You can do two things:
either reduce the whole picture,
or crop (cut off pieces off) the picture from any or all sides.
To reduce the picture, click on it and then go one of the coners and "pull it in inwards". If you pull on any side, this will make the picture "shorter" or "narrower" - this will not keep the picture proportional (try both options to see the difference).
To crop the picture, make sure you have your PICTURE toolbar selected
(if not go to TOOLBAR OPTIONS/ADD REMOVE BUTTONS/CUSTOMISE/mark the PICTURE toolbar). You will see the CROP icon (looks like XX on top of each other sideways in the top or bottom bars).
Click somewhere INSIDE the picture,
chose the CROP icon,
CUT OFF any pices from top, bottom, left, and/or right sides by PULLING INWARDS on the middle of any side on the little black line you see. If you cut off too much you can pull back out and you will get back what you had cropped.
Once picture is the size you want it, you can
RIGHT CLICK on pict
FORMAT PICTURE
LAYOUT
Choose IN FRONT OF TEXT and then you can place the picture where u want.
Play with the rest of the options to see what is the difference among them.
Hope doesn't sound confusing!
GOOD LUCK