Six Sigma shares with TQM its focus on improving value chain processes to increase

What are the 4 ways to create a competitve advantage from low costs and differentation?

- improving responsiveness to customers - improving efficiency - improving innovation - improving quality

functional-level strategy

- plan to improve the ability of an organization's deparments - perform task-specific activities in ways that add value to goods and services

-  coordinated series or sequence of functional activities necessary to transform inputs such as new product concepts, raw materials, component parts, or professional skills into the finished goods or services customers
value and want to buy

- development of a set of functional-level strategies that support a company’s business-level strategy and strengthen its competitive advantage

- engineering and scientific research activities involved in innovating new or improved products that add value to a product

What is the marketing function's task?

- to persuade customers a product meets their needs and convince them to buy it

materials management function

- controls the movement of physical materials from the procurement of inputs through production and into distribution and delivery to the customer

- responsible for the creation, assembly or provision of a good or service, for transforming inputs into outputs

-plays a crucial role in locating customers and then informing and persuading them to buy the company’s products

customer service function

- provides after sales service and support - can create a perception of superior value by solving customer problems and supporting customers

What are 5 things customers want?

1. A lower price to a higher price 2. High-quality products 3. Quick service and good after-sales service 4. Products with many useful or valuable features 5. Products that are tailored to their unique needs

customer relationship management

-technique that uses IT to develop an ongoing relationship with customers to maximize the value an organization can deliver to them over time

What does increased quality lead to in terms of organizational performance?

-increased reliability -increased productivity -higher prices -lower costs -higher profits

total quality management (TQM)

-focuses on improving the quality of an organization’s products and stresses that all of an organization’s
value-chain activities
should be directed
toward this goal

Steps for quality gaps in TQM

1. Identify what customers want from the good or service that the company provides 2. Identify what the company actually provides to customers 3. Identify the gap that exists between what the customers want and what they get (quality gap) 4. Formulate a plan for closing the quality gap

First 5 steps to successful TQM implementation

1. Build organizational commitment to quality 2. Focus on the customer 3. Find ways to measure quality 4. Set goals and create incentives 5. Solicit input from employees

Last 5 steps to successful TQM implementation

6. Identify defects and trace to source. 7. Introduce just-in-time inventory systems. 8. Work closely with suppliers. 9. Design for ease of production. 10. Break down barriers between functions.

-A technique used to improve quality by systematically improving how value chain activities are performed and then using statistical methods to measure the improvement.

What's the goal of Six Sigma?

to improve a company’s quality to only three defects per million by systematically altering

the way all the processes involved in value chain activities are performed, and then carefully

measuring how much improvement has been made using statistical methods.

How does six sigma differ from TQM?

Sigma shares with TQM its focus on improving value chain processes to increase quality;

but it differs because TQM emphasizes top-down organization wide employee involvement,

whereas the Six Sigma approach is to create teams of expert change agents, known

as “green belts and black belts,” to take control of the problem-finding and problem-solving

process and then to train other employees in implementing solutions.

- strategy of designing the machine-worker interface to increase production system efficiency - product layout, process layout, fixed-position layout

-The set of techniques that attempt to reduce the costs associated with the product assembly process or the way services are delivered to customers.

What is the goal of flexible manufacturing?

-Aims to reduce time required to set up production equipment b y redesigning the process, setup times and costs can be drastically reduced - Able to produce many more varieties of a product than before in the same amount of time

- inventory system gets components to the assembly line just as they are needed to drive down costs -Major cost savings can result from increasing inventory turnover and reducing inventory holding costs

-Produce an entire product instead of just parts of it -Team members learn all tasks and move from job to job -Can increase productivity and efficiency

-The fundamental rethinking and radical redesign of business processes to achieve dramatic improvement in critical measures of performance such as cost, quality, service, and speed.

What are the two kinds of innovation?

-Quantum product innovation -Incremental product innovation

what is quantum product innovation?

-The development of new, often radically different , kinds of goods and services because of fundamental shifts in technology brought about by pioneering discoveries .

What is incremental product innovation?

-The gradual improvement and refinement of existing products that occur over time as existing technologies are perfected.

What are 3 strategies to promote innovation and speed product development?

-Involve both customers and suppliers

-Establish a stage-gate development funnel

-Establish cross-functional teams

what is product development?

-management of the value-chain activities involved in bringing new or improved kinds of goods and services to the market

what is the stage-gate developmental funnel?

-A planning model that forces managers to choose among competing projects so organizational resources are not spread thinly over too many projects.

what's a product development plan?

-A plan that specifies all of the relevant information that managers need in order to decide whether to proceed with a full-blown product development effort.

-A written agreement that details product development factors such as responsibilities, resource commitments, budgets, time lines, and development milestones

-members of a team who bear primary responsibility for the success of a project and who stay with a project from inception to completion.

What is organizationalarchitecture?

The organizational structure, control systems, culture, and human resource management systems that together determine how efficiently and effectively organizational resources are used.

-The process by which managers establish working relationships among employees to achieve goals .

what is organizationalstructure?

-formal system of task and reporting relationships that coordinates and motivates organizational members so they work together to achieve organizational goals.

what are the 4 factors affecting the organizational structure?

-organizational environment -technology -human resources -strategy

what is organizationaldesign?

-The process by which managers create a specific type of organizational structure and culture so that a company can operate in the most efficient and effective way

The way an organization’s structure works depends on the choices managers make about:

1. How to group tasks into individual jobs 2. How to group jobs into functions and divisions 3. How to allocate authority and coordinate     functions and divisions

-The process by which managers decide how to divide tasks into specific jobs. -The appropriate division of labor results in an  effective and efficient workforce.

What 3 things are included in job design?

-job simplification -job enlargement -job enrichment

what is job simplification?

-The process of reducing the tasks each worker performs.

-Increasing the number of different tasks in a given job by changing the division of labor

-Increasing the degree of responsibility a worker has over a job

what is the functional structure?

-An organizational structure composed of all the departments that an organization requires to produce its goods or services.

Advantages of a functional structure

-Encourages learning from others doing similar jobs. -Easy for managers to monitor and evaluate workers. -Allows managers to create the set of functions they need in order to scan and monitor the competitive environment

disadvantagesof a functional structure

-Difficult for departments to communicate with others. -Preoccupation with own department and losing sight of organizational goals.

what is a divisional structure?

-An organizational structure composed of separate business units within which are the functions that work together to produce a specific product for a specific customer. -Product , market, geographic

-Managers place each distinct product line or business in its own self-contained division -Divisional managers have the responsibility for devising an appropriate business-level strategy to allow the division to compete effectively in its industry

-Allows functional managers to specialize in one product area -Division managers become experts in their area -Removes need for direct supervision of division by corporate managers -Divisional management improves the use of resources

-Divisions are broken down by geographic location

Global geographic structure

-Managers locate different divisions in each of the world regions where the organization operates. -Generally, occurs when managers are
pursuing a multi-domestic strategy

-Groups divisions according to the particular kinds of customers they serve -Allows managers to be responsive to the needs of their customers and act flexibly in making decisions in response to customers’ changing needs

-An organizational structure that simultaneously groups people and resources by function and product. -The structure is very flexible and can respond rapidly to the need for change. -Each employee has two bosses

-Structure in which employees are permanently assigned to a cross-functional team and report only to the product team manager or to one of his direct subordinates -Does away with dual reporting relationships and two-boss managers

-A group of managers brought together from different departments to perform organizational tasks.

-power to hold people accountable for their actions and to make decisions concerning the use of organizational resources.

-Someone in the direct line or chain of command who has formal authority over people and resources

-Managers who are functional-area specialists that give advice to line managers.

What are characteristicsof tall structures?

-As hierarchy levels increase, communication gets difficult creating delays in the time being taken to implement decisions. -Communications can also become distorted as it is repeated through the firm. -Can become expensive -have many levels of authority and narrow spans of control.

what are characteristicsof flat structures?

-have fewer levels and wide spans of control. -Structure results in quick communications but can lead to overworked managers.

What does decentralizing authority mean?

-giving lower-level managers and non-managerial employees the right to make important decisions about how to use organizational resources

Marketing manager and research and development manager meet to brainstorm new product ideas

What are the 4 sources of an organization's culture?

- characteristics of organizational members - the employment relationship - organizational structure - organizational ethics

-The shared set of beliefs, expectations , values, and norms that influence how members of an organization relate to one another and cooperate to achieve organizational goals .

what are organizationalethics?

-The moral values, beliefs, and rules that establish the appropriate way for an organization and its members to deal with each other and with people outside the organization.

What are human resource policies?

-Can influence how hard employees will work to achieve the organization’s goals, -How attached they will be to it -Whether or not they will buy into its values and norms

what are characteristics of adaptive cultures?

-values and norms help an organization to build momentum and to grow and change as needed to achieve its goals and be
effective

what are characteristicsof inert cultures?

-Those that lead to values and norms that fail to motivate or inspire employees -Lead to stagnation and often failure over time

what is organizationalcontrol?

-Managers monitor and regulate how efficiently and effectively an organization and its members are performing the activities necessary to achieve
organizational goals

what are control systems?

-Formal, target-setting, monitoring, evaluation and feedback systems that provide managers with information about whether the organization’s strategy and structure are working efficiently and effectively.

What are the 3 types of control?

-feedback control -concurrent contrul -feedback control

what is feedforward control?

-Control that allows managers to anticipate problems before they arise. -Giving stringent product specifications to suppliers in advance - input stage

what is concurrent control?

-Control that gives managers immediate feedback on how efficiently inputs are being transformed into outputs so managers can correct problems as they arise. -conversion stage

what is feedback control?

-Control that gives managers information about customers’ reactions to goods and services so corrective action can be taken if necessary. -output stage

what are the 4 control process steps?

1. establish standards of performance, goals, or targets which performance is to be evaluated 2. measure actual performance 3. compare actual performance against chosen standards of performance 4. evaluate the result and initate corrective action if the standard is not being achieved

what are the 3 organizationalcontrol systems?

-output control -behavior control -clan control

-measure how efficiently managers are using the organization’s resources to generate profits

return on investment (ROI)

-organization’s net income before taxes divided by its total assets -most commonly used financial performance measure

what is the operating margin?

-calculated by dividing a companies operating profit by sales revenue -Provides managers with information about how efficiently an organization is utilizing its resources

what are liquidity ratios?

-measure how well managers have protected organizational resources to be able to meet short-term obligations

what are leverage ratios?

-measure the degree to which managers use debt or equity to finance ongoing operations

what are activity ratios?

-Show how well managers are creating value from organizational assets

Corporate-level managers set goals for...

individual divisions that will allow the organization to achieve corporate goals.

Divisional managers set goals for...

each function that will allow the division to achieve its goals.

Functional managers set goals for...

each individual worker that will allow the function to achieve its goals.

-Blueprint that states how managers intend to use organizational resources to achieve organizational goals efficiently.

Characteristics of direct supervision

-Managers who actively monitor and observe the behavior of their subordinates -Teach subordinates appropriate behaviors -Intervene to take corrective action -Most immediate and potent form of behavioral control -Can be an effective way of motivating employees

what are the problems with direct supervision?

-Very expensive because a manager can personally manage only a relatively small number of subordinates effectively -Can demotivate subordinates if they feel that they are under such close scrutiny that they are not free to make their own decisions

what is management by objectives (MBO)?

-formal system of evaluating subordinates for their ability to achieve specific organizational goals or performance standards and to
meet operating
budgets

what is bureaucratic control?

-Control through a system of rules and standard operating procedures (SOPs) that shapes and regulates the behavior of divisions, functions, and individuals.

what are the problems with bureaucratic control?

-Rules easier to make than discarding them, leading to bureaucratic “red tape” and slowing organizational reaction times to problems. -People might become so used to automatically following rules that they stop thinking for themselves

-The control exerted on individuals and groups in an organization by shared values, norms, standards of behavior,
and expectations.

what is organizationalchange?

-Movement of an organization away from its present state and toward some desired future state to increase its efficiency and effectiveness

what is evolutionary change?

-gradual, incremental, and narrowly focused -constant attempt to improve, adapt, and adjust strategy and structure incrementally to accommodate changes in the environment

what is revolutionary change?

-Rapid, dramatic, and broadly focused -Involves a bold attempt to quickly find ways to be effective -Likely to result in a radical shift in ways of doing things, new goals, and a new structure for the organization

what are the 4 steps in the organizational change process?

1. asses the need for change 2. decide the change to make 3. implement the change 4. evaluate the change

-A fast, revolutionary approach to change in which top managers identify what needs to be changed and then move quickly to implement the changes throughout the organization.

what is bottom-up change?

-A gradual or evolutionary approach to change in which managers at all levels work together to develop a detailed plan for change.

-The process of comparing one company’s performance on specific dimensions with the performance of other, high-performing organizations.

Which of the following statements is true about total quality management TQM )?

Which of the following statements is true about total quality management (TQM)? All managers in every function must cooperate and develop goals for the organization.

Is a management technique that focuses on improving attributes?

total quality management (TQM) A management technique that focuses on improving the quality of an organization's products and services. Focus on the customer.

Is an approach that creates teams of expert change agents known as green belts and black belts?

Six Sigma shares with TQM its focus on improving value chain processes to increase quality; but it differs because TQM emphasizes top-down organization wide employee involvement, whereas the Six Sigma approach is to create teams of expert change agents, known as "green belts and black belts," to take control of the ...

Which product innovation results in gradual improvements and refinements of products over time?

The gradual improvement and refinement of existing products over time as existing technologies are perfected are called incremental product innovations.