Chapter 7

Designing Organizations for Performance Excellence

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

Functional Structure

Problems With the Functional Structure

Separates employees from customers
Inhibits process improvement
Functional organizations often have a separate function for quality

Redesigning Organizations for Performance Excellence

Focus on processes
Make quality everyone’s job
Recognize internal customers
Create a team-based organization
Reduce hierarchy
Use leadership teams
Develop an agile organization
Redesign work systems
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

Make Quality Everyone’s Job

 Recognize that all jobs involve “managing quality”
 Eliminate the quality department
 Example: Texas Nameplate Company

Put External Customers First

Recognize Internal Customers

 Chains of customers” concept
 Process mapping to identify internal customer-supplier relationships
 Create links between internal customers and external suppliers
Create a Team-Based Organization

 Structure the quality organization around functional or cross-functional teams

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

Use Leadership Teams

 Four elements: leadership,
 planning,
 implementation, and
 review

Develop an Agile Organization

 Faster reaction to competitive challenges and changing customer demands
 Simplification of work processes and rapid changeovers

High Performance Culture

 Respect
 Aligned values
 Shared purpose
 Communication
 Trust
 Redesign Work Systems

Job descriptions Compensation and

Flexibility recognition

Innovation
Health and safety Knowledge and
skill sharing
Empowerment
Organizational
Suggestion systems
alignment
Customer focus
Employee Involvement
Training and Rapid response
Education

Teamwork and Cooperation

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.

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