What are the 5 Current Challenges of Operations Management?

Operations Management Masters Degree Online
Operations Management Masters Degree Online
Operations Management Masters Degree Online

What are the 5 Current Challenges of Operations Management?

There are multiple challenges that operations managers face on a daily basis; this blog highlights the following five: globalization, sustainability, ethical conduct, ineffective communication, and system design.


Globalization101.org defines globalization as: “a process of interaction and integration among the people, companies, and governments of different nations.” It is driven by a reduction in trade barriers, advancements in information technology, and transportation technology. Operation managers face competition from the company across the street, as well as, from across the country and across the world. Tishta Bachoo, Accounting Professor at Curtin University in Australia, explains that companies who compete with others abroad will have to improve quality while lowering prices to remain competitive. This falls on the operations manager as he or she is the one who “engages in the four functions of planning, organizing, leading, and controlling to ensure that the product or service remains competitive in the market.” Batchoo adds that the operations manager must tap into their creative skills as innovation will be a key factor of success as will knowledge about international business and the myriad cultures of the businesses around the globe.



In her article, Business Definition of Operational Sustainability, Kay Miranda, journalist for the Houston Chronicle, defines business operational sustainability as a “method of evaluating whether a business can maintain existing practices without putting future resources at risk.” When discussing the concept of sustainability, it is often referred to as the Three Pillars of Sustainability which are social, environmental, and economic. Operations managers must concern themselves with the outcomes of each of the pillars including how their work affects safety, welfare, communities, the environment and economic sustainability.

Effective operations managers must implement best practices with a concern for all three pillars of sustainability. They also need to initiate and verify corrective action when any outcome of one of the three pillars becomes jeopardized.


Ethical Conduct

Education site ManagementStudyGuide.com takes special note of the role ethics plays in production. Ethics is defined as a subset of business ethics that is “meant to ensure that the production function and/or activities are not damaging to either the consumer or the society.” In particular organizations should consider the effects new technologies, defective services, animal testing and business deals have on people, safety, and the environment.

Unethical behavior has significantly contributed to the demise of successful corporations like Enron, Tyco, and many varied firms doing business on Wall Street. Being ethical across all business functions such as accounting, human resource management, marketing and sales, and production are clearly within the purview of the operations manager. Unethical behavior, regardless of its origin, becomes a stain on the company as a whole. The recently noted ethics breach at Wells Fargo is just one poignant example.


Effective Communication

Being consistent and effective when communicating can be difficult anyone in any position within an organization. The challenge for the operations manager is to be able to communicate effectively with all internal and external stakeholders. Whether they are talking to someone on the factory floor, or in the boardroom, they must be able to effectively communicate their message as well as process the messages being directed to them. Mastering oral, written, and non-verbal communication is integral to making day-to-day operations run smoothly. Effective and efficient communication is also necessary for building employee morale and deepening trust with management. Operations managers who take the time to be self-reflective, the initiative to be authentic, and the effort to work on their communication skills are bound to be both productive and successful. The development of these skills are frequently the most requested of upper level management of their new and mid-level managers and required to be successful in any company.


System Design

In Key Issues in Operations, a blog detailing the relationship between system design and operational management, the main theme is that organizations must develop systems capable of “producing quality goods and services in demanded quantities in acceptable time frames.” Designing the system, planning the system, and managing the system present a wide variety of challenges to even the most savvy operations managers.

As operations managers work in multidisciplinary environments, they must be aware of and effectively respond to the challenges presented by globalization, sustainability, ethical conduct, effective communication, and system design. Doing this calls for operations managers to excel in the business, technical, and interpersonal aspects of their work as they actively support the mission and vision of their organization.

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