CHAPTER ONE

INTRODUCTION

1.1 Operations Management

According to Michael Hammer in 1993[22] Operations management is an
area of management concerned with overseeing, designing, and
controlling the process of production and redesigning business
operations in the production of goods or services. It involves the
responsibility of ensuring that business operations are efficient in
terms of using as few resources as needed, and effective in terms of
meeting customer requirements. It is concerned with managing the
process that converts inputs (in the forms of raw materials, labor,
and energy) into outputs (in the form of goods and/or services). The
relationship of operations management to senior management in
commercial contexts can be compared to the relationship of line
officers to highest-level senior officers in military science. The
highest-level officers shape the strategy and revise it over time,
while the line officers make tactical decisions in support of carrying
out the strategy. In business as in military affairs, the boundaries
between

levels

are

not

always

distinct;

tactical

information

dynamically informs strategy, and individual people often move

between roles over time.
According to the United States Department of Education, operations
management is the field concerned with managing and directing the
physical and/or technical functions of a firm or organization,

particularly

those

relating

to

development,

production,

and

manufacturing. Operations management programs typically include

instruction in principles of general management, manufacturing and
production systems, factory management, equipment maintenance
management, production control, industrial labor relations and
skilled trades supervision, strategic manufacturing policy, systems
analysis, productivity analysis and cost control, and materials
planning. Management, including operations management, is like
engineering in that it blends art with applied science. People skills,
creativity, rational analysis, and knowledge of technology are all
required for success

Operations Management deals with the design and management of

products, processes, services and supply chains. It considers the
acquisition, development, and utilization of resources that firms
need to deliver the goods and services their clients want.

According to D. A. Wren and A. G. Bedeian, The purvey of OM ranges

from strategic to tactical and operational levels. Representative
strategic issues include determining the size and location of
manufacturing

plants,

deciding

the

structure

of

service

or

telecommunications networks, and designing technology supply

chains. Tactical issues include plant layout and structure, project
management methods, and equipment selection and replacement.
Operational issues include production scheduling and control,
inventory management, quality control and inspection, traffic and
materials handling, and equipment maintenance policies.

According

to

management

MIT
(OM)

Sloan
is

School

the

of

business

Management.
function

Operations

responsible

for

managing the process of creation of goods and services. It involves

planning, organizing, coordinating, and controlling all the resources
needed to produce a companys goods and services. Because
operations management is a management function, it involves
managing people, equipment, technology, information, and all the
other resources needed in the production of goods and services.
Operations management is the central core function of every
company. This is true regardless of the size of the company, the
industry it is in, whether it is manufacturing or service, or is forprofit or not-for-profit.
Consider a pharmaceutical company such as Merck. The marketing
function of Merck is responsible for promoting new pharmaceuticals
to target customers and bringing customer feedback to the
organization. Marketing is essentially the window to customers. The
finance function of Merck makes sure that they have needed capital
for different processes including R&D. However, it is the operations
function that plans and coordinates all the resources needed to
design, produce, and deliver the various pharmaceuticals to
hospitals, pharmacies, and other locations where needed. Without
operations, there would be no products to sell to customers.
Organizational Culture
Organizational culture encompasses values and behaviors that
"contribute to the unique social and psychological environment of
an organization." According to Needle (2004), organizational culture
represents

the

collective

values,

beliefs

and

principles

of

organizational members and is a product of such factors as history,

product, market, technology, and strategy, type of employees,
management style, and national culture. Culture includes the
organization's vision, values, norms, systems, symbols, language,
assumptions, beliefs, and habits. Ravasi and Schultz (2006) wrote

that organizational culture is a set of shared assumptions that guide

what happens in organizations by defining appropriate behavior for
various situations.[3] It is also the pattern of such collective
behaviors and assumptions that are taught to new organizational
members as a way of perceiving and, even, thinking and feeling.
Thus, organizational culture affects the way people and groups
interact with each other, with clients, and with stakeholders. In
addition, organizational culture may affect how much employees
identify with an organization.

Schein (1992),

Deal

and

Kennedy

(2000),

and Kotter (1992)

advanced the idea that organizations often have very differing

cultures as well as subcultures. Although a company may have its
"own unique culture", in larger organizations there are sometimes
co-existing or conflicting subcultures because each subculture is
linked to a different management team.

Bernard Rosauer (2012), in 'Three Bell Curves: Business Culture

Decoded' described his methods for helping organization leaders
better understand what culture is, whether it could be measured
and how it might be improved. Using Kennedy and Deal's definition
of culture ('the way things are done around here'), Rosauer further
defined culture as an 'emergence'-an extremely complex and often
immeasurable state, resulting the combination of relatively few
ingredients. From an organizations standpoint Rosauer argues the
ingredients are 'employee (the people who get things done), the
work (the things that actually get done), and the customer (the
consumer of the provision.

Organizational culture is a system of shared assumptions, values,

and beliefs, which governs how people behave in organizations.
These shared values have a strong influence on the people in the
organization and dictate how they dress, act, and perform their jobs.
Every organization develops and maintains a unique culture, which
provides guidelines and boundaries for the behavior of the members
of the organization. Let's explore what elements make up an
organization's culture.

Organizational culture is composed of seven characteristics that

range in priority from high to low. Every organization has a distinct
value for each of these characteristics, which, when combined,
defines the organization's unique culture. Members of organizations
make judgments on the value their organization places on these
characteristics, and then adjust their behavior to match this
perceived set of values. Let's examine each of these seven
characteristics.

Innovation (Risk Orientation) - Companies with cultures that place a

high value on innovation encourage their employees to take risks
and innovate in the performance of their jobs. Companies with
cultures that place a low value on innovation expect their
employees to do their jobs the same way that they have been
trained to do them, without looking for ways to improve their
performance. Attention to Detail (Precision Orientation) - This
characteristic of organizational culture dictates the degree to which
employees are expected to be accurate in their work. A culture that
places a high value on attention to detail expects their employees to
perform their work with precision. A culture that places a low value
on this characteristic does not.

Emphasis on Outcome (Achievement Orientation) - Companies that

focus on results, but not on how the results are achieved, place a
high emphasis on this value of organizational culture. A company
that instructs its sales force to do whatever it takes to get sales
orders has a culture that places a high value on the emphasis on
outcome

characteristic.

Emphasis on People (Fairness Orientation) - Companies that place a

high value on this characteristic of organizational culture place a
great deal of importance on how their decisions will affect the
people in their organizations. For these companies, it is important to
treat their employees with respect and dignity.

Teamwork (Collaboration Orientation) - Companies that organize

work activities around teams instead of individuals place a high
value on this characteristic of organizational culture. People who
work for these types of companies tend to have a positive
relationship with their coworkers and managers.

Aggressiveness (Competitive Orientation) - This characteristic of

organizational

culture

dictates

whether

group

members

are

expected to be assertive or easygoing when dealing with companies

they compete with in the marketplace. Companies with an
aggressive culture place a high value on competitiveness and
outperforming the competition at all costs.

Stability (Rule Orientation) - A company whose culture places a high

value on stability are rule-oriented, predictable, and bureaucratic in
nature. These types of companies typically provide consistent and
predictable levels of output and operate best in non-changing
market conditions

1.2

Problem Statement

Despite the rich body of literature dealing with Operations

Management

most

of

the

previous

studies

performance of Operations Management

focus

on

the

only (2015 MIT Sloan

School of Management). However, the performance of Operations

management

(OM)

is

the

business

function

responsible

for

managing the process of creation of goods and services. It involves

planning, organizing, coordinating, and controlling all the resources
needed to produce a companys goods and services. Because
operations management is a management function, it involves
managing people, equipment, technology, information, and all the
other resources needed in the production of goods and services.
Operations management is the central core function of every
company. This is true regardless of the size of the company, the
industry it is in, whether it is manufacturing or service, or is forprofit or not-for-profit.
From reviewing previous literature, the author is not aware of any
study

that

attempts

Organizational

to

culture ,

examine
and

the

Operations

relationship

between

Management,

and

particularly, there is no study attempt to examine the effect of

Organizational

culture on

Operations

Management

in

Trade

Companies at Yemen. Accordingly, it is necessary to conduct such

research for increasing the awareness of Organizational culture .
Hence, this study attempts to examine the effect Operations

Management on Organizational culture

in Trade Companies at

Yemen.
1.3

Research Questions

In attempting to examine the impact of Operations Management on

Organizational culture, this study aims to answer the following
questions.
i.
ii.

Does Organizational culture affect Operations Management?

Is there any relationship between Operations Management and
Organizational culture?
1.4

Research Objectives

This study aims to examine the impact of Operations Management

on Organizational culture

in Trade Companies at Yemen. and

specifically achieving the following objectives.

i.

To examine the effect of Organizational Culture on Operations

ii.

Management.
To determine the relationship between Operations Management
and Organizational culture.

1.5

Research Contribution

The contribution of this study consists of theoretical and practical

perspectives. This study contributes to the body of knowledge from
the theoretical point of view due to some reasons. This study
provides a framework to knowledge base by developing a model for
Operations Management and Organizational culture. in Trade
Companies, and examining whether Organizational culture have
significant

or

non-significant

relationships

with

Operations

Management. In addition, this study investigates the effect of

Organizational

culture

Companies at Yemen..

on

Operations

Management

in

Trade

In addition, this study contributes to the practical aspects through

different ways.

this study is significant in the field of

Organizational culture as characteristics to it and the extent of its

impact. it attempts to provide some information about the Trade
Companies in Yemen under Organizational culture. In addition this
study is significant in order to help the Yemeni Government in
developing the appropriate conditions in the form of certain policies
for the Operations Management
1.6

Limitations of the Study

The scope of this research was limited to examining the impact of of

Organizational

culture

on

Operations

Management

in

Trade

Companies at Yemen. This study focused on Trade Companies and

the impact for Operations management in areas of marketing.
The targeted respondents were the employees who are working with Trade Companies
in Sanaa (the capital of Yemen). The decision was made to only solicit responses
from Trade Companies employees since this research was concerned with the
Organizational culture that have relationship with Operations management within the
Trade Companies sector. Respondents were largely selected from Yemeni managers
and employees of these companies.
1.7

Definition of Terms

The following definitions describe the key terms that are adopted for this study:
i. Organizational culture
Organizational culture encompasses values and behaviors that
"contribute to the unique social and psychological environment
of an organization." According to Needle (2004), organizational
culture represents the collective values, beliefs and principles
of organizational members and is a product of such factors as

history, product, market, technology, and strategy, type of

employees, management style, and national culture.
ii.

Operations management
According

Operations

2015

MIT

management

Sloan
(OM)

School
is

the

of

Management.

business

function

responsible for managing the process of creation of goods and

services. It involves planning, organizing, coordinating, and
controlling all the resources needed to produce a companys
goods and services. Because operations management is a
management

function,

it

involves

managing

people,

equipment, technology, information, and all the other resources

needed in the production of goods and services. Operations
management is the central core function of every company.
This is true regardless of the size of the company, the industry
it is in, whether it is manufacturing or service, or is for-profit or
not-for-profit.
1.8

Research Organizing

Chapter 1 discusses on the introduction of the study

Chapter 2 discusses the literature review
Chapter 3 discusses research methodology
Chapter 4 details the data analysis
Chapter 5 is devoted to the discussion and conclusion