GEB1011 MODULE 3
Using machines with computers to implement sensor controlled baking in a cookie shop is an example of what type of manufacturing process
CAM
The Production Process
The production process takes inputs such as land, labor, capital, entrepreneurship, and knowledge to produce outputs in the form of goods, services, and ideas. This is accomplished by using the production control activities of planning, routing, scheduling, dispatching, and follow-up. Inputs-production control-outputs.
As organizations grew larger using mass production, it became important for managers to _____ more workers
control
Leading
creating a vision for the organization and guiding, training, coaching, and motivating others to work effectively to achieve the organization's goals and objectives.
Adding CAD and CAM to a company's production process makes it possible to custom design products, offsetting the additional cost of the software
true
Looking to the long-term future to identify strengths is the best way for an international company to compete
true
Management
The process used to accomplish organizational goals through planning, organizing, leading, and controlling people and other organizational resources.
Leading: Providing Continuous Vision and Values
Leaders must: -Communicate a vision and rally others around that vision. -Establish corporate values. -Promote corporate ethics. -Embrace change. -Stress accountability and responsibility. *Transparency*- The presentation of the company's facts and figures in a way that is clear and apparent to all stakeholders. Leadership Styles: -*Autocratic leadership*- Make managerial decisions without consulting others. -*Participative or democratic leadership*-Managers and employees work together to make decisions. Leadership style that consists of managers and employees working together to make decisions. -*Free-rein leadership*- Managers set objectives and employees are relatively free to do whatever it takes to accomplish those objectives.
What Managers Do
Planning: -Setting organizational goals -Developing strategies to reach those goals -Determining resources needed -Setting precise standards Leading: -Guiding and motivating employees to work effectively to accomplish organizational goals and objectives -Giving assignments -Explaining routines -Clarifying policies -Providing feedback on performance Organizing: -Allocating resources, assigning tasks, and establishing procedures for accomplishing goals -Preparing a structure (organization chart) showing lines of authority and responsibility -Recruiting, selecting, training, and developing employees -Placing employees where they'll be most effective Controlling: A management function that involves establishing clear standards to determine whether or not an organization is progressing toward its goals and objectives, rewarding people for doing a good job, and taking corrective action if they are not. -Measuring results against corporate objectives -Monitoring performance relative to standards -Rewarding outstanding performance -Taking corrective action when necessary
Preparing for the Future
Tremendous opportunities exist for careers in operations management. Those who see future trends and have the skills to work in highly automated factories will benefit.
The goal of operations management in service industries is _____ satisfaction
customer
Advantages and Disadvantages of Centralized versus Decentralized Authority
Advantages of centralized authority: •Greater top-management control •More efficiency •Simpler distribution system •Stronger brand/corporate image Disadvantages of centralized authority: •Less responsiveness to customers •Less empowerment •Interorganizational conflict •Lower morale away from headquarters Advantages of decentralized authority: •Better adaptation to customer wants •More empowerment of workers •Faster decision making •Higher morale Disadvantages of decentralized authority: •Less efficiency •Complex distribution system •Less top-management control •Weakened corporate image
*Strengths*: factors that give an edge for the company over its competitors. *Weaknesses*: factors that can be harmful if used against the firm by its competitors. *Opportunities*: favorable situations which can bring a competitive advantage. *Threats*: unfavorable situations which can negatively affect the business.
Strengths- Helpful, Internal Weaknesses- Harmful, Internal Opportunities- Helpful, External Threats- Harmful, External
Brainstorming
Coming up with as many solutions to a problem as possible in a short period of time with no censoring of ideas.
Operations Management Planning
Operations management planning helps solve problems like: -Facility location -Facility layout -Materials requirement planning -Purchasing -Inventory control -Quality control Facility Location -*Facility location*- The process of selecting a geographic location for a company's operations. -Rising numbers of online businesses means brick-and-mortar retailers must find great locations. Facility Location for Manufacturers -Considerations for moving facilities to a new location: •Labor costs •Availability of resources •Access to transportation •Proximity to suppliers and customers •Crime rates •Quality of life for employees •Cost of living •Need to train or retrain local workforce Interfirm Operations Management -Sometimes businesses outsource engineering, design, and manufacturing to other companies. -Often these relationships are managed through the Internet. -Many companies are developing Internet-focused strategies. Facility Location in the Future -Information technology gives firms increased flexibility in terms of location. -*Telecommuting*- Working from home via computer and modem. Facility Layout -*Facility layout*- The physical arrangement of resources (including people) in the production process. -Facility layout depends on the processes performed: •Service: Help customers find products •Manufacturing: Improve efficiency -Facility layout options 1. *Assembly line layout*- Workers do only a few tasks at a time. 2. *Modular layout*-Teams of workers produce more complex units of the final product. 3. *Fixed-position layout*- Allows workers to congregate around the product. 4. *Process layout*- Similar equipment and functions are grouped together. Materials Requirement Planning -*Materials requirement planning (MRP)*- A computer-based operations management system that uses sales forecasts to make sure that needed parts and materials are available at the right time and place. -*Enterprise resource planning (ERP)*- A newer version of MRP that combines the computerized functions of all the divisions and subsidiaries of the firm—such as finance, human resources, and order fulfillment—into a single integrated software program that uses a single database. Purchasing -*Purchasing*- The function in a firm that searches for quality material resources, finds the best suppliers, and negotiates the best price for goods and services. -The Internet has transformed purchasing. Just-in-Time Inventory Control -*Just-in-time (JIT) inventory control*- A production process in which a minimum of inventory is kept on the premises and parts, supplies, and other needs are delivered just in time to go on the assembly line. -To work effectively, the process requires excellent coordination with suppliers. Quality Control -*Quality*- Consistently producing what the customer wants while reducing errors before and after delivery to the customer. -*Six Sigma quality*- A quality measure that allows only 3.4 defects per million opportunities. -*Statistical quality control (SQC)*- The process some managers use to continually monitor all phases of the production process to assure/ensure that quality is being built into the product from the beginning. -*Statistical process control (SPC)*- The process of taking statistical samples of product components at each stage of the production process and plotting those results on a graph. Any variances from quality standards are recognized and can be corrected if beyond the set standards. -Measuring quality along the production process reduces the need for quality control at the end. The Baldrige Awards -Companies can apply for awards in these areas: •Manufacturing •Services •Small businesses •Nonprofit/government •Education •Health care ISO 9001 and ISO 14001 Standards -The International Organization for Standardization (ISO) is a worldwide federation of national standards bodies. Not part of a governmental body. -*ISO 9001*- The common name given to quality management and assurance standards. -*ISO 14001*- A collection of the best practices for managing an organization's impact on the environment.
Planning
A management function that includes anticipating trends and determining the best strategies and tactics to achieve organizational goals and objectives.
Autocratic Leadership
Autocratic leadership is effective in situations such as emergencies, and working with new, unskilled workers.
Facility layouts and types of design
Fixed position layout- Scheduling work operations at side of end product as in home building Process layout- Serving different customers with different needs Cellular or modular layout- Can accommodate changes in design or demand Product (assembly) layout- Used to produce large quantities of a few products
Which of the following are examples of companies that utilize mass customization?
GNC, M&M, National Bicycle Industrial Company
Manufacturing and Services in Perspective
Manufacturing in the U.S. -Since 1979, the number of U.S. workers employed by factories has steadily dropped. -American factories can operate efficiently without large amounts of human labor. The U.S. economy is no longer manufacturing-based. -80 percent of jobs are in the service sector. -American factories can't fill positions as engineers and computer experts flock to the tech industry. Manufacturers and Service Organizations Become More Competitive -U.S. manufacturers must compete with China, Germany, South Korea, and India. -How can U.S. businesses maintain a competitive edge? •Keeping up with latest production techniques •Focusing on customers •Maintaining close relationships with suppliers •Practicing continuous improvement
The reasons why companies decide to decentralize include
adapting more rapidly to changes in the competitive environment and being more responsive to customer needs.
When sales were dropping, as they do periodically, companies often layoff employees. This is an example of
adapting to change in the environment
Ways to Departmentalize
(By product): A marketing manager oversees trade books, college texts, and technical books. (By function): A president oversees production, marketing, finance, human resources, and accounting. (By customer group): A presidents oversees the consumers, commercial users, manufacturers, and institutions. (By geographic location): A vice president of international operations oversees the Canadian division, the Japanese division, the European division, and the Korean division. (By process): A production manager oversees the cutters, dyers, and stitchers.
A Flat Organizational Structure
(PIC) Owner/Manager with 6 people below them
Styles of Leadership
*Authoritarian leadership*: A leadership style in which the leader retains a great deal of authority *Democratic leadership*: A leadership style in which the leader allows subordinates to participate in decision making and problem solving *Laissez-faire leadership*: A leadership style in which the leader is uninvolved and lets subordinates direct themselves ? *Servant leadership*: involves putting other people's needs, aspirations, and interests above your own. A good listener, Empathetic, Healing, Aware, Persuasive. *Entrepreneurial leadership*: involves believing that one plays a very important role at a company rather than an unimportant one. Visionary, problem solver, decision maker, risk taker.
The Theories of Leadership
*Fiedler's Contingency Model*: Each leader has a preferred leadership style, which may be people oriented or task oriented. Performance depends on three characteristics of the leadership situation: -Leader-member relations -Task structure -The position power of the leader Fiedler recommends that a leader determine whether his or her preferred leadership style fits the situation. If not, the leader should try to change the characteristics of the situation. *Hersey-Blanchard theory (Life cycle theory)*: Assumes that the leader's behavior should adapt to the situation. Leadership style should reflect the maturity of the followers as measured by traits such as ability to work independently. Leaders should adjust the degree of task and relationship behavior in response to the growing maturity of their followers. *Path-Goal theory*: Suggests that the primary activities of a leader are to make desirable and achievable rewards available to organization members who attain organizational goals and to clarify the kinds of behavior that must be performed to earn those rewards. Leader should exhibit the following behaviors: -Directive behavior (involves telling followers what to do and how they are to do it) -Supportive behavior (involves recognizing that above all, followers are human beings) -Participative behavior (involves seeking input from followers about methods for improving business operations) -Achievement behavior (involves setting a challenging goal for a follower to meet, and expressing confidence that the follower can meet this challenge)
The Production Process
*Form utility*- The value producers add to materials in the creation of finished goods and services. Grove's Basic Production Requirements 1. To build and deliver products in response to the demands of the customer at the scheduled delivery time 2. To provide an acceptable quality level To provide everything at the lowest possible cost *Process manufacturing*- That part of the production process that physically or chemically changes materials. *Assembly process*- That part of the production process that puts together components. Production processes are either continuous or intermittent. -*Continuous process*- Long production runs turn out finished goods over time. -*Intermittent process*- The production run is short and the machines are changed frequently to make different products. The Need to Improve Production Techniques and Cut Costs -Developments making U.S. companies more competitive: 1. Computer-aided design and manufacturing 2. Flexible manufacturing 3. Lean manufacturing 4. Mass customization 5. Robotics 6. 3D printing Computer-Aided Design and Manufacturing -*Computer-aided design (CAD)*- The use of computers in the design of products. -*Computer-aided manufacturing (CAM)*- The use of computers in the manufacturing of products. Using computers to guide and control the manufacturing process. -*Computer-integrated manufacturing (CIM)*- The uniting of computer-aided design with computer-aided manufacturing. •CIM is expensive but it drastically reduces the time needed to program machines to make parts. Flexible Manufacturing -*Flexible manufacturing*- Designing machines to do multiple tasks so that they can produce a variety of products. -Allen-Bradley uses flexible manufacturing to build motor starters. -Machines and robots build, test, and package parts. Lean Manufacturing -*Lean manufacturing*- The production of goods using less of everything compared to mass production. -Compared to others, lean companies: •Take less human effort •Take less manufacturing space •Require less investment in tools •Require less engineering time to develop a new product Mass Customization -*Mass customization*- Tailoring products to meet the needs of individual customers. -More manufacturers are learning to customize. -Mass customization exists in the service sector too. Robotics -The use of robotics allows manufacturing to continue 24 hours a day, seven days a week with great precision. -Robotics have improved productivity while reducing the number of jobs for humans. -Robots work in service businesses, such as hotels, as well. 3D Printing and Additive Manufacturing -Products are created one layer at a time by a nozzle. -For now, 3D printing is typically used to make prototypes and molds. Using Sensing, Measurement, and Process Control -Sensors can detect the moment anything goes wrong. -Nanomanufacturing allows manipulation of materials on a molecular or atomic scale.
Managing the Interactions among Firms
*Networking*- Using communications technology and other means to link organizations and allow them to work together on common objectives. The process of establishing and maintaining contacts with key managers in one's own organization and other organizations and using those contacts to weave strong relationships that serve as informal development systems. Transparency and Virtual Organizations -*Real time*-The present moment or actual time in which something takes place. -Most companies are no longer self-sufficient; they're part of a global business network. -Transparency occurs when a company is so open to other companies that electronic information is shared as if the companies were one. -*Virtual corporation*- •A temporary networked organization made up of replaceable firms that join and leave as needed. -*Benchmarking*- •Compares an organization's practices, processes, and products against the world's best. •If a company can't do as well as the best, they can try to outsource the function. -*Core competencies*-Functions that the organization can do as well as or better than any other organization in the world.
From Production to Operations Management
*Production*- The creation of finished goods and services using the factors of production: land, labor, capital, entrepreneurship, and knowledge. *Production management*- The term used to describe all the activities managers do to help firms create goods. *Operations management*- A specialized area in management that converts or transforms resources (including human resources) into goods and services. When a college combines faculty, facilities, and equipment in the education process, it is an example of _____ management Operations management includes: -Inventory management -Quality control -Production scheduling -Follow-up services Operations Management in the Service Sector -All about creating a good experience for those who use the service. -In hotels, like Hilton, operations management includes smooth-running elevators, fine restaurants, comfortable beds, and a front desk that processes people quickly.
Control Procedures: PERT and Gantt Charts
*Program Evaluation and Review Technique (PERT)*- A method for analyzing the tasks involved in completing a given project, estimating the time needed to complete each task, and identifying the minimum time needed to complete the total project. Steps Involved in PERT 1. Analyzing and sequencing tasks 2. Estimating the time needed to complete each task 3. Drawing a PERT network illustrating the first two steps 4. Identifying the critical path •*Critical path*- In a PERT network, the sequence of tasks that takes the longest time to complete. -*Gantt chart*- Bar graph showing production managers what projects are being worked on and what stage they are in at any given time.
SWOT Analysis Starbucks
*Strengths* -Starbucks Corporation is a very profitable organization, earning in excess of $600 million in 2004.The company generated revenue of more than $5000 million in the same year. -It is a global coffee brand built upon a reputation for fine products and services. It has almost 9000 cafes in almost 40 countries. *Weaknesses* -Starbucks has a reputation for new product development and creativity. However, they remain vulnerable to the possibility that their innovation may falter over time. -The organization has a strong presence in the United States of America with more than three quarters of their cafes located in the home market. It is often argued that they need to look for a portfolio of countries, in order to spread business risk. -The organization is dependent on a main competitive advantage, the retail of coffee. This could make them slow to diversify into other sectors should the need arise. *Opportunities* -Starbucks are very good at taking advantage of opportunties. In 2004 the company created a CD-burning service in their Santa Monica (California USA) cafe with Hewlett Packard, where customers create their own music CD. -New products and services that can be retailed in their cafes, such as Fair Trade products. -The company has the opportunity to expand its global operations. New markets for coffee such as India and the Pacific Rim nations are beginning to emerge. -Co-branding with other manufacturers of food and drink, and brand franchising to manufacturers of other goods and services both have potential. *Threats* -Who knows if the market for coffee will grow and stay in favor with customers, or whether another type of beverage or leisure activity will replace coffee in the future? -Starbucks are exposed to rises in the cost of coffee and dairy products. -Since its conception in Pike Place Market, Seattle in 1971, Starbucks' success has lead to the market entry of many competitors and copy cat brands that pose potential threats.
The Managerial Grid
*Task-oriented leader*- focuses on the jobs to be done and the goals to be accomplished. *People-oriented leader*- primarily concerned with the well-being of the employees being managed
Planning and Decision Making
*Vision*- More than a goal; an encompassing explanation of why the organization exists and where it's trying to go. Gives an organization a sense of purpose and a set of values that unite workers in a common destiny. *Mission statement*- An outline of the fundamental purposes of an organization, including: -The organization's self-concept -Its philosophy -Long-term survival needs -Customer needs -Social responsibility -Nature of the product or service *Goals*- The broad, long-term accomplishments an organization wishes to attain. *Objectives*- Specific, short-term statements detailing how to achieve the organization's goals. Planning Answers Fundamental Questions: 1. What is the situation now? -*SWOT analysis*- A planning tool used to analyze an organization's strengths, weaknesses, opportunities, and threats. 2. How can we get to our goal from here? -Strategic planning -Tactical planning -Operational planning -Contingency planning *Strategic planning*- Determining the major goals of the organization and the policies and strategies for obtaining and using resources to achieve those goals. *Tactical planning*- Developing detailed, short-term statements about what is to be done, who is to do it, and how it is to be done. *Operational planning*- Setting work standards and schedules necessary to implement the company's tactical objectives. *Contingency planning*- Preparing alternative courses of action that may be used if the primary plans don't achieve the organization's objectives. Decision Making: Finding the Best Alternative -*Decision making*- Choosing among two or more alternatives. -*Rational decision-making model* -1. Define the situation. -2. Describe and collect needed information. -3. Develop alternatives. -4. Decide which alternative is best. -5. Do what is indicated. -6. Determine whether the decision was a good one, and follow up. -*Problem solving*- The process of solving the everyday problems that occur; less formal than decision making and usually calls for quicker action. -Problem-solving techniques include *brainstorming* and *PMI*- Listing all the pluses for a solution in one column, all the minuses in another, and the implications in a third column.
Limitations
-Excessive lists of strengths, weaknesses, opportunities and threats; -No prioritization of factors; -Factors are described too broadly; -Factors are often opinions not facts; -No recognized method to distinguish between strengths and weaknesses, opportunities and threats.
Strength or a weakness?
-Often, company's internal factors are seen as both, strengths and weaknesses, at the same time. -It is also hard to tell if a characteristic is a strength (weakness) or not. For example, firm's organizational structure can be a strength, a weakness or neither!
Opportunities and Threats
-Opportunities and threats are the external uncontrollable factors that usually appear or arise due to the changes in the macro environment, industry or competitors' actions. -Opportunities represent the external situations that bring a competitive advantage if seized upon. Threats may damage your company so you would better avoid or defend against them. -*Competition*. Competitor's react to your moves and external changes. They also change their existing strategies or introduce new ones. Therefore, the company must always follow the actions of its competitors as new opportunities and threats may open at any time. -*Market changes*. The most visible opportunities and threats appear during the market changes. *Markets converge*, starting to satisfy other market segment needs with the same product. *New geographical markets open up* allowing the firm to increase its export volumes or start operations in a new country. *Often niche markets become profitable* due to technological changes. As a result, changes in the market create new opportunities and threats that must be seized upon or dealt with if the company wants to gain and sustain
Strengths and Weaknesses
-Some strengths or weaknesses can be recognized instantly without deeper studying of the organization. But usually the process is harder and managers have to look into the firm's: -Resources: land, equipment, knowledge, brand equity, intellectual property, etc. -Core competencies -Capabilities -Functional areas: management, operations, marketing, finances, human resources and R&D -Organizational culture -Value chain activities
Organizing
A management function that includes designing the structure of the organization and creating conditions and systems in which everyone and everything work together to achieve the organization's goals and objectives.
Fixed-Position Layout Examples
A new home build A bridge construction New road construction An office building
Advantages and Disadvantages of a Narrow versus a Broad Span of Control
Advantages of a broad span of control: •Reduced costs •More responsiveness to customers •Faster decision making •More empowerment Disadvantages of a broad span of control: •Fewer chances for advancement •Overworked managers •Loss of control •Less management expertise Advantages of a narrow span of control: •More control by top management •More chances for advancement •Greater specialization •Closer supervision Disadvantages of a narrow span of control: •Less empowerment •Higher costs •Delayed decision making Less responsiveness to customers
Organizing for Success
Building an Organization from the Bottom Up -Create a division of labor. -Divide tasks through job specialization. -Set up teams or departments (departmentalization). -Allocate resources. -Assign specific tasks. -Establish procedures. -Develop an organization chart. -Adjust to new realities.
Adapting to Change
Change -Change isn't easy; employees like to do things the way they always have. -Get rid of old, inefficient facilities and equipment. -Use the Internet to get to know your customers and sell directly to them. •*Digital natives*- Young people who have grown up using the Internet and social networking. Restructuring for Empowerment -*Restructuring*- •Redesigning an organization so that it can more effectively and efficiently serve its customers. -*Inverted organization*- •An organization that has contact people at the top and the CEO at the bottom of the organization chart. •The manager's job is to *assist* and *support* frontline people, not boss them around. Creating a Change-Oriented Organizational Culture -*Organizational or corporate culture*- •Widely shared values within an organization that provide unity and cooperation to achieve common goals. •Culture is shown in stories, traditions and myths. •Some of the best organizational cultures emphasize service. Managing the Informal (?) Organization -*Formal organization*- •Details lines of responsibility, authority, and position. The structure shown on organization charts. •The formal system is often slow and bureaucratic, but it helps guide the lines of authority. •No organization can be effective without formal and informal organization. -*Informal organization*- •The system that develops spontaneously as employees meet and form cliques, relationships, and lines of authority outside the formal organization. The human side of the organization that does not appear on any organization chart. •The informal organization helps foster camaraderie and teamwork among employees. •The informal system is too unstructured and emotional on its own. •The informal organization may also be powerful in resisting management directives.
Choosing a Leadership Style
Characteristics of the leader: -The manager's values -Level of confidence in employees -Personal leaderships strengths -Tolerance for ambiguity
Decisions to Make in Structuring Organizations
Choosing Centralized or Decentralized Authority -*Centralized authority*-When decision-making authority is maintained at the top level of management at the company's headquarters. -*Decentralized authority*- When decision-making authority is delegated to lower-level managers more familiar with local conditions than headquarters management could be. Choosing the Appropriate Span of Control -*Span of control*- The optimum number of subordinates a manager supervises or should supervise. -When work is standardized, broad spans of control are possible. -The appropriate span narrows at higher levels of the organization. -The trend today is to reduce middle managers and hire better low-level employees. Choosing between Tall and Flat Organizational Structures -*Tall organization structure*- An organizational structure in which the pyramidal organization chart would be quite tall because of the various levels of management. -*Flat organization structure*- An organizational structure that has few layers of management and a broad span of control. Weighing the Advantages and Disadvantages of Departmentalization -*Departmentalization*- The dividing of organizational functions into separate units. -Workers are grouped by skills and expertise to specialize their skills. Advantages: 1.Employees develop skills and progress within a department as they master skills. 2.The company can achieve economies of scale. 3.Employees can coordinate work within the function, and top management can easily direct activities. Disadvantages: 1.Departments may not communicate well. 2.Employees may identify with their department's goals rather than the organization's. 3.The company's response to external changes may be slow. 4.People may not be trained to take different managerial responsibilities; instead they become specialists. 5.Department members may engage in groupthink and may need outside input.
Controlling: Making Sure It Works
Control Function -Measures performance relative to planned objectives -Rewards people for work well done -Takes necessary corrective action A Key Criterion for Measurement: Customer Satisfaction -Traditional forms of measuring success are financial. -Pleasing employees, stakeholders, and customers is important. •*External customers*- Dealers, who buy products to sell to others, and ultimate customers (or end users), who buy products for their own use. •*Internal customers*- Individuals and units within the firm that receive services from other individuals or units.
Planning Functions
Forms of Planning -Strategic planning: The setting of broad, long-range goals by top managers -Tactical planning: The identification of specific, short-range objectives by lower-level managers -Operational planning: The setting of work standards and schedules -Contingency planning: Backup plans in case primary plans fail
A Virtual Corporation
In the center is the core firm. Surrounding the core firm are the production firm, distribution firm, advertising agency, design firm, legal firm, and accounting firm.
Leadership
Leading is the management function of influencing people to act or not act in a certain way. Values, Empowerment, Vision, Encouragement
Organizational Models
Line Organizations -*Line organization*- •Has direct two-way lines of responsibility, authority, and communication running from the top to the bottom, with all people reporting to only one supervisor. •There are no specialists or legal, accounting, human resource, or information technology departments. •Line managers issue orders, enforce discipline, and adjust the organization to changes. Line-and-Staff Organizations -*Line personnel*- •Employees who are part of the chain of command that is responsible for achieving organizational goals. •Line personnel have authority to make policy decisions. -*Staff personnel*- •Employees who advise and assist line personnel in meeting their goals. •Staff personnel includes marketing research, legal advising, IT, and human resource management. Matrix-Style Organizations -*Matrix organization*- Specialists from different parts of the organization are brought together to work on specific projects but still remain part of a line-and-staff structure. Emphasis is on product development, creativity, special projects, rapid communication, and interdepartmental teamwork. -Advantages: •Managers have flexibility in assigning people to projects. •Interorganizational cooperation and teamwork is encouraged. •Creative solutions to product development problems are produced. •Organizational resources are used efficiently. -Disadvantages: •It's costly and complex. •Employees may be confused where their loyalty belongs. •Good interpersonal skills and cooperative employees are a must. •It may only be a temporary solution to a long-term problem. Cross-Functional Self-Managed Teams -*Cross-functional self-managed teams*- Groups of employees from different departments who work together on a long-term basis. -A way to fix the problem of matrix-style teams is to establish long-lived teams. -Teams are empowered to make decisions without management approval. Going Beyond Organizational Boundaries -Cross-functional teams work best when the voice of the customer is heard. -Teams that include customers, suppliers, and distributors go beyond organizational boundaries. -Government coordinators may assist in sharing market information across national boundaries.
Organizing: Creating a Unified System
Management Levels -*Top management*- Highest level, consisting of the president and other key company executives who develop strategic plans (President, Vice Presidents) -*Middle management*- Includes general managers, division managers, and branch and plant managers who are responsible for tactical planning and controlling (Plant managers, Division heads, Branch managers) -*Supervisory (First-Line) management*- Those directly responsible for supervising workers and evaluating their daily performance. (Supervisors, Foremen, Department heads, Section leaders) -*Nonsupervisory*- (Employees) Top Management -Chief executive officer (CEO): Introduces change into an organization. -Chief operating officer (COO): Implements CEO's changes. -Chief financial officer (CFO): Obtains funds, plans budgets, collects funds, etc. -Chief information officer (CIO): Gets the right information to the right people so decisions can be made. Tasks and Skills at Different Levels of Management: -*Technical skills*- The ability to perform tasks in a specific discipline or department. -*Human relations skills*- Communication and motivation; they enable managers to work through and with people. -*Conceptual skills*- The ability to picture the organization as a whole and the relationship among its various parts. Staffing: Getting and Keeping the Right People -*Staffing*- A management function that includes hiring, motivating, and retaining the best people available to accomplish the company's objectives. •Staffing is critical, especially in the Internet and high-tech areas. •Many people are not willing to work at companies unless they are treated well with fair pay.
Managers' Roles Are Evolving
Managers Today -Tend to be collaborative -Emphasize teams and team building -Guide, train, support, motivate, and coach employees -Need to be skilled communicators and team players -Need to be globally prepared
The Changing Organization
Often change in organizations is due to evolving business environments: -More global competition, declining economy, faster technological change' and pressure to protect the environment Customer expectations have also changed -Consumers today want high-quality products with fast, friendly service, and all at low cost. The Development of Organizational Design -*Economies of scale*- Companies can reduce their production costs by purchasing raw materials in bulk. -The average cost of goods decreases as production levels rise. -Mass production of goods led to complexities in organizing businesses. Fayol's Principles of Organization -Unity of command -Hierarchy of authority -Division of labor -Subordination of individual interests to the general interest -Authority -Degree of centralization -Clear communication channels -Order -Equity -Esprit de corps -Characteristics of organizations based on the principles •Organizations in which employees have no more than one boss; lines of authority are clear. •Rigid organizations that often don't respond to customers quickly. Max Weber and Organizational Theory -Employees just need to do what they're told. -In addition to Fayol's principles, Weber emphasized: •Job descriptions •Written rules, decision guidelines, and detailed records •Consistent procedures, regulations, and policies Staffing and promotion based on qualifications. Turning Principles into Organizational Design -When following Fayol and Weber, managers control workers. -*Hierarchy*- A system in which one person is at the top of an organization and there is a ranked or sequential ordering from the top down of managers who are responsible to that person. -*Chain of command*- The line of authority that moves from the top of the hierarchy to the lowest level. -*Organization chart*- A visual device that shows relationships among people and divides the organization's work; it shows who is accountable for the completion of specific work and who reports to whom. Bureaucratic Organizations -*Bureaucracy*- An organization with many layers of managers who set rules and regulations and oversee all decisions. •It can take weeks or months to have information passed down to lower-level employees. •Bureaucracies can annoy customers.
The Four Functions of Management
Planning, Organizing, Leading, Controlling
SWOT Matrix
Potential Internal Strengths: -Core competencies in key areas -An acknowledged market leader -Well-conceived functional area strategies -Proven management -Cost advantages -Better advertising campaigns Potential Internal Weaknesses: -No clear strategic direction -Obsolete facilities ] -Subpar profitability -Lack of managerial depth and talent -Weak market image -Too narrow a product line Potential External Opportunities: -Ability to serve additional customer groups -Expand product lines -Ability to transfer skills/technology to new products -Falling trade barriers in attractive foreign markets -Complacency among rival firms -Ability to grow due to increases in market demand Potential External Threats: -Entry of lower-cost foreign competitors -Rising sales of substitute products -Slower market growth -Costly regulatory requirements -Vulnerability to recession and business cycles -Changing buyer needs and tastes
Typical Layout Designs
Product Layout (also called Assembly-line Layout): ? The pic is of a truck being put together pieced by piece Process Layout: The chart shows a series of functions following a specific order: storage, cutting, stamping, deburring, bending, assembly, packing, and shipping. Some steps may be skipped if needed. The process may move from cutting to assembly or from deburring to assembly. Cellular or Module Layout: The chart shows the following workstations: saws, planing machines, drills, lathes, sanders, and assembly tables. The process starts at the saws, then can go in any order through the other workstations before ending at assembly tables. Fixed-Position Layout: Workers include a roofing contractor, general carpentry and supplies, grading equipment and operators, an architect, a painting contractor, a finish carpenter, a plaster contractor, an electrical contractor, a masonry contractor, and a plumbing contractor.
Benefits
SWOT tool has 5 key benefits: -Simple to do and practical to use; -Clear to understand; -Focuses on the key internal and external factors affecting the company; -Helps to identify future goals; -Initiates further analysis.
The Control Process
Step 1: Establish clear standards Step 2: Monitor and record performance Step 3: Compare results against standards Step 4: Communicate results Step 5: If needed, take corrective action Feedback results in determining if standards are realistic, and the process may begin again at step 1.
Gantt Chart for a Doll Manufacturer
The Gantt chart is set up as a bar chart, with labels on the vertical axis and horizontal axis. The machines and parts of the doll that need to be completed are listed on the vertical axis, and the horizontal axis progresses in one-week increments. Bars show the expected duration of each activity and are color-coded to show completed work and work to be done. •Machine A (Heads molded): began at week 1 and should have been completed by the end of week 3. The heads finished about a half week early. •Machine B (Bodies molded): began at week 2 and were completed on schedule at the end of week 3. •Machine C (Fabric cut): will start at week 4 and should be completed by the end of week 4. •Machine D (Clothing sewn): will start at week 5 and should be completed by the end of week 5. •Line A (Assembly): will start at week 6 and should be completed by the end of week 7. •Line B (Painting): will start into week 7 and will be completed by the end of week 7. The dolls should be completed by the end of week 7.
PERT Chart for a Music Video
The PERT chart includes boxes for each of the activities, linked by arrows to show dependencies and flow of work. Each arrow is labeled with the duration, in weeks. A bold arrow shows the critical path, from start to video filmed, as 15 weeks. Activities in the critical path are star and song chosen, set designed, set materials purchased, set constructed, dance rehearsed, and video filmed. Other activities include dancers selected, dance choreographed, costumes designed, dancers measured, and costumes made.
Typical Organization Chart
The chart has four levels. At the bottom level are the employees who report to the first-line supervisors. The first-line supervisors report to a specific manager such as a production manager, a marketing manager, or a finance manager. These managers, in turn, report to the president, who is the top level of the organization.
A Sample Line-and-Staff Organization
The chief executive officer is at the top. Directly reporting to the CEO is the plant manager. Three supervisors report directly to the plant manager, and each of the three supervisors have assembly line workers reporting to them. All of these employees are considered line personnel. Three staff personnel departments (human resources, legal, and marketing research) are shown on the chart between the CEO and plant manager but without directly reporting to any one individual.
Various Leadership Styles
The continuum runs from boss-centered leadership to subordinate-centered leadership. Boss-centered leadership shows a large amount of authority used by managers, while subordinate-centered leadership shows a large area of freedom for employees. Along the continuum, a manager's authority decreases as it moves toward subordinate-centered leadership, while an employee's freedom increases. From the most boss-centered to the most subordinate-centered, the leadership styles are as follows: 1. Autocratic leadership: A manager makes a decision and announces it, the manager then "sells" the decision, and then the manager presents ideas and invites questions. 2. Participative/democratic leadership: A manager presents tentative decisions subject to change; the manager presents a problem, gets suggestions, and makes a decision; and the manager defines limits and asks the group to make the decision. 3. Free rein leadership: A manager permits employees to function within limits defined by their superior. Empowering Workers -Progressive leaders give employees the authority to make decisions on their own without consulting a manager. -Customer needs are handled quickly. -Manager's role becomes less of a boss and more of a coach. -*Enabling*- Giving workers the education and tools they need to make decisions. Managing Knowledge -*Knowledge management*: -Finding the right information, keeping the information in a readily accessible place, and making the information known to everyone in the firm. -This tries to keep people from reinventing the wheel.
Comparison of an Inverted Organizational Structure and a Traditional Organizational Structure
The organization chart in a traditional organization is shown as a pyramid sectioned from top to bottom in the following order: •Top management •Middle management •Supervisory management •Frontline workers The organization chart in an inverted organization chart is shown as an upside-down pyramid sectioned from top to bottom in the following order: •Empowered frontline workers (often in teams) •Support personnel •Top management
A Matrix Organization
The president is at the top. Directly reporting to the president are the vice presidents of project management, manufacturing, marketing, finance, and engineering. Each vice president has employees that report directly to them in a line structure. Three project managers report directly to the vice president of project management but are also shown as staff personnel to the other departments.
Skills Needed at Various Levels of Management
Top managers rely mostly on conceptual skills, then human relations skills, then technical skills. Middle managers need a good mix of technical, human relations, and conceptual skills. First-line managers rely mostly on technical skills, then human relations skills, then conceptual skills.
The reasons for implementing departmentalization include
assigning people with the correct knowledge to do each task and grouping all of those doing the same task together
ISO is the name for the International Organization for Standardization, which is a(n)
federation whose purpose is to facilitate trade, and worldwide federation of national standards bodies.
Some companies create __________ structures because the sales department has geographic departments, production is by function, and marketing is by customer groups.
hybrid
As effective as the informal organization may be in creating group cooperation, it can still
influence the work force against management goals and be a powerful force for resisting management directives.
SWOT Analysis
it's a tool used for situation (business or personal) analysis! SWOT is an acronym which stands for: STRENGTH, WEAKNESSES, OPPORTUNITIES, THREATS
Good _____ motivate workers and create an environment for them to motivate themselves
leaders
Purchasing a smaller machine able to turn out more units while taking up less space on the production floor is an application of _____ manufacturing
lean
In line-and-staff structures, staff managers provide advice and support to _____ departments on specialized matters such as finance engineering, human resources, and the law.
line
Locating a McDonald's inside of a Walmart is an example of a facility _____ strategy
location
It is easier to adapt to a service rather than a tangible product for _____ _____ because they are typically not machines in need of adjustment
mass customization
A _____ structure, also called a project management structure, sets up teams from different departments, thereby creating two or more intersecting lines of authority.
matrix
Uses of sensors to control manufacturing processes include
measuring humidity, and the measurement of the thickness of material
Global competition grows stronger each year making the future of _____ _____ robust with career opportunities
operations management
Students who can see trends and have the skills to work in highly automated factories and modern serviced facilities have a future in
operations management
3 m is a company that rewards innovation as part of its
organizational culture
When a firm assigns one or more of its function to an outside organization, it is
outsourcing
A _____ facility layout, such as that in a hospital, is usually designed to increase efficiency.
service
Today's trend is to expand the span of control because
the workforce is better educated at all levels and organizations save by reducing the number of middle managers.
When a supervisor is responsible for 20 or more workers assembling computers or cleaning movie theaters, it is an example of a(n) _____ span of control
wide