2 Managing Operations aOrganization diagnosis change design Mgt

2 - Managing Operations a-Organization diagnosis, change, & design Mgt 300 Thompson Session 5 12/27/2021 Mgt 300/Thompson/Ses 5: Org diagnosis, change, & design 1

A. Organization Diagnosis: 1. Techniques to find problem sources (the diagnostic phase) • Looking for the real problem. • Not just a symptom 12/27/2021 Mgt 300/Thompson/Ses 5: Org diagnosis, change, & design 2

First cause determination • Motorola terminology to search out the real reason for an error or a problem • Help to get things corrected for good. 12/27/2021 Mgt 300/Thompson/Ses 5: Org diagnosis, change, & design 3

Pareto charting • Define problems • Count frequency • Use pareto chart to determine where to put the most attention to correct a problem Text: 388 12/27/2021 Mgt 300/Thompson/Ses 5: Org diagnosis, change, & design 4

Fishbone diagram o d k- ar d. M Inventory Poor variety Shop-worn L l rt a n e C No training h Store Cleanliness Signage Outside contractors Too small Not specific Machine problems Unfriendly Employees 12/27/2021 ay yp url tra Staff Ho Non-responsive mgt No pay difference No Seniority-based pay ini ng No training p c ur g in s a No funds for new equipment Can’t find item Dissatisfaction with K-Mart ite im s n w Lack of Knowledgeable Waiting time Employees in check-out line Text: 387 Mgt 300/Thompson/Ses 5: Org diagnosis, change, & design 5

In practice 5 -1. Fishbone Diagramming Given the bookstore has an objective to run as a profit-center by the administration, construct a fishbone diagram that will show them the way, that is the main bone will be making a profit. Then. . 1. Construct 6 main bones to demonstrate areas related to profit 2. Give a metric to measure success in at least 3 of these bones. 3. Subdivide 2 of the bones into 3 third level bone. 4. For one of the 3 third level bones, divide into 3 further actions. 12/27/2021 Mgt 300/Thompson/Ses 5: Org diagnosis, change, & design 6

B. Managing Organizational Change: The Big Fix • From being in this course you have the tools to identify where and how change needs to be made. • Remember 80% of organization problems are peoplesystem or system problems? 12/27/2021 Mgt 300/Thompson/Ses 5: Org diagnosis, change, & design 7

1. Techniques: Force Field Analysis Supporting the change Opposing the change or behavior Text: 347, fig. 18 -4 12/27/2021 Mgt 300/Thompson/Ses 5: Org diagnosis, change, & design 8

Affinity diagramming • to help organize thoughts • all idea are put on post -its • put on a board • then all people sort the post-its without comment into groups 12/27/2021 Mgt 300/Thompson/Ses 5: Org diagnosis, change, & design 9

2. Implementation Strategies • How to reduce resistance to change? • How to increase acceptance? • Best practices to manage the change process. 12/27/2021 Mgt 300/Thompson/Ses 5: Org diagnosis, change, & design 10

Reducing resistance to change • direct actions e. g. • reward system • direct leader behavior • make the organization more receptive to change • reinforcing creativity • reinforcing change 12/27/2021 Mgt 300/Thompson/Ses 5: Org diagnosis, change, & design 11

A major shortcoming of most managers is that they do not involve the team in deciding how to meet the goals. Getting input from them will help get commitment and some pretty good ideas as they are closer to the work than management 12/27/2021 Mgt 300/Thompson/Ses 5: Org diagnosis, change, & design 12

So how do we implement change? Decide what you want to do. . Set forth metrics to measure final desired outcome (downstream metrics) Est. additional upstream or intermediate metrics and reinforcements to help shape activities to get to the final goal. e. g. 12/27/2021 Mgt 300/Thompson/Ses 5: Org diagnosis, change, & design 13

In Practice 5 -2 Mapping out a change program Develop a change strategy using the last graphic as a model. 1. Define the main objective to be reached (quantify) 2. Provide for strategies to get there and means to measure success in the various strategies that you have created so we know that the strategies are working. 12/27/2021 Mgt 300/Thompson/Ses 5: Org diagnosis, change, & design 14

C. Organization Design Let’s look at Levi Strauss’s organization chart. Here is how it would be as a straight functional organization design. Initial Design, see handout for revised design 12/27/2021 Mgt 300/Thompson/Ses 5: Org diagnosis, change, & design 15

In Practice 5 -3 Now, take a few minutes in your group and come up with answers to the following 1 -What do you think they are trying to do by using the second design? 2 -In what cases would the first design be better? 3 -Should R & D be a organization-wide function or should there be one in each of the three groups? Why? 12/27/2021 Mgt 300/Thompson/Ses 5: Org diagnosis, change, & design 16

1. Components of Organization design Job specialization Delegation of authority Chain of command Line & Staff Span of control Departmentalization or types of design for organizing the work Remember design should be chosen that is best to meet organizational goals Also note good form in design (where the lines go and why) 12/27/2021 Mgt 300/Thompson/Ses 5: Org diagnosis, change, & design 17

2. 3 major design types A. Functional 12/27/2021 Mgt 300/Thompson/Ses 5: Org diagnosis, change, & design 18

B. Product, Geographical or Customer Types of Design (also known as divisional) Geographic 12/27/2021 Mgt 300/Thompson/Ses 5: Org diagnosis, change, & design 19

Geographical, product, or customer design type Product structure A functional division appears below the product division indicated above. 12/27/2021 Mgt 300/Thompson/Ses 5: Org diagnosis, change, & design 20

Product, customer, or geographic division design Customer division A functional division appears below the product division indicated above. 12/27/2021 Mgt 300/Thompson/Ses 5: Org diagnosis, change, & design 21

C. Matrix RE HA ALL IT RD Y RI TO GH T DO Evolution of Matrix Designed to help coordinate between a customer focus and a functional focus. 12/27/2021 Mgt 300/Thompson/Ses 5: Org diagnosis, change, & design 22

Adding a coordinator 12/27/2021 Mgt 300/Thompson/Ses 5: Org diagnosis, change, & design 23

Adding more coordinators 12/27/2021 Mgt 300/Thompson/Ses 5: Org diagnosis, change, & design 24

Creating a matrix org. structure 12/27/2021 Mgt 300/Thompson/Ses 5: Org diagnosis, change, & design 25

Which may work, but often becomes. . . 12/27/2021 Mgt 300/Thompson/Ses 5: Org diagnosis, change, & design 26

or becomes. . . 12/27/2021 Mgt 300/Thompson/Ses 5: Org diagnosis, change, & design 27

A look at GM & org design as a strategy Pre 1955 A functional design under each division. 12/27/2021 Mgt 300/Thompson/Ses 5: Org diagnosis, change, & design 28

Trying to Improve the Individuality of the Automobiles With fears of anti-trust under Kennedy 1977 Research & Devel 12/27/2021 R&D Mgt 300/Thompson/Ses 5: Org diagnosis, change, & design 29

But they should be. . . . 12/27/2021 to reflect current market share Mgt 300/Thompson/Ses 5: Org diagnosis, change, & design 30

3. Other Coordinating mechanisms • • 12/27/2021 Cross functional teams Quality groups Concurrent engineering CPI groups Training Town-hall meetings MBWA Leadership Mgt 300/Thompson/Ses 5: Org diagnosis, change, & design 31

How can organization design improve motivation? Look at the strengths and weaknesses of each type of org design from the handouts. Consider what Levi’s did in our first example today, why did they do it? Right, by using a divisional structure, matching revenues and costs for each subdivision, and rewarding for performance (market share growth, return on investment, profit margin) we have a powerful motivation tool as each member of the smaller unit (sometimes called SBU) can see the direct result of her or his efforts. 12/27/2021 Mgt 300/Thompson/Ses 5: Org diagnosis, change, & design 32

In Practice 5 -4. . . In your groups solve the case that you have received by making a change in the design type (functional, divisional, or matrix). Justify which design type you used and why it should solve the problem. Or if you think some other coordinating mechanism would solve the problem, feel free to propose that plus a rationale why it should work & why the current org design is reasonable. See the handout for your assigned problem. 12/27/2021 Mgt 300/Thompson/Ses 5: Org diagnosis, change, & design 33