Modern business management can be complicated; it is often as much about instinct as it is about policy. A manager can tell if his or her firm needs improvement in control through a variety of benchmarks: quality, profitability, morale, the performance of individuals within the organization, and the overall performance of the firm in respect to competitors (Gibson, et al, 2003). If improvement is needed, the manager can tell if improvement is needed in several key areas, and steps can be taken for improvement, as follows:
Operational: If there is an identified problem within the inner workings of the organization, such as inefficiencies in purchasing, logistics, accounting, etc, this is indicative of operational deficiency that needs to be improved. Managers can implement operational improvements by empowering the work teams in these given areas to provide feedback about their tasks, offer improvements and so forth. This information can be combined with process improvements such as lean principles to provide efficiency and better operations.
Financial: Financial problems are detected through the accounting process, and can be caused by excessive costs, insufficient revenue, or a combination of both. To correct financial problems, managers can wisely cut costs through productivity improvement and increase revenues through increased sales activity. Structural: Structural problems emerge commonly when the different strategic business units do not work well together to achieve the goals of the organization, supervisors are not reaching established goals, and individual employees are deficient in a given area or areas.
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These problems can be corrected by management through personnel changes, a change to the company structure itself, or steps to improve the performance of the ineffective employee(s). Strategic: Problems of a strategic nature are seen when the organization is not performing according to established goals, seems to lack direction, and has problems competing against other firms. This can be corrected through evaluation of the currents strategic plan, and improving the plan or developing another if needed.
This process should include staff members from all of the strategic units within the firm itself. In its most basic form, quality has been defined as the essential goodness of a product (Evans and Lindsay, 2003). While this definition is easy to understand, it is vague and ineffective when discussing quality within the scope of the modern business environment. A practical, yet simple definition of quality is that quality exists when products or services meet the expectations of the customer for their given purpose.
As an example, a disposable cigarette lighter need only be durable enough to provide reliable service until the fuel within it is exhausted. This quality definition reflects back to the classic business assertion that a light bulb can be made to last 100+ years (in fact, an Edison prototype still lights today) but the price of such an item is beyond what someone is willing to pay for the given utility of the ordinary light bulb.
This brings up another interesting point that a given quality level is also necessary in order to offer a product or service at a price that the customer is willing to pay based on perceived value. This quality definition affects managers' behavior because quality control initiatives do not need to exceed the given level of quality that is sought. This affects the strategic planning the manager will undertake, operational costs, the structure of the organization, etc. Overall, quality shapes the organization and the management style of the organization as well.
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