Über die Autorinnen und Autoren

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

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PRINCIPLES OF GENERAL MANAGEMENT

YALE UNIVERSITY PRESS

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 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...