Ch. 9: Organizational Agility: The Responsive Organization Organic structure An organizational form that emphasizes flexibility Mechanistic organization A form of organization that seeks to maximize internal efficiency.

Organic Structure Jobholders have broader responsibilities that change as need arises. Communication occurs through advice & information rather than orders & instructions. Decision making and influence are decentralized and informal. Expertise highly valued.

Organic Structure (cont.) Jobholders rely more on judgment than rules Obedience to authority less important than commitment to the org. goals Employees more interdependent, relate more informally & personally

Formal Organization Chart Figure 9.1(a)

Advice Network = Knowledge Flow Figure 9.1(b)

Organizing around Core Competencies Identify existing core competencies Acquire/build core competencies important for future Invest in competencies so company stays competitive Extend competencies to find new applications and opportunities for future

Strategic Alliances A formal relationship created among independent organizations with the purpose of joint pursuit of mutual goals.

Best Alliances Table 9.1

The Learning Organization An organization skilled at creating, acquiring, transferring knowledge, and at modifying its behavior to reflect new knowledge/insights.

Becoming a Learning Organization Disciplined thinking Attention to details Decisions based on data and evidence rather than guesswork and assumptions Search for new knowledge and ways to apply it Review successes and failures to find lessons Benchmark--identify & adopt best practices Share ideas throughout organization

The High-Involvement Organization A type of organization in which top management ensures that there is consensus about the direction in which the business is heading

Organizational Size and Agility Large organizations tend to be less organic and more bureaucratic Jobs tend to become more specialized in large organizations With size comes greater complexity and a need for increased control Organizations can still find ways to remain agile despite these challenges

The Case for Big Larger size helps create economies of scale Larger size helps develop economies of scope Economies in which materials and processes employed in one product can be used to make other related products

The Case for Small Large organizations can have difficulty managing relationships with customers and among its own units Large organizations are more difficult to coordinate and control Smaller organizations can: Move fast Provide quality goods and services to targeted market niches Inspire greater involvement from their people Being small can avoid diseconomies of scale

Being Big and Small Downsizing Rightsizing The planned elimination of positions or jobs Rightsizing A successful effort to achieve an appropriate size at which the company performs most effectively

Downsizing Survivor’s syndrome Loss of productivity and morale in employees who remain after a downsizing.

Customers and the Responsive Organization The point of structuring a responsive, agile organization lies in enabling it to meet and exceed the expectations of its customers Managers must stay focused in three key ingredients - the strategic triangle The company itself Competition The customer

The Strategy Triangle Figure 9.2

Customer Relationship Management CRM A multifaceted process focusing on creating two-way exchanges with customers to foster intimate knowledge of their needs, wants, and buying patterns.

Customer Relationship Management Value chain The sequence of activities that flow from raw materials to the delivery of a good or service, with additional value created at each step.

Generic Value Chain Figure 9.3

Total Quality Management Total quality management (TQM) An integrative approach to management that supports the attainment of customer satisfaction through a wide variety of tools and techniques that result in high-quality goods and services.

ISO 9001 A series of quality standards Developed by committee under International Organization for Standardization To improve total quality in all businesses For the benefit of producers and consumers.

Reengineering Reengineering Revolutionizing key organizational systems and processes to answer the question: “If you were the customer, how would you like us to operate?” Processes are designed from scratch as if the organization was just starting out

Types of Technology Configurations Small batch Technologies that produce goods and services in low volume. Large batch Technologies that produce goods and services in high volume. Continuous process A process that is highly automated and has a continuous production flow.

Organizing for Flexible Manufacturing Mass customization The production of varied, individually customized products at the low cost of standardized, mass-produced products.

Key Features in Mass Customization Table 9.2

Computer-Integrated Manufacturing CIM Use of computer-aided design and computer-aided manufacturing to sequence and optimize a number of production processes.

Flexible Factories Manufacturing plants With short production runs, Organized around products, Use decentralized scheduling.

Lean Manufacturing An operation that strives to achieve highest possible productivity and total quality, cost effectively, By eliminating unnecessary steps in production process and continually striving for improvement.

Organizing for Speed Time-based competition (TBC) Strategies aimed at reducing total time needed to deliver a good or service.

Time-Based Competition Logistics The movement of the right goods in the right amount to the right place at the right time

Time-Based Competition Just-in-time (JIT) A system that calls for subassemblies and components to be manufactured in very small lots and delivered to the next stage of the production process just as they are needed.

Just-in-time (JIT) Elimination of waste Perfect quality. Reduced cycle times. Employee involvement Value-added manufacturing Discovery of problems and prevention of recurrence

Time-Based Competition Simultaneous engineering Design approach All relevant functions cooperate jointly and continually in max effort Aimed at producing high-quality products that meet customers’ needs.