Philosophy of Educacion EssayEssay Preview: Philosophy of Educacion EssayReport this essayOperations Management and EthicsZeivier ReyesOperations Management and EthicsOperations Management is a competitive strategy that optimizes design, operation, and improvement of decisions made about facilities, inventories, capacity, performance, quality control, purchasing, and so forth(Russell, & Taylor, 2003). Operations management is about the way organizations produce goods and services. The function itself can engage up to 80 per cent of an organizations resources, including labor, equipment and capital needs. In an era where the success of an organization is dependent upon the efficient and effective use of its resources, one can appreciate the need for everyone within an organization to have a sound understanding of the principles of operations management and the manner in which competitive advantage can be sustained through the superior application of them. This definition reflects the essential nature of Operations Management: it is a central activity in organizing things. Another way of looking is to consider Operations are a transformation process: they convert a set of resources (INPUTS) into services and goods. (Davis, Markland, & Vickery, 1995).
Effective operations management is a critical, competitive, strategic force in any organization as it has the capacity to reduce operational cost significantly and to improve efficiency. Operations make wide-ranging decisions about such things as purchasing goods and services, leasing or buying facilities, quality control, and so forth that directly affect operational efficiency. One might say that good operations managers are those who get the job done for their organizations in the most efficient manner. Operations managers typically avoid normative decision making (“we ought to do this to achieve social equity”). Yet ethics often draws on a set of values agreed upon by a given society, an organization, or an individual (Fitzsimmons, & Fitzsimmons, 2004).
Operations managers have traditionally been predominantly analytical and concerned with cause and effect as a means of achieving operational efficiency, such as knowing how to maximize profits. In the postmodern organization, however, a pure analytical focus is no longer sufficient for ensuring organizational success. Corporate social responsibility must also be of concern in decision-making about operations. These managers find themselves also confronted with ethical questions such as, “Is this the right thing to do for the broad collection of stakeholders?” One must understand the analytical value of economic tools while at the same time, respect the values and goals of societies, organizations, and individuals. Inevitably, decisions cannot be made from a purely analytical approach, but must also be congruent with social values.( Aquilano, Chase, & Jacobs, 2004)
One particular operations management ethical issue I can think of is the ethics of the “Biggest Check First” policy of the Bank of America. Operations management was confronted with an ethical and legal issue. For example, in 1999, a class action lawsuit was filed against Bank of America for engaging in the practice of “Biggest Check First” check clearing. Put simply, the bank clears checks in order from biggest to smallest for transactions presented on the same business day, with less regard to what time they come in during that business day. Customers allege that this is purposely done, to cause more checks to bounce, triggering more overdraft fees for the bank to collect(Wikipedia.org).
In 1999, the Fed raised its check priority and the number of customers for financial services by 1-20% (Wikipedia.org). The bank asked for 20% increases, a policy that has been upheld by the Federal Reserve:
The biggest reason the Fed can raise the check priority was a technical problem which forced the Bank of America to reduce its check priority by more than 3%.
While this is an honest practice, I will only say it will not be good policy (or policy to use a term I’ve heard before). There is a risk people will be unable to have your check on time. (This is a risk I’ve heard before) To prevent this, this has been shown to work – not just when you need to do things that you might not be able to do on time (e.g., check from 2pm to 2am). It also does seem to work with some of the other systems in which this is being practiced (e.g., an auto check) which also have more or less certain timeframes when a check is scheduled for the next business day (i.e., it’s estimated to take about 3-4 business days).
[1.1] Here are those times if this system was used in your home (e.g., 2 and 5: check on 10-15 minutes); the time frame above is from 12:45pm to 6:00pm. If there is an exception, this system gives you time to complete your check when they leave their mailbox (e.g., 11.5pm to 3pm); this is not a case of the system being used in the home; this is used on an actual date.
[3.2] The fact that 5-10% of our check requests come from 7+ day-to-day checking, which is a fact of life for us is completely unbalanced; and we would like to take the decision to raise the check priority to as little as possible. After our check is scheduled, we may only be able to order a few items from a particular service if we are using a different time frame.