Chapter 9

Organizing for TQM:

Structure and Teams
If you still believe in hierarchy, Job descriptions
and functional boundaries, and are not
experimenting with new approaches to
boundaryless/networked/virtual organizations
engaged in ever-changing partners, you are
already in deep yogurt.

Tom Peters
Forbes
Organizing for TQM: The System Approach
An entity composed of interdependent components that are
integrated for achievement of an objective.
The organizations is a social system comprised of a number of
components.
These organizational components are activities that may or
may not be integrated, and they do not necessarily have
objectives or operate toward achievement of an object.
Thus, synergies, a necessary attribute of well-organized system,
may be lacking as each activity takes a parochial view or
operates independently of the others.
This lack of synergism cannot continue under the TQM
approach to strategic management because interdependency
across functions and departments is a necessary precondition.
The Organization System
Input
Money
Human Resources
Machines
Material
Technology
Activities
Output
People
Dimension
Technical
Skills
Objectives
The People Dimensions:
Making the Transition From a Traditional to a TQM
Organization.
The typical company operates with a vertical, functional
organizational structure based on reporting relationships,
budgeting procedures, and specific and detailed job classifications.
Departmentation is by function, and communication, rewards, and
loyalties are functionally orientated, processes are forced to flow
vertically from the top down, creating costly barriers to process
flow.
The system approach to organizing suggests three significant
changes, one conceptual and two requiring organizational
realignment:
o The concept of the inverted organizational chart
o A system of intra-company internal quality
o Horizontal and vertical integration of functions and activities
Transition from Traditional to TQM
Organization
Top
Mgt
Top Mgt
Middle Mgt
Functional
Mgt
Strategic Business Units,
Plants, Profit Centers
Employees
Departments
Front-Line
Supervision
Employees
Front-Line Supervision
Customers
Functional
Mgt
Middle Mgt
Top
Mgt
Quality
Council
Steering
Committees
Cross-Functional
Teams
Quality Improvement
Teams
Quality Circles
Functions
Employees
(a) (b) (c)
Value Chain Concept
Michael Porter suggests that competitive advantage
cannot be understood by looking at a firm as a whole. It
stems from the many discrete activities a firm performs
in designing, producing, marketing, delivering, and
supporting its product.
Porters concept is expanded to include any of the many
sources of competitive advantage, the value chain
concept will be used here to focus on organizational
structure for TQM.
Subdividing a Generic Value Chain
Firm Infrastructure Margin
Human Resource Management
Technology Development
Procurement

Inbound Operations Outbound Marketing Service
Logistics Logistics and Sales Margin





Marketing
Management

Advertising

Sales Force
Administration

Sales Force
Operations

Technical
Literature

Promotion
Roles in Organizational Transition to TQM
Top Management
Many of the most successful companies launched their
programs by creating a quality council or steering
committee whose members comprise the top
management team.
Some multi-division companies encourage a council in
each division or strategic business unit.
The council provides a good vehicle for management to
demonstrate its leadership in the quality initiative.
Continue..

Middle Management
The role of middle management has traditionally been a
integrative one.
They are drivers of quality and the information funnel for
change both vertically and horizontally-the go-between
for top management and front-line employees.
They implement the strategy devised by top
management by linking unit goals to strategic objectives.
They develop personnel, make continuous improvement
possible, and accept responsibility for performance
deficiencies.

Continue..
Front-line supervision
Front line supervision has been called the missing link in TQM.
At Federal Express, a Baldrige winner, the communication effort is
focused on the front-line supervisors because most employees
report directly to them.
The company realizes that the real purveyors of quality are that
employees and a basic quality concept is candid, open, two-way
communication.
Supervisors can make or break a quality improvement effort.
They are called upon to provide support to employee in groups
and individuals.
Continue..
Quality assurance and the quality professional
Quality assurance and the quality professional are faced with
good news and bad news as TQM emerges as the load-bearing
concern of company strategy.
On the one hand, the accelerating emphasis on quality has
given them more visibility, and in some cases the reporting
relationships have move to higher levels in the organizations.
On the other hand, they may now be perceived as a staff
supports function as quality becomes more widespread and led
by line managers.
Teams for TQM
Quality Circles
Quality circle defined as a small group of employees doing similar
or related work who meet regularly to identify, analyze, and solve
product-quality and production problems and to improve general
operations.
Although the concept has had some success in white-collar
operations, the major impact has been among direct labor
employees in manufacturing, where concerns are primarily with
quality, cost specifications, productivity, and schedules.
By their very nature, quality circles were limited to concerns of the
small group of members and few cross-functional problems were
considered.
Organizations can go beyond using circles by creating task forces,
work teams, and cross-functional teams.
Teams for TQM
Task teams
Task teams are a modification of the quality circle.
The major differences are that the task teams can
exist at any level and the goal or topic for discussions
is given, whereas in quality circles members are
generally free to choose the problems they will solve.
Task teams with the best chance for success are
those that represent an extension of a pre-existing,
successful quality circle program.
Teams for TQM
Self-managing work teams
Members are empowered to exercise control over their jobs and
optimize the efficiency and effectiveness of the total process
rather than the individual steps within it. Team members
perform all the necessary tasks to complete an entire job, setting
up work schedules and making assignments to individual team
members.
A number of common elements is characteristics of self-
managed teams:
Job design and structure
Supervision
Quality
Decisions
Customers
Authority
Teams for TQM
Cross-Functional Teams
When organizational complexity demanded horizontal as well as
vertical coordination in order to plan and control processes that
flowed.
Linking business process improvement (billing, procurement,
recruiting, record keeping, design, sales, etc) to the key business
objectives of organization is necessary if quality is to become
real and relevant.
Cross functional approached achieved the objective of:
Customer
Function
Processes
The organization