Download Lecture-31

Management Practices
Lecture-31
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Today’s Lectures
• Revision of important concepts of 1-15
lectures
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Achieving High Performance
• Organizations must provide a good or service
desired by its customers.
– Chen One and Addidas manages his firm
to provide quality food products.
– Physicians, nurses and health
care
administrators seek to provide healing
from sickness.
– McDonald’s restaurants provide burgers,
fries and shakes that people want to buy.
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Organizational Performance
• Measures how efficiently and effectively
managers use resources to satisfy customers and
achieve goals.
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Efficiency: A measure of how well resources are
used to achieve a goal.
• Usually, managers must try to minimize the input
of resources to attain the same goal.
Effectiveness: A measure of the appropriateness of
the goals chosen (are these the right goals?), and
the degree to which they are achieved.
• Organizations are more effective when managers
choose the correct goals and then achieve them
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Restructuring
• Top Management have sought methods
to restructure their organizations and
save costs.
• Downsizing: eliminate jobs at all levels of
management.
Can lead to higher efficiency.
– Often results in low morale and customer
complaints about service.
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Managerial Roles
• Described by Mintzberg.
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A role is a set of specific tasks a person performs
because of the position they hold.
• Roles are directed inside as well as outside the
organization.
• There are 3 broad role categories:
1. Interpersonal
2. Informational
3. Decisional
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The 4 Principles
• Four Principles to increase efficiency:
1. Study the way the job is performed now &
determine new ways to do it.
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Gather detailed, time and motion information.
Try different methods to see which is best.
2. Codify the new method into rules.
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Teach to all workers.
3. Select workers whose skills match the rules set
in Step 2.
4. Establish a fair level of performance and pay
for higher performance.
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Workers should benefit from higher output.
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Weber’s Principles of Bureaucracy
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Contingency Theory
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Key External Factors
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Types of Decision Making
• Programmed
Decisions:
automatic process.
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routine,
almost
Managers have made decision many times before.
There are rules or guidelines to follow.
Example: Deciding to reorder office supplies.
• Non-programmed Decisions: unusual situations
that have not been often addressed.
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No rules to follow since the decision is new.
These decisions are made based on information, and
a manger’s intuition, and judgment.
Example: Should the firm invest in a new technology?
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Decision Making Steps
Recognize need for
a decision
Frame the problem
Generate & assess alternatives
Choose among alternatives
Implement chosen
alternative
Learn from feedback
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Organizational Learning & Creativity
• Organizational Learning: Managers seek to
improve member’s ability to understand the
organization and environment so as to raise
effectiveness.
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The learning organization: managers try to improve
the people’s ability to behave creatively to maximize
organizational learning .
• Creativity: is the ability of the decision maker to
discover novel ideas leading to a feasible course
of action.
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A creative management staff and employees are the
key to the learning organization.
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Individual Creativity
• Organizations can build
supportive of creativity.
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an
environment
Many of these issues are the same as for the
learning organization.
Managers must provide employees with the ability
to take risks.
If people take risks, they will occasionally fail.
• Thus, to build creativity, periodic failures must
be rewarded.
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This idea is hard to accept for some managers.
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Planning and Strategy
• Planning
– Identifying and selecting appropriate goals and
courses of action for an organization.
• The organizational plan that results from the planning
process details the goals and specifies how managers
will attain those goals.
• Strategy
– A cluster of decisions about what goals to pursue,
what actions to take, and how to use resources to
achieve goals
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Three Stages of the Planning Process
Determining the Organization’s
mission and goals
(Define the business)
Strategy formulation
(Analyze current situation &
develop strategies)
Strategy Implementation
(Allocate resources & responsibilities
to achieve strategies)
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Why Planning is Important
Planning determines where the organization is
now and where it will be in the future. Good
planning provides:
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Participation: all managers are involved in setting
future goals.
Sense of direction & purpose: Planning sets goals
and strategies for all managers.
Coordination: Plans provide all parts of the firm
with understanding about how their systems fit
with the whole.
Control: Plans specify who is in charge of
accomplishing a goal.
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Vertical Integration
• When the firm is doing well, managers can add
more value by producing its own inputs or
distributing its products.
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Backward vertical integration: the firm produces
its own inputs.
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McDonalds grows its own potatoes.
Can lower the cost of supplies.
Backward vertical integration: the firm distributes
its outputs or products.
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McDonalds owns the final restaurant.
Firm can lower costs and ensure final quality.
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Goals for successful functional strategies:
1. Attain superior efficiency: the measure of
outputs for a given unit of input.
2. Attain superior quality: products that
reliably do the job they were designed for.
3. Attain superior innovation: new, novel
features about the product or process.
4. Attain superior responsiveness to
customers: Know the customer needs and
fill them.
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PORTER’S FIVE-FORCES MODEL
• The intensity of competition
widely from industry to industry
among
firms
varies
• Porters model of competitive forces assumes that there
are five competitive forces that identifies the competitive
power in a business situation. These five competitive
forces identified by the Michael Porter are:
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Threat of substitute products
Threat of new entrants
Intense rivalry among existing players
Bargaining power of suppliers
Bargaining power of Buyers
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Four Ways to Create a Competitive
Advantage
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Total Quality Management
• Total quality management (TQM)
– focuses on improving the quality of an organization’s
products and stresses that all of an organization’s
value-chain activities should be directed toward this
goal
1. Identify what customers want from the good or service
that the company provides
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4.
Identify what the company actually provides to customers
Identify the gap that exists between what the customers
want and what they get (quality gap)
Formulate a plan for closing the quality gap
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Control Types
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Feedforward: use in the input stage of the process.
– Managers anticipate problems before they arise.
– Managers can give rigorous specifications to suppliers
to avoid quality
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Concurrent: gives immediate feedback on how inputs
are converted into outputs.
– Allows managers to correct problems as they arise.
– Managers can see that a machine is becoming out of
alignment and fix it.
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Feedback: provides after the fact information managers
can use in the future.
– Customer reaction to products are used to take
corrective action in the future.
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Creating Strong Organizational Culture
Values of Founder
Socialization Process
Ceremonies & Rites
Organizational
Culture
Stories & Language
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Next Lecture
• Revision- Lecture 16 to 30
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