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ORGANIZATIONS AND THEIR FUNCTIONS

Part two of a three part series.

The following is an excerpt from Chapter 2 of The Handbook for Quality Management by Thomas Pyzdek, © Quality Publishing.
The Handbook for Quality Management may be ordered from the Quality Publishing Order Form.

MANAGEMENT STYLES

JUDGMENTAL MANAGEMENT STYLE

If the traditional organizational hierarchy is viewed as a "chain-of-command," then ultimate authority can be viewed as residing in the topmost position on the organization chart. The individual occupying this position "delegates" authority to subordinates who may, in turn, delegate authority to positions further down in the hierarchy. In this system, managers are expected to use their authority to get the work done via command-and-control. Action is based on the manager’s judgment. This system effectively requires that managers possess complete knowledge of the work being done by their subordinates—how else could the manager "command-and-control" the work? Of course, this omniscience does not exist. Thus, the manager who attempts to follow this metaphor too closely finds herself making decisions based on guesswork to a greater or lesser degree. The result is mistakes, for which the manager is held responsible. Managers who make too many mistakes may be fired, demoted, or disciplined. A natural response to this threat is fear, which may result in the manager blaming his subordinates for their "failures." Because of the authoritarian mindset, problems are ascribed to individuals, not systems. This produces the classic approach to performance appraisal, including ranking of employees, merit pay, etc. (An analysis of these practices is given in VII.B.2. of The Complete Guide to the CQM) Another outcome of this approach is to act only when it is absolutely necessary. Since actions are based on judgments, judgments can lead to mistakes, and mistakes are punished; the manager who can minimize action will minimize the chance that a mistake will occur that can be blamed on her. Of course, this tendency is partially offset by the threat of being blamed for not meeting goals set by higher authorities.

DATA-BASED MANAGEMENT STYLE

One reaction to the obvious shortcomings of the judgmental management has been to try to improve the judgments by relying on "facts." Managers solicit feedback from employees and review data in reports before making a decision. Ostensibly, this "data-based approach" changes the basis for action from the manager’s judgment to data. Results are marginally better than with the purely judgmental approach. However, data are always incomplete and the element of judgment can never be completely removed. To the extent that the manager abdicates her responsibility for making a judgment, the quality of the decision will suffer. Another problem is the time involved in collecting data. The time (and expense) required increases exponentially to the extent that the manager wishes to remove all judgment from the decision and insists on "complete" data.

COMBINATION DATA-BASED/JUDGMENT MANAGEMENT STYLE

Most experts in management advocate making management decisions based on a combination of the manager’s judgment and reasonable amounts of data analysis. Managers, working with all parties impacted, formulate a coherent model of the system. The model (or theory) is used to predict the outcome that would result from operating the system in a certain manner. The system is operated and data is collected on the results obtained. The results are compared to the results predicted by the model, and the theory and systems are updated accordingly. This is the classic Shewhart Plan-Do-Check-Act (PDCA) cycle, or Deming Plan-Do-Study-Act (PDSA) cycle. It closely resembles the scientific method, the hypothesize-experiment-test hypothesis.

With this management style systems are evaluated rather than people. The change in focus is fundamental and profound. Here judgment is a source of generating hypotheses about systems or problems, and data is used to evaluate the quality of the hypotheses. People are asked to work to stabilize, then improve, the systems and the organization as a whole.