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Organizational Control and Quality Improvement

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Presentation on theme: "Organizational Control and Quality Improvement"— Presentation transcript:

1 Organizational Control and Quality Improvement
Chapter 17 Organizational Control and Quality Improvement 2

2 Chapter Outline Fundamentals of Organizational Control
Types of Control Components of Organizational Control Systems Strategic Control Identifying Control Problems 5

3 Chapter Outline (continued)
Crisis Management Crisis Management Defined Developing a Crisis Management Program 5

4 Chapter Outline (continued)
The Quality Challenge Defining Quality Five Types of Product Quality Unique Challenges for Service Providers Defining Service Quality 2

5 Chapter Outline (continued)
An Introduction to Total Quality Management (TQM) Do It Right the First Time Be Customer-Centered Make Continuous Improvement a Way of Life Build Teamwork and Empowerment The Seven Basic TQM Process Improvement Tools 3

6 Chapter Outline (continued)
Deming Management Principles of Deming Management Deming's Fourteen Points 5

7 ORGANIZATIONAL CONTROL
Control: the process of taking the necessary preventive or corrective actions to ensure that the organization’s mission and objectives are accomplished as effectively and efficiently as possible. 25

8 ORGANIZATIONAL CONTROL (continued) Figure 17.1
Types of Control Feedforward control: active anticipation and prevention of problems, rather than passive reaction. Concurrent control: involves monitoring and adjusting ongoing activities and processes to ensure compliance with standards. Feedback control: gathering information about a completed activity, evaluating that information, and taking steps to improve similar activities in the future. 26

9 ORGANIZATIONAL CONTROL (continued)
Team Exercise: Choose a common activity—like taking a shower, preparing dinner, taking a vacation, or going out on a special date—and explain how feedforward, concurrent, and feedback control could make the activity a success. 27

10 COMPONENTS OF ORGANIZATIONAL CONTROL SYSTEMS
1. Objectives (“What do we want to accomplish?”) 2. Standards (“What guidelines and standards do we need to follow?”) 3. An evaluation-reward system (“How will our results be measured and how will we be rewarded?”) 28

11 IDENTIFYING CONTROL PROBLEMS
Executive reality check: top-level managers periodically work in the trenches to increase their awareness of operations. Internal auditing: independent appraisal of organizational operations and systems to assess effectiveness and efficiency. 29

12 IDENTIFYING CONTROL PROBLEMS (continued)
For Discussion: Why are executive reality checks particularly important today? 30

13 CRISIS MANAGEMENT Crisis management: “systematic anticipation of and preparation for internal and external problems that seriously threaten an organization’s reputation, profitability, or survival. 23

14 DEVELOPING A CRISIS MANAGEMENT PROGRAM Figure 17.3
Conduct a crisis audit. Formulate contingency plans. Create a crisis management team. Perfect the program through practice. 23

15 Philip Crosby’s Definition of Quality: conformance to requirements.
THE QUALITY CHALLENGE Philip Crosby’s Definition of Quality: conformance to requirements. 7

16 THE QUALITY CHALLENGE (continued)
Five Types of Product Quality Transcendent quality (Inherent excellence) Product-based quality (Product attributes) User-based quality (Meet user's expectations) Manufacturing-based quality (Matching design specifications) Value-based quality (Perceived cost-benefit relationship) 8

17 THE QUALITY CHALLENGE (continued)
For Discussion: Thinking of a major purchase you made in the last year, which type(s) of product quality drove your purchase decision? 9

18 UNIQUE CHALLENGES FOR SERVICE PROVIDERS
1. Customers participate directly in the production process. 2. Services are consumed immediately and cannot be stored. 3. Services are provided where and when the customer desires. 4. Services tend to be labor-intensive. 5. Services are intangible. 10

19 UNIQUE CHALLENGES FOR SERVICE PROVIDERS (continued)
For Discussion: 1. Drawing upon your own experience in service jobs, what is most difficult about serving the public? 2. Which of the above service challenges makes providing high-quality services most difficult today? 11

20 DEFINING SERVICE QUALITY (The Texas A&M Study)
Dimensions of Service Quality (RATER) 1. Reliability: ability to perform the desired service dependably, accurately, and consistently. 2. Assurance: employees’ knowledge, courtesy, and ability to convey trust and confidence. 3. Tangibles: physical facilities, equipment, appearance of personnel. 4. Empathy: provision of caring, individualized attention to customers. 5. Responsiveness: willingness to provide prompt service and help customers. 12

21 DEFINING SERVICE QUALITY (The Texas A&M Study) (continued)
"In the Texas A&M study, reliability was the most important dimension of service quality, regardless of the type of service involved." 13

22 DEFINING SERVICE QUALITY (The Texas A&M Study) Table 17.2
For Discussion: How do you rate the overall quality of the services you are paying for today? Which of these service dimensions seems to be the number one problem? How can service providers avoid that problem? 14

23 TOTAL QUALITY MANAGEMENT (TQM)
Total quality management: creating an organizational culture committed to the continuous improvement of skills, teamwork, processes, product and service quality, and customer satisfaction. 15

24 TOTAL QUALITY MANAGEMENT (TQM) (continued)
Richard Schonberger: TQM is "continuous, customer-centered, employee-driven improvement." 16

25 TOTAL QUALITY MANAGEMENT (TQM) (continued)
Principles of TQM 1. Do it right the first time. 2. Be customer-centered. Internal customer: anyone in your organization who cannot do a good job unless you do a good job. Customer-centered: means (1) anticipating the customer's needs, (2) listening to the customer, (3) learning how to satisfy the customer, and (4) responding appropriately to the customer. 17

26 PRINCIPLES OF TQM (continued)
3. Make continuous improvement a way of life. Kaizen: a Japanese word meaning continuous improvement 4. Build teamwork and empowerment. 18

27 TOTAL QUALITY MANAGEMENT (TQM) (continued)
For Discussion: Why is a "three-out-of-four" approach to TQM a recipe for failure today? 19

28 HOW TO IMPLEMENT CONTINUOUS IMPROVEMENT
Improved and more consistent product and service quality. Faster cycle times (e.g., product development, order processing, payroll processing). Greater flexibility (e.g., faster response to changing customer demands and new technology). Lower costs and less waste (e.g., eliminating needless steps, scrap, rework, and non-value-adding activities). 20

29 HOW TO IMPLEMENT CONTINUOUS IMPROVEMENT (continued)
For Discussion: How can you integrate the philosophy of "continuous improvement" into all aspects of your life? 21

30 TQM TOOLS Figure 17.4 Basic TQM Process Improvement Tools 1. Flow chart: graphic display of a sequence of activities and decisions. 2. Cause-and-effect analysis Fishbone diagram: a tool for visualizing cause-and-effect relationships. 3. Pareto analysis: bar chart indicating which problem needs the most attention (80-20 principle). 23

31 TQM TOOLS (continued) 4. Control chart: visual aid showing acceptable and unacceptable variations from the norm for repetitive operations. 5. Histogram: bar chart indicating deviations from a standard bell-shaped curve. 6. Scatter diagram: diagram that plots relationships between two variables. 7. Run chart: a trend chart for tracking a variable over time. 24

32 DEMING MANAGEMENT Deming management: application of W. Edwards Deming's ideas for more responsive, more democratic, and less wasteful organizations. 25

33 DEMING MANAGEMENT (continued)
Principles of Deming Management Quality improvement drives the entire economy The customer always comes first. Don't blame the person, fix the system. Plan-do-check-act (Figure 17.6) 26

34 DEMING MANAGEMENT (continued)
For Discussion: 1. Why is product/service quality a general quality of life issue today? 2. As an employee, how many times have you been blamed when the system actually prevented you from doing a good job? Explain the circumstances and what management should have done differently. 27

35 DEMING'S FOURTEEN POINTS
1. Constant purpose. 2. New philosophy. 3. Give up on quality by inspection. 4. Avoid the constant search for lowest-cost suppliers. 5. Seek continuous improvement. 28

36 DEMING'S FOURTEEN POINTS (continued)
6. Train everyone. 7. Provide real leadership. 8. Drive fear out of the workplace. 9. Promote teamwork. 10. Avoid slogans and targets. 29

37 DEMING'S FOURTEEN POINTS (continued)
11. Get rid of numerical quotas. 12. Remove barriers that stifle pride in workmanship. 13. Education and self-improvement are key. 14. "The transformation is everyone's job." 30

38 DEMING'S FOURTEEN POINTS (continued)
For Discussion: Generally speaking, how well are today's organizations doing relative to Deming's fourteen points? What needs to be done? 31


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