Lesson 9ª

There is a variety of theories in Administration, what some call "jungle of administrative theories". Here are the most common ones:

The general theory of administration has received many contributions from exact sciences, specifically from mathematics. Mathematic models have given solutions to several problems and/or enterprise situations, for example: in the areas of personnel or human resources, production, marketing, finances, etc. Administrative decisions can be made based in mathematical equations that constitute real situation drills, which obey specific laws.

Mathematical theory applied to administration problems is known as Operations Investigations. This focus encompasses a very wide tendency that emphasizes in the process of decision making. Thus, it is a contribution to the decision process for the administrator.

The Investigation of Operations emerged during World War II, and after 1954 it began to be used gradually in public american enterprises, and later, in private enterprises. The Investigation of Operations includes games theory, tails theory, lineal programming, statistics and probability, and, nowadays, computer simulations. .

The main fields of action of the mathematical theory are:

• Related to people: organization and management, absences and work relationships, economy.
• Related to people and machines: efficiency and productivity, quality control, inspection and sampling, technological changes, etc.
• Related to movement: transport, storing, distribution, communication.

Contingency Focus.

The theory of contingencies has as a fundamental premise that the appropriate administrative actions in an enterprise depend upon a particular situation. It seeks to identify variables or elements belonging to every situation or type of organization.

The term contingency is quite confusing in this time and age. This is due to other administrative theories with a wider spread, for example Strategic Planning (in further detail in this course). They use the term contingency as a synonym of risk or a situation with a degree of danger. If we look for the meaning in a dictionary, we can find the following definition: "from the Latin contingencia. The possibility that something may or may not happen. Risk".

The contingency theory is based in the following statements:

• What is false or true can only be known following a unique and exclusive model.
• Enterprise efficiency can't be reached following a unique and exclusive model.
• There is no unique ways which is better than to organize to reach the extremely diverse objectives and goals.
• The structure of an enterprise and its actions are dependent of their appeal to the external environment.
• The identification of variables that provoke a greater impact and incidence in the enterprise, such as the environment and technology.

Model of "7-S" by McKinsey.

This focus was developed by the consulting firm McKinsey & Company. These days, it has become more popular. The most outstanding characteristic of this model is the fact that it has been widely tested in several enterprises and this reference frame has been used by prestigious administration schools, such as Harvard and Stanford. As a consequence, theory and practice seem to come hand in hand in administration study and analysis.

The 7-S are the following:

1. SKILLS: the enterprise must determine its true ability to do something.
2. STRUCTURE: the functions to be developed in the enterprise must be defined clearly, as well as the command flowchart.
3. SYSTEMS: it refers to the formal and informal processes and flows inside an enterprise.
4. STYLE: it defines they way to act in the case of a crisis.
5. STAFF: it is the human resource; its characteristics, its education, etc.
6. SHARED VALUES: what the enterprise means and shares with the people.
7. STRATEGY: the plan to assign resources be able to take the competitive advantage.

Total Quality.

The administration of Total Quality can be defined as the strategic behavior to improve quality, combining statistical methods of quality control with the cultural compromise of seeking instruments in improvements that increase quality and reduce costs. Thus, it improves the competitive advantage and it increases performance.

The proclaimed guru of Total Quality, Dr. Edward Demming defines it as: "the satisfaction of the requirements and expectations of our clients, internal as well as external, in what refers to services and products, the first time and every consequent one". And he adds that "total quality is the human condition that recognizes the presence another that requires a service and, is given exactly what he needs".

Edward Demming established the following points in his program of total quality:

1. Creating a constant with the purpose of improving.
3. Not to depend of massive inspection.
4. Ending the practice of granting purchasing contracts based exclusively in the price.
5. Improving the system of production and services continuously and always.
6. Instituting training at work.
8. Expelling fear
9. Eliminating barriers that may exist between the line and staff areas.
10. Eliminating slogans, exhortations, and numerical goals for the personnel.
11. Eliminating numerical fees.
12. Bringing down the boundaries that measure the pride of a well-made job.
13. Instituting a vigorous education and re-training program.
14. Taking steps to achieve transformation.

Among the ends that Total Quality pursues, we have: encouraging team work, active participation of employees, constant planning, effective production, satisfaction and improvement of the client's expectations, improving labor environment and improving communication.

The steps to implement Total Quality are:

a) Knowledge of the changes to be made.
b) Applying knowledge.
c) Changes in personal behavior
d) Changes in group behavior
e) Doing things well from the start.

To achieve Total Quality, there are four basic stages:

Stage 1: producing goods and/or services which are delivered as they are generated.
Stage 2: delivering products and giving services without defect, repeating those which do not comply with the expectations. The establishment of Handbooks and internal controls.
Stage 3: producing goods and/or services with "zero defects" controlling manufacturing processes. Strict supervision.
Stage 4: producing goods and/or services with "zero defects" incorporating the needs of the client into the design and manufacturing of those same products or services. Total Quality.

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