Page 24 - The Handbook for Quality Management a Complete Guide to Operational Excellence

10 B u s i n e s s - I n t e g r a t e d Q u a l i t y S y s t e m s O r g a n i z a t i o n a l S t r u c t u r e s 11

The knowledgeable quality manager will immediately recognize the
similarity of Fig. 1.5 to the cause-and-effect diagram. This is a useful anal-
ogy. The “effects” being sought must be clearly defined before the design
of this type of organization can proceed. The “causes” are built into the
organization such that the desired effects can be consistently and econom-
ically produced. Note that the design can accommodate multiple custom-
ers, suppliers, and internal subprocesses; in this example the mother and
baby are the primary customers. The scope is neither internal nor exter-
nal: it embraces the entire process.
Also noteworthy is the complete absence of reporting relationships.
The foundation of this type of organization is work flow, not authority. In
effect, everyone “reports” to the customer. This blurring of lines of author-
ity is a characteristic of this type of organization, which can be a source of
discomfort for those accustomed to the clear chain of command inherent
in traditional organizations. Clearly this involves a significant cultural
change. Another cultural change is the obliteration of the professional ref-
erence group. In functional organizations, professionals (e.g., accountants,
nurses, doctors, engineers) report to and work with others in the same
profession and are often more loyal to their profession than to their
employer. This is changed dramatically in horizontal organizations. The
transition from a traditional management approach to a horizontal struc-
ture must deal explicitly with the cultural aspects of the change.
Horizontal organizations maximize core competencies, rather than
suboptimizing quasi-independent functions. For example, in the patient-
focused-care example several support activities are involved in the delivery
of care (lab services, transportation, etc.). In a traditional organization there
would be a tendency for the laboratory manager to optimize the laboratory,
the transportation manager to optimize transportation, etc. However, in the
horizontal organization the optimization is focused on delivery of care. This
may well result in a perceived “suboptimal” performance of support activ-
ities, if each are (inappropriately) viewed in isolation.
Experience has shown that horizontal organizations have achieved dra-
matically improved efficiencies, compared to traditional hierarchal organi-
zations. One reason is in the intelligent reintegration of work to correct the
disintegrated work practices advocated by Taylor’s scientific management
theories. This segregation of work was done partly in response to condi-
tions that no longer exist: a better-educated workforce combined with
modern technology makes it possible to design integrated processes that
combine related tasks and bring the needed resources under local control.
In addition to improved efficiencies, the new approach to work creates
other welcome results, notably: improved employee morale, increased cus-
tomer satisfaction, and greater supplier loyalty and cooperation.
Table 1.1 summarizes the changing pattern of the marketplace. In
some ways the changing business environment involves a return to the

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