Chapter 5
Designing Organizations for
Performance Excellence
1
Factors Affecting Work
Organization
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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
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Separates employees from customers
Inhibits process improvement
Functional organizations often have a
separate function for quality
Redesigning Organizations
for Performance Excellence
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Focus on processes
Make quality everyone’s job
Recognize internal customers
Create a team-based organization
Reduce hierarchy
Use steering committees
Develop an agile organization
Redesign work systems
Types of Processes
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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
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Support processes – those most
important to an organization’s value
creation processes, employees, and
daily operations
Example of Process Focus:
Gold Star Chili
Make Quality Everyone’s Job
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Recognize that all jobs involve
“managing quality”
Eliminate the quality department
– Example: Texas Nameplate Company
Recognize Internal
Customers
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“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
Six Sigma Project Teams
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Champions – senior managers who promote
Six Sigma
Master Black Belts – highly trained experts
responsible for strategy, training,
mentoring, deployment, and results.
Black Belts – Experts who perform technical
analyses
Green Belts – functional employees trained
in introductory Six Sigma tools
Team Members – Employees who support
specific projects
Reduce Hierarchy
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Eliminate layers of middle
management
Empower frontline workers
Benefits include improved
communication
Risks include impact on morale and
loss of valuable experience
Steering Committees
Develop Agile Organizations
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Faster reaction to competitive
challenges and changing customer
demands
Simplification of work processes and
rapid changeovers
Redesign Work Systems for
High Performance
Job
descriptions
Health and
safety
Suggestion
systems
Training and
Education
Flexibility
Innovation
Compensation
and
recognition
Knowledge and skill
sharing
Empowerment
Organizational
alignment
Customer focus
Rapid response
Employee
Involvement
Teamwork and Cooperation
Enhancing Work Design
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Job enlargement – expanding workers’
jobs
Job rotation – having workers learn
several tasks and rotate among them
Job enrichment – granting more
authority, responsibility, and
autonomy
Case Studies
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Boeing Airlift and Tanker Programs
VA Hospitals
Solar Turbines, Inc.
General Electric Bayamon
The San Diego Zoo
Comparisons to
Organizational Theory
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Structural Contingency Theory
– Mechanistic vs. organic
– Choice depends on organizational
environment and technology
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Institutional Theory
– Structure legitimizes purpose, even if
they may not provide value
– ISO 9000 and Six Sigma