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The General Managers
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The Washington Post
General Electric Company
Kotter's landmark portrayal of general managers at work offers new insights about actual managerial performance. He documents the importance of "growing up in a business" for career development and business competence...Most important, by identifying and depicting the most effective managers in his study, he documents the value of different approaches to management. His work represents a monumental contribution to all who educate, advise, select and evaluate general managers -- and to general managers themselves.
Former Chairman of the Board and CEO, Time, Inc.
Excellent. Kotter is describing the real world of general managers rather than the theoretical portrait which rarely matches any business activity I've ever known. All business school students should read The General Managers.
Oxford Centre for Management Studies author of Managers and Their Jobs
This is a path-breaking contribution to our knowledge of the work and behavior of general managers. Most importantly John Kotter analyzes the implications of the differences as well as the similarities in the behavior of general managers he studied. He destroys the myth of the professional manager who can be successful in any organization.
Well-documented, powerful, thorough...valuable for aspiring managers...must reading for board members and owners of companies looking for leaders.
The General Management Jobs: Key Challenges and Dilemmas
It is well recognized in a general sense that the world of the typical manager has changed considerably during this century as organizations have grown larger, more diverse, more geographically dispersed, more technologically sophisticated, and the like. But I wonder if we really appreciate in a more specific sense how these trends, which continue today, affect the nature of managerial work.
With respect to general-management jobs, these trends seem to have made most of these jobs extremely demanding, difficult, and complex in both an intellectual and an interpersonal sense. These jobs today put a person in a position where he is held responsible for a complex system which he cannot directly control and cannot entirely understand. They demand that he identify problems and solutions in an environment where behavior-results linkages are unclear, that he cope with the fact that thousands of diverse issues and problems could absorb his time and attention, that he balance the short and the long run despite pressures to ignore the latter, that he somehow motivate good performance and deal with bad performance on the part of large numbers of subordinates, that he keep a very diverse group of people working together harmoniously and effectively, and that he get a lot of other busy people over whom he has no formal authority always to cooperate with him.
These same trends have also helped create more kinds of GM jobs, and have made the key demands associated with those jobs less and less similar in different contexts. As a result, two general-management jobs today can be very different in terms of the key tasks involved, and thus in terms of the demands they make of the general manager. Even GM jobs that look very much alike on the surface can present the incumbent managers with a very different set of challenges and dilemmas.
In this chapter we will examine in some detail the basic nature of the demands associated with all the general-management jobs in this study. Further, we will explore how and why these demands can be different in different settings.
The Job, the Context, and the Emergent Demands
Like most "Jobs" in modern organizations, the GM jobs in this study tended to be defined, sometimes formally and sometimes not, in terms of a set of responsibilities and a set of relationships. Specifically, the responsibilities and relationships associated with these jobs were:
1. Long run -- for setting some or all of the basic goals, directions, and priorities for an organization, including deciding what business or businesses to be in, and how to secure key resources.
2. Medium run -- for deciding how to allocate resources effectively to that business or those businesses so as to achieve long-run goals.
3. Short run -- for the efficient use of the human, financial, and material resources employed in that business or those businesses, including some profit responsibility.
1. Up -- reporting to a GM boss (or a board of directors).
2. Lateral -- sometimes (but not always) having to rely on other internal groups for support (e.g., corporate staff) or having to coordinate groups that are associated with the business but do not report to this GM position.
3. Down -- authority over what is usually a very diverse set of subordinates (not just specialists in a single function).
As the above suggests with such words as "some," "usually," and "sometimes," there was variety in how these jobs were defined, and we will explore that variation later in this chapter. But despite that variety, this statement of responsibilities and relationships basically describes all the GM jobs in this study.
These jobs were located within broader business and organizational contexts that were almost always quite complex, owing to factors such as business uncertainty and the large number of people involved. As a result, each of the job responsibilities and relationships tended to be magnified and shaped into important and difficult sets of demands, challenges, and dilemmas.
Job Demands I: Challenges and Dilemmas Associated with the Responsibilities
1. Key Problem/Challenge #1: Setting basic goals, policies, and strategies despite great uncertainties. In the typical GM job in this study, the long-run task was fraught with great uncertainty. The number of factors relevant to this type of strategic decision making was generally enormous. Knowledge of how those factors interacted was generally very limited. And tools for forecasting those factors into the future were generally crude. Yet despite all this uncertainty, the GM job was usually charged with overall responsibility for making the long-run decisions for some organization.
Dan Donahue, for example, had been in the process of reexamining and adjusting the basic direction of his organization when I first met him. This reexamination occurred because his division (which he had just recently joined) had been losing money. The reexamination had proved to be a very difficult task for two major reasons. First, Dan lacked clear information regarding the past and present state of affairs in his division and in that industry. He could not clearly identify what, if any, distinctive competence and comparative advantages his division had over companies with whom they competed. Different individuals in the company had varying opinions, none of which could be objectively verified with available information. Second, forecasting future opportunities and risks was hampered by dozens of important unknowns. Even the most sophisticated information gathering, analysis, and forecasting could offer only vague guesses to such questions as:
* Will there be any breakthroughs in the next decade in the two or three technologies they used most often? If yes, how will these affect product design and manufacturing economics?
* How will changes in the demographics of the labor force, in family patterns, and in disposable income affect consumer demand for their products? What impact will inflation have on consumer demand? How bad will the inflation be?
* Will any major new competitors enter their industry in the next decade? If yes, who are they likely to be (foreign or domestic) and where will they try to position themselves?
* Who is likely to win the U.S. elections in 1980 and 1984? What effect might that have on the regulation of their industry?
* What will probably be happening in the parent corporation over the next decade? How will that affect their inclination to provide resources to this division?
Although the long-run decisions that Donahue faced were extremely complex and the uncertainties very large, his situation was not at all atypical in this study. Indeed, at least half the other GMs had to deal with a long-run task which seemed to be as or more complex and uncertain. Furthermore, all the evidence of which I am aware suggests that the same is true in general for these kinds of jobs in corporations today.
2. Key Problem/Challenge #2: Achieving a delicate balance in the allocation of scarce resources among a diverse set of functional and business needs. Not allowing short-run concerns to dominate long-run ones, or marketing issues to stifle production needs, etc. Because of growth, ambitious goals, performance problems, and the like, resources were usually scarce in the situations in this study. Indeed, none of the fifteen GMs had extra cash for which there was no clear need. This scarcity made resource allocation an especially important task. Furthermore, the typical situation had a diverse set of activities that required resources because of the different products, markets, functions, and technologies involved. This diversity made resource allocation a complex task. Taken together, scarcity of resources and diversity of needs made the resource allocation task a most demanding balancing act. Under these conditions it was easy for short-run concerns to dominate long-run issues, or one product line to starve another, or one functional area to stifle another.
When I was with John Thompson, the United States economy had just gone into an economic downturn. Because sales were slipping, he had to reduce the resource budgets that had been previously planned in order to maintain some minimum level of profitability. In commenting on this, he told me:
Sometimes it is very difficult to judge how much to cut and where in a situation like this. If I cut too much, we do well this year, but it will hurt us in the future. If I don't cut enough, we can be hurt badly this year. If I overdo the cuts in operations, we could end up with business that we cannot handle. If I overdo the cuts in sales, we could end up with excess capacity in operations. It really is a tough balancing act.
Frank Firono talked about this same basic issue in this way:
In our business it is easy to crank out the short-term sales and relatively easy to get short-run profits. It's also relatively easy to get one store really performing well. What is difficult is to achieve acceptable short-run numbers while maintaining or increasing the quality of the business (a key long-term objective), and to get most or all of your stores performing pretty well.
To some degree, all the GMs in this study faced this problem. Evidence from elsewhere again suggests that this is probably the case for GM jobs in general.
3. Key Problem/Challenge #3: Keeping on top of a very large and diverse set of activities. Being able to identify problems ("fires") that are out of control and to solve them quickly. Because the buck stops at the GMs' desks, any problem associated with their businesses can become their problem. Any task that is not being accomplished effectively or efficiently can eventually create serious problems for them. But because of the typical scope of a GM's job, spotting fires that are out of control can be extremely difficult. And because of the diversity and complexity of these activities, figuring out how to put th...
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