Operations Management

Top Managers
- Executives responsible for overall direction of the company
- Time Horizon—3-5 years out thinking strategic planning or goals
- Skills: need big picture for having more conceptual ideas and humans skills
Middle Managers
- Responsible for setting objectives consistent with top mgmt goals and for planning/implementing strategies, allocating resources, coordinating and linking departments, working laterally
- Time Horizon— 6-18 months in the future
- Skills: human skills, and an even mix of technical and conceptual skills
- Tactical planning
First Line Managers
- Oversee hourly labor, train/teach employees, supervise hourly employees - Time Horizon— 2-3 weeks
- Skills: human skills, need more technical skills to be able to teach job
Team Leaders
- Person that has been with the company a long time
- Communicate, but not really a "manager"
- not responsible for team performance, at service of the group
Two Big Differences Between Managers
1. Time Horizon—how far ahead they plan
2. Scope of Work—what they do
Models
- Allows us to categorize things
Interpersonal Role
Figurehead role- ceremonial duties like greeting company visitors, speaking at opening of new facility, ripping company at a luncheon
• Leader role- motivate/encourage workers to accomplish organizational objectives
• Liaison role- deal with people outside their units. Sitting on their boards within company
Information Role
• Monitor role- scan environment for info, actively contact others for info, receives lots of unsolicited info, reading local newspapers, keep eye on competition, customer & tech changes
• Disseminator role- share info they have collected with subordinates and others in the company
• Spokesperson role- share info with people outside department or company, CEO's do this when they meet with shareholders or Board of Directors. CEO's also do this when involved in media news story.
Decisional Role
• Entrepreneur role: adapt themselves, subordinates & their units to change
• Disturbance Handler role: respond to pressures & problems so severe that they demand immediate attention and action
• Resource Allocator: decide who will get what resources and how many resources they will get
• Negotiator role: negotiate schedules, projects, goals, outcomes, resources, & employee raises
Motivation to Manage
assessment of how motivated employees are to interact with superiors, participate in competitive situations, behave assertively toward others, tell others what to do, reward good behavior, punish poor behavior. Perform actions that are highly visible to other and handle/organize administrative tasks, need strong motivation
Top Three Mistakes Managers Make
1. Insensitive to others: abrasive, intimidating, bullying style
2. Cold, aloof, arrogant
3. Betray Trust
Transition to Mgmt
- Managers Initial Expectations: be the boss, formal authority, manage tasks, and job is not managing people
- After six months as a manager: initial expectations were wrong, fast pace, heavy workload, job is to be a problem solver, and troubleshoot for subordinates
- After a year: no longer a doer, communication and listening, positive reinforcement, learning to adapt, control stress, and job is people development
How to Make a Plan
1. Set Goals (Smart ones)
2. Develop Commitment to Goals: determination to achieve goals, this is not automatic, employees/managers need to make together
3. Develop Effective Action Plans: lists specific steps, people, resources, and time needed to attain goal (how, what, who, when)
4. Track Progress: Two methods to track goals—proximal goals and distal goals. Proximal= short term subgoals, where as Distal= long term or primary goals
5. Maintain Flexibility: obtain flexibility by using options based planning—maintaining planning planning flexibility by making small, simultaneous investments in alt. plans,
Purpose of Planning
leave those commitments open by maintaining slack resources—cushion of extra resources that can be used with option-based planning to adapt to unanticipated changes, problems, or opportunities
Purpose Statement
- statement of company's purpose or reason for existing, the mission or vision of the company, top mgmt
Strategic Objective
- a more specific goal that unifies company wide efforts, stretches & challenges the organization, & possesses a finish line/time frame, top mgmt
Middle Management Plans
- Tactical Plans: carried out by the middle mgmt & are plans created/implemented by middle mgmt that specify how company will use resources, budgets, and people over the next six months to two years to accomplish specific goals within mission
• used to direct behavior, effort and attention
- four step process in which managers & employees communicate
1. discuss possible goals
2. collectively select goals that are challenging, attainable, & consistent with companies overall goals
3. jointly develop tactical plans that lead to accomplishment of tactical goals & objectives
4. Regularly meet to review progress toward accomplishment of goals
Lower Level Management Plans
- Operational Plans: day-to-day plans, developed/implemented by lower-level managers, for producing or delivering the organization's products/services over a thirty day to six month period
- Single-use Plans: plans that cover unique, one-time events
- Standing Plans: plans used repeatedly to handle frequently recurring events
• Policies: standing plans that indicate the general course of action that should be taken in response to a particular event or situation
• Procedures: standing plans that indicate the specific steps that should be taken in a response to a particular event
• Rules & Regulations: standing plans that describe how a particular action should be performed, or what must happen or not happen in response to a particular event
Budgeting
quantitive planning through which managers decide to allocate available money to best accomplish company goals and acts as language for communicating goals to others
Decision Making
process of choosing a solution form available alternatives
Rational Decision Making
systematic process of defining problems, evaluating alternatives, and choosing optimal solutions
Problem
gap between desired state and existing state. Presence of a gap between existing state and desired state is no guarantee that managers will will make decisions to solve problems
Decision Criteria
standard used to guide judgement & decisions usually, more criteria a potential solution meets, the better the solution will be
Absolute Comparisons
process in which each decision criterion is compared to a standard or ranked on its own merits
Relative Comparisons
process in which each decision criterion is compared directly with every other criterion

• Identify courses of action to solve a problem—generate lots of alternatives • Evaluate alternatives & use info systematically
• Compute optimal decision by determining optimal value for each alternative
Nominal Group Technique
decision-making method that begins & ends by having group members quietly write down & evaluate ideas to be shared with the group
Delphi technique
decision-making method in which members of a panel of experts respond to questions and to each other until agreement on an issue
Resources
assets, capabilities, processes, employee time, info & knowledge that an organization uses to improve its effectiveness and efficiency & create/sustain competitive advantage
Competitive Advantage
provide greater value for customers than competitors can
Sustainable Competitive Advantage
a competitive advantage that other companies have tried unsuccessfully to duplicate and have for the moment, stopped trying to duplicate
Valuable Resource
resource that allows companies to improve efficiency and effectiveness
Rare Resource
resource that is not controlled or possessed by many competing firms
Imperfectly Imitable Resources
a resource that is impossible or extremely costly or difficult for other firms to duplicate
Non-substitutable Resources
resource that produces value or competitive advantage and that has no equivalent substitutes or replacements
Portfolio Strategy
corporate-level strategy that minimizes risk by diversifying investment planning among various businesses or product lines
Grand Strategy
level strategic plan used to achieve strategic goals, and guide strategic alternatives that managers of individual businesses or subunits may use
Growth Strategy
strategy that focuses on increasing profits, revenues, market share, or the number of places in which the company does business
Stability Strategy
strategy that focuses on improving the way in which company sells the same products or services to the same customers
Retrenchment Strategy
strategy that focuses on turning around very poor company performance by shrinking the size of scope of the business
Recovery
strategic actions taken after retrenchments to return to a growth strategy
Cost Leadership
all about cost, acceptable quality, lower price alternative, broad target
Cost Focus
Lower cost, narrow target
Differentiation
different or unique for a higher price, broad target
Focused Differentiation
narrow target, differentiation
Focus Strategy
specialized focus for specific target people that are not being focused on
Firm Level Strategies
- Strategic Moves in Direct Competition: attacks & responses in red ocean - Entrepreneurship: movement into deep blue waters
Value Curves
- Graph that identifies who are the competitors - What are their strengths and weaknesses
Types of Ownership
- Proprietorship/Partnership
- Corporation
- Subchapter S-Corporation
- Limited Liability Corporation (LLC)
Main Differences in Ownership
how/when earnings are taxed, & liability for debts
Groupthink
- barrier to good decision making caused by pressure within group for members to agree with each other. Most likely to occur when: group is insulated from others with different perspectives—group leader by giving strong preference for particular decision — group has no established procedure for defining problems/explore alts. Group member have similar background/experiences
Minority Domination
- where one or two people dominate team discussion—limits consideration of different problem definitions and alternative solutions
Four Main Functions of Management
- Planning: setting goals, deciding on action, developing rules/procedures, developing
budgets/plans
- Organizing: identifying jobs to be done, hiring people, establishing departments, establishing chain of command, delegating, who should they report to, hierarchy comes into play, as a company grows—changes organization and how much one person can take on
- Leading: influencing others to get job done, maintaining morale, molding company culture, managing conflicts/communication
- Controlling: setting standards, comparing performance with standards, taking corrective action
Sources of learning
reading, reflecting, relationships, real experience
Skills gained
combining multiple sources and self mgmt
Self-Management Process
1) Self-Assessment & Planning
2) Goal Setting
3) Self & Environmental Control
4) Evaluating and Rewarding Progress
Self-Control Mistakes
allowing negative emotions/habits to derail us
Environmental Control Tips
proactively structure work environment to increase
likelihood of success, surround self with others who support your goals

Environmental Control Mistakes
allow others to control your time/peer pressure
Emotional Control Activity
Dr. Seligman; - Signature strengths in a new way, three good things every day & causes
Task Roles
making sure tasks are done, team meetings, written agenda
Social Roles
behaviors associated with group cohesion, get along, follow up on members, scheduling conflicts, encouraging
Task Conflict
(Cognitive Conflict in book) "beneficial"— "I have another idea we could consider" work better together
Relationship Conflict
(Affective Conflict in book) "harmful"— "I don't like your idea"
Devil's Advocate
assign person in the group to point out all flaws (hidden flaws)
Improving Task Roles
- Better team meetings: having a written agenda, start/end time, begin with review, clear ground rules for decision making, include time for questions/debate, encourage equal participation, end with summary of who is doing what/when
Diversity in teams
Diversity can be a strength, but slows down decision making & can result in confusion/frustration, increases innovation/creativity, can make it harder to communicate
Enhancing Work-Team Effectiveness
- Setting Team Goals & Priorities
- Setting Specific Team Goals
- Setting Challenging Goals
- Setting Stretch Goals
SMART goals
Specific, Measurable, Attainable, Realistic, Timely
Potential Advantages of Teams
- Improve customer satisfaction
- Improve product or service quality
- Improve employee job satisfaction
- Improve some steps in the decision making process
Actual Activity
Potential Productivity + Process Gains - Process Losses
Process Gains
information exchange, load balancing, social facilitation
Process Losses
group maintenance (unavoidable), social loafing, production blocking
Norms
Informally agreed upon standards that regulate team behavior
Team Size
between 6 to 9 members— small enough to get to know each other and each contribute, but large enough to take advantage of team's diverse skills, knowledge and perspectives (instill sense of responsibility and mutual accountability)
Task conflict
associated with improvements in team performance, willingness to examine, compare, and reconcile differences to produce the best possible solution
Relationship Conflict
associated with decrease in team performance because of different experiences and expertise lead to different views on problem and solution
Stages of Team Development
- Forming: first meet, first impression, first norms, early ground rules, set team structure - Storming: conflicts & disagreements, jockey positions, focus goals
- Norming: begin to settle into roles, can be short
- Performing: improved performance, effective team, very loyal, mutual accountability
Ethics
set of principles that defines what is right/wrong for a person or group
Ethical Behavior
behavior that conforms to a society's accepted principles of right/ wrong
Magnitude of Consequences
how much trouble, how many hurt/how widespread
Social Consequences
greater benefit or harm
Probability of effect
bad or good will really happen
Temporal Immediacy
how soon will they find out
Proximity of effect
people you know that get hurt
Concentration of Effect
how much average person is affected
Stages of Moral Development
- Preconventional
- Conventional
- Principled
Preconventional
Stage 1: small, selfish kid, me me me
Stage 2: scratch your back if you scratch mine, less selfish stage, sharing
Conventional
Stage 3: looking for praise
Stage 4: reinforce, follow rules & the law (black/white no gray area)
Principled
Stage 5: social contract to not violate other's lives
Stage 6: embrace universal notions of right & wrong
Long Term Self-Interest
best in the long run, never take any action that is not in your
or your organization's long-term self-interest
Personal Virtue
honest, open, truthful, (not broadcasted all over tv), should never
doing anything that is not honest, open or truthful that you do not want all over the
news
Religious Injunctions
wouldn't want to hurt anyone, never take an action that is not
kind and that does not build a sense of community
Gov't Requirements
under the law, never take any action that violates the law
Utilitarian Benefits
whatever creates the most good for lots of people
Individual Rights
how it affects the individual, but by the law, never take an action that
does not infringes on others agreed-upon rights
Distributive Justice
never take an action that harms the least fortunate, including the
poor, uneducated, the unemployed
Ethical Decision Making Steps
Identify the problem, Identify Constituents, Diagnose Situation, Analyze options, Make your choice, Act:
Whistleblower
something in company is unethical and they will be protected by the
law if they come forward
Encouraging Ethical Conduct/Behavior
hire people with integrity, teach ethical behavior, deal with & enforce
Shareholder View
Purpose of Business is to maximize profit— stockholder is beneficiary
Stakeholder View
Purpose of business is to create value for society—multiple stakeholders are
considered and multiple can benefits
Primary Stakeholders
Employees, Stockholders, Customers (receive most attention)
Secondary Stakeholders
Community, Gov't, Suppliers
Corporate Social Responsibility
a business's obligation to pursue policies, make decisions, and take actions that benefit society
Social Responsiveness Strategies
Reactive, Defensive, Accommodative, Proactive
Reactive
less than society expects, deny it, nothing they can do
Defensive
least admit responsibility, but do least amount to fix the problem
Accommodative
accept responsibility and do all to be expected to solve problem
Proactive
do things right before it happens, do everything to solve the problem, and
lead in the industry
Environmental Scanning
systematically searching the environment for events or issues that might affect an organization, includes tracking on social media

Keeps Companies Current- know what consumers want
Reduces Uncertainty- responses to ads, a catchy jingle
Alters Organizational Strategies
if people don't like something, they can change/
alter it
Contributes to Organizational Performance
more scanning, increase profits, react
quickly
Confirmation Bias
hear something that fits our opinions we latch onto, but ignore stuff that strays
Components of the General External Environment
Economy, Technology, Sociocultural, Political/ Legal
Components of Specific External Environment
- Competitors
- Suppliers
- Industry Specific Laws/Regulations
- Advocacy Groups
Levels of Organizational Culture
Seen, heard, and believed
Control Process
Set standard, Measure actual performance, Compare with Standard, Identify Deviations, Analyze Deviations, & Take Corrective Action
Three Types of Control
Feedforward, Concurrent, & Feedback
Feedforward
monitoring inputs, anticipating/preventing problems, try to identify problems before they occur (inputs)
Concurrent
monitoring processes & activities,
watching it be delivered, employee in the wrong, adjusting ongoing activities
Feedback
monitoring products, learning from past mistakes, identify
problems with end product from the customers who use the product, want to know how to improve it
Methods of Control
Bureaucratic, Objective, Normative, Concertive
Bureaucratic
rules/procedures, top down control, rewards/punishments
Objective
(measures) assess performance & output (actual-expected) meeting
objectives
Normative
values/beliefs set forward, expectation, powerful, may not be written down
Concertive
values/beliefs shaped by groups, peer pressure, more stressful than
bureaucratic, develop norms
Service Provision Characteristics
- Customers participate
- Services are consumed immediately
- Services are provided where and when the customer desires
- Services tend to be labor intensive
- Services are intangible
Quality in Service Provision
- Reliability (most important)
- Assurance
- Tangibles
- Empathy
- Responsiveness