Republic of the Philippines

UNIVERSITY OF ANTIQUE
COLLEGE OF BUSINESS AND ACCOUNTANCY
Sibalom, Antique

Topic: Chapter 5 – Designing Organizations for Performance Excellence

Subject: Seminar in Government Management
Professor: Dr. Eva Capague
Reporter: Renesito Labnao
Marichee Santillan
Joel Odango

Boeing Aerospace Support

 Part of the Boeing Company, largest aerospace company in the world
 Provides products and services, including aircraft maintenance, modification, and repair, and
training for aircrews and maintenance staff, to reduce life-cycle costs and increase the
effectiveness of aircraft
 Ninety-seven percent of Boeing AS’ business comes from military customers.
 Workforce of over 13,000 employees based at Boeing AS headquarters in St. Louis, Mo., and
nine major sites—eight in the United States and one in Australia—as well as more than 129
secondary and smaller sites. In this highly competitive industry, new orders for Boeing AS’
products and services have grown each year since 1999 and are significantly higher than its
competitors’ cumulative growth.
 The company’s sales exceed $4 billion annually.
 Boeing AS earnings have grown at a double-digit average cumulative rate from 1999 to 2002.
 Annual revenue has more than doubled from 1999 to 2003.
 Since 1998, Boeing AS has provided products and services within three days of a request, while
competitors take up to 40 days.
 Cash awards paid to employees for extraordinary performance has tripled from 2000 to 2002.
 In 1998, Boeing Airlift and Tanker Programs, which received a Baldrige award in the
manufacturing category
 Key factors to the success of Boeing AS are its commitment to customer satisfaction,
performance-to-plan, and on-time delivery of quality products and services
 Carefully planned and well-managed processes combined with a culture that encourages
knowledge sharing and working together have been essential to Boeing AS’ ability to deliver
high-quality products and services
 Boeing AS employees are involved in community activities through the company’s Employee
Community Fund (ECF) programs operated at all Boeing AS locations. The ECF, which is
sponsored by AS’s parent organization Boeing, is the world’s largest employee-owned charitable
organization

ORGANIZATIONAL STRUCTURE
The effectiveness of an organization depends in part on its organizational structure – the clarification of
authority, responsibility, reporting lines, and performance standards among individuals at each level of
the organization.
Factors having to do with the context of the organization:
1. Company operational and organizational guidelines
2. Management style
3. Customer influences
4. Company size
5. Diversity and complexity of product line
6. Stability of the product line
7. Financial stability
8. Availability of personnel

THE FUNCTIONAL STRUCTURE

 The organization is divided into functions such as operation and maintenance which is headed
by a manager
 Communication occurs vertically up or down the chain of command
 Provide organizations with a clear chain of command and allow people to specialize in the
aspect of the work for which they are suited
 Problems with the Functional Structures
- designed primarily for the administrative convenience of the organization rather than for providing
high quality service to customers
1. Functional Structure separates employees from customers
2. Functional Structure inhibits process movement
3. Functional Organizations often have a separate function for quality; called Quality Control or
Quality Assurance

REDESIGNING ORGANIZATIONS FOR PERFORMANCE EXCELLENCE

1. Focus on processes
2. Make Quality everyone’s job
3. Recognize internal customers
4. Create team-based organization
5. Reduce hierarchy
6. Use steering committees

DEVELOP AN AGILE ORGANIZATION

Agility is an important characteristic for any organization that wishes to develop and maintain
focus on the customer and react to competitive challenges, particularly as e-commerce grows and
requires more rapid, flexible, and customized responses.
Small organizations are often more agile, meaning that they can adapt quickly and flexibly to
changing customer requirements and demand, a key characteristic in today’s globally competitive
markets.

REDESIGN WORK SYSTEMS

Organizations may be viewed at three levels:
1. Individual job level – work systems should enable effective accomplishment of work activities
and promote flexibility and individual initiative in managing and improving work processes.
Empowering employees and using work teams are ways to achieve these objectives.
2. Process level – work systems promote cooperation, cross functional teamwork, and
communication
3. Organizational level – senior managers must design a supportive work environment through
compensation and recognition policies, and health, safety, and support services
Examples of organizations that use these ideas to ensure or improve quality in their operations:
1. Boeing Airlift and Tanker Programs
2. Veterans’ Affairs Hospitals
3. Solar Turbines, Inc.
4. General Electric Bayamon
5. San Diego Zoo

COMPARISON TO ORGANIZATIONAL DESIGN THEORY

Structural Contingency Theory
 Two principal types of organization structures:
1. Mechanistic – centralized, many rules, strict division of labor, formal coordination across
departments
2. Organic – decentralized, few rules, loose division of labor, informal coordination across
departments
 Holds that there is no “one best way” to organize and that the choice between
mechanistic and organic structures should be a function of certain contingencies, most
often characteristics of the organization’s environment and technology

Institutional Theory
 Holds that organizations try to succeed by creating structures that will be seen as appropriate
by important external constituencies – customers, other organizations in the industry,
government agencies, and so on.