Term 3 - Business Studies 2nd Year PDF

THE FOUR MANAGEMENT TASKS MANAGEMENT = The process of utilizing an organisations resources to achieve specific objectives by employing human and other resources, while navigating the tasks of Planning, Organising, Leading and Controlling. Deciding what should be done Planni...

THE FOUR MANAGEMENT TASKS MANAGEMENT = The process of utilizing an organisations resources to achieve specific objectives by employing human and other resources, while navigating the tasks of Planning, Organising, Leading and Controlling. Deciding what should be done Planning Deciding how it should be done Organising Saying how and when it should be done Leading Checking whether it is done Control 4  PLANNING PLANNING = The process of setting goals, developing strategies and outlining tasks and schedules to accomplish the goals ** Making today’s decisions with tomorrow in mind Goals flow directly from the mission statement, but are more specific. Plans = Is the ‘blueprint’ for goal achievement, and indicates how the goals are going to be achieved. “Proper Planning Prevents Poor Performance” 5  IMPORTANCE AND BENEFITS OF PLANNING  Determining what the organisation wants to achieve in the future.  Effective plans specify goals & objectives for the different departments  Provides the basis for other managerial functions  Provides basis for performance standards – what is expected  Gives the organisation a sense of direction and purpose  Future‐orientated and can minimise threats/negative outcomes  Insure that organisations keep‐up with changing technology  Minimises bad decision‐making and promotes coordination amongst departments  Allows strategic and scarce resources to be properly allocated 6  DIFFERENT LEVELS OF PLANNING 1. Strategic planning “The Big picture” – long term objectives Deals with the broad perspective Applies to the entire organisation Top management determines vision & mission of the organisation 2. Tactical planning Medium to short‐term planning Taking the strategic plan and breaking it down into short‐term plans Distinct to certain areas of the organisation Responsibility and functionality of lower‐level departments 3. Operational planning Specifies how the overall plan will be achieved Focuses on specific objectives Frontline, first level managers ‐ Short‐term plans Routine, day‐to‐day tasks 7 DIFFERENT TYPES OF PLANS Specific Plans Clearly defined plans that leave no room for misunderstanding. Objectives are clearly stated and the plans are clearly defined. Directional Plans General guidelines that allow for flexibility by applying focus to certain areas Do not require specific goals and objectives to be achieved Preferable in dynamic environments where managers need to be flexible to changing environments 8 DIFFERENT TYPES OF PLANS Single‐use Plans Developed for specific situations Used once and never again (Example?) Standing Plans On‐going plans that provide direction for activities that will be performed repeatedly Used to reach strategic objectives Aim to prevent specific issues from arising by providing common action plans Can be adapted over time if needs be, because of environmental changes (Example?) Policies, procedures, rules and regulations are all types of standing plans. 9 GOALS VS OBJECTIVES Goals & objectives should clearly indicate what they are related to Objectives = specific short‐term things needed to be done to achieve long term goals Goals = General targets to be accomplished long‐term. Give direction and focus attention on tasks & objectives Lead to persistence and serve as motivators for success Provide a benchmark for performance measurement **It is important that goals and objectives are clear and measurable 10 PLANNING (levels & diff. between goal and objective) 11 WHAT IS PLANNING? SMART Objectives 12 THE PLANNING PROCESS 1. Determine the state of the organizational 9. Repeat the objectives 2. Assess planning threats & process opportunities 8. Control and 3. Assess assess the strengths & results weaknesses 4. List alternative 7. Implement ways of the plans reaching objectives 6. Develop 5. Choose the strategies to best pursue the alternative for chosen reaching 13 alternative objectives  THE PLANNING PROCESS 1. Determine the state of the organizational 9. Repeat the objectives Activity: planning 2. Assess process threats & opportunities Your fashion brand is launching a new 8. Control and 3. Assess collection/product for assess the strengths & Summer 2025. results weaknesses Using the Planning Process, plan how you 4. List alternative will execute this 7. Implement ways of the plans launch. reaching objectives 6. Develop 5. Choose the strategies to best pursue the alternative for chosen reaching alternative objectives 14  DECISION MAKING Decision Making = The purposeful selection from among a set of alternatives, keeping in mind the relevant objective to be achieved. A continuous process throughout management tasks Closely linked to Planning, Organising, Leading & Controlling Efficient managers start off with critical decisions about what strategies to pursue to help the business grow Strategic decisions = Long-term, complex decisions made by senior management. Affect the entire business organisation *Tactical and Organizational decisions are the made to support strategic decisions. 15 DECISION MAKING Decision making falls under 3 sets of conditions: Certainty Risk Uncertainty Decisions made under conditions of certainty :  All individuals are fully informed about the situation  All alternative solutions are apparent  The likely outcome of each solution is clear **Pause for Attendance** If you’re still with me, Quickly go sign attendance ;) 16 DECISION MAKING Decisions made under conditions of risk:  Informational surrounding a situation is not clear  Base decisions on previous experiences, intuition or personal judgement  Decisions under risk are likely to yield more than one outcome  Probability of various outcomes is unknown & cannot be reliably estimated Decisions made under conditions of uncertainty : X Little to no information available on a situation X Difficult to define the problem or any alternative solutions – unusual/ambiguous X Decisions based on educated guess 17 TYPES OF DECISIONS Routine Decisions Made on a regular/daily basis Require little research or time invested Supported by established rules or operating procedures Standard choices – well defined, common and familiar problems Obvious solutions – require little to no consideration of alternatives Adaptive Decisions Made in response to uncommon situations Involve modifying or improving past decisions Innovative Decisions Create innovative solutions to unusual problems 18 DECISION MAKING cont. 1. Define & diagnose the problem 7. Follow up and control 2. Set Goals Decision Making 6. Implement the Model 3. Search for chosen alternative alternative Solutions 5. Choose between 4. Assess alternatives alternative solutions 19 Recap : Planning = The process of setting goals, developing strategies and outlining tasks and schedules to accomplish those goals. Once a plan has been set, management must combine human and other resources, such as money, machinery, raw materials and information/knowledge in the best possible way to achieve organisational goals: ORGANISING INTRODUCTION Organising = The process of delegating and coordinating tasks, activities and resources in order to achieve organisational objectives. Requires Communication, Coordination and Cooperation. Organising is about creating structure… Allocates responsibility to employees Allocates accountability Established channels of communication Allocates resources Improves teamwork & synergy …Ensuring resources are used efficiently and effectively THE IMPORTANCE OF ORGANISING Organising promotes the productive deployment & utilization of resources Related activities and tasks are grouped together rationally and in specialized departments – marketing, personnel or finance [experts in their particular fields] **Successful organising makes it possible for businesses to achieve their goals Avoid unnecessary duplication of tasks Obviates possible conflicts Reduces doubt & misunderstandings ORGANISING Organisational Structure: Formal tasks assigned to individuals and departments Formal reporting relationships – lines of authority, responsibility and hierarchical levels Designing systems to ensure effective co-ordination of employees across departments Formal reporting relationships & hierarchies provide the framework for vertical control of the organisation THE FUNDAMENTALS OF ORGANISING Five Fundamental building blocks to Constructing an organisation: 1. Designing Jobs 2. Grouping Jobs (Departmentalisation) 3. Establishing Reporting Relationships 4. Establishing Authority Relationships 5. Co-ordinating activities  1. DESIGNING JOBS Job Design = the determination of an employees work-related responsibilities Determines the level of specialization – Tasks are broken into smaller units to take advantage of specialized knowledge or skills to improve productivity. Job specialization is an extension of organisational growth. Job Rotation – Systemically moving employees from one position to another. Helpful in training initiatives, but not always conducive to employee motivation or satisfaction. Job Enlargement – Increase the total number of tasks an employee can perform. All employees perform a variety of tasks. Job Enrichment – Increases both the number of tasks the employee has, as well as the control they have over those tasks. Delegation of more authority to employees, continually assigning new and challenging tasks – allows for growth & advancement. Work Teams – Allow working groups to design the work system they want to use to [perform interrelated tasks. 2. DEPARTMENTALISATION Departmentalisation – The logical grouping of operational activities that belong together. Each department has its own managerial positions Departments constitute the overall business structure Common bases for Departmentalisation: - Functional Departmentalisation - Product Departmentalisation - Geographic Departmentalisation - Customer Departmentalisation 2. DEPARTMENTALISATION Functional Departmentalisation : Activities belonging to each management function are grouped together MANAGING DIRECTOR Human Marketing Financial Production Resource Manager Manager Manager Manager  2. DEPARTMENTALISATION Product Departmentalisation : All activities concerned with manufacturing a particular product/group of products are grouped together MANAGING DIRECTOR Manager of Consumer Manager of Industrial Products Products Marketing HR Marketing HR Manager Manager Manager Manager Financial Production Financial Production Manager Manager Manager Manager  2. DEPARTMENTALISATION Geographic Departmentalisation : Best structure for businesses that manufacture and sell across different geographical regions MANAGING DIRECTOR Manager Manager Manager Manager [Western Cape] [Eastern Cape] [Gauteng] [KwaZulu-Natal] Marketing Financial Production HR Manager Manager Manager Manager 2. DEPARTMENTALISATION Customer Departmentalisation : Business concentrates on a special segment of the market or group of consumers/limited number of users. i.e. industrial products. MANAGING DIRECTOR Manager Manager Electronic Electronic Equipment for Equipment for TV industry SA Air Force ESTABLISHING REPORTING RELATIONSHIPS The Chain of Command = Who reports to whom in the organisational structure A clear and distinct line of authority among the positions within an organisation. The Unity of Command VS The Scalar Principle Unity of Command : Each person within an organisation must have a clear reporting relationship to one, and only one, supervisor. The Scalar Principle : There must be a clear and unbroken line of authority that extends from the lowest to the highest position in the organisation. Someone in the organisation must ultimately be accountable for every decision. DEVELOPING AN ORGANISATIONAL STRUCTURE Structures are developed to fit the business and their activities. There is no BEST structure – Managers will structure a business according to its objectives and operational processes Line Organisational Structure (Heirarchial) Line and Staff Organisational Structure Functional Organisational Structure Matrix Organisational Structure See Advantages VS Disadvantages in the Project Organisational Structure Textbook pg. : 157 - 162 **See Flowcharts on Departmentalisation to understand organisational structure for Functional & Matrix Structures. ORGANISATIONAL STRUCTURE Line Authority = Authority delegated down through the line of command. Managers in each line are directly responsible for achieving the goals of the organisation. ORGANISATIONAL STRUCTURE Staff Authority = Indirect supplementary authority. Individuals or sections with staff authority assist, advise and recommend. The source of authority is their special knowledge of a particular field. 2. DEPARTMENTALISATION Matrix Organisational Structure : Incorporates the advantages of both Functional and Product Structures, allowing for both project managers (horizontal) and functional managers (vertical) to have authority. [Teams report to multiple leaders] DEVELOPING AN ORGANISATIONAL STRUCTURE Project Organisational Structure Employees work continuously on projects Teams are made up of employees that work together on individual projects Flexible – as projects complete, team restructures into new projects ESTABLISHING REPORTING RELATIONSHIPS Span of Management = Determines how many people will report to one manager. Wide (Flat) Vs Narrow (Tall) Each organisation will have a unique set of factors that may determine their most optimal span of control Factors that influence span of control Skills, competence and maturity of supervisors Physical dispersion of employees Complexity of business Extent of non-supervisory work Extend of standardized procedures Similarity of tasks being supervised Frequency of new problems Preferences of supervisors and employees reporting to them AUTHORITY RELATIONSHIPS Organising is more than just the assignment of tasks and departments, but the assignment of responsibility, authority, accountability to each post within the organisational structure. Stipulates the persons from whom employees receive instructions, to whom they report and for what they are responsible. Responsibility = The duty to perform tasks or activities as assigned. Authority = The right to command or give orders and discipline defaults or negligence (power that has been legitimized by the organisation) Formal authority is vested in organisational positions and not people Formal authority is accepted by employees Formal authority flows down the vertical hierarchy of an organisation. (higher positions have more authority) AUTHORITY RELATIONSHIPS Accountability = The mechanism through which authority and responsibility are brought into alignment. People with authority and responsibility are subject to reporting and justifying task outcomes to those above them in the chain of command. Delegation = The process managers use to transfer authority and responsibility to positions below them in the organisational hierarchy. Decentralization = the process of systemically delegating power and authority throughout the organisation to middle and lower level manager. Centralization = the process of retaining power and authority in the hands of higher level managers. FACTORS THAT INFLUENCE ORGANISATIONAL STRUCTURE Plans can only be implemented successfully if the organisational structure makes it possible. Effective Planning, Leading & Control are facilitated through effective Organising. Different factors impact organisational structure & ultimately affect how a business operates. 1. The environment in which a business operates 2. The relationship between strategy and structure 3. The size of the business 4. The staff employed by the business 5. The organisational culture FACTORS THAT INFLUENCE ORGANISATIONAL STRUCTURE 1. THE ENVIRONMENT IN WHICH A BUSINESS OPERATES - Businesses need to adapt to their environments to survive: Stable Environment: Does not change – product changes are the exception, not the rule Demand for product is regular (only slight fluctuations) New technological changes are small & unlikely Little in the way of innovation – no great need for co-ordination and co-operation between departments Businesses with fewer competing markets, less pressure for product development Few specialists – marketing & advertising Decisions usually made from top level management FACTORS THAT INFLUENCE ORGANISATIONAL STRUCTURE Turbulent Environment: Changes are the norm Competitors unexpectedly bring out new products regularly Technological innovations cause revolutionary changes in the manufacturing process or product itself Necessitates many specialists for market research, product development Requires close coordination and communication between departments Departmentalisation according to product is usually best – speeds up decision making Decision making made within separate departments FACTORS THAT INFLUENCE ORGANISATIONAL STRUCTURE Technologically Dominant Environment: Technology changes the speed and manner in which organisations conduct and transact business Technology forms the basis of a businesses product – organisational design will be influenced by technological sophistication Need for more manager and more levels of management Specialized technicians work in small groups with a narrow span Requires an adaptable organisational structure based on Departmentalisation FACTORS THAT INFLUENCE ORGANISATIONAL STRUCTURE 2. THE RELATIONSHIP BETWEEN STRATEGY AND STRUCTURE Strategy provides a direct input into the designs of the organisational structure – the structure cannot be separate from the strategy. **Pause for Attendance** If you’re still with me, Quickly go sign attendance ;) FACTORS THAT INFLUENCE ORGANISATIONAL STRUCTURE 3. THE SIZE OF THE BUSINESS Structure depends on the size of the business – the number of employees and managers to be coordinated In increase in the size of the business creates a need for greater specialization – more departments & more levels of management FACTORS THAT INFLUENCE ORGANISATIONAL STRUCTURE 4. THE STAFF EMPLOYED BY THE BUSINESS Close relationship between organisational structure and the competence and role of staff Competence in the form of training, experience, attitude, availability management structure influences organisational strategy and preferences for how things like to be done Managers can have personal preferences for organisational strategies and the types of relationships they keep with employees (formal or authoritative) Experts suggest a shift away from formal bureaucratic structures FACTORS THAT INFLUENCE ORGANISATIONAL STRUCTURE 5. THE ORGANISATIONAL CULTURE The beliefs and values shared by people in a business The “personality” of the business Corporate culture comprises basic values that are reflected in the staffs behaviors, the businesses architecture, décor, dress regulations and general way in which things are done Culture can influence the successful implementation of tasks INTRODUCTION Managers perform the function of leading by influencing, guiding and directing the organisations employees toward achieving the goals of the organisation Influence one exerts over another Intentional, with the purpose of achieving specific outcomes Recipients should be willing to follow – interdependent relationship between leaders & followers Therefore, leadership is defined as the process of influencing employees to work willingly towards the achievement of organisational objectives MOTIVATION Employees directly influence a company’s productivity and profitability To manage employees effectively, managers should understand what motivates them Motivation = An inner desire to satisfy an unsatisfied need. Intrinsic - Cannot be externally forced **Managers need to create an environment that is conducive to employees being motivated to achieve organisational goals **Any influence by managers to create an inner desire in employees to achieve the company goals MOTIVATION Theories of Motivation Maslow’s Hierarchy of needs Herzberg’s two-factor Theory - Hygiene Factors : Do not lead to prolonged motivation, but the lack of these factors will lead to dissatisfaction and demotivation - Motivators : Aspects of one’s job that create positive feelings in an organisational context. - Inner, personal satisfaction that employees want from work : job characteristics such as challenging work, responsibility, recognition, achievement, advancement and growth MOTIVATION Motivating Factors - Opportunity to Achieve - Policy & Administration - Personal Growth - Wage/Salary Benefits - Recognition - Interpersonal relationships Hygiene Factors - Advancement - Supervision - Responsibility - Working Conditions - The work itself - Status & Security MOTIVATION PERFORMANCE = Ability X Motivation X Resources Employees need motivation, as well as the appropriate training, knowledge and skills to perform effectively. Organisations should provide opportunity to perform – appropriate tools, resources, materials and equipment LEADERSHIP & MANAGEMENT Leadership = The process of influencing employees to work willingly towards the achievement of organisational objectives Influence = communicating ideas. Gaining acceptance of them and inspiring followers to support and implement these ideas through change. Managers Leaders The aim is to make good managers also good leaders LEADERSHIP & MANAGEMENT ❑ Carry out Traditional Management Tasks ❑ Challenge status quo and ❑ Planning, Organising, bring about change Leading, Controlling ❑ Develop organisations vision ❑ Efficient & Effective & set direction ❑ Liaising with key figureheads Managers Leaders ❑ Develop strategies to work ❑ Supervising employees towards new vision ❑ Monitor and disseminate ❑ Communicate new direction information and get people involved ❑ Decision –maker ❑ Motivate ❑ Disturbance handler The aim is to make good managers also good leaders ❑ Inspire ❑ Resource allocator ❑ Negotiator COMPONENTS OF LEADERSHIP Authority relations relate strongly to the leadership function Authority : the right of a manger to give commands and demand action from employees Power : managers ability to influence behaviour Responsibility : obligation to achieve organisational goals. Responsible for results of their departments Delegation : The process of assigning responsibility and authority Accountability : The evaluation of how well individuals meet their responsibilities. POWER Managers have 2 types of power : Personal Power – Based on one’s personality, courage and ability to inspire Position Power – Held over others by virtue of one’s official position in the organisation POSITION PERSONAL POWER POWER Coercive Reward Legitimate Referent Expert Power Power Power Power Power THE POWER CONTINUUM A manger who commands all 5 types of power is a strong leader. AUTHORITY Owners/ Managers are responsible for ensuring employees Shareholders work together to achieve organisational goals Board Decide who does what Discipline those who do not follow command Top Managers **members confer authority onto managers in their Middle acceptance of them as their leaders Management Lower Management Etc LEADERSHIP THEORIES “Great Man” Trait Theory Behavioural Theory Contingency Theory Situational Theory Participative Theory Leader-Member Exchange Theory Substitute Theory Read : p.g. 179 - 181 CONTEMPORARY APPROACHES TO LEADERSHIP Servant Leadership Authentic Leadership Charismatic Leadership Transactional & Transformational Leadership Emotional Intelligence and Leadership Read : p.g. 181 - 182 CHARACTERISTICS OF CURRENT LEADERS Personal Qualities Personal Philosophies Management Capabilities Working with colleagues Relationship Skills Making Decisions Motivating Employees Communicating like a leader Developing Emotional Intelligence Read : p.g. 184 - 189 CONTROL CONTROLLING THE MANAGEMENT PROCESS 1. Determine the Organisations use control state of the organizational objectives procedures to ensure they are 9. Repeat the 2. Assess threats & planning process opportunities progressing towards their goals & resources are being used properly and productively 8. Control and 3. Assess strengths & assess the results weaknesses Feedback loop – sets the first step in motion for the next set of 4. List alternative 7. Implement the ways of reaching plans objectives objectives 6. Develop 5. Choose the best strategies to alternative for pursue the chosen reaching objectives alternative CONTROLLING THE MANAGEMENT PROCESS Effective leaders follow up on planned activities Assess that predetermined goals are reached Control = The process of establishing and implementing mechanisms to ensure that objectives of the organisation are reached. **Control is the creation of realistic standards against which performance can be measured, and deviations from the standard can be detected in good time, in order to take corrective actions. THE IMPORTANCE OF CONTROL Detecting Faults Identifying Opportunities Handling Complex Situations Achieve Goals Greater Efficiency Improves Goodwill Judging Accuracy of Standards Assigns Responsibility Motivates Employees THE PURPOSE OF CONTROL Planning, Organising, Leading, Control. Without control, planning is pointless Control helps companies adapt to environmental change & cope with uncertainty Variables in the turbulent contemporary business environment can hinder the smooth & seamless flow of plans – controlling the process helps navigate this Limit the accumulation of errors – detect & deal with in a timely manner Coping with increasing organisational size & complexity – maintaining the extensive network of departments (production, finance, admi9n, marketing, etc.) Minimize costs and increase output CONTROL IMPLEMENTATION STYLES Control comes from specific lines of authority associated with one’s position Formal rules, policies, standards, hierarchy, formal authority, reward systems Common in large organisations (less face-to-face interaction) Inflexible Bureaucratic Can be counterproductive when limiting personal growth Uses economic forces to establish control and regulate performance (price & competition) Attempt to achieve goals through manipulation of supply, demand, pricing, transportation, etc. Market Managers compare prices and profits to determine efficiency of the organisation Works well where tangible outputs can be identified No formal rules, regulations or analysis Workers have common goals and values – shared trust within an organisation Greater employee autonomy – make decisions for best outcomes Clan Emphasis on pleasing customer over boss TYPES OF CONTROL Owners/ Shareholders Strategic Planning & Control Board Top Managers Tactical Planning & Control Middle Management Lower Management Operational Planning & Control Etc TYPES OF CONTROL Inputs Transformation Outputs Controlled Through Controlled Through Controlled Through Preliminary Concurrent Control Feedback Control Control Ensures Ensures Ensures Standards are Quality standards Good Quality being met are met, Output throughout the production process post-production THE CONTROL PROCESS 1. Determine what to control (Objectives) Take 2. Set Corrective Control Actions Standards 5. Determine 3. Measure Reasons for Actual Deviations 4. Compare Performance **Pause for Attendance** Actual Performance If you’re still with me, Quickly to Set Standards go sign attendance ;) THE CONTROL PROCESS STEP 1 : DETERMINE WHAT TO CONTROL Determine which areas and activities need control, and which can function on their own. Financial Resources Information Resources Human Resources Physical Resources Administrative Control Budgets Inventory Performance Management Data Control Control Financial Analysis Quality Control CONTROL OF PHYSICAL RESOURCES Physical Resources = Tangible assets (buildings, equipment, vehicles, machinery, stock, raw materials, work in progress, finished products) Inventory Control Inventory = reserves of resources held in readiness to produce products/services, as well as end products that are kept in stock to satisfy customer needs - raw materials - work in progress - components - finished products 3 SYSTEMS OF INVENTORY CONTROL: 1. Economic-Ordering Quantity (EOQ) Replenishing inventory levels by ordering the most economic quantity. Disadvantage : inventory must be kept regardless of manufacturing depts needs. Items kept in stock indefinitely, despite wanting to keep inventory costs low. 2. Materials-Requirement Planning (MRP) Estimates made on the demand for raw materials and components necessary to create the finished product. Inventories are ordered only when needed, and costs of maintaining inventory are eliminated 3. Just-In-Time Planning (JIT) Actual orders for finished products are converted into orders for raw materials, which receive just in time for the manufacturing process. Ordering in smaller, frequent quantities, saving inventory costs and associated risk CONTROL OF PHYSICAL RESOURCES Quality Control Total Quality Management Quality is the responsibility of everyone within the organisation Managers can continually improve organisations work systems for better products/services Quality should be included in the mission statement of a business The ultimate test of product quality is the marketplace  THE CONTROL PROCESS STEP 2 : SET UP PERFORMANCE STANDARDS Profitability Standards : How much profit to be made in a given time period Market Position Standards : Percentage of total market for a product that a company would like to win Productivity Standards : rates at which products should be produced Product Leadership Standards : level of Product Innovation contributing to market leadership Personnel Development Standards : Attitudes of employees Public Responsivity Standards : Corporate Social Responsibility Goals Performance Standard = planned target against which actual performance will be compared Relevant Realistic Attainable Measurable THE CONTROL PROCESS STEP 3 : MEASURE ACTUAL PERFORMANCE Performance measurement is continuous & quantifiable Reports should be reliable : accuracy = effective Measurement should be carried out at necessary strategic points Consider reporting lines – what information and how much should be fed back and to whom? Ways to measure performance: ❑ Personal observation ❑ Statistical reports ❑ Oral reports ❑ Written reports THE CONTROL PROCESS STEP 4 & 5 : EVALUATE DEVIATIONS & DETERMINE REASONS Assessing the performance gap between the performance standard and the actual performance. Understand why there may be discrepancies – positive & negative The nature and scope of deviations can have various causes (impossible to make generalizations) Ensure performance standards and measurements are objective Are deviations large enough to justify further investigation (set upper and lower limits) Identify every possible reason for deviations THE CONTROL PROCESS STEP 6 : TAKE CORRECTIVE ACTION Ensure deviations do not recur If actual achievements do not match up to performance standards, managers have 3 possible actions: - Actual performance ben be improved to match standards - Strategies can be revised to accomplish standards - Performance standards can be lowered or raised to make them more realistic CHARACTERISTICS OF AN EFFECTIVE CONTROL SYSTEM Valid Performance Standards Adequate Information Future Oriented Multidimensional Cost-Effective Acceptable to Employees Timely Accurate TOOLS FOR LEADERSHIP AND CONTROL Managers frequently rely on formal documentation to help them lead and control effectively Operations Manual = Document that outlines the fundamental processes, procedures and guidelines required for a smooth functioning organisation. Ensures consistency Streamlines processes Promotes efficient decision making  TOOLS FOR LEADERSHIP AND CONTROL ** Brief BBP2-2-1-A-2024: Operations Manuals need to be clear, Use the criteria as outlined in your brief to create your insightful and accessible own Operating Manual for the StyleWeave case study Provides employees with a comprehensive guide to perform their tasks efficiently Vision, Mission, Values Organisational Structure Processes & Procedures Policies & Guidelines Training & Development TOOLS FOR LEADERSHIP AND CONTROL Creating an Operations Manual Analyse current processes & identify gaps and improvement areas Document processes and procedures Review and Refine Operating Manuals are specific to different organisations and serve different purposes : E.g.: Project Management , Production Processes, Customer Service The Production Department The Production Department Responsible for turning raw materials into finished products - Administrative - Technical - Detail oriented Coordination of all aspects of production : from execution to delivery Company Expense - Does not directly generate revenue Challenges in Production Tighter Costing Increased competition Expensive material & labour components Quick Response Shortening the production & distribution cycle Reduced inventory & increased turnover **constantly looking for ways to save money, increase production and shorten turnaround time. Production Planning & Scheduling Poor planning can be disastrous Poor quality Damaged merchandise Late orders Incorrect units Production Plan = Integration of both long & short term goals A sequence of standing operations, procedures, standards and requirements **clearly defined objectives – No room for misinterpretation Production Planning & Scheduling Effective planning = Higher Performance Necessary to maintain quality, increase production facilities and meet shipping deadlines Short-Term Planning Long-Term Planning Tactical, operational Strategic in nature Based on customer orders Based on forecasts & budgets Shorter than 1 year Organisation-wide objectives Extends beyond 5 years Production Planning & Scheduling Short Term Planning: **Requires a knowledge of plant* capacity, productivity and workflow As work is planned – it is scheduled into production Too much or too little work in one factory can impede the flow **production planner to work closely with sales to ensure orders are in sync. Material Requirements Planning System = Software that is based on production planning and inventory control. Estimates made on the demand for raw materials and components necessary to create the finished product. Inventories are ordered only when needed, and costs of maintaining inventory are eliminated (*Plant = Factory) Preproduction & Production Planning Preproduction Planning Process of coordinating pre-manufacturing processes to be performed by different functions & workstations By now, samples are already approved and costed Preproduction Department Coordinates The Following: Ordering fabric for duplicate samples Checking that production samples & patterns are complete (fit & specs) Check that patterns graded Ensuring spec sheets and tech packs are in motion Production Planning & Scheduling Production Planning = Coordinates plant capacity with style requirements, projected volumes and shipping dates (Scheduling). Cut to Order Cut to Stock Production Department Coordinates The Following: Negotiating fabric and final garment costs (volume discounts) Checking final samples and prototypes (specs) Inspecting patterns & grades Assigning production contracts to vendors; inspecting factories Finalizing tech packs Scheduling When planning is complete, orders must be assigned to factories (CMTs) CMT = Cut Make Trim Production Facilities need to understand the job required : What to make When Where On what equipment By how many employees **helps manufacturers control their time, maximize their efficiency and reduce costs. Quick Response = Enhances efficiency and reduce lead times, allowing manufacturers to respond rapidly to changes in consumer demand and market trends. Production Management The Role of Production Teams: Coordinate fabric & trim deliveries to factories Schedule raw materials for construction Schedule & track production Ship finished good to retailers Knowledgeable on all aspects - sewing - packaging - care labels - import & custom laws - quality control Me&B, 2024 Production Management Control flow of production Ensure continued supply of work Timing of operations **Precision & coordination are essential to success = Production Manager  Push VS Pull Production Principles of a Push System Sets production based on market and consumer demand projections Based on anticipated need Reduces the risk of product shortages Potential for wasted or overstocked inventory and materials Good for longer lead times Principles of a Pull System Based on a Just-in-Time manufacturing model Production only occurs when there is an actual customer order Materials and supplies are ordered only when needed Lower risk of waste and overstock situations Higher risk of inventory shortages when demand fluctuates Good for shorter lead times Push VS Pull Production Push VS Pull Production Types of Production Processes Project Processes = Unique, one-off production tailored to specific customer requirements. Creating a custom wedding dress where every detail, from fabric to fit, is customized for an individual client. Jobbing Processes: = Small-scale production where items are made in limited quantities, often customized but not unique. Producing a limited-edition capsule collection where each item is made in small batches and may involve some customization, like custom embroidery on jackets. Batch Processes = Manufacturing a set quantity of identical products before switching to the next set. Producing a batch of 500 T-shirts in one colour and size before switching to another colour or size. This is common in seasonal collections where a specific number of each design is produced. Types of Production Processes Mass Processes = Large-scale production of standardized products where each item is identical. Mass production of basic white T-shirts in large quantities, typically for global retailers like H&M or Zara. Continuous Processes = Non-stop production where products are made continuously, typically in high volumes. Continuous production of nylon or polyester fabric, which is produced in long, uninterrupted runs to supply material for various fashion brands. Production Layouts The layout of an operation or process : How transforming resources are positioned relative to each other How various tasks are allocated to these transformation processes. Effective layouts improve productivity, reduce bottle necks and long lead times. What makes a good layout? Layouts need to consider the objectives the organisation needs to achieve. The objectives of any layout depend on the strategic objectives of the operation: Inherent Safety Dangerous operations should not be accessible to the unauthorize Fire exists marked with uninhibited access Pathways clearly defines and not cluttered Length of Flow Flow of materials should be channeled by layout – appropriate for the objectives Minimizing distance travelled by transformed resources Clarity of Flow All flow materials should be well signposted Manufacturing operations should have clearly marked gangways What makes a good layout? Staff Conditions Staff should be located away from noisy parts of the operations Well ventilated, well lit and pleasant working environment Management coordination Supervision and communication throughout the manufacturing process Accessibility Machinery and equipment should be accessible to a degree for cleaning & maintenance Use of Space Appropriate use of space (height and floor space) Long-term Flexibility Layouts are changed periodically as the needs of an operation change A good layout is devised with future needs of the operation in mind Basic Layout Types 1. Fixed Position Layout 2. Functional Layout 3. Cell Layout 4. Product Layout Fixed Position Layout Locating the position of a product or service such that it remains largely stationary, while transforming resources are moved to and from it The resources being transformed do not move – Rather the materials, equipment, information and people flowing through the operation move as necessary. Example: Motorway construction : product is too large to move Open hear surgery : patient too delicate to move Construction sites : product being made cannot be moved – allocate areas of the site to different contractors  Fixed Position Layout FASHION EXAMPLE : Tailoring a Large-Scale Theatrical Costume or Couture Dress ❖ For a high-end couture dress or a large-scale theatrical costume the garment is often constructed in a fixed position. ❖ The dress or costume is set up on a mannequin or dress form, and the seamstresses, designers, and embellishment specialists work around it. ❖ The different elements—such as fabric, sequins, beads, and lace—are brought to the workstation, and multiple workers collaborate on different aspects of the garment while it remains in one position. ❖ This layout allows for meticulous attention to detail and customization, which is crucial for such intricate, one-of- a-kind pieces. Alexander McQueen, 2023  Functional Layout Manufacturing operations are grouped together on the basis of the function, technology or equipment used. Similar resources and processes are grouped together Convenient grouping and utilizations of resources Route is taken from activity to activity according to their needs Different products have different needs and may take different routes Examples: Super markets - products are grouped together which are convenient for restocking - i.e. canned foods | freezer goods | fresh vegetables Manufacturing facilities - some processes need specialist or technical support and are grouped together - heat finishes : require ventilation and fume extraction - machinists : require technical skills to operate certain machines  Functional Layout FASHION EXAMPLE: Factory Producing Ready-to-Wear Garments ❖ Cutting Department: All cutting machines and tables are in one area. Fabrics are brought here to be cut into pattern pieces according to the garment design. ❖ Sewing Department: This area is equipped with sewing machines and tools. After cutting, the fabric pieces are moved here, where different workers specialize in sewing specific parts of the garment, like sleeves, collars, or zippers. ❖ Finishing Department: Once sewn, the garments move to this area for tasks like pressing, buttoning, and adding labels. ❖ Packaging Department: Finally, finished garments are sent to the packaging area for folding, tagging, and packing into boxes for shipping. Each department focuses on a specific part of the garment production process, with the product moving from one function to the next until it is complete. This layout is efficient for handling high volumes of similar products.  Cell Layout Transformed resources entering the operation are pre-selected to move to one part of the operation in which all the transforming resources , to meet their immediate processing needs, are located. This structure entails the creation of work cells, which are micro units of 3-12 workers. Each unit contains a certain number of machines and supplies Cells themselves may be arranged in either functional or product layout. After being processes in one cell, transformed resources move on to another cell for the next step in the operation. ** Cell layouts attempt to bring some order to the complexity of functional layouts. Examples Manufacturing Maternity ward in the hospital Shop-within-a-shop Cell Layout FASHION EXAMPLE: Production of a Specific Style of Jeans Jeans Production Cell: The factory creates a dedicated cell for producing a specific style of jeans. ❖ Within this cell, all necessary tasks—cutting, sewing, assembling pockets, attaching zippers, and hemming—are grouped together in a U-shaped or circular layout. ❖ Cell Structure: Workers in this cell are cross-trained to handle multiple tasks. ❖ One worker might start by sewing the waistband, pass the jeans to another worker who attaches the pockets, and so on. ❖ The product moves through the cell in a smooth, continuous flow, reducing the time and effort needed to transport it between different functional areas. ❖ Flexibility: This cell layout allows the factory to quickly switch production to different styles of jeans or adjust to varying demand levels, as the entire process is contained within the cell and can be reconfigured as needed. Product Layout Locating transforming resources in a sequence defined by the processing needs Each product follows a pre-arranged route in which the sequence of activities required, matches the sequence in which the processes have been located. Products flow along a line of processes. “Line Layout” Products flow through the same sequence Example Motor vehicle assembly Mass immunization programs Mass clothing manufacturers Self-service cafeteria  Product Layout FASHION EXAMPLE: Assembly Line for T-Shirt Production ❖ Fabric Feeding: Rolls of fabric are fed into the cutting machine at the start of the line. ❖ Cutting Station: The fabric is automatically cut into T-shirt shapes using templates or patterns. The cut pieces then move directly onto the next station via a conveyor belt. ❖ Sewing Station: The cut fabric pieces move sequentially through different sewing stations—one for attaching sleeves, another for hemming the bottom, and a third for stitching the neckline. Each task is completed in a specific order, and the T-shirt moves down the line as each step is completed. ❖ Finishing Station: The nearly finished T-shirts pass through stations where tags are added, threads are trimmed, and the garment is pressed. ❖ Quality Control & Packaging: The final T-shirts reach the end of the line, where they are inspected for quality, folded, and packed for shipment. In this product layout, the T-shirts move along a linear path from raw material to finished product, enabling the factory to produce large quantities of identical T-shirts efficiently. This layout is ideal for mass production of standard products. Mixed Layout Hybrid layouts that combine elements of each **Pause for Attendance** Make use of different layouts for different If you’re still with me, Quickly processes/departments go sign attendance ;) ** Remember: The layout of an operation or process depends on what is being produced and the objectives and outcomes of the organisation Effective layouts improve productivity, reduce bottle necks and long lead times Basic Layout Types Layout Type Advantages Disadvantages Fixed Position Very high mix of product flexibility. Very high unit costs. Product/customer not moved or disturbed Scheduling of space and activities can be difficult. High variety of tasks for staff Much movement of plant and staff Process High mix and product flexibility. Low facilities utilization. Relatively robust in the case of disruptions. Can have very high work-in-progress or queueing. Relatively easy supervision of equipment or plant Complex flow can be difficult to control Cell Can give a good compromise between cost and Can be costly to rearrange existing layout. flexibility for relatively high variety of operations. Can need more plant equipment. Fast throughput Can give lower plant utilization. Group work can result in good motivation Product Low unit costs for high volume. Can have low mix flexibility. Gives opportunities for specialization of Not very robust is there is disruption. equipment. Work can be very repetitive. Materials or customer movement is convenient THE LEAN PHILOSOPHY – OPERATIONS MANAGEMENT Waste created within the production process : Lean Operations = Moving towards the elimination of all waste in order to develop an operation that is Faster More dependable Produces higher quality products Operates at low cost Doing simple things well & eliminating waste along the way  THE LEAN PHILOSOPHY – OPERATIONS MANAGEMENT 3 Key issues in Lean Philosophy Eliminate Waste Involve Everyone Continuous Improvement Focus on Planning & Control Basic work practices Designing for manufacturing Operations focus Flow layout Total people involvement Visibility THE LEAN PHILOSOPHY – OPERATIONS MANAGEMENT Lean Philosophy : ELIMINATING WASTE Waste = Any activity that does not add value. Identify areas of waste Set up principles for reducing waste Streamline processes to avoid waste of time, energy, resources Evaluate options for dealing with by-product waste  Lean Philosophy : ELIMINATING WASTE 7 Forms of Waste in Manufacturing Over-Production : Producing more than is immediately needed (in the next process of operation) Waiting Time : Equipment efficiency & labour efficiency Transport : Moving items around the operation. Layout changes which bring processes closer together – improvements in transport methods and workplace organisation Process : some operations may exist only because of poor component design or poor maintenance, and can be eliminated Inventory : All inventory should become a target for elimination Motion : Operators may look busy, but no value is being added by the work. Simplification of work Defectives : Quality Waste. Lean Philosophy : INVOLVE EVERYONE Organisational culture is an important aspect of supporting company operations “Respect-for-humans” system Encourages team-based problem solving Job enrichment Job rotation Multi-skilling The intention is to encourage a high degree of personal responsibility, engagement and ‘ownership’ of the job Lean Philosophy : CONTINUOUS IMPROVMENT The Ideal : To meet demand instantaneously with perfect quality and no waste If one’s aims are set in terms of ideals which organisations may never fully achieve, the emphasis should be on the ways in which an organisation moves closer to the ideal state over time. Improvement is more likely transitory than continuous LOGISTICAL MERCHANDISE DISTRIBUTION  QUICK RESPONSE Quick Response = Allows supply systems to react quickly to changes while improving their performance Compressing the time between product or service design concept and appearance on the retail shelf. Relevant to Fast Moving Consumer Goods (FMCG) & Fashion Industry Take advantage of technologies to process sale tracking and re-order processes. (Data collection and processing)  QUICK RESPONSE Emphasis on reduction of internal and external lead times - Improved Quality - Reduced Costs - Eliminate non Value added waste within the organisation QR eliminates dysfunctions variability like rework and changing of due dates LOGISTICAL MERCHANDISE DISTRIBUTION Companies need to address getting stock/merchandise to the selling floor in a timely manner. If merchandise is not available in store when customer need arises, the sale will be lost. Inventory management decision making – Advancements in technology have allowed for smoother transition from vendors to warehouses / distribution centers to retailers. Achieves through Quick Response Inventory Planning and Electronic Data Interchange  QUICK RESPONSE Electronic Data Interchange = Intercompany communication of business documents in a standard format. Standard electronic format that replaces paper-based documents such as purchase orders or invoices. Purchase order = A commercial document issued by a buyer to a seller, indicating types, quantities, and agreed prices for products or services required. It is used to control the purchasing of products and services from external suppliers. QUICK RESPONSE IN SOUTH AFRICA Historically Retailers in SA have relied on majority imports Cost effective = maximize profit Longer lead times = outdated merchandise (trend response) Obtain merchandise from geographically closer suppliers Quick, small manufacture What about TODAY?? Surge in local production processes. Ensure fast and quality turnaround time. QUICK RESPONSE GLOBALLY Critical Market Challenge - To read Point of Sale data and respond to restock/redesign of new products, timeously. Businesses that use QR are financially more successful – able to meet demand – right time, right place, right consumer. Retailers have manufacturing partnerships that facilitate the quick flow of production to meet Quick response demands.  The 4 R’s of QUICK RESPONSE Responsiveness - Information Management Responsiveness - Supply Chain Partnerships - Manufacturing Flexibility - Effective Inventory Management - Strong Logic System Relationships QUICK Reliability Reliability Response - Conformance to consumer expectations - Delivering the promised product - Total Quality Management Resilience Resilience - Managing weaknesses in the supply chain - recovering quickly from unexpected disturbances Relationships - Developing positive supply chain relations - Collaboration & information Sharing - Performance depends on alliances QUICK RESPONSE MODEL (Budgeting) MERCHANDISE PLAN Outlines total & category budgets based on historical performance and trends DEPARTMENTAL BUDGET & PLAN Plan per garment category MONTHLY OTB RELEASE CYCLE In-store sales & trends analysis (release of OTB budget) **OTB = Open-To-Buy CHANGE MANAGEMENT implement strategies for effecting change, controlling change and helping people to adapt to change.  QUICK RESPONSE MODEL Open-to-buy (OTB) = Shows how much money is available to spend on new orders, based on sales projections, inventory goals, and merchandise budget. Buyers get go-ahead to buy for those product categories. A merchandise financial tool that helps retailers plan and control their inventory levels and cash flow. Purchase order initiates pre-production. QR buying cycle = 2 - 8 weeks. From order, to arrive in store 20% Quick 80% Standard Lead time response (OTB) Percentage of budget allocated to confirmed styles vs new QR styles QR – BUYING PROCESS BUYERS DESIGNERS ZARA MODEL 150 New Styling 120 22-30 Design, Product DAYS New Fabrics Traditional DAYS DAYS & Market cycle 90 Product development 90 10-12 DAYS Stock fabric DAYS Reactive Quick Response DAYS 56 Direct Repeats 56 DAYS Quick Response DAYS Quick Response 28 DAYS Replenishment CRITICAL QR LESSONS Align in-season product design & product development process Major changes needed happen in pre-production process - sampling, fabric & trim management, tech pack development Production capabilities constantly improving - Quality management, production management, inventory control (JIT) - Continuous improvement culture Overhaul supply chain logistics & merchandise distribution - Focus on whole supply chain optimization and not just end point - Production, movement, distribution and retail Information technologies to provide clear pipeline visibility - Intelligently deployed Supply chain measurement systems  QR – MERCHANDISE PLAN 1. Performance review + market share & trend analysis – analyse products and product categories as well as impacts on customer base 2. Budget decisions – financial analysis of what worked and what didn’t. look at profit margins and assess budget to buy next cycle of products 3. Post-mortem of previous season – which categories sold well and which didn’t – what price points work. Insight into customer behaviours & market movements 4. Merchandise mix – planning for new season – ensuring balanced assortment and to budget 5. Financial targets to buying teams - allocating budgets per category 6. Securing merchandise strategy – Assortment allocations (fashion pyramid) 7. Plan intersection – traditional with QR  QR – PRE- & IN-SEASON DESIGN PROCESSES How the Design House Manufacturer will position itself successfully to fulfill its obligations to meet QR. 1. Setting QR OTB% If a retailer sets to hold 20% of its ladieswear category in QR, DHM needs to needs to have the capabilities to meet those demands (Volume & Variety – Depth & Breadth) 2. Preparing QR Merchandise Framework DHM needs to have clarity on at least 60% of the standard lead time merchandise plan to prepare for the QR trading period Fabric Base Postponement – a hold on fabric type with a partnered mill. (yarns & ideal options) Greige – unfinished/undyed fabric held for production PFP / PFD – prepared for dye, part finished (limited “handle” changes)  QR – PRE- & IN-SEASON DESIGN PROCESSES Trims Colour & Pattern Direction Have lab dips finalized based on merchandise assortment Have capacity to evolve colour palette with changing market Print directions Design Blocks Fully calibrated with retailer requirements across all product types ensure consistent fit accuracy – base requirement for monthly capsule development  PREPARING QR MONTHLY CAPSULE Buying team responsible for OTB spend within a particular category communicate POS successes to the Design House on a weekly basis DH begins working on monthly capsule - Review style cards of best sellers - Analyse attribute profile of product - Assess demand indicators with seasonal fabrics, trims, production capacities etc. DH initiates first set of samples - Subtle iterations of most successful styles (new colours, trims, adjustments & embellishments) - Creation of new products in alignment with market successes - Fashion forwardness depends on capabilities & confidence of DH : “play it safe” Buying team reviews capsule and selects products **DH needs to prepare the most compelling and appropriately prices priced set of products for the buying team to release their OTB against when the monthly capsule is reviewed (1-4 weeks). **Finished capsule finalized on a Just-In-Time bases for QR  QR – PRE-PRODUCTION PROCESSES 1. Fabric Prep: DH requires fabric to be available in the most flexible form possible - Yarn form (most flexible for knitting) - Greige Form - Prepared for Dye (PFD) | Prepared for Print (PFP) - Finished fabric 2. Tech Pack Prep: Technical details in CAD form - Information on sizes & units required, colour varieties, etc - Fabrics, materials and trims - Construction instructions - Packing instructions 3. Production Capacity Booking DH books capacity at a selection of CMTs capable of manufacturing QR orders within the parameters of the OTB held Until finished capsules are finalized, manufacturers will have place holders on their production planning boards (Black PO’s) QR – PRODUCTION QR Capable garment manufacturer profile Visible production flow Inventory management = product flows, increase speed Quality assurance (QA) = right the first time Machine maintenance Rapid line changeovers = allows small batch runs Multi-skilled workforce Motivated workers  QR - PRODUCTION 1. QR production plan - Garments & lead times, planned (week-by-week production calendar) 2. QR production set-up - 2 of each sample size made up in sample room. - construction issues noted, production processes considered - Manufacturer will create “test run” for QC – test against sample 3. QR production - blend long & short production runs to keep maximum efficiency of production floor and cost structures 4. Post-production - Quality Check - Prepared for delivery, in alignment with retailer logistics model  QR – LOGISTICS & DISTRIBUTION 1. QR supply to retailer distribution control points - Garments shipped in the form they will be displayed in store 2. QR distribution to stores - product should flow through distribution hub in max 1-2 days. (no storage) - Reaching stores by 3-4 days after leaving factory floor 3. In-store QR processes - Ensure new stock is displayed instore timeously. - Do not enter storeroom. From delivery, straight into the floor. DC = Distribution Centre QR – IN ACTION CUSTOMER TEST SATISFACTION & REACT TO SALES NEW PRODUCT INCREASED TURNOVER Quick Response Test trends on the Manufacturing (QRM) Customers who market is a strategy for experience quick Shorter lead times reducing lead-times resolutions are more Improve quality across all functions of likely to stay loyal, as Reduce cost an organisation. timely responses to Eliminate non value service issues added waste within The resulting enhance their organization improvements in confidence in your speed and brand. responsiveness increase the organisation's agility and responsiveness, resulting in a competitive advantage TOOLS NEEDED FABRIC AVAILABILITY & QR SUPPLIER/ LOCAL CONTINUOUS OR IN-HOUSE CAPACITY PLANNING PRODUCT MANUFACTURING DEVELOPMENT Flexibility and speed in manufacturing processes. You can’t react to sales if This helps in adapting you don’t have the fabric Capacity Planning production quickly based on available. It does not ensures that the market feedback and ensuring always have to be production lines are that the right products reach identical in colour booked and ready to turn the stores promptly. however it needs to be on styles that are working planned for and stored. quickly and react to sales. A significant portion of its products close to its major Product development is markets. This localization essential part of QR as it strategy reduces shipping reduces the lead time and times and costs, enabling have the styles signed off Zara to restock stores quickly for production and respond efficiently to regional variations in demand. Human Resources Human Resources (HR) 1. HR management in the organisation 2. Human resource provision 3. Human resource retention 4. Challenges in working with people Human Resources (HR) Human Resources Development/Department (HRD) Human Resources Management (HRM)  Human Resources Humans = Most important resource within an organisation Need to be well paid, happy within their work environment & satisfied with the work they do Plan, develop & administer policies & programmes around the working environment to make the best use of the organisations human resources Human Resources = The Management of people and their relationship within an organisation Effective HRM contributes to employee productivity Supports the achievement of the organisations goals & objectives Human Resource Management Process Human Resource Management Human Resource Retention Human Resource Provision Training & Development Human Resource Planning performance Appraisal Job Analysis Remuneration & Benefits Recruitment Job Design & Redesign Selection Placement Induction  Human Resource Provision Ensure the employment of the right number & type of employees on a continuous basis Human Resource Planning Constantly changing environment – no guarantee of stable workforce Ongoing process of ensuring skilled labour force Forecasts for the future of the organisations needs Planning needs to be flexible – meet short term challenges & adapt to long term changes Need to understand Vacant positions –functions, responsibilities, etc Job Analysis = identifying & determining the details of a particular job – duties and requirements Results in Job Description and Job Specification  Human Resource Provision Job Description = lists the requirements for the job and what is expected (not the person doing the job) Prospective candidates New employees Management Job Specification = Describes the knowledge, skills, education, experience and abilities that are essential to performing the job (the requirements of the person)  Human Resource Provision Human Resource Forecasting Forecasting = planning for the future (based on past & present data) Jobs that still need to be filled Skills & knowledge required for those jobs To what degree can the current workforce fill these jobs Assess current staffing situation – are there gaps to fill? Does Staff requirement equal Staff supply? If supply is less than required – recruit new staff If supply is more than required – redundant employees may need to be retrenched or let go Human Resource Provision Recruitment & Selection Recruitment = Process of identifying & hiring the best qualified candidate (timely & cost effective) Details of the position & qualifications required are outlined in Job Analysis Job analysis forms basis for job ad Internal VS External Recruitment Internal Recruitment = Finding & hiring the best-qualified candidate from within the existing workforce to fill a vacancy External Recruitment = Finding & hiring the best-qualified candidate from outside its existing workforce to fill a vacancy. - Headhunting : making use of external professional recruitment services  Recruitment & Selection The benefits (advantages) and limitations (disadvantages) of internal and external recruitment. INTERNAL RECRUITMENT BENEFITS LIMITATIONS 1. Saves time and money 1. Limited choice 2. Reduces training period 2. Passive job seekers 3. Improves productivity 3. Fear of applying 4. Improves morale 4. Ripple recruitment can be costly 5. Facilitates succession planning 5. Completing current tasks 6. No bidding wars 6. Relocation costs 7. Multiple promotions 7. Hide poor management 8. Entry-level positions 8. Organisational politics 12 2. HR provision cont. EXTERNAL RECRUITMENT BENEFITS LIMITATIONS 1. More skills 1. Expensive 2. Competitive intelligence 2. Dissatisfaction 3. Creates a climate of re-thinking 3. Long process 4. Wider choice 4. Adaptability problems 5. Staying current with industry trends 5. Misplacement 6. Increased diversity 6. Weakened corporate culture 7. Higher induction costs 8. Legal issues 13  Human Resource Provision Recruiting Techniques Internal: Self-selection: post advertised within Proficiency surveys: workers records kept on file, compared to vacancy specifications References: managers recommend people for vacancies Transfers: from one department to another Promotions: given higher positions Demotions: moved to lower positions Re-recruitment: retired/retrenched employees brought back Human Resource Provision Recruiting Techniques External: Training Institutions: Seek candidates from schools, universities, colleges etc Recruitment Agencies: Businesses search for candidates on behalf of company Press advertisements: Adverts places seeking candidates Professional Institutions: institutions that processionals belong to i.e. institute of marketing managers or institute of bankers Self-presentations: Person seeking employment makes first contact Recruiting Procedure Step 3: Advertise The Step 1: Step 2: Position Internally Identify Vacancy Do A Job Analysis or Externally or Both Step 4: Step 5: Step 6: Placement Shortlist Possible Select Candidates Please read detailed Selection & Placement process in textbook pages 257-262 Human Resource Retention Human Resource Retention The ability of an organisation to keep its employees, and not lose them to other organisations Training = Organised activity aimed at imparting information and/or instructions to improve employee performance or help them attain a required level of knowledge or skill (basic, foundational knowledge) Development = Official and ongoing educational activities within an organisation, designed to enhance performance of employees (improving capabilities & preparing for future) Happy and satisfied employees add both qualitative & quantitative value to a business Training & development is about creating opportunity for employees to become more valuable to the organisation Read more about Training & Development Initiatives : Pg. 264-265  Human Resource Retention Performance Appraisal Assess how well employees are carrying out their jobs Clearly define areas in which they excel as well as areas in which they struggle Able to assess individual contributions to the relevant positions Indicate under-performance or over-performance Decisions regarding promotions, salary increases and further company investments rely on the outcome of performance appraisals 2 Main Objectives: Evaluative Objectives Evaluate past performance Merit awards or bonuses Determines if the right person was recruited for the position Developmental objectives Aimed at developing employee skills Help employees to focus on future performance Determine training & development needs of employees Human Resource Retention Remuneration & Benefits Remuneration = Compensation for work done Wages = Per Hour/Day/Week or per piece produced Salary = Fixed monthly income Direct Remuneration ✓ Paid to the worker for work done ✓ More work = more pay Indirect Remuneration Fringe benefits Added to fixed income Leave (maternity, study, vacation etc) Insurance (pension, medical aid) Housing allowances Car allowances Ethics & Behaviour in the Workplace 20  What is Business Ethics? Ethics = (Moral Philosophy) Involves systematizing, defending, and recommending concepts of right and wrong behavior. Professional ethics Examines ethical principles and problems that arise in a business environment. Applies to all aspects of business conduct - Individuals and entire organizations. 21 Three Levels Of Business Ethics The Macro Level Systemic level (i.e.: laws) Wider operating environment Politics, economics, society local & international markets Individual The Corporate Level Corporate corporate entities (private and public Macro sector) policies and procedures business strategy Derived from the influences felt at macro level The Individual Level behaviour and actions of individuals Discrepancies between individual & corporate peer pressure, personal financial position, and socio-economic status all may influence individual ethical standards. Ethics In The Fashion Industry Fashion Industry holds complex connections to other fields Manufacturing Advertising Production of raw materials Transportation Retailing Marketing Tremendous Profits = temptation to engage in unethical behaviour. When producers, manufacturers, marketers, models or consumers are being exploited or treated unfairly – executives have ethical responsibility to change situation.  Whistle-blowing Examples Typical cases of whistleblower reports Corruption Discrimination and harassment in the workplace Breaches of law and crimes Human rights violations Bribery Maladministration or mismanagement Insider trading Misuse of data CORPORATE SOCIAL RESPONSIBILITY Businesses as Agents of Change Increased pressure on business leaders to take a stand on social & environmental issues Have an impact on the communities & environment around them Have the power to influence policies & lobby both Govt & Civil Society The company taking responsibility for the impact of their decisions and activities on society and the environment as well as the behavior of others with whom they do business (supply chain) Need for transparent & ethical behavior that Contributes to sustainable development Takes interest & expectations of stakeholders into account Is compliant with applicable laws Integrated throughout company practices & relationships 34 THE WHAT AND WHY OF CSR External to the normal business activities of a company Not directly for purposes of increasing company profit Projects with a strong developmental approach Utilise company resources to benefit and uplift communities Not primarily driven as marketing initiatives 35 (Freepik.com, 2023) Corporate Social Responsibility “Fashion, when intertwined with social responsibility, becomes a force for positive change. Brands that champion ethics and sustainability not only shape style but also contribute to a world where every purchase makes a difference.” (Fibre2Fashion, 2024) 36 THE TRIPLE BOTTOM LINE 37 (Waste4Change, 2021) WHY DEVELOP A CSR STRATEGY? (CONT.) Contribute to and support marketing tools: i.e. Brand Awareness. Align your company with industry charters: SRI (Social Responsibility Index) and GRI (Global Reporting Index) Stabilise the social and economic environment Generate new business ideas Generate inquiries about your business operations Enhance your company’s corporate image and ultimately your Return On Investment (ROI). 41 Factors that Motivate CSR: Social drivers: Society expects companies to act ethically Want to protect company reputation Do not want to be socially irresponsible Government drivers: Legal systems uphold ethical compliance (labour laws) Subsidies for CSR – facilitate ethical practices Market drivers: Reduced costs or increased revenue Avoid fines, reduce recruitment costs, staff retention Using resources efficiently/sourcing alternatives Competitive Edge Ethical drivers: Right and Wr