certification study group section 4

8/6/2019 Certification Study Group Section 4

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Certification StudyGroup

Operations Management


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Operations Management

(OM) Refers to the development and

administration of the activities

involved in transforming resourcesinto goods and services.


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Key OM Terms Manufacturing

The activities and processes used in

making tangible products; also calledproduction

Operations

The activities and processes used inmaking both tangible and intangibleproducts


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The Transformation

Process The process through which inputs

are converted into outputs. Inputs are resources such as labor,

money, materials, and energy.

Outputs are goods, services, and

ideas that result from the conversionof inputs


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Transformation Process

Customer Controlstandards

(Feedback)

Inputsland

laborcapitalrawmaterialstimeinformationenergy

Transformationor Conversion

proceduresequipmentfacilitiestechnologyknowledge

Outputsgoods

servicesideas

This process creates utility.

ConversionProcess


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Operations Management in

Service Businesses Service providers use human and

mechanical processes to provide

products that are intangible


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Service Businesses: Labor

Requirements Service providers are generally

more labor intensive.

A manufacturer is likely to be morecapital intensive.


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Planning and Designing

Operations Systems Operations planning

Before a company can make a

product, it must decide what it willproduce for what group of customers,what processes it will use to make theproducts, and what facilities it needsfor production.


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Steps in Planning and Designing

Operations Systems1. Planning the product

2. Designing the operations process

a. Standardizationb. Modular designc. Customization

3. Planning capacity

4. Planning facilitiesa. Facility location


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Steps in Planning and Designing

Operations Systems4. Planning facilities

b. Facility layout1. Fixed position layout2. Process layout3. Product layout

c. Technology1. Cad

2. Cam3. Flexible manufacturing4. CIM


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TransportationTransportation

Human ResourcesHuman Resources

Physical FactorsPhysical Factors

Choosing The Best LocationFactors


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Technology and the

Production Process Robots

Computer aided design

Computer aided manufacturing

Flexible manufacturing system

Computer integratedmanufacturing


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Logistics

The McGraw-Hill Companies, 2000

Purchasing Management

Inventory Control Management

Routing and Scheduling

Distribution Management


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The Objectives of

Purchasing

1. Buying the right items

2. Obtaining desired quality3. Buying the right quantity

4. Paying the lowest price

5. Obtaining inventory at the righttime


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Logistics and Purchasing Make, buy, or lease decision this is

the decision of choosing whether to

manufacture a needed product inhouse, purchase it from a supplier, or tolease it

If the decision is made to purchase acomponent it is important to maintainmore than one source of supply


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Types of Inventory


raw

materials

raw

materialsfinished

goods

finished

goodswork in

process

work in

process

transformation process


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Inventory Control Inventory control

Perpetual inventory

Vendor managed inventory

Material-requirements planning (MRP)

Economic order quantity (EOQ) model

JIT


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Managing InventoryJust-in-time (JIT) inventory

management eliminates waste

by using smaller quantities ofmaterials that arrive just in timefor use in the transformation

process


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Routing and Scheduling Routing is the sequence of

operations through which the

product must pass. Scheduling is the process of

assigning work to be done to

departments or even specificmachines or persons.


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Routing and Scheduling

PERT Program Evaluation and Review Technique

(PERT) a popular scheduling technique isthat evaluates the sequence of activities

required to complete a project to find themost efficient, or critical, path.

The path that requires the longest timefrom start to completion is called the

critical path because it determines theminimum amount of time in which theprocess can be completed.

A Hypothetical PERT


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A Hypothetical PERTDiagram for a McDonaldsBig Mac


9-13 2

1 4 5

5

6 7 8

3

Remove buns,

2 beef patties,

cheese,sauce,

lettuce,

onions,

pickle

(20)

Grill beef

patties

(120)

Apply

sauceto bun(10)

Placecookedpattieson bun(5)

Topwithcheese

andvegetables(15)

PlaceBig Mac inpackage

(5)

Placepackagein heated

bin(5)

Serve tocustomer(5)

Critical path Activity Event (185) Time to completevent (seconds)

Start End


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Importance of Quality Quality control - involves

measuring goods and services

against established qualitystandards

Starts with senior management,

but everyone must be involved


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TQMTotal quality management (TQM) is

the organizational philosophy that

quality control should beincorporated throughout thetransformation process


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Statistical process control management collects and analyzes

information about the productionprocess to pinpoint quality problems.

Handling Quality Issues


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Establishing Standards A company must determine what

standard of quality it desires and

then assess whether its productsmeet that standard


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Strategic Importance of

the Production Function The productions and operations

manager is responsible for coordinating

the creation of a good and servicewhich creates profits for the company

Profits are needed to survive

Effective management can lower thecost of production, boost quality, andallow the firm to respond to customerdemands


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Certification StudyGroup

Organizational Leadership


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The Nature of LeadershipThe Meaning of Leadership

Process: what leaders actually do.

Use noncoercive influence to shape thegroups or organizations goals.

Motivate others behavior toward goals.

Help to define organizational culture.

Property: who leaders are.The set of characteristics

attributed to individualsperceived to be leaders.


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The Nature of LeadershipThe Meaning of

Leadership

Leaders People who caninfluence thebehaviors of otherswithout having to

rely on force. People who are

acceptedas leaders by others.


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Leadership Versus

Management Leadership and management are

related, but different.

For example, the management side ofexecuting plans focuses on monitoringresults, comparing them with goals, andcorrecting deviations.

In contrast, the leadership side of thesame activity focuses on energizingpeople to overcome bureaucratichurdles to help reach goals.


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Management and

Leadership

Leadership Activity Management

Establishing direction andvision for the organization

Creating an agenda Planning and budgeting,allocating resources

Aligning people throughcommunications and actions

that provide direction

Developing a human networkfor achieving the agenda

Organizing and staffing,structuring and monitoring

implementation

Motivating and inspiring by

satisfying needs

Executing plans Controlling and problem

solving

Produces useful change andnew approaches to challenges

Outcomes Produces predictability andorder and attains results

Source: Adapted fromA Force for Change: How Leadership Differs from

Managementby John P. Kotter. Copyright 1990 by John P. Kotter, Inc.

Reprinted with permission of The Free Press, a division of Simon & Schuster Inc.


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Types of Power in

Organizations

Source: Van Fleet, David D., and Tim Peterson, Contemporary Management, Third Edition. Copyright 1994 by Houghton Mifflin Company. Used with permission.

Poweris the ability toaffect the behavior of

others.


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Forms of Power Legitimate power is granted through the

organizational hierarchy.

Reward power is to give or withhold rewards. Coercive power is the capability to force

compliance by means of psychological,emotional, or physical threat.

Referent power is based on identification,imitation, loyalty, or charisma. Expert power is derived from information or

expertise.


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Leadership Schools Trait Model

Behavioral Models

Michigan Studies (Likert) Ohio State Studies

Leadership Grid

Situational (Contingency) Models Leadership Continuum (Tannenbaum &

Schmidt)

Least Preferred Coworker Theory (Fiedler)

Path Goal Model (Evans & House)

Vroom-Yetton- a o Model


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Trait Approach Assumed that a basic set of personal traits that

differentiated leaders from nonleaders could beused to identify leaders and predict who wouldbecome leaders.

The list had as many exceptions as items and soonbecame too long to be useful.

The trait approach was unsuccessful in establishingempirical relationships between traits and personsregarded as leaders.

Despite weaknesses, leaders today are oftenchosen on various traits.


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Traits

intelligence

supervisory ability

initiative drive

individuality

self confident

risk taker

motivated hard working

self assurance


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Leadership Behaviors Michigan Studies (Rensis Likert)

Identified two forms of leader behaviorJob-centered behavior managers who pay

close attention to subordinates work, explain work

procedures, and are keenly interested inperformance.

Employee-centered behavior managers whofocus on the development of cohesive work groupsand employee satisfaction.


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Michigan StudiesA Behavioral Approach to

Leadership

The two forms of leader behaviorswere considered to be at

opposite ends ofthe same continuum.

Job-centered behavior

Employee-centered behavior


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Ohio State Studies

A Behavioral Approach to Leadership

Did not interpret leader behavior as being one-dimensional as did the Michigan State studies.

Identified two basic leadership styles that can beexhibited simultaneously: Initiating-structure

Individual clearly defines leader-subordinate role, formalizescommunications, and sets the working agenda

Consideration Shows concern for subordinates and attempts to establish

friendly and supportive climate.


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Ohio State Studies Initial assumption was that the most effective leaders who exhibithigh levels of both behaviors. Subsequent research indicated that:Employees of supervisors ranked high on initiating structure were highperformers, yet they expressed low levels of satisfaction and higher

absenteeism.Employees of supervisors ranked high on consideration had low- performanceratings, yet they had high levels of satisfaction and less absenteeism.

Other situational variables make consistent leader behavior predictionsdifficult. There is no universal or one best way model of leadership.


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pGrid

4

6

2

1

3

5

8

7

9

0

1 4 6 952 3 87

Concern for production

High

Low

Low High

1,9 9,9

1,1 9,1

Team Management

Work accomplishment is

from committed people;

interdependence through

a common stake in

organization purpose

leads to relationships

of trust and respect.

Middle of the RoadManagement

Adequate organization performance is

possible through balancing the necessity

to get out work with maintaining morale

of people at a satisfactory level.

Impoverished Management

Exertion of minimum effort

to get required work done

is appropriate to sustain

organization membership.

Authority-Compliance

Efficiency in operations

results from arranging

conditions of work in

such a way that

human elements

interfere to a

minimum degree.

5,5

Country Club Management

Thoughtful attention to the

needs of people for satisfying

relationships leads to a

comfortable, friendly

organization atmosphere

and work tempo.

Concern

forpeople

The Leadership Grid is

a method of evaluating

leadership styles. The

Grid is used to trainmanagers so that they

are simultaneously more

concerned for people

and for production (9,9

style on the Grid).

Source: From Leadership Dilemmas

Grid Solutions by Robert R. Blake and

Anne Adams McCanse. (Formerly the

Managerial Grid by Robert R. Blake and

Jane S. Mouton.) Houston: Gulf Publishing

Company, p. 29. Copyright 1991 by

Scientific Methods, Inc. Reproduced by

permission of the owners.


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Situational Approaches to

Leadership Situational Models of Leader Behavior

Assume that: Appropriate leader behavior

varies from one situation to

another. Key situational factors that

are interacting to determineappropriate leader behaviorcan be identified.


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Situational Approaches to

Leadership Situational Variables:

Personality of leader

Task to be accomplished

Expectations, needs, andattitudes of followers

Environment where leadershiptakes place


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Employee Characteristics

Job Characteristics

Productivity&

Employee

Satisfaction

ExperienceAbility

PersonalityGroup cohesiveness

Goal ClarityTask Structure

LE

ADERSHIP

ST

YLE


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Political Behavior in

Organizations Political Behavior

The activities carried out for the specificpurpose of acquiring, developing, and usingpower and other resources to obtain onespreferred outcomes.

Common Political Behaviors Inducementoffering to give something to

someone else in return for that persons support. Persuasionpersuading others to support a goal

on grounds that are objective and logical as wellas subjective and personal.


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Organizations Political Behavior

Common Political Behaviors

Creation of an obligationprovidingsupport for another persons position thatobliges that person to return the favor at afuture date.

Coercionusing force to get ones way. Impression managementmaking a

direct and intentional effort to enhanceones image in the eyes of others.


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Organizations Managing Political Behavior

Be aware that even if actions are notpolitically motivated, others may assumethat they are.

Reduce the likelihood of subordinatesengaging in political behavior by providingthem with autonomy, responsibility,challenge, and feedback.

Avoid using power to avoid charges ofpolitical motivation.


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Organizations Managing Political Behavior

Get disagreements and conflicts out in theopen so that subordinates have lessopportunity to engage in political behavior.

Avoid covert behaviors that give theimpression of political intent even if noneexists.


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AModelof

EthicalPoliticalBehavi

orSource: Gerald F. Cavanaugh, Denis J.

Moberg, and Manuel Velasquez, The

Ethics of Organizational Politics,

Academy of Management Review, July

1981, p. 368. Used with permission.

certification study group section 4

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