© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 7 Designing Organizations for Performance Excellence 1 Dr. Mahnmood AsadMGT433

© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Outline Discuss issues related to choosing organizational structures; Describe the functional structure, Show how many aspects of the functional structure stand in the way of quality and how to change it Provide several examples of how firms are making substantial changes in their organizations Compare organizational design from a TQ point of view to more conventional perspectives 2 Dr. Mahnmood AsadMGT433

© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Factors Affecting Work Organization Company and organizational guidelines Management style Customer influences Company size Diversity and complexity of product line Stability of the product line Financial stability Availability of personnel 3 Dr. Mahnmood AsadMGT433

© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Functional Structure 4 Dr. Mahnmood AsadMGT433

© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Problems With the Functional Structure Separates employees from customers Inhibits process improvement Functional organizations often have a separate function for quality 5 Dr. Mahnmood AsadMGT433

© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Redesigning Organizations for Performance Excellence Focus on processes Make quality everyone’s job Recognize internal customers Create a team-based organization Reduce hierarchy Use leadership teams Develop an agile organization Redesign work systems 6 Dr. Mahnmood AsadMGT433

© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Types of Processes Value-creation processes – those most important to “running the business” – Design processes – activities that develop functional product specifications – Production/delivery processes – those that create or deliver products Support processes – those most important to an organization’s value creation processes, employees, and daily operations 7 Dr. Mahnmood AsadMGT433

© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Process Focus: Gold Star Chili 8 Dr. Mahnmood AsadMGT433

© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Make Quality Everyone’s Job Recognize that all jobs involve “managing quality” Eliminate the quality department – Example: Texas Nameplate Company 9 Dr. Mahnmood AsadMGT433

© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Put External Customers First 10 Dr. Mahnmood AsadMGT433

© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Recognize Internal Customers “Chains of customers” concept Process mapping to identify internal customer-supplier relationships Create links between internal customers and external suppliers 11 Dr. Mahnmood AsadMGT433

© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Create a Team-Based Organization Structure the quality organization around functional or cross-functional teams 12 Dr. Mahnmood AsadMGT433

© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Reduce Hierarchy Eliminate layers of middle management Empower frontline workers Benefits include improved communication Risks include impact on morale and loss of valuable experience 13 Dr. Mahnmood AsadMGT433

© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Use Leadership Teams Four elements: leadership, planning, implementation, and review 14 Dr. Mahnmood AsadMGT433

© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Develop an Agile Organization Faster reaction to competitive challenges and changing customer demands Simplification of work processes and rapid changeovers 15 Dr. Mahnmood AsadMGT433

© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Redesign Work Systems 16 Job descriptions Employee Involvement Suggestion systems Empowerment Training and Education Teamwork and Cooperation Compensation and recognition Health and safety Flexibility Innovation Knowledge and skill sharing Organizational alignment Customer focus Rapid response Dr. Mahnmood AsadMGT433

© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Work Design Approaches Job enlargement – expand jobs to include several tasks rather than one single, low-level task Job rotation – have individual workers learn several tasks by rotating from one to another Job enrichment - “vertical job loading” in which workers are given more authority, responsibility, and autonomy rather than simply more or different work to do. 17 Dr. Mahnmood AsadMGT433

© 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Comparisons to Organizational Theory Structural Contingency Theory – Mechanistic vs. organic – Choice depends on organizational environment and technology Institutional Theory – Structure legitimizes purpose, even if they may not provide value – ISO 9000 and Six Sigma 18 Dr. Mahnmood AsadMGT433