The Toyota Way Philosophy

Japanese quality movement was a miracle and created world-class products. All these methodologies and concepts developed these quality gurus for internal process and quality improvement crisis are still practiced in various companies. These have become universal approach to improve the quality and manage performance crisis.  Quality gurus created work culture and dedicated teams, which developed Japanese production systems through group activities. Toyota Corporation developed a new philosophy to create major change in manufacturing systems and delivered world-class products with internal benchmark for quality of vehicles. In reality, Toyota changed external business environment for competitors and created a long-lasting impact on automobile industry.

The Toyota Way is a set of principles and behaviors that underlie the Toyota Motor Corporation’s managerial approach and production system. It consists of principles in two key areas: continuous improvement, and respect for people. Toyota use operational excellence as a strategic weapon. Company places the highest value on actual implementation and taking action. By constant improvement based upon the actions, one can rise to the higher levels of practice and knowledge. Toyota success story can be summed up by using three models, which are used by Toyota Corporation. These models are explained below;

1. 4P Model

Toyota has developed 14 principles for performance improvement. These principles are guiding thumb rules in Toyota. These 14 principles are divided into four sections and a unique 4P model is developed. Major thrust is given on teamwork and a systematic approach is developed by using these principles. These 4Ps are Problem Solving, Process and Partners, Process, Philosophy.… Read the rest

Knowledge Management Cycle

In today’s business scenario where there is lot of competition, only source of lasting is Knowledge. It is argued that knowledge management is a necessity due to changes in the environment such as increasing globalization of competition, speed of information and knowledge aging, dynamics of both product and process innovations, and competition through buyer markets. Knowledge management promises to help companies to be faster, more efficient, or more innovative than the competition. Also, the term ‘‘management” implies that knowledge management deals with the interactions between the organization and the environment and the ability of the organization to react and act

Various researchers then gave the various definitions on Knowledge Management and still it’s the buzzword today. Knowledge management is the process through which we can manage human centered assets efficiently and effectively. The function of knowledge management is to guard and grow knowledge owned by individuals, and where possible, transfer the asset into a form where it can be more readily shared by other employees in the company. KM refers to activities aimed at enhancing knowledge processing. These activities are interventions designed to affect how knowledge processing is done. The tools, techniques, and strategies to retain, analyze, organize, improve, and share business expertise. Knowledge management promotes an integrated approach to identifying, capturing, retrieving, sharing and evaluating enterprise information assets. These information assets may include database, policies, procedures and documents and as well as uncaptured tacit expertise and experience stored in the heads of individual workers.

Knowledge management is the information having some intent that can be interpreted and made available.… Read the rest

Business Intelligence (BI)

Business Intelligence is the process of discovering and analyzing data to make informed business decisions. The management in any business needs this aspect of management as part of the companies integral infrastructure in today’s world in order for the business to succeed. The data collected from many of the data collecting sources is used to determine trends, or measure, manage and improve on the performances of individuals, processes, teams and business units. The enterprise refers to any business organisation that uses computers as an integral part of their business and relies on it for that businesses development.

The History Of Business Intelligence

The term Business Intelligence was coined by the Gartner group in mid-1990s. But Business Intelligence was around before that, it originated in the Management Information Systems reporting systems of the 1970s. Reports in this era was only two fold, there was no analytical dimension to reporting. In the early 1980s, Executive Information Systems emerged. This introduced ad hoc (on demand) reporting forecasting, prediction, trend analysis, drill down to details, status access and critical success factors. It was available to top level managers who were the ones to make decisions for the businesses future. Some of the capabilities from the 1990s appeared in products along with some new ones and it was called Business Intelligence. A good Business Intelligence based enterprise information system contains all the information executives need. By 2005 Business Intelligence systems started to include artificial intelligence capabilities and more powerful analytical capabilities. The most sophisticated Business Intelligence Products include most of these capabilities.… Read the rest

What is Social Accounting?

Any business accountant of an enterprise or any organisation can describe the conditions of that organisation. Social accounting is that kind of movement by which everyone can analyze the same thing as like a business accountant. The main aim of social accounting is to produce data, indices and other information to help everyone about an organisation.

Social accounting is also known in various names. These are social and environmental accounting, corporate social reporting, corporate social responsibility reporting, non-financial reporting or sustainability accounting. This is actually a procedure of communicating in which the social and environmental belongings of organisations (NGO, Charities, may be Government agencies etc.) are included. This is a way by which an organisation can express the level to which it meets its societal or ethical goals.

Social accounting is distinct from evaluation in that it is an internally generated process whereby the organisation itself shapes the social accounting process according to its stated objectives. In particular it aims to involve all stakeholders in the process. It measures social and environmental performance in order to achieve improvement as well as to report accurately on what has been done.

There are some key factors in social accounting by which everyone can understand the difference between social accounting and conventional accounting. Main focus of social accounting is mainly on issues which can develop a correlation in between society and organisation. In maximum aspects social accounting is not focusing on financial data but sometimes it needs financial data for making a report. The purpose of social accounting is to be liable to a large number of stakeholders.… Read the rest

Advantages and Limitations of the Balanced Scorecard (BSC)

Advantages of the Balanced Scorecard

Balanced Scorecard has been widely used in many organizations in the past 15 years. It obviously has some benefits to these organizations. Here are some of the advantages of Balanced Scorecard and they are also reasons that make so many organizations adopt BSC.

Firstly, each perspective of Balanced Scorecard requires the identification of a number of goals, and suitable measures. This means that BSC can provide strong support to the decision making of the organization. In the world which is full of competition, it’s very important for an organization to identify what is most important. Each goal and each measure of the BSC is closely related to the strategic target of the organization. The organization can make strategic decisions based on the BSC. Multi-national organizations are often very large, they need simplified and concentrated target for the whole organization to keep themselves competitive. Otherwise, the connection between different departments will become weak and the organization will finally fall apart.

Secondly, Balanced Scorecard guards against sub-optimisation, so that improvement in one area is not achieved at the expense of another. Teamwork is a very important part of corporate culture. BSC combines different elements of an organization and that enables managers to consider what different departments’ functions are. In traditional methods of performance evaluation, managers only focus on financial figures. This can lead to decisions that make one department improve its performance on the expense of another. This is quite important to multi-national organizations. A multi-national organization has many departments and one of the managers’ tasks is to coordinate these departments and make the most use of each department.

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HR Scorecard: A Balanced Scorecard for HR

The new economic paradigm is characterized by speed, innovation, quality and customer satisfaction. The essence of the competitive advantage has shifted from tangible assets to intangible ones. The focus is now on human capital and its effective alignment with the overall strategy of organizations. This is a new age for Human Resources. The entire system of measuring HR‘s contribution to the organization‘s success as well as the architecture of the HR system needs to change to reflect the demands of succeeding in the new economy. The HR scorecard is a measurement as well as an evaluation system for redefining the role of HR as a strategic partner.

Managers often use an HR Scorecard to measure the HR function’s effectiveness and efficiency in producing employee behaviors and thus in achieving the company’s strategic goals. The HR Scorecard is a concise measurement system. It shows the quantitative standards or “metrics” the firm uses to measure HR activities, and to measure the employee behaviors resulting from these activities, and to measure the strategically relevant organizational outcomes of those employee behaviors. In so doing, it highlights, in a concise but comprehensive way, the causal link between the HR activities, and the emergent employee behaviors and the resulting firm wide strategic outcomes and performance.

Brian E.Becker, Mark A. Huselid, David Ulrich in their book titled “The HR Scorecard: Linking People, Strategy, and Performance,”  explain the need for such a measurement system this way:

In our view, the most potent action HR managers can take to ensure their strategic contribution is to develop a measurement system that convincingly showcases HR’s impact on business performance.

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