notes / study guide for the second exam:)
notes / study guide for the second exam:) ISOM 125
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This 16 page Study Guide was uploaded by Katherine Ann Turnbull on Wednesday October 7, 2015. The Study Guide belongs to ISOM 125 at Ball State University taught by Samer Takieddine in Fall 2015. Since its upload, it has received 117 views. For similar materials see Introduction to Business with Integrated Computer Applications in Business at Ball State University.
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Date Created: 10/07/15
Exam 2 study guide Ch6 Management the process of organizing planning and controlling company resources to meet objectives by using resources EFFECTIVELYamp EFFICIENTLY Managers make decisions about the use of the organizations resources and handle the planning organizing staffing directing and controlling organization s activities to reach the firms objectives Mission or mission statement is declaration of an organizations fundamental purpose and basic philosophy Should answer five basic questions 0 Who are we 0 Who are our customers 0 What is our operating philosophy 0 What are our core competencies and competitive advantage 0 What are our responsibilities Goals the result the firm wishes to achieve Objectives the ends or results desired by an organizations derive from their mission statement The difference between goals and objectives is that objectives are generally stated in measurable ways 0 Example objective is to sell 50000 more units Management functions planning organizing staffing directing and controlling 0 Planning the process of determining the organizations objectives and deciding how to accomplish them Determining the best course of action what should be done by whom where when and how Planning also includes crisis management or contingency planning which deals with potential disasters 0 Plans three general types of plans strategic tactical and operational 39 Strategic plans establish the long range objectives and overall strategy or course of action developed by the firm s highest managers I Tactical plans are short range and designed to implement carry out the activities and objectives specified in the strategic plan Usually cover a period of one year or less 39 Operational plans are very short term and specify what actions specific individuals work groups or departments need to accomplish in order to achieve the tactical plan and ultimately the strategic plan Organizing the structuring of resources and activities to accomplish objectives in an efficient and effective manner establishes lines of authority and improves communications Staf ng hiring people to carry out the work of the organization Directing motivating and leading employees to achieve organizational objectives Involves telling employees what to do when to do it and encouraging them Controlling the process of evaluating and correcting activities to keep the organization on course Involves 5 activities 0 Measuring performance 0 Comparing present performance with standardsobjectives 0 Identifying deviations from the standards 0 Investigating the causes of deviations 0 Taking corrective action when necessary Levels of Management Top management middle management and first line or supervisory management These levels form a pyramid figure 62 on page 107 Top management include the president and other top executives such as the chief executive officer CEO and chief financial officer CFO and chief operations officer COO who have overall responsibility for the organization Middle management are responsible for tactical planning that will implement the general guidelines established by top management First line management those who supervise employees and daily operations of the organization They are responsible for implementing the plans established by middle management and directing employee s daily performance on the job Areas of management finance production and operations human resources marketing and administration Financial managers focus on obtaining the financial resources needed for the successful operation of the organization Production and operations management develop and administer the activities involved in transforming resources into goods services and ideas ready for the marketplace Human resources management handle the staffing function and deal with employees in a formalized manner They determine an organization s human resource needs recruit hire develop and administer employee benefits training and performance appraisal programs Marketing management responsible for planning pricing and promoting products and making them available to customer through distribution Information technologyIT management these managers are responsible for implementing maintaining and controlling technology applications in business Administrative management they manage an entire business or a major segment of business Often called general managers Skills needed by managers leadership technical expertise conceptual skills analytical skills and human relations skills Leadership the ability to in uence employees to work toward organizational goals Technical expertise the specialized knowledge and training required to perform jobs related to their area of management Conceptual skills the ability to think in abstract terms and see how parts fit together to form the whole Analytical skills refer to the ability to identify relevant issues and recognize their importance understand the relationships between them and perceive the underlying causes of a situation 0 Human relations skills the ability to deal with people both inside and outside the organization 0 Decision making systematic 6 step approach for making effective decisions 0 Recognizing and de ning the decision situation negative or positive situation do we need to do anything If so what Is this an emergency opportunity etc Developing options to resolve the situation possible course of action Analyzing the options what is the most practical and appropriate choice Selecting the best option choosing the best option Implementing the decision putting the selected option or options into action Monitoring the consequences of the decision monitoring to determine whether 00000 the decision has accomplished the desired result 0 Agenda contains both specific and vague items covering short terms goals and long term objectives Helps the manger figure out what must be done and how to get it done to meet the objectives set by the organization 0 Networking building relationships and sharing information with colleagues who can help them achieve the items on their agendas Ch 8 0 Operations management OM the development and administration of activities involved in transforming resources into goods and services 0 Operations manager oversee the transformation process and the planning and designing of operations systems managing logistics quality and productivity The core of most organizations goods and services 0 Manufacturing and production used interchangeably to represent the activities and process used in making tangible products 0 Operations the term used to describe those processes used in making both tangible and intangible products goods and services 0 Transformation process at the heart of operations management inputs are converted into outputs The transformation process also combines inputs in predetermined ways using different equipment administrative procedures and technology to create a product Inputs resources such as labor money materials and energy 0 Outputs goods services and ideas Businesses that manufacture tangible goods differ from business39s that produce services in 5 basic ways as follows 1 Nature and consumption of output manufacturersproducers supply tangible products whereas a service provider produces intangible outputs 2 Uniformity of inputs manufacturers typically nave more control over the amount of variability of the resources they use than do service providers 3 Uniformity of outputs because of the human element inherent in providing services each service tend to be performed differently every time whereas with manufacturing outputs are standardized 4 Labor required service providers are generally more labor intensive they need more labor than manufactures 5 Measurement of productivity For manufacturers measuring productivity is fairly straightforward because of the degree of uniformity in their outputs vs service providers who have a harder time measuring productivity for each output Planning and designing operations systems before a company can produce any product it must rst decide what it will produce and for what customers Then it determines what processes it will use to make these products as well as the facilities it needs to produce them these decisions comprise operations planning Planning the product rst the company must determine what consumers want and then design a product to satisfy customer wantsneeds This is where the marketing department comes into play Designing the operations processes rst the company must decide the appropriate method of transforming resources inputs into products outputs Typically products are designed to be manufactured by one of three processes standardization modular design or customization Standardization making identical interchangeable components or even complete products used mostly with rms that manufacture products in large quantities This process speeds up production and quality control and reduces production costs Modular design involves building an item in self contained units or modules that can be combined or interchanged to create different products Example keyboards that can be used in different types of computers Modular designs allows products to be repaired quickly this reduces the cost of labor but the component itself is expengve Customization making products to meet a particular customer s needs or wants tailored to be unique mostly used in communications and service products Examples artwork furniture repair services computer software etc Planning the operations process involves two areas capacity planning and facilities planning Capacity refers to the maximum load that an organizational unit can carryoperate Capacity planning is very important so your operation doesn t go over max operating capacity or so your operation doesn t fall under capacity which results in unmet demand and lost customers Organizations must accurately forecast demand and then plan capacity so there isn t more capacity available than needed this will cause operating costs to be high Capacity planning is also important for long term commitment of resources Planning facilities once a company knows what process it will use then it can design and build an appropriate facility to make their products Companies must decide where to locate their operations facilities what layout is best for production and what technology to use Facility location a rm must pay attention to factors such as proximity to market availability of raw material availability of transportation availability of power climatic in uences availability of labor community characteristics and taxes Facility layout arranging the physical layout of a facility usually comes in 3 basic layouts xedposition process and product Fixed position layout brings all resources required to create the product to a central location the product does not move typically project organizations use this layout bc it s typically involved in large complex projects Process layout a layout that organizes the transformation process into departments that group related processes Product layout requires that production be broken down into relatively simple task assigned to workers who are usually positioned along an assembly line Workers remain in one location and the products moves from one worker to another Companies that use this layout are usually known as continuous manufacturing organizations Many companies use a combination of layout designs Technology dictates the nature of a rms transformation process CAD computer assisted design helps engineers design components products and processes on the computer instead of on paper CAM computer assisted manufacturing that uses specialized computer systems to actually guide and control the transformation processes Flexible manufacturing the direction of machinery by computers to adapt to different versions of similar operations CIM computer integrated manufacturing is a complete system that designs products manages machines and materials along with controlling the operations function Sustainability and manufacturing manufacturing and operations items are moving quickly to establish environmental sustainability and minimize negative impact on the natural environment Sustainability issues pollution climate change waste management are becoming increasingly important Supply chain management refers to connecting and integrating all parties or members of the distribution system in order to satisfy customers Includes all activities involved in obtaining and managing raw materials and component parts managing nished products packaging them and getting them to customers Purchasing also known as procurement but is the buying of all the materials needed by the organization Managing inventory accounting for and controlling inventory raw material component completed or partially completed products pieces of equipment a rm uses 3 basic types of inventory nished goods inventory work in process inventory and raw materials inventory Raw materials inventory all materials that have been purchased to be used as inputs for making other products Work in process consists of those products that are partly completed or are in some stage of the transformation process Finished goods inventory includes products that are ready for sale Inventory control the process of determining how many supplies and goods are needed and keeping track of quantities on hand where each item is and who is responsible for it Economic order quantity model identi es the optimum number of items to order to minimize the costs of managing ordering storing and using them Used to control the number of items maintained in inventory just in time inventory management eliminates waste by using smaller quantities of materials that arrive just in time for use in the transformation process Material requirements planning MRP a planning system that schedules the precise quantity of materials needed to make the product Basic components are master production schedule a bill of materials and an inventory status le Routing sequence of operations through which the product must pass scheduling assigns the tasks to be done to departments or even speci c machines workers or teams quality re ects the degree to which a good or service meets the demands and requirements of customers Quality control refers to the processes an organization uses to maintain its established quality standards Total quality management a philosophy that uniform commitment to quality in all areas of an organization will promote a culture that meets customers perceptions of quality Statistical process control a system in which management collects and analyzes information about the production process to pinpoint quality problems in the production system International organization for standardizationlSO they have created a series of quality management standards l509000 designed to ensure the customers quality standards are met ISO 14000 a comprehensive set of environmental standards that encourages a cleaner and safer world Ch10 notes Human resources managementHRM refers to all the activities involved in determining an organization s human resources needs as well as acquiring training and compensating people to ll those needs Human resource needs employees and skills needed Job analysis determines through observation and study information about a job the speci c tasks that comprise it the knowledge skills and abilities necessary to perform the job along with the environment in which the job will be preformed job description a formal written explanation of a speci c job that includes the job title tasks to be performed relationship with otherjobs physical and mental skills required duties responsibilities and working conditions Job speci cation describes the quali cations necessary for a speci c job in terms of education experience personal characteristics and physical characteristics Recruiting forming a pool of quali ed applicants from which management can select employees from Two ways to develop this pool internal and external Internal sources of applicants include the organizations current employees External sources of applicants consist of people drawn to company via advertising online websites and social networking looking for employment Selection the process of collecting information about applicants and using that information to decide which ones to hire This includes the application interviewing testing and reference checking The application the rst stage of the selection process asks for basic contact information education and previous work experience etc Goal of this is to get acquainted with the applicants and to weed out those who aren t quali ed Human resource managers tend to spend less than two minutes reviewing an application The interview the second phase of the selection process sitting down face to face with the potential employee and asking them questions to determine if they are a good t for the position do they t the quali cations Testing third step in the selection process ability and performance are tested to determine whether an applicant has the skills necessary for the job Aptitude IQ and or personality tests may be used Reference checking involves verifying educational background and previous work experience along with checking for any past criminal history Title VII of the civil rights act of 1964 prohibits discrimination in employment Equal employment opportunity commission a federal agency dedicated to increasing job opportunities for women and minorities and eliminating job discrimination based on race religion sex handicaps national origin etc Orientation familiarizes the newly hired employees with fellow workers company procedures and the physical properties of the company Training teaches new employees how to do their speci c job tasks On the job training and classroom training 0 On the job training workers learn by actually performing the tasks of the job 0 Classroom training teaches employees With lectures conferences videotapes case studies and web based training Development training that augments the skills and knowledge of managers and professionals Used to improve the skills of employees in their present positions and to prepare them for increased responsibility and job promotions Objective assessments are quanti able theirjob performance can be recorded in terms such as numbers and percentages Subjective assessments ranking systems is used to lists various performance factors Turnover occurs when employees quit or are red and must be replaced by new employees Promotion is an advancement to a higher level job with increased authority responsibility and pay Transfer is a move to another job within the company at essentially the same level and wage Separations occur when employees resign retire and or terminated Wagesalary survey way of determining compensation for a speci c job via comparing what rms in the same sector pay their employees Wages nancial rewards based on the number of hours the employees works or the level of output achieved Commission incentive system that pays a xed amount or percentage of the employee s sales Salary nancial reward calculated on a weekly monthly or annualbasE Bonuses incentives for exceptional performance Pro t sharing distributes a percentage of company pro ts to the employees whose work helped to generate those pro ts Bene ts non nancial forms of compensation provided to employees such as pensions plans health disability and life insurance holidays and paid days off etc Labor unions employee organizations formed to deal with employers for achieving better pay hours and working conditions Collective bargaining negotiation process through which management and unions reach an agreement about compensation working hours and working conditions for the bargaining unit Labor contract the formal written document that spells out the relationship between the union and management for a speci ed period of time usually two or three years Cost of living escalatorCOLA calls for automatic wage increases during periods of in ation to protect quotrealquot income of employees Picketing a public protest against management practices and involves union members marching at the employers plant or work site Strikes employee walkouts one of the most effective weapons labor has workers refuse to work Boycott an attempt to keep people from purchasing the products of a company Lockout management actually closes a work site so that employees cannot go to work Strikebreakers peope hired by management to replace striking employees Conciliation brings in a neutral third party to keep labor and management talking Mediation involves bringing in a neutral third party to suggest or propose a solution to the problem Arbitration a neutral third party brought in to settle the dispute with a legally binding solution Workforce diversity is important since globalization has decreased national borders between businesses Bene ts of workforce diversity productive use of a company s human resources reduced con ict among employees of different ethnicities races etc More productive working relationships among diverse employees and increased commitment to sand sharing of organizational goals o Af rmative action programs legally mandated plans that try to increase job opportunities for minority groups
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