What is a key challenge of retail management?
deterring theft at checkout- "sweethearting". Some retailers are using hidden and overt cameras to record cashier behavior on shift
What is "Control"?
monitoring activities
What is monitoring activities?
ensuring they are accomplished as planned, correcting deviation
What are effective control systems?
ensures activities lead to attainment of goals
What is the importance of control?
control is important because goals aren't achieved just because we want them to
What do control's value lie in?
planning and delegating. it sets objectives that provide direction and provides a basis for following-up.
Why do you need control?
to plan, empower employees and protect the workplace. it also helps asses the effectiveness of plans, and helps ameliorate a lot of the threats that orgs face.
What are the three steps of the control process?
measuring actual performance (standards are created in the planning function), comparing actual performance against a standard (performance is compared to the standards set), and taking managerial action to correct deviations or to address inadequate standards (if performance is substandard, fixes have to be made)
What does the control process assume?
that performances standards already exist, these standards are the specific goals created during the planning process
What is criteria for measurement?
what managers measure is probably more important to the control process than how they measure
What is critical to evaluating performance?
selecting the right criteria, but what we measure also influences the areas of work on which people in the organization will focus their efforts
How can we measure performance?
sources of information: personal observation, statistical reports, oral reports, written reports. Each source has strengths/weakness and their use involves making trade-offs
What is the good of personal observation?
unfiltered by others, permits intensive coverage, provides an opportunity to "read between the lines"
What is the bad of personal observation?
subject to the perceptual biases of the observer, time consuming, obtrusive, people behave differently when they know they are being observed
What is the good of statistical reports?
quantifiable,objective, easy to visualize, effective for showing relationships
What is the bad of statistical reports?
provides limited information (lacks context), may only cover a few areas of performance
What is the good of oral reports?
fast, less labor-intensive than observation
What is the bad of oral reports?
info is filtered by the employee, difficult to document
What is the good of written reports?
more formal, permanent-archived, comprehensive and specific
What is the bad of written reports?
time-consuming and labor-intensive
What do you measure?
what we measure is more important than how we measure it
What are some universal control criteria that can be measured?
employee satisfaction, turnover, absenteeism, budgets
What is the goal of measuring something?
to try to break down standards into objective, measurable activities
How are activities measured?
most activities can be broken down and objectively measured, most jobs are expressed in measurable terms. Sometime subjective measures are necessary, usefulness is limited
What are the 2 ways to take action if there is a problem?
do nothing, correct actual performance, revise the standard
What is immediate corrective action?
addresses the problem at the time it occurs. Examples: firing an employee, changing an incorrect price, recalling a product for defect
What is basic corrective action?
looks at the causes of a problem and addresses them. Examples: identifying a flaw in the manufacturing, identifying an unsafe practice
How do you correct actual performance?
Depending on the problem, a manager can take different corrective actions. For instance, if unsatisfactory work is the reason for performance variations, the manager could correct it with training programs, disciplinary action, changes in compensation practices, and so on.
Why do you revise the standard?
If the variance results from an unrealistic standard—one that is set too low or too high—the standard, not the performance, needs corrective action. For example, if performance consistently exceeds the goal, then a manager should look at whether the goal is too easy and needs to be adjusted.
What are the two options for revising the standard?
revise downward, revise upward
Why do you revise downward?
can be problematic: is the goal really the problem. However, managers must be cautious about revising a standard downward. It's natural to blame the goal when an employee or a team falls short, rather than accept that one's performance was inadequate. If you believe the standard is realistic, fair, and achievable, tell employees that you expect future work to improve and then take the necessary corrective action to help make that happen.
How do you revise upward?
if constantly exceeded, make more difficult
What is feedforward control?
anticipated problems. focused on prevention. Precedes actual activity the most desirable type of control, prevents problems because it takes place before the actual activity starts. However, feedforward controls require timely and accurate information that isn't always easy to obtain, so managers frequently end up using the other two types of control. Management can implement controls before an activity begins (INPUT)
What is concurrent control?
corrects problems as the activity is going on. corrects problems before they escalate. best known concurrent control: direct supervision (PROCESSES)
What is feedback controls?
Most popular form of controls corrects problems after they occur damage occurs before the fix gives good informaiton can motivate employees (OUTPUT)
What are examples of feedforward control?
scheduling preventative maintenance on a fleet of vehicles. Contracting for counseling services to help employees deal with pending layoffs
What is an example of concurrent control?
For instance, Google's director of business product management and his team keep a watchful eye on one of its most profitable businesses—online ads. They watch the number of searches and clicks, the rate at which users click on ads, and the revenue this generates. Everything is tracked hour by hour, compared with the data from a week earlier, and charted. If something is not working well, they fine-tune it.
What can be designed to include concurrent controls?
Computers and computerized machine controls can be designed to include concurrent controls, such as organizational quality programs that inform workers whether their work output is of sufficient quality to meet standards.
What are the two advantages of feedback control?
1.Feedback gives managers meaningful information on how effective their planning efforts were. Feedback that shows little variance between standard and actual performance indicates that the planning was generally on target. If the deviation is significant, that information can be used to formulate new plans. 2. Feedback enhances motivation because people want to know how well they're doing.
What are financial controls?
controlling finances is critical to any organization. Businesses want to be profitable. Non-profits want remain at or under-budget
What are two commonly used financial controls?
ratio analyses, budgets
How are ratios calculated?
using selected information from the organizations balance sheet and income statement
What is the application of the transformation process?
design, operation, control
What is the transformation process?
taking raw inputs and converting them to finished goods and services
Why is operations management important?
encompasses all organizations, important to managing productivity effectively and efficiently, plays a strategic role
What is operations management?
refers to the design, operation, and control of the transformation process that converts resources such as labor and raw materials into goods and services that are sold to customers
What are the inputs of operations?
people, technology, capital, equipment, materials, information
What is the transformation process of operations?
creates additional value
What are the outputs of operations?
goods and services
What is manufacturing organizations?
produce physical goods, transformation readily evident Examples: car manufacturers, home builders, aircraft companies
What are service organizations?
produce non physical goods and services, transformation less evident Examples: google, health care
What happens as economies develop?
they become more service oriented
What is productivity?
ratio of outputs to inputs
How do you improve productivity?
high productivity can lower costs and prices, producing more for less, productivity required for companies to compete
What is productivity influenced by?
by people and operations variables. effective organizations integrate people into operations to maximize productivity
What helps businesses to improve their productivity in order to survive?
technology, especially in a market filled with low cost competitors
What does higher productivity lead to?
economic growth and development of countries and to higher wages and company profits without causing inflation. Individual organizations also benefit from a more competitive cost structure and the ability to offer more competitive prices.
What are examples of productivity gains?
Latex Foam International Increased capacity 50%, 30% increase in efficiency Pella Corporation Reduced paperwork processing times, improved HR processes, more efficient work design McDonald's Corporation Reduced the time it takes to cook french fries
What does every organization need in order to survive?
customers. customers want some value from the goods and services they purchase or use, and the customers decide what has value.
What must organizations provide to attract and keep customer.
value. Value is defined as the performance characteristics, features and attributes, and any other aspects of goods and services for which customers are willing to give up resources (usually money).
What is value?
the properties of a good or service for which customers are willing to give up resources ($$$) for
What are examples of value?
performance characteristics, features, aesthetics
What is the value chain?
all the activities that add value as raw materials are transformed into finished products. Externally/effectiveness oriented: value is about fulfilling/creating customer demand. Related to, but different from the supply chain (efficiency oriented)
What is a good value chain?
one in which a sequence of participants works together as a team, each adding some component of value—such as faster assembly, more accurate information, or better customer response and service—to the overall process. The better the collaboration among the various chain participants, the better the customer solutions. When value is created for customers and their needs and desires are satisfied, everyone along the chain benefits.
What does value impact?
competitive advantage: doing something better than the competition doing something different than the competition that customers value
What king of competitive advantage do companies seek?
sustained, long-term out performance of rivals.
What does the value chain look like?
inbound logistics>operations>outbound logistics>marketing and sales>service
What is the process of managing the entire integrated process from start to finish?
focused on flow into and out of organization. focused on effectiveness and creating value
What does the value change management change?
organizational processes
What are three requirements of the value chain?
better demand forecasting, collaboration with partners in the value chain, new performance measures
What are value chain management requirements?
organizational culture and attitudes, coordination and collaboration, technology investment, organizational processes, leadership, employees
What is coordination and collaboration?
integration throughout the chain, identification of what customers value by all partners, sharing of information and open communication among all members of the chain is absolutely necessary to achieve its goal of meeting and exceeding customers' needs and desires. To successfully collaborate, all partners must identify things that their customers value, share information, and be flexible as far as who does what.
What is technology investment?
IT is fundamental to value chain management (particularly true for large firms) Can also be infrastructural IT (e.g., manufacturing equipment). Technology can improve operational efficiency Real-time data can improve responsiveness and accuracy. Some technology automates important areas E.g., when a machine on the assembly-line is about to fail it generates an alert.
What are common types of IT?
enterprise resources planning systems ( SAP), customer relationship management systems, supply-chain management systems
What are organizational processes?
focus on core competencies: unique skills, capabilities, resources. Eliminate activities that don't add value. Better demand forecasting is critical
What is critical in orgs?
leadership. better demand forecasting. select functions done collaboratively with other partners in the chain, new measures needed for evaluating the performance of various activities along the chain -from top organizational levels to lower levels, managers must support, facilitate, and promote implementation and ongoing practice of value chain management.
What are 3 important conclusions about how organizational processes must change?
1.Better demand forecasting is necessary and possible because of closer ties with customers and suppliers. 2.Selected functions may need to be done collaboratively with other partners in the value chain. This collaboration may even extend to sharing employees. 3.Finally, new measures are needed for evaluating the performance of various activities along the value chain.
What are employees/HR?
design jobs flexibly around work processes that link all functions in the value chain. hire flexible employees. invest in continual ongoing training
What are the three main human resources requirements for the value chain management?
1. flexible approaches to job design 2. an effective hiring process 3. ongoing training
What are barriers to effective value chain management?
organizational barriers, cultural attitudes
What are organizational barriers?
refusal/reluctance to share info, resistance to change
What are cultural attitudes?
lack of trust, respect, hoensty, lacking required capabilities, people
What are the most difficult barriers to handle?
organizational. These barriers include refusal or reluctance to share information, reluctance to shake up the status quo, and security issues. Without shared information, close coordination and collaboration is impossible. And the reluctance or refusal of employees to shake up the status quo impedes efforts toward value chain management and prevents its successful implementation. Finally, because value chain management relies heavily on a substantial information technology infrastructure, system security and Internet security issues need to be addressed.
What is quality?
perceived quality is critical, quality is needed to be competitive.
What does quality improvements require?
specific, measurable goals, cross functional / self managing teams, progress evaluation ex: total quality management (TQM), six sigma, ISO 9000 certification
When planning for quality what much managers have?
quality improvement goals, strategies, and plans to achieve those goals
What are two important approaches orgs with extensive and successful quality improvements tend to rely on?
cross-functional work teams and self-directed or empowered work teams. It's not surprising that quality-driven organizations rely on well-trained, flexible, and empowered employees.
What is a project?
a one-time-only set of activities with a definite beginning and ending point.
What is project management?
the task of getting the activities done on time, within budget, and according to specifications. lots of projects fail because of poor project management , estimated that >50% of all IT projects fail
What is the Gantt Charts?
used for both planning and controlling a sequential list of activities: when do they start, when do they end, duration, % complete also include the logic of the project essentially a bar graph
What are PERT charts?
network diagram that shows the sequential flow of activities that make up a project. 3 items: events (start/finish), activities (actions that take place), critical path
What is the critical path?
PERT charts, the longest/most time consuming sequence of events required to complete the project in the shortest amount of time. the absolute minimum length of the project
How do you create a PERT chart?
1. identify every significant activity required to complete a project 2. determine the order of activities 3. diagram the flow of activities from start to finish 4. compute time to complete each activity 5. determine schedule for start/finish dates
A manager measuring actual performance is like a teacher ________.
grading a test
Immediate corrective action is designed ________.
to get performance back on track
A well-run company that has well-thought-out plans, motivated and productive workers, and an efficient organizational structure ________.
may not always attain its goals
Controlling compares ________ to see if goals are being achieved.
actual performance to planned performance
A GPS that tells you that you are making a wrong turn is an example of concurrent control
True
When actual performance falls outside an acceptable range of variation, it is termed a(n) ________.
significant deviation
A car company that puts more effort into measuring quality than total units sold most likely wants to excel at ________.
customer satisfaction
Some control criteria, such as employee satisfaction and absenteeism, are applicable to almost any management situation.
True
Controlling provides a critical link back to planning that compares actual outcomes to planned outcomes.
True
Personal observation as a form of control measurement requires little time.
False
_______ management oversees the transformation process that converts resources such as labor and raw materials into finished goods and services.
operations
Operations management includes service industries but not manufacturing firms
False
Value is any aspect of a product that customers ________ in the product
will pay for
_______ focuses on providing an efficient flow of resources to an organization
supply chain management
Which of the following is NOT an example of a service organization? (military force, hospital, university, lens maker)
a lens maker
Manufacturing organizations produce both physical and nonphysical outputs
False
A laptop computer company is a ________ organization because its product is ________
manufacturing; a computer
n its entirety, the value chain can encompass the supplier's ________ to the customer's ________
suppliers; customer
Which of the following is NOT a way to increase productivity?
increase inputs
In a transformation process, people are considered to be inputs because they _______
perform tasks that are needed to create outputs
A major part of the controlling function of management is to __.
correct performance problems
This type of performance measurement format would most likely include graphs, tables and computer outputs
statistical report
When should a manager's course of action be to do nothing?
when the variance is acceptable
A fast-food restaurant is querying prospective customers about the features they would like to see in a new sandwich. What kind of control is being used?
feedfoward control
When a budget is used for controlling, it provides ___ against which resource consumption can be compared.
quantitative standards
As a product, piano lessons are ___.
a service because they are non material
Organizational processes in value chain management organizations need to eliminate __.
non value- adding activities
Durability and features are measures of ___.
product quality
When a customer gets frustrated from being put on hold for 30 minutes during a call, the company is having problems with which service quality dimension?
timeliness