Unit 10:  Operations Management. Entrepreneurship. Innovation. Ethics
Managing Expectations <ul><li>LEARNING OUTCOMES: </li></ul><ul><li>At the end of the course, students will be able to: </l...
Managing Expectations <ul><li>SUBJECTS DISCUSSED: </li></ul><ul><ul><li>Management, Managers and evolution of Management t...
Managing Expectations <ul><li>TOPIC DETAILS: </li></ul><ul><li>After going through UNIT 10, you should be able to: </li></...
Managing Service & Operations Management Operations Management :  Managing the daily production of goods and services.  Ke...
Kinds of Productivity Partial productivity = Multifactor productivity = Outputs Single Kind of Input Outputs Labor + Capit...
Quality Baldrige National  Quality Award Total Quality  Management ISO  9000 & 14000 Quality-Related Product  Characterist...
Meaning of Quality … A product or service  free of deficiencies … The characteristics of a product or service that satisfy...
Quality- Product & Services Reliability Serviceability Durability Product
Total Quality Management Principles of TQM Continuous improvement  Teamwork Customer focus and satisfaction
Service Operations Services… <ul><li>are performed </li></ul><ul><li>are intangible </li></ul><ul><li>are unstorable </li>...
Service Operations Service Recovery and Empowerment Service-Profit Chain
The Service-Profit Chain
Components of Internal Service Quality Both vertical and horizontal communication? Do service employees have tools needed?...
Service Recovery and Empowerment <ul><li>Service recovery is restoring customer satisfaction to strongly dissatisfied cust...
Doing the Right Thing <ul><li>Protect Your Front-Line Staff: The Customer Isn’t  Always  Right </li></ul><ul><li>Fire cust...
Empowering Service Employees COST BENEFITS 1.  Finding service workers capable of solving problems 2.  Training service wo...
Manufacturing Operations <ul><li>Make-to-order operations </li></ul><ul><ul><li>manufacturing doesn’t begin until an order...
Why Innovation Matters <ul><li>1900-1910 </li></ul><ul><li>airplane, plastic, air  conditioner </li></ul><ul><li>1911-1920...
Technology Cycles Technology Cycle A cycle that begins with the “birth” of a new technology and ends when that technology ...
S-Curves and Technological Innovation Innovation Streams Patterns of innovation over time that can create sustainable comp...
Technological Innovation Discontinuous  Change Dominant Design Technological  Discontinuities Technological Substitution D...
Managing Innovation Creative Work Environments Challenging Work Work Group Encouragement Lack of Organiz. Impediments Supe...
Managing Innovation Steps   Environment   Goals   Approach   Experimental  Approach Compression Approach Uncertain discont...
Managing Expectations <ul><li>TOPIC DETAILS: </li></ul><ul><li>After going through this part, you should be able to: </li>...
Ethical and Unethical Workplace Behavior Ethics The set of moral principles or values that defines right and wrong for a p...
Ethics and the  Nature of Management Jobs Unethical Managerial Behaviour Authority and Power Handling Information Influenc...
Ethics and the Nature of Management Jobs <ul><li>Managers can encourage ethical behaviours by… </li></ul><ul><ul><li>using...
Workplace Deviance <ul><li>Workplace Deviance </li></ul><ul><ul><li>Unethical behaviour that violates organisational norms...
Types of Workplace Deviance Production  Deviance Property  Deviance Political  Deviance Personal  Aggression Minor Serious...
Production Deviance <ul><li>Leaving early </li></ul><ul><li>Taking excessive breaks </li></ul><ul><li>Intentionally workin...
Property Deviance <ul><li>Sabotaging equipment </li></ul><ul><li>Accepting kickbacks </li></ul><ul><li>Lying about hours w...
Political Deviance <ul><li>Showing favouritism </li></ul><ul><li>Gossiping about co-workers </li></ul><ul><li>Blaming co-w...
Personal Aggression <ul><li>Sexual harassment </li></ul><ul><li>Verbal abuse </li></ul><ul><li>Stealing from co-workers </...
U.S. Sentencing Commission Guidelines Companies can be prosecuted and punished even if management didn’t know about the un...
Compliance Program Steps Revise if required 1.  Establish standards and procedures. 7.  Improve program after violations. ...
How Do You Make Ethical Decisions? Influences on Ethical Decision Making Ethical Answers Depend on… Ethical Intensity of D...
Ethical Intensity Depends on… Concentration of effect Magnitude of consequences Social consensus Probability of effect Pro...
Moral Development Societal  Expectations Selfish Internalised Principles Pre conventional Conventional Post conventional K...
Principles of Ethical Decision Making Never take any action not in your  organisation’s  long-term self-interest. Never do...
Practical Steps to Ethical Decision Making <ul><li>Studies show that Integrity Tests… </li></ul><ul><ul><li>Help reduce wo...
A Basic Model of Ethical Decision Making 1.  Identify the problem 2.  Identify the constituents 3.  Diagnose the situation...
What Is Social Responsibility? <ul><li>Social Responsibility:  A business’s obligation to… </li></ul><ul><ul><li>pursue po...
To Whom Are Organisations  Socially Responsible? Stakeholder Model Satisfy Interests  of Multiple Stakeholders Shareholder...
Organisation’s Social Responsibilities Abide by principles of right and wrong Obey laws and regulations Ethical Legal Econ...
Responses to Demands  for Social Responsibility Reactive Defensive Accommo- dative Proactive Fight all  the way DO NOTHING...
Social Responsibility and  Economic Performance Realities of Social Responsibility Can cost a company Sometimes it does pa...
Upcoming SlideShare
Loading in …5
×

MBA MCO101 Unit 10 Lecture 11 200806 Xx

2,343 views

Published on

Published in: Economy & Finance, Business
0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total views
2,343
On SlideShare
0
From Embeds
0
Number of Embeds
805
Actions
Shares
0
Downloads
93
Comments
0
Likes
0
Embeds 0
No embeds

No notes for slide

MBA MCO101 Unit 10 Lecture 11 200806 Xx

  1. 1. Unit 10: Operations Management. Entrepreneurship. Innovation. Ethics
  2. 2. Managing Expectations <ul><li>LEARNING OUTCOMES: </li></ul><ul><li>At the end of the course, students will be able to: </li></ul><ul><ul><li>Explain fundamental concepts and principles of management including the basic roles, skills, and functions of management </li></ul></ul><ul><ul><li>Discuss the knowledgeable of historical development, theoretical aspects and practice application of managerial process </li></ul></ul><ul><ul><li>Examine the environment, technology, human resources, and organisations in order to achieve high performance </li></ul></ul><ul><ul><li>Discuss the ethical dilemmas faced by managers and the social responsibilities of businesses . </li></ul></ul>
  3. 3. Managing Expectations <ul><li>SUBJECTS DISCUSSED: </li></ul><ul><ul><li>Management, Managers and evolution of Management theory </li></ul></ul><ul><ul><li>Personality traits and diversity </li></ul></ul><ul><ul><li>Organisation, Globalisation and the resulting environments </li></ul></ul><ul><ul><li>Decision-making and Planning </li></ul></ul><ul><ul><li>Structure and Strategy </li></ul></ul><ul><ul><li>Executing and Controlling </li></ul></ul><ul><ul><li>Human Resources Management as a function </li></ul></ul><ul><ul><li>Motivation, Leadership, Groups and Teams </li></ul></ul><ul><ul><li>Communication </li></ul></ul><ul><ul><li>Operations Management. Entrepreneurship. Innovation </li></ul></ul>
  4. 4. Managing Expectations <ul><li>TOPIC DETAILS: </li></ul><ul><li>After going through UNIT 10, you should be able to: </li></ul><ul><ul><li>explain the functions that exists within a business environment </li></ul></ul><ul><ul><li>describe how various units interact to achieve the organizational goals. </li></ul></ul><ul><ul><li>explain why innovation matters to companies. </li></ul></ul><ul><ul><li>discuss the different methods that managers can use to effectively manage innovation in their organizations. </li></ul></ul><ul><ul><li>explain the ethical dilemma faced by today’s managers in performing their duties. </li></ul></ul>
  5. 5. Managing Service & Operations Management Operations Management : Managing the daily production of goods and services. Key issue faced by Managers - Productivity Increased wages and new jobs More donations to charities More affordable and better products Higher Productivity Lower Costs Lower Prices Higher Market Share Higher Profits Higher Standard of Living
  6. 6. Kinds of Productivity Partial productivity = Multifactor productivity = Outputs Single Kind of Input Outputs Labor + Capital + Materials + Energy
  7. 7. Quality Baldrige National Quality Award Total Quality Management ISO 9000 & 14000 Quality-Related Product Characteristics Quality-Related Service Characteristics
  8. 8. Meaning of Quality … A product or service free of deficiencies … The characteristics of a product or service that satisfy customer needs Quality
  9. 9. Quality- Product & Services Reliability Serviceability Durability Product
  10. 10. Total Quality Management Principles of TQM Continuous improvement Teamwork Customer focus and satisfaction
  11. 11. Service Operations Services… <ul><li>are performed </li></ul><ul><li>are intangible </li></ul><ul><li>are unstorable </li></ul>Goods… <ul><li>are made </li></ul><ul><li>are tangible </li></ul><ul><li>are storable </li></ul>
  12. 12. Service Operations Service Recovery and Empowerment Service-Profit Chain
  13. 13. The Service-Profit Chain
  14. 14. Components of Internal Service Quality Both vertical and horizontal communication? Do service employees have tools needed? Are good performers rewarded/recognized? Does management aid or hinder employees? Is there teamwork among individuals and departments? Do they facilitate serving customers? Is job-specific training available? Are goals of senior management and frontline service employees aligned? Policies and Procedures Tools Effective Training Rewards and Recognition Communication Management Support Goal Alignment Teamwork
  15. 15. Service Recovery and Empowerment <ul><li>Service recovery is restoring customer satisfaction to strongly dissatisfied customers </li></ul><ul><ul><li>Fixing the mistakes that were made </li></ul></ul><ul><ul><li>Performing “heroic” service that delights customers </li></ul></ul><ul><li>Empowering workers can help solve customer dissatisfaction </li></ul><ul><ul><li>The goal is zero customer defections </li></ul></ul>
  16. 16. Doing the Right Thing <ul><li>Protect Your Front-Line Staff: The Customer Isn’t Always Right </li></ul><ul><li>Fire customers who use foul language, make threats against employees or other customers, lie, demand unethical or illegal service, bully, or are belligerent </li></ul><ul><li>Otherwise, you are saying you care more about money than the safety of people in the business </li></ul>
  17. 17. Empowering Service Employees COST BENEFITS 1. Finding service workers capable of solving problems 2. Training service workers 3. Higher wages 4. Less emphasis on service reliability 5. Eagerness to provide “giveaways” 6. Unintentional unfair customer treatment 1. Quicker response to customer complaints 2. Employees feel better 3. Enthusiastic employee interaction with customers 4. Employees offer ideas for improvement and prevention 5. Great word-of-mouth advertising and customer retention 6. Satisfied employees more likely to stay with company
  18. 18. Manufacturing Operations <ul><li>Make-to-order operations </li></ul><ul><ul><li>manufacturing doesn’t begin until an order is placed </li></ul></ul><ul><li>Assemble-to-order operations </li></ul><ul><ul><li>used to create semi-customized products </li></ul></ul><ul><li>Make-to-stock operations </li></ul><ul><ul><li>manufacture standardized products </li></ul></ul>Amount of Processing Flexibility of Manufacturing Is for large, expensive, specialized products like aircraft carriers Project manufacturing Handle small, specialty batches Job shops Produces specific quantities of different items, like a bakery or commissary Batch production Uses predetermined, linear steps, like beverage bottling Line-flow production Produces products continuously, like oil drilling Continuous-flow production
  19. 19. Why Innovation Matters <ul><li>1900-1910 </li></ul><ul><li>airplane, plastic, air conditioner </li></ul><ul><li>1911-1920 </li></ul><ul><li>mammogram, zipper, sonar </li></ul><ul><li>1921-1930 </li></ul><ul><li>talking movies, penicillin, jet engine </li></ul><ul><li>1931-1940 </li></ul><ul><li>radar, helicopter, computer </li></ul><ul><li>1941-1950 </li></ul><ul><li>atomic bomb, bikini, transistor </li></ul><ul><li>1951-1960 </li></ul><ul><li>DNA, oral contraceptive, Tylenol </li></ul><ul><li>1961-1970 </li></ul><ul><li>video recorder, handheld calculator, computer mouse </li></ul><ul><li>1971-1980 </li></ul><ul><li>compact disc, gene splicing, laser printer </li></ul><ul><li>1981-1990 </li></ul><ul><li>MS-DOS, space shuttle, CD-ROM </li></ul><ul><li>1991-2000 </li></ul><ul><li>taxol, Pentium processor, Java </li></ul><ul><li>2001-Today </li></ul><ul><li>mapping of human genome, first cloning of human embryo </li></ul>
  20. 20. Technology Cycles Technology Cycle A cycle that begins with the “birth” of a new technology and ends when that technology reaches its limits and is replaced by a newer, better technology.
  21. 21. S-Curves and Technological Innovation Innovation Streams Patterns of innovation over time that can create sustainable competitive advantage. Technological Discontinuity A scientific advance or unique combination of existing technologies that creates a significant breakthrough in performance or function. Effort Performance Discontinuity New Technology A B C
  22. 22. Technological Innovation Discontinuous Change Dominant Design Technological Discontinuities Technological Substitution Design Competition
  23. 23. Managing Innovation Creative Work Environments Challenging Work Work Group Encouragement Lack of Organiz. Impediments Supervisory Encouragement Organizational Encouragement Freedom Flow
  24. 24. Managing Innovation Steps Environment Goals Approach Experimental Approach Compression Approach Uncertain discontinuous change: technological substitution and design competition Certain incremental change established technology (i.e., dominant design) Compress time/steps needed to bring about small improvements Planning Supplier involvement Shorten time of steps Overlapping steps Multifunctional teams Build something new, different, and better Design iterations Testing Milestones Multifunctional teams Powerful leaders Speed Lower costs Incremental improvements in performance of dominant design Speed Performance Improvements New dominant design
  25. 25. Managing Expectations <ul><li>TOPIC DETAILS: </li></ul><ul><li>After going through this part, you should be able to: </li></ul><ul><ul><li>Discuss how the nature of management jobs creates the possibility for ethical abuses. </li></ul></ul><ul><ul><li>Identity common kinds of workplace deviance. </li></ul></ul><ul><ul><li>Describe the U.S. Sentencing Commission Guidelines for Organisations and explain how they both encourage ethical behaviour and punish unethical behaviour by businesses. </li></ul></ul><ul><ul><li>Describe what influences ethical decision making. </li></ul></ul><ul><ul><li>Explain what practical steps managers can take to improve ethical decision making. </li></ul></ul><ul><ul><li>Explain to whom organisations are socially responsible. </li></ul></ul><ul><ul><li>Explain for what organisations are socially responsible. </li></ul></ul><ul><ul><li>Explain how organisations can choose to respond to societal demands for social responsibility. </li></ul></ul><ul><ul><li>Explain whether social responsibility hurts or helps an organisation’s economic performance. </li></ul></ul>
  26. 26. Ethical and Unethical Workplace Behavior Ethics The set of moral principles or values that defines right and wrong for a person or group.
  27. 27. Ethics and the Nature of Management Jobs Unethical Managerial Behaviour Authority and Power Handling Information Influencing the Behavior of Others Setting Goals
  28. 28. Ethics and the Nature of Management Jobs <ul><li>Managers can encourage ethical behaviours by… </li></ul><ul><ul><li>using resources for company business only </li></ul></ul><ul><ul><li>handling information confidentially </li></ul></ul><ul><ul><li>not influencing others to engage in unethical behaviour </li></ul></ul><ul><ul><li>not creating policies that reward employees for unethical behaviour </li></ul></ul><ul><ul><li>setting reasonable goals </li></ul></ul>
  29. 29. Workplace Deviance <ul><li>Workplace Deviance </li></ul><ul><ul><li>Unethical behaviour that violates organisational norms about right and wrong </li></ul></ul><ul><ul><li>Two dimensions: </li></ul></ul><ul><ul><ul><li>Degree of deviance </li></ul></ul></ul><ul><ul><ul><li>Target of deviant behaviour </li></ul></ul></ul>
  30. 30. Types of Workplace Deviance Production Deviance Property Deviance Political Deviance Personal Aggression Minor Serious Organisational Interpersonal
  31. 31. Production Deviance <ul><li>Leaving early </li></ul><ul><li>Taking excessive breaks </li></ul><ul><li>Intentionally working slow </li></ul><ul><li>Wasting resources </li></ul>
  32. 32. Property Deviance <ul><li>Sabotaging equipment </li></ul><ul><li>Accepting kickbacks </li></ul><ul><li>Lying about hours worked </li></ul><ul><li>Stealing from company </li></ul>
  33. 33. Political Deviance <ul><li>Showing favouritism </li></ul><ul><li>Gossiping about co-workers </li></ul><ul><li>Blaming co-workers </li></ul><ul><li>Competing non-beneficially </li></ul>
  34. 34. Personal Aggression <ul><li>Sexual harassment </li></ul><ul><li>Verbal abuse </li></ul><ul><li>Stealing from co-workers </li></ul><ul><li>Endangering co-workers </li></ul>
  35. 35. U.S. Sentencing Commission Guidelines Companies can be prosecuted and punished even if management didn’t know about the unethical behaviour. <ul><li>Who, What, and Why? </li></ul><ul><ul><li>Nearly all businesses are covered </li></ul></ul><ul><ul><li>Punishes a number of offences </li></ul></ul><ul><ul><li>Encourages businesses to be proactive </li></ul></ul><ul><li>Partial List of Offences </li></ul><ul><ul><li>Invasion of privacy </li></ul></ul><ul><ul><li>Price fixing </li></ul></ul><ul><ul><li>Fraud </li></ul></ul><ul><ul><li>Customs violations </li></ul></ul><ul><ul><li>Antitrust violations </li></ul></ul><ul><ul><li>Civil rights violations </li></ul></ul><ul><ul><li>Theft </li></ul></ul><ul><ul><li>Money laundering </li></ul></ul><ul><ul><li>Conflicts of interest </li></ul></ul><ul><ul><li>Embezzlement </li></ul></ul><ul><ul><li>Dealing in stolen goods </li></ul></ul><ul><ul><li>Copyright infringements </li></ul></ul><ul><ul><li>Extortion ……and more!!! </li></ul></ul>
  36. 36. Compliance Program Steps Revise if required 1. Establish standards and procedures. 7. Improve program after violations. 6. Enforce standards consistently and fairly. 5. Train employees on standards and procedures. 3. Delegate decision-making authority only to ethical employees. 4. Encourage employees to report violations. 2. Assign upper-level managers to be in charge.
  37. 37. How Do You Make Ethical Decisions? Influences on Ethical Decision Making Ethical Answers Depend on… Ethical Intensity of Decision Moral Development of Manager Ethical Principles Used
  38. 38. Ethical Intensity Depends on… Concentration of effect Magnitude of consequences Social consensus Probability of effect Proximity of effect Temporal immediacy
  39. 39. Moral Development Societal Expectations Selfish Internalised Principles Pre conventional Conventional Post conventional Kohlberg’s Stages of Moral Development <ul><li>Punishment and Obedience </li></ul><ul><li>Instrumental Exchange </li></ul><ul><li>Good boy, nice girl </li></ul><ul><li>Law and order </li></ul><ul><li>Social contract </li></ul><ul><li>Universal principle </li></ul>
  40. 40. Principles of Ethical Decision Making Never take any action not in your organisation’s long-term self-interest. Never do anything that is not honest, open, and truthful and that you would not be glad to see reported in the newspapers or on TV. Never take any action that is not kind and that does not build a sense of community. Never take any action that violates the law, for the law represents the minimal moral standard. Never take any action that does not result in greater good for society. Never take any action that infringes on others’ agreed-upon rights. Never take any action that harms the least among us: the poor, the uneducated, the unemployed. Long-term self-interest Personal virtue Religious injunctions Government requirements Utilitarian benefits Individual rights Distributive justice
  41. 41. Practical Steps to Ethical Decision Making <ul><li>Studies show that Integrity Tests… </li></ul><ul><ul><li>Help reduce workplace deviance </li></ul></ul><ul><ul><li>Help hire workers who are better performers </li></ul></ul><ul><li>Communicate code of ethics to both inside and outside the company </li></ul><ul><li>Develop ethical standards and procedures specific to business </li></ul><ul><li>Develops employee awareness of ethics </li></ul><ul><li>Achieves credibility with employees </li></ul><ul><li>Teaches a practical model of ethical decision making </li></ul><ul><li>Managers must: </li></ul><ul><ul><li>Act ethically </li></ul></ul><ul><ul><li>Are active in company ethics programs </li></ul></ul><ul><ul><li>Report potential ethics violations </li></ul></ul><ul><ul><li>Punish those who violate the code of ethics </li></ul></ul>Select and hire ethical employees Establish a Code of Ethics Train employees to make ethical decisions Create an ethical climate
  42. 42. A Basic Model of Ethical Decision Making 1. Identify the problem 2. Identify the constituents 3. Diagnose the situation 4. Analyse your options 5. Make your choice 6. Act
  43. 43. What Is Social Responsibility? <ul><li>Social Responsibility: A business’s obligation to… </li></ul><ul><ul><li>pursue policies </li></ul></ul><ul><ul><li>make decisions </li></ul></ul><ul><ul><li>take actions that benefit society </li></ul></ul>
  44. 44. To Whom Are Organisations Socially Responsible? Stakeholder Model Satisfy Interests of Multiple Stakeholders Shareholder Model Maximize Profits <ul><li>PRO </li></ul><ul><li>Firm maximises shareholder wealth and satisfaction </li></ul><ul><li>The company stock increases in value </li></ul><ul><li>CON </li></ul><ul><li>Organisations cannot act effectively as moral agents for shareholders </li></ul><ul><li>Time, money, and attention diverted to social causes undermine market efficiency </li></ul>Primary Stakeholders: Shareholders Employees Customers Suppliers Governments Local Communities Secondary Stakeholders: Media Special Interest Groups Trade Associations
  45. 45. Organisation’s Social Responsibilities Abide by principles of right and wrong Obey laws and regulations Ethical Legal Economic Discretionary Be profitable Serve a social role $ ?
  46. 46. Responses to Demands for Social Responsibility Reactive Defensive Accommo- dative Proactive Fight all the way DO NOTHING DO MUCH Withdrawal Do only what is required Legal Approach Bargaining Problem Solving Public Relations Approach Be progressive Lead the industry
  47. 47. Social Responsibility and Economic Performance Realities of Social Responsibility Can cost a company Sometimes it does pay Does not guarantee profitability

×