Managing for Quality and Competitiveness

CHAPTER 6 The Nature of Management CHAPTER 7 Organization, Teamwork, and Communication CHAPTER 8 Managing Service and Manufacturing Operations 7-2

Enter the World of Business Green Mountain Coffee Roasters (GMCR) Empowers Employees GMCR sells coffee and beverage selection through a coordinated, multichannel distribution network of wholesale and consumer direct operations Has a decentralized and flat organizational structure with few layers of management Has a culture in which employees are involved in creating ideas and coming up with solutions together With growth, GMCR must carefully manage its communications channels to ensure that employees will continue to be heard? Describe how GMCR uses a decentralized and flat organizational structure.? How does empowerment work at GMCR?? What are some of the challenges GMCR must overcome as it continues to expand? 7-3

Organizational Culture Organizational Culture (Corporate Culture) A firm s shared values, beliefs, traditions, philosophies, rules, and role models for behavior o Ensures that organizational members: Share values Observe common rules Share problem solving approaches 7-4

Organizational Culture Formal Expression Mission statement Code of ethics Memos Manuals Informal Expression Dress code (or lack of one) Work habits Extracurricular activities Stories Ceremonies 7-5

Organizational Culture Helps ensure that all members of a company share values Suggests rules for how to behave and deal with problems Has a significant impact on performance and employee retention Sets a positive tone for decision making and building efficient organizational structure 7-6

Impact of Corporate Culture on Business Performance 7-7

Going Green Best Buy Emphasizes Teamwork and Communication to Promote Sustainability Surveys indicated that customers wanted Best Buy to provide sustainable solutions to the electronic waste (e-waste) problem Best Buy created a Sustainability and Corporate Responsibility Scorecard that provides employees with metrics enabling them to measure their progress toward the company s sustainability initiatives Best Buy collects consumers used electronics, and its partners work to give these products a second life by repairing them or using their parts for other products? Why did Best Buy feel the need to embrace sustainability?? Why is communication so important in achieving Best Buy s sustainability goals?? Describe how Best Buy has used teamwork to increase sustainability within its operations. 7-8

Organizational Structure Structure The arrangement or relationship of positions within an organization o An organization s structure develops when: 1. Managers assign work tasks to specific individuals or work groups 2. Coordinate the diverse activities required to reach the firm s objectives 7-9

Organizational Structure Impacts: Decision making Costs and efficiencies Overall success and sustainability Employee unity Understanding of how to deal with problems 7-10

The organizational structure at TOMS Shoes consists of two parts The for-profit component of the company manages overall operations Its nonprofit component, Friends of TOMS, is responsible for volunteer activities and shoe donations 7-11

Organizational Charts Organizational Chart A visual display of the organizational structure, lines of authority (chain of command), staff relationships, permanent committee arrangements, and lines of communication 7-12

The Evolution of a Clothing Store, Phases 1, 2, and 3 7-13

Assigning Tasks Specialization The division of labor into small, specific tasks and the assignment of employees to do a single task o Why specialize: Efficiency Ease of training Activities too numerous for one person 7-14

Henry Ford, the founder of Ford Motor Company, revolutionized manufacturing by creating assembly lines like this one to specialize the tasks his workers performed 7-15

Risks of Overspecialization Overspecialization can have negative consequences Employees become bored Job dissatisfaction Poor quality work Increased injuries Increased employee turnover 7-16

Departmentalization Departmentalization The grouping of jobs into working units usually called departments, units, groups, or divisions Functional departmentalization Product departmentalization Geographical departmentalization Customer departmentalization 7-17

Functional Departmentalization Functional Departmentalization The grouping of jobs that perform similar functional activities, such as finance, manufacturing, marketing, and human resources 7-18

Product Departmentalization Product Departmentalization The organization of jobs in relation to the products of the firm 7-19

The Campbell Soup Company uses product departmentalization to organize its company However, the firm also engages in a type of geographic departmentalization for various regions 7-20

Geographical Departmentalization Geographical Departmentalization The grouping of jobs according to geographic location, such as state, region, country, or continent 7-21

Customer Departmentalization Customer Departmentalization The arrangement of jobs around the needs of various types of customers 7-22

An Organizational Chart for the City of Corpus Christi 7-23

Delegation of Authority Delegation of Authority Giving employees not only tasks, but also the power to make commitments, use resources, and take whatever actions are necessary to carry out those tasks As a business grows, so do the number and complexity of decisions that must be made; no one manager can handle them all Delegation of authority frees a manager to concentrate on larger issues such as planning or dealing with problems and opportunities 7-24

Responsibility and Accountability Responsibility The obligation, placed on employees through delegation, to perform assigned tasks satisfactorily and be held accountable for the proper execution of work Accountability The principle that employees who accept an assignment and the authority to carry it out are answerable to a superior for the outcome 7-25

Degree of Centralization Centralized Organizations A structure in which authority is concentrated at the top, and very little decision-making authority is delegated to lower levels Overcentralization can cause serious problems for a company, in part because it may take longer for the organization as a whole to implement decisions and to respond to changes and problems on a regional scale Decentralized Organizations An organization in which decision-making authority is delegated as far down the chain of command as possible Delegating authority to lower levels of managers may increase the organization s productivity 7-26

Span of Management Span of Management The number of subordinates who report to a particular manager A wide span of management exists when a manager directly supervises a very large number of employees A narrow span of management exists when a manager directly supervises only a few subordinates 7-27

Organizational Layers Organizational Layers The levels of management in an organization Complements the concept of span of management A company with many layers of managers is considered tall; in a tall organization, the span of management is narrow Organizations with few layers are flat and have wide spans of management 7-28

Forms of Organizational Structures Forms of Organizational Structures Line structure Line-and-staff structure Multidivisional structure Matrix structure 7-29

Line Structure Line Structure The simplest organizational structure in which direct lines of authority extend from the top manager to the lowest level of the organization 7-30

Line-and-Staff Structure Line-and-Staff Structure A structure having a traditional line relationship between superiors and subordinates and also specialized managers called staff managers who are available to assist line managers 7-31

Line-and-Staff Structure 7-32

Multidivisional Structure Multidivisional Structure A structure that organizes departments into larger groups called divisions Occurs as organizations grow larger and more diversified Divisions can be formed on the same bases as departments (customer, product, and/or geography) Delegation of authority and divisionalized work 7-33

Matrix Structure Matrix Structure A structure that sets up teams from different departments, thereby creating two or more intersecting lines of authority; also called a projectmanagement structure 7-34

Matrix Structure 7-35

Groups and Teams Group Two or more individuals who communicate with one another, share a common identity, and have a common goal Team A small group whose members have complementary skills; have a common purpose, goals, and approach; and hold themselves mutually accountable 7-36

Differences between Groups and Teams 7-37

Committees and Task Forces Committee A permanent, formal group that performs a specific task Task Force A temporary group of employees responsible for bringing about a particular change Typically come from across all departments and levels of an organization Membership is usually based on expertise rather than organizational position Occasionally, a task force may be formed from individuals outside a company 7-38

Teams Project Teams Groups similar to task forces which normally run their operation and have total control of a specific work project Product-Development Teams A specific type of project team formed to devise, design, and implement a new product 7-39

Teams Quality-Assurance Teams (or Quality Circles) Small groups of workers brought together from throughout the organization to solve specific quality, productivity, or service problems Self-Directed Work Teams (SDWT) A group of employees responsible for an entire work process or segment that delivers a product to an internal or external customer 7-40

Responding to Business Challenges Creating a Corporate Culture Virtually Yammer supplies internal social networking for organizations and encourages employees to engage in social networking Yammer enables global employees to communicate easily in real time, cutting down significantly on e-mail Many companies use Yammer and the equivalent to track ideas from conception through production and beyond in a streamlined fashion It s important to implement guidelines to avoid trouble and enhance company culture and the workplace experience?how does Yammer contribute to a firm s corporate culture??how can Yammer be used as a way to improve productivity??what are some potential pitfalls of Yammer, and how can these pitfalls be avoided? 7-41

The Flow of Communication in an Organizational Hierarchy 7-42

Technology and Communication Technology has generated many alternatives to faceto-face communications: Voice-mail Social media Videoconferencing E-mail Online newsletters Online meeting services Many companies use internal networks called intranets to share information with employees A survey of managers and executives found that they feel 28% of meetings are a waste of time and that information could be communicated more effectively using other methods 7-43

Formal Communication Flow of communication within the formal organizational structure as depicted on organizational charts Upward Communication Flows from lower to higher levels of the organization Includes information such as progress reports, suggestions for improvement, inquiries, and grievances Downward Communication Refers to the traditional flow of information from upper organizational levels to lower levels Typically involves directions, the assignment of tasks and responsibilities, performance feedback, and certain details about the organization s strategies and goals 7-44

Formal Communication Horizontal Communication Involves the exchange of information among colleagues and peers on the same organizational level, such as across or within departments Information informs, supports, and coordinates activities both within the department and with other departments Diagonal Communication When individuals from different units and organizational levels communicate With firms downsizing and increasing the use of work teams, workers are being required to communicate with others in different departments and on different levels to solve problems and coordinate work 7-45

Informal Communication Grapevine An informal channel of communication, separate from management s formal, offical communication channels Managers can utilize informal communications as a sounding device Can obtain valuable information from the grapevine that could improve decision making Some organizations use the grapevine to their advantage by floating ideas, soliciting feedback, and reacting accordingly 7-46

Monitoring Communications Technological advances and the increased use of electronic communication in the workplace have made monitoring its use necessary for most companies Managers must monitor communications: Without invading employee privacy While generating respect and mindfulness amongst employees Model Electronic Privacy Act on the American Civil Liberties Union site 7-47

Improving Communication Effectiveness Encourage employees to provide feedback Helps identify strengths and weaknesses Avoid interruptions Develop strong and effective communication channels through training Important for companies to communicate their e-mail policies throughout the organization 7-48

Solve the Dilemma Quest Star in Transition Quest Star (QS) which manufactures quality stereo loudspeakers, wants to improve its ability to compete The company has launched a quality improvement program: 1.Has flattened the layers of management and uses teams and peer pressure to achieve the plant s goals instead of multiple management layers 2.Employees make all decisions within the boundaries of their responsibilities 3.Employees must be trained to supervise themselves? What techniques or skills should an employee have to assume a leadership role within a work group?? If each work group has a team representative, what problems will be faced in supervising these representatives?? Evaluate the pros and cons of the system developed by QS. 7-49