Quality & Performance
Excellence, 8th Edition
Chapter 7
Designing Organizations
for Performance
Excellence
S
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
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
Functional Structure
4
Problems With the Functional
Structure
S Separates employees from customers
S Inhibits process improvement
S Functional organizations often have a
separate function for quality
S No one has control over the entire process
5
Redesigning Organizations for
Performance Excellence
Focus on processes Create a team-based
organization
Make quality everyone’s
job Reduce hierarchy
Put external customers Use leadership teams
first
Develop an agile
Recognize internal organization
customers
Redesign work systems
6
Types of Processes
S Value-creation processes – those most
important to “running the business”
S Design processes – activities that develop
functional product specifications
S Production/delivery processes – those that
create or deliver products
S Support processes – those most important to an
organization’s value creation processes,
employees, and daily operations
7
Process Focus: Gold Star Chili
8
Make Quality Everyone’s Job
S Recognize that all jobs involve “managing
quality”
S Eliminate the quality department
S Example: Texas Nameplate Company
9
Put External Customers First
10
Recognize Internal Customers
S “Chains of customers” concept
S Process mapping to identify internal
customer-supplier relationships
S Create links between internal customers
and external suppliers
11
Create a Team-Based
Organization
S Structure the quality
organization around
functional or cross-
functional teams
12
Reduce Hierarchy
S Eliminate layers of middle management
S Empower frontline workers
S Benefits include improved
communication
S Risks include impact on morale and loss
of valuable experience
13
Use Leadership Teams
S Four elements:
leadership,
planning,
implementation,
and review
14
Develop an Agile
Organization
S Faster reaction to competitive challenges
and changing customer demands
S Simplification of work processes and rapid
changeovers
15
Redesign Work Systems
High Performance Culture
Job Flexibility Compensation
descriptions and
Innovation
recognition
Health and Knowledge and
safety skill sharing
Organizational Empowerment
Suggestion alignment
systems Customer focus
Employee
Training and Rapid response
Involvement
Education
Teamwork and Cooperation
16
High Performance Culture
S Five Conditions of Collaboration
S Respect
S Aligned values
S Shared purpose
S Communication
S Trust
17
Work Design Approaches
S Job enlargement – expand jobs to include several
tasks rather than one single, low-level task
S Job rotation – have individual workers learn
several tasks by rotating from one to another
S Job enrichment – “vertical job loading” in which
workers are given more authority, responsibility,
and autonomy rather than simply more or
different work to do.
18
Organizational Design for
Quality in Action
S Boeing Airlift and Tanker Programs
S VA Hospitals
S Solar Turbines, Inc.
S Octicon
S The San Diego Zoo
19
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
20
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
21
Homework
S Questions, pp 318-319
S 2, 12
S Case Study, p 321
S Patterson Auto Sales and Service, Revisited
22