up decision making are primary objectives of

downsizing.

____

19.

The modular corporation is seldom used in auto manufacturing and for outsourcing
production.

____

20.

Pharmaceutical firms like Merck and Eli Lily would not benefit from the network form of
organization.

v3 v

v4 v

MULTIPLE CHOICE
Directions: Select the best answer in the space provided.

v1 v
____

1.

All of the following are key managerial competencies except:

a. teamwork.
b. self-management
c. global awareness.
d. conceptual thinking.

____

2.

Any structured group of people working together to achieve certain goals that the same
individuals could not reach alone is a(n):
a. goal.

11
Chapter 1: Managing in a Dynamic Environment

b. organization.
c. network group.
d. management team.
____

3.

Which of the following job titles typically represents the role of a manager?
a. Coach.
b. Stockbroker.
c. Chief knowledge officer.
d. Two of the above.

____

4.

The head of the payroll department for the Target store in Reston, Virginia, is a:
a. first-line manager.
b. general manager.
c. matrix manager.
d. functional manager.

____

5.

The four functions of management are:

a. scheduling, leading, planning, and organizing.
b. planning, controlling, employing, and leading.
c. organizing, planning, controlling, and managing.
d. organizing, planning, leading, and controlling.

____

6.

_________ is the process of creating a structure of relationships that will enable

employees to carry out managements plans and meet organizational goals.
a. Organizing
b. Planning
c. Networking
d. Controlling

____

7.

Which of the following is not a step in the control process?

a. Create more structure
b. Take action to correct deviations
c. Set standards of performance
d. Adjust the standards if necessary

____

8.

_________ receive broad, general strategies and policies from top managers and translate
them into specific goals and plans for first-line managers to implement.
a. General mangers
b. Middle managers
c. Executive managers
d. Functional mangers

____

9.

John Morson works in the construction industry and supervises the crews for the metal
framing and wall-building activities and he sometimes operates machinery and
participates in the building process. John is considered to be a:
a. first-line manager.
b. top manager.
c. general manager.
d. middle manager.

v2 v

12

Chapter 1: Managing in a Dynamic Environment

____

10.

Which of the following is a false statement regarding first-line managers?

a. First-line managers in most companies spend little time with higher management or
with people from other organizations.
b. First-line managers may be called sales managers, section heads, or production
supervisors.
c. First-line managers spend a great deal of time planning and organizing.
d. First-line managers need strong technical expertise.

____

11.

Margie Miller spends most of her time planning and leading while at work. She is
considered a _________ manager.
a. first-line
b. top
c. middle
d. strategic

____

12.

Which of the following is an example of informal communication?

a. Kankei
b. Guanxi
c. Kwankye
d. All of the above.

____

13.

Jack Welch, General Electrics CEO, believes that to beat competitors and maximize the
companys profitability GE must improve quality control. As a manager, Jack builds
strong interpersonal relationships with a diverse range of people and solicits feedback
from employees. Nevertheless, Jack recently informed his managers that they wouldnt
have a future with the company if they failed to produce results.9 Jack is exhibiting the
_________ competency.
a. strategic action
b. planning and administration
c. communication
d. global awareness

____

14.

This managerial competency includes: information gathering, time management, financial

management, and problem solving.
a. Strategic action
b. Planning and administration
c. Organization
d. Managerial effectiveness

____

15.

Team design involves:

a. formulating goals to be achieved.
b. defining tasks to be done.
c. identifying the staffing needed to accomplish tasks.
d. All of the above.

____

16.

Understanding the overall mission and values of the company and ensuring that your
actions and those of the people you manage are aligned with them involves _________
competency.

v3 v

13
Chapter 1: Managing in a Dynamic Environment

a.
b.
c.
d.

global awareness
strategic alliance
strategic action
teamwork

____

17.

An open attitude about cultural differences and a sensitivity to them are important for
mastering the _________ competency.
a. global awareness
b. empathy
c. multicultural
d. communication

____

18.

Which of the following statements is true regarding self-management competency?

a. Companies today are much more concerned with prospective employees technical
skills and aptitude than their integrity.10
b. Research shows that people who take advantage of the development and training
opportunities that employers offer learn much from them and advance more quickly.
c. A derailed manager is one who has little managerial responsibility in a high risk
functional area.
d. Successful managers normally devote all their attention to their careers and neglect
their personal lives.

____

19.

In Europe, the _________ issues certification standards for excellence in quality.

a. ISO
b. EU
c. GATT
d. WTO

____

20.

The Jolly Toy Company, based in the United States, allows production of toys to be done
in low-cost plants in China. After production is completed, the toys are imported back to
the United States for distribution in North America. Distribution for Europe and Asia is
done from the same plants. This is an example of:
a. downsizing.
b. outsourcing.
c. exporting.
d. resourcing.

____

21.

The most commonly outsourced function is:

a. production.
b. public relations.
c. accounts receivable.
d. purchasing.

____

22.

A _________ is a company whose operating functions are performed by other companies.

a. network corporation
b. modern corporation
c. modular corporation

v4 v

14

Chapter 1: Managing in a Dynamic Environment

d. strategic alliance
____

23.

The U.S. biotechnology industry is characterized by nodes of relationships between new

biotechnology firms dedicated to research and new product development and established
firms in industries that can use these products. This is an example of _________.
a. matrix form of organization
b. multicultural organization
c. network form of organization
d. interdependent organization

____

24.

_________ refers to the mix of people from various backgrounds in todays labor force.
a. Employees
b. Multicultural
c. Culturally diverse
d. Workforce diversity

____

25.

A(n) _________ firm has headquarters in several nations, and no single national culture
is dominant.
a. international
b. multinational
c. global
d. transnational

ESSAY QUESTIONS
v1 v
1.

Explain the difference between functional and general managers.

v2 v
2.

Identify and discuss the four basic managerial functions.

v1v v2v
3.

Define management and managers. Discuss the duties and responsibilities of first-line managers,
middle managers, and top managers.

15
Chapter 1: Managing in a Dynamic Environment

v1v v3v
4.

Define managerial competencies and explain the six key managerial competencies.

v4 v
5.

Discuss the network form of organization and its relationship to strategic alliances.

CHAPTER 1
MANAGING IN A DYNAMIC ENVIRONMENT
MATCHING SOLUTIONS
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.

J
N
A
O
H
B
R
E
T
G
L
F
M
C
K
I
P
Q
D
S

Modular Corporation
Top Managers
Teamwork Competency
Downsizing
Network Form of Organization
Organization
Functional Manager
Outsourcing
First-Line Manager
Controlling
Strategic Alliance
Management
Global Awareness Competency
Leading
General Manager
Transnational Firm
Strategic Action Competency
Planning
Multicultural Organization
Managerial Competencies

16

Chapter 1: Managing in a Dynamic Environment

TRUE/FALSE SOLUTIONS
Question

Answer

Page

Explanation

1.

False

45

Managerial competencies are sets of knowledge, skills,

behaviors, and attitudes that a person needs to be effective in
a wide range of managerial jobs and various types of
organizations.11 The six key managerial competencies are:
communication, planning and administration, teamwork,
strategic action, global awareness, and self-management.12

2.

False

57

Profit-oriented businesses are one type of organizational

setting in which managers are found, but they also are found
in organizations such as: hospitals, schools, museums, sports
teams, stores, amusement parks, restaurants, orchestras,
community clubs and groups, government agencies, and
others. A manager is a person who plans, organizes, directs,
and controls the allocation of human, material, financial, and
information resources in pursuit of the organizations goals.

3.

True

4.

True

5.

False

89

Functional managers supervise employees having expertise

in one area, such as accounting, human resources, sales,
finance, marketing, or production. For example, the head of
a payroll department is a functional manager. Usually,
functional managers have a great deal of experience and
technical expertise in the areas of operation they supervise.
General managers are responsible for the operations of a
more complex unit, such as a company or a division. Usually
they oversee the work of functional managers.

6.

False

10

Planning involves defining organizational goals and

proposing ways to reach them. Organizing involves creating
a structure by setting up departments and job descriptions.

7.

True

8.

True

17
Chapter 1: Managing in a Dynamic Environment

9.
False 1314 Middle managers receive broad, general strategies and policies from top
managers and translate them into specific goals and plans for first-line managers to implement. Middle
managers typically have titles such as department head, plant manager, and director of finance. Middle
managers often are involved in reviewing the work plans of various groups, helping them set priorities,
and negotiating and coordinating their activities. They are involved in establishing target dates for
products or services to be completed; developing evaluation criteria for performance; deciding which
projects should be given money, personnel, and materials; and translating top managements general
goals into specific operational plans, schedules, and procedures. Top managers are responsible for the
overall direction of the company. Typical titles of top managers are chief executive officer, president,
division president, and executive vice-president.

10.

False

11.

True

12.

False

13.

True

14.

True

15.

False

16.

True

17.

False

18.

True

15

Top managers spend most of their day (over 75 percent)

planning and leading. They spend most of their leading time
with key people and organizations outside their own
organization.

5, 1617

The six managerial competencies are: communication

competency, planning and administration competency,
teamwork competency, strategic action competency, global
awareness competency, and self-management competency.
They are all important. However, communication is the most
fundamental because unless you can express yourself and
understand others in written, oral, and nonverbal
communication, you cant use the other competencies
effectively to accomplish tasks through other people.

23

Strategic action competency involves understanding the

overall mission and values of the company and ensuring that
your actions and those of the people you manage are aligned
with them. Strategic action competency includes
understanding the industry, understanding the organization,
and taking strategic action. All managers, but especially top
managers, need strategic action competency.

29

The U.S. equivalent of the Deming prize is the coveted

Malcolm Baldrige Quality Award. Congress created this
award by passing the Malcolm Baldrige National Quality
Improvement Act of 1987 in an attempt to create standards
for measuring total quality in both small and large service
and manufacturing companies.

18

Chapter 1: Managing in a Dynamic Environment

19.

False

30

The modular corporation is most common in three industries:

apparel, auto manufacturers, and electronics.13 The most
commonly outsourced function is production.

20.

False

3132

Network form of organization is a weblike structure that

links several firms through strategic alliances. Big
pharmaceutical firms such as Merck or Eli Lily gain from
such partnerships because the smaller firms typically
develop new drugs in as little as five years, versus eight-year
average development cycle in the larger firms.14

MULTIPLE CHOICE SOLUTIONS

Question

Answer

Page

Explanation

1.

45

Managerial competencies are sets of knowledge, skills,

behaviors, and attitudes that a person needs to be effective in
a wide range of managerial jobs and various types of
organizations.15 The six key managerial competencies are:
communication, planning and administration, teamwork,
strategic action, global awareness, and self-management.16

2.

An organization is any structured group of people brought

together to achieve certain goals that the same individuals
could not reach alone.

3.

A manager is a person who plans, organizes, directs, and

controls the allocation of human, material, financial, and
information resources in pursuit of the organizations goals.
Some managers have unique and creative titles, such as chief
knowledge officer and chief information officer. People with
the job titles of chief executive officer (CEO), president,
managing director, supervisor, and coach also have the
responsibility for helping a group of people achieve a
common goal, so they too are managers. Most employees
contribute to organizations through their own individual
work, not by directing other employees. Journalists,
computer programmers, insurance agents, machine
operators, newscasters, graphic designers, sales associates,
stockbrokers, accountants, and lawyers are essential to
achieving their organizations goals, but many people with
these job titles arent managers.

4.

Functional managers supervise employees having expertise

in one area, such as accounting, human resources, sales,
finance, marketing, or production. General managers are
responsible for the operations of a more complex unit, such

19
Chapter 1: Managing in a Dynamic Environment

as a company or a division. Usually they oversee the work of

functional managers.

5.

1011

The four basic functions of management are: planning,

organizing, leading, and controlling.

6.

10

Organizing is the process of creating a structure of

relationships that will enable employees to carry out
managements plans and meet organizational goals.
Organizing involves creating a structure by setting up
departments and job descriptions.

7.

11

Controlling is the process by which a person, group, or

organization consciously monitors performance and takes
corrective action is controlling. In the control process
managers: set standards of performance, measure current
performance against those standards, take action to correct
any deviations, and adjust the standards if necessary.

8.

13

Middle managers receive broad, general strategies and

polices from top managers and translate them into specific
goals and plans for first-line managers to implement.

9.

12

First-line managers spend most of their time with the people

they supervise and with other first-line managers. This level
of management is the link between the operations of each
department and the rest of the organization.

10.

1213

First-line managers are directly responsible for the

production of goods and services. First-line managers spend
relatively little time planning and organizing. Most of their
time is spent leading and controlling.

11.

1415

Top managers set the overall direction of an organization.

They spend most of their day (over 75 percent) planning and
leading.

12.

18

Through informal communication, managers build a social

network of contacts. In China, these connections are know as
guanxi; in Japan theyre called kankei, and in Korea theyre
called kwankye. Maintaining social networks is especially
important to managerial work and building of the
communication competency.

13.

17

The communication competency involves the effective

transfer and exchange of information and understanding
between yourself and others. It includes informal
communication, formal communication, and negotiation.

14.

1920

Planning and administration competency involves deciding

what tasks need to be done, determining how they can be
done, allocating resources to enable them to be done, and

20

Chapter 1: Managing in a Dynamic Environment

then monitoring progress to ensure that they are done.

Included is this competency are: information gathering,
analysis, and problem solving; planning and organizing
projects; time management; and budgeting and financial
management.

15.

21

Designing the team is the first step for any team project and
usually is the responsibility of a manager or team leader.
Team design involves formulating goals to be achieved,
defining tasks to be done, and identifying the staffing needed
to accomplish those tasks.

16.

23

Strategic action competency involves understanding the

overall mission and values of the company and ensuring that
your actions and those of the people you manage are aligned
with the companys mission and values. Strategic action
competency includes: understanding the industry,
understanding the organization, and taking strategic actions.

21
Chapter 1: Managing in a Dynamic Environment

17.
a
2325 Global awareness competency includes performing managerial work for
an organization that utilizes human, financial, informational, and material resources from multiple
countries and serves markets that span multiple cultures. An open attitude about cultural differences
and a sensitivity to them are especially important for anyone who must operate across cultural
boundaries.
18.

2527

Self-management competency means taking responsibility

for your life at work and beyond. Organizations expect their
employees to show integrity and act ethically. A derailed
manager is one who has moved into a position of managerial
responsibility but has little chance of future advancement or
gaining new responsibilities. Future managers wont succeed
unless they can balance work and life demands.

19.

29

In Europe, the International Organization for Standardization

(ISO) issues certifications for excellence in quality that serve
a purpose similar to that of the Deming Prize and the
Baldrige Award.

20.

30

Outsourcing means letting other organizations perform a

needed service and/or manufacture needed parts or products.

21.

30

The most commonly outsourced function is production. By

outsourcing production, a company can switch suppliers as
necessary to use the supplier best suited to a customers
needs.

22.

30

Modular corporation is a company whose operating

functions are performed by other companies. It is most
common in the apparel, auto manufacturing, and electronic
industries.17

23.

2932

Network form of organization is a weblike structure that

links several firms through strategic alliances. This form is
prevalent in high-tech industries, where they allow older,
established firms to gain access to the hot new discoveries
being made in small, creative organizations.

24.

32

Workforce diversity refers to the mix of people from various

backgrounds in todays labor force.

25.

34

A transnational firm has headquarters in several nations,

and no single national culture is dominant in the firm.18

ESSAY SOLUTIONS
[Pages 89]

1. Functional managers supervise employees having expertise in one area, such as accounting,
human resources, sales, finance, marketing, or production. For example, the head of a payroll

22

Chapter 1: Managing in a Dynamic Environment

department is a functional manager. Usually, functional managers have a great deal of experience
and technical expertise in the areas of operation they supervise.
General managers are responsible for the operations of a more complex unit, such as a company
or a division. Usually they oversee the work of functional managers. General managers must
have a broad range of well-developed competencies to do their jobs well.
[Pages 1011]

2. Planning involves defining organizational goals and proposing ways to reach them. Managers
plan for three reasons: (1) to establish an overall direction for the organizations future, such as
increased profit, expanded market share, and social responsibility; (2) to identify and commit the
organizations resources to achieving its goals; and (3) to decide which tasks must be done to
reach those goals.
Organizing is the process of creating a structure of relationships that will enable employees to
carry out managements plans and meet organizational goals. By organizing effectively,
managers can better coordinate human, material, and informational resources.
Leading involves communicating with and motivating others to perform the tasks necessary to
achieve the organizations goals. Leading isnt done only after planning and organizing end; it is
a crucial element of those functions.
Controlling is the process by which a person, group, or organization consciously monitors
performance and takes corrective action. A management control system sends signals to
managers that things arent working out as planned and that corrective action is needed.
[Pages 78, 1215]

3. Management refers to the tasks or activities involved in managing an organization: planning,

organizing, leading, and controlling. A manager is a person who plans, organizes, directs, and
controls the allocation of human, material, financial, and information resources in pursuit of the
organizations goals.
First-line managers are directly responsible for the production of goods or services. They may be
called sales managers, section heads, or production supervisors. This level of management is the
link between the operations of each department and the rest of the organization. Most of their
time is spent with the people they supervise and with other first-line managers. First-line
managers spend relatively little time planning and organizing. Most of their time is spent leading
and controlling. They usually need strong technical expertise to teach subordinates and supervise
their day-to-day tasks.
Middle managers receive broad, general strategies and policies from top managers and translate
them into specific goals and plans for first-line managers to implement. They typically have titles
such as department head, plant manager, and director of finance. They are responsible for
directing and coordinating the activities of first-line managers and nonmanagerial personnel.
They review the work plans of various groups, help them set priorities, and negotiate and
coordinate their activities.

23
Chapter 1: Managing in a Dynamic Environment

Top managers are responsible for the overall direction of the company. They develop goals,
policies, and strategies for the entire organization. Typical titles are: CEO, president, and
executive vice-president. They spend most of their day (over 75 percent) planning and leading.
[Pages 46, 1628]

4. Managerial competencies are sets of knowledge, skills, behaviors, and attitudes that a person
needs to be effective in a wide range of managerial jobs and various types of organizations.19
The six key managerial competencies are:
1.

Communication competency refers to the effective transfer and exchange of information

that leads to understanding between yourself and others. It includes: informal
communication, formal communication, and negotiations. Of the six managerial
competencies, it is the most fundamental.

2.

Planning and administration competency involves deciding what tasks need to be done,
determining how they can be done, allocating resources to enable them to be done, and
then monitoring progress to ensure that they are done. Included in this category are:
information gathering, analysis, and problem solving; planning and organizing projects;
time management; and budgeting and financial management.

3.

Teamwork competency requires accomplishing tasks through small groups of people who
are collectively responsible and whose work is interdependent. Managers in companies
that utilize teams can become more effective by: designing teams properly, creating a
supportive team environment, and managing team dynamics appropriately.

4.

Strategic action competency involves understanding the overall mission and values of the
company and ensuring that your actions and those of the people you manage are aligned
with them. It includes: understanding the industry, understanding the organization, and
taking strategic actions.

5.

Global awareness competency means performing managerial work for an organization that
utilizes human, financial, and material resources from multiple countries and serves
markets that span multiple cultures. It includes: cultural knowledge and understanding, and
cultural openness and sensitivity.20

6.

Self-management competency refers to taking responsibility for your life at work and
beyond. It includes: integrity and ethical conduct, personal drive and resilience, balancing
work/life issues, and self-awareness and development.

[Pages 3031]

5. The network form of organization is a weblike structure that links several firms through strategic
alliances. Strategic alliances are two or more firms agreeing to cooperate in a venture that is
expected to benefit all the participants. Network forms of organization are prevalent in high-tech
industries, where they allow older, established firms to gain access to the hot new discoveries
being made in small, creative organizations. Being competitive increasingly requires establishing
and managing strategic alliances with other firms. In a strategic alliance, two or more firms agree
to cooperate in a venture that is expected to benefit both firms.

24

Chapter 1: Managing in a Dynamic Environment

ENDNOTES
1. Our definition of managerial competencies is adapted from definitions provided by S. B. Parry. The Quest
for Competencies. Training, July 1996, pp. 4856; American Society for Training and Development.
Models for HRD Practice. Alexandria, Va.: ASTD, 1996; E. E. Lawler III and G. E. Ledford, Jr. New
approaches to organizing: Competencies, capabilities, and the decline of the bureaucratic model. In C. L.
Cooper and S. E. Jackson (eds.), Creating Tomorrows Organizations: A Handbook for Future Research in
Organizational Behavior. London: John Wiley & Sons, 1997; The American Compensation Associations
Competency Research Team. The role of competencies in an integrated HR strategy. ACA Journal,
Summer, 1996, pp. 620; The Hay Group. People, Performance, & Pay. New York: Free Press, 1996; and
The Career Planning Competency Model developed by Bowling Green State University, as described at
its Web site: www.bgsu.edu/office/careers/process/competen.html (February 20, 1997).
. The list integrates the competencies identified in several sources: B. B. Allred, C. C. Snow, and R. E.
Miles. Characteristics of managerial careers in the 21st century. Academy of Management Executive,
10(4), 1996, pp. 1727; H. Axel. HR Executive Review: Redefining the Middle Manager. New York: The
Conference Board, 1995; Personnel Decisions, Inc. Management Skills Profile. Minneapolis, Minn., 1997;
Personnel Decisions, Inc. Executive Success Profile. Minneapolis, Minn., 1997; Center for Creative
Leadership. Skillscope. Greensboro, N.C., 1992; Center for Creative Leadership. Benchmarks.
Greensboro, N.C., 1990; and D. T. Hall. Protean careers of the 21st century. Academy of Management
Executive, 10, 1996, pp. 816.
3. For information about other factors that contribute to success in overseas assignments, see W. Arthur, Jr.,
and W. Bennett, Jr. The international assignee: The relative importance of factors perceived to contribute
to success. Personnel Psychology, 48, 1995, pp. 99114; T. Brake and D. Walker. Doing Business
Internationally. Princeton, N.J.: Princeton Training Press; and G. M. Spreitzer, M. W. McCall, Jr., and J.
D. Mahoney. Early identification of international executive potential. Journal of Applied Psychology, 82,
529.
4. S. A. Mohrman and A. M. Mohrman, Jr.; K. B. Evans and H. P. Sims, Jr. Mining for innovation: The
conceptual underpinnings, history, and diffusion of self-directed teams. In C. L. Cooper and S. E. Jackson
(eds.), Creating Tomorrows Organizations: A Handbook for Future Research in Organizational Behavior.
Chichester, England: John Wiley & Sons, 1997, pp. 269292. G. M. Parker. Cross-Functional Teams. San
Francisco: Jossey-Bass, 1994; and C. C. Manz and H. P. Sims, Jr. Business Without Bosses. New York:
John Wiley & Sons, 1994.
5. G. Dess, A. M. A. Rasheed, K. J. McKaughlin, and R. L. Priem. The new corporate architecture. Academy
of Management Executive, 9 (3), 1995, pp. 720.
6. M. J. Mandel. The new business cycle. Business Week, March 31, 1977, pp. 56-68.
7. N. Adler and S. Bartholomew. Managing globally competent people. Academy of Management Executive,
6, 1992, pp. 5265.
8. See Note 7.
9. W. M. Carley. Charging ahead: To keep GEs profits rising, Welch pushes quality control plan. Wall Street
Journal, January 13, 1997, pp. A1, A8. Also see GEs home page at www.ge.com.
10. D. Bartram, P. A. Lindley, L. Marshall, and J. Foster. The recruitment and selection of young people by
small businesses. Journal of Occupational and Organizational Psychology, 68, 1995, pp. 339358; and T.
Teal. The human side of management. Harvard Business Review, November-December 1996, pp. 3544.
11. See Note 1.
12. See Note 3.
13. See Note 5.
14. E. Schonfeld. Merck vs. the biotech industry: Which one is more potent? Fortune, March 31, 1997, pp.
161162; and I. Sager. The new biology of big business. Business Week, April 15, 1996, p. 19.

25
Chapter 1: Managing in a Dynamic Environment

15.
16.
17.
18.
19.
20.

See Note 1.
See Note 2.
See Note 5.
See Note 7.
See Note 1.
See Note 3.

26

Chapter 1: Managing in a Dynamic Environment

11.

Our definition of managerial competencies is adapted from definitions provided by S. B. Parry. The
Quest for Competencies. Training, July 1996, pp. 4856; American Society for Training and Development.
Models for HRD Practice. Alexandria, Va.: ASTD, 1996; E. E. Lawler III and G. E. Ledford, Jr. New approaches
to organizing: Competencies, capabilities, and the decline of the bureaucratic model. In C. L. Cooper and S. E.
Jackson (eds.), Creating Tomorrows Organizations: A Handbook for Future Research in Organizational
Behavior. London: John Wiley & Sons, 1997; The American Compensation Associations Competency Research
Team. The role of competencies in an integrated HR strategy. ACA Journal, Summer, 1996, pp. 620; The Hay
Group. People, Performance, & Pay. New York: Free Press, 1996; and The Career Planning Competency Model
developed by Bowling Green State University, as described at its Web site:
www.bgsu.edu/office/careers/process/competen.html (February 20, 1997).
2.
The list integrates the competencies identified in several sources: B. B. Allred, C. C. Snow, and R. E.
Miles. Characteristics of managerial careers in the 21st century. Academy of Management Executive, 10(4),
1996, pp. 1727; H. Axel. HR Executive Review: Redefining the Middle Manager. New York: The Conference
Board, 1995; Personnel Decisions, Inc. Management Skills Profile. Minneapolis, Minn., 1997; Personnel
Decisions, Inc. Executive Success Profile. Minneapolis, Minn., 1997; Center for Creative Leadership. Skillscope.
Greensboro, N.C., 1992; Center for Creative Leadership. Benchmarks. Greensboro, N.C., 1990; and D. T. Hall.
Protean careers of the 21st century. Academy of Management Executive, 10, 1996, pp. 816.
33.
For information about other factors that contribute to success in overseas assignments, see W. Arthur, Jr.,
and W. Bennett, Jr. The international assignee: The relative importance of factors perceived to contribute to
success. Personnel Psychology, 48, 1995, pp. 99114; T. Brake and D. Walker. Doing Business Internationally.
Princeton, N.J.: Princeton Training Press; and G. M. Spreitzer, M. W. McCall, Jr., and J. D. Mahoney. Early
identification of international executive potential. Journal of Applied Psychology, 82, 529.
44.
S. A. Mohrman and A. M. Mohrman, Jr.; K. B. Evans and H. P. Sims, Jr. Mining for innovation: The
conceptual underpinnings, history, and diffusion of self-directed teams. In C. L. Cooper and S. E. Jackson (eds.),
Creating Tomorrows Organizations: A Handbook for Future Research in Organizational Behavior. Chichester,
England: John Wiley & Sons, 1997, pp. 269292. G. M. Parker. Cross-Functional Teams. San Francisco: JosseyBass, 1994; and C. C. Manz and H. P. Sims, Jr. Business Without Bosses. New York: John Wiley & Sons, 1994.
55.
G. Dess, A. M. A. Rasheed, K. J. McKaughlin, and R. L. Priem. The new corporate architecture.
Academy of Management Executive, 9 (3), 1995, pp. 720.
66.
M. J. Mandel. The new business cycle. Business Week, March 31, 1977, pp. 56-68.
77.
N. Adler and S. Bartholomew. Managing globally competent people. Academy of Management
Executive, 6, 1992, pp. 5265.
88.
See Note 7.
99.
W. M. Carley. Charging ahead: To keep GEs profits rising, Welch pushes quality control plan. Wall
Street Journal, January 13, 1997, pp. A1, A8. Also see GEs home page at www.ge.com.
1010. D. Bartram, P. A. Lindley, L. Marshall, and J. Foster. The recruitment and selection of young people by
small businesses. Journal of Occupational and Organizational Psychology, 68, 1995, pp. 339358; and T. Teal.
The human side of management. Harvard Business Review, November-December 1996, pp. 3544.
1111. See Note 1.
1212. See Note 3.
1313. See Note 5.
1414. E. Schonfeld. Merck vs. the biotech industry: Which one is more potent? Fortune, March 31, 1997, pp.
161162; and I. Sager. The new biology of big business. Business Week, April 15, 1996, p. 19.
1515. See Note 1.
1616. See Note 2.
1717. See Note 5.
1818. See Note 7.
1919. See Note 1.
2020. See Note 3.