In: Operations Management
a. Read the case carefully and answer the questions that follows:
Solomon is trying to reduce wastage of resources in his company.
He is trying to do it in the best possible manner. He has set
standards for performance of different types of activities and is
doing his level best to perform according to these set standards to
minimize wastage of resources. Things are not going to be over for
him as he will have to look into other aspects too. He has set up a
good monitoring system which helps him know how to employees ate
performing according to set standards as when the employees meet
these standards they will be given incentives. He is hoping to pull
out a good performance from his team this year.
i) Which function of management has been referred to in the above
case?
ii) Explain the identified function and state why you think
so.
iii) Which benefits of this function of management have been
highlighted in the above case?
b. Identify the step of controlling process applicable in the
following cases:
i) Mrs Betty is keenly observing the quantity of capsules produced
in a pharmaceutical company. She realizes that there is no need for
any action to be taken as the deviations are within the acceptable
limits. A day later when she comes to work she finds the situation
opposite to that of the previous day. This lime the deviation was
beyond the acceptable range and needed immediate action. She called
her subordinates and told them that this should not happen
again.
ii) Michel, who is the owner of a company has decided to focus only
on a few activities of his business. He considers that the rest of
all activities are not critical to the performance of his company.
One such area he finds is of labour. The labour cost recently went
up by 4% sending signals of coming danger. Now he will put his
efforts to control this variation by arranging labour at a cheaper
rate.
iii) In a company a manager is trying to find out the deviation
between the actual number of fans produced and the desired number.
He already knows about the standard as the company has assigned him
a definite quantity of fans to be produced.
iv) Karen a senior experience manager is concerned about the 2%
rise in the raw materials. However he knows that this is an
acceptable range. He tells his staff that if this rise goes beyond
2% it should be brought into the notice of management. Then he sets
a limit of 5% when the management should give it the priority over
other activities.
v) Alexander wants to ran his company in a different manner. He
wants to set standards to be achieved in both qualitative as well
as quantitative terms. He wants to judge the motivation, skill
levels and satisfaction of the employees. All these things will
require qualitative standards. On the other hand the company will
have to set quantitative standards for the number of units
produced.
vi) Some employees have been assigned the job of judging the output
of production in a neutral and reliable way. They are applying
different techniques for achieving this aim. Some of these are
personal observation, sample checking, etc. They are also keeping
the units of measurement same to that of the units of set
standards
a.
i) the function of management that has been referred in this case is controlling. This function involves monitoring and controlling of activities to ensure that they work as per the pre-defined plans. Standards for work performances are set, performance is measured on those standards and necessary action is taken to improve the performance to achieve the end goals.
ii) The controlling function of management involves five steps- performance standards are established, actual performance is measured, the measured performance is compared with the set standards, deviations in the performance are identified, corrective action is taken to improve the performance. In this case, Solomon has a goal to achieve which is to reduce the waste resources of his company. He sets standards of performance for the employees of the company to achieve this goal. He tries himself to perform on the set standard to achieve the goal and ensures that his employees are also performing based on the standards through a monitoring system. Thus he controls their performance through a monitoring system which ensures performance on standards formed by him.
iii) The benefits of controlling function of management as mentioned in the case above are as follows:
- accomplishing the objectives and organizational goals.
- evaluating the accuracy of the standards formed and changing them as per requirement.
- efficient use of resources with monitoring any deviations and thus minumum waste.
- increased motivation of employees
- following order and discipline in employees way of doing work
- ensuring coordination in work done by all employees as their efforts are based on a common standard.