Can you please give me 2 questions based on this topic which I can asked during
ID: 359191 • Letter: C
Question
Can you please give me 2 questions based on this topic which I can asked during the presentation?
Chapter 3.5
New Management Tools for Optimization
u Benchmarking refers to the finding out, in an open aboveboard way, how
other firms may be doing something better (cheaper) so that your firm can
copy and possibly improve on its technique.
It requires:
1. Picking a specific process that your firm seeks
to improve and identifying a few firms that do
a better job.
2. Sending on the benchmarking mission the
people who will actually have to make the
changes.
Plan
Find
Analyze Collect
Improve
Benchmarking has evolved from rather lengthy and cumbersome set of
procedures to a fast and flexible tool that is less elaborate and more
tactical; it has come to be called fast-cycle or rapid benchmarking.
Realizing what process
the firm needs to
improve on
Searching for other
firms that do a better
job
Looking for “useful
analogies” from them
Solving the firm’s
problems
Save money
Total Quality Management
u Total Quality Management (TQM) involves maximizing quality and minimizing
costs. The process refers to constantly improving the quality of products and
the firm’s process so as to consistently deliver increasing value to customers.
TQM constantly asks
“How can we do this
cheaper, faster, or
better?”
Five rules determine the success of a TQM program:
1. The corporate executive officer (CEO) must strongly and visibly support it
with words and actions.
2. The TQM program must clearly show it benefits customers and creates value
for the firm.
3. The TQM program must have a few clear strategic goals; that is, it must ask,
“What is the firm trying to accomplish?”
4. The TQM program must provide quick financial returns and compensationpeople
need to see early and concrete results to continue to support the
program.
5. The TQM program should be tailored to a particular firm; that is, one firm
cannot simply copy another firm’s TQM program.
Frequent reason for lack of success in TQM programs:
• Failure of upper management to show a strong personal involvement and
commitment to the program
• TQM programs often were not strongly linked to the overall business strategy
of the firm or aimed at delivering increasing value to costumers.
Six Sigma =
Refers to the situation in which
everything - from product design to
manufacturing to billing – proceeds
practically flawlessly, with fewer than
3.4 defects per million widgets or
procedures.
Reengineering
u Reengineering seeks to completely reorganize the firms.
u It requires restructuring the firm to conform to that vision.
It asks “If this were an entirely new firm, how would you organize it?” or,
“If you were able to start all over again, how would you do it?”
Involves the radical redesign of all of the firm’s process to achieve major
gains in speed, quality, service, and profitability.
Time
Business Performance
REENGINEERING
Two major reasons to reengineer:
1. Fear that competitors may come up with new products, services or ways of
doing business that might destroy your firm
2. greed, if you believe that by reengineering, your company can obliterate
the competition.
Reengineering involves reorganizing the firm horizontally around
cross-functional core processes managed by teams that seek to
maximize customers’ satisfaction.
Profits are likely to be maximized at dramatically higher levels in
the long run if the reengineering is successful.
Reengineering:
u Very easy to understand in principle but extremely difficult to carry out
u Not all firms are capable of reengineering or need to reengineer
u Even companies that have been successful have not completely eliminated
functional specializations
Reengineering today is slowly fading – some people would even say that it is dead
REASON #1
Only a small number
of firms that tried it
actually succeeded
REASON #2
Reengineering received
bad press as a result of
the large layoffs and
workers’ resistance
The Learning Organization
u A learning organization values continuing learning, both individual and
collective, and believes that competitive advantage derives from and requires
continuous learning in our information age.
According to Peter Senge, a learning organization in based on five basic ingredients:
1. New mental model – People must put aside old ways of thinking and be willing to
change.
2. Personal mastery – Firm employees must learn to be open with others and listen, rather
than telling others what to do.
3. System thinking – Everyone in the organization must have an understanding of how the
firm really works.
4. Shared vision – All firm employees must share the same strategy.
5. Team learning – The organization must see how all the firm’s employees can be made to
work and learn together to realize the shared vision and carry out the strategy of the
firm.
The learning Organization
§ The result of Peter Senge’s The Fifth Discipline and countless other publications
were a compelling vision of an organization made up of employees skilled at
creating, acquiring, and transferring knowledge.
§ Although the five ingredients on which the learning organization is based may
be clear in theory, they are very difficult to carry out in practice.
§ For now, the learning organization is, for the most part, a management vision of
the future.
References:
Salvatore, D. (2015) Managerial Economics In a Global Economy. New York:
Oxford.
Garvin, D. A., Edmondson, A. C., Gino, F. (2008). Is Yours a Learning
Organization? Harvard Business Review. Retrieved from
https://hbr.org/2008/03/is-yours-a-learning-organization
Explanation / Answer
Among all the tools listed, Benchmarking, TQM, BPR & Learning Organization, is there a way or a framework through which companies can determine which tool is best for their company? For example, a retailer is different from a car manufacturing company, so how these two different players determine which tools to use? What should be the procedure or process to use Benchmarking method of improving the business? Should a company benchmark within its own industry or there should be a comparison across industries? Is there a process to choose KPIs (Key Performance Indicators)?