Organizational Effectiveness

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1 Organizational Effectiveness Second Edition Donna C. S. Summers I niwrsity of Dayton Columbus, O

2 Contents Organizational Effectiveness. ' 2 What is an effective organization? 4 ' How is an effective organization created? 10.., ; What benefits can be gained from creating an effective organization? 16 Lessons Learned 16.., ; -.. Chapter Questions 18 Organizational Philosophy ' 20 What are the key philosophical elements to delighting customers and generating organizational success? 22. Who are the individuals, and what are their philosophies?.24 Lessons Learned 48 Chapter Questions 51 Quality Systems ( 52 What standards and criteria exist to support effective quality management systems? 54 What is ISO 9000?. 54.,,,... What are supplier certification requirements? ;.. ; What is ISO ? 63 ' ' '..', V... ' What is Six Sigma? ; ' What is the Malcolm Baldrige National Quality Award? 75 Lessons Learned 80 Chapter Questions 85 ;,. :->- -. ; ;...,.-. Creating a Customer Focus Why is a focus on customers so important? 92 ' "'.. ',. How do customers define quality? 92 "' i How do customers define value? 94 '! What is the difference between satisfaction and perceived value? 95 - Why is it important to understand how the customer views the process? 96 How does an effective organization create an unwavering focus, on customers' requirements, needs, and expectations? 97 How do effective organizations know what their customers want? 99. How do effective organizations capture the voice of the customer and turn that voice into actions that drive customer-perceived value? i 100 How can the Malcolm Baldrige National. Quality Award criteria help an organization create a more effective.customer focus? 114 v 90 vm

3 CONTENTS Lessons Learned 115 Chapter Questions 117 Organizational Leadership 124 What is expected of leaders? 126 How do effective leaders create an organizational culture focused on creating value for their customers? 126 How do effective leaders translate the vision and mission into day-to-day activities? 135 What are the different leadership styles of effective leaders? 137 How do effective leaders manage by fact and with a knowledge of variation? 138 How do effective leaders practice ethical behavior and good, citizenship? 141 How can the Malcolm Baldrige National Quality Award criteria help an organization's leadership become more effective? 141 Lessons Learned 143 Chapter Questions 146 Strategic Planning 154 What is strategic planning? 156 How do strategic plans give an effective organization a competitive edge? 161 How do strategic plans support customer satisfaction and perceived value? 162 How are strategic plans created? 163 How do effective leaders create organizational alignment through strategy deployment? 169 How can the Malcolm Baldrige National Quality Award criteria help an organization's leadership create effective strategic plans? 172 Lessons Learned 174 Chapter Questions 176 Human Resource Development and Management 184 How do employees create an effective organization? : How do effective employees enable an organization to create value for their customers? 188 How do leaders in effective.organizations,motivate employees? 188 How do leaders in effective organizations manage change? 192 What modifications do effective organizations make to their reward system to support the desired culture? 196' " ' ' ',, What types of education and training do effective organizations provide for their employees in order to remain competitive? 199 How do effective organizations use teams? 201

4 CONTENTS How do individual personalities affect team performance? 203 What needs to happen in order to have effective meetings? 206 How can the Malcolm Baldrige National Quality Award criteria help an organization's human resources become more effective? 208 Lessons Learned 210 Chapter Questions Managing the Supply Chain 220 What is a supply chain? 222 What are the benefits of effective supply chain management? 222 What are the elements of effective supply chain management? 224 What challenges face the development of an effective supply chain? 238 How does supply chain management relate to the Malcolm Baldrige National Quality Award? 238 Lessons Learned 239 Chapter Questions Measures of Organizational Success 248 Why measure? 250 What are good measures of performance? 250 How are measures of performance utilized in an effective organization? 261 What are the goals of a measurement system? 262 What role does the cost of quality information play in an effective organization? 265 How are quality costs defined? 267 What types of quality costs exist? 270 What does a formal quality cost measurement system look like? 274 How are quality costs utilized for decision making? 275 How do the Malcolm Baldrige National Quality Award criteria support measurement, analysis, and knowledge management for effective organizations? 277 Lessons Learned 279 Chapter Questions Benchmarking 288 How does benchmarking help an effective organization measure its success? 290 What is the purpose of benchmarking? 291 What types of benchmarking can be performed? 292 What are the benefits of benchmarking? 293 What are the different standards for comparison? 293 How is benchmarking done? 295

5 CONTENTS xi How do the Malcolm Baldrige National Quality Award criteria view benchmarking? 297 Lessons Learned 298 Chapter Questions Process Management 308 What is a process? 310 How are key processes identified? 311 What is the difference between a functionally structured organization and a process-focused organization? 312 Why do functionally structured organizations have more difficulty focusing on key processes? 313 What benefits does a process orientation provide? 316 How do well-managed processes create value and generate customer satisfaction? 316 How are processes improved? 320 Why is it important to determine the objective of the process as it relates to the customer? 320 Why is it important to identify the boundaries of the process? 322 Why is it important to involve individuals from key activities in the process improvement effort? 323, What is meant by process ownership? 323 Why is it necessary to create a process map by identifying all of the activities in the process? 323 Why should an effort be made to separate the non-value-added activities from the value-added activities? 330 Why should non-value-added activities be eliminated? 332 What is variation, and why should it be eliminated? 335 Why is it critical to determine whether the remaining value-added activities are truly the "best practice"? 336 Why should the process be redesigned using the knowledge gained during the improvement effort? 336 How do the Malcolm Baldrige National Quality Award criteria support process management? 337 Lessons Learned 340 Chapter Questions Lean Tools and Techniques 352 What is lean thinking? 354 What is value stream process mapping? 356 What is kaizen? 358 What are the five Ss? 360 What is kanban (pull inventory management)? 364

6 .xii. CONTENTS What is error proofing (poka-yoke)? 365 What is productive maintenance? 367 What is setup time reduction (single minute exchange of dies [SMED])? 370 What are reduced batch sizes (single piece flow)? 371 What is line balancing? 372 What is schedule leveling? 374 What is standardized work? 374 What is visual management? 378 Lessons Learned 378 Chapter Questions Problem-Solving Tools and Techniques 382 How does an effective organization make value-driven improvements? 384 What are typical steps in a problem-solving process? 388 What happens during the "Plan" phase? 388 What happens during the "Do" phase? 437 What happens during the "Study" phase? 439 What happens during the "Act" phase? 440 Lessons Learned 444 Chapter Questions Project Management 454 Why do organizations engage in project management? 456 What are the characteristics of a project? 456 How are projects selected? 456 What is a project proposal? 458 What are the components of an effective project proposal? 460 What are the characteristics of clear project goals and objectives? 460 What are the components of an effective project plan? 463 How are projects scheduled? 465 How are resources budgeted? 476 What are contingency plans and change control systems? 476 What is project control? 476 What must a project manager do in order to be effective? 478 Lessons Learned 479 Chapter Questions Business Results 484 Why are business results key to effective organizations? 486 How does auditing allow an effective organization to see its progress? 490 What types of audits exist? 491

7 ORGANIZATIONAL EFFECTIVENESS xni How is an audit designed? 491 What do effective organizations audit? 493 What happens when the audit is over? 496 How do the Malcolm Baldrige National Quality Award criteria encourage a focus on business results? 497 Lessons Learned 498 Chapter Questions 500 Appendix 1 Appendix 2 Appendix 3 Appendix 4 Appendix 5 Glossary Z Tables X and R Chart Factors Malcolm Baldrige National Quality Award Organizational Effectiveness Evaluation Websites for Quality Attribute Charts Answers to Selected Problems Bibliography Index

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