Week 1 - Assignment

CHAPTER 2 Manasement-[hought: Past and Prelent

Q uA N r I rAr I v_E I&l N 4q E_!4ENI THEORY The next wave of rnanage:ment thought moved frorn concern f<lr people to the use of quantitative toois to help plan and contrrol nearlv,everything in the organization. llhe emphasis in this new school, t]re quanrritative school of management theory', vr'as on mathernatical approaches to, manaigr:ment prob- lems. This approach vras trorn during \7orld V/ar II with reseerr,:h teams that developed radar, guidance systems. yet engines, informartion theory, and the

atomic bomb. Since then, quantitative tools have beerr ap;plied to every aspect of business.l2

Management scienr:e is the study of complex systerns,:rf perlple, tnolley, equipment, and pr<tcedures, with the goal of understandir-rg them, eLnd improving their effectiveness. l3 Nl.anagement science is a facet of quarrtita.tive rnanagement theory. Historians l.,esrtr:r llittel and Jackson Ramsey presente,C the following explanation of the marragetnent science approach:

Such studies are cc>nducted througb the use of the s'ctentifi,: tne,tl.,od, utiliz:,-

ing tools and k:nrot,:tled57e from the physical, rnather.natic:a1., and' behauioral sciences. lts ultimate purpose is to prctuide'the mtntger u'i;:l; a sountl, scientific, and quantitatiue basis for decision mahir't:g.

Management s;cience enables managers to design ,i;pecific imeetsures' such as a computer prograrn, to test or evaluate the effects a]rd effe,:ti,reness of a pro- cess or intended action. Airlines use management scie:nce to s,:h.e,Jrrle flights, t<> schedule maintenance, and to book passenger reservations. A.n rrre:r of manage- ment science cal[ec[ operations research commonly uses' mrl,Ce]s, r;irnulations, and games. For example, sophisticated cornputer models and sirnulatrons of the inter-

actions between arrd among atn.rospheric forces forecast the weathr:t: For alrother

example, through the use of several commercially available sc,ftware programs' we can predict and understand in advance the impact throuS;hc,ut a business of an expected price increase iior vrtal raw materials.

The techniques an,C trtols of maqagement science 21s 1i16rqut:otly used t<l plan, organize, staff, lead, and control production operations; this aspect of management science is krrown as operations marlagement.

'fhe management science approach ls rrlso used to direct facilities, prurchasing., investmc'nts, marketing, personnel, and research and development. l{anageraent sclence depends on rhe participation of a variety of experienced researchers and prac- titioners to gather and process inf<trmation, analyze, clperations, and develop and use the appropriate tools and techniques. Regardless of the methods, tools, and persortrrel r-rsed. however, the ultimate tcst of maln.rgemcnt Sci- ence is whether better decisions are made and mole effectil'e l)rocess.es are developed.ra

Operations Management The branch of management science that applies to manufactuning or service industries is operations marnagement. Some of the rngst corlrnojn tools of opera- tions management incluLde the following:

o Invenrory models that determine optimum storage levels andre,order points r Break-even analyses to determine levels of production ancl sales at which the

organization recaptures the total costs of developrnent anLr:l mirnufacturing

E xp I o in thel4tibfiion s ot

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quantitative school tunphasized nn$nmatical approachs to management problems

management science: The$udof compkxs$eru of people nnney, equipnent and procedurel utrih the pal of undedandirrg thed and inr, proving treir dhctircnss

operations research An area of management science

that commonly uses nndels, simulationt and Sames

operations management The brandr of management sci-

ence that applb to manufadur- ing or service indusffies

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PART I Managemenl. ConcePts

. production schedulirrg, whi,:h determines when operat:iorrs begin. and end

. production routing, whLich directs the path followed by parts and products during assembll'

You can find more ab'curt operations management in Appendix l\'

Management Information SYstems

A key ingretlient in mar:rall;ernerrt science is the trmely arrd efficien.t delivery ol'

up-to-clate informati'n, i\i os,t organizatrons utilize information tr':chnology tc'

implement, maintain, "tr.l ,,"'etst:Jtheir use of computers' '4r fiIanagement infor-

rrration systcim (MIS) is a c()nnputer-base<11 system that gives managers the infor-

mation they need to -,rk,= dei:isions. Specialists. who k^'w what the users olr

;;;;, o,,,i'.r, ni:ed maint'a.in an MIS. The Walmart chairr o'f retail stores imple-

mented a managenlent irrLli:rrmation system bv using comp.uter linl':s to connect

ir."Jl""rr..s, sirpplierr; (;r.rch as procter E< Garnble) a.d o'tlets. The system

allowed walmart to minirnize expenses and the time needed to garher and pro-

cess information about slrles atttl inventory'

Companiesthatdependorrdomestir:andforeignsuppliersar]doutletsfor their goods and serr,,ices rnu:;t know promptly and

precise [y what is happeninlg

in all vital op..urionr. ip'i'ihcut such information' manager!; cannol make timely

and appropri"r. a..oioo,r. 6;n"p,". 1-,i wil] examine info.mation technology an'C

rrru.t" g.-*t inl:orrna ti on liystems in detir il'

AssessmentFromtlre-[950s'wellrrrt<rthe19.90s,large:numbersofAmerican managers became preo,;cupi,ecL 'with quantitative

measurenlent' Thrj management

.rfbusinessafterbusinLess\^/asgivenovertoengineersandfin.anr:ialmanagers dedicated to acl,ieui.rg'ti", fl*.,ti p.ssible .ort n.,i the highLest

short-term profits'

Symbolic of this ui.#,*..r. rhe s;bstantial bonuses paid to managers accordi.g

to financial performance in each qualter.or year. A decision not barled on a qual:I-

,i,"tiu. tooI or rechr-riclrn'e 'wa's considerecl a p<lor decision' -[,his prolong"a,-i,;r.,nr. f,rcus 'n

immediate results generated significant

difficutties. l.ong-terrr investment was neglected-especially investment in

research ".d dru.l,rf,n'rr,r:,. C,,,.,prnies rignor"e<l trends di'elopinEi

overseas and'

as a result, lo,t m"rk..t l;he're to inncrv:;ttive cornpetitors' organizations forgot

the humanis- of rn. i''-lt'ttit""f apProrach antl the lessons learned from behav-

ioral manlgement ihcc"y' Cornpanies produced what they wanted to produce

in the wa1' ,n.y **t',d 'io ptt'i"tt it; they forgot about quality and their cus-

tomers. The result was clisa,strous for n]".ry fi.ni, and whole industries' Perhaps

the most <lramatic ;;;;;;1.; ,rf such industries are the Arnerican steel and aurto

manufacturers, l{owr:,rt)i,,e}lamples er:ist in el'ery indrrsrry' The losers run the

gamut, fr<yn the -ott''"' ''{ "u"li appliances

"t'd ioor*e"r to the manufacturers

of textiles and tires. In hindsight, the leison of overemphasizing the

quantitatirre management

approach is clear' it-i'"o'" the tools tha'iare important' but the results they bring

to the organization a,r,j ,th,, r:,ommunity. Management scit:nce carrt help

manaS;ers

analyzedevelop,anclirlpro'veoperat;ions'butmanagenlentsci'::ncetechniques .""rror rubrtrtui* for s,oir.,,r, llalanced

judgment and manragement experlence'

Managemen,;,.;;t; ;;;t''-t t't foigotttn or isngre{'lor^/ever' Like all pherses

of nranagement theory, rnanLagemellt S(;lence ctrntains positive a]:ipects. The vlise

manager draws upon i:h,,e best aspec:ts ,rf each managemellt theory and integrzrtes

thern with insight anrl il:nagination'