Chapters 7,8,9 Assesment Questions

Name: Steven P Sanderson II Date: 6/17/06 Class: Intro to Business Professor: McNamara Chapter 7 Questions on page 214 What are some of the new challenges facing managers today? Today the roles of managers are changing. By that we mean that the style of management most often used today is one of a progressive style meaning that managers today are not longer sort of dictators but guides and mentors that give out a specific job but do not any longer tell the employee a specific way to do it. Managers are now more or less guiding, training and motivating the employees to get them to do the task at hand. Also today managers are more personable with the employees; they treat them as partners then just workers. This needs to be done for one simple fact that today companies will not hesitate to lay off workers and managers of course would like to keep the best and brightest employees and that is a real effort today as employees will also leave at the drop of a hat for better opportunity. What’s the definition of management used in this chapter? The definition of management as defined by this chapter is the process used to accomplish organizational goals through planning, organizing, leading, and controlling people and other organization resources. What are the four functions of management? The four functions of management are planning, leading, organizing and controlling. Planning includes setting organization goals and developing strategies to reach those goals. Organizing includes allocating resources, assigning tasks and establishing procedures for accomplishing goals. Preparing a structure (organization chart) showing lines of authority and responsibility. Leading includes guiding and motivating employees to work effectively to accomplish organizational goals and objectives. Also giving assignments and explaining routines. Controlling involves measuring results against corporate objectives and monitoring performance relative to standards. Questions from page 219 What’s the difference between goals and objectives? Goals are defined as the broad, long-term accomplishments an organization wishes to attain. Goals need to be mutually agreed upon by workers and management. This makes goal setting a team process. Objectives are specific, short-term statements detailing how to achieve the organizations goals. What does a company analyze when it does a SWOT analysis? SWOT stands for Strength, Weakness, Opportunities and Threats. Strengths include core competencies in key areas, an acknowledged market leader and well-conceived

functional area strategies. Weaknesses include obsolete facilities, sub par profitability and a too narrow product line. Opportunities would be the ability to serve additional customer groups, expand product lines and the ability to transfer skills/technology to new products. Threats would be things like lower-cost foreign competitors, rising sales of substitute products and slower market growth. What’s the difference between strategic, tactical and operational planning? Strategic planning determines the major goals of the organization. It provides the foundation for the policies, procedures and strategies for obtaining and using resources to achieve those goals. Policies are broad guides to action and strategies determine the best way to use resources. At the strategic planning stage, the company decides which customers to serve, what products or services to sell and the geographic areas in which the firm will compete. Tactical planning is the process of developing detailed, short-term statements about what is to be done, who is to do it and how it is to be done. Tactical planning is normally done by managers or teams of managers at lower levels of the organization, whereas strategic planning is done by upper management such as the president of the firm. Operational planning is the process of setting work standards and schedules necessary to implement the company’s tactical objectives. Whereas strategic planning looks at the organization as a whole, operational planning focuses on specific supervisor, department manages and individual employees. What are the seven D’s in decision making? Define the situation, describe and collect needed information, develop alternatives, develop agreement among those involved. Decide which alternative is best, do what is indicated (begin implantation) and determine whether the decision was a good one and follow up. Questions from page 233 How does enabling help empowerment? When enabling an employee you are giving them a sense of pride, you are in effect helping them to make their own decisions. First of all empowerment is defined as the increasing of the political, social or economic strength of individuals. It often involves the empowered developing confidence in their capacities. This gives employees the right to use their own discretion when working in teams. It gives them a better sense of accomplishment and usually brings about a happier employee and workplace. Sometimes this will also raise functionality and productivity of workers do to the fact that they seem to have a sense of authority over their own direction at the workplace. Empowerment in the workplace is regarded by critics as more a pseudo-empowerment exercise, the idea of which is to change the attitudes of workers, so as to make them work harder rather than giving them any real power, and Wilkinson (1998) refers to this as "attitudinal shaping". This was taken form an excerpt on wikipedia.org which makes a reference to Empowerment: Theory and Practice by A. Wilkinson 1998. What are the five steps in the control process?

The five steps of the control process are Establish clear standards, monitor and record performance, compare results against standards, communicate results and if needed, take corrective action. What’s the difference between internal and external customers? An internal customer would be say a sales rep who is out in the field may need a report from the companies own marketing department. An external customer would be a dealership. You can find examples of this all around like car dealerships, they are external customers for car manufacturer like Ford and Toyota who have end user customers like you and me. What is the corporate scorecard? The corporate scorecard is a tool that is used today that has grown in popularity in the last few years. In addition to measuring customer satisfaction, the corporate scorecard measures financial progress as well as return on investment and anything else that needs to be measured. Chapter 8 Questions from page 244 What do the terms division of labor and specialization mean? Division of labor would be finding out what needs to be done and then spreading the tasks out to certain individuals. When jobs are given to specific people because they seem to have an aptitude for certain functions this is called specialization. When job specialization is done the tasks at hand usually get done faster and better then if the jobs were just divided amongst the workers. What are the principles of management outlined by Fayol? Fayol outlined management in the following manner. One principal is unity of command, which is where every worker is to report to a certain manager and only to that manager. The reason is obvious, what if the worker reported to two different managers and they both gave different tasks? Which is to be done first? Hierarchy of authority is also another principal offered by Fayol. This describes to whom all workers should report to. Division of labor, Fayol said that labor should be divided amongst workers by specialization. Subordination of individual interests is another aspect of management that Fayol expresses meaning that the interests of the teams must be placed before the individuals. Authority, managers should have the right to give orders and the power to enforce obedience. Now authority and responsibility are interrelated in that when a manager exercises authority he/she must take responsibility for the outcome. Centralization is also another key element described by Fayol. He believed that decisions should be made by top management, when his book came out this would have been true do to the fact that the workforce for the most part was uneducated. Clear communication is also needed so that workers can reach others in the firm quickly. What did Weber add to the principals of Fayol?

Weber not only reiterated the same points as Fayol but also emphasized Job descriptions, written rules, decision guidelines, and detailed records, consistent procedures, regulations and polices and staffing and promotion based upon qualification. Questions from page 249 Why are organizations becoming flatter? Organizations are becoming flatter do to the fact that with tall organizations like government it is hard to respond to what the people in this case customers and client’s needs and wants. In organizations that are flat there are few layers of management and a broad span of control such structures can be highly responsive to customer needs and wants because the authority and power to do most things customers wants lies with the lower level employee. What are some reasons for having a narrow span of control in an organization? In some organizations that have subordinates that need close supervision it would be good to have a narrow span of control also the more coordination needed the more narrow the span of control will have to be. When there are high planning demands and functional complexity there needs to be a narrow span of control to ensure things run smoothly. What are the advantages and disadvantages of departmentalization? Some advantages are that employees can develop skills in depth and can progress within a department as they master those skills. The company can achieve economies of scale in that it can centralize all the resources it needs and locate various experts in that area. There’s good coordination within the function, and top management can easily direct and control various departments’ activities. Some disadvantages to departmentalization would be that there could be a lack of communication among the different departments, for example production could be so isolated from marketing that people making the product do not get the proper feedback. Individual employees may begin to identify with their department and its goals rather than with the goals of the organization as a whole. For example the purchasing department may find a good value somewhere and buy a huge volume of goods that have to be stored at a high cost to the firm. Such a deal may make the purchasing department look good but be bad for the organization as a whole. The companies’ response to external demands may also be slow. What are the various ways a firm can departmentalize? Some ways an organization may departmentalize are as follows: By product, by function, by customer group, by geographic location and by process. Questions from page 255 What is the difference between line and staff personnel? Line personnel are part of a chain of command that is responsible for achieving organizational goals. Included are production staff, distribution and marketing staff. Staff personnel advise and assist line personnel in meeting their goals (e.g. marketing,

legal, accounting, IT and human resource). One important difference between line and staff personnel is authority. Staff personnel have the authority to advise the line personnel and make suggestions that might influence those decisions, but they can’t make policy changes themselves like the line personnel. What management principle does a matrix-style organization challenge? Matrix-style organizing challenges the management principals brought forth by Fayol who said that a worker should only report to one person. When a matrix-style organization is used may get confused on whose orders they should follow first. In a Matrix-style organization a project manager is given temporary authority over a particular set of employees which should eliminate the employee’s confusion over who they should listen to. What may hinder the development of cross-functional teams? To turn into a company that is employee driven or team driven the company must transform and allow those teams to work as self managed groups which some managers may find particularly difficult. Questions form page 261 What is an inverted organization? An inverted organization is one that has first line employees or the contact employees at the top and management at the bottom. There are few layers of management and the management’s job is to assist the frontline personnel. You can see this in many firms that their employees get paid on commission. The managers are there to help them make sales to keep the employees happy but also because a happy employee is a good employee is a productive employee. What is reengineering? Reengineering is the fundamental rethinking and radical redesign of organizational processes to achieve dramatic improvements in critical measures of performance. Note the words radical redesign and dramatic improvements. At IBM/s credit organization for example, the process for handling a customer’s request for credit once went through a five-step process that took an average of six days. By completely reengineering the customer-request process, IGM cut it credit request processing time form six days to four hours. In reengineering, narrow, task-oriented jobs become multidimensional. Employees who once did what they were told now made their own decisions. Why do organizations outsource functions? Organizations may outsource functions based on the fact say if they were a car manufacturer they may want to outsource the assembly and or manufacturing of the parts to low cost work places like China and India. Some companies may outsource so much that they are only left with basic functions that may connect with other firms when necessary; these companies are called virtual firms. What is organizational culture?

Organizational culture may be defined as widely shared values within an organization that provide unity and cooperation to achieve common goals. Usually the culture of an organization is reflected in stories, traditions and myths. For example Carley Fiorina has advertised the story about how Bill Hewlett and Dave Parkard started their business in a Palo Alto garage. She hopes to maintain the entrepreneurial spirit of HP as symbolized by the garage. Chapter 9 Questions from page 281 Can you name and define three functions that are common to operations management in both the service and manufacturing sectors? Three functions that are common in operations management to the service and manufacturing industries are Facility location which is the process of selecting a geographic location for a company’s operations. In keeping with the need to focus on customers, one strategy in facility location is to find a site that makes it easy for consumers to access the company’s service and to maintain a dialogue about their needs. Today you will see flower shops, banks and even McDonalds in supermarkets so that their services and products are more accessible to the public. A major issue of the recent past has been the shift of manufacturing organization from one city or state to another in unemployment in some geographic areas and lead to tremendous economic growth in others. One of the most common reasons for a business move is the availability of inexpensive labor to the right kind of skilled labor. Even though labor cost is becoming a smaller percentage of total cost in some highly automated industries, the low cost of labor remains a key reason many producers move their plants. Inexpensive resources are another major reason firms may relocate or choose a certain location for production. Facility layout is the next common function. Facility layout is the physical arrangement of resources (including people) in the production process. The idea is to have offices, machines, storage areas, and other items in the best possible position to enable workers to produce goods and provide services for customers. Facility layout depends greatly on the processes that are to be performed. For services, the layout is usually designed to help the consumer find and buy things. More and more, that means helping consumers find and buy things on the internet. For manufacturing plants, facilities layout has become critical because the possible cost savings are enormous. The Delphi Automotive Systems plant in Oak Creek, Wisconsin, is huge – a walk around the outside would be more than a mile. Delphi makes catalytic converters for 40 different automobile manufacturers. Product delivery once took 21 days, but with today’s more modern layout, delivery takes less than a week. The plant was redesigned to reduce cost, to increase productivity, to simplify the process, and to speed thins up. Compared to the old plant, the new plant uses only half of the space, 2 percent of its powered conveyor system and 230 fewer processes. Productivity increased by over 25 percent, and the plant is now more profitable. Quality control is the third common function. Quality is consistently producing what the customer wants while reducing errors before and after delivery to the customer. Earlier in the United Sates, quality control was often done by quality control departments at the end of the production line. Products were completed and then tested. This resulted in several problems: there was a need to inspect other people’s work; this

took extra people and resources. If an error was found, someone would have to correct the mistake or scrap the product. This of course was costly. IF the customer found the mistake, he or she might be dissatisfied and might even buy form someone else thereafter. Companies have turned to the use of modern quality control standards, such as six sigma. Six sigma qualities (just 3.4 defects per million opportunities) detect potential problems to prevent their occurrence. Statistical quality control (SQC) is the process some managers use to continually monitor all phases of the production process to assure that quality is being built into the product from the beginning. Statistical process control (SPC) is the process of taking statistical samples of product components at each stage of the production process and plotting those results on a graph. Holiday Inn authorized its hotel staff to do almost anything to satisfy an unhappy customer, from handing out gift certificates to eliminating charges for certain services. Empowerment gives managers and employees the authority to waive charges for the night’s stay if the customer is still unhappy. What are major criteria for facility location? Some major criteria for facility location would be levels of crime, quality of life for employees. One of the largest criteria for facility location would be cost of materials and labor. What is involved in the implementing each of the following: six sigma, SQC, SPC, QFD, ISO 9000 and ISO 14000? Six sigma involves a firm to have their quality at a level of just 3.4 defects per million opportunities this will help them to detect problems before they occur. SQC (Statistical Quality Control) is the process some managers use to continually monitor all phases of the production process to assure that quality is being built into the product from the beginning. SPC (Statistical Process Control) is the process of taking statistical samples of product components at each stage of the production process and plotting those results on a graph. Any variances from quality standards are recognized and can be corrected if beyond the set standards. Making sure product meet standards all along the production process eliminates or minimized the need for having a quality control inspection at the end. QFD (Quality function deployment) is a process of linking the needs of end users (customers) to design, develop, engineering, manufacturing, and service functions. The goal is to go beyond not making mistakes to maximizing customer satisfaction. One way to do that is to identify customer’s spoken and unspoken needs and to meet as many of those needs as possible by constantly improving. QFD came out of Japan but is now used in many leading companies. ISO 9000 is the common name give to quality management and assurance standards. The latest standards, called ISO 9001: 2002, were published in 2002. The new standards require that a company must determine what customer needs are, including regulatory and legal requirements. The company must also make communication arrangements to handle issues such as complaints. SIO 14000 is a collection of the best practices for managing an organization’s impact on t environment. It does not prescribe a performance level. ISO 14000 is an environmental management system (EMS). The requirements for certification include having an environmental policy, having specific improvement targets and maintaining top management review.

Questions from page 284 Can you explain the production process? The production process consists of taking the factors of production (land, labor, capital ect.) and using those inputs to produce goods, services and ideas. Planning, routing, scheduling and the other activities are the means to accomplish the objective. Can you define and differentiate the following: process manufacturing, assembly process, continuous process, and intermittent process? Process manufacturing physically or chemically changes materials. For example, boiling physically changes and egg (similarily, process manufacturing turns sand into glass or computer chips.) The assembly process puts together components (eggs, toast, and coffee) to make a product (breakfast) cars are made through an assembly process. A continuous process is one in which long production runs turn out finished goods over time. As the chef in our diner, you could have a conveyor belt that lowers eggs into boiling water for three minutes and then lifts them out on a continuous basis. A three— minute egg would be available whenever you wanted one. (A chemical plant for example runs a continuous basis) it usually makes more sense when responding to specific customer orders to use intermittent process This is an operation where the production run is short (one or two eggs) and the machines are changed frequently to make different products. What is the difference between ERP and MRP? MRP is a computer-based operations management system that uses sales forecasts to make sure that needed parts and materials are available at the right time and place. In our diner, for example we could feed the sales forecast into the computer which would specify how many eggs and how much coffee to order and then print out the proper scheduling and routing sequence. The same can be done with the seats and other parts of an automobile. The newest version of MRP is ERP or enterprise resource planning. ERP is a computer application that enables multiple firms to manage al of their operations (finance, requirements planning, human resources, and other fulfillments) on the basis of a single, integrated set of corporate data. The result is shorter time between orders and payment, less staff to do ordering and order processing, reduced inventories and better customer service for all the firms involved. Questions from page 290 What is just-in-time inventory control? Just in time inventory is where a firm will keep the minimum amount of inventory possible to keep it running this requires that the suppliers and shippers be extremely reliable. If there is the slightest glitch at the supplier end it could shut down the manufacturer. I have seen it happen at my old job I worked for a shipping company that was subcontracted to load finished automobiles onto trains for furtherance to their respective locations and when a supplier shut down for any reason the plant would usually shut down by the end of the shift.

How does flexible manufacturing differ from lean manufacturing? Flexible manufacturing is when machines are designed to do many different tasks so that they can produce a variety of products thus eliminating the need to hire more workers build more plants and so on. Lean manufacturing is the production of goods using less of everything compared to mass production: less human effort, less manufacturing space, less investment in tools, and less engineering time to develop a new product. What are CAD, CAM and CIM? CAD is computer aided design. The latest cad systems allow designers to work in three dimensions, the next step was to involve computers directly in the production process; this is called CAM or Computer aided manufacturing. CAD and CAM are even invading the clothing industry a computer program establishes a pattern and cuts the cloth automatically. CIM is computer integrated manufacturing. The new software is expensive, but it cuts as much as 80 percent of the time needed to program machines to make parts. The printing company JohnsBryne uses CIM in its Niles, Illinois, plant. It noticed a decrease in overhead, reduced outlay of resources, and fewer errors. Draw a PERT chart for making a breakfast of three-minute eggs, buttered toast and coffee. Define the critical path. How could you use a Gantt chart to keep track of production?