Ch. 9: Organizational Agility: Ch. 9: Organizational Agility: The Responsive OrganizationThe Responsive Organization

Mechanistic Mechanistic organizationorganization A form of A form of

organization that organization that seeks to maximize seeks to maximize internal efficiency.internal efficiency.

Organic structureOrganic structure An organizational An organizational

form that form that emphasizes emphasizes flexibilityflexibility

Organic StructureOrganic Structure

1.1. Jobholders have broader responsibilities Jobholders have broader responsibilities that change as need arises.that change as need arises.

2.2. Communication occurs through advice & Communication occurs through advice & information rather than orders & information rather than orders & instructions.instructions.

3.3. Decision making and influence are Decision making and influence are decentralized and informal.decentralized and informal.

4.4. Expertise highly valued.Expertise highly valued.

Organic Structure (cont.)Organic Structure (cont.)

5.5. Jobholders rely more on judgment Jobholders rely more on judgment than rulesthan rules

6.6. Obedience to authority less important Obedience to authority less important than commitment to the org. goalsthan commitment to the org. goals

7.7. Employees more interdependent, Employees more interdependent, relate more informally & personallyrelate more informally & personally

Formal Organization ChartFormal Organization Chart

Figure 9.1(a)

Advice NetworkAdvice Network = =Knowledge FlowKnowledge Flow

Figure 9.1(b)

Organizing around Core Organizing around Core CompetenciesCompetencies

Identify existing core competenciesIdentify existing core competencies Acquire/build core competencies important Acquire/build core competencies important

for futurefor future Invest in competencies so company stays Invest in competencies so company stays

competitivecompetitive Extend competencies to find new Extend competencies to find new

applications and opportunities for futureapplications and opportunities for future

Strategic AlliancesStrategic Alliances

A formal A formal relationship created relationship created among independent among independent organizations with organizations with the purpose of joint the purpose of joint pursuit of mutual pursuit of mutual goals.goals.

Best AllianBest Alliancesces

Table 9.1

The Learning OrganizationThe Learning Organization

An organization skilled at creating, An organization skilled at creating, acquiring, transferring knowledge, and acquiring, transferring knowledge, and at modifying its behavior to reflect new at modifying its behavior to reflect new knowledge/insights.knowledge/insights.

Becoming a Learning Becoming a Learning OrganizationOrganization

Disciplined thinkingDisciplined thinking Attention to detailsAttention to details Decisions based on data and evidence rather Decisions based on data and evidence rather

than guesswork and assumptions than guesswork and assumptions Search for new knowledge and ways to apply it Search for new knowledge and ways to apply it Review successes and failures to find lessonsReview successes and failures to find lessons Benchmark--identify & adopt best practicesBenchmark--identify & adopt best practices Share ideas throughout organizationShare ideas throughout organization

The High-Involvement The High-Involvement OrganizationOrganization

A type of organization in which top A type of organization in which top management ensures that there is management ensures that there is consensus about the direction in consensus about the direction in which the business is headingwhich the business is heading

Organizational Size and AgilityOrganizational Size and Agility

Large organizations tend to be less Large organizations tend to be less organic and more bureaucratic organic and more bureaucratic

Jobs tend to become more specialized in Jobs tend to become more specialized in large organizationslarge organizations

With size comes greater complexity and a With size comes greater complexity and a need for increased controlneed for increased control

Organizations can still find ways to Organizations can still find ways to remain agile despite these challengesremain agile despite these challenges

The Case for BigThe Case for Big

Larger size helps Larger size helps create economies of create economies of scalescale

Larger size helps Larger size helps develop economies develop economies of scopeof scope Economies in which Economies in which

materials and materials and processes processes employed in one employed in one product can be product can be used to make other used to make other related productsrelated products

The Case for SmallThe Case for Small

Large organizations can Large organizations can have difficulty managing have difficulty managing relationships with relationships with customers and among customers and among its own unitsits own units

Large organizations are Large organizations are more difficult to more difficult to coordinate and controlcoordinate and control

Smaller organizations Smaller organizations can:can: Move fastMove fast Provide quality Provide quality

goods and services goods and services to targeted market to targeted market nichesniches

Inspire greater Inspire greater involvement from involvement from their peopletheir people

Being small can avoid Being small can avoid diseconomies of scalediseconomies of scale

Being Big and SmallBeing Big and Small

DownsizingDownsizing The planned The planned

elimination of elimination of positions or jobspositions or jobs

RightsizingRightsizing A successful effort A successful effort

to achieve an to achieve an appropriate size at appropriate size at which the which the company performs company performs most effectivelymost effectively

DownsizingDownsizing

Survivor’s Survivor’s syndromesyndrome Loss of Loss of

productivity and productivity and morale in morale in employees who employees who remain after a remain after a downsizing.downsizing.

Customers and the Responsive Customers and the Responsive OrganizationOrganization

The point of The point of structuring a structuring a responsive, agile responsive, agile organization lies in organization lies in enabling it to meet and enabling it to meet and exceed the exceed the expectations of its expectations of its customerscustomers

Managers must Managers must stay focused in stay focused in three key three key ingredients - the ingredients - the strategic trianglestrategic triangle The company itselfThe company itself CompetitionCompetition The customerThe customer

The Strategy TriangleThe Strategy Triangle

Figure 9.2

Customer Relationship Customer Relationship ManagementManagement

CRMCRM A multifaceted process focusing on A multifaceted process focusing on

creating two-way exchanges with creating two-way exchanges with customers to foster intimate knowledge of customers to foster intimate knowledge of their needs, wants, and buying patterns.their needs, wants, and buying patterns.

Customer Relationship Customer Relationship ManagementManagement

Value chainValue chain The sequence of activities that flow The sequence of activities that flow

from raw materials to the delivery of from raw materials to the delivery of a good or service, with additional a good or service, with additional value created at each step.value created at each step.

Generic Value ChainGeneric Value Chain

Figure 9.3

Total Quality ManagementTotal Quality Management

Total quality management (TQM)Total quality management (TQM) An integrative approach to management An integrative approach to management

that supports the attainment of customer that supports the attainment of customer satisfaction through a wide variety of tools satisfaction through a wide variety of tools and techniques that result in high-quality and techniques that result in high-quality goods and services.goods and services.

ISO 9001ISO 9001

A series of quality standards A series of quality standards Developed by committee under Developed by committee under

International Organization for International Organization for Standardization Standardization

To improve total quality in all To improve total quality in all businesses businesses

For the benefit of producers and For the benefit of producers and consumers.consumers.

ReengineeringReengineering

ReengineeringReengineering Revolutionizing key organizational Revolutionizing key organizational

systems and processes to answer the systems and processes to answer the question: “If you were the customer, how question: “If you were the customer, how would you like us to operate?”would you like us to operate?”

Processes are designed from scratch as if Processes are designed from scratch as if the organization was just starting outthe organization was just starting out

Types of Technology Types of Technology ConfigurationsConfigurations

Small batchSmall batch Technologies that produce goods and Technologies that produce goods and

services in low volume.services in low volume. Large batchLarge batch

Technologies that produce goods and Technologies that produce goods and services in high volume.services in high volume.

Continuous processContinuous process A process that is highly automated and A process that is highly automated and

has a continuous production flow.has a continuous production flow.

Organizing for Flexible Organizing for Flexible ManufacturingManufacturing

Mass customizationMass customization The production of The production of

varied, individually varied, individually customized products customized products at the low cost of at the low cost of standardized, mass-standardized, mass-produced products.produced products.

Key Features Key Features in Massin Mass

CustomizationCustomization

Table 9.2

Computer-Integrated Computer-Integrated ManufacturingManufacturing

CIMCIM Use of computer-aided design and Use of computer-aided design and

computer-aided manufacturing to computer-aided manufacturing to sequence and optimize a number of sequence and optimize a number of production processes.production processes.

Flexible FactoriesFlexible Factories

Manufacturing plantsManufacturing plants With short production runs, With short production runs, Organized around products, Organized around products, Use decentralized scheduling.Use decentralized scheduling.

Lean ManufacturingLean Manufacturing

An operation that strives to achieve An operation that strives to achieve highest possible productivity and total highest possible productivity and total quality, cost effectively, quality, cost effectively,

By eliminating unnecessary steps in By eliminating unnecessary steps in production process and continually production process and continually striving for improvement.striving for improvement.

Organizing for SpeedOrganizing for Speed

Time-based Time-based competition (TBC)competition (TBC) Strategies aimed at Strategies aimed at

reducing total time reducing total time needed to deliver a needed to deliver a good or service.good or service.

Time-Based CompetitionTime-Based Competition

LogisticsLogistics The movement of the The movement of the

right goods in the right goods in the right amount to the right amount to the right place at the right place at the right timeright time

Time-Based CompetitionTime-Based Competition

Just-in-time (JIT) Just-in-time (JIT) A system that calls for subassemblies A system that calls for subassemblies

and components to be manufactured in and components to be manufactured in very small lots and delivered to the next very small lots and delivered to the next stage of the production process just as stage of the production process just as they are needed.they are needed.

Just-in-time (JIT)Just-in-time (JIT)

Elimination of wasteElimination of waste Perfect quality.Perfect quality. Reduced cycle times.Reduced cycle times. Employee involvementEmployee involvement Value-added manufacturingValue-added manufacturing Discovery of problems and prevention Discovery of problems and prevention

of recurrenceof recurrence

Time-Based CompetitionTime-Based Competition

Simultaneous engineeringSimultaneous engineering Design approach Design approach All relevant functions cooperate jointly All relevant functions cooperate jointly

and continually in max effort and continually in max effort Aimed at producing high-quality Aimed at producing high-quality

products that meet customers’ needs.products that meet customers’ needs.