Management Ch. 16&18

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standards

basis of comparison for measuring the extent to which organizational performance is satisfactory or unsatisfactory.

Control Process

-Begins with establishment of clear standards of performance
-Involves a comparison of actual performance to desired performance
-Takes corrective action to repair performance deficiencies
-Is a dynamic, cybernetic process
-Consists of feedback control, concurrent control, feedforward control
are three basic control methods: feedback control, concurrent control, and feedforward control, which are discussed on a subsequent slide.

next step in control process is Corrective Action

Identify performance deviations
Analyze those deviations
Develop and implement programs to correct them

Feedback Control

a mechanism for gathering information about performance deficiencies after they occur. This information is then used to correct or prevent performance deficiencies. Study after study has clearly shown that feedback improves both individual and organizational performance. In most instances, any feedback is better than no feedback. However, if there is a downside to feedback, it is that it sometimes occurs too late. Sometimes it comes after big mistakes have been made.

Concurrent Control

mechanism for gathering information about performance deficiencies as they occur. Thus, it is an improvement over feedback, because it attempts to eliminate or shorten the delay between performance and feedback about the performance.

Feedforward Control

mechanism for gathering information about performance deficiencies before they occur. In contrast to feedback and concurrent control, which provide feedback on the basis of outcomes and results, feedforward control provides information about performance deficiencies by monitoring inputs, not outputs. Thus, feedforward seeks to prevent or minimize performance deficiencies before they occur.

Control Methods: five different methods to achieve control in their organizations

Bureaucratic
Objective
Normative-are based on the strongly-held, widely-shared beliefs throughout a company,driven by strong organizational cultures ex: nordstorms is extraordinary customer service
Concertive
Self-Control

Bureaucratic Control

-Top-down control
-Use rewards and punishment to influence employee behaviors
-Use policies and rules to control employees and follow
-Often inefficient and highly resistant to change

Concertive Control

-Regulation of workers' behavior and decisions through work group values and beliefs
-beliefs that are shaped and negotiated by work groups
-usually arise when companies give autonomous work groups complete responsibility for task completion
- operate w/o managers and completely responsible for controlling work group processes, outputs and behavior

Autonomous Work

groups that operate without managers and are completely responsible for controlling work group processes, outputs, and behavior. These groups do their own hiring, firing, worker discipline, work schedules, materials ordering, budget making and meeting, and decision making.
-two phases as they develop concertive control. In phase one, autonomous work group members learn to work with each other, supervise each other's work, and develop the values and beliefs that will guide and control their behavior. And because they develop these values and beliefs themselves, work group members feel strongly about following them. The second phase in the development of concertive control is the emergence and formalization of objective rules to guide and control behavior. The beliefs and values developed in phase one usually develop into more objective rules as new members join teams. The clearer those rules, the easier it becomes for new members to figure out how and how not to behave.

Self Control

-Also known as self-management(managers and workers control their own behavior)
-Employees control their own behavior
-Employees make decisions within well-established boundaries
-Managers teach others the skills they need to maximize work effectiveness
-Employees set goals and monitor their own progress

Operations Management

Managing the daily production of goods and services

Productivity

. Companies combine inputs, such as labor, raw materials, capital, and knowledge, to produce outputs in the form of finished products or services. Productivity is a measure of performance that indicates how many inputs it takes to produce or create an output.
Outputs
Productivity = ---------------
Inputs
The fewer inputs it takes to create an output (or the greater the output from one input), the higher the productivity.

why Productivity matters

-Increased wages and new jobs
-More donations to charities
-More affordable and better products

quality

-A product or service free of deficiencies
-The characteristics of a product or
service that satisfy customer needs

Quality-Related Product Characteristics

reliability-average time between breakdowns,breakdown occurs when a product quits working or doesn't do what it was designed to do. The longer it takes for a product to break down, or the longer the time between breakdowns, the more reliable the product
serviceability-how easy or difficult it is to fix a product. The easier it is to maintain a working product or fix a broken product, the more serviceable that product is.
durability-mean time to failure breakdown assumes that a product can be repaired. However, some products don't break down—they fail. Product failure means these products can't be repaired. They can only be replaced. Thus, durability is a quality characteristic that applies to products that can't be repaired.

Characteristics of Service Quality (5)

Service reliability- is the ability to consistently perform a service well. Studies clearly show that reliability matters more to customers than anything else when buying services
tangibles- refer to the appearance of the offices, equipment, and personnel involved with the delivery of a service. ex: perception of quality is the restroom, eat at fancy restaurant u expect clean bathroom
Responsiveness- is the promptness and willingness with which service providers give good service ex: dry cleaner returns your laundry perfectly clean and pressed in an hour or day
Assurance- is the confidence that service providers are knowledgeable, courteous, and can be trusted.
Empathy- is the extent to which service providers give individual attention and care to customers' concerns and problems.

Total Quality Management

Principles of TQM:
integrated organization-wide strategy for improving product and service quality. TQM is not a specific tool or technique. Rather, TQM is a philosophy or overall approach to management that is characterized by three principles: customer focus and satisfaction, continuous improvement, and teamwork
-Customer focus and satisfaction
-Continuous improvement
-Teamwork

TQM

customer focus and customer satisfaction should be a company's primary goals.
Customer focus- means the entire organization, from top to bottom, should be focused on meeting customers' needs.
Customer satisfaction- is an organizational goal to make products or deliver services that meet or exceed customers' expectations.
Continuous improvement- is an ongoing commitment to increase product and service quality by constantly assessing and improving the processes and procedures used to create those products and services.
How do companies know whether they're achieving continuous improvement? Besides higher customer satisfaction, continuous improvement is usually associated with a reduction in variation.
Variation- is a deviation in the form, condition, or appearance of a product from the quality standard for that product. The less a product varies from the quality standard, or the more consistently a company's products meet a quality standard, the higher the quality.
The third principle of TQM is teamwork- meaning collaboration between managers and nonmanagers, across business functions, and between the company and its customers and suppliers. Quality improves when everyone in the company is given the incentive to work together and the responsibility and authority to make improvements and solve problems.

TQM: six sigma

-continuous improvement means shooting for a goal of Six Sigma quality meaning just 3.4 defective or nonstandard parts per million. Achieving this goal would eliminate almost all product variation.

Service Profit Chain

The first step in the service-profit chain is internal service quality, meaning the quality of treatment that employees receive from a company's internal service providers, such as management, payroll and benefits, human resources, etc. Employee satisfaction occurs when companies treat employees in a way that meets or exceeds their expectations. In other words, the better employees are treated, the more satisfied they are, and the more likely they are to give high-value service to satisfy customers.
Service capability is an employee's perception of his or her ability to serve customers well. When an organization serves its employees in ways that help them to do their jobs well, employees, in turn, are more likely to believe that they can and ought to provide high-value service to customers.
Finally, high-value service leads to customer satisfaction and customer loyalty, which, in turn, lead to long-term profits and growth. What's the link between customer satisfaction and loyalty and profits? The average business keeps only 70 to 90 percent of its existing customers each year. Also, new customers typically buy only 20 percent as much as established customers. In fact, keeping existing customers is so cost-effective that most businesses could double their profits by simply keeping 5 percent more customers per year!

Service Recovery and Empowerment

When problems occur, must switch from process of service delivery to service recovery-restoring customer satisfaction to strongly dissatisfied customers.
To do this they must:
-Fixing the mistakes that were made
-Performing "heroic" service that delights customers
Because production-line systems make it difficult for service employees to do service recovery, many companies are now empowering their service employees.
empowering workers-means permanently passing decision-making authority and responsibility from managers to workers. With respect to service recovery, empowering workers means giving service employees the authority and responsibility to make decisions that immediately solve customer problems ( goal is zero customer defections)

Objective control

-focus on observing and measuring worker behavior or output ex: employee fired for talking bad about customer on facebook
2 types:
behavior control- regulating behavior and actions that workers perform on the job. Regulates, guides, measures how workers behave on job
output control- measures results of their effort, gives managers and workers the freedom to behave as they see fit as long as they accomplish prespecified , measurable results, reward and incentives

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