Operations management focuses on managing the processes of producing and distributing products and services. Operations activities often include product creation, development, production and distribution. It deals with all operations within the organization. Related activities include managing purchases, inventory control, quality control, storage, logistics and evaluations. The nature of how operations management is carried out in an organization depends very much on the nature of products or services in the organization, for example, retail, manufacturing, wholesale, etc.
In operation management a great deal of focus is on efficiency and effectiveness of processes. Efficiency is when processes are being completed at the lowest cost possible. Effectiveness is having the right processes that will create the most value for the company. In addition, operations processes depend solely on the decisions made by management. When management makes decisions, the concept of ethics comes in to play.
Managers who fail to provide leadership and incorporate systems that facilitate ethical conduct share responsibility with those who knowingly benefit from corporate misdeeds. Executives who ignore ethics run the risk of personal and corporate liability. One example would be Bank of America (BofA), the bank that I currently bank with. BofA has begun operations of combining its wealth and investment management operations with Fleet Boston Financial Corp.
BofA is looking to expand a policy requiring employees to keep all of their personal investments with the company’s own brokerage dealers. BofA asset management employees have been generally required to keep their accounts with the company since 2002, but now the policy could be extended to former Fleet employees. The change comes as BofA is integrating operations with Fleet and recuperating from a huge investigation of its mutual fund operations. Bank of America and Fleet last week finalized a $675 million settlement over allegations of improper mutual fund trading.
Requiring employees to keep their accounts in-house allows the company to more closely monitor their personal trading practices. Unfortunately some of the workers look at it as being an unethical monetary gain for the company. The change raised fury among workers who don’t want the hassle of moving their accounts or paying transfer fees. When accounts are transferred over, BofA gets additional fees from adding new accounts. If everyone has to transfer everything they have, that’s a huge revenue gain for the company.
The motive behind BofA A’s policy is to assure that no noncompliant, unethical activities are taking place within the company. The cost of incurring dissatisfied employees is much less expensive than spending millions to settle allegation. To gain faith in its employees, the company agreed to pay for some of the workers transfer fees. In doing this, BofA A believes the employees will recognize the crucial importance of complying with company and regulatory rules and procedures.