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Quality Management: Creating and Sustaining Organizational Effectiveness Chapter 1

Summers: Quality Management, 2nd. ed.

2009 Pearson Education, Upper Saddle River, NJ 07458. All rights reserved

Figure 1-1 Achieving Organizational Success

Summers: Quality Management, 2nd. ed.

2009 Pearson Education, Upper Saddle River, NJ 07458. All rights reserved

Organizational Effectiveness Brief History of the Quality Management Skilled Craftsmen/Artisans supervised by masters of the trade Small volume: Parts fitted by eye

1798- Eli Whitney Designed and manufactured guns with interchangeable parts (quality control)

1911 - Frederick Taylor Principles of scientific management defines role of inspector

1914 - Henry Ford Creates the assembly line on a big scale (Quality = Inspection)

1924- Juran, Dodge, Romig, Edwards Western Electric IE department:

1931- Shewhart publishes control chart concepts

1950-1980s- Wake-up call for U.S. manufacturing 1980s-1990s Total Quality Management including ISO 1987 Malcolm Baldrige National Quality Award created

1990s to today Six Sigma and its variations

Summers: Quality Management, 2nd. ed.

2009 Pearson Education, Upper Saddle River, NJ 07458. All rights reserved

Organizational Effectiveness Why do we care? Historic Short term/Quick Fix focus Fire fighting Weve always done it this way Random improvement efforts Inspect for errors Reactive Opinions not facts Motivated by profit Rely on programs Localized competition Reasonable cost Large budgets Resources available Compete Individual efforts Strong management

Now Long term focus Structured problem solving Innovation and change Structured improvement Error identification and prevention Proactive Facts not opinions Motivated by customers New way of life Intense global competition Lowest possible cost Small budgets Limited resources Cooperate Team efforts Strong leadership

Summers: Quality Management, 2nd. ed.

2009 Pearson Education, Upper Saddle River, NJ 07458. All rights reserved

Organizational Effectiveness

Efficiency focuses on activities Effectiveness focuses on results

Summers: Quality Management, 2nd. ed.

2009 Pearson Education, Upper Saddle River, NJ 07458. All rights reserved

Organizational Effectiveness What is an effective organization? An effective organization, one that excels, is one that continually strives to identify and focus on factors critical to its customers and improves its processes in order to provide the highest-quality product or service possible.

Every company wants to do this, its not easy!Summers: Quality Management, 2nd. ed. 2009 Pearson Education, Upper Saddle River, NJ 07458. All rights reserved

Organizational Effectiveness What is an effective organization? Organizations try different strategies in order to achieve their goals. Disjointed efforts Flavor of the month Most efforts are successful in the short run

How can an organization sustain effective performance?

Summers: Quality Management, 2nd. ed.

2009 Pearson Education, Upper Saddle River, NJ 07458. All rights reserved

Organizational Effectiveness What is an effective organization? How can an organization sustain effective performance? Generating success requires an organization-wide approach that improves and enhances the whole process of providing a product or service, enabling the organization to exceed customer expectations, each time and every time.

Summers: Quality Management, 2nd. ed.

2009 Pearson Education, Upper Saddle River, NJ 07458. All rights reserved

Organizational Effectiveness What is an effective organization? How can an organization sustain effective performance? People need a sense of how to pull a variety of knowledge and skills together to make improvements in a complex environment.

umbrella coverage

Summers: Quality Management, 2nd. ed.

2009 Pearson Education, Upper Saddle River, NJ 07458. All rights reserved

Umbrella coverageCustomer Focus Value Chain management Leadership Strategic Planning Quality Assurance Project Management Elimination of Waste Human Resource Management Quality Tools Six Sigma Lean Manufacturing Business Results Information and Knowledge Management Organizational Philosophy Value Engineering Teams Just-in-time Process Management Improvement

Summers: Quality Management, 2nd. ed.

2009 Pearson Education, Upper Saddle River, NJ 07458. All rights reserved

Figure 1-2 Organizational Effectiveness

Summers: Quality Management, 2nd. ed.

2009 Pearson Education, Upper Saddle River, NJ 07458. All rights reserved

Figure 1-3 Factors Affecting Organizational SuccessStrategic Factors Market Product Technology Customers Suppliers Vision Value Creation Strategy Organizational Factors Strategic Deployment Effective Leadership Policies Procedures Processes Continuous Improvement Culture Problem-solving Commitment Culture Measures of Performance Trust, Honesty, & Ethical Behavior

People Factors Employee Involvement Education Training Internal Supplier-Customer Relations Motivation Teamwork Communication SafetySummers: Quality Management, 2nd. ed.

Environmental Factors Social Economic Competitive Technology 2009 Pearson Education, Upper Saddle River, NJ 07458. All rights reserved

Organizational Effectiveness How is an effective organization created? What is the mission of the organization? What is the business the organization is really in? What are the primary products or services the organization provides to their customers? Who are their customers? What do their customers expect and need? How does the organization know what the customers needs and expectations are?

Summers: Quality Management, 2nd. ed.

2009 Pearson Education, Upper Saddle River, NJ 07458. All rights reserved

Organizational Effectiveness How is an effective organization created? How well does the organization meet the needs and expectations of their customers? How does the organization know how well it is doing? What is the proof? What are the indicators? Do managements strategies and actions support the business and support the organization in meeting the customers needs and expectations? Do the employees know how the work they do specifically benefits the ultimate, external, customer? What improvements have been made based on the answers to these questions? What is management doing to support improvement efforts?

Summers: Quality Management, 2nd. ed.

2009 Pearson Education, Upper Saddle River, NJ 07458. All rights reserved

Organizational Effectiveness What benefits can be gained from creating an effective organization? Improved profitability Increased customer retention Reduced customer complaints and warranty claims Reduced costs through less waste, rework Greater market share Increased employee involvement and satisfaction, lower turnover

Summers: Quality Management, 2nd. ed.

2009 Pearson Education, Upper Saddle River, NJ 07458. All rights reserved

Organizational Effectiveness What benefits can be gained from creating an effective organization? Increased ability to attract new customers Improved competitiveness Improved customer satisfaction Improved management-employee relations Improved focus on key goals Improved communication Improved teamwork

Summers: Quality Management, 2nd. ed.

2009 Pearson Education, Upper Saddle River, NJ 07458. All rights reserved

Figure 1-4 The Journey to Organizational Effectiveness

Summers: Quality Management, 2nd. ed.

2009 Pearson Education, Upper Saddle River, NJ 07458. All rights reserved

Figure 1-5 Benefits of Creating and Maintaining an Effective OrganizationImproved: profitability competitiveness customer satisfaction management-employee relations focus on key goals communications teamwork employee morale company image revenue service to customers (internal & external) effectiveness planning work environment decision making Greater: market share adaptabilitySummers: Quality Management, 2nd. ed.

Reduced: customer complaints warranty claims cost waste rework employee turn-over

Increased: employee involvement employee satisfaction ability to attract new customers

2009 Pearson Education, Upper Saddle River, NJ 07458. All rights reserved