Strategic Cost

1. Name the only cost driver in Traditional Costing Volume

Activity-based cost (ABC) drivers are developed at a detailed level of operations using activity analysis–a cost driver is determined for each activity

Pennsylvania Blue Shield

2. Name Structural Cost Drivers Scale, scope, experience, technology, Complexity How much should be invested? Experience How much prior experience does the firm have in its current and planned products and services? Technology What process technologies are used in manufacturing, and in distributing the product or service? Complexity What is the firm’s level of complexity?

3. Name Executional Cost Drivers Work force Involvement, Total quality management, Capacity Utilization, Plant layout efficiency, Product configuration, exploiting linkages with suppliers & or customer's. EXECUTIONAL COST DRIVERS • • • • • •

Commitment of work force to continuous improvement Attitudes & capabilities regarding quality Cycle time in getting new products to market Utilization of existing capacity Whether internal business processes are efficiently designed & executed How efficiently firm works with suppliers and/or customers to reduce costs

4. Expand UCL & LCL Upper Control Limit and Lower Control Limit 5. Explain DFMA Design For Manufacturing and Assembly (DFMA) A methodology and tool set used to determine how to simpilify a current or future product design and/or manufacturing process to achieve cost savings. DFMA allows for improved supply chain cost management, product quality and manufacturing, and communication between Design, Manufacturing, Purchasing and Management.

6. Explain DMAIC DMAIC Define, Measure, Analyze, Improve, Control. Incremental process improvement using Six Sigma methodology. DMAIC refers to a data-driven quality strategy for improving processes, and is

an integral part of the company's Six Sigma Quality Initiative. DMAIC is an acronym for five interconnected phases: Define, Measure, Analyze, Improve, and Control. Each step in the cyclical DMAIC Process is required to ensure the best possible results. The process steps: Define the Customer, their Critical to Quality (CTQ) issues, and the Core Business Process involved.  Define who customers are, what their requirements are for products and services, and what their expectations are  Define project boundaries the stop and start of the process  Define the process to be improved by mapping the process flow Measure the performance of the Core Business Process involved.  Develop a data collection plan for the process  Collect data from many sources to determine types of defects and metrics  Compare to customer survey results to determine shortfall Analyze the data collected and process map to determine root causes of defects and opportunities for improvement.  Identify gaps between current performance and goal performance  Prioritize opportunities to improve  Identify sources of variation Improve the target process by designing creative solutions to fix and prevent problems.  Create innovate solutions using technology and discipline  Develop and deploy implementation plan Control the improvements to keep the process on the new course.  Prevent reverting back to the "old way"  Require the development, documentation and implementation of an ongoing monitoring plan  Institutionalize the improvements through the modification of systems and structures (staffing, training, incentives)

7. What is the Japanese concept of mistake proofing Poka Yoke Mistake Proofing It was a Japanese manufacturing engineer named Shigeo Shingo who developed the concept that revolutionized the quality profession in Japan. Originally called "fool proofing" and later changed to "mistake proofing" and "fail safing" so employees weren't offended, poka yoke (pronounced "poh-kah yohkay") translates into English as to avoid (yokeru) inadvertent errors (poka). The result is a business that wastes less energy, time and resources doing things wrong in the future. What Is Poka Yoke? Poka yoke is one of the main components of Shingo's Zero Quality Control (ZQC) system -- the idea being to produce zero defective products. One way this was achieved is through the use of poka yoke; a

bunch of small devices that are used to either detect or prevent defects from occurring in the first place. These poka yoke methods are simple ways to help achieve zero defects. Who Develops Poka Yokes? Here's the beauty of the methods...anyone, from manager to line supervisor to line employee can develop a poka yoke. (Alright for you transaction people out there...anyone, from regional sales manager to sales associate to document specialist). All it takes is the empowerment of employees, as well as a little instruction around what makes a good poka yoke. What Does A Poka Yoke Look Like? Poka Yoke looks different in each situation. I'll try to present a few different scenarios for poka yoke use. Let's take a transactional situation and analyze a few parts of it. Say, for instance, we're at the signing of a bank loan by a lucky couple closing the mortgage on their first home. Example 1: The lucky couple picks up the pen to sign, but when they depress the top of the pen to extend the writing part it malfunctions because the spring is missing. A poka yoke could have prevented this situation. If all pieces of the pen were presented to the assembler in a dish, a simple poka yoke would be for the assembler to visually inspect the dish for any remaining parts once the pen was assembled. (Ok, I lied about this being only a transactional process!) Example 2: The lucky couple bypasses the signature part of the process because their bank is really high-technology focused. In fact, they signed a writing pad and their signature was recorded electronically. The bank also needed to collect 4 additional pieces of information before the entire package of information is sent to the processing department. A simple poka yoke to add to this process is to require all fields to be filled in (including the loanee signature) before allowing the form to be sent to processing. This prevents the processing department from reviewing an incomplete document, sending back to the loan department, delaying the processing of paperwork...you get the idea. Example 3: Once the complete paperwork is submitted to the processing department and it is printed, it then needs to be filed with the city and state. In order for this to occur, papers need to be filled out (the city and state are not high-technology enabled) and attached to the form. A poka yoke used by the city is a simple checksheet at the top of the form. This allows the person submitting the form to ensure that all additional information and payments are attached. As in example 2 above, this prevents the city/state from reviewing an incomplete document, sending back the document to the sender, delaying the processing of paperwork...again, you get the idea.

8. Explain Taguchi. Taguchi methods are statistical methods developed by Genichi Taguchi to improve the quality of manufactured goods, and more recently also applied to, engineering, biotechnology, marketing and advertising. Professional statisticians have welcomed the goals and improvements brought about by Taguchi methods, particularly by Taguchi's development of designs for studying variation, but have criticized the inefficiency of some of Taguchi's proposals. Taguchi's work includes three principal contributions to statistics: 1. Taguchi loss function;

2. The philosophy of off-line quality control; and 3. Innovations in the design of experiments. 4. 8. Explain Taguchi.

9. State four types of activities under activity based management •

There are four types of cost drivers: – Activity-based – Volume-based – Structural – Executional

10. State four types of cost under cost of quality Understanding Quality Cost

Quality cost is the sum of all costs a company invests into the release of a quality product. When developing a software product, there are four types of quality costs: prevention costs, appraisal costs, internal failure costs, and external failure costs.

1.

Prevention costs represent everything a company spends to prevent software errors, documentation errors, and other product-related errors. These include requirements and usability analysis, for example. Dollars spent on prevention costs are the most effective quality dollars, because preventing errors from getting into the product is much cheaper than fixing errors later. If there is an error in a requirement or the intended usability, and money is spent on developing the software to the erroneous requirement, the costs of identifying the error, determining how to fix it, and then developing new code to correct it will arise later.

2.

Appraisal costs include the money spent on the actual testing activity. Any and all activities associated with searching for errors in the software and associated product materials falls into this category. This includes all testing: by the developers themselves, by an internal test team, and by an outsourced software test organization. This also includes all associated hardware, software, labor, and other costs. Once a product is in the coding phases, the goal is to do the most effective appraisal job, so that internal failure work is streamlined and well-managed and prevents skyrocketing external failure costs.

3.

Internal failure costs are the costs of coping with errors discovered during development and testing. These are bugs found before the product is released. As we mentioned previously, the further in the development process the errors are discovered, the more costly they are to fix. So the later the errors are discovered, the higher their associated internal failure costs will be.

4.

External failure costs are the costs of coping with errors discovered after the product is released. These are typically errors found by your customers. These costs can be much higher than internal failure costs, because the stakes are much higher. These costs include post-release customer and technical support. Errors at this stage can also be costly in terms of your company's reputation and may lead to lost customers.

The following table in shows examples of costs that fall into each of the four categories of quality costs. Prevention Staff training Requirements analysis

Appraisal Design reviews Code inspection

Early prototyping Fault tolerant design Defensive programming Usability analysis Clear specification Accurate internal documentation Pre-purchase evaluation of the reliability of development tools

Glass box testing Black box testing Beta testing Test automation Usability testing Pre-release out-of-box testing by customer service staff

Internal Failure Bug fixes Regression testing Wasted in-house user time Wasted tester time Wasted writer time Wasted marketer time Wasted advertisements Direct cost of late shipment Opportunity cost of late shipment

External Failure Technical support calls Answer books (for support) Investigating complaints Refunds and recalls Interim bug fix releases Shipping product updates Warranty, liability costs PR to soften bad reviews Lost sales Lost customer goodwill Supporting multiple versions in the field Reseller discounts to keep them selling the product

The Four Categories of Quality Costs All the costs mentioned above can be effectively reduced through smarter test efforts that include a high degree of test automation. [1] Test automation when done right leads to greater test coverage, resulting in higher-quality products. Higher-quality products require less technical support, fewer patches, and lead to greater customer satisfaction. Smarter automated testing also speeds up the release process and incrementally reduces the manual test costs. But most of all, more test coverage gives you and your customers more confidence in your product. You will feel more comfortable knowing that there are not bugs lurking in your software that have not been exposed yet because of insufficient test coverage. You will also not have to scramble at the last minute (typically on the first day of that much-needed vacation), to deal with a problem and fix it to your customer's satisfaction in a rush. The solution to quality cost problems is to get a better understanding of your investment in product quality and manage your costs better. The first place most organizations look for a better understanding is in the highest cost area: the software test effort or lack thereof. For example, if you do not test at all, your testing or appraisal cost is low. You will ship on time but your external failure costs will skyrocket. Your prevention and appraisal costs will result in finding errors that can be corrected while they are still internal failures, where they are cheaper to deal with than when they are external failures. The goal of understanding quality costs is to analyze where you spend your time and money to get the most bang for the buck. It is well known that it is faster and cheaper to find and fix a bug during unit testing done by developers early in the development cycle. Should we then spend most of our time/budget on unit testing? No. There are many limitations to unit testing. Unit testing is not capable of finding many varieties of bugs, including graphical user interface (GUI) bugs, usability problems, end-to-end bugs, and configuration bugs. For most organizations, getting a better unit test effort will help you release a better product sooner. It is not a replacement for the test effort done by skilled software testers, but it may reduce the time that test effort takes. Understanding quality costs will hopefully help you shift some of your test effort to the most cost-effective places. In the following, the total quality cost is shown in the upper bathtub-shaped curve. On the bottom axis is the quality of performance, ranging from totally defective to zero defects. On the left axis is the cost per good unit of product. You can see that with highly defective software, your prevention and appraisal costs are very low, but your failure costs are very high, yielding a high total quality cost. With zero defect

software, likewise, your failure costs are very low, but your prevention and appraisal costs are very high. To optimize your total quality costs, you want to be between these extremes, at the bottom of the bathtub curve.

Theoretical Model of Optimum Quality Cost This offers two challenges: First, a sufficiently sophisticated accounting system allowing a typical mid-sized company to track the total cost of quality has yet to be developed. To optimize total quality cost, you need to have the appropriate categories in your accounting system and keep track of the related costs. Second, you need to be able to track your external quality costs. You may not even have enough information from customers on why the software is not working for them. How are you going to know what to book into your accounting system for external failure costs? The point here is that while capturing this data is difficult and expensive, you know that the benefit is reducing your overall cost of quality. You need to determine if the benefits of tracking your total quality cost will give you enough of a return on investment to make setting up the appropriate accounting system and paying for the implementation of the program worthwhile. Conclusion Taking the time to better understand you quality costs will help you to much more cost effectively deliver a quality software product. You will be able to optimize the various costs to achieve the best quality achievable at a more reasonable price.

11. Explain what is mean by Keiretsu and Zaibatsu A keiretsu (系列?, lit. system, series, grouping of enterprises, order of succession) is a set of companies with interlocking business relationships and shareholdings. It is a type of business group. Three types of keiretsu: (1) Kigyō shūdan (企業集団): � horizontally diversified business groups (2) Seisan keiretsu (生産系列): � vertical manufacturing networks (3) Ryūtsū keiretsu (流通系列): � vertical distribution networks

Keiretsu in Japan

The prototypical keiretsu are those which appeared in Japan during the "economic miracle" following World War II. Before Japan's surrender, Japanese industry was controlled by large family-controlled vertical monopolies called zaibatsu. During the occupation of Japan, under the Supreme Commander of the Allied Powers, General Douglas MacArthur, a partially successful attempt was made to dissolve the zaibatsu in the late 1940s. Sixteen zaibatsu were targeted for complete dissolution, and twenty six more for reorganization after dissolution. However, the companies formed from the dismantling of the zaibatsu were later reintegrated. The dispersed corporations were re-interlinked through share purchases to form horizontally-integrated alliances across many industries. Where possible, keiretsu companies would also supply one another, making the alliances vertically integrated as well. In this period, official government policy promoted the creation of robust trade corporations which could withstand heavy pressures from intensified world trade competition.[1] The major keiretsu were each centered around one bank, which lent money to the keiretsu's member companies and held equity positions in the companies. Each bank had great control over the companies in the keiretsu and acted as a monitoring entity and as an emergency bail-out entity. One effect of this structure was to minimize the presence of hostile takeovers in Japan, because no entities could challenge the power of the banks. There are two types of keiretsu: vertical and horizontal. Vertical keiretsu illustrates the organization and relationships within a company (for example all factors of production of a certain product will be connected), while a horizontal keiretsu shows relationships between entities and industries, normally centered around a bank and trading company. Both are complexly woven together and self-sustain each other. Although the divisions between them have blurred in recent years, there are six major postwar keiretsu: Name

Mitsubishi

Bank

Major group companies

Mitsubishi Bank (until 1996) Bank of TokyoMitsubishi (1996–2005) Bank of TokyoMitsubishi UFJ (2006– )

Mitsubishi Corporation, Kirin Brewery, Mitsubishi Electric, Mitsubishi Fuso, Mitsubishi Motors, Nippon Yusen, Nippon Oil, Tokio Marine and Fire Insurance, Nikon, Mitsubishi Chemical, Mitsubishi Estate, Mitsubishi Heavy Industries, Mitsubishi Rayon Co., Ltd., Mitsubishi Materials Corp., Mitsubishi Paper Mills Ltd., Pacific Consultants International Ltd.

Mitsui

Mitsui Bank (until 1990) Sakura Bank Fuji Photo Film, Mitsui Real Estate, Mitsukoshi, Suntory, (1990–2001) Toshiba Sumitomo Mitsui Bank (2001– )

Sumitomo

Sumitomo Bank (until 2001) Asahi Breweries, Hanshin Railway, Keihan Railway, Mazda, Sumitomo Nankai Railway, NEC, Nippon Koei, Sumitomo Real Estate Mitsui Bank (2001– )

Fuyo

Fuji Bank (until 2000) Canon, Hitachi, Marubeni, Matsuya, Nissan, Ricoh, Tobu Mizuho Bank Railway, Yamaha (2000– )

Dai-Ichi Kangyo

Dai-Ichi Kangyo Bank (until Fujitsu, Hitachi, Isuzu, Itochu, Tokyo Electric Power 2000) Mizuho Bank (2000– )

Sanwa Bank (until 2002) UFJ Bank Sanwa (2002–2006) Hankyu Railway, Keisei Railway, Kobe Steel, Konica ("Midorikai" Bank of Minolta, Kyocera, Orix, Shin-Maywa, Takashimaya, Toho ) TokyoMitsubishi UFJ (2006– )

Toyota is considered the biggest of the "vertically-integrated" keiretsu groups.[2]

The Japanese recession in the 1990s had profound effects on the keiretsu. Many of the largest banks were hit hard by bad loan portfolios and forced to merge or go out of business. This had the effect of blurring the lines between the keiretsu: Sumitomo Bank and Mitsui Bank, for instance, became Sumitomo Mitsui Banking Corporation in 2001, while Sanwa Bank (the banker for the Hankyu-Toho Group) became part of Bank of Tokyo-Mitsubishi UFJ. Additionally, many companies from outside the keiretsu system, such as Sony, began outperforming their counterparts within the system. Generally, these causes gave rise to a strong notion in the business community that the old keiretsu system was not an effective business model, and led to an overall loosening of keiretsu alliances. While the keiretsu still exist, they are not as centralized or integrated as they were before the 1990s. This, in turn, has led to a growing corporate acquisition industry in Japan, as companies are no longer able to be easily "bailed out" by their banks, as well as rising derivative litigation by more independent shareholders.

Zaibatsu Zaibatsu (財閥?, literally plutocrats or financial clique) is a Japanese term referring to industrial and financial business conglomerates in the Empire of Japan, whose influence and size allowed for control over significant parts of the Japanese economy from the Meiji period until the end of the Pacific War. Significance The zaibatsu were the heart of economic and industrial activity within the Empire of Japan, and held great influence over Japanese national and foreign policies. The Rikken Seiyukai political party was regarded as an extension of the Mitsui group, which also had very strong connections with the Imperial Japanese Army. Likewise, the Rikken Minseito was connected to the Mitsubishi group, as was the Imperial Japanese Navy. By the start of World War II, the Big Four zaibatsu alone had direct control over more than 30% of Japan's mining, chemical, metals industries and almost 50% control of the machinery and equipment market, a significant part of the foreign commercial merchant fleet and 60% of the commercial stock exchange.[citation needed] The zaibatsu were viewed with suspicion by both the right and left of the political spectrum in the 1920s and 1930s. Although the world was in the throes of a worldwide economic depression, the zaibatsu were prospering through currency speculation, maintenance of low labor costs and on military procurement. Matters came to a head in the League of Blood Incident of March 1932, with the assassination of the managing director of Mitsui, after which the zaibatsu attempted to improve on their public image through increased charity work.

List of zaibatsu

[edit] The Big Four • • • •

Mitsubishi (三菱財閥) Mitsui (三井財閥) Sumitomo (住友財閥) Yasuda (安田財閥)

[edit] Second-tier zaibatsu • • • • • • • • • • • • •

Asano (浅野財閥) Fujita (藤田財閥) Furukawa (古河財閥) Mori (森コンツェルン) Kawasaki (川崎財閥) Nakajima (中島飛行機) Nitchitsu (日窒コンツェルン) Nissan (日産コンツェルン) Nisso (日曹コンツェルン) Nomura (野村財閥) Okura (大倉財閥) Riken (理研コンツェルン) Shibusawa (渋沢財閥 )

[edit] Bankrupt zaibatsu •

Suzuki shoten (鈴木商店)

The Big Four

The Big Four zaibatsu (四大財閥?, shidai zaibatsu) of Mitsubishi, Mitsui, Sumitomo and Yasuda are the most significant zaibatsu groups. Two of them, Mitsui and Sumitomo, have roots stemming from the Edo period while Mitsubishi and Yasuda trace their origins to the Meiji Restoration. Throughout Meiji to Showa, the government employed their financial powers and expertise for various endeavors, including tax collection, military procurement and foreign trade. 12. Expand TQM

Total Quality Management, or "TQM," represents one of the hottest theories of management science studied by today's college business students. For the most part, total quality management relies on a single fundamental principle that should really serve as the core mission of any business: Maximize productivity while minimizing costs. Of course, what looks good on paper is not always as easily transformed into reality. In similar theme, while discussing total quality management in class may seem easy enough, writing term papers analyzing TQM's theoretical platform, history, use, and/or application may be an entirely different story altogether!

The Eight Elements Of TQM Total Quality Management is a management approach that originated in the 1950's and has steadily become more popular since the early 1980's. Total Quality is a description of the culture, attitude and organization of a company that strives to provide customers with products and services that satisfy their needs. The culture requires quality in all aspects of the company's operations, with processes being done right the first time and defects and waste eradicated from operations. To be successful implementing TQM, an organization must concentrate on the eight key elements:

1. Ethics 2. 3. 4. 5. 6. 7. 8.

Integrity Trust Training Teamwork Leadership Recognition Communication

This paper is meant to describe the eight elements comprising TQM.

Key Elements TQM has been coined to describe a philosophy that makes quality the driving force behind leadership, design, planning, and improvement initiatives. For this, TQM requires the help of those eight key elements. These elements can be divided into four groups according to their function. The groups are: I. Foundation - It includes: Ethics, Integrity and Trust. II. Building Bricks - It includes: Training, Teamwork and Leadership. III. Binding Mortar - It includes: Communication. IV. Roof - It includes: Recognition. I. Foundation TQM is built on a foundation of ethics, integrity and trust. It fosters openness, fairness and sincerity and allows involvement by everyone. This is the key to unlocking the ultimate potential of TQM. These three elements move together, however, each element offers something different to the TQM concept. 1. Ethics - Ethics is the discipline concerned with good and bad in any situation. It is a two-faceted subject represented by organizational and individual ethics. Organizational ethics establish a business code of ethics that outlines guidelines that all employees are to adhere to in the performance of their work. Individual ethics include personal rights or wrongs. 2. Integrity - Integrity implies honesty, morals, values, fairness, and adherence to the facts and sincerity. The characteristic is what customers (internal or external) expect and deserve to receive. People see the opposite of integrity as duplicity. TQM will not work in an atmosphere of duplicity. 3. Trust - Trust is a by-product of integrity and ethical conduct. Without trust, the framework of TQM cannot be built. Trust fosters full participation of all members. It allows empowerment that encourages pride ownership and it encourages commitment. It allows decision making at appropriate levels in the organization, fosters individual risk-taking for continuous improvement and helps to ensure that

measurements focus on improvement of process and are not used to contend people. Trust is essential to ensure customer satisfaction. So, trust builds the cooperative environment essential for TQM. II. Bricks Basing on the strong foundation of trust, ethics and integrity, bricks are placed to reach the roof of recognition. It includes: 4. Training - Training is very important for employees to be highly productive. Supervisors are solely responsible for implementing TQM within their departments, and teaching their employees the philosophies of TQM. Training that employees require are interpersonal skills, the ability to function within teams, problem solving, decision making, job management performance analysis and improvement, business economics and technical skills. During the creation and formation of TQM, employees are trained so that they can become effective employees for the company. 5. Teamwork - To become successful in business, teamwork is also a key element of TQM. With the use of teams, the business will receive quicker and better solutions to problems. Teams also provide more permanent improvements in processes and operations. In teams, people feel more comfortable bringing up problems that may occur, and can get help from other workers to find a solution and put into place. There are mainly three types of teams that TQM organizations adopt: A. Quality Improvement Teams or Excellence Teams (QITS) - These are temporary teams with the purpose of dealing with specific problems that often re-occur. These teams are set up for period of three to twelve months. B. Problem Solving Teams (PSTs) - These are temporary teams to solve certain problems and also to identify and overcome causes of problems. They generally last from one week to three months. C. Natural Work Teams (NWTs) - These teams consist of small groups of skilled workers who share tasks and responsibilities. These teams use concepts such as employee involvement teams, self-managing teams and quality circles. These teams generally work for one to two hours a week. 6. Leadership - It is possibly the most important element in TQM. It appears everywhere in organization. Leadership in TQM requires the manager to provide an inspiring vision, make strategic directions that are understood by all and to instill values that guide subordinates. For TQM to be successful in the business, the supervisor must be committed in leading his employees. A supervisor must understand TQM, believe in it and then demonstrate their belief and commitment through their daily practices of TQM. The supervisor makes sure that strategies, philosophies, values and goals are transmitted down through out the organization to provide focus, clarity and direction. A key point is that TQM has to be introduced and led by top management. Commitment and personal involvement is required from top management in creating and deploying clear quality values and goals consistent with the objectives of the company and in creating and deploying well defined systems, methods and performance measures for achieving those goals. III. Binding Mortar 7. Communication - It binds everything together. Starting from foundation to roof of the TQM house, everything is bound by strong mortar of communication. It acts as a vital link between all elements of TQM. Communication means a common understanding of ideas between the sender and the receiver. The success of TQM demands communication with and among all the organization members, suppliers and customers. Supervisors must keep open airways where employees can send and receive information about the TQM process. Communication coupled with the sharing of correct information is vital. For communication to be credible the message must be clear and receiver must interpret in the way the sender intended. There are different ways of communication such as: A. Downward communication - This is the dominant form of communication in an organization.

Presentations and discussions basically do it. By this the supervisors are able to make the employees clear about TQM. B. Upward communication - By this the lower level of employees are able to provide suggestions to upper management of the affects of TQM. As employees provide insight and constructive criticism, supervisors must listen effectively to correct the situation that comes about through the use of TQM. This forms a level of trust between supervisors and employees. This is also similar to empowering communication, where supervisors keep open ears and listen to others. C. Sideways communication - This type of communication is important because it breaks down barriers between departments. It also allows dealing with customers and suppliers in a more professional manner. IV. Roof 8. Recognition - Recognition is the last and final element in the entire system. It should be provided for both suggestions and achievements for teams as well as individuals. Employees strive to receive recognition for themselves and their teams. Detecting and recognizing contributors is the most important job of a supervisor. As people are recognized, there can be huge changes in self-esteem, productivity, quality and the amount of effort exhorted to the task at hand. Recognition comes in its best form when it is immediately following an action that an employee has performed. Recognition comes in different ways, places and time such as,  Ways - It can be by way of personal letter from top management. Also by award banquets, plaques, trophies etc.  Places - Good performers can be recognized in front of departments, on performance boards and also in front of top management.  Time - Recognition can given at any time like in staff meeting, annual award banquets, etc.

13. Expand SGA SGA: Small Group Activities One of the fundamental improvement efforts at TDD allows employees to work together to solve problems that confront them in their daily duties. Small Group Activity (SGA) gives employees the problem solving tools they need to eliminate obstacles to Total Productivity, the cumination of zero break-downs, zero defects, and zero waste. Enterprising employees identify the the problem, be it in "man, material, method, or machine," and develop cost-effective and practical methods for solving the problem. Each year, some of TDD's top SGAs compete internally for the chance to vie for national honors at the Toshiba America annual small group activity conference. Since TDD started its SGA program, employees working together in problem-solving teams have saved the company hundreds of thousands of dollars in time and materials. SGA

provides employees with the opportunity to creatively confront and solve problems, thus engendering in them pride in their accomplishments and ownership in their jobs

14. Name 5 S 5S (methodology) 5S is the name of a workplace organization methodology that uses a list of five Japanese words which, transliterated and translated into English, start with the letter S. This list is a mnemonic for a methodology that is often incorrectly characterized as "standardized cleanup", however it is much more than cleanup. 5S is a philosophy and a way of organizing and managing the workspace and work flow with the intent to improve efficiency by eliminating waste, improving flow and reducing process unevenness. What is 5S? 5S is a method for organizing a workplace, especially a shared workplace (like a shop floor or an office space), and keeping it organized. It's sometimes referred to as a housekeeping methodology, however this characterization can be misleading, as workplace organization goes beyond housekeeping (see discussion of "Seiton" below). The key targets of 5S are improved workplace morale, safety and efficiency. The assertion of 5S is, by assigning everything (that is needed) a location, time is not wasted by looking for things. Additionally, it is quickly obvious when something is missing from its designated location. Advocates of 5S believe the benefits of this methodology come from deciding what should be kept, where it should be kept, how it should be stored and most importantly how the new order will be maintained. This decision making process usually comes from a dialog about standardization which builds a clear understanding, between employees, of how work should be done. It also instills ownership of the process in each employee. Another key distinction between 5S and "standardized cleanup" is Seiton. Seiton is often misunderstood, perhaps due to efforts to translate into an English word beginning with "S" (such as "sort" or "straighten"). The key concept here is to order items or activities in a manner to promote work flow. For example, tools should be kept at the point of use, workers should not have to repetitively bend to access materials, flow paths can be altered to improve efficiency, etc. The 5S's are:[1] Phase 1 - Seiri (整理) Sorting: Going through all the tools, materials, etc., in the plant and work area and keeping only essential items. Everything else is stored or discarded. Phase 2 - Seiton (整頓) Straighten or Set in Order: Focuses on efficiency. When we translate this to "Straighten or Set in Order", it sounds like more sorting or sweeping, but the intent is to arrange the tools, equipment and parts in a manner that promotes work flow. For example, tools

and equipment should be kept where they will be used (i.e. straighten the flow path), and the process should be set in an order that maximizes efficiency. For every thing there should be place and every thing should be in its place. (Demarcation and labeling of place.) Phase 3 - Seisō (清掃) Sweeping or Shining or Cleanliness: Systematic Cleaning or the need to keep the workplace clean as well as neat. At the end of each shift, the work area is cleaned up and everything is restored to its place. This makes it easy to know what goes where and have confidence that everything is where it should be. The key point is that maintaining cleanliness should be part of the daily work - not an occasional activity initiated when things get too messy. Phase 4 - Seiketsu (清潔) Standardizing: Standardized work practices or operating in a consistent and standardized fashion. Everyone knows exactly what his or her responsibilities are to keep above 3S's. Phase 5 - Shitsuke (躾) Sustaining the discipline: Refers to maintaining and reviewing standards. Once the previous 4S's have been established, they become the new way to operate. Maintain the focus on this new way of operating, and do not allow a gradual decline back to the old ways of operating. However, when an issue arises such as a suggested improvement, a new way of working, a new tool or a new output requirement, then a review of the first 4S's is appropriate. A sixth phase, "Safety," is sometimes added. Purists, however, argue that adding it is unnecessary since following 5S correctly will result in a safe work environment. Often, however a poorly conceived and designed 5S process can result in increases in workplace hazard when employees attempt to maintain cleanliness at the expense of ensuring that safety standards are adequately followed. There will have to be continuous education about maintaining standards. When there are changes that will affect the 5S program—such as new equipment, new products or new work rules—it is essential to make changes in the standards and provide training. Companies embracing 5S often use posters and signs as a way of educating employees and maintaining standards. 15. Define Value analysis / 16. Define Value Enginneering

Value Analysis / Engineering (VA/VE) All commercial activities are performed with the objective of providing value of some kind, where the value is a combination of the benefits gained from the activity and the cost of achieving these benefits. In many product generation situations, both the benefits and the real costs are not understood, for example where they are measured at such a gross level that individual activities cannot be accurately determined. This can cause problems for projects that are aimed at improving these activities, as the real value cannot be found. Value Analysis (VA) is an approach to improving the value of an item or process by first understanding the functions of the item and their value, then by identifying its constituent

components and their associated costs. It then seeks to find improvements to the components by either reducing their cost or increasing the value of their functions. Functions may be broken down into a hierarchy, starting with a basic function, for which the customer believes they are paying, and then followed by secondary functions, which support that basic function. Functions may be aesthetic functions (such as the look of a camera) or use functions (so the camera captures images), and basic functions may be either or both of these. When the functions are understood, including how they are produced, then they can be improved as needed. A close cousin of Value Analysis is Value Engineering (VE). One is basically the reverse of the other. Analysis is discovery of what is (or is not) already there, engineering is the creation of something new. There are many derivatives of Value Analysis, such as Customer Value Analysis, Strategic Value Analysis, etc. The bottom line is always the same: what is valued, how is it created and how can it be improved. The original Value Analysis as an engeering methodology was developed by Lawrence Miles at General Electric in the late 1940s.

16. Define Value Engineering (VE) Value engineering (VE) is a systematic method to improve the "value" of goods or products and services by using an examination of function. Value, as defined, is the ratio of function to cost. Value can therefore be increased by either improving the function or reducing the cost. It is a primary tenet of value engineering that basic functions be preserved and not be reduced as a consequence of pursuing value improvements.

The Job Plan Value engineering is often done by systematically following a multi-stage job plan. Larry Miles' original system was a six-step procedure which he called the "value analysis job plan." Others have varied the job plan to fit their constraints. Depending on the application, there may be four, five, six, or more stages. One modern version has the following eight steps: 1. 2. 3. 4. 5. 6. 7. 8.

Preparation Information Analysis Creation Evaluation Development Presentation Follow-up

Four basic steps in the job plan are: •

• • •

Information gathering - This asks what the requirements are for the object. Function analysis, an important technique in value engineering, is usually done in this initial stage. It tries to determine what functions or performance characteristics are important. It asks questions like; What does the object do? What must it do? What should it do? What could it do? What must it not do? Alternative generation (creation) - In this stage value engineers ask; What are the various alternative ways of meeting requirements? What else will perform the desired function? Evaluation - In this stage all the alternatives are assessed by evaluating how well they meet the required functions and how great will the cost savings be. Presentation - In the final stage, the best alternative will be chosen and presented to the client for final decision.

• How it works • • • • • • • • • • • • • •

VE follows a structured thought process to evaluate options as follows. Gather information 1.What is being done now? Who is doing it? What could it do? What must it not do? Measure 2.How will the alternatives be measured? What are the alternate ways of meeting requirements? What else can perform the desired function? Analyze 3.What must be done? What does it cost? Generate

• • • • • • • • •

4.What else will do the job? Evaluate 5.Which Ideas are the best? 6. Develop and expand ideas What are the impacts? What is the cost? What is the performance? 7.Present ideas Sell alternatives

17. Name the costing based on design Executional cost drivers Target costing. 18. Expand DRB Drum-buffer-rope is the Theory of Constraints production application. It is named after the 3 essential elements of the solution; the drum or constraint or weakest link, the buffer or material release duration, and the rope or release timing. The aim of the solution is to protect the weakest link in the system, and therefore the system as a whole, against process dependency and variation and thus maximize the systems’ overall effectiveness. The outcome is a robust and dependable process that will allow us to produce more, with less inventory, less rework/defects, and better on-time delivery – always. Drum-buffer-rope however is really just one part of a two part act. We need both parts to make a really good show. If drum-buffer-rope is the motor for production, then buffer management is the monitor. Buffer management is the second part of this two part act. We use buffer management to guide the way in which we tune the motor for peak performance. In the older notion of planning and control, the first part; drum-buffer-rope, is the planning stage of the approach – essentially the overall agreement on how we operate the system. The second part, buffer management, is the control system that allows us to keep a running check on the system effectiveness. However, I want to reserve the word “planning” and the word “control” for quite specific and established functions within the solution, functions that we will investigate further on this page. I want to propose that we step out a level and instead use the terms “configuration” and “monitoring.” Using this terminology the configuration is drum-buffer-rope and the monitoring is buffer management. Let’s draw this;

The way that we configure the solution, the way that we configure the; drum, the buffer, and the rope, will determine the characteristics and the behavior of the system as a whole. Buffer management allows us to monitor that behavior. The use of the terms configuration and monitoring will allow a more critical distinction to be developed once we introduce the concepts of planning and control. This, I hope, will also clarify some of the confusion that may exist over the dual role of buffer management.

19. What is managed Capacity By combining its strengths in infrastructure and managed services, company delivers and manages network capacity when and where operators need it. As a result, operators grow their business and evolve their networks efficiently, and they are free to focus on their customers and business development. The solution, created in close cooperation with customers, is a part of company’s industry-leading managed services offering. "It benefits both operators in high-growth markets that need efficient buildout of network coverage and capacity, as well as operators in developed markets facing technology migrations or consolidation."

20. State difference between valued added analysis and value chain analysis

Value Chain The value chain approach was developed by Michael Porter in the 1980s in his book “Competitive Advantage: Creating and Sustaining Superior Performance” (Porter, 1985). The concept of value added, in the form of the value chain, can be utilised to develop an organisation’s sustainable competitive advantage in the business arena of the 21st C. All organisations consist of activities that link together to develop the value of the business, and together these activities form the organisation’s value chain. Such activities may include

purchasing activities, manufacturing the products, distribution and marketing of the company’s products and activities (Lynch, 2003). The value chain framework has been used as a powerful analysis tool for the strategic planning of an organisation for nearly two decades. The aim of the value chain framework is to maximise value creation while minimising costs (www.wikipedia.org). Main aspects of Value Chain Analysis Value chain analysis is a powerful tool for managers to identify the key activities within the firm which form the value chain for that organisation, and have the potential of a sustainable competitive advantage for a company. Therein, competitive advantage of an organisation lies in its ability to perform crucial activities along the value chain better than its competitors. The value chain framework of Porter (1990) is “an interdependent system or network of activities, connected by linkages” (p. 41). When the system is managed carefully, the linkages can be a vital source of competitive advantage (Pathania-Jain, 2001). The value chain analysis essentially entails the linkage of two areas. Firstly, the value chain links the value of the organisations’ activities with its main functional parts. Then the assessment of the contribution of each part in the overall added value of the business is made (Lynch, 2003). In order to conduct the value chain analysis, the company is split into primary and support activities (Figure 1). Primary activities are those that are related with production, while support activities are those that provide the background necessary for the effectiveness and efficiency of the firm, such as human resource management. The primary and secondary activities of the firm are discussed in detail below. Primary activities The primary activities (Porter, 1985) of the company include the following: •

•

•

•

Inbound logistics These are the activities concerned with receiving the materials from suppliers, storing these externally sourced materials, and handling them within the firm. Operations These are the activities related to the production of products and services. This area can be split into more departments in certain companies. For example, the operations in case of a hotel would include reception, room service etc. Outbound logistics These are all the activities concerned with distributing the final product and/or service to the customers. For example, in case of a hotel this activity would entail the ways of bringing customers to the hotel. Marketing and sales This functional area essentially analyses the needs and wants of customers and is responsible for creating awareness among the target audience of the company about the firm’s products and services. Companies make use of marketing communications tools like advertising, sales promotions etc. to attract customers to their products.

•

Service There is often a need to provide services like pre-installation or after-sales service before or after the sale of the product or service.

Support activities The support activities of a company include the following: •

•

•

•

Procurement This function is responsible for purchasing the materials that are necessary for the company’s operations. An efficient procurement department should be able to obtain the highest quality goods at the lowest prices. Human Resource Management This is a function concerned with recruiting, training, motivating and rewarding the workforce of the company. Human resources are increasingly becoming an important way of attaining sustainable competitive advantage. Technology Development This is an area that is concerned with technological innovation, training and knowledge that is crucial for most companies today in order to survive. Firm Infrastructure This includes planning and control systems, such as finance, accounting, and corporate strategy etc. (Lynch, 2003).

•

Figure 1: The Value Chain: Source: Porter (1985)

•

Porter used the word ‘margin’ for the difference between the total value and the cost of performing the value activities (Figure 1). Here, value is referred to as the price that the customer is willing to pay for a certain offering (Macmillan et al, 2000). Other scholars have used the word ‘added value’ instead of margin in order to describe the same (Lynch, 2003). The analysis entails a thorough examination of how each part might contribute towards added value in the company and how this may differ from the competition. In a study of Saudi companies, Ghamdi (2005) found that 22% of the companies in the study used value chain frequently, while 17% reported that they somewhat used it, and 42% did not use the tool at all. An interesting finding of the study was that the manufacturing

firms were frequent users of the tool compared to their service counterparts (Ghamdi, 2005). 21. State three different strategies at corporate level

Three Hierarchical Levels of Strategy5

1.

Corporate Strategy – What business should you be in? Looks at the whole range of business opportunities

2.

Business Strategy – Battle plans, tactics used to fight the competition in the industry that your company currently participates in (see Competitive Strategies and Competitive War Games)

3.

Functional Strategy – Operational methods and value adding activities that you choose for your business (venture strategies, technology strategies, diversification strategies, marketing strategies, differentiation strategies, etc.)

Strategy can be formulated on three different levels: • • •

corporate level business unit level functional or departmental level.

While strategy may be about competing and surviving as a firm, one can argue that products, not corporations compete, and products are developed by business units. The role of the corporation then is to manage its business units and products so that each is competitive and so that each contributes to corporate purposes. Consider Textron, Inc., a successful conglomerate corporation that pursues profits through a range of businesses in unrelated industries. Textron has four core business segments: • • • •

Aircraft - 32% of revenues Automotive - 25% of revenues Industrial - 39% of revenues Finance - 4% of revenues.

While the corporation must manage its portfolio of businesses to grow and survive, the success of a diversified firm depends upon its ability to manage each of its product lines. While there is no single competitor to Textron, we can talk about the competitors and strategy of each of its business units. In the finance business segment, for example, the chief rivals are major banks providing commercial financing. Many managers consider the business level to be the proper focus for strategic planning. Corporate Level Strategy Corporate level strategy fundamentally is concerned with the selection of businesses in which the company should compete and with the development and coordination of that portfolio of businesses. Corporate level strategy is concerned with: •

•

•

•

Reach - defining the issues that are corporate responsibilities; these might include identifying the overall goals of the corporation, the types of businesses in which the corporation should be involved, and the way in which businesses will be integrated and managed. Competitive Contact - defining where in the corporation competition is to be localized. Take the case of insurance: In the mid-1990's, Aetna as a corporation was clearly identified with its commercial and property casualty insurance products. The conglomerate Textron was not. For Textron, competition in the insurance markets took place specifically at the business unit level, through its subsidiary, Paul Revere. (Textron divested itself of The Paul Revere Corporation in 1997.) Managing Activities and Business Interrelationships - Corporate strategy seeks to develop synergies by sharing and coordinating staff and other resources across business units, investing financial resources across business units, and using business units to complement other corporate business activities. Igor Ansoff introduced the concept of synergy to corporate strategy. Management Practices - Corporations decide how business units are to be governed: through direct corporate intervention (centralization) or through more or less autonomous government (decentralization) that relies on persuasion and rewards.

Corporations are responsible for creating value through their businesses. They do so by managing their portfolio of businesses, ensuring that the businesses are successful over the long-term, developing business units, and sometimes ensuring that each business is compatible with others in the portfolio. Business Unit Level Strategy A strategic business unit may be a division, product line, or other profit center that can be planned independently from the other business units of the firm.

At the business unit level, the strategic issues are less about the coordination of operating units and more about developing and sustaining a competitive advantage for the goods and services that are produced. At the business level, the strategy formulation phase deals with: • • •

positioning the business against rivals anticipating changes in demand and technologies and adjusting the strategy to accommodate them influencing the nature of competition through strategic actions such as vertical integration and through political actions such as lobbying.

Michael Porter identified three generic strategies (cost leadership, differentiation, and focus) that can be implemented at the business unit level to create a competitive advantage and defend against the adverse effects of the five forces. Functional Level Strategy The functional level of the organization is the level of the operating divisions and departments. The strategic issues at the functional level are related to business processes and the value chain. Functional level strategies in marketing, finance, operations, human resources, and R&D involve the development and coordination of resources through which business unit level strategies can be executed efficiently and effectively. Functional units of an organization are involved in higher level strategies by providing input into the business unit level and corporate level strategy, such as providing information on resources and capabilities on which the higher level strategies can be based. Once the higher-level strategy is developed, the functional units translate it into discrete action-plans that each department or division must accomplish for the strategy to succeed. 22. State different strategies at unit level Business Unit Level Strategy A strategic business unit may be a division, product line, or other profit center that can be planned independently from the other business units of the firm. At the business unit level, the strategic issues are less about the coordination of operating units and more about developing and sustaining a competitive advantage for the goods and services that are produced. At the business level, the strategy formulation phase deals with: At the business unit level, the strategy formulation and implementation deals with: 1. Positioning and differentiating the business and/or products against rivals 2. Business-level cross-functional process management

3. Anticipating changes in technology and customer perceptions and adjusting the strategy to accommodate them. 4. Influencing the nature of competition through strategic actions such as virtual integration and through political actions 5. Building strategic partnerships and co-innovating with other business units, partners, and customers. Michael Porter identified three generic strategies (cost leadership, differentiation, and focus) that can be implemented at the business unit level to create a competitive advantage and defend against the adverse effects of the five forces. 23. What is the name of the costing based on internal linkage? Value Chain 24. Explain dysfunctional behavior

A dysfunctional behavior can be defined as “an inappropriate action or response, other than an activity of daily living, in a given social milieu that is a problem for the caregiver.” Dysfunctional behaviors commonly accompany cognitive impairment and are a significant source of burden to caregivers. Dysfunctional behaviors may be the first sign of a dementing illness, even before caregivers perceive changes in the patient's cognitive abilities. However, unlike cognitive impairment, dysfunctional behaviors are amenable to medical treatment. Effective treatment of these behaviors requires their description and identification, evaluation of their frequency and impact on the caregiver, identification of causes, development of a treatment plan, and evaluation of the effects of treatment. 50 Forms of Dysfunctional Behavior in the Workplace 1. Declaring war on a person or department.. 2. Withdrawing assistance. 3. Hiding resources or information. 4. Frequent and senseless reorganizations. 5. Pouting. 6. Focusing on turf instead of the greater good. 7. Taking undue credit. 8. Misrepresenting another's position. 9. Staying in the job when it is time to leave. 10. Seeking undeserved promotions. 11. Being careless about quality. 12. Backbiting. 13. Gossiping. 14. Letting personal problems overwhelm effectiveness.

15. Treating everyone in exactly the same manner. 16. Engaging in bigoted behavior. 17. Using hiring quotas. 18. Refusing to establish procedures. 19. Being a slave to procedures. 20. Failing to take initiative. 21. Listening only to what is said and not to what is meant. 22. Failing to maintain confidentiality. 23. Bullying. 24. Pretending to work. 25. Disloyalty. 26. Confusing what is good for you with what is good for the organization. 27. Filtering bad news. 28. Squandering time. 29. Mistaking abusive behavior for toughness. 30. Constantly giving alibis. 31. Failing to confront. 32. Excessive fear of change. 33. Perfectionism. 34. Smugness. 35. Hubris. 36. Shooting the messenger. 37. Excessive upward delegation. 38. Rewarding "face time" over actual performance. 39. Undue emphasis on speed. 40. Lack of intellectual diversity 41. Emphasizing equal results instead of equal opportunity. 42. Overpromising and underperforming. 43. Managing to the dysfunctional. 44. Paralysis by analysis. 45. Management by best seller. 46. Unfriendliness. 47. Reinventing the wheel. 48. Undue emphasis on results. 49. Inaccessibility. 50. Ascribing bad motives.

25. State two defects in large organization

What is Muda? word “muda” is Japanese for waste. The word is commonly used within corporations all over the world that are in the midst of lean manufacturing excellence. There are many Japanese words in use today at companies throughout the world implementing lean manufacturing. Kaizen (meaning small, incremental improvement) is the most popular, followed by the word muda. Lean manufacturing originated in Japan, and a few of the concepts have kept their Japanese word associated with the meaning of the concept. The word “muda” became popular because it has additional meaning than just the word “waste” which has been used in manufacturing industries. Traditional manufacturing companies thought of “waste” as material waste. Material waste reduction is often one of the largest opportunities for manufacturers. However, muda has the meaning of any type of waste throughout the entire system. Lean manufacturing principles generally identify 7 or 8 different types of waste. The seven most commonly identified wastes lean manufacturing are: Material (scrap & reword) Inventory Transportation Motion Waiting Overprocessing Overproduction The eighth waste is the waste of intelligence. This is wasting the intellectual capital in the organization. It is the waste of not involving everyone in the improvement efforts. The goal of a lean manufacturing implementation is to eliminate every bit of the above eight wastes from the system. The eight wastes are described below, including how they integrate into the overall lean manufacturing implementation. Overproduction waste is the product made that may not be sold. Even if it is eventually sold, the warehouse space and time value of money is wasted until it is sold. An example would be a quantity produced of 1050 when the customer will only take 1000. The overproduction is either scrapped or stored (both wastes) for later use. Inventory is often one of the largest wastes in a company. Inventory occupies valuable floor

space and ties up cash, which often costs a corporation 8% - 12% per year. The cost of obsolescence is also large in many companies. Products become obsolete or the customer decides not to take the product. Even with a purchase order, forcing customers to take product they don’t need or want is often detrimental to the business relationship. Some inventory becomes damaged as a result of being moved or stored over time. One of the largest “hidden costs” of inventory is the cost of moving and counting it. Inventory is often moved from production, staging, warehouse, shipping, and trucking, all of which is expensive. The lean manufacturing system either eliminates or minimizes the inventory through the use of tools such as “pull systems”, “continuous flow”, “takt time”, and “value stream mapping”. Another identified waste is the “waste of waiting”. The waste of time spent waiting is very large in almost every business. Workers wait on product, instructions, supervisors, engineers, inspection, and each other. Supervisors wait on workers and co-workers, engineers, maintenance, etc. Lean manufacturing systems eliminate this waiting through many tools including value stream mapping, process maps, line balancing, Ishikawa diagrams, and many others. Motion waste is also very large in most businesses. For example, a lot of time is lost when professionals walk to a printer many times per day. Machinery operators and maintenance technicians traditionally incur large amounts of wasted motion. Operators walk to retrieve tools that should be positioned closes to their point of use. Mechanics often wear a path to the maintenance shop for gathering tools. The waste of motion is often largest in office and white collar settings, as these activities have often been untouched by improvement initiatives over the years. Lean manufacturing tools reduce motion waste through the systems of “5S”, value stream mapping, SMED setup reduction, kanban, standardized operations, and root cause problem solving methods. Over-processing waste is providing more product or features than necessary. For example, if a customer wants a product made a certain minimum thickness but the manufacturing process adds material to produce a larger one, the additional amount is waste. All of the seven wastes comprise what is known as “muda” in lean manufacturing. Muda reduction takes management commitment and employee involvement. Muda often occurs in small chunks throughout an organization and over time. It takes the effort of every employee to find and eliminate muda.

Organization Learning (OL):Chris Argyris and Donald Schön (1978) defined organizational learning as: "the detection and correction of error". Fiol and Lyles later define learning as "the process of improving actions through better knowledge and understanding" (1985). Dodgson describes organizational learning as "the way firms build, supplement, and organize knowledge and routines around their activities and within their cultures and adapt and develop organizational efficiency by improving the use of the broad skills of their workforces" (1993). Huber states that learning occurs in an organization "if through its processing of information, the range of its [organization's]

potential behaviors is changed" (1991).

A "learning organization" is a firm that purposefully constructs structures and strategies so as to enhance and maximize OL (Dodgson, 1993). The concept of a learning organization has become popular since organizations want to be more adaptable to change. Learning is a dynamic concept and it emphasizes the continually changing nature of organizations. The focus is gradually shifting from individual learning to organizational learning. Just as learning is essential for the growth of individuals, it is equally important for organizations. Since individuals form the bulk of the organization, they must establish the necessary forms and processes to enable organizational learning in order to facilitate change.

OL is more than the sum of the parts of individual learning (Dodgson, 1993; Fiol & Lyles, 1985). An organization does not lose out on its learning abilities when members leave the organization. Organizational learning contributes to organizational memory. Thus, learning systems not only influence immediate members but also future members due to the accumulation of histories, experiences, norms, and stories. Creating a learning organization is only half the solution to a challenging problem (Prahalad & Hamel, 1994). Equally important is the creation of an unlearning organization which essentially means that the organization must forget some of its past. Thus, learning occurs amidst such conflicting factors (Dodgson, 1993). Argyris and Schön describe three types of organizational learning: Single-loop learning: This occurs when errors are detected and corrected and firms carry on with their present policies and goals. According to Dodgson (1993), Single-loop learning can be equated to activities that add to the knowledge-base or firm-specific competences or routines without altering the fundamental nature of the organization's activities. Single-loop learning has also been referred to as lower-level learning by Fiol and Lyles (1985), adaptive learning or coping by Senge (1990), and non-strategic learning by Mason (1993).

Double-loop learning: This occurs when, in addition to detection and correction of errors, the organization is involved in the questioning and modification of existing norms, procedures, policies, and objectives. Doubleloop learning involves changing the organization's knowledge-base or firm-specific competences or routines (Dodgson, 1993). Double-loop learning is also called higher-level learning by Fiol and Lyles (1985), generative learning (or learning to expand an organization's capabilities) by Senge (1990), and strategic learning by Mason (1993). Strategic learning is defined as "the process by which an organization makes sense of its environment in ways that broaden the range of objectives it can pursue or the range of resources and actions available to it for processing these objectives." (Mason, 1993: 843) Deutero-learning: This occurs when organizations learn how to carry out single-loop and double- loop learning. The first two forms of learning will not occur if the organizations are not aware that learning must occur. Awareness of ignorance motivates learning (Nevis et al., 1995). This means identifying the learning orientations or styles, and the processes and structures (facilitating factors) required to promote learning. Nevis et al., (1995) identify seven different learning styles and ten different facilitating factors that influence learning. For example,

one of the facilitating factors is identifying the performance gap between targeted outcomes and actual performance. This awareness makes the organization recognize that learning needs to occur and that the appropriate environment and processes need to be created. This also means recognizing the fact that lengthy periods of positive feedback or good communication can block learning (Argyris, 1994). Double-loop and Deutero Learning are concerned with the why and how to change the organization while singleloop learning is concerned with accepting change without questioning underlying assumptions and core beliefs. Dodgson states that the type of organizational learning also depends on where in the OL occurs. Thus, learning can occur in different functions of the organization such as research, development, design, engineering, manufacturing, marketing, administration, and sales.