Research Korner

Quantitative Methods for Business

1. The problem at work The shop made two kinds of products, the dressers and the cabinets that pass in the assembly and finishing department. The table 1 below shows the given data as well as the unknowns. This data can be collected using the analyzation and measuring the time of every department and the number of units that produced. Table 1. 	 		 		 		  		 		 		Cabinets (x) 		 		 		Dressers (y) 		 		 		Time Available 	 	 		 		 		Time in Assembly 		 		 		4 hours 		 		 		2 hours 		 		 		60 hours 	 	 		 		 		Time Finishing 		 		 		2 hours 		 		 		4 hours 		 		 		48 hours 	 	 		 		 		Profit 		 		 		$100/unit 		 		 		$80/ unit 		 		 		  	   I. Decision Variables: Let x = no. of the units that can be produced as well as sold in order to maximize the profit       y = units that the dressers to be produced and sold so that it can maximize its profit   II. The objective function: Max. P = 100x + 80y III. Subjected to:             Explicit Constraints:             4x + 2y < 60             2x + 4y < 48             x > 0 and y > 0   IV. Assume that both the equations be equal. 4x + 2y < 60                                       2x + 4y < 48 4x + 2y = 60                                       2x + 4y = 48 The ordered pairs (0,30) and (15,0) for 4x + 2y = 60. On the other hand, the ordered pairs for 2x + 4y = 48 are (0,12) and (24,0) Get the point of intersection for the two equations. 2(4x + 2y) = (2)60 2x + 4y = 48 6x = 72 x = 12 Substitute the value of x to any equation 4x + 2y = 60 4(12) + 2y = 60 y = 12/2 y = 6 The point of intersection therefore is (12, 6)                 V. Graph VI. Test the corners P (0,0) Max P = 100(x) + 80(y) Max P = (100) (0) + 80(0) Max. P = $0 P (0,12) Max P = 100(x) + 80(y) Max P = (100) (0) + 80(12) Max. P = $960 P (12, 6) Max P = 100(x) + 80(y) Max P = (100) (12) + 80(6) Max P = $1680 P (15, 0) Max P = 100(x) + 80(y) Max P = (100) (15) + 80(0) Max P = $1500   VII. Decision For the company to maximize the maximum profit of $1,680, it needs to manufacture and sell 12 units of the cabinets and 6 units of the dressers.   2. Break Even Analysis The formula in break even point analysis is: TR = TC Where: TR = Total Revenue               TC = Total Cost TC = VC + FC Where VC = Variable Cost               FC = Fixed Cost Then the Fixed Cost = $200,000                 Variable Cost is $500/passenger To get the average sales per flight, get the 80% of the airplane capacity which is 240 and it is equal average of 192 passengers per flight. Te variable cost therefore is ($500) (192) = $96,000 The equation for the break even therefore is: TR = $96,000 + $200,000 In getting the total revenue it needs to multiply the number of average passengers to the minimum amount to be paid. Let x is the amount to be paid an it must be multiplied to the average passengers of 192. 192x = $96,000 + $200,000 192x = $296,000 x = $1, 541.67 The company therefore has the minimum price which can be charge to its passengers of $1, 541.67 in order to break even.   3. Probability Normal Distribution a. Use the x equation which is: z = (x-mean)/standard deviation z = 6,000 – 5,200 / 600 z = 1.33 The probability for this area is 0.4082 or 40.82% which the probability of getting the egg-tart in between 5,200 and 6000. But, it also needs to add the other areas covered because it is part of the restrictions of less than 5,200. Thus,  0.4082 + 0.5 is equal to 0.9082 or 90.82% which is the probability of getting less than 5,200 egg-tart sold for the day.   b. Using the same formula: z = 7,500 – 6,000 / 600 z = 2.5 The probability for this area is 0.4938 and this needs to subtract it from 0.5. Thus it has the probability of 0.0062 or 0.62% that the egg-tart sold will be greater that 7,500.   c. Let x be the value greater that 95% chance 1.645 = 6,000 - x/600 x = 5,013 – 3,000 x = 2,013     This is the value that exceeds in order to have the 95% chance that the egg-tart can be sold in the day.     4. Probability in Market Decision 	 		 			 			 			  			 			 			 			Market Reaction 			 			 		 		 			 			 		 		 			 			 			 			Good 			 			 			 			Medium 			 			 			 			Poor 			 			 		 		 			 			 		 		 			 			 			X 			 			 			100 			(0.30) = 30 			 			 			110 			(0.40) = 44 			 			 			80 			(0.30) = 24 			 			 		 		 			 			  		 		 			 			 			Y 			 			 			70 			(0.30) = 21 			 			 			90 			(0.40) = 36 			 			 			120 			(0.30) = 36 			 			 		 		 			 			  		 		 			 			 			Z 			 			 			130 			(0.30) = 39 			 			 			100 			(0.40) = 40 			 			 			70 			(0.30) = 21 			 			 		 		 			 			  		 	   For the product X, the company can have the ability to generate the total profit of 101. In the product Y, it can generate have the ability to generate the total amount of 93. For the product Z, the company can have the ability in generating the total income of 100. Thus, the company needs to launch the version of product X in order to generate much profit which can be total to 101 as it compared to the products Y and Z.   5. Probability in Business Decision a. Probability of a favorable market given a favorable study = 0.72  b. Probability of an unfavorable market given a favorable study = 0. 28 c. Probability of a favorable market given an unfavorable study = 0. 22 d. Probability of an unfavorable market given an unfavorable study = 0. 78 e. Probability of a favorable research study = 0. 6 f. Probability of a favorable research study = 0.4 Answers: a. ($200,000 - $7,000)0.72 = profit of 138,960 b. (-$50,000 - $7,000)0.28 = loss of $15,960 c. ($200,000 – 7,000)0.22 = Profit of $42,460 d. (-50,000 – $7,000)0.28 = Loss of $44,460 e. (-$7,000)0.6 = Loss of $4,200 f. (-$7,000)0.4 = Loss of $2,800 This means that the cook is willing to pay s much as $44,460 in the market study.       6. Simple Linear Regression For the given sales of the company for the last ten years, the graph of the data and the regression line can be computed as: 	 		 			 			 			  			 			 			Year(x) 			 			 			Sales(y) 			 			 			(xy) 			 			 			xsquared 		 		 			 			 			  			 			 			1 			 			 			9 			 			 			9 			 			 			1 		 		 			 			 			  			 			 			2 			 			 			14 			 			 			28 			 			 			4 		 		 			 			 			  			 			 			3 			 			 			20 			 			 			60 			 			 			9 		 		 			 			 			  			 			 			4 			 			 			28 			 			 			112 			 			 			16 		 		 			 			 			  			 			 			5 			 			 			40 			 			 			200 			 			 			25 		 		 			 			 			  			 			 			6 			 			 			60 			 			 			360 			 			 			36 		 		 			 			 			  			 			 			7 			 			 			90 			 			 			630 			 			 			49 		 		 			 			 			  			 			 			8 			 			 			130 			 			 			1040 			 			 			64 		 		 			 			 			  			 			 			9 			 			 			180 			 			 			1620 			 			 			81 		 		 			 			 			  			 			 			10 			 			 			250 			 			 			2500 			 			 			100 		 		 			 			 			Total 			 			 			 			55 			 			 			821 			 			 			6559 			 			 			385 		 	       Using the formula  Y = a + bX  this can be solved. xbar = 55/10 = 5.5 y bar = 821/10 = 82.1 b = ∑ xy – n (xbar) (ybar) / ∑x2 – n(ybar)2 b = 6559 – 10(5.5)(82.1) / 385 – 302.5 b = 2043.5 / 82.5 b = 24.77 To get the value of a it needs to follow the formula: a = xbar – b(ybar) a = 82.1 – 24.77(5.54) a = -54.135 The simple linear regression line therefore which also graph below is equal to: y = -54. 13 + 24. 77x      a. The linear regression line is y = -54. 13 + 24.77x which can forecast to the upcoming number of years. b. In order to get how strong the relationship of the two data, it is important to use the process of correlation which as the formula: Px, y = r = (10)6559 – 55 (821)               √ 10(385) - 3025 √10 (126561) – 674, 041          r = 65,590 – 45,155                 28.72 • 769.135          r = 20,435 / 22,089.56          r = 0.93   This means that the having the given sales and the period or year as the variables, the they have the high or the strong relationship for having the 0.93 as the value of the pearson r. This implies that they have strong relationship.   c. Using the regression equation as the answer in the question a, which is y = -54. 13 + 24.77x the value of 11th year can be substitute to the x value so that the projected value of the sales can be computed. y = -54. 13 + 24.77x y = -54. 13 + 24.77(11) y = 218.34 is the number of sales for the next year or the 11th year   7. Economic Order Quantity  a. Given: A = Annual Total Sales = 1,200 pairs ($40 per pair) = $48, 000 P = ordering cost = $30 per order Qn  = optimum number of order at a time (EOQ) = 200 pairs The carrying cost can be computed as Qn2 = 2AP / C To get rid of C C = 2AP / Qn2   Solving simultaneously, we have to compute first the EOQ per year or the number of orders per year. Therfore 1200 pairs / 200 = 6 orders per year C = 2($1,200) (30)  / (200)2 C = 72,000 / 40,000 C = 1.8% or $1.8 per order per year   b. If the carrying cost is 5% then the optimal order quantity can be computed as: C = 2AP / Qn2 Qn = 2($1,200) (30)  / 5 Qn = 120  the EOQ therefore is 120 if the holding cost is 5%   8. Linear Programming I. The decision variable Let x = units of product in the standard testers       y = the units of products in the normal testers II. Objective Function Max. P = 6x + 7y III. Subjected to: 2x + 4y < 160 6x + 2y < 240 4x + 4y < 200   IV. Assume that the equations are equal 2x + 4y = 160 The values of ordered pairs are (0,40) and (80,0) 6x + 2y = 240 The values of the ordered pair are (0,120) and (40,0) 4x + 4y = 200 The values of the ordered pair are (0,50) and (50,0) Get the point of intersection of 4x + 4y = 200 and 2x + 4y = 160 which is (20,30) And the point of intersection of 4x + 4y = 200 and 6x + 2y = 240 which is (35,15) V. Graph   VI. Test the corners points P (0,40) Max. P = 6x + 7y          P = 6(0) + 7(40)          P = $280 P (20,30) Max. P = 6x + 7y          P = 6(20) + 7 (30)          P = 120 + 240          P = $360 P(35,15) Max. P = 6x + 7y          P = 6(35) + 7(15)          P = 210 + 105          P = $315   P(40,0) Max. P = 6x + 7y          P = 6(40) + 7(0)          P = $240   VI. Decision a. The company therefore needs to produce 20 units of the standards testers and 30 units of the normal testers in order to allocate the maximum profit of $360. b. There are no spare capacities to the production facilities since it has overcome the number of the units in the different processes.               9. Network Diagram a. The network diagram can is given below: b.   	 		 		 		  		 		 		 		Days 		 		 		Required 		 		 		 		Immediate 		 		 		Predecessors 		 		 		  		 		 		  		 		 		  		 		 		  		 		 		  		 		 		  	 	 		 		 		  	 	 		 		 		 		Activity 		 		 		ES 		 		 		EF (ES+t) 		 		 		LS(LF-t) 		 		 		LF(LS 		+t) 		 		 		TS (LF 		- EF) 		 		 		 		Critical Path? 	 	 		 		 		A 		 		 		5 		 		 		  		 		 		0 		 		 		5 		 		 		1 		 		 		6 		 		 		1 		 		 		No 	 	 		 		 		B 		 		 		3 		 		 		  		 		 		0 		 		 		3 		 		 		0 		 		 		3 		 		 		0 		 		 		Yes 	 	 		 		 		C 		 		 		3 		 		 		B 		 		 		3 		 		 		6 		 		 		3 		 		 		6 		 		 		0 		 		 		Yes 	 	 		 		 		D 		 		 		7 		 		 		A 		 		 		5 		 		 		12 		 		 		6 		 		 		13 		 		 		1 		 		 		No 	 	 		 		 		E 		 		 		10 		 		 		B 		 		 		3 		 		 		13 		 		 		6 		 		 		16 		 		 		3 		 		 		No 	 	 		 		 		F 		 		 		14 		 		 		A,C 		 		 		6 		 		 		20 		 		 		6 		 		 		20 		 		 		0 		 		 		Yes 	 	 		 		 		G 		 		 		7 		 		 		D 		 		 		12 		 		 		19 		 		 		15 		 		 		22 		 		 		3 		 		 		No 	 	 		 		 		H 		 		 		4 		 		 		E 		 		 		13 		 		 		17 		 		 		18 		 		 		22 		 		 		5 		 		 		No 	 	 		 		 		I 		 		 		5 		 		 		D 		 		 		12 		 		 		17 		 		 		15 		 		 		20 		 		 		3 		 		 		No 	 	 		 		 		J 		 		 		2 		 		 		 		F, G, H, I 		 		 		20 		 		 		22 		 		 		20 		 		 		22 		 		 		0 		 		 		Yes 	   The ES or the earliest activities start time. The ES for the activity J which has 20 days to finish and it will pass through the points B, C, F which has number of days of 3,3, and 14 respectively. The other variables can be computed and can be seen in the table above.     c. The critical can be seen to the drawing below: The project can be completed in 20 days.

Quantitative Methods for Business

1. The problem at work The shop made two kinds of products, the dressers and the cabinets that pass in the assembly and finishing depart...

Smithy’s Brewery

Smithy’s Brewery   Introduction Smithy’s Brewery is a small independent brewery in the UK supplying ale to its 200 pubs in the south-west of England. It brews a range of quality beers, the most popular of which is Anvil Ale, a traditional, light tawny-coloured beer with a slightly fruity taste and malty finish with an original gravity (OG) of 1038, alcohol by volume (ABV) 3.8%. In the summer a lighter addition to the range is Thirstquencher with a dry hopped aroma and clean bitter taste, OG 1035, ABV 3.4%. All of the brewery’s pubs trade under the Anvil name. Many of the pubs are featured in The Good Beer Guide published by CAMRA ().   Pub Segmentation 1. Local – small town or city pubs, usually on the outskirts with a regular clientele, with darts and dominoes and a snack menu 2. Traditional Town Pub (Young People) – town center drinking pubs with music, serving snacks at lunch time and early evening, transient clientele with large numbers of customers at weekends 3. Traditional Town Pub (Older People) – town center quiet pubs with bar meals, real tires and quiet background music 4. Traditional Country Pub – destination pubs requiring car journeys from nearby towns, with family-friendly facilities, wide range of meals available all day, piped music and beer gardens   Challenges Between 1990 and 2000, British beer consumption fell by 13 per cent around two billion pints per year and during the same period, wine consumption doubled. Whilst this movement is the result of changing consumer tastes, it has also been exacerbated by the strengthening grip on the market by big breweries. In the early 1990s the British Government, following a review of the beer industry by the Monopolies and Mergers Commission, tried to force the six big breweries to relax their complex monopoly on the industry. At that time these breweries accounted 75 per cent of beer production. The legislation required the breweries to open up some of their pubs to non-tied beers, that is allow their tenants to buy one draught beer not produced by the brewery that owned the pub. Rather than free their pubs of some of their pubs of some tie to the brewery, the major breweries embarked on a number of different strategies, including selling thousands of their pubs to new pub-owning companies, often set up with money from the big breweries. These pub companies were outside the remit of the legislation. By 1999 there were just four major national breweries now controlling 85 percent of the country’s beer production and the new pub companies (pubcos) had emerged as a major retailing force in the industry. These new powerful pubcos could now not only demand heavily discounted beer but also require a product that does not need too much looking after. Discussion Why was Smithy’s Brewery considering improving its customer service? Smithy’s Brewer maintained their beers and excellent pubs. However, because of stiff competition and the changing taste of its target markets, the management decided to raise the level of service and product quality that they offer the customers. A survey commissioned by the brewery revealed that service is important to customers. The also revealed that the customers felt that staff attitudes were crucial in creating the right atmosphere and that customers expected them to be friendly, happy, smiling, polite and efficient. Every single person in the survey agreed that pubs should provide a friendly, warm and happy atmosphere. Furthermore, customers believed that the high turnover of staff was an indication of poor management. The brewery believes that is they positioned themselves as a traditional brand with good honest values of good beer, good food and homely service provided by people who care, they will have an advantage that competitors and the major players cannot easily copy.   How good or bad was its service and how reliable is the evidence presented in the case? The service at Smithy’s pubs was not considered bad. However, the management realized that in order to achieve success and to have an edge against its competitors, they must achieve a quality service. The survey revealed that the customers value service and they saw the high turnover rate of employees as a sign of bad management. The evidence presented was reliable because of the supporting surveys and documents.   What are the Barriers to improvement? 1. Staffing Problem The main problem is that the pub managers rely heavily on part-time staff. Most of the pub managers have difficulty in recruiting good staff. Another problem is the high staff turnover rate. Another source of headache is the staff training. The small central training staff cannot deal with the many new staff that the pubs are hiring each year. The managers train their own staff. 2. Central Control The control systems that were used in the brewery were not appropriate for a family owned business like Smithy’s Brewery. 3. Inadequate Training The small central training staff at Smithy’s cannot accommodate all the new recruits. The mangers are often left to train their own staff.           Evaluate the Customer Service Report as a means of measuring service quality. The customer service report is intended to measure the level of service that is rendered to the customers and to identify the areas that need improvements. The report aims to measure the quality of service delivered to the customers at the pubs of Smithy’s Brewery. The customer service report is an adequate means of measuring the service quality because it gathers the responses of the customers.   Conclusions Improving customer service is among Smithy’s Brewery’s top priority. This shift was caused by the stiff competition and the changes in the customers’ tastes. Delivering a quality customer service will aid a company to position it self as a traditional brand with good honest values of good beer, good food and homely service provided by people who care. The new goal and strategy of the brewery call for a new business and operations structure. Product and service are equally important to make the business successful. The management is now focusing on the training and development of its workforce.   Recommendations Operations Management The company needs to change not only the operations at its pubs but an overall change of company structure and control systems. The brewery needs to restructure and a new focus must be given to the customer service. However, in order to achieve maximum benefit the entire operation including the production must also be aligned to the brewery’s new strategy and goal. 1. Product-Service Combination The value that is added by both operations management and operations strategy is fundamental to most organizations. Operational activities are central to the provision of services and goods. Every organization provides a product and service combination. Operations management is: <ul style="margin-top: 0in; margin-bottom: 0in" type="circle"> <li class="MsoNormal" style="text-align: justify; text-justify: inter-ideograph; line-height: 200%"> The design and improvement of the systems that create and deliver the firm’s primary product and service combinations.</li> <li class="MsoNormal" style="text-align: justify; text-justify: inter-ideograph; line-height: 200%"> The design, operation and improvement of the internal and external systems, resources and technologies that create and deliver the firm’s primary product and service combinations.</li> <li class="MsoNormal" style="text-align: justify; text-justify: inter-ideograph; line-height: 200%"> The design, operation and improvement of the internal and external systems, resources and technologies that create product ands service combinations in any type of organization.</li> </ul> Operations has a strategic contribution to make in supporting the needs of customers and consumers. More and more corporations throughout the world are adding value to their core corporate offerings through services. The trend pervading almost all industries, is consumer demand-driven, and perceived by corporations as sharpening their competitive edges. Modern corporations are increasingly offering fuller market packages or bundles of consumer-focused combinations of goods, services, support, self-service, and knowledge. But services are beginning to dominate (2002).   2. Customer Service Quality Improvement Customer Service Customer service is not just an add-on, a little something extra to keep the customer happy. Customer service is an integral part of the total product. Service is not what you do to the product, it is what you do for the customer. The customer-focused firm looks at the core product as an incomplete solution for customers. These firms supplement the core product with services that help customize or otherwise enhance solutions for customers. Such product enhancements add value for the customer ( 2003).   A service package consists of four interrelated elements that must provide a consistent image to the customer. First, facilitating goods are the materials purchased or consumed by the buyer or the physical items that an operation uses during service delivery. Second, explicit services are the readily observable or sensual benefits that the operation delivers. Third, implicit services are psychological benefits that derive to the customer from using a particular service. Fourth, supporting facility is the physical environment that must be in place before a service can be offered (2000).       Improvement Focus The beers and foods offered at Smithy’s pubs can be bundled with a quality service in order to make the customers’ experience more satisfying and enjoyable. Smithy’s products (beers and ales) are the motivating factors that make the customers go to its pubs. A quality customer service will enhanced the experiences of the customers and will make a distinct advantage over Smithy’s competitors. Attention should be given to the following: <ul style="margin-top: 0in; margin-bottom: 0in" type="disc"> <li class="MsoNormal" style="text-align: justify; text-justify: inter-ideograph; line-height: 200%"> Quality of foods and drinks</li> <li class="MsoNormal" style="text-align: justify; text-justify: inter-ideograph; line-height: 200%"> Speed of service delivery</li> <li class="MsoNormal" style="text-align: justify; text-justify: inter-ideograph; line-height: 200%"> Accuracy of the order</li> <li class="MsoNormal" style="text-align: justify; text-justify: inter-ideograph; line-height: 200%"> Menu range</li> <li class="MsoNormal" style="text-align: justify; text-justify: inter-ideograph; line-height: 200%"> Aesthetic appeal of the pubs</li> <li class="MsoNormal" style="text-align: justify; text-justify: inter-ideograph; line-height: 200%"> Restaurant decors and designs</li> <li class="MsoNormal" style="text-align: justify; text-justify: inter-ideograph; line-height: 200%"> Attitude of staff members</li> <li class="MsoNormal" style="text-align: justify; text-justify: inter-ideograph; line-height: 200%"> Physical structure of the building</li> <li class="MsoNormal" style="text-align: justify; text-justify: inter-ideograph; line-height: 200%"> Car park</li> <li class="MsoNormal" style="text-align: justify; text-justify: inter-ideograph; line-height: 200%"> Furnishings and fittings</li> <li class="MsoNormal" style="text-align: justify; text-justify: inter-ideograph; line-height: 200%"> External landscaping</li> </ul>           Service Quality Service quality is intangible and instantaneous. It perishes with the completion of the transaction and cannot subsequently be verified or audited. It depends not on what actually happened. The key to quality in service provision is not standardization and verification but skills, knowledge and education. The challenge for service organizations is to embrace those notions of process control which can be usefully applied to the service environment and couple them to management of the skills of the staff to assure quality ( 2002).   Characteristics of Services 1. Intangibility – Services are Intangible Services are performances. Services cannot be seen but they can be experienced. Services are experiences and not physical goods. Customers cannot take ownership or title to a service (2003). 2. Simultaneity – Services are Consumed as they are Produced The acts of production and consumption occur simultaneously in services. Services are produced and consumed in real time. There is a great deal of interaction before, during, and after the service between provider and customer. Services cannot be moved through distribution channels. Customers usually must come to the service facility or the provider must be brought to the customer (2003). 3. Perishability – Services cannot be Stored Since services cannot be produced and stored for alter use, as physical products can, services are said to be perishable products ( 2003). 4. Variability – Services Vary from Production to Production Service products as experiences vary form one experience to the next, from customer to customer, as well as for the same customer from one occasion to the next (2003).     Service Recommendations 1. Careful Identification of target market 2. The product and service must be carefully defined and the values or outcomes it provides well understood 3. Important long-term decisions will need to be made about the service delivery system. These include workforce and human resource issues, organizational policies, control of quality cost, technology, resources and value delivery, layout, technology, equipment, processes and procedures, work force levels and job description and roles. The design of the delivery system should ensure maximum customer satisfaction. A well-designed delivery system will be a source of competitive advantage and difficult for competitors or new industry entrants to copy ( 2002). Positioning Positioning is the method by which the organization can differentiate it self from its competitors. It requires a deep understanding of customer needs, the organization’s capabilities and competencies, competitors’ service offering, and the ability of the service to meet and provide value needs. Once understood, the organization can seek unique attributes that match the service offering to the value needs of the segment targeted. This uniqueness can use cost, service features, advertising and promotion, distribution channels and delivery channels ( 2002). Value/Cost Leverage A well-designed and positioned service offering provides unique benefits to customers and creates value more than competitors create ( 2002). Strategy/System Integration In addition to the consistency between target market and service concept, and between service concept and operations strategy, the operations strategy must also be consistent with the delivery system to provide integration and consistency. This consistency can be achieved by carefully designing the delivery system to reflect the operations strategy and overall business for the service ( 2002).   3. Internal Control System An internal control system according to Hermanson and Hermanson is a collection of controls designed to provide reasonable assurance that the company meets the following objectives: <ul style="margin-top: 0in; margin-bottom: 0in" type="disc"> <li class="MsoNormal" style="text-align: justify; text-justify: inter-ideograph; line-height: 200%"> Reliability and integrity of information</li> <li class="MsoNormal" style="text-align: justify; text-justify: inter-ideograph; line-height: 200%"> Compliance with policies, plans and laws</li> <li class="MsoNormal" style="text-align: justify; text-justify: inter-ideograph; line-height: 200%"> Safeguarding of assets</li> <li class="MsoNormal" style="text-align: justify; text-justify: inter-ideograph; line-height: 200%"> Efficient use of resources</li> <li class="MsoNormal" style="text-align: justify; text-justify: inter-ideograph; line-height: 200%"> Accomplishment of goals</li> </ul> An internal control system consists of three elements – the control environment, the accounting system, and the individual control procedures. The control environment includes the company’s organizational structure, management’s operating style, the personnel practices used, and the methods of assigning authority and responsibility to employees. The accounting system is designed to accurately identify, record, and report the company’s transaction. Control procedures are detailed policies and rules, such as authorization of transactions, segregation of duties, documentation, physical control over assets, independent checks on performance (1994).   4. Total Quality Management Total Quality Management is built on a philosophy where individuals, teams and organizations can improve their performance at all times ( 2002). Principles 1. Leadership Leadership is a prerequisite for putting TQM principles and core concepts into practice. Management at all levels must understand TQM in-depth and show their commitment through outlining quality goals, policies, principles and plans. In order for management to plan for quality improvements, one must first know where they are at this moment (2002). 2. Delight the Customer Delight the customer focuses on how to satisfy the external customer. This implies understanding the needs of both products and services, tangible and intangible (2002). 3. Continuous Improvement Continuous improvement is probably the most powerful principle to guide management. By following a continuous improvement cycle it means that you never stop learning and improving, both internally and towards the external customer (2002). 4. Management by Facts To be able to improve one must first know the current performance. When managing the business, decisions should be based on facts. The philosophy of TQM is built on measuring the process in order to find the cause of a failure early in the process. Actions to correct the fault should be focused on changing the process (2002). 5. People-based Management There is a need for cooperation between people and that excellence cannot be achieved only through standards, technology and processes. People must be encouraged to produce quality. This should be done through clear goals, processes and feedback on the performance ( 2002).   Achieving TQM 1. Processes need to be examined to determine ways to reduce complexity while providing a better service and producing a better product. 2. Satisfaction of customers, both internal and external is paramount. 3. Management must provide leadership and foster commitment to quality. 4. The empowerment of employees is crucial. Employees must understand the business of their organization, and must have an understanding of how their activities contribute to the organization, and must have an understanding of how their activities contribute to the organization. Employee participation is critical in identifying root problems and finding solutions to such problems; employees should be encouraged to control, manage, and improve processes for which they are responsible. 5. Total quality management is built around the concept of using teamwork to accomplish change. Terms need to be trained in using problem-solving techniques aimed at quality improvement. 6. Tools and techniques are important and must be integrated into an organization’s routine. Processes are brought under control through consistent application of a quality improvement methodology. 7. Long-term commitment is critical. TQM is based on the concept of incremental change, which leads to a gradual change in organizational culture. As the organization institutionalizes a philosophy of quality management, the areas where changes occur increase until the entire organization has been transformed into a more effective entity (1996).         5. TQM and Human Resource Management A TQM strategy focuses on customer satisfaction, quality improvement, solving problems at the source, just-in-time production, and continuous improvement. The tools and techniques used to achieve these ends all rely on employee empowerment and involvement to accomplish objectives of the organization (2000). In cultivating the TQM philosophy, strategy implementation must involve a focused effort on the part of every employee within the organization. TQM requires that management, and eventually every member of the organization commit to the need for continual improvement in the way work is accomplished. To institute total quality management as a philosophy within an organization, all employees must come to realize that satisfying customers is essential to the long-run well-being of the firm and their jobs. The TQM approach entails identifying the wants and needs of customer groups and then propelling the entire organization toward fulfilling these needs. A customer’s concerns must be taken seriously, and organizations should make certain that its employees are empowered to make decisions that will ensure a high level of customer satisfaction. Human resource management can plan a vital role in implementing and maintaining a total quality management process. HR managers are responsible for recruiting high-quality employees, the continual training and development of those employees, and the creation and maintenance of reward system. In developing TQM training programs, efforts should be aimed at an integrated approach to the instruction process. Training objectives should be directed at helping employees reach goals set forth for their individual jobs and overall goals of the organization (1994).

Smithy’s Brewery

Smithy’s Brewery Introduction Smithy’s Brewery is a small independent brewery in the UK supplying ale to its 200 pubs in the sout...

Analysis of Google's Organisational Culture using organisational behaviour theory

Google’s Organisational Culture   <li class="MsoNormal" style="text-align: justify"> What are the main factors/HRM procedures that have contributed to the success of Google? </li>   Google is among the most successful Internet-based businesses and companies since the booming dotcoms years in late 1990s and remains to be a leader (2007, 2006; 2002). The success of the Google is rooted on its outstanding organisational practices and core competencies. Google’s formula of success is not only its competent technology but also its aggressive ability to come-up with both innovative and profit-oriented projects. Innovation is very critical among the members of its workforce since it operates in global environment.  (2003) pointed out that managing global environment requires managers the ability to manage change through innovation and creativity. The innovative capability of Google combined with integrated process and a supportive culture creates sustainable competitive advantage. Among the considered high-leverage innovators, Google excels in ideation with overall adeptness and competence across all four stages of the innovation value chain. For example,  (2007) describes Google as search engine leader that creates new-fangled ideas with intense speed or what they call the “70-20-10 Rule” where the staff particularly engineers are encouraged to use 70 percent of their working time on central business functions, 20 percent on related business functions, and 10 percent on areas entirely of their own choice. Larger organisations like Google, in contrast to small ones are faster in adoption of innovations because of greater access to resources and need for strategic planning (1995;1994). Due to the stiff competition among Internet companies, the encouragement of innovation and creativity is inherent to Google. Innovation as a ground for doing business in the 21st century will be the consistent tugging force that the organisation must either strive to adopt or suffer the consequences of being left behind by competitors. The Googlers (employees) are motivated to contribute their suggestions, ideas, or anything that pertains to potential profit-gaining activities through various means like meetings, intranet, and other forms of communication. In product development, they emphasise on the feasibility and user-friendliness of relevant ideas. The feasibility is supported by Google’s aim of coming-up with something original and financially viable whereas the idea of user-friendliness works toward potential users. Through innovations, Google has expanded its services and features. Google today is no longer a search engine company but a web computing applications company (2006). The upscale ability of Google is among its critical success factors that make it a sustainable competitive company in its specified industry.             Further, teamwork is another main factor for Google’s success. It is stated that engineers work in teams in pursuing projects. The team had complete freedom regarding their projects and the ways in which they will work on it. The concept of teamwork relies on the ability of every team player to communicate with all the members of the workplace situation. Furthermore, teamwork is also attributed to the positive effects upon the psychological health and well-being of organisations member (1999). Understanding of the importance of teamwork is limited to the group in focus, that is, Google’s engineering teams. When team forms, a “team mind” also forms through the sharing of information and pooling of knowledge (1997). The promotion of teamwork despite the absence of clear management structure among engineers and project managers is effective because of efficient process of communication among the Googlers and its upper management.    Organisational communication is also a core competency of Google. Communication within organisational context serves a number of fundamental functions (2001) as surveys focusing on areas of improvement among corporations states that it usually ranked as key element within the organization (1993).  (1994) suggested that communication serves four major functions within a group or organization including control, motivation, emotional expression, and information. Googlers’ communication process is free and open. This serves as the pathway through which ideas, suggestions, and insights that would potentially generate change and new features in the system are discussed. Communication also keeps and maintains values and relationships necessary to keep the system of the united organisation. Googlers are encouraged to extend communication initiatives among various departments. Upper management including Sergey and Larry are deliberate in supporting the open communication process. Communication is evident during lunch at the cafeteria, meetings on Friday afternoons, etc.  (1997) noted communication’s function in allowing employees to conduct meetings, make memos, provide feedback and share corporate-wide information. However, it is important to consider that the communication provided by the organisation is clear and consistent from within all levels. It must address both organisational and individual employee concerns. Management behaviour will influence employee behaviour more than the words included in a communication process using a particular channel. Employees assess the communication to see if the company policies, changes and other concerns meet their needs and the company as well. Furthermore, the efficient feedback system of Google exemplifies their communication process in both internal and external business environment.             On the aspect of HRM, Google has a distinct recruitment procedure that is bounded on the increased importance on valued intelligence and brainpower more than experience.  (2003) identified recruiting as part of the overall management function of staffing. Conversely, (2004) emphasised that staffing requires both the process of attracting and selecting potential personnel with exceptional capabilities and competencies to fill-in the company position available at hand. Recruiting potential Googlers are based on academic proficiency and human intelligence. The diversity of skills and qualities of applicants is recognised because Google management believes that it can contribute on its progression. There are also unique advertising techniques in job postings, effective referral system, and campus recruitment. Generally, Google upholds the key HRM functions namely; attracting a quality workforce, developing a quality workforce, and maintaining a quality workforce (2002; 2001). It has been recognised that HRM is a fundamental element in an organization’s life and well-being, since its beginning, for the reason that it is considered as an important means to uphold competitive advantage ( 1990). In this emerging system of global working setting, the critical factor in production has shifted from machines and equipment to the "knowledge" worker (1991). This may be the reason why Google management pays particular attention to academic performance of its applicants. The employees are also given the opportunity to enjoy through various recreation programs and other perks. The HRM practices of Google work at some specific areas of the organization but not all, thus, some criticism are identified.             All in all, the main factors that contribute to the remarkable success of Google are: the ability to innovate, outstanding teamwork among Googlers, effective communication process, and distinctive recruitment procedures. These are the given critical success factors (CSFs) and core competencies that make up the booming organisational (i.e. financial, management, marketing, etc) performance leading to victory in its chosen area of industry.    <li class="MsoNormal" style="text-align: justify"> Describe some of the negative aspects of Google’s culture. Do you think Google needs to change its culture and, if so, in what ways? </li>   Amidst the successful reputation of Google in the Internet industry, there are few criticisms in the organisational culture of the Company. The case study presented specifies the following negative features: absence of clear management structure, poor employee relations and work ethics, and its informal work culture. An organisation must have a core management structure. Although Google has  plus  as key figures, the rest of the staff are not strictly structured. Organisational management structure is a basic element in planning and decision-making (2003; 1996). On the case of project engineers and even the rest of the workforce, the unclear definition of management structure can lead to organisational conflict.  Recognising the diversity of skills and Googlers, conflict is a risk because employees have differing values and experience differing situations ( 2001). The lack of hierarchy resulted to confusion about control and decision making power and practically affects overall working conditions. To address such, management theories serve as established body of knowledge that will guide the engineers and project managers in making excellent decisions for the benefit of the whole organisation. Similarly, the understanding of management structure is directly linked to enhanced organisational performance requiring Google’s management to review its organisational composition, job positions, and area of control. On its HRM functions, Google is acknowledged with a unique recruitment process yet some aspects of the process are criticised. Some critics describes Google’s recruitment process is narrow. Companies worldwide undergo changes and utilise various job selection and recruitment methodologies (2003) due to some affecting factors (i.e. globalisation and technology innovations). For Google, there is a need to re-evaluate and study the HRM functions and policies particularly its recruitment process to meet the demands of the target market. A lot of organizations began to significantly switch their people-managing policies and systematise them in new directions (2001). It is acknowledge that selection and recruitment of potential employees, like on the case of Googlers, is directed to the attainment and accomplishment of companies’ goals in the global scene (2000). Knowledge, skills, and abilities (KSAs) that include job-related information and the necessary human abilities to perform certain job activities (1997) should be considered by Google HR team rather than academic proficiency alone. The importance of valid KSAs cannot be overstated, as the relationship between them and individual performance in the organisation is well-established (1995, 1994). Most KSAs are gained through experience yet Google oversee this point. It is accepted that quality, competence and flexibility among the employees had efficiently replaced quantity of task accomplished and imperceptive obedience gained through extensive experience. Thus, Goggle should reconsider its recruitment and selection policies and practices. Further, Google is also called upon its problematic employee relations and work ethics as seen on the unjust treatment of contractual employees and inefficient organisational behaviour. Around 30 percent of Google’s total employees are contractual, not given any employee benefits, and treated unfairly. To solve such problems, hiring, training, and providing pay and benefits to employees are essential tasks that must be accomplished by the organisation. For example, the 12-hour working day is arguably stressful especially when expectations are needed to be exceeded (i.e. the workloads and task requirements) among employers and employees themselves. Stress lowers the efficiency of the employees to perform their tasks. According to  and  (1995), in order to help organisations alleviate stress within them, they must consider the forms of stress management. The major stressors in the workplace must be properly identified and assessed, and the concerned personnel must help their employees identify their major personal sources of stress. Furthermore, the employees must be assisted in identifying their own stressors and stress tolerance levels. Before learning how to deal with stress, employees first have to identify those stressors which they react to because not everyone responds the same way to the same stressors. To aid this process, organisations might provide health risk appraisals which test for their employees' levels of stress. In general, it is suggested that organisation’s HR policies are responsive to the needs and welfare of the whole workforce. The HRM role must be proactive rather than reactive, that is, serving the employers and employees needs and welfare as directed to the achievement of competitive advantage. It should not only on the basis of attracting the best employees but taking care, developing and grooming them as organisation’s indispensable assets. As according to  and  (1989), the organisation’s HR personnel must understand its workforce and create organisational systems that will result to the development of human labour that works for the valuation of a larger organisational unit. On the issue of work ethics, Googlers are branded to be arrogant at times and never kept their appointments and always turned up late for clients’ presentation. According to (2005), ethics is a moving target. Social values change over time as influenced by a composite web of factors. To solve this, the HR leader/manager is the key person that upholds the welfare, matters of concerns, as well as conditions of the entire workforce. With this given intricate set of tasks, the need to identify its overall role is imperative as it determines the scope of its managerial functions and power. The presence of strategic planning in management minimises the potential pitfalls of the said process such as uncertainty (1995;  2004). Managing workplace diversity is also a potent solution. Diversity is one of the most effective strategies that manage individuals with different characteristics who eventually create the team (2000). It seeks to address issues related to human resources, internal communications, interpersonal relationships, conflict resolution, quality, productivity, and efficiency ( 2002, p2000). To solve work problems within Google working environment, the recognition of its strengths as well as it weaknesses in all areas of production is basic so as to be used as the form of practical guide for reinforcing its strengths and similarly creating potent solutions to its weaknesses. All in all, the negative issues of Google are not yet reflected to its current organisational performance. However, it is forecasted that such negative issues are threats to its success. Its organisational culture is claimed not to be set to manage its growth. With these given negative aspects of Google, they surely have their own organisational plans and initiatives of addressing such difficulties.

Analysis of Google's Organisational Culture using organisational behaviour theory

Google’s Organisational Culture What are the main factors/HRM procedures that have contributed to the success of Google? ...