PUAD 626: Information Resources Management

	ORGANIZATION THEORY, PROCESS DESIGN, the QUALITY MOVEMENT, and ORGANIZATIONAL REENGINEERING

Organizational Theory and Reengineering
A “Quik” Outline

	Basic Concepts from Organization Theory
		Two perspectives of organizations
			Traditional view
			Process view
		Organizations as a Production Process
			Input Þ Process Þ Output Þ Outcome
			Types of processes
		Measurement and the Production Process
			Importance
			Types of measures
	Process Improvement
		Total Quality Management (TQM)
		Continuous Quality Improvement (CQI)
		Relationship between TQM & CQI
		CQI Improvement Model

Two Perspectives on Organizations
Traditional View versus Process View

	Focus of the traditional view
		Hierarchical control
		Vertical workflow
	Nature of the organization
		Emphasis on top manager
		Direct personnel supervision
		Emphasis on vertical relationships
	This is the model that made American industry great — between 1850 and 1950.
	First proposed by Adam Smith, and adopted by Henry Ford, strict division of labor and assembly lines made a lot of sense at the time.

Traditional View of Organizations
Vertical Workflow

Traditional View of Organizations
Times Have Changed

Traditional View of Organizations
Focuses Attention on the WRONG Things

Two Perspectives on Organizations
Traditional View versus Process View

	Focus of the process view
		Adaptation to change
		Process workflow
	Nature of the organization
		Emphasis on customer
		Decentralized decision-making
		Emphasis on horizontal relationships
	“Taking a process approach implies taking the customer point of view, since processes are the means by which an organization does what is necessary to produce value for its customers.” (Davenport, 1993, 7)
	This is the organizational model on which continuous quality improvement is based.

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Process View of Organizations
What Is a Process?

Process View of Organizations
Focuses Attention on the RIGHT Things

Two Perspectives on Organizations
A Final Comparison

Slide 12

Organizations as a Production Process
Transforming Inputs Into Outputs

	As a production process, an organization is viewed as a network of activity chains that transform inputs into outputs using a specific technology.
	These outputs are provided to another individual who wants them for the outcomes that result.
	Terms
		Inputs
		Technology
		Activity chain
		Network of activity chains
		Output
		Another individual
		Outcome

Organizations as a Production Process
Transforming Inputs Into Outputs

Organizations as a Production Process
Definitions of Key Terms

Organizations as a Production Process
Definitions of Key Terms, continued

Organizations as a Production Process
Categories of Common Processes

Organizations as a Production Process
Categories of Common Processes, continued

Organizations as a Production Process
Types of Processes

Organizations as a Production Process
Core Processes

Organizations as a Production Process
Not A Way, The Only Way

	Developing an understanding of your organization’s processes is a fundamental but underappreciated management responsibility. Yet without this approach, permanent improvement cannot be achieved.
	A senior officer at a Deming Prize winning Japanese firm was overheard to say — “Of course, process management is the only way to secure permanent improvement. But you will have a hard time convincing [managers] in the U.S. because they probably perceive this type of work as too detailed, boring, and not the basis on which people get promoted.”

Slide 22

Organizations as a Production Process
Enumerating Processes

Organizations as a Production Process
Identifying Process Boundaries

Organizations as a Production Process
Identifying Process Boundaries

Slide 26

Organizations as a Production Process
Where to Start

Organizations as a Production Process
Process Health

Measurement and the Production Process
The Importance of Measurement

Slide 30

Continuous Quality Improvement
The Model

Evaluating Process Improvements
A Criteria Checklist

	Acceptance by customers
	Legal/statutory authority
	Fit with mission, vision, and values
	Relevance to goals (causal connection?)
	Public acceptance; Impact on users/clients
	Political considerations
	Long term impact
	Technical feasibility
	Integration with other processes
	Cost and financing
	Cost-effectiveness
	Facility, staff, and training requirements

Implementing Process Improvements
Criteria for Action Plans

	Specific results and milestones
	Roles and responsibilities of the implementers
	Specific action steps
	Schedules
	Resource requirements and sources
	A communication process
	A review and monitoring process
	Accountability processes and procedures

Slide 34