CH-8-9 Producing Quality Goods and Services – Business : Book Guide

This Document Contains Chapters 8 to 9 CHAPTER 8 Producing Quality Goods and Services 8.7 TEXTBOOK ANSWER KEYS 8.7a Return to Inside Business Unilever 1. How do the concepts of focus, magnitude of change, and number of production processes, describe the way Unilever produces products? Focus refers to the resource or resources that make up the most important input—whether material, information, financial, or people resources. For Unilever, the focus is material resources such as food ingredients. Magnitude of change is the degree to which the original resources are physically changed. Unilever makes noticeable changes in material resources as it incorporates them into finished products. For example, the milk that Unilever incorporates into Ben & Jerry’s ice creams takes on a very different form after production. Finally, Unilever uses a number of production processes because of the variety of products it makes. To illustrate, the process it uses for Ben & Jerry’s ice creams is entirely different from the process it uses for Axe deodorants. 2. Why would a large multinational company like Unilever with established products that consumers purchase on a regular basis continue to invest money in research and development? Unilever continues to invest in research and development because customers’ needs and market conditions can change at any time. Products that are selling well today may not be as much in demand tomorrow. In addition, new technology is constantly emerging, changing both needs and production capabilities. Finally, competitors are always introducing new products. Therefore, Unilever needs to be ready with a steady stream of new ideas that can be developed into useful goods and services, year after year. 8.7b Review Questions 1. List all the activities involved in operations management. The activities involved in operations management are product development, planning for production, and operations control. 2. What is the difference between an analytical and a synthetic manufacturing process? Give an example of each type of process. The analytical process breaks raw materials into different component parts. The example that was used in this chapter was a barrel of crude oil. Another example of an analytical process is a meat processing plant. The synthetic process is just the opposite of the analytical process; it combines raw materials or components to create a finished product. The example used in this chapter was a Black & Decker cordless drill. Another example of the synthetic process is the manufacture of a Hewlett-Packard DeskJet printer. 3. In terms of focus, magnitude, and number, characterize the production processes used by a local pizza parlor, a dry-cleaning establishment, and an auto repair shop. The focus of the pizza parlor is all of the ingredients that go into a pizza. The magnitude is fairly small, because most of the ingredients are fairly recognizable. The pizza parlor uses only one production process, unless it has more than one product. For the dry cleaner, the focus is dirty clothes and dry-cleaning solvent. The magnitude is small, and there is only one production process. In the auto repair shop, there are many focuses, including all the parts used and the automobiles in need of repair. The magnitude is not very great, but several production processes are involved because of the numerous operations performed in repairing a car. 4. Describe how research and development leads to new products and product extension and refinement. Research and development (R&D) is a set of activities intended to identify new ideas that have the potential to result in new goods and services. Today, business firms use three general types of R&D activities. Basic research is aimed at uncovering new knowledge. Applied research consists of activities geared to discovering new knowledge with some potential use. Development and implementation are research activities undertaken specifically to put new or existing knowledge to use in producing goods and services. The last type of research results in more new products because that is the primary objective of development and implementation. Product extension and refinement extend a product’s life cycle. Each refinement or extension results in an essentially “new” product whose sales make up for the declining sales of a product that was introduced earlier. 5. What are the major elements of design planning? The major elements of design planning are (1) product line, (2) required production capacity, and (3) use of technology. When considering the product line, management must determine how many product variations there will be, and then the product-design process will create the specifications for each variation. The required capacity will be determined by the operations managers working with the firm’s marketing managers to make sure resources won’t lie idle or be insufficient. When management decides the degree to which automation will be used to produce the product or service, it must choose between labor-intensive technology and a capital-intensive technology. 6. What factors should be considered when selecting a site for a new manufacturing facility? The following factors should be considered when selecting a site for a new manufacturing facility: the location of major customers; transportation costs to deliver finished products to customers; geographic location of suppliers of parts and raw materials; the cost of both land and construction required to build a new production facility; local and state taxes and environmental regulations and zoning laws; the amount of financial support offered by local and state governments; special requirements for energy, water, and other resources used in the production process; quality of life for employees and management in the proposed location; and availability and cost of skilled and unskilled labor. 7. If you were an operations manager, what would you do if market demand exceeded the production capacity of your manufacturing facility? What action would you take if the production capacity of your manufacturing facility exceeded market demand? When market demand exceeds capacity, several options are available to the firm, including the following: a. Production of products or services may be increased by operating the facility overtime or starting a second or third work shift. b. For manufacturers, another response is to subcontract a portion of the work to other producers. c. If the excess demand is likely to be permanent, the firm may expand the current facility or build another facility. d. Some firms occasionally pursue another option—ignore the excess demand and allow it to remain unmet. When capacity exceeds market demand, again several options are available to the firm, including the following: a. To reduce output temporarily, workers may be laid off and part of the facility may be shut down. b. The facility may be operated on a shorter-than-normal work week for as long as the excess capacity persists. c. To adjust to a permanently decreased demand, management may shift the excess capacity to the production of other goods or services. d. The most radical adjustment is to eliminate the excess capacity by selling unused facilities. 8. Why is selecting a supplier so important? The objective of purchasing is to ensure that required materials are available when they are needed at minimum cost. For some products, purchased materials make up more than 50 percent of their wholesale costs. For these reasons, purchasing personnel should constantly be on the lookout for new or backup suppliers, even when their needs are being met by their present suppliers. Such problems as strikes and equipment breakdowns may cut off the flow of purchased materials from a primary supplier. The choice of suppliers should result from careful analysis of a number of factors. The following are especially critical: price, quality, reliability, credit terms, and shipping costs. 9. What costs must be balanced and minimized through inventory control? The costs that must be balanced and minimized through inventory control are holding cost (or storage cost) and stock-out cost (the cost of running out of inventory). 10. How can materials requirements planning (MRP), enterprise resource planning (ERP), and the just-in-time inventory system help to control inventory and a company’s production processes? Materials requirements planning (MRP) is a computerized system that integrates manufacturing planning and inventory control. An MRP system is able to juggle delivery schedules and lead times effectively so that materials, parts, and supplies arrive when they are needed. The second extension of materials requirements planning is known as enterprise resource planning, or ERP. The primary difference between ERP and the above methods of controlling inventory and production is that ERP software is more sophisticated and can monitor not only inventory and production processes, but quality, customer satisfaction, and such variables as inventory at a supplier’s location. A just-in-time inventory system is designed to ensure that materials or supplies arrive at a facility just when they are needed so that storage and holding costs are minimized. 11. Explain in what sense scheduling is a control function of operations managers. Scheduling is a control function because managers can control the production of products and services by scheduling materials and other resources to arrive at the right place at the right time and the movement of finished goods into inventory and out to customers. 12. In what ways can employees help to improve the quality of a firm’s products? One of the first steps needed to improve quality is employee participation. Successful firms encourage employees to accept full responsibility for the quality of their work. One way of doing this is through a quality circle—a team of employees who meet on company time to solve problems of product quality. Another “quality tool” is inspection. Employees perform inspections at various times during production. Purchased materials may be inspected when they arrive at the production facility. 13. How might productivity be measured in a restaurant? In a department store? In a public school system? Productivity in a restaurant might be measured by how many meals are prepared in an hour, how many tables are served (by how many servers in a shift), and how many tables are turned over during the eating hour. Productivity in a department store might be measured by dollar sales per salesperson, total sales revenues per number of employees working, and the number of customer complaints per thousand sales. A public school system might measure productivity by the percentage of students graduating, individual school scores on compulsory state exams, and grade point trends of students in core subjects over time. 14. How can CIM and FMS help a manufacturer to produce products? Computer-integrated manufacturing (CIM) is a computer system that helps design products and controls the machinery needed to produce the finished product. A flexible manufacturing system (FMS) combines robotics and CIM into a single production system. Instead of spending time and money to retool traditional production machinery for each new product, an FMS can be quickly and inexpensively reprogrammed, allowing smaller batches of a variety of products to be manufactured without raising production costs. 8.7c Discussion Questions 1. Why would Rubbermaid—a successful U.S. company—need to expand and sell its products to customers in foreign countries? Today, Rubbermaid produces and sells over 5,000 everyday products—mops, storage boxes, toys, desk organizers, and so on. While it has been extremely successful in the United States, it is more difficult for a company like Rubbermaid to increase sales in the United States because of its market saturation at home. The fact is that many companies like Rubbermaid have turned to customers in foreign nations as a way to increase sales and, ultimately, profits. 2. What steps have U.S. firms taken to regain a competitive edge in the global marketplace? Although the number of manufacturing jobs has declined, productivity has increased. At least two very important factors account for increases in productivity: First, innovation—finding a better way to produce products—is the key factor that has enabled American manufacturers to compete in the global marketplace. Often, innovation is the result of manufacturers investing money to purchase new, state-of-the-art equipment that helps employees improve productivity. Second, today’s workers in the manufacturing sector are highly skilled in order to operate sophisticated equipment. Simply put, Americans are making more goods, but with fewer employees. 3. Do certain kinds of firms need to stress particular areas of operations management? Explain. Certain types of firms do need to stress specific areas of operations management. A firm that produces precision machine parts may emphasize quality control, whereas a merchandising firm may stress inventory control. A marketing firm, on the other hand, would probably stress productivity. 4. Is it really necessary for service firms to engage in research and development? In planning for production and operations control? A service firm must engage in research and development to determine whether the services it currently offers are still required or whether there are any other services the firm can develop and provide at a profit. Like any business, a service firm must engage in planning for production and operations control. Some aspects of these processes will be more important than others, depending on the type of firm. Consider a dry-cleaning firm as an example. Management has to decide what services it will offer—its product line—such as whether to only clean clothes with a dry-cleaning solution or to make soap-and-water laundering available as well. Should it offer only machine pressing or also hand finishing? Tailoring? Shoe repair? Required capacity will depend on how many of these services will be performed on site. Management will also have to decide what technology to implement to streamline the processes. In terms of operations control, if clean clothes aren’t ready when the customers come to pick them up—scheduling and quality control—the dry-cleaning firm won’t be in business long. 5. How are the four areas of operations control interrelated? A business must purchase the proper amount of goods at the right time to maintain the necessary level of inventory. Proper scheduling cannot be achieved unless the inventory is maintained at the correct levels. In the absence of the right kinds of materials of the right quality, the quality of the product will be adversely affected. 6. Is operations management relevant to nonbusiness organizations such as colleges and hospitals? Why or why not? Although those types of businesses are generally not for profit, they have the same types of problems as profit-making organizations. Since operations management deals effectively with operational problems, it is relevant to almost all types of business. 8.7d Comments on Video Case 8.1 Suggestions for using this video case are provided in the Pride/Hughes/Kapoor Video Guide. Burton Snowboards’ High-Quality Standards 1. About 40 people lost their jobs when Burton closed its Burlington manufacturing factory. How do you think the factory closing might affect the productivity of the remaining headquarters staff? What impact could it have on product quality? In the current slow economy, students will probably suspect that job losses will have some negative effect. Given Burton’s commitment to its employees and their apparent loyalty to the sport and the firm, such an effect should be temporary, especially if management handles the situation appropriately by involving remaining employees in any further changes that need to occur at headquarters and stressing the need to maintain quality of both R&D and productivity. 2. Do you think there will be an impact on quality when the design and development staff is separated from the factory floor by so many miles? Why or why not? It is probably safe to assume the company will invest (or has already invested) in communications technology such as intranet and videoconferencing to ensure that the R&D staff have fast and frequent access to the European manufacturing staff and vice versa. Real or even virtual tours of the factory floor in Austria might be arranged for the U.S. employees, and prototype products can either be shipped to the United States or tested in Europe. Students might enjoy using their imaginations to come up with ways to prevent or resolve any quality problems that might arise from the distance between the headquarters and the factory. 3. Can you reconcile the company’s focus on product quality with its decision to concentrate manufacturing in a place where it’s less expensive to operate? If so, how, and if not, why not? Students should be able to recognize that paying unnecessarily high production costs will eventually limit the company’s ability to invest in the market research and product development processes that lead to higher product quality. Further, if the company tried to cover the costs of its U.S. manufacturing facility by raising its prices, it would lose some sales to cheaper competitors and further weaken its ability to support its quality standards with design innovation, premium materials, and accurate market research. 8.7e Comments on Case 8.2 Inside Boeing’s Jet Factories 1. Currently, Boeing has a big backlog of orders for both 737 and 787 Dreamliner aircraft. How does the backlog affect its plans for production? What could the company do to increase production without sacrificing quality? Boeing must be sure its operational planning includes steps to reduce the backlog and simultaneously maintain production output at acceptable levels that approach a better balance of capacity and demand. The company should consider a variety of remedies, including building new facilities and adding shifts. Due to safety considerations, Boeing is unlikely to subcontract final assembly of any aircraft, although it might increase production by subcontracting assembly of specific sections of a product, which would then be reinspected and tested for quality before being incorporated into complete aircraft under construction in Boeing’s facilities. Students may offer other answers, such as asking employees for ideas that will save time and uphold quality, as the case shows Boeing has done in the past with much success. 2. Do you agree that a just-in-time inventory system is appropriate for Boeing’s 787 production? Explain your answer. Because Boeing has experienced parts shortages during 787 production, some students may argue that a just-in-time inventory system is inappropriate for a company that has a backlog of orders. Instead, Boeing might need to stockpile inventories of the key parts so it can maintain production for some period if parts suddenly become temporarily unavailable. Students who argue the other side of this question may say that the just-in-time inventory system can be adjusted to Boeing’s production schedule, meaning more parts would be delivered as the speed of output increases and fewer parts would be delivered if slowdowns occur. Given the price of a single aircraft, some of its parts may be expensive, and stockpiling a large inventory would be extremely costly for Boeing. 3. One production team suggested changing the sequence required to paint parts and saved 10 minutes per employee per job in the paint job. How do suggestions—even those that result in small improvements in the production process—improve the company’s ability to meet customer demand, improve quality, and increase profits? Because employees perform their individual tasks so often, they are in a good position to share information in teams and try out suggestions for improving the efficiency of specific areas of production. Better efficiency translates to higher productivity, which generally increases output to meet demand and ultimately improves profitability. Employees also understand the overall quality standards that Boeing aims to achieve, and suggestions that improve quality even in a small way (such as longer-lasting paint or finish) will contribute to better quality over the life of each jet. The case indicates that the 737 has been produced in some form since the 1960s, and it has been redesigned with improvements a number of times. If each redesign incorporates a small quality improvement, all jets produced from that point on will be better quality—a benefit that can last many years. 8.7f Building Skills for Career Success 1. Social Media Exercise Starbucks has taken an innovative approach to improving their products and the customer experience in their stores. Their entire purpose is to create a “third place” beyond home and work where people can congregate and socialize (while having a nice cup of coffee). To engage customers, they created a Web site called My Starbucks Idea (http://mystarbucksidea.com) that allows customers to post their ideas and then allows customers to also vote on them. 1. Visit the http://mystarbucksidea.com site. Do you have an idea for Starbucks? If so, post it. Do you have a feeling about one of the current ideas? If so, then vote for it. Students’ answers will vary based on their creativity and the depth of their view of the Web site. 2. Do you think this is an effective way to gain customer ideas for new products? Why or why not? Hearing from customers can be an effective way of gaining information directly from the people who currently support the business, and having a Web site for only that purpose is effective. However, there are many comments unrelated to product ideas so sorting the information requires time. 3. Can you think of other ways that corporate executives at Starbucks can gauge customer interest in their products and experience using social media? Using Facebook, Twitter, and other social media outlets will gauge customer interest and provide additional feedback. 2. Journaling for Success Today, people purchase all kinds of products ranging from inexpensive, everyday items to expensive, sophisticated products including electronics, automobiles, and even housing. In each case, customers like to think they are “getting their money’s worth” when they purchase a product or service. Assignment 1. Describe a recent purchase that you made. Be sure to include the cost and why you made the purchase. 2. Given the cost of the product or service, were you satisfied? Why? 3. Do you think that the quality of this product or service was acceptable or unacceptable? 4. How could the manufacturer or provider of the service improve the quality of the product or service? Students answers will vary depending upon the recent purchase they made. Satisfaction levels will also vary depending upon students’ expectations. The same purchase can result in different levels of satisfaction. This is also true about quality; perceptions will influence opinions. 3. Developing Critical-Thinking Skills Plant layout—the arrangement of machinery, equipment, and personnel within a production facility—is a critical ingredient in a company’s success. If the layout is inefficient, productivity—and, ultimately, profits—will suffer. The purpose of the business dictates the type of layout that will be most efficient. There are three general types: process layout, product layout, and fixed-position layout. The process layout is used when different operations are required for creating small batches of different products or working on different parts of a product. The plant is arranged so that each operation is performed in its own particular area. A product layout (sometimes referred to as an assembly line) is used when all products undergo the same operations in the same sequence. Workstations are arranged to match the sequence of operations, and work flows from station to station. A fixed-position layout is used when a very large product is produced. The product remains stationary, while people and machines are moved as needed to assemble the product. The answers will depend on how the company’s internal operations are described. • One-hour dry cleaners—product layout • Health club—process layout • Auto repair shop—process layout • Fast-food restaurant—product layout • Shipyard that builds supertankers—fixed-position layout • Automobile assembly plant—process layout 4. Building Team Skills The responsibilities of the general contractor are to order the materials and have them delivered to the construction site as they are needed, to schedule activities to begin at the proper time, and to monitor the quality of the work in progress. The following is a sequenced list of the activities required to build a house. On the PERT chart, use the numbers to indicate the activity. a. Apply for a water meter from the cooperative water system. b. Get approval and installation of water meter. c. Prepare land (level and/or excavate). d. Set forms for foundation. e. Install plumbing in foundation. f. Pour concrete. g. Complete foundation. h. Accept delivery of materials. i. Frame the house. j. Complete roof. k. Complete masonry work. l. Install septic system. m. Complete electrical and propane work. n. Complete wiring. o. Install and complete air conditioning and heating equipment. p. Complete inside plastering. q. Complete painting outside and inside. r. Pour sidewalks and patio. s. Install cabinets. t. Install flooring. u. Install window blinds. Under normal conditions, the time required to build a house is 90 to 180 working days. If the weather turns bad, if workmen are not available at the scheduled time, or if the materials are backordered or unavailable, the time to build the house will be longer. The time necessary to receive approval for a water meter depends on the availability of water meters on the line. That could delay the whole project for as long as a year. 5. Researching Different Careers The following Internet address can help students in their job research: www.bls.gov/oco/home.htm Quality Control Inspector According to the Occupational Outlook Handbook (OOH), there are quality control inspectors monitoring almost every manufacturing process today because of the increasing stress on product quality. Main activities and responsibilities differ according to the product manufactured but can include sorting, weighing, tasting, measuring, or any other task that can verify that a product has been created to the firm’s standards or that machinery is operating at necessary efficiency. In many cases, a high school diploma is all that is needed to be hired for this position, with training provided by the firm based on duties. The OOH predicts that employment of quality control inspectors is expected to grow 8 percent through the year 2020 with experience being key to the most opportunities. According to the latest published figures in the Occupational Outlook Handbook, the median earnings of inspectors in May 2010 was $15.88 an hour. Purchasing Agent According to the OOH, purchasing agents are responsible for obtaining the highest-quality goods and services for their firms at the lowest possible prices. They evaluate suppliers, negotiate prices, negotiate contracts, review product quality, and strive to have the right amount of goods and services available at the right time. The projected outlook for employment in this position through the year 2020 is 7 percent. The median annual wage of purchasing managers, buyers, and purchasing agents was $58,360 in May 2010. Educational requirements vary according to the firm’s size and industry. Most organizations prefer applicants to have a college degree and some experience in the industry. 8.8 QUIZZES I AND II QUIZ I True-False Questions Select the correct answer. 1. T F Reducing production costs by selecting suppliers that offer higher-quality raw materials and components at reasonable prices is one way U.S. firms are trying to become more competitive in the global marketplace. 2. T F The degree to which resources are physically changed is referred to as the focus of a production process. 3. T F Basic research consists of activities undertaken specifically to put new or existing knowledge to use in producing goods and services. 4. T F A typical planning horizon for many firms is one year. 5. T F Scheduling involves both routing and timing of production activities. Multiple-Choice Questions Circle the letter before the most accurate answer. 6. A manufacturing process that combines raw materials or components to create a finished product is referred to as a(n) a. synthetic process. b. technological process. c. analytical process. d. manufacturing utility. e. productivity measure. 7. A(n) __________ line is a group of similar products that differ only in relatively minor characteristics. a. operation b. process c. product d. fixed e. capital-intensive 8. Inventory control is concerned about a. holding costs and manufacturing units. b. holding costs and storage costs. c. statistical quality control and storage costs. d. timing and routing. e. routing and manufacturing costs. 9. A(n) __________ system combines robotics and computer-integrated manufacturing in a single production process. a. computer-aided design b. computer-aided manufacturing c. SQP d. automated e. flexible manufacturing 10. The productivity growth rate in the United States is a. the highest in the world. b. currently a negative number. c. pretty impressive, with a productivity increase of 5.8 percent in 2010. d. lagging behind the productivity growth rates of such countries as Italy and Japan. e. the lowest in the world. Quiz II True-False Questions Select the correct answer. 1. T F An analytical process combines raw materials or components to create a finished product. 2. T F Today, the American economy is characterized as a service economy. 3. T F When labor-intensive technology is used, people must do most of the work. 4. T F The objective of purchasing is to ensure that required materials are available when they are needed in the proper amounts and at minimum cost. 5. T F The U.S. productivity growth rate has fallen in recent years. Multiple-Choice Questions Circle the letter before the most accurate answer. 6. Operations managers often refer to the resource or resources that comprise the major or most important input as the a. analytical process. b. synthetic process. c. magnitude of change. d. focus of the production. e. SQP process. 7. __________ consists of activities aimed at uncovering new knowledge and scientific advancement. a. Basic research b. Applied research c. Developmental research d. Implementation e. Product research 8. Product __________ is the development of a plan for converting a product idea into an actual product. a. line b. automation c. capacity d. design e. specification 9. Groups of employees who meet on company time to solve problems are a. quality squares. b. quality circles. c. performance committees. d. productivity rounds. e. inspection teams. 10. ISO 9000 standards help a firm to a. reduce government regulation. b. become environmentally stable. c. improve quality management. d. use robotics and computer-aided design. e. do nothing; they are overrated and do not really help firms. 8.9 ANSWER KEY FOR QUIZZES I AND II Quiz I True-False Multiple-Choice 1. T 6. a 2. F 7. c 3. F 8. b 4. T 9. e 5. T 10. c Quiz II True-False Multiple-Choice 1. F 6. d 2. T 7. a 3. T 8. d 4. T 9. b 5. F 10. C 8.10 CLASSROOM EXERCISES 8.10a Homework Activities • Article Report. Have students bring in an article that shows an example of a company that provides services. An alternative would be to bring in a newspaper or magazine ad promoting a service. It is likely that an ad will stress some quality aspect of the business. • Researching and Following a Company Throughout the Course (continuing assignment). Have students describe the company’s main products or services. Where does manufacturing occur? Are there multiple plants or service locations? • Factory Conditions Overseas. Ask students to find articles on factory conditions overseas to prepare for discussion if you are going to use the Supplemental Lecture. 8.10b Classroom Activities • Debate Activity. Use the Supplemental Lecture to debate whether or not the United States should attempt to influence factory conditions overseas. • Just How Good Is It? Exercise. Organize students into groups of three to five. The objective of this exercise is to help them evaluate quality issues in services, and to demonstrate how service quality can be measured. They are to identify three restaurants/eateries on campus, identify criteria by which to judge them, and then rank each eatery on that criteria. This should generate lively discussion. The exercise should take no more than 15 minutes. • Let’s Improve That Product! Exercise. In groups, students should be asked to develop a list of potential product improvements for five existing products. This should take no more than 15 minutes. Encourage the students to be creative and not worry about feasibility. As the assignment indicates, the best way to generate product improvement is to identify a problem with the existing product and fix it. • The Crayon Factory Exercise. To illustrate the difference between assembly line and fixed-position layout, bring in a pack or several packs of crayons so that there are enough for the entire class. Also bring in either two large pieces of poster board or a page out of a large format coloring book. You may also enlarge the “coloring book” page at the end of this chapter. Make two copies of the coloring book page. To begin the exercise, pass out the crayons to each student. For part one, the assembly line, ask each student to wait in their seat as the page to be colored is passed from student to student. Time the process. For part two, place the page to be colored in the middle of the room if possible. The front of a large lecture hall where seats cannot be moved will also work. Ask the students to line up and come down one by one to add their color to the page. Time the process. The time required for this activity will depend on the size of the class. For a class of 40 students, it would take 30 minutes or more. • How Can You Improve Your Productivity? Exercise. Today’s students often carry a heavy academic and work load. Organize your students into small groups to brainstorm the barriers they face in improving efficiency and productivity as well as possible solutions. This exercise should take about 20 minutes. • Producing Goods and Services Jeopardy. Use the online jeopardy game that is available at http://jeopardylabs.com/play/chapter-8-producing-quality-goods-and-services. This is a Jeopardy game that can be played during class, and it is intended to reinforce the key terms covered in this chapter. You can set it up in teams of students and give a prize (or bonus points) for the winning team. 8.10c Exercise Handouts Follow on Next Pages Just How Good Is It? In your groups, first list the three most popular places on or near campus to eat. Then, consider what constitutes service quality for you and assign a value of 5 for excellent, 3 for acceptable, and 1 for unacceptable. Be as specific as you can in setting up your criteria. For example, you may wish to consider items similar to those listed below. 1. Length of wait time to place order: 2 minutes or less—5 points 3–5 minutes—3 points 6 or more minutes—1 point 2. Availability of menu items and ingredients: Always available—5 points Runs out 1 in 5 purchases—3 points Out of something every time you shop—1 point In your groups, determine what criteria are important to you and assign values of 5, 3, and 1 for specific performance. Finally, rate the three eateries on the criteria. Which one is the best? Worksheet for Just How Good Is It? Criteria Restaurant 1 Restaurant 2 Restaurant 3 Let’s Improve That Product! Consider the following product improvements: • Desk phones • Cell phones • Hot water bottle • Heating pad • Oven • Microwave • Manual transmission • Automatic transmission • Slippery bottles • Easy grip bottles If you were making requests of the R&D department for improvements to the following products, what would you ask for? The first one is done for you. For number 5, choose any product you would like to improve. List as many possible improvements as you can. Hint: Consider problems you may have with the existing product. 1. Toaster Improvements: • Self-cleaning • Pre-programmable • Small, plug into car • No electricity required • Even smaller, carry in backpack 2. Backpacks Improvements: 3. Bottled water Improvements: 4. Refrigerator Improvements: 5. Any product Improvements: The Crayon Factory Part One: After the instructor passes out the crayons (one to each student), wait in your seat as the pattern to be colored (below) is passed around to your desk. Add your color and pass it on to the next student. Keep the crayon for part two. Part Two: After all your classmates have finished part one, the instructor will place a second copy of the pattern in a central location. Line up as instructed. One by one, go to the central location and add your color to the page. How Can You Improve Your Productivity? THE PURPOSE OF THIS EXERCISE IS TO HELP YOU FIND A WAY TO INCREASE YOUR PERSONAL PRODUCTIVITY RELATING TO SCHOOL WORK. Step One: Begin by identifying and grouping the major tasks required of the students in your group. For example, how many hours a day are spent in class? Studying? Eating? Sleeping? And so forth. Step Two: Identify those areas where you need to become more efficient. Step Three: Identify the barriers to efficient performance. These could be personal (too much time texting while reading), communal (interruptions by roommates), process related (computer too slow), or academic (the workload in one course overshadows others). Step Four: Choose one of the barriers and brainstorm a list of strategies that would help you to become more productive and efficient in that area. Plan to share your results with the class. RUNNING A BUSINESS—PART 3 Suggestions for using this video case are provided in the Pride/Hughes/Kapoor Video Guide. Graeter’s Grows through Good Management, Organization, and Quality 1. Based on this case and the two previous Graeter’s cases, what are the company’s most important strengths? Can you identify any weaknesses that might affect its ability to grow? Students should recognize that Graeter’s possesses a number of key strengths, including its extensive experience in making premium ice cream, its specially-built and expandable facilities, and its owners’ and employees’ in-depth knowledge of the production process. Also, its dedicated management team is a strength, as is the ability and willingness to call on expert consultants when needed. If the next generation of Graeter’s family members decided not to enter the business, this could prove a possible weakness, but it could be overcome by recruiting new managers to keep the company growing. If Graeter’s suffers a quality-control lapse or another problem that is highly publicized, the damage to its image would be a possible weakness. 2. How would you describe the departmentalization and the organizational structure at Graeter’s? Do you think Graeter’s is centralized or decentralized, and what are the implications for its plans for growth? Graeter’s appears to be organized into at least four basic functions: production (under Bob Graeter), retail store sales (under Chip Graeter), accounting and finance (under the controller), and sales and marketing (under a separate executive). The organization is flatter than it is tall, with few levels separating front-line employees from top management. The organization seems to be centralized, with the family seeking input from employees at all levels when making important decisions. According to the case, top management allows group managers to handle routine store-level problems, which indicates good delegation, a key to being able to open more stores and manage them effectively over time. 3. The newest Graeter’s plant can produce far more ice cream than is needed today. The company also makes ice cream at its original plant and at the plant formerly owned by a franchisee. What are the implications for Graeter’s strategy and for its operational planning? Graeter’s now has more flexibility as it prepares to meet higher market demand during implementation of its strategy of coast-to-coast expansion. Because of excess capacity, the company has the choice of operating on a longer planning horizon or speeding up implementation of long-term growth plans. Should demand plummet, however, Graeter’s will need to take steps to reduce short-term output. Looking at operations control, Grater’s can place quantity orders for supplies at a lower price, due to higher volume, and have a stronger position when negotiating with suppliers over credit terms and other details. However, operating so many production facilities may complicate inventory control decisions, because each facility has different equipment and different production capacity. BUILDING A BUSINESS PLAN—PART 3 The two major components in this section of the business plan relate to the management team and the manufacturing and operations plan. The Management Team Component Remind students that they should provide evidence that they have a management team with the necessary skills and experience to execute their business plan successfully. They should also describe their manufacturing and operations plan. Refer students to the three chapters in Part 3 of the textbook: Chapter 6, Understanding the Management Process Chapter 7, Creating a Flexible Organization Chapter 8, Producing Quality Goods and Services Make sure that students include the answers to the following questions: 1. How is the management team balanced in technical, conceptual, interpersonal, and other special skills? 2. What is their style of leadership? 3. How will the company be structured? 4. What are the key management positions, compensation, and key policies? In addition, students should prepare an organization chart and résumés for members of the management team. The Manufacturing and Operations Plan Component Students should describe their manufacturing and operations plan, space requirements, equipment, human resources, inventory control, and purchasing requirements. Assure students that even if they are in a service-oriented business, many of these questions may still apply. Students should list advantages and disadvantages of their planned location in terms of wage rates, unionization, labor pool, proximity to customers and suppliers, types of transportation available, tax rates, utility costs, and zoning requirements. Refer students to Chapter 8, which should help them in answering such questions as facilities requirements; make-or-buy decisions (make sure students justify their “make-or-buy” decision); potential subcontractors and suppliers; and issues related to quality control, inventory, and production. Students must also document that there is a sufficient quantity of adequately skilled people in the labor force to meet their needs. Review of Business Plan Activities Students should review their business plan activities for any weaknesses/problems and resolve them before beginning Part 4. Students should also review all the answers to the questions in all previous parts to be certain that all answers are consistent throughout the entire business plan. They should write a brief statement that summarizes all the information for this part of the business plan. Chapter 8 Video Case: Burton Snowboards’ High-Quality Standards RUNNING TIME: 6:25 Chapter 8 discusses producing quality goods and services. Operations management consists of all the activities that managers engage in to create goods and services. Generally, three major activities are involved in producing goods or services: product development, planning for production, and operations control. A business transforms resources into goods and services in order to provide utility to customers. Conversion processes vary in terms of the major resources used to produce goods and services, the degree to which resources are changed, and the number of production processes that a business uses. Operations management often begins with product research and development (R&D). R&D activities are classified as basic research, applied research, and development and implementation. Planning for production involves three major phases: design planning, facilities planning, and operational planning. The major areas of operations control are purchasing, inventory control, scheduling, and quality control. Automation, the total or near-total use of machines to do work, has for some years been changing the way work is done in factories. Concepts Illustrated in the Video • Demographic Trends • External Business Environment • Quality • Social Trends • Technological Trends • Trends in Global Competition VIDEO CASE SUMMARY Jake Burton started Burton Snowboards as an entrepreneurial venture in 1977. The company has grown significantly since then, with factories and stores located in the United States and internationally. The company’s success is influenced by factors within the external business environment. These external factors include social trends, demographic trends, technological trends, and trends in global competition. A major factor in the company’s success is its high-quality standards. Burton Snowboards is a premium supplier whose name is synonymous with quality. The company does not cut corners, but this sometimes means that its products are priced higher than the competition. The prevailing philosophy is that “you get what you pay for.” By listening to its core customers, Burton remains confident that its high standards meet the expectations of those for whom snowboarding is not just a sport, but also a lifestyle. Quality is further assured by the company’s policy of redesigning every product each year to retain its position as “an innovator, not an imitator.” This allows the company to keep up with changing customer needs and desires as well as with competitors’ efforts to grow their own market share. Critical-Thinking Questions Using information from the case and the video, answer the following questions: 1. About 40 people lost their jobs when Burton closed its Burlington manufacturing factory. How do you think the factory closing might affect the productivity of the remaining headquarters staff? What impact could it have on product quality? In the current slow economy, students will probably suspect that job losses will have some negative effect, but given Burton’s commitment to its employees and their apparent loyalty to the sport and the firm, such an effect should be temporary, especially if management handles the situation appropriately by involving remaining employees in any further changes that need to occur at headquarters and stressing the need to maintain quality of both R&D and productivity. 2. Do you think there will be an impact on quality when the design and development staff is separated from the factory floor by so many miles? Why or why not? One can assume that the company will invest (or has already invested) in communications technology such as intranet and videoconferencing to ensure that the R&D staff have fast and frequent access to the European manufacturing staff and vice versa. Real or even virtual tours of the factory floor in Austria might be arranged for the U.S. employees, and prototype products can either be shipped to the United States or tested in Europe. Students may come up with other ways to prevent or resolve any quality problems that might arise from the distance between the headquarters and the factory. 3. Can you reconcile the company’s focus on product quality with its decision to concentrate manufacturing in a place where it’s less expensive to operate? If so, how, and if not, why not? Students should be able to recognize that paying unnecessarily high production costs will eventually limit the company’s ability to invest in the market research and product development processes that lead to higher product quality. Further, if the company tried to cover the costs of its U.S. manufacturing facility by raising its prices, it would lose some sales to cheaper competitors and further weaken its ability to support its quality standards with design innovation, premium materials, and accurate market research. Chapter 8 Lecture Launcher: ANOTHER Spike in Traffic VIDEO SUMMARY Business continues to boom for Urban Farmz. It has five new restaurants to supply, it has started four new online markets, and it will attract even more customers once the article about it comes out in Growing Green magazine. That sounds like a great situation, right? “Maybe not,” says Rick, Urban Farmz’s operations manager. “We’re growing too fast,” he tells Jake, noting that the business doesn’t have enough workers, delivery vans, and an accurate inventory system. “How are we going to fill all these orders? How are we going to ensure that we don’t cut corners trying to keep up?” he asks. Fortunately, he has a plan for improving the capacity, accuracy, and efficiency of Urban Farmz’s operations. CHAPTER 9 Attracting and Retaining the Best Employees 9.7 TEXTBOOK ANSWER KEYS 9.7a Return to Inside Business LinkedIn 1. What are the advantages and disadvantages of asking employees to alert their LinkedIn member networks when a job opening is available? Students should be able to identify a number of advantages and disadvantage. One advantage: when employees spread the word about an open position through their LinkedIn networks, other members will alert their networks, as well, increasing the chances that qualified candidates will learn of the opening and apply. A second advantage: Employees are likely to know, through LinkedIn, people with appropriate skills and experience to match at least some of the job openings that occur from time to time. Using LinkedIn, these people will find out when the employer is hiring and also realize that if one position doesn’t match their skills, the next one might. One disadvantage: The company might receive a lot of inquiries from unqualified job-seekers who learn of the opening through employees’ LinkedIn networks. A second disadvantage: The company might assume that people in its employees’ LinkedIn networks are personally known to the employees and are presumably reliable, which might not be the case. 2. Do you think a company should be able to view the LinkedIn profiles of members who work for its competitors and even contact them about job openings? Explain your answer. Students who say yes may explain this answer by noting that all LinkedIn members can see at least some profile information about other members. It is advantageous to members that their profiles be visible for networking purposes, and they would probably not want to restrict competitors from being able to view profiles and make contact. From the employers’ perspective, they all have the same ability to view and contact members via LinkedIn. Students who disagree may argue that company address books and employee lists aren’t public, so therefore the names and titles of people who work for them should not be available to competitors, even on LinkedIn. Or these students may argue that profiles should always be visible to members but contact between a company and employees who work for competitors should be limited to avoid the possibility that employees with vital knowledge of business affairs might be recruited by direct competitors. When students discuss this issue, ask them about their own careers and how they believe LinkedIn might affect their ability to change jobs within a certain industry. 9.7b Review Questions 1. List the three main HRM activities and their objectives. The three main HRM activities and their objectives are as follows: a. Acquiring—getting people to work for the firm b. Maintaining—keeping these valuable resources c. Developing—training employees so they can make a greater contribution to the firm 2. In general, on what basis is responsibility for HRM divided between staff and line managers? Responsibility for human resources management is usually shared between line managers and HRM specialists. Specific HRM activities are assigned to those managers in the best position to perform them. Human resources planning, job analysis, recruiting, and selection are usually done by staff specialists with input from line managers. Performance appraisal is the job of the line manager. 3. How is a forecast of human resources demand related to a firm’s organizational planning? The firm’s organizational planning determines whether the firm will need more or fewer employees. The human resources demand forecast should then match the organizational plan requirements. 4. How do human resources managers go about matching a firm’s supply of workers with its demand for workers? When the demand is greater than the supply, human resources managers increase the size of the workforce by hiring more personnel. When the supply exceeds the demand, steps must be taken to reduce the size of the workforce through layoffs, attrition, or early-retirement incentives. As a last resort, employees are simply fired. 5. What are the major challenges and benefits associated with a culturally diverse workforce? The challenges include teaching managers how to cope with many people with varied backgrounds and value systems. Another challenge is training employees to work with peers and superiors with diverse backgrounds. Benefits of cultural diversity include cost advantages, the ability to attract the best employees, and the opportunity to develop creative solutions to problems. 6. How are job analysis, job description, and job specification related? A job analysis is a systematic procedure used to determine the elements of a job. A job description is a list of these elements. A job specification is a list of the qualifications required for a job. The job description together with the job specification determines the type of individual needed to fill that position. 7. What are the advantages and disadvantages of external recruiting and of internal recruiting? The primary advantage of external recruiting is that it enables the firm to bring in people with new perspectives and varied business backgrounds. But external recruiting can be expensive, especially if private employment agencies are used. The use of social networks and other canvassing techniques can reduce the cost of external recruiting. On the other hand, promoting from within provides strong motivation for current employees and helps the firm retain quality people. The major disadvantage of internal recruiting is that the promotion of an employee leaves that employee’s position vacant. Thus, the firm not only incurs recruiting and selection costs, but it must also train two employees instead of one. 8. In your opinion, what are the two best techniques for gathering information about job candidates? The most commonly used means of obtaining information about applicants’ qualifications are employment applications, employment tests, interviews, references, and assessment centers. Most human resources managers rely heavily on employment applications and interviews to choose the most appropriate applicant. Of course, employment tests, references, and the use of assessment centers may also be of value in determining which applicant to hire. 9. Why is orientation an important HRM activity? Orientation is an important HRM activity because it eases some of a new employee’s concerns, acquaints him or her with the firm more thoroughly, and generally makes the transition easier and less time consuming. The end result is that the employee is more productive sooner. 10. Explain how the three wage-related decisions result in a compensation system. The wage-level decision generally determines the level at which the organization will pay its employees relative to similar firms. The wage-structure decision determines the payment for each type of job in relation to other jobs in the firm. The individual-wage decision determines what each individual in any given job will be paid within the limits set by the first two decisions. 11. How is a job analysis used in the process of job evaluation? Job analysis provides input on the type of job and the requirements for that job. It thus establishes a “standard” against which to measure. 12. Suppose that you have just opened a new Ford sales showroom and repair shop. Which of your employees would be paid wages, which would receive salaries, and which would receive commissions? The mechanics would receive wages, the administrative staff would receive salaries, and the salespeople would receive commissions. 13. What is the difference between the objective of employee training and the objective of management development? Employee training teaches an employee how to do his or her present job better. Management development prepares the recipient for additional responsibility or a promotion. 14. Why is it so important to provide feedback after a performance appraisal? It is important to provide performance feedback so that the employee knows how he or she is doing and what can be done to improve future performance. 9.7c Discussion Questions 1. How accurately can managers plan for future human resources needs? Depending on the system used and the information available and obtained, managers can be very accurate. If, however, the information is inadequate, the job of forecasting human resources needs will be difficult and inaccurate results will be likely. 2. How might an organization’s recruiting and selection practices be affected by the general level of employment? If the general level of employment is down, the firm that is hiring can be more selective because more qualified applicants will probably be available. But if the general level of employment is up, the competition to hire qualified individuals will be keen. In addition to having fewer candidates, the firm will probably have to increase the salary and/or the benefits of that position. 3. Are employee benefits really necessary? Why? Some employee benefits are required by law, such as worker’s compensation and unemploy-ment insurance. Other employee benefits—including health insurance, sick time, and vacation pay—are necessary to retain the workforce. Employees will be attracted to firms that offer the most for their efforts in terms of wages and benefits. 4. As a manager, what actions would you take if an operations employee with six years of experience on the job refused ongoing training and ignored performance feedback? Ask the employee what the problem is. Try to remedy the problem, or employ various motivational techniques such as MBO or job enrichment. As a last resort, dismiss the employee. 5. Why are there so many laws relating to HRM practices? Which are the most important laws, in your opinion? Legislation regarding the personnel practices of HRM has been passed mainly to protect the rights of employees, to promote job safety, and to eliminate discrimination in the workplace. The most important of those laws are Title VII, the Employee Retirement Income Security Act, and the Occupational Safety and Health Act. 9.7d Comments on Video Case 9.1 Suggestions for using this video case are provided in the Prides/Hughes/Kapoor Video Guide. Whirlpool’s Award-Winning Diversity Program Is Facilitated Through Employee Network 1. What are the three main objectives of Whirlpool’s diversity networks? The three main objectives of Whirlpool’s diversity networks are (1) to be a resource to the employee, (2) to be a resource to the community, and (3) to tie back into the business. Each employee network is charged with recognizing what is important to the company’s consumer base and bringing that information to bear on business decisions. The networks are also charged with reaching out to new employees. 2. What challenges do managers face in establishing a diverse workplace, and how might they respond to these challenges? Challenges related to diversity in the workplace include resistance to change, lack of cohesiveness, communication problems, interpersonal conflict, and slowed decision making. In addition, some companies with a diverse workforce experience disparity in the compensation and advancement opportunities afforded to women and minorities. Managers can respond to these challenges in a variety of ways. For example, management might conduct a review of promotion structures and recruiting systems in hopes of exposing and eliminating hidden biases. Managers may also develop companywide training to discuss topics such as glass ceilings, dimensions of cultural differences, and the impact of gender on work attitudes. The main task is for managers to communicate that differences are assets. 3. Do you think formation of Whirlpool’s employee networks is the best way to promote a positive culture of diversity? Explain. Although the video paints a positive picture of employee networks at Whirlpool, such networks create challenges as well as opportunities. For example, they encourage self-segregation and thus may discourage multicultural mixing. If an “us versus them” mentality develops, it could weaken the cohesiveness of work teams. Moreover, if employees perceive that a network is not truly inclusive, that perception may have an impact on the group’s success. Despite these potential pitfalls, inclusive networks focused on benefitting all members can expect to achieve positive results, such as the formation of effective multicultural teams. Sources: www.whirlpool.com, accessed May 26, 2010, and information provided through interviews with Whirlpool personnel and in the video “Meeting the Challenge of Diversity: Whirlpool.” 9.7e Comments on Case 9.2 High Tech Recruiting Is a No-Brainer at Intel 1. How do job candidates and Intel managers benefit when the company accepts résumés electronically instead of using printed résumés? The case states that electronic résumés become available for internal searching much more quickly than if the résumés were submitted in print form. This speeds up the time it takes Intel to identify qualified candidates for open positions. Also, it helps managers finish the selection and hiring process on an accelerated schedule to avoid positions remaining open for too long. If positions are unfilled for any length of time, Intel managers may be unable to complete key projects or accomplish certain objectives as planned. 2. Why would Intel mention its policy on sabbaticals to job candidates and publicize it periodically to current employees? Candidates understand that Intel is a demanding but admired employer. If they know about special benefits like the sabbatical, they may have a more positive attitude toward taking a job with Intel. This would be especially important if a candidate is deciding between two competing job offers with similar responsibilities and compensation. Employees need to be reminded of benefits that they don’t take advantage of every day and plan in advance for a sabbatical in the coming year. In this way, Intel can also be alerted to an employee’s interest in time to be sure his or her responsibilities are covered by colleagues. 3. What are the advantages and disadvantages of relying on virtual career fairs for initial contact with students instead of personal meetings on campus? One advantage is saving time and money. Intel’s recruiters can remain in the office and avoid hours or days of travel. A second advantage is that recruiters can reach many more people virtually than they can if they have individual meetings with students. One disadvantage is that Intel and the students don’t have the opportunity for casual chats that add to the recruiters’ knowledge of potential candidates and help students see the human side of Intel. A second disadvantage is that the recruiters can only spend a very limited time interacting with one student at a virtual career fair, whereas one-on-one meetings on campus allow for somewhat more flexibility in scheduling. Ask students whether they would prefer to meet with recruiters virtually or in person, and why. 9.7f Building Skills for Career Success 1. Social Media Exercise LinkedIn is the largest and best-known social network for professionals. Check out www.linkedin.com. 1. Do you have a profile? If not, the first step is to develop a LinkedIn profile because many companies recruit from LinkedIn. In groups of two or three, students should be asked to share their profiles with their classmate(s). They should provide constructive feedback regarding the profile. What is the first impression? What catches the eye? What is missing? 2. If you already have a profile, determine how to make it better. Are you participating in discussion groups? Have you reached out and connected to people in industries where you want to work? Continuing the discussion with their classmate(s), students should brainstorm how to connect with others in one or more industries and get connected to discussion groups. The students should discuss strategies for discussion group participation. 2. Journaling for Success 1. Assuming that you are currently in school and that you plan to begin a new job when you have completed your studies, at what point will you begin looking for a job? Explain why. Some students will begin looking for a new job in the last part of their senior year, while others will want to take some time off. Yet others will be going on to graduate school almost immediately. 2. How will you find out about job openings? The most likely sources for students will include campus and university offices as well as friends of the family. The Internet is also a potential source. 3. What types of information will be important to you when considering whether to interview for a specific position? The types of information most important to students are likely to focus on opportunity for advancement, the ability to learn desirable and marketable skills, as well as working conditions. 4. What sources of information will you use to prepare for an interview with a specific organization? Students are likely to mention the Internet as a source of information. They are also likely to check with their networks of friends and family. 3. Developing Critical-Thinking Skills To be fair and equitable in granting pay raises, base the raises on work performance and not on personal circumstances. This means that standards for work performance must be established and the employee’s work performance compared to the standards before any pay raises are issued. The reasons for issuing specific raises must be based on the level of work performance as compared to the criteria. Remaining money could be used for bonus pay or for special training. 4. Building Team Skills A. To determine your staffing needs and make sure you meet the three-month deadline, you need to gather some basic information. (1) Review the number of referrals or treatments per day provided per each discipline by the previous therapy company. This will help you determine how many full-time employees (FTEs) are required to meet each facility’s needs. (2) Poll local physical therapist (PT), occupational therapist (OT), speech therapist (ST), and respiratory therapist (RT) service providers to find out typical salary amounts. This information may also be obtained through the universities that offer degrees in these fields. OPTIONS: (1) Hire full-time OT and PT assistants at a lower salary than registered and licensed therapists for each facility and have one or two full-time licensed therapists float from facility to facility to attend meetings and complete evaluations. Licensed/registered therapists must complete the evaluations. (2) Hire full-time registered therapists for each facility. This option is the most expensive. (3) Use temporary therapists from a contract company to work in the facilities to give you more time to look for and hire good choices for permanent employees. The number of therapists you will need depends on the above information. Therapist burnout can be prevented in several ways: (1) Offer liberal continuing education benefits to employees. (2) Reward quality work with bonuses. The work should be monitored through patient outcomes and feedback from each facility. This is the high end of the rewards. Or offer a one-on-one lunch with the owner/director of the New Therapy Company. This would be the low end of the reward system. (3) Take staff out to lunch in appreciation for hard work each quarter or once a year. (4) As owner/director of the New Therapy Company, participate in admissions evaluations conducted by each facility to solicit “rehab appropriate” admissions. This will keep the therapy staff motivated by ensuring a more rehab-appropriate caseload, improve the chances of success of rehab services provided, and improve revenue by having clientele that are capable of tolerating greater amounts of billable treatment time. You can retain experienced staff in your employ and still limit cost by selecting Option 1 above. Also, offer appropriate career ladder options, encourage personal skill development through continuing education, and gather feedback from employees themselves on cost-cutting measures. Typical career ladder: staff therapist >> lead therapist of each facility >> lead therapist over each discipline—responsible for supervising, for instance, all OTs who work for the company >> consultant in program development and soliciting new contracts for additional nursing homes—a person responsible for getting each new nursing home up and running smoothly. (The roles beyond lead therapist of each facility may be handled initially by the director/owner of the New Therapy Company. As the company grows, the need for the other positions becomes evident.) Voice mail and a pager are necessary so that your employees can reach you during business hours. Frequent contact with new employees will help smooth new company start-up difficulties. Initial daily or biweekly contacts are necessary until programs are fully established. Then weekly or twice monthly meetings may suffice. Always, employees should feel free to approach you with questions/needs. Travel costs are expected and should be budgeted. Other expenses will include benefit packages (insurance, vacation, and sick leave), office supplies, nametags, liability insurance, and lawyer fees, just to name a few. B. The contract or plan presented to the facility should be clearly written and approved by an attorney before being signed by either company. It should include how you expect to be paid for your services and a clear time period agreed to by each that can be “counted on” unless either company breaks the agreement and does not fulfill its obligations. (The students answering this question may want to simply prepare an outline of a document, since an official agreement or “plan” may be extensive. You can also let this serve as an exercise to practice document preparation/grammar/business acumen/salesmanship, etc.) An important point for students to gain from this exercise is that preparing a plan for hiring staff is much more complex and involves more issues than simply deciding on a number of people to hire. Also, the costs include more than salaries. 5. Researching Different Careers Résumés may vary in format. Examples are included in web Appendix A, “Careers in Business.” Also, investigate Internet sites. A résumé should be printed on one page. It should list a career or job objective, skills or abilities, experience, education and training, and honors. To learn what HR people in your community are looking for in good résumés, ask three HR people in local businesses to review the résumés of several students and give each student feedback. Books that focus on preparing résumés: • Careerxroads 1998 by Gerry Crispin and Mark Mehler (MMX Group). This book gives 500 best job, résumé, and career management Web sites. • How to Get Your Dream Job on the Web by Shannon Karl and Arthur Karl (Coriolis Group Books). This book identifies key Web sites for job searches and shows how to put a résumé online and how to network online. • Résumés in Cyberspace by Pat Criscito (Barron’s). This book describes how to write, design, and use an effective electronic résumé, including scannable, e mailable, and multimedia résumés. Examples of sites on the Internet for getting résumé advice: • Monster—http://resume.monster.com/ • Hotjobs—www.hotjobs.com/htdocs/tools/resumes/index-us.html Examples of sites on the Internet for posting jobs: • America’s Job Bank—www.ajb.dni.us/ • Best Jobs in the USA Today—www.bestjobsusa.com/ Books helpful for people wanting a career change: • The Career Chase by Dr. Helen Harkness, published by Davies-Black • Your Signature Path by Geoffrey M. Bellman, published by Berrett-Koehler 9.8 QUIZZES I AND II Quiz I True-False Questions Select the correct answer. 1. T F An organization’s most important resource is its human resource. 2. T F The starting point for human resources planning is the firm’s overall strategic plan. 3. T F Cultural diversity in the workplace is an issue that must be addressed primarily by those firms operating in highly diverse geographic areas. 4. T F Perhaps the most widely used selection technique is the employment test. 5. T F Most employee benefits, such as holidays, sick leave, and insurance, are required by law. Multiple-Choice Questions Circle the letter before the most accurate answer. 6. The activities involved in the acquisition of human resources are HR planning, a. job analysis, recruiting, employee relations, and compensation. b. job analysis, recruiting, selection, and orientation. c. hiring, orientation, training and development, and job analysis. d. job analysis, recruiting, training and development, and benefits orientation. e. job analysis, employee relations, selection, and training. 7. Determining a firm’s future human resources needs is referred to as a. management development. b. performance appraisal. c. recruiting. d. a replacement chart. e. human resources planning. 8. Well-managed cultural diversity is not likely to a. develop cost advantages for the firm. b. provide different viewpoints in decision making. c. give the firm a marketing edge. d. give preferential treatment to certain groups. e. improve the firm’s level of productive creativity. 9. The requirements needed to fill a vacancy are listed in the job a. inventory. b. description. c. analysis. d. specification. e. evaluation. 10. Attempting to attract job applicants from outside an organization is called a. selection. b. external recruiting. c. external replacement. d. internal recruiting. e. vestibule selection. Quiz II True-False Questions Select the correct answer. 1. T F The four phases of human resources management are acquiring, maintaining, developing, and terminating. 2. T F Perhaps the most humane method of reducing the size of a firm’s workforce is through attrition. 3. T F Job specification refers to the list of elements that make up a particular job. 4. T F Recruiting on college campuses and recruiting at union hiring halls are examples of internal recruiting. 5. T F Title VII of the Civil Rights Act of 1964 applies directly to selection and promotion of employees. Multiple-Choice Questions Circle the letter before the most accurate answer. 6. The activities involved in acquiring, maintaining, and developing an organization’s human resources are called a. human resources management. b. human resources planning. c. skills inventory. d. recruiting. e. selection. 7. You have been asked to assist Fuller Company in its human resources planning. You will suggest it take all the following steps except a. developing the overall strategic plan. b. acquiring funds for implementation. c. forecasting future demand. d. forecasting future supply within the firm. e. matching supply with demand. 8. Diversity training programs may include all of the following except a. appointing a cultural diversity task force. b. recruiting minorities. c. training minorities to be managers. d. training managers to view diversity positively. e. providing mentoring programs. 9. A systematic procedure for studying jobs to determine their various elements and requirements is called a job a. description. b. specification. c. analysis. d. orientation. e. inventory. 10. Considering present employees as applicants for available positions is called a. job posting. b. external recruiting. c. internal recruiting. d. organizational recruiting. e. an internal promotion plan. 9.9 ANSWER KEY FOR QUIZZES I AND II Quiz I True-False Multiple-Choice 1. T 6. b 2. T 7. e 3. F 8. d 4. F 9. d 5. F 10. b Quiz II True-False Multiple-Choice 1. F 6. a 2. T 7. b 3. F 8. a 4. F 9. c 5. T 10. c 9.10 CLASSROOM EXERCISES 9.10a Homework Activities • Diversity Article. Have students bring in an article that shows an example of the importance of cultural diversity in the global workplace. They may wish to search www.findarticles.com for articles from HR sites such as workforce.com. • Researching and Following a Company Throughout the Course (continuing assignment). Have students determine whether the company is currently recruiting. What kinds of jobs are available? Does the company make a statement about the importance of cultural diversity in the workplace? What kinds of compensation and benefits are used to attract job applicants? • Job Search. Ask students to choose three occupations that interest them and then access the Department of Labor, Bureau of Labor Statistics’ online Occupational Outlook Handbook at www.bls.gov/oco. What are the job prospects like in each of these fields? Based on what students read at the Web site, do they think they would enjoy any of these occupations? Why or why not? • Performance Appraisals. Have students contact a local organization to determine how that organization evaluates the performance of employees in complex jobs such as middle- or higher-level manager, scientist, lawyer, or market researcher. What problems with performance appraisal do students note? 9.10b Classroom Activities • Classroom Exercise. Use the Supplemental Lecture to discuss fake credentials, a problem human resources managers face on a regular basis. • Diversity Exercise. Create groups of three to five students. Using the handout provided, ask them to brainstorm special needs relative to the workplace that might exist for the listed groups of workers. After students develop a list of needs for each group, they should develop a list of programs employers could provide to attract these workers. The exercise should last 20 minutes. • Working and Playing Well with Others! Exercise. Create groups of four to five students and ask them to develop a list of criteria by which students in work groups can be evaluated. Distribute copies of the handout provided to each group. Ask students to think about the times they were required to do projects as part of a team. What were the characteristics and behaviors of high performing group members and what were those of poor performers? This exercise takes approximately 10 to 20 minutes. A sample list of various criteria would be as follows:  Well-prepared  Attends meetings  On time  Does homework  Takes notes  Has ideas  Fun to work with  Positive  Creative  Reliable • Classroom Exercise. Training program development skills can be enhanced when your students, acting alone or in teams, design their own training program for a familiar activity (e.g., taking good class notes, riding a motorcycle, being interviewed for a job, snow skiing, or making a formal presentation before an audience). Have students discuss how different methods are appropriate for training related to different tasks or jobs. • Special Experiential Exercise. To help students understand the challenges of those with disabilities, rent a wheelchair (or get one from your health services department) and have students spend some time in it, getting lunch at the cafeteria, going to the library, or going to the coffee shop. Include some required experiences such as going up and down several buildings’ ramps, riding up and down an elevator, and asking for directions from a nondisabled student. Have students discuss the experience. Some issues to bring up include: how hard was it to get around; did people seem uncomfortable around you; were people willing to make eye contact; did students lean down or sit so they were at eye level; if you were with a nondisabled person or persons, did they focus on them and ignore you? Ask students if the experience has changed their estimation of appropriate behavior toward the disabled. • On the Spot Feedback! Exercise. This is a five-minute exercise in which four students interact in front of the class. See the handout for role descriptions as well as instructions. • Human Resources Jeopardy. Use the online jeopardy game that is available at http://jeopardylabs.com/play/chapter-9782. This is a jeopardy game that can be played during class, and it is intended to reinforce the key terms covered in this chapter. You can set it up in teams of students and give a prize (or bonus points) for the winning team. 9.10c Exercise Handouts Follow on Next Pages Diversity In your groups, first identify special needs related to each group. After you have identified needs, brainstorm different programs employers could implement to satisfy those needs. An example for the first group has been done for you. Finally, what other groups might you wish to include? You have 20 minutes. Needs Employer Response Single Parents 1. Flexibility in scheduling a. Flexible hours b. Job sharing Employees over 50 Immigrants with College and Post-Graduate Degrees Minorities Empty Nester Workforce Returnees Gay and Lesbian Employees Disabled Workers Other Employees Working and Playing Well with Others! In your groups, develop a list of criteria that can be used for measuring performance of students in work groups. The first criterion is listed for you. Criterion Always (4 pts.) Sometimes (3 pts.) Rarely (2 pts.) Never (1 pt.) Well-prepared On the Spot Feedback! Instructions: Assign four students to each role below. After they read their individual descriptions and instructions, they are to interact in front of the class for three to five minutes. Jill: You are the manager of a discount retail store such as TJ Maxx or Marshalls. You have three employees that require some additional direction. These employees are: 1. Lauren: Lauren is an excellent worker who is shy and quiet. She is often taken advantage of by other workers who do not have her work ethic. You are hoping to encourage Lauren to both assert herself relative to the other employees and to develop her potential. 2. Molly: Molly is lazy and full of excuses. She is aggressive and tries to get others to do her work for her. She pushes the envelope throughout the day—10-minute breaks turn into 20 minutes, and somehow she manages to leave before the other employees. You need to either turn her around or terminate her employment. 3. Allan: Allan is a great guy, very social, and willing to work. He does, however, seem to be having some difficulty in learning what needs to be done. Despite repeated instructions, he still seems to be confused as to what is required of him. You need to get Allan to focus and learn his job better. Your part in the role play is to call a meeting of the three employees prior to doors opening for customers and provide additional coaching and feedback. You can choose to meet with them all together, or separately. For example, you may ask Lauren to help Allan with one of his tasks, and then have a serious talk with Molly alone. Lauren: You are a dedicated worker, but very shy. Because you don’t want to displease others, you are willing to do their work for them. You also try to avoid having attention focused on you. Molly: You really hate this job and want to do as little work as possible. You don’t like your boss or your co-workers. Allan: You like your job, but feel rushed and confused about your specific responsibilities. But you don’t want to let your boss know how confused you are. You really want to do well. Chapter 9 Video Case: Whirlpool’s Award-Winning Diversity Program Is Facilitated Through Employee Network RUNNING TIME: 6:52 Chapter 9 outlines processes for attracting and retaining the best employees. Human resources management (HRM) is the set of activities involved in acquiring, maintaining, and developing an organization’s human resources. Human resources planning consists of forecasting the human resources that a firm will need and those that it will have available and then planning a course of action to match supply with demand. Cultural diversity refers to the differences among people in a workforce owing to race, ethnicity, and gender. Job analysis provides a job description and a job specification for each position within a firm. Recruiting is the process of attracting qualified job applicants. Compensation is the payment employees receive in return for their labor. Employee-training and management-development programs enhance the ability of employees to contribute to a firm. Performance appraisal is used to provide employees with performance feedback. A number of laws have been passed that affect HRM practices and that protect the rights and safety of employees. Concepts Illustrated in the Video • Communication • Culture • Diversity • Employee Networks • Glass Ceiling • Resistance to Change VIDEO CASE SUMMARY Whirlpool Corporation has shown that a diverse workforce can be a powerful advantage. Established in 1911 and headquartered in Michigan, Whirlpool has grown into a global corporation with manufacturing locations on every major continent and annual revenues in excess of $19 billion. Approximately 60 percent of Whirlpool’s 70,000+ employees work outside of North America. The development of this broad workforce is aided by the company’s award-winning diversity program, which gathers workers into support groups based on personal affiliations. To enter the program, workers join a particular employee network of their choosing. These networks give employees access to a world of new career resources and training opportunities. Despite the program’s obvious focus on employee well-being, leaders at Whirlpool say the networks also offer a competitive advantage in the global market. Critical-Thinking Questions Using information from the case and the video, answer the following questions: 1. What are the three main objectives of Whirlpool’s diversity networks? The three main objectives of Whirlpool’s diversity networks are (1) to be a resource to the employee, (2) to be a resource to the community, and (3) to tie back into the business. Each employee network is charged with recognizing what is important to the company’s consumer base and bringing that information to bear on business decisions. The networks are also charged with reaching out to new employees. 2. What challenges do managers face in establishing a diverse workplace, and how might they respond to these challenges? Challenges related to diversity in the workplace include resistance to change, lack of cohesiveness, communication problems, interpersonal conflict, and slowed decision making. In addition, some companies with a diverse workforce experience disparity in the compensation and advancement opportunities afforded to women and minorities. Managers can respond to these challenges in a variety of ways. For example, management might conduct a review of promotion structures and recruiting systems in hopes of exposing and eliminating hidden biases. Managers may also develop companywide training to discuss topics such as glass ceilings, dimensions of cultural differences, and the impact of gender on work attitudes. The main task is for managers to communicate that differences are assets. 3. Do you think formation of Whirlpool’s employee networks is the best way to promote a positive culture of diversity? Explain. Although the video paints a positive picture of employee networks at Whirlpool, such networks create challenges as well as opportunities. For example, they encourage self-segregation and thus may discourage multicultural mixing. If an “us versus them” mentality develops, it could weaken the cohesiveness of work teams. Moreover, if employees perceive that a network is not truly inclusive, that perception may have an impact on the group’s success. Despite these potential pitfalls, inclusive networks focused on benefiting all members can expect to achieve positive results, such as the formation of effective multi-cultural teams. Chapter 9 Lecture Launcher: I Was Thinking Something More Management-ish VIDEO SUMMARY Caleb and Jake begin taking applications to hire additional help. That’s when their star produce supplier, Sue, applies for a job. However, Sue is not interested in a job as a driver or warehouse worker. She has a managerial position in mind. “I know all the organic and natural certification processes and rules, and I have a great network of farmers all over the country,” she tells them. Caleb is ready to hire Sue on the spot, but Jake puts on the brakes. “Whoa,” he says to Caleb. “What are you doing? We need warehouse people and an assistant operations manager. I mean who is going to pay her? Is she salaried? Freelance, or what?” he asks. Solution Manual for Business William M. Pride, Robert J. Hughes, Jack R. Kapoor 9781133595854, 9780538478083, 9781285095158, 9781285555485, 9781133936671, 9781305037083