Nicole T.

Aretaño
2BSA4
Assign#3
OPEMAN-18

Assignment#3 Questions

3.1. Explain the difference between attribute control charts and variable control
charts.

Variable Control Charts have limitations

 must be able to measure the quality characteristics in numbers may be
impractical and uneconomical
 e.g. manuf. plant responsible of 100,000 dimensions
 Variables control charts plot continuous measurement process data, such as
length or pressure, in a time-ordered sequence. 
Attribute Control Charts
 In general are less costly when it comes to collecting data
 Can plot multiple characteristics on one chart
 But, loss of information vs. variable chart
 Attribute control charts plot count data, such as the number of defects or
defective units. Variables control charts, like all control charts, help you
identify causes of variation to investigate, so that you can adjust your process
without over-controlling it.

3.2. Select three service companies or organizations you are familiar with and
indicate how process control charts could be used in each.

 SM Investments Corporation
The Board is composed of eight (8) highly qualified directors, majority
of whom are non-executive directors. The Board ensures that it has an
appropriate mix of competence and expertise and that its members remain
qualified for their positions individually and collectively, which enables it to
fulfill its roles and responsibilities and respond to the needs of the organization
based on the evolving business environment and strategic direction.
In accordance with the Manual on Corporate Governance, the Board
meets at least six (6) times annually.  Board meetings are scheduled a year in
advance to encourage higher participation.  Special board meetings may be
called by the Chairman, the President or Corporate Secretary at the request of
any two (2) directors.  A director’s absence or non-participation for whatever
reason in more than 50% of all meetings, both regular and special, in a year may
be a ground for temporary disqualification in the succeeding election. 
Furthermore, non-executive directors meet at least once a year, without any
executive directors or representatives of Management present.  “Board papers
and other materials used during Board meetings are distributed to the relevant
parties at least one (1) week or five (5) business days before the actual
meeting.”

 Banco de Oro
Nicole T. Aretaño
2BSA4
Assign#3
OPEMAN-18

1. Composition of the Board – the number of Independent Directors was

increased from 3 to 4. Independent Directors and Non-Executive Directors
would constitute 63.63% (7 of 11 members) of the Board who are independent
of management and could exercise unfettered and independent judgment, free
from any business or other relationship that could materially interfere with the
exercise of their ability to act in the best interest of the Bank.
2. Term Limit of Independent Directors – reduced to a total of 9 years of
service which is the threshold of foreign jurisdictions in determining that
directors are still independent.
3. Selection of Board Members - using an external database to the extent
possible and identifying the qualifications of directors aligned with the Bank’s
strategic directions and promoting diversity of the Board.
4. Executive Sessions of Independent and Non-Executive Directors - chaired
by a Lead Director without the presence of senior management.
5. Creation of the Related Party Transactions Committee - to ensure that
RPTs are conducted in manner that prevents the occurrence of improper
conflict of interest.
6. Adoption of an expanded Code of Conduct and Business Ethics - that is
applicable to Directors, Officers and employees of the Bank. It covers the
Bank’s commitment to a gender friendly workplace, concern for occupational
health, safety and environment, transparency, integrity and accountability,
compliance with laws and regulations, standards of behavior and personal
conduct and ethics of doing business.
7. Adoption of a formal Dividend Policy - as a way of recognizing the
importance of providing a stable and sustainable dividend stream consistent
with its commitment to shareholders.
8. Release of audited financial statements not later than 60 days - after the
close of the financial year to promote transparency and full disclosure of the
results of the operations of the Bank to various stakeholders and the general
public.
9. Improvements in stakeholder engagement - through the implementation of
various initiatives to recognize their roles, promote equitable treatment and
protection of their rights. Additional information could be found in the
Definitive Information Statement.

 Ayala Corporation

Board Meetings, Quorum and Attendance

At the onset of each year, the Board designates the days when it shall meet,
at least six (6) times each calendar year.

Members of the Board should attend regular and special meetings of the
Board in person or via teleconference or videoconference or by any other
technological means allowed by the SEC.
Nicole T. Aretaño
2BSA4
Assign#3
OPEMAN-18

Two-thirds (2/3) of the number of directors as fixed in the articles of

incorporation shall constitute a quorum for the transaction of corporate
business.

In 2019, the Board had six regular meetings. The average attendance rate of
members of the Board was 100 percent, with each member individually
complying with the SEC’s minimum attendance requirement of 50 percent.
The Executive Committee likewise convenes regularly in lieu of the Board.

3.3. Select a local fast-food restaurant, retail store, grocery store, or bank, and
identify the different processes that control charts could be used to monitor.

McDonald

 Control charts are one of the tools being used in Operational excellence. They
are basically applied for the purpose of providing valuable data to create a
“baseline process performance, monitor and control process performance”
(Stagliano, 2004 p. 90). They can also be used in measurement systems to be
evaluated and multiple processes can also be compared. Practically, control
charts can be utilized in any aspect of operations that can be attributed to
“process characterization and analysis” (Stagliano, 2004 p. 90).

 Control charts not simply provide routine data, but its main use is for
stakeholders or managers analyse if there are certain variations that may be
interpreted as “in-control” if the process data points shows “random causes” or
“out-of-control” if the specific process has a combination of variations that
was caused by both “random and special causes” (SQCOnline, 2010).

 2) How to possibly improve quality at specific levels from doing research on

McDonalds.

 Overall, McDonald’s already is doing a good job in ensuring quality not only
from an operational standpoint, but to food safety as well. They have ensured
high standards of safety in all of the goods they provide to the market, thus
meeting customer expectations. The focus for improvement for McDonalds
would be its consistency, not to their status quo but consistency on continuous
improvement in all areas of their operations. Like for example, given that they
have achieved customer retention and satisfaction, they can now focus more
time on the quality of their workforce, even though as per their business
model, which is not really that dependant on staff due to the minimal training
and skills required, having an uninspired staff may affect the quality of their
work, in effect could possibly translate to customer dissatisfaction.
Nicole T. Aretaño
2BSA4
Assign#3
OPEMAN-18

 There are evidences pointing to some of McDonalds’ staff having trouble

coping with the corporate standards. Such as the action of cutting labour costs
when sales are lower than expected (mcspotlight.org 2010 p.7), which has an
effect to the staff especially the lower levels. However, McDonalds has been
working out a decent incentive programs (Citana, 2001) already, but the focus
was not on the regular crew but on Unit Managers of a certain franchise.

 Hence, it is about time that McDonalds can focus on the regular staff to
achieve consistencies of synchronized quality in all facets of operations. On
this perspective costs could be a big factor and could possibly ruin the
business model of cost efficiency for short-term, but the point of improving
standards for the regular worker, would not only pay dividends on long term
but dramatically improve McDonald’s corporate image as also a “high
quality” employer, working with the best and engaged people.

 A suggestion on this part could be as simple as providing the same type of

incentive packages ( but with reasonable bonus amounts according to level)
when a particular stores sales exceed expectations. All employees can be
measured by the quality of work that can also be categorized through a control
chart measuring their average handling time in serving a customer as just an
example metric.

 3) Any specific quality measures that McDonalds uses to compare itself

against its competitors. What do these measures mean?

 McDonald's pride itself on its food safety and quality of their products. They
ensure that the customers would receive a safe and satisfying meal each and
every time they ordered. McDonalds is considered on having the highest
standards with regard for safety and food quality for all and every “food it
procures, cooks and serves at its restaurants, the company considers animal
welfare as an integral part of their commitment to quality” (The W.Howard
Chase Award, 2001 p.1). Thus, having the image of a company producing a
high quality and safe product and delivering it on an above industry average
handling time, shows that McDonalds has somehow the edge over its
competitors. All their raw materials are being audited unannounced from the
suppliers, they also have a comprehensive and tough objective audit system
based on good animal handling practices applied on animal behaviour science”
(The W.Howard Chase Award, 2001 p.1).

 Another measure of quality in which McDonald’s is really spot-on, is they

know what the consumers want and they adapt custom operations by “re-
engineering the menu” based on their target market’s taste, lifestyle,
discernment and values.

 And lastly, McDonald’s has an efficient “just in time” inventory system, they
apply a “stock control chart” in which any restaurant manager can identify the
number of stock remaining, whether it needs to be replenished, they can also
Nicole T. Aretaño
2BSA4
Assign#3
OPEMAN-18

double check on sales receipts and see what was the most sellable product on
any given time and they can also analyse a particular trend on product
movement and study what could be the causes of the variations.

Sources:

https://support.minitab.com/en-us/minitab-express/1/help-and-how-to/control-
charts/supporting-topics/understanding-variables-control-charts/variables-control-
charts-in-minitab.

https://phdessay.com/quality-assurance-and-statistical-process-control-mcdonalds/

https://ir.ayalaland.com.ph/corporate-governance/board-processes/