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Chapter 2

MGTA02H3 Chapter Notes - Chapter 2: Business Process, Blic, Business Process Reengineering


Department
Management (MGT)
Course Code
MGTA02H3
Professor
Chris Bovaird
Chapter
2

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THE PRODUCTIVITY - QUALITY CONNECTION
-productivity: a measure of efficiency that compares how much is produced with the resources
used to produce it
-by using resources more efficiently, the quantity of output will be greater
-quality: a product’s fitness for use in terms of offering the features that consumers want
Responding to the Productivity Challenge
-when 1 country is more productive to another -> more wealth
-as quality ^, more firms will receive $$ for them
-measuring productivity:
-labour productivity of a country = gross domestic product
total number of workers
-productivity among global competitors: different countries have different output/hour, it differs
due to differences in technologies, human skills, economic policies, natural resources...etc
-domestic productivity: when a country improves its ability to be productive, wealth increases. If
there’s a decline in productivity, wealth decreases, so the increase of one person’s wealth comes
only at the expense of others whom he or she shares an economic system.
-manufacturing productivity is higher than service productivity
-agriculture is more productive in Canada b/c we use more sophisticated technology and
superior natural resources
-high productivity gives a company a competitive edge (b/c costs are lower, offer products @
lower price, gain more profit, pay workers more w/out raising prices).
TOTAL QUALITY MANAGEMENT
-a business not only should measure productivity but also quality.
Managing for Quality
-Total quality management (TQM): a concept that emphasizes that no defects are tolerable
and that all employees are responsible for maintaining quality standards
-customer focus is starting point, companies must develop methods to figure out what customers
want and direct resources to fulfill those needs
-performance quality: the overall degree of quality; how well the features of a product meet
consumers’ needs and how well the product performs
-quality reliability: the consistency of quality from unit to unit of a product
-everyone in the board must work to ensure quality including CEO - part times.
-quality ownership: the idea that quality belongs to each employee who creates or destroys it in
producing a good or service. The idea that all workers must take responsibility for producing a
quality product
Process Re-engineering
-Any business process can add value and customer satisfaction by performing processes well
-Business process re-engineering: redesigning of business processes to improve performance,
quality, and productivity (6 steps)
1. Identify the business activity that will be changed
2. evaluate information and human resources to see if they can meet the requirement for
change
MGTA04 Chapter 2
1
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