1. Chapter 11 Performance Excellence and Organizational Change
University of Bahrain
College of Business Administration
MGT 433 Total Quality Management
Chapter 11
Performance Excellence and Organizational Change
Dr. Mahnmood Asad
MGT433

2. Outline Explain the importance and scope of organizational change
Explore how organizations build a strong quality culture, sustain performance, and continually improve
Provide some examples of firms undertaking these changes
Explain how TQ perspectives on organizational change relate to organization theory.
Dr. Mahnmood Asad
MGT433

3. Organizational Change Realities
Organizations contemplating change must answer some tough questions, such as, Why is the change necessary? What will it do to my organization (department, job)? What problems will I encounter in making the change? and perhaps the most important one — What’s in it for me?
Dr. Mahnmood Asad
MGT433

4. Strategic vs. Process Change
Strategic change is broad in scope and stems from strategic objectives, which are generally externally focused and relate to significant customer, market, product/service, or technological opportunities and challenges.
Process change is narrow in scope and deals with the operations of an organization. An accumulation of continuously improving process changes can lead to a positive and sustainable culture change.
Dr. Mahnmood Asad
MGT433

5. Strategic vs. Process Change
Dr. Mahnmood Asad
MGT433

6. Cultural Change
Culture – the set of beliefs and values shared by the people in an organization.
Cultural values often seen in mission and vision statements
Firms pursuing TQ often need cultural change
Dr. Mahnmood Asad
MGT433

7. Elements of a Performance Excellence Culture
Visionary leadership
Customer-driven excellence
Organizational and personal learning
Valuing workforce members and partners
Agility
Focus on the future
Managing for innovation
Management by fact
Societal responsibility
Focus on results and creating value
Systems perspective
Dr. Mahnmood Asad
MGT433

8. Why Adopt a Performance Excellence Philosophy?
Reaction to competitive threat to profitable survival
An opportunity to improve
Dr. Mahnmood Asad
MGT433

9. Requirements for Building and Sustaining Performance Excellence
Readiness for change
Sound practices and implementation strategies
Effective organization
Dr. Mahnmood Asad
MGT433

10. Perspectives on Cultural Change
Change can be accomplished, but it is difficult
Imposed change will be resisted
Full cooperation, commitment, and participation by all levels of management is essential
Change takes time
You might not get positive results at first
Change might go in unintended directions
Dr. Mahnmood Asad
MGT433

11. American Express Change Process
Scope the change—why are we doing this?
Create a vision—what will the change look like?
Drive commitment—what needs to happen to make the change work?
Accelerate the transition—how are we going to manage the effort on an ongoing basis?
Sustain momentum—what have we learned and how can we leverage it?
Dr. Mahnmood Asad
MGT433

12. People Roles in Organizational Change
Senior management – remove barriers
Middle management – be supportive
Workforce – create ownership
Dr. Mahnmood Asad
MGT433

13. Transforming Middle Managers to Change Agents
Empower
Create a common vision of excellence
Create new organizational rules
Implement continuous improvement
Develop and retain peak performers
Dr. Mahnmood Asad
MGT433

14. Common Implementation Mistakes (1 of 3)
Change is regarded as a short-term “program”
Compelling results are not obtained quickly
Process not driven by focus on customer, connection to strategic business issues, and support from senior management
Structural elements block change
Goals set too low
“Command and control” organizational culture
Dr. Mahnmood Asad
MGT433

15. Common Implementation Mistakes (2 of 3)
Training not properly addressed
Focus on products, not processes
Little real empowerment is given
Organization too successful and complacent
Organization fails to address fundamental questions
Senior management not personally and visibly committed
Dr. Mahnmood Asad
MGT433

16. Common Implementation Mistakes (3 of 3)
Overemphasis on teams for cross-functional problems
Employees operate under belief that more data are always desirable
Management fails to recognize that quality improvement is personal responsibility
Organization does not see itself as collection of interrelated processes
Dr. Mahnmood Asad
MGT433

17. Life Cycles of Quality Initiatives
Adoption: the implementation stage of a new quality initiative.
Regeneration: when a new quality initiative is used in conjunction with an existing one to generate new energy and impact.
Energizing: when an existing quality initiative is refocused and given new resources.
Maturation: when quality is strategically aligned and deployed across the organization.
Limitation or stagnation: when quality has not been strategically driven or aligned.
Decline: When a quality initiative has had a limited impact, is failing and the initiative is awaiting termination.
Dr. Mahnmood Asad
MGT433

18. Baldrige Roadmap to Performance Excellence
Dr. Mahnmood Asad
MGT433

19. Self Assessment: Basic Elements
Management involvement and leadership
Product and process design
Product control
Customer and supplier communications
Quality improvement
Employee participation
Education and training
Quality information
Dr. Mahnmood Asad
MGT433

20. Importance of Follow-Up of Self-Assessment Results
Many organizations derive little benefit from conducting self-assessment and achieve few of the process improvements suggested by self-study
Reasons:
Managers do not sense a problem
Managers react negatively or by denial
Managers don’t know what to do with the information
Dr. Mahnmood Asad
MGT433

21. Leveraging Self-Assessment Findings
Prepare to be humbled
Talk through the findings
Recognize institutional influences
Grind out the follow-up
Dr. Mahnmood Asad
MGT433

22. Knowledge Management
The process of identifying, capturing, organizing, and using knowledge assets to create and sustain competitive advantage.
Knowledge assets refer to the accumulated intellectual resources that an organization possesses, including information, ideas, learning, understanding, memory, insights, cognitive and technical skills, and capabilities.
Dr. Mahnmood Asad
MGT433

23. Types of Knowledge
Explicit knowledge includes information stored in documents or other forms of media.
Tacit knowledge is information that is formed around intangible factors resulting from an individual’s experience, and is personal and content-specific.
Dr. Mahnmood Asad
MGT433

24. Organizational Learning
Create a “learning organization”
Planning
Execution of plans
Assessment of progress
Revision of plans based on assessment findings
Dr. Mahnmood Asad
MGT433

25. Key Activities of Learning Organizations
Systematic problem solving
Experimentation with new approaches
Learning from their own experiences and history
Learning from the experiences and best practices of others
Transferring knowledge quickly and efficiently throughout the organization
Dr. Mahnmood Asad
MGT433

26. Internal Benchmarking
The ability to identify and transfer best practices within the organization
Process:
Identify and collect internal knowledge and best practices
Share and understand those practices
Adapt and apply them to new situations and bringing them up to best-practice performance levels.
Dr. Mahnmood Asad
MGT433

27. Organizational Change Theory
Organizational models :
Weisbord’s six box model
Nadler and Tushman’s congruence model
McKinsey seven-s model
Tichy’s change framework and TPC (technical, political, cultural) matrix
Burke-Litwin model
Dr. Mahnmood Asad
MGT433

28. Teleological Perspective
Organizations change through an iterative process of goal setting, implementation, evaluation, and revision
Change is a deliberate undertaking by individuals affiliated with the organization
Dr. Mahnmood Asad
MGT433

29. Organizational Change and Total Quality
Reason for change
Traditional: productivity or job satisfaction
TQ: customer satisfaction
Source of change
Both: top management
Types of change
Traditional: limited in scope and duration
TQ: continuous improvement over a long period of time
Dr. Mahnmood Asad
MGT433

30. Principles for Managing Change
Unfreeze attitudes and behavior
Have effective leadership
Manage interdependence
Involve the people
Refreeze to make gains permanent
Dr. Mahnmood Asad
MGT433