Chapter 1 (Lecture Outline Presentation) Organization Control and Quality Improvement

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<ul><li><p>Chapter 1(Lecture Outline Presentation)Organization Control and Quality Improvement</p></li><li><p>Chapter ObjectivesIdentify three types of control and the components common to all control systems.Discuss organizational control from a strategic perspective.Identify the four key elements of a crisis management program.Identify five types of productivity.Explain how providing a service differs from manufacturing a product and list the five service-quality dimensions.</p></li><li><p>Chapter Objectives (contd)Define total quality management (TQM) and discuss the basic TQM principles.Describe at least three of the seven TQM process improvement tools.Explain how Demings PDCA cycle can improve the overall management process.Specify and discuss at least four of Demings famous 14 points.</p></li><li><p>Fundamentals of Organizational ControlControlTaking preventive or corrective action to keep things on track.Checking, testing, regulation, verification, or adjustment.Objectives are yardsticks for measuring actual performance.Purpose of the control functionGet the job done despite environmental, organizational, and behavioral obstacles and uncertainties.</p></li><li><p>Types of ControlsFeedforward ControlThe active anticipation and prevention of problems, rather than passive reaction.Concurrent ControlMonitoring and adjusting ongoing activities and processes.Feedback ControlChecking a completed activity and learning from mistakes.</p></li><li><p>Components of Organizational Control SystemsOrganizational Control SubsystemsStrategic plansLong-range plansAnnual operating budgetStatistical reportsPerformance appraisalsPolicies and proceduresCultural control</p></li><li><p>Components of Organizational Control Systems (contd)ObjectivesMeasurable reference points (targets) for corrective action.StandardsGuideposts on the way to achieving objectives.Benchmarking: identifying, studying, and building upon the best practices of organizational role models.</p></li><li><p>Components of Organizational Control Systems (contd)Evaluation-Reward SystemsMeasure and reward individual and team contributions to attaining organizational objectives.Can shape effort-reward expectancies that motivate better performance.</p></li><li><p>Components of Organizational Control Systems (contd)Strategic ControlStrategic planning and strategic control go hand in hand.Top-level strategy sets and/or determines objectives through the organization.Control measures of activities and results are translated up the organizational pyramid.</p></li><li><p>Components of Organizational Control Systems (contd)Identifying Control ProblemsExecutive reality checks: top managers periodically working at lower-level jobs to become more aware of operations.Internal auditing: independent appraisals of organizational operations and systems to assess effectiveness and efficiency.</p></li><li><p>Components of Organizational Control Systems (contd)Identifying Control Problems (contd)Symptoms of inadequate controlAn unexplained decline in revenues or profits.A degradation of service (customer complaints).Employee dissatisfaction .Cash shortages caused by bloated inventories or delinquent accounts receivable.Idle facilities or personnel.Disorganized operations.Excess costs.Evidence of waste and inefficiency.</p></li><li><p>Crisis ManagementOrganizational CrisisA low-probability, high impact event that threatens the viability of the organization and is characterized by ambiguity of cause, effect, and means of resolution, and well as by belief that decisions must be made swiftly.</p></li><li><p>Crisis Management (contd)Crisis ManagementAnticipating and preparing for events that could damage the organization.Two Biggest Mistakes Regarding Organizational CrisesIgnoring early warning signs of an impending disaster.Denying the existence of a problem when disaster actually strikes.</p></li><li><p>Crisis Management (contd)Developing a Crisis Management ProgramConduct a crisis audit seeking out trouble spots and vulnerabilities.Formulate contingency plans that specify early warning signals, actions to be taken, and consequences of those actions.Create crisis management teams with specific skills to deal with a crisis.Perfect the program through serious practice and rehearsals.</p></li><li><p>The Quality ChallengeDefining QualityConformance to requirements (Crosby).A subjective response by customers to the adequacy of product or service quality in meeting their expectations/needs/requirements.</p></li><li><p>Five Types of Product QualityTranscendent QualityInherent value or innate excellence apparent to the individual.Product-Based QualityThe presence or absence of a given product attribute.User-Based QualityQuality of the product is determined by its ability to meet the users expectations.</p></li><li><p>Five Types of Product Quality (contd)Manufacturing-Based QualityHow well the product conforms to its design specification or blueprint.Value-Based QualityHow much value each customer separately attributes to the product in calculating their personal cost-benefit ratio.</p></li><li><p>Unique Challenges for Service ProvidersStrategic Service ChallengeTo anticipate and exceed customers expectations.Distinctive service characteristicsCustomers participate directly in the production process.Services are consumed immediately and cannot be stored.Services are provided where and when the customer desires.Services tend to be labor intensive.Services are intangible.</p></li><li><p>Unique Challenges for Service Providers (contd)Defining Service QualityFive service quality dimensionsReliability (most important)AssuranceTangiblesEmpathyResponsiveness</p></li><li><p>Introduction to Total Quality Management (TQM)Total Quality ManagementCreating an organizational culture committed to the continuous improvement of skills, teamwork, processes, product and service quality, and customer satisfaction.Four Principles of TQMDo it right the first time.Be customer-centered.Make continuous improvement a way of life.Build teamwork and empowerment.</p></li><li><p>Introduction to Total Quality Management (TQM) (contd)Do It Right the First TimeDesigning and building quality into the product.Be Customer-CenteredSatisfying the customers needs by anticipating, listening, and responding.Internal customers: anyone in the organization who cannot do a good job unless you do a good job.</p></li><li><p>Introduction to Total Quality Management (TQM) (contd)Make Continuous Improvement a Way of LifeKaizen: a Japanese word meaning continuous improvement (quality is an endless journey).A gain in one area does not mean loss in another.Venues for continuous improvementImproved and more consistent product and service quality.Faster cycle times.Greater flexibility.Lower costs and less waste.</p></li><li><p>Introduction to Total Quality Management (TQM) (contd)Build Teamwork and EmpowermentTeamworkSuggestion systems.QC circles and self-managed teams.Team work and cross-functional teams.EmpowermentAdequate trainingAccess to information and toolsInvolvement in key decisionsFair rewards for results</p></li><li><p>The Seven Basic TQM Process Improvement ToolsFlow ChartA graphic display of a sequence of activities and decisions.Cause-and-Effect AnalysisThe fishbone diagram helps visualize important cause-and-effect relationships.Pareto Analysis (80/20 Analysis)A bar chart indicating which problem needs the most attention.</p></li><li><p>The Seven Basic TQM Process Improvement Tools (contd)Control ChartVisual aid showing acceptable and unacceptable variations from the norm for repetitive operations.HistogramA bar chart indicating deviations from a standard bell-shaped curve.Scatter DiagramA diagram that plots relationships between two variables.</p></li><li><p>The Seven Basic TQM Process Improvement Tools (contd)Run ChartA trend chart for tracking a variable over time.</p></li><li><p>Deming ManagementDeming ManagementThe application of W. Edwards Demings ideas to revitalize productive systems to make them more responsive to the customer, more democratic, and less wasteful organizations.Essentially the opposite of scientific management.Principles of Deming ManagementQuality improvement drives the entire economy.The customer always comes first.Dont blame the person, fix the system.Plan-do-check-act (PDCA cycle).</p></li><li><p>Deming Management (contd)Demings 14 PointsConstant purposeNew philosophyGive up on quality by inspectionAvoid the constant search for lowest-cost suppliersSeek continuous improvementTrain everybodyProvide real leadershipDrive fear out of the workplacePromote teamworkAvoid slogans and targetsGet rid of numerical quotasRemove barriers that stifle pride in workmanshipEducation and self-improvement are keyThe transformation is everyones job</p></li></ul>

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