1

MANAGEMENT 339: PRINCIPLES OF MANAGEMENT AND OPERATIONS

• What is Operations Management (OM) ?– Activities that relate to creation of goods and services

through transformation of inputs– Relationship to other functional areas such as Marketing

and Accounting Finance– Key areas in OM

• Product/service design/Process design/Capacity planning/facilities location and design (Layout)/Quality management/HR and job design/Supply chain management/Inventory and materials management/Operations planning and scheduling/Maintenance

• We will learn principles/methods to handle issues in these areas

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MANAGEMENT 339: PRINCIPLES OF MANAGEMENT AND OPERATIONS

• What are Principles of Management ?– Principles applicable to all functions of the organization– Principles applicable at all levels of the organization– Principles useful to all levels of managers

• What are the levels of the organization ?– Corporate; Business; Functional. Page 273.

• What are levels of managers/management ?– Top management, middle management,

entry-level/first-level/supervisory

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MANAGEMENTWhat all managers do

1. Achieving Objectives/Goals2. Functions of Management3. Efficient Use of Resources

4

MANAGEMENT

Definition: Pg 8• Goal/objective directed• A process involving management functions• Resources: assembling and using• Setting:

–Organizational - functions, people, coordination–External environment

How good is our management ?

Effectiveness: Achieving objectives, goals Efficiency: Managing resources OUTPUT

INPUT

5

6

Efficiency

Team A Team B Target

TicketsSold

200 150 250

$ Spent 100 50

Efficiency 200/100 150/50

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Function of ManagementPg 25

PlanningOrganizing

Directing/ LeadingControl

Process of Management

8

Planning at Different Levels of Management

TOP

MIDDLE

FIRST

LEVEL

Planning

Horizon

Long

Medium

Short

Planning

Type

Strategic

Tactical

Operational

Skills (pg 32)

Conceptional

Human

Technical

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Trends in Management and OM

• Globalization • Growth of service sector• Emphasis on quality and productivity

– TQM and JIT philosophies• Social responsibility and ethics• Diversity issues• Emphasis on Technology, IT, logistics,

integration, coordination: SCM

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Social Responsibility and Ethics• Why relevant to business studies: Pg. 151• SR: obligation of an organization’s management

to make decisions and take actions that will enhance the welfare and interests of society as well as the organization

• Economic, legal, ethical and discretionary responsibilities

• What organizations can do: 164-– Leadership, code of ethics, compliance

committees/officers, policies (e.g. whistle-blowing), training

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ETHICS IN MANAGEMENT

• Ethics: The code of moral principles and values that govern the behavior of a person or group with respect to what is right or wrong.

• Values Statements• Code of ethics• New employee orientation, employee training• Leadership, corporate culture

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An Overview of Planning. Pg 270-

• Purpose– Direction, standards for measurement

• Types of plans– Strategic, Tactical and Operational– See chart on page 270

• Planning process– Pg 275

• Setting Objectives/Goals. 279-– Principles: Page 288-– Specific, Measurable, Realistic but challenging, Participation– MBO. 291

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Strategic Management. Chapter 6

• Objective: Competitive advantage• Characteristics of competitive advantage. 194-

– Superiority, inimitability, durability, non-substitutability, appropriate levels of profits/gains

• Strategic Management process 197– Strategic Intent/Vision/Mission– Environmental Analysis– Revised Vision/Mission and LT objectives 198-– Detailed situation analysis– Formulate strategies– Develop action for implementation: Programs, Policies, Budgets– Plan monitoring

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ENVIRONMENTAL SCANNING 204-: EXTERNAL ENVIRONMENT

• ECONOMY• POLITICAL-LEGAL• SOCIO-CULTURAL• TECHNOLOGY• GLOBAL/INTERNATIONAL• COMPETITION• CUSTOMERS• SUPPLIERS

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INTERNAL ENVIRONMENT

• FUNCTIONAL AREA RESOURCES– Finance, Marketing, Operations, HR, MIS, R&D

• ORGANIZATION STRUCTURE– Dividing work, Authority & Responsibility,

Information flow, decision making• CORPORATE CULTURE

– Social responsibility and ethics, integration and intensity of competitive priorities

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STRATEGIC MANAGEMENTFORMULATING STRATEGY

EXT. ENVT.

INT. ENVT.

MISSION

OBJECTIVESSITUATION

ANALYSIS

STRATEGY

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SITUATION ANALYSIS

1. SWOT ANALYSIS. 2142. PORTFOLIO ANALYSIS. 2113. PRODUCT LIFE CYCLE ANALYSIS

2094. INDUSTRY/ COMPETITION

ANALYSIS

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STRATEGY

CORPORATE LEVEL(GRAND)

GROWTH STABILITY RETIREMENT

BUSINESS LEVEL: Pg 200

COST LEADERSHIP DIFFERENTIATIONFOCUS

FUNCTIONAL LEVEL:

OPERATIONAL STRATEGY

“Competitive Priorities”: Cost/Price Quality Availability Dependability

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GROWTH STRATEGY

CONCENTRATION

DIVERSIFICATION

VERTICAL INTEGRATION

ACQUISITIONS & MERGERS

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Functional level strategyE.g. Operations Strategy

PRODUCTS/SERVICESPROCESSTECHNOLOGYQUALITYWORK FORCEFACILITIESSUPPLIERS/VERTICAL INTEGRATION

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STRATEGY IMPLEMENTATION

• Organizing and Directing view• Policies/procedures, Programs and Budgets

view• Seven S view . Pg 218• What are policies? Why important here?• Programs are MT and ST plans

– Elements

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MANAGEMENT CONTROLChapter 16

The systematic process through which managers regulate

organizational activities to make them consistent with expectations established in plans, targets, and

standards of performance.

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MANAGEMENT CONTROLSteps 570-

SETTING STANDARDS

MEASURING ACTUAL PERFORMANCE

COMPARISON ANALYSIS

CORRECTIVE ACTION/ NO ACTION

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Stages of Management Control589-

• Preliminary control• Concurrent control• Post/Feedback control

• Examples of control 577- : quality control, process control, employee evaluations, customer satisfaction surveys, supplier evaluations

25

Principles of Effective Control591 –

• Focus• Amount of• Quality of information• Flexibility