1

MANAGEMENT 339: PRINCIPLES OF MANAGEMENT AND OPERATIONS

• What are the levels of the organization ?– Corporate; Business; Functional. Page 130; Pg 151

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

entry-level/first-level/supervisory Page 20

• 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 managers

2

MANAGEMENTWhat all managers do

Page 12

1. Achieving Objectives/Goals

2. Functions/Process of Management

3. Efficient Use of Resources

4. Managing organizational change

3

MANAGEMENT

Definition: Pg 5• 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

4

5

Efficiency

Team A Team B Target

Tickets

Sold

200 150 250

$ Spent 100 50

Efficiency 200/100 150/50

6

Function of ManagementPg 12 -

Planning

Organizing

Directing

Control

Process of Management

7

Planning at Different Levels of Management

TOP

MIDDLE

FIRST

LEVEL

Planning

Horizon

Long

Medium

Short

Planning

Type

Strategic

Tactical

Operational

Skills (pg 20)

Conceptual

Human

Technical

WHAT IS OPERATIONS MANAGEMENT ? OM Chapter 1

• 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

8

KEY CONCEPTS IN OMOM Chapter 1

• Process view OM chapter 1; pg. 5

• Supply chain view. Pg 7

• Operations Strategy: Areas for making long term plans in operations

PRODUCTS/SERVICES

PROCESS

TECHNOLOGY

QUALITY

WORK FORCE

FACILITIES

SUPPLIERS/VERTICAL INTEGRATION

• Productivity Pg 19

9

10

Contemporary Challenges in Management and OM Pg 6-

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

– TQM and JIT philosophies• Social responsibility and ethics• Emphasis on integration, coordination using IT:

SCM

11

Social Responsibility and Ethics

• Why relevant to business studies• 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

• 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.

• Economic, legal, ethical and discretionary responsibilities• What organizations can do: • Leadership, code of ethics, Values statements, compliance

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

12

An Overview of Planning Chapter 6

• Purpose– Direction, standards for measurement

• Types of plansStrategic, Tactical and Operational 146

• Planning process Pg 151

• Setting Objectives/Goals. 161– Principles: 161-– Specific, Measurable, Realistic but challenging, Participation,

Timely– Tools: Budgets

13

Strategic Management. Chapter 5

• Objective: Competitive advantage

• Characteristics of competitive advantage. 116-– Superiority, inimitability, rarity, durability, non-substitutability,

appropriate levels of profits/gains

• Strategic Management process 118-– Strategic Intent/Vision/Mission

– Environmental Analysis

– Revised Vision/Mission and LT objectives

– Detailed situation analysis

– Formulate strategies

– Develop action for implementation: Programs, Policies, Budgets

– Plan monitoring

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ENVIRONMENTAL SCANNING 119-: EXTERNAL ENVIRONMENT

• ECONOMY

• POLITICAL-LEGAL

• SOCIO-CULTURAL

• TECHNOLOGY

• GLOBAL/INTERNATIONAL

• COMPETITION – Porter’s industry competition analysis 123- ; 126

• 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

16

STRATEGIC MANAGEMENTFORMULATING STRATEGY

EXT. ENVT.

INT. ENVT.

MISSION

OBJECTIVES

SITUATION

ANALYSIS

STRATEGY

17

SITUATION ANALYSIS

1. SWOT ANALYSIS. 129

2. PORTFOLIO ANALYSIS.

3. PRODUCT LIFE CYCLE ANALYSIS

4. INDUSTRY/ COMPETITION ANALYSIS – See previous discussion

18

STRATEGY

CORPORATE LEVEL(GRAND)

GROWTH STABILITY RETIREMENT

BUSINESS LEVEL: 131

COST LEADERSHIP DIFFERENTIATION

FOCUS

FUNCTIONAL LEVEL:

OPERATIONS STRATEGY

“Competitive Priorities”: Cost/Price Quality Availability Dependability OM Chap 1 Pg 14

19

GROWTH STRATEGIES

CONCENTRATION

DIVERSIFICATION

VERTICAL INTEGRATION

ACQUISITIONS & MERGERS

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STRATEGY IMPLEMENTATIONPg 136-

• Organizing and Directing view

• Policies/procedures, Programs and Budgets view

• What are policies? Why important here?

• Programs are MT and ST plans

– Elements

21

MANAGEMENT CONTROLChapter 14

The systematic process through which managers regulate

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

standards of performance.

22

MANAGEMENT CONTROLSteps 402-

SETTING STANDARDS

MEASURING ACTUAL PERFORMANCE

COMPARISON ANALYSIS

CORRECTIVE ACTION/ NO ACTION

23

Scope and Stages of Management Control 407-

• Control at all levels: strategic, tactical and operational

• Preliminary control• Concurrent control• Post/Feedback control• Examples of control: quality control, process

control, employee evaluations, customer satisfaction surveys, supplier evaluations

24

Principles of Effective Control419-

• Focus

• Amount of

• Quality of information

• Flexibility

• Timeliness