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MANAGEMENT 339: PRINCIPLES OF MANAGEMENT AND OPERATIONS
• What is Operations Management (OM) ?– Activities that relate to creation of goods and services
through transformation of inputs– Relationship to other functional areas such as Marketing
and Accounting Finance– Key areas in OM
• Product/service design/Process design/Capacity planning/facilities location and design (Layout)/Quality management/HR and job
design/Supply chain management/Inventory and materials management/Operations planning and scheduling/Maintenance
• We will learn principles/methods to handle issues in these areas
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MANAGEMENT 339: PRINCIPLES OF MANAGEMENT AND OPERATIONS
• What are Principles of Management ?– Principles applicable to all functions of the organization
– Principles applicable at all levels of the organization
– Principles useful to all levels of managers
• What are the levels of the organization ?– Corporate; Business; Functional. Page 273.
• What are levels of managers/management ?– Top management, middle management,
entry-level/first-level/supervisory
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MANAGEMENTWhat all managers do
1. Achieving Objectives/Goals
2. Functions of Management
3. Efficient Use of Resources
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MANAGEMENT
Definition: Pg 8• Goal/objective directed
• A process involving management functions
• Resources: assembling and using
• Setting: –Organizational - functions, people, coordination
–External environment
How good is our management ?
Effectiveness: Achieving objectives, goals
Efficiency: Managing resources
OUTPUT INPUT
5
6
Efficiency
Team A Team B Target
Tickets
Sold
200 150 250
$ Spent 100 50
Efficiency 200/100 150/50
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Function of ManagementPg 25
Planning
Organizing
Directing/ Leading
Control
Process of Management
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Planning at Different Levels of Management
TOP
MIDDLE
FIRST
LEVEL
Planning
Horizon
Long
Medium
Short
Planning
Type
Strategic
Tactical
Operational
Skills (pg 32)
Conceptional
Human
Technical
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Trends in Management and OM
• Globalization • Growth of service sector• Emphasis on quality and productivity
– TQM and JIT philosophies• Social responsibility and ethics• Diversity issues• Emphasis on Technology, IT, logistics,
integration, coordination: SCM
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Social Responsibility and Ethics
• Why relevant to business studies: Pg. 151• SR: obligation of an organization’s management
to make decisions and take actions that will enhance the welfare and interests of society as well as the organization
• Economic, legal, ethical and discretionary responsibilities
• What organizations can do: 164-– Leadership, code of ethics, compliance
committees/officers, policies (e.g. whistle-blowing), training
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ETHICS IN MANAGEMENT
• Ethics: The code of moral principles and values that govern the behavior of a person or group with respect to what is right or wrong.
• Values Statements
• Code of ethics
• New employee orientation, employee training
• Leadership, corporate culture
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An Overview of Planning. Pg 270-
• Purpose– Direction, standards for measurement
• Types of plans– Strategic, Tactical and Operational– See chart on page 270
• Planning process– Pg 275
• Setting Objectives/Goals. 279-– Principles: Page 288-– Specific, Measurable, Realistic but challenging, Participation– MBO. 291
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Strategic Management. Chapter 6
• Objective: Competitive advantage
• Characteristics of competitive advantage. 194-– Superiority, inimitability, durability, non-substitutability, appropriate
levels of profits/gains
• Strategic Management process 197– Strategic Intent/Vision/Mission
– Environmental Analysis
– Revised Vision/Mission and LT objectives 198-
– Detailed situation analysis
– Formulate strategies
– Develop action for implementation: Programs, Policies, Budgets
– Plan monitoring
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ENVIRONMENTAL SCANNING 204-: EXTERNAL ENVIRONMENT
• ECONOMY• POLITICAL-LEGAL• SOCIO-CULTURAL• TECHNOLOGY• GLOBAL/INTERNATIONAL• COMPETITION• CUSTOMERS• SUPPLIERS
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INTERNAL ENVIRONMENT
• FUNCTIONAL AREA RESOURCES– Finance, Marketing, Operations, HR, MIS, R&D
• ORGANIZATION STRUCTURE– Dividing work, Authority & Responsibility,
Information flow, decision making
• CORPORATE CULTURE– Social responsibility and ethics, integration and
intensity of competitive priorities
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STRATEGIC MANAGEMENTFORMULATING STRATEGY
EXT. ENVT.
INT. ENVT.
MISSION
OBJECTIVES
SITUATION
ANALYSIS
STRATEGY
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SITUATION ANALYSIS
1. SWOT ANALYSIS. 214
2. PORTFOLIO ANALYSIS. 211
3. PRODUCT LIFE CYCLE ANALYSIS 209
4. INDUSTRY/ COMPETITION ANALYSIS
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STRATEGY
CORPORATE LEVEL(GRAND)
GROWTH STABILITY RETIREMENT
BUSINESS LEVEL: Pg 200
COST LEADERSHIP DIFFERENTIATION
FOCUS
FUNCTIONAL LEVEL:
OPERATIONAL STRATEGY
“Competitive Priorities”: Cost/Price Quality Availability Dependability
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GROWTH STRATEGY
CONCENTRATION
DIVERSIFICATION
VERTICAL INTEGRATION
ACQUISITIONS & MERGERS
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Functional level strategyE.g. Operations Strategy
PRODUCTS/SERVICES
PROCESS
TECHNOLOGY
QUALITY
WORK FORCE
FACILITIES
SUPPLIERS/VERTICAL INTEGRATION
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STRATEGY IMPLEMENTATION
• Organizing and Directing view
• Policies/procedures, Programs and Budgets view
• Seven S view . Pg 218
• What are policies? Why important here?
• Programs are MT and ST plans
– Elements
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MANAGEMENT CONTROLChapter 16
The systematic process through which managers regulate
organizational activities to make them consistent with expectations established in plans, targets, and
standards of performance.
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MANAGEMENT CONTROLSteps 570-
SETTING STANDARDS
MEASURING ACTUAL PERFORMANCE
COMPARISON ANALYSIS
CORRECTIVE ACTION/ NO ACTION
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Stages of Management Control589-
• Preliminary control• Concurrent control• Post/Feedback control
• Examples of control 577- : quality control, process control, employee evaluations, customer satisfaction surveys, supplier evaluations
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Principles of Effective Control591 –
• Focus
• Amount of
• Quality of information
• Flexibility