Enhancing Organizational Performance (1997) / Chapter Skim
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2 Techniques for Making Organizations Effective
2 Techniques for Making Organizations Effective
Pages 39-64
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From page 39... ...
3. The major sources of guidance for organizational redesign are research and theory, pragmatic experience and, in special cases, the existence of doctrine or overarching principles regarding "the way things are done here." Doctrine as a guide for organizational decisions has been developed most fully in the military, although doctrinal elements are apparent in many organizations.
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From page 40... ...
6. Some organizational changes, incremental for the most part, seem to be age related.
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From page 41... ...
The multiple dimensions of quality make it difficult to draw precise conclusions about its relationship to organizational effectiveness. Although there is much anecdotal evidence that TQM increases the effectiveness of modern organizations, a surprising dearth of systematic empirical research exists.
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From page 42... ...
a statistical control era, in which defects were reduced by controlling the processes that produced the products; (3) a quality assurance era, in which techniques and philosophies encompassed total quality control and top management took responsibility for ensuring quality throughout the organization; and (4)
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From page 43... ...
Affordable excellence System-based "[Quality is] a system Utilizing accepted of means to economically quality procedures produce goods or services which satisfy customers' Quality processes requirements" (Japanese Industrial Standards Integrated approach Committee, 1981)
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From page 44... ...
, the list of possible attributes is even longer (see Malcolm Baldrige National Quality Award, 1995; Deming, 1986; Juran, 1992) : Continuous improvement in all activities and in all people, Customer satisfaction for internal and external customers, Efficient deployment of resources, Employee, supplier, and customer development and recognition, Environmental well-being, Exemplary, visionary, and aggressive leadership, Fast response time, Full participation of employees, suppliers, and customers, Life-long relationships with customers, Long-range perspectives,
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From page 45... ...
Four dimensions -- information gathering and analysis, quality planning, quality assurance, and human resource management -- are all classified as process dimensions. Two dimensions are assumed to be desirable outcomes, namely, customer satisfaction and quality results.
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From page 46... ...
It seems that much more is known about the attributes and dimensions of TQM than on its impact on organizational effectiveness. Some empirical research has been conducted on the relationships between various aspects of TQM and organizational effectiveness, but it is
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From page 47... ...
Although quality processes and practices were pursued, an inadequate level of payoff occurred in these firms to maintain support for change efforts associated with quality. A Rath and Strong survey of Fortune 500 companies also found that only 20 percent reported having achieved their quality objectives; over 40 percent indicated that their quality initiatives were a complete flop.
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From page 48... ...
The major conclusion of the study was that firms that implemented the quality process advocated by the Malcolm Baldrige program experienced continuous improvement in performance indicators and exceeded the industry averages in each of the four outcome categories -- employee-related indicators, customer-related indicators, operational results, and financial results. TABLE 2-2 Results of a General Accounting Office Study of the Relationships Between Quality Processes and Desired Outcomes Outcome Category Reported Annual Improvement Percentage Employee related indicators: Employee satisfaction 1.4 Attendance 0.1 Turnover (decrease)
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From page 49... ...
. Although empirical evidence is limited, increases in customer satisfaction are generally believed to shift the demand curve upward, reduce marketing costs, increase marketing costs for competitors (satisfied customers are more difficult for competitors to take away)
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Cameron and his colleagues found that organizations that had developed an advanced quality culture (i.e., error prevention and perpetual creative quality) were more successful in their downsizing activities (a finding that we return to later)
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From page 51... ...
. Unanswered Questions With the dearth of empirical research on quality and the absence of theory regarding how, why, and even whether TQM affects organizational performance, there is little clear understanding about the relationships between quality and organizational effectiveness.
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From page 52... ...
Assuming that one can identify its core dimensions, what are the relationships among those dimensions? Do they have a temporal ordering, as some models suggest (e.g., should leadership involvement precede the development of certain organizational processes as implied in the Malcolm Baldrige program)
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From page 53... ...
Although its definition is neither precise nor consensual, organizational downsizing can be thought of as a set of activities, undertaken on the part of the management of an organization, designed to improve organizational efficiency, productivity, or competitiveness -- or all three -- by reducing the size of the organization. A precise definition seems to matter much more to scholars than to managers, who use an array of terms, such as compressing, consolidating, contracting, demassing, dismantling, downshifting, rationalizing, reallocating, reassigning, rebalancing, redesigning, resizing, retrenching, redeploying, rightsizing, streamlining, slimming down, and even leaning up.
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From page 54... ...
It is true that downsizing announcements have usually led to positive reactions on Wall Street, because of the possibility of cost savings, reduced expenses, and increased competitiveness. But the pattern of evidence described below is one of negative results far outweighing positive ones.
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From page 55... ...
; the adoption of a short-term, crisis mentality; loss of innovativeness; increased resistance to change; decreasing employee morale, commitment, and loyalty; the escalation of politicized special interest groups and political infighting; risk aversion and conservatism in decision making; loss of trust among customers and employees; increasing interpersonal conflict; restricted communication flows and less information sharing; lack of teamwork; and loss of accessible, forward-thinking, aggressive leaders. McKinley (1992)
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From page 56... ...
found that communicating openly about downsizing strategies, procedures, and rationale was associated with reduced stress, increased commitment, and improved productivity. Providing adequate outplacement ser
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From page 57... ...
This negative association, however, seems to be due more to the manner in which downsizing is implemented than by the fact that organizations have engaged in it. Unanswered Questions Although case studies abound, and popular accounts of downsizing among companies are frequent, empirical research on the effects of downsizing on organization-level performance is still rare in the organizational studies literature.
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From page 58... ...
Other than simply cutting the head count, eliminating positions or hierarchical levels, and trying to become more cost-conscious, are other organizational changes required for downsizing to positively affect organizational performance? Does the act of downsizing require that special attention be paid to other aspects of the organization?
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From page 59... ...
, defined reengineering as "the fundamental rethinking and radical redesign of business processes to achieve dramatic improvements in critical, contemporary measures of performance, such as cost, quality, service, and speed." Reeingineering is not incremental change or small alteration. It is an activity that emphasizes reinventing, or radically changing, the processes in the organization that are directly connected to producing an output.
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From page 60... ...
Moreover, one of the main downsizing strategies is labeled organizational redesign, and it sometimes involves some reengineering activity. However, most downsizing activity is designed fundamentally to
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From page 61... ...
, for example, described the successful reengineering activities of several firms, such as Hallmark, which now designs cards in a new way; Capital Holding's DRG business, which changed from a mass market to a customer-focused business; and Bell Atlantic, which reengineered its longdistance carrier access services. These case study descriptions are typical of the success stories that are easily found in the popular press.
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From page 62... ...
Dramatic improvements are not forthcoming, and easy solutions to organizational problems do not occur. By the time systematic research can be produced in which the conceptual boundaries are specified (what it is and is not)
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From page 63... ...
Reengineering may be well along in that process. Without systematic empirical research, it risks being cast aside as one more management fad.
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From page 64... ...
This chapter has focused on trying to define each underlying construct and identify the relevant attributes of each. Indeed, in order to begin to build a theoretical and empirical research base, it must be clear what each of the three change approaches includes and excludes.
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