Friday, April 18, 2008

MS-11 Question 3

Assume that you are in the top management cadre of commercial airlines, which is competing with the low cost strategy. Frame an appropriate organization culture for your organization so that it can maintain its position in the market.

Critical instrumental mechanisms for changing and managing culture include
-Strategic planning and the identification of necessarily cultural requisites
-Ensuring consistency of culture with mission, goals, strategies, structures and processes
-Creating formal statements of organizational philosophy and values
-Establishing consistent incentives, recognition systems, and performance measurement
-Maintaining appropriate error-detection and accountability systems
-Coaching, mentoring, informal and formal training, and identifying role models
-Embracing appropriate rites, rituals, symbols, and narratives
-Taking advantage of the growth of subcultures
-Managing and promoting strong communities of practice .
Several requisites for organizational success that organizational culture must now take into account:
-The organization must be proactive, not just reactive.
-The organization must influence and manage the environment, not just adapt.
-The organization must be pragmatic, not idealistic.
-The organization must be future-oriented, not predominantly present/past oriented.
-The organization must embrace diversity, not uniformity.
-The organization must be relationship-oriented, not just task-oriented.
-The organization must embrace external connectivity, as well as promote internal integration.
These fundamental assumptions are key to eliminating obstacles that will inhibit the kinds of internal and external organizational adaptations necessary for future success. They are not, however, sufficient. They must be reinforced by values, behavioral norms and patterns, artifacts and symbols, as well as accompanied by a particular mission, set of goals, and strategies.
Four essential strengths of the organizational culture approach:
It focuses attention on the human side of organizational life, and finds significance and learning in even its most mundane aspects (for example, the setup in an empty meeting room). It makes clear the importance of creating appropriate systems of shared meaning to help people work together toward desired outcomes. It requires members—especially leaders—to acknowledge the impact of their behavior on the organization’s culture. People should ask themselves: "What impact am I having on the social construction of reality in my organization?" "What can I do to have a different and more positive impact?" It encourages the view that the perceived relationship between an organization and its environment is also affected by the organization’s basic assumptions.
Morgan says:
We choose and operate in environmental domains according to how we construct conceptions of who we are and what we are trying to do. . . . And we act in relation to those domains through the definitions we impose on them. . . . The beliefs and ideas that organizations hold about who they are, what they are trying to do, and what their environment is like have a much greater tendency to realize themselves than is usually believed.
Organization culture can be a set of key values , assumptions,understandings and norms that is shared by members of anorganization.
Organization values are fundamental beliefs that an organizationconsiders to be important , that are relatively stable over time,and they have an impact on employees behaviors and attitudes.
Organization Norms are shared standards that define what behaviors are acceptable and desirable within organization.
Shared assumptions are about how things are donein an organization.
Understandings are coping with internal / external problemsuniformly.=======================================================================================================Competitiveness: The ability of an entity to operate effectively / efficiently and productively in relation to other similar entities.
COMPETITIVENESS / PRODUCTIVITY is a product of Resource utilization whose skills encompass all areas of business management from strategy design, to management of production, marketing, export transactions, and e-competencies.
COMPETITIVENESS / PRODUCTIVITY is a culture of its ownwhich must be embedded in the organization.Selecting businesses that have the greatest potential to become competitive; -Providing assistance to them in building strategies; -Building consortiums to provide of the needed resources. -Select the businesses with the highest potential; - Determine their managerial skill requirements and design programmes to meet those needs; - Assist businesses to design competitive strategies; - Prepare resource requirement plans; - Provide assistance with the acquisition and allocation of resources from a consortium of resource providers; - Help managers implement their strategies.
The Key Role of COMPETITIVENESS / PRODUCTIVITY “COMPETITIVENESS / PRODUCTIVITY isn’t everything, but in the long run it is almost everything.”
COMPETITIVENESS / PRODUCTIVITY is the measure of output per unit of input . COMPETITIVENESS / PRODUCTIVITY is therefore increased by improvements in FINANCE and labour productivity. “ competitiveness is increasing productivity while raising the sales and the market share of the company.
What Improves COMPETITIVENESS / PRODUCTIVITY The factors that enable COMPETITIVENESS / PRODUCTIVITY include the following considerations:
FINANCIAL Investment
– the greater the resulting productivity.
– the skilling-up of the workforce through training and education is also an investment therefore, leading to the development of ‘Human Capital’. Education therefore, and the ability and willingness of the workforce to learn new skills becomes a key competitive driver to longer-term business growth
Total Factor Productivity
– different ways of working
– meaning how firms are organised, structured, use technology and are managed.
Innovation and/or ‘Technological Progressiveness’
– i.e the ability to develop new products, services and ways of doing things that enable a competitive advantage to be sustained. In addition to improving performance and creativity (i.e. creating ideas), this means translating R&D into productivity gains.
– the more competitive the business the faster its growth.
Information Communications Technology. BUSINESSES that made the largest investment in IT [computer hardware, software and telecoms) have shown the largest COMPETITIVENESS / PRODUCTIVITY growth .
Step One: Define Vision and MissionA company must get buy-in from its management and its employees, before getting involved in the COMPETITIVENESS / PRODUCTIVITY journey. To create buy-in a company must first recognize the fears that both management and employees will have. Management may fear losing authority when employees are encouraged to take control of what they are doing and employees may fear loss of job security as efficiency is improved, workloads are increased and employees are being asked to expand their comfort zone. Methods of getting management buy-in include obtaining support from the top, strategic planning, keeping managers informed, and providing networking systems. Methods of getting employee buy-in include providing proper tools and training, keeping them informed and providing networking systems.Once buy-in is obtained or at least starting to bud, then the COMPETITIVENESS / PRODUCTIVITY journey can begin. The first step is to develop vision and mission statements for the company or to revisit existing ones to ensure that they still fit the company and where it is going. These statements help solidify the goals and objectives and provide a common focus point. One key advantage of a common focus point is that it gives direction to all personnel and helps them determine how to prioritize their activities. Company success is strongly dependent upon the extent to which efforts and resources are concentrated towards a common focus.
Explanation of Step One - Defining Vision and MissionThe first step of the COMPETITIVENESS / PRODUCTIVITY journey is developing a company's vision and mission statements. With input from all employees, these two statements are used as guides for the rest of the COMPETITIVENESS / PRODUCTIVITY journey.It is important to tie COMPETITIVENESS / PRODUCTIVITY into the overall company vision so that each department or area of the company realizes that COMPETITIVENESS / PRODUCTIVITY is important to the company.VisionA vision statement outlines what a company wants to be. It focuses on tomorrow; it is inspirational; it provides clear decision-making criteria; and it is timeless. MissionA mission statement outlines what the company is now. It focuses on today; it identifies the customer(s); it identifies the critical process(es); and it states the level of performance. It has been said that a vision is something to be pursued, while a mission is something to be accomplished.Developing guidance for the company is not that easy - it takes time to get it right. These visions, missions, and values must be aligned with the company or they are just rhetoric.The overall objectives are achieved - they explain what the company is today; what it wants to be in the future; and the key factors that guide its decision making.
Impact of Vision and Mission on the Company When a company collaboratively decides to express its vision, beliefs, goals, values and mission in words, it will give direction to everyone in the company. Therefore, it is important to involve all employees and give them a chance to indicate how they perceive the company and to identify what is important to them, i.e., things the company must not lose sight of as it continues on its journey. If this step is done right, it will not be viewed as the latest gimmick.The way that the vision and mission are communicated is important. This requires full commitment from senior management and may result in several changes depending on where the company presently is and how well it presently represents its vision. Quality must be recognized not as a separate entity but as an integral part of a person's overall job. This communication process can take time and much effort but does become easier as people see that the company truly uses these statements in their decision process and refers to them for guidance on a regular basis.Once the direction is defined, then it will impact such things as strategic planning, objectives and goals. Strategic planning includes reviewing the vision and mission of the company and then determining what has to be done in order to achieve the goals of these statements. This normally translates into Objectives (Strategic Focus). Next, the company determines how it will know when the statements have been achieved. This translates into Objective Measures. From the measures, each department can set goals, objectives and measures that will help the company achieve its strategic objectives (and, therefore, its mission as well as get closer to its vision).
Tools and Assessments for Vision and MissionToolsThe visioning process consists of eight steps:1) Collect input - to be most effective, the vision should represent the ideals of the entire organization. The vision can be created most successfully by a representative group of five to seven people. Other people can be surveyed for their input by using the following types of questions: What would be the perfect organizational culture? What would the perfect organization do for its members' growth and development? What products or services would the perfect organization provide to customers and the community? What else would the perfect organization do or be? 2) Brainstorm - using the data collected, have the visioning group brainstorm ideas with the same questions used in step one. The goal is to record ideas and words to describe the perfect organization.3) Shrink the mess - the large number of ideas generated must be shrunk down to a smaller, more manageable number without losing content by eliminating duplication, grouping ideas into suitable categories, and eliminating ideas that aren't appropriate or don't fit. With the ideas grouped, choose the word or words that best represent each group.4) Develop a rough draft - work with the words (that represent the groups of ideas) and rough out a statement for each component: culture, people, and product or service.5) Refine the statements - use words that create pictures. Consider content and style as well. This step deserves the appropriate time and energy.6) Test the criteria - before taking the vision to the organization, test it against the following criteria: Is your vision timeless, inspirational, and does it provide decision-making criteria for employees faced with tough situations? If it passes, continue to the next step. If it doesn't pass, then work on improving only those parts that don't meet the criteria.7) Obtain organization approval or modify - present the vision to the entire organization for approval. This step is essential if everyone is to "own", and commit to, the vision. When soliciting the approval of other employees, explain the process the team went through, explain the vision, and be open to modifications. All suggestions should be considered.8) Communicate and celebrate - sometimes a vision will stand alone. If yours does, go out and celebrate. Usually, the vision will require some explanation, clarification, and application. Every word should have a purpose. To bring the vision from the idea world into the physical world, a flexible strategic plan is needed.
Step Two
- Document Processes
Now that the company knows what it is and where it wants to go, the next step in the COMPETITIVENESS / PRODUCTIVITY journey is to determine how it presently does its business. To accomplish this the company must focus on its processes. It must know how it presently does things and be able to measure its ability to be consistent in meeting customer requirements. It has been said that customers remember a company's name under two conditions: When the company provides extremely poor products or service. When the company provides surprisingly good products or service. In order to provide surprisingly good products or service (output), companies must look at what is involved in delivering that output. It is the business processes that deliver the output. Therefore, companies must focus on the process in order to keep customers coming back and staying loyal to the product or service.To truly address the output, companies must start focusing on the processes that control the customer interfaces, rather than the organizational structure.In Business Process Improvement, this comparison shows the difference between an organizational focus and a process focus.
Organizational Focus
Process Focus
Employees are the problem
The process is the problem
Employees People
Doing my job
Help to get things done
Understanding my job
Knowing how my job fits into the total process
Measuring individuals
Measuring the process Change the person Change the process Can always find a better employee Can always improve the process Motivate people Remove Barriers Controlling employees Developing people Don't trust anyone We are all in this together Who made the error? What allowed the error to occur? Correct errors Reducing variation Bottom line driven Customer driven Companies that focus on delivering surprisingly good output and building their reputations will be more successful than companies that just focus on the bottom line as the bottom line will not bring customers back. And the only way to determine how to consistently deliver this type of output is by focusing on processes within your company/business.
Explanation of Step Two
- Documenting Processes Every product/service (output) is the result of a process. A process can be defined as any activity or group of activities that takes an input, adds value to it, and provides an output to an internal or external customer. The key elements of a process are: inputs, activities, outputs, customers, resources (materials, dollars and person/processing time), and cycle time (how long does it take). When documenting a process, all these key elements need to be identified.A company must first document the current state - define what the company does, who does it and how and why it is done. A common approach is to draw a process picture (called process mapping), identify inputs, actions, decisions points as well as time and cost inputs. This process picture permits common understanding, enables measurement and develops a common language.There are several ways to "map" a process. Some companies describe the flow of information and activities between departments in step form. Other companies use flowcharting tools.A caution is worthy of note here - most companies organize themselves in a vertical format (for example, accounting department, shipping/receiving department and customer service department). However, processes tend to flow horizontally and connect more than one functioning group. This horizontal work flow combined with a vertical organization results in voids and overlaps and process problems.Because of the difference in directional flow, it is important that all groups know how they interrelate and how the various outputs are used by others.When starting to map a company's processes, some of the things to identify are the objectives of the process (performance targets, financial, quality, operational, behavioural), the inputs and outputs, and the measures (how will the progress be monitored, internally and externally).A common concern about process mapping is determining where to start and what to map. If a process consists of several subprocesses then it may be easier to start mapping at the subprocess level. Depending on the detail required, activities can be mapped individually.The next question might be, how is a process mapped? There are numerous ways to map a process and there are several tools available on the market (e.g., software programs). Flowcharting is the most popular and can be simple or complex.Flowcharts Flowcharts graphically represent the activities that make up a process. Flowcharts are useful because they illustrate how the different elements fit together and provide discipline in thinking. Comparing a flowchart to the actual process will highlight the areas in which rules or policies are unclear or are not being followed and may highlight areas in which unclear procedures disrupt quality and productivity. Flowcharts also facilitate communication about problem areas since all inputs and outputs are identified.There are many different types of flowcharts: Block diagrams provide a quick overview of a process. The American National Standards Institute (ANSI) standard flowcharts analyze the detailed interrelationships of a process. Functional flowcharts depict the process flow between organizations or areas. Geographic flowcharts illustrate the process flow between locations (e.g., distribution systems).
Step Three - Establish MeasurementsThe next step in the COMPETITIVENESS / PRODUCTIVITY journey is to set standards and measures for each process, product and service. Within the whole organization (production, sales, administration, shipping, agents) while moving down the COMPETITIVENESS / PRODUCTIVITY road, the focus must be on improving the customer's perception of the company, its products and services. To do this the company must measure customer satisfaction.Companies need to determine precisely where they stand in their customer's eyes by engaging in ongoing information gathering activities to measure customer satisfaction. Listening to customer complaints, identifying and measuring critical processes that are responsible for generating poor service or products, and implementing corrective action are integral in developing a quality management philosophy.The old sayings: What Gets Measured, Gets Managed and Never Assume You Know What The Customer Wants, sound like common sense, but many companies fail to develop even the most basic methods of gathering information and establishing performance measures.Companies need to: know on an ongoing basis what their customers are thinking, analyze their own structures and processes to ensure that they do not hinder or interfere with customer satisfaction, and, implement measures to monitor the effectiveness of all critical processes that impact customer satisfaction.
Explanation of Step Three - Establishing Measurements The focus of standards and measures is to ensure that the processes are meeting requirements and that customers are satisfied.Standards Standards are yardsticks for measuring performance, quality, and duration. Normally companies are concerned with two types of standards: work standards that measure performance and customer service standards that measure the quality of service to the customers.Standards must be realistic. Setting standard too low creates complacency but setting them too high may make them uneconomical to reach. If standards are set too high, resources may be diverted in order to achieve them and this might interfere with improvement in other areas. Standards are not set in stone, they must be adjusted to reflect changes in customer requirements or processes.Examples of standards include: When more than five people are in queue, another checkstand is to be opened immediately - operated by supervisory or management personnel, if necessary. Process and post credit memos within 7 days of receiving them. Post all adjustments within 7 days. All adjustments must be current at month's end. Ship 98 percent of orders to A customers within 24 hours. Maintain 99.5 percent accuracy on order entry and assembly. Order turnaround: 93 percent of orders filled completely within 72 hours. Measures A company needs to determine what to measure and how to measure it in order to deliver the outputs the customer wants.Here are some guidelines to use for establishing measurements: Find out why the key customers (the ones that account for a large portion of the company's dollar sales) keep coming back instead of going to the competition. Find out how good the entire company must be - not just your products or services. Use surveys, interviews, point of sale/service and follow-up calls. Determine the obstacles to excellent service for external and internal customers. Look at company structure, work flows, and evaluate personnel abilities/skills/knowledge. Use tools such as employee attitudinal surveys and exit interviews and develop formal/informal feedback mechanisms. Determine which processes are critical to the delivery of products or services to the customers or the ones that affect the criteria that the customer uses to evaluate the company's performance. Develop measurements that strike a balance between cost, quality and cycle time. Use as many proactive measurements as possible because they provide immediate feedback and allow time for corrective action before problems have any impact on the customer. Use some reactive measures to take advantage of feedback after the product or service has been purchased by the customer. Examples of these are warranty claims, customer complaints, and surveys. Measure quality standards in both production and service.
Impact of Measurements on the Company Employee Concerns
When a company starts the measurement step, employees are often concerned about what is being measured and how the information will be used. Keep communication open with all personnel and stress that the measures are needed to ensure the process effectiveness and customer satisfaction (internal and external).Performance Evaluation The standards and measures for work, customer service and performance must be carried forward into the performance evaluation process. Performance evaluations, whether of the company or the employee, should be based on standards linked to customer requirements, customer satisfaction, and competitive performance. If performance evaluations do not tie into the quality journey, then the company is defeating itself.TrainingPeople doing performance evaluations need to be trained to evaluate fairly and consistently. As well, employees will need to be advised about the performance measures and evaluation criteria.Process improvement teams will need to be trained in problem-solving and information analysis. As well, employees will need to be trained to use statistical tools.Tools and Assessments for MeasurementsThe Basic Quality ToolsFLOWCHARTS , which are used during process mapping, are considered a basic quality tool.
Step Four
- Control Processes Using Measurements
The goal in this step of the COMPETITIVENESS / PRODUCTIVITY journey is to use the measurement results to fine tune processes and align them with the desired outcomes and standards. Processes, standards and measures need to be controlled and aligned to ensure that the company is serving its customers and supporting the people who are serving the customers or producing the products or services. Measurement allows management to "Manage by Fact" rather than managing by intuition or judgment by providing facts about the operating environment and performance. Based on the vision and the objectives desired, management can use those facts for analysis and decision making.There are two primary uses of "Management by Fact". They are:
Manage service quality - Manage the processes and the deliverables to make sure they meet customer requirements/specifications.
Manage process improvement - Identify opportunities for process improvement, and then implement them.
The obstacles of "Management by Fact" include: Unreliable, invalid measures. If the measures are not reliable and are not valid, they are not believable and will not be used. Measuring individuals instead of groups/teams or projects. When measurements are thought to be individual performance indicators, the tendency is to manipulate those measures to make personal performance look better. Non-timely recording of manual measures. When people are asked to keep manual logs, they frequently do not keep them up to date, resulting in inaccurate data. Misuse of measurement data by management. If data is used to punish employees rather than improve processes, the measurement concept will be undermined. Statistical methods need to be used to ensure that the information used for decision making is statistically valid otherwise the decisions may not be good ones and may actually create more problems.DATA collected during the measurement stage are used to control and align operational processes and systems to the company's values and vision.
Explanation of Step Four
- Control and Alignment The information collected during measurement is called "measurement data". It may be survey feedback, sales per month, number of deliveries made each shift, number of errors in billing, etc.Measurement data can be used to: Ensure that the outputs of a process meet the requirements. Identify where a process needs to be adjusted to meet the customer requirements Monitor the defined/desired standards. (As customer needs and requirements change, standards will have to be adjusted and the process may also have to be adjusted.) When there is a large amount of data, it is helpful to display it using more than one method. The reason for this, is that trends and other issues, can be easily seen when data are shown as a graph or bar chart. These methods make data more user friendly.
Impact of Control and Alignment on the Company Vertical Organization Affected Process improvement will have an affect on systems. Systems are basically the vertical organization of a company such as human resources, shipping/receiving or distribution, customer complaints or customer relations, purchasing, and accounting. As processes are controlled, improved and aligned, other parts of the company will be effected and may need to change and realign to ensure that the company VISION, goals and objectives are met.Firing on All Cylinders offers these examples of realignments that were needed to support continuous improvement principles.[In summary, the new appraisal process consisted of a meeting of the employee and supervisor where they agreed on job responsibilities, priorities, opportunities and training needs; a review meeting for the employee to give an update on progress; feedback on employee's performance by other employees; review of feedback and development of the next year's plan.]Continual Training and Use of Teams and Statistical Tools Teams will need training in statistics and the various tools as needed to ensure that they are kept up-to-date with new methods. As well, teams will need training in team building, effective brainstorming and problem solving techniques.Management PracticesManagement must start to manage using facts such as using monthly summaries of data in management meetings to keep up-to-date with operational changes needed or impacting another part of the company.As well, management needs to review measurements, process improvements and other realignments during STRATEGIC PLANNING meetings to ensure they support the overall goals and direction of the company.
Tools and Assessments for Controlling Based on Fact There are many tools that can be used during this stage of the quality journey. The statistical methods and tools that were explained in Step Three - Establish Measurements are also used in Step Four. Basically, the control and alignment step involves problem analysis as well as problem solving tools. The techniques used by companies vary based on the type of services they provide and their company's values and mission. In general, they follow a similar pattern and involve more than one technique.
Step Five
- Implement Continuous ImprovementIn Step Five of the COMPETITIVENESS / PRODUCTIVITY , the company continues doing what it has been doing; that is mapping its processes, establishing standards and measures and then controlling the processes based on the measurement data. But in addition, the company starts expanding what is has been doing to all aspects of its business.From this point on, the company needs to continue its focus on customer requirements and improving value to customers and improvement of the overall company performance and capabilities. But the company must also start learning from others and assessing its progress. Using benchmarking or comparing the company to competition standards are ways to assess the improvement progress.
Explanation of Step Five
- Continuous Improvement Successful companies that are truly world class and that demonstrate COMPETITIVENESS / PRODUCTIVITY principles possess common characteristics : LEADERSHIP and management commitment: unrelenting constancy of purpose Total customer delight: no ifs or buts Long-range effort: no instant pudding Teamwork and partnerships: with employees, suppliers, and customers Employee involvement and satisfaction: diversity and empowerment Ongoing training: from the chief executive officer to the lowest ranks Statistical measurement of progress CONTINUOUS IMPROVEMENT : an unending journey BENCHMARKING against the best in class Total, open communication with employees, suppliers, and customers The company needs to continue using the basics to improve its business. This is the foundation that will allow the company to be successful at implementing and using other tools, techniques and programs. It is necessary to review : Vision and mission statements as well as goals and objectives to ensure they still fit the company and its market. Procedures and processes in case new techniques become available that could streamline or improve the efficiency of them. · Measurement tools because there may be better ones and internal/external standards or requirements may change. · New methods for controlling processes. The COMPETITIVENESS / PRODUCTIVITY improvement process must be integrated into the normal day-to-day operations. Quality and business need to become one with a focus on total customer satisfaction.
Impact of Continuous Improvement on the Company When a company truly commits to becoming world class and successful, all employees realize that this is it. If a change in culture has not already occurred, it will happen now.
Tools and Assessments for Continuous Improvement The tools that were mentioned in the other steps apply here as well. Communication, statistical tools, training, ongoing assessment of customer satisfaction criteria, and teamwork are some of the tools that will help with the journey.Benchmarking Benchmarking is a management technique that improves business performance by showing where the company stands compared to others. Before benchmarking, ensure that you have defined the goals and objectives and that you have looked at your own process and made improvements to it. Next, get training and assistance to help in preparing for and following up on the benchmarking findings.Criteria for COMPETITIVENESS / PRODUCTIVITY PERFORMANCELeadership Strategic planning Customer and market focus Information and analysis Human resource development and management Process management Business results

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