Designing Organization

for Quality
Traditional Organization
 Functional Structure
Organization is divided into functions and communication
occurs vertically up or down the chain of command, rather than
horizontally across functions.
Functional structures provide organizations with a clear chain
of command and allow people to specialize in the aspect of the
work for which they are best suited.
They also make it easy to evaluate people based on a narrow
but clear set of responsibilities.
Contd…
Despite its popularity, the functional structure is designed
primarily for the administrative convenience of the
organization, rather than for providing high-quality
service to customers.
From a Quality management point of view, the functional
structure has several inadequacies.
 Contd…
The Functional Structure Separates Employees from
Customers:
 Few employees only have direct contact with customers or even
a clear idea of how their work combines with the work of others
to satisfy customers.
 Insulate employees from learning about customer expectations
and their degree of satisfaction with the service or product the
firm provides.
 Employees have a limited understanding of how their
organizational system works that often results in demotivated
workers and poor quality work.
Contd…
“the boss”is the customer the employee must satisfy.
Managers in functional organizations are usually
rewarded for satisfying functional goals, such as meeting
design deadlines and limiting manufacturing costs,
rather than for providing value to customers.
Because functional organizations focus on vertical
reporting relationships,many observers refer to
departments in these organizations as “chimneys” or
silos.
Contd…
The Functional Structure Inhibits Process
Improvement
No organizational unit has control over a whole process,
although most processes involve a large number of
functions.
This is because the breakup of the organization into
functions is usually unrelated to the processes used to
deliver a product to the customer.
This structure is likely to create complex, wasteful
processes, as people do things in one area that must be
redone or undone in another.
Contd…
Functional organizations often have a separate function
for quality called Quality Control or Quality Assurance
The QC department is generally responsible for collecting
and maintaining quality statistics, which may not seem as
valid to the departments actually doing the work.
This arrangement obviously stands in the way of continuous
process improvement.
Organizations pursuing Total Quality often retain their quality
assurance departments, but these units act more as coaches or
facilitators to employees, rather than as the group with
primary responsibility for quality.
 Designing Organization for Quality
Focus on Processes
Recognize Internal Customers
Create a Team-based Organization
Reduce Hierarchy
Use Steering Committees
 Focus on Processes
Common business processes include acquiring customer
and market knowledge, fulfilling customer orders,
purchasing, developing new products or services, strategic
planning, production or service delivery, distribution,
research and development, information management,
performance measurement, and training, etc.
 Processes that drive the creation of products and services,
are critical to customer satisfaction, and have a large impact
on the strategic goals of an organization are generally
considered core processes of a business.
In general, core processes are driven by external customer
needs while support processes are driven by internal
customer needs.
Contd…
Support processes are critical to the operation of a business
but generally do not add direct value to the product or
service.
Process management involves designing processes to develop
and deliver products and services that meet the needs of
customers, providing daily control so they perform as required,
and continually improving the processes.
A process perspective links all parts of an organization and
increases employee understanding of the entire system, rather
than focusing on only a small part.
it helps managers to recognize that problems arise from
processes, not people.
Process Vs Functional
 Recognize Internal Customer
To promote quality and team work is to recognize the
existence of “internal customers.”
 An internal customer is another person or group within
the organization who depends on one’s work to get their
work done.
For example, machine operators in a manufacturing plant
are customers of maintenance; if maintenance does not do
its job well, the machines will not produce quality
products (or perhaps not any products at all).
 Create a Team-Based Organization
Structure the quality organization
around functional or cross-
functional teams, each of which
has the responsibility to carry out
and improve one of the
organization’s core processes.
By bringing together everyone
associated with a process,
practices that are
wasteful or compromise quality
become much easier to identify
and eliminate.
 Reduce Hierarchy
Flat type structural change often results from a focus on internal
customers and the creation of process teams is a reduction in the
number of hierarchical layers in the organization.
Several levels of middle management are often eliminated and it
is also facilitated by advances in information systems that have
done by middle managers.
When organizations eliminate non-value-added activities and
empower frontline workers to improve processes, managers
have less supervision and coordination to do.
“flatter” organizations is improved communication between top
managers and frontline employees.
 Use Steering Committees
Creation of a high level planning group responsible for
guiding the organization’s quality efforts.
Such steering committees, quality councils, or quality
improvement teams are a key part of many firms’ quality
improvement efforts.
steering committees act as a focal point for quality in the
organization. Such groups provide a means of
demonstrating and increasing the organization’s
commitment to quality, as well as a mechanism for
coordinating the efforts of various organizational units.
Thank You