How an organization operates
Organizations are involved in some forms of transformation process. Like input such as labor , capital and land and make them into outputs like goods and services. In mostly cases the output of an organization or business is a mixture of both physical goods and intangible services. i.e. in restaurant you are not only buying a meal but also the services and the environment. The basic aim of the organization is to put value i.e. to make outputs that value more than the inputs. In most of the cases the value is measured in financial terms in which the organizations makes profit. A company earns profit when the revenue is high than the cost of product. But in non-profitable businesses like hospitals and schools, other factors are used to measure the value. Like school performances, for example measuring the result of exams and student grades when they joined the school, to measure the progress. And in hospital it will see the good doctors, good technology and good treatment.
The transformation process differs a lot from business to business. Like it may take manufacturing or giving services, it can be labor or capital or based on a single or multi site. However the business nature is managers are continuously searching for different and new ways of adding value either by giving benefits and goods that people are agreed to pay more for that product or services or by arranging resources more accurately to reduce cost. We can add value in any stage of transformation process like in supply of raw material, in manufacturing or in supplying the product. Organizations normally adds value in their product at manufacturing stage, by giving the product a unique feature and look which their competitor don’t have. Or also adds value in the supplying part through good marketing, like advertisements, banners, brochures etc. Now a days marketing is taking higher part in every organization to compete with their competitors. So managers should deal with everything with effectiveness and efficiency.
To increase effectiveness and efficiency organizations are always looking methods of producing more with the given level of inputs or making the same quantity with less input. This can be done in a different ways: change in working rules and regulations, more technology, motivating staff through incentives and change the way of production. i.e in the last fifteen years the progress in manufacturing process is called lean production. This shows a low wastage in all levels of transformation process. It takes only In Time production like products are produced when there is order for that not in advance. In this material is not wasted, items are produced when there is need for it like there is an order for it otherwise not. Similarly they don’t need to wait for the purchasing of the product. Small changes are there to improve the efficiency and effectiveness of employees. You can also create value by generating outputs that worth more for customers than money. In marketing the brand has become very important now a days for customers as well as for organizations. Through effective branding you can add very high value in your product. Just take a simple, plain T-shirt and then you will have a high price of it when you just add a brand name and logo on it. Take Prada, Armani, Gucci and then you will see the brand name power. And also the product features can earn more profit that customers are willing ti buy it ”think of iphone, salvatore faragamo shoes , sony bravia” as well as the production and delivery time of product like “1 hour opticians and photo processing”, convenience and flexibility “like home delivery is convenient and your business is flexible that can adopt a change easily according to the changing environment”. Organizations are continuously reviewing that what will they produce and how will they deliver it so that they will add more value. As the environment changes so that demands change, there are more...
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