Principles of General Management: The Art and Science of Getting Results Across Organizational Boundaries - Hardcover

Colley, John L.; Doyle, Jacqueline L.; Hardie, Robert D.

Hardcover

ISBN 10: 0300117094 ISBN 13: 9780300117097

Verlag: YALE UNIV PR, 2007

Inhaltsangabe

An up-to-date and comprehensive guide to the responsibilities of the general manager and the capabilities and tactics for meeting them

Stop! If you have been looking for the one resource for managing a business of any size, this is it. Based on the extensive business experience of five experts, this authoritative guide provides an in-depth look at what every leader must know about managing across departments, functions, divisions, or companies. Drawing on decades of combined experience, John Colley and colleagues detail the wide range of skills, tools, and conceptual understanding as well as the qualities of leadership that a successful general manager must acquire. In an era of specialization and specialists, the authors return due focus to the generalist. No other book so passionately and thoroughly examines the roles and responsibilities of the general manager and the full scope of this distinct, pressure-filled occupation. The authors explore the quantitative and qualitative aspects of the job and discuss how the skilled manager moves an organization from abstract goals to definitive action. For every profit center or plant manager, function head, division president, or CEO, this book is indispensable reading.

Über diesen Titel

Über die Autorin bzw. den Autor

John L. Colley, Jr., is Almand R. Coleman Professor of Business Administration, Jacqueline L. Doyle is visiting assistant professor, Robert D. Hardie is adjunct assistant professor, George W. Logan is visiting lecturer, and Wallace Stettinius is visiting lecturer, all at the Darden Graduate School of Business Administration, University of Virginia.

Auszug. © Genehmigter Nachdruck. Alle Rechte vorbehalten.

PRINCIPLES OF GENERAL MANAGEMENT

The Art and Science of Getting Results Across Organizational BoundariesBy John L. Colley, Jr. Jacqueline L. Doyle Robert D. Hardie George W. Logan Wallace Stettinius

YALE UNIVERSITY PRESS

Copyright © 2007 Yale University
All right reserved.
ISBN: 978-0-300-11709-7

Contents

Foreword,....................................................................ixPreface,.....................................................................xiiiAcknowledgments,.............................................................xixPart I: Introduction to General Management1. General Management in Economic Context,...................................32. General Management in Organizational Context,.............................153. The Roles and Tasks of the General Manager,...............................40Part II: The General Management Process: Planning4. The Efficacy of Strategic Management,.....................................645. The Strategic Management Process,.........................................856. Fundamentals of Strategy Formulation,.....................................1107. The Strategic Plan: Purpose, Direction, and Goals,........................1378. The Business Plan: Scale and Resources,...................................1519. The Annual Plan: Anticipated Actions,.....................................175Part III: Analytical Concepts for the General Manager10. The Business Model,......................................................19411. The Relationship between Cash Flow and Growth,...........................20712. Product, Marketing, and Pricing Strategies,..............................21513. Relating Productivity and Firm Growth,...................................22414. Residual Income, EVA, and Corporate Capital Charges,.....................24715. The Allocation (Redeployment) of Capital (Cash),.........................26216. Share Repurchases,.......................................................275Part IV: General Managers Taking Action17. Making Effective Decisions,..............................................28918. Organizing and Aligning,.................................................30919. Staffing,................................................................32320. Integrating,.............................................................34621. Executing,...............................................................361Part V: In Summation22. Controlling and Reporting,...............................................37723. Learning and Innovation,.................................................39024. Public Relations and Advocacy,...........................................40325. Reflections on General Management,.......................................415Notes,.......................................................................435Bibliography,................................................................439Index,.......................................................................449

Chapter One

GENERAL MANAGEMENT IN ECONOMIC CONTEXT

General Management and General Managers

The terms general management and general manager have been in use since the early twentieth century, along with an extensive litany of substitutes, to refer to a field of study or practice and the associated practitioner in the realm of the modern corporation. As with most broad subjects, numerous interpretations of the terms exist, along with variations and inconsistencies in their form and application.

General management addresses sources of income or revenue (sales) as well as expenses, with the difference between these two measures determining a level of profit or loss. General managers therefore have what is commonly referred to as profit-and-loss (P&L) responsibility. In contrast, managers of the functional departments of a business, such as marketing, finance, operations, and engineering or research and development (R&D), are responsible for individual pieces of the P&L puzzle. General managers are presumed to take responsibility for a total firm or economic entity, so general managers are frequently described as having an enterprise perspective.

General managers may assume one of a variety of roles depending on the structure of the organization in which they operate. Common titles and roles for general managers in corporate organizations include chief executive officer (CEO), president, general manager, owner, business unit manager, division manager, group vice president, managing partner, and managing member, among others. The preeminent general manager is the CEO of a major corporation, to whom many of the other general management positions cited above eventually report. As a result, multiple levels of general managers are often employed within an organization.

CEOs of corporations are typically appointed by and report to a board of directors. In these situations, the CEO and board work together to operate the business effectively on behalf of its shareholders and stakeholders. The board governs and the CEO manages the corporation. Within the corporation, general managers other than the CEO are normally appointed by and report to the CEO. As noted, general managers have P&L responsibility, and some have the authority to manage a decentralized business or collection of businesses. In some corporations, the bylaws require the board to appoint certain lower-level general managers as corporate officers, but these managers clearly serve at the pleasure of the corporate general manager, the CEO.

General managers have numerous additional responsibilities within the corporation. As part of their duties, they must integrate the functions of the business to maintain viability and meet their organization's goals and objectives. The topic of goals and objectives is addressed in some detail later in this book; typically, this topic encompasses an overall pattern of results for meeting the firm's strategic goals and specified targets or targeted ranges for important financial measures, such as profit, return on investment, cash flow, and growth.

Coordinating and integrating the activities of the functional departments of the business are key tasks of the general manager and often are referred to collectively as "managing the functional interfaces." In the course of business, conflicts naturally arise among and between the functional managers. For example, marketing managers frequently would prefer to have numerous product variations and large inventories of finished goods to meet customer demands rapidly, but product proliferation and large inventories create added costs and complexity for manufacturing and warehousing and lead to increased capital investment. Manufacturing managers often would prefer stable demand forecasts and longer production runs in order to decrease volatility and lower costs, but long runs lengthen delivery times and slow responsiveness to ever-changing demand. Engineering managers would naturally prefer to overdesign products in the interest of durability and quality, but overdesign increases product costs without perceived benefit to the customer. The list of these potential conflicts and competing interests within a business could go on, and the general manager must effectively manage all such conflicts in the best long-term interests of the firm.

The general manager regularly must face difficult decisions involving forces outside the firm as well as those within. In some fashion, nearly all of these forces have an economic impact on the organization. Primary among the elements or parties exerting substantial force are:

Owners (shareholders or equity holders) who invest in the corporation, whether public or private Employees of the organization Customers of the organization, including consumers and purchasers acting on behalf of other business organizations Suppliers of the organization from whom goods and services are purchased Communities in which the organization operates and competes Lenders who finance the debt of the firm The board of directors, whose primary tasks include governing the firm on behalf of all shareholders and hiring the general manager or CEO Laws and lawmakers as well as regulations and regulatory agencies that define the rules under which the firm competes Competitors who challenge any of the firm's products Addressing and managing these stakeholders, elements, and forces are the heart of the general manager's role. This job is the crucial management task in today's organization, and the corporation is a vital instrument by which our current systems of capitalism, free enterprise, and competition operate for the greater good of our economy. The remainder of this book is intended to identify and explain the primary elements of general management and tasks of the general manager in the competitive environment of a free-enterprise marketplace. Before forging ahead, though, we would like to examine briefly some important elements of the historical context in which general management has evolved to its current state.

Evolution of General Management

Economic history began thousands of years ago and evolved as communities developed and grew. Over time, tools improved, craft skills advanced, and the efficiency of specialization was recognized. Bartering began first within and then among communities, and rudimentary economic systems burgeoned.

In an agrarian economy, the ownership of land was the source of wealth and often freedom. Landowning classes emerged that lived off the efforts of peasants and serfs. In order to protect their property and lands, the leaders developed military organizations that, over time, became larger and larger, necessitating the development of such management standards as chains of command and discipline in the ranks.

Sun Tzu wrote The Art of War some 2,500 years ago, yet many of this work's principles have applicability to modern management. Another early description of management appears in the Book of Exodus in the Bible, where Jethro, the father-in-law of Moses, speaks to him about managing the exodus of the Israelite males and their households out of Egypt. Jethro advises Moses to delegate-a skill that is essential to managing large operations as well as organizations. A plethora of other epic works has addressed principles of work, discipline, and human nature and still remains relevant to contemporary general management. Notably, Machiavelli provided an impressive summary of management advice to his patron, Lorenzo de' Medici, in his treatise to The Prince in 1521. While Machiavelli focused on principles for ruling, the work was written during a period of revitalization in Europe during which early forms of modern economic systems emerged. Nonetheless, Machiavelli's treatise remains one of the most forceful explanations of our inherent human nature, and the elegant writings of Sun Tzu and Machiavelli remind us of the enduring fascination with principles of management.

Free Enterprise, Capitalism, and Competition

A fundamental chapter in the evolution of current management thought was the emergence of democracy as a viable form of government. Democracy and its freedoms created an environment in which the free-market economic system of capitalism could take hold and flourish. There is a clear and logical connection between the concept of individual political freedom and the freedom of individuals to pursue their economic self-interests.

A paradox resulting from the development of a free-market system is that the collective pursuit of individual self-interest has created a prosperity that benefits the whole-that is, most of society. Free enterprise brings to the economies of developed countries the sustained energy of competition, in which the creative minds of countless individuals are unleashed to pursue their individual best interests, within the rules provided by laws and regulation. Adam Smith first wrote in 1776 that "an invisible hand of self-interest" moved to create a total environment in the best interests of "the many" when each of us acts to maximize our own individual interests. While counterintuitive in some respects, this remains an astonishing and liberating idea.

The concept of the invisible hand has led logically to the notion that as individuals pursue their separate interests, the intersections of their interests and objectives result in a natural state of competition. In the realm of business, competition among firms arises for raw materials, labor, customers, intellectual capital, and investment capital. This competitive environment typically leads to a "survival of the fittest" regimen that, over time, weeds out the weakest competitors and promotes survival of the most successful. While some people may fear this relentless ferreting out of the less effective, it is perhaps the most energizing aspect of systems of free enterprise and competition.

An additional key to the development of modern capitalism has been the mechanism by which the capital of many investors can be united to provide the large amounts of investment needed to fund extensive projects and massive enterprises. It is axiomatic that the greater the freedom of business enterprises to compete in search of expansive returns, the greater is the inclination of individual and institutional investors to provide the required capital. This capital is normally deployed in the funding of corporations, whose form we take as a given today. The corporation, however, is a relatively new form of business organization.

The Corporation

Early organizations engaging in trade or commerce were established as proprietorships or partnerships, where owners managed their own affairs and typically participated in the creation and delivery of goods and services. As business evolved, these simple forms of ownership were augmented with others that were generated to accommodate larger and more extensive organizations. The massive enterprises of today's economy have roots in the early companies of colonial-era Europe. The Muscovy Company (in 1555), the Spanish Company (in 1577), and the East India Company (in 1601) received history's first recorded business charters of incorporation during the reign of England's Queen Elizabeth I. The London Company, soon to be called the Virginia Company of London, followed in 1606.

The U.S. Supreme Court, under Chief Justice John Marshall, made corporations possible legally in the early nineteenth century. Marshall himself defined a corporation in a Supreme Court opinion for Dartmouth College v. Woodward in the following terms: "A corporation is an artificial being, invisible, intangible and existing only in the contemplation of the law. Being the mere creature of law, it possesses only three qualities which the charter of its creation confers upon it, either expressly or as incidental to its very existence ... [The most] important are immortality and, if the expression may be allowed, individuality; properties by which a perpetual succession of many persons are considered as the same, and may act as a single individual."

In summary, the corporation is a creation of the law and has legal standing independent of its owners. Three features have made the corporation attractive:

its unlimited life the limited liability of the owners the divisibility of ownership that permits transfer of ownership interests without disrupting the structure of the organization Expansion of the use of the corporate form was fueled by the Industrial Revolution, which began in England around the mid-nineteenth century and launched the Western world's evolution from agrarian to industrial economies. Changes began in Britain with the introduction of steam power and powered machinery. Over time, energy to power machines was harnessed through water-driven mills, steam engines, and then the internal combustion engine and electricity, and the phenomenon of mass production emerged. Initially, commerce was essentially local, with local production and trade of products within the community. The revolution roared to life as farmers sought work in factories, towns were born, and prices of mass-produced goods became affordable to the new class of workers.

After its legal establishment, the corporation quickly became the preferred form of organization for larger enterprises. By 1919, corporations, while representing only 31.5 percent of the total number of businesses, employed 86 percent of the U.S. workforce and produced 87.7 percent of the total business output by value.

The Industrial Revolution, driven by a wave of technological advances, created ever-larger organizations made possible by the corporate form. Within what was known as the second Industrial Revolution, the role of the general manager evolved. Larger organizations employed large numbers of workers, tasks and labor were divided, and a coordinating function became a necessity. The job of the general manager emerged, and hierarchical corporate structures became commonplace. These organizations were predecessors of the huge multinational and global businesses we see today, and their development was made possible by transportation and communication advances of the railroads, steamships, and telegraph. These advances allowed goods and information to travel rapidly across markets and concurrently expanded the feasible span of control within an organization.

Similar and related progress has been found in the rapid advances of the technological revolution driven by the computer, which has created and continues to create a very different type of global economy in what many call the Information Age. Syndicated columnist Thomas L. Friedman summarizes many of the attendant consequences as a "flattening" of the world, resulting in a leveling of the playing fields of competition.

In the contemporary global economy, new business models are evolving as political boundaries are rendered economically obsolete in spite of protectionist laws. Economic theory tells us that these changes are not necessarily all bad. David Ricardo (1772-1823), an English economist, developed the free-trade theory of competitive costs, now called comparative advantage, in which he theorized that the global economy is not a zero-sum game. Rather, if a nation were to specialize in the production of goods in which it had a comparative cost advantage and then trade with another nation for goods in which it had a cost advantage, both nations would be better off than had they not traded. Extrapolation suggests there would be an overall gain in trade as well as income in all such trading countries. Many of these related advantages are evolving in the twenty-first century, but not all of the changes come without cost.

Adjusting to global competition has created structural shifts in certain economies, where short-run consequences have proven painful for those associated with industries whose work has faced stiff competition from or moved to other regions of the globe. Public policy makers often take this situation into account and lawmakers attempt to soften the impact, but no country can be successful in ultimately stemming the competitive tide using protectionist policies without great economic cost. Every country must learn to produce and compete, and managers must lead their companies to do the same, or perish.

(Continues...)

Excerpted from PRINCIPLES OF GENERAL MANAGEMENTby John L. Colley, Jr. Jacqueline L. Doyle Robert D. Hardie George W. Logan Wallace Stettinius Copyright © 2007 by Yale University. Excerpted by permission.
All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.
Excerpts are provided by Dial-A-Book Inc. solely for the personal use of visitors to this web site.

Details zur Ausgabe

• Verlag: YALE UNIV PR
• Erscheinungsdatum: 2007
• Sprache: Englisch
• ISBN 10: 0300117094
• ISBN 13: 9780300117097
• Einband: Tapa dura
• Anzahl der Seiten: 488
• Kontakt zum Hersteller: Nicht verfügbar
• Verantwortliche Person: Nicht verfügbar