Operations, Change and Risk Management

Management Defined

An organisation is a group of people who work together with coordinated efforts to achieve certain objectives or goals. Organisational goals and objectives are of various categories, and it is this variation of the goals and objectives which classify organisations into three main categories namely profit-making; service-based and social responsibility based organisations (Lewis, 2007).

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Management is about planning, coordinating and controlling organisational resources so as to facilitate the achievement of organisational goals and objectives in an efficient and effective manner. The nature of management therefore only allows for the top leadership of an organisation to act as the drivers of the organisation in a way which facilitates the organisation to achieve its goals and objectives, including the management of organisational change (Lewis, 2007).

All organisations operate with an overall objective of making some profit or some gains either in monetary or in other forms. It is for this reason that organisations strive to use their resources in an efficient and effective manner so as to achieve their mission, goals and objectives using the minimum resources possible. This is based on the general economic principle of minimization of costs and maximization of profits. Organisations, therefore, try to employ strategies which minimize costs of production so as to improve their gross margins without compromising on the quality of their goods and services.

Operations Management Defined

Operation management is an aspect of management which involves the designing, controlling and overseeing the production process. Its main focus is ensuring that an organisation utilizes its resources in an efficient and effective manner to realize its goals and objectives. It involves activities such as maintenance of equipment, strategic policy development, labour relations, planning for resources, supervision of staff, productivity, systems and cost analysis and identification and application of the appropriate technology in the production process (Lewis, 2007).

Challenges Faced By Operations Managers

Some of the major challenges which operations managers are faced within the dynamic business environment of today include the management of change, risk management, staffing and effective communication (Lewis, 2007). These are discussed below.

Change Management

Organisations today operate in a very dynamic socio-cultural and political environment. This necessitates adaptation to the changing environment so as to stay on the course of meeting their objectives. Organisational change, therefore, focuses on how organisations adapt to the changing internal and external environments so as to achieve their objectives in an efficient and effective manner using the minimum resources possible. Some forces of organisational change include competitions from other organisations, the need to improve organisational productivity, advancement in technology, the financial crisis which may call for layoffs, change of the market preferences, mergers of organisations, and expansion or reduction of organisational scopes of operation.

These forces of change call for operation managers to put in place adequate measures to ensure that change is perceived positively by employees so as to reduce resistance. Obviously, if the change is not effected properly, it may negatively affect the organisation by creating fears among employees who may react by either becoming less motivated or resisting the change. Operation managers, therefore, need to continuously train their employees to empower them with the necessary skills and knowledge about the change to be effected.

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According to Lewis, first-order change is a change which is reversible. This type of change entails doing more or less the same things which an organisation has been doing with little variations. This type of change is usually non-transformational and aims at restoring equilibrium in the systems of an organisation or retaining the status quo. First-order changes, therefore, happen within the existing organisational structure and do not entail any new form of learning (Lewis, 2007). Second-order change is a change which is irreversible. This type of change involves doing fundamentally new things within an organisation; either as a result of internal or external pressure. This type of change is usually transformational and thus entails the learning of new concepts as well as the adoption of new approaches to organisational functions, processes and procedures.

The major challenge with the management of change within organisations is the resistance to change. Human nature is such that human beings are always comfortable with what they know than what is new or strange to them. Due to this fact, they always form what is known as comfort zones. It is this formation of comfort zones which makes them resist organisational change. Resistance to organisational change manifests itself mainly in three levels, namely level one, level two and level three.

Level one resistance to change has to do with the refusal to accept the change. Employees are preoccupied with three questions of when will the change begin and end, how much the change will cost, and the changed timeline will or outline. At this level of resistance to change, therefore, employees raise their objections based on ideological or factual grounds.

Level two resistance to change involves the emotional and physiological resistance to organisational change. It manifests itself either consciously or unconsciously in the employees, and it’s mainly characterized by fear and anxiety. Employees perceive the proposed change as dangerous to them especially when it could lead to a restructuring of the organisation, which may lead to a change of jobs, demotions or in the worst cases, retrenchment of some of the employees. Due to these fears, the employees prepare themselves to fight the implementation of the change.

Level three resistances to change is about what the change means or represents to the individual employees. Employees may resist the change if it may interfere with their faith, personal preferences, or it represents a threat to their cultural beliefs.

Risk Management

It is important to underscore the fact that every one of us wishes that the future was as predictable as possible. In fact, if it were possible, everyone would like to have the ability to determine what would happen in the future so that all the plans which we have may go on without any form of hitches.

Risk as an event or anything which is foreseen to happen in the future with some negative effects on a subject or an object. It is associated with the uncertainty of what the future may hold for a particular entity, be it a person, group of persons or organisations. Some people may confuse risk with uncertainty. While risk can be measured in terms of probability of happening, it is not possible to calculate the probability of uncertainty happening. Since it is not always possible to foresee the future or to correctly predict what may happen in the future, it is necessary to put in place some preparedness measures so as to minimize the negative effects of a negative future. That is why we have risk management, which is defined as the process of identification, assessment and prioritization of the possible risks (Lewis, 2007).

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The management of risks is always a difficult task for operation managers. It is important to underscore the fact that risk management involves the use of financial resources. What this means is that operation managers must strike a balance between allocating resources for risk management, such as paying for insurance and using the same resources in organisational activities. This is not always easy because sometimes some resources may be kept aside for risk management, only to find that the risks are actually unlikely to happen.

Effective Communication

Communication is the transfer of information from one person or source to another. In an organisational context, effective communication involves using the correct language when communicating between the employees and their seniors and within themselves. The language used should be neutral to everybody and free form any connotations of mockery or discrimination based on one’s position in the organisation, age, gender, level of education or race and religion. This enables respect and discipline to prevail in the organisation, which are perquisites of acquiring and sustaining a learning culture.

Operation managers are faced with the challenge of ensuring that there is an efficient flow of information throughout the hierarchy. Since information is about everything which happens in organisations, there is no excuse for not having an efficient flow of the same. The challenge comes in, especially when there are new systems introduced in the organisation or changes in reporting. The challenges are usually compounded by the fact that there may be delays in delivering crucial information to those it is intended to. The other challenge concerned with communication is the confidentiality of information. In an organisational setting, there are various categories of information made for particular individuals. However, sometimes some information may land to the wrong people. When this happens, the information may hinder the success of the organisation or its ability to meet its strategic goals and objectives (Barnes, 2008).

Manpower Recruitment, Selection and Orientation

Staffing has to do with human resources, basically employees. Human resources play a very crucial role in enabling organisations to meet their objectives. In the present day business environment, there is the challenge of getting the right people to perform specific tasks within organisations. Sometimes the staffs usually have varying interests, making it difficult to retain employees in an organisation. Operations managers also face the challenge of motivating employees. There is also the challenge of poaching of staff by other organisation, especially those who are business rivals. Rival organisations or business competitors may sabotage an organisation by promising the employees better packages and working conditions. When this happens, operation managers suffer a loss because they usually invest a lot in employee development activities such as training.

The main aim of operation managers is to place all persons on jobs perfectly suited to them and society, the assumption being that each person should use his abilities, temperament and motivations in all the best way possible for him or her. Thus manpower planning for recruitment and selection witnesses the shift from a static base to the dynamics of change. The manpower planning perspective demands ‘total’ pictures of current and future manpower needs and avoids the disjointed functional approach of past years. Reliance on short-run, purely economic criteria for determining manpower needs is viewed with disfavour (Mahadevan, 2009).

If the total staffing effort of an organisation is haphazard, the results, from even the most technically correct recruitment program will be relatively poor. One can, therefore summarise that good management practice requires competent selection and induction as well as competent recruitment. This, in turn, re-emphasizes the need for a sound over-all management philosophy.

The staffing effort becomes to the manpower manager what vendor analysis is to the purchasing agent. Staffing includes the determination of manpower needed, the determination of the best source of supply, and the development of the best means of acquiring and assuring quality selection from chosen sources. It also includes consideration of the best way to put a man into his new environment.

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Recruitment serves to locate the proper sources and to interest potential employees in the possibility of employment. Selection serves to identify and promise the desired quality. Selection thus facilitates good management practice by isolating the required knowledge and compatibility necessary to that and making it available to the organisation. To be effective, both the planning and the operational phases of the system require excellent communication with all segments of the company. The manpower division should develop a well-coordinated flow of information and to and from their manpower sources (Mahadevan, 2009).

Effective selection procedure requires careful attention to the system and must be adjusted to fit the specific needs of an organisation. A carefully conceived selection procedure is just as important to the small firm as to the large. After all, the smaller the universe, the larger the errors appear. Loses from unnecessary turnover become uncomfortably significant in the small organisation. However, such loses can be prevented in part by good manpower selection. In large organisations, equal care is needed in apportioning funds, and effective manpower selection can minimize the risks of loss associated with the poor personnel department. The amount of money available should not be the deciding factor in determining the steps taken. The known needs of the organisation are the correct criteria.

Organisations and managers must be fair to their employees. Bias may be imminent during the selection process; however, many countries have put in place legislation to ensure fair selection. Such legislation includes those who advocate for the rights of such groups as the disabled, expectant mothers, among others. Discrimination throughout the selection process should, therefore, be avoided. Organisations and managers should ensure that men and women have equal opportunities for employment, enjoy equal pay for similar jobs and the same working environment.

Operation managers, therefore, have the uphill task of ensuring that the selection, deployment and retention of employees through fair employment practices are adhered to. In its face value, the task may appear easy, but when put in the context of organisations, which are operated by human beings, it becomes a completely different task which is full challenges. The point here is that in an organisation, people have varying opinions, interests and ideas about who constitutes a good employee. Since the operations managers cannot impose decisions on the other members of organisations, they have to deal with the varying views and interests and find a way of reaching a compromised position as far as staffing is concerned. They have to convince them that everything is done for the best interest of the organisation and not for personal interest.

Reference List

Barnes, D 2008, Operations management: an international perspective, Thomson, London.

Lewis, P.S 2007, Management : challenges for tomorrow’s leaders, Thomson/South-Western, Mason, OH.

Mahadevan, B 2009, Operations management : theory and practice, Dorling Kindersley, New Delhi.

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