Operation And Management Ethics

Abstract

In this paper I will define Operational Management and discuss an ethical decision made by operational managers in my organization.

Operational Management

Our text defines Operational management "as the design, operation, and improvement of the systems that create and deliver the firm's primary products and services." (Chase, et. al, 2006). Operations Management involves the management of the entire system that produces a good or delivers a product. It involves making processes efficient and effective. Efficient and effective processes allow organizations to increase quality and reduce price while maintaining or improving profit margins. One of the toughest decisions to be made is which portions of the operation are best served by outsourcing.

One of the ethical dilemmas facing managers today is whether to use outsourcing to reduce the costs of producing products. Outsourcing can range from moving manufacturing of products to other countries to replacing white collar professional jobs with foreign labor, or to leave the labor in place and just outsource some internal administrative services. The reasoning behind this is the same no matter which use is selected. Those reasons are usually using lower cost labor to reduce the costs of products or services overall. The ethical issues are apparent and currently a hot topic in the news. The first issue it that it takes jobs away from American workers in an already strained economy. Economists contend that it will be good for the economy in the long run, but in the short term it helps to diminish the number of consumers that buy the products or services. Another ethical issue is that the workers performing the cheaper labor or services do not have the same working conditions and the countries they live in have little or no rules governing these conditions. Considering this it will be impossible for U.S. workers to compete with foreign labor. Another concern is national security. If products and services, military and civilian, are being created in other countries, who is insuring other countries are not are not jeopardizing the security of our intellectual property?

Our organization currently out sources all of the information technology services since our manufacturing is already globally distributed using our own employees. While this arrangement may seem cost effective there are definite problems. One is the communication barrier and another is the quality of the resulting work. While our contractors are willing to work extraordinary hours to complete projects and services, it puts a definite strain on the rest of the staff that work with or support these workers. It serves to erode the working conditions for everyone. Expectations are set higher for us to ensure the vendor is meeting the levels of service agreed upon in the contract. This ultimately ends up creating an internal management team to govern the activity and processes of the outsource vendor. Many companies choose to outsource without thinking through the real issues and doing a real world cost analysis. I feel my organization and most organizations outsource because of the cost savings and do not consider working conditions, product quality, and the effect it may have on their products and services. I have found there will also always be a gap in directives between the partnership of company and outsource vender. The outsource vendor is most interested in making as much money as possible with as little effort as possible without to much regard to weather or not the services are correctly aligned with the business strategy and direction of the company. From an operational standpoint this can also cause extremely inefficient process models.

References:

Chase, et. al. (2006). Operations Management for Competitive Advantage (11th ed.). New York: McGraw-Hill. Retrieved March 9, 2006 from University of Phoenix, resource, MGT/554-Operations Management site: https://ecampus.phoenix.edu/secure/resource/resource.asp.

Abstract

In this paper I will define Operational Management and discuss an ethical decision made by operational managers in my organization.

Operational Management

Our text defines Operational management "as the design, operation, and improvement of the systems that create and deliver the firm's primary products and services." (Chase, et. al, 2006). Operations Management involves the management of the entire system that produces a good or delivers a product. It involves making processes efficient and effective. Efficient and effective processes allow organizations to increase quality and reduce price while maintaining or improving profit margins. One of the toughest decisions to be made is which portions of the operation are best served by outsourcing.

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