PRACTICE OF OPERATIONS IN COMPANIES OF TERESINA, PIAUÍ, BRAZIL
Tonny Kerley de Alencar Rodrigues
Federal University of Rio de Janeiro (Coppead), Brazil
E-mail: tonny.rodrigues@coppead.ufrj.br
Átila de Melo Lira
Universidade Paulista, Brazil
E-mail: atilalira@hotmail.com
Irenilza de Alencar Naas
Universidade Paulista, Brazil
E-mail: irenilza@gmail.com
Submission: 01/04/2014
Revision: 15/04/2014
Accept: 22/04/2014
ABSTRACT
This research was structured in
order to respond those research problems: The companies of the city of
Teresina, Piauí, Brazil practice operations management? What tools of
operations management they use? What are the tools of operations management
that they need more? Therefore, this study aimed to characterize the management
operations practices of Teresina undertakings, specifically, the research seeks
to analyze the management practices of Teresina business operations as well as
operations management tools they use in contrast to the observance of what they
need most. Trying to understand these issues, we developed a quantitative
survey. The research can be rated as descriptive and explanatory, applied
and/or intervention. As for media, research can be classified as documentary,
bibliographic and/or participant. For the better development of the study it
was used a documentary approach. Regarding the sample was stratified random
amount of small businesses that responded to the proposed questionnaire was
used was 415. The results showed that the MPEs have a number of
structural features against practices and tools for managing the operations of
companies Teresina, for example: complementarity and subordination relationship
with large companies, low investment in technological innovation, high rate
birth and death, low capital intensity, strong family presence in the
composition of labor among other.
Keywords: Operations, Management, Practice
Contributors and Supporting Agencies: Capes, CNPq and Associação Teresinense de Ensino.
1. INTRODUCTION
The
practices of operations management tools follow a trend of increasing
operational data levels competitive edge companies have lived for decades. The
need to equalize the productive management may never have advanced so much in
the history of the area as it has been lately with the improvement and
advancement of new technologies. However, there are locations that may not yet
be accompanied by such developments still act in markets with low asset
specificity.
Therefore,
this research appeared on the following question: what practical operations management
can help small businesses in the city of Teresina, Piauí, Brazil on improving
the administrative process? Was taken as the main assumption in this question
that the adoption of planning and executing operations management tools can aid
in reducing the lack of technical and scientific knowledge of these
organizations. Therefore, this study aimed to characterize the management operations
practices of Teresina undertakings, specifically, the research seeks to analyze
the management practices of Teresina business operations as well as operations
management tools they use in contrast to the observance of what they need most.
Quantitative research, applied, descriptive was performed with the use of a
survey (structured questionnaire with a representative sample of the
population, n=415 small businesses).
The
focus and scope of analysis of the research focuses on management practices in
small business operations Teresina because they are organizations with no study
in the area so far. Moreover, these organizations have great social
representativeness, since they employ the majority of the population,
corresponding to most of the business organizations, but have translated their
results in small efforts, since they correspond to only a small portion of gross
national product.
Theoretical
support of research, we chose to rescue a discussion of production and
operations that would enable progress in interfaces and boundaries between the
classics with their balances between production systems and discussion of classical
economists administration amplifies the need for productive uses of models
internally organizations. Still, we attempted to provide an overview of small
Brazilian companies for this scenario is best viewed and interpreted.
2. THEORETICAL FRAMEWORK
The
production is an administrative element that makes up most of the execution of
planned strategies by firms. As it competes aspects such as the physical
arrangement belonging to the "shop floor", capacity issues and
decisions of what and how much to produce, inputs and their quantities to be
purchased or sales forecast to assist in production decisions.
At
first, to better understand how the production of an organization works, it is
necessary to understand the early events of the Industrial Revolution, with
their consequences in production methods. To this end, this study will show
some ideas of the most important scholars and industry of that period on the
forms of production and on the expectations of the employees on the production:
Adam Smith, in order to streamline production, followed by Thomas Malthus,
David Ricardo, Robert Owen, Frederick Taylor and Henry Poor, this specifically
entered deeply into the productive aspects, formulating Scientific Management.
In
the beginning of the eighteenth century was a huge change in industrial
processes, the global population increased considerably, the consumer market
stimulated the large-scale production and provided technological development.
The workforce grew so abundant, some coming from rural and other originating
from the own population growth in cities.
In
this context, Britain had the technological supremacy. Due to the various
colonies and the mastery of the seas, she possessed the factor necessary to give
strength to the plants: the consumer market and transport. Through various
inventions like the flying shuttle, hydraulic loom and the steam engine, the
industry is modernized and a change was needed in production processes to
streamline production (SMITH, 1976).
Serving
the philosophical and theoretical bases of human behavior, business and
production processes, classical liberalism caused the accumulation of capital
is the term of order among merchants and factory owners (HOBSBAWM, 1981;
TREVELYAN, 1967). In this scenario, by first concerns the behavior of the
worker before his task and rational production.
A
leading rationalizing production was Adam Smith. He pointed out that the
efficient way to achieve the minimization of production time and achieve
greater dexterity of the worker would be through specialization of production
stages (SMITH, 1976).
During
this period, the employee was subjected to inhumane conditions, with workloads
that arrived 18 hours daily (MALTHUS, 1946). With regard to earnings, Ricardo
(2004) expressed very well thought of the time by saying that he should be the
necessary price just to ensure their survival and their class. Thus, the
individual had a life at work, which was not considered their other needs.
Reviewing
the literature that this study was conducted, Robert Owen is regarded as the
first to make use of methods for humanizing working conditions within an
industry. He was the first manufacturer to provide decent working conditions,
fair wages and education for the children of their employees. Practically, it
correlated better quality of life at the factory with a better performance
(HUNT; SHERMAN, 1986).
In
the nineteenth century, the productive efficiency continued to be “kept in
check”. Through specialization, division of labor was defended by John Stuart,
who also advocated a salary proportional to each worker was able to produce
(MILL, 1994). On the other hand, concerns about the slow production, caused by
specialization, were observed by Marshall (2006), which, despite being favored
the production process, believed that monotony was an evil of the first order
in the division of labor.
In
the late nineteenth century with the growth of American railroads, which were
the greatest work in progress at the time, the project coordinator Henry Poor
came to the conclusion that to achieve productive efficiency three factors were
needed: the organization, communication and information. He applied
motivational aspects in the work environment as wages proportionate to the performance:
in order to seek satisfaction of the employee, promoted a flexible
communication among various hierarchical levels and clearly communicated the
information about the project objectives to the workers (POOR, 1952).
Frederick
Taylor expanded all previous studies. He sought to develop the overall
performance of the organization through improvements in the techniques of
individual production, increasing the performance of workers and machines.
Empirically applied the division of labor in simple and predefined tasks in
order to try to eliminate the interference of a single worker in the entire
production process. This was very important in the production process because
it allowed it to be no longer necessary for industries to find workers who knew
the entire production process, but only knew perform its designated task
(TAYLOR, 2010).
Production
is handled both in the economic and administrative sciences. The production
activity is responsible for the agglutination of resources to produce goods and
services. In systematic terms, any organization have a single type of
transformation that is represented by the inputs, process and outputs (or
inputs, processing and outputs), or any organization receives inputs, processes
them and have a product or service as a result. However, despite the
transformation model is the same for any company, ways of obtaining the inputs,
processing and shape that occur with the output may be different and depend on
the level of technological structure of the organization and line of business
which operates.
The
main role of the production function is to provide grants to enable companies
to produce products/services demanded by consumers. Moreover, the production
function also supports the business strategy, implements this strategy and
drives. Support the business strategy is to develop activities necessary to
provide conditions that enable the organization to achieve its strategic
objectives; implement the business strategy concerns the implementation, for
example, even if the strategy is brilliant, if not well executed will fail, and
thrust business strategy is related to the fact of making the production of
goods/services in the best way, or give competitive advantage to the strategy
in the long term (MENTZER et al., 2008). The production has tools that are
associated with matters relating to the planning and control, as well as the
physical arrangement or layout, inventory levels, sales forecasting (which
indicates the level of production to be searched) and other (MAYORGA; AHN,
2011).
Small
businesses are in accordance with Complementary Law No. 123 of December 14,
2006, the individual limited liability companies, simple partnerships, business
corporations and businessman who plays professionally organized for the
production of goods and services economic activity that in the case of small
enterprises, or get an annual gross income equal to or less than R$ 360,000
(approximately 180,000 dollars), and in the case of small business that has a
gross annual income above that amount and even R$ 3,600,000 (approximately
1,800,000 dollars), and by 2011 the annual ceiling for small business was R$
1,500,000 (approximately 750,000 dollars) (BRAZIL, 2006).
In the
design of Santos et al. (2011) claim that the world these companies form a
productive system that allows dilution of the economy in thousands of projects.
In the Brazilian case, these authors postulate that the small business play an
important socioeconomic role in generating income, offering jobs and strengthen
the economy.
Small
enterprises form a production system worldwide that enables, on the basis of a
society, the dilution of the economy in thousands of projects. Highlighting the
Brazilian case, the small enterprises are important in generating income, the
provision of jobs and strengthen the economy. Therefore, this segment has an
important social and economic role as a center for the creation and
distribution of wealth decisive in generating jobs and economic development
(SANTOS et al., 2011).
According
to IBGE (2011) and RAIS (2011), small enterprises correspond to most Brazilian
companies and employ the majority of the population, yet they account for a
small share of GDP and nearly half of them do not pass the first years of life.
As pointed out by Borges et al. (2012), despite the economic representativeness
of Brazilian companies, they encounter significant difficulties for the conduct
of their activities and stay in the market. In this sense, one of the main
factors contributing to the high mortality of these organizations is the
absence of economic management tool applications.
The
current Brazilian literature on the subject points out that this fact is
because the managers of these organizations, largely lack the scientific
knowledge about these tools (BORGES et al., 2012; KASSAI; KASSAI, 2001;
RIBEIRO, 2011; SANTOS, 2012; SANTOS et al., 2011; TACHIZAWA; POZO, 2007). They
manage only with the empirical knowledge, or common sense, that they call
“practical”. Combine this practice to the theory can be a powerful weapon for
these organizations in pursuit of competitive advantage. Borges et al. (2012)
show that due to the importance of local businesses, for example small
enterprises, it is necessary to isolate aspects of the same failure to
understand the phenomena that influence the continuity of business. Since
knowledge of these causes is important to create instruments to minimize the
discontinuity indices of these companies.
3. METHODOLOGY
In
research question we chose a more positivist strand which values quantitative
aspects (KUHN, 1997). As Vergara (2006), the methodology can be categorized as
to the purposes and on the means. As for the purpose, the research can be
descriptive and explanatory, applied and/or intervention. As for media,
research can be classified as documentary, bibliographic and/or participant.
The
population for this study is composed by Brazilian small enterprises are
characterized by having a lower or equal to R$ 3,600,000 (approximately
1,800,000 dollars) gross annual income. They amount to about 5,786,696 business
establishments, according to IBGE (2011).
Regarding
the sample, it was random stratified where “n” calculated was 385 small
businesses at a confidence level of 95% and a sampling error of 5%. The “n”
observed, for example the amount of small enterprises who answered the
questionnaire proposed was 415.
According
to IBGE (2011), through its management of research, stratification of small
Brazilian enterprises has the following format: 1.3% in the northern region,
14.3% in the Northeast, 55.5% in southeast, 22.4% in the south and 6.5% in the
Midwest. Thus, the sample is very close to the percentages of these percentages
for each region, proceeding just rounding them.
To
obtain these samples as close to these percentages, the researcher was counting
the questionnaires answered by geopolitical region of the country. As you could
be the desired percentage, going to disregard or not count most of the
responses coming from that region. This procedure allowed the stratification of
the sample.
To
collect information regarding the diagnosis of the degree of knowledge of small
entrepreneurs, a structured questionnaire using gradual tracks in
identification of the respondent and the firm (such as age groups, marital
status, length of business and geographic region was used business location)
and a Likert type scale which is related to the operations management practice
of companies in the city of Teresina, where the researcher was able to deduce
the main difficulties encountered by respondents in the administrative process
for these organizations and the level of skilled operations management practice
of companies. The scale had the following configuration: a) Strongly agree; b)
Agree in parts; c) Neither agree nor disagree; d) disagree in parts; e)
Strongly disagree.
The
questionnaire was filed in Google Docs (Internet tool that provides free filing
of a questionnaire), and sent to the Sebraes of all states of the federation,
secretaries of finance, development and farm all the states and capitals of the
country, departments management, economics and accounting in various Brazilian
federal universities with a disclosure requirement for small entrepreneurs.
Furthermore, the researcher sent the questionnaire to your bank emails of small
business owners across the country.
The
pretest of the instrument was performed with some businessmen database
researcher who agreed to contribute to the development and structuring of it.
Data collection occurred from November 2011 to March 2012. Initially the
researcher personally visited some offices Sebraes, Sesi and Sesc and some
departments of farm some municipalities in the North and Northeast of Brazil to
promote research and seek cooperation in sending the same link of the
instrument and the awareness of entrepreneurs to reply the questionnaire.
The
data relating to the questionnaire were analyzed with the help of SPSS
(Statistical Package for Social Science). Through breeding techniques could be
identified as the organizational structure and the type of manager that applies
more or less applies operations management practice, as well as which ones that
have better financial results. Also, was provided at the end of the analysis of
the results, a set of operations management practices found in the literature
of administrative sciences for the best management of these small enterprises.
The
selection methodology and exemplification of management tools was made
compatible with the defined objectives and design management as a scientific
and technical process of applying scientific knowledge to seek survival and/or
growth of small enterprises.
4. RESULTS AND DISCUSSION
The
responses from 415 questionnaires with managers of Brazilian enterprises were
summarized in percentage frequencies of twenty claims arising from a scale
(Likert) related to practices of these managers on the operations management
tools. It is noteworthy that the language used was simple due to research
addressing an audience of different levels of education.
For
each statement the scale contained the questionnaire, management tools for
application in small business were chosen. Three factors have conditioned and
guided these choices: a) the organization or require the application of these
tools; b) or manager known in part or in whole the tools and; c) or manager has
not yet apply the tools for not understanding the process of implementing.
Were
listed the questions in the questionnaire with the operations management tools
described in the literature of the area. Thus we have, for example, the
existing physical space associated with the physical arrangement by product or
process. That knowledge of the quantity to be sold is related to capacity
expansion by means of the equilibrium point. And so on for the other
affirmative and tools.
So we
have that the first statement of the scale: existing today in my company is
enough physical space for all activities that desire to accomplish; seeks to
show that the manager believes that the layout of your company is suitable to
the needs of the same. The majority of respondents (65%) believe that companies
do not have the appropriate layout because disagreed with the statement above.
The
second statement: I know how much my company needs to sell at least pay the
monthly bills. That is, the entrepreneur knows the balance point of your
business? In the specific case of entrepreneurs who responded to the instrument
of data collection, 51% do not know the balance point of sale of company
products. However, this question 30% of respondents said they know clearly
determine the equilibrium point. Probably only those entrepreneurs who have
higher revenues must be completely agreed with the statement. If yes 3: Know
the correct amount of supplies to be purchased per month by my company not to
miss or leftover goods, it can be observed that 53% did not know about economic
lot of shopping because they totally disagreed with this statement.
The
fourth affirmative: know the right amount of feedback that my company if she
does have some investment in advertising, it can be observed that 59% of
respondents know technically not work and/or qualified, with forecast sales or
return on investment in advertising, because disagreed with the statement. In
Question 5: I know exactly towns or places that my company must sell its
products for greater gains, also had a high percentage (55%) of respondents who
do not know the cost attributable to so they can determine the best markets for
their products, because they also disagreed with the statement. If yes 6: If my
company want to open a new branch or a new point of sale, I will know which
place greater return, 57% of small entrepreneurs disagreed with the statement,
for they know not scientifically determine the appropriate location if it
decides to open a new business.
So on
the almost absolute majority of respondents said it disagreed with the
assertions that reveal if they know management tools or not. However, in the
affirmative 13: know the value (in dollars) that my company currently has on
hand or in banks, there was a high percentage (42%) of small entrepreneurs who
strongly agreed with this statement compared with the percentage the other
affirmative. On the other hand, the percentage of entrepreneurs who do not know
the liquidity of its business is still very high (49%) as disagreed with the
statement.
5. CONCLUSION
That
survey also identified possible, theoretical and practical, that the MSE
Brazilian possess the following structural features: a) complementarity and
subordination relationship with large companies; b) low investment in
technological innovation; c) high rate birth and death; d) low capital
intensity; e) strong family presence in the composition of labor; f) use of
unskilled labor or semi qualified; g) no separation between the assets of the
partners and the firm; h) barely adequate accounting records; i) centralized
decision-making power; j) more difficult access to finance working capital.
The
results indicate that mostly operates in the Services sector (30%), are in the
market for over 10 years (38%), employ an average of up to 5 people (82%) and
have an average monthly turnover of up to $3,000.00 (43%), buying or selling of
large companies (72%), have low investment in technological innovation (59%),
have strong family presence among employees (68%); using hand labor low-skilled
(32%); decisions are highly centralized (79%) and machinery and equipment used
in small quantity (57%).
Finally,
this research can be a starting point for the formulation of other studies that
will address the small Brazilian enterprises. These studies may involve
structural and fields of activity of these organizations in order to do more
with sector specific analyze, or different groups of managers profiles. They
may also arise studies to assess individually the impact of each practice in
the management of these businesses. It is also worth mentioning that one of the
shortcomings of this research was not to discuss the consistency of the
different operations management practices for the different organizational
structures of Brazilian enterprises. That's because not all Brazilian companies
require all operations management practices presented.
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