1. Chapter 14 Implementing and Controlling

2. The Implementing Function Operations Management – Operations are the major ongoing activities of a business. – When completing the implementing function, managers are ensuring that employees are performing business activities as planned. – Process Improvement - efforts to increase the effectiveness and efficiency of specific business operations.

3. – Effective planning and organizing are important parts of operations management. Planning helps employees know what to do. Organizing helps operations run smoothly. – Example of Common operations activities. Hire new employees Monitor work schedules Communicate policies and procedures

4. Employee Motivation Motivation – is a set of factors that influence an individual’s actions towards accomplishing a goal. Managers don’t actually “motivate” employees, but they can use rewards and punishments to encourage employees to motivate themselves toward pursuing company objectives. A key to motivation is to know what employees value and give them these things for achieving company goals. – The reward need not be monetary.

6. Employee Motivation Motivation comes from influences both inside and outside the individual. – Internal motivation arises from: » Personal beliefs. » Personal feelings. » Personal attitudes. – External motivation arises from: » Rewards and punishment supplied by other people. Managers can influence employee performance by understanding individual needs and providing rewards that satisfy those needs when employees accomplish work goals.

7. Work Teams Seldom do people complete all of their work alone. – Most people are part of a work group and rely on cooperation from others. A work team – is a group of individuals who cooperate to achieve a common goal. Managers can play in important role in developing team effectiveness. Managers must understand: – The characteristics that make teams effective. – Help to organize the team and develop needed team skills. – Create a work environment that supports teamwork. – Help the group resolve problems when they occur.

8. Characteristics of an effective work team. (See figure 356 in your textbook) – Support for group purpose – Activities are clear – Members have needed skill – Communicate effectively – Work to solve problems – Committed to the group – Members understand responsibility

9. Motivation

10. Motivation Theories Psychologist have developed theories about what factors motivate people to behave as they do. (See figure 14-2 in your Textbook)

11. Maslow’s Hierarchy of Needs – Abraham Maslow described motivation in terms of a hierarchy of needs. Maslow’s hierarchy of needs from top to bottom are: – Physiological » Food, shelter, etc.. – Security » The need to feel safe – Social » The need for humanity » To feel part of a group – Esteem » The need to feel good about ourselves – Self-actualization » The need to grow, be creative, to reach your full potential.

12. Maslow’s Hierarchy of Needs People seek to fulfill their needs in order, from lowest to highest. Not until a person fulfills the lowest need on the order will they move onto fulfilling the next one. One people have fulfilled their physiological and security needs, and then the need for social interaction will influence their behavior. Managers can influence employee behavior by recognizing what level of the hierarchy that is motivating the employee and helping the employee fulfill his or her needs.

14. Maslow

15. Herzberg’s Two-Factor Theory – Hertzberg conducted studies on employees to identify what satisfied and dissatisfied them at work. – Hertzberg identified two factors that related to employee motivation. Hygiene Factors – are job factors that dissatisfy when absent but do not contribute to satisfaction when they are present. – Examples of hygiene factors are: amount of pay, fringe benefits, working conditions, rules, and the amount and type of supervision. Motivators – are factors that increase job satisfaction. – The people who Hertzberg studied were motivated by factors such as: challenging work, recognition, achievement, accomplishment, increased responsibility, and personal development.

16. Herzberg’s Two-Factor Theory – The two types of factors and their results are separate from each other. Hygiene factors can create dissatisfaction but cannot improve satisfaction. Motivators increase satisfaction. Effective managers must help employee to fulfill those needs in a way that achieves the goals of the company.

18. McClelland’s Achievement Motivation – David McClelland believed that people are influence most strongly by one of three specific needs. The Achievement Need – When people need to feel a sense of achievement. » These people: Take personal responsibility for their work. Set personal goals. Want immediate feedback on their work. The Affiliation Need – When people are concerned about their relationships with others, and to work to get along with well and fit in with in a group. Power Need – When people want to influence and control others and to be responsible for the group’s activities.

19. McClelland’s Achievement Motivation – Managers who believe in McClelland’s theory recognize that various jobs provide better or worse opportunities for achievement, affiliation, or power. – McClelland’s theory suggests that the strength of the three needs can be changed over time with careful development.

20. Managing Change The only thing that seems certain in business today is change. – People are not always comfortable with change. Many people will resist change. Many people fear the unknown. – People resist change: When it occurs the most suddenly When they are not prepare When they don’t understand the reason for change. – Careful planning can make the transition smoother for change and the people affected will more be more likely to support the change.

21. Managing Change

22. Planning – Manages must be careful not to move too quickly to make changes. – They must be certain that the change is needed and the organization will be better off because of the change. Communication – It is almost impossible to conceal information about pending changes. Concealing information can lead to rumors and misinformation. – Manages who have previously established open communications with employees will be in the best position to communicate with them about possible changes. – Open two-way communication between managers and employees are a part of an effective change process..

23. Managing Change Involving – People are more likely to accept change if they feel they were part of the changing process. – Managers must recognize that employees can be a good source of ideas on effective solution on how to make changes. It is usually not possible to involve everyone in all parts of the change process, or to use a majority vote to decide on a change Educating – Change in a business does not just happen. – Usually there are factors causing the change. – As plans for change develop mangers must decide who will be affected and what new knowledge or skills those employees will need.

25. Managing Change Supporting – When people believe they will receive support from the organization they are more willing to accept changes. – Managers must assure employees that there is support available to help them adjust to change. Examples of support are: allowing employees time to adjust to the change, counseling, training, etc… Managers should not be as critical of employees as they make the adjustment through the training process. – Sometimes change has negative impacts on employees which cannot be avoided.

26. The Controlling Function Managers must be able to determine if performance meets expectations. Controlling cannot be completed unless the organization has specific goals and plans. Controlling involves three basic steps. – Establishing standards for each of the company’s goals. – Measuring and comparing performance against the established standards to see if performance meets the goals. – Taking corrective action when performance falls short of the standards.

27. Standards Managers establish standards in the planning stage. Managers can determine reasonable standards by studying the job, past experience, industry information, and input from experienced workers. Standards become the basis for determining effective performance. There are four main types of standards.

28. Quantity Standards Quantity standards are standards that are measureable by quantity. An example of these standards can be a quota that people must meet.

29. Quality Standards These are standards meant to measure quality. No defects would be an example of a quality standard.

31. Time Standards These are standards that measure the time it takes to complete an activity. An example is 24 hours to return a phone call.

32. Costs Standards These are standards that measure costs. Most firms use cost standards more then any other type of standards. An important measure of the success of failure of a firm is financial profit or loss. – Profits equal sales income minus costs. Profit can be increased by: – Increasing sales volume. – Decreasing costs.

34. Measuring and Comparing Performance Managers gather information on all parts of business operation for which they are responsible. – Managers compare that information against the standard to determine if the standard is being met.

35. Variance – A variance is the difference between the current performance and the standard.

36. Variance A variance can be positive. – Performance exceeds expectation. – In which case the performance should be studied to make sure it can be repeated. A variance can be negative – Performance does not meet expectations. – In which case the manger must look at the performance and correct the reasons the standards were not met.

37. Taking Corrective Actions When managers discover that performance is not meeting standards, they can take three positive steps. – Take steps to improve performance. – Change policies and procedures. – Revise the standard. If managers have planned carefully they should be reluctant to change standards. Most often, managers need to improved performance of activities when standards are not being met.

38. Controlling Costs All managers need to watch constantly for ways to reduce costs. There are several areas of the business where managers can anticipate costs.

39. Inventory Maintaining inventory costs money. However, managers must maintain sufficient inventory to meet their production and sales needs. Companies need to find a way to develop and maintain a quick inventory turn over.

40. Inventory Maintaining inventory costs money. However, managers must maintain sufficient inventory to meet their production and sales needs. Companies need to find a way to develop and maintain a quick inventory turn over.

41. Just-in-time (JIT) inventory controls A method of inventory control in which the company maintains very small inventories and obtains materials just in time for use. To set up JIT system, managers carefully study production time, sales activity, and purchasing requirements to determine the lowest possible inventory. Managers place orders for materials so that they arrive just as they are needed for production or to fulfill sales orders. This technique requires careful communication and cooperation with the company’s suppliers.

42. Credit Business must be able to extend credit to customers. – Businesses must develop credit policies to reduce the amount of potential losses. Check customers’ credit history. Develop billing and correction procedures that will collect accounts on time. Businesses also use credit when buying products from suppliers. – Businesses must make sure they do not spend too much on interest from buying on credit. – Bills must be paid on time to protect the reputation of the company.

43. Theft Thefts can occur in many parts of a business and can be done by employees as well as by customers and others. – The theft of merchandise from warehouse and stores is a major concern. – Shoplifting by customers and employees equals 6% of more of total sales each year for the typical retailer.

45. Health and Safety When an employee takes sick the company must still conduct work. – Usually the salary of both the absent employee and the substitute employee covering their work must be paid. – A major share of healthcare insurance is often paid by the company as well. Costs that result from health and safety problems can be reduced. – Companies should provide safety training for all employees. – Companies can provide information on ways employees can improve health and wellness.