Management-Functions-_1_.txt

Management Functions Chef Elijah J Coronado Facilitator  Intended Learning Outcomes At the end of this session, the students are expected to: Appraise the roles and responsibilities of the food service managers, and how each function affects achieving the goals of the organization.  CHAPTER 4.1 OR...

Management Functions Chef Elijah J Coronado Facilitator  Intended Learning Outcomes At the end of this session, the students are expected to: Appraise the roles and responsibilities of the food service managers, and how each function affects achieving the goals of the organization.  CHAPTER 4.1 ORGANIZATIONAL DESIGN  Business visionaries have said that today’s organizations will need to have leaner staffs, empower their employees by sharing decisions, obtain commitment and innovation from employees, and create an organizational culture that is adaptive and responsive to change. Organizations will also need strong, competent managers who are able to design properly and lead the organization to meet its goals and objectives efficiently and effectively  THEORIES OF MANAGEMENT The four important and predominant theories of management are classical or traditional, human relations, management science or operations research, and the modern or systems approach.  CLASSICAL MANAGEMENT Fayol’s (1949) principles encompass these tenets: 1. Division of work: This is essential for efficiency, and specialization is the most efficient way to use human effort. 2. Authority and responsibility: Authority is the right way to give orders and obtain obedience, and responsibility is the natural result of authority. 3. Discipline: The judicious use of sanctions and penalties is the best way to obtain obedience to rules and work agreements. 4. Unity of command: This specifies that each person should be accountable to only one superior.  CLASSICAL MANAGEMENT 5. Unity of direction: This specifies that all units should be moving toward the same objectives through coordinated and focused effort. 6. Subordination of individual interest to general interest: The interests of the organization should take priority over the interests of individuals 7. Remuneration of employees: Pay and compensation should be fair for both employee and organization. 8. Centralization: Subordinates’ involvement through decentralization should be balanced with managers’ final authority through centralization. 9. Scalar chain: In a scalar chain, authority and responsibility flow in a direct line vertically from the highest level of the organization to the lowest.  CLASSICAL MANAGEMENT 10. Order: People and materials must be in the appropriate places at the proper time for maximum efficiency. 11. Equity: All employees should be treated equally to ensure fairness. 12. Stability of personnel: Employee turnover should be minimized to maintain organizational efficiency. 13. Initiative: Workers should be encouraged to develop and carry out plans for improvements. 14. Esprit de corps: Managers should promote a team spirit of unity and harmony among employ HUMAN RELATION Human relations theory evolved during the 1920s through the 1950s from the effort to compensate for some of the deficiencies of classical theory. Where classical organization advocated focus on tasks, structure, and authority, human relations theorists introduced the behavioral sciences as an integral part of organization theory.  MANAGEMENT SCIENCE / OPERATION RESEARCH The management science theory of management combines some of the ideas from classical and human relations theories. It emphasizes research on operations and the use of quantitative techniques to help managers make decisions.  MANAGEMENT SCIENCE / OPERATION RESEARCH One extension of this theory has been the development of management information systems (MIS). MIS include such tools as linear programming, queuing models, and simulation models to facilitate decision making. The program evaluation and review technique (PERT) is another tool for the effective planning and control functions of management.  MODERN MANAGEMENT THEORIES Modern management theories have evolved because of the complex nature of today’s organizations. Ideas from classical, human relations, and management science have been integrated into the modern theories.  THE SYSTEMS THEORY Important systems theory concepts are feedback, hierarchy of systems, interdependency, and wholism. Using the systems approach, a manager recognizes that the organization as a whole is greater than the sum of its parts, which is called as wholism. The systems manager sees the contributions of each part to the whole system and that a change in one part will have an impact on other parts of the system. This approach allows a manager to diagnose and identify reasons for the occurrence of a situation.  THE CONTINGENCY THEORY This is an approach to management based on the belief that activities should be adjusted to fit the situation. Factors within the situation, such as characteristics of the workforce, size and type of organization, and its goals, should determine the managerial approach that is used.  THE CHAOS THEORY Chaos theory suggests that managers should work with, rather than against, the nonlinearity of the process. Chaos theorists suggest that as systems become more complex, these systems become more volatile (or susceptible to cataclysmic events) and must expend more energy to maintain complexity. As more energy is expended, the organization seeks more structure to maintain stability.  STRATEGIC MANAGEMENT Strategic management requires that managers steer the organization through strategic change under conditions of complexity and uncertainty STRATEGIC MANAGEMENT Strategic management may be defined as an organization-wide task of forming a strategic vision, setting objectives, crafting a strategic plan, implementing and executing the plan, and then over time initiating whatever corrective adjustments in the vision, objectives, strategic plan, and execution are deemed appropriate. Any system of strategic management involves five steps: 1. Identification of the fundamental values of the organization and the goals and objectives that arise from them 2. Assessment of the organization’s external environment 3. Assessment of the organization’s resources and capabilities 4. Identification or formation of the organization’s components: (a) subsystems that receive allocated inputs; and (b) an organizational structure that includes the subsystems and the relationship of authority, responsibility, and communication (linking processes) that they have with one another 5. Development of the management and decision-making structure  STRATEGIC MANAGEMENT • A strategic plan is a written document that assesses the current state of the organization and what it should do to achieve its mission, goals, and objectives. • Strategy formulation requires that management analyze requirements and develop guiding principles for all in the organization.  FUNCTIONS OF MANAGEMENT The basic functions performed by managers are planning, organizing, staffing, directing, coordinating, reporting, and budgeting.  The basic purpose of management has been recognized as the leadership of individuals and groups in order to accomplish the goals of the organization. Henri Fayol, a French recognized that managerial undertakings require planning, organization, command, coordination, and control. Luther Gulick (1937) developed the following seven major functions of management (POSDCORB): • planning • coordinating • organizing • reporting • staffing • budgeting • directing  PLANNING Planning involves developing, in broad outline, the activities required to accomplish organizational objectives and the most effective ways of doing so.The first steps in the planning process are to: • develop a vision (the organizations view of the future), • a philosophy or core values statement (the organization’s set of core values for the attainment of that vision), • a slogan(a short, memorable statement of “who we are”), • a mission statement (the summary of the organization’s purpose, customers, product, and service. )  PLANNING • Strategic plans are written documents prepared for short- and long-term goals on a periodic basis. Planning should be viewed as a continuous process. A strategic plan requires ongoing revision for improvement. • Policies are decision-making guides that are written to ensure that all actions taken by organizational members are consistent with the organization’s strategy and objectives.  PLANNING • Operating plans lay out the plans for the current period of time, specify the procedures to be used, the schedule to be followed, and the budget to stay within. • Procedures are detailed guidelines for planned activities that occur regularly, sometimes called standard operating procedures (SOPs). • If policies and procedures do not change over time, they are referred to as standing plans.  ORGANIZING Organizing includes the activities necessary to develop the formal structure of authority through which work is subdivided, defined, and coordinated to accomplish the organization’s objectives.  TYPES OF ORGANIZATION • Line Authority - In the line organization, lines of authority are clearly drawn, and each individual is responsible to the person ranking above him or her on the organizational chart. Thus, authority and responsibility pass from the top-ranking member down to the lowest in rank. • Staff Authority / Line and Staff - The line positions and personnel are involved directly in accomplishing the work for which the organization was created, and the staff advises and supports the line. • Functional Authority - exists when an individual delegates limited authority over a specified segment of activities to another person. SKILLS OF MANAGERS Managers need varying degrees of three skills depending on the level in the hierarchy at which the manager is working. The three skills include: • Technical Skills - performing specialized activities, • Human Skills - understanding and motivating individuals and groups, and • Conceptual Skills - understanding and integrating all of the activities and interests of the organization toward a common objective.  MANAGERIAL ACTIVITES AND ROLES Managerial roles may be classified as: • Interpersonal (as a figurehead, a Leader, a liaison) • Informational (monitor, disseminator, spokesperson) • Decisional (entrepreneur, disturbance handler, resource allocators, negotiators)  TOOLS OF MANAGEMENT Useful mechanical or visual tools of management are organization charts, job descriptions, job specifications, and work schedules. ORGANIZATIONAL CHART The organization chart may be considered the first tool of management. It graphically presents the basic groupings and relationships of positions and functions. The chart presents a picture of the formal organizational structure and serves many useful purposes, but it does have some limitations.  JOB DESCRIPTION A job description is an organized list of duties that reflects required skills and responsibilities in a specific position. It may be thought of as an extension of the organization chart in that it shows activities and job relationships for the positions identified on the organization chart. To empower employees, job descriptions have been replaced by a skills matrix system, an organized plan that allows employees to plan their own professional growth within the organization. JOB SPECIFICATION A job specification is a written statement of the minimum standards that must be met by an applicant for a particular job. It covers duties: • involved in a job • the working conditions peculiar to the job • Personal qualifications required of the worker to carry out the assigned responsibilities successfully  WORK SCHEDULE A work schedule is an outline of work to be performed by an individual with stated procedures and time requirements for his or her duties. In scheduling of employees, workers may be scheduled successfully only after thorough analysis and study of the jobs to be done, the working conditions, and the probable efficiency of the employees. Workers may be scheduled successfully only after thorough analysis and study of the jobs to be done, the working conditions, and the probable efficiency of the employees. The total estimated work hours to cover all activities in the organization divided by the number of working hours in the day would give an indication of the number of full-time employees needed. CHAPTER 4.2 LEADERSHIP  MOTIVATION An individual’s motivations stem from energizing forces within the individual (needs, attitudes, interests, and perceptions) and within the organization (rewards, tasks, coworkers, supervisors, communication, and feedback).  MOTIVATION Motivation is the sum of energizing forces internal (individual) and external (organizational) to an individual that results in behavior. It is only possible to create an environment in which a person becomes self-motivated. To do this, a leader must understand the concept of human motivation.  HISTORY OF MOTIVATIONAL THEORIES: Based on differences among people Abraham Maslow’s 1954 classic research on motivational theory has provided the foundation of most current thinking in this area. According to Maslow’s need hierarchy theory, a person is motivated by his or her desire to satisfy specific needs.  HISTORY OF MOTIVATIONAL THEORIES Based on differences among people A second theory of motivation based on needs was proposed by McClelland in 1961. Achievement motivation theory holds that an organization offers an individual the opportunity to satisfy three needs: • the need for power • the need for achievement • the need for affiliation HISTORY OF MOTIVATIONAL THEORIES Based on organizational factors Herzberg’s (1959) dual-factor theory or motivation-hygiene theory purports that factors such as achievement, recognition, responsibility, opportunity for advancement, and the work itself are all motivators, whereas factors such as the company policies, supervision, salary, working, and interpersonal relations are hygiene factors (do not motivate but simply prevent dissatisfaction and act as a precondition for motivation by motivators) HISTORY OF MOTIVATIONAL THEORIES Based on organizational factors Operant conditioning is a second theory of motivation based on organizational factors, developed from the work of E. L. Thorndike and B. F. Skinner. The basic idea behind operant conditioning is that people will perform in order to receive rewards and avoid punishment.  HISTORY OF MOTIVATIONAL THEORIES Based on individual and organizational factors Expectancy theory combines individual factors and organizational factors into a theory of motivation based on the interaction of the two. Expectancy theory states that people make decisions about their behavior on the expectation that the choice they make is more likely to lead to a needed or desired outcome.  CURRENT THINKING OF MOTIVATION As with leadership, much has been written about the concept of motivation. Motivation is still not clearly understood and, more often than not, is poorly practiced. One problem is the common myths that exist. Some examples of these myths are as follows: 1. It is possible for a manager to motivate an employee. Not really—Motivation must come from within. A manager can only create an environment in which employees motivate themselves. 2. Money is a good motivator. Not really—The satisfaction of lower-level needs such as money, job security, and nice facilities can help employees from becoming less motivated, but it does not help them to become more motivated. 3. Fear is a good motivator. Fear is a very good short-term motivator but very often is a demotivator for the long term. 4. What motivates me, the manager, will motivate my staff. Different people are motivated by different things, and those things may change with time. Managers need to know what motivates each of their employees.  LEADERSHIP Leadership is the activity of influencing other people’s behavior toward the achievement of desired objectives. Management is the function of running an organization by effectively and efficiently integrating and coordinating resources in order to achieve desired objectives. LEADERSHIP At times, the terms leadership and management have been used synonymously. However: • Leadership is essentially the business or activity of trying to influence people to strive willingly to attain the goals and plans of the organization • Management is the function of running an organization from a conceptual or policy standpoint.  THE TRADITONAL LEADERSHIP ROLE Early theories of leadership include scientific management, in which a leader’s role was to motivate employees with rewards of money, and human relations theory, in which a leader improved productivity by showing an interest in the employee as an individual. Scientific management was founded on the belief that the main common interest of both the organization and the employee was money, and only money. The leader- manager’s role consisted of issuing orders and handing out rewards and punishments. Human Relations Approach. Researchers concluded that the level of performance was a result of the interest shown in the worker as a person rather than as a machine.  NEWER APPORACHES TO LEADERSHIP McGregor’s Theory X and Theory Y are based on the idea that a leader’s attitude toward employees has an impact on job performance and may lead to different management strategies. • Theory X was the traditional set of managerial assumptions that employees have an inherent dislike of work and will avoid it if possible • Theory Y was the attitude held by the managers of the 1960s and 1970s in a more optimisitc view  SITUATIONAL MANAGEMENT The situational management approach concentrates on the theory that leadership effectiveness is a function of the individual leader, of that leader’s subordinate, and of the situational variables involved.  SITUATIONAL MANAGEMENT Two separate and distinct dimensions of leader behavior were identified - initiating structure and consideration. • Initiating structure refers to the relationship between the leader and the members of the work group in seeking to establish well-defined patterns of organization, channels of communication, and procedures. • Consideration refers to behavior that indicates friendship, mutual trust, respect, and warmth in the relationship between the leader and the work group. TYPES OF POWER AND THEIR ROLES Leaders acquire power from their ability to reward and punish, position in the organization, expertise, and personal characteristics.  SITUATIONAL MANAGEMENT Because of his or her position in the organization, a leader possesses position power; because of personal characteristics or expertise, she or he may also possess personal power. Power is used to influence the behavior of others, an important part of a leader’s job. • Coercive power - Followers believe that the leader has the authority to punish them and the punishment will be unpleasant  SITUATIONAL MANAGEMENT • Reward power - Followers believe that the leader has the authority to reward them, and the rewards will be pleasant • Legitimate power - Followers believe that the leader has the right to give directions because of his or her position in the organization. • Expert power - Followers believe that the leader has expertise or knowledge that will be of help to them • Referent or charismatic power - Followers believe that the leader has charisma or personal characteristics that result in admiration and respect and therefore want to follow that leader EFFECTIVE COMMUNICATION Communication, or the constant development of understanding among people, is central to leadership effectiveness. Effective communication means that there is successful transfer of information, meaning, and understanding from a sender to a receiver. EFFECTIVE COMMUNICATION An organization’s channels of communication can be divided into the: • formal channel where communication can be downward, upward, or horizontal. • Informal channel of communication includes the grapevine where news contains some factual information but, most of the time, it carries inaccurate information, half-truths, rumors, private interpretations, suspicions, and other kinds of distorted information.  TYPES OF COMMUNICATION • Oral, or spoken, communication is the most common form of communication and is generally superior. Oral communication takes less time and is more effective in achieving understanding. • Written communication • Visual aids, such as pictures, charts, cartoons, symbols, and videos, can be effective, particularly when used with good oral communication. • Gestures, handshakes, a shrug of the shoulders, a smile, and silence all have meaning and are powerful forms of communication to subordinates.  ETHICS AND SOCIAL RESPONSIBILITY • Ethics can be defined as the rightness or wrongness of actions and as the goodness or badness of these actions’ objectives. • Social responsibility is an ethical issue because it deals with the goodness or badness of organizational actions in terms of their impact on society as a whole  Diversity often requires changing an organization’s culture so that everyone feels welcome and able to participate at a very high level. This organizational change should be part of a strategic long-term effort and requires good leadership and the active support of the organization’s top-level management.  SUPERVISION Supervision encompasses coordinating, directing, and leading the work of employees to accomplish the organization’s goals. In small foodservice systems, the total supervisory function may be the responsibility of the manager. In larger systems, the supervision of the day-to-day technical operations may be delegated to foodservice supervisors, dietetic technicians, or cook-managers. Routine supervision varies with the situation, but it is, for the most part, a matter of personal contact reinforced through checking by observations, records, and charts.  CHANGE MANAGEMENT Understanding that people in an organization respond to change in distinct and predictable ways is the foundation of change management. This are the process, tools, and techniques to manage people effectively and the associated human resource issues that surface when implementing changes, which has three phases: (1) preparing for change (2) managing change (3) reinforcing change  CHAPTER 4.3 HUMAN RESOURCE MANAGEMENT  STAFFING Staffing is the managerial function of matching requirements of tasks to be performed with people who have the necessary skills. This is accomplished through effective hiring, placement, promotion, transfer, job design, training, supervision, decision making, performance evaluation, and discipline. Integrated staffing is an integrated system for moving people into, through, and eventually out of the organization SKILL STANDARDS These skill standards define the level of performance necessary to be successful on the job. More specifically, they include the steps involved in completing critical tasks, tools and equipment used, descriptions of possible problems and their responses, and the knowledge, skills, and abilities basic to completing these tasks.  THE EMPLOYMENT PROCESS Employment needs are outlined in various management tools such as the organization chart, job description, and job specification. RECRUITMENT • Internal recruitment - promotion of employees to a higher-level position, transfer from a re lated department or unit, and the rehire of a person formerly on the payroll • External sources include newspaper advertising, employment agencies, schools, and labor unions. • Advertising - newspaper advertising and Internet Web sites are a means of reaching a large group of potential applicants. RECRUITMENT • Private employment agencies have long served as a means of locating labor. They generally provide a preliminary “weeding out” of would-be applicants, eliminating the unfit. • Schools - In some localities, vocational and technical schools offer training for the food industry. These graduates are excellent candidates for available foodservice positions. • Labor Unions - In organizations where employees are unionized, the labor union may be an important source for workers.  SELECTION After the prospective workers have been recruited, the next step is for the employer to select the most capable person available for the opening. An effective hiring process includes a carefully prepared application form and an equally carefully prepared interview. The purposes of the selection interview are: (1) to get information; (2) to give information; and (3) to make a friend Impressions of the prospective employee gained in the interview and from the follow-up of references are admittedly incomplete. They may be checked or replaced by tests of various types, the most common being intelligence, trade, and aptitude.  TRAINING • Adult Training. The unique characteristics of adults as learners must be considered when planning for on-the-job training. • Group Training. This type of teaching saves time for the instructor and the worker and also has the advantage of affording the stimulus that comes as the result of group participation. • On-the-Job Training. Important objectives of such programs are: (1) to reduce time spent in perfecting skills (2) to avoid accidents and damage (3) to promote good understanding and close working relationships (4) to give employees a sense of achievement and prepare them for advancement PERFORMANCE EVALUATION For maximum effectiveness from the workforce, every employee should know what is expected and how he or she is performing on the job. Critical-incident appraisal method are records are kept of both positive and negative occurrences/behaviors for each employee to be used for performance evaluation purposes PERFORMANCE EVALUATION Rating scales are systems of gradation checking where each quality, factor, or characteristic may be marked on a scale ranging from poor to superior, or the reverse, with two or three possible levels within each grade. Combining both the rating scale and critical- incident methods led to the behaviorally anchored rating scale (BARS) method of performance evaluation.  DISCIPLINE Any disciplinary action taken should be immediate, consistent, impersonal, based on known expectations, and legally defensible. As an aid to supervisors, the “hot stove” analogy to disciplinary action is suggested. The burn gives advance warning and is immediate, consistent, and impersonal: • Advance warning: Everyone knows what will happen if you touch a hot stove. Employees should know what is expected of them. • Immediate: The burn is immediate. Discipline should not be hasty but should be taken as soon as possible after the infraction. • Consistent: The hot stove burns every time. Disciplinary action should be taken every time an infraction occurs. • Impersonal: Whoever touches the stove is burned. The act, not the person, should be disciplined. DISIMISSAL If an employee is terminated without the consent of the employee, the act is termed dismissal. • Due process - A constitutionally guaranteed right requiring a fair procedural process before employment termination when the employee has a reasonable expectation of continued employment • Just cause - An employee dismissal is not arbitrary, capricious, or illegal and is based on facts that are supported by substantial evidence and reasonably believed by the employer to be true • At-will employee - Where the employment relationship is not in writing and is for an indefinite period of time  LABOR POLICIES AND LEGISLATION Labor policies have been developed to guide managerial decision making and to commit employees to certain predictable actions. Wages and Income Maintenance - from the point of view of the worker, the most important characteristic of the wage—the take-home pay received for labor performed—is its purchasing power. The Fair Labor Standards Act of 1938, also known as the Federal Wage and Hour Law, was first enacted to help eliminate poverty, to create purchasing power, and to establish a wage floor that would help prevent another Great Depression.  LABOR POLICIES AND LEGISLATION Hours and Schedule of Word - time worked beyond 40 hours in a 7-day or 80 hours in a 14-day period as specified under the law requires extra compensation. Security in Employment • Equal employment opportunity (EEO) is the umbrella term that encompasses all laws and regulations prohibiting discrimination or requiring affirmative action. • Equal Employment Opportunity Commission (EEOC) regulations and interpretive guidelines provide guidance to management for compliance the Age Discrimination in Employment Act, the Pregnancy Discrimination Act, and the Americans with Disabilities Act (ADA) of 1990, all of which are federal EEO statutes.  LABOR POLICIES AND LEGISLATION Sexual harassment takes two forms and is a form of sexual discrimination: • “quid pro quo” - occurs when a supervisor either rewards or punishes a subordinate for providing or not providing sexual favors • “hostile environment” - occurs when an employee’s ability to work, take pride in their work, or desire to stay in the position is undermined by an atmosphere infused with unwelcome sexually oriented or otherwise hostile conduct created by supervisors or coworkers. EMPLOYEE SERVICES AND BENEFITS The Occupational Safety and Health Act of 1970 (OSHA) has forced managers to look critically at working conditions and to bring any that are undesirable up to a standard demanded by law. Workers’ compensation insurance is a program administered by the state in which premiums are paid by the employer to cover employee accidents. Social Security is a federal program of insurance to protect wage earners and their families against loss of income due to age, disability, and death. LABOR-MANAGEMENT REALTIONS Federal legislation, beginning with the National Labor Relations Act of 1935, has been enacted to allow employees to unionize and engage in collective bargaining. LEGISLATION • Labor-Management Relations Act Prevents unions from coercing employees to join, outlaws union and closed shops, and provides for collective bargaining. Also known as the Taft- Hartley Act • Union shop - Illegal practice that requires an employee to become a member of a union in order to keep a job • Closed shop - Illegal practice that obligates an employer to hire only union members • Collective bargaining - An obligation to meet and discuss terms with an open mind Management Functions Chef Elijah J Coronado Facilitator  Intended Learning Outcomes At the end of this session, the students are expected to: Appraise the roles and responsibilities of the food service managers, and how each function affects achieving the goals of the organization.  CHAPTER 4.4 PERFORMANCE IMPROVEMENT Performance improvement is the continuous study and adaptation of a foodservice organization’s functions and processes to increase the probability of achieving the desired outcomes and to better meet the needs of customers, patients, and other users of the services. Productivity is a measure or level of output of goods produced or services rendered in relation to the input in terms of resources used. Performance is a measure of the results (outputs) achieved. Therefore, performance improvement is systematically making changes to enhance the organization’s desired results.  TOTAL QUALITY MANAGEMENT Total quality management (TQM) is a management process and set of disciplines that are coordinated to ensure that the company consistently meets or exceeds quality standards as set by customers and other stakeholders. Japanese-style management or Theory Z - Theory of management in which workers are seen as the key to increased productivity PRINCIPLES OF TQM The Fourteen Points of Management of Dr. W. Edward Deming (1982), one of the most prominent pioneers in the quality movement, represent for many the essence of TQM: 1. Create constancy of purpose for improvement of product and service. 2. Adopt the new philosophy 3. Cease dependence on mass inspections. 4. End the practice of awarding business on the basis of price tags alone. 5. Improve constantly and forever the system of production and service. 6. Institute training. 7. Adopt and institute leadership. 8. Drive out fear. 9. Break down barriers between staff areas 10. Eliminate slogans, exhortations, and targets for the workforce. 11. Eliminate numerical quotas for the workforce and numerical goals for people in management. 12. Remove barriers that rob people of pride of workmanship. 13. Encourage education and self-improvement for everyone. 14. Take action to accomplish the transformation. • Quality assurance - the process of checking for adherence to quality standards or specifications after the product has been produced.  THE PDCA CYCLE The PDCA (Plan, Do, Check, Act) cycle is a continuous quality improvement model consisting of a logical sequence of four repetitive steps. 1. PLAN (prepare for implementation): 2. DO (execute the plan, taking small steps in controlled circumstances) 3. CHECK (check and study the results, develop and implement tools, programs, and performance improvement strategies): 4. ACT (take action to standardize or improve the process. Review, measure, and evaluate the results, then replan as needed).  SIX SIGMA Six Sigma is a highly disciplined approach to performance improvement that helps organizations focus on developing and delivering near-perfect products and services. Six Sigma has been combined with principles from lean manufacturing to yield a program called Lean Six Sigma in which the focus on reducing waste is added to the original Six Sigma concept.  TQM TOOLS Quality standards can be made more quantifiable by establishing key result areas (KRAs) also known as KPIs (key performance indicators) such as food and service quality, financial management, human resource management, productivity, planning and marketing, and facilities management. • Baseline measurements provide the starting point in a TQM program against which progress and overall performance toward targets or goals may be assessed • Companies have used a number of other programs to improve work processes. The primary ones include sociotechnical systems (STS), statistical process control (SPC), just-in-time (JIT) production and inventory control, the ISO 9000 program of the International Organization for Standardization.  QUALITY MANAGEMENT APPROACHES TO PRODUCTIVITY MANAGEMENT Quality of work life (QWL) is a term that has been used to describe values that relate to the quality of human experience in the workplace. QWL is affected by a composite of factors on the job, including factors that relate to work itself, to the work environment, and to the employee personally  WORK DESIGN The goals of work design are to improve the content of the job, to provide a safe and healthy work environment, and to design a staff of fit people, an optimum work environment, and work simplification. Principles of Motion Economy - A summary of some fundamental principles of motion economy most relevant to foodservice follows: • Your two hands should begin and end their motions at the same time and should not be idle at the same time, except during rest periods. • Motions of your arms should be made in opposite and symmetrical directions simultaneously. • Hand motions should be smooth and continuous. • Good lighting is essential for visual perception.  WORK DESIGN • The height of the worktop and chair should allow for sitting and standing wherever possible. • A work chair should permit good posture. • Combine tools whenever possible. • Preposition tools and materials, having a definite, fixed place for everything used. • Handles and cranks should allow for maximum contact with the surface of the hand. • Arrange work to allow for an easy, natural rhythm. • Use drop delivery whenever possible. • Tools, materials, and controls should be located directly in front of the worker and arranged to allow for the best sequence of motions.  TOOLS FOR ASSESSING PRODUCTIVITY Methods that can be used when conducting a productivity improvement study include work sampling, pathway or flow diagrams, operation and process charting, and micromotion studies. • Work sampling - Random sampling of work to measure the activities and delays of people or equipment to determine percentage of productive time • Pathway chart/Flow diagram - A scale drawing of an area on which the path of the worker or movement of material during a given process may be indicated and measured; also called a flow diagram • Micromotion study - A technique whereby movements of the worker are photographed and recorded permanently on film • Chronocyclegraph - A photographic technique to show motion patterns of hands in performing rapid repetitive operations  CHAPTER 4.5 FINANCIAL MANAGEMENT ACCOUNTING FUNDAMENTALS Financial management is an important management function and requires knowledge of fundamental accounting techniques. PURPOSE OF ACCOUNTING Accounting may be defined as an information system that identifies, records, and communicates the economic events of an organization to interested users. Branches of accounting include: • Financial accounting is the branch of accounting that focuses on recording, summarizing, and reporting financial transactions that include revenue, expense, profit, assets, liabilities, owners’ equity. • Cost accounting focuses on classifying, recording, and reporting business expenses. • Tax accounting deals with the accurate and timely filing of tax forms, payments, and documents required by the government. • Managerial accounting is the branch of accounting where transactions are recorded and analyzed for the purpose of making management decisions.  The Accounting Formula states that for every business Assets = Liabilities + Equity. This formula forms the foundation of the balance sheet (a financial summary of the health of the business on a given date) and the income statement (a financial report that includes the revenue, expenses, and net income over a period of time). FINANCIAL RECORDS Careful record keeping is essential for monitoring day-today financial data and to serve as the foundation of financial statements. • Service records are those documents used to collect and track actual demand for eating occasions and individual menu items. • Income and Expense Records are records of daily transactions which is essential for preparation of monthly financial statements. • Cash receipts and disbursements book is a record of income from sales other than cash sales and of payments made for all expense items MANAGEMENT OF REVENUE AND EXPENSES  PRICING Many factors affect menu pricing, and all must be considered in order to assign financially viable menu prices. The pricing factor is determined by dividing the desired food cost percentage that the foodservice wishes to maintain into 100 (representing total sales or 100 percent); it is then used to multiply the food cost to arrive at the menu price. • The item contribution margin (sometimes called item gross profit margin) is the amount that remains after the food cost of a menu item is subtracted from the selling price of that item. To calculate a menu price using the item contribution margin, the following formula is used: Selling Price = Item Food Cost + Desired Item Contribution Margin PRICING • Food Production: Preparation, Cooking, and Leftovers Control The manager’s ability to forecast accurately the number of portions that are used or sold is critical and should not be based on guesswork or left to the cooks to decide how much to prepare. • Portion Size and Serving Wastes. An established portion size is part of the standardized recipe and is one basis for costing and setting the selling price. • Food Costs. Food is the most readily controlled item of expenditure and the one subject to greatest fluctuation in the foodservice budget. PRICING • Labour Control Costs Labor costs are less controllable than food costs, and their percentage of payroll costs to sales fluctuates with sales. • Operating and Other Expenses These include utilities, laundry and linen supplies, repairs, replacement and maintenance, cleaning materials, depreciation, rent or amortization, etc. • Energy and Utility Costs. The energy “squeeze” of the 1970s made most foodservice managers and equipment manufacturers well aware of the need for conservation. ACCOUNTING AND INFORMATION PLANNING A budget is a financial plan developed to help achieve future goals.  BUDGET Several different types of budgets are used in organizations, including the operating, cash, and capital budgets. • Master Budgets - coordinates every aspect of the operation. The master budget in practice is actually a compilation of several small budgets. • Operating Budget - a plan that minimally includes revenues and expenses. It is a forecast of revenue (sales), expenses, and profit for a specified period of time or fiscal year. • Cash Budgets – to determine if funds will be available when needed in order to meet the financial obligations of demands of the operation. • Capital Budgets - a long-term plan prepared to estimate or predict the costs of capital outlays or expenditures and their financing.  STEPS IN BUDGET PLANNING As mentioned, budgets are time-consuming to prepare and require thought-provoking effort on the part of all who are involved. the following steps are usually included in planning the foodservice budget: 1. Collect operating data from records and reports 2. Study these data and evaluate them against departmental goals. 3. Analyze and discuss any factors that can affect future operations. 4. Discuss and plan for new goals or activities desired. 5. Set priorities and make decisions on what can be included in the budget for next year. 6. Write the budget for presentation. CHAPTER 4.6 MARKETING MARKETING DEFINED Marketing is a business strategy designed to attract customers and influence their purchasing behaviors.  MARKETING CONCEPT The marketing concept is a business philosophy whereby resources and activities are diligently directed toward satisfying the needs and wants of customers through an exchange process, with the obvious understanding that outcomes contribute to the bottom line.  MARKETING CYCLE The Marketing cycle is a recurrent series of activities designed to meet the wants and needs of customers; the cycle is driven by customer feedback The market, or target market, is defined as a segment of a population that, as individuals or organizations, have needs for products and possess the ability, willingness, and authority to make a purchase. Market segmentation is the process of placing customers into groups of like characteristics such as by demographics or geographic location MARKETING MIX The marketing mix represents the package of approaches that organizations use to attract a target market. A well-defined marketing program includes the four P’s of marketing: • Product (satisfies a want or need) • Place (distribution and how products are sold) • Price (amount of money charged) • Promotion (all communication with the customer) Their unique combinations in any marketing program are called the marketing mix  MARKETING FOR FOOD SERVICE OPERATIONS Unique Aspects of Foodservice Marketing Marketing in foodservice requires a unique approach, because unlike some industries, foodservice includes a direct service component. • Product - Food provided by a foodservice operation is consumed but not possessed, which distinguishes it from other consumer goods such as appliances. • Customer contact - The customer takes a more active role in the marketing function in a service industry • Perishability - Food is unique in that it is highly perishable and difficult to store in inventory • Distribution - Without careful consideration of the conditions during holding and transport, food quality can deteriorate significantly and, thus, it can be rejected by the paying customer.  MARKETING AS A MANAGERIAL FUNCTION Marketing is a business strategy designed to attract customers and influence their purchasing behaviors.  SWOT ANALYSIS Planning in marketing as a managerial function includes self-analysis which usually comes through as a formal procees called the SWOT analysis which stands for strengths, weaknesses, opportunities, and threats. By carefully considering each of these relative to its operation, the management team can determine what it can uniquely offer that can satisfy a recognized need for a particular target market. PROMOTIONS IN FOOD SERVICE OPERATIONS Promotions are specific and well-planned events to attract customers and influence perception or buying behaviors.  SALES PROMOTIONS Success of a promotion is based on the type of promotion and its objective. There are two categories of promotion: • Share-of-market promotions, which are financial, volume-based activities designed to increase patronage, sales, or a combination of the two. • Share-of-mind promotions, which seek to influence the customer’s preference or feelings about a particular facility or product. Both of these can be used in noncommercial and retail foodservices.  PROMOTION PLANNING The primary objectives of promotions are to increase the frequency of customer visits and the level of customer satisfaction. In contrast to marketing and merchandising, promotions are generally designed to run for a short period of time but may be extended or repeated if the objectives remain desirable.  BRANDING In foodservice operations, branding is used specifically to increase sales through brand promotions that are designed to woo new customers and increase the average amount of individual transactions. A branded concept is a marketing strategy that communicates a recognized brand to customers. RESOURCES Payne-Palacio, J., & Theis, M. (2016). Food Service Managament Principles and Practices (13th ed.). Pearson., Part 5, Chapter 13-18, Pages 345-495