IE 31 MOD 6 AND 7

• Poor management


  The most common reason for organizational failure
• A good system of management is the key to success and profitability, and the key to a good management system is an ORGANIZED MANAGEMENT STRUCTURE
• Management Structure


  • Facilitates the coordination and control within a company, which depends on the organization's classification or type, size, objectives, and strategies
• Main Types of Management Structure

  • Simple Management Structure
  • Divisional & Matrix Management Structure
  • Professional Bureaucracy & Adhocracy
• Factors that management structure considers

  • Environment – both external & internal to the organization
  • Technology – range of technical structure to support daily operations
  • Culture – desired culture; may develop sub-cultures
  • Measure of Effectiveness – resources used to implement strategies & report results
• Delegation


  Entrusting others with responsibility and authority in work creating accountability for results
• Guidelines for Effective Delegation

  • Be clear in the objectives of the task
  • Determine and Monitor what each worker can most effectively accomplish
  • Determine if the person has the appropriate sources
• How to attain Effective Delegation

  1. Knowledge of objectives

  2. The scalar principle of delegation (i.e. clear & direct lines of authority)

  3. Clarify of delegation

  4. Effective communication support system
• Lines of Authority


  Represents the chain of command. This determines "Who is in charge of making decisions"
• Lines of Responsibility


  Determine "who is responsible for whom" and "who is responsible to whom". It must be FIXED and CLEAR.
• The degree of control within an organization help determine the levels of which higher authorities, as well as subordinates, in an organization assume responsibility and authority.
• Coordination


  Unification, integration, & synchronization of the efforts of group members to provide unity of action in the pursuit of common goals
• Facilitation


  The process of designing and running a successful, productive meeting
• There may be instances when the president or chief executive officer disagrees with the majority judgment of the group. This sparks the need for the top executive to exercise his/her/their right to final authority.
• Alternatives for Handling Disagreements in Organizations

  • Exercise the right to final authority and reverse the majority recommendation
  • Carry the issue at hand to higher authority for further recommendation
• Utilization of these alternatives should be necessary only on rare occasions. Do not use frequently the right to final authority for it will lead to "one-person company".
• If such reversals prove to be always necessary, you don't have the right quality of counsel.
• Change members of the committee and put more competent personnel.
• Production


  The process of creating goods and services through a production system
• Production System


  A manufacturing subsystem that combines resources and utilizes various functions to transform inputs into some desired outputs
• Components of a Production System

  • Input – involves capturing and assembling elements that enter the system to be processed
  • Process – involves transformation processes that convert input into output
  • Output – the transformed element that have been produced by processes to their ultimate form
• Categories of Processes

  • Informational – allow shoppers to compare prices and quality
  • Storage – hold items in inventory until needed
  • Exchange – sell goods
• Operations Management


  The activities that are concerned with the creation of goods and services through the transformation of inputs into outputs
• Operations Management


  The design, operation, and improvement of systems that create and deliver the firm's primary product in the most efficient (best way of doing things) and effective (achieving goals and objectives) way, while creating value for the product
• Operations Management


  The administration of business practices to create the highest level of efficiency possible within an organization
• Major Activities in an Organization

  • Finance (including Accounting)
  • Marketing
  • Operations
• The Management Process

  1. Planning

  2. Organizing

  3. Staffing

  4. Leading

  5. Controlling
• Operations Management is one the three major functions of any organization (operations) and is essential to understanding what organizations do.
• Operations Management may provide the best opportunity for an organization to improve its profitability as it provides goods or services.
• A business education is incomplete without an understanding of the modern approaches to managing operations.
• Operations Management provides a systematic approach to organizational processes. It uses analytical thinking to deal with real-world problems.
• Knowledge in operations management is used in production planning and control (PPC), production, supply chain management (SCM), purchasing and logistics (P&L), quality assurance (QA), and process reengineering.
• Areas of Management Decisions

  • Strategic
  • Tactical
  • Planning & Control
• Strategic Decisions


  Long-term business decisions that impact the company's long-range effectiveness in terms of how it can address customer needs – aligned to corporate strategy
• Examples of Strategic Decisions


  • What products/service will we offer?
  • How will we make the product?
  • Where do we locate the facilities?
  • How much capacity do we need?
  • When should we add capacity?
• Tactical Decisions


  Addresses how to efficiently utilize resources (i.e., schedule material and labor) with constraints to strategic decisions
• Examples of Tactical Decisions


  • How many workers do we need?
  • When do we need them?
  • Should we work overtime or on shift?
  • When to order/deliver material?
  • Do we store finished goods inventory to cushion possible demand increases?
• Planning and Control Decisions


  Short-term decisions that help breakdown tactical decisions into immediately realizable goals and objectives
• Strategic Decisions


  Decisions that determine the long-term goals you want to achieve, given the existence of uncertainties
• Tactical Decisions


  Also known as an intermediate-term decision, this addresses how to efficiently utilize resources (i.e., schedule material and labor) with constraints to strategic decisions