Importance of Operations Management

The assignment discusses the significance of operations management in accomplishing organizational goals. It explains the roles and functions performed by managers and leaders in dealing with different situations in the business environment. The report also describes various approaches followed by Toyota to increase their effectiveness. Furthermore, it touches upon the impact of external environment on decision-making.

MANAGEMENT AND
OPERATIONS

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
1 Introduction of the organisation and its management structure..........................................1
2.Definition and roles of both managers and leaders and their differences...........................3
3. Different roles of managers and leaders in different organisational situations..................5
Management theories..............................................................................................................6
4. Theories of leadership........................................................................................................7
5.Conclusions on how managers and leaders have made an impact on the organisation......9
Task 2...............................................................................................................................................9
1 Introduction to Key Operations of Toyota..........................................................................9
2. key operational function and roles and responsibilities of managers.................................9
3. key operational approaches of operational management..................................................11
4. Evaluation of Impact of External Business Environment Factors on Toyota..................12
5. Approaches to Leadership and Management to Improve Operational Efficiencies.........14
6. Conclusion and Recommendation for future improvements............................................15
CONCLUSION..............................................................................................................................16
REFRENCES.................................................................................................................................17

INTRODUCTION
Operation management is related with preparation, supervision and organising process
and is liable to make necessary changes to improve the productiveness of the organisation. It can
be defined as a function which converts materials into goods and services. This report is based
on Toyota which conduct their business in auto mobile industry. It is founded in year 1937 and
its headquarter is in Japan. The report will follow the differences in the role of a leader and
manager functions with the help of various theories and concepts. The report will further discuss
the strengths and weaknesses of several approaches to the business situations. It will also include
different type environmental factors which has a impact on business environment.
TASK 1
1 Introduction of the organisation and its management structure
The chosen organisation is Toyota and it is based in Japan and operates as one of the
leading auto mobile industry. Toyota is the second largest automotive manufacturer in the
market. The company has around 352,000 employees and it has expanded its business in 28
countries as manufacturing units and they provide vehicles in around 150 countries.
The management structure of Toyota is based on different business operations the
company follow globally (Burns, 2014). The company's structure is related to the traditional
business structure used in japan. The management structure of Toyota defines the patterns and
arrangements in company's resources and process. The management structure Toyota follows are
as follows:
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Illustration 1: Management structure of Toyota
 Global Hierarchy- It defines the order Toyota follows that all the business units of the
company in the world will coordinate to the headquarter which is based in japan. The
headquarter is responsible to take all the concerned decisions and to direct the other units
on major issues.
 Geographic divisions- Toyota has divided their business operations into eight
geographic divisions which are Japan, Europe, North America, China, Asia and Middle
East, Asia and Oceania, Africa, Latin America and Caribbean. These all divisions are
required to report to the company's headquarter (De Roover, 2017). It leads the company
to improve the business functions and to allow to operate in better ways. These divisions
have their own division heads but the final authority stays with the office in japan.
 Product based divisions- the company has four divisions in this feature and they are
Lexus international, Toyota no.1 for operations in Europe, Japan and North America
which supports the development of product line and brands of the company. It leads to
construct a way for smooth functioning of business operations and to resolve the issues at
a faster pace.
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2.Definition and roles of both managers and leaders and their differences
Managers can be characterised as a person who is accountable for controlling and
managing the department and its employees in the organisation. The primary duty of manager is
to assure cooperation to the employees with health and safety legislation (Harrison and Lock,
2017).
Leader can be defined as a person who has the superior ability in there field, who
influences other workers to perform task in a proper manner to attain the organisational goals.
Difference between Management and Leadership
Basis Management Leadership
Influence Management can influence the
authorised powers of managers
in the company.
It influences the skills and abilities
of the leaders by which they can
influence other people to work for
the objectives.
Focus Management focuses on the
procedures of the organisation.
Leadership focuses on skills of
individual to achieve the desired
targets.
Approaches It is essential for management to
follow different approaches to
accomplish the goals in an
effective manner. The
approaches can be like scientific,
behavioural, etc.
Leadership follow different
leadership styles such as autocratic,
democratic, transformational, etc.
Characteristics of a leader and a manager.
Manager
Manager is required to have complete focus on the desired outcome and for that it is essential to
manage the employees to perform their duties in effective manner. Manager is also required to
measure the performance level of the working staff so that weaknesses and strengths can be
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analysed properly and the required steps can be taken to overcome any difficulties faced by the
organisation with the skills and abilities possessed by a manger.
Characteristics of Leader
A leader consists of good communication skills that help in defining the clear set of
duties to the staff members on the basis of their skills and abilities in effective manner. Leader
provides proper guidance and training to the employees to make them perform in efficient way.
.
Functions of managers
Managers are required to set a clear objective for each department in the organisation that
will lead in defining properly the role and duties of each individual in the firm and will help in
accomplishing the desired target within a set period of time. Managers of Toyota has to
formulate effective managerial strategies to attain the set targets in effective and efficient
manner. They have the responsibility to conduct proper training and developments programs for
the employees to motivate them and to increase their working ability. The managers of Toyota
performs their duties with full of their potential to increase the brand image in the market and to
acquire the market share in great level.
Functions of leaders
The functions of leaders consist of handling the issues related to the workplace and to
handle and resolve them effectively and to create a good working environment for the employees
to perform their duties in a productive manner. A leader is required to construct a proper
communication channel between the management and the workers to maintain good relations
within the organisation and to deliver the important information or instructions of the
management to workers and the requirement and needs of the workers to the employees.
Roles of managers
 Informational Role- Manager is required to provide the accurate information to the
members of the organisation. The information can be external as well as internal. The
internal information will be related to employees, products and services of Toyota,
whereas, external information will be about market demands, competitors, etc.
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 Decision Making Role- As, the manager is at one of the top positions in the organisation
so, it important to take decision at various level in the organisation operations which will
lead in gaining the competitive advantage in the market..
Roles of leader
 Training- A leader is required to provide training to its employees for improving their
efficiency to attain the objectives of Toyota in effective manner.
 Motivation- Leader motivates its employees time to time to make them passionate
towards the organisational goals and objectives with the help of financial or non financial
motivation techniques.
3. Different roles of managers and leaders in different organisational situations
Every company faces the situational issues in an organisation. So, Toyota has also dealt
with different organisational situations and the company knows the methods to surmount from
situations, the different theories and concepts are explained below:
 Stable Situation: In a stable market situation Toyota focuses on their business policies to
handle the situation. As, the company is still sure about their past policies and regulations
which results in attaining better results (Jacobs, Chase and Lummus, 2014). Manager is
required to perform functions regarding the proper planning for the organisations to
analyse the future conditions as well. Whereas, leaders can work on democratic
leadership style in the stable situation. They can influence their employee's by motivating
them regarding their work. At this time leader can also take suggestions from the workers
to construct some new policies. For this situational manager of respective company will
select situational leadership theory.
 Moderate Situation: In moderate business situation, organisation desires to overcome
the challenges faced by them to reduce in a short period of time and for this they have
trained the employees to face these situations in effective manner. The company Toyota
is working on the advancement of technology to provide their customers with advanced
products in the market. In this manager plays a very important role in production of the
products in effective manner by providing required training to the employees to give
them knowledge of the marketing trends and advancement in the technology. Whereas,
leaders are required to assign the duties on the basis of suitable skills and abilities to the
workers to successfully accomplish the task.
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 Fast changing situation: when the business environment changes at a rapid pace there
are different roles which are performed by the leaders and managers. In these situations,
managers are required to conduct environmental scanning, that will lead to them to
analyse the market conditions through that they can formulate decisions regarding price
of the product, requirements of the customers, etc. whereas, leaders will follow the
autocratic or contingent leadership styles to handle the quick changes and to formulate
required decisions in shorter period of time. Theory which is use by respective company
in this situation is autocratic leadership theory.
Management theories
Every organisation faces with different kind of situations in the business environment like
recession, crises and various other issues. The organisation has also faced some problems in the
recent times and has overcome these situations with the help of these theories which are
describes as follows:
Classical Management theory: This theory describe the needs of the employees that they
expect from the management to fulfil these physical and economical needs. In case of Toyota,
the management in the organisation follows a rapidly changing situation in the market and
demands the employees to perform in a effective manner. This theory believes in productivity of
work instead of the needs and demands of the employees.
Strength Weakness
The strength consist in enhancing the
productiveness of the company to attain the
great position in the market..
The theory does not consider the requirements
and needs of the customers that lead to reduce
the motivation level of the employees and it
make impact on their performance level.
Behavioural theory:
This theory focuses on building good relations with the employees and also analyse the
needs and requirements of the working unit. This theory helps in assigning proper duties to make
the working environment effective and helps in solving the issues effectively.
Strength Weakness
It focuses on the employees in the organisation All the employees are not treated in the same
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in giving opportunity to fulfil their needs and
chances of promotions in their position.
way and it leads in creating conflicts within
the organisation.
System theory of Management:
This theory of management describes that the managers of Toyota is required to
formulate an open system in the workplace that will lead in accomplishing the task in a
systematic manner.
Strength Weakness
It motivates the workforce to commence their
task in productive manner to increase the
profitability of the organisation.
This theory does not provide a specific
management theory to the managers which
sometimes leads to reduce the performance
level of the customers.
4. Theories of leadership
The different theories which are used by the leaders to work effectively in Toyota are
discussed below along with their strengths and weaknesses which are as follows:
 Situational Leadership: This leadership theory defines the quality, where leader is
required to follow changes for acquiring the organisation goals. In Toyota, the leader
adopts this leadership style accordant to the working experience of the workers of the
company (Kato and et. al., 2015). The leader form positive changes and take essential
measures according to the situation of the market.
Strength Weaknesses
It helps in motivating employees as it relates to
the decision-making process, it also leads in
improving the task relevant maturity of the
employees.
As this leadership theory is for brief period of
time, and followers need to work accordingly
as the leaders will instruct them.
This theory explains that one leader can be
effective in many situations.
Due to speedy changes in the market this
theory can form problems by creating cognitive
state among employees in the organisation.
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 System leadership: this leadership theory allows the leaders of Toyota to develop a
framework which will allow all the employees of the company to work profitably. The
following theory uses principles of human behaviour to construct good leadership
models, strategies, etc. (Song and Parola, 2015).
Strength Weaknesses
This theory explains the thought process
according to the philosophy and complexness
of the environment and gives an efficacious
model for building ideas.
The procedure is complex and extended in
nature as it resides different inter-related
invariable in it.
This theory focuses on attaining personal and
organisation objectives as well.
The theory is unable to define its nature of
interdependence.
 Contingency leadership: this leadership theory focuses on the importance of both leader
personality and the situation in which leader functions. In Toyota, there are two types of
leaders. One is considered as task oriented and second one act as a supportive leader in
nature (Langabeer and Helton, 2015). Thus, a leader is considered as a good leader who
are aware about all the leadership styles and the need to apply them when needed.
Strength Weaknesses
It helps in designing the organisation structure
and planning the information system as well as
in making decisions.
This theory is more than challenging for the
business leader while selecting the most
appropriate approach.
It gives an effectual way to measure leadership
style that could be necessary and helpful for
the Toyota.
Continual variations in environment or in the
structure of the governing body is difficult for
the management.
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5.Conclusions on how managers and leaders have made an impact on the organisation
From the above task it can be concluded that managers and leaders are two essential part
in the business organisation and both follows their own set of roles and functions. The above task
has explained the management structure of Toyota and explained the leadership theories and
various strengths and weaknesses of them. The decision making ability changes according to the
requirement of the organisation and the condition of the market. It can be evaluated from the task
that to attain the organisational goals in a smooth manner, the leaders and managers need to
improve the communication channel within the organisation. Good relationship are required to
be maintained by the employees and there should be employee engagement as well. To deal with
the changes in the environment Toyota needs to hire skilled and highly qualified people to deal
with the changes in a proper and effective manner. Manager and leader plays an important role in
respective company by conducting various activities. Such as taking appropriate decisions, plan
training and development activities according to requirement, make rules and regulations and
many other.
Task 2
1 Introduction to Key Operations of Toyota
Key operations of a company can be described as the activities which are carried by the
organisation to accomplish the demands of the customers by providing them with high quality of
of goods. The key operations of Toyota which are required to be defined are designing of goods
and services, control and distribution system, inventory management, quality management, etc.
(Laudon and Laudon, 2016). To meet the business objectives, the formulated decisions should
be in accordance to these key operations so, that Toyota able meet business goals in a effective
and appropriate manner.
2. key operational function and roles and responsibilities of managers
Operations management can be defined as a very important part of the organisation as, it
provides help to the management in regulating and controlling the production process in
effective manner. It also leads to controlling the cost of the products and increase the chances of
gaining profitability in the market and smooth functioning of the business operations.
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Every organisation requires various functions to manage the business activities. These
functions leads in dealing with these aspects in the organisation. The key operational functions of
Toyota and roles and responsibilities of managers are as follows:
Designing Goods and Services:
This procedure is related to designing the goods and services of Toyota. It also generates
new features for the present products of the organisation according to the needs of the customers.
R&D Department of the company is liable to carry this operation.
Roles and Responsibilities of Managers of Toyota are mentioned below:
 Assuring that the technological resources are managed efficaciously by working with
different departments for designing the resource.
 Insuring the use of available resources in fully efficient way.
 Helping in the development of the design and guiding the team in taking effective
decisions so that improved results can be accomplished from their work.
Control and Distribution System:
This activity is very crucial factor in the operations of Toyota as this component is
accountable for controlling the production process and insuring proper organisation of products
in order to carry out the demand of the market (Slack and Brandon-Jones, 2018).
Roles and Responsibilities of managers are.
 Assuring proper and equal distribution of raw materials in the company.
 Insuring the delivery of right products are delivered at right place and at right time.
Quality management:
quality management is related to ensuring the productiveness in the quality of the
products the company is offering to the customers (McCrie, 2015). The production system of the
Toyota helps the company to increase the quality in the production system.
Roles and Responsibilities of managers are.
 Manager is required to formulate required changes to improve the quality.
 Examining the material used in the production process.
Inventory management:
this operation is required to manage the stocks of the organisation. It very important for
Toyota to eradicate the problem of deficit in the supply process. The company make proper
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usage of this operation to minimise the level of inventory in the company with the help of just in
time inventory management.
Roles and Responsibilities of managers are.
 Managers are liable to reduce the inventory level and to control the cost involved in it.
3. key operational approaches of operational management
There are different approaches of operational management which Toyota can use and
they are as follows:
 Just in time: this approach is related to the inventory management method in which the
required stocks for the company are refilled at the exact time of their use in the
production process. Just in time will prevent Toyota from utilising inventory in an
excessive form and to strengthen the production process if the task takes longer time with
proper management of all the required stocks. Leaders are responsible to direct and to
align the employees towards the just in time approach (Muller, CommVault Systems Inc,
2014). Managers are required to perform the functions related to making plans for
continuous improvement in the organisation.
 Six Sigma: This operational approach is consider tools which is use to eliminating the
unnecessary activities from the manufacturing process. It includes different features such
as measurement and betterment of the offerings. Requirement of this approach for Toyota
is that, this process helps in reducing the time of production process. Toyota will be able
to produce products in short period of time with full efficiency. It also withdraws the
faults which was occurring in the production process. Role of manager and leader of
Toyota in respective method is to design process which eliminate unnecessary step from
production process. Along with this they motivate and encourage employees of respective
company so that they conduct there task and work in appropriate and effective manner.
These approaches will help the managers of Toyota to analyse the issues taking place in the
production process and they can be eradicated easily.
Business objectives: It can be described as the desired goal set by the organisation to
achieve in a certain period of time. To accomplish these goals a proper time structure is
formed and the allocation of resources is conducted in proper manner. For instance-
Managers of Toyota has decided to improve the quality of the products to gain a large market
share and to have the competitive advantage as well. To accomplish the desired objective the
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manager opted the lean manufacturing system in the production process to supply quality
products to the customers.
Importance of operations management in achievement of business objectives –
Operations management has a very important part to play in attaining the desired goals of the
organisation. It assist managers in defining job and responsibilities of the employees in
proper way so that they can work in effective manner for the company. This also helps in
measuring the performance level of the employees and it can reduce the in competencies
faced by the employees to increase their working productivity and to maximise the profit of
the company.
4. Evaluation of Impact of External Business Environment Factors on Toyota
The business environment consists of external and internal factors which directly affects
the decision-making in the organisation. It is very essential for the company to analyse the
external and internal factors in proper manner and the manager and leaders play an important
role in formulating the decisions according to the impact of these factors. The factors are as
follows:
 Political factors: These factors affect the business operations of Toyota in relation to the
policies formulated by the government in the country. It includes the political stability in
the country, taxation policies, trade agreement, etc. Managers and leaders will be liable
in managing the operations of Toyota and they will be required to make decision
according to the regulations of the government and to produce good quality products
which will not harm the environment to meet the needs by the government. To conduct
this process manager will construct decisions regarding planning, designing, and
forecasting (Omansky and Kanner, Autodesk Inc, 2014). Whereas, the leader will be
liable to provide training and development programs to the employees to motivate them
in accordance of accomplishing the task.
 Economic factors: Economic factors affect the business operation of the company by
the elements of inflation, deflation, interest rates, recession, etc. the economic conditions
are very important for the business operations as when the economic conditions are
better it leads the company to produce more goods with full efficiency. In these
economic conditions managers will be able to provide employment opportunities in the
society and the leaders will be required to provide proper training and guidance to the
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workers and will help them in improving their skills and abilities to prepare them to
attain the organisation goals.
 Social factors: these factors are related with the social and cultural elements which
directs the major impact on the operations of the organisation. The impact of this factor
is concerned with sales of the products because of changes in demand and needs of the
customers in the market (Schwarz, Hall and Shibli, 2015). To measure these factors
Toyota needs to improve the products with the required changes in the market and to
introduce the new products according to the requirement of the people. Toyota can plan
for the electric vehicles as the new technology is getting very popular in the market. To
accomplish this manager will need to provide with a group of skilled and highly
educated employees in the organisation and a proper management of R&D department is
to be initiated to evaluate the forecasting of the product. Leaders will be required to
perform function of training employees and setting the clear vision of the company's
objective in regard to make them work with full effectiveness and efficiency.
 Technological factors: This factor impacts the business organisation with the
advancement of technology and directly affects the brand image of the company. Toyota
will need to modify the business operations according to the change in the technological
factors in the market to gain the competitive advantage. The manager and leaders will
coordinate with the technical department of the company and will work accordingly to
the requirement of the customers in the market. The manager will need to take decisions
in appropriate manner in upgrading technologies for the organisation.
Corporate social responsibility: this concept of management encourages the managers to
interrelate the social and environmental factors to improve the conditions of the economical and
social benefits for the society provided by the organisation. CSR also influence the business
operations of the organisation to make the managers to follow according to these factors so, that
the better decisions can be executed that leads to provides guidance to the managers in producing
good quality of the products and to reduce the cost incurred in the production process as well and
also reduces the cost of product as well to attract the customers in large portion.
Here are the some major benefits of the CSR which are described as follows:
Environmental Society Organisation
With the help of CSR mangers It will motivate the managers The reduced cost and good
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will recycle the waste of
Toyota to reduce the wastage
of resources and to save the
environment.
to encourage the charity events
by the organisation that help in
benefiting the society and will
lead to build a strong image of
the company.
quality production will help to
attract the customers in the
market and will lead in gaining
competitive advantage for the
organisation.
Values: Managers at Toyota believes in creating good values for the organisation which will lead
in creating good image in front of the customers. It also helps in generating effectivre ideas to
accomplish the desired goals.
Ethics: Managers of Toyota follows ethics and principles in effective manner that will lead in
giving proper directions to the employees and to guide them from doing any unethical work in
the organisation.
The stakeholders of Toyota and their expectations are:
 Shareholders expect form the company to achieve higher returns on the funds
invested.
 Government expectation from the company is related to the deposition of taxes on
regular basis as and when required.
 Suppliers expect the company to demand more quantity of raw materials for
production purposes.
 Customers want that the company should provide good quality of the produ ts in the
nominal price in the market.
5. Approaches to Leadership and Management to Improve Operational Efficiencies
Management of Toyota are required to adopt the approach of decision theory to improve
the operational efficiency. The approach is discussed as follows:
Scientific Management Theory: This theory is related with the workforce of the
company which has to perform their responsibilities in an organized manner which will lead to
enhance the productivity of the organisation. In Toyota, managers have to ascertain the situations
and accordingly make changes in the structure of business environment. It will result in making
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the employees aware about their roles and duties in the organisation and will motivate them to
execute the given task in an impressive manner (Ravindran, 2016).
The leadership approach which can be opted by the managers of the organisation to improve the
operational activities is describes below:
Transformational Theory Of Leadership: This approach of leadership assist the
organisation in analysing the needs of the employees for the effective utilisation of their abilities
towards the attainment of organisational objectives (Schönsleben, 2016). As, Toyota is following
the market changes and working with moderate technology to work in accordance to improve the
efficiency of the workers. This approach helps in motivating the employees and lead to increase
their productivity.
Importance and value of operations management:
 By adopting effective operational management Toyota able to enhance there productivity
of employees as well as organisation.
 By this manager and leader of respective company able to conduct various things in
effective manner such as planning, monitoring, controlling, directing, motivating and
many others.
 When Toyota conduct activities through appropriate operation management they able to
use resources in effective manner and also able to reduce wastage.
6. Conclusion and Recommendation for future improvements
It can be concluded from the above discussions that management operation is very
essential for the organisation for proper growth and success in the market. The managers and
leaders of Toyota have to take assistance from various approaches of leadership and management
by which they can raise the skilfulness and productivity of the employees. It also aids them in
reducing the effect of environmental elements in the business activities. It is suggested that
Toyota is required to focus on the needs and demands of the customers and then should construct
a way to design the offerings accordingly. The managers are liable to analyse the environmental
factors and the production process can be produce according to the demand of the market and
can be prepared with the future expectations which will be accommodating in enhancing the
success of the organisation.
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CONCLUSION
The above report explains the importance of operations management in accomplishing
the organisational goals. The report also describes the roles and functions performed by
managers and leaders and how they deal with different situations in the business environment
and how the decision making gets affected. Further report, consists of the various approaches
followed by Toyota which leads in increasing their effectiveness. The impact of external
environment is also explained and their effect on decision-making is also discussed.
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