BusinessEssentialsTwelfthEditionChapter7OperationsManagementandQualityCopyright?2019,2016,2013PearsonEducation,Inc.AllRightsReserved.IntroductionInthischapterweexplorethenumerouswayscompaniesaligntheiroperationsprocesseswiththeirbusinessplansdiscusshowthesedecisionscontributetoafirm’sabilitytocreateahigh-qualityproductdiscussthemanystepsittakestobringhigh-qualitygoodsandservicestomarketLearningObjectives(1of3)ExplainthemeaningofoperationsanddiscussthegrowthintheservicesandgoodssectorsoftheU.S.economy.Identifythethreekindsofutilitycreatedbyoperationsandthecharacteristicsthatdistinguishserviceoperationsfromgoodsproduction.Explainhowcompanieswithdifferentbusinessstrategiesarebestservedbyhavingdifferentoperationscapabilities.LearningObjectives(2of3)Identifythemajorfactorsthatareconsideredinoperationsplanning.Discusstheinformationcontainedinfourkindsofoperationsschedules—themasteroperationsschedule,detailedschedule,staffschedule,andprojectschedule.Discussthetwokeyactivitiesrequiredforoperationscontrol.LearningObjectives(3of3)Identifytheactivitiesandunderlyingobjectivesinvolvedintotalqualitymanagement.Explainhowasupplychainstrategydiffersfromtraditionalstrategiesforcoordinatingoperationsamongfirms.WhatDoesOperationsMeanToday?(1of2)Operations(Production)activitiesinvolvedinmakingproducts—goodsandservices—forcustomersWhatDoesOperationsMeanToday?(2of2)ServiceOperations(ServiceProduction)activitiesproducingintangibleandtangibleproducts,suchasentertainment,transportation,andeducationGoodsOperations(GoodsProduction)activitiesproducingtangibleproducts,suchasradios,newspapers,buses,andtextbooksGrowthintheServicesandGoodsSectorsGDPfromGoodsandServicesCreatingValueThroughOperationsUtilityproduct’sabilitytosatisfyahumanwantorneedOperations(Production)ManagementsystematicdirectionandcontroloftheactivitiesthattransformresourcesintofinishedproductsthatcreatevalueforandprovidebenefitstocustomersOperations(Production)ManagersmanagersresponsibleforensuringthatoperationsactivitiescreatevalueandprovidebenefitstocustomersTheResourceTransformationProcessDifferencesbetweenServiceandGoodsManufacturingOperationsInteractingwithcustomersTheintangibleandunstorablenatureofsomeservicesThecustomer’spresenceintheprocessServicequalityconsiderationsOperationsProcessesOperationsProcesssetofmethodsandtechnologiesusedtoproduceagoodoraserviceMake-to-OrderOperationsactivitiesforone-of-a-kindorcustom-madeproductionMake-to-StockOperationsactivitiesforproducingstandardizedproductsformassconsumptionServiceProductionProcesses:ExtentofCustomerContactLow-ContactSystemlevelofcustomercontactinwhichthecustomerneednotbepartofthesystemtoreceivetheserviceHigh-ContactSystemlevelofcustomercontactinwhichthecustomerispartofthesystemduringservicedeliveryBusinessStrategyDeterminesOperationsCapabilitiesOperationsCapability(ProductionCapability)specialabilitythatproductiondoesespeciallywelltooutperformthecompetitionExcellentfirmslearn,overtime,howtoachievemorethanjustonecompetenceBusinessStrategiesThatWinCustomersforFourCompaniesTable7.1BusinessStrategiesthatWinCustomersforFourCompaniesCompanyStrategyforAttractingCustomersWhattheCompanyDoestoImplementItsStrategyToyotaQualityCarsperformreliably,haveanappealingfitandfinish,andconsistentlymeetorexceedcustomerexpectationsatacompetitivepriceSave-A-LotLowcostFoodsandeverydayitemsofferedatsavingsupto40percentlessthanconventionalfoodchains3MFlexibilityInnovation,withmorethan55,000productsinaconstantlychanginglineofconvenienceitemsforhomeandofficeFedExDependabilityEverydeliveryisfastandontime,aspromisedOperationsCapabilitiesandCharacteristicsforFourCompanies(1of2)Table7.2OperationsCapabilitiesandCharacteristicsforFourCompaniesOperationsCapabilityKeyOperationsCharacteristicsQuality(Toyota)High-qualitystandardsformaterialssuppliersJust-in-timematerialsflowforleanmanufacturingSpecialized,automatedequipmentforconsistentproductbuildupOperationspersonnelareexpertsoncontinuousimprovementofproduct,workmethods,andmaterialsLowCost(Save-A-Lot)Avoidsexcessiveoverheadandcostlyinventory(nofloraldepartments,sushibars,orbanksthatdriveupcosts)Limitedassortmentofproducts,staples,inonesizeonlyforlow-costrestocking,lowerinventories,andlesspaperworkManylocations;smallstores—lessthanhalfthesizeofconventionalgrocerystores—forlowconstructionandmaintenancecostsReduceslaborandshelvingcostsbyreceivingandsellingmerchandiseoutofcustomshippingcartonsOperationsCapabilitiesandCharacteristicsforFourCompanies(2of2)Table7.2ContinuedOperationsCapabilityKeyOperationsCharacteristicsFlexibility(3M)Maintainssomeexcess(expensive)productioncapacityavailableforfaststartuponnewproductsAdaptableequipmentandfacilitiesforproductionchangeoversfromoldtonewproductsHiresoperationspersonnelwhothriveonchangeManymedium-tosmall-sizedmanufacturingfacilitiesindiverselocations,whichenhancescreativityDependability(FedEx)Customerautomation:useselectronicandonlinecommunicationstoolswithcustomerstoshortenshippingtimeWirelessinformationsystemforpackagescanningbycourier,updatingofpackagemovement,andpackagetrackingbycustomerMaintainsacompanyairforce,globalweatherforecastingcenter,andgroundtransportationforpickupanddelivery,withbackupvehiclesforemergenciesThe25automatedregionaldistributionhubsprocess3.5millionpackagesperdayfornext-daydeliveriesOperationsPlanning(1of2)CapacityPlanningdeterminingtheamountofaproductthatacompanycanproduceundernormalconditionsLocationPlanningdeterminingwhereproductionwillhappenbasedoncostsandflexibilityLayoutPlanningplanningforthelayoutofmachinery,equipment,andsuppliesOperationsPlanning(2of2)CapacityamountofaproductthatacompanycanproduceundernormalconditionsCapacityPlanningdeterminingtheamountofaproductthatacompanycanproduceundernormalconditionsOperationsPlanningandControlLayoutPlanning(1of2)ProcessLayout(Custom-ProductLayout)physicalarrangementofproductionactivitiesthatgroupsequipmentandpeopleaccordingtofunctionProductLayout(Same-StepsLayout)physicalarrangementofproductionstepsdesignedtomakeonetypeofproductinafixedsequenceofactivitiesaccordingtoitsproductionrequirementsLayoutPlanning(2of2)AssemblyLineLayoutasame-stepslayoutinwhichaproductmovesstepbystepthroughaplantonconveyorbeltsorotherequipmentuntilitiscompletedFixed-PositionLayoutlabor,equipment,materials,andotherresourcesarebroughttothegeographiclocationwhereallproductionworkisdoneProcessLayoutforaServiceProviderProductLayoutforaServiceProductLayoutforGoodsProductionFlowchartofTraditionalGuestCheckoutQualityPlanningQualitycombinationof“characteristicsofaproductorservicethatbearonitsabilitytosatisfystatedorimpliedneeds”PerformancedimensionofqualitythatreferstohowwellaproductdoeswhatitissupposedtodoConsistencydimensionofqualitythatreferstosamenessofproductqualityfromunittounitOperationsScheduling(1of2)Masterschedule“thegameplan”forupcomingproductionDetailedschedulesshowday-to-dayactivitiesthatwilloccurinproductionExampleofPartialMasterOperationsScheduleFigure7.9ExampleofPartialMasterOperationsScheduleCoil#(Product)8/4/198/11/198/18/19...11/3/1911/10/19TC0161,5002,500BlankBlank2,100600TC032900Blank2,700Blank3,000BlankTR020300Blank2,600BlankBlank1,600FoodRetailer’sPartialOperationsScheduleOperationsScheduling(2of2)Staffschedulesidentifywhoandhowmanyemployeeswillbeworking,andwhenProjectschedulesprovidecoordinationforcompletinglarge-scaleprojectsProjectSchedulingGanttChartproductionschedulethatbreaksdownlargeprojectsintostepstobeperformedandspecifiesthetimerequiredtoperformeachstepPERTChartproductionschedulespecifyingthesequenceofactivities,timerequirements,andcriticalpathforperformingthestepsinaprojectGanttChartPERTChartMaterialsManagement(1of2)Materialsmanagementtheprocessbywhichmanagersplan,organize,andcontroltheflowofmaterialsfromsourcesofsupplythroughdistributionoffinishedgoodsMaterialsManagementActivitiesforPhysicalGoods(1of2)SupplierSelectionprocessoffindingandchoosingsuppliersfromwhomtobuyPurchasingacquisitionofthematerialsandservicesthatafirmneedstoproduceitsproductsMaterialsManagementActivitiesforPhysicalGoods(2of2)TransportationactivitiesintransportingresourcestotheproducerandfinishedgoodstocustomersWarehousingstorageofincomingmaterialsforproductionandfinishedgoodsfordistributiontocustomersInventoryControlprocessofreceiving,storing,handling,andcountingofallrawmaterials,partlyfinishedgoods,andfinishedgoodsMaterialsManagement(2of2)LeanProductionSystemproductionsystemdesignedforsmoothproductionflowsthatavoidinefficiencies,eliminateunnecessaryinventories,andcontinuouslyimproveproductionprocessesJust-in-Time(JIT)ProductiontypeofleanproductionsystemthatbringstogetherallmaterialsattheprecisetimetheyarerequiredateachproductionstageOperationsControlOperationsControlprocessofmonitoringproductionperformancebycomparingresultswithplansandtakingcorrectiveactionwhenneededFollow-UpoperationscontrolactivityforensuringthatproductiondecisionsarebeingimplementedQualityControlQualityControlactionofensuringthatoperationsproduceproductsthatmeetspecificqualitystandardsTheQuality-ProductivityConnectionProductivitytheamountofoutputproducedcomparedwiththeamountofresourcesusedtoproducethatoutputManagingforQualityTotalQualityManagement(TQM)allactivitiesinvolvedingettinghigh-qualitygoodsandservicesintothemarketplaceQualityOwnershipprincipleoftotalqualitymanagementthatholdsthatqualitybelongstoeachpersonwhocreatesitwhileperformingajobToolsforTotalQualityManagement(1of3)CompetitiveProductAnalysisprocessbywhichacompanyanalyzesacompetitor’sproductstoidentifydesirableimprovementsValue-AddedAnalysisprocessofevaluatingallworkactivities,materialsflows,andpaperworktodeterminethevaluethattheyaddforcustomersToolsforTotalQualityManagement(2of3)QualityImprovementTeamTQMtoolinwhichcollaborativegroupsofemployeesfromvariousworkareasworktogethertoimprovequalitybysolvingcommonsharedproductionproblemsISO9000programcertifyingthatafactory,laboratory,orofficehasmetthequalitymanagementstandardssetbytheInternationalOrganizationforStandardizationToolsforTotalQualityManagement(3of3)ISO14000certificationprogramattestingtothefactthatafactory,laboratory,orofficehasimproveditsenvironmentalperformanceBusinessProcessReengineeringrethinkingandradicalredesignofbusinessprocessestoimproveperformance,quality,andproductivityAddingValueThroughSupplyChainsSupplyChain(ValueChain)flowofinformation,materials,andservicesthatstartswithraw-materialssuppliersandcontinuesaddingvaluethroughotherstagesinthenetworkoffirmsuntiltheproductreachestheendcustomerSupplyChainManagement(SCM)principleoflookingatthesupplychainasawholetoimprovetheoverallflowthroughthesystemSupplyChainOutsourcingandGlobalSupplyChainsOutsourcingreplacinginternalprocessesbypayingsuppliersanddistributorstoperformbusinessprocessesortoprovideneededmaterialsorservicesApplyingWhatYou’veLearned(1of3)ExplainthemeaningofoperationsanddiscussthegrowthintheservicesandgoodsectorsoftheU.S.economy.Identifythethreekindsofutilitycreatedbyoperationsandthecharacteristicsthatdistinguishserviceoperationsfromgoodsproduction.Explainhowcompanieswithdifferentbusinessstrategiesarebestservedbyhavingdifferentoperationscapabilities.ApplyingWhatYou’veLearned(2of3)Identifythemajorfactorsthatareconsideredinoperationsplanning.Discusstheinformationcontainedinfourkindsofoperationsschedules—themasteroperationsschedule,detailedschedule,staffschedule,andprojectschedule.Discussthetwokeyactivitiesrequiredforoperationscontrol.ApplyingWhatYou’veLearned(3of3)Identifytheactivitiesandunderlyingobjectivesinvolvedintotalqualitymanagement.Explainhowasupplychainstrategydiffersfromtraditionalstrategiesforcoordinatingoperationsamongfirms.CopyrightBusinessEssentialsTwelfthEditionChapter8EmployeeBehaviorandMotivationCopyright?2019,2016,2013PearsonEducation,Inc.AllRightsReserved.IntroductionInthischapterwedescribethedifferentformsofbehaviorsthatemployeesexhibitatworkexaminemanyofthewaysthatpeopledifferfromoneanotherlookatsomeimportantmodelsandconceptsofemployeemotivation,aswellassomestrategiesandtechniquesusedbyorganizationstoimproveemployeemotivationLearningObjectives(1of2)Identifyanddiscussthebasicformsofbehaviorsthatemployeesexhibitinorganizations.Describethenatureandimportanceofindividualdifferencesamongemployees.Explainthemeaningandimportanceofpsychologicalcontractsandtheperson-jobfitintheworkplace.LearningObjectives(2of2)Identifyandsummarizethemostimportantmodelsandconceptsofemployeemotivation.Describesomeofthestrategiesandtechniquesusedbyorganizationstoimproveemployeemotivation.FormsofEmployeeBehaviorEmployeeBehaviorthepatternofactionsbythemembersofanorganizationthatdirectlyorindirectlyinfluencestheorganization’seffectivenessPerformanceBehaviorsthetotalsetofwork-relatedbehaviorsthattheorganizationexpectsemployeestodisplayOrganizationalCitizenshipOrganizationalCitizenshippositivebehaviorsthatdonotdirectlycontributetothebottomlineCounterproductiveBehaviorsAbsenteeismTurnoverTheftSabotageSexualharassmentWorkplaceviolencePersonalityatWorkPersonalitytherelativelystablesetofpsychologicalattributesthatdistinguishonepersonfromanotherThe“BigFive”PersonalityTraits(1of3)The“BigFive”PersonalityTraits(2of3)Agreeablenessaperson’sabilitytogetalongwithothersConscientiousnessareflectionofthenumberofthingsapersontriestoaccomplishEmotionalitythedegreetowhichpeopletendtobepositiveornegativeintheiroutlookandbehaviorstowardothersThe“BigFive”PersonalityTraits(3of3)Extraversionaperson’scomfortlevelwithrelationshipsOpennessreflectshowopenorrigidapersonisintermsofhisorherbeliefsMyers-BriggsFrameworkMyers-BriggsTypeIndicator(MBTI)apopularquestionnairethatsomeorganizationsusetoassesspersonalitytypesFourGeneralDimensionsExtraversionvs.IntroversionSensingvs.IntuitionThinkingvs.FeelingJudgingvs.PerceivingEmotionalIntelligence(1of3)EmotionalIntelligence(EmotionalQuotient,EQ)theextenttowhichpeopleareself-aware,canmanagetheiremotions,canmotivatethemselves,expressempathyforothers,andpossesssocialskillsEmotionalIntelligence(2of3)Self-awarenessaperson’scapacityforbeingawareofhowtheyarefeelingManagingemotionsaperson’scapacitiestobalanceanxiety,fear,andangersothattheydonotoverlyinterferewithgettingthingsaccomplishedEmotionalIntelligence(3of3)Motivatingoneselfaperson’sabilitytoremainoptimisticandtocontinuestrivinginthefaceofsetbacks,barriers,andfailureEmpathyaperson’sabilitytounderstandhowothersarefeelingevenwithoutbeingexplicitlytoldSocialskillsaperson’sabilitytogetalongwithothersandtoestablishpositiverelationshipsOtherPersonalityTraitsatWork(1of3)LocusofControltheextenttowhichpeoplebelievethattheirbehaviorhasarealeffectonwhathappenstothemSelf-Efficacyaperson’sbeliefabouthisorhercapabilitiestoperformataskOtherPersonalityTraitsatWork(2of3)AuthoritarianismtheextenttowhichapersonbelievesthatpowerandstatusdifferencesareappropriatewithinhierarchicalsocialsystemssuchasorganizationsMachiavellianismusedtodescribebehaviordirectedatgainingpowerandcontrollingthebehaviorofothersOtherPersonalityTraitsatWork(3of3)Self-EsteemtheextenttowhichapersonbelievesthatheorsheisaworthwhileanddeservingindividualRiskPropensitythedegreetowhichapersoniswillingtotakechancesandmakeriskydecisionsAttitudeStructureCognitiontheknowledgeapersonpresumestohaveaboutsomethingAffectaperson’sfeelingstowardsomethingIntentionpartofanattitudethatguidesaperson’sbehaviorCognitiveDissonancewhentwosetsofcognitionsorperceptionsarecontradictoryorincongruentAttitudesatWorkAttitudesaperson’sbeliefsandfeelingsaboutspecificideas,situations,orpeopleJobSatisfactiondegreeofenjoymentthatpeoplederivefromperformingtheirjobsOrganizationalCommitmentanindividual’sidentificationwiththeorganizationanditsmissionMatchingPeopleandJobsPsychologicalContractsetofexpectationsheldbyanemployeeconcerningwhatheorshewillcontributetoanorganization(referredtoascontributions)andwhattheorganizationwillinreturnprovidetheemployee(referredtoasinducements)ThePsychologicalContractThePerson-JobFitPerson-JobFittheextenttowhichaperson’scontributionsandtheorganization’sinducementsmatchoneanotherBasicMotivationConceptsandTheoriesMotivationthesetofforcesthatcausepeopletobehaveincertainwaysClassicalTheoryofMotivationtheoryholdingthatworkersaremotivatedsolelybymoneyEarlyBehavioralTheoryHawthorneEffecttendencyforproductivitytoincreasewhenworkersbelievetheyarereceivingspecialattentionfrommanagementHumanResourcesModel:TheoriesXandYTheoryXtheoryofmotivationholdingthatpeoplearenaturallylazyanduncooperativeTheoryYtheoryofmotivationholdingthatpeoplearenaturallyenergetic,growth-oriented,self-motivated,andinterestedinbeingproductiveTheoryXandTheoryYTable8.1TheoryXandTheoryYTheoryXTheoryYPeoplearelazy.Peopleareenergetic.Peoplelackambitionanddislikeresponsibility.Peopleareambitiousandseekresponsibility.Peopleareself-centered.Peoplecanbeselfless.Peopleresistchange.Peoplewanttocontributetobusinessgrowthandchange.Peoplearegullibleandnotbright.Peopleareintelligent.Maslow’sHierarchyofNeedsModelHierarchyofHumanNeedsModeltheoryofmotivationdescribingfivelevelsofhumanneedsandarguingthatbasicneedsmustbefulfilledbeforepeopleworktosatisfyhigher-levelneedsMaslow’sHierarchyofHumanNeedsTwo-FactorTheoryTwo-FactorTheorytheoryofmotivationholdingthatjobsatisfactiondependsontwofactors,hygieneandmotivationTwo-FactorTheoryofMotivationContemporaryMotivationTheory(1of2)ExpectancyTheorytheoryofmotivationholdingthatpeoplearemotivatedtoworktowardrewardsthattheywantandthattheybelievetheyhaveareasonablechanceofobtainingContemporaryMotivationTheory(2of2)EquityTheorytheoryofmotivationholdingthatpeopleevaluatetheirtreatmentbytheorganizationrelativetothetreatmentofothersReinforcement/BehaviorModificationPositiveReinforcementrewardthatfollowsdesiredbehaviorsPunishmentunpleasantconsequencesofanundesirablebe