Importance of Operations Management

The assignment provides an overview of operations management as a crucial part of every firm. It emphasizes the need for managers to consider macro-environmental factors and make informed decisions. The report also mentions key operational approaches that can help leaders make strategic decisions.

Management
And
Operations

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK...............................................................................................................................................3
P1 Define and compare the different roles and characteristics of a leader and a manager....3
P2 Role of a leader and the function of a manager apply in different situational contexts....5
P3 Apply different theories and models of leadership approach, including situational
leadership, System leadership and contingency.....................................................................7
P4 Explain the key approaches to operations management and the role that leaders and
managers play.........................................................................................................................8
P5 Explain the importance and value of operations management in achieving business
objectives................................................................................................................................9
P6 Macro environmental factors and their impact upon operational management and decision-
making by managers.............................................................................................................10
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................13

INTRODUCTION
Operational management is defined as an administration of an organisation which uses
tools and techniques for improving, organising and supervising of various functions. In addition
to this, it is a part of management which is used for gaining higher efficiency in the operational
activities of organisation. Taken firm for this assignment is Toyota which was founded in 1933
by Kiichiro Toyota and based in Aiichi, Japan. This assignment will talk about characteristics,
roles, functions of managers and leaders along with influences of external factors on the business
operations. Furthermore, it also discuss about the strength and weakness of various leadership
and management approaches which can be used by leaders or managers for handling the
situations of firm. Report will also talk about improvement of operational efficiencies so that
business objectives or goals will be achieved in proper manner.
TASK
P1 Define and compare the different roles and characteristics of a leader and a manager.
Introduction of the organisation and its management structure - Toyota was started in 1933
and in current scenario, it is the second largest and multinational automotive firm across the
world. The company have more than 350000 employees who are providing their services in its
operations which are spread across the world. The market share of company was rose up-to
4.87% which is considered as a highest growth of a firm. Company has earned 260.8 billion
dollar revenue in the last financial year. Main rivals of firm are Ford, Hyundai, Honda, BMW
etc. who are providing a tough competition in the global markets. Management structure of
Toyota is given as under:
Global Hierarchy: Owners of Toyota follows a hierarchical structure in their workplace
in which they have provided all the responsibilities of taking final decisions to the headquarters
and without their permission any action can't be take by their divisions (Khan, 2011).
Geographic division: For managing all the functional activities and making
improvements in the products and services of the firm, management of Toyota have divided their
operational activities in 8 sectors such as Asia, Japan, Caribbean, East Asia, Europe etc. and all
these divisions and its heads have a responsibility to provide all the reports to headquarters.
Divisions head can take decisions for their specific division but final decision will be taken by
the Headquarters which are located in Japan.

Product-based division: The management of Toyota have also segmented some
divisions on the basis of product manufacturing which are assorted in 4 parts such as Lexus
International, Japan and Europe, Toyota no. 1 in North America and No. 2 for all regions.
Through this, segmentation they have maintained their brand image in front of their customers.
Manager: It is the person who has authority to control the organisational functions by
formulating plans and effective strategies so that preset goals or objectives of firm will be
achieved within given time period (Du, S., 2010).
Role of manager:
 To formulate effective plans and policies and that have to followed by staff membersso
that organisational goals or objectives will be achieved in proper manner.
 They have duty to plan, organise and monitor all the business functions so that company
can achieved a good position in the marketplace.
Leader:It is the one who has all the abilities and skills to encourage its team members to
contribute more effective efforts so that desired target will be achieved within the allotted time.
Roles of Leaders
 They have responsibility to gave effective training to their team members so that given
task will be accomplish in an allotted time.
 Main role of leaders are, they should provide guidance and motivation to their team
mates so that more contribution can be taken by them for completing a complex task.
Difference between managers and Leaders
Basis Leader Manager
Meaning Leaders are the one who have to
influence their subordinates so that
the preset goals of firm will be
achieved.
Managers are the person who have to manage
the firm and responsibility for planning and
controlling the activities of firm.
Aim Main objective of Leaders are
making growth and development of
firm
Regulating all the functions so that expected
results can be achieved in a short time period.
Characteristics of Managers- Managers have to motivate their employees so that expected
results will be received in a given time frame. The main characteristics of managers are, they

evaluate performance level of staff members so that strength and weaknesses of them can easily
identified and they have all capabilities for handling the situations which can take place in the
firm at any time.
Characteristics of Leader- The main characteristics of leaders are they have a strong
communication through which they easily communicate roles and responsibilities to their team
mates so that the given task will be done in a systematic manner. Leaders are also innovative in
nature so they makes changes in the given task on regular basis therefore, dedication of
employees can increased.
Roles of leaders and managers through different management theory and practices.
Managers and leaders both plays an important role in the organisation which is supported
from a management theory such as classical for example- classical theory is based on a belief
which states that employees have only two kinds of needs such as physical or economical so
management have to fulfil such needs for effectively completing the goals and objectives of firm.
According to this theory managers determine the needs and demands of their employees so that
performance level of them will be enhanced whereas, leaders motivate the employees so that
working efficiency of them will be improved and desired task will be completed in proper
manner (Ham, 2012).
Roles of leaders and managers through different leadership theory and practices.
Managers and leaders have also plays very crucial role within the organisation which is
based on a leadership theory like contingency. For instance- contingency approach of leadership
is encourage the leaders to take decisions according to condition so that issues of workplace can
be resolved in easy manner. On the other hand, managers find the origin of problems which takes
place in the workplace and resolved it accordingly.
P2 Role of a leader and the function of a manager apply in different situational contexts.
Leaders are the one who guides and leads its team mates in effective manners so that
respective task will be completed in easy manner. Whereas, managers are the persons who have
responsibility to controlling and regulating the functional activities of the firm so that better
results can be received in future time. In a firm different situations takes places and for each
leaders and managers have to play various roles which are discussed as under:

 Stable Situation: During this situation, company formulate suitable plans and policies so
that the overall improvement of firm can be possible. As the management of firm
believes in rules and regulations which are formulated by their headquarters and also
beneficial for achieving preset objectives of organisation. In this situation, managers of
Toyota can adopt classical management theory through which they will easily determine
the needs and wants of their employees and fulfils it accordingly. With the help of this,
their efficiencies will be improved and they will perform their duties in well manner.
Leaders have to support their team mates through motivating them on the given task.
Through this, the quality of products will be improved which will be beneficial for the
firm in gaining good position in marketplace.
 Moderate Situation: In it, every firm wants to overcome the conflicts and issues from
the workplace so that the improvement in the quality of products can be done in easy
manner. In the context of Toyota, managers focuses on the implementation of advanced
technologies in the workplace so that good quality products can be delivered in the
market which will be beneficial for the firm in gaining competitive advantage in the
marketplace. For this, management of Toyota can adopt Behavioural theory in their
workplace and maintains effective relations with their staff members. In which managers
have responsibility to provide effective training to their employees so that they can easily
understand current market trends and needs of customers. Whereas, leaders have to
delegate roles and responsibilities to their team mates as per their skills and capabilities
so that better results can be gained within a small period of time (Alderton, 2013).
 Fast Changing Situation: In this situation when competition is regularly increasing and
needs and wants of consumers are changing day by day in the marketplace so that for this
managers of cited firm can implement system theory in their workplace. With the help of
this theory, managers will delegate the roles and responsibilities to their employees in a
proper way through which the duties will be performed in a systematic manner which
will helpful for the firm in providing quality products in the marketplace. On the other
hand, leaders have to motivate their teammates so that they can easily adopt changes and
working accordingly on the given task.

P3 Apply different theories and models of leadership approach, including situational leadership,
System leadership and contingency.
Situational Leadership : It is an effective approach of leadership in which they have to make
changes in their behaviour according to situations so that preset goals of firm can easily
achieved. In the context of Toyota, Leaders have to adopt such theory so that their skills of
understanding of situations can be improved and they will able in taking better decisions as per
the situations which will also encourage the employees of organisation to perform their duties in
a proper manner so that the expected outcomes will be received within a shorter period of time.
Contingency leadership: It provides importance to both such as personality of leaders
and situations in which they are performing their duties. In the context of Toyota, it is seems that
there are two kind of leaders first one are task oriented and always motivated their team members
to complete the task in given time period and other one plays supportive role in the organisation.
Hence, it can be said that leaders always provides supportive role to the managers in handling
situations and removing conflicts from the workplace so that better outcomes can be received in
future time (Gunasekaran, 2012).
System Leadership: This theory was given by Sir MacDonald it enables the leaders to
create situation in which all the employees of firm can perform their duties in an effective
manner. In it, leaders can use different kind of tools such as employee feedback, communication
to understand the behaviour of their teammates. As the firm are facing quality challenges in their
products so that, with the help of this theory leaders can create an effective working structure
which will help them in encouraging their employees so that quality products can be delivered
within a shorter period of time. For example- as various employees are working within the firm
who have different opinions and views on a situations so that a proper working structure will be
helpful for gaining good results of overall productivity of firm.
From the above theories of leadership, Situational leadership can be adopted by the
leaders of Toyota because it provides ability in them to take effective decisions according to
situations. It also encourages them to use different tools for communicating with their team
mates so that overall profitability of firm will be decided in a shorter period of time.

P4 Explain the key approaches to operations management and the role that leaders and managers
play
Operations management is an essential part of business organisation which encourages
the managers to improve,control and design the production process and structuring the business
operations so that better position can be achieved by the firm in marketplace. In addition to this,
This system is connected with managing and controlling of whole process of production
department so that enhancement in the productivity of firm can be done in a short time period.
On the other hand, key operations are considered as the important activities of an association that
are executed by the managers or staff members for achieving revenue and increasing sales
figures. Some of the main approaches of operations management along with role of managers
and leaders are briefly explained as under:
Just in time : It is an effective approach of operation management which can be used by
the managers of Toyota in order to creating an effective inventory management so that labour
and raw material in production process can be delivered at a time when it requires. It also aid the
management in analysing the difficulties or issues which are faces by the employees in the
production department of firm. Through this, element will be identified which are increasing the
cost of product and remove it accordingly which will be helpful for the firm in enhancing the
productivity (Starr, 2014).
Roles of managers in JIT
 Main role of managers are that to monitor the whole distribution process so that equal
distribution can be done in proper manner.
Role of leaders in JIT Leaders have duty to make effective relations with the suppliers so that raw material can
be delivered in a given time period in the production process.
Six Sigma: This process includes some effective tools and techniques so that defects of
production process can be identified and removed accordingly. It also provide assistance to the
managers in measuring the improvement of product so that activities can be validate in proper
manner.
Roles of Managers in Six sigma
 In this, Managers have to identify the defects and obstacles which are occurring in
production process and removing them accordingly.

Role of leaders in Six sigma Leaders have duty to provide effective training to their teammates so that they perform
better on the given task due to which improvement in product quality can be possible
within a short period of time.
Total Quality Management: It is also an effective approach which can be used by the
managers of Toyota for improving quality of products and services that are provided by them to
their customers. It also helps the managers in considering the feedbacks which are given by the
users of product so that improvement can be done within a small time period.
Roles of Managers in TQM
 As per this approach, Managers have to identify the unessential activities and remove
them accordingly so that Total quality products can be delivered in the marketplace.
Roles of Leaders in TQM
 In it, leaders have duty to encourage and motivate their team members so that they gets
motivated and perform well on the given task.
P5 Explain the importance and value of operations management in achieving business objectives.
Business objectives – It is an expectation or target of a firm which provides
encouragement to the employees so that it will be achieved in a given time period. For instance,
Managers of cited firm have decided to provide better quality products in marketplace through
which competitive advantage can easily gained by the firm
Importance of operations management in achievement of business objectives –
Operations management also plays an important role in properly achievement of targets and
objectives of organisation. It gave assistance to the managers of firm to delegate roles and
responsibilities to employees as per their skills and capabilities so that resources of firm will be
utilise in proper manner. Through this, managers will easily increase the productivity and
profitability of Toyota. It also helps them in determining the lower and best performer of the
organisation which will beneficial for the improvement of operational efficiency of firm.
Managers of Toyota can use the Decision theory approach in order to improving the operational
efficiencies of firm (Van Wassenhove, 2014).
The description of this approach is as under:
Scientific Management Theory: This theory states that, employees have to done given
task in a simplest manner so that productivity of organisation can easily enhanced. In the context

of Toyota, Managers have duty to determine the situations and make changes accordingly so that
the given task will be performed by the employees in an easy manner. With the help of this,
operational efficiency of firm will easily improved.
For this, an approach of leadership can be used by the managers of Toyota which is given
as under:
Transformational Theory of Leadership: This theory provide obligations upon the
leaders of Toyota to determine the needs and requirements of employees and fulfils them
accordingly so that they gets motivated and desired task will be completed in an effective
manner. As management of Toyota have adopted moderate technology in their workplace so that
the leaders have duty to provide better training to them so that their efficiencies and abilities can
be improved and desired task will be completed in a shorter period of time.
P6 Macro environmental factors and their impact upon operational management and decision-
making by managers.
In the context with Toyota, there are a large number of external factors which can influences the
decision making of managers. These factors are described under: Political Factors: These factors are related with political situations of a specific country.
As cited firm is multinational which provides products and services in whole world.
Therefore, modifications in policies of a government of nation can negatively impact on
the decisions of managers of Toyota. For instance- Australian government had
formulated a legislation in which they have increases the tax duties due to this legislation
Managers of Toyota have to remove their business operations from the Australia nation
in 2017. Economical Factors: It includes inflation rate, exchange rates of money etc. These can
also influences the decisions of management of a firm in positive or negative manner. For
example, falling of Japanese currency have adversely impact on the profitability and
sales figures of the firm (Khan, 2011). Social Factors: It comprises culture, taste, preferences of the customers. Toyota is a
company which provides products and services across the world and also faces various
challenges from society such as eco-friendly vehicles, pollution etc. Thus, managers have
to make focus on such factors and make electric cars so that negative influences of such
factors can be reduced in easy manner.

 Technological Factors: It includes the factors which are related with advanced
technology that can influence the business operations of any organisation in positive or
negative manner. Rising of e-commerce, online applications have negatively influences
the decisions of managers. Through considering such factors, managers will easily grab
the opportunities which are related with improving of products and making quality in it.
As the macro-environmental factors impact on the decisions of managers in negative or
positive manner. There are also some factors which have to consider by the managers while
making decisions. These factors are given as under:
CSR- Business operations are highly influences by CSR policy because it is connected
with the social responsibilities of organisation and also provide encouragement in making good
position in front of the customers. If managers of Toyota will not consider such responsibilities
then it will bring negative image of the firm in the mindset of customers which can also impact
on the decision-making of managers.
Values- Managers of Toyota have also make consideration towards values which is
related with society or where the firm is operating its business operations. It also assist the
managers in getting innovative ideas which will help them in decision-making of firm and they
will easily satisfy the desired needs of customers (Jacobs, 2017).
Ethics- These are formulated by the organisation so that growth and success can be
achieved in the marketplace. It can also influence the decision making if the managers will not
follow the ethics in proper manner.
The stakeholders of Toyota and their expectations are:
1) Shareholders of the company wants better return on their invested amount so as to
motivate them for future investment.
2) Government expects from company that they should pay their tax liabilities as prescribed
in the law.
3) Company should pay the amount dues to the supplier on time.
4) Employees expectations from the company are that they wants recognition of their
performance from their superiors so that they can get promotion and incentives.
CONCLUSION
It has been summarised from the above report that Operations management is considered
as an important part of every firm which provides assistance to the leaders and managers in

enhancing the operational efficiency of firm. It has been recommended that, managers of
organisation have to consider macro-environmental factors which can influence the decision-
making of them so that they have duty to analyse such factors and make effective policies and
strategies for them. Key operational approaches are also important because it provides assistance
to managers and leaders to make a good position of the organisation in marketplace.

REFERENCES
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Mahadevan, B., 2015. Operations management: Theory and practice. Pearson Education India.
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