Business Acumen chapter 1-2

tactical planning

(Middle Management) _______________ involves implementing the activities specified by strategic plans. ________________ guide the current and near-term activities required to implement interconnected retail strategies. The _______________ keeps customers in contact with the retailer across multiple points of the shopping process in addition to helping them navigate the retail store with product location by aisle. Examples: Quarterly and semiannual plans, departmental policies and procedures

Different Elements of Mass Production

- Mass production begins with the specialization of labor, dividing work into its simplest components so that each worker can concentrate on performing a single task. - By separating jobs into small tasks, managers create conditions for high productivity through mechanization, in which machines perform much of the work previously done by people. - Standardization, the third element of mass production, involves producing uniform, interchangeable goods and parts. Standardized parts simplify the replacement of defective or worn-out components.

Production and operations managers perform four major tasks:

- Plan the overall production process - Determine the best layout for the firm's facilities - Implement the production plan - Control the manufacturing process to maintain the highest possible quality

How Managers Make decision

1. process begins when someone recognizes a problem or opportunity, 2. develops possible courses of action, 3. evaluates the alternatives, 4. selects and implements one of them 5. assesses the outcome. It's important to keep in mind that managers are human decision-makers, and while they can follow the decision-making process step-by-step, the outcome of their decisions depends on many factors, including the accuracy and timeliness of their information and the experience, creativity, and wisdom of the person.

vision

A business begins with a ______________, its founder's perception of marketplace needs, and the ways a company can satisfy them. _____________ serves as the target for a company's actions, helping direct the company toward opportunities and differentiating it from its competitors. ______________ Is defined as the ability to perceive marketplace needs and what an organization must do to satisfy them. A company's ________________ must be focused and yet flexible enough to adapt to changes in the business environment. Also critical to a company's long-term relationship with its customers, suppliers, and the general public are the ethical standards that top management sets. Sometimes ethical standards are set in compliance with industry or federal regulations, such as safety or quality standards. Sometimes new standards are set in response to a crisis.

Computer-integrated manufacturing (CIM)

Companies integrate robots, CAD/CAM, FMS, computers, and other technologies to implement computer-integrated manufacturing (CIM), a production system in which computers help workers design products, control machines, handle materials, and control the production process in an integrated fashion. This type of manufacturing does not necessarily imply more automation and fewer people than other alternatives. It does, however, involve a new type of automation organized around the computer. The key to CIM is a centralized computer system running software that integrates and controls separate processes and functions. The advantages of CIM include increased productivity, decreased design costs, increased equipment utilization, and improved quality.

Strategic Planning Six Steps

Defining the Organization's Mission Assessing Your Competitive Position Setting Objectives for the OrganizationCreating Strategies for Competitive Differentiation Implementing the Strategy Monitoring and Adapting Strategic Plans

Creating Strategies for Competitive Differentiation

Developing a mission statement and setting objectives point a business in a specific direction. But the company needs to identify the strategies it will use to reach its destination ahead of the competition. The underlying goal of strategy development is competitive differentiation--the unique combination of a company's abilities and resources that set it apart from its competitors.

How Retailers Compete:

Identify Target Market Selecting a Product Strategy Shaping a Customer Service Strategy Selecting a Pricing Strategy Choosing a Location Building a Promotional Strategy Creating a store atmosphere

The four basic types of organization structures

Line organization, line-and-staff organization, A committee organization, Matrix Structure

Which Leadership Style is the Best

No single leadership style is best for every company in every situation. Sometimes leadership styles require change in order for a company to grow, as has been the case for Google. A company that recognizes which leadership style works best for its employees, customers, and business conditions is most likely to choose the best leaders for its particular needs. Managers use symbols, rituals, ceremonies, and stories to reinforce corporate culture.

Environmental impact study

Physical or infrastructure variables involve such issues as weather, water supplies, available energy, and options for disposing of hazardous waste. A company that wants to locate near a community must prepare an environmental impact study that analyzes how a proposed plant would affect the quality of life in the surrounding area. Regulatory agencies typically require these studies to cover topics such as the impact on transportation facilities, energy requirements, water and sewage treatment needs, natural plant life and wildlife, and water, air, and noise pollution.

Plan the overall production process:

Production planning Determine the best layout for the firm's facilities Implement the production plan

Functional departmentalization

Some companies organize work units according to business functions such as finance, marketing, human resources, and production. Nike, Inc. is organized by function, including Finance, Global Human Resources, Product & Merchandising, Administration & Legal, Global Sports Marketing, and Operations.

Process departmentalization

Some goods and services require multiple work processes to complete their production. For instance, a textile manufacturer may set up separate departments for cotton ginning (separating cotton fibers from their seeds), spinning, weaving, dyeing, and finishing.

Types of planning

Strategic Planning, Operational Planning, Tactical Planning, Contingency Planning

Controlling

The ______________ function evaluates an organization's performance against its objectives. _______________ assesses the success of the planning function and provides feedback for future rounds of planning.

ethical tone

The ______________ that a top management team establishes can reap monetary as well as nonmonetary rewards. Setting a high _______________ does not merely discourage employees from wrongdoing, but it also motivates and inspires them to achieve goals they never thought possible. Such satisfaction creates a more productive, stable workforce one that can create a long-term competitive advantage for the organization.

Monitoring and Adapting Strategic Plans

The final step in the strategic planning process is to monitor and adapt plans when the actual performance fails to meet goals. Monitoring involves securing feedback about performance. Managers might compare actual sales against forecasts; compile information from surveys; listen to customer feedback; interview employees who are involved; and review reports prepared by production, finance, marketing, or other company units. If a social media ad campaign doesn't result in enough response or sales, managers might evaluate whether to continue the campaign, change it, or discontinue it.

Defining the Organization's Mission

The first step in strategic planning is to translate the company's vision into a ______________. A _______________ is a written explanation of an organization's business intentions and aims. It is an enduring statement of a company's purpose, possibly highlighting the scope of operations, the market it seeks to serve, and the ways it will attempt to set itself apart from competitors. A _______________ guides the actions of employees and publicizes the company's reasons for existence. A good ___________________ states the company's purpose for being in business and its overall goal.

Setting Objectives for the Organization

The next step in planning is to develop objectives for the company. Objectives set guideposts by which managers define the organization's desired performance in such areas as new-product development, sales, customer service, growth, environmental and social responsibility, and employee satisfaction. While the mission statement identifies a company's overall goals, objectives are more concrete.

Middle Managers

The second tier in the management hierarchy, includes positions such as general managers, plant managers, division managers, and unit managers. _________________ attention focuses on specific operations, products, or customer groups within an organization. They are responsible for developing detailed plans and procedures to implement the company's strategic plans. If top management decided to broaden the distribution of a product, a sales manager would be responsible for determining the number of sales personnel required. _________________ are responsible for targeting the products and customers who are the source of the sales and profit growth expected by their CEOs. To achieve these goals, _____________ might budget money for product development, identify new uses for existing products, and improve the ways they train and motivate salespeople. Because they are more familiar with day-to-day operations than CEOs, ________________ often come up with new ways to increase sales or solve company problems.

customer-driven production

The system evaluates customer demands in order to make the connection between products manufactured and products bought. Many companies use this approach with great success. One method is to establish information systems between production facilities and retailers using sales data as the basis for creating short-term forecasts and production schedule designs to meet those forecasts. Another approach to customer-driven production systems is simply to make the product only when a customer orders it whether it's a taco or a tablet.

Analytic production

The system reduces a raw material to its component parts in order to extract one or more marketable products. Petroleum refining breaks down crude oil into several marketable products, including gasoline, heating oil, and aviation fuel. When corn is processed, the resulting marketable food products include animal feed and corn sweetener.

Product departmentalization

This approach organizes work units based on the goods and services a company offers. California's Activision Blizzard Inc. is organized by product. The video-game publisher is divided into the following divisions: Call of Duty, Candy Crush, Destiny, Skylanders, Guitar Hero, World of WarCraft, StarCraft, Diablo, and HearthStone: Heroes of WarCraft.

Geographical departmentalization

This form organizes units by geographical regions within a country or, for a multinational company, by region throughout the world. Denim jean maker Levi Strauss & Co. is divided into the following divisions: Levi Strauss Americas (LSA), headquartered in San Francisco; Levi Strauss Europe (LSE), based in Brussels; and Levi Strauss Asia Pacific, Middle East, and Africa(LSAMA), based in Singapore.

conceptual skills

_______________ determine a manager's ability to see the organization as a unified whole and to understand how each part of the overall organization interacts with other parts. These skills involve an ability to understand abstract relationships, interpret information, develop ideas, and creatively solve problems. _______________ are especially important for top-level managers, who must develop long-range plans for the future direction of their organization.

automatic merchandising

___________________ provides convenience through the use of vending machines. WeGoBabies vending machines are for parents on the go. Within each vending machine, essentials for babies, including pacifiers, diapers, wipes, formula, and snacks, are available. The machines are strategically placed in airports, malls, amusement parks, zoos, museums, and anywhere else babies and toddlers can be found. The machines come with a touch screen for customized advertising, branding, and logos.

Computer-aided design (CAD)

allows engineers to design components as well as entire products on computer screens faster and with fewer mistakes than they could achieve working with traditional drafting systems. Using an electronic pen, an engineer can sketch three-dimensional (3-D) designs on an electronic drafting board or directly on the screen. The computer then provides tools to make major and minor design changes and to analyze the results for particular characteristics or problems. Engineers can put a new car design through a simulated road test to project its real-world performance. If they find a problem with weight distribution, for example, they can make the necessary changes virtually-without actually test-driving the car. With advanced CAD software, prototyping is as much "virtual" as it is "hands-on." Actual prototypes or parts aren't built until the engineers are satisfied that the required structural characteristics in their virtual designs have been met. Dentistry has benefited from CAD, which can design and create on-site such products as caps and crowns that precisely fit a patient's mouth or jaw.

Product layout

also referred to as an assembly line, sets up production equipment along a product-flow line, and the work in process moves along this line past workstations. This type of layout efficiently produces large numbers of similar items, but it may prove inflexible and able to accommodate only a few product variations. Although product layouts date back at least to the Model T assembly line, companies are refining this approach with modern touches. Many auto manufacturers continue to use a product layout, but robots perform many of the tasks and activities once performed by humans. Automation overcomes one of the major drawbacks of this system-unlike humans, robots don't get bored doing a dull, repetitive job. However, in what some label "a rare win" for humans over robots in the battle for productivity and efficiency, Wall Street analysts have identified "over-automation" as the root of Tesla's problems and production delays of its Model 3. In recent years, the company has quadrupled the number of robots used on its production lines.

Free-rein leaders

believe in minimal supervision. They allow subordinates to make most of their own decisions. ____________________ communicate with employees frequently, as the situation warrants.

Make, buy, or lease decision

choosing whether to manufacture a needed product or component in-house, purchase it from an outside supplier, or lease it.

line-and-staff organization

combines the direct flow of authority of a line organization with staff departments that support the line departments. Line departments participate directly in decisions that affect the core operations of the organization. Staff departments lend specialized technical support. Accounting, engineering, and human resources are staff departments that support the line authority extending from the plant manager to the production manager and supervisors. Oftentimes, when an organization is in the process of either growth or retrenchment, as part of corporate restructure or reorganization, a management consultant will perform the role of evaluating the flow of authority and specific support of line and staff departments. See the "Job Description" feature to learn more.

materials requirement planning (MRP)

computer-based production planning system that lets a company ensure that it has all the parts and materials it needs to produce its output at the right time and place and in the right amounts.

Production control

creates a well-defined set of procedures for coordinating people, materials, and machinery to provide maximum production efficiency.

distribution strategy

deals with the marketing activities and institutions involved in getting the right good or service to the company's customers. Distribution decisions involve modes of transportation, warehousing, inventory control, order processing, and selection of marketing channels. Marketing channels typically are made up of intermediaries such as retailers and wholesalers that move a product from producer to final purchaser.

Production processes use

either an analytic or synthetic system; time requirements call for either a continuous or an intermittent process.

three traits are often mentioned with great leaders

empathy (the ability to imagine yourself in someone else's position), self-awareness, and objectivity courage, passion, commitment, innovation, and flexibility, to name a few.

Companies without a plan run a higher risk of

failure

The ISO 14000

family of standards for environmental management helps organizations to ensure that their operations cause minimal harm to the environment and to achieve continual improvement of their environmental performance.

The ISO 9000

family of standards gives requirements and guidance for quality management to help organizations ensure that their goods and services achieve customer satisfaction and also provide a framework for continual improvement.

inventory control

function requiring production and operations managers to balance the need to keep stock on hand to meet demand against the costs of carrying inventory.

Process layout

groups machinery and equipment according to their functions. The work in process moves around the plant to reach different workstations. A process layout often facilitates production of a variety of nonstandard items in relatively small batches. Its purpose is to process goods and services that have a variety of functions. For instance, a typical machine shop generally has separate departments where machines are grouped by functions such as grinding, drilling, pressing, and lathing. Process layouts accommodate a variety of production functions and use general-purpose equipment that can be less costly to purchase and maintain than specialized equipment.

Retailers

in contrast to wholesalers, are distribution channel members that sell goods and services, typically in small quantities, to individuals for their personal use rather than for resale. Consumers usually buy their food, clothing, shampoo, furniture, and appliances from some type of retailer. Retailers are the final link of the distribution channel. Because they are often the only channel members that deal directly with consumers, it is essential that retailers remain aware of changing shopping trends.

Top managers

include such positions as chief executive officer (CEO), chief financial officer (CFO), and executive vice president. ______________ devote most of their time to developing long-range plans for their organizations. They make decisions such as whether to introduce new products, purchase other companies, or enter new geographical markets. __________________ set a direction for their organization and inspire the company's executives and employees to achieve their vision for the company's future. The job is intense and demanding. Many ________________ must lead their companies through a variety of challenges, which might include a slowing economy, a quality crisis, and formidable competitors. Sometimes this involves selling a positive outlook to investors, stockholders, and managers during challenging times.

direct selling

includes direct-to-consumer sales by Pampered Chef kitchen consultants (as seen in photo) and high-end Stella & Dot jewelry salespeople through party-plan selling methods. The party plan, a form of direct selling, is a method of marketing products by hosting what is presented as a social event at which products will be offered for sale.

Democratic leadership

includes subordinates in the decision-making process. This leadership style centers on employees' contributions. _________________ delegate assignments, ask employees for suggestions, and encourage participation. An important outgrowth of ________________ in business is the concept of empowerment, in which employees share authority, responsibility, and decision-making with their managers.

Nonprogrammed decision

involves a complex and unique problem or opportunity with important consequences for the organization. Examples of nonprogrammed decisions include entering a new market, deleting a product from the line, or developing a new product. In a surprising announcement, Amazon, Berkshire Hathaway, and JP Morgan announced that they would be forming a healthcare not-for-profit. They would be developing technological solutions to provide "simplified, high-quality healthcare for their hundreds of thousands of U.S. workers," clearly a nonprogrammed decision.

Programmed decision

involves simple common, and frequently occurring problems for which solutions have already been determined. Examples of programmed decisions include reordering office supplies, renewing a lease, and referring to an established discount for bulk orders. Programmed decisions are made in advance the company sets rules, policies, and procedures for managers and employees to follow on a routine basis. Programmed decisions actually save managers time and companies money because new decisions don't have to be made each time the situation arises.

A marketing intermediary (also called a middleman)

is a company that moves goods between producers and consumers or business users. Marketing intermediaries perform various functions that help the distribution channel operate smoothly, such as buying, selling, storing, and transporting products; sorting and grading bulky items; and providing information to other channel members. The two main categories of marketing intermediaries are wholesalers and retailers.

robot

is a reprogrammable machine capable of performing a variety of tasks that require the repeated manipulation of materials and tools. Robots are capable of frequent and repetitive tasks with precision. Different robot types include industrial, domestic or household, medical, service, military, space exploration, and transportation.

Management

is the process of achieving organizational objectives through people and other resources. The _______________ job is to combine human and technical resources in the best way possible to achieve the company's goals.

Decision-making

is the process of recognizing a problem or opportunity, evaluating alternative solutions, selecting and implementing an alternative, and assessing the results.

International Organization for Standardization

known as ISO for short not an acronym but a shorter name derived from the Greek word isos, meaning "equal." Operating since 1947, ISO is a network of national standards bodies from 162 countries. Its mission is to develop and promote international standards for business, government, and society to facilitate global trade and cooperation. ISO has developed voluntary standards for everything from the format of banking and telephone cards to freight containers to paper sizes to metric screw threads. The U.S. member body of ISO is the American National Standards Institute (ANSI).

Fixed-position

layout places the product in one spot, and workers, materials, and equipment come to it. This approach suits production of very large, bulky, heavy, or fragile products. For example, a bridge cannot be built on an assembly line. Fixed-position layouts dominate several industries, including construction, shipbuilding, aircraft and aerospace, and oil drilling, to name a few. In all of these industries, the nature of the product generally dictates a fixed-position layout.

quality control

measuring output against established quality standards.

Strategic planning

often makes the difference between an organization's success and failure. _________________ has formed the basis of many fundamental management decisions.

supervisory managers

or first-line management, includes positions such as supervisor, section chief, and team leader. These managers are directly responsible for assigning non-managerial employees to specific jobs and evaluating their performance. Managers at this first level of the hierarchy work directly with the employees who produce and sell the company's goods and services. They are responsible for implementing middle managers' plans by motivating workers to accomplish daily, weekly, and monthly goals. David Novak, former CEO of Yum Brands (KFC, Pizza Hut, and Taco Bell), believes that today's first-line supervisors do not yet receive proper training. The majority of people who begin supervising others wish they had been better prepared with some sort of leadership training. After retiring from Yum Brands, Novak is doing his life's work. Using his many years of experience, he has put together a curriculum for a digital leadership training program called oGoLead.

production and operations management

oversees the production process by managing people and machinery in converting materials and resources into finished goods and services.

Computer-aided manufacturing (CAM)

picks up where the CAD system leaves off. Computer tools enable a manufacturer to analyze the steps that a machine must take to produce a needed product or part. Electronic signals transmitted to processing equipment provide instructions for performing the appropriate production steps in the correct order. Both CAD and CAM technologies are now used together at most modern production facilities. These so-called CAD/CAM systems are linked electronically to automatically transfer computerized designs into the production facilities, saving both time and effort. They also allow more precise manufacturing of parts.

Managerial Functions

planning, organizing, directing, controlling

production control as a five-step process

planning: production planning determines the amount of resources (including raw materials and other components) an organization needs to produce a certain output. The production planning process develops a bill of materials that lists all needed parts and materials. By comparing information about needed parts and materials with perpetual inventory data, purchasing staff can identify necessary purchases. Employees or automated systems establish delivery schedules to provide needed parts and materials when required during the production process. Production planning also ensures the availability of needed machines and personnel. routing: routing, determines the sequence of work throughout the facility and specifies who will perform each aspect of the work at what location. Routing choices depend on two factors: the nature of the good or service and the facility layouts discussed earlier in the chapter--product, process, fixed position, or customer oriented. scheduling: scheduling phase of production control, managers develop timetables that specify how long each operation in the production process takes and when workers should perform it. Efficient scheduling ensures that production will meet delivery schedules and make efficient use of resources. Scheduling is important whether the product is complex or simple to produce and whether it is a tangible good or a service. Gantt chart, tracks projected and actual work progress over time. Gantt charts remain popular because they show at a glance the status of a particular project. However, they are most effective for scheduling relatively simple projects. A complex project might require a PERT (program evaluation and review technique) chart, which seeks to minimize delays by coordinating all aspects of the production process. First developed for the military, PERT has been modified for industry. The simplified PERT diagram in Figure 10.7 summarizes the schedule for purchasing and installing a new robot in a factory. The heavy gold line indicates the critical path- the sequence of operations that requires the longest time for completion. In this case, the project cannot be completed in fewer than 17 weeks. dispatching: Dispatching is the phase of production control in

Continuous production

process generates finished products over a lengthy period of time. The steel industry provides a classic example. Its blast furnaces never completely shut down except for malfunctions. Petroleum refineries, chemical plants, and nuclear power facilities also practice continuous production. A shutdown can damage sensitive equipment, with extremely costly results.

Intermittent production

process generates products in short production runs, shutting down machines frequently or changing their configurations to produce different products. Most services result from intermittent production systems. For example, accountants, plumbers, and dentists traditionally have not attempted to standardize their services because each service provider confronts different problems that require individual approaches.

A production and operations manager's facility location decision must consider the following factors:

proximity to suppliers, warehouses, and service operations insurance and taxes availability of employee needs such as housing, hospitals and health centers, schools, mass transportation, daycare, shopping, and recreational facilities size, skills, and costs of the labor force ample space for current and future growth needs distance to market for goods receptiveness of the community economical transportation for materials and supplies as well as for finished goods climate and environment that match the industry's needs and employees' lifestyle amount and cost of energy services government incentives.

direct-response retailing

reaches prospective customers through catalogs; telemarketing; and even magazine, newspaper, and television ads. Shoppers order merchandise by mail, telephone, online, or mobile device and then receive home delivery or pick up the merchandise at a local store.

ISO 9001:2008 and ISO 14001:2004

respectively give the requirements for a quality management system and an environmental management system. Both can be used for certification, which means that the organization's management system (the way it manages its processes) is independently audited by a certification body (also known in North America as a registration body, or registrar) and confirmed as conforming to the requirements of the standard.

mass production

system for manufacturing products in large quantities through effective combinations of employees with specialized skills, mechanization, and standardization. _______________ makes outputs (goods and services) available in large quantities at lower prices than individually crafted items would cost. _______________ brought cars, computers, televisions, books, and even homes to the majority of the population.

Synthetic production

system is the reverse of an analytic system. It combines a number of raw materials or parts or transforms raw materials to produce finished products. Canon's assembly line produces a camera by assembling various parts such as a shutter or a lens cap. Other synthetic production systems make prescription drugs, chemicals, computer chips, and canned soup.

Skills needed for managerial success

technical skills, human skills, conceptual skills

Line organization

the oldest and simplest organization structure, establishes a direct flow of authority from the chief executive to employees. The line organization defines a simple, clear chain of command a hierarchy of managers and workers. With a clear chain of command, everyone knows who is in charge and decisions can be made quickly. This structure is particularly effective in a crisis situation. But a line organization has its drawbacks. Each manager has complete responsibility for a range of activities; in a medium-size or large organization, however, this person can't possibly be expert in all of them. In a small organization such as a local hair salon or a dentist's office, a line organization is probably the most efficient way to run the business.

Leadership involves

the use of influence or power.

Three levels of management

top, middle, supervisory

production

use of resources, such as people and machinery, to convert materials into finished goods and services.

Matrix Structure

use a ____________ or product management design to customize their structures. The ____________ structure links employees from different parts of the organization to work together on specific projects. A project manager assembles a group of employees from different functional areas. The employees keep their ties to the line-and-staff structure, as shown in the vertical white lines. As the horizontal gold lines show, employees are also members of project teams. When the project is completed, employees return to their regular jobs. In the ____________ structure, each employee reports to two managers: one line manager and one project manager. Employees who are chosen to work on a special project receive instructions from the project manager (horizontal authority), but they continue as employees in their permanent functional departments (vertical authority). The ______________ structure is popular at high-technology and multinational corporations, as well as hospitals and consulting firms. The major benefits of the ___________ structure come from its flexibility in adapting quickly to rapid changes in the environment and its capability of focusing resources on major problems or products. It also provides an outlet for employees' creativity and initiative. However, it challenges project managers to integrate the skills of specialists from many departments into a coordinated team. It also means that team members' permanent functional managers must adjust their employees' regular workloads. The ___________ structure is most effective when company leaders empower project managers to use whatever resources are available to achieve the project's objectives. Good project managers know how to make the project goals clear and keep team members focused. A company that truly embraces the _____________ structure also nurtures a project culture by making sure staffing is adequate, the workload is reasonable, and other company resources are available to project managers.

LEED (Leadership in Energy and Environmental Design):

voluntary certification program administered by the U.S. Green Building Council, aimed at promoting the most sustainable construction processes available. The LED certification process is rigorous and involves meeting standards in energy savings, water efficiency, CO, emissions reduction, improved indoor environmental quality (including air and natural light), and other categories

Direct distribution channel

which carries goods directly from producer to consumer or business user, or distribution channels that involve several different marketing intermediaries.

Operational Planning

(Supervisory Management) _______________ creates the detailed standards that guide implementation of tactical plans. This activity involves choosing specific work targets and assigning employees and teams to carry out plans. Unlike strategic planning, which focuses on the organization as a whole, ______________ deals with developing and implementing tactics in specific functional areas. Examples: Daily and weekly plans, rules, and procedures for each department

The steps involved in the organizing process:

- Managers first determine the specific activities needed to implement plans and achieve goals. - Next, they group these work activities into a logical structure. - Then they assign work to specific employees and give the people the resources they need to complete it. - Managers coordinate the work of different groups and employees within the company. - Finally, they evaluate the results of the organizing process to ensure effective and efficient progress toward planned goals. - Evaluation sometimes results in changes to the way work is organized.

Mass Production Limitations

- highly inefficient when producing small batches of different items. - the labor specialization associated with mass production can lead to boring jobs, because workers keep repeating the same task.

Centralized

A company that emphasizes _______________ retains decision-making at the top of the management hierarchy.

Implementing the Strategy

Once the first four phases of the strategic planning process are complete, managers are ready to put those plans into action. Often, it's the middle managers or supervisors who actually implement a strategy. But studies show that top company officials are still reluctant to empower these managers with the authority to make decisions that could benefit the company. Companies that are willing to empower employees generally reap the benefits.

Customer-oriented

Service organizations also must decide on appropriate layouts for their production processes. A service firm should arrange its facilities to enhance the interactions between customers and its services also called customer-oriented layout. If you think of patients as inputs, a hospital implements a form of the process layout. Banks, libraries, dental offices, and hair salons also use process layouts. Sometimes the circumstances surrounding a service require a fixed-position layout. For instance, doctors, nurses, and medical devices are brought to patients in a hospital emergency room.

human skills

____________ include the ability to communicate, build rapport, collaborate, motivate, and lead employees to meet organizational goals through individual and team assignments. It would be challenging for a manager to succeed with others both inside and outside of the organization without the ability to get a point across, create a compelling presentation to support goals, and get buy-in for ideas that inspire others to achieve results. Effectively communicating using e-mail, text messaging, voicemail, videoconferencing and even face-to-face is crucial in today's business environment. _____________ might also include emotional intelligence, the ability to understand and manage one's own emotions, along with the emotions of others.

Planning

______________ is the process of anticipating future events and conditions and determining courses of actions for achieving organizational objectives. ________________ helps a business focus its vision, avoid costly mistakes, and seize opportunities. Planning should be flexible and responsive to changes in the business environment and should involve managers from all levels of the organization. As global competition intensifies, technology expands and the speed at which companies bring new innovations to market increases. Thus, planning for the future becomes even more critical.

Technical Skills

are the manager's ability to understand and use the techniques, knowledge, tools, and equipment of a specific discipline or department. ________________ are especially important for first-line managers and become less important at higher levels of the management hierarchy.

Distribution channels

are the paths that products- and legal ownership of them-follow from producer to consumer or business user. They are the means by which all organizations distribute their goods and services.

Collaborative robots

are those working alongside humans, and they too will boost productivity and efficiency even further.

Quality

as it relates to the production of goods and services- is defined as being free of deficiencies. Quality matters because fixing, replacing, or redesigning defective products is costly. For most companies, the costs of poor quality can amount to lost revenues and a tarnished reputation. Poor quality results in additional material-related costs, downtime, labor, rework, repair, opportunity costs, and recalls. Takata, a Japanese airbag supplier, is responsible for a faulty airbag inflator.

Field robots

assist people in nonmanufacturing, often hazardous, environments such as nuclear power plants, the international space station, and even military battlefields.

Production planning

begins by choosing what goods or services to offer to customers. Products must satisfy customers and be produced as efficiently and cost effectively as possible. So while marketing research studies determine consumer reactions to proposed products and services, and estimate potential sales and profitability levels, production departments focus on planning the production process when they (1) convert original product ideas into final specifications and (2) design the most efficient facilities to produce those products.

just-in-time (JIT) system

broad management philosophy that reaches beyond the narrow activity of inventory control to influence the entire system of production and operations management. A JIT system seeks to eliminate anything that does not add value in operations activities by providing the right part at the right place at just the right time right before it is needed in production.

Autocratic leadership

is centered on the boss. _______________ make decisions on their own without consulting employees. They reach decisions, communicate them to subordinates, and expect _____________ implementation.

Internet retailing

the second form of nonstore retailing, continues to experience strong sales growth. To offset the decline in bricks-and-mortar sales, most retailers have created online websites, which continue to grow faster than traditional physical (bricks-and-mortar) retail store sales. With more people owning smart phones, there has been a shift to shopping with mobile devices, and this has helped fuel the growth of online sales.

contingency planning

(Primarily Top Management, but all levels contribute) Planning cannot foresee every possibility. Major accidents, natural disasters, and rapid economic downturns can throw even the best-laid plans into chaos. To handle the possibility of business disruption from events of this nature, many companies use _________________, which allows them to resume operations as quickly and as smoothly as possible after a crisis while openly communicating with the public about what happened. This planning activity involves two components: business continuation and public communication. Many companies have developed management strategies to speed recovery from accidents such as loss of data, breaches of security, product failures, and natural disasters such as floods or fire. If a major disaster or business disruption occurs, a company's ___________________ usually designates a chain of command for crisis management, assigning specific functions to particular managers and employees in an emergency. But crisis more often occurs on a less global scale. Examples: Ongoing plans for actions and communications in an emergency

Strategic Planning

(Top Management) The most far-reaching level of planning is _____________- the process of determining the primary objectives of an organization and then acting and allocating resources to achieve those objectives. Generally, ______________ is undertaken by top executives in a company. Examples: Organizational objectives, fundamental strategies, long-term plans

Decentralized

A company that emphasizes ________________ locates decision-making at lower levels. A trend toward decentralization has pushed decision-making down to operating employees in many cases. Companies that have decentralized believe that the change can improve their ability to serve customers.

Customer departmentalization

A company that offers a variety of goods and services targeted at different types of customers might structure itself based on customer departmentalization. Management of Procter & Gamble's wide array of products (see photo) is divided among four business units: Baby, Feminine, and Family Care (Always, Bounty, Charmin, and Pampers); Beauty (Head & Shoulders, Olay, and Pantene); Fabric and Home Care (Dawn, Downy, Febreze, Gain, and Tide); and Health and Grooming (Gillette, Crest, and Oral-B). 34

Selection of Supplier

Once a company decides what inputs to purchase, it must choose the best vendors for its needs. To make this choice, production managers compare the service levels, quality, prices, dependability of delivery, and other services offered by competing companies. Different suppliers may offer virtually identical quality levels and prices, so the final decision often rests on factors such as the company's experience with each supplier, speed of delivery, warranties on purchases, and other services.

Assessing Your Competitive Position

Once a mission statement has been created, the next step in the planning process is to determine the company's current- or potential position in the marketplace. The company's founder or top managers evaluate the factors that may help it grow or could cause it to fail. A frequently used tool in this phase of strategic planning is the SWOT analysis. SWOT is an acronym for strengths, weaknesses, opportunities, and threats. By systematically evaluating all four of these factors, a company can then develop the best strategies for gaining a competitive advantage.

Directing

Once an organization has been established, managers focus on __________________, or guiding and motivating employees to accomplish organizational objectives. ________________ might include training (or retraining), setting up schedules, delegating certain tasks, and monitoring progress.

Organizing

Once plans have been developed, the next step in the management process typically is _______________--the process of blending human and material resources through a formal structure of tasks and authority; arranging work, dividing tasks among employees, and coordinating them to ensure implementation of plans and accomplishment of objectives. _______________ involves classifying and dividing work into manageable units with a logical structure. Managers staff the _______________ with the best possible employees for each job. Sometimes the __________________ function requires analyzing a company's existing structure and determining whether to change it in order to operate more efficiently, cost-effectively, or sustainably.

Benchmarking

One process that companies use to ensure that they produce high-quality products from the start is benchmarking-determining how well other companies perform business functions or tasks. In other words, benchmarking is the process of comparing other firms' standards, performance metrics, and best practices, usually in terms of quality, costs, and time. Taking apart or dismantling a competitor's automobile, otherwise known as a teardown, provides information about quality, production costs, design, materials, and even suppliers. It's important when benchmarking for a company to establish what it wants to accomplish, what it wants to measure, and which company can provide the most useful benchmarking information. A company might choose a direct competitor for benchmarking, or it might select a company in an entirely different industry- but one that has processes the firm wants to study and emulate.

Flexible manufacturing system (FMS)

is a production facility that workers can quickly modify to manufacture different products. The typical system consists of computer-controlled machining centers to produce metal parts, robots to handle the parts, and remote-controlled carts to deliver materials. All components are linked by electronic controls that dictate activities at each stage of the manufacturing sequence, even automatically replacing broken or worn-out drill bits and other implements. Flexible manufacturing systems have been enhanced by powerful new software that allows machine tools to be reprogrammed while they are running. This capability allows the same machine to make hundreds of different parts without the operator having to shut the machine down each time to load new programs. With updates and software, engineers can make decisions or diagnose problems from anywhere they can access a company's network. Pharmaceutical companies are using flexible manufacturing for multiproduct manufacturing because of the need for rapid deployment of products worldwide (for example, threats of serious disease outbreaks). In addition, an increasing number of products and formulations dictate the need for manufacturing flexibility. Overall, the need to reduce costs, increase capacity, and reduce the time needed to develop pharmaceuticals has increased the industry's attention toward a flexible manufacturing process.

A committee organization

is a structure that places authority and responsibility jointly in the hands of a group of individuals rather than a single manager. This model typically appears as part of a regular line-and-staff structure. _______________ also work in areas such as new-product development. A new-product ________________ may include managers from such areas as accounting, engineering, finance, manufacturing, marketing, and technical research. By including representatives from all areas involved in creating and marketing products, such a _______________ generally improves planning and employee morale because decisions reflect diverse perspectives. ________________ tend to act slowly and conservatively, however, and may make decisions by compromising conflicting interests rather than by choosing the best alternative. The definition of a camel as "a racehorse designed by ______________ provides an apt description of some limitations of _______________ decisions.

An organization

is a structured group of people working together to achieve common goals. An ______________ features three key elements: human interaction, goal-directed activities, and structure. The ________________ process, much of which is led by managers, should result in an overall structure that permits interactions among individuals and departments needed to achieve company goals.

Organization chart

is a visual representation of a company's structure that illustrates job positions and functions. An effective structure is one that is clear and easy to understand: Employees know what is expected of them and to whom they report. They also know how their jobs contribute to the company's mission and overall strategic plan.

Marketing utility

is created when intermediaries help ensure that products are available for sale when and where customers want to purchase them.

Corporate culture

is its system of principles, beliefs, and values. The leadership style of its managers, the way it communicates, and the overall work environment influence a company's _______________. A corporate culture is typically shaped by the leaders who founded and developed the company and by those who have succeeded them. _________________ can be very strong and enduring, but sometimes they are forced to change to meet new demands in the business environment. A company that is steeped in tradition and bureaucracy might have to shift to a leaner, more flexible culture in order to respond to shifts in technology or customer preferences.

Physical distribution

is the actual movement of products from producer to consumers or business users. Physical distribution covers a broad range of activities, including customer service, transportation, inventory control, materials handling, order processing, and warehousing. Local Foods, a wholesale distribution company in Chicago, provides innovative distribution options to connect Midwest farmers and local restaurants, as described in the "Business Model" feature.

Span of management, or span of control

is the number of employees a manager supervises. These employees are often referred to as direct reports. First-line managers have wider __________________, monitoring the work of many employees. The __________________ varies depending on many factors, including the type of work performed and employees' training. In recent years, a growing trend has brought wider _______________, as companies have reduced their layers of management to flatten their organizational structures, in the process increasing the decision-making responsibility the give employees.

Departmentalization

is the process of dividing work activities into units within the organization. In this arrangement, employees specialize in certain jobs such as marketing, finance, or design. Depending on the size of the company, usually a senior-level executive runs the department, followed by middle-level managers and supervisors.

flexible production

which allows manufacturing equipment to be used for more than one purpose, is usually more cost-effective for producing smaller runs. ________________ can take many forms, but it generally involves using information technology to share the details of customer orders, technology (sometimes robots) to fulfill the orders, and skilled people to carry out whatever tasks are needed to fill a particular order. This system is even more beneficial when combined with lean production methods that use automation and information technology to reduce requirements for workers and inventory. ___________________ requires a lot of communication among everyone in the organization. __________________ is now widely used in the auto industry.