041_MANAJEMEN_Meija_495

Informal Communication

Also called the grapevine – informal communication
that takes place at the workplace.

 can be about promotions and other personnel decisions

 can be about company events (new products, downsizing)

 must be managed so that negative rumors do not hurt
morale

Management by Wandering Around (MBWA) –
dropping in unannounced for spontaneous
conversations

 builds levels of trust

 stops harmful rumors

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Assertive Communication Skills

 Assertive communication skills—communicate in ways

that meet one’s own needs while at the same time respecting the

needs and rights of others

Several less effective styles people tend to use
because they are indirect or not mindful of needs:

 Passive communication – an individual does not let others know

directly what he or she wants or needs.

 Aggressive communication – a forceful approach that expresses

dominance or anger.

 Passive-aggressive communication – avoids giving direct

responses but rather tries to “get even” with others.

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Presentation Skills

Basic guidelines
 Prepare objectives
 Organize the presentation
 Structure the presentation
 Tailor the presentation
 Establish credibility
 Speak in a responsive and conversational style
 Use visual aids
 Practice presentation skills
 Restate key ideas

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Nonverbal Communication Skills

Nonverbal communication is sending and decoding
messages with emotional content.

Dimensions of nonverbal communication:

 Body movements and gestures
 Eye contact
 Touch
 Facial expressions
 Physical distance
 Tone of voice

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Listening Skills

Help create understanding between both parties
Are an active rather than passive activity
Use of nonverbal indicators, like eye contact, tone

of voice, or touch
Are an invaluable skill for managers

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Guidelines for Active Listening

 Do create a supportive  Don’t try to change the other’s
atmosphere. views.

 Do listen for feelings as well as  Don’t solve the problem for the
words. speaker.

 Do note cues.  Don’t give advice.
 Don’t pass judgment.
 Do occasionally test for  Don’t explain or interpret others’
understanding.
behavior.
 Do demonstrate acceptance and  Don’t give false reassurances.
understanding.  Don’t attack if the speaker is

 Do ask exploratory, open-ended hostile.
questions.  Don’t ask “why” the feelings.

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Applications of Management
Perspectives—For the Manager

Use your listening skills when dealing with an
employee who has an issue that is emotional in
nature.

Try to understand the issue from the employee’s
perspective.

If it is necessary to give negative feedback, make
sure that the behavior being criticized is one the
employee is able to control.

McGraw-Hill © 2004 The McGraw-Hill Companies, Inc. All rights reserved.

Applications of Management
Perspectives—For Managing Teams

If you are part of a virtual team it is important to
schedule periodic face-to-face meetings in order to
build team spirit and trust.

Without trust, there can be misunderstandings and
teams are likely to be short-lived.

Make sure individual team members and the team
as a whole receive performance feedback.

Give team members customer feedback.

McGraw-Hill © 2004 The McGraw-Hill Companies, Inc. All rights reserved.

Applications of Management
Perspectives—For Individuals

Look for ways to practice presentation skills by
speaking to different audiences.

Find ways to enhance your credibility so that
people want to listen to what you have to say.

Act with integrity around other employees.

Make sure your actions are consistent with your
verbal messages.

McGraw-Hill © 2004 The McGraw-Hill Companies, Inc. All rights reserved.

McGraw-Hill © 2004 The McGraw-Hill Companies, Inc. All rights reserved.

Chapter

16

Management Control

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Learning Objectives

After reading this chapter, you should be able to:

Understand the importance of control systems.

Distinguish between system- and person-based
control systems.

Distinguish between process- and outcome-based
control systems.

Evaluate various control approaches.

Understand why measurement is necessary for
control.

Develop measures that support effective control
systems.

Develop and implement a balanced scorecard.

McGraw-Hill © 2004 The McGraw-Hill Companies, Inc. All rights reserved.

The Importance of Control

Control is the process of comparing performance to
standards and taking corrective action.

 It ensures that:

 standards are met
 errors are limited
 quality is acceptable
 products are safe
 the company is performing at the highest possible level

Control is closely associated with planning.

McGraw-Hill © 2004 The McGraw-Hill Companies, Inc. All rights reserved.

Categorization of
Control Approaches

Control approaches can be categorized
according to two factors - type and focus:

Type - divided into formal and informal approaches

 Formal control systems consist of written rules
 Informal control systems rely on unwritten expectations

Focus – directed at the outcome or the process

 Outcome approach focuses on the results of a business process
 Process approach focuses on how the work is performed

McGraw-Hill © 2004 The McGraw-Hill Companies, Inc. All rights reserved.

Control Approaches Model

Outcomes Subjective Control Marketing Control
Financial Controls

Focus Operations Management
Bureaucratic Control
Process Clan Control Balanced Scorecard

Informal Formal

Type

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Informal and Outcome-Focused Control

Characterized by subjective control - an informal
approach based on global assessment of outcomes

Subjective control:

 does not typically utilize explicit standards
 does not specify how deviations from an acceptable level

should be handled
 is common in smaller businesses and service settings
 is the “no news is good news” approach

McGraw-Hill © 2004 The McGraw-Hill Companies, Inc. All rights reserved.

Formal and Process-Focused Control:
Bureaucratic Control

Bureaucratic control is a formal control approach
that operates in a cycle and is characterized by
written guidelines and controls.

 Involves:

 the application of standards to assess performance
 the application of corrective actions to regulate performance

and bring it back to the level of the standards.

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The Bureaucratic Control Process

1. Establishing 2. Performance
Standards Measurement

3. Identifying 4. Corrective
Gaps Action

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The Bureaucratic Control Process

(continued)

Establishing Standards

 Standards should be participative rather than simply
implemented from the top down so that employees
understand and are committed to them.

 Standards come from:

 goals
 statistical analysis
 benchmarking

Performance Measurement

 Use of objective data, which is free from error or bias
 Use of subjective data, which involves human judgement

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The Bureaucratic Control Process

(continued)

Identifying Gaps

 Compare standards with performance measures
 Upper and lower control limits establish:

 acceptable variations
 normal variations
 unacceptable variations

Corrective Action

 What should management do?

 Nothing
 Take action
 Change standards

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Types of Bureaucratic Control

McGraw-Hill Feedforward Control
Concurrent Control
Feedback Control

© 2004 The McGraw-Hill Companies, Inc. All rights reserved.

Types of Bureaucratic Control (cont.)

Feedforward control

Designed to prevent problems before they occur

Concurrent control

Takes place as the work process is being carried out

Feedback control

Occurs after a process has been completed

McGraw-Hill © 2004 The McGraw-Hill Companies, Inc. All rights reserved.

The Balanced Scorecard

A balanced scorecard is a technique designed to
control and improve:

 customer service
 learning and growth
 finance
 internal business processes

Links strategy to action

Is more broad than bureaucratic control

 Focus on:

 priorities
 the work process
 how things are done

McGraw-Hill © 2004 The McGraw-Hill Companies, Inc. All rights reserved.

A General Balance Scorecard Format

Objectives Measures Targets Initiatives

Financial -
what we need to
do to succeed
financially

Customer -
what we need to
do to excel at
customer service

Internal Business © 2004 The McGraw-Hill Companies, Inc. All rights reserved.
Processes - what
we need to do to
have world class
processes

Learning and
Growth - how to
change and increase
our potential and
effectiveness

McGraw-Hill

Formal and Outcome-Focused
Control

The regulation of performance by applying the
standards or guidelines to the outcomes of a
process through:

 Market control - the use of indicators of market values as
standards for regulating performance

 Financial controls - the use of various monetary measures to
regulate performance

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Types of Financial Controls

Budgetary Control Financial Statements

Financial Ratios Activity-Based
Costing
McGraw-Hill
© 2004 The McGraw-Hill Companies, Inc. All rights reserved.

Types of Financial Controls (cont.)

Budgetary control - used to specify amounts
to be expended for various activities or
events

Can help managers control and predict costs

Financial Statements - tools that are used to
assess and control the financial health of an
organization

Balance sheets

Profit and loss (income) statements

McGraw-Hill © 2004 The McGraw-Hill Companies, Inc. All rights reserved.

Types of Financial Controls (cont.)

Financial Ratios - provide an overall check of
performance

 Liquidity ratios - an organization’s ability to pay short-term debt

 Leverage ratios - the amount of funds available in an organization
from shareholders and creditors

 Profitability ratios - indicate the amount of financial return from an
investment

Activity-Based Costing - associates costs with tasks

 calculated for:
 receiving and processing sales orders
 expediting supplies and production
 distribution
 resolving errors and problems

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Informal and Process-Focused
Control

Emphasizes an implicit sense and common
understanding of how things should be done

Does not rely on explicit guidelines and
standards

Assumes that people have an internal set of
standards that will guide how they perform

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Clan Control

Clan control is a reliance on corporate culture and
the norms it develops as an informal means for
regulating the work process

Employees control themselves

Clan control works best if:

 the organization is constantly changing
 the organization has a strong culture

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Management Control Revisited

Should control be directed at people, systems, or
some other aspect of the company?

 Emphasis should be on systems and performance rather than
people.

 Focusing on people can result in resistance and negative
reactions

McGraw-Hill © 2004 The McGraw-Hill Companies, Inc. All rights reserved.

Applications: Management is Everyone’s
Business—For the Manager

Control over the actions and outcomes in the
workplace is a central management responsibility.

Measurement is a key component of effective
control.

Managers go beyond measurement to take
corrective action, which is part and parcel of an
effective control system.

As a manager, it is important to understand the
control systems used in an organization as well as
whether your own philosophy regarding control fits
with the organization’s approach.

McGraw-Hill © 2004 The McGraw-Hill Companies, Inc. All rights reserved.

Applications: Management is Everyone’s
Business—For Managing Teams

Teams of workers often employ formal and
process-focused control.

Team roles and contributions to team efforts are
often controlled with the culture and norms.

Understanding how control mechanisms work is to
the benefit of all of the team members.

McGraw-Hill © 2004 The McGraw-Hill Companies, Inc. All rights reserved.

Applications: Management is Everyone’s
Business—For Individuals

Understanding control mechanisms can clarify why
they are needed and how they contribute to the
effectiveness of the organization.

Many control techniques discussed in this chapter
can be applied to one’s own work.

McGraw-Hill © 2004 The McGraw-Hill Companies, Inc. All rights reserved.

McGraw-Hill © 2004 The McGraw-Hill Companies, Inc. All rights reserved.

Chapter

17

Operations Management

McGraw-Hill © 2004 The McGraw-Hill Companies, Inc. All rights reserved.

Learning Objectives

After reading this chapter, you should be able to:

 Define operations management and its three stages:
inputs, transformation and disposition.

 Describe how operations management ensures supplies
of inputs and an efficient production system.

 Use tools of operations management, including Gantt
charts, PERT networks, and statistical process tools.

 Explain the role of quality management in the
operations management process.

 Understand and apply the principles of quality
management, kaizen, just-in-time manufacturing, and
kanban to the production process.

McGraw-Hill © 2004 The McGraw-Hill Companies, Inc. All rights reserved.

What is Operations Management?

Operations management is the process an
organization uses to:

 Obtain the materials or ideas for the product it provides.
 Transform the materials or ideas into the product.
 Provide the final product to a user.

Operations management is closely linked to:

 Strategic Management (Chapter 7)
 Planning (Chapter 5)
 Information Systems Management (Chapter 18)

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Skills for Operations Management

Organization Skills

Analytical Problem Communication Skills
Solving Skills

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The Operations Management
Process

Inputs Conversion Outputs

Raw materials Facility Goods
Labor Capacity Services
Energy Process Information
Knowledge Control

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Planning in Operations
Management

Planning is the foundation of operations
management.

Planning – the management function that assesses
the management environment to set future
objectives and map out activities necessary to
achieve those objectives.

McGraw-Hill © 2004 The McGraw-Hill Companies, Inc. All rights reserved.

Strategic Planning

Strategic management decisions involved in
operations management:

Make-buy analysis: whether to produce an item or
to purchase it.

Capacity: firm’s ability to produce the product
during a given period.

Facilities: design and location of an operations
facility.

Process: how a product or a service will be
produced.

Facilities layout design: physical arrangement that
allows for efficient production.

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Acquiring Inputs

Inputs are the supplies needed to create a product.
Materials requirements planning: analyzing a design to

determine the materials and parts required in the
production process.
Inventory: the stock of raw materials, inputs, and
component parts that the firm keeps on hand.

 Reordering systems: the process used to help keep inventory
levels more or less consistent.

 Fixed point reordering system
 Fixed interval reordering system

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The Conversion Process

Conversion process: the stage in which the
product’s inputs are converted to the final product.

An effective conversion process:

 Works to lower the cost of creating the product; or to
 Create a better product for the same cost.

Key decision areas:

 Designing the process
 Monitoring the process

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Designing the Process

Process design begins with analyzing the general
operation and identifying:

 Every major step that needs to be done.
 The order that the steps must take.
 The flow of the steps from start to finish (including their

relationship to each other).
 The amount of time each individual step requires.

McGraw-Hill © 2004 The McGraw-Hill Companies, Inc. All rights reserved.

Example of Process Analysis Information

Step Order Relation to Other Steps Time
A. Get permit 1 None 4 weeks
1 week
B. Order equipment 1 None 2 weeks
1 week
C. Paint interior 2 None 1 week
1 week
D. Install electrical fixtures 3 Following C 1 week

E. Install floors 4 Following C

F. Install equipment 5 Following B, E

G. Test equipment 6 Following F

McGraw-Hill © 2004 The McGraw-Hill Companies, Inc. All rights reserved.

Process Design Tools

Gantt Charts: provide a visual sequence of
the process steps.

Load Charts: type of Gantt chart based on
departments or specific resources that are
used in the process.

Program Evaluation and Review Technique
(PERT) Network: tool for analyzing the
conversion process.

McGraw-Hill © 2004 The McGraw-Hill Companies, Inc. All rights reserved.

Example of a Gantt Chart

Get permit WEEKS
Order baking equipment
Paint interior Start 1 2 3 4 5
Install electrical fixtures
Install floors ----------------------------------------------------
Install baking equipment -------------------
Test equipment -----------------------------

------------
------------

-----------
-----------

McGraw-Hill © 2004 The McGraw-Hill Companies, Inc. All rights reserved.

Example of a Load Chart

Office Staff WEEKS
Order department
Painter Start 1 2 3 4 5
Electrician
Carpenter -------------------
-------------------
-----------------------------

----------------------------------
------------

McGraw-Hill © 2004 The McGraw-Hill Companies, Inc. All rights reserved.

Example of a PERT Network

Get permit 1

4

Start 1 Order baking equipment 1 1 Test equipment

Install baking equipment

1 1
11
Paint interior
Install electrical fixtures Install floors

McGraw-Hill © 2004 The McGraw-Hill Companies, Inc. All rights reserved.