principles and practices of management: unit 4
TRANSCRIPT
PRINCIPLES & PRACTICES OF MANAGEMENT
Dr. Rahul Pratap Singh KauravPrestige Institute of Management, Gwalior
Controlling
Total Qualit
y
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Controlling– The process of measuring performance and
taking action to ensure desired results.– Has a positive and necessary role in the
management process.– Ensures that the right things happen, in the right
way, at the right time.– Organizational learning and after-action review.
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Feedforward controls – Employed before a work activity begins.– Ensures that:
■Objectives are clear.■Proper directions are established.■Right resources are available.
– Focuses on quality of resources.
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Concurrent controls – Focus on what happens during work
process.– Monitor ongoing operations to make
sure they are being done according to plan.
– Can reduce waste in unacceptable finished products or services.
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Feedback controls – Take place after work is completed.
– Focus on quality of end results.
– Provide useful information for improving
future operations.
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Internal and external control– Internal control
■ Allows motivated individuals and groups to exercise self-discipline in fulfilling job expectations.
– External control■ Occurs through personal supervision
and the use of formal administrative systems.
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– Bureaucratic control■ influences behavior through authority, policies,
procedures, job descriptions, budgets, and day-to-day supervision
– Clan control■ influences behavior through norms and expectations
set by the organizational culture.
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Steps in the control process:– Step 1 — establish objectives and
standards.
– Step 2 — measure actual performance.
– Step 3 — compare results with objectives and standards.
– Step 4 — take corrective action as needed.
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Four steps in the control process.
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Step 1 — establishing objectives and standards– Output standards
■Measure performance results in terms of quantity, quality, cost, or time.
– Input standards■Measure effort in terms of amount of work
expended in task performance.
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Step 2 — measuring actual performance– Goal is accurate measurement of actual
performance results and/or performance efforts.
– Must identify significant differences between actual results and original plan.
– Effective control requires measurement.
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Step 3 — comparing results with objectives and standards– Need for action reflects the difference between
desired performance and actual performance– Comparison methods:
■ Historical comparison■ Relative comparison■ Engineering comparison
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Step 4 — taking corrective action– Taking action when a discrepancy exists
between desired and actual performance.– Management by exception
■Giving attention to situations showing the greatest need for action.
■Types of exceptions– Problem situation– Opportunity situation
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Employee discipline systems– Discipline is the act of influencing behavior
through reprimand.
– Discipline that is applied fairly, consistently, and
systematically provides useful control.
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Employee discipline systems– Progressive discipline ties reprimands to the
severity and frequency of the employee’s infractions.
– Progressive discipline seeks to achieve compliance with the least extreme reprimand possible.
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To be effective, reprimands should – Be immediate.– Be directed toward actions, not personality.– Be consistently applied.– Be informative.– Occur in a supportive setting.– Support realistic rules.
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Project Management Overall planning, supervision, and control of projects.■ Projects – unique one-time events that
occur within a defined time period■Gantt chart – graphic display of scheduled
tasks required to complete a project■CPM/PERT – combination of the critical
path method and program evaluation and review technique
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Economic Value Added– a performance measure of economic value
created in respect to profits being higher than the cost of capital
Market Value Added– a performance measure of stock market
value relative to the cost of capital
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Basic Financial Ratios– Liquidity
■The ability to generate cash to pay bills.– Leverage
■The ability to earn more in returns than the cost of debt.
– Asset management■The ability to use resources efficiently
and operate at minimum cost.– Profitability
■The ability to earn revenues greater than costs.
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Balanced ScorecardFactors used to develop scorecard goals and measures:– Financial performance
– Customer Satisfaction– Internal process improvement– Innovation and learning
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Gannt chart
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CPM/PERT
QUALITY CONCEPT
The Quality Concept■ The totality of features and characteristics of a product or service
that bear on its ability to satisfy stated or implied needs.■ Factors effecting quality1. Man, Materials and Machines2. Manufacturing Conditions3. Market research in demand of purchases4. Money in capability to invest5. Management policy or quality level6. Product design or Production method 7. Packaging and transportation8. After Sales Service
Developing a quality control system■ A Quality Control System (QCS) supports effective quality control requirements,
quality customer services and the efficiency of internal management systems. ■ A QCS is an important tool for integrating best practices for profitability and
compliance with external QA requirements. ■ The essential requirements for success are:1. Management commitment2. Identification of practices that are essential to both quality and efficiency3. Quantified goals and processes for measurement4. Assigned QCS responsibilities5. Employee training and communication6. A regular process for evaluating how QCS-related practices are being
implemented7. Documentation of need for improvement and Documentation of improvements.
Developing a quality control systemFive Steps for QCS Development
Step 1: Identify the quality mission and objectives of your organization. ■These may include, for example, corporate quality goals,
customer satisfaction objectives, and compliance with external quality requirements.
Step 2: Assign responsibilities for development of a QCS plan. Step 3: Develop information that will provide the foundation for the QCS plan:1. The most important quality-related activities2. Goals for managing and improving quality-related activities
Developing a quality control system3. Existing or needed processes for measuring and improving quality-related
activities:1. Fact-based measurement2. Needs for corrective action3. Resolution of corrective action requirements
4. Management and staff implementation responsibilities, and5. Processes for feedback to improve processes based on experience.Step 4: Based on assessment of material developed in Step 3, create a written plan for a process-based and consistent quality improvement system. Ensure that the plan assigns responsibilities for implementation. Create a plan that is easy for managers and employees to understand; that provides clear measurable objectives; that clearly identifies responsibilities, and that describes processes for meeting objectives. Step 5: Consistently implement the QCS plan. The plan should establish a system that now requires only periodic – at least annual – review and modification.
Total Quality Control From Griffin
■ Definition: A strategic commitment by top management to change its whole approach to business in order to make quality a guiding factor in everything it does
■ Major ingredients of TQM:1. Strategic commitment2. Employee Involvement3. Technology4. Materials5. Methods
Total Quality Control
■ TQM tools and techniques1. Value added analysis: Evaluation of all work activities,
materials flow and paper work2. Benchmarking: Competitor analysis3. Outsourcing: Subcontracting services and operations4. Reducing cycle time: Input process and output5. ISO 9000:2000 and ISO 14000: Certification6. Statistical Quality Control: Acceptance sampling and in
process sampling
Types of Control■ Controls used to standardize performance in order to increase efficiency, lower
cost and optimize performance: standard of performance set by using time and motion study
■ Controls devised to safeguard company assets: reduces losses due to waste and misuse of raw material
■ Controls used to standardize quality: setting quality standards■ Controls used to set limits for the delegated authority: centralization and
decentralization■ Controls designed to measure workers performance: setting performance standard■ Controls designed to measure and enhance workers attitude: Friendly supervision
and participative leadership■ Controls used to monitor total performance and operations: overall control of
activities■ Controls designed to synchronize all operational activities of the enterprise: master
plans, set procedures and manuals
