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OATSIH Accreditation Manual
1.9 Continuous Quality Improvement
This chapter refers to the Continuous Quality Improvement tool for improving quality of
services provided by organisations.
Page last updated: 07 September 2012
Continuous quality improvement is a tool for improving the quality of services provided by
organisations. Continuous quality improvement refers to having a systematic approach to
2. collecting and reviewing data or information in order to identify opportunities to improve the
operations of an organisation with the end result of delivering better services to customers or
clients.
Most current standards frameworks, including those relevant to ACCHOs, require
organisations to demonstrate that they have implemented processes to continuously improve
their operations and the quality of services to clients. Most organisations are always
improving in response to people’s ideas on how to do things better. The drawback is that
improvements are often ad-hoc, not monitored and rarely evaluated to check that they really
did result in improvements to clients, the staff and the organisation as a whole.
Continuous quality improvement is a managed approach to quality improvement that
emphasises an ongoing or continual process of improvement and evaluation.
The process involves:
Identifying improvements
Implementing the improvements
Evaluating the effect of improvements and
Going back to identify more improvements.
A common approach to continuous quality improvement is to see it as an ongoing cycle
involving planning, doing, checking, identifying more actions and then starting again. This is
the Plan, Do, Check, Act Cycle shown below.
Figure 1.1: The Plan, Do, Check, Act Cycle
Top of page
3. Plan:
Clarify issues or problems
Collect and review data or other information related to the issues or problems
Identify the causes of the issue or problem
Clearly identify improvements that can be made
Clarify the outcomes for improvements
Develop strategies to implement improvements—consider stakeholders—consider
strategies to get management support
Identify how you will measure the success of the improvement and identify how you
will collect the data
Identify key tasks
Do:
Gain approval for improvements
Implement the improvements— assign key tasks
Monitor the implementation—make sure key tasks are completed
Collect data on improvements
Check:
Did the improvement work? If not, why not?
Were there any unintended consequences?
Collect ongoing data on the operations of your organisation—e.g. client feedback,
staff feedback, accident/incident reports, hazard reports, audits, etc.—what does this
tell us about the improvements?
Act:
Consider improvements—do they suggest other improvements—e.g. staff training,
review of procedures, changes to organisation operations?
If improvements did not work what do we need to do?
If there were unintended consequences to improvements—do we need to do anything
about them?
Consider new data—e.g. client feedback, staff feedback, accident/ incident reports,
hazard reports, audits, etc—does it suggest improvements?
Look for things to improve—look at problems and consider solutions.
The commitment to improvement needs to be ongoing. It needs to be built into the
organisation’s culture and practice to ensure the organisation continues to change and adapt
to the needs of its clients. Top of page
Case Study 1: Practice Manager, Victoria
I am the Practice Manager of a bustling ACCHO with 25 full-time staff in rural Victoria. In
addition to general medical services, we also provide programs including Drug and Alcohol
4. and ‘Bringing them Home’, a HACC program and a Regional Hearing Program. We were
first accredited in 2006 and are up for renewal in 2009.
Early in the process, most of the staff that were involved moved on, so we had to get the
standards out and get our EQHS facilitator involved in the process. This involved a number
of sessions where we looked at what each standard was, what the gaps were and what to do to
fill in the gaps. It really was a case of looking at the resulting action plan and looking at the
organisational profile—we actually didn’t want to tack things on. We understood that we
needed to change the ‘culture of the organisation’. It needed to be done on a day to day
basis—it needed to be built into the system.
Accreditation is a time-consuming process, and it is not easy to fulfil the role of coordinating
accreditation on top of other responsibilities. I got through it with EQHS facilitator support,
and for our next accreditation I would possibly be able to manage it alongside all my other
duties without the support, simply because we now have the processes in place to ensure that
the entire organisation participates and is accountable.
Ideally it would be good to have someone to primarily deal with accreditation, but they would
need to be a long term staff member. Initially, this must be to change the culture, but once
that happens, everyone owns it.
In the beginning there were some difficulties. Alongside the first initial review there were
delays in getting the funding and this caused a few headaches.
However, the EQHS facilitator gave us an action plan to differentiate between the things that
could be achieved short-term in house, and those that needed to consider the ‘red tape’.
It was also difficult with staff. Speaking to them they said they found it hard to make the
changes because they were not seeing anything happen, due to the ‘limbo’ time lag. The way
we overcame this was to implement an accreditation review committee which meets
fortnightly. We also implemented training and mentoring with all staff.
It is so important to keep communications open with all staff, simply because if they aren’t
aware of the process and the impact, they will not stay in the loop. An organisation must
evaluate and audit all RACGP related issues and processes on a regular basis.
The first time around accreditation can be a daunting process, but with good management and
an overall commitment to the process, it gets easier.
EQHS facilitator support (I could not have done without this the first time) was so valuable in
the early days, as they have a lot of resources and expertise, and once you have a monthly
action plan in place to follow, it is a straightforward process.
If we were to do it differently
I would say that you cannot involve staff enough! Get them to ‘OWN’ the process a bit more.
We have redone our position descriptions—so that all staff participate in the whole process of
standards and the requirements.
Accreditation is so important as all staff become part of the organisation—it is not just an
5. add-on after-thought; it becomes part of all the processes in the organisation. It is all about
improving the organisation and providing a quality service.
If we were to give advice, I would say:
Accreditation should be embraced—it allows so much to be achieved—systems, policies and
procedures. As an example: with play equipment—what safety procedures are in place? What
about cleaning? Who does the cleaning? Does it need to be put onto the maintenance forms?
It changes the whole culture of the organisation. Who needs to sign off? Who needs to be
responsible? For every part of an organisation, these questions have to be asked.
Accreditation has really increased and strengthened our team and provided a high quality
organisation that delivers a high quality service to all our clients.
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Table of contents
Preface
Abbreviations
Section1: Terms and definitions
o 1.1 Establishing Quality Health Standards (EQHS)1
o 1.2 Standards
o 1.3 Quality
o 1.4 Quality Management System
o 1.5 Good Practice and Best Practice
o 1.6 Accreditation and Certification
o 1.7 Accreditation and the OATSIH Risk Assessment Process
o 1.8 Australian Commission on Safety and Quality in Health Care — Proposed
Standards
o 1.9 Continuous Quality Improvement
Section 2: Standards and Frameworks
o 2.1 Royal Australian College of General Practitioners Standards
o 2.2 Quality Improvement Council Standards 16
o 2.3 Australian Council on HealthCare Standards (ACHS)
o 2.4 International Organisation for Standardization AS/NZS 9001:2008 Quality
Management Systems—Requirements
o 2.5 Choosing a Standards Framework
Section 3: Key Stakeholders
o 3.1 OATSIH National Quality Network21
o 3.2 Aboriginal Community Controlled Health Organisations
o 3.3 ACCHO Board
o 3.4 ACCHO Manager
o 3.5 ACCHO Staff
o 3.6 ACCHO Clients
o 3.7 Referral Agencies
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Ann Marie T. Sullivan, M.D., Commissioner
Governor Andrew M. Cuomo
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Quality Improvement Plan Template
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New York State Office of Mental Health
Office of Quality Management
2005
Quality Improvement Plan
Name of Clinic
Date of the Current Plan
Section 1 – Introduction
Introduction: Mission, Vision, Scope of Service
(Describe briefly the clinic program that will be covered by this Plan, including the clinic’s
mission and vision, the types of services provided, its relative size, etc,)
9. The following Quality Improvement Plan serves as the foundation of the commitment of the
this clinic to continuously improve the quality of the treatment and services it provides.
Quality.
Quality services are services that are provided in a safe, effective, recipient-centered, timely,
equitable, and recovery-oriented fashion.
( Clinic name ) is committed to the ongoing improvement of the quality of care its consumers
receive, as evidenced by the outcomes of that care. The organization continuously strives to
ensure that:
The treatment provided incorporates evidence based, effective practices;
The treatment and services are appropriate to each consumer’s needs, and available
when needed;
Risk to consumers, providers and others is minimized, and errors in the delivery of
services are prevented;
Consumers’ individual needs and expectations are respected; consumers – or those
whom they designate – have the opportunity to participate in decisions regarding their
treatment; and services are provided with sensitivity and caring;
Procedures, treatments and services are provided in a timely and efficient manner,
with appropriate coordination and continuity across all phases of care and all
providers of care.
Quality Improvement Principles.
Quality improvement is a systematic approach to assessing services and improving them on a
priority basis. The (Name of Clinic) approach to quality improvement is based on the
following principles:
Customer Focus. High quality organizations focus on their internal and external
customers and on meeting or exceeding needs and expectations.
Recovery-oriented. Services are characterized by a commitment to promoting and
preserving wellness and to expanding choice. This approach promotes maximum
flexibility and choice to meet individually defined goals and to permit person-centered
services.
Employee Empowerment. Effective programs involve people at all levels of the
organization in improving quality.
Leadership Involvement. Strong leadership, direction and support of quality
improvement activities by the governing body and CEO are key to performance
improvement. This involvement of organizational leadership assures that quality
improvement initiatives are consistent with provider mission and/or strategic plan.
10. Data Informed Practice. Successful QI processes create feedback loops, using data
to inform practice and measure results. Fact-based decisions are likely to be correct
decisions.
Statistical Tools. For continuous improvement of care, tools and methods are needed
that foster knowledge and understanding. CQI organizations use a defined set of
analytic tools such as run charts, cause and effect diagrams, flowcharts, Pareto charts,
histograms, and control charts to turn data into information.
Prevention Over Correction. Continuous Quality Improvement entities seek to
design good processes to achieve excellent outcomes rather than fix processes after
the fact.
Continuous Improvement. Processes must be continually reviewed and
improved. Small incremental changes do make an impact, and providers can almost
always find an opportunity to make things better.
Continuous Quality Improvement Activities.
Quality improvement activities emerge from a systematic and organized framework for
improvement. This framework, adopted by the hospital leadership, is understood, accepted
and utilized throughout the organization, as a result of continuous education and involvement
of staff at all levels in performance improvement. Quality Improvement involves two primary
activities:
Measuring and assessing the performance of clinic services through the collection and
analysis of data.
Conducting quality improvement initiatives and taking action where indicated,
including the
o design of new services, and/or
o improvement of existing services.
The tools used to conduct these activities are described in Appendix A, at the end of this
Plan.
Section 2 – Leadership and Organization
Leadership.
The key to the success of the Continuous Quality Improvement process is leadership. The
following describes how the leaders of the (Name of Clinic) clinic provide support to quality
improvement activities.
The Quality Improvement Committee provides ongoing operational leadership of continuous
quality improvement activities at the clinic. It meets at least monthly or not less than ten (10)
times per year and consists of the following individuals: (List titles of committee members.
The membership should include a recipient/family member for adult settings and a family
member for children settings. Indicate the Chairperson of the Committee.)
11. The responsibilities of the Committee include:
Developing and approving the Quality Improvement Plan.
As part of the Plan, establishing measurable objectives based upon priorities identified
through the use of established criteria for improving the quality and safety of clinic
services.
Developing indicators of quality on a priority basis.
Periodically assessing information based on the indicators, taking action as evidenced
through quality improvement initiatives to solve problems and pursue opportunities to
improve quality.
Establishing and supporting specific quality improvement initiatives.
Reporting to the Board of Directors on quality improvement activities of the clinic on
a regular basis.
Formally adopting a specific approach to Continuous Quality Improvement (such as
Plan-Do-Check-Act: PDCA).
The Board of Directors also provides leadership for the Quality Improvement process as
follows:
Supporting and guiding implementation of quality improvement activities at the
clinic.
Reviewing, evaluating and approving the Quality Improvement Plan annually.
(Describe how leadership will support clinic’s QI Program.)
The Leaders support QI activities through the planned coordination and communicatio n of
the results of measurement activities related to QI initiatives and overall efforts to continually
improve the quality of care provided. This sharing of QI data and information is an important
leadership function. Leaders, through a planned and shared communication approach, ensure
the Board of Directors, staff, recipients and family members have knowledge of and input
into ongoing QI initiatives as a means of continually improving performance.
This planned communication may take place through the following methods;
Story boards and/or posters displayed in common areas
Recipients participating in QI Committee reporting back to recipient groups
Sharing of the clinic’s annual QI Plan evaluation
Newsletters and or handouts
12. Please describe your clinics method and/or mechanism for communication to recipients, staff
and leadership.
Section 3 – Goals and Objectives
The Quality Improvement Committee identifies and defines goals and specific objectives to
be accomplished each year. These goals include training of clinical and administrative staff
regarding both continuous quality improvement principles and specific quality improvement
initiative(s). Progress in meeting these goals and objectives is an important part of the annual
evaluation of quality improvement activities.
The following are the ongoing long term goals for the (Name of Clinic) QI Program and the
specific objectives for accomplishing these goals for the year ______ . (Indicate the current
year.)
To implement quantitative measurement to assess key processes or outcomes; (An
example of an objective involving quantitative measurement: The average number of
“no shows” will be reduced overall by 30% from its current average of ______ within
the next 12 months.)
To bring managers, clinicians, and staff together to review quantitative data and major
clinical adverse occurrences to identify problems;
To carefully prioritize identified problems and set goals for their resolution;
To achieve measurable improvement in the highest priority areas;
To meet internal and external reporting requirements;
To provide education and training to managers, clinicians, and staff; (An example of
an objective involving education and training; 100% of all managers, clinicians, and
staff will be trained in the principles and practices of Quality Improvement
by date .)
To develop or adopt necessary tools, such as practice guidelines, consumer surveys
and quality indicators.
13. List here your goals and objectives for the current year. Selection of your goals may be taken
from the list provided above. You do not need to select all of these goals. The list should be
tailored to your program and include specific objectives - ways in which these goals will be
accomplished. The objective(s) for each of your selected goals need to be specific and
measurable. Specific and measurable means that you will be able to clearly determine
whether the objectives have been met at the end of the year by using a specified set of QI
tools. (See Appendix A.) At least one of the goals and its corresponding objective(s) should
concern staff education related to your quality improvement activities.
Section 4 – Performance Measurement
Performance Measurement is the process of regularly assessing the results produced by the
program. It involves identifying processes, systems and outcomes that are integral to the
performance of the service delivery system, selecting indicators of these processes, systems
and outcomes, and analyzing information related to these indicators on a regular
basis. Continuous Quality Improvement involves taking action as needed based on the
results of the data analysis and the opportunities for performance they identify.
The purpose of measurement and assessment is to:
Assess the stability of processes or outcomes to determine whether there is an
undesirable degree of variation or a failure to perform at an expected level.
Identify problems and opportunities to improve the performance of processes.
Assess the outcome of the care provided.
Assess whether a new or improved process meets performance expectations.
Measurement and assessment involves:
Selection of a process or outcome to be measured, on a priority basis.
14. Identification and/or development of performance indicators for the selected process
or outcome to be measured.
Aggregating data so that it is summarized and quantified to measure a process or
outcome.
Assessment of performance with regard to these indicators at planned and regular
intervals.
Taking action to address performance discrepancies when indicators indicate that a
process is not stable, is not performing at an expected level or represents an
opportunity for quality improvement.
Reporting within the organization on findings, conclusions and actions taken as a
result of performance assessment.
Selection of a Performance Indicator.
A performance indicator is a quantitative tool that provides information about the
performance of a clinic’s process, services, functions or outcomes. Selection of a
Performance Indicator is based on the following considerations:
Relevance to mission - whether the indicator addresses the population served
Clinical importance - whether it addresses a clinically important process that is:
o high volume
o problem prone or
o high risk
Characteristics of a Performance Indicator.
Factors to consider in determining which indicator to use include;
Scientific Foundation: the relationship between the indicator and the process, system
or clinical outcome being measured
Validity: whether the indicator assesses what it purports to assess
Resource Availability: the relationship of the results of the indicator to the cost
involved and the staffing resources that are available
Consumer Preferences: the extent to which the indicator takes into account individual
or group (e.g., racial, ethnic, or cultural) preferences
Meaningfulness: whether the results of the indicator can be easily understood, the
indicator measures a variable over which the program has some control, and the
variable is likely to be changed by reasonable quality improvement efforts.
(Describe the factors which you will consider in selecting a measure of quality.)
The Performance Indicator Selected for the (Name of Clinic) Quality Improvement
Plan.
For purposes of this plan, an indicator(s) comprises five key elements: name, definition, data
to be collected, the frequency of analysis or assessment, and preliminary ideas for
15. improvement. The following Table presents each performance indicator currently in use by
the clinic, along with the corresponding descriptors.
Measure of Service Quality (Complete this table for each indicator which
is selected. Note that only one indicator is required during the first year
of the agreement.)
Name Name. Usually a brief two or three word title.
Definition Definition. With detail, explain the name by including
the data elements and the type of numerical value to be
used to express the indicator (percentage, rate, number
of occurrences etc.).
Data Collection Describe how the data will be collected as well as the
method and frequency of collection, and who will
collect the data.
Assessment
Frequency
State how often the Quality Improvement Committee
will assess information associated with the indicator.
Assessment.
Assessment is accomplished by comparing actual performance on an indicator with:
Self over time.
Pre-established standards, goals or expected levels of performance.
Information concerning evidence based practices.
Other clinics or similar service providers.
(List here the assessment strategies you will use. See APPENDIX A, attached, for examples
of performance improvement tools.)
Section 5 – Quality Improvement Initiative
Once the performance of a selected process has been measured, assessed and analyzed, the
information gathered by the above performance indicator(s) is used to identify a continuous
quality improvement initiative to be undertaken. The decision to undertake the initiative is
based upon clinic priorities. The purpose of an initiative is to improve the performance of
existing services or to design new ones. The model utilized at Name of Clinic is called
Plan-Do-Check-Act (PDCA). (Modify the following as appropriate for your program. If you
choose a model other than PDCA, describe the model here.)
16. Plan - The first step involves identifying preliminary opportunities for
improvement. At this point the focus is to analyze data to identify concerns and to
determine anticipated outcomes. Ideas for improving processes are identified. This
step requires the most time and effort. Affected staff or people served are identified,
data compiled, and solutions proposed. (For tools used during the planning stage, see
sections “a” thru “k” in APPENDIX: A. )
Do - This step involves using the proposed solution, and if it proves successful, as
determined through measuring and assessing, implementing the solution usually on a
trial basis as a new part of the process.
Check - At this stage, data is again collected to compare the results of the new
process with those of the previous one.
Act - This stage involves making the changes a routine part of the targeted activity. It
also means “Acting” to involve others (other staff, program components or
consumers) - those who will be affected by the changes, those whose cooperation is
needed to implement the changes on a larger scale, and those who may benefit from
what has been learned. Finally, it means documenting and reporting findings and
follow up.
Section 6 – Evaluation
An evaluation is completed at the end of each calendar year. The annual evaluation is
conducted by the clinic and kept on file in the clinic, along with the Quality Improvement
Plan. These documents will be reviewed by the Office of Mental Health as part of the clinic
certification process.
The evaluation summarizes the goals and objectives of the clinic’s Quality Improvement
Plan, the quality improvement activities conducted during the past year, including the
targeted process, systems and outcomes, the performance indicators utilized, the findings of
the measurement, data aggregation, assessment and analysis processes, and the quality
improvement initiatives taken in response to the findings.
Summarize the progress towards meeting the Annual Goals/Objectives.
For each of the goals, include a brief summary of progress including progress in
relation to training goal(s).
Provide a brief summary of the findings for each of the indicators you used during the
year. These summaries should include both the outcomes of the measurement process
and the conclusions and actions taken in response to these outcomes. Summarize your
progress in relation to your Quality Initiative(s). For each initiative, provide a brief
description of what activities took place including the results on your indicator. What
are the next steps? How will you “hold the gains.” Describe any implications of the
quality improvement process for actions to be taken regarding outcomes, systems or
outcomes at your program in the coming year.)
Recommendations: Based upon the evaluation, state the actions you see as necessary
to improve the effectiveness of the QI Plan.
Appendix A. Quality Improvement Tools
Following are some of the tools available to assist in the Quality Improvement process.
17. 1. Flow Charting: Use of a diagram in which graphic symbols depict the nature and
flow of the steps in a process. This tool is particularly useful in the early stages of a
project to help the team understand how the process currently works. The “as-is”
flow chart may be compared to how the process is intended to work. At the end of the
project, the team may want to then re-plot the modified process to show how the
redefined process should occur. The benefits of a flow chart are that it:
1. Is a pictorial representation that promotes understanding of the process
2. Is a potential training tool for employees
3. Clearly shows where problem areas and processes for improvement are.
Flow charting allows the team to identify the actual flow-of-event sequence in
a process.
2. Brainstorming: A tool used by teams to bring out the ideas of each individual and
present them in an orderly fashion to the rest of the team. Essential to brainstorming
is to provide an environment free of criticism. Team members generate issues and
agree to “defer judgement” on the relative value of each idea. Brainstorming is used
when one wants to generate a large number of ideas about issues to tackle, possible
causes, approaches to use, or actions to take. The advantages of brainstorming are
that it:
1. Encourages creativity
2. Rapidly produces a large number of ideas
3. Equalizes involvement by all team members
4. Fosters a sense of ownership in the final decision as all members actively
participate
5. Provides input to other tools: “brain stormed” ideas can be put into an affinity
diagram or they can be reduced by multi-voting.
3. Decision-making Tools: While not all decisions are made by teams, two tools
can be helpful when teams need to make decisions.
1. Multi-voting is a group decision-making technique used to reduce a long list
of items to a manageable number by means of a structured series of
votes. The result is a short list identifying what is important to the
team. Multi-voting is used to reduce a long list of ideas and assign priorities
quickly with a high degree of team agreement.
2. Nominal Group technique-used to identify and rank issues.
4. Affinity Diagram: The Affinity Diagram is often used to group ideas generated by
brainstorming. It is a tool that gathers large amounts of language data (ideas, issues,
opinions) and organizes them into groupings based on their natural relationship. The
affinity process is a good way to get people who work on a creative level to address
difficult, confusing, unknown or disorganized issues. The affinity process is
formalized in a graphic representation called an affinity diagram.
This process is useful to:
1. Sift through large volumes of data.
2. Encourage new patterns of thinking.
As a rule of thumb, if less than 15 items of information have been identified,
the affinity process is not needed.
18. 5. Cause and Effect Diagram(also called a fishbone or Ishakawa diagram): This is
a tool that helps identify, sort, and display. It is a graphic representation of the
relationship between a given outcome and all the factors that influence the
outcome. This tool helps to identify the basic root causes of a problem. The structure
of the diagram helps team members think in a very systematic way. The benefits of a
cause-and-effect diagram are that it:
1. Helps the team to determine the root causes of a problem or quality
characteristic using a structured approach
2. Encourages group participation and utilizes group knowledge of the process
3. Uses an orderly, easy-to-read format to diagram cause-and-effect relationships
4. Indicates possible causes of variation in a process
5. Increases knowledge of the process
6. Identifies areas where data should be collected for additional study.
Cause and effect diagrams allow the team to identify and graphically display
all possible causes related to a process, procedure or system failure.
6. Histogram: This is a vertical bar chart which depicts the distribution of a data set at
a single point in time. A histogram facilitates the display of a large set of
measurements presented in a table, showing where the majority of values fall in a
measurement scale and the amount of variation. The histogram is used in the
following situations:
1. To graphically represent a large data set by adding specification limits one can
compare;
2. To process results and readily determine if a current process was able to
produce positive results assist with decision-making.
7. Pareto Chart: Named after the Pareto Principle which indicates that 80% of the
trouble comes from 20% of the problems. It is a series of bars on a graph, arranged in
descending order of frequency. The height of each bar reflects the frequency of an
item. Pareto charts are useful throughout the performance improvement process -
helping to identify which problems need further study, which causes to address first,
and which are the “biggest problems.” Benefits and advantages include:
1. Focus on most important factors and help to build consensus
2. Allows for allocation of limited resources.
The “Pareto Princip le” says 20% of the source causes 80% of the problem.
Pareto charts allow the team to graphically focus on the areas and issues where
the greatest opportunities to improve performance exist.
8. Run Chart: Most basic tool to show how a process performs over time. Data points
are plotted in temporal order on a line graph. Run charts are most effectively used to
assess and achieve process stability by graphically depicting signals of variation. A
run chart can help to determine whether or not a process is stable, consistent and
predictable. Simple statistics such as median and range may also be displayed.
The run chart is most helpful in:
19. 1. Understanding variation in process performance
2. Monitoring process performance over time to detect signals of change
3. Depicting how a process performed over time, including variation.
Allows the team to see changes in performance over time. The diagram can
include a trend line to identify possible changes in performance.
9. Control Chart: A control chart is a statistical tool used to distinguish between
variation in a process resulting from common causes and variation resulting from
special causes. It is noted that there is variation in every process, some the result of
causes not normally present in the process (special cause variation). Common cause
variation is variation that results simply from the numerous, ever-present differences
in the process. Control charts can help to maintain stability in a process by depicting
when a process may be affected by special causes. The consistency of a process is
usually characterized by showing if data fall within control limits based on plus or
minus specific standard deviations from the center line. Control charts are used to:
1. Monitor process variation over time
2. Help to differentiate between special and common cause variation
3. Assess the effectiveness of change on a process
4. Illustrate how a process performed during a specific period.
Using upper control limits (UCLs) and lower control limits (LCLs) that are
statistically computed, the team can identify statistically significant changes in
performance. This information can be used to identify opportunities to
improve performance or measure the effectiveness of a change in a process,
procedure, or system.
10. Bench Marking: A benchmark is a point of reference by which something can be
measured, compared, or judged. It can be an industry standard against which a
program indicator is monitored and found to be above, below or comparable to the
benchmark.
11. Root Cause Analysis: A root cause analysis is a systematic process for identifying
the most basic factors/causes that underlie variation in performance.
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22. Plan, Do, Study, Act (PDSA)
What is it and how can it help me?
You can use plan, do, study, act (PDSA) cycles to test an idea by temporarily trialling
a change and assessing its impact. This approach is unusual in a healthcare setting
because traditionally, new ideas are often introduced without sufficient testing.
The four stages of the PDSA cycle:
Plan - the change to be tested or implemented
Do - carry out the test or change
Study - data before and after the change and reflect on what was learned
Act - plan the next change cycle or full implementation
When does it work best?
23. You may not get the results you expect when making changes to your processes, so
it is safer, and more effective to test out improvements on a small scale before
implementing them across the board.
Using PDSA cycles enables you to test out changes before wholesale
implementation and gives stakeholders the opportunity to see if the proposed
change will work.
Using the PDSA cycle involves testing new change ideas on a small scale.
For example:
Trying out a new way to make appointments for one consultant or one clinic
Trying out a new patient information sheet with a selected group of patients before
introducing the change to all clinics or patient groups
By building on the learning from these test cycles in a structured way, you can put a
new idea in place with greater chances of success
As with any change, ownership is key to implementing the improvement
successfully. If you involve a range of colleagues in trying something out on a small
scale before it is fully operational, you will reduce the barriers to change.
Why test change before implementing it?
It involves less time, money and risk
The process is a powerful tool for learning; from both ideas that work and those that
don't
It is safer and less disruptive for patients and staff
Because people have been involved in testing and developing the ideas, there is
often less resistance
How to test:
Plan multiple cycles to test ideas. You can adapt these from the service improvement
guide so there is already evidence that the change works
Test on a really small scale. For example, start with one patient or one clinician at
one afternoon clinic and increase the numbers as you refine the ideas
Test the proposed change with people who believe in the improvement. Don't try to
convert people into accepting the change at this stage
Only implement the idea when you're confident you have considered and tested all
the possible ways of achieving the change
How to use it
PDSA cycles form part of the improvement guide, which provides a framework for
developing, testing and implementing changes leading to improvement. The model is
based in scientific method and moderates the impulse to take immediate action with
the wisdom of careful study. The framework includes three key questions and a
process for testing change ideas.
24.
25. The three questions:
1. What are we trying to accomplish? The aims statement
2. How will we know if the change is an improvement?
3. What changes can we make that will result in improvement?
What we trying to accomplish?
Teams need to set clear and focused goals. These goals require clinical leadership;
they should focus on problems that cause concern, as well as patients and staff.
The aims statement should:
Be consistent with any national goals and relevant to the length of the project
Be bold in its aspirations
Have clear, measurable targets
An example of an aims statement from cancer services:Aims: To improve access,
speed of diagnosis, speed of starting treatment and patient care of people who are
suspected of having bowel cancer.
This will be achieved by:
Introducing booked admissions and appointments. Target: more than 95 per cent of
patients
Reducing the time from GP referral to first definitive treatment to less than 15 weeks
Ensuring that over 80 per cent of patients are discussed by the multidisciplinary
team
Concentrate efforts and measurements on key stages of care: GP referral, first out-patient
appointment, first diagnostic test and first definitive treatment.
How do we know if the change is an improvement?
You will need to measure outcomes, such as reduction in the time a patient has to
wait in order to answer this question. If we make a change, this should affect the
measures and demonstrate over time whether the change has led to sustainable
improvement. The measures in this model are tools for learning and demonstrating
improvement, not for judgment.
26. Each project team should collect data to demonstrate whether changes result in
improvement.
You should report improvement progress monthly on time series graphs known as
‘run charts' or statistical process control charts (SPC). See the PJA.
What changes can we make that will result in improvement?
There are many potential changes your team could make. However, evidence from
scientific literature and previous improvement programmes suggests that there are a
small number of changes that are most likely to result in improvement.
The Cancer Service Collaborative has identified twenty eight change principles
which they have grouped into four areas that you may find helpful.
1. Connect up the patient journey
2. Develop the team around the patient journey
3. Make the patient and care experience central to every stage of the journey
4. Make sure there is capacity to meet patients' needs at every stage of the journey
It is possible that there may be several PDSA cycles running sequentially (figure 3),
or even simultaneously (figure 4). Sequential cycles are common when the study
reveals results which suggest a different approach is needed.
Figure 3
29. Simultaneous cycles may occur when the changes are more complex, possibly
involving several departments. It is important that you identify any interactions
between simultaneous cycles, as a change in method in one cycle may alter the
impact of another somewhere else. For example, you are making changes to the
way that secretaries process letters, so that they are printed and stuffed into
envelopes in a central department. As another part of the project, a PDSA cycle
looks at when doctors sign their correspondence and concludes that is should be
done in the secretary's office. Obviously the two solutions conflict.
The cycles in use:
Produce a first draft. Check it against this guidance. Make changes. Is it easy to
read? Produce another draft and check it with members of your team. Do rapid
cycles of testing until it seems easy to read?
Is it right?
Produce another draft and check it with colleagues, clinicians, experts, patient
support groups. Think about people like secretaries and booking staff. If you have to
send it to someone, always give them a deadline.
Is it good for patients?
Produce another draft and check it with patients or people in the hospital who are
unfamiliar with the topic area.
What next?
Having identified the changes with the greatest benefits, the next stage is to fully
implement the change. This will require a stakeholder analysis, full project
management programme and benefits realisation programme.
Reference for the Model for Improvement
34. http://education-portal.
com/academy/lesson/deming-juran-crosby-contributors-
to-tqm.html#lesson
W. Edwards Deming, Joseph Juran and Philip B. Crosby are three of the most influential people involved in the
shift from production and consumption to total quality management (TQM). Their work significantly impacted
how industries view customer satisfaction, employee needs and supplier relations.
TQM And The Men Who Made Us Think About It
Total quality management (TQM) is an approach to serving customers that involves
totallyreengineering processes and systems to improve products and services in the way customers expect
while considering the needs of employees and relationships with suppliers. W. Edwards Deming, Joseph
Juran and Philip B. Crosby each developed a different aspect of TQM. We will learn abo ut how each
contributed to how we think about TQM today.
The TQM approach began as a means of
repairing the damage Japan suffered post-World
War II. W. Edwards Deming worked with
Japanese automobile manufacturers to improve
the quality of their products in an effort to gain a
competitive foot in the industry.
His philosophy resulted in the 14 Points of TQM,
which can be summed up by saying management
must redesign their processes and systems to:
Deming, Juran and Crosby
Plan
Do
Check
Act
Deming's Philosophy On TQM
Let's see how TQM is implemented at Beefy's Burgers.
To plan, Deming counsels that businesses should design quality products and services that customers want,
develop processes and systems that reduce waste and increase quality and decrease the cost of production.
Deming wanted to revolutionize the way Beefy's Burgers produces burgers. To gain a better understanding of
the customer preferences, he surveyed everyone involved in the operation, from the customers to the
employees. He even called his suppliers in to get their opinions. From the information collected, Deming was
able to determine a few important things. Beefy's was competitive on price. However, the burger was small
and flavorless.
35. He called his employees in and showed them how to properly grill the burgers. He called his supplier in to
discuss alternatives to the current beef he uses. A timing schedule for completion of burger orders was set. No
burger would hit the grill until the customer placed an order. Tomorrow would be go time!
Next, the businesses must do the work by putting the plan into action. As processes and systems are running,
they must continually seek ways to do things better. Deming's crew knew exactly what to do. Stations were set
up for bun-slicing, burger-grilling and ketchup-squeezing. As customers placed their orders, the beef hit the
grill, the bun was sliced 1.2 seconds after and delivered to the grill, ketchup was squeezed and the process
ended with wrapping.
Customers were thrilled with the new and improved burgers. However, during busy times, it wasn't feasible to
make each burger as ordered. Lines formed, creating more customer complaints. This time complaints were
about the system.
As work moves through the processes and systems, check points will monitor changes that need to take place
- changes like removing barriers to quality by providing employees with the tools needed to do the job right
the first time.
Finally, managers take action. Management may make changes. Deming tweaked a few things to speed up the
process by placing more people on the line. Customers received their burgers on time, and they were tasty,
too!
Juran's Approach To Quality Planning, Control And Improvement
Joseph Juran shared a connection with Deming. Juran's approach to quality con trol also had Japanese roots.
While Japan was price-competitive with the rest of the world, the quality of product did not measure up.
Like Deming, Juran stressed the importance of total quality management. However, he summed it up by
saying total quality management begins at the top of an organization and works its way down. He developed
10 steps to quality improvement. The steps boil down to three main areas of management decision -making:
Quality planning
Quality control
Quality improvement
Quality planning involves building an awareness of the need to improve, setting goals and planning for ways
goals can be reached. This begins with management's commitment to planned change. It also requires a highly
trained and qualified staff. Juran managed Beefy's during the night shift. He set the standard for quality during
his shift by training each employee on how to properly make a burger.
Quality control means to develop ways to test products and services for quality. Any deviation from the
standard will require changes and improvements. On Sunday nights when business was slow, Juran invited
mystery diners to come to Beefy's to rate the quality of the burgers. If he found that a diner was displeased, he
retrained employees.
Quality improvement is a continuous pursuit toward perfection. Management analyzes processes and
systems and reports back with praise and recognition when things are done right. Juran allowed the staff to
engage in a well-deserved burger-eating contest at the end of a profitable shift.
Crosby's Ideology Of Conformance To Quality Standards
36. Philip B. Crosby was a contemporary leader in TQM. He didn't engineer principles or steps. He simply made
TQM easier for the layman to implement by breaking it down to an understandable ideology that organ izations
should adopt.
Crosby re-defined quality to mean conformity to standards set by the industry or organization that must align
with customer needs.
There are Four Absolutes of Quality Management necessary for conformity:
Quality is defined as conformance to standards
The system for causing quality is prevention
The performance standard is not arbitrary; it must be without defect
The measurement of quality is price of non-conformance
Crosby worked the register at Beefy's. He was also a business student at the local college. He used Beefy's as
a field study on TQM. When customers sent back burgers, he looked at the price of inferior products and its
toll on the overall organization.
Continue reading...
Taught by
Kat Kadian-Baumeyer
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concepts-workplace-17693.html
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3. Manage Workplace Diversity
Management Theories & Concepts at the Workplace
by Madison Hawthorne, Demand Media
Management theories are implemented to help increase organizational productivity and service quality. Not
many managers use a singular theory or concept when implementing strategies in the workplace: They
commonly use a combination of a number of theories, depending on the workplace, purpose and workforce.
38. Contingency theory, chaos theory and systems theory are popular management theories. Theory X and Y, which
addresses management strategies for workforce motivation, is also implemented to help increase wo rker
productivity.
Contingency Theory
This theory asserts that managers make decisions based on the situation at hand rather than a "one size fits all"
method. A manager takes appropriate action based on aspects most important to the current situation. Managers
in a university may want to utilize a leadership approach that includes participation from workers, while a leader
in the army may want to use an autocratic approach.
Systems Theory
Managers who understand systems theory recognize how different systems affect a worker and how a worker
affects the systems around them. A system is made up of a variety of parts that work together to achieve a goal.
Systems theory is a broad perspective that allows managers to examine patterns and events in the workpla ce.
This helps managers to coordinate programs to work as a collective whole for the overall goal or mission of the
organization rather than for isolated departments.
Related Reading: What Are Effective Management and Motivational Theories in Relation to Problem Solving?
Chaos Theory
Change is constant. Although certain events and circumstances in an organization can be controlled, o thers can't.
Chaos theory recognizes that change is inevitable and is rarely controlled. While organizations grow,
complexity and the possibility for susceptible events increase. Organizations increase energy to maintain the
new level of complexity, and as organizations spend more energy, more structure is needed for stability. The
system continues to evolve and change.
Theory X and Theory Y
The management theory an individual chooses to utilize is strongly influenced by beliefs about worker attitudes.
Managers who believe workers naturally lack ambition and need incentives to increase productivity lean toward
the Theory X management style. Theory Y believes that workers are naturally driven and take responsibility.
While managers who believe in Theory X values often use an authoritarian style of leadership, Theory Y leaders
encourage participation from workers.
References (2)
About the Author
Madison Hawthorne holds a bachelor's degree in creative writing, a master's degree in social work and a
master's degree in elementary education. She also holds a reading endorsement and two years experience
working with ELD students. She has been a writer for more than five years, served as a magazine submission
reviewer and secured funding for a federal grant for a nonprofit organization. Hawthorne also swam
competitively for 10 years and taught for two years.
Photo Credits
Creatas Images/Creatas/Getty Images
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43. contemporary have pointed out that Taylor's theories tend to "dehumanize" the
workers. To modern readers, he stands convicted by his own words:
" … in almost all of the mechanic arts, the science which underlies
each act of each workman is so great and amounts to so much that the
workman who is best suited to actually doing the work is incapable of
fully understanding this science, without the guidance and help of
those who are working with him or over him, either through lack of
education or through insufficient mental capacity."
And:
"to work according to scientific laws, the management must takeover
and perform much of the work which is now left to the men; almost
every act of the workman should be preceded by one or more
preparatory acts of the management which enable him to do his work
better and quicker than he otherwise could."
The Principles of Scientific Management
Environment
Taylor's work was strongly influenced by his social/historical period. His lifetime
(1856-1915) was during the Industrial Revolution. The overall industrial
environment of this period is well documented by the Dicken's classicHard
Times or Sinclar's The Jungle. Autocratic management was the norm. The
manufacturing community had the idea of interchangeable parts for almost a
century. The sciences of physics and chemistry were bringing forth new miracles
on a monthly basis.
One can see Taylor turning to "science" as a solution to the inefficiencies and
injustices of the period. His idea of breaking a complex task into a sequence of
simple subtasks closely mirrors the interchangeable parts ideas pioneered by Eli
Whitney earlier in the century. Furthermore, the concepts of training the workers
and developing "a hearty cooperation" represented a significant improvement over
the feudal human relations of the time.
Successes
Scientific management met with significant success. Taylor's personal work
included papers on the science of cutting metal, coal shovel design, worker
incentive schemes and a piece rate system for shop management. Scientific
management's organizational influences can be seen in the development of the
fields of industrial engineering, personnel, and quality control.
44. From an economic standpoint, Taylorism was an extreme success. Application of
his methods yielded significant improvements in productivity. Improvements such
as Taylor's shovel work at Bethlehem Steel Works (reducing the workers needed to
shovel from 500 to 140) were typical.
Human Relations Movement - Hawthorne Works Experiments
Description
If Taylor believed that science dictated that the highest productivity was found in
"the one best way" and that way could be obtained by controlled experiment, Elton
Mayo's experiences in the Hawthorne Works Experiments disproved those beliefs
to the same extent that Michelson's experiments in 1926 disproved the existence of
"ether." (And with results as startling as Rutherford's.)
The Hawthorne Studies started in the early 1920's as an attempt to determine the
effects of lighting on worker productivity. When those experiments showed no
clear correlation between light level and productivity the experiments then started
looking at other factors. Working with a group of women, the experimenters made
a number of changes, rest breaks, no rest breaks, free meals, no free meals, more
hours in the work-day / work-week, fewer hours in the work-day / work-week.
Their productivity went up at each change. Finally the women were put back to
their original hours and conditions, and they set a productivity record.
This strongly disproved Taylor's beliefs in three ways. First, the experimenters
determined that the women had become a team and that the social dynamics of the
team were a stronger force on productivity than doing things "the one best way."
Second, the women would vary their work methods to avoid boredom without
harming overall productivity. Finally the group was not strongly supervised by
management, but instead had a great deal of freedom.
These results made it clear that the group dynamics and social makeup of an
organization were an extremely important force either for or against higher
productivity. This caused the call for greater participation for the workers, greater
trust and openness in the working environment and a greater attention to teams and
groups in the work place.
Environment
The human relations movement that stemmed from Mayo's Hawthorne Works
Experiments was borne in a time of significant change. The Newtonian science that
supported "the one best way" of doing things was being strongly challenged by the
"new physics" results of Michalson, Rutherford and Einstein. Suddenly, even in the
realm of "hard science" uncertainty and variation had found a place. In the work
place there were strong pressures for shorter hours and employee stock ownership.
45. As the effects of the 1929 stock market crash and following depression were felt,
employee unions started to form.
Successes
While Taylor's impacts were the establishment of the industrial engineering,
quality control and personnel departments, the human relations movement's
greatest impact came in what the organization's leadership and personnel
department were doing. The seemingly new concepts of "group dynamics",
"teamwork" and organizational "social systems" all stem from Mayo's work in the
mid-1920's.
Max Weber - Bureaucracy
Description
At roughly the same time, Max Weber was attempting to do for sociology what
Taylor had done for industrial operations. Weber postulated that western
civilization was shifting from "wertrational" (or value oriented) thinking, affective
action (action derived from emotions), and traditional action (action derived from
past precedent to "zweckational" (or technocratic) thinking. He believed that
civilization was changing to seek technically optimal results at the expense of
emotional or humanistic content.
Viewing the growth of large-scale organizations of all types during the late
nineteenth and early twentieth centuries, Weber developed a set of principles for an
"ideal" bureaucracy. These principles included: fixed and official jurisdictional
areas, a firmly ordered hierarchy of super and subordination, management based on
written records, thorough and expert training, official activity taking priority over
other activities and that management of a given organization follows stable,
knowable rules. The bureaucracy was envisioned as a large machine for attaining
its goals in the most efficient manner possible.
Weber did not advocate bureaucracy, indeed, his writings show a strong caution
for its excesses:
"…the more fully realized, the more bureaucracy "depersonalizes"
itself, i.e., the more completely it succeeds in achieving the exclusion
of love, hatred, and every purely personal, especially irrational and
incalculable, feeling from the execution of official tasks"
or:
46. "By it the performance of each individual worker is mathematically
measured, each man becomes a little cog in the machine and aware of
this, his one preoccupation is whether he can become a bigger cog."
Environment
Weber, as an economist and social historian, saw his environment transitioning
from older emotion and tradition driven values to technological ones. It is unclear
if he saw the tremendous growth in government, military and industrial size and
complexity as a result of the efficiencies of bureaucracy, or their growth driving
those organizations to bureaucracy.
Successes
While Weber was fundamentally an observer rather than a designer, it is clear that
his predictions have come true. His principles of an ideal bureaucracy still ring true
today and many of the evils of today's bureaucracies come from their deviating
from those ideal principles. Unfortunately, Weber was also successful in predicting
that bureaucracies would have extreme difficulties dealing with individual cases.
It would have been fascinating to see how Weber would have integrated Mayo's
results into his theories. It is probable that he would have seen the "group
dynamics" as "noise" in the system, limiting the bureaucracy's potential for both
efficiency and inhumanity.
Henri Fayol - Administration
Description
With two exceptions, Henri Fayol’s theories of administration dovetail nicely into
the bureaucratic superstructure described by Weber. Henri Fayol focuses on the
personal duties of management at a much more granular level than Weber did.
While Weber laid out principles for an ideal bureaucratic organization Fayol’s
work is more directed at the management layer.
Fayol believed that management had five principle roles: to forecast and plan, to
organize, to command, to co-ordinate and to control. Forecasting and planning was
the act of anticipating the future and acting accordingly. Organization was the
development of the institution's resources, both material and human. Commanding
was keeping the institution’s actions and processes running. Co-ordination was the
alignment and harmonization of the groups’ efforts. Finally, control meant that the
above activities were performed in accordance with appropriate rules and
procedures.
47. Fayol developed fourteen principles of administration to go along with
management’s five primary roles. These principles are enumerated below:
Specialization/division of labor
Authority with responsibility
Discipline
Unity of command
Unity of direction
Subordination of individual interest to the general interest
Remuneration of staff
Centralization
Scalar chain/line of authority
Order
Equity
Stability of tenure
Initiative
Esprit de corps
The final two principles, initiative and esprit de corps, show a difference between
Fayol’s concept of an ideal organization and Weber’s. Weber predicted a
completely impersonal organization with little human level interaction between its
members. Fayol clearly believed personal effort and team dynamics were part of a
"ideal" organization.
Environment
Fayol was a successful mining engineer and senior executive prior to publishing
his principles of "administrative science." It is not clear from the literature
reviewed if Fayol’s work was precipitated or influenced by Taylor’s. From the
timing, 1911 publication of Taylor’s "The Principles of Scientific Management" to
Fayol’s work in 1916, it is possible. Fayol was not primarily a theorist, but rather a
successful senior manager who sought to bring order to his personal experiences.
Successes
Fayol’s five principle roles of management are still actively practiced today. The
author has found "Plan, Organize, Command, Co-ordinate and Control" written on
one than one manager’s whiteboard during his career. The concept of giving
appropriate authority with responsibility is also widely commented on (if not well
practiced.) Unfortunately his principles of "unity of command" and "unity of
48. direction" are consistently violated in "matrix management" the structure of choice
for many of today’s companies.
Conclusion
It is clear that modern organizations are strongly influenced by the theories of
Taylor, Mayo, Weber and Fayol. Their precepts have become such a strong part of
modern management that it is difficult to believe that these concepts were original
and new at some point in history. The modern idea that these concepts are
"common sense" is strong tribute to these founders.
Reference:
Print:
75 Years of Management Ideas and Practice, David Sibbet, September/October
1997 Supplement, Harvard Business Review, Reprint number 97500
The Hunters and the Hunted, Swartz, James, 1994, Productivity Press, Portland OR
What You Can Learn from 100 Years of Management Science: A Guide to
Emerging Business Practice, Stauffer, David, January 1998, Harvard Business
Review, Reprint number U9801A
Web:
Accel-team.com, Elton Mayos' Hawthorne Experiments, http://www.accel-team.
com/motivation/hawthorne_03.html
Accel-team.com, Frederick Winslow Taylor. Founder of modern scientific
management principles, http://www.accel-team.com/scientific/scientific_02.html
Ba 321 Henri Fayol, Retrieved September 26,
2000, http://www.eosc.osshe.edu/~blarison/mgtfayol.html
Elwell, Frank, 1996, Verstehen: Max Weber's HomePage, Retrieved September 26,
2000, http://www.faculty.rsu.edu/~felwell/Theorists/Weber/Whome.htm
Galbraith, Jeffery, Evolution of Management Thought, Retrieved September 24,
2000, http://www.ejeff.net/HistMgt.htm
49. General Theories of Administration, Retrieved September 26,
2000, http://choo.fis.utoronto.ca/fis/courses/lis1230/lis1230sharma/history2.htm
Greater Washington Society of Association Executives, Peter Senge Resources,
Retrieved September 26,
2000, http://www.gwsae.org/ThoughtLeaders/SengeInformation.htm
Halsall, Paul, 1998, Modern History Sourcebook: Frederick W. Taylor Retrieved
September 27, 2000, http://www.fordham.edu/halsall/mod/1911taylor.html
Jarvis, Chris, Henri Fayol, Retrieved September 27,
2000, http://sol.brunel.ac.uk/~jarvis/bola/competence/fayol.html
Nicholson, Don, MWO: Michelson's Speed of Light
Experiment, http://pinto.mtwilson.edu/Tour/24inch/Speed_of_Light/
Reshef, Yonatan, Fayol, Retrieved September 27,
2000, http://courses.bus.ualberta.ca/orga417-reshef/Fayol.htm
Ridener, Larry, Dead Sociologists Index, 1999, Retrieved September 27,
2000, http://raven.jmu.edu/~ridenelr/DSS/INDEX.HTML#weber
Schombert, James, Rutherford, 1997, Retrieved September 27,
2000, http://zebu.uoregon.edu/~js/glossary/rutherford.html
Wertheim, Edward G. Historical Background of Organizational Behavior,
Retrieved September 26,
2000, http://www.cba.neu.edu/~ewertheim/introd/history.htm#Theoryx
Frederick W. Taylor, The Principles of Scientific Management (New York: Harper
Bros., 1911): 5-29
Max Weber, Wirtschaft und Gesellschaft, part III, chap. 6, pp. 650-78.
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Posted on May 2, 2014 by Tim Friesner
Marketing’s Relationship with other Functions
Functions within an organization
The marketing function within any organization does not exist in isolation. Therefore it’s
important to see how marketing connects with and permeates other functions within the
organization. In this next section let’s consider how marketing interacts with research and
development, production/operations/logistics, human resources, IT and customer service.
Obviously all functions within your organization should point towards the customer i.e. they are
customer oriented from the warehouseman that packs the order to the customer service team
member who answers any queries you might have. So let’s look at these other functions and their
relationship with marketing.
Research and development
Research and development is the engine within an organization which generates new ideas,
innovations and creative new products and services. For example cell phone/mobile phone
manufacturers are in an industry that is ever changing and developing, and in order to survive
manufacturers need to continually research and develop new software and hardware to compete
in a very busy marketplace. Think about cell phones that were around three or four years ago
which are now completely obsolete. The research and development process delivers new products
and is continually innovating.
Innovative products and services usually result from a conscious and purposeful search for
innovation opportunities which are found only within a few situations.
Peter Drucker (1999)
51. Research and development should be driven by the marketing concept. The needs of consumers
or potential consumers should be central to any new research and development in order to deliver
products that satisfy customer needs (or service of course). The practical research and
development is undertaken in central research facilities belonging to companies, universities and
sometimes to countries. Marketers would liaise with researchers and engineers in order to make
sure that customer needs are represented. Manufacturing processes themselves could also be
researched and developed based upon some aspects of the marketing mix. For example logistics
(place/distribution/channel) could be researched in order to deliver products more efficiently and
effectively to customers.
Production/operations/logistics
As with research and development, the operations, production and logistics functions within
business need to work in cooperation with the marketing department.
Operations include many other activities such as warehousing, packaging and distribution. To an
extent, operations also includes production and manufacturing, as well as logistics. Production is
where goods and services are generated and made. For example an aircraft is manufactured in a
factory which is in effect how it is produced i.e. production. Logistics is concerned with getting
the product from production or warehousing, to retail or the consumer in the most effective and
efficient way. Today logistics would include warehousing, trains, planes and lorries as well as
technology used for real-time tracking.
Obviously marketers need to sell products and services that are currently in stock or can be made
within a reasonable time limit. An unworkable scenario for a business is where marketers are
attempting to increase sales of a product whereby the product cannot be supplied. Perhaps there is
a warehouse full of other products that our marketing campaign is ignoring.
Human resources
Human Resource Management (HRM) is the function within your organization which overlooks
recruitment and selection, training, and the professional development of employees. Other related
functional responsibilities include well-being, employee motivation, health and safety,
performance management, and of course the function holds knowledge regarding the legal
aspects of human resources.
So when you become a marketing manager you would use the HR department to help you recruit
a marketing assistant for example. They would help you with scoping out the job, a person
52. profile, a job description, and advertising the job. HR would help you to score and assess
application forms, and will organise the interviews. They may offer to assist at interview and will
support you as you make your job offer. You may also use HR to organise an induction for your
new employee. Of course there is the other side of the coin, where HR sometimes has to get
tough with underperforming employees. These are the operational roles of HR.
Your human resources Department also have a strategic role. Moving away from traditional
personnel management, human resources sees people as a valuable asset to your organization.
Say they will assist with a global approach to managing people and help to develop a workplace
culture and environment which focuses on mission and values.
They also have an important communications role, and this is one aspect of their function which
is most closely related to marketing. For example the HR department may run a staff
development programme which needs a newsletter or a presence on your intranet. This is part of
your internal marketing effort.
IT (websites, intranets and extranets)
If you’re reading this lesson right now you are already familiar with IT or Information
Technology. To define it you need to consider elements such as computer software, information
systems, computer hardware (such as the screen you are looking at), and programming languages.
For our part is marketers we are concerned with how technology is used to treat information i.e.
how we get information, how we process it, how we store the information, and then how we
disseminate it again by voice, image or graphics. Obviously this is a huge field but for our part
we need to recognise the importance of websites, intranets and extranets to the marketer. So
here’s a quick intro.
A website is an electronic object which is placed onto the Internet. Often websites are used by
businesses for a number of reasons such as to provide information to customers. So customers
can interact with the product, customers can buy a product, more importantly customers begin to
build a long-term relationship with the marketing company. Information Technology underpins
and supports the basis of Customer Relationship Management (CRM), a term which is
investigated in later lessons.
An intranet is an internal website. An intranet is an IT supported process which supplies up-to-date
information to employees of the business and other key stakeholders. For example European
train operators use an intranet to give up-to-date information about trains to people on the ground
supporting customers.
53. An extranet is an internal website which is extended outside the organization, but it is not a public
website. An extranet takes one stage further and provides information directly to
customers/distributors/clients. Customers are able to check availability of stock and could check
purchase prices for a particular product. For example a car supermarket could check availability
of cars from a wholesaler.
Customer service provision
Customer service provision is very much integrated into marketing. As with earlier lessons on
what is marketing?, the exchange process, customer satisfaction and the marketing concept,
customer service takes the needs of the customer as the central driver. So our customer service
function revolves around a series of activities which are designed to facilitate the exchange
process by making sure that customers are satisfied.
Think about a time when you had a really good customer service experience. Why were you so
impressed or delighted with the customer service? You might have experienced poor customer
service. Why was it the case?
Today customer service provision can be located in a central office (in your home country or
overseas) or actually in the field where the product is consumed. For example you may call a
software manufacturer for some advice and assistance. You may have a billing enquiry. You
might even wish to cancel a contract or make changes to it. The customer service provision might
be automated, it could be done solely online, or you might speak to a real person especially if you
have a complex or technical need. Customer service is supported by IT to make the process of
customer support more efficient and effective, and to capture and process data on particular
activities. So the marketer needs to make sure that he or she is working with the customer service
provision since it is a vital customer interface. The customer service provision may also provide
speedy and timely information about new or developing customer needs. For example if you have
a promotion which has just been launched you can use the customer service functions to help you
check for early signs of success.
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