Text 5: defining operations management

Operation management is the management of the productive

processes that convert input into goods and services. Because of its close association with manufacturing, operations management is sometimes called production-operations management. Recently, though, the term "production" is increasingly being dropped in favor of simply "operations management", a term that has less of a manufacturing connotation. The operations management function is that part of the organization directly involved in production the primary goods and services.

In the case of a manufacturing organization such as Fanuc, the operation management function would include plan managers and all the other managers who work in the factories (e.g., production manag­ers, inventory control managers, quality assurance managers, and line supervisors). If an organization's structure had corporate level, opera­tions would also encompass any manufacturing or operations vice presidents that exist as the corporate level, as well as related corporate operations staff (such as those primarily concerned with production, inventory, quality, facilities, and equipment).

In a service industry such as the hotel business, the operations management function would include hotel managers and the various managers who work in the hotels (e.g., housekeeping managers, food and beverage managers, and convention managers). Again, if there were a corporate level, operation would also comprise managers and staff at the corporate level who are directly involved in other related function, such as marketing and finance). Regardless of whether an organization produces a service, a product, or both, operations manag­ers need to be acutely concerned about productivity.

Text 6: strategic human resource management

At 3M, a company famous for fostering employee innovation, human resource issues are increasingly an integral part of strategic management. Thus 3M is at the forefront of a trend toward recogniz­ing human resources as a crucial element in the strategic success of organizations. In a growing number of organizations, such as 3M and CARE, high-level managers within the human resource management function participate directly in strategy implementation. They also help coordinate human resource aspects of strategy implementation. In this process before exploring in greater depth the main reasons for the growing strategic role of human resource management.

The HRM Process: An Overview

As suggested by the HRM process shown in Figure 12-1, human resource management encompasses a number of important activities. One critical aspect of the process, human resource planning, assesses the human resource needs associated with strategic management and help identify staffing needs. The staffing component of the process includes attracting and selecting individuals for appropriate positions. Once individuals become part of the organization, their ability to con­tribute effectively is usually enhanced by various development and evaluation efforts, such as training and periodic performance evalua­tions. Compensating employees for their efforts is another important factor in the HRM process, because adequate rewards are critical not only to attracting but also to motivating and retaining valuable em­ployees. Finally, managers must respond to various issues that influ­ence work-force perceptions of the organization and its treatment of employees.

In order to explore human resource management in an order fash­ion, the various activities that make up the HRM process are discussed sequentially in this chapter. The components, though, are actually highly interrelated. For example, when a group of British financiers took over the British arm of F.W. Woolworth from its American par­ent in 1982, the chain of 1000 stores had a tarnished image and 30,000 employees with a reputation for poor service. Investigation reveled many interrelated problems, such as poor employment interviewing practices (interviews typically lasted 10 minutes), little training for either sales staffer mangers, and a components of the HRM process collectively reinforced the service problems.

Human resource professional operating within human resource departments typically play a major role in designing the various ele­ments in the HRM process and in supporting their use by line manag­ers. Nevertheless, line managers ultimately are responsible for the ef­fective utilization of human resources within their and, this, carry out many aspects of the HRM process, particularly as they relate to im­plementing strategic plans.

The Strategic Importance of HRM

Understanding the strategic potential of human resource manage­ment in organizations is relatively recent phenomenon. In fact, the role of such management in organizations, as it is known today, has evolved through three main stages. From early in this century until the mid-1960s, HRM activities comprised a file maintenance stage, in which much of the emphasis was on screening applicants, orienting new em­ployees, recording employee-related data for personnel purposes, and planning company social functions (such as the company picnic).

The second stage, government accountability, began with pas­sage of the Civil Rights ACT of 1964 (which forbids employment dis­crimination based on race, color, religion, sex, or national origin) and continued as additional laws, court rulings, and federal regulatory guidelines increasingly impacted various aspects of employment, such as hiring and promotion decisions, pension plans, and health and safety issues. Of course, some laws, particularly those governing rela­tions with unions, existed 1964; but the mid-1960s ushered in an era of accelerated governmental regulation of employment issues. As organizations attempted to gain greater control over activities that could result in legal difficulties and large financial settlements, the HRM function gained in importance. Indicative of the expense that can be involved, under a 1973 consent decree (a court-sanctioned agreement in which the accused party does not admit wrongdoing but agrees to discontinue a practice). AT&T agreed to raise the starting pay of women promoted to managerial positions so that their pay level would be equal to those of similarly promoted men, at a cost of more that $30 million.

The third stage, which began in the late 1970s and early 1980s, can be termed the competitive advantage stage. In this stage, human resource management is, increasingly viewed as important for both strategy formulation and implementation. Thus, under some circum­stances, human resources can comprise a source of distinct compe­tence that forms a basis for strategy formulation. For example, 3M's notes scientists enable the company to pursue a differentiation strategy based on innovative product. Under other circumstances, HRM activi­ties may be used to support strategy implementation. For instance, at Honda of America's Marysville, Ohio, plant, an emphasis on differ­entiation through quality is supported by such HRM activities as train­ing programs, developmental performance appraisal processes, and promises of job security. Human resource management often is an important ingredient in the success of such strategy-related activities as downsizing, mergers, and acquisitions. At the competitive advan­tage stage, then, human resources are considered explicitly in conjunc­tion with strategic management, particularly through the mechanism of human resource planning.