Management Science - Weeks 1-17 PDF

**WEEK 1** **Lesson 1 -- Definition of Management: its Nature and Purpose** Management applies to managers at **all organizational levels**. The aim is to create **surplus.** It is concerned with **productivity, effectiveness, and efficiency.** **Lesson 2 -- The Aim of All Managers** **Product...

**WEEK 1** **Lesson 1 -- Definition of Management: its Nature and Purpose** Management applies to managers at **all organizational levels**. The aim is to create **surplus.** It is concerned with **productivity, effectiveness, and efficiency.** **Lesson 2 -- The Aim of All Managers** **Productivity, Effectiveness, and Efficiency** **Lesson 3 -- The Functions of Management** **Management as an Essential for Any Organization** **All Effective Managers Carry out Essential Functions** **Five functions of Managers:** **Planning, Organizing, Staffing, Leading, and Controlling** **WEEK 2** **Lesson 1 -- Managerial Operation in a Pluralistic Society** **The Technological Environment** **The Ecological Environment** **Lesson 2 -- Organization's Role in the Society** 3\. Combination of individual functions in the society to achieve their needs. 4\. as a catalyst to better civilized group and competitive. 5\. Organization as a basic changing tool to better civilized nations. **Factors that contribute to the formation of organizations in the society** 1\. Need to achieve desired goals. 2\. Need to have better administration and specialized task or job. 3\. Need for responsibilities to have better lives. 4\. Need to have a leadership in the society. 5\. Needs in several aspects such as security, defense, politics and socio-economic well-being. 6\. Need for control in the society. **Organizations and People** 2\) Organizations Require Management 3\) Organizations use management to accomplish the work that is required to achieve the goals **The nature of organizational environment** 1\. The **external environment** is everything outside an organization that might affect it. 2\. The **internal environment** consists of conditions and forces within the organization. **The External Environment** **The external environment** **General Environment** 1\. The **economic factors** include inflation, interest rates, unemployment and demand. **Task Environment** 1\. **Competitors** are other organizations that compete for resources. 2\. **Suppliers** are organizations that provide resources for other organizations. **Lesson3 -- Managerial Ethics and Corporate Social Responsibility** **What Is Social Responsibility?** **Environmental Sustainability Initiatives** **Direct Philanthropic Giving** **Ethical Business Practices** **WEEK 3** **Lesson 1 - DEFINITION AND IMPORTANCE OF MANAGERIAL PLANNING** **The following are the importance of planning** **1. Planning gives direction** **2. Planning reduces risks of uncertainty** 3\. Planning reduces overlapping and wasteful activities, all problems of when, where, and why they are almost decided. This puts an end to disorder and suspicion. **5. Planning promotes innovative ideas** **6. Planning facilitates decision making** A variety of alternative are discovered, and the best alternative is chosen. Planning establishes standards for controlling Planning is looking ahead, and control is looking back. **Lesson 2 -- The nature of objectives** **Nature of objectives** **Lesson3 -- VARIOUS TYPES OF PLANS AND HOW DO THEY RELATE TO EACH OTHER** **TYPES OF PLANS** Plans can be classified as (1) **Mission or purposes**, (2) **Objectives or goals**, (3) **strategies** (4) **Policies**, (5) **Procedures** (6) **Rules** (7) **Programs** and (8) **budgets.** 1. The **mission or purpose** (the terms are often used interchangeably) identifies the basis purpose or tasks of a n enterprise or agency or any part of it. Every kind of meaningful organized operation has, or at least should have a mission or purpose. In every social system, enterprises have a basic function or task assigned to them by the society. Ex. The purpose of a business generally is the production and distribution of goods and services, the purpose of a university is teaching, research and providing services to the community. 2. **Objectives or goals** are the ends toward which activity is aimed. They represent not only the end point of planning but also the end toward which organizing, staffing, leading and controlling are aimed 3. **Strategies** are defined as the determination of the basic long term objectives and the adoption of courses of action and allocation of resources to achieve these goals. 4. **Policies** are also plans, they are general statements or understandings that guide or channelize thinking in decision making. Not all policies are "statements", they are merely implied from the actions of the managers. Policies help decide issues before they become problems 5. **Procedures** are plans that establish a required method of handling future activities. They are chronological sequences of required actions. They are guides to action, rather than to thinking and they detail the exact manner in which certain activities must be accomplished 6. **Rules** spell our specific required actions or non-actions, allowing no discretion. They are the simplest type of plan. "No smoking" is a rule that allows no deviation from a stated course of action 7. **Programs** are a complex of goals, policies, procedures, rules, task assignments, steps to be taken, resources to be employed and other elements necessary to carry out a given course of action, they ordinarily supported by budgets. 8. **Budget** is a statement of expected results expressed in numerical terms. **WEEK 4** **Lesson 1 -- Strategies, Policies and Planning** **Nature of the Strategies and planning** **Policies in Various Functional Areas of Business** In the following functional areas, policies are announced generally to guide decision making. Source: 1\. Product selection and development 2\. Pricing 3\. Sales promotion 4\. Distribution channels 5\. Production and inventory 6\. Finance 7\. Personnel selection and training 8\. Compensation 9\. Employee benefits **There are three different levels of strategy:** **Lesson 2 -- The Strategic Planning Process** **Planning premises** -- The anticipated environment in which plans are expected to operate **Inputs** -The goal inputs of various claimants on the organization have to be ascertained. **Strategic Intent** **External Environment** **Internal Environment** **Alternative Strategies** **Evaluation and Choice of Strategies** **Consistency testing and contingency planning** **Lesson3 - SWOT Analysis, TOWS Matrix and the Product Portfolio Matrix** **The four alternative strategies of TOWS Matrix** - The **WT strategy** aims to **minimize both weaknesses and threats and may be called the Mini-Mini** (for "minimize-minimize") strategy. It may require that the company for example, forms a joint venture, retrenches or even liquidates - The **WO strategy** attempts to **minimize the weaknesses and maximize the opportunities**. Thus a firm with weaknesses in some areas may either develop those areas within the enterprise or acquire the needed competencies (such as technology or persons with needed skills) from outside in order to enable it to take advantage of opportunities in the external environment. - The **ST strategy** is based on **using the organizations strengths to deal with threats in the environment**. The aim is to **maximize the former while minimize the latter**. Thus, a company may use technological, financial, managerial, or marketing strengths to cope with the threats off a new product introduced by its competitor. - The **SO strategy**, which **capitalizes on a company's strengths to take advantage of opportunities, is the most desirable**. Indeed, it is the aim of enterprise to move from other positions in For this purpose, **a SWOT analysis**, which involves analyzing the organization\'s internal strengths and weaknesses and environmental opportunities and threats, is carried out. Different kinds of strategies and policies cover the areas of growth, finance, organization, and personnel, public relations, products or services and marketing **Michael Porter** identified three generic competitive strategies of, overall cost leadership, differentiation strategy, and focus strategy that may be adopted by firms. **Cost leadership strategies** aim at reduction in cost. Firms which adopt a differentiation Source: strategy attempt to offer products and services that are considered unique in the industry A focus strategy facilitates specialization by establishing a position of overall cost leadership, differentiation, or both. A firm adopting a focus strategy attempts to serve a specific segment of the market, instead of catering to the entire market **The Product Portfolio Matrix** it classifies the products based on two dimensions: Business growth rate and relative market position. Stars, Cash cows, Question marks and Dogs are the four quadrants. **Michael Porter** outlined that as generic strategies organizations can follow cost leadership or differentiation to achieve competitive advantage or higher profit margins. Similarly focus on special groups of customers can also be a generic strategic choice. **WEEK 5** **Lesson 1 -- Decision Making** **Importance and limitations of rational decision-making** Rationality in decision making **Limited or "bounded" rationality** **Lesson 2 -- Development of Alternatives** **Evaluation of Alternatives** In comparing alternative plans for achieving objective, people are likely to think exclusively of **quantitative factors** -- factors that can be measured in numerical terms. **qualitative factors** -- are the factors that are difficult to measure numerically were ignored. **Marginal Analysis** **Cost-effective Analysis** **Quantitative factors** -- factors that can be measured in numerical terms **Qualitative factors** -- are the factors that are difficult to measure numerically were ignored **Lesson 3 -- Programmed and Non- Programmed Decisions and Creativity and Innovation.** **WEEK 7** **Lesson 1 -- Departmentation** The advantages and disadvantages of the different forms of departmentation are as follows 1. **Departmentation by enterprise function** Grouping of activities according to the functions of an enterprise, such as production, sales and financing.  2. **Departmentation by territory or geography** Departmentation based on territory is common enterprise that operate over wide geographic grouped and assigned to a manager.  3. **Departmentation by customer group**  4. **Departmentation by Product** **1.5 Matrix Organization** **Manufacturing Organization (Manufacturing Company)** 5. **Strategic Business Units** Companies have been using an organizational device generally referred to as a strategic business unit (SBU). SBU's are distinct businesses set up as units in a larger company to ensure that certain products or product lines are promoted and handled as through each was an independent business. **Lesson 2 Organization Structures for Global Environment** Organization structures differ greatly for enterprises operating in the global environment. The kinds of structure depend on a variety factors, such as the degree of international orientation and commitment. A company may begin internationalizing its operation by simply creating at its headquarters an international department, headed by an export manager. As the company expands its international divisions may be established in various countries, reporting to a manager in charge of global operation at headquarters or possibly the chief executive officer. With further growth of the international operations, several countries may be grouped into regions, such as Africa, Asia, Europe, and South America. Furthermore, the European division and other division as well may then be divided into groups of countries such as the European Union (EU) Countries, non-EU countries, and Eastern European Countries **2.1 The Virtual Organization** **2.2 The boundary-less organization** **WEEK 8** **Lesson 1 -- Human Resources Management and Selection** **Definition of Staffing** **Staffing is identified as a separate managerial function because** - The staffing of organizational roles includes knowledge and approaches - It emphasizes on the human element in selection, appraisal, and career planning and manager Development - Knowledge and experience has been developed in the area of staffing. - Staffing is manager's responsibility. **Lesson 2 - the Systems Approach to Human Resource Management: an Overview of the Staffing** **Factors Affecting the Number and Kinds of Managers Required** **Determination of Available Managerial Resources: The Management Inventory** **Lesson 3 - Selection Process, Techniques and Instruments** **The Selection Process** **PROCESS / STEPS IN SELECTION** 1. **Preliminary Interview:** 2. **Selection Tests:** Jobseekers who past the preliminary interviews are called for tests. There are various types of tests conducted depending upon the jobs and the company. These tests can be Aptitude Tests, Personality Tests, and Ability Tests and are conducted to judge how well an individual can perform tasks related to the job. Besides this there are some other tests also like Interest Tests (activity preferences), Graphology Test (Handwriting), Medical Tests, Psychometric Tests etc. 3. **Employment Interview:** The next step in selection is employment interview. Here interview is a formal and in-depth conversation between applicant's acceptability. It is considered to be an excellent selection device. Interviews can be One-to-One, Panel Interview, or Sequential Interviews. Besides there can be Structured and Unstructured interviews, Behavioral Interviews, Stress Interviews. 4. **Reference & Background Checks:** Reference checks & background checks are conducted to verify the information provided by the candidates. Reference checks can be through formal letters, telephone conversations. However it is merely a formality and selections decisions are seldom affected by it. 5. **Selection Decision:** After obtaining all the information, the most critical step is the selection decision is to be made. The final decision has to be made out of applicants who have passed preliminary interviews, tests, final interviews and reference checks. The views of line managers are considered generally because it is the line manager who is responsible for the performance of the new employee. 6. **Physical Examination:** After the selection decision is made, the candidate is required to undergo a physical fitness test. A job offer is often contingent upon the candidate passing the physical examination. 7. **Job Offer:** The next step in selection process is job offer to those applicants who have crossed all the previous hurdles. It is made by way of letter of appointment. We had just finished the discussion about Human Resource Management and Selection. Let's move on to the next higher level of activity/ies or exercise/s that demonstrates your potential skills/knowledge of what you have learned. 8. **Final Selection** **WEEK 9** **Lesson 1 -- Performance Appraisal** **Choosing the Appraisal Criteria** The appraisal should measure performance in accomplishing goals and plans as well as performance as a manager. No one wants a person in a managerial role that appears to do everything right as manager but who cannot turn in a good record of profit making, marketing, controllership, or whatever the area of responsibility may be. **Performance in Accomplishing Goals** **Appraising Managers against Verifiable Objectives** **The Appraisal Process** **Evaluating Employee Performance** Performance evaluation is the process of assessing an employee's job performance and **Lesson 2 - Three Kinds of Reviews and Criteria for Appraisal** Simplified model of performance appraisal indicates three kinds of appraisals: **Appraisal Criteria** **Appraising Mangers as Manager: A Suggested Program** **A Team Evaluation Approach** **Lesson 3 -- Rewards, Stress of Managing and Formulating the Career Strategy** The concern here is with some of the general and financial rewards, as well as the stressful aspects, of managing. **Rewards of Managing: General Aspects** **Pay for Performance** **Formulating the Career Strategy** **Preparation of Personal Profile** **Analysis of the environment: Threats and Opportunities** **Analysis of personal strengths and weaknesses** **Development of Strategic Career Alternatives** **Development of Contingency Plan** **Implementation of the Career Plan** **Monitoring Progress** **Strategy for Dual-Career Couples** **WEEK 9** **Lesson 1 -- Performance Appraisal** **Choosing the Appraisal Criteria** The appraisal should measure performance in accomplishing goals and plans as well as performance as a manager. No one wants a person in a managerial role that appears to do everything right as manager but who cannot turn in a good record of profit making, marketing, controllership, or whatever the area of responsibility may be. **Performance in Accomplishing Goals** **Appraising Managers against Verifiable Objectives** **The Appraisal Process** **Evaluating Employee Performance** Performance evaluation is the process of assessing an employee's job performance and **Lesson 2 - Three Kinds of Reviews and Criteria for Appraisal** Simplified model of performance appraisal indicates three kinds of appraisals: **Appraisal Criteria** **Appraising Mangers as Manager: A Suggested Program** **A Team Evaluation Approach** **Lesson 3 -- Rewards, Stress of Managing and Formulating the Career Strategy** The concern here is with some of the general and financial rewards, as well as the stressful aspects, of managing. **Rewards of Managing: General Aspects** **Pay for Performance** **Formulating the Career Strategy** **Preparation of Personal Profile** **Analysis of the environment: Threats and Opportunities** **Analysis of personal strengths and weaknesses** **Development of Strategic Career Alternatives** **Development of Contingency Plan** **Implementation of the Career Plan** **Monitoring Progress** **Strategy for Dual-Career Couples** **WEEK 10** **Lesson 1 Human Factor in Managing** **Multiplicity of Roles** **No Average Person** **The Importance of Personal Dignity** **Consideration of the Whole Person** **Motivation** **An Early Behavioral Model: McGregor's Theory X and Theory Y**  **Clarification of the Theories** **Maslow's Hierarchy of Needs Theory The Needs Hierarchy** 1. **Physiological Needs:** These are basic needs for sustaining human life itself, such as food, water, warmth, shelter and sleep. Maslow took the position that until these needs are satisfied to the degree necessary to maintain life, other needs will not motivate people. 2. **Security or Safety Needs:** These are the needs to be free of physical danger and of the fear of losing a job, property, food or shelter. 3. **Affiliation or Acceptance Needs:** Since people are social beings, they need to belong, to be accepted by others. 4. **Esteem Needs:** This kind of need produces such satisfactions as power, prestige, status and self confidence. 5. **Need for Self-Actualization:** it is the desire to become what one is capable of becoming -- to maximize one's potential and to accomplish something. **Questioning the Needs Hierarchy** **Alderfer's ERG Theory** **Herzberg's Motivation-Hygiene Theory** **The Expectancy Theory of Motivation** **The Vroom Theory in Practice** **Equity Theory** **Goal Setting Theory for Motivating** **McClelland's Needs Theory of Motivation** **Need for Power** **Need for Affiliation** **Need for Achievement** **How McClelland's Approach Applies to Managers** **Special Motivational Techniques** Motivation is so complex and individualized that there can be no single best answer. **Money** **Other Rewards Considerations** **Quality of Working Life** **Job Enrichment** **Limitations of Job Enrichment** **Making Job Enrichment Effective** **WEEK 11** **Lesson 1- Leadership, its essence and ingredients and Trait Approach to Leadership** **Essence of leadership** **Ingredient of Leadership** **Leadership skill seems to be a compound of at least four major ingredients:** - the ability to use power effectively and in responsible manner, - the ability to comprehend that human being have different motivation forces at different time and different situations, - the ability to inspire and ability to act in manner that will develop a climate conducive to responding to and arousing motivations. **Trait Approach to Leadership** **Charismatic Leadership** **Lesson 2 - Leadership Behavior and Styles and Situational or** **Contingency Approaches to Leadership** **Leadership Behavior and Styles** There are several theories on leadership behavior and styles. **Styles Based on Use of Authority** **Do Women Lead Differently?** **The Managerial Grid** **The Grid Dimensions** **The Four Extreme Styles**  **Leadership as a Continuum** **Situational or Contingency Approaches to Leadership** **Fiedler's Contingency Approach to Leadership** **Critical dimensions of the leadership situation** 1. **Position Power** -- This is the degree to which the power of a position, as distinguished from other sources of power, such as personality or expertise, enables a leader to get group members to comply with directions 2. **Task structure** -- With this dimension, Fiedler has in mind the extent to which tasks can be clearly spelled out and people held responsible for them. 3. **Leader-member reactions** -- Fiedler regards this dimension as the most important from a leaders point of view, since position power and task structure may be largely under the control of an enterprise. **Leadership Style** **Lesson 3 - Fiedler's Research and Management, The Path-Goal Approach to Leadership** **Effectiveness, Transactional and Transformational Leadership, Leadership and Motivation,** **and Appreciation and Rewards** **Fiedler's Research and management** **The Path-Goal Approach to Leadership Effectiveness** The theory categorizes leader behavior into four groups: 1. **Supportive leadership** behavior gives consideration to the needs of subordinates, shows a concern for their well-being, and creates a pleasant organizational climate. It has greatest impact on subordinate's performance when they are frustrated and dissatisfied. 2. **Participative leadership** allows subordinates to influence the decision of their superiors and can result in increased motivation. 3. **Instrumental leadership** gives subordinates rather specific guidance and clarifies what is expected of them; this include aspects of planning g, organizing, coordinating and controlling by the leader. 4. **Achievement-oriented leadership** involves setting challenging goals, seeking improvement of performance and having confidence that subordinates will achieve high goals. **Transactional and Transformational Leadership** **Leadership and Motivation** **WEEK 13** **Lesson 1 - Committee, Teams and Group Decision Making** A **committee** is a group of persons to whom, as a group, some matter is committed. **Group Process in Committees** **Functions and Formality of Committees and Groups** **Reason for Using Committees and Groups Deliberation and Judgment** - **Fear of Too Much Authority in a Single Person** - **Representation of Interested Groups** Boards of directors are often selected on the basis of groups interested in company and perhaps more often, on the basis of groups in which the company has an interest. - **Coordination of Departments, Plans and Policies** Committees are very useful for coordinating activities among various organizational units. They are also useful for coordinating plans and policies as well as their implementation. - **Transmission and Sharing of Information** Committees are useful for transmitting and sharing information. - **Consolidation of Authority** - **Motivation through Participation** Even limited participation can be helpful **Disadvantages and Misuse of Committees** **Lesson 2 - Successful Operation of Committees and Groups** - **Authority** A committee's authority should be spelled out so that the members know whether their responsibilities is to make decision, make recommendations or merely deliberate and give the chairperson some insights into the issue under discussion. - **Size** If the group is too large, there may not be enough opportunities for an adequate communication among its members. On the other hand, if the group consists of only three persons, there is the possibility that two may form a coalition against the third member. A committee should be large enough to promote deliberation and include the breadth of expertise required for the job but not so large as to waste time or foster indecision. - **Membership** The members of a committee must be selected carefully. Members should have the capacity for communicating well and recharging the group. - **Subject Matter** The subject must be carefully selected. Jurisdictional disputes and strategy formulation, for example, may be suitable for group deliberation, while certain isolated technical problems may be better solved by an expert in the specialized field. - **Chairperson** The selection of the chairperson is crucial for an effective committee meeting. Such a person can avoid the wastes and drawbacks of committees. - **Minute's** Effective communication in committees usually requires circulating minutes and checking conclusions. - **Cost Effectiveness** A committee must be worth its cost. But the committee can be justified only if the costs are offset by tangible and intangible benefits. **Additional Group Concepts** **Characteristics of Groups** 1\. Group members share one or more common goals. 2\. They normally require interaction and communication among members 3\. Members within a group assume roles. 4\. Groups usually are part of large group. 5\. Groups interface with other groups. **A Special Kind of Group: The Focus Group** **Functional Advantages of Groups** **Lesson 3 -- Teams, Team building, Self-managing teams** - **Team Building** - **Self-Managing Team** - **Virtual Teams** **Conflicts in Committees, Groups and Teams** **WEEK 14** **Lesson 1- Communication** **The Purpose of Communication** - **The Sender of the Message** - **Use of Channel to Transmit the Message** - **The Receiver of the Message** - **Noise Hindering Communication** - **Feedback in Communication** - **Situational and Organizational Factors in Communication** **Communication in the Organization** **The Manager's Need to Know** **The Communication Flow in the Organization**  **Downward Communication** **Upward Communication** **Crosswise Communication** **Lesson 2 - Written, Oral and Nonverbal Communication** Written, oral and nonverbal communications are used together so that the favorable qualities of each can complement the other. When message is repeated through several media, the people receiving it will more accurately comprehend and recall it. An executive who feels uncomfortable in front of a large audience may choose written communication rather than a speech. On the other hand, certain audience who may not read a memo may be reached and become motivated by direct oral communication. **1. Written Communication** **2. Oral Communication** **3. Nonverbal Communication** **Communication Methods** **Barriers and Breakdowns in Communications** **Lack of Planning** **Unclear Assumptions** Often overlooked, yet very important, are the un-communicated assumptions that underlie message **Semantic Distortion** **Poorly Expressed Messages** **Communication Barriers in the International Environment** **Loss by Transmission and Poor Retention** In the series of transmissions from one person to the next, the message becomes less and less accurate. Poor retention of information is another serious problem. **Poor Listening and Premature Evaluation** **Impersonal Communication** Effective communication requires face-to-face contact in an environment of openness and trust. **Distrust, Threat and Fear** **Insufficient Period for adjustment to Change** **Information Overload** **Other Communication Barriers** **Lesson 3 - Toward an Effective Communication** **Guidelines for Improving Communication** **Listening: A Key to Understanding** **Tips for Improving Oral Communication** **Tips for Improving Written Communication** Forceful Style: The tone is being polite but firm. This is to be used when writer has a power. Passive Style: This is to be used when writer in the position lower than that of recipient of the message. Lively/Colorful Style: This is to be used for good-news items, advertisement and sales letter. Less Colorful Style: This is appropriate for common business writing. **Electronic Media in Communication Telecommunication** **Teleconferencing** **The Use of Computers for Information Handling and Networking** **WEEK 15** **The System and Process of Controlling** **Lesson 1 -- The Basic Control Process** Basic Control Process involves three steps: establishing standards measuring performance against these standards correcting variations from standards and plan **Establishment of Standards** **Measurement of Performance** **Correction of Deviations** **1.2 Types of Critical-Point Standards** Standards to be of following points: physical standards cost standards capital standards revenue standards program standards intangible standards goals as standards strategic plans as control points for strategic control **Physical Standards** **Cost Standards** **Capital Standards** **Revenue Standards** Revenue standards arise from attaching monetary values to sales. **Program Standards** **Intangible Standards** **Goals as Standards**: **Strategic Plans as Control Points for Strategic Control** **Benchmarking** **Lesson 2 -- Control as a Feedback System** **Figure: Feedback loop of management control** esired performance Actual performance Measurement of actual performance Comparison of actual performance against standards Identification of **2.2 Feedforward, or Preventive, Control** **Feed-forward in Human Systems** **Feed-forward versus Feedback Systems** **Feed-forward in Management** **Requirements for Feed-forward Control** - Make a through and careful analysis of the planning and control system and identify the more important input variables. - Develop a model of the system. - Take care to keep the model up to date. The model should be reviewed regularly to see what the input variables identified and their interrelationships continue to represent realities. - Collect data on input variables regularly and put them into the system. - Regularly asses the variations of actual input data from planned-for inputs and evaluate the impact on the expected end result. - Take action. Like any other technique of planning and control, all that the system can do is indicate problems; must obviously take action to solve them. **Control of Overall Performance** **Lesson 3 -- Profit and Loss Control** **The Nature and Purpose of Profit and Loss Control** **Limitations of Profit and Loss Control** **Control through Return on Investment (ROI)** **Management Audits and Accounting Firms** **Bureaucratic and Clan Control** **3.2 Requirements for Effective Controls** **Tailoring Controls to Plans and Positions** **Tailoring Controls to Individual Managers** **Designing Controls to Point Up Exceptions at Critical Points** **Seeking Objectivity of Controls** **Ensuring Flexibilities of Controls** **Fitting the Control System to the Organizational Culture** **Achieving Economy of Controls** Controls must be worth their cost. **Establishing Controls that Led to Corrective Action** **WEEK 16** **Control Techniques and Information Technology** **Lesson 1 -- Budget as a Control Device** The Concept of Budgeting **Dangers in Budgeting** **Zero-Base Budgeting** **Traditional Non-budgetary Control Devices** **1.2 Time-Event Network Analysis** **Gnatt Charts**  **Milestone Budgeting** **1.3 Program Evaluation and Review Technique (PERT)** This is developed by Special Project Office of the US Navy. **Major Features of the PERT** **Strength and Weaknesses of PERT** There are five important advantages of PERT. - It forces managers to plan, because it is impossible to make a time event analysis without planning and seeing how the pieces fit together. - It forces planning all the way down the line, because each subordinate manager must plan the event for which he or she is responsible. - It concentrates attention on critical elements that may need correction. - It makes possible a kind of forward looking control; a delay will affect succeeding events and possibly the whole project if manager doesn't take appropriate action. - The network system with its subsystems enables managers to aim reports and pressure for action at the right spot and level in the organization structure at the right time. **Limitations of PERT** - This technique is not useful when a program is nebulous and no reasonable "guess-time" of schedule can be made. - Major disadvantage of PERT is, it emphasis on time only, and not on cost. While this focus is suitable for programs in which time is of the essence or in which, as so often is the case, time and costs have a close, direct relationship. The tool is more useful when considerations other than time are introduced into the analysis. **Lesson 2 -- Information Technology** **Expansion of Basic Data** **Information Indigestion and Intelligence Services** **The Use of Computers in Handling Information** **The Impact of Computers on Managers at Different Organizational Levels** **The Application and Impacts of Microcomputers** **Lesson 3 -- Opportunities and Challenges Created by Information Technology** Preventing the unauthorized use of information is just one of the many challenges created by information technology. - **Resistance to Computer Application**: People over age of 50, may have a phobia. Also in the past, typing was considered as the task of the secretary, not manager. When benefits were realized, resistance decreased. - **Speech Recognitions Devices**: Speech recognition is increasingly used at call-center and car. - **Telecommuting**: This means that a person can work at a computer terminal at home instead of commuting to work. It may be useful for avoidance of traffic congestion and reduce need for office space but its use may lead to miss office gossip and the human interactions with workers. - **Computer Networks**: The interconnection allows users at several workstations to communicate with each other as well as to access other computers. Moreover, workstations can be connected to costly hardware that may be underutilized by single user. - **Internet**: The internet is the largest network of computers. The internet is also excellent tool for doing company research and doing business. Building community is one purpose of the internet. It has created internet related companies such as Google, Yahoo, etc. Use of internet requires understanding of English language, as almost all scientific material on the internet is in English. - **Other Types of Networks**: The intranet is a network that applies the computer and technologies of the internet to an organization or selected groups within the organization. The extranet also uses the computer and Internet technologies but it connects selected users inside and outside the company. - **Groupware**: A group of people on a network can collaborate over long distance at the same time using groupware. Thus, people who may be located in different parts of the world can collaborate on the same task simultaneously. - **Information Security**: Protection of computers can be afforded through encryption. The use of firewall also provides some protection. There is a concern about people working with information systems in organization. Individual and companies also should protect data by regularly making copies and storing them in a secure place. **3.1 The Digital Economy, E-Commerce and M-Commerce** The e-commerce---business transactions on the web---is changing the way we do business. **The Emerging Digital Economy** The internet facilitates four kinds of transactions. e web---is changing the way we do business. 1\. Business to Consumers (B2C): e.g., ordering books from Amazon.com 2\. Consumer to Business (C2B): e.g., bidding for airline tickets through Priceline.com 3\. Consumer to Consumer (C2C): e.g., auction through eBay.com The five largest US airlines---Continental, Delta, Northwest, United Airlines and American Airlines have a common website called orbitz.com **M-Commerce and Wireless Communication** WEEK 17 **Lesson 1 -- Productivity Problems and Measurement** **Productivity Problems** **Measurement of Productivity of Knowledge Workers** **Production and Operations Management-Manufacturing and Service** **Quality Measurement in the Information Age** **Lesson 2 -- Operations Management System** **Planning Operations** **Special Interest in a Product Decision** **Product and Production Design** Following are the steps: - Create product ideas by searching for consumer needs and screening the various alternatives. - Select the product on the basis of various considerations, including data form market and economic analysis and make general feasibility study. - Prepare a preliminary design by evaluating various alternatives, taking into consideration reliability, quality and maintenance requirement. - Reach a final decision by developing, testing and simulating the process to see if they work. - Decide whether the enterprise's current facilities are adequate or if new or modified facilities are required. - Select the process for producing the product; consider the technology and the methods available. - After the product is designed, prepare the layout of the facilities to be used, plan the system of production and schedule the various things that must be done. **System Design** **Operating the System** **Controlling Operations with Emphasis on Information Systems** **Lesson 3 -- Tools and Techniques for Improving Productivity** Tools and techniques include: - inventory planning and control - just-in-tie inventory system - outsourcing - operational research - value engineering - work simplification - quality circles - total quality management - lean management - computer-aided design - computer-aided manufacturing - manufacturing automation protocol **Inventory Planning and Control** Qe = Square Root of ( 2 D S / H ) Where, Qe = Economic Order Quantity (EOQ) D = Demand per year S = Setup Costs H = Inventory holding (carrying) cost per item, per year **Just-in-Time (JIT) Inventory System** **Outsourcing** **Operation Research** **Value Engineering** The following steps are suggested: - Divide the product into parts and operations. - Identify the costs for each part and operation. - Identify the relative value of the contribution of each part to the final unit or product. - Find a new approach for those items, which appear to have a high cost and low value. **Work Simplification** **Quality Circles** **Total Quality Management (TQM)** **Lean Manufacturing** **Computer-aided Techniques** **Lesson 3 -- Supply Chain and Value Chain Management** **Supply Chain Management**