DEBRE MARKOS UNIVERSITY

COLLEGE OF BUSINESS AND ECONOMICS

  DEPARTMENT OF MANAGEMENT (MBA)

Mgt Concepts and Practices Assignment

Group Name :-
• Alefe Abate
• Endalamaw
• Mekonnen Mehertu
• Alem Asay
• Abayneh
  Submitted to: Dr yeheyess
  Bure, Ethiopia
December 2019
 Total quality management/TQM/
A core definition of total qualitymanagement
(TQM) describes a management approach to
long-term success through customer
satisfaction.
In a TQM effort, all members of an organization
participate in improving
• processes,
• products,
• services,
• and the culture in which they work.
 cond

• Dr W Edwards Deming’s definitions

of quality, total quality and total quality management (TQM):
• 1. Quality is continuously meeting customers’ needs.
• 2. Total quality is continuously meeting customers’ needs at the
lowest possible cost.
• 3. Total quality management (TQM) is meeting customers’ needs at
the lowest possiblecost through an organization’s full participation
• Total Quality Management (TQM) is a participative, systematic
approach to planning and implementing a constant organizational
improvement process.
• Its approach is focused on exceeding customers' expectations,
identifying problems, building commitment, and promoting open
decision-making among workers.
 cond
• The basic concept of TQM are :
 customers-orientation (both internal and external),
 never-ending improvement ,
 statistical control of business processes,
 upstream preventive maintenance,
 participative management,
 on going preventive action,
 cross-functional management and
 committed leadership and commitment.
 cond
• There are seven primary quality control tools which include:
• Checklists. At its most basic, quality control requires to check
off a list of items that are imperative to manufacture and sell
product.
• Fishbone diagram. ...
• Control chart. ...
• Stratification. ...
• Pareto chart. ...
• Histogram. ...
• Scatter Diagram.
 cond
• Let us have a look at the seven basic quality tools in brief.
• Flow Charts. This is one of the basic quality tool that can be used
for analyzing a sequence of events. ...
• Histogram. ... is used for illustrating the frequency and the extent
in the context of two variables.
• Histogram is a chart with columns. This represents the distribution
by mean. If the histogram is normal, the graph takes the shape of a
bell curve.
Cause and Effect Diagram. ... Cause and effect diagrams (Ishikawa
Diagram) are used for understanding organizational or business
problem causes.
• Check Sheet. ... A check sheet can be introduced as the most basic
tool for quality.
• A check sheet is basically used for gathering and organizing data.
 cond
• Scatter Diagram. ... When it comes to the values of two variables, scatter
diagrams are the best way to present. Scatter diagrams present the
relationship between two variables and illustrate the results on a
Cartesian plane.
• Control Charts. ... These types of charts can be used for monitoring any
processes related to function of the organization.
• the following conditions related to the process that has been
monitored.
• Stability of the process
• Predictability of the process
• Identification of common cause of variation
• Special conditions where the monitoring party needs to react
• Pareto Charts. used for identifying a set of priorities. You can chart any
number of issues/variables related to a specific concern and record the
number of occurrences.
 cond
• The advantages of total quality management (TQM) include:
• Cost reduction. When applied consistently over time, TQM can
reduce costs throughout an organization, especially in the areas
of scrap, rework, field service, and warranty cost reduction. ...
• Customer satisfaction. ... Since the company has better products
and services, and its interactions with customers are relatively
error-free, there should be fewer customer complaints.
• Defect reduction. ... TQM has a strong emphasis on improving
quality within a process, rather than inspecting quality into a
process.
• Morale. The ongoing and proven success of TQM, and in
particular the participation of employees in that success can lead
to a noticeable improvement in employee morale, which in turn
reduces employee turnover, and therefore reduces the cost of
hiring and training new employees.
 cond
• The objectives of TQM are:
• Decrease of mistakes in all operating areas,
• Early mistake recognition,
• Mistake prevention as a preventive step,
• Avoidance of wastes,
• Reduction of the lead times,
• Increase of the flexibility and profitability,
• Better capture and conversion of the customer's
needs,
• Contented position of the customers.
 cond

• The four pillars of the TQM

 implementation involve satisfying customer
 system/process,
 people, and
 improvement tools.
• Building on the work of founders of the TQM approach,
Creech identified what he called five pillars of TQM:
 Product (service),
 Process,
 Organization,
 Leadership and
 Commitment
 cond

• To be successful implementing TQM, an organization

must concentrate on the eight key elements:
• Ethics.
• Integrity.
• Trust.
• Training.
• Teamwork.
• Leadership.
• Recognition.
• Communication.
 cond
• The eight principles of quality management are:
• 1  Customer focus
• focus by trying to understand and meet their customers’ current and future
requirements and expectations.
• 2  Leadership
• Organizations succeed when leaders establish and maintain the internal
environment in which employees can become fully involved in achieving the
organization’s unified objectives.
• 3  Involvement of people
• Organizations succeed by retaining competent employees, encouraging
continuous enhancement of their knowledge and skills, and empowering
them, encouraging engagement and recognizing achievements.
• 4  Process approach
• Organizations enhance their performance when leaders manage and control
their processes, as well as the inputs and outputs that tie these processes
together.
 cond
•5  System approach to management
•Organizations sustain success when processes are managed as one coherent
quality management system.
•6  Continuous improvement
•Organizations will maintain current levels of performance, respond to changing
conditions, and identify, create and exploit new opportunities when they
establish and sustain an ongoing focus on improvement.
•7  Factual approach to decision making
•Organizations succeed when they have established an evidence-based decision
making process that entails gathering input from multiple sources, identifying
facts, objectively analyzing data, examining cause/effect, and considering
potential consequences.
•8  Mutually beneficial supplier relationships
•Organizations that carefully manage their relationships with suppliers and
partners can nurture positive and productive involvement, support and
feedback from those entities.
•  
 cond

• Where is TQM used?Industries Using Total Quality

Management
• With this in mind, TQM is used in many industries, including,
but not limited to, manufacturing, banking and finance, and
medicine. These techniques can be applied to all departments
within an individual organization as well.
 Balanced scorecard/BSC/

• A balanced scorecard is
• a performance metric used to identify, improve, and
control a business's various functions and resulting
outcomes.
• It was first introduced in 1992 by David Norton and
Robert Kaplan, who took previous metric performance
measures and adapted them to include nonfinancial
information.
• The balanced scorecard involves measuring four main
aspects of a business: learning and growth, business
processes, customers, and finance.
 cond
• What was new about balanced scorecard was that
• it provided a simple, pedagogic structure for assessing such
values.
• When Robert Kaplan and David Norton launched the concept
of the balanced scorecard in the Harvard Business Reviewin
1994 and later in a book under the title of their concept, they
postulated the idea of organizational control on a basis of four
perspectives/ components /:
– finance,
– learning and growth,
– customers and
– internalbusiness processes.
 cond
The balance in balanced scorecard is first and foremost the
balance between financial and non-financial values
• For a more comprehensive appreciation of the different
perspectives of organizational control, we can divide them into
. internal, external and profit perspectives.
Minor perspectives commonly grouped under these three
categories
INTERNAL PERSPECTIVE
• Processes
• Efficiency
• Employee
• Innovation/ renewal/learning
• Organization
• Products
• Environment/quality
 cond

EXTERNAL PERSPECTIVE
• Customer
• Relations/stakeholders
• External business environment
• Suppliers
• Community
PERFORMANCE PERSPECTIVE
• Finance
• Economy
• Owners
• Profitability
 cond
• However, the balance in balanced scorecard is of a more
traditional character in that
it pits leading metrics against lagging metrics.
– Leading metrics are measures that refer to earlier parts of
a process and give early indications of the direction a
company is taking,
– while lagging metrics measure the results.
– If we assume that happy employees make for more
satisfied customers, and that this in the long-term will
result in better profitability,
– then co-worker satisfaction is a leading metric while
profitability is a lagging metric.
 cond

– Leading metrics are often found in the internal and, possibly,

the external perspectives,
– while lagging metrics are to be found in the profitability
perspective.
• Apart from juggling the financial against the non-financial, and
leading metrics against lagging metrics, the balanced scorecard
aims for a balance between internal and external focus.
• The balanced scorecard goals
• help managers make better allocation and prioritizing decisions,
• enabling them to see exactly which initiatives are necessary for
meeting organizational goals.
• The fourth aspect of balanced scorecard incorporates reviews
and feedback from customers, internal processes, and growth
 cond

• A popular model for working with balanced scorecard is to describe,

for each perspective:
1. the long-term goals of the organization.
2. what success factors have been established to achieve these
goals.
3. what activities should be carried out to achieve goals.
4. what indicators should be measured to monitor development.
7 Benefits of a Balanced Scorecard
• Better Strategic Planning.
• Improved Strategy Communication & Execution
• Better Alignment of Projects and Initiatives.
• Better Management Information.
• Improved Performance Reporting.
• Better Organisational Alignment.
• Better Process Alignment.
 Bench marking
• A benchmark is a term used in surveying and means a fixed point, i.e. a point –
often red – marked out in the bedrock or some other immovable mass.
• It is used as a reference for establishing altitudes and locations for buildings, and
other construction work.
• Because it comes up with reference points where none previously existed,
benchmarking has become deservedly popular.
• Benchmarking is the practice of comparing business
processes and performance metrics to industry bests and
best practices from other companies. Dimensions typically
measured are quality, time and cost. ...
• four primary types of benchmarking:
• internal,
• competitive,
• functional, and
• generic.
 cond
• Internal benchmarking is a comparison of a business
process to a similar process inside the organization.
• Competitive benchmarking is a direct competitor- to
competitor comparison of a product, service, process,
or method.
• Functional benchmarking is a comparison to similar or
identical practices within the same or similar functions
outside the immediate industry.
• Generic benchmarking broadly conceptualizes
unrelated business processes or functions that can be
practiced in the same or similar ways regardless of the
industry.
 cond

• . Internal benchmarking
• Benefits
• most cost efficient
• relatively easy
• low cost
• fast
• good practice/training with benchmarking process
• information sharing
• easy to transfer lessons learned
• common language
• gain a deeper understanding of your own process
• makes a great starting point for future benchmarking studies
 cond

• Challenges
• fosters mediocrity
• limits options for growth
• low performance improvement
• can create atmosphere of competitiveness
• not much of a stretch
• internal bias
• may not yield best-in-class comparisons
 cond

• Competitive benchmarking
• Benefits
• comparing like processes
• know your competition better
• possible partnership
• useful for planning and setting goals
• similar regulatory issues
• Challenges
• difficult legal issues
• relatively low performance improvement
• threatening
• limited by trade secrets
• may provide misleading information
• may not get best-in-class comparisons
• competitors could capitalize on your weaknesses
 cond

• Functional benchmarking
• Benefits
• provides industry trend information
• quantitative comparisons
• better improvement rate; about 35
• Challenges
• diverse corporate cultures
• great need for specificity
• not invented here. syndrome
• common functions can be difficult to find
• takes more time than internal or percent
• must be able to visualize how to adapt the best practices
 cond

• Generic benchmarking
• Benefits
• high payoff; about 35 percent
• noncompetitive/nonthreatening
• broad,new perspective
• innovative
• high potential for discovery
• examines multiple industries
• can compare to world
 cond

• Challenges
• difficult concept
• can be difficult to identify best-in- class
• takes a long time to plan
• known world-class companies are inundated
with requests
• quantum changes can bring high risk, escalate
fear
• class organizations in your process
 cond
• The use and misuse of benchmarking may be
illustrated at four different levels:
1. De-standardized key ratio sresult in the
comparison of metrics that do not reflect
the same work content, so that what we get
is
• not a comparison between apples and apples
but rather between apples and whole baskets
of fruit. Comparisons of this kind are far too
common, particularly in the public sector.
 cond
2. Standardized key ratios. Obviously, it is much better to
have carried out a standardization process, i.e. to end
up with comparable figures.
– This variation of benchmarking is extremely useful for
diagnostics – identifying which areas should be
chosen for careful examination.
3. Genuine benchmarking is just as much about
standardized key ratios as documented procedures with
comparable work content or causality. By this we mean
not only that somebody performs better, but also
whyand how..
 cond
• 4. Benchlearning is a methodology developed by Karlöf
Consulting that can help organizations further on their
way towards progress through participation and the
learning process.
• In its most developed form, benchmarking is not merely
about making comparisons with role models. It is also about
learning from mistakes.
 cond

• uses of benchmarking:
• 1. Calibration of one’s efficiency against others
2. Source of inspiration to improve procedures
3. Source of expertise in any given situation,
e.g. strategy development
• 4. Diagnostic search tool to improve areas of
the whole organization
 cond

• Some criticisms of benchmarking

• On several occasions we have encountered
criticisms of benchmarking generally expressed as
follows:
1. Benchmarking leads to imitation and is not
conducive to the learning process.
2. You can only become as good as your best
competitor, which won’t give you a competitive
edge.
”Benchmarking is not imitation and almost never
consists of a comparison with competitors,,
 Business Process Re-engineering (BPR)
• Reengineering is the fundamental rethinking and radical
redesign of business processes to achieve dramatic
improvements in critical, contemporary measures of
performance such as cost, quality, service and speed”. ...
• “A business process is a series of steps designed to
produce a product or a service.
• Promoted by Hammer and James Champy published
book Reengineering the corporation. ... Meaning
Business process reengineering (BPR) is the analysis and
redesign of workflows within and between enterprises
in order to optimize end-to-end processes and automate
non-value-added tasks.
 cond

Principles of BPR
1.Organize around outcomes, not tasks
2.Identify all the organization's processes and
prioritize them in order of redesign urgency
3.Integrate information processing work into the
real work that produces the information
4.Treat geographically dispersed resources as
though they were centralized
5.Link Parallel activities in the workflow instead
of just integrating their results
 cond
6.Put the decision point where the work is
performed, and build control into the process
7.Capture information once and at the source
Advantages of BPR
• BPR revolves around customer needs and helps
to give an appropriate focus to the business.
• BPR provides cost advantages that assist the
organisation's competitive position. ...
• BPR can help to reduce organisational
complexity by eliminating unnecessary activities.
 cond

Objectives Of Business Process Reengineering

• BPR enable the entity to increase
effectiveness and thereby deliver higher
quality products to the customer.
• BPR enables the company to improve
efficiency in the production processes
involved.
• Cost saving can be achieved in the long run
with the help of BPR
 cond

The Six Key Steps of Business Process Reengineering

• Define Business Processes.
• Analyze Business Processes.
• Identify and Analyze Improvement
Opportunities.
• Design Future State Processes.
• Develop Future State Changes.
• Implement Future State Changes
 cond
BPI vs BPR
 Kizen
Kizen:-continuous improvement
•kizen, according to its founder masaaki
imai it is as much as a philosophy as it is a
method for the development of
organizations.
•It applied to private life among familly and
friends.
•It composed of two “Japanese”signs
KAI:means change and ‘ZEN’ means good as
well as wisdom.
 con’t

The term can be roughly translated as

changes for better . It indicates the
continuous improvement that helps to
achieve long term success and does not
require investment. It is very important for
management and co- workers to participate
in the work of improvement. According to
imai kizen changes the way people think
and work and also have a close relation
with total quality management.
 Con’t

•According to imai kaizen can be regarded

as a collective term for a number of
contemporary trends among these are:-
• TPM (Total productive maintainance)
• TQM ( total quality control)
suggestion schemes quality circles
customer orientation
 Con’t

Robotization automation JIT(JUST

in time production) zero defects
small group schemes quality
improvement employees as a
partners of management work
discipline improvement in
productivity
 Con’t
• Product development kanban
planning system involving two
control cards for JIT systems
some criticisms on kaizen
• small ,continuous improvement are
not enough in today's business
climate and changing world.
 some criticisms on kizen

kizen was product of the Japanese

manufacturing industry and could be difficult
to apply to service companies
kizen is vague and woolly minded, it
apparently applies to every thing but in so
doing becomes meaningless
the concept was developed to explain japan
,superior business achievements, if things go
badly for japan it will lose its attraction.
 Knowledge management
km is a term that has become
popular since the middle of
the1990,s
what is knowledge? Km:- is
information that has value.
GARDNER(1995) has proved an
nexus of conditions on the them
of km as applied in the business:-
 Con’t

• know what information required know how

information is to be used.
• know why certain information is required.
• know where information for aparticular
purpose can be found.
• The diffrence b/n data, information and
knowledge
data:- symbols that have not bee
interpreted or put into meaning full
contexts.
 Con’t
• INFORMATION:-is data has been given a
meaning.
KNOWELDGE:-is what makes it possible
for human binges to create meaning
from data and there by generate new
information.
Classification of knowledge
explicit and tacit knowledge
 Con’t
Explicit(codified )knowledge:- it can
be expressed and communicated
whether it is in the form of
documented experience of a
project or success factors relating to
past improvement work.
Tacit knowledge :- it comprises what
can not be codified and
communicated between individuals
 Con’t

•according to michael polani ‘’we know

more than we can express ‘’ what we
are able to express is codified
knowledge and what we know but
can not express is tacit knowledge.
•The transformation of tacit knowledge
to tacit knowledge generates new
knowledge trough
 Con’t
•Dialogue, reflection and learning is
called socialization. this kind of
transfer of tacit knowledge can take
place with out the use of knowledge.
•The transformation from tacit to
codified (explicit) knowledge implies
expression this is called externalization.
 Con’t
The transformation of codified
knowledge to tacit knowledge implies
that some one interprets and
assimilates codified knowledge by for
example reading a book and reflecting
on what has been read this is called
internalization. The transformation of
knowledge from codified to codified is
called combination.
 Con’t

This can be transformed in this way without

the need for human intervention but it could
be argued that this kind of transformation
occurs when two databases are combined.
The difference between knowledge
management and information management
1. information management focus on how
codified knowledge is handled, transferred and
made available through systems and
databases.
 Cont….
2. km focus instead on the creation of the right conditions
for the interpretation and development of both tacit
and explicit knowledge.
In this respect knowledge management has much in
common with learning organization. Bench learning is
another concept the aims of which are closely related
to knowledge management.
Bench learning is a method for the structure transfer
of knowledge and learning between groups and
individuals.
here the right conditions are created for transfer of
knowledge both in its codified form and face to face,
thus facilitating the transfer of tacit knowledge.
 McKINSEY, S 7s MODEL

mckinsey,s 7s model can not really be

considered as a pure strategy model,
but rather as away of thinking about
development or remodeling of
organizations. Its name comes from the
seven factors that mckinsey found
essential in the context of organization
development :these are the following
 Con’t
• Strategy, skills, shared values, structure,
systems ,staff and style
normally, when a company sets out to
change its organization the seven S,s are
dealt with in a given sequence.
• In the first phase the strategy is usually
determined. The next step is to define
what the organization must be especially
good at in order to be able to
 Con’t
Implement its strategy, in other words,
what skills it must develop or otherwise
acquire.
The final step is to determine what
changes are needed in other five factors to
make the change a successful one. strategy
tells a company how it must adapt it self to
its environment and use its organizational
potential,
 Con’t
Whereas the analysis of skill
answers the question of how the
strategy ought to be implemented.
These skills represent the link
between the strategy and the new
era, while at the same time they
define the changes that need to be
made in the other five S,s
 Con’t

STRUCTURE:-is perhaps the best known of

the concepts relating to organizational
change .It refers to the way business areas,
divisions and units are grouped in relation
to each other. This is too ,is perhaps the
most visible factor in the organization, and
that is why it is often tempting to begin by
changing the structure.
 Con’t
SYSTEMS:-It refers to the procedures or
processes which exist in a company and which
involve many people for the purpose of
identifying important issues, getting things done
or making decisions. systems have a very strong
influence on what happens in most
organizations, and provide management with
powerful tool for making changes in the
organizations.
 Con’t

STAFF:- the staff factor is concerned with

the question of what kind of people the
company needs. This is not so much a
question of single individuals as of the total
know-how possessed by the people in the
organization.
STYLE:- is one of the lesser known
implements in the management tool box. It
can be said to consist of two elements:-
 Con’t

Personal style and symbolic actions. Thus

management style is not a matter of
personal style but of what the executives in
the organization do how they use their
personal signaling system. SHARD VALUE:-It
refers to one or more guiding themes of the
organization ,things that every body is aware
of as being specially important and crucial to
survival and success of the organization.
 MERGERS AND ACQUISITIONS
 the acquisition, merging and sales of
companies often come under the umbrella of
structural business.
 They have sometimes been monumental and
sometimes disastrous.no value is created
through mergers and acquisitions.
Comparisons of share prices and other
relevant values before and after mergers
showed that both parties
 Con’t
• Come out losers, but the buyer was the loser
much more often than the seller.
• It should remembered that these results are of a
general character and in no way definitive. Five
motives for acquisitions.
1. to fill a gap in portfolio
2. to invest a surplus
3. To strengthen the business unit
4. to build an empire
5. growth and change
 Mintezberg Five Structure & Strategy Analysis

The famous management expert, Henry Mintzberg, proposed a fivec on

figurations approach to strategic management wherein any organization can
be broken down into five core elements or parts. The interactions between
these parts determine the strategy of the organization.
• The five parts according to Mintzberg are:
The Operating Core which consists of those doing the basic work and
whose output can be directly linked to the goods and services that the
organization makes and sells. According to Mintzberg, this part is common
to all organizations since the core work must be done and hence, the
operating element has to be put in place.
The Strategic Apex, which is composed of senior management and the
senior leadership, which provides the vision, mission, and sense of purpose
to the organization. Indeed, it can be said that this part consists of those
men and women who shape and control the destinies of the organization.
 Cont…
The Middle Level Managers who are the “sandwich” layer between the
apex and the operating core. This element is peopled by those who take
orders from above and pass them as work to the operating core and
supervise them. In other words, they perform the essential function of
acting as a buffer between the senior management and the rank and file
employees.
The fourth element is the Technostructure that is composed of planners,
analysts, and trainers who perform the intellectual work. This element
provides the advice for the other parts and it is to be noted that they do
not do any work but function in an advisory capacity.
The final element is the Support Staff who perform supporting roles for the
other units and exist as specialized functions that are responsible for the
peripheral services in the organization.
• The key aspect about these configurations is that it can be used to predict
the organizational structure of any organization and used to model the
strategy that the organization follows as a result of the interaction between
these parts.
 Cont…

For instance, in many service sector companies, the organization

structure is very fluid and interchangeable with the result that the middle
managers perform crucial tasks and the apex gets directly involved in
running the organization.On the other hand, in many manufacturing
companies, it is common to find the Technostructure prevailing as the
organizational processes are bureaucratic and have mechanistic
characteristics which makes the organization function like a machine. This
is the configuration in many public sector and governmental organizations
as well.Finally, the startups have a structure that is composed of the
strategic apex and the supporting staff in their initial years of operation as
the organization structure is yet to be formalized.The key implications of
Mintzberg’s configurations are that it gives us a useful model to describe
how the organizational structure affects strategy. As many theoretical
models depend on external strategy alone, this model is preferred by
those who want to understand how internal dynamics produce strategy.
 Performance Management
Definition: Performance Management can be defined as a
process which continuously identifies, measures and
developsthe performance of the workforce in the organization.
And to do so, each individual’s performance and objectives are
connected with the overall mission and goals of the enterprise.
Hence, the two key elements of performance management are:
Continuous process
Link to mission and goals
 In performance management, the managers try to figure out,
the existing performance level of the employees and works on
improving that level. It is a systematic assessment of the
performance of an employee and using the assessment to
better the performance over time.
Cont…
 Cont…
Performance management is commonly misconstrued with
performance appraisal, which is a process of evaluating the
performance of the workforce and includes feedback/review
on an employee job performance. However, getting feedback is
not sufficient. There are three more steps involved in the
accomplishment of the process, which are:
 Performance Interview
 Archiving Performance Data
 Use of Appraisal Data
These three activities along with the feedback are the essence
of the process, when undertaken in an organized way, the
process turns out as Performance Management System (PMS).
 Concept of Performance Management
As a communication system, it is developed to assist
employees in succeeding. It not just requires direction,
from the end of managers and supervisors, but also
needs active participation on the part of employees.
• It makes sure that employees are known about their
key job functions, aware of the performance level
expected, get constant feedback on their
performance, have opportunities for training and
development, get ratings on their performance and
reward thereon, in just and fair manner.
• North Carolina Rating Scale
Cont…
 Cont…

North Carolina Rating Scale is a five point

performance management rating scale, which
guides the performance functions, expectations,
and appraisals.
 Cont…

• Outstanding Performance (O): Performance level supersedes the expected

level. The employee is doing an outstanding job and the performance goes
beyond expected level, because of the employee’s efforts and skills.
• Very Good Performance (VG): Performance level fulfills established job
expectations and in many ways exceeds it.
• Good Performance (G): Performance level of the employee, is in alignment
with the job expectations set by the organization, the employee is said to be
doing a good job.
• Below Good Performance (BG): The level of performance of employee
meets a few job expectation, but not all the parameters are met. It is said
that employee’s performance is at a minimal level and improvements are
required.
• Unsatisfactory Performance (U): The level of performance is below a certain
level, i.e. he/she fails to fulfill the established standards. It is said that the
employee is not performing well at the level expected and requires high
supervision and direction.
 Cont…

The primary focus of the performance

management is towards the achievement of
results. It highlights the difference between
being engaged and producing results, meaning
that, when one is busy, it does not mean that
outcome is generated. It is often seen that
employees seem to be very busy, but when it
comes to performance, the results are against
what is expected. So, performance
management, is a must for every organization.
 Six Sigma
• Six Sigma is a quality-control methodology developed in
1986 by Motorola, Inc. The method uses to limit mistakes
or defects in and process. Six Sigma emphasizes cycle-time
improvement while at the same time reducing
manufacturing defects to a level of no more than 3.4
occurrences per million units or events. In other words, the
system is a method to work faster with fewer mistakes.
• Six Sigma points to the fact that, mathematically, it would
take a six-standard-deviation event from the mean for an
error to happen. Because only 3.4 out of a million
randomly (and normally) distributed, events along a
bell curve would fall outside of six-standard-deviations
(where sigma stands in for "standard deviation").
 Cont…
 In recent years, Six Sigma has evolved into a more general business-management
philosophy, focused on meeting customer requirements, improving customer
retention, and improving and sustaining business products and services. Six Sigma
applies to all industries. Many vendors, including Motorola itself, offer Six Sigma
training with the special certifications carrying the names of yellow belt, green
belt and black belt.The differing definitions below have been proposed for Six
Sigma, but they all share some common threads:
 The use of teams that are assigned well-defined projects that have a direct impact
on the organization's bottom line.
 Training in "statistical thinking" at all levels and providing key people with
extensive training in advanced statistics and project management. These key
people are designated "Black Belts." 
Review the different Six Sigma belts, levels and roles .
 Emphasis on the DMAIC approach to problem solving: define, measure, analyze,
improve, and control.
 A management environment that supports these initiatives as a business strategy.
 Cont…
 Philosophy: The philosophical perspective of Six Sigma
views all work as processes that can be defined, measured,
analyzed, improved, and controlled. Processes require
inputs (x) and produce outputs (y). If you control the inputs,
you will control the outputs. This is generally expressed as y
= f(x).
 Set of tools: The Six Sigma expert uses qualitative and
quantitative techniques or tools to drive process
improvement. Such tools include
statistical process control (SPC), control charts,
failure mode and effects analysis (FMEA), and
process mapping. Six Sigma professionals do not totally
agree as to exactly which tools constitute the set.
 Cont…
 Methodology: This view of Six Sigma recognizes the
underlying and rigorous approach known as
DMAIC (define, measure, analyze, improve and control).
DMAIC defines the steps a Six Sigma practitioner is
expected to follow, starting with identifying the problem
and ending with the implementation of long-lasting
solutions. While DMAIC is not the only Six Sigma
methodology in use, it is certainly the most widely
adopted and recognized.
 Metrics: In simple terms, Six Sigma quality performance
means 3.4 defects per million opportunities (accounting
for a 1.5-sigma shift in the mean).
Cont…
 Z- theory of Management
• Theory Z represents a humanistic approach to
management. Although it is based on Japanese
management principles, it is not a pure form of
Japanese management. Instead, Theory Z is a hybrid
management approach combining Japanese
management philosophies with U.S. culture. In
addition, Theory Z breaks away from McGregor's
Theory Y. Theory Y is a largely psychological
perspective focusing on individual result of employer-
employee relationships while Theory Z changes the
level of analysis to the entire organization.
 Cont…
• According to Professor Ouchi, Theory Z organizations exhibit a strong,
homogeneous set of cultural values that are similar to clan cultures. The clan
culture is characterized by homogeneity of values, beliefs, and objectives. Clan
cultures emphasize complete socialization of members to achieve congruence
of individual and group goals. Although Theory Z organizations exhibit
characteristics of clan cultures, they retain some elements of bureaucratic
hierarchies, such as formal authority relationships, performance evaluation,
and some work specialization. Proponents of Theory Z suggest that the
common cultural values should promote greater organizational commitment
among employees. Theory Z has been called a sociological description of the
humanistic organizations advocated by management pioneers such as Elton
Mayo, Chris Argyris, Rensis Likert, and Douglas McGregor.
• The primary features of Theory Z are summarized in the paragraphs that
follow.
 LONG-TERM EMPLOYMENT

• Traditional U.S. organizations are plagued with short-term

commitments by employees, but employers using more traditional
management perspective may inadvertently encourage this by
treating employees simply as replaceable cogs in the profit-making
machinery. In the United States, employment at will, which
essentially means the employer or the employee can terminate
the employment relationship at any time, has been among the
dominant forms of employment relationships. Conversely, Type J
organizations generally make life-long commitments to their
employees and expect loyalty in return, but Type J organizations
set the conditions to encourage this. This promotes stability in the
organization and job security among employees.
 CONSENSUAL DECISION MAKING
• The Type Z organization emphasizes
communication, collaboration, and consensus
in decision making. This marks a contrast from
the traditional Type A organization that
emphasizes individual decision-making.
 INDIVIDUAL RESPONSIBILITY

• Type A organizations emphasize individual

accountability and performance appraisal.
Traditionally, performance measures in Type J
companies have been oriented to the group.
Thus, Type Z organizations retain the emphasis
on individual contributions that are
characteristic of most American firms by
recognizing individual achievements, albeit
within the context of the wider group.
 SLOW EVALUATION AND PROMOTION
• The Type A organization has generally been
characterized by short-term evaluations of
performance and rapid promotion of high
achievers. The Type J organization, conversely,
adopts the Japanese model of slow evaluation
and promotion.
INFORMAL CONTROL WITH ORMALIZED MEASURES

• The Type Z organization relies on informal

methods of control, but does measure
performance through formal mechanisms.
This is an attempt to combine elements of
both the Type A and Type J organizations
 MODERATELY SPECIALIZED CAREER PATH

• Type A organizations have generally had quite

specialized career paths, with employees
avoiding jumps from functional area to
another. Conversely, the Type J organization
has generally had quite non-specialized career
paths. The Type Z organization adopts a
middle-of-the-road posture, with career paths
that are less specialized than the traditional
U.S. model but more specialized than the
traditional Japanese model.
 HOLISTIC CONCERN
• The Type Z organization is characterized by
concern for employees that goes beyond the
workplace. This philosophy is more consistent
with the Japanese model than the U.S. model.
• Read more:
https://www.referenceforbusiness.com/mana
gement/Str-Ti/Theory-Z.html#ixzz67JQsGTEN
 Outsourcing

Definition: The practice of having certain job functions done outside

a company instead of having an in-house department or employee
handle them; functions can be outsourced to either a company or
an individual. Outsourcing has become a major trend in human
resources over the past decade.
Wise outsourcing, however, can provide a number of long-term benefits:
Control capital costs. Cost-cutting may not be the only reason to
outsource, but it's certainly a major factor. ...
Increase efficiency. ...
Reduce labor costs. ...
Start new projects quickly. ...
Focus on your core business. ...
Level the playing field. ...
Reduce risk.
 Outsourcing

Why do we need outsourcing?

At times, outsourcing includes the exchange of representatives from
the organization to the outsourcing organization. There are many
reasons why a company may choose to outsource certain business
functions. Some of the most common reasons include: Lessening
and controlling working expenses
Is outsourcing a good idea?
When Outsourcing Is Not A Good Idea. Outsourcing can really be
beneficial for a number of reasons. Some companies enjoy benefits
such as reduced labor costs, larger workforces, access to industry
experts and increased flexibility through outsourcing. ... One of the
primary advantages of outsourcing is a cost reduction.
 Globalization in Business
Globalization refers to the changes in the world where we
are moving away from self-contained countries and toward
a more integrated world. Globalization of business is the
change in a business from a company associated with a
single country to one that operates in multiple countries.
Impact of Globalization
Imagine for a moment that you run a business that
produces digital cameras. How would globalization impact
your company?
The impact of globalization on business can be placed into
two broad categories: market
globalization and production globalization.
 Globalization in Business
Market globalization is the decline in barriers to selling in
countries other than the home country. This change will
make it easier for your company to begin selling products
internationally, since lower tariffs keep consumer prices
lower and fewer restrictions when crossing borders makes
it easier for a company to enter a foreign market. It also
means that companies must consider other cultures when
developing their business strategies and potentially adjust
the product and marketing messages if they aren't
appropriate in the target country. This may not be an issue
in the camera industry, but a hamburger company entering
India would definitely need to revisit their product and
strategies to be successful
 Globalization in Business
The Benefits of Globalization are:
more International Trade.
more goods & services generally available at lower prices.
higher quality goods & services more generally available.
more Wealth in the world.
lower Cost of Living.
higher Standard of Living.
Waste Reduction from greater Economic Efficiency.
 Globalization in Business

What is globalization give an example?

Generally, the globalization could be
Financial Globalization,
Economic Globalization,
Technological Globalization,
Political Globalization,
Cultural Globalization,
Ecological Globalization, and
Sociological Globalization, etc. the above-
mentioned example are some of
the examples of globalization in the different
 Entrepreneurship
• Opinions vary as to what makes
• an entrepreneur, but we can mention some of the things that entrepreneurs do.
They:
1. build and create organizations.
2. combine things in new ways.
3. actively study possibilities.
4. deal with uncertainty.
5. get elements in production to work together.
6. identify and take action in respect of shortcomings or gaps in the market. It seems
that the concept of entrepreneurship can mean different things to different
people. Even researchers have failed to agree on a definition of the word.
Schumpeter reasoned that entrepreneurship involved the creative identification
and development of:
1. new products.
2. new production methods.
3. new markets.
4. new forms of organization.
 Con’t
• The word entrepreneurship has now entered the vocabulary of management
circles, normally carrying the meaning of new deas and creative development in
the framework of large organizations. Peter Drucker, the well-known consultant,
has come up with a contemporary definition. Drucker says that entrepreneurship
is really about seizing the possibilities that come with change, rather than
bringing about change itself. Drucker defines an entrepreneur as a person who
”…always searches for change, responds to it and exploits it as an opportunity.”
Change may be found everywhere, in technology, consumer behaviour and social
norms. Entrepreneurship is often interpreted as another form of capitalism. The
capitalist and entrepreneur may well be found in one and the same person 138
but a closer look reveals two completely different values. The confusion of roles
may come from the fact that entrepreneurs often earn a lot of money and
appear to be capitalists in the sense that they have been successful enough to
finance their own companies. Manfred Kets de Vries in an article in the Harvard
Business Review entitled ‘The Dark Side of Entrepreneurship’ (1985) reflects on
the darker side of entrepreneurship.
 Con’t
• He believes that the personal qualities, which make for a
successful entrepreneur are the same ones that contribute to his
or her demise. Entrepreneurs are often control freaks with an eye
for detail, two important attributes for building an organization.
But these qualities can be a drag on an organization’s growth if the
entrepreneur is not able
• to survey everything that happens and becomes frustrated as a
result. To understand how familiarity with entrepreneurship can
best be used, we have to go back to what motivates people. David
McClelland has identified three different motivational needs:
1. Power
2. Affiliation
3. Achievement
 Con’t
• Someone motivated by power wants to be in authority and have influence over others, and
wants to see his or her ideas prevail. Good performance is secondary; the important thing is
to have made an impact. The authority-motivated driver produces a need to dominate over
his or her environment. The affiliation-motivated person wants to have friendly relationships
and be held in popular regard, and sees interaction with other people as his or her
motivational force. To be affiliation-motivated does not necessarily imply a lack of power or
disregard for good performance, but the over-riding preoccupation is to interact with others
rather than to attain power or out-perform his associates. The achievement-oriented person
too may have good relationships with others, as well as being both powerful and influential,
but what drives them
• is the desire to do a good job. It is worth noting that the importance of good performance is
growing in the world, not only in business but also in public-sector and non-profit
organizations where performance is now a measure of the very ability to exist. The reason for
this is something called 139 metacompetition, a development where resources are limited
and
• customers’ time and money are objects of competition. Some motivation inhibitors are:
• Stagnation
• Bureaucracy and ceremony
• Planning and negotiations with unions
• Reasoning, tactics and diplomacy
 Electronic Business (E-Business)
• Definition - What does Electronic Business (E-Business) mean?
• Electronic business (e-business) refers to the use of the Web, Internet,
intranets, extranets or some combination thereof to conduct business. E-
business is similar to e-commerce, but it goes beyond the simple buying and
selling of products and services online. E-business includes a much wider
range of businesses processes, such as supply chain management, electronic
order processing and customer relationship management. E-business
processes, therefore, can help companies to operate more effectively and
efficiently.
• Electronic business is a broader term that encompasses other common
terms such as e-commerce and e-tailing. As more of companies' sales,
marketing and other internal business processes are conducted digitally,
electronic business processes such as customer relationship management
(CRM), enterprise resource planning (ERP), and content management are
becoming increasingly important. This shift has also been facilitated by
improved security measures for online transactions.
 Con’t
• Types of E-Business Applications
E-business applications are web-based applications that can be
implemented to perform tasks for businesses. These applications are not
just for online businesses, but also for traditional ones. Behind the
scenes, e-business applications usually rely on relationships between
company servers and end user computers. Common e-business
applications provide some way for a company to interact with consumers
on the web or to perform tasks related to meeting consumer needs (such
as online tracking of postal shipments).
• Application Server
One example of an e-business application is a when a company builds an e-
business application in which users interface with the application only
through a web browser. The application server is responsible for returning
HTML content (information) to users based on their requests. This server
also collects information entered by users in their web browsers. The
exchange of information between client and server and server and client
always occurs through a web server.
 Con’t
• What are the benefits of e business?
• To open an e-business is to pursue a dream of
balancing professional goals with personal freedoms
at a pace you can live with.
• E-Business Saves Money
• Better Communication and Faster Decision-Making. ...
• The Office can be anywhere. ...
• Cheaper Marketing, More Control. ...
• Less Restrictive Hours....
• More Avenues for Making Money
 change and innovation
• Innovation is about making things better, faster, or cheaper than
your competition. It drives ongoing improvements and may help
unleash a new idea that changes the rules. Companies need to
approach innovation and change effectively and proactively
• The key difference between change and innovation
• The key difference between change and innovation is that change
is the difference in a state of affairs related to different points of
time whereas innovation is something original and new, being
introduced to the world. It can be new ideas, new devices or new
processes. Change is regarded to be permanent, and all  things in
the universe are thought to change. Change is inevitable for
development and growth. Innovation is also crucial as it opens
new possibilities. Change drives innovation and innovation drives
change. Innovation creates endless opportunities and the change
assists in making use of such endless opportunities.
 What is Change?
• Change can be defined as the “difference in a state of affairs related to different
points of time”. Time dictates change, so the change needs to be conceptualized at
different stages of a certain factor. It may be organizational or personal. The change
could be an act of making (intentional) or becoming (natural). Change always would
have two stages. One is the previous or old stage, and the other is the new stage
(after the change). Knowledge of both stages is a prerequisite to confirm a change
has taken place. It’s a comparison of different stages and evaluation of the
differences between such stages. The change could have been positive or negative.
iPhone 5 has been replaced with iPhone 6 which is a good example of change.
• Change can be looked in different context. We will be looking at it in a management
context. Management is the process of planning, organizing, monitoring and
controlling in order to achieve organization goals through effective use of available
scarce resources. The element of controlling is all about change, and it creates a
never ending cycle. If the present results are not in line with the objectives of the
organization, new plans are devised and carried forward which is a change in the
management context. But, change is not the purpose of management. Change is
unintentional and occurs naturally in the process of management.
 What is Innovation?
• Innovation can be new ideas, new devices or new processes. It can be defined as
something original and new being introduced to the world. In a management context,
Peter Drucker (2002) has noted that innovation is a specific function of 
entrepreneurship and its ability to create new wealth, producing resources or improving
the wealth creation ability of existing resources. Innovation can be intentional or
accidental. Innovation is not a value addition, but the a creation of new value.
Innovation begins with the analysis of the sources of new opportunities. The
opportunities are the unsatisfied needs. Through innovation, these needs are being
satisfied.
•  Innovation is said to be an independent factor. It can’t be judged as it will not have any
close or related product to be compared with as it’s new and invented to satisfy an
unsatisfied need. So, it’s independent in nature. Further, it’s believed that innovation
stems from perceptional change rather than reality change. Reality change is a
continuous and natural process. But, perception or imaginary change is discontinuous,
unrelated and new. This creates revolutionary ideas which in turn lead to innovation.
For example, the perceptional change of how we can travel lead to the invention of
aircraft. The aircraft had no comparison as only road vehicles were present at that time,
so we can understand the independent factor of innovation also in this case.
 Social responsibility
• Social responsibility is an ethical framework and suggests that an
entity, be it an organization or individual, has an obligation to act for
the benefit of society at large. Social responsibility is a duty every
individual has to perform so as to maintain a balance between the
economy and the ecosystems. A trade-off may exist between economic
development, in the material sense, and the welfare of the society and
environment. Though this has been challenged by many reports over
the past decade. Social responsibility means sustaining the equilibrium
between the two. It pertains not only to business organizations but also
to everyone whose any action impacts the environment. It is a concept
that aims to ensure secure healthcare for the people living in rural
areas and eliminate all barriers like distance, financial condition,
etc.  This responsibility can be passive, by avoiding engaging in socially
harmful acts, or active, by performing activities that directly advance
social goals. Social responsibility must be intergenerational since the
actions of one generation have consequences on those following.
 Con’t
• Businesses can use ethical decision making to secure their businesses by
making decisions that allow for government agencies to minimize their
involvement with the corporation.  "A significant element of current thinking
about privacy, however, stresses "self-regulation" rather than market or
government mechanisms for protecting personal information". According to
some experts, most rules and regulations are formed due to public outcry,
which threatens profit maximization and therefore the well-being of the
shareholder, and that if there is not an outcry there often will be limited
regulation.
• Some critics argue that corporate social responsibility (CSR) distracts from
the fundamental economic role of businesses; others argue that it is nothing
more than superficial window-dressing, or "greenwashing"; others argue
that it is an attempt to pre-empt the role of governments as a watchdog
over powerful corporations though there is no systematic evidence to
support these criticisms. A significant number of studies have shown no
negative influence on shareholder results from CSR but rather a slightly
negative correlation with improved shareholder returns.
 Con’t
• There is no clear-cut definition of what CSR comprises. Every
company has different CSR objectives though the main motive is
the same. All companies have a two-point agenda—to improve
qualitatively (the management of people and processes) and
quantitatively (the impact on society). The second is as important
as the first and stake holders of every company are increasingly
taking an interest in "the outer circle"-the activities of the company
and how these are impacting the environment and society. The
other motive behind this is that the companies should not be
focused only on maximization of profits.
• While many corporations include social responsibility in their
operations, it is still important for those procuring the goods and
services to ensure the products are socially sustainable. Verification
tools are available from a multitude of entities internationally.
 Workforce diversity
• Workforce diversity means similarities and differences among
employees in terms of age, cultural background, physical abilities and
disabilities, race, religion, gender, and sexual orientation. No two humans
are alike. People are different in not only gender, culture, race, social and
psychological characteristics but also in their perspectives and
prejudices. Society had discriminated on these aspects for centuries.
Diversity makes the work force heterogeneous. In current scenario,
employing diversified workforce is a necessity for every organization but
to manage such diversified workforce is also a big challenge for
management. This paper critically analyses the workforce diversity and
its impact on productivity of an organization. The researcher after
examining the literature and various research papers concluded that
workforce diversity is strength for any organization but people still stick
to their views related to caste, religion etc and so consider diversity as a
problem but if managed properly, can increase the productivity.
 Workforce diversity
• The four types of diversity that will be examined are: occupation,
differences in skills and abilities, personality traits, and value and
attitudes. For each type of diversity, the impact on individual
behavior will be described. One type of diversity is occupation.
• Here are some real and immediate benefits to diversity in the
workplace:
• A Variety of Perspectives. Put a variety of world views into one
room, and you'll come out the other side with better ideas. ...
• Increased Creativity. ...
• Increased Productivity. ...
• Reduced Fear, Improved Performance. ...
• Boost Your Brand's Reputation. ...
• Global Impact. 
 Business ethics

• Business ethics (also known as corporate ethics) is a form of

applied ethics or professional ethics, that examines ethical
principles and moral or ethical problems that can arise in a
business environment. ...
• These norms, values, ethical, and unethical practices are the
principles that guide a business.
• Why is ethics important to business?
• Ethics concern an individual's moral judgements about right
and wrong. ...
• Attract customers to the firm's products, which means boosting
sales and profits.
• Make employees want to stay with the business, reduce labour
turnover and therefore increase productivity
 cond

• Having a code of ethics

• helps the comany define and maintain standards of
acceptable behavior.
• A good ethical framework can help guide your company
through times of increased stress, such as rapid growth or
organizational change, and decreases your firm's susceptibility
to misconduct.
 cond

• Types of Business Ethics

• Personal responsibility.
• Representative or official responsibility.
• Personal loyalties.
• Corporate responsibilities.
• Organizational loyalties.
• Economic responsibilities.
• Technical morality.
• Legal responsibility.
 cond

• Business ethics serves the important social function of

integrating business and society, by promoting the legitimacy
of business operations, through critical reflection.
• In general, business ethical values are a set of guiding
principles that encourage individuals in an organization to
make decisions based on the company's stated beliefs and
attitudes toward business practices within its industry.
 cond
• General ethical principles
• There are five general principles that serve as the ideals to which
psychologists should aspire within the profession
• Principle A: Beneficence and nonmaleficence
• The beneficence and non maleficence principle of the APA general
principles guides psychologists to perform work that is beneficial
to others yet does not hurt anyone in the process of carrying out
that work.
• Principle B: Fidelity and responsibility
• The fidelity and responsibility principle of the APA general
principles inspires psychologists to cultivate a professional and
scientific environment built upon trust, accountability, and ethical
considerations.
 cond

• Principle C: Integrity
• The integrity principle of the APA general principles aims to
encourage psychologists to engage in honest, transparent
practices within all aspects of the field of p
• Principle D: Justice
• The justice principle of the APA general principles states that
people are entitled to the advances made within the field of
psychology and to the services offered by professionals within
the fieldsychology.
• Principle E: Respect for people's rights and dignity
• The APA general principle concerning respect for people's rights
and dignity recognizes individuals' rights to privacy and
confidentiality.
 Theory of R managment

• A basic but often ignored premise with working with people is

that every person hungers to be treated with value. This is
central to what authors Wayne T. Anderson and Nancy Alderson
McDonnell call Theory R -- love, dignity, and respect -- you will
learn how to empower your employees to achieve excellence,
revitalize your business, exceed global challenges, and improve
the culture of your workplace and bottom line. In fact,
organizations that go beyond the status quo by applying these
principles can bring forth positive changes that lead to double-
digit productivity improvement, total quality excellence, lasting
employee satisfaction, teamwork loyalty, trust, and open
communication.
•  
 Theory of R management
• Theory R Management also shows you how to..... *
Turn conflict into harmony * Manage diversity in your
organization * Succeed through cooperation, not
confrontation * Develop an innovative management
style that transforms managers into leaders. Theory R
Management will benefit all leaders who want to
build an environment based on the collective good of
their people. Total quality excellence is not just
another program, it is a state of mind. Position your
organization for lasting success as the new century
approaches with Theory R Management
•