1. Designing Organizations for Performance Excellence
Quality & Performance Excellence, 8th Edition
Chapter 7
Designing Organizations for Performance Excellence

2. 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

3. 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

4. Functional Structure

5. Problems With the Functional Structure
Separates employees from customers
Inhibits process improvement
Functional organizations often have a separate function for quality
No one has control over the entire process

6. Redesigning Organizations for Performance Excellence
Focus on processes
Create a team-based organization
Make quality everyone’s job
Reduce hierarchy
Put external customers first
Use leadership teams
Develop an agile organization
Recognize internal customers
Redesign work systems

7. 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

8. Process Focus: Gold Star Chili

9. Make Quality Everyone’s Job
Recognize that all jobs involve “managing quality”
Eliminate the quality department
Example: Texas Nameplate Company

10. Put External Customers First

11. Recognize Internal Customers
“Chains of customers” concept
Process mapping to identify internal customer-supplier relationships
Create links between internal customers and external suppliers

12. Create a Team-Based Organization
Structure the quality organization around functional or cross- functional teams

13. Reduce Hierarchy Eliminate layers of middle management
Empower frontline workers
Benefits include improved communication
Risks include impact on morale and loss of valuable experience

14. Use Leadership Teams
Four elements: leadership, planning, implementation, and review

15. Develop an Agile Organization
Faster reaction to competitive challenges and changing customer demands
Simplification of work processes and rapid changeovers

16. Knowledge and skill sharing Organizational alignment
Redesign Work Systems
High Performance Culture
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

17. High Performance Culture
Five Conditions of Collaboration
Respect
Aligned values
Shared purpose
Communication
Trust

18. 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.

19. Organizational Design for Quality in Action
Boeing Airlift and Tanker Programs
VA Hospitals
Solar Turbines, Inc.
Octicon
The San Diego Zoo

20. 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

21. 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

22. Homework Questions, pp 318-319 Case Study, p 321 2, 12
Patterson Auto Sales and Service, Revisited