Decision-Making and Quality Management in Organizations
Decision-Making in Organizations
Queuing theory is a valuable tool for making decisions that require an optimal balance between service cost and the expected cost of losses. When analyzing the “tails” of waiting, very large costs due to defections, among other things, can be detected.
Probability Theory
Probability theory allows you to make a decision between several alternatives. To understand this theory, it is necessary to understand the concept of decision-making, which is defined as follows: the process of selecting an alternative within a set of more than two of these. For correct decision-making, knowledge of the risk of each alternative and the probability of success is required.
Econometrics Management
This discipline is responsible for measuring the economy or the state of a business.
Macro-Stages in Decision-Making
- Diagnosis of the problem: This is the determination of the problem area, i.e., detecting the difference between what was planned and what was conducted. This is the starting point, and the following steps depend on it.
- Research or obtain information: The collection of all information necessary for proper decision-making.
- Development of alternatives.
- Experimentation: The manager should approach the scientific ideal and test their decisions whenever possible.
- Analysis restrictions.
- Evaluation of alternatives.
- Formulation of the plan.
- Decision-making.
- Execution and control.
Theory and Systems Approach
A system is defined as a set of closely related elements for a particular purpose or as a set or combination of elements or parts forming a unitary whole.
General Theory of Systems (TGS)
TGS studies organizations as social systems embedded in larger social systems and in constant motion as they interrelate and affect each other.
Classification of Systems
By Degree of Open Interaction
- Open: These systems have trade relations with the environment through inputs and outputs and receive much influence or input.
- Closed: These receive little influence and have no exchange with the surrounding environment.
By Material Composition and Objective
- Abstract: These are where the elements are concepts, plans, scenarios, and ideas.
- Concrete: These are those in which at least two of its elements are objects.
By Responsiveness
- Passive: Those who by themselves cannot respond to stimulation from other systems; they need an active system.
- Active: Those who respond by themselves to other systems.
- Reactive: Those that work in response to the stimulation of another, i.e., other systems need to respond or function.
Total Quality Management
Total Quality is an administrative concept that seeks systematic and organized participation of all members of a company or organization to consistently and comprehensively improve the quality of its processes, products, and services. Providing quality does not simply mean a product or service is done well, but that the product’s performance produces customer satisfaction, appropriateness in use, or the absence of deficiencies that prevent customer dissatisfaction.
Achieving Good Quality
To get a good quality product or service, three important aspects (basic dimensions of quality) must be considered:
- Technical dimension: Includes the scientific and technological factors affecting the product or service.
- Human dimension: Looks at good relations between customers and companies.
- Economic dimension: Tries to minimize costs for both the customer and the company.
Quality Parameters
- Quality of design: The degree to which a product or service is reflected in its design.
- Quality of conformity: The degree of fidelity with which a product or service is reproduced compared with the design.
- Quality of use: The product must be easy to use, secure, reliable, and so on.
The Customer is the New Target
The new theories put the client as an active part of the quality rating of a product, trying to create a standard based on the subjective point of view of a customer.
Total Quality Management (TQM)
This management philosophy is governed by constantly achieving customer satisfaction through continuous improvement of all organizational processes.
Reengineering
Reconsidering how work should be done and how the organization should be structured if they were created from scratch.
Manager
A person whose principal activities are part of the administration, who plans, organizes, directs, and controls the resources of the organization.
Process of Administration
- Plan and make decisions: Determining the objectives and deciding the best way to achieve them.
- Organizing: Determining how best to group activities and resources.
- Leading: Motivating the members of the organization to work efficiently and effectively.
- Controlling: Monitoring and correcting activities to facilitate the achievement of objectives.
Types of Managers
Vertical Vision (Levels of Managers)
- Top Managers: Control the organization at the highest level.
- Middle Managers: Implement policies and plans.
- Supervisors: Supervise the work of subordinates.
Horizontal View (Roles of Managers)
- Marketing Manager
- Finance Manager
- Personnel Manager
- Operations Manager
- Administration Manager