1. Unit 10: Operations Management. Entrepreneurship. Innovation. Ethics

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. Kinds of Productivity Partial productivity = Multifactor productivity = Outputs Single Kind of Input Outputs Labor + Capital + Materials + Energy

7. Quality Baldrige National Quality Award Total Quality Management ISO 9000 & 14000 Quality-Related Product Characteristics Quality-Related Service Characteristics

8. Meaning of Quality … A product or service free of deficiencies … The characteristics of a product or service that satisfy customer needs Quality

9. Quality- Product & Services Reliability Serviceability Durability Product

10. Total Quality Management Principles of TQM Continuous improvement Teamwork Customer focus and satisfaction

12. Service Operations Service Recovery and Empowerment Service-Profit Chain

13. The Service-Profit Chain

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

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

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. 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. Technological Innovation Discontinuous Change Dominant Design Technological Discontinuities Technological Substitution Design Competition

23. Managing Innovation Creative Work Environments Challenging Work Work Group Encouragement Lack of Organiz. Impediments Supervisory Encouragement Organizational Encouragement Freedom Flow

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

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. Ethics and the Nature of Management Jobs Unethical Managerial Behaviour Authority and Power Handling Information Influencing the Behavior of Others Setting Goals

30. Types of Workplace Deviance Production Deviance Property Deviance Political Deviance Personal Aggression Minor Serious Organisational Interpersonal

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. 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. Ethical Intensity Depends on… Concentration of effect Magnitude of consequences Social consensus Probability of effect Proximity of effect Temporal immediacy

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

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

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. 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. Social Responsibility and Economic Performance Realities of Social Responsibility Can cost a company Sometimes it does pay Does not guarantee profitability