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Contents FRAMEWORKS OF MANAGEMENT ...................................................................................................................................... 3

Business Process Framework Overview ...................................................................................................................... 3

7S: LEARNING ....................................................................................................................................................................... 7

Key points: .................................................................................................................................................................. 10

BUSINESS ETHICS ................................................................................................................................................................ 11

What is Ethical Behaviour? ........................................................................................................................................ 11

What Role Should Ethics Play in Business? ............................................................................................................... 11

A Code of Ethics .......................................................................................................................................................... 11

How Can Businesses Resolve Ethical Dilemmas? ...................................................................................................... 11

What Happens When People Do Not Behave Ethically? .......................................................................................... 11

CORPORATE SOCIAL RESPONSIBLITY ................................................................................................................................. 12

CSR Principles ............................................................................................................................................................. 12

Laws that Govern Corporate Ethics ........................................................................................................................... 12

Environmental Protection Act ................................................................................................................................... 12

Kyoto Protocol ............................................................................................................................................................ 12

CORPORATE GOVERNANCE (SARBANES OXLEY ACT 2002) ............................................................................................... 16

QUALITY CIRCLES ................................................................................................................................................................ 20

Objectives of Quality Circles ...................................................................................................................................... 20

Other Names of Quality Circles .................................................................................................................................. 21

Quality Circle Meetings .............................................................................................................................................. 21

Objectives of Quality Circle Meetings ....................................................................................................................... 21

What Quality Circles are Not? (Misconcepts) ........................................................................................................... 21

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Pitfalls and Problems .................................................................................................................................................. 21

Structure of Quality Circles Program ......................................................................................................................... 22

Quality Circles Operate? ............................................................................................................................................ 22

Code of Conduct for QCs ............................................................................................................................................ 22

Problem Solving Tools and Techniques Used by Quality Circles .............................................................................. 23

New QC Tools ............................................................................................................................................................. 23

Benefits of QC ............................................................................................................................................................. 23

TOTAL QUALITY MANAGEMENT (TQM) ............................................................................................................................ 23

What does TQM cover? .............................................................................................................................................. 24

The principles of quality management: ..................................................................................................................... 24

How does TQM differ from the EQA model? ............................................................................................................ 24

Why should a company adopt TQM? ........................................................................................................................ 24

When should a company adopt TQM? ...................................................................................................................... 24

The first steps ............................................................................................................................................................. 24

Methodology .............................................................................................................................................................. 25

Measurements ............................................................................................................................................................ 25

Pitfalls ......................................................................................................................................................................... 25

KAIZEN ................................................................................................................................................................................ 26

TOYOTA’s WAY ........................................................................................................................................................... 26

Kaizen costing ............................................................................................................................................................. 27

5S Technique ...................................................................................................................................................................... 28

LEAN MANUFACTURING .................................................................................................................................................... 30

FLEXIBLE MANUFACTURING SYSTEMS (FMS) ............................................................................................................ 32

1. Flexibility concept. Different approaches.............................................................................................................. 32

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Flexibility in manufacturing ....................................................................................................................................... 33

2. Seeking benefits on flexibility ................................................................................................................................ 33

3. FMS- an example of technology and an alternative layout .................................................................................. 34

4. Advantages and disadvantages of FMSs implementation .................................................................................... 34

SIX SIGMA ........................................................................................................................................................................... 35

FRAMEWORKS OF MANAGEMENT The key benefits of the Business Process Framework include: Reduces risk and allows future proof plans: Service providers use it as a master plan for process direction and as a reference for internal process engineering needs (portfolios of applications in terms of business process requirements). Clarifies potential boundaries for software: The framework provides insight on required functions to system integrators and vendors, and the inputs and outputs to be supported by products Reduces time to launch and streamlines services: Service providers can refine or implement re-useable, consistent, complete and robust end-to-end process flows. Improves partnership: Actors of the value chain use it as a reference for partnership, alliances, outsourcing and general agreements. Reduces implementation cost and risk: System integrators and service providers create consistent and high-quality end-to-end process flows, with opportunities for cost and performance improvement.

Business Process Framework Overview Like the other TM Forum frameworks, the Business Process Framework is an industry consensus on the Service Provider processes, which has been harmonized across the global scene and is based on member contributions. This framework provides an enterprise-wide view of all the process areas needed to run a service provider business. At the overall conceptual level, the framework can be viewed as having the following three major process areas, reflecting major focuses within typical enterprises: - Strategy, Infrastructure and Product, covering planning and lifecycle management. - Operations, covering the core of operational management. - Enterprise Management, covering corporate or business-support management.

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The Business Process Framework has multiple groupings for the processes that it contains: Vertical process groupings: focusing on end-to-end activities (for example, Assurance) each vertical grouping links together the customer, the supporting services, resources and supplier/partners. Taken together, these vertical groupings can be visualized as a ”lifecycle” view, moving left-to-right across the Framework from the initial strategy for the products and their components, through development and delivery, and on into operations and billing. Horizontal process groupings: focusing on functionally related areas, such as Customer Relationship Management. These groupings can be visualized as a “layered” view of the enterprise’s processes, moving from top to bottom, with the customers and products supported by the underlying services, resources and interaction with suppliers and partners. In each place where a vertical process grouping and a horizontal process grouping intersect all across the map, the resulting intersection leads on to further process detail that can be applied in either the horizontal or vertical context, according to the user’s needs. The process structure in the Framework uses hierarchical decomposition, so that the business processes of the enterprise are successively decomposed in a series of levels that expose increasing detail. In addition, the Business Process Framework defines the process structure, with descriptions, linkages between these processes, identification of potential interfaces, inputs and outputs, as well as other key elements. The Business Process Framework is not a final implementation specification. It will typically be customized and extended by users for their own business needs, but provides

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a vital common reference that is industry-recognized. TM Forum together with the it SMF community – whose members developed ITIL originally – have analyzed and defined integration of the two frameworks that leverages the best of both. As a result, the Business Process Framework has embedded direct support for ITIL processes by integrating these as best practice processes within the TM Forum Business Process Framework. In addition, the Business Process Framework has been absorbed into a formal ITU-T Recommendation M.3050, published by the ITU-T as an international standard.

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Business problem:

AAPT Limited is Australia’s third-largest telco in terms of revenues in the Australian telecommunications market. To achieve a full service offering, AAPT increasingly aggregated its own services from its own network infrastructure and ISP network applications with other providers’ core network services. The complexity of its offerings and the reliance on 100-plus legacy IT systems were restricting AAPT’s market nimbleness and contributed to the company’s mounting profitability challenges. The analysis pointed to the need to significantly overhaul the front- and back-office systems to enable the company to offer its customers a seamless online “quote-to-cash” experience.

Solution using the Business Process Framework: BearingPoint were initially engaged to deploy Info nova’s BSS point solution to solve wholesale back-office transaction management issues. The central approach taken in the development of the new business model was the adoption of key principles defined within the TM Forum NGOSS and e TOM frameworks, which involved the abolition of traditional technology and business silos. Both AAPT and BearingPoint brought proprietary insights to the way that industry best practice TMF models could be optimized. The main goals of the new operating model were: focus on the client, automated self- service for customers, virtualization (“white labeling”) for channels, real-time processing, end-to-end business processes, straight-forward sophisticated product bundles and a streamlined process based organizational structure, resulting in a major reduction in customer-facing staff.

Results: Some specific examples of the benefits enabled by Info nova’s BSS are: - Customer sign-up time from a typical 25-40 minutes down to 3 minutes (where the underlying third-party systems are able to support this turnaround timeline). - Operate on a like-for-like basis at 50% of cost at the completion of this program. - Total staff across the consumer business has been significantly reduced from five Billing systems to one; from 100 systems to one; from 80

applications in call centers to a few. - Ease of outsourcing some of its call center operations. (Source: Triple Play and transformation, AAPT, BearingPoint & Info nova Case Study,

Sept 2008))

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7S: LEARNING The McKinsey 7S Framework - Ensuring that all parts of your organization work in harmony. How do you go about analyzing how well your organization is positioned to achieve its intended objective? This is a question that has been asked for many years, and there are many different answers. Some approaches look at internal factors, others look at external ones, some combine these perspectives, and others look for congruence between various aspects of the organization being studied. Ultimately, the issue comes down to which factors to study. While some models of organizational effectiveness go in and out of fashion, one that has persisted is the McKinsey 7S framework. Developed in the early 1980s by Tom Peters and Robert Waterman, two consultants working at the McKinsey & Company consulting firm, the basic premise of the model is that there are seven internal aspects of an organization that need to be aligned if it is to be successful. The 7S model can be used in a wide variety of situations where an alignment perspective is useful, for example to help and improve:

Improve the performance of a company; Examine the likely effects of future changes within a company; Align departments and processes during a merger or acquisition; or Determine how best to implement a proposed strategy. The McKinsey 7S model can be applied to elements of a team or a project as well. “Hard” elements are easier to define or identify and management can directly influence them: These are strategy statements; organization charts and reporting lines; and formal processes and IT systems. “Soft” elements, on the other hand, can be more difficult to describe, and are less tangible and more influenced by culture. However, these soft elements are as important as the hard elements if the organization is going to be successful. The way the model is presented in Figure 1 below depicts the interdependency of the elements and indicates how a change in one affects all the others. Let’s look at each of the elements specifically: 1. Strategy: the plan devised to maintain and build competitive advantage over the competition. 2. Structure: the way the organization is structured and who reports to whom. 3. Systems: the daily activities and procedures that staff members engage in to get the job done. 4. Shared Values: called “superordinate goals” when the model was first developed, these are the core values of the company that are evidenced in the corporate culture and the general work ethic.

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5. Style: the style of leadership adopted. 6. Staff: the employees and their general capabilities. 7. Skills: the actual skills and competencies of the employees working for the company. Placing Shared Values in the middle of the model emphasizes that these values are central to the development of all the other critical elements. The company’s structure, strategy, systems, style, staff and skills all stem from why the organization was originally created, and what it stands for. The original vision of the company was formed from the values of the creators. As the values change, so do all the other elements. The model is based on the theory that, for an organization to perform well, these seven elements need to be aligned and mutually reinforcing. So, the model can be used to help identify what needs to be realigned to improve performance, or to maintain alignment (and performance) during other types of change. Whatever the type of change – restructuring, new processes, organizational merger, new systems, change of leadership, and so on – the model can be used to understand how the organizational elements are interrelated, and so ensure that the wider impact of changes made in one area is taken into consideration. You can use the 7S model to help analyze the current situation (Point A), a proposed future situation (Point B) and to identify gaps and inconsistencies between them. It’s then a question of adjusting and tuning the elements of the 7S model to ensure that your organization works effectively and well once you reach the desired endpoint. Sounds simple? Well, of course not: Changing your organization probably will not be simple at all! Whole books and methodologies are dedicated to analyzing organizational strategy, improving performance and managing change. The 7S model is a good framework to help you ask the right questions – but it won’t give you all the answers. For that you’ll need to bring together the right knowledge, skills and experience. When it comes to asking the right questions, we’ve developed a Mind Tools checklist and a matrix to keep track of how the seven elements align with each other. Supplement these with your own questions, based on your organization’s specific circumstances and accumulated wisdom. 7S Checklist Questions Here are some of the questions that you'll need to explore to help you understand your situation in terms of the 7S framework. Use them to analyze your current (Point A) situation first, and then repeat the exercise for your proposed situation (Point B). Strategy: What is our strategy? How to we intend to achieve our objectives? How do we deal with competitive pressure? How are changes in customer demands dealt with? How is strategy adjusted for environmental issues? Structure: How is the company/team divided? What is the hierarchy?

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How do the various departments coordinate activities? How do the team members organize and align themselves? Is decision making and controlling centralized or decentralized? Is this as it should be, given what we're doing? Where are the lines of communication? Explicit and implicit? Systems: What are the main systems that run the organization? Consider financial and HR systems as well as communications and document storage. Where are the controls and how are they monitored and evaluated? What internal rules and processes does the team use to keep on track? Shared Values: What are the core values? What is the corporate/team culture? How strong are the values? What are the fundamental values that the company/team was built on? Style: How participative is the management/leadership style? How effective is that leadership? Do employees/team members tend to be competitive or cooperative? Are there real teams functioning within the organization or are they just nominal groups? Staff: What positions or specializations are represented within the team? What positions need to be filled? Are there gaps in required competencies? Skills: What are the strongest skills represented within the company/team? Are there any skills gaps? What is the company/team known for doing well? Do the current employees/team members have the ability to do the job? How are skills monitored and assessed? 7S matrix questions Using the information you have gathered, now examine where there are gaps and inconsistencies between elements. Remember you can use this to look at either your current or your desired organization. Start with Shared Values: Are they consistent with your structure, strategy, and systems? If not, what needs to change? Then look at the hard elements. How well does each one support the others? Identify where changes need to be made. Next look at the other soft elements. Do they support the desired hard elements? Do they support one another? If not, what needs to change?

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As you adjust and align the elements, you’ll need to use an iterative (and often time consuming) process of making adjustments, and then re-analyzing how that impacts other elements and their alignment. The end result of better performance will be worth it. Tip: For similar approaches to this, see our articles on the Burke-Litwin Change Model, and the Congruence Model. You may also find our articles on the Change Curve, Impact Analysis and Lewin's Change Management Model useful. Key points: The McKinsey 7Ss model is one that can be applied to almost any organizational or team effectiveness issue. If something within your organization or team isn’t working, chances are there is inconsistency between some of the elements identified by this classic model. Once these inconsistencies are revealed, you can work to align the internal elements to make sure they are all contributing to the shared goals and values. The process of analyzing where you are right now in terms of these elements is worthwhile in and of itself. But by taking this analysis to the next level and determining the ultimate state for each of the factors, you can really move your organization or team forward.

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BUSINESS ETHICS EEtthhiiccss aarree rruulleess tthhaatt hheellpp uuss tteellll tthhee ddiiffffeerreennccee bbeettwweeeenn rriigghhtt aanndd wwrroonngg.. TThheeyy eennccoouurraaggee uuss ttoo ddoo tthhee rriigghhtt tthhiinngg.. What is Ethical Behaviour?

EEtthhiiccaall bbeehhaavviioouurr iiss ccoonndduucctt tthhaatt ccoonnffoorrmmss ttoo eetthhiiccss——iinnddiivviidduuaall bbeelliieeffss aanndd ssoocciiaall ssttaannddaarrddss aabboouutt wwhhaatt iiss rriigghhtt aanndd ggoooodd..

VVaalluueess tteellll uuss wwhhaatt iiss iimmppoorrttaanntt.. TThheeyy hheellpp uuss mmaakkee ddeecciissiioonnss aabboouutt rriigghhtt aanndd wwrroonngg..

MMoorraallss aarree rruulleess wwee uussee ttoo ddeecciiddee wwhhaatt iiss ggoooodd oorr bbaadd.. What Role Should Ethics Play in Business?

BBuussiinneessss eetthhiiccss aarree bbaasseedd oonn ssoocciieettyy’’ss eetthhiiccss aanndd tthhoossee ooff tthhee ppeeooppllee wwhhoo wwoorrkk ffoorr aanndd bbuuyy ffrroomm tthheemm.. A Code of Ethics

SSoommee ccoommppaanniieess wwrriittee aa ccooddee ooff eetthhiiccss,, aa ddooccuummeenntt tthhaatt eexxppllaaiinnss ssppeecciiffiiccaallllyy hhooww eemmppllooyyeeeess sshhoouulldd rreessppoonndd iinn cceerrttaaiinn

ssiittuuaattiioonnss..

CCaannaaddiiaann llaawwss aaddddrreessss aacccceeppttaabbllee bbuussiinneessss bbeehhaavviioorrss.. HHoowweevveerr,, bbuussiinneesssseess ccaann ssttiillll bbeehhaavvee uunneetthhiiccaallllyy wwiitthhoouutt

bbrreeaakkiinngg tthheessee llaawwss.. How Can Businesses Resolve Ethical Dilemmas?

AA ddiilleemmmmaa iiss aa ssiittuuaattiioonn wwhheerree aa ddiiffffiiccuulltt cchhooiiccee mmuusstt bbee mmaaddee bbeettwweeeenn ttwwoo oorr mmoorree ooppttiioonnss..

AAnn eetthhiiccaall ddiilleemmmmaa iiss aa mmoorraall pprroobblleemm wwiitthh aa cchhooiiccee bbeettwweeeenn ppootteennttiiaall rriigghhtt aanndd wwrroonngg.. SSoommee qquueessttiioonnss ttoo ccoonnssiiddeerr aarree:: WWhhoo wwiillll bbee hheellppeedd bbyy wwhhaatt yyoouu ddoo?? WWhhoo wwiillll bbee hhuurrtt bbyy wwhhaatt yyoouu ddoo?? WWhhaatt aarree tthhee bbeenneeffiittss aanndd pprroobblleemmss ooff ssuucchh aa ddeecciissiioonn?? WWiillll tthhee ddeecciissiioonn ssuurrvviivvee tthhee tteesstt ooff ttiimmee??

WWhhiissttllee--bblloowwiinngg hhaappppeennss wwhheenn aann eemmppllooyyeeee iinnffoorrmmss ooffffiicciiaallss oorr tthhee ppuubblliicc aabboouutt aann iilllleeggaall oorr eetthhiiccaall vviioollaattiioonn.. What Happens When People Do Not Behave Ethically?

WWhheenn aann iinnddiivviidduuaall aaccttss uunneetthhiiccaallllyy,, hhiiss oorr hheerr bbeehhaavviioouurr wwiillll mmoosstt lliikkeellyy hhaarrmm ootthheerrss.. TThhee iinnddiivviidduuaall ccoouulldd aallssoo bbee sseenntt ttoo jjaaiill ffoorr hhiiss oorr hheerr aaccttiioonnss.. MMaajjoorr eetthhiiccaall iissssuueess iinncclluuddee ffrraauudd,, aaccccoouunnttiinngg ssccaannddaallss,, aanndd iinnssiiddeerr ttrraaddiinngg..

FFrraauudd

FFrraauudd iiss aa ccrriimmee ooff llyyiinngg oorr pprreetteennddiinngg.. SSoommee bbuussiinneesssseess mmiisslleeaadd ccoonnssuummeerrss aanndd ttrriicckk tthheemm ttoo bbuuyy tthheeiirr pprroodduuccttss oorr sseerrvviicceess.. TThhee CCoommppeettiittiioonn AAcctt 22000022 bbaannss ssuucchh ffrraauudd aanndd ddeecceeppttiivvee bbuussiinneessss pprraaccttiicceess aanndd ddeeffiinneess tthheessee::

aass ffaallssee oorr mmiisslleeaaddiinngg aaddvveerrttiissiinngg

““bbaaiitt aanndd sswwiittcchh”” sseelllliinngg

ddoouubbllee ttiicckkeettiinngg iitteemmss ffoorr ssaallee

AAccccoouunnttiinngg SSccaannddaallss:: AAnn aaccccoouunnttiinngg ssccaannddaall ooccccuurrss wwhheenn aaccccoouunnttaannttss oorr sseenniioorr eexxeeccuuttiivveess aalltteerr aaccccoouunnttiinngg rreeccoorrddss ffoorr ppeerrssoonnaall bbeenneeffiitt..

AAccccoouunnttiinngg iinnffoorrmmaattiioonn iiss uusseedd iinnssiiddee aanndd oouuttssiiddee ooff tthhee bbuussiinneessss ttoo mmaakkee ddeecciissiioonnss.. WWhheenn aaccccoouunnttiinngg iirrrreegguullaarriittiieess aarree uunnccoovveerreedd,, aa ffoorreennssiicc aaccccoouunnttaanntt iinnvveessttiiggaatteess lleeggaall aanndd ffiinnaanncciiaall ddooccuummeennttss ttoo ffiinndd eevviiddeennccee ooff ttaammppeerriinngg..

EEmmbbeezzzzlleemmeenntt,, aa ttyyppee ooff aaccccoouunnttiinngg ffrraauudd,, hhaappppeennss wwhheenn aann aaccccoouunnttaanntt oorr sseenniioorr eexxeeccuuttiivvee ccrreeaatteess ffaallssee aaccccoouunnttss aanndd rreeddiirreeccttss mmoonneeyy iinnttoo tthheemm ffoorr ppeerrssoonnaall ggaaiinn.. BBuussiinneessss oowwnneerrss rreellyy oonn oouuttssiiddee aaccccoouunnttaannttss,, aauuddiittoorrss,, ttoo cchheecckk aanndd rreeppoorrtt oonn tthhee vvaalliiddiittyy ooff ffiinnaanncciiaall rreeccoorrddss..

IInnssiiddeerr TTrraaddiinngg

IInnssiiddeerr ttrraaddiinngg iiss bbuuyyiinngg oorr sseelllliinngg sshhaarreess ooff aa ccoommppaannyy bbaasseedd oonn ccoonnffiiddeennttiiaall iinnffoorrmmaattiioonn.. TThhiiss ttyyppee ooff ttrraaddiinngg iiss iilllleeggaall..

PPrroosseeccuuttiioonn ffoorr iinnssiiddeerr ttrraaddiinngg ffaallllss uunnddeerr tthhee pprroovviinncciiaall sseeccuurriittiieess ccoommmmiissssiioonnss.. PPuunniisshhmmeenntt iinncclluuddeess

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ffiinniinngg tthhee iinnddiivviidduuaall((ss)) ffoorr uupp ttoo $$11 mmiilllliioonn

ttuurrnniinngg oovveerr aallll pprrooffiittss ffrroomm ttrraaddiinngg

iinnccaarrcceerraattiinngg tthhee ppeerrssoonn((ss)) ffoorr uupp ttoo ttwwoo yyeeaarrss

bbeeiinngg bbaannnneedd ffrroomm ffuuttuurree ttrraaddiinngg iinn sseeccuurriittiieess

CORPORATE SOCIAL RESPONSIBLITY

AA bbuussiinneessss eexxhhiibbiittss ccoorrppoorraattee ssoocciiaall rreessppoonnssiibbiilliittyy ((CCRRSS)) tthhrroouugghh tthheeiirr vvaalluueess,, eetthhiiccss,, aanndd tthhee ccoonnttrriibbuuttiioonnss iitt mmaakkeess ttoo ccoommmmuunniittiieess.. CCRRSS iiss ddrriivveenn bbyy aa ddeessiirree ttoo pprrootteecctt ccuussttoommeerrss aanndd ttoo ttrreeaatt eemmppllooyyeeeess aanndd sshhaarreehhoollddeerrss ffaaiirrllyy.. CSR Principles

BBuussiinneesssseess tthhaatt pprraaccttiiccee CCSSRR pprriinncciipplleess ssuuppppoorrtt tthheeiirr eemmppllooyyeeeess aanndd ccoonnssuummeerrss bbyy • pprroovviiddiinngg aa ssaaffee aanndd hheeaalltthhyy wwoorrkk eennvviirroonnmmeenntt • aaddooppttiinngg ffaaiirr llaabboouurr ppoolliicceess • pprrootteeccttiinngg tthhee eennvviirroonnmmeenntt • bbeeiinngg ttrruutthhffuull iinn aaddvveerrttiissiinngg • aavvooiiddiinngg pprriiccee ddiissccrriimmiinnaattiioonn • ddoonnaattiinngg ttoo cchhaarriittyy

DDuuttyy ttoo RReeppoorrtt

CCoorrppoorraattiioonnss aanndd tthheeiirr eemmppllooyyeeeess hhaavvee aa dduuttyy ttoo rreeppoorrtt,, wwhhiicchh mmeeaannss tthheeyy mmuusstt ddiisscclloossee aallll iimmppoorrttaanntt iinnffoorrmmaattiioonn ttoo sshhaarreehhoollddeerrss,, ppaarrttnneerrss,, lleennddeerrss,, iinnssuurreerrss,, ccoommmmuunniittiieess,, rreegguullaattoorrss,, ccoonnssuummeerrss,, eemmppllooyyeeeess,, aanndd iinnvveessttoorrss.. Laws that Govern Corporate Ethics

WWoorrkkppllaaccee SSaaffeettyy

TThhee OOccccuuppaattiioonnaall HHeeaalltthh aanndd SSaaffeettyy AAcctt ((OOHHSSAA)) ooff OOnnttaarriioo ddeeffiinneess tthhee rriigghhttss aanndd rreessppoonnssiibbiilliittiieess ooff eemmppllooyyeeeess iinn tthheeiirr wwoorrkkppllaaccee ttoo eennssuurree tthheeiirr ssaaffeettyy aanndd hheeaalltthh.. TThheessee rreegguullaattiioonnss wweerree ppuutt iinn ppllaaccee ttoo rreemmiinndd ccoommppaanniieess tthhaatt iitt iiss nnoott oonnllyy iimmppoorrttaanntt ttoo ffooccuuss oonn mmaakkiinngg pprrooffiittss,, bbuutt aallssoo eeqquuaallllyy iimmppeerraattiivvee ttoo llooookk aafftteerr tthhee ssaaffeettyy aanndd hheeaalltthh tthheeiirr wwoorrkkeerrss..

AAnnttiiddiissccrriimmiinnaattiioonn IIssssuueess

DDiissccrriimmiinnaattiioonn iiss ddeennyyiinngg aa qquuaalliiffiieedd iinnddiivviidduuaall aann iinntteerrvviieeww,, jjoobb,, oorr pprroommoottiioonn bbaasseedd oonn hhiiss oorr hheerr rreelliiggiioonn,, ggeennddeerr,, sseexxuuaall oorriieennttaattiioonn,, oorr pphhyyssiiccaall ddiissaabbiilliittiieess..

GGeennddeerr ddiissccrriimmiinnaattiioonn iiss ttrreeaattiinngg aann eemmppllooyyeeee ddiiffffeerreennttllyy bbaasseedd oonn tthheeiirr sseexx ((mmaallee oorr ffeemmaallee))..

TThhee ggllaassss cceeiilliinngg rreeffeerrss ttoo iinnvviissiibbllee bbaarrrriieerrss tthhaatt mmaayy aaffffeecctt tthhee ccaarreeeerr ppaatthh ooff sseenniioorr lleeaaddeerrss iinn ccoorrppoorraattee ppoossiittiioonnss..

HHaarraassssmmeenntt

MMaannyy bbuussiinneesssseess hhaavvee ppoolliicciieess aanndd pprroocceedduurreess ffoorr ddeeaalliinngg wwiitthh hhaarraassssmmeenntt:: bbeehhaavviioouurr tthhaatt iiss tthhrreeaatteenniinngg,, ddiissttuurrbbiinngg,, oorr mmaakkeess ootthheerrss ffeeeell uunnccoommffoorrttaabbllee..

AAcccceessssiibbiilliittyy IIssssuueess

TThhee dduuttyy ttoo aaccccoommmmooddaattee rreeffeerrss ttoo aann eemmppllooyyeerr’’ss oobblliiggaattiioonn ttoo eennssuurree aacccceessssiibbiilliittyy ffoorr aallll eemmppllooyyeeeess.. TThhee CCaannaaddiiaann HHuummaann RRiigghhttss AAcctt,, SSeeccttiioonnss 22 aanndd 1155,, ssttaatteess tthhaatt eemmppllooyyeeeess wwiitthh ddiissaabbiilliittiieess mmuusstt bbee aaccccoommmmooddaatteedd bbyy bbuussiinneessss aass lloonngg aass uunndduuee hhaarrddsshhiipp ddooeess nnoott ooccccuurr ttoo tthhee bbuussiinneessss..

EEnnvviirroonnmmeennttaall RReessppoonnssiibbiilliittyy

EEnnvviirroonnmmeennttaall ccoonncceerrnnss ffoorr bbuussiinneessss iinncclluuddee tthhee EEaarrtthh’’ss aaiirr,, llaanndd,, aanndd wwaatteerr.. TThheessee iissssuueess aaffffeecctt CCaannaaddiiaann bbuussiinneesssseess aanndd ootthheerrss iinn tthhee wwoorrlldd

Environmental Protection Act

TThhee CCaannaaddiiaann EEnnvviirroonnmmeennttaall PPrrootteeccttiioonn AAcctt 11999999 wwaass tthhee rreessppoonnssee ooff EEnnvviirroonnmmeenntt CCaannaaddaa ttoo tthhee eennvviirroonnmmeennttaall ddiissaasstteerr ooff tthhee EExxxxoonn VVaallddeezz.. Kyoto Protocol

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CCaannaaddaa ssiiggnneedd tthhee KKyyoottoo PPrroottooccooll iinn 11999988 tthhaatt ssttaatteess ccoouunnttrriieess mmuusstt rreedduuccee ccaarrbboonn ddiiooxxiiddee eemmiissssiioonnss bbyy 22001122 ((ffiivvee ppeerrcceenntt lleessss tthhaann iinn 11999900))..

BBuussiinneessss aanndd tthhee EEnnvviirroonnmmeenntt::

TThhee wwaayy bbuussiinneesssseess rreessppoonndd ttoo eennvviirroonnmmeennttaall ccoonncceerrnnss aanndd llaawwss tteellllss uuss aabboouutt tthheeiirr eetthhiiccss oorr ccoommmmiittmmeenntt ttoo ddooiinngg wwhhaatt iiss rriigghhtt..

BBuussiinneessss iiss lliikkee aa tthhrreeee--lleeggggeedd ssttooooll:: eeaacchh lleegg ssttaannddss ffoorr aa ddiiffffeerreenntt ggooaall..

BBuussiinneessss GGooaallss

FFiirrsstt lleegg:: ffiinnaanncciiaall ggooaallss

SSeeccoonndd lleegg:: eennvviirroonnmmeennttaall ggooaallss

TThhiirrdd lleegg:: ssoocciiaall ggooaallss

LLaabboouurr PPrraaccttiicceess

IInn OOnnttaarriioo,, tthhee EEmmppllooyymmeenntt SSttaannddaarrddss AAcctt aaddddrreesssseess tthhee mmiinniimmuumm eemmppllooyymmeenntt ccoonnddiittiioonnss iinncclluuddiinngg::

hhoouurrss ooff wwoorrkk oovveerrttiimmee ppaayy mmiinniimmuumm wwaaggee hhoolliiddaayyss vvaaccaattiioonnss eeqquuaall ppaayy ffoorr mmaallee aanndd ffeemmaallee eemmppllooyyeeeess eemmppllooyyeeee bbeenneeffiitt ppllaannss pprreeggnnaannccyy,, ppaarreennttaall,, aanndd ootthheerr lleeaavveess ooff aabbsseennccee nnoottiiccee ooff tteerrmmiinnaattiioonn ooff eemmppllooyymmeenntt sseevveerraannccee aanndd tteerrmmiinnaattiioonn ppaayy

PPaayy EEqquuiittyy

AAlltthhoouugghh ppaayy eeqquuiittyy lleeggiissllaattiioonn hhaass cchhaannggeedd ccoonnssiiddeerraabbllyy ssiinnccee iittss eessttaabblliisshhmmeenntt iinn 11997788,, iitt ssttiillll ddooeess nnoott aallwwaayyss ddeelliivveerr

eeqquuaall ppaayy ffoorr wwoorrkk ooff eeqquuaall vvaalluuee.. TThhee lleeggiissllaattiioonn pprroohhiibbiittss eemmppllooyyeerrss ffrroomm ppaayyiinngg eemmppllooyyeeeess ooff oonnee sseexx ddiiffffeerreennttllyy

tthhaann ffrroomm tthhee ootthheerr wwhheenn tthhee ssaammee oorr ssuubbssttaannttiiaallllyy tthhee ssaammee wwoorrkk iiss ddoonnee..

PPrriivvaaccyy LLaawwss TThhee PPeerrssoonnaall IInnffoorrmmaattiioonn PPrrootteeccttiioonn aanndd EElleeccttrroonniicc DDooccuummeennttss AAcctt ((JJaannuuaarryy 11,, 22000044)) rreeqquuiirreess aallll pprroovviinncciiaallllyy rreegguullaatteedd bbuussiinneesssseess ttoo eexxppllaaiinn wwhhaatt ppeerrssoonnaall iinnffoorrmmaattiioonn tthheeyy nneeeedd ffrroomm eemmppllooyyeeeess oorr ccuussttoommeerrss aanndd wwhhyy tthheeyy nneeeedd iitt

FFaaiirr TTrraaddee

FFaaiirr ttrraaddee iiss tthhee vvoolluunnttaarryy pprraaccttiiccee ooff hheellppiinngg pprroodduucceerrss iinn ddeevveellooppiinngg ccoouunnttrriieess bbyyppaassss eexxppeennssiivvee mmiiddddlleemmeenn ssoo tthheeyy ccaann sseellll tthheeiirr ggooooddss iinn ootthheerr ccoouunnttrriieess ffoorr aa ffaaiirr pprrooffiitt..

AA ggrraassssrroooottss mmoovveemmeenntt ssttaarrttss oouutt aass tthhee llooccaall aaccttiioonn ooff oorr rreessppoonnssee bbyy aa ggrroouupp ooff ppeeooppllee ttoo aa pprroobblleemm:: tthhee mmoovveemmeenntt ddeevveellooppss ffrroomm tthhee bboottttoomm uupp,, nnoott ffrroomm tthhee ttoopp ddoowwnn.. FFoorr eexxaammppllee,, tthhee ffaaiirr ttrraaddee iinniittiiaattiivvee bbeeggaann wwiitthh ppaarrttnneerrsshhiippss bbeettwweeeenn ffaarrmmeerrss iinn lleessss--ddeevveellooppeedd ccoouunnttrriieess aanndd aaiidd oorrggaanniizzaattiioonnss ((bboottttoomm uupp)) ttoo hheellpp tthheemm rreeaacchh mmaarrkkeettss iinn EEuurrooppee aanndd NNoorrtthh AAmmeerriiccaa ((ttoopp ddoowwnn))..

FFaaiirr--ttrraaddee pprroodduuccttss aarree mmaarrkkeedd wwiitthh llooggooss ssuucchh aass tthhee nnoonn--pprrooffiitt oorrggaanniizzaattiioonn’’ss TTrraannssFFaaiirr CCaannaaddaa ssyymmbbooll.. EEtthhiiccaall ttrraaddiinngg mmeeaannss uussiinngg ttrraaddee ttoo eennssuurree tthhaatt tthhee bbaassiicc llaabboouurr rriigghhttss ooff eemmppllooyyeeeess iinn ootthheerr ccoouunnttrriieess aarree rreessppeecctteedd..

Problem: Corporate resources spent on environmental and social goals never equal what is spent trying to generate profits (financial goals).

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TThhee NNaattuurree ooff BBuussiinneessss EEtthhiiccss Ethics is primarily concerned with the distinction between what is considered ‘right’ and what is consider ‘wrong’ behaviour and with the way in which individuals arrive at such judgments in terms of moral duty and obligations that govern conduct. Ethical issues in business include:

honesty in advertising of jobs or products;

fairness in setting pay and working conditions;

non-exploitation of countries or peoples;

effects on customer of consuming product;

dealing with oppressive governments;

management of closures and redundancies. Ethical issues can also be considered at four levels in the organisation:

Macro level: This relates to business in international and national context and the role of the organisation in society.

Corporate level: Ethical issues affecting the organisation over which it has some direct control for example preservation of the environment, contributions to political parties and so on.

Group level: Ethical issues affecting particular professional groups or particular groups within an organisation.

Individual level: The conduct, activities and standards of behaviour of individuals within an organisation. Business ethics is about the standards of conduct that an organisation sets itself in its dealings with different stakeholders both within the organisation and outside with its environment is part of the culture of the organisation in that it sets the norms of behaviour by which people will abide. The question for organisations is the extent to which they want to consider ethical issues that could arise in the conduct of its business beyond the legal minimum. However, the application of ethics to the business setting is not simple or straight forward. One of the difficulties in dealing with ethics in a practical sense is in determining what constitutes ‘right behaviour’. There is little agreement on this because what is ethical, to a great extent, will depend upon the context in which the issues arise. Factors affecting ethical obligations A number of factors will affect the ethical obligations of an organisation, for example: the law; extent of government regulation; industry and company ethical codes and social pressure. Carroll (1990) identifies eleven different ethical criteria which managers could use as a basis of judgment in relation to ethical business issues: 1. The categorical imperative – whereby principles of action will be adopted only if they can be adopted, without

inconsistency, by everyone else. 2. The conventionalist ethic – whereby acting in your own self-interest is permitted provided that the laws imposed

by society are not thereby infringed. 3. The golden rule – do unto others as you would have them do unto you. 4. The hedonistic rule – if it feels OK, then it probably is OK.

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5. The disclosure rule – whereby the correctness of a particular action is judged by reference to how you would feel should it appear on the front page of a newspaper.

6. The intuition rule – do whatever your emotions, as opposed to rational decision-making, tells you to do. 7. The means to an end ethic – whereby it is permissible to act if the end result is defensible. 8. The might equals right rule – where acting in accordance with the strength of your power base is permissible even

though this runs contrary to social conventions. 9. The organisational ethics in accordance with which loyalty to the organisation takes transcends all other

considerations. 10. The professional ethics under which adherence to the code of your profession transcends other considerations. 11. The utilitarian principle under which the guiding principle is attaining ‘the greatest good of the greatest number’.

Increasingly, organisations are judged by those with whom they come into contact on the basis of their capacity to act in an ethical manner. Having an ethical framework in place can make it easier for businesses to choose the ‘right’ behaviour. However, the pressures of organisational life, such as competitor activities or the constant need to improve productivity, can mean that managers make decisions that can conflict with their own personal values. This can bring about an ethical dilemma, which is a situation faced by an individual that involves complex and conflicting principles of ethical behaviour. For example, while selling a product, an individual may face the dilemma of whether or not to tell the truth about product features which could result in them losing the sale and their commission. Other examples of ethical issues that managers may face include:

situations of unfair competition

whether or not to do business with or in certain countries

dealing with bribes and attempts at extortion

dealing with the rights of employees

implementing policies that imply social cost, for example the pollution of rivers. This may reduce the costs to a company of getting rid of waste, but it will involve the social

costs in clearing the rivers;

the relations an organisation should have with political parties. Blanchard and Peale suggest that individuals facing ethical dilemmas should ask themselves:

Is it legal? Will you be breaking laws by engaging in the activity?

Is it balanced? This means ‘is it fair to all parties involved’?

Is it right? How does this decision make you feel and would you like others to know about it? The fact that there are so many possible approaches to the determination of what, in a given set of circumstances, would constitute ‘right’ behaviour shows how difficult is the translation of anything which could be regarded as an ethical principle into the world of business. Organisations may be judged by those with whom they come into contact, for example customers, regulators, suppliers or others, who expect them to exhibit ‘right’ behaviours, even though each group may have a different slant on what constitutes correctness.

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THE 3 R’S” OF BUSINESS ETHICS By James Carson on Sep 27, 2010 in Common Sense

Like to enhance your reputation as an ethical business person and team member? One of the best ways to do that is by focusing on – and mastering – “The 3 R’s”:

The first “R” of business ethics is RESPECT. It’s something that must be applied to people, organizational resources, and your environment. And it includes behaviors such as:

Treating everyone (customers, coworkers, vendors, etc.) with dignity and courtesy; Using company supplies, equipment, time, and money appropriately, efficiently, and for the business’ business

only; Protecting and improving your work environment, and abiding by all rules and regulations that exist to protect our

world and our way of life.

The second “R” of business ethics is RESPONSIBILITY – to your customers, your coworkers, your organization … and to yourself. Included here are behaviors such as:

Providing timely, high-quality goods and services; Working collaboratively and carrying your share of the load; Meeting all performance expectations and adding value to everything you’re involved with.

The third “R” of business ethics is RESULTS. More accurately, it’s right results – the kind where the how’s are equal in weight to the what’s … where means to achieving ends are just as important as the ends themselves. Obviously, you’re expected to get results for your organization and for your customers. But you’re also expected to get those results legally and ethically. Allow yourself to lose sight of this, and you jeopardize your business and your career.

CORPORATE GOVERNANCE (SARBANES OXLEY ACT 2002) This section is based on extracts from the CIMA working party report, Corporate Governance: History, Practice and Future, published by CIMA Publishing and reproduced with permission. CADBURY REPORT According to the Cadbury report, corporate governance is the system by which companies are directed and controlled. A number of high profile scandals over the last few decades have highlighted the need for guidance to confront the problems that can arise in organisations’ systems of governance. Whilst usually associated with large quoted companies, governance is an issue for all organisations – profit making and not-for-profit publicly on internal control. In the United Kingdom, the corporate governance debate was stimulated by a series of corporate scandals and unexpected corporate collapses in the late 1980s and early 1990s. Press coverage of BCCI, Polly Peck and the pension funds of the Maxwell Communications Group caused much public questioning about how effective the boards of these companies had been in monitoring the actions of their executive management, and about the difficulties that non-executive directors and auditors faced in ‘standing up’ to dominant chairmen or chief executives.

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Cadbury The Cadbury Committee was set up in May 1991 by the Financial Reporting Council (FRC), the Stock Exchange and the accountancy profession in response to their concern about ‘the perceived low level of confidence, both in financial reporting and in the ability of auditors to provide the safeguards which the users of company reports sought and expected’. The committee’s remit was to report on the financial aspects of corporate governance (particularly in relation to financial reporting and accountability), to consider the responsibilities of executive and non-executive directors, the case for audit committees, the principal responsibilities of auditors, the extent and value of the audit, and the links between shareholders, boards and auditors. At the heart of the Cadbury Committee’s recommendations was the Code of Best Practice, with which all listed companies were to comply. The Code was based on three principles: 1. openness (subject to commercial confidentiality) 2. integrity (honest, balanced and complete financial reporting) 3. accountability (the requirement for directors to provide quality information, and for shareholders to exercise their powers as

owners responsibly). The argument for adhering to the Code was that it would strengthen both confidence and accountability. The board would find it easier to secure assent for its strategies if its activities were more open and there was a clearer understanding of its responsibilities. And if the general level of confidence in financial reporting were improved, this would facilitate the efficient working of capital markets. One of the recommendations of the Cadbury Code was that ‘directors should explain their responsibility for preparing the accounts next to a statement by the auditors about their reporting responsibilities.’ It intended this requirement to ensure that compan ies have an appropriate control system in place, and apply it effectively. The committee placed great importance on internal control – both because it is essential to efficient management, and because failures in internal control were one of the reasons the committee was established. The combined code principles of corporate governance The Combined Code was first published in June 1998 and comprised Principles of Good Governance and a Code of Best Practice, which set out Code Provisions for each of these principles. The code was revised in 2003, and now reflects the work done by Turnbull Smith and Higgs. Only the ‘purpose and principles’ of Corporate governance are examinable in the Integrated management paper, and the principles of the code are divided into the broad areas listed below. Directors of listed companies should be led by an effective board, with a balance of executive and non-executive directors such that no individuals or small groups can dominate decision-making. There should be a clear division of responsibilities of the two key tasks of running the board (Chairman) and running the business (Chief Executive) so that no individual has unfettered powers. Appointments to the Board should be made in a formal, rigorous and transparent manner. To enable it to discharge its duties, the board should be supplied in a timely manner with good quality information. Directors should receive an induction, on joining the company, and should regularly update and refresh their skills.

The Board should evaluate its own performance, and that of its committees, on an annual basis. The directors should offer themselves for re-election at regular intervals, and should plan for the Board to be ‘progressively refreshed’ by bringing in new members. ● Directors’ remuneration. Without paying more than is necessary, the level of remuneration should be that which is necessary to recruit and retain directors of the right calibre. A significant proportion of executive directors’ pay should be performance-related in such a way as to encourage the achievement of corporate objectives and to reward individual performance. Policy on executive remuneration should be clear, and no director should be involved in determining his/her own remuneration.

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● Accountability and audit. The board is responsible for presenting a balanced and understandable assessment of the company’s financial position and prospects. It is also responsible for maintaining a sound system of internal controls to safeguard the company’s assets and the shareholders’ investments in the company. It should establish formal and transparent arrangements for considering how to apply the principles of financial reporting and internal control and for maintaining an effective relationship with external auditors. ● Relations with shareholders. There should be a dialogue with shareholders based on the mutual understanding of objectives. The Board as a whole is responsible for ensuring that this dialogue takes place. The Board should use the annual general meeting (AGM) of the company as a vehicle for communication with investors, and a tool to encourage them to participate. The Combined Code requires listed companies to include in their accounts a narrative statement of how they applied the principles set out in the Combined Code and a statement as to whether or not they complied throughout the accounting period with the provisions set out in the Combined Code. Listed companies which do not comply must give reasons for non-compliance. The Combined Code includes Code Principles and Provisions for institutional shareholders, covering matters such as voting, communication between investor and company, and the investor organisation’s responsibilities to evaluate the company’s corporate governance arrangements. In a section titled ‘Related Guidance and Good Practice Suggestions’, the code also provides guidance relating to internal control (the ‘Turnbull guidance’) and audit committees (the ‘Smith guidance’). Implementation of Corporate Governance <CASE STUDY>

General Secretary – Lebanese Businessmen Association Dr Fouad Zmokhol Managing Director of Zimco group (Lebanon)

I am very honored to have been invited as a speaker at this MENA regional Corporate Governance meeting “Advancing the corporate governance agenda in the MENA region”. I will focus in my presentation on the implementation of corporate governance on Non-listed Companies. On the 19th and 20th of April 2005, I had the chance to participate at “ The International Experts meeting on Corporate Governance of Non-Listed Companies” that was organized by the OECD and was held in Istanbul. The presence of participants from 36 countries around the globe, from different economies, different culture contributed greatly to a better understanding of corporate governance problems and possible solution for non-listed companies. Corporate governance and the variety of non-listed companies (NLC) The general definition of “non-listed companies” used in the discussion was: “ Closely held companies whose shares, unlike those publicly held companies, do not trade freely in impersonal markets, either because theirs shares are held by a small number of persons or because they are subject to restriction that limit their transferability”. We can distinguish a variety of non-listed companies such as the family owned companies (which constitute the largest number of NLC), state-owned companies, group owned companies, private investor-owned companies, joint ventures, and mass privatized companies. As a start we agreed that non-listed companies do not need a separate set of corporate governance principles or guidelines.

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Internal and external mechanisms of good corporate governance During our discussions, we have stressed on the importance of creating effective internal and external measures that can be employed to solve the complex governance problem on the NLC and the need for improved institution to stimulate social welfare and economic growth. Internal mechanisms include ownership structure, the board of directors, managerial compensation, financial transparency and adequate information disclosure. They usually, Successful implementation of corporate governance in the MENA region would be raising and building awareness on the strategic benefits of its application especially for NLC. In order to create awareness we need to demonstrate the concrete benefits of solid CG. We should stress for example on the correlation between corporate governance and company performance , between good CG and the companies access to capital, between Good CG and the low debt interest rate an organisation is paying. Companies have to see clearly that CG raise corporate value and lower the financing costs. It should be clearly understood that corporate governance reduces disputes between successors and contribute to company sustainability in the long run.

Presenting pilot studies or success stories in governance application can serve as well as an effective enforcement.

Good education, effective training are crucial to the application of CG practices and for the continuity of corporations.

Awards would work well in environment as ours, where personality and personal legacies are highly regarded.

Rating agencies, institutional investors and the media have a key influence on corporate governance application since investor are more receptive to the business environment in which the company evolves.

Changing mentalities which is a very long process should start from university and than followed up through business association, chamber of commerce, training and seminars.

Corporate governance is not just a box ticking exercise, companies need an exchange of practical guidance in order to conceive and implement successful governance mechanism. Instead of a menu of corporate governance options it would be more appropriate to present a best practice guidelines applicable to family business, SME’s….These will serve as a benchmark for appropriate customization in different companies.

The benefits of corporate governance /implications Good corporate governance:

Reduces risk. It helps to ensure that the personal objectives of the board and the company’s strategic objectives are brought into line with those of stakeholders. It can help to reduce the risk of fraud. It can provide a mechanism to review risk, and it can provide a framework for reviewing and assessing projects.

Stimulates performance. It institutes clear accountability and effective links between performance and rewards which can encourage the organisation to improve its performance.

Improves access to capital markets. It reduces the level of risk as perceived by outsiders, including investors. In particular, corporate governance can be seen as protecting shareholders’ rights, and thus makes it easier for companies to raise finance.

Enhances the marketability of goods and services. It creates confidence among other stakeholders, including employees, customers, suppliers and partners in joint ventures.

Improves leadership. It allows increased expertise to be brought to bear on strategic decision- making, through the influence of non-executive directors (NEDs), and because all board members are encouraged to examine board

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decisions critically. The wider pool of knowledge and experience available to the board, through the inclusion of external members, helps the board to identify opportunities more readily.

Demonstrates transparency and social accountability. This in turn can foster political support for, and public confidence in, the organisation.

QUALITY CIRCLES

Quality Circles are (informal) groups of employees who voluntarily meet together on a regular basis to identify, define, analyze and solve work related problems. Usually the members of a particular team (quality circle) should be from the same work area or who do similar work so that the problems they select will be familiar to all of them. In addition, interdepartmental or cross functional quality circles may also be formed.

Formal and Informal Groups

Formal Groups

Family. Organization. Departments.

Informal Groups Employees meet near water cooler and gossip. Five salesmen from marketing department meet once a month for lunch to discuss mutual concerns and to

seek relief from tedious aspects of their job. Four computer programmers form a jogging club that meets three days per week at lunch time to run two

miles. All employees of a section meet and discuss how to improve and beautify office layouts. Seven workers of a production shop floor meet once a week to solve their technical problems. Maintenance department staff meet regularly to maintain machines in a better way.

An ideal size of quality circle is seven to eight members. But the number of members in a quality circle can vary.

Objectives of Quality Circles

1. Promote job involvement 2. Create problem solving capability 3. Improve communication 4. Promote leadership qualities 5. Promote personal development 6. Develop a greater awareness for cleanliness 7. Develop greater awareness for safety 8. Improve morale through closer identity of

employee objectives with organization's objectives

9. Reduce errors.

10. Enhance quality 11. Inspire more effective team work 12. Build an attitude of problem prevention 13. Promote cost reduction 14. Develop harmonious manager, supervisor and worker

relationship 15. Improve productivity 16. Reduce downtime of machines and equipment 17. Increase employee motivation

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Other Names of Quality Circles Quality Circle Meetings

Small Groups Action Circles Excellence Circles Human Resources Circles Productivity Circles

Meetings are important part of quality circle's working.

Meetings are attended by all the members of the quality circle.

In general, meetings take place once a week or once in a fortnight.

Each meeting lasts for approximately one hour, though variations are possible.

Apart from the frequency of the meetings, what is important is the regularity of the meetings.

Objectives of Quality Circle Meetings What Quality Circles are Not? (Misconcepts)

Any of the several activities may occur during a meeting such as: Identifying a theme or a problem to work on. Getting training as required to enable

members to analyze problems. Analyzing problem(s). Preparing recommendations for implementing

solution(s). Follow up of implementation of suggestions. Prepare for a presentation to the

management.

Quality Circles do not tackle just quality problems. Quality Circle is not a substitute or replacement

for task forces, product committees, and joint plant councils or works committees, quality assurance department, and suggestion schemes.

Quality Circles do not change the existing organizational structure or the chain of command.

Quality Circles are not a forum for grievances or a spring board for demands.

Quality Circles are not a means for the management to unload all their problems.

Quality Circles are not just another technique. Quality Circles are not a panacea for all ills.

Pitfalls and Problems Lack of faith in and support to Quality Circle activities among management personnel Lack of interest or incompetence of leaders/facilitator Apathy, fear and misunderstanding among middle level executives Delay or non-implementation of Circle recommendations Irregularity of Quality Circle activities Non-application of simple techniques for problem solving Lack of or non-participation by some members in the Circle activities Circles running out of problems Antagonism of non-members towards Quality Circle operations Inadequate visibility of management support Complexity of problems taken up Non-maintenance of Quality Circle records

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Too much facilitation or too little Language difficulty in communication Communication gap between Circles and departmental head Change of management Confusing Quality Circle for another technique Resistance from trade unions Structure of Quality Circles Program Six Basic Elements 1. Circle participants or members. 2. Circle leaders/deputy leaders. 3. Program facilitator. 4. Steering/advisory committee. 5. Top management. 6. Non-participating management/members. Quality Circles Operate? Appointment of a steering committee, facilitator and QC team leaders. Formation of QCs by nomination/voluntary enrolment of QC members. Training of all QC members (by an expert consultant). Training of non-participating employees (by an expert consultant). Problem data bank and identification of problems for QC work. QC problem resolution by QCs through standardized techniques. Presentation of QC solutions to management. Evaluation of award/recognition. Code of Conduct for QCs Attend all meetings and be on time. Listen to and show respect for the views of other members. Make others feel a part of the group. Criticize ideas, not persons. Help other members to participate more fully. Be open to and encourage the ideas of others. Every member is responsible for the team’s progress. Maintain a friendly attitude. Strive for enthusiasm. The only stupid question is the one that is not asked. Look for merit in the ideas of others. Pay attention- avoid disruptive behavior. Avoid actions that delay progress. Carry out assignments on schedule. Give credit to those whom it is due. Thank those who give assistance. Do not suppress ideas- do express. Objectives and causes first, solutions next.

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Give praise and honest appreciation when due. Ideas generated by the group should not be used as individual suggestions to suggestion scheme. Problem Solving Tools and Techniques Used by Quality Circles Given below are the most commonly used tools and techniques. These are called the old QC tools: Brainstorming. Pareto analysis. Cause and effect diagram (or fish bone diagram or Ishikawa diagram). Histogram. Scatter diagram Stratification Check sheet Control charts and graphs New QC Tools Quality circles started using additional seven tools as they started maturing. These are: 1. Relationship diagram. 2. Affinity diagram. 3. Systematic diagram or Tree diagram. 4. Matrix diagram. 5. Matrix data analysis diagram. 6. PDPC (Process Decision Program Chart). 7. Arrow diagram. Benefits of QC Self development. Promotes leadership qualities among participants. Recognition. Achievement satisfaction. Promotes group/team working. Serves as cementing force between management/non-management groups. Promotes continuous improvement in products and services. Brings about a change in environment of more productivity, better quality, reduced costs, safety and corresponding

rewards. TOTAL QUALITY MANAGEMENT (TQM) Total quality management is a management approach centred on quality, based on the participation of an organisation's people and aiming at long term success. This is achieved through customer satisfaction and benefits all members of the organisation and society. In other words, TQM is a philosophy for managing an organisation in a way which enables it to meet stakeholder needs and expectations efficiently and effectively, without compromising ethical values. TQM is a way of thinking about goals, organisations, processes and people to ensure that the right things are done right first time. This thought process can change attitudes, behaviour and hence results for the better.

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What does TQM cover? The total in TQM applies to the whole organisation. Therefore, unlike an ISO 9000 initiative which may be limited to the processes producing deliverable products, TQM applies to every activity in the organisation. The principles of quality management: There are eight principles of quality management: 1. customer-focused organisations depend on their customers and therefore should understand current and future

customer needs, meet customer requirements and strive to exceed customer expectations 2. leadership - leaders establish unity of purpose, direction and the internal environment of the organisation. They

create the environment in which people can become fully involved in achieving the organisation's objectives 3. involvement of people - people at all levels are the essence of an organisation and their full involvement enables

their abilities to be used for the organisation's benefit 4. process approach - a desired result is achieved more efficiently when related resources and activities are managed

as a process 5. system approach to management - identifying, understanding and managing a system of interrelated processes for

a given objective contributes to the effectiveness and efficiency of the organisation 6. continual improvement - continual improvement is a permanent objective of an organisation 7. factual approach to decision making - effective decisions are based on the logical and intuitive analysis of data and

information 8. mutually beneficial supplier relationships - mutually beneficial relationships between the organisation and its

suppliers enhance the ability of both organisations to create value How does TQM differ from the EQA model? The European Quality Award model is used to assess business excellence. Business excellence is the result of adopting a TQM philosophy and realigning the organisation towards satisfying all stakeholders (customers, owners, shareholders, suppliers, employees and society). The quality award criteria offers measures of performance rather than a methodology. Why should a company adopt TQM? Adopting the TQM philosophy will:

make an organisation more competitive establish a new culture which will enable growth and longevity provide a working environment in which everyone can succeed reduce stress, waste and friction build teams, partnerships and co-operation

When should a company adopt TQM? TQM can be adopted at any time after executive management has seen the error of its ways, opened its mind and embraced the philosophy. It cannot be attempted if management perceives it as a quick fix, or a tool to improve worker performance. The first steps In order to focus all efforts in any TQM initiative and to yield permanent benefits, a company must answer some fundamental questions:

what is its purpose as a business?

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what is its vision for the business? what is its mission? what are the factors upon which achievement of its mission depends? what are its values? what are its objectives?

A good way to accomplish this is to take top management off site for a day or two for a brainstorming session. Until management shares the same answers to these questions and has communicated them to the workforce there can be no guarantee that the changes made will propel the organisation in the right direction. Methodology There are a number of approaches to take towards adopting the TQM philosophy. The teachings of Deming, Juran, Taguchi, Ishikawa, Imai, Oakland etc can all help an organisation realign itself and embrace the TQM philosophy. However, there is no single methodology, only a bundle of tools and techniques. Examples of tools include: flowcharting statistical process control (SPC) Pareto analysis cause and effect diagrams employee and customer surveys Examples of techniques include: benchmarking cost of quality quality function deployment failure mode effects analysis design of experiments Measurements After using the tools and techniques an organisation needs to establish the degree of improvement. Any number of techniques can be used for this including self-assessment, audits and SPC. Pitfalls TQM initiatives have been prone to failure because of common mistakes. These include: allowing external forces and events to drive a TQM initiative an overwhelming desire for quality awards and certificates organising and perceiving TQM activities as separate from day-to-day work responsibilities treating TQM as an add-on with little attention given to the required changes in organisation and culture senior management underestimating the necessary commitment to TQM

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KAIZEN ‘Kaizen’ is a Japanese term meaning to improve processes via small, incremental amounts rather than through large innovations. Kaizen processes focus on eliminating waste in the targeted systems and processes of an organisation, improving

productivity, and achieving sustained continual improvement. This philosophy implies that small, incremental changes routinely applied and sustained over a long period result in

significant improvements. The Kaizen strategy aims to involve workers from multiple functions and levels in the organisation in working

together to address a problem or improve a particular process. The team uses analytical techniques, such as value stream mapping, to quickly identify opportunities to eliminate

waste in a targeted process. The team works to rapidly implement chosen improvements (often within 72 hours of initiating the Kaizen event),

typically focusing on ways that do not involve large capital outlays. Periodic follow-up events aim to ensure that the improvements from the Kaizen blitz are sustained over time.

Kaizen, or rapid improvement processes, are often considered to be the building block of all lean production methods. Kaizen can be used as an implementation tool for most of the other lean methods.

Although incremental changes can often be too small to be seen, Kaizen can be very effective in the long run and lead to sustainable improvements.

TOYOTA’s WAY Kaizen in action – the Toyota production system and the elimination of waste A classic example of the Kaizen philosophy is the production system developed at the Japanese car manufacturer Toyota. Toyota identified seven main types of waste in a production environment: Once these wastes have been identified in a manufacturing operation corrective action can be taken. This may involve minor changes to a product or individual process or more fundamental changes to the entire factory layout. 1. waste from over production: that is producing more than customers have ordered: if customer demand fails to

materialize, the excess production has to be discarded, or sold off at a heavily discounted price. In addition the manufacturer will incur additional unnecessary costs such as inventory costs, and additional use of resources such as labour and machinery to manufacture the unwanted goods

2. waste from waiting time: waiting time is evidence of a holdup in the flow of production through the system. The aim should be to maximize the use of the worker, not the machine. Setup time is also nonproductive time. (‘Setup’ is the work needed at the end of one job or batch of work to get the production process ready for the next job or batch.) The aim is to achieve quick setup times and low cost setup waste from transportation of materials and working progress (WIP), often due to poor planning or factory layout

3. waste in production processes (procedures and methods): this includes problems due to poorly maintained machinery, and also the use of excessive material and labour in products which have been designed without consideration of the ease and cost of manufacture

4. waste from inventory: this is closely related to waste from over production, but includes all extra inventory whether due to overproduction or from part finished WIP. WIP builds up when there is a long lead time in production and delays between one stage in processing and the next. WIP has a cost, but adds no value

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5. waste from motion: that is unnecessary movement of materials or people. Moving items around a production area does not add value. Simplification of work gets rid of waste in the system (the ‘waste of motion’) by eliminating unnecessary actions

6. waste from the manufacture of defective items: if defective items are spotted before they leave the factory, they must be either scrapped or reworked. If they are not discovered until after they have been delivered to the customer, costs will arise from handling the complaint and having to take back and replace the item. Even more significantly, poor quality output risks the loss of customer goodwill.

Kaizen costing Kaizen costing is a planning method used during the manufacturing cycle that emphasizes reducing variable costs of a period below the cost level in the base period. The target reduction rate is the ratio of the target reduction amount to the cost base. Kaizen costing has been developed to support the continued cost reduction of existing components and products. Cost reduction targets are set and applied on a more frequent basis than standard costs. Typically these targets are

set on a monthly basis whereas standards within a traditional standard costing system are set annually or perhaps semiannually.

Variance analysis involves the comparison of target Kaizen costs versus actual cost reduction amounts achieved. This contrasts sharply with standard costing where the variance analysis involves the comparison of actual and ‘standard’ costs.

Under Kaizen costing investigation occurs when target reductions are not attained in spite of the fact that improvements may have been made during the period. Under standard costing investigation occurs when standards are not met.

Although this approach was developed in the manufacturing industry it could also be applied in the service sector. Identify some possible sources of waste in a restaurant business and categorise them according to the seven main types of waste described above.

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5S Technique

5S is a technique that results in a well-organized workplace complete with visual controls and order. It’s an environment that has “a place for everything and everything in its place, when you need it”.

5S produces a workplace that’s clean, uncluttered, safe and organized. People become empowered, engaged and spirited. As the workplace begins to “speak”, by linking people and processes, product begins to flow at the drumbeat of the Customer.

The 5S’s stand for 5 Japanese words that constitute good housekeeping. Roughly translated they are;

1. Sort (Seiri) 2. Set in order (Seiton) 3. Shine (Seiso) 4. Standardize (Seiketsu) 5. Sustain (Shitsuke)

“Visual order is the foundation of excellence in manufacturing. When it is in its place on the production floor, work gets done efficiently and effectively. When it is not in place, work still gets done – but at a level of cost that is hard to justify”.

5S is not just a clean-up campaign, it’s a system that allows individuals to work more efficiently. It requires;

Perseverance and determination The ability to see what’s important Attention to detail

5S is the key first step in workplace improvement.

1. “Sort”

Remove from the workplace all items that are not needed for current production (or office) operation. · Sorting means leaving only the bare necessities · When in doubt, throw it away

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2. “Set in Order”

Arranging needed items so that they are readily accessible and labelled so that anyone can find them or put them away.

3. “Shine”

Sweep and clean the work area. The key purpose is to keep everything in top condition so that when someone needs to use something, it is ready to be used. Cleaning a work area produces and opportunity to visually inspect equipment, tooling, materials and work conditions.

4. “Standardize”

Define what the “normal” condition of the work area. Define how to correct “abnormal” conditions. The standard should be easily understood and easy to communicate (i.e. visual controls).

5. “Sustain”

Implementing solutions to address the root causes of work area organization issues. All employees must be properly trained and use visual management techniques.

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LEAN MANUFACTURING Ever since Henry Ford invented the assembly line, industrial innovators have constantly focused on improvement through a variety of different manufacturing strategies. Lean manufacturing is a manufacturing strategy that seeks to produce a high level of throughput with a minimum of inventory.

Originally a Japanese methodology known as the Toyota Production System designed by Sakichi Toyoda, lean manufacturing centers around placing small stockpiles of inventory in strategic locations around the assembly line, instead of in centralized warehouses. These small stockpiles are known as kanban, and the use of the kanban significantly lowers waste and enhances productivity on the factory floor.

In addition to eliminating waste, lean manufacturing seeks to provide optimum quality by building in a method whereby each part is examined immediately after manufacture, and if there is a defect, the production line stops so that the problem can be detected at the earliest possible time. The lean manufacturing method has much in common with the Total Quality Management (TQM) strategy. Both strategies empower workers on the assembly line, in the belief that those closest to production have the greatest knowledge of how the production system should work.

In a lean manufacturing system, suppliers deliver small lots on a daily basis, and machines are not necessarily run at full capacity. One of the primary focuses of lean manufacturing is to eliminate waste; that is, anything that does not add value to the final product gets eliminated. In this respect, large inventories are seen as a type of waste that carries with it a high cost. A second major focus is to empower workers, and make production decisions at the lowest level possible.

Additionally, supply chain management factors heavily into lean manufacturing, and a tight partnership with suppliers is necessary; this facilitates the rapid flow of product and parts to the shop floor.

Lean manufacturing strategies can save millions of dollars and produce excellent results. Advantages include lower lead times, reduced set-up times, lower equipment expense, and of course, increased profits. It gives the manufacturer a competitive edge by reducing costs and increasing quality, and by allowing the manufacturer to be more responsive to customer demands

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LEAN MANUFACTURING V/S FLEXIBLE MANUFACTURING Lean Manufacturing Lean manufacturing is a production practice that considers the expenditure of resources for any goal other than the creation of value for the end customer to be wasteful, and thus a target for elimination. Working from the perspective of the customer who consumes a product or service, "value" is defined as any action or process that a customer would be willing to pay for. Basically, lean is centered around preserving value with less work. Lean manufacturing is a generic process management philosophy derived mostly from the Toyota Production System (TPS) (hence the term Toyotism is also prevalent) and identified as "Lean" only in the 1990s. It is renowned for its focus on reduction of the original Toyota seven wastes to improve overall customer value, but there are varying perspectives on how this is best achieved. The steady growth of Toyota, from a small company to the world's largest automaker, has focused attention on how it has achieved this.

Lean manufacturing is a variation on the theme of efficiency based on optimizing flow; it is a present-day instance of the recurring theme in human history toward increasing efficiency, decreasing waste, and using empirical methods to decide what matters, rather than uncritically accepting pre-existing ideas. As such, it is a chapter in the larger narrative that also includes such ideas as the folk wisdom of thrift, time and motion study, Taylorism, the Efficiency Movement, and Fordism. Lean manufacturing is often seen as a more refined version of earlier efficiency efforts, building upon the work of earlier leaders such as Taylor or Ford, and learning from their mistakes.

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FLEXIBLE MANUFACTURING SYSTEMS (FMS) A new strategy was formulated: Customizability. The companies have to adapt to the environment in which they operate, to be more flexible in their operations and to satisfy different market segments (customizability). Thus the innovation of FMS became related to the effort of gaining competitive advantage. FMS is a manufacturing technology. The buzz word for today’s manufacturer is "agility". An agile manufacturer is one who is the fastest to the market, operates with the lowest total cost and has the greatest ability to "delight" its customers. FMS is simply one way that manufacturers are able to achieve this agility. An MIT study on competitiveness pointed out that American companies spent twice as much on product innovation as they did on process innovation. Germans and Japanese did just the opposite.

Peter Drucker said: "We must become managers of technology not merely users of technology".

Since FMS is a technology, well adjusted to the environmental needs, we have to manage it successfully.

1. Flexibility concept. Different approaches

Today flexibility means to produce reasonably priced customized products of high quality that can be quickly delivered to customers.

Different approaches to flexibility and their meanings are shown Table 1.

Approach Flexibility meaning

Manufacturing

The capability of producing different parts without major retooling A measure of how fast the company converts its process (es) from making an old

line of products to produce a new product The ability to change a production schedule, to modify a part, or to handle multiple

parts

Operational The ability to efficiently produce highly customized and unique products

Customer The ability to exploit various dimension of speed of delivery

Strategic The ability of a company to offer a wide variety of products to its customers

Capacity

The ability to rapidly increase or decrease production levels or to shift capacity quickly from one product or service to another

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Flexibility in manufacturing

While variations abound in what specifically constitutes flexibility, there is a general consensus about the core elements. There are three levels of manufacturing flexibility.

(a) Basic flexibilities

Machine flexibility - the ease with which a machine can process various operations Material handling flexibility - a measure of the ease with which different part types can be transported

and properly positioned at the various machine tools in a system Operation flexibility - a measure of the ease with which alternative operation sequences can be used

for processing a part type

(b) System flexibilities

Volume flexibility - a measure of a system’s capability to be operated profitably at different volumes of the existing part types

Expansion flexibility - the ability to build a system and expand it incrementally Routing flexibility - a measure of the alternative paths that a part can effectively follow through a

system for a given process plan Process flexibility - a measure of the volume of the set of part types that a system can produce without

incurring any setup Product flexibility - the volume of the set of part types that can be manufactured in a system with minor

setup

(c) Aggregate flexibilities

Program flexibility - the ability of a system to run for reasonably long periods without external intervention

Production flexibility - the volume of the set of part types that a system can produce without major investment in capital equipment

Market flexibility - the ability of a system to efficiently adapt to changing market conditions

2. Seeking benefits on flexibility

Today’s manufacturing strategy is to seek benefits from flexibility. This is only feasible when a production system is under complete control of FMS technology. Having in mind the Process- Product Matrix you may realize that for an industry it is possible to reach for high flexibility by making innovative technical and organizational efforts. See the Volvo’s process structure that makes cars on movable pallets, rather than an assembly line. The process gains in flexibility. Also, the Volvo system has more flexibility because it uses multi-skill operators who are not paced by a mechanical line.

So we may search for benefits from flexibility on moving to the job shop structures.

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Actually, the need is for flexible processes to permit rapid low cost switching from one product line to another. This is possible with flexible workers whose multiple skills would develop the ability to switch easily from one kind of task to another.

As main resources, flexible processes and flexible workers would create flexible plants as plants which can adapt to changes in real time, using movable equipment, knockdown walls and easily accessible and re-routable utilities.

3. FMS- an example of technology and an alternative layout

The idea of an FMS was proposed in England (1960s) under the name "System 24", a flexible machining system that could operate without human operators 24 hours a day under computer control. From the beginning the emphasis was on automation rather than the "reorganization of workflow".

Early FMSs were large and very complex, consisting of dozens of Computer Numerical Controlled machines (CNC) and sophisticate material handling systems. They were very automated, very expensive and controlled by incredibly complex software. There were only a limited number of industries that could afford investing in a traditional FMS as described above.

Currently, the trend in FMS is toward small versions of the traditional FMS, called flexible manufacturing cells (FMC).

Today two or more CNC machines are considered a flexible cell and two ore more cells are considered a flexible manufacturing system.

Thus, a Flexible Manufacturing System (FMS) consists of several machine tools along with part and tool handling devices such as robots, arranged so that it can handle any family of parts for which it has been designed and developed.

4. Advantages and disadvantages of FMSs implementation Advantages Faster, lower- cost changes from one part to another which will improve capital utilization Lower direct labor cost, due to the reduction in number of workers Reduced inventory, due to the planning and programming precision Consistent and better quality, due to the automated control Lower cost/unit of output, due to the greater productivity using the same number of workers Savings from the indirect labor, from reduced errors, rework, repairs and rejects.

Disadvantages Limited ability to adapt to changes in product or product mix (ex. machines are of limited capacity and the

tooling necessary for products, even of the same family, is not always feasible in a given FMS) Substantial pre-planning activity Expensive, costing millions of dollars Technological problems of exact component positioning and precise timing necessary to process a

component Sophisticated manufacturing systems

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SIX SIGMA

Six Sigma at many organizations simply means a measure of quality that strives for near perfection. Six Sigma is a

disciplined, data-driven approach and methodology for eliminating defects (driving toward six standard deviations

between the mean and the nearest specification limit) in any process -- from manufacturing to transactional and from

product to service.

The statistical representation of Six Sigma describes quantitatively how a process is performing. To achieve Six Sigma, a process must not produce more than 3.4 defects per million opportunities. A Six Sigma defect is defined as anything outside of customer specifications. A Six Sigma opportunity is then the total quantity of chances for a defect. Process sigma can easily be calculated using a Six Sigma calculator.

The fundamental objective of the Six Sigma methodology is the implementation of a measurement-based strategy that focuses on process improvement and variation reduction through the application of Six Sigma improvement projects.

This is accomplished through the use of two Six Sigma sub-methodologies: DMAIC and DMADV. The Six Sigma DMAIC process (Define, Measure, Analyze, Improve, Control) is an improvement system for existing processes falling below specification and looking for incremental improvement. The Six Sigma DMADV process (Define, Measure, Analyze, Design, Verify) is an improvement system used to develop new processes or products at Six Sigma quality levels. It can also be employed if a current process requires more than just incremental improvement. Both Six Sigma processes are executed by Six Sigma Green Belts and Six Sigma Black Belts, and are overseen by Six Sigma Master Black Belts.

General Electric, one of the most successful companies implementing Six Sigma, has estimated benefits on the order of $10 billion during the first five years of implementation. GE first began Six Sigma in 1995 after Motorola and Allied Signal blazed the Six Sigma trail. Since then, thousands of companies around the world have discovered the far reaching benefits of Six Sigma.

Many frameworks exist for implementing the Six Sigma methodology. Six Sigma Consultants all over the world have developed proprietary methodologies for implementing Six Sigma quality, based on the similar change management philosophies and applications of tools.

LEAN 6 Sigma Lean Six Sigma, a relatively well-known approach for achieving operational excellence, can, as it turns out, do more than simply improve processes. It can help leaders discover innovation opportunities far beyond operations, enhance financial performance and create organizations that have an inherent inclination toward innovation.