Administracion Empresarial I

Operations management is the systematic direction (strategy) and control of operations processes that transform resources into finished goods and services; it is getting things done by working with or through other people.

Production is the transformation of organizational resources into products.

Productivity is the relationship between the total amount of goods or services being produced (output) and the organizational resources needed to produce them (input).

Production control ensures that an organization produces goods and services as planned.

Quality is the extent to which a product reliably does what it is intended to do.

Statistical quality control is the process used to determine how many products should be inspected to calculate a probability that the total number of products will meet organizational quality standards.

Quality circles are small groups of workers that meet to discuss quality related problems on a particular project and communicate their solutions to these problems to management at a formal presentation session.

Capacity strategy is an operational plan of action aimed at providing the organization with the right facilities to produce the needed output at the right time.

Location strategy is an operational plan of action that provides the organization with a competitive location for its headquarters, manufacturing, services, and distribution activities.

Factors for a good location

• Nearness to market and distribution centers
• Nearness to vendors and resources
• Requirements of federal, state, and local governments
• The degree of interaction with the rest of the corporation
• The quality and quantity of labor pools
• Taxes and financing requirements
• Existing and potential transportation
• The quality of utilities and services

Product strategy is an operational plan of action outlining which goods and services an organization will produce and market.

Process strategy is an operational plan of action outlining the means and methods the organization will use to transform resources into goods and services.

• Continuous process – (high volume, low variety) to produce beer, petroleum etc.
• Repetitive process – (items in large lots) to produce cars; assembly-line production
• Job-shop process – (high variety, low volume) to produce one-of-a-kind items such as spaceships

Layout strategy is an operational plan that determines the location and flow of organizational resources around, into, and within production and service facilities.

A layout is the overall arrangement of equipment, work areas, service areas and storage areas within a facility that produces goods or provides services.

• A product layout is a layout designed to accommodate a limited number of different products that require high volumes, highly specialized equipment, and narrow employee skills.
• A process (functional) layout is a layout pattern based primarily on grouping together similar types of equipment.
• A fixed-position layout is a layout plan appropriate for organizations involved in a large number of different tasks that require low volumes, multipurpose equipment, and broad employee skills.

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Operational control is an operational plan that specifies the operational activities of an organization.

Just-in-time inventory control is a technique for reducing inventories to a minimum by arranging for production components to be delivered to the production facility “just in time” to be used.

Best conditions for JIT

• Companies that produce relatively standardized products for which there is a constant demand.

Advantages of JIT

• Enhances organizational performance
• Reduces unnecessary labor expenses generated by manufacturing products that are not sold
• Minimizes tying monetary resources for inventory

Characteristics of JIT

1. Closeness of suppliers
2. High quality of material purchased from suppliers – difficult to overcome problems caused by defective materials since inventory is kept small
3. Well-organized receiving and handling of materials purchased from suppliers
4. Strong management commitment – the system takes time and effort to plan, install and improve and is therefor expensive to implement.

• Pure-preventive maintenance policy is a maintenance control policy that tries to ensure that machine adjustments, lubrications, cleaning, parts replacement, painting, and needed repairs are and overhauls will be performed before facilities or machines malfunction.
• Pure-breakdown (repair) policy is a maintenance control policy that decrees that machine adjustments, lubrications, cleaning, parts replacement, painting, and needed repairs are and overhauls will be performed only after facilities or machines malfunction.

A budget is a control tool that outlines how funds will be obtained and spent in a given period.

Zero-base budgeting requires managers to justify their entire budget request in detail rather than simply referring to budget amounts established in previous years.

A variable budget (flexible budget) is one that outlines the levels of resources to be allocated for each organizational activity according to the level of production within the organization. (rises budget for various levels when production goes up and vice versa)

Ratio analysis is a control tool that summarizes the financial position of an organization by calculating ratios based on various financial measures.

Breakeven analysis is a control tool that summarizes the various levels of profit or loss associated with various levels of production.

BE = FC / (P – VC)

Decision tree analysis is a statistical and graphical multiphased decision-making technique that shows the sequence and interdependence of decisions.

Process control is a technique that assists in monitoring production processes.

Value analysis is a cost control and cost reduction technique that examines all the parts, materials, and functions of an operation. The goal of this analysis is to reduce costs by using cheaper components and materials in such a way that the product quality or appeal is not affected.

Decision tree analysis is a statistical and graphical multiphased decision-making technique that shows the sequence and interdependence of decisions.

Process control is a technique that assists in monitoring production processes.

Value analysis is a cost control and cost reduction technique that examines all the parts, materials, and functions of an operation. The goal of this analysis is to reduce costs by using cheaper components and materials in such a way that the product quality or appeal is not affected.

• Can “see” a venture through to its end stages
• Are not afraid of failure. No (or low) risk aversion.
• Adopt a mission to create and sustain value
• Identify and pursue opportunities to serve mission
• Engage a process of continuous innovation, adaptation, and learning
• Exhibit accountability

Advantages

• Long term interest in the success of the company: do not have an extra pressure to show short term results.
• Tend to have common sets of objectives.
• Faster decision making.
• Well-defined culture, sometimes paternalistic, generally strong and shared-accepted.
• More job stability in executives, longer term strategies and politics.
• More interest in quality and image, as both clients and suppliers have a direct contact with top management.

Disadvantages

• Overlapping of family and business roles.
• Leadership lasts for too long and in general lack of succession planning.
• “Nepotism”.
• Mistrust, secrecy, need to control non family members.
• Tend to resist change and professionals.
• Not result-oriented.
• Difficulty in attracting and retaining talent.

Have a distinct purpose (goal)

Composed of people

Have a deliberate structure

• Management
  • is a process or series of continuing and related activities.
  • It involves and concentrates on reaching organizational goals.
  • is the process of reaching organizational goals by working with and through people and other organizational resources.

refers to management’s use of organizational resources meeting organizational goals. (High goal attainment)

is the degree to which organizational resources contribute to productivity. It is measured by the proportion of total organizational resources used during the production process. (Low waste)

• Technical skills are skills involving the ability to apply specialized knowledge and expertise to work related techniques and procedures.
• Human skills are skills involving the ability to build cooperation within the team being led.
• Conceptual skills are skills involving the ability to see the organization as a whole.

What do we want to become

What is our business

• Interpersonal roles (Manages relationships, Interactions with people inside and outside the work unit)
  • Figurehead (serve as a representative for external influence groups (social, legal, and ceremonial)).
  • Leader (are responsible for guiding individuals toward organizational goals, etc (direction, discipline, coaching…)
  • Liaison (Networker) (serves as a link between the organization and outside groups (e.g. visits clients regularly))

• Informational roles (Gathering and analyzing information)
  • Monitor (assess organizational progress toward goals. Assess general environment and its impact in the organization)
  • Disseminator (The manager brings external information into his/ her group or company, informes about events outside the company or outside his/ her group)
  • Spokesperson (The manager represents the organization before others, and tells them information about the company)

• Decision maker (Reaching conclusions, making decisions, problem solving)
  • Entrepreneur (Brings new products)
  • Disturbance handler (Settles disputes between different groups in the organization, calms the angry client down)
  • Resource allocator (determine allocation of limited resources throughout the organization (human, capital, monetary, inventory & raw material))
  • Negotiator (Negotiates and influences)

is the sum of all established relationships among resources within the organization.

• Structure based on business function
• Structure based on territory served
• Structure based on customers
• Structure based on manufacturing process

reflects the belief that multinational corporations should regard home-country management practices as superior to foreign-country management practices. (easy structure of organization)

reflects the belief that because foreign managers are closer to foreign organizational units, they probably understand them better, and therefore foreign management practices should generally be viewed as more insightful than home-country management practices. (many organizational units)

reflects the belief that the overall quality of management recommendations, rather than the location of managers, should determine the acceptability of management practices used to guide multinational corporations. The geocentric attitude is considered most appropriate for long-term organizational success. (expensive, distribution of power, most accepted)

• Ethics is a branch of philosophy which seeks to address questions about morality; that is, about concepts such as good, bad, wrong, right, justice and virtue

• Ethics is about how we ought to live 

• Respecting core human rights
• Respecting local traditions
• Determining right from wrong by examining context

• Pursues "the greatest good for the greatest number of people"
  • (to fire some employees when it helps to maintain the majority of the labor positions)

Is based on upholding individual human or legal rights, such as the rights to privacy and ownership of property, freedom of expression, etc. 

• The obligation of a business to meet its economic and legal responsibilities and nothing more.

• The capacity of a firm to adapt to changing societal conditions through the practical decisions of its managers in responding to important social needs.

• A firm’s obligations as a moral agent extends beyond its legal and economic obligations, to the pursuit of long-term goals that are good for society.