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First published in Australia by Cengage Learning Australia in 2010. Second edition published in 2014.
Third edition published in 2017.
Fourth edition published in 2019.
Acknowledgements
Adaptation of MGMT, 12th edition by Chuck Williams, Cengage Learning US [9780357137727].
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Guide to the text
As you read this text you will find a number of features in every chapter to enhance your study of management and help you understand how the theory is applied in the real world.
PART OPENING FEATURES
The Part openers outline the chapters contained in each part for easy reference.
CHAPTER OPENING FEATURES
Identify the key concepts you will engage with through the Learning objectives at the start of each chapter
The Chapter overview lists the topics that are covered in the chapter.
Learning objectives
LO1 Describe what management is.
LO2 Explain the four functions of management.
LO3 Describe the different kinds of managers.
LO4 Explain the major roles and sub-roles that managers perform in their jobs.
LO5 Explain what companies look for in managers.
LO6 Discuss the top mistakes that managers make in their jobs.
LO7 Describe the transition that employees go through when they are promoted to management positions.
LO8 Explain how and why companies can
WHAT IS MANAGEMENT?
Management issues are fundamental to any organisation: how do we plan to get things done, organise the company to be efficient and effective, lead and motivate employees and put in place controls to make sure our plans are followed and our goals are met? Good management is basic to starting a business, growing a business and maintaining a business once it has achieved some measure of success.
Determining what constitutes good management for individual businesses is not always straightforward. Companies in Australia pay management consultants nearly $6.5 billion1 per year for advice on basic management issues, such as how to lead people effectively, organise the company efficiently, and manage large-scale projects and processes.
2 This textbook will help you understand some of the basic issues that management consultants help companies resolve (and it won’t cost you billions of dollars).
After reading the next two sections, you should be able to:
• describe what management is
• explain the four functions of management.
REVIEW FEATURES
Review your understanding of the key chapter topics with the Concept summary at the end of each Part.
PART 1, CHAPTERS 1–4
Overall aim of Part 1
To introduce management, its history and its applications in contemporary workplaces
What can you take from your progress through this part of MGMT5?
1 Management
☑ You have developed your understanding of the four functions of management and covered the different kinds of managers – including the major roles and sub-roles that managers perform in their jobs.
☑ You can articulate what companies look for in managers and you will be able to describe the transition that employees go through when they are promoted to management positions.
☑ You understand that companies can create competitive advantage through people.
☑ You have learned that sometimes managers make mistakes, and you can now identify and discuss the top mistakes that managers make in their jobs.
2 History of management
☑ You have developed your understanding of the history of management and you have covered conceptual, theoretical and analytical aspects of management
☑ You are able to discuss the origins of management, comparing them with the ideas and practices of managers today.
☑ You understand the history of scientific management, bureaucratic and administrative management, and you have learned about the contributions to management theory and practice by key thinkers in the field.
☑ You have covered the history of human relations management and can apply the lessons learned from
3 Organisational environments and cultures
☑ You have learned how changing environments affect organisations. You can explain and provide examples of the four components of the general environment and explain the five components of the specific environment.
Consolidate your knowledge with the Tear-out study cards found at the end of the book that summarise each chapter for class preparation and revision.
1 REVIEW MANAGEMENT
☑ You will be able to articulate and adopt certain processes that companies use to make sense of their changing environments, and expand upon how organisational cultures are created and how they can help companies be successful.
4 Ethics and social responsibility
☑ You have learned how to identify common kinds of workplace deviance, and understand the role of the Australian Competition and Consumer Commission (ACCC) in the Australian business environment.
LO1 Management is …
Management Getting work done through others.
Efficiency Getting work done with a minimum of effort, expense or waste.
Effectiveness Accomplishing tasks that help fulfil organisational objectives.
Planning Determining organisational goals and a means for achieving them.
Organising
Deciding where decisions will be made, who will do what jobs and tasks, and who will work for whom.
Leading Inspiring and motivating workers to work hard to achieve organisational goals.
Controlling Monitoring progress towards goal achievement and taking corrective action when needed.
Top managers Executives responsible for the overall direction of the organisation.
Middle managers Managers responsible for setting objectives consistent with top management’s goals and for planning and implementing subunit strategies for achieving these objectives.
First-line managers Managers who train and supervise the performance of non-managerial employees who are directly responsible
LEARNING OBJECTIVES
☑ Your study of ethical decision making has allowed you to discuss how companies are encouraged to behave ethically and how they may be punished for unethical behaviour.
Team leaders Managers responsible for facilitating team activities toward goal accomplishment.
Figurehead role The interpersonal role managers play when they perform ceremonial duties.
Leader role The interpersonal role managers play when they motivate and encourage workers to accomplish organisational objectives.
Liaison role The interpersonal role managers play when they deal with people outside their units.
Monitor role The informational role managers play when they scan their environment for information.
Disseminator role The informational role managers play when they share information with others in their departments or companies.
Spokesperson role The informational role managers play when they share information with people outside their departments or companies.
Entrepreneur role The decisional role managers play when they adapt themselves, their subordinates and their units to change.
Disturbance handler role The decisional role managers play when they respond to severe problems that demand
Good management is working through others to accomplish tasks that help fulfil organisational objectives as efficiently as possible.
LO2 Management functions
Henri Fayol’s classic management functions are known today as planning, organising, leading and controlling. Planning is determining organisational goals and a means for achieving them. Organising is deciding where decisions will be made, who will do what jobs and tasks and who will work for whom. Leading is inspiring and motivating employees to work hard to achieve organisational goals. Controlling is monitoring progress toward goal achievement and taking corrective action when needed. Studies show that performing management functions well leads to better managerial performance.
85 CHAPTER
LO3 Kinds of managers
There are four different kinds of managers. Top managers are responsible for creating a context for change, developing attitudes of commitment and ownership, creating a positive organisational culture through words and actions and monitoring their company’s business environments. Middle managers are responsible for planning and allocating resources, coordinating and linking groups and departments, monitoring and managing the performance of subunits and implementing the changes or strategies generated by top managers. First-line managers are responsible for managing the performance of non-managerial employees, teaching their workers how to do their jobs and making detailed schedules and operating plans based on middle management’s intermediate-range plans. Team leaders are responsible for facilitating team performance, managing external relationships and facilitating internal team relationships.
LO4 Managerial roles
Managers perform interpersonal, informational and decisional roles in their jobs. In fulfilling the interpersonal role, managers act as figureheads by performing ceremonial duties, as leaders by motivating and encouraging workers and as liaisons by dealing with people outside their units. In performing their informational role, managers act as monitors by scanning their environment for information, as disseminators by sharing information with others in the company and as spokespeople by sharing information with people outside their departments or companies. In fulfilling decisional roles, managers act as entrepreneurs by adapting their units to incremental change, as disturbance handlers by responding to larger problems that demand immediate action, as resource allocators by deciding resource recipients and amounts, and as negotiators by bargaining with others about schedules, projects, goals, outcomes and resources.
LO5 What companies look for in managers
Companies do not want one-dimensional managers. They want managers with a balance of skills. They want managers who know their stuff (technical skills), are equally comfortable working with bluecollar and white-collar employees (human skills), are able to assess the complexities of today’s competitive marketplace and position
Guide to the online resources
FOR THE INSTRUCTOR
Cengage is pleased to provide you with a selection of resources that will help you prepare your lectures and assessments. These teaching tools are accessible via cengage.com.au/instructors for Australia or cengage.co.nz/instructors for New Zealand.
MINDTAP
Premium online teaching and learning tools are available on the MindTap platform – the personalised eLearning solution.
MindTap is a flexible and easy-to-use platform that helps build student confidence and gives you a clear picture of their progress. We partner with you to ease the transition to digital – we’re with you every step of the way.
The Cengage Mobile App puts your course directly into students› hands with course materials available on their smartphone or tablet. Students can read on the go, complete practice quizzes or participate in interactive real-time activities.
MindTap for MGMT5 is full of innovative resources to support critical thinking, and help your students move from memorisation to mastery! Includes:
• MGMT5 eBook
• Media quizzes
• Self assessments
• Revision quizzes
• Research activities and more!
MindTap is a premium purchasable eLearning tool. Contact your Cengage learning consultant to find out how MindTap can transform your course.
INSTRUCTOR’S MANUAL
The Instructor’s manual includes:
• Learning objectives
• Key terms
COGNERO ® TEST BANK
• Lesson plans
• Video assignments and activities
• Review questions with solutions
• And more!
A bank of questions has been developed in conjunction with the text for creating quizzes, tests and exams for your students. Create multiple test versions in an instant and deliver tests from your LMS, your classroom, or wherever you want using Cognero. Cognero test generator is a flexible online system that allows you to import, edit, and manipulate content from the text’s test bank or elsewhere, including your own favourite test questions.
POWERPOINT™ PRESENTATIONS
Use the chapter-by-chapter PowerPoint slides to enhance your lecture presentations and handouts by reinforcing the key principles of your subject.
ARTWORK FROM THE TEXT
Add the digital files of graphs, tables, pictures and flow charts into your learning management system, use them in student handouts, or copy them into your lecture presentations.
OTHER INSTRUCTOR RESOURCES
The Mapping grid is a simple grid that shows how the content of this book relates to the units of competency needed to complete the Diploma of Leadership and Management.
FOR THE STUDENT
MindTap is the next-level online learning tool that helps you get better grades! MindTap gives you the resources you need to study – all in one place and available when you need them. In the MindTap Reader, you can make notes, highlight text and even find a definition directly from the page. If your instructor has chosen MindTap for your subject this semester, log in to MindTap to:
• Get better grades
• Save time and get organised
• Connect with your instructor and peers
• Study when and where you want, online and mobile
• Complete assessment tasks as set by your instructor
• When your instructor creates a course using MindTap, they will let you know your course link so you can access the content. Please purchase MindTap only when directed by your instructor. Course length is set by your instructor.
Alan McWilliams
About the authors
Alan is an Associate Professor in the College of Business at Victoria University where is he also the Deputy Head of Community Engagement in the First Year College. In academia since 1990, Alan previously worked in various management and HR roles in hospitality and within the Tasmanian State public service. Alan’s research interests include team-based organisations, employee relations management and management issues within the hospitality and events industries. Alan has published in numerous refereed journals and has presented at a variety of discipline-related conferences. His teaching awards include Carrick Australia Award for University Teaching 2007: Citation for Outstanding Contribution to Student Learning, Vice Chancellors citation for outstanding contribution to student learning 2006 and a Vice Chancellors Award for programs which enhance the student experience 2006. Alan is also a board member of the Australia and New Zealand Academy of Management (ANZAM).
Rob Lawrence
Rob Lawrence has many years of senior management experience with federal and state public services, working as a project manager, ministerial adviser and speechwriter for Commonwealth and Victorian governments. He also worked for three years as Manager (Learning and Development) for the Australian Public Service Commission. Rob has a BA in economics, adult training certification and post-graduate qualifications in management. His teaching experience includes lecturing in a range of management subjects at Monash and RMIT universities. In recent years Rob has focused on teaching first-year Management at Victoria University. He teaches locally and overseas, mainly in China.
Wahed Waheduzzaman
Wahed Waheduzzaman is currently a lecturer in the Faculty of Business and Law, Swinburne University of Technology. He completed his PhD in comparative management and public service management from the Victoria University. Wahed previously worked in different ministries as a deputy secretary to the Government of Bangladesh. Major areas of his research interests are management, human resource management, good governance, and public-sector management. He has published articles in several refereed journals including Public Administration and Society, Local Government Studies , Employee Relations and Australian Journal of Public Administration .
Acknowledgements
The authors would like to thank Rachael, Stephanie and Kylie for their valuable feedback to improve the chapters in this book.
Cengage would like to thank Anjali Chhetri firstly for her valuable research on Chapters 14, 15 and 17, and her writing on Chapter 5. We would also like to thank Gaby Grammeno for her writing on Chapters 14, 15 and 17.
Cengage Learning would like to thank the following reviewers for their valuable feedback in the development of this text:
• Zoë Port – Massey University
• Dr Dhara Shah – Griffith University
• Mark Wickham – University of Tasmania
• Merran Renton – Bedford College
• Bruce Johnstone – Monash University
• Jess Co – Monash University
• Jing Ye – Deakin College
• Jason Yap – Scope Training
• Helen Parker – University of Sydney
• Nicole El Haber – La Trobe University
• Pheroza Daruwalla – Western Sydney University
• Elisa Uyen – The Pivot Institute.
efficiency getting work done with a minimum of effort, expense or waste
effectiveness accomplishing tasks that help fulfil organisational objectives
as the guy who has to do everything or have all the answers. Instead, he sees himself as ‘the guy who is obsessed with enabling employees to create value’. Rather than coming up with solutions himself, Nayar creates opportunities for collaboration, peer review and employees to give feedback on ideas and work processes. Says Nayar: ‘My job is to make sure everybody is enabled to do what they do well.’ 3 Nayar’s description of managerial responsibilities suggests that managers also have to be concerned with efficiency and effectiveness in the work process. Efficiency is getting work done with a minimum of effort, expense or waste. For example, if you drive along Footscray road in Melbourne, or pass by Port Tauranga near Auckland, you’ll see containers from many countries, with the logos of even more companies on their sides. Chances are you will have seen a lot of containers with the name ‘Maersk’ on them. Maersk is the world’s largest container shipping company. The Chief Operating Officer at Maersk, Soren Toft, says: ‘Cutting idle time at ports is a big priority and challenge. It’s like a Formula One pit stop. The faster we come in and out, the more time and money we save.’4 So Maersk digitally tracks each container (a 12-metre steel box loaded onto a railway wagon or truck) and all the loading and unloading steps for its ‘Triple E’ ships, which hold nearly 21 000 containers. Maersk’s ‘pit stop’ system ties into mobile phone apps so ships can easily share data with shore crews who position 1815-tonne stacking cranes, shuttle carriers and ‘truck-on’ loaders to efficiently move the right container boxes on and off at each stop. 5 For example, the ship Madrid Maersk unloaded and reloaded 6500 containers in just 59 hours in Antwerp, Belgium. By itself, efficiency is not enough to ensure success. Managers must also strive for effectiveness , which is accomplishing tasks that help fulfil organisational objectives, such as customer service and satisfaction. The renowned writer on management, Peter Drucker, puts it like this: ‘efficiency is doing things right, effectiveness is doing the right things’.6
LO2 Management functions
Henri Fayol, who was a managing director (CEO) of a large steel company in the early 1900s, was one of the founders of the field of management. You’ll learn more about Fayol and management’s other key contributors when you read about the history of management in Chapter 2. Based on his 20 years of experience as a CEO, Fayol argued that ‘the success of an enterprise generally depends much more on the administrative ability of its leaders than on their technical ability’.7
A century later, Fayol’s arguments still hold true. During a two-year study code-named Project Oxygen, Google analysed performance reviews and feedback surveys to identify the traits of its best managers. According to Laszlo Bock, Google’s Vice President for People Operations: ‘We’d always believed that to be a manager, particularly on the engineering side, you need to be as deep or deeper a technical expert than the people who work for you. It turns out that that’s absolutely the least important thing.’ 8 What was most important? ‘Be a good coach.’ ‘Empower; Don’t micromanage.’ ‘Be product and results-oriented.’ ‘Be a good communicator and listen to your team.’ ‘Be interested in [your] direct reports’ success and wellbeing.’ 9 In short, Google found what Fayol observed: administrative ability, or management, is key to an organisation’s success.
Maersk is managing the use of shipping containers more efficiently by using tracking software.
to a million electric cars per year.15 In Australia, the number of people aged between 20 and 24 who hold a driver’s licence has been falling in some states, but has risen slightly in others; overall, there seems to be a downward trend in younger people getting their driver’s licence.16 Fewer people with driver’s licences means fewer car sales. Furthermore, some forecasts suggest that there will be an estimated 23 million selfdriving cars in the US by 2035, although the uptake of self-driving cars in Australia and elsewhere may be slower. Whatever the number of self-driving cars eventually turns out to be, if the trend in self-driving technology continues, even fewer people will need to own other forms of cars.17 Toyota CEO Akio Toyoda sees the future for Toyota as being its development from being a car maker to being a mobility provider for communities: ‘we will strive to adopt a broad, community-level and society-level perspective … which in essence is the concept of the “connected city”.’18
You’ll learn more about planning in Chapter 5 on planning and decision making, Chapter 6 on organisational strategy, Chapter 7 on innovation and change and Chapter 8 on global management.
Organising
Organising is deciding where decisions will be made, who will do what jobs and tasks, and who will work for whom in the company. In other words, organising is about determining how things get done. For example, supermarket click-and-collect online orders – in which customers pick up their groceries in the supermarket car park without setting foot in the shop itself – used to make up just a small percentage of total grocery shopping, but surging customer demand is forcing supermarkets to rethink how they do things.19
of 14.4 per cent. With the shift to online purchasing at the outset of the COVID-19 pandemic, total online sales in Australia averaged an annual rise of 67.1 per cent from March to October 2020. 20
The experience in the US and elsewhere was similar. The first challenge, according to industry analyst Sucharita Kodali, is that unlike in warehouses, ‘[i]nventory is never where it’s supposed to be [in the store]. People [shoppers] move it around, and fast-moving items are never there.’ 21 The second is that store workers only collect 80 items per hour from grocery store aisles. 22 With online orders rising rapidly, Walmart couldn’t keep up. So, it turned to Alert Innovation.
Alert Innovation’s Alphabot Automated Storage and Retrieval System reorganises who does what. Installed in the almost 7000-square-metre storerooms at the back of Walmart Supercenters, the 7.3-metrehigh system automatically moves items vertically and horizontally in automated carts from their stored locations to work stations where employees check and bag the items for pick-up. According to Walmart Senior Manager Brian Roth: ‘Ultimately, this will lower dispense times, increase accuracy, and improve the entirety of online grocery [shopping].’ 23 Indeed, the Alphabot system allows Walmart associates to handle 800 items per hour – a tenfold increase from manually picking up from the aisles. 24 Roth concludes that the reorganisation ‘will help free associates to focus on service and selling, while the technology handles the more mundane, repeatable tasks’. 25
You’ll learn more about organising in Chapter 9 on designing adaptive organisations, Chapter 10 on managing teams and Chapter 11 on human resource management.
Leading
organising deciding where decisions will be made, who will do what jobs and tasks, and who will work for whom leading inspiring and motivating employees to work hard to achieve organisational goals
In Australia, online sales generally, including click-and-collect, became increasingly popular during 2020 and the first part of 2021, mainly due to the COVID-19 pandemic. The range of goods available online exploded in 2020, and grew to include not just groceries, but also hardware from stores such as Bunnings and sporting/outdoors equipment from stores such as Anaconda and BCF. Retailers had to adapt to this rapid increase in online sales very quickly during the pandemic, and the Australian Bureau of Statistics (ABS) stated in December 2020 that it was possible that the value of online purchases had been under-reported since April that year. The ABS further stated that in the 12 months from March 2019 to February 2020, total online sales averaged growth
Our third management function, leading , involves inspiring and motivating employees to work hard to achieve organisational goals. During the depth of the Australian drought in 2019, Grace Brennan founded the ‘Buy From The Bush’ campaign. She had a vision of turning around the fortunes of drought-ravaged rural and regional communities by promoting the products and produce of businesses in those communities to the urban population. Speaking in an interview with The Sydney Morning Herald , Brennan explained that she believed that if consumers knew of the quality of products available in the regions, they would be happy to buy them and so invest in regional businesses. She was right. Since Buy From The Bush started, it has
grown to have over 400 000 social media followers, and some rural businesses sold out of stock after being featured in the campaign.
Brennan told the The Sydney Morning Herald that ‘Buy From The Bush injected energy back into businesses. At times it was difficult [for businesses] to open the doors when you were reliant on cash flow from farmers who were not spending.’ 26
The Buy From The Bush model has stimulated comparable campaigns in response to the devastating bushfires of 2019–2020, with #SpendWithThem and #EmptyEsky using social media to promote small businesses affected by the fires.
Brennan inspired people around her to work hard to achieve organisational goals by clearly outlining a vision for rural and regional business impacted by drought, by being a role model, and by setting an example of enthusiastic entrepreneurialism and effective management.
You’ll learn more about leading in Chapter 12 on motivation, Chapter 13 on leadership and Chapter 14 on managing communication.
Controlling
controlling monitoring progress towards goal achievement and taking corrective action when needed
The last function of management, controlling, is monitoring progress towards goal achievement and taking corrective action when progress isn’t being made. The basic control process involves setting standards to achieve goals, comparing actual performance to those standards and then making changes to return performance to the standards you set.
Have you ever sat in your car at the traffic lights next to a huge truck? If the truck was close to fully laden, that would probably be a little over 40 tonnes rolling along the road beside you. Now think of a truck weighing in at about 390 tonnes rolling along at 60 km/h with no driver. This is not a ‘runaway’ vehicle or a scene from a science fiction action movie; it is an everyday occurrence in some of Australia’s biggest mines. Australian mines lead the world in the use of autonomous trucks and trains. Driverless trains carry millions of tonnes of iron ore from mines in the Pilbara region of Western Australia to the coast for international shipment.
The huge size of the mines in the Pilbara and the repetitive nature of the tasks that autonomous vehicles do has made the mine operations not only safer but also more efficient. Speaking in a media interview in 2019, Rio Tinto Group Executive Steve McIntosh said that while Rio Tinto are developing advanced operations, where repetitive tasks or those
that pose a threat to safety are automated, the human element of operations remains. They are now just in different forms and in a different location. Rio Tinto’s autonomous equipment is monitored from a control centre in Perth. The centre, sometimes compared to ‘NASA mission control’, is about 1500 km from the mines. 27
You’ll learn more about the control function in Chapter 15 on control, Chapter 16 on managing information and Chapter 17 on managing service and manufacturing operations.
WHAT DO MANAGERS DO?
Not all managerial jobs are the same. The demands and the requirements placed on the CEO of Facebook, for example, are significantly different from those placed on the manager of your local fast-food restaurant.
After reading the next two sections, you should be able to:
• d escribe different kinds of managers
• e xplain the major roles and sub-roles that managers perform in their jobs.
LO3 Kinds of managers
As shown in Table 1.1, there are four kinds of managers, each with different jobs and responsibilities:
• top managers
• middle managers
• first-line managers
• team leaders.
Top managers
Top managers hold positions such as chief executive officer (CEO), chief operations officer (COO), chief financial officer (CFO) or chief information officer (CIO), and are responsible for the overall direction of the organisation. Top managers have responsibilities in the following areas: change, commitment, culture and environment. 28
Top managers executives responsible for the overall direction of the organisation
First, they are responsible for creating a context for change, including forming a long-range (that is, three to five years out) vision or mission for the company.
Table 1.1 WHAT THE FOUR KINDS OF MANAGERS DO Job
Top managers
CEO CIO
COO Vice-president
CFO Corporate heads
Middle managers
General manager
Plant manager
Regional manager
Divisional manager
First-line managers
Office manager
Shift supervisor
Department manager
Team leaders
Team leader
Team contact
Group facilitator
When Satya Nadella became CEO of Microsoft in 2014, the company had blown opportunities in mobile phones, search engines, web advertising and social media. It was entrenched and unable to move beyond its dominant product, Microsoft Windows. Nadella’s vision refocused Microsoft around cloud-based services.
A former Microsoft executive said that Nadella ‘just started omitting “Windows” from sentences … Suddenly, everything from Satya was “cloud, cloud, cloud!”’ Five years later, Azure, Microsoft’s cloud platform, had grown from $4.2 billion to $48 billion in annual revenues. Microsoft Office, formerly a ‘buy once, upgrade often’ software package, became a $99-per-year cloud-based service with 214 million subscribers. Netflix CEO Reed Hastings commented: ‘I don’t know of any other
Change
Commitment
Culture
Environment
Responsibilities
Resources
Objectives
Coordination
Subunit performance
Strategy implementation
Non-managerial worker supervision
Teaching and training
Scheduling
Facilitation
Facilitation
External relationships
Internal relationships
software company in the history of technology that fell onto hard times and has recovered so well.’29
Second , once that vision or mission is set, the next responsibility of top managers is to develop employees’ commitment to and ownership of the company’s performance.
Amy Hood became Microsoft’s CFO at a challenging time, just six months before Satya Nadella was appointed CEO in 2014. Goldman Sachs Analyst Heather Bellini says: ‘Satya has done an excellent job, but people think of them as a package together.’ One of Hood’s regular responsibilities is speaking to new Microsoft employees. She tells them that while she’s responsible for company finances, she sees her main responsibility as making employees happy that they
chose to work for Microsoft – in other words, gaining employee buy-in. Says Hood:
My kids will tell you I practice counting, but my job is really a little different than that. I may have thought about it that way when I took the job almost five years ago. But now it’s about creating an environment in which you all remember that you still want to pick us every day. That’s my job as a CFO. 30
Third , top managers are responsible for creating a positive organisational culture through language and action. Top managers have an impact on company values and strategies through what they do and say to others, both inside and outside the company. Above all, no matter what they communicate, it’s critical for CEOs to send and reinforce clear, consistent messages. 31
For Ronni Kahn, CEO of OzHarvest, food has always been about sharing and showing you care. Understanding that food isn’t just about nutrition, it’s also about love, she started a charity to help feed those in need. When she was running a successful event management company, she had seen firsthand the amount of food that was wasted by the hospitality industry every day. She decided it was time to do something and started OzHarvest to get food – that would otherwise go to waste – to people who need it. ‘I never set up OzHarvest intending … that this could be a way of life or that I could support myself,’ she laughs. ‘I ran my business for the first seven years of OzHarvest to support myself because I never started OzHarvest because I was a rich bored housewife.’
Kahn says that the purpose of OzHarvest is to nourish our country through rescuing food, educating members of the public and vulnerable people to live a more sustainable life, and coming up with ways to end the human-made problem of hunger.
During the first year of OzHarvest, Kahn was confronted with a huge issue – legislation that didn’t allow the charity to collect good-quality but unneeded foods from food vendors and then redistribute them to those who were so desperately in need of a decent meal. Kahn didn’t give up. Instead she fought to change the legislation – something she appreciates is no small feat. Working with a team of pro bono lawyers, she lobbied state governments to amend legislation to allow potential food donors to give their surplus food to charities without fear of liability. The Civil Liability Amendment (Food Donations) Act was passed in New South Wales in 2005, and other states followed. She says:
It was one of the obstacles that I faced, well one of the challenges, cause I didn’t face obstacles, just
challenges, … that some people were worried about the liability. So considering that when I’m faced with challenges I just try to be a fixer person, and think what could be done to change that and what we needed was to change the legislation to make it as simple as possible and easy for people to donate, so that’s what I needed to do.
Kahn is an example to the people at OzHarvest and thereby shapes the culture of the organisation. 32
(You can find out a little more about Ronni Kahn by listening to her in the ABC program ‘Fierce Girls’: https://www.abc.net.au/radio/programs/fierce-girls/ ronni-kahn/9566650.)
Finally, top managers are responsible for monitoring their business environments. This means that they must closely monitor customer needs, competitors’ moves, economic conditions, and long-term business and social trends.
Middle managers
Middle managers hold positions such as factory manager, regional manager or divisional manager. They are responsible for setting objectives consistent with top management’s goals and for planning and implementing subunit strategies for achieving those objectives in the intermediate range (or six to 18 months out).
33
middle managers managers responsible for setting objectives consistent with top management’s goals, and for planning and implementing subunit strategies for achieving these objectives
As one middle manager put it, a middle manager is ‘the implementer of the company’s strategy’ who figures out ‘how’ to do the ‘what’. 34 Ryan Carson founded online learning company Treehouse Island without managers because he believed that his 100
Getty Images/Mark Metcalfe
Ronni Kahn, CEO of OzHarvest worked to amend legislation allowing potential food donors to give their surplus food to charities without fear of liability.
employees could make decisions better and faster by themselves. However, that decision was severely tested when rapid growth resulted in 100 000 students enrolling in Treehouse Island’s online courses. Employees, unsure of their responsibilities, became increasingly frustrated as endless meetings never seemed to result in meaningful action or decisions. Tasks and projects that were necessary to keep up with demand started to fall behind schedule. Carson fixed the situation by creating roles for middle managers. ‘That [managerless] experiment broke,’ said Carson. ‘I just had to admit it.’ 35
One specific middle management responsibility is to plan and allocate resources to meet objectives. A second major responsibility is to coordinate and link groups, departments and divisions within a company. One middle manager described his job as being ‘a man who can discuss strategy with [the CEO] at breakfast and [then] eat lunch with workers’. 36 A third responsibility of middle management is to monitor and manage the performance of the subunits and individual managers who report to them. Finally, middle managers are also responsible for implementing the changes or strategies generated by top managers. Why? Because they’re closer to the managers and employees who work on a daily basis with suppliers to effectively and efficiently deliver the company’s product or service. In short, they’re closer to the people who can best solve problems and implement solutions.
How important are middle managers to company performance? A university study of nearly 400 video game companies found that middle managers’ effectiveness accounted for 22 per cent of the differences in performance across companies. In fact, middle managers were three times as important as the video game designers who develop game characters and storylines. Professor Ethan Mollick, who conducted the study, said that middle managers are the key to ‘making sure the people at the bottom and the top [of the organisation] are getting what they need’. 37
As for Treehouse Island, revenue is up, the number of online courses has increased, and response times to student questions have been cut in half. According to instructor Craig Dennis, things are ‘light years better’ with middle managers in place. 38
Culture in the googleplex in the increasingly fierce competition to hire and retain the best and brightest employees, companies are looking to their organisational culture to find an advantage. Research from consulting firm Deloitte shows that culture, engagement and employee retention are now the top talent challenges facing businesses today. A leader in building a highperformance culture that is attractive to work in is Google.
Google actively encourages employees to put their ideas into action. The company advocates that everyone has access to senior decision makers, as can be seen from this online statement about Google culture: We strive to maintain the open culture often associated with start ups, in which everyone is a hands-on contributor and feels comfortable sharing ideas and opinions. In our weekly all hands (‘TGIF’) meetings – not to mention over email or in the cafe – Googlers ask questions directly to Larry [Larry Page, CEO], Sergey [Sergey Brin, co-founder] and other execs about any number of company issues. Our offices and cafes are designed to encourage interactions between Googlers within and across teams, and to spark conversation about work as well as play. 39
Google
Google’s Melbourne office
do the project. By contrast, a manager, and not the team, would have probably made this decision in a traditional management structure.
Second , team leaders are responsible for managing external relationships. Team leaders act as the bridge or liaison between their teams and other teams, departments and divisions in a company. For example, if a member of Team A complains about the quality of Team B’s work, Team A’s leader needs to initiate a meeting with Team B’s leader. Together, these team leaders are responsible for getting members of both teams to work together to solve the problem. If it’s done right, the problem is solved without involving company management or blaming members of the other team.43
Third , team leaders are responsible for internal team relationships. Getting along with others is much more important in team structures because team members can’t get work done without the help of their teammates. You will learn more about teams in Chapter 10.
LO4 Managerial roles
So far, we have described managerial work by focusing on the functions of management and by examining the four kinds of managerial jobs. However, although those are valid and accurate ways of categorising managerial work, if you followed managers around as they performed their jobs you probably would not use the terms planning , organising , leading and controlling to describe what they do. In fact, that’s exactly the conclusion that management researcher Henry Mintzberg reached when he observed five American CEOs. Mintzberg spent a week ‘shadowing’ each of the CEOs and analysing their correspondence, their conversations and their actions. Mintzberg concluded that managers fulfil three major roles while performing their jobs:44
• interpersonal roles
• informational roles
• decisional roles.
In other words, managers talk to people, gather and give information, and make decisions. Furthermore, as shown in Figure 1.2, these three major roles can be subdivided into 10 sub-roles. We will examine these in the following sections.
More than anything else, management jobs are people-intensive. Estimates vary with the level of management, but most managers spend between two-thirds and four-fifths of their time in face-to-face communication with others.45 If you’re a loner or if you consider dealing with people to be a pain, then you may not be cut out for management work.
In fulfilling the interpersonal roles of management, managers perform three sub-roles: figurehead, leader and liaison.
In the figurehead role , managers perform ceremonial duties such as greeting company visitors, speaking at the opening of a new facility or representing the company at a community luncheon to support local charities. The figurehead role is also important when companies face major challenges. Alan Joyce took to the media in November 2020 to explain that passengers on Qantas international flights would need proof of COVID-19 vaccination before they could board the aircraft. By personally announcing bad news and difficult policy Joyce was fulfilling his figurehead role for Qantas.46
When managers are in the leader role, they motivate and encourage employees to accomplish organisational objectives. Remember the empty supermarket shelves where toilet paper should have been? In March 2020, Woolworths Group CEO Brad Banducci said
Source: Adapted from H. Mintzberg, ‘The Manager’s Job: Folklore and Fact’, Harvard Business Review July–August 1975 Interpersonal roles figurehead role the interpersonal role managers play when they perform ceremonial duties leader role the interpersonal role managers play when they motivate and encourage employees to accomplish organisational objectives
FIGURE 1.2 MINTZBERG’S MANAGERIAL ROLES
in a corporate press release: ‘The safety of our customers, teams and the communities in which we operate remains our number one priority.’47 As well as making pleas to the public to stay calm and respect one another as fear spread that essential grocery items might run out, Banducci made sure that the teams of workers who stacked shelves and staffed checkouts were recognised. He said:
I want to specifically thank our team who have been working tirelessly to support customers and replenish stores as quickly as possible. Our team responds incredibly well in a crisis and I am especially proud of how they have come together … for our customers. 48
liaison role the interpersonal role managers play when they deal with people outside their units
And finally, in the liaison role, managers deal with people outside their units. Studies consistently indicate that managers spend as much time with ‘outsiders’ as they do with their own subordinates and their own bosses.49
Informational roles
Not only do managers spend more of their time in faceto-face contact with others, they also spend much of it obtaining and sharing information. Indeed, Mintzberg found that the managers in his study spent 40 per cent of their time giving and getting information from others. 50 In this regard, management can be viewed as gathering information by scanning the business environment and listening to others, processing information, and then sharing information with the people inside and outside the company.
Mintzberg described three informational sub-roles: monitor, disseminator and spokesperson.
monitor role the informational role managers play when they scan their environment for information
In the monitor role, managers actively contact others for information and, because of their personal contacts, receive a great deal of unsolicited information. In addition to receiving firsthand information, they monitor their environment by reading online news and business sites, local newspapers and the business pages of The Age , The Sydney Morning Herald or the Financial Review to keep track of customers, competitors and technological changes that may affect their businesses. Managers can also take advantage of electronic monitoring and distribution services that track news services (Associated Press, Reuters and so forth) for stories related to their businesses.
Because of their numerous personal contacts and their access to subordinates, managers are often hubs for the distribution of critical information. In the disseminator role, they share information
they have collected with their subordinates and others in the company. Although there will never be a complete substitute for face-toface dissemination of information, the primary methods of communication in large companies are email and voicemail.
Front is a software company that facilitates effective teamwork by providing shared emails, inboxes and assignments, all within a powerful email/ calendar platform. CEO and Co-founder Mathilde Collin makes sure everyone is clear on Front’s goals and plans. She says:
At the beginning of every week, I also send an email to direct reports, I share what my goals of the week are. What I’m working on is also what they’re working on. The way that our goal-setting works is that once the company OKRs [objectives and key results] are done, then every executive will work on their OKRs and those are shared [with their teams].51
Collin doesn’t share goals that are personal or confidential (out of privacy concerns for others), or that ‘would raise more questions’. She says: ‘The way I think about transparency is: Good transparency will help solve problems, and bad transparency will create more questions and problems.’52
In contrast to the disseminator role, in which managers distribute information to employees inside the company, in the spokesperson role managers share information with people outside their departments and companies. One of the most common ways CEOs serve as spokespeople for their companies is at annual meetings with company shareholders or the board of directors.
disseminator role the informational role managers play when they share information with others in their departments or companies spokesperson role the informational role managers play when they share information with people outside their departments or companies
The news is not always good, and managers have to sometimes ‘face the music’ and admit when their company has got it wrong. For example, as problems with bad behaviour in the Australian banking industry became known during the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry, senior managers were faced with the job of apologising and explaining to the public how these things could happen. Matt Comyn’s first public task as CEO of the Commonwealth Bank of Australia was to say ‘sorry’. In a letter written to 51 000 bank staff in 2018, Comyn wrote:
We have made mistakes. That starts with me and our senior executives. We have let some of our customers down when they have needed us most … in doing so we have let you down. We have been too slow to fix mistakes and we have failed to meet some important
