Designing Organization for Quality

February 2013

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 commandand 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 clearset of responsibilities.

 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 TQ point of view, the functional structure has several inadequacies.

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.

 the bossis 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.

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.

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 TQ 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. 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 ones 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 crossfunctional teams, each of which has the responsibility to carry out and improve one of the organizations 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 organizations 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 organizations commitment to quality, as well as a mechanism for coordinating the efforts of various organizational units.