April 23, 2018

Organization Behavior Dilemma - Why There is no Expected Behavior from Organization Associates?

Organization behavior is related to leadership. If leaders in the organization do not show effective leadership, there will not be expected behavior in the organization.

What is going wrong with leadership that is giving  rise to unexpected or inappropriate organization behavior?

Communication  may be the first reason. Leaders are not communicating the required tasks. There is content of communication, context of communication, clarity of communication and style of communication.

Motivation can be the problem. Leaders are not able to assess the personal needs of the group members and make organization provide them the need satisfying environment and means.

Stress and Conflict can be more in the organization.

 Power and Politics may become dominant behavior in the organization. Politics signify personal interests and leaders and other associates dominating in the organization.

Groups  especially informal groups may be in conflict with the line being advocated by the leader.

Effective Leadership Process  that is style of leadership may be the reason. Leader may be using authoritarian style or close directing and controlling style when it is not appropriate especially when the associates are mature and have similar experience profiles. Such a leadership style develops only conflict and difference of opinion.

Leaders are expected to be masters in managing behavior based on the relations that they established with their followers. Whenever in an organization, expected behavior is missing, back to basics and application of behavioral science theories has to be attempted afresh by leaders themselves, or their superiors or external consultants and mentors.

 Attitudes can be formed against individuals also. If the current leaders have  developed negative attitudes in the organization associates, they may themselves try to change them. They may take the help of their superiors or consultants.

Important Organization Behavior Chapters

4. Organizational Context: Design and Culture

5. Organizational Context:: Reward Systems

Cognitive Processes

6. Perception and Attribution

7. Personality and Attitudes

8. Motivational Needs and Processes

9. Positive Psychology Approach to OB

Dynamics of Organizational Behavior

10. Communication

11. Decision Making

12. Stress and Conflict - Negotiation Process (in more detail)

13. Power and Politics

14. Groups and Teams

17. Effective Leadership Process

April 12, 2018

Health of Organization



Uploaded Mile Madinah  - A Management Institute
Presentation by Jim Laub

Organizational health is also a concept of importance for top management.

Definitions of Organizational Health

For the organi­zation, the definition of health  may be stated as: a healthy organization is an organization which establishes and maintains a mutually beneficial relationship with its environment.

Organizational health is  the capacity to deliver—over the long term—superior financial and operating performance. (McKinsey)

The capacity to deliver has to be improved along with using it deliver performance.

Even though many authors have not mentioned it, we can describe some characteristics of the organization as disease. An organization where the CEO is despised is a sick organization. No body can be a healthy CEO, who develops hatred in the employees of the organization. Leaders that means managers in the organization must have the capability to assemble followers. They should not become group leaders in organizations and create conflict between employees and create a context for fights, cases and dismissals. In majority of the commercial organizations where conflict among employees is started by the leaders are doomed to fail. There are leaders who join organizations of relative peace and stability but convert them into organizations of strife, mistrust and dissatisfaction.

Shaomin Huang and  Gerald Ramey have proposed a method of measurement of organizational health through four propositions

PROPOSITION 1 (organizational effectiveness):
a)  Strong attention to task orientation will lead to higher organization effectiveness.
b)  A more involved work force will lead to higher organization effectiveness.
c)  An increase in innovative practices among workers will lead to higher organization effectiveness.
d)  Optimal interaction among the variables of innovation, involvement and task orientation (collectively, not individually) within  the work force will improve organization

PROPOSITION 2 (leadership):
a)  An increase in appropriate supervisor support will lead to more leadership within the
b)  A decrease in excessive control mechanisms will create more leadership within the
c)  An increase in autonomy will increase leadership within the organization.
d)  Optimal interaction among the variables of autonomy, control, and supervisor support
(collectively, not individually) within the work force will improve leadership in the

PROPOSITION 3 (team work efficiency):
a)  Increased clarity in all communication will reduce destructive conflict in the organization.
b)  An increase in cohesiveness among peers within the work force will decrease destructive
conflict in the organization.
c)  A reasonable release in work pressure  will decrease destructive conflict in the organization.
d)  Optimal interaction among the variables of clarity, peer cohesion,and work pressure (collectively, not individually) within  the work force will reduce excessive and
destructive conflict in the organization.

Assessment on organization effectiveness, leadership, and team work efficiency showing multiple causalty effects is a valid and appropriate method of evaluating organizational health.

McKinsey - Measurement of Health of Organizations

McKinsey helps you to measure your Organizational Health Index

Healthy organizations perform better. In healthy companies, employees know where the organization is headed; understand how they fit into the strategy to get there; have the tools, capabilities, and motivation to execute; and are empowered to innovate and change.

The Organizational Health Index is a survey-based diagnostic. It  has been deployed by more than 1,300 organizations worldwide. The data collected from employees and executive, provide the consultants and company managers  to understand the underlying mind-sets and behaviors that drive performance. Country- and industry-specific benchmarks are available  to compare like with like.


A detailed article


For the CEO


Shaomin Huang and  Gerald Ramey,    "Organizational Health Assessment: a Romania Firm Case Study"

This article is part of #AtoZChallenge 2017 for Blogging Posts. My Theme for the Challenge is Top Management Challenges - Full List of Articles  http://nraomtr.blogspot.com/2016/12/a-to-z-2017-blogging-challenge-top.html

To Know More About A to Z Blogging Challenge

Blog posts visited today

Homemade: Theme values

A to Z of Happiness: H - Hope #atozchallenge @AprilA2Z

#AtoZchallenge Healthy Minds and Healthy Writers

H for Happiness- What is it like to be in the state of happiness and how to attain it?

H is for HORIZONS #AtoZ Poetry

#atozchallenge Letters to my Embryos: H is for Hospital

Updated on 13 April 2018, 10 April 2017

April 8, 2018

Managing Economies of Scale in the Supply Chain: Cycle Inventory

Chopra and Meindl's book, Supply Chain Management: Strategy, Planning, and Operation, is a comprehensive introduction on supply chain management.

Economies of Scale in Buying and Production Lots

Producing or purchasing in large lots allows a stage of supply chain to exploit economies of scale and lower cost. These economies of scale result due to fixed costs associated with ordering and transportation, quantity discounts on buying larger lots, and short-term discounts or trade promotions.

*It is important at this stage to point out that Toyota Production System has shown that there are economies of small lot sizes or lot size of one. Hence the discussion in this chapter has to be interpreted along with the content related to economies of small lot sizes.

Cycle Inventory

If purchasing is done in large lots and consumption is done in smaller lots, when the order is received there is a sharp increase in stock or inventory. This inventory or stock gets depleted as consumption takes place gradually and once again a big lot may be ordered and received. Thus the cycle repeats and the average inventory held by a firm during each cycle is termed cycle inventory.

The inventory holding results in costs for a firm and this cost is called inventory holding cost or inventory carrying cost.

Economic Order Quantity or Production Quantity Formulas

(1) Q = SQRT(2RS/hC)

R = demand in a period (usually a year)
S = Ordering cost
h = holding cost per year per dollar of inventory
C = unit price of the item

To reduce lot sizes that arise due to presence of ordering costs, a number of individual items are ordered in a single order. This will distribute the transportation cost over a number of items and lot sizes for individual items can be small.

To take decisions in case of quantity discounts, the total inventory cost when discount is taken is compared with total inventory cost when discount is not taken and appropriate decision is taken.

In case of trade promotions also retailers compare the total inventory cost when the trade promotion is used to accumulate inventory with the total inventory cost when the trade promotion is not utilized.

Estimating Cycle Inventory Related Costs

Inventory holding cost

Cost of capital
Obsolescence cost
Handling cost
Occupancy cost
Miscellaneous cost

Order Cost

Buyer time
Transportation cost
Receiving cost
Other costs


Sunil Chopra and Peter Meindl, Supply Chain Management: Strategy, Planning and Operations, Prentice Hall, 2001. Supply Chain Management: Chopra and Meindl - Book Information and Review

Lee, Hau L., and Corey Billington, "Managing Supply Chain Inventories: Pitfalls and Opportunities," Sloan Management Review, Spring 1992, pp. 65-73

First posted in Knol by Narayana-rao  Number  2utb2lsm2k7a/ 1367

Updated on 9 April 2018, 9 December 2011

March 30, 2018

Operations Scheduling - Review Notes

Chapter Outline of

Richard B. Chase, F. Robert Jacobs, Nicholas J. Aquilano, Operations Management for Competitive Advantage, 10/e, McGraw-Hill Higher Education, 2004

Manufacturing Execution Systems
The Nature and Importance of Work Centers
Typical Scheduling and Control Functions
Objectives of Work-Center Scheduling
Job Sequencing
Priority Rules and Techniques
Scheduling n Jobs on One Machine
Comparison of Priority Rules
Scheduling n Jobs on Two Machines
Scheduling a Set Number of Jobs on the Same Number of Machines
Scheduling n Jobs on m Machines
Shop-Floor Control
Gantt Charts
Tools of Shop-Floor Control
Input/Output Control
Data Integrity
Principles of Work Center Scheduling
Personnel Scheduling in Services
Scheduling Consecutive Days Off
Scheduling Daily Work Times
Scheduling Hourly Work Times
Summary for Revision

Manufacturing execution systems do scheduling.

Work Center

Work centers are areas in a business in which productive resources are organized and work is completed. It may be a single machine, a group of machines, or an area where a particular type of work is done. The work centers can be organized in a variety of ways including by function in a job-shop configuration; or by product in a flow, assembly line, or group-technology-cell configuration.

Scheduling and controlling functions of an operation are critical. The functions must be performed beginning with allocating orders, equipment, and personnel to work centers or the specified locations for short-run capacity planning. Next is the determination of the sequence of order performance or establishing job priorities. Initiating the scheduled work or dispatching of orders is followed by shop-floor control.

Loading - Infinite loading or Finite loading

A characteristic that distinguishes one scheduling system from another is how capacity is considered in determining the schedule. The scheduling systems can use infinite loading or finite loading.

Infinite loading occurs when work is assigned to a work center simply based on what is needed over time.

Finite loading actually schedules in detail each resource using the setup and run time required for each order.

Another characteristic, that distinguishes scheduling systems, is whether the schedule is generated forward or backward in time.

Processes can be machine limited or labor limited. Determining the sequence of orders and establishing job priorities are critical as is dispatching orders.

Shop floor control

Shop floor control is necessary to review job status and expediting late and/or critical orders when necessary. The schedule must be revised as necessary to reflect changes in order status.

Various priority rules work to satisfy job arrival patterns, the number and variety of machines in the manufacturing facility, the ratio of workers to machines in the shop, the flow pattern of jobs through the shop, the priority rules for allocating jobs to machines, and schedule evaluation criteria. Priority rules for allocating jobs to machines can use a variety of methods.

The objectives of work-center scheduling are to meet customer due dates, minimize lead-time, minimize set-up time, minimize work in process inventory, and maximize machine or labor utilization.

Role of Simulation

In manufacturing job shops, scheduling relies heavily on simulation to estimate the flow of work through the system to determine bottlenecks and adjust job priorities. Software packages are available to do this. In services, the focus is typically on employee scheduling using mathematical tools that can be used to set work schedules in light of expected customer demand.



More information

Manufacturing Execution Systems

Manufacturing Execution System (MES) are IT enabled systems that provide solutions for improving and optimizing the manufacturing process to the production floor engineers and managers. MES provides solution as to how the current conditions of the shop floor be altered to generate greater output at minimal cost. MES provides for the middle layer between the ERP system and the process control system.


Enterprise 360

Originally posted on Knol - 2utb2lsm2k7a/ 436

Updated 1 April 2018,  30 March 2015, 9 Dec 2011

Revision article for 1 April

March 28, 2018

Management Theory and Practice - Bulletin Board - 2018

Engineering and Management News - A Daily Publication  - Management Principles and Propositions

HBR Business Blogs

March 2018

Managing Greatest people - Steve Jobs

The greatest people are self-managing -- they don't need to be managed. Once they know what to do, they'll go figure out how to do it. What they need is a common vision. And that's what leadership is: having a vision; being able to articulate that so the people around you can understand it; and getting a consensus on a common vision.



Among Planning, Organizing, Resourcing and Staffing, Directing and Controlling, directing activity can be minimized when you have greatest people in your team. Recruiting them is important. Once you have such people Managing can be planning, organizing and controlling the main events. The processes can be left to the people to figure out and execute. You don't have to micro manage things.

Jobs terms people with highest maturity of business processes and tasks as greatest people.




November 2017

Transformations by New CEOs

Amoeba Management - Kazuo Inamori - Full Web Page on the topic with various links


27 August 2016

Why Companies Can’t Perceive Customer Insights and Can't Turn the limited Customer Insight into Growth

BCG Perspectives
16 August 2016

Many companies spend more time looking inward. Check in your next internal meeting, record on one sdie each mention of an internal topic, such as financial or operational performance, plans, metrics, organization, employees, or culture. On the other side, record each discussion of an external topic, related to competition such as technology, innovation, purpose, testing, social media conversations, or topics related to customer,  customers’ behaviors, needs, and wants. You will be surprised to see that internal topics dominate the external topics. Hence people spend more time in preparing for answering internal issues related questions and spend less time customers and competition.  This is not a good way of allocating top management and middle management resources. At each meeting, the priority area is to be decided and adequate time is to be given to that area. There has to be balance in various activities of the organisation. This principle was given by Henri Fayol way back in 1920s.

Values of Business Schools

Popular Posts of This Blog









Updated  30 March 2018,  12 November 2017, 20 October 2016,  27 August 2016,  18 September 2015

February 28, 2018

February - Management Knowledge Revision


Frank Gilbreth
Picture Source:

Febuary 1st Week  1 - 5 , 2016

The Nature of Organizing - Review Notes
Departmentation in Organizations - Review Notes

Line-Staff Authority and Decentralization - Review Notes
Effective Organizing and Organizational Culture - Review Notes

Summary - Principles - Organizing
Human Resource Management and Selection

Performance Appraisal and Career Strategy
Manager and Organization Development

Summary - Principles - Staffing
Resourcing; A Function of Management

February 2nd week,  8 to 12  (2016)

Human Factors and Motivation
Leadership - Koontz and O'Donnell - Review Notes

Supervision - Introduction - Public Administration Point of View
Committes and Group Decision Making - Review Notes

Communication - Koontz and O'Donnell - Review Notes
Summary of Principles - Directing - Leading

The System and Process of Controlling - Review Notes
Control Techniques and Information Technology

Productivity Control
Overall Control and Preventive Control - Review Notes

February 3rd Week  (15 - 19, 2016)

Summary - Principles of Controlling
Global and Comparative Management

Organizing - Global Management Issues - Review Notes
Staffing - Global Management Issues

Leading - Global Management Challenges
Controlling - Global Management Challenges - Review Notes

Management and Entrepreneurship: Science, Theory and Practice
Managerial Skills

Principles of Management - List
Principles of Management - Subject Update Articles Recent Years

February 4th Week  (22 to 26, 2016)

Marketing Management Revision Articles

The Marketing Concept Kotler
Marketing Strategy - Marketing Process - Kotler's Description

Scanning of Environment for Marketing Ideas and Decisions
Marketing Strategy - Differentiating and Positioning the Market Offering

Management of Marketing Department and Function
Marketing Research and Market Demand Forecasting

Consumer Behavior
Analysis of Consumer Markets

Organizational Buying Processes and Buying Behavior
Market Segmentation and Selection of Target Segments

To March - Management Knowledge Revision

Industrial Engineers support Engineers and Managers in Efficiency Improvement of Products, Processes and Systems

One Year MBA Knowledge Revision Plan

January  - February  - March  - April  - May   -   June

July  - August     - September  - October  - November  - December

Updated 2018 - 24 February

  1 Februry 2017, 16 Feb 2016, 22 Feb 2016

February 25, 2018

Market Segmentation and Selection of Target Segments

Marketing Management Revision Article Series

Buyers for a generic product constitute a market. Market can be segmented in a number of ways.

Target Market

Buyers for a generic product constitute a market. But different buyers may have different preferences for attributes of a generic product. A marketer may have to focus on a particular group of potential buyers for a product with specific attributes. This focus is termed as targeting. Market segmentation is the effort to isolate groups of potential buyers having similar preferences for attributes of a product. Instead of mass marketing a single product, segmented marketing is done at four levels: segments, niches, local areas and individuals and companies if they want to, offer different products for different segments.

Targeted marketing also referred to as differentiated marketing. It means that the firm  may differentiate some aspect of marketing (offering, promotion, price) for different groups of customers selected. Mass marketing, or undifferentiated marketing involves selling the same product to everybody. Automaker Henry Ford was very successful at mass production and mass marketing. Ford pioneered the  assembly line early in the twentieth century, which helped him to produce large number of identical Model T automobiles and allowed him to realize cost reduction year after year. They came in only one color: black. “Any customer can have a car painted any color he wants, so long as it is black,” Ford used to joke. The affordable Ford car, was bought by large number of Amercans. By 1918, half of all cars on America’s roads were Model Ts.

Then Alfred P. Sloan, the head of General Motors (GM) changed the game. Sloan began to segment consumers in the automobile market—and find the prices different groups of customers wanted to pay and the different cars they wanted to buy. The idea was to offer different car for every target market as per their desires. His efforts were successful, Ford had problems and in the 1950s, GM overtook Ford as the nation’s top automaker.

Markets can be segmented in a number of ways.

Market Segmentation

Two broad groups of variables are used to segment consumer markets. One group of variables is consumer characteristics. The other group of variables is behavioral characteristics. Behavior is consumer response in terms of  benefits sought or  occasions when the product is used.

Consumer characteristics used for market segmentation include geographic, demographic and psychographic characteristics.

Geographic segmentation

Geographic segmentation divides the market into different geographic units such as nations, states, regions, cities and neighbor hood etc.

Demographic segmentation

In this segmentation approach, the market is divided into groups on the basis of variables such as age, family size, family life cycle, gender, income, occupation, education, religion, race, generation, nationality, or social class.

Psychographic segmentation

In this approach to segmentation, buyers are divided into different groups on the basis of lifestyle and/or personality.


Active lifestyle, country lifestyle, latenighters etc. are some of the segments under this classification


Markets are being segmented on the basis of personality. Personality is a group of traits exhibited persistently by a person. For example, Ford buyers were identified as independent, impulsive, masculine, alert to change, and self confident, while Chevrolet owners were conservative, thrifty, prestige conscious, less masculine, and seeking to avoid extremes.

Behavioral segmentation

In this approach buyers are classified into groups on the basis of their knowledge of, attitude toward, use of, or response to a product. Some behavioral variables can be usage rate, readiness for buying the product, attitude toward the product, loyalty to the product, and occasions on which the product is used etc.

Multi-attribute segmentation (Geoclustering)

Some marketers are using multiple variables to define target groups. For example using socioeconomic status and lifestyle variables may be combined and market segmentation is done.

Effective Segmentation

To be useful, market segments identified in a segmentation exercise have to be:
  • Differentiable: the segments must have a conceptual basis and they have to respond differently to different marketing mix variable and attribute mix of the product.
  • Measurable: The size and purchasing power of the segments have to be measurable.
  • Substantial: The segments have  to be large enough to serve them with a separate market mix profitably.
  • Accessible: The segments must be accessible to the marketer.
  • Actionable: The company in consideration must be able to create marketing programs for the segments.

Market Targeting

After the doing the market segmentation, the firm has to evaluate the segments for their market potential. Then the company has to decide which and how many segments to serve and how to serve them. The decision alternatives available to the firm are:

Single segment concentration

In the simplest case, the company selects a single segment.

Selective specialization

The firm selects a number of segments, each objectively attractive and appropriate, for the firms objectives and resources. There may be little or no synergy among the segments, but each segment is a money maker on its own.

Full market cover

The firm may attempt to serve all customer groups

Philip Kotler, Marketing Management , Ninth Edition (Main text for revision articles)


Migration from Knol

Marketing articles are available under the label http://nraomtr.blogspot.com/search/label/Marketing%20Management
Article on differentiating and positioning http://nraomtr.blogspot.com/2011/11/marketing-strategy-differentiating-and.html

Planned Revision schedule for marketing chapters is in February and March

Originally posted by me in Knol

Updated 2018 - 27 February 2018
26 February 2017, 3 December 2011 (First posted in the blog)