Operations Management and Ethics

Operations Management and Ethics

Operations management may be defined as the design, operation, and improvement of the production system that creates the firm's primary products and services, or, as Chase, Jacobs & Aquilano (2006) state "operations management is about getting the day-to-day work done quickly, efficiently, without errors, and at low cost". Operations management is critically important in any organization or business nowadays.

Operations management is one of the three major functions of any organization along with marketing and finance. The operations function is comprised of a significant percentage of all employees and physical assets in most organizations (Thomas, 2005). Operations management determines what should go into an operating system such as equipment, labor, tools, facilities, materials, energy, and information and how these inputs can best be obtained and used to satisfy the requirements of the market place. Activities that fall within the operations management discipline include managing purchases, inventory control, quality management and control, materials management, purchasing, storage, logistics, scheduling and evaluations. Since operations management focuses on efficiency and effectiveness of internal processes, operations management often includes measurement and analysis of internal processes (McNamara, n.d.).

The importance of operations management has increased dramatically in recent years. Foreign competition, shorter product and service life-cycles, better-educated and quality-conscious consumers, and the capabilities of new technology have placed increasing pressures on operations management to improve productivity while providing a broader array of high-quality products and services. With the globalization of markets, firms are recognizing the importance of operations management in strengthening their position in the market place.

Operations management is about making the right decisions for the business and an increasingly important area of consideration in making those decisions involves business ethics. A study performed by Webley & More (2002) concluded that there is strong evidence to indicate that those companies with explicit codes of business ethics outperform those companies who do not.

Among the many ethics decisions that operations management must make responsible purchasing can have far reaching effects. McDonald's Corporation purchases only a small fraction of the world's goods and services. However, they believe that they have an obligation to use their influence with suppliers to improve their practices and set an example for other companies to make the world a better, safer place.

Among the programs supported by McDonalds is their global animal welfare program. On site audits of suppliers' facilities are conducted and to provide guidance for continuous improvement McDonald's has an independent animal welfare advisory council of animal science experts. To help preserve the effectiveness of life-saving antibiotics, McDonald's has a global policy that calls for their suppliers worldwide to phase out use for animal growth promotion, antibiotics used in human medicine and to follow specific guidelines for uses in preventing, controlling, and treating animal diseases. McDonald's also has a specific policy against purchasing cattle from rainforest or recently deforested rainforest land thereby supporting the preservation of tropical rainforests. McDonald's food safety system runs from farm to counter, with quality