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Chapter 5Chapter 5Chapter 5Chapter 5

Designing Organizations Designing Organizations for Performance for Performance ExcellenceExcellence

Factors Affecting Work Factors Affecting Work Organization Organization

Company and organizational guidelinesCompany and organizational guidelines Management styleManagement style Customer influencesCustomer influences Company sizeCompany size Diversity and complexity of product lineDiversity and complexity of product line Stability of the product lineStability of the product line Financial stabilityFinancial stability Availability of personnelAvailability of personnel

Functional StructureFunctional Structure

Problems With the Problems With the Functional StructureFunctional Structure

Separates employees from Separates employees from customerscustomers

Inhibits process improvementInhibits process improvement Functional organizations often Functional organizations often

have a separate function for have a separate function for qualityquality

Redesigning Redesigning Organizations for Organizations for Performance ExcellencePerformance Excellence Focus on processesFocus on processes Make quality everyone’s jobMake quality everyone’s job Recognize internal customersRecognize internal customers Create a team-based organizationCreate a team-based organization Reduce hierarchyReduce hierarchy Use steering committeesUse steering committees Develop an agile organizationDevelop an agile organization Redesign work systemsRedesign work systems

Types of ProcessesTypes of Processes

Value-creation processesValue-creation processes – those – those most important to “running the most important to “running the business”business”– Design processesDesign processes – activities that – activities that

develop functional product specificationsdevelop functional product specifications– Production/delivery processesProduction/delivery processes – those – those

that create or deliver productsthat create or deliver products Support processesSupport processes – those most – those most

important to an organization’s value important to an organization’s value creation processes, employees, and creation processes, employees, and daily operationsdaily operations

Example of Process Example of Process Focus: Gold Star ChiliFocus: Gold Star Chili

Make Quality Everyone’s Make Quality Everyone’s JobJob

Recognize that all jobs involve Recognize that all jobs involve “managing quality”“managing quality”

Eliminate the quality department Eliminate the quality department – Example: Texas Nameplate Example: Texas Nameplate

CompanyCompany

Recognize Internal Recognize Internal CustomersCustomers

““Chains of customers” conceptChains of customers” concept Process mapping to identify Process mapping to identify

internal customer-supplier internal customer-supplier relationshipsrelationships

Create links between internal Create links between internal customers and external supplierscustomers and external suppliers

Create a Team-Based Create a Team-Based OrganizationOrganization

Six Sigma Project TeamsSix Sigma Project Teams

ChampionsChampions – senior managers who – senior managers who promote Six Sigmapromote Six Sigma

Master Black BeltsMaster Black Belts – highly trained experts – highly trained experts responsible for strategy, training, responsible for strategy, training, mentoring, deployment, and results.mentoring, deployment, and results.

Black BeltsBlack Belts – Experts who perform technical – Experts who perform technical analyses analyses

Green BeltsGreen Belts – functional employees trained – functional employees trained in introductory Six Sigma toolsin introductory Six Sigma tools

Team MembersTeam Members – Employees who support – Employees who support specific projectsspecific projects

Reduce HierarchyReduce Hierarchy

Eliminate layers of middle Eliminate layers of middle managementmanagement

Empower frontline workersEmpower frontline workers Benefits include improved Benefits include improved

communicationcommunication Risks include impact on morale Risks include impact on morale

and loss of valuable experienceand loss of valuable experience

Steering CommitteesSteering Committees

Develop Agile Develop Agile OrganizationsOrganizations

Faster reaction to competitive Faster reaction to competitive challenges and changing challenges and changing customer demandscustomer demands

Simplification of work processes Simplification of work processes and rapid changeoversand rapid changeovers

Redesign Work Systems Redesign Work Systems for High Performancefor High Performance

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

Enhancing Work DesignEnhancing Work Design

Job enlargementJob enlargement – expanding – expanding workers’ jobsworkers’ jobs

Job rotationJob rotation – having workers – having workers learn several tasks and rotate learn several tasks and rotate among them among them

Job enrichmentJob enrichment – granting more – granting more authority, responsibility, and authority, responsibility, and autonomyautonomy

Case StudiesCase Studies

Boeing Airlift and Tanker Boeing Airlift and Tanker ProgramsPrograms

VA HospitalsVA Hospitals Solar Turbines, Inc.Solar Turbines, Inc. General Electric BayamonGeneral Electric Bayamon The San Diego ZooThe San Diego Zoo

Comparisons to Comparisons to Organizational TheoryOrganizational Theory

Structural Contingency TheoryStructural Contingency Theory– Mechanistic vs. organicMechanistic vs. organic– Choice depends on organizational Choice depends on organizational

environment and technologyenvironment and technology Institutional TheoryInstitutional Theory

– Structure legitimizes purpose, even Structure legitimizes purpose, even if they may not provide valueif they may not provide value

– ISO 9000 and Six SigmaISO 9000 and Six Sigma