Quantitative Management

And Management Today

Argyris’s Theory of Adult Personality.

• Classical Management practices were flawed because they provided no freedom and required no imagination from the employees.

• He thought that management should allow the Adult Personality to develop by:

• Increasing task responsibility

• Increasing task variety

• Using participative decision-making.

Quantitative Analysis in Management

• Management science (or operations research) foundations

• This way of thinking uses mathematical techniques to solve management problems

• Techniques include:

• Mathematical forecasting

• Inventory modelling

• Linear programming

• Queuing Theory

• Network Models

• Simulations

1. Mathematical Forecasting

• Makes future projections that are useful for planning.

• It makes educated assumptions based on known information.

• “If we used “X” amount of boxes for January, we can assume that we will need “Y” for February.”

Inventory Modelling

• This helps to control inventory by figuring out how much to order and when.

• Many retail businesses have “minimum level information.”

• This allows managers to focus elsewhere, knowing inventory is taken care of.

Linear Programming

• This determines how to best allocate resources between different uses.

• Software can figure out where the most profit will come from, what is easier, and uses the most efficient method.

Queuing Theory

• This allocates service personnel or workstations to minimize customer waiting time and service cost.

• Think of places you have queued up…where do you think we could apply this?

Network Models

• This breaks up complicated tasks into smaller parts to allow for better analysis, planning, and control.

• Think of the IBP from last semester?

Simulations

• For developing models of problems so different solutions under various assumptions can be tested.

Quantitative Analysis in Management (Today!)

• Today, large companies hire staff specialists to help management apply varying techniques.

• Software and hardware has made management a lot easier. If management is a “game of numbers,” having software do it is a benefit.

• Good judgment and appreciation of human factors has to be used with these aids.

Systems View and Contingency Thinking

• What is a system?

• How can we apply that to business and to organizations?

Systems View and Contingency Thinking

• Systems are collections of interrelated parts that function together to achieve a common purpose.

• Are businesses systems?

• A subsystem is a smaller component of a larger system.

• Do you remember what an open system is?

Open systems

• We have looked at open systems already.-LOOK AT THE BOARD.

Contingency Thinking

• Tries to match managers’ responses with problems and opportunities unique to different situations.

• There is not “one best way.”

• Appropriate way depends on the situation.

Management themes in the 21st Century

• Quality and performance excellence-Managers and workers in progressive organizations are quality conscious.-Quality and competitive advantage are linked (Obviously)

• Total Quality Management-Approach to continuous quality improvement for a total organization.

Total Quality Management

• Edward Demming – Statistical expert who was hired by various companies after the Second World War to focus on productivity. He spent a lot of time helping Japanese companies reach efficiency again.

• Joseph Juran – Spoke of the “vital few” issues instead of the “trivial many.” - Coined the “80/20 Principle” that said that 80 percent of the

problems in a company are caused by 20 percent of the operations

• These ideas were partly responsible for things like ISO and various national awards for businesses.

“Value Chains”

• A value chain is the sequence ofactivities that turn raw materialinto finished goods or services

Eight attributes for performance excellence

• 1. Bias towards action-making decisions, getting things done.

• 2. Closeness to the customer-knowing customer needs and valuing their satisfaction

• 3. Autonomy and entrepreneurship-supporting innovation, change, and risk taking

• 4. Productivity through people-valuing human resources for quality and performance

• 5. Hands-on, value-driven-having a clear sense of purpose

• 6. Sticking to the knitting-what the hell does this mean??

• 7. Simple form and lean staff -minimizing levels of management and staff personnel.

• 8. Simultaneous loose-tight policy-Another head scratcher.

Global Awareness

• Pressure for quality and performance excellence is created by a highly competitive global economy.

• This has promoted interest in new management concepts like:-Process engineering, Virtual organizations, Agile factories, Network firms.-Japanese management practices

• Adoption to Theory Z management practices.

Theory Z

• This is a theory of management that focuses on long-term employment, consensus, teamwork, career planning and development, lateral job movements.

Learning Organizations

• Modern businesses must learn to become learning organizations. This means it continuously changes and improves, and learns from experiences.

• They must have:-Mental models – Sets aside old ways of thinking-Personal mastery – becomes self-aware and open to others-Systems thinking – learns how the whole organization works-Shared vision – understanding and agreement of the plan of action-Team learning – working together to accomplish the plan.

So. ALLLLL of that said…

• 21st century managers must be:

•Global Strategists

•Masters of technology

• Inspiring leaders

•Models of ethical behaviour