MGT 258 EXAM TWO

Dash Board

Easy-to-read graphics all the information on sales, orders, and the like assembled from data pulled in time from corporate software. Make evidence-based management possible (One tool)

Information technology

Economist think the recent productivity growth is the result of organization's huge investment in information technology. For that reason, companies have implemented **enterprise resource planning** (ERP)

Six Sima (2)

Six Sigma may be also thought of as a phil. - to reduce variation in your company's business and make customer-focused, data-driven decisions. The method preaches the use of Define, Measure, Analyze, Improve, Control (DMAIC). Team leaders should be awarded for applying DMAIC

Special-purpose team

Meet to solve a special or onetime problem, then disbands. Often cross-functional, drawing on members from different departments.

**Two core principles of TQM

(1) People orientation: everyone involved with the organization should focus on delivering value to customers (2) Improvement orientation: everyone should work on continuously improving the work process.

The balanced scorecard perspectives

(a) goals (b) performance measures - 1.Financial - 2.Customer - 3.Internal business - 4.Innovation and learning

Fixed Budgets

- Allocated resources on the basis of a single estimate of cost. There is only 1 set of expenses; the budget does not allow for adjustment over time.

Deming principles

1. Quality should be aimed at the needs of the consumer 2. Companies should aim at improving the system, not blaming workers 3. Improved quality leads to increased market share, increase company prospects, and increased employment. 4. Quality can be improved on the basis of hard data, using the PDCA Cycle

Levels of control

1. Strategic 2. Tactical 3. Operational Considerable interaction occurs among the 3 levels, with lower-level managers providing information upward.

Succesful control system

1. They are strategic and result-oriented 2. They are timely (when needed), accurate (correct), and objective (impartial) 3. They are realistic, positive, and understandable and they encourage self-control 4. They are flexible.

Why is control needed?

1. To adapt to change and uncertainty: Control systems can help managers anticipate, monitor, and react to changes. 2.To discover irregularities and errors: in the long run they can bring about even the downfall of an organization. 3. To reduce costs, increase productivity, or add value. 4. To detect opportunities 5. To deal with complexity: i.e in a merge, different cultures, etc.

Barriers to control succes

1. Too much control 2. Too little employee participation 3. Overemphasis on means intend of ends 4. Overemphasis on paperwork 5. Overemphasis on one instead of multiple approaches

The U.S productivity track record

1960: 2.9% -1955: 1.5% 1995-2000: 2.5% -longest economic boom 2001-2007: 2.7% 2008: 2% -recession 2009: 3.7%

The balance sheet

A balance sheet summarizes an organization's overall financial worth-that is assets and liabilities- at a specific point in time.

1. Physical

Buildings, equipment, and tangible products.

ISO 9000Series

Consist of quality-control procedures companies must intel-from purchasing to manufacturing to inventory to shipping-that can be audited by independent quality-control experts, or "registrars". The goal is to reduce flaws in manufacturing and improve productivity. Companies must document the procedures and train their employee to use them/

(2) Improvement orientation

Continuous improvement: defined as ongoing small, incremental improvements in all parts of an organization- products, services, functional areas, and work processes.

Total quality management (TQM)

Defined as a comprenhensive approach -led by top management and supported throughout the organization- dedicated to continious quality improvement, training, and customer satisfaction.

Lean Six Sigma

Focuses on problem solving and performance improvement-speed with excellence-of a well-defined project.

External audits

Formal verification of an organization's financial accounts and statements (financial statements, assets, liabilities) by outside experts. The auditors are certified public accountants )CPAs) who work for an accounting firm.

Audits

Formal verifications of an organization's financial accounts and statements by outside experts.

5. Structural Area

How is the organization arranged from a hierarchical or structural standpoint. Two examples are bureaucratic control and decentralized control.

"""Management by exception

Is a control principle that states that managers should be informed of a situation only if data show a significant deviation from standards.

Six Sigma

Is a rigorous statistical analysis process that reduces defects in manufacturing and service-related processes. By testing a 1000 variables and eliminating guesswork, a company using the technique attempts to improve quality and reduce waste to the point where errors are nearly vanish. In everything from product design t manufacturing to billing, the attainment of Six Sigma means there are no more than 3.4 defect per million products or procedures.

Financial statement

Is a summary to some aspects of an organization's financial status. Two types: Balance sheet and income statement

You as a manager

Must operate in a complex environment and... - Competitive advantage - Diversity - Globalization - Information technology - Ethical standards - Sustainability - Your happiness and goals Make decisions about the 4 management functions =POLC ... to achieve productivity and realize results

3. Operational control by first-level managers

Operational contro, is monitoring performance to ensure that operational plans -day-to-day goals- are being implemented and making corrective action as needed. Reporting is done on a daily basis.

Variable budget

Or flexible budget. - Allows the allocation of resources to vary in proportion with various levels of activity. The budget can be adjusted over time to accommodate pertinent changes in the environment.

(1) People orientation

People: most important resource: employees and customers.

3. Comparte performance to standards: How do the desired and actual outcomes differ.

Performance that exceed standards -> bonuses, promotions...; performance that is below the standard: ask, is the deviation significant? -> need 4 action. How much deviation is acceptable depends on the range of variation built in step 1. The range of variation is incorporated in computer systems into a principle called management by exception."""

3. Informational area

Production schedules. Sales forecast. Environmental impact statements. Analysis of competition. Public relations briefing.

Deming management

Proposed ideas for making organizations more responsive, more democratic, and less wasteful. This include these principles...

1. Strategic control by top managers

Strategic control is monitoring performance to ensure that strategic plans are being implemented and taking corrective action as needed. Monitoring is accomplished by reports issued every 3,6,12 or + months, although more frequent reports may be requested of the organization is operating in an uncertain environment.

Strategy Map: Visual representation of a balanced scorecard (2)

Strategy maps show the cause-and-effect links by which specific improvements create desired outcomes, such as objectives for revenue growth, targeted customer markets, the role of excellence and innovation in products. Measures and standards can be developed in each of the 4 operational areas, financial goals, customer goals, internal goals, learning and growth goals.

Outsourcing

Subcontracting of services and operations to an outside vendor; because the subcontractor can do the job better or cheaper.

2. Tactical control by middle managers

Tactical control is monitoring performance to ensure that tactical plans -those at the divisional or departmental level -are being implemented and taking corrective action as needed. Reporting is done on a weekly or monthly basis.

2. Customer perspective: How do customers see us?

The balanced scorecard translated the mission of customer service into specific measures of concerns really matter to customer- time between placing an order and taking delivery, quality in terms of detect level, satisfaction with products and service, and cost.

Measurement-managed

Those in which senior management reportedly agree on measurable criteria for determining strategic success, and management updated and reviewed semiannual performance measures in 3 of 6 primary performance areas (financial performance, operating efficiency, customer satisfaction, employee performance, innovation/change, and community/environment. (IT IS BETTER)

1. Financial perspective: how do we look to shareholders

Typical profitability, growth, and shareholder values.

3. Internal Business Perspective: At what must we excel

What the company must do internally to meet its customers' expectations. Processes such as quality, employee skills, and productivity. Top management's judgement about key internal processes must be linked to measures of employee actions at the lower levels, such as time to process customer orders, get materials from suppliers, produce products, and deliver them to customer. Computer information system can help.

4. Take corrective actions, if necessary: What changes should we make to obtain desirable outcomes?

When performance falls significantly short of the standards, managers should examine the reasons why and take the appropriate action.

Measurement management: Forget magic

You cannot manage anything you can't measure. Two types of organization: measurement-managed and non-measurement-managed.

Two budget planning approaches

Zero-based budgeting: forces each department to start from zero in projecting funding needs, is no longer favored. Incremental budgeting

For a manager, building an effective team requires work, but the payoff is

a stronger work unit

The final stage of group and team development is known as

adjourning

T/F Members of a group that are asking "What's next?" are in the performing stage of team development.

false

T/F The Abilene paradox is the tendency of people to go along with others in order to make requests of them in the future.

false

A committee investigating the impacts of health care reform on the organization is an example of an

formal group

Stereotyping the opposition, rationalization, and peer pressure are symptoms of

groupthink

2. Measure performance: What is the actual outcome we got?

i.e # of products sold, units produced, cost per item. Performance measures are obtained from (1) written reports, including computerized printouts, (2) oral reports; (3) personal observations. Measurement techniques varies for different industries.

Members of a(n) ______ team are more likely to tolerate autocratic leadership, and therefore autocratic leadership is more common among teams of this nature.

large

PDCA Cycle

plan-do-check-act cycle using observed data for continuous improvement of operations. - PLAN: desired and important changes, based on observed data. Make pilot test, if necessary. - DO implement the change or make a small-scale test - CHECK or observe what happened after the change or during the test. - ACT on lessons learned, after study of results. Determine if predictions can be made as basis for new methods.

The workers on the night shift at a manufacturing plant would be considered a(n) ______ team.

production

In ______ teams, the traditional clear-cut distinction between manager and managed is blurred as nonmanagerial employees are delegated greater authority and granted increased autonomy.

self managed

Enterprise resource planning

software systems, information systems for integrating virtually all aspects of a business.

During the storming stage of group and team development, which of the following is most important for the team leader to encourage?

voicing of disagreements

Industries

- Tangible products, manufacturers - Service products: more directly related w/ customer satisfaction

Some TQM Tools and techniques

- Benchmarking - Outsourcing - Reduced cycle time - ISO 9000 - ISO 14000 - Statistical process control - Six sigma

Other budgets

- Cash or cash-flow budget: Forecast all sources of cash income and cash expenditures - Capital expenditures budget: Forecast invest. in major assets. - Sales or revenue budget: project sales - Expense budget: Project expenses. - Financial budget: Projects organization's source of cash and how it plans to expend it. - Operating budget: Projects what an organization will create in goods and services, what financial resources are needed, and what income is expected. - Nonmonetary budget: hours, labor, ft square...

Assumptions of People orientation

- Delivering customer values is most important - People will focus on quality of given empowerment since they can easily detect opportunities for quality improvement. - TQM requires training, teamwork, and cross-functional efforts. Teams may be self-managed (given administrative oversight of planning, scheduling, monitoring and staffing) or may be SPECIAL-PURPOSE TEAM.

Some ways to improve productivity

- Establish base points, set goals, and measure results - Use new technologies - Improve match between employees and jobs (Also pay attention to the training, redesigning jobs, and providing financial incentives that are tied to performance. - Encourage employee involvement and innovation - Encourage employees diversity - Redesign the work process

Assumptions of improvement orientation

- It's less expensive to do it right the first time. - It's better to do small improvements all the time. - Accurate standards must be followed to eliminate small variations - There must be strong commitment from top management.

Four barriers to effective measurement

- Objectives are fuzzy - Managers put too much trust in informal feedback systems - Employee resist new measurement system - Companies focus too much on measuring activities instead of results

Rater Scale

- Reliability: ability to perform the desired service dependably, accurately and consistently. - Assurance: Employees' knowledge, courtesy, and ability to convey trust and confidence - Tangibles: physical facilities, equipment, appearance of personnel - Empathy: provision of caring, individualized attention to customers. - Responsiveness: willingness to provide prompt service and help customers.

What makes a company of services successful?? *&^%%

- The offering- which features are given top- quality treatment? - The funding mechanic,- who pays for the service? - The employee management system - how are workers trained and motivated? - The customer management system- how are customers "trained"

Why measurement-managed firms succeed

- Top executives agree on strategy (Translating strategy into measurable objectives helps make them specific) - Communication is clear - There is better focus and alignment - The organizational culture emphasizes teamwork and allows taking risk

Some financial controls

1. Budgets 2. Financial statements 3. Ratio analysis 4. Audits

Steps in the control process

1. Establish standards 2. Measure performance 3. Compare performance to standards 4. Take corrective action, if necessary

Personl amanagement succes

1. Find your passion and follow ir 2. Encourage self-discovery , and be realistic 3. Evert situation is different, so be flexible 4. Fine-tune your people skills 5. Learn how to develop leadership skills 6. Treat people as igf they matter, because they do 7. Draw employees and peers into your management process 8. Be flexible, keep you coll, and take yourself lighty.

Four components to TQM

1. Make continuous improvement 2. Get every employee involved 3. Listen to and learn from customer and employee 4. Use accurate standards to identify and eliminate problems. **This may be summarized as Two core principles of TQM

Six areas of control

1. Physical 2. Human 3. Informational 4. Financial 5. Structural 6. Cultural

Budget

A budget is a formal financial projections. It states an organization's planned activities for a given period of time in quantitive term, such as $, h, or # of products. It provides a yardstick against which managers can measure performance and make comparisons.

1. Establish standards: What is the outcome we want?

A control standard, or performance standard or simply standard, is the desire performance level for a given goal. Standards can be narrow or broad. They are best measured when can be quantified. One technique for establishing standards is to use the balanced scorecard.**

Benchmarking

A process by which a company compares it performance worth the best practices of high-performance organizations.

Statistical Process control

A statistical technique that uses periodic random samples from production runs to see if quality is being maintained within a standard range of acceptability. If not, production is stopped to allow corrective measures.

Internal Audits

A verification of an organization's financial accounts and statements by the organization's own professional staff. To verify the accuracy of organization's records and operating activities. Help uncover inefficiencies and thus help managers evaluate performance of their control systems.

Incremental budgeting

Allocates increased or decreased funds to a department by using the last budget period as a reference point; only incremental changes in the budget request are reviewed. Difficulties: lock departments into stable spending arrangements; not flexible in meeting environmental demos.; also department may engage in many activities which is not easy to sort out the performance.

4. Financial Area

Are bills being paid on time? How much money is owed by customers? $ owed to suppliers?, etc.

ISO 4000 series

Extends the concept, identifying standards for environmental performance. It dictates standards for documenting a company;s management of pollution, efficient use of raw materials, and reduction of the firm;s impact on the environment.

The balanced scorecard: A dashboard-like view of the organization.

Gives top managers a fast but comprehensive view of the organization via (1) customer satisfaction, (2) internal processes, (3) innovation and improvement activities, and (4) financial measures.

Strategy Map: Visual representation of a balanced scorecard

Improvement to balanced scorecard. A strategy map is a visual representation of the four perspectives of the balanced scorecard that enables managers to communicate their goals so that everyone in the company can understand how their jobs are linked to the overall objectives of the organization.

Decentralized control

Is an approach to organizational control that is characterized by informal and organic structural arrangements. Is the opposite of bureaucratic control. It aims to get increased employee commitment, using the corporate culture, group norms, and workers taking responsibility for their performance. It is found in companies with a flat organization.

Bureaucratic control

Is an approach to organizational control that is characterized by use of rules, regulations, and formal authority to guide performance. It attempts to elicit employee compliance, using strict rules, a rigid hierarchy, well-defined job descriptions, and administrative mechanisms such as budgets, performance appraisals, and compensations. It works well in organizations in which the tasks are explicit and certain. Can be an effective means of ensuring performance standards are been met.

6. Cultural area

Is an informal method of control. It influences the work process and levels of performance through the set of norms that develop as a result of the values and beliefs that constitute an organization's culture.

4. Innovation and learning perspective: Can we continue to improve and create value?

Learning and growth is the foundations for innovation and creativity. The organization must create a cultural that encourages rank-and-file employees to make suggestions and questions the status quo and it must provide employees with the environment and resources needed to do their jobs.

2. Human resources areas

Monitor employees i.e personality tests and drug test for hiring, performance test, performance evaluation, employees surveys.

What is productivity?

Productivity can be applied at any level (personal, work, etc). It is defined by the formula of : outputs/inputs (in specific period of t) Outputs: All goods and services produced (goods+ services. Inputs: labor+capital+materials+energy It means that productivity can increase by making substitutions or increasing the efficiency of any one element of input. Maintaining productivity depends on control.

Why increasing productivity is important?

Productivity is important to companies because it determines wether the organizations will make profit or even survive. Also important for the nation since it controls the living standard

How to measure quality of delivered service

RATER SCLAE, enables customers to rate the quality of a service along 5 dimensions from 1 to 10.

Reduced cycle time

Reduction in steps in a work process

Ratio analysis: Indicators of an organization's financial health.

The practice of evaluating financial ratios. - Liquidity ratios: how easily an organization's assets can be converted into cash. - Debt ratios: the degree to which an organization can meet its long-term financial obligations. - Assets ratios: how effectively an organization is managing its assets, such the inventory. - Return ratios: or return on investments (ROI) or return on assets (ROA): how effectively is management in generating return, or profits, on its assets.

Evidence-based management

The use of real-world data rather than fads and hunches in making management decisions. Tools: dashboard, balanced scorecard, strategy maps, measurement management.

Which of the following is the most important factor that should be considered when building a group into an effective team?

cohesiveness

Which of the following statements about conflict is accurate?

conflict is perfectly normal

Control/Controlling

control is making something happen the way it was planned to happen. Controlling is defined as monitoring performance, comparing it with goals, and taking corrective action as needed. Its purpose: to make sure that performance meets objectives. Controlling is concerned with seeing that the right things happen at the right time in the right way. However, P+O+L+C= PRODUCTIVITY

Although ______ are typically unwritten and seldom discussed openly, they have a powerful influence on group and organizational behavior.

norms

Income statement

summarized an organization's financial results -revenues and expenses- over a specified period of time. The diff. bw revenues and expenses, called the bottom line, represents the profit or losses incurred over the specified period of time.

Lorelei frequently requests meetings between her team and counterparts in Portland. She often spots issues that will affect both groups and wants to work openly on coordination so there are no surprises for anyone. Lorelei plays a ______ role for her team.

task

A collection of five employees who are studying industry pay scales, with the goal of making recommendations for adjusting pay grades within their company, is known as a(n)

team

T/F The tendency of people to exert less effort when working in groups than when working alone is known as social loafing.

true