Domain III: Functions of Management Flashcards
Planning
the basic function of management
Policies
general decision-making guide, boundaries within you must operate
Procedures
chronological sequence of activities, specific guide for daily operations
Short range/operational planning
covers 1 year or less, operating budget (day, week, month)
Long range planning
up to 5 year cycle, focus on goals and objectives, requires mission statement of long range vision
Strategic planning
decisions about intended future outcomes and how success is measured and evaluated
Point of strategic planning
- sets direction for organization
- SWOT analysis
- assesses the environment outside and insight the organization
Functions of Organizing and Staffing
A. identifies tasks and activities, divide tasks into positions
B. establish relationships among all other functions of management
Organizational chart
shows how employee fits into organization
What does an organizational chart show?
- shows relationship of position and functions
- depicts lines of authority shown with solid lines (chain of command)
- Advisory (staff) positions shown with dotted lines
What does an organizational chart NOT show?
Degree of authority at each level, informal relationships
Chain of Command
shows command relationship from top to lowest level
Where do RDs fall in the chain of command?
staff-advisory; specialists
Functional
serves as both line and staff; has limited authority over a segment of activity because of specialized knowledge
Span of Control
number of individuals/departments under direction of one individual
Narrow span of control
more levels and managers, need with new hires
Wide span of control
fewer levels and managers needed with highly trained and motivated workers
Staffing patterns: acute care conventional
17 minutes/meal or 3.5 meals/labor hour
Staffing patterns: school food service
13-15 meals/labor hour
Master work schedule
overall plan, days on/off, vacations, basis for developing weekly schedules
Shift schedule
staffing patterns for particular operations; positions and hours worked per week, relief assignments
Production schedule
time sequencing of events required to produce a meal; employee assignments and menu items, quantity to prepare and timing
Absolute FTE
minimum number needed to staff the facility; counts productive hours
Adjusted FTE
also takes into account benefit days and days off
FTE/day
labor hours worked per day/8 hour normal work load
FTE/week
labor hours worked per week/40 hour normal work load
FTE/year
labor hours worked per year/2080
A food service has seven 40 hour employees, five 20 hour employees and three 16 hour employees. How many FTEs are involved?
- 7
(7x40) + (5x20) + (3x16) = 428 hours/40
Relief workers
1.55 employees necessary for every day coverage of FT positions
Actual workers needed
multiply the number of FT positions by 0.55 (129/236) to get the number of relief workers needed
20 FT positions; how many employees are needed?
31 total employees needed
20 x 0.55 = 11 relief employees
20 + 11 = 31 total employees needed
Hospital food service positions cover 7 days/week; employees work 5 days on, 2 days off. Relief workers cover 2 days off and work 5 days/week. How many days off for the FT workers can relief workers cover?
2.5 days
5/2 = 2.5
Purpose of Work Simplification procedures
eliminated unnecessary parts of a job that add no value, covers the smallest parts of a job
Occurrence sampling
Work Simplification procedure: observe random samples (intermittent observations) to determine % of time working or idle
Cross Charts
Work Simplification procedure: efficiency of equipment placement, studies work motions, shows number of movements between pieces of equipment
Productivity management
evaluation tool: measures efficiency, provides data to enhance decision-making
Productivity:
Inputs, outputs; expressed as ratios
Inputs (resources):
labor, money, materials, facilities, energy
Outputs (units of service):
meals, patient days, consults
Meals per labor hour
meals produced/# hours worked
20 FTE produced 2,700 meals during a 40 hour week. How many meals were produced per labor hour?
3.38 meals/labor hour
20 FTE x 40 hours = 800 hours
2700 meals/800 hours = 3.38
Labor turnover rate
of employees separated, terminated, replaced/total positions in department x 100
High labor turnover rates results in:
higher labor costs
Barriers to effective delegation
manager’s reluctance to delegate
Communication
transmitting and receiving information to bring about a desired action
Feedback/response
tells you whether the correct message was received
Barriers to communication:
words not mutually understood, poor voice quality, handwriting
Biggest barrier to communication
listening skills
Downward organizational communication channel
Ex:
from head through the ranks; chain of command
Ex: policy statements, procedure manuals
Upward organizational communication channel
Ex:
workers to head
Ex: suggestion box, grievance, open door policy
Purpose of upward organizational communication channel
provides employees with opportunity to have a say in what happens; management needs to receive vital info from lower levels
Diagonal organizational communication channel
Ex:
minimizes time and effort expended in organization; between functions diagonally placed
Ex: ordering clerk in food service, sends requests to purchasing department
Horizontal organizational communication channel
between departments (nutrition and nursing)
Information organizational communication channel
grapevine; meets social needs of group
Maslow’s Hierarchy of Needs
determinants of behavior, motivated by a desire to satisfy specific needs
Maslow’s basic needs
Physiological, Security and Safety
Maslow’s physiological needs
food, clothing, shelter, pay, benefits
Maslow’s security and safety needs
insurance, retirement, job security
Higher human needs/motivators
Social
Self-esteem/recognition
Self-realization/potential growth
When ____ ____ are met, then ____ ____ become motivators
basic needs, higher needs
Herzberg’s two-factor theroy
Maintenance/hygiene factors-do not produce motivation buy can prevent motivation from occurring
Motivators-call forth energy and enthusiasm, job enrichment
McCelland’s achievement-power-affiliation theory
Achievement need: sales and management
Affiliation need: desire to be liked by others
Power need: enjoys competition and seeks confrontation
MacGregor attitude of manager towards employees-Theory X
authoritarian, workers prefer to be controlled/directed by pressure; negative, autocratic
MacGregor attitude of manager towards employees-Theory Y
positive, participative
Hawthrone Studies
if you involve people in the process they become more productive
Expectancy theory-Beer, Vroom
employees must feel that rewards offered are attractive
Leadership Styles
Autocratic, consultative, bureaucratic, participative, free rein
Most controlling style of leadership?
Autocratic
Least controlling style of leadership?
Free rein
Autocratic
demands obedience
Consultative
asks for input, makes own decision
Participative
encouraged workers to participate in decision-making; uses quality circles
Free rein
laissez-faire
Contry club management
employee-centered, 1,9
Team Management
high concern for both people and production; 9,9
Impoverished Management
low concern for people and production; 1,1
Authority, obedience, atocratic
people are like machines, focus on production; 9,1
Most desirable style of leadership
Team Management
Likert-management
Participative is the most effective
Peter Principle
promote someone to a level of incompetence
Management Theories
Traditional or classical
Formal structure that organizes and administers work activities
Focus on tasks, structure, authority
Unity of Command
each is accountable to only one superior
Human Relations (behavioral) theory
employee participation in decision-making is essential
Human Relations Theory Z (Ouchi)
the value of the company is the people; consensus decision-making is participative
Subsystem
complete system within itself that’s part of a larger system
Open system interacting with external forces:
change in one part affects many other parts
Leadership Continuum: Tannebaum and Schmidt
each type of behavior is r/t the degree of authority used by the manager and amount of freedom available to subordinates in reaching decisions
Contingency approach: Fiedler
task-oriented leader is more effective in highly favorable and unfavorable situation; relationship-oriented leader is more effective in moderately favorable situations
Leadership effectiveness: Hersey, Blanchard, Johnson
readiness of followers and recommended leadership styles
Scientific management-Taylor
work-centered
focus on physical aspects of job
Management of objectives (MBO): Drucker
type of democratic management that provides control from within; participative leadership
Transactional reciprocal approach
uses rewards and punishments to achieve goals; top of control list; autocratic
Transformational reciprocal approach
agents of change; participative
Organizational change theory
managers serve as catalysts for change; must recognize there is a need to make a change
Controlling/Evaluating
establish qualitative and quantitative standards
measure performance
compare to standards
take corrective action
Managerial Skills
Technical
Human
Conceptual
Technical skills
understanding of and proficiency in specific kind of activity; important at lower levels of management
Human skills
ability to work effectively as a group member; important at all levels
Conceptual
ability to see organization as a whole; importance increases at higher ranks of management
____ skills can be ____; ____ skills must be _____ and _____
hard, taught; soft, developed, nurtured
Managerial Roles
informational
Decision-making
Informational managerial roles
monitor, disseminator, spokesman
Steps to decision-making
recognize and analyze the problem; assess; determine workable solutions, gather data, choose solutions, take action, follow up
Nominal group technique-Delbecq
silent generation of ideas by participants; group ranks items in priority order; vote for final decision
Delphi technique
designed to probe expert minds in written interviews where consensus is sought; participants do not meet
Cause and effect (fish diagram)
what influences the outcome? focuses on different causes of a problem; what are the causes of the effects/results you seek?
Pareto Analysis
illustrates relative importance of problems; work on the problem that occurs the most frequently; correcting the vital few problems that will have the greatest impact on quality
What type of queue makes customers most happy?
Snake-like
Conflict resolution methods
Dominance and suppression-repress conflict rather than settle it
Compromise
Integrative problem solving
Managerial Traits
Influence-action that will cause a change in behavior/attitude of another
Power-ability to exert influence
Reward power
ability to reward another for carrying out an order
Coercive power
negative side of reward; ineffective in motivating behavior change
Position/Legitimate Power
subordinate acknowledgment that influencer has right to exert influence d/t position
Expert Power
belief that influencer has relevant expertise that subordinate does not
Referent power
personality, charisma
Managerial attributes
Have a bias for action Learn from customers Autonomy Productivity through people Participative management
AND SOP
Standards of Practice: RDs working in direct patient care
AND SOPP
Standards of Professional Practice: all RDs
Unemployment Compensation
each state has own laws that define benefits with minimum federal standards
Workmans Compensation
Administered by state
National Labor Relations Act-Wagner Act
Pro-labor; right to organize/join labor unions Created NLRB (National Labor Relations Board)-listens to claims of unfair labor practice
Labor Management Relations Act-Taft Hartley Labor Act
Pro-management
Balance powers of labor and management
Specified unfair labor practices of the union
Civil Rights Act
prevents discrimination; prohibits sexual harrassment
Equal Employment Opportunity Act
prevents discrimination
Overseen by EEOC (Equal Employment Opportunity Commission)
Civil Rights Act
Equal Employment Opportunity Act
Fair Labor Standards Act/Minimum Wage
For overtime, must pay time and a half
Donated (tolerated) time-compensable
Child labor laws
Amendment to Fair Labor Standards
Equal Pay Act-prohibits discrimination on basis of sex
Occupations exempt from minimum wage and overtime
Executive, administrative, professional, outside salesperson
Age Discrimination in Employment Act
Prevents discrimination due to age
Family and Medical Leave Act
up to 12 workweeks of unpaid, job-protected leave; when return to work guaranteed equal job
Americans with Disability Act
must provide reasonable accommodations
36” aisles and 32” doors
Flashing alarm lights
Job descriptions must specify essential job functions
HIPAA-Health Insurance Portability and Accountability Act
allows employees to take insurance with them
Employment Standards
Job Analysis Job Description Job Specification Work Schedule Job breakdown Job Enlargement Job Enrichment
Job Analysis
studies all aspects of job; assessed to collect info for job description
Job Description
reflects required skills, responsibilities
matches application to job, orientation/training, employee appraisal
Job Specification
Qualifications, used in hiring
Work schedule
tasks and time-hour by hour
Job breakdown
no time limits-what to do and how to do it
Job Enlargement
alleviates boredom
Job Enrichment + motivator theory
upgrades + Maslow and Herzberg
Fair Employment Practice Law
illegal to ask about race, religion, sex, national origin, age, marital status
Types of Interviews
Structured/Directed
Unstructured/Non-directed
Structured Interview
checklist of strategy; gives the same information to all
Unstructured interview
conversational, more participation from applicant
Separation
Voluntary or involuntary termination of employee
Salary
earnings of managerial and professional personnel
Wages
hourly earnings of employees covered by Fair Labor Standards Act
Statutory benefits
required by law to ensure income
Compensatory benefits
benefits/pay for time not worked
Supplementary benefits
life and health insurance
Unionization
means of collective bargaining
Check-off
deduction of union dues from pay
Union shop
must join after being hired
Open shop
can join union or not
Closed shop
must be a member of union first before hiring
Agency sh
All workers must pay agency fee but not required to join agency
Union/shop steward
employee who represents fellow employees
Steps of collective bargaining
- Bargaining
- Mediation
- Arbitration
Bargaining
between union steward and management
Mediation
neutral person that helps settle differences
Arbitration
final step; hearing to dissolve dispute
Disciplinary action/grievances
Oral warning
Written warning
Suspension
Dismissal
Positive Discipline Practices
Consistency is key
Goal: correct behavior and save employee
Be sure employee is aware of severity of problem and standards
Corrective discipline meted out in private
Obstacles to effective appraisals
Halo effect
Leniency of error
Error of central tendency
Halo effect
judge on the most noticeable positive trait
Leniency of error
rate everyone higher than they deserve
Error of central tendency
rate everyone as average
Purpose of budget development
gives manager basis for control
Operating budget
Forecast of revenues, expenses, profit for a specific period of time
Steps to operating budget
- forecast sales or revenue portion
2. budget expenditures r/t projected level of revenue
Cash budget
projects revenues and expenses; shows inflow and output of cash. The purpose is to determine if funds will be available when needed
Capital budget
plant facilities, equipment, cost of improvements, repairs (maintence contracts); expensive and long-lasting
Traditional (incremental, baseline)
uses existing budget as base and projects change
begins with this year’s expenses plus inflation
ZBB + PPBS
Zero-based budget; NOT this year’s expenses plus inflation
PPBS: Planning, Programming, Budgeting System
Fixed Budget
prepared at one level of sales or revenue (no expected major change in pt/customer count)
Flexible budget
adjusted to various levels of operation with varying levels of sales or revenue (changes with pt/customer count)
Performance Budget
details what it costs to perform an activity
Indirect costs/fixed
Not affected by sales volume, not directly evident in day to day activities, cannot be readily changed
Examples: rent, taxes, interest on debt, insurance, depreciation
Direct/variable/flexible costs
varies directly with change in revenue
Example: china, silver, food, uniforms, laundry, repairs, benefits
Semi Variable costs
both a fixed and variable component; portion of cost will remain fixed regardless of change in sales volume
Example: labor, maintenance, utilities
Divided into fixed and variable before BE analysis
Food costs
most readily controlled item; subject to greatest fluctuation
Food costs + menu planning
most important
Food costs + type of service
selective menu reduced waste and cost
Food costs + purchasing methods
group buying reduces cost
Labor costs
less controllable than food costs
Operating costs
12-18% of budget; utilities, laundry, cleaning
EP vs AP
Raw purchase cost (AP)/Cooked edible wt
You purchase an 18# ready to cook turkey at $0.68/lb. The AP price is $12.24. After cooking and slicing, the EP is 9.9#. What is the EP cost per pound?
$12.24/9.9# = $1.24
Shows operating results over a period of time; dynamic
Profit and loss statements, income statement, revenue and expense statement
Shows financial condition as of a particular date; static
balance sheet; lists assets, liabilities
What is considered an asset?
goods/products owned; cash, inventory, accounts receivable
Liabilities
amounts owed to others
Turnover ratio
shows current effectiveness of inventory control
COGS
cost of goods sold
Turnover ratio calculation
cost of sales (food cost or COGS)/average inventory cost
Food cost of June: $37, 380. Average inventory cost: $17,500
2.1 (inventory was turned 2.1x in June)
Daily food cost report (food cost percentage)
tells you what percent of the income was spent on food sold
Daily food cost percentage
daily food cost/daily income
The cafeteria income for Tuesday was $640. Food cost for the day was $265. What was the food cost percentage?
$265/$640 = 41.4%
Food cost per meal
food cost per month/# meals per month
Food cost =
food purchases + foods removed from inventory
Determine the food cost per meal using the following information: June 1 inventory: $36,250 July 1 inventory: $34,375 Foods purchased in June: $52,390 Meals served in June $134,000
$0.40 per meal
(36,250-34,375) + 52,390/134,000
Food cost per meal calculation
(month 1 inventory-month 2 inventory) + foods purchased in month 1/meals served in month 1
Profit margin
most commonly used assessment of overall financial efficiency; reflects the portion of sales volume remaining after paying all expenses
Profit margin calculation
net profit (profit after all expenses paid)/sales dollars (revenue)
Cost of sales
cost of raw food and beverage sold
Gross profit
profit shown after deducting raw food and beverage (cost of sales) from sales (revenue)
Net profit
profit shown after all expenses have been deducted from sales
What is the net profit, gross profit, and profit margin? Sales: $12,771 Cost of sales: $54,779 Salaries: $31,324 FICA: $4,380 Benefits: $8,191 Utilies: $3,697 Supplies: $4,272 Depreciation: $16,579 Taxes $2,324
Net profit: sales-expenses
($127,771-$54,779 = $2,225)
Gross Profit: sales-cost of sales
($127,771-$54,779 = $72,992)
Profit margin: net profit/revenue
($2,225/$$127,771 = 0.02)
Payback period
determines the length of time it will take for the cash inflows from a project to equal the initial cash outlay
Steps to payback period
- add up costs of service
- add up costs saved by using new service
- divide costs of service by dollars saved
What is the payback period? Hardware: $3,500. Software: $2,400. Staff instructor: $1,000. Labor hours saved: 6 per week at $20/hour
- Add up costs of service: $3,500 + $2,400 + $1,000 = $6,900
- Add up costs saved by using new service: 6 x $20 = $120
- Divide costs of service by dollars saved: $6,900/$120 = 57.5 weeks to recoup money
Budget Projection
- determine actual costs for this year
- multiply by expected increase
- add current amount to increased amount
- add all costs
What is the projected budget for this year? Sales: $1,500,000 Labor costs: 35% of income Food costs: 40% of income Operating costs: 15% of income Budget for next year will increase by: Labor 7% Food 8% Operating 2%
- Labor: $525,000
Food: $600,000
Operating: $225,000
2 + 3.
Labor: $561,750
Food: $648,000
Operating: $229,500
4.
$1,439,250
First step in marketing analysis
identifying a need
Marketing channel
Exchange of ownership: producer, processor, distributor, supplier, customer
First step in marketing process and plan
identify a need that is not being fulfilled (market niche)
Market segmentation
divide market into groups of people with similar product needs
Demographic variables
age, gender, race, education, income
Geographic variables:
urban, suburban, climate, resources, cultures
Psychographic variables
social class, lifestyle, motive
Behavioristic variables
occasions, loyalty, purchase volume
Target market
group of people or places with similar wants/needs with the potential for purchasing your product
4 Ps of marketing/develop the marketing mix
Product
Place
Price
Promotion –> publicity
Strategic marketing
long-term overall view of marketing in the organization in which resources are allocated
Social marketing
use of marketing principles to advance a social cause, idea, behavior
Business marketing
filling customers needs or desires
Service marketing characteristics
intangible (performance not product)
inseparable (produced and consumed at same time)
Perishable (cannot be stored for later use)
Heterogenicity (variation in performance of people)
Breakeven point
point at which sales revenue/income will cover fixed and variable costs
BE in number of units sold
BE = FC/SP-VC
What is the breakeven point?
FC $50,000
Selling price: $5.00
VC $3.25
BE = 28,572
$50,000/($5-$3.25)
BE in sales volume
BE = FC/ 1- (VC/Sales)
number of $ you need to bring in to break even
What is the BE point?
FC $25,000
VC $60,000
Sales $100,000
BE = $62,000
$25,000/ 1 - ($60,000-$100,000)
BE = $60,000. If income is less than $60,000 there is a ___. If income exceeds $60,000 there is a ____.
Loss. Profit
Factor pricing method
traditional method/mark up method. Mark up is the difference between cost and selling price
Factor pricing method calculation
100/food cost percentage = mark up factor
Steps to determine selling price
- determine mark up factor
- mark up factor x raw food cost = selling price
- “hidden cost” of 10% added to food cost to cover unproductive costs
If the food cost percentage is 30 and the raw food cost if the item is $0.18, what is the selling price using the factor method?
- 100/food cost percentage = mark up factor
100/30 = 3.3 - mark up factor x raw food cost = selling price
3.3 x $0.18 = $0.59 - 10% for hidden costs
3.3 x ($0.18 + $0.018) = $0.65 selling price
Prime cost method
raw food cost + labor cost involved in making the item
Steps to determining selling price with prime cost method
- determine prime cost: raw food cost + direct labor cost
- determine price factor/markup: add desired food cost % to %)of direct labor cost; divide into 100
- selling price = prime cost x price factor (markup factor
Determine the selling price using the prime cost method Raw food cost $1.80 Labor cost: 5 minutes @ $12/hour Food cost % 0.333 Labor cost % 0.467
- Prime cost = raw food cost + labor cost
$1.80 + $1.00 = $2.80 - Add desired food cost % to % of direct labor cost; divide into 100
0.333 + 0.467 = 80%; 100/80 = 1.25 (markup factor) - Selling price = prime cost x markup factor
$2.80 x $1.25 = $3.50
Promotion pricing
done for a short amount of time
Loss leaders
items are priced lower to draw people in with the hope that they will purchase other items at normal markups
Cost of profit pricing
price the product to ensure a predetermined percentage of profit
Cost of profit pricing calculation
- add all costs (including profit cost) as percentages)
- subtract the total from 100% to find targeted food cost percentage
- to determine the selling price of the item: total food cost/desired food cost percentage
Determine the selling price using cost of profit pricing: Fixed costs: 25% Labor cost: 35% Profit cost: 10% Food cost: $0.78
- 25% + 35% + 10% = 70%
- `100%-70% = 30% (targeted/desired food cost percentage)
- Selling price: 0.78/.30 desired food cost = $2.60
Reasons for public relations within the community
- good press relations
- newsworthy information
- build and retain relations with legislators and government officials
Cost-benefit studies
the “should”
is it worthwhile to complete this project?
determines whether the goal of the intervention is worthwhile with the costs
value of the benefits derived from intervention must outweigh the costs
Cost-effectiveness analysis
the “yes-how?”
assumes that the goal of the project is worthwhile
question to resolve is which method of intervention i smost effective
compares cost of alternative strategies
Audit
formal study that retrospectively monitors performance; did performances meet standards/purpose?
Management approaches to improving performance
- TQM-Total Quality Management
a. PDCA/PDSA-plan, do, check/study, act
b. CQI-continuous quality improvement
TQM
total quality management
processes, improvement, customer satisfaction
Contains PDCA/PDSA and CQI
CQI
Continuous Quality Improvement Integral part of TQM focus on process ideal that systems and performances can always improve uses outcome assessment
Criteria
professionally developed standards that describe a desirable process or outcome
Outcome (end result)
measurable result of an intervention, measures success or failure of the process of care provided-includes time frame)
Indicators
measurement tool that monitors and evaluates important aspects of patient care and management functions
Rate-based indicators
what will happen with the best care, thresholds between 1%-99%
Sentinel event indicator
serious events
thresholds of 0%-100% (never or always)
Ex: 0% food poisoning; dish machine area is dry 100%
100% of oncology pts are fed within 5 days
Six sigma
data-driven approach for improving quality by removing defects and their causes. Achieving six sigma (six standard deviations from the mean) means there is very little variation in the process
Kaizen philosophy (good change)
suggests making continuous and small incremental improvements in process on a daily basis rather than large revolutionary changes
Lean method
uses less human effort, space, capital, and time to make products exactly as the customer wants with few defects
