bands chap 09
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9 - 1
Chapter
9 The ResponsiveOrganization
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9 - 3
Elements Of Organic Structure
Expertise is
highly valued
Greater reliance
on judgement
than rules
Broad,
changing job
responsibilities
Organic
Structure
Communication
is advisory
Employees relate
more informally
and personally
Commitment to
organizational
goals
Decentralized
and informal
decision making
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9 - 5
Church
Swinney
Lee
Fiola
Wilson
Carlson
Hoberman
Harris
Calder (SVP)
Fleming
Martin
Benson
Blair
Ruiz
OHara (SVP)
Stewart
Leers (Ceo)
Atkins
Stern (SVP)
Huttle
Kibler
BakerJules Zanado
Daven
Thomas
Long (SVP)
Muller
Advice Network Reveals Knowledge
Flow
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9 - 6
Organizing For Optimal Size
Large organizations
typically less organic and more bureaucratic
tend to have more specialized jobs and distinct groups of
specialists
add more levels to keep spans of control from becoming too
large
are more difficult to control
adopt bureaucratic controls such as rules, procedures, andpaperwork
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Organizing For Optimal Size (cont.)
The case for big
scale economies- lower costs per unit of production
lowered operating costs, easier access to capital, greater
purchasing power
economies of scope- materials and processes used with one
product can be used for other, related products
Disadvantages of big
diseconomies of scale- cost of being too big administrative difficulties may inhibit efficient performance
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9 - 8
Organizing For Optimal Size (cont.)
The case for small
smaller companies can:
move fast
provide quality goods and services to targeted market niches inspire greater involvement from their people
today, premium exists for flexibility and responsiveness
Being big and small
small is beautiful for unleashing energy and speed
large size offers market power
challenge is to be both big and small to capitalize on the
advantages of each
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9 - 9
Organizing For Optimal Size (cont.)
Downsizing the planned elimination of positions or jobs
common approaches include eliminating functions,
hierarchical levels, or units
rightsizing- a successful effort to achieve an appropriate
size at which the company performs most effectively
survivors syndrome - loss of productivity and morale in
employees who remain after a downsizing
struggle with heavier workloads
wonder who will be the next to go
try to figure out how to survive
become narrow-minded, self-absorbed, and risk averse
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9 - 10
Easing The Pain Of Downsizing
Positive
practices
Carefully choose
positions to be
eliminated
Communicate
constantly
Attend to those
who have lost
their jobs
Train people
how to cope
Emphasize a
positive future
Protect talented
people
O i i F E i l
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9 - 11Organizing For Environmental
Response
Organizing for customer responsiveness no other aspect of the environment has had a more profound
impact on organizing recently than the focus on customers
strategic tr iangle- managers must balance this triangle
Customers
CompetitorsCorporation
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9 - 12
Organizing for customer responsiveness (cont.) Customer Relationship Management(CRM)-multifaceted
process that creates two-way exchanges with customers in
order to learn their needs and buying patterns
traditional thinking - customers wanted high quality orlow
costs
world-class companies know that customers want it all
kaizen- attain and retain competitive advantage by
continuing to improve
customer- refers to the next processor wherever work goes
next
highlights interdependence among related functions
Organizing For Environmental
Response (cont.)
9 13O i i i l
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9 - 13Organizing For Environmental
Response (cont.)
Organizing for customer responsiveness (cont.)
Total Quali ty Management(TQM)- comprehensive approach
to improving quality and customer satisfaction
characterized by a strong orientation toward internal and external
customers
involves people across departments in improving all aspects of
the business
requires integrative mechanisms that facilitate group problem
solving, information sharing, and cooperation across businessfunctions
Baldrige award- given to U.S. companies that achieve quality
excellence
9 14W Ed d D i 14 P i
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9 - 14W. Edwards Demings 14 Points
Of Quality
Create constancy of purposeDont tolerate delays or mistakes
Cease dependencies on mass inspection
Dont award business on price tag alone
Constantly and forever improve the system of production or service
Institute training and retraining
Institute leadership
Drive out fear
Breakdown barriers among departments
Eliminate slogans, exhortations, and arbitrary targetsEliminate numerical quotas
Remove barriers to pride in workmanship
Educate your people who should be viewed as assets, not commodities
Provide a structure that enables quality
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9 - 15
The Baldrige Criteria
Human resource
development and
management
Management of
process quality
Leadership
Quality
excellence
Information
and analysis
Customer focus
and satisfaction
Quality and
operational
results
Strategic
quality planning
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9 - 16Organizing For Environmental
Response (cont.)
Organizing for customer responsiveness (cont.)
I SO 9000- a series of quality standards developed by a
committee working under the International Organization for
Standardization
intended to improve total quality in all businesses
companies that comply with standards entitled to certification
reengineering- revolutionizes key organizational systems and
processes
based on a vision for how the organization should run
completely overhauls the operation in revolutionary ways
9 17O i i F T h l i l
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9 - 17Organizing For Technological
Response
Technology systematic application of scientific knowledge to a new
product, process, or service
refers to the methods, processes, systems, and skills used to
transform resources (inputs) into products (outputs)
Types of technology configurations
small batch technologies- produce goods and services in
low volume
job shops
structure tends to be organic
few rules and formal procedures
decentralized decision making
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9 - 18Organizing For Technological
Response (cont.)
Types of technology configurations (cont.) large batch technologies- produce goods and services in
high volume (mass production)
structure tends to be more mechanistic
many more rules and formal procedures
centralized decision making with higher spans of control
more formal communication
continuous process technologies- highly automated
continuous production flow structure can be more organic
less monitoring and supervision required
more informal communication
9 - 19Organi ing For Technological
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9 - 19Organizing For Technological
Response (cont.)
Organizing for flexible manufacturingproduce both high-volume and high-variety products at the
same time
mass customization- the production of varied, individually
customized products at the low cost of standardized, mass-produced products
a dynamic network of relatively independent operating units
module- a specific process or task performed by a unit
some modules performed by outside suppliers or vendors
different modules joined to make a good or service
combination of modules dictated by unique customer requests
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9 20Organizing For Technological
Response (cont.)
Organizing for flexible manufacturing (cont.)
Computer-integrated manufactur ing(CIM)- use of
computer-aided design and computer-aided manufacturing to
sequence and optimize a number of production processes
host of computerized production efforts linked together
team members work on the network from remote sites
potentially affords greater control and predictability of production
processes, reduced waste, faster throughput times, and higher
quality
requires good strategy and qualified people
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9 21Organizing For Technological
Response (cont.)
Organizing for flexible manufacturing (cont.)
f lexible factories- differ from traditional factories
have much shorter production runs with different products
organized around products in work cells or teams
use local or decentralized scheduling
lean manufactur ing- operation that strives to achieve the
highest possible productivity and total quality, cost effectively,
by eliminating unnecessary steps in the production process and
continually strives for improvement
9 - 22Conditions For Effectiveness Of Lean
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9 22Conditions For Effectiveness Of Lean
Manufacturing
Effective
operation of
lean
manufacturing
Broad training
of people
Long-term
supplier
relationships
Work is
organized in
teams (cells)
Informal and
horizontal
communication
Concurrent
product
development
General-purpose
equipment
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Organizing For Technological
Response (cont.)
Organizing for speed: Time-based competition (TBC)
timeis emerging as a key competitive advantage that can
separate market leaders from also-rans
TBC- strategies aimed at reducing the total time it takes to
deliver a product or service
logistics- the movement of resources into the organization
(inbound) and products from the organization (outbound)
movement of the right goods in the right amount to the right place
at the right time
an extension of the organizations technology configuration
a great mass of parts, materials, and products moving via trucks,
trains, planes, and ships
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Organizing for speed: Time-based competition (cont.)
Just-In-Time(JIT)- 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
a company-wide philosophy oriented toward eliminating waste
throughout all operations and improving materials throughout
excess inventory is eliminated
costs are reduced
Organizing For Technological
Response (cont.)
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P d ti C t I l d d I JIT
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Production Concepts Included In JIT
JIT
Elimination
of waste
Value-added
manufacturing
Employee
involvement
Perfect
quality
Problem
discovery and
prevention
Reduced
cycle times
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Organizing For Technological
Response (cont.)
Organizing for speed: Time-based competition (cont.)
simul taneous engineer ing- a design approach in which all
relevant functions cooperate jointly and continually in
maximum effort aimed at producing high-quality products that
meet customers requests
departure from old development process in which tasks were
assigned to various functions in sequence
incorporates the issues and perspectives of all functions - and
customers and suppliers - from the beginning of the process
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O i i F St t i R
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Organizing For Strategic Response
Organizing around core competencies companies compete on the basis of their core strengths and
expertise
core competence- the capability - knowledge, expertise, skill -
that underlies a companys ability to be a leader
company viewed as a portfolio of competencies
company should strive for core competence leadership by:
identifying existing core competencies
acquiring or building core competencies that will be important in
the future
investing in competencies in order to remain world-class
extending competencies
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Organizing For Strategic Response
(cont.)
The network organization a collection of independent, mostly single-function firms
not one firm but a web of interrelationships among many firms
dynamic network(modular/virtualcorporation) - temporary
arrangement among partners that can be assembled and
reassembled to adapt to the environment
contracts stipulate expected results
poorly performing firms can be removed and replaced
offers flexibility, innovation, quick responses, and reduced costsand risks
managers become brokers
play several important boundary roles
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A Dynamic Network
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A Dynamic Network
DistributorsSuppliers
Brokers
ProducersDesigners
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Organizing For Strategic Response
(cont.)
Strategic alliances
a formal relationship created among independent organizations
with the purpose of joint pursuit of mutual goals
individual organizations:
share administrative authority
form social links
accept joint ownership
may lead to the creation of additional, unforeseen
opportunities
managers must foster and develop the human relationships in
the partnership
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How Is Can Become Wes
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How I s Can Become We s
Characteristics
of the best
alliancesIntegration Interdependence
Information Investment
Institutionalization Importance
IntegrityIndividual
excellence
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Organizing For Strategic Response
(cont.)
Strategic Alliances
Advantages
Quick market entry
Access to materials and technology
Disadvantages
Shared ownership limits control and profits
May lose control of proprietary technology
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Organizing For Strategic Response
(cont.)
Strategic Alliances
Mutually strengthens partners
Exploit economies of scale
Fills gaps in technology and expertise
Share distribution facilities
Must overcome issues of
Language, cultural barriers and trust
Differences on how to proceed
Effective and efficient decision making
Sharing competitively sensitive information
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Organizing For Strategic Response
(cont.)
Strategic Alliances
Pick good partners
Be sensitive to cultural differences
Alliance must benefit both sides
Ensure parties honor their commitments
Initiate structure for fast and effective decision making
Keep the alliance flexible
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g g g p
(cont.)
The learning organization an organization skilled at creating, acquiring, and
transferring knowledge
modifies its behavior to reflect new knowledge and insights
characteristics of learning organizations
people engage in disciplined thinking and attention to detail
constant search for new knowledge in order to expand horizons
careful review of successes and failures
benchmark and implement the best business practices
share ideas throughout the organization
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High-involvement organization
top management ensures that there is consensus about the
direction of the business
seeks input from lower-levels of the company
techniques used to foster participation in decision making
continual feedback to participants
flat, decentralized structure built around customer, product, or
service
g g g p
(cont.)