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

489 Pages·2007·1.29 MB·English

by  John L. Colley Jr.

PRINCIPLES OF GENERAL MANAGEMENT

PRINCIPLES OF
GENERAL MANAGEMENT
The Art and Science of
Getting Results Across
Organizational Boundaries
John L. Colley, Jr.
Jacqueline L. Doyle
Robert D. Hardie
George W. Logan
Wallace Stettinius
Foreword byRobert F. Bruner
Published in Association with
The Darden Graduate School
of Business Administration
YALE UNIVERSITY PRESS
NEW HAVEN AND LONDON
Copyright © 2007 by Yale University.
All rights reserved.
This book may not be reproduced, in whole or in part, including illustrations, in
any form (beyond that copying permitted by Sections 107 and 108 of the U.S.
Copyright Law and except by reviewers for the public press), without written
permission from the publishers.
Set in Galliard type by Westchester Book Group.
Printed in the United States of America.
Library of Congress Cataloging-in-Publication Data
Principles of general management : the art and science of getting results
across organizational boundaries / John L. Colley, Jr. . . . [et al.].
p. cm.
“Published in association with The Darden Graduate School of Business
Administration.”
Includes bibliographical references and index.
ISBN 978-0-300-11709-7 (cloth : alk. paper)
1. Industrial management. 2. Strategic planning. 3. Corporate
governance. I. Colley, John L.
HD31.P737 2007
658—dc22 2006038986
A catalogue record for this book is available from the British Library.
The paper in this book meets the guidelines for permanence and durability of
the Committee on Production Guidelines for Book Longevity of the Council on
Library Resources.
10 9 8 7 6 5 4 3 2 1
We gratefully dedicate this book to our students,
who have enriched our lives and changed the world.

CONTENTS
Foreword, ix
Preface, xiii
Acknowledgments, xix
Part I: Introduction to General Management
1. General Management in Economic Context, 3
2. General Management in Organizational Context, 15
3. The Roles and Tasks of the General Manager, 40
Part II: The General Management Process: Planning
4. The Efficacy of Strategic Management, 64
5. The Strategic Management Process, 85
6. Fundamentals of Strategy Formulation, 110
7. The Strategic Plan: Purpose, Direction, and Goals, 137
8. The Business Plan: Scale and Resources, 151
9. The Annual Plan: Anticipated Actions, 175
Part III: Analytical Concepts for the General Manager
10. The Business Model, 194
11. The Relationship between Cash Flow and Growth, 207
vviiii
viii CONTENTS
12. Product, Marketing, and Pricing Strategies, 215
13. Relating Productivity and Firm Growth, 224
14. Residual Income, EVA, and Corporate Capital Charges, 247
15. The Allocation (Redeployment) of Capital (Cash), 262
16. Share Repurchases, 275
Part IV: General Managers Taking Action
17. Making Effective Decisions, 289
18. Organizing and Aligning, 309
19. Staffing, 323
20. Integrating, 346
21. Executing, 361
Part V: In Summation
22. Controlling and Reporting, 377
23. Learning and Innovation, 390
24. Public Relations and Advocacy, 403
25. Reflections on General Management, 415
Notes, 435
Bibliography, 439
Index, 449
FOREWORD
The commander-in-chief is always in the midst of a series of shifting events,
and so he can never at any moment consider the whole import of an event
that is occurring. Moment by moment the event is imperceptibly shaping it-
self, and at every moment of this continuous, uninterrupted shaping of
events, the commander-in-chief is in the midst of the most complex play of
intrigues, worries, contingencies, authorities, projects, counsels, threats,
and deceptions, and is continually obliged to reply to innumerable ques-
tions addressed to him which constantly conflict with one another.
An order to retreat must be given to the adjutant, at once, that instant.
And the order to retreat carries us past the turn to the Kaluga road. And af-
ter the adjutant comes, the commissary-general asks where the stores are to
be taken and the chief of the hospitals asks where the wounded are to go,
and a courier from Petersburg brings a letter from the sovereign which does
not admit of the possibility of abandoning Moscow, and the commander-in-
chief’s rival, the man who is undermining him (and there are always not
merely one, but several such) presents a new project diametrically opposed
to that of turning to the Kaluga road.
—Leo Tolstoy, War and Peace
The general manager has a predicament unlike any other. This
person is subject to immense pressure from others, must have a bias for
action, and yet must analyze carefully and comprehensively, often under
conditions of incomplete information. General managers do not solve
problems; they manage messes. Russell Ackoff, professor at the Wharton
School, wrote, “Managers are not confronted with problems that are inde-
pendent of each other, but with dynamic situations that consist of complex
iixx