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Nonprogrammed decisions are made a what level of management


Rational Decision Making Model

1) Identification of the problem
2) Development of alternatives
3) Evaluation of alternatives
4) Selection of an alternative
5) Implementation of the alternatives
6) Evaluation of the choice

Planning for implementation requires the following

-Clearly envision what the implementation looks like
-Outline the specific tasks that must be completed
- Identify the resources that are required for each task
-Identify how much time it will take to complete each task
- Someone is assigned the responsibility for each task

How to make high quality decisions

Tips in using the rational decision making model
- Select criteria against your alternatives that will be tested
- Generate several ideas
- Weigh the pros and cons of each alternative
- Keep searching for new information
- Be aware of all consequences for each alternative
- Plan meticulously for the implementation

operational decisions are made at what level of management


Tools for operations decision makers

1) Decision Trees
Are tree diagrams depicting alternatives and pay offs

2) Cost-Benefit
Compares costs and financial benefits of a project or decision

3) Cost-Effectiveness
Comparison of alternative courses of action in terms of their cost and effectiveness

4) Networks
Graphic representation of a project depicting flow and
and sequence of defined activities

5) Linear Programming
An aid in allocating resources

Creativity def

generation of unique ideas

Innovation def

using these unique ideas

How to encourage creativity

-hire creative people
-train employees to be creative
-create climate that encourages
-be flexible
-value new ideas
-provide opportunities for employees to interact
-celebrate success

Characteristics of creative organzations

- open communication
- no limits on how to preform work
- hetergeneous
- ideas are objectively based on merit
- encourage risk taking
- personal freedom
- participative decision making

Successful decision makers

- always prepared
- know culture of organization
- use decision making process
- include employees in decision making process
- support group decision making
- ensure reliable info is used
- creative problem solving when needed
- create open climate to encourage feedback

Management Def

process of integrating resources for accomplishment of objectives

Management Functions (5)

planning: determining in advance what should happen

2 aspects of effective management

1. Task Accomplishment- getting others to do their work
2. Employee Satisfaction

Old vs. New Management

Old = power over people
New = partnership

Rules of New Management

1. Take responsibility/make decisions
2. listen to your instincts
3. lead by example
4. good communcation

Effective def

doing the right things

Efficient def

doing things right

(cant compensate for lack of effectiveness)

General Manager

responsible for all activities of a unit

Functional Manager

responsible for only one area of the organization

3 Managerial levels

1. First Line Manager- day to day operations
2. Middle Manager- coordinated activities that implement policies + facilitate activities at technical level
3. Top Manager- executives that control the organization, vision of future, overall responsible

3 types of management skills

1. technical
2. human
3. conceptual

technical skills

ability to understand the technology available to perform job (lower skills)

human skills

working with people and understanding their behavior (required by all levels)

conceptual skills

ability to see the big picture by viewing organization as a whole

(top level management)

Planning divided by levels

first line- 1 yr at most (procedures + methods)
middle- 1-5 yrs (policies)
top- 5-20 yrs (goals + objectives)

3 components of planning

1. setting goals + objectives
2. developing + placing policies, procedures, and methods
3. developing mission and vision statements

Planning: repetitiveness

indicates the relationship of standing and single-use plans

standing = used over and over again
single = not repeated but remain part of records (i.e. budget)

Planning flexibility + Rigidity

goal is to develop fixed short range plans and more flexible long range strategic plans

Organizing def

process of grouping activities, delegating authority to accomplish activities, and providing coordination of relationships

Authority def

the right of the manager to direct others and to take action because of the position held in the organization

Delegation Def

is the process of assigning job activities to specific individuals within the organization

Vertical division of labor

(traditional organizations) based on establishment lines of authority
- chain of command
- authority
- responsibility

chain of command def

clear and distinct lines of authority that need to be established among all positions in the organzation

Unity of command

employee reports to 1 manager

scalar principle

having more than one person to report to

responsibility def

obligation to perform an assigned activity

Horizontal Division of Labor

(new organizations) emphasis on sharing ideas and encouraging employees

empowerment def

the level or degree to which managers allow employees to act within their job descriptions

rightsizing def

eliminating unneeded managers and empowering employees

Positives of horizontal division of lab

- focus on customer
- repetition = proficiency
- fewer skills for each worker
= more conformity as product

(neg. = boredom)


process of grouping jobs according to some logical arrangement which is the most used method for implementing division of labor

(function, product, geography, customer, equipment, time)

2 divisions of Labor

Line- a position in the direct chain of command that is responsible for the achievement of the organizational goals
Staff- is intended to provide expertise, advise, and support for line positions

Mission statement includes

summation of purpose, competition, target market, product and service, recipients of service

(departments' should match organizations)

*quality assurance (QA)

a procedure that defines and ensures maintenance of standards within prescribed tolerance for a product or service

*Total Quality Management

management philosophy directed at improving customer satisfaction while promoting positive change and an effective cultural environment for continuous improvement of all organizational aspects

*Continuous Quality Management

focused management philosophy for providing leadership, structure, training, and environment to continuously improve organizational processes

Six Sigma


Quality Assurance Process

1. Identify and define the problem
2. Evaluation of the problem
3. Data collection
4. Analysis of the data
5. Corrective actions
6. Quality improvement reports

Why interested in quality?

- ethical
- saves money
- good for patients/clients
- attracts customers
- eliminates hassels
- self respect/pride
- meet accreditation requirements
- competitive must

Quality in health care is doing the right things to ensure

- best possible clinical outcomes
- satisfaction for all customers
- retention of talented staff
- sound financial performance


Joint Commission on Accreditation of Health Care Organizations
- determines degree to which organization complies with est. control standards
- published original QA standards for hospitals

4 elements of continuous quality improvement (CQI)

1. customer expectations
2. performance improvement
3. process improvement
4. supportive culture

CQI 2 kinds of change

1. raising standards of performance
2. reducing variation in performance

Difference between QA and QI

QA: inspects for quality, searchers for problem people, satisfied to meet standards, clinical people involved, lots of paperwork
QI: prevents quality problems, searches for problem processes, never satisfied, everyone involved, lots of problem solving

Tools for QI

1. benchmarking
2. pareto analysis
3. plan, do, check (results), Act (PDCA) approach


setting goals based on knowing what has been achieved by others. involves rating companies products and services against those of the front runners in the industry

Pareto Analysis

approximately 80% of total sales volume comes from approximately 20% of customers


Markets def

groups of actual or potential buyers who can afford to buy the product, need to have authority, desire, and will respond similarly to a marketing mix appeal


= money, authority, desire, response

Market Mix

combinations of marketing tools that marketing managers orchestrate to satisfy customers and company objectives (4 P's)
- product
- price
- promotion
- place/packing

Product def

anything tangible or intangible, offered for attention, acquisition, or consumption that is capable of satisfying needs

(objects, people, places, services, ideas

Price is based on

cost, needs, competitive prices, government reg., political demands

Trial pricing

introductory price

image pricing

price the product for the image your customers want

tier pricing

lower prices once they pass certain quantity bought

bundling pricing

selling products together as a package

value-added pricing

value added services (free delivery)

captive pricing

sell product at low price in order to pay more later

pay one price

one fixed fee

promotion def

programs designed to persuade customers to buy the product

image =

every experience with your company makes an impression

positioning visuals

people remember


what draws customer in

marketing segmentation

process of dividing a total market into groups of people with similar product needs

(i.e. for large market = geographic, demographic, etc.)

Psychographic segmentation

"state of mind" variables = have direct influence on buyer behavior

(social class, values, personality, lifestyle)

Behavioristic Segmentation

in terms of how members behave toward a sellers offering

(how frequently they use it, loyalty, benefits they seek from it)

Large firms vs small firms market research

large firms have own departments for research, small depend on outside MR firms

Marketing Research Includes

1. sales and market research
2. business economics
3. product research
4. advertising research

Communication based marketing tactics

1. advertising
2. marketing messages (slogans, tag line)
3. brochures
4. trade shows
5. publicity (press release, newsletter)
6. direct mail

Effective project management entails

- good communication
- plan clearly communicated to team members
- everyone involved must agree
- effective management

PM Planning Issues (Identify)

goals and objectives
boundaries and contraints

goal =

aim or purpose of project

objectives =

monitor progess and determine the success upon completion

3 phases of projects

I. Planning
- WBS work breakdown structure
- resource requirements
II. Scheduling
III. Controlling

PM planning def:

process in which you identify who, what, where, and how much with respect to project


work breakdown structure

taking a large project and breaking it down into smaller parts that can be easily managed
(remember people, resources, and equipment needed)

PM With scheduling consider

- how long each task will take
- time
- people (their skills)
- resources

To measure critical points in the projects progress by:

- Gantt Chart: graphical depiction of the progress of your projects
- Networks such as program evaluation and review technique (PERT) & critical path method (PM)

PM controlling def

monitoring the progress of the project
- actual performance against objectives, resources, costs, and quality

Project Manager

oversees the project

project sponser

primary support person

team members

members skilled in technical and business skills

How to close a project

- report or meeting
- getting feedback
- disband team

Why plans fail

- people do not know how to plan
- no solicited input from major stakeholders
- only project manager completes the plan
- team thinks it will be easy

In order to own a restaurant you need

- location, feasibility, theme, budget, loans
- team = owner, architect, engineer, builder
- Plan- including equipment, heating, cooling, storage, decor
- Bids for building
- choose contractor and build
- inspect facility
- final decor + equipment, utilities
- print menus, marketing
- hire manager, employees, train, establish payroll, policies
- get bids from food vendors
- open

Budgeting def

plan for operating business expressed in financial terms

Type of budget

1. operating
2. capital

Operating Budget

- sales and revenue
- expenditures (food, labor, operational expenses)
- labor (salaries, wages, payroll taxes)

Capital Budget

completed at same time as operating, improvements, expansions, replacements, prorated over several periods

fixed budget

prepared at 1 level of revenue

flexible budget

various levels of revenues

financial statements help monitor

your financial resources to ensure that you are making more money than you are spending

4 primary financial statements

1. balance sheet
2. income statement
3. cash flow statement
4. statement of change in stockholders equity

Balance sheet provides info concerning (3)

1. assets= accounts that list what is owned by the business
2. liabilities = are obligations to creditors that the company has acquired through the normal course of business
3. owner's equity = accounts that deal with the net worth of a business

2 types of assets

1. current assets: are converted to cash in less than one yrs time (cash, inventory, accounts receivable, prepaid expenses)
2. fixed assets: have an expected life greater than one year or are permanent in nature (plan + equipment, land, buildings, accumulated depreciation)

2 types of liabilities

1. current liability (short term) acquiring goods and services on credit that must be paid within one year (income tax payable, short-term debt, accrued expenses, accounts payable)
2. Fixed liability (long term) acquiring goods and services on credit for more than one year (mortgage payable, long term debt)

components of owner's equity

capital stock
additional paid in capital
retained earnings

Income Statement

provides a picture of the company's financial performance over a specified period of time
- tells if profit or loss

2 types of accounting methods

1. cash accounting methods- does not recognize that items are prepaid or accrued, revenues are reported in the period in which they were paid
2. accrual accounting method- record expenses when they occur

Income Statement Weighted Average

total value of the inventory and determines the average price based upon all the items in the current inventory
*utilizes the cost of sales formula for inventory

Cash flow statment

reflects the cash position of the firm
- lists cash at beginning of fiscal period, and then shows how cash was generated and used by business

Items recorded on Statement in change of stockholder's equity

net profit, net loss
selling additional shares of stock
repurchases of company of its own stock

3 basic organizational forms

1. sole proprietorship (1 owner) - simplest, owner completely liable
2. partnership (2 or more owners)- have unlimited liability
3. corporations (business incorporated under laws of the state with ownership held by stockholders. )

Corporations continued

legal entity =
profits are taxed..

= limited liability

taxed twice

higher costs associated with operating an organization

Standard of comparison (2)

internal standard of comparison- review of current performance in relation to budgeted performance, past performance, or pre-established department standards

external standard of comparison- include review of performance in relation to similar operations or comparisons with industry performance

Ratio Analysis

Common ratio: Between X:Y
Percentage ratio:Expressed as a %
Turnover ratio: Y divided by X
On a per unit basis: Dollars per unit

liquidity ratios

organizations ability to meet current obligations or its ability to pay bills when due

solvency ratios

used to examine an establishments ability to meet long-term financial obligations

activity ratios

measures how effectively an organization is utilizing its assets, usually expressed as a percent (%) turnover

profitability ratios

measures the ability of an organization to generate profit in relation to sales of the investment of assets

operating ratios

concerned with analysis of success of the operation in generating revenues and in controlling expenses.

Trend Analysis

is a comparison of results over several periods of time which is used to forecast future revenue or levels of activity

break-even analysis

point at which the organization is just breaking even financially, making no profit but incurring no loss. (total revenues = total expenses)

components of breakeven analysis

fixed costs- costs required or an operation to exist, even if it produces nothing

variable costs- costs that change in direct proportion to the volume of sales

Break even equation

Fixed cost/ (1-[variable cost/sales])

2 investment decision

payback period

net present value (NPV)

Def of Communication

transfer of information that is meaningful to those involved

primary components of communication

sender- person who encodes the message and sends it
message- communication that is intended, sent through channel (face to face, bill board, etc.)
receiver- responsible for decoding (interpretation) message
feedback- return to the message, enhances effectiveness of the communication process

Noise DEF

any factor that hinders the receipt of the intended message (physical or actual)

One way communication

sender communicates without expecting or getting feedback from reciever

Two way communication

exists when feedback is provided by the receiver

3 main communication methods

face to face

barriers to comm.

physical separation
info overload

techniques for improved communication

Many channels
Face-to-face communication (encourages feedback)
Sensitivity to the receiver
Awareness of symbolic meanings
Careful timing and reinforcing words with actions
Simple language


study of how space is used (comfort zones, personal space, seating)

reengineering 3 phases

1. planning
2. designing
3. implementing

Job Design 4 choices

1. job simplification
2. job enlargement
3. job rotation- employees preform 1 task for a period of time and then another
4. job enrichment- adding responsibility can provide motivation

3 stages of the change process

1. unfreezing- need 4 change recognized, open to accepting new behaviors
2. change- actually occurs
3. refreezing- change is reinforced

2 components of compensation

direct = money paid for work
indirect = benefits portion

exempt vs nonexempt workers

exempt = receive salaries, ineligible for overtime
nonexempt = receive min. wage + overtime

alternative pay systems

1. skill based or knowledge based
2. pay for performance
3. broadbanding = several paygrades are combined into one band

internal factors determining wage

job rank
job classification
point system
factor comparison
employees relative worth
employers ability to pay

external factors

area wage rates
condition of the local labor market
govnt influences

point system (internal)

various elements of a job are assigned point values, such as skill level requirement, proficiencies, or working conditions

factor comparison

scale is developed as the standard measurement against which all jobs are compared

collective bargaining

unionized companies, formal bargaining between management and labor representatives sets wage levels for specific groups of workers, based on market rate, and the employer's resources available to pay wages

Government influences

Fair labor standards Act
SS act
employment retirement income security act
workers comp

See more

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