Download - 01 Organizational Effectiveness

Summers: Quality Management, 2nd. ed. © 2009 Pearson Education, Upper Saddle River, NJ 07458.All rights reserved

Quality Management:

Creating and Sustaining Organizational Effectiveness

Chapter 1


Figure 1-1 Achieving Organizational Success


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

– 1950-1980’s- Wake-up call for U.S. manufacturing– 1980’s-1990’s -

• Total Quality Management – including ISO • 1987 Malcolm Baldrige National Quality Award created

– 1990’s to today• Six Sigma and its variations


Organizational EffectivenessWhy do we care?

• Historic– Short term/Quick Fix focus– Fire fighting– We’ve 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


Organizational Effectiveness

• Efficiency focuses on activities

• Effectiveness focuses on results



• 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, it’s not easy!



• 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?



• 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.



• 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”


Umbrella coverage

Customer 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


Figure 1-2 Organizational Effectiveness


Figure 1-3 Factors Affecting Organizational

Success

Strategic FactorsMarketProduct

TechnologyCustomersSuppliers

VisionValue Creation Strategy

Organizational FactorsStrategic DeploymentEffective Leadership

PoliciesProceduresProcesses

Continuous Improvement CultureProblem-solving

CommitmentCulture

Measures of PerformanceTrust, Honesty, & Ethical BehaviorPeople Factors

Employee InvolvementEducationTraining

Internal Supplier-Customer RelationsMotivationTeamwork

CommunicationSafety

Environmental FactorsSocial

EconomicCompetitiveTechnology



• 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?



• 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 management’s 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?



• 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



• 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


Figure 1-4 The Journey to



Figure 1-5 Benefits of Creating and Maintaining

an Effective Organization Improved:

• 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

Reduced:

• customer complaints

• warranty claims

• cost

• waste

• rework

• employee turn-over

Greater:• market share• adaptability

Increased:

• employee involvement

• employee satisfaction

• ability to attract new customers

Download - 01 Organizational Effectiveness

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