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:
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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 of
activities that turn raw material
into 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