Contingency, TQM, Learning ORg Report

7/31/2019 Contingency, TQM, Learning ORg Report

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3Group

Contemporary Approachesto Organization & Management

De L

eon, Lolita Joaquin, Olivia Ricalde, Myra Grace C .


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Management in the New Millennium

A firm can be efficient by making thebest use of people, money, physicalplant, and technology.

It is ineffective if its goals do not providea sustained competitive advantage.

A firm with excellent goals would fail if it hired the wrong people, lost keycontributors, relied on outdatedtechnology, and made poor investmentdecisions.

McGraw-Hill 2004 The McGraw-Hill Com anies, Inc. All rights reserved.


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Copyright McGraw-Hill. All rights reserved.

The Evolution of Management Theory

Figure 2.1Source:


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Contingency Theory

Total Quality Management

Learning Organization

Contemporary Management Perspectives


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The Contingency Approach

The contingency approach (ca 60 s & 70 s) toManagement is a management approach thatemphasizes that what managers do in practicedepends on a given set of circumstances--a situation.

Environment ca 1960s Expansion of markets based on differentiation ofproducts resulting on growing quality consciousness

Workforce becoming less blue-collar, more white collarEnvironment in ca1970 s Emergence of new companies Apple Emergence of new products, IBM PC


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The Contingency Approach

The Contingency Viewemphasizes that amanagers approach

should vary accordingtothat is, be contingenton the individual andthe environmental

situationAlso sometimes calledthe situational approach.


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Contingency Theory

The idea that the organizational structures andcontrol systems manager choose depend on arecontingent on characteristics of the externalenvironment in which the organization operates.

The environment impacts the firm and managersmust be flexible to react to environmental changes .



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Contingency Theory

States that there is no one best way to manage anorganization .

Because what works for one organization may not work foranotherSituational characteristics (contingencies) differOrganizations are individually different, face differentsituations (contingency variables), and require different ways

of managing.Managers need to understand the key contingencies thatdetermine the most effective management practices in agiven situation


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Four Popular ContingencyVariables

Organization size

Routineness of task technology Environmental uncertainty Individual differences


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Proponents of theContingency Approach

Joan Woodward technologies directly determine organizational attributessuch as span of control, centralization of authority, and the

formalization of rules and procedures.

She classified technology as follows:SMALL BATCH and UNIT TECHNOLOGY LARGE BATCH and MASS PRODUCTION

CONTINUOUS PROCESS PRODUCTION


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Proponents of theContingency Approach

P.R. Lawrence and J. W. Lorsch companies operating in less stable environments operated more effectively, if the organizational structure was less

formalized, more decentralized and more reliant on mutualadjustment between various departments in the company

companies operating in more stable and certainenvironments functioned more effectively if the organizationwas more formalized, centralized in the decision-makingand less reliant on mutual adjustment between departments.


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2 Organization Types according toThomans Burns & G.M. Stalker

Mechanistic

Organic


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Organic vs Mechanistic Structure

MECHANISTIC for tasks which are routine &unchanging

Authority is centralized at the top.

Employees are closely monitored & managed.Characterized by tallness, specialization, and formalization Emphasize efficiency and elaborate rules and procedures for maintaining control over behavior can be very efficient in a stable environment.


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ORGANIC for tasks which are non-routine & changing emphasize low job specification , creativity rather than efficiency, and freedom for workers

to control their own behavior Authority is decentralized throughout the organization.Tasks and roles are left ambiguous to encourage employees to react quickly to changing environment.


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Mechanistic vs. Organic Structure


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ORGANIC MECHANISTIC

Span of control

# of levels

Centralization

Formalization

Range ofcompensation

Wide

Few

Low

Low

Narrow

Narrow

Many

High

High

Wide


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Contingency Theory of Organizational Design

** Technological environments change rapidly, so must managers .


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So what should managers do?

It depends on where they are in the organization:

Level Activities Skill

Top Direction/goals.Allocate

resources.Set standards.

Middle Integrateknowledge.Balance short-termwith Long termgoals.Develop people.

Frontline Secure resources andOpportunities.Manage performanceand improvements.


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Lessons from theContingency Approach

Approach emphasizes situational appropriatenessrather than rigid adherence to universal principles.

Approach creates the impression that anorganization is captive to its environment.Approach has been criticized for creating theimpression that an organization is a captive of itsenvironment.


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APPLICATION:What would you do if you were the

manager of a shoe manufacturing business experiencing decreasing profits? conduct a study on how to increase the productivity of the

workers (Classical Management Theory) involve workers more fully in decisions concerning the methodsto use in producing shoes based on the premise that this willmotivate the workers to produce more (Behavioral Management Theory) establish a committee which would coordinate the production anddistribution of goods under the assumption that large inventoriesare responsible for the decline in profit (Systems Theory) study the situation carefully to determine the cause of thedecreasing profits before deciding on a new procedure or program(Contingency Theory)


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TOTAL QUALITY MANAGEMENT

TQM: Creating an OrganizationDedicated to Continuous Improvement


23/77Total ualit Mana ement

Why TQM?

Environment ca 1980 s : slow Americanproductivity improvements, rise of Japanesecompanies

Ford Motor Company had operating losses of$3.3 billion between 1980 and 1982.

Xerox market share dropped from 93% in 1971to 40% in 1981.

Attention to quality was seen as a way tocombat the competition.



TQM

Total - made up of the wholeQuality - degree of excellence a product or serviceprovides

Management - act, art or manner of planning,organizing, leading, and controlling resources

Therefore, TQM is the art of managing the whole toachieve excellence .


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WHAT IS TQM?

Defination of TQM, According to JOHN GILBERT :A process designed to focus on customer expectations,preventing problems, building commitment to quality in theworkforce and promoting open decision-making.

Total Quality Management is a comprehensive term notrelated only to the quality goods and services.

TQM is a preventive approach and not corrective one.

It tries to produce best possible product and services throughregular innovation by doing right things every time.


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Total Quality Management reflects the culture of anorganization.It indicates consumer-oriented, quality oriented

management philosophy.It is a commitment to Quality by all managers andworkers.It is a philosophy to achieve consumer satisfaction.TQM encourages formation of Quality circles.


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Origin of TQM

The concept of Quality control as a distinct disciplineemerged in the United States in the 1920s. TQM concept developed in Japan in 1960s. The idea of involving all employees not just the quality control staff.

The credit of introducing TQM in Japan goes to twoAmerican, Dr. W.EDWARDS DEMING andDr.J.M.JURAN, with this they become heroes in Japan longbefore America could realize their importance.

The Deming prize is the highest TQM award in Japan and isgiven to most respected and successful corporations.


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THE EVOLUTION OF TOTAL QUALITYMANAGEMENT (TQM)

1940sQuality became more statistical in nature. Statistical

sampling techniques were used to evaluate quality, and qualitycontrol charts were used to monitor the production process.

1960sW ith the help of quality gurus, the concept took on a

broader meaning. Quality began to be viewed as something thatencompassed the entire organization

1970sThe meaning of quality for businesses changed

dramatically quality was still viewed as something that neededto be inspected and corrected.


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Timeline showing the differencesbetween old and new concept of quality



Whats the goal of TQM?

Do the right things right the firsttime, every time.


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Objectives of TQM

TQM stresses on collective effort of all functionsactivities and people for improving quality of goods and services to bring in higher consumersatisfaction.The aim of TQM is to give maximum satisfactionto consumer by providing goods which are best inquality (i.e. zero defect).

TQM aims at educating and training the managersand employees because these are the integral partof TQM as it is rightly said TQM begins witheducation and end with education.


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TQM is useful in improving quality as well as

productivity the methods used in thisprogrammers' are zero defects production thisnot only makes ever employee responsible forquality improvement but also results in higher

productivity.TQM aims at giving full freedom to expresstheir suggestion for quality improvement, costreduction and elimination of wastages and thosewho take active participation should berewarded.


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Total ualit Mana ement

Another way to put it

At its simplest, TQM is all managers leading andfacilitating all contributors in everyones two mainobjectives:

(1) total client satisfaction through quality productsand services; and

(2) continuous improvements to processes, systems, people, suppliers, partners, products, and services.


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Basic Tenets of TQM

1. The customer makes the ultimate determinationof quality.2. Top management must provide leadership andsupport for all quality initiatives.

3. Preventing variability is the key to producinghigh quality.4. Quality goals are a moving target, therebyrequiring a commitment toward continuous

improvement.5. Improving quality requires the establishment of effective metrics. We must speak with data and factsnot just opinions.


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PRINCIPLES OF TQM

Total Quality Management encompasses a set of four principles& eight core concepts.

Principles: Delight the customer Management by fact People-based management

Continuous improvement


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EIGHT CORE CONCEPTS

Customer satisfaction Internal customer are real All work is process MeasurementTeamwork

People make quality

Continuous improvement cycle prevention


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The three aspects of TQM

Counting

Customers

Culture

Tools, techniques, and training in theiruse for analyzing, understanding, andsolving quality problems

Quality for the customer as adriving force and central concern.

Shared values and beliefs, expressedby leaders, that define and supportquality.


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Total Quality Managementand Continuous Improvement

TQM is the management process used to make continuousimprovements to all functions.TQM represents an ongoing, continuous commitment toimprovement.The foundation of total quality is a management philosophy thatsupports meeting customer requirements through continuousimprovement.


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Continuous Improvement versusTraditional Approach

Market-share focusIndividuals

Focus on who and why Short-term focusStatus quo focusProduct focus

InnovationFire fighting

Customer focusCross-functional teams

Focus on what and how Long-term focusContinuous improvementProcess improvement focus

Incremental improvementsProblem solving

Traditional Approach Continuous Improvement


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Quality Throughout

A Customers impression of quality begins with theinitial contact with the company and continuesthrough the life of the product.

Customers look to the total package - sales, service duringthe sale, packaging, deliver, and service after the sale.Quality extends to how the receptionist answers thephone, how managers treat subordinates, how courteoussales and repair people are, and how the product is

serviced after the sale.All departments of the company must strive toimprove the quality of their operations.


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Value-based Approach

ManufacturingDimensions

Performance

FeaturesReliabilityConformance

DurabilityServiceabilityAestheticsPerceived quality

Service DimensionsReliabilityResponsiveness

AssuranceEmpathyTangibles


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The TQM System

CustomerFocus

ProcessImprovement

TotalInvolvement

Leadership

Education and Training Supportive structureCommunications Reward and recognitionMeasurement

Continuous Improvement Objective

Principles

Elements


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BENEFITS OF TQM

Customer satisfaction enhanced.A total change in culture is brought aboutIncreased productivity and efficiencyAdvanced techniques are incorporated in the

organizationNew products & skills are developedTeamwork is enhancedImproved house-keeping

Reduced rework Reduced inventoryIncreased profitability


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LIMITATIONS OF TQM

TQM is a slow moving process. It requires total change in theoutlook of management and employees. It benefits will beavailable only after a long period of time.The success of TQM largely depends on existence of participative management. TQM need employee who can take alead,& trade union are interested in their own benefits ratherthan quality management.TQM implementation is not an easy task, specially in a

developing country sue to unfavorable attitude of managementand employees.


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BENCHMARKING

Another way companies implement continuousimprovement is by studying business practices of companies considered best in class.

Purpose: To identify and fill gaps inperformance by putting in place best practice,thereby establishing superior performance.When to Use : As a part of total quality process

when taking an independent look at performanceby comparing it with that of others.


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DEMING WHEEL (PDCA)

Plan

DoCheck

Act

Demings Cycle (1900-1993)P-D-S-A

Study


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Purpose: A management concept suggested byDeming to satisfy the quality requirements of thecustomer by using the cycle: plan,do,check andaction.When to use: For the development of a newproduct based on the requirements of thecustomer.Example: A company implementing the TQMprocess used the Deming Wheel for achieving

continuous improvement of the various businessprocesses in order to develop qualityimprovement of the whole organisation.

ERROR PROFFING (POKAYOKE)


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ERROR PROFFING (POKAYOKE)Purpose: To design an operation in such a way thatspecific errors are prevented from causing majorproblems to the customer.When to use: It can be used when defects occur andrequire 100% inspection,immediate feedback and actionat the:

Start of production process.Production points where an error may occur.Source of raw material and components.

Example: A large steel press is automatically monitored

for wear.If the thickness becomes less than a specifiedamount,an alarm sounds and action has to be taken torectify the error.


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JUST IN TIME

Purpose: To deliver the raw materials orcomponents to the production line to arrive justin time when they are needed.When to use: When you want to minimize oreliminate stock in order to prevent theorganization from incurring unproductive cost.


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KAIZEN


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Purpose: A Japanese term meaning changefor the better, the concept implies acontinuous improvement in all companyfunctions at all levels.When to use: The term is so common inJapan that it is used in all aspects of life.

KAIZEN


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PARETO ANALYSIS


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Purpose: To separate the most important causes of aproblem from the many trivial. Also, to identify the mostimportant problems for a team to work on. ParetoAnalysis was first used by Wilfredo Pareto, an Italianeconomist.When to use: When the team is analyzing data relatingto a problem to decide which are the most important

factors to be tackled first to have the most impact on the problem.

Example:


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QUALITY CIRCLES

Purpose: A special type of small group activity which forms avehicle for the development of individuals.When to use: Quality circles are especially useful in the laterstages of a total quality process when individuals in their ownwork areas begin to tackle their own problems. They lead to

self-regulation in work groups.Example: A companies in the Potteries set up quality circlesto allow all employees to contribute their own ideas to thebenefit of the whole company. In the first year more than 25circle presentations were made and successfully implemented.


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BRAINSTORMINGPurpose: To generate as many ideas as possible withoutassessing their value.When to use: In,teams when trying to identify possibleroot causes or when seeking solutions to aproblem.Brainstorming can also be used when decidingwhat problem or improvement activity to work on,andwhen planning the steps of a project.Example: An organization was seeking suggestions toreduce absenteesim.They ran a series of brainstorming

sessions to generate ideas for tackling the problem.


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WHY TQM EFFORTS FAIL

Lack of a genuine quality cultureLack of top management support and

commitmentOver- and under-reliance on statistical processcontrol (SPC) methods

E i i h N


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Environment in the NewMillennium

Highly competitive environment Information and electronic age Information and knowledge is readily

available to us all Information speed through Internet Emergence of new work practices suchas virtual teams, network organizations The future is going to be dominated byour need to understand systems.

Th L i O i i


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The Learning OrganizationApproach

The learning organization approach tomanagement is the management approachbased on an organization anticipatingchange faster than its counterparts to havean advantage in the market over itscompetitors.

From The Fifth Discipline by Peter Senge, 1990


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Why Learning Organization? The C Words

Complexity: Situations that are difficult to understand, haveconsiderable ambiguity and uncertainty, and often have no

solutions, only options and tradeoffs

Chaos: Seemingly random events that have an underlying

pattern (which is difficult to discern)

Change: turbulent environments in which the future isdifficult to predict or control

The illiterate of the 21st century will not be the individual whocannot read and write, but the one who cannot learn, unlearn,and relearn. -- Futurist Alvin Toffler


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The Learning Organization

1. Creating and Acquiring Knowledge2. Transferring Knowledge

3. Modifying Behavior

A Learning Organization is an organizationthat actively creates, acquires, and transfersknowledge within itself and is able to modify itsbehavior to reflect new knowledge


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The Learning Organization

The management approach based on anorganization anticipating change faster than itscounterparts to have an advantage in the market

over its competitors.

There are two ways organizations can learn:Experimental learningExternal learning


M g F i L i g


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Managers Focus in a LearningOrganization:

Build a commitment to learningWork to generate ideas with impact

Work to generalize ideas with impact

M i l A h t L i


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Managerial Approach to LearningOrganization

Managers must create an environment conducive to learningManagers encourage the exchange or information amongorganization membersManagers promote :

systematic problem solving Experimentationlearning from experiences and past historylearning from experience of others

transferring knowledge rapidly throughout the organization



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Building a Learning Organization

System ThinkingEvery organization member understands his or her own job and how the

jobs fit together to provide finals products to the customer

Shared vision

All organization members have a common view of the purpose of theorganization and a sincere commitment to accomplish the purpose

Challenging of the mental modelsOrganization members routinely challenge the the way business is doneand the thought processes people use to solve organizational problems



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Building a Learning Organization

Team learningOrganization members work together, develop solution to new problemstogether, and apply the solutions together.Working as teams rather than than individuals will help the organization

gather collective force to achieve organizational goalsPersonal mastery

All organization members are committed to gaining a deep and richunderstanding of their work Such an understanding will help organizations to reach importantchallenges that confront them



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Building aLearning

Organization

System thinking

Personal mastery

Team Learning

Learning Organization Approach

Shared Vision

Challenging ofMental models

(Systems Approach)

(Chaordic Organization)

(Classical/Managementscience)

(Theory Z/Behavioral)

(Theory Z/Behavioral)


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Western Management Theories

Is there an Asian Management Theory??

What is business management


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What is business managementthe Asian way?

Business tend to be small scaleTime has no beginning and endIndividualism is less relevant; managerial beliefs shift towardsthe autocratic endConformity to socially acceptable behaviors is done throughmorality (e.g losing face)Oriental managers rely less on interpersonal confrontationsManagerial decisions consider effects on othe rpeopleControl of performance is less formal

Maintaining and developing guanxi (connection andrelationship

*From World Executive Digest by Redding & Martyn, 1984


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Will Western Managementwork in Asia?*

Values and attitudes affect but do not invalidate the transfer of American management concepts Consequently, when wewish to transfer an effective device from one culture to another,careful attention should be given to underlying premises?

Tools of management remain the same.** Economic and business philosophy are however, different.** Combination of general management, functional management,and communal organization and management..**

*From World Executive Digest by William Newman, 1984

**From World Executive Digest by Sixto Roxas, 1981

Photo from www.aim.edu.ph


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Are Western Theories Applicable


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Are Western Theories Applicablein Philippine Setting?

The models and ideal types taught in Western-oriented MBA programs are based on certain assumptions, many of which areinvalid in the Philippines.

Although organizations here have most of the structures and

formal procedures of Western business, actual day-to-daybusiness processes and interactions necessarily proceed withinthe matrix of Filipino culture and values.Thus, the need for the Westerner to go "the extra mile" tounderstand what's really going on and adapt a culturally

sensitive style of doing business . - Clarence Henderson,Henderson Consulting International

What is Pinoy Management


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What is Pinoy ManagementTheory??

No one Management Theory or Style. Under the formal organization are:

Informal organization

Battlefield of behavioral styles among managers and employees Unknown cultural ambiance among peoples and systems

From Pinoy Management by Ernesto Franco, 1986


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Weaknesses of Pinoy Workers

Walang bilib sa sarili (No confidence in oneself) Dikdik sa Colonial Mentality (Indoctrinated with ColonialMentality)

Masyadong relaks (Overly relaxed)

Ningas-cogon (Not a follow-up people)Holiday mentalityLack of managerial and organizational effectivenessLack of self-reliant tenacity



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Pinoy Management

Kailangan may No. 2 (There is a need for No.2)Tsismis machine (Grapevine Machine)Kailangan may Hatchet Man (There is need for a Hatchet Man)Be an expert on timing

Lumayo sa madalas matalo (Avoid losers)Gawin mong personal (Make it personal)NBA Style: One-on-onePower play. Laban (Fight)

Be situational and contingentUmarte kang parang intelihente. Iyong laging nag-iisipBody language ang importante (Body language is important)Pag sinabing No, dapat No talaga



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Pinoy Management Approaches

Management by Kayod (Realist Manager)He wants quick actionHes an autocrat He is siguristaHe has gut feelHe knows how to use people

Management by Libro (Idealist Manager) He is a thinker; technocrat; mabusisi ; may sistema

Matigas and ulo



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Pinoy Management Approaches

Management by Lusot (Opportunist Manager) He is galawgawWalang konsensiya

Mahilig sa lusot ( Loves to get by) Mahilig sa ayusan

Ugnayan-Management (The Hybrid)Has balanceContingency management style

He is solid Marunong pumili (Chooses well)Pambihira talaga (Exceptionally gifted)



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Contingency, TQM, Learning ORg Report

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