Operations Management and Ethics
Operations Management and Ethics
Rajesh Chug
MGT 554 - Operations Management
Feb 07, 2005
Operations management is about the way organizations produce goods and services. The function itself can engage up to 80 per cent of an organization's resources, including labor, equipment and capital needs. In an era where the success of an organization is dependent upon the efficient and effective use of its resources, one can appreciate the need for everyone within an organization to have a sound understanding of the principles of operations management and the manner in which competitive advantage can be sustained through the superior application of them.
This definition reflects the essential nature of Operations Management: it is a central activity in organizing things. Another way of looking is to consider Operations are a transformation process: they convert a set of resources (INPUTS) into services and goods (OUTPUTS). These resources may be raw materials, information, or the customer itself. These resources are transformed into the final goods or services by way of other 'transforming' resources - the facilities and staff of the operation. (Twigg, 2004, p1)
Operation Management aspect is grouped into six broad areas: (i) product/service design, (ii) product/service process design, (iii) planning of operations, (iv) facilities management and planning, (v) operations strategy, (vi) people management. Here are few examples of operations in organization. (Management Science, Vol. 50 Issue 1, p8, 7p.)
Supply Chain Management - Supply chain management is defined as the management of all aspects of providing goods to a consumer, from extraction of raw materials to end-of life disposal and recycling, including manufacturing, physical logistics, and after-sale service and warranty issues.
Marketing Operations - Marketing operations is charged ...
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Operation Management aspect is grouped into six broad areas: (i) product/service design, (ii) product/service process design, (iii) planning of operations, (iv) facilities management and planning, (v) operations strategy, (vi) people management. Here are few examples of operations in organization. (Management Science, Vol. 50 Issue 1, p8, 7p.)
Supply Chain Management - Supply chain management is defined as the management of all aspects of providing goods to a consumer, from extraction of raw materials to end-of life disposal and recycling, including manufacturing, physical logistics, and after-sale service and warranty issues.
Marketing Operations - Marketing operations is charged with determining what customers value (including cost, quality, and delivery characteristics) prior to product development; product positioning, pricing, and forecasting both before and after product launch; and promotions after product launch.
Finance Operations - Operations management relates financial models and financial instruments to the procurement and management of capital equipment and inventories, which has high impact on financial decision-making process.
Organization Operations - No plant manager anywhere would ignore the role of good people management in running an efficient operation. Human resource operation manages the organizational behavior and uses simplified models and improvement techniques for motivation, learning, creativity, and other such aspects of human behavior that are vital to the success of management policies in practice.
Service Operations - Service organizations are a large and growing part of the world economy. A service transaction, which is difficult to inventory, features simultaneous production and consumption with the customer an integral part of this activity. Service organizations are challenged not only on how to make existing service operations more effective and efficient, but also on how to design, deploy, and operate systems offering new services, or old services via new technologies.
As other management stream, ethics plays important role in Operations management. Operations manager not only has to resolve quantitative issues using management techniques but also needs to deal with the "soft" issues. One of the ethical problems faced by operations manager is to obtain co-operation from individuals/other managers in the organization over whom managers have no authority. It may be possible that other department manager may influence the decision for owns sake. It is very difficult to improve process in that scenario. Taking an example of Software Company, development manager has designed the system, which has involved costly infrastructure deployment. Operations manager is responsible to analyze each application from process point of view. Operations manager found that the newly designed system has redundant functionality and less reliable than existing system. It is now an ethical dilemma. If operation manager rejects the new application, development manager will face the consequences of poor design and loss of finance including wastage of manpower, systems and time. If operations manager behaves unethical and doesn't disclose truth, organization will not only loose the money invested but incurred on-going expense to support duplicate systems. Data center manager will have to support the system round the clock, which doesn't have any positive impact for organization. Operation manager has to perform duty ethically despite of political pressure, peer personal agenda and during conflicting demands. Operation manager must make all decisions keeping the ultimate aim of "efficiency and effectiveness in processes" in mind.
Reference
Aquilano, N. J., Chase, R. B., & Jacobs, F. R. (2004). Operations management for competitive advantage. (10th ed.). New York: McGraw Hill Irwin. p1-18p. Retrieved February 5, 2005 from University of Phoenix Resource Database.
Chopra, Sunil, Lovejoy, William; Yano, Candace (Jan 2004): Five Decades of Operations Management and the Prospects Ahead. Management Science, Vol. 50 Issue 1, p8, 7p. Retrieved February 5, 2005 from University of Phoenix EBSCOhost Database.
Twigg, David (2004): What is Operations Management? Retrieved February 5, 2005 from http://www.sussex.ac.uk/Users/dt31/TOMI/whatisom.html
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