MGMT 300 Final (2,7,16)

WASTE PRODUCTION

waste in production, is anything that does not add value (products being stored, inspected, delayed, products waiting in queues, defective products, activities that do not add value)

explicit strategy

which is the plan of action that describes resource allocation and activities for dealing with the environment, achieving a competitive advantage, and attaining the organization's goals.

Outsourcing

which means contracting out selected functions or activities to other organizations that can do the work more cost efficiently.These relationships might reach far beyond the boundaries of the physical organization; they are built through flexible e-links between a company and its employees, suppliers, partners, and customers

JIT INCREASE FLEXIBILITY

work cells can be rearranged to adapt to changes in volume, product improvements, or even new designs

JIT CONCERN OF SUPPLIERS

*Desire for diversification -want a variety of customers *Poor customer scheduling *engineering changes *quality assurance *production with zero defects is not realistic to many *suppliers *small lot sizes *proximity

GOALS OF JIT PARTNERSHIPS

*Elimination of unnecessary activities *Elimination of in-plant inventory *elimination of in-transit inventory -encouraging suppliers and prospective suppliers to locate near manufacturing plants and provide frequent small shipments -Consignment inventory, means the supplier maintains the title to the inventory until it is used *elimination of poor suppliers -perfect quality aka zero defects= achieving deliveries only when needed and in exact quantities -both delivery system and supplier

SUPPLIERS & JIT PARTNERSHIPS

*JIT Partnerships, exist when supplier and purchaser work together with a mutual goal of removing waste and driving down costs *Every moment material is held, some process that adds value should be occuring

JUST-IN-TIME AND LEAN PRODUCTION

*Just-in-time, a philosophy of continuous and forced problem solving that supports lean production. key ingredient is lean production *Lean production, supplies the customer with exactly what the customer wants when the customer wants it, without waste, through continuous improvement driven by the "pull" of customer's order *both create competitive advantage and results in greater overall returns *both..elimination of waste and variability

PULL VERSUS PUSH

*Pull system, a system that pulls a unit where it is needed just as it is needed *Manufacturing cycle time, the time between the arrival of raw materials and the shipping of finished products *Push system, dumps the orders on the next downstream workstation regardless of timeliness and resource availability

JIT IN SERVICES

*Suppliers *Layouts -required in resturant kitchens *Inventory -an unexectued sell or buy order is not acceptable to most clients *Scheduling -demand must be satisfied by personel -scheduling rather than things inventories

VARIABILITY PRODUCTION

*Variability, is any deviation from the optimum process that delivers perfect production on time, every time *caused by internal and external factors *Variability occurs when: -employees, machines, and supplies produce units that do not conform to standards are late, or not the proper quantity -engineering drawings or specifications are inaccurate production personnel try to produce before drawings or specifications are complete *customer demands are unknown *variability can go unseen when inventory exists

KABAN

*inventory is moved only when needed-> call system Kanban *japanese often use a card to signal the need for another container of material *there is visual contact between producer and user, -the process works like this: -the user removes a standard size container of parts from small storage -the signal at the storage area is seen by the producing department as authorization to replenish the using department or storage area. Because there is an opitmum lot size, the producing department may make several containers at a time

LEAN PRODUCTION

*major difference between JIT and lean production is that JIT is a philosophy of continuing improvement with *an internal focus, while lean production is externally with a focus on the customer *Lean production is sometimes called Toyota *Production System (TPS) *Lean production share following attributes: -use just-in-time techniques -build systems that help employees -reduce space requirements -develop close relationships with suppliers -educate suppliers -eliminate all but value-added activities -develop the workforce -make jobs more challening -reduce number of job classes

JIT & QUALITY

*relationship between JIT and quality is a strong one -JIT cuts the cost of obtaining good quality (JIT immediately exposes bad quality) -JIT improves quality (has early warning system)

Mgmt Humanistic Perspective: Behavioral Sciences (3)

- uses scientific methods and draws from sociology, psychology, anthropology, economics, and other disciplines to develop theories about human behavior and interaction in an organizational setting. Seen in pratically every organizaiton -organization development (OD):to improve the organization's health and effectiveness through its ability to cope with change, improve internal relationships, and increase problem-solving capabilities -matrix organizations, self-managed teams, ideas about corporate culture, and management by wandering around.

Formulating Corporate-Level Strategy: The BCG (for Boston Consulting Group) matrix

-BCG matrix organizes businesses along two dimensions—business growth rate and market share -Business growth rate pertains to how rapidly the entire industry is increasing. -Market share defines whether a business unit has a larger or smaller share than competitors..

New Trends in Strategy: Strategic Partnerships

-Collaboration with other organizations, sometimes even with competitors, is an important part of how today's successful companies enter new areas of business. -The Internet is both driving and supporting the move toward partnership thinking. The ability to rapidly and smoothly conduct transactions, communicate information, exchange ideas, and collaborate on complex projects via the Internet means that companies such as Citigroup, Dow Chemical, and Herman Miller have been able to enter entirely new businesses by partnering in business areas that were previously unimaginable.

Formulating Corporate-Level Strategy: Diversification Strategy (3 types)

-Diversification is moving into new lines of business. -The purpose of diversification is to expand the firm's business operations to produce new kinds of valuable products and services -related diversification -Unrelated diversification -Vertical integration means the company expands into businesses that either produce the supplies needed to make products or that distribute and sell those products to customers. Creates value through a strategy of Vertical Integration.

Henri Fayol "General and Industrial Management" principles (1 fact, 3 principles)

-He also identified five basic functions or elements of management: planning, organizing, commanding,coordinating, and controlling -principles can be applied in any org setting: -Unity of command: Each subordinate receives orders from one—and only one—superior. -Division of work: Managerial work and technical work are amenable to specialization to produce more and better work with the same amount of effort. -Unity of direction: Similar activities in an organization should be grouped together under one manager. -Scalar chain: A chain of authority extends from the top to the bottom of the organization and should include every employee.

JIT & INVENTORY

-Just-in-time inventory, is the minimum inventory necessary to keep a perfect system running -the exact amount of goods arrives at the moment it is needed

JIT & REDUCING LOT SIZES

-Key is to produce goods in small lot sizes in order to make this happen we need to improve -material handeling and work flow -we need to radical reduction in set up times

Management and the Organization (2 facts, 3 Forces)

-Management practices and perspectives vary in response to these social, political, and economic forces in the larger society. - During difficult times, managers look for ideas to help them cope with environmental turbulence and keep their organization vital. Management idea life cycles have been growing shorter as the pace of change has increased. -Political, Social, Economical Forces.

JIT & REDUCE SETUP COSTS

-Set up costs associated with set up time -set up costs can be reduced at a machine in a factory, setup time can also be reduced during the process of getting the order ready

Management and the Organization Forces:Social Forces (3)

-Social forces refer to those aspects of a culture that guide and influence relationships among people. -Ex. What do people value? Generation Y? -These forces shape what is known as the social contract, which refers to the unwritten, common rules and perceptions about relationships among people and between employees and management

Innovative Mgmt: Managing the technology driven workplace

-Supply Chain Mgmt -Customer Relationship Mgmt -Outsourcing

Total Quality Mgmt

-The ideas of W. Edwards Deming, known as the "father of the quality movement," were initially scoffed at in the United States, but the Japanese embraced his theories and modified them to help rebuild their industries into world powers. Japanese companies achieved a significant departure from the American model by gradually shifting from an inspection-oriented approach to quality control toward an approach emphasizing employee involvement in the prevention of quality problems -total quality management (TQM), which focuses on managing the total organization to deliver quality to customers, moved to the forefront in helping U.S. managers deal withglobal competition.The approach infuses quality values throughout every activity within a company, with front- line workers intimately involved in the process -TQM is not a quick fix, but companies such as General Electric, Texas Instruments, Procter &Gamble, and DuPont achieved astonishing results in efficiency, quality, and customer satisfaction through total quality management.TQM is still an important part of today's organizations, and managers consider benchmarking in particular a highly effective and satisfying management technique -4 elements: employee involvement, focus on the customer, benchmarking, and continuous improvement.

Chester I. Barnard (2)

-The informal organization occurs in all formal organizations and includes cliques and naturally occurring social groupings. Barnard argued that organizations are not machines and stressed that informal relationships are powerful forces that can help the organization if properly managed. - Another significant contribution was the acceptance theory of authority which states that people have free will and can choose whether to follow management orders. People typically follow orders because they perceive positive benefit to themselves, but they do have a choice. Managers should treat employees properly because their acceptance of authority may be critical to organization success in important situations.

New Trends in Strategy: Innovation From Within "dynamic capabilitities"

-The strategic approach referred to as dynamic capabilities means that managers focus on leveraging and developing more from the firm's existing assets, capabilities, and core competencies in a way that will provide a sustained competitive advantage -The idea is that getting growth out of existing businesses is cheaper and more effective than trying to buy it from outside

Purpose of Strategy: Build Synergy

-When organizational parts interact to produce a joint effect that is greater than the sum of the parts acting alone, synergy occurs. -When properly managed, synergy can create additional value with existing resources, providing a big boost to the bottom line

JIT & REDUCE INVENTORY

-With reducing inventory, removes variability -no inventory-> no problems

New Trends in Strategy (2)

-a decided shift has occurred toward enhancing the organization's existing capabilities as the primary means of growing and innovating. -Another current trend is using strategic partnerships as an alternative to mergers and acquisitions.

Formulating Business Level Strategy: Porter's Five Competitive Forces (5)

-competitive forces that exist in a company's environment and indicates some ways Internet technology is affecting each area. -These forces help determine a company's position vis-à-vis competitors in the industry environment. 1.Potential new entrants. 2. Bargaining power of buyers. 3.Bargaining power of suppliers. 4. Threat of substitute products. 5. Rivalry among competitors.

Mgmt Humanistic Perspective: Human Resources Perspective (4)

-contented cows give more milk, so satisfied workers will give more work. -interest in worker participation and considerate leadership but shifted the emphasis to consider the daily tasks that people perform. The human resources perspective combines prescriptions for design of job tasks with theories of motivation.In the human resources view, jobs should be designed so that tasks are not perceived as dehumanizing or demeaning but instead allow workers to use their full potential -Maslow's heirchy of needs *Douglas McGregor : Theory X&Y

strategic business units (SBUs).

-corporations like to have a balanced mix of business divisions called strategic business units (SBUs). - An SBU has a unique business mission, product line, competitors, and markets relative to other SBUs in the corporation -Executives in charge of the entire corporation generally define an overall strategy and then bring together a portfolio of strategic business units to carry it out.

JIT DISTANCE REDUCTION

-firms now use work cells, designed in U shape, containing several machines performing different operations -Group technology codes help identify components with similar characteristics so we can group them into families

Classical Management Approach Sub Field: Administrative Principles (4)

-focused on entire organization rather than individual productivity -Henri Fayol "General and Industrial Management" principles -Mary Parker Follett ethics, , empowerment research -Chester I. Barnard:informal org & acceptance theory

Management Science Perspective (3 facts, 3 subsets)

-its application of mathematics, statistics, and other quantitative techniques to management decision making and problem solving -military, large scale business -Peter Drucker's 1946 book: -3 subsets: operations research, operations mgmt, IT

Classical Management Approach Sub Field: Beaucratic Organizations (5)

-looked at organizations as a whole -Max Weber biggest contributer -Weber envisioned organizations that would be managed on an impersonal, rational basis. Used to be employees loyal to single individual not an organization -wanted advancement in positions thats not possbible in those individual orgs. not on whom you know, but rather on competence and technical qualifications, which are assessed by examination or according to training and experience. The organization relies on rules and written records for continuity. In addition, rules and procedures are impersonal and applied uniformly to all employees. A clear division of labor arises from distinct definitions of authority and responsibility legitimized as official duties. Positions are organized in a hierarchy, with each position under the authority of a higher one. The manager depends not on his or her personality for successfully giving orders but on the legal power invested in the managerial position. -The term bureaucracy has taken on a negative meaning in today's organizations and is associated with endless rules and red tape. We have all been frustrated by waiting in long lines or following seemingly silly procedures. However, rules and other bureaucratic procedures provide a standard way of dealing with employees.Everyone gets equal treatment, and everyone knows what the rules are. This foundation enables many organizations to become extremely efficient

Management and the Organization Forces: Economical Forces (2)

-pertain to the availability, production, and distribution of resources in a society. -Today's economy is mostly based on ideas, info, knowledge vs. material resources.

ADVANTAGES OF KANBUN

-places emphasis on meeting schedules, reducing the time and cost required by setups and economical material handeling -small inventory and pulling

Classic Management Approach (3)

-productivity and effective treatment of employees -can be traced to 3000 b.c., to the first government organizations developed by the Sumerians and Egyptians, but the formal study of management is relatively recent -The early study of management (early 19th and 20th century) is called the early perspective -salaried manager for "manufacturing" -These professional managers began developing and testing solutions to the mounting challenges of organizing, coordinating, and controlling large numbers of people and increasing worker productivity -Sub fields: Scientific mgmt, beaucratic, admin

JIT REDUCED SPACE AND INVENTORY

-reduce inventory by removing space for inventory when there is little space, inventory must be moved in -very small lots or even single units

Management and the Organization Forces: Political Forces(2)

-refer to the influence of political and legal institutions on people and organizations. -Ex. Property rights, contract rights

Strategic Management

-refers to the set of decisions and actions used to formulate and execute strategies that will provide a competitively superior fit between the organization and its environment so as to achieve organizational goals.

Strategic Thinking

-take the long-term view and to see the big picture, including the organization and the competitive environment, and consider how they fi t together -important for both profit-> competitive advantages /non-profit-> external environment -senior executives at today's leading companies want middle- and low-level managers to think strategically as well.

DETERMINING THE NUMBER OF KANBAN CARDS OR CONTAINERS

-the number sets the amount of authorized inventory -lead time needed to produce the container of parts -amount of safety stock needed to account for variability or uncertainity in the system

Contigency View (4 facts, 2 views)

-unviersilist view: Management concepts were thought to be universal; that is, whatever worked—leader style, bureaucratic structure—in one organization would work in another. -Case view: every situation is unique. Principles are not universal, and one learns about management by experiencing a large number of case problem situations. Managers face the task of determining what methods will work in every new situation. -Contigency View saw neither view correct -Certain contingencies, or variables, exist for helping management identify and understand situations. The contingency view tells us that what works in one setting might not work in another. Contingency means that one thing depends on other things and a manager's response to a situation depends on identifying key contingencies in an organizational situation. -Ex of Contigency: industry working for -When managers learn to identify important patterns and characteristics of their organizations, they can then fit solutions to those characteristics

Mgmt Humanistic Perspective: Human Relations Movement(3)

-was based on the idea that truly effective control comes from within the individual worker rather than from strict, authoritarian control -Hawhorne Study: study that found better treatment (human relations) increase productivity. Subjects behaved differently because of the active participation of researchers in the Hawthorne experiments -belief that human relations is the best approach for increasing productivity persists today.

JIT LAYOUT

-we want flexible layouts that reduce the movement of both people and material -JIT layouts move material directly to the location where needed

Systemic Thinking (3)

-when managers learn to think systemically, they have a powerful tool for changing outcomes and improving performance. Systemic thinking means looking both at the distinct elements of a situation and at the interaction among those elements -However, most managers tend to think analytically, by breaking things down to their distinct elements. -To think systemically, managers look not only at the distinct parts of a system or situation but also at the interactions among those parts, which are continually changing and affecting each other differently. A systemic thinking process allows managers to get a handle on highly complex problems and situations in a way that analytical thinking cannot

Global Strategy (3)

1. Globalization 2. Multidomestic Strategy 3. Transnational Strategy

The Strategic Management Process (3)

1. It begins when executives evaluate their current position with respect to mission, goals, and strategies. 2.They then scan the organization's internal and external environments and identify strategic factors that might require change. Internal or external events might indicate a need to redefine the mission or goals or to formulate a new strategy at either the corporate, business, or functional level. 3.The final stage in the strategic management process is implementation of the new strategy.

Peter Drucker

1946 book: Concept of the Corporation, cranking out numerous mathematical tools for corporate managers, such as the application of linear pro- gramming for optimizing operations, statistical process control for quality management, and the capital asset pricing model. Computers helped.

Formulating Corporate-Level Strategy: BCG Matrix Categories (4)

=The star has a large market share in a rapidly growing industry. The star is important because it has additional growth potential, and profits should be plowed into this business as investment for future growth and profits. The star is visible and attractive and will generate profits and a positive cash flow even as the industry matures and market growth slows. -The cash cow exists in a mature, slow-growth industry but is a dominant business in the industry, with a large market share. Because heavy investments in advertising and plant expansion are no longer required, the corporation earns a positive cash flow. It can milk the cash cow to invest in other, riskier businesses. -The question mark exists in a new, rapidly growing industry, but has only a small market share. The question mark business is risky: It could become a star, or it could fail. The corporation can invest the cash earned from cash cows in question marks with the goal of nurturing them into future stars. -The dog is a poor performer. It has only a small share of a slow-growth market. The dog provides little profit for the corporation and may be targeted for divestment or liquidation if turnaround is not possible.

Purpose of Strategy: Exploit Core Competencies

A company's core competence is something the organization does especially well in comparison to its competitors (represents competitive advantage)

Total Quality Mgmt Element: Focus on the customer

All employees are focused on the customer; companies find out what customers want and try to meet their needs and expectations.

Formulating Corporate-Level Strategy: BCG Matrix Circle Size

Circle size represents the relative size of each business in the company's portfolio.Most large organizations, such as General Electric (GE), have businesses in more than one quadrant, thereby representing different market shares and growth rates.

Corporate-level strategy.

Corporate-level strategy pertains to the organization as a whole and the combination of business units and product lines that make up the corporate entity

Customer Relation Management

Customer relationship management (CRM) systems use the latest information technology to keep in close touch with customers and to collect and manage large amounts of customer data. These data can help employees and managers act on customer insights, make better decisions, and provide superior customer service.Meeting customer needs and desires is a primary goal for organizations, and using CRM to give customers what they really want provides a tremendous boost to customer service and satisfaction.

Total Quality Mgmt Element: Employee Involvement

Employee involvement means that achieving quality requires company wide participation in quality control.

Management Science Perspective Subset: IT

Information Technology: these systems are designed to provide relevant information to managers in a timely and cost-efficient manner. More recently, information technology within organizations evolved to include intranets and extranets, as well as various software programs that help managers estimate costs, plan and track production, manage projects, allocate resources, or schedule employees. Most of today's organizations have departments of information technology specialists who use management science techniques to solve complex organizational problems

Management Science Perspective Subset: Operations Mgmt

Operations management: refers to the field of management that specializes in the physical production of goods or services. Operations management specialists use quantitative techniques to solve manufacturing problems.

Management Science Perspective Subset: Operations Research

Operations research: It consists of mathematical model building and other applications of quantitative techniques to managerial problems

Peter Senge

Peter Senge's book, The Fifth Discipline: The Art and Practice of Learning. Organizations Senge described the kind of changes managers needed to undergo to help their organizations adapt to an increasingly chaotic world.

Innovative Mgmt: The Learning Organization

Peter Senge's book, The Fifth Discipline: The Art and Practice of Learning. Organizations Senge described the kind of changes managers needed to undergo to help their organizations adapt to an increasingly chaotic world. -The learning organization can be defined as one in which everyone is engaged in identifying and solving problems, enabling the organization to continuously experiment, change, and improve, thus increasing its capacity to grow, learn, and achieve its purpose. -The essential idea is problem solving, in contrast to the traditional organization designed for efficiency. In the learning organization all employees look for problems, such as understanding special customer needs.

Formulating Corporate-Level Strategy: Portfolio Strategy

Portfolio strategy pertains to the mix of business units and product lines that fit together in a logical way to provide synergy and competitive advantage for the corporation

The Strategic Management Process: SWOT Analysis

SWOT analysis includes a search for strengths, weaknesses, opportunities, and threats that affect organizational performance.

Mary Parker Follett

She offered the pithy admonition, "Don't hug your blueprints," and analyzed the dynamics of management-organization interactions. Follett addressed issues that are timely today, such as ethics, power, and how to lead in a way that encourages employees to give their best. The concepts of empowerment, facilitating rather than controlling employees, and allowing employees to act depending on the authority of the situation

The Strategic Management Process: Strategy Formulation Versus Execution

Strategy formulation may include assessing the external environment and internal problems and integrating the results into goals and strategy. -Strategy execution, which is the use of managerial and organizational tools to direct resources toward accomplishing strategic results.

Sub System

Subsystems depend on one another as parts of a system. Changes in one part of the organization affect other parts. The organization must be managed as a coordinated whole. Managers who understand subsystem interdependence are reluctantto make changes that do not recognize subsystem impact on the organization as a whole

Douglas McGrego

Theory X&Y -Theory Y is more realistic -the point of Theory Y is that organizations can take advantage of the imagination and intellect of all their employees. Employees will exercise self-control and will contribute to organizational goals when given the opportunity. -Assumptions of Theory X •The average human being has an inherent dislike of work and will avoid it if possible. •Because of the human characteristic of dislike for work, most people must be coerced, controlled, directed, or threatened with punishment to get them to put forth adequate effort toward the achievement of organizational objectives. •The average human being prefers to be directed, wishes to avoid responsibility, has relatively little ambition, and wants security above all. -Assumptions of Theory Y •The expenditure of physical and mental effort in work is as natural as play or rest. The average human being does not inherently dislike work. •External control and the threat of punishment are not the only means for bringing about effort toward organizational objectives. A person will exercise self-direction and self-control in the service of objectives to which he or she is committed. •The average human being learns, under proper conditions, not only to accept but to seek responsibility. •The capacity to exercise a relatively high degree of imagination, ingenuity, and creativity in the solution of organizational problems is widely, not narrowly, distributed in the population. •Under the conditions of modern industrial life, the intellectual potentialities of the average human being are only partially utilized

Purpose of Strategy: Deliver Value

Value can be defi ned as the combination of benefits received and costs paid. -Managers help their companies create value by devising strategies that exploit core competencies and attain synergy

Levels of Strategy (3)

What Business Are We In? (Corporate-level?) -How Do We Compete? (Business-level strategy ) -How Do We Support the Business-Level Strategy? (Functional Level Strategy)

Max Weber

biggest contributer to Beaucratic Classical Mgmt Approach

JIT & SCHEDULING

can improve ability to meet customer orders, drives down inventory by allowing smaller lot sizes, and reduce work-in-process LEVEL SCHEDULES -Level Schedules, process frequent small batches rather than few large batches -the scheduler may find that freezing the portion of the schedule closest to due date allows the production system to function and schedule to be met (freezing means not allowing changes to be part of the schedule)

Henry Gantt

developed the Gantt chart—a bar graph that measures planned and completed work along each stage of production by time elapsed.

Mgmt Humanistic Perspective (3)

emphasized the importance of understanding human behaviors, needs, and attitudes in the workplace as well as social interactions and group processes , Sub fields- human relations movement, HR Perspective, Behavioral Science

Classical Management Approach Sub Field: Scientific Mgmt (7)

emphasizes scientifically determined jobs and management practices as the way improve efficiency and labor productivity. -Frederick Winslow Taylor-suggested that decisions based on rules of thumb and tradition be replaced with precise procedures developed after careful study of individual situations. He stressed efficency. Indeed, the ideas of creating a system for maximum efficiency and organizing work for maximum productivity are deeply embedded in our organizations. -because scientific management ignored the social context and workers' needs, it led to increased conflict and sometimes violent clashes between managers and employees. -Each man capable to load 75 pounds per day and created an incentive system -Henry Gantt, an associate of Taylor's, developed the Gantt chart—a bar graph that measures planned and completed work along each stage of production by time elapsed. -Frank B. and Lillian M. Gilbreth. Frank B. Gilbreth (1868-1924) pioneered time and motion study -To use this approach, managers should develop standard methods for doing each job, select workers with the appropriate abilities, train workers in the standard methods, support workers and eliminate interruptions, and provide wage incentives.

JIT IMPACT ON EMPLOYEES

employees are cross trained to bring flexibility and efficiency to work cell

W. Edwards Deming

father of the quality movement," for Total Quality Mgmt

Supply Chain Mgmt

he essential idea is problem solving, in contrast to the traditional organization designed for efficiency. In the learning organization all employees look for problems, such as understanding special customer needs. A supply chain is a network of multiple businesses and individuals that are connected through the flow of products or services

Maslow

heirchy of needs

Recent Historical Trends for Mgmt approaches

humanistic perspective remained most prelavent til this day

organization development (OD):

improve the organization's health and effectiveness through its ability to cope with change, improve internal relationships, and increase problem-solving capabilities

Total Quality Mgmt Element: Continous Improvement

improvement is the implementation of small, incre-mental improvements in all areas of the organization on an ongoing basis.

Formulating Business Level Strategy: Competitive Strategies (3)

in order to have strategic advantage 1. Differentiation 2. Cost leadership. 3. Focus

System

is a set of interrelated parts that function as a whole to achieve a common purpose A system functions by acquiring inputs from the external environment, transforming them in some way, and discharging outputs back to the environment.

Synergy

means that the whole is greater than the sum of its parts. When an organization is formed, something new comes into the world. Management, coordination, and production that did not exist before are now present. Organizational units working together can accomplish more than those same units working alone. The sales department depends on production, and vice versa

Open Systems

must interact with the environment to survive;

Closed Systems

need not. In the classical and management science perspectives, organizations were frequently thought of as closed systems. In the management science perspective, closed system assumptions—the absence of external disturbances—are sometimes used to simplify problems for quantitative analysis. In reality, however, all organiza- tions are open systems, and the cost of ignoring the environment may be failure.

Systems Theory

of organizations. It consists of five components: inputs, a transformation process, outputs, feedback, and the environment. Inputs are the material, human, financial, or information resources used to produce goods and services. The transformation process is management's use of production technology to change the inputs into outputs.Outputs include the organization's products and services. Feedback is knowledge of the results that influence the selection of inputs during the next cycle of the process. The environment surrounding the organization includes the social, political, and economic forces noted earlier in this chapter.

Business-level strategy

pertains to each business unit or product line at this level concern amount of advertising, direction and extent of research and development, product changes, new-product development, equipment and facilities, and expansion or contraction of product and service lines.

Functional-level strategy

pertains to the major functional departments within the business unit.

Lillian M. Gilbreth. Frank B. Gilbreth (1868-1924)

pioneered time and motion study

Total Quality Mgmt Element: Benchmarking

refers to a process whereby companies find out how others do something better than they do and then try to imitate or improve on it.

Hawthorne Studies

study that found better treatment (human relations) increase productivity. Subjects behaved differently because of the active participation of researchers in the Hawthorne experiments

Frederick Winslow Taylor

suggested that decisions based on rules of thumb and tradition be replaced with precise procedures developed after careful study of individual situations. He stressed efficency. Indeed, the ideas of creating a system for maximum efficiency and organizing work for maximum productivity are deeply embedded in our organizations.