Midterm 1 Flashcards
Historical Cases of “Modern Management”:
What are the three schools?
- Classical
- Behavioral Approach
- Management Sciences Approach
What is the classical school know for?
Who were involved (names)
Careful selection of training of workers.
- Frederick Taylor
- Max Weber
- Henri Fayol
- Anthony’s Management of Hierarchy
Frederick Taylor:
Scientific Management -EFFICIENCY
Time motion studies
Max Weber:
Bureaucracy - how to organize and divide up labor
-very structural
Henri Fayol:
Administration- how to operate the bureaucracy
Anthony’s Management of Hierarchy
- Strategic Planning
- Management Control
- Operational Control
- Organizational Members.
These boundaries prevent micro managing.
(Executives: Markets products, suppliers, customers Managers: Make resources work - labor levels, training Supervisors: Execute the plans - schedule work crew, etc Workers: Doing the actual work)
Behavioral Approach:
- Aspirations in life - social life that was rewarding.
- An attempt to increase production by understanding people as it is easier to change organizations that to change people.
- Workplace must be enjoyable.
- Shifted away from the pure scientific approach to management
Abraham Maslow:
Theory of human needs (1. Physiological needs, safety needs, social needs, esteem and self actualization)
Douglas McGregor:
Theory X and Y (X assumes people need to be led - Inefficient, and Y assumes that people are willing to work and be creative. GOOD!)
Management Sciences Approach:
Apply quantitative tools and math to management issues.
KEY: Introduction of technology.
-Learning organization
-Contingency thinking - respond to supply and demand
-Systems approach - How systems interface with each other.
Value Proposition:
- What value we can offer so customers give up something.
- Link strategy with operations, how they solve problems.
Constraints:
-Sets the pace for the organization. (the bottle neck).
Also the DRUM in D-B-R model. (Pull approach)
(The Rope enforces the pace for the organization)
Micro problem:
Macro problem:
Micro = urgent!
Macro = important!
Statistical fluctuations:
They occur when there is variation, occurs on a random basis, found in processes. (Think of the dice).
Why do statistical fluctuations accumulate?
Because they don’t have a property to be offset, so we can’t make up for them. Once it’s lost, it’s gone. Once you lose 6 units, that 6 units works its way through the whole system.
They build up after bottle necks.
They occur in DEPENDENT EVENTS.
Statistical Process Control:
TQM - Total Quality Management
There’s a range of quality, we want to produce a product that’s within six sigmas.
If we design a Control Chart, we can have LCL (Lower Control Limit) and UCL (Upper Control Limit). This all makes sure the process is under control.
Control limits are 6 sigmas apart!!
Edward Deming:
Red Bead Experiment
- Quality Movement: must change system
- Not workers, management is issue.
Hawthorne experiment:
- Study effects of different working environments
- shift away from pure scientific approach
Buy side and Sell side:
Both are external
- Buy side is very smooth and professional
- Sell side is chaotic (customer preferences change)
MECE:
Mutually Exclusive Collectively Exhaustive – Identify the constraint, this is the detail step,
a. Mutually exclusive: Is each issue a separate and distinct issue?
b. Collectively exhaustive: Does every aspect of the problem come under one, and only one of the issues?
Social Facilitation:
The tendency for people to do better on simple tasks when in the presence of other people. Whenever people are being watched by others, they will do things they are already good at doing.
Groupthink:
When the desire for harmony in a decision-making group overrides a realistic appraisal of alternatives.
Group Polarization:
Refers to the tendency for groups to make decisions that are more extreme than the initial indication of its members.
Social Loafing:
People exerting less effort to achieve a goal when they work in a group than when they work alone.
Self- Referencing Group:
How you assess yourself. Mountain climbers take more risks than runners
The driving forces for transformational change:
Requirements for transformational change..
a. Globalization
b. Rapid change in technology
c. Changes on consumer demands
d. Changes in supply of raw materials
e. Shifts in asymmetric or symmetric information
f. Competition
Targets for transformational change:
a. Tasks
b. People
c. Culture
d. Technology
e. Structures
The various consultant styles:
a. Analytical
b. Cheerleader
c. Stabilizer
d. Persuader
e. Pathfinder
Process control
- Upper control limit & Lower control limit
b. Positives
- Quality increases & Process efficiency increases
c. Negatives
- Rewards the status quo in terms of products & Does not foster creativity but only innovation – that difference will be discussed later
d. Who uses it?
- Food processors, banks, hospitals, manufacturers
The red bead experiment:
Deming:
-Red beads were the errors. Worker just uses the system. Reinvent system for quality. Most problems are management problems, not worker problems.
Types of conflicts:
Substantive
Emotional
Functional
Dysfunctional
Substantive Conflict:
Disagree with outcome.
-Need to come up with a solution. Compromises work well.
Emotional or Relationship Conflict:
How people work together. (Difficult to resolve)
Functional Conflict:
“How” and “When” the outcome will be achieved.
-Disagreement on the function not the outcome. (Resolved through reasoning)
Dysfunctional Conflict:
Inability to resolve a conflict such as not listening to each other.
What are John Gottman’s Four Horsemen:
- Criticism: attacking someone’s personality rather than behavior
- Contempt: intention to purposely insult
- Defensiveness: party sees themselves as the victims, making excuses.
- Withdrawal or Stonewalling: Most dangerous. Withdrawal from conflict completely.
Causes of conflict:
- Role ambiguities (Expectation groups)
- Task interdependencies (relying on others)
- Competing objectives, resources, scarcities
- Structural differences
- Unresolved prior conflicts
- Cross functional groups
- Move from vertical to horizontal group
Methods or mechanisms for conflict resolution:
Negotiation
Arbitration
Mediation
Conflict Resolution:
- Avoidance - Not my job, you deal with it
- Accommodation -Living with their decision
- Authoritative command - The boss, “I Choose”
- Compromise - occurs in political setting
- Consensus - all agree on best choice: End product
Why Change occurs:
- Dissatisfaction with present situation
- External Pressures toward change
- Momentum toward change
Threats to Change:
- Degree of change
- Time Frame
- Impact of Culture
- Loss of existing benefits
- Threat to position of power
- Threat to security
- Redistribution of power
- Disruption of routine
Types of Power:
- Coercive Power - to punish (to fire, etc)
- Legit Power - Granted by authority
- Expert Power (Best, you can’t take it away) - having some specific skill
- Referent Power (Next best, want at a higher position in organization) - from admiration or respect. If you want to be a leader you need referent power.
- Reward Power - From being able to provide a reward to others.
Historical Perspective of Organizations:
- Alexander the Great: Personality Driven
- Genghis Kahn: Mission Driven
- Dynasties of China: History Driven
- The Wild West: Success Driven. (No history, lots of opportunity)
- The Circus: Market Driven
Change methods:
a. Phase method: builds collaboration among team
i. Unfreezing: prepare for change (cannot change ice unless unfrozen)
ii. Changes
iii. Refreezing: stabilize the change
b. Crossover approach: small, tell people what to do
i. Alex- today, we are making a change and doing this
Change Strategies:
a. Force Coercion: Use of formal authority to create change
i. When fly told Babe- “do what I say!”
b. Rational Persuasion: creating change through rational and empirical arguments
i. Jonah- get your data, this is how it works!
c. Shared Power: developing support through personal values , beliefs and commitments
i. Alex put the team together (Stacy, Lou, Bob, and Ralph). He didn’t get anyone from corporate!
What is BATNA?
BATNA: Best Alternative to a Negotiated agreement: sets the bargaining zone
a. Needs to be real and actionable
b. It is your best outcome of the negotiation if all else fail
c. Not the “walk-away” point or the “reservation point”
d. A form of game theory
Define:
b. Transaction costs
c. Cost of uncertainty
d. Bounded rationality
e. Incomplete contracts
Transaction costs: Costs to do economic activity
Cost of Uncertainty: ??
Bounded rationality: As humans we can only think so much
Incomplete Contracts: When one party knows more information than the other, has an advantage.
What is the Goal?
The goal is to make money.
Lou looks at the problem, measuring:
Net Profit, ROI, and Cash Flow
What’s the answer to the problem in The Goal?
The answer is to make money by increasing net profit, while simultaneously increasing ROI and increasing Cash Flow.
What are Jonah’s three key terms:
o Throughput: The rate at which the system generates money through sales (increase this)
o Inventory: all the money that the system has invested in purchasing things which it intends to sell (decrease this)
o Operational expense: all the money the system spends in order to turn inventory into throughput (decrease this)
How do they express the Goal in Jonah’s terms?
- Increase throughput while simultaneously reducing both inventory and operational expense
What is a balanced plant?
A balanced plant is where the capacity of each and every resource is perfectly balanced with market demand.
According to Jonah, what is a balanced plant?
• To balance the flow of product through the plant with demand from the market.
What’s the whole improvement thing about?
The Goal is about ongoing improvement.
What are the steps to ongoing improvement?
Step 1: Identify the system’s bottlenecks
Step 2: Decide how to exploit the bottlenecks.
Step 3: Subordinate everything else to the above decision
Step 4: Elevate the system’s bottlenecks
Step 5: If, in a previous step, a bottleneck has been broken go back to step 1.
What is the short wall, long wall thing?
Short wall was using groups of two to carry out materials,
Long wall was less efficient, long conveyor belt.
