This article summarizes the theoretical basis necessary to investigate the need for an organizational change in the modern company, in it different concepts are raised that are the common thread of any research that poses a problem: How should the structure of a company provide services, in accordance with your corporate strategy and the key processes identified, to achieve optimal use of your resources and comprehensive customer satisfaction?
It is about understanding the client categories and resources to evaluate how to provide an excellent service, taking into account the rethinking of a new strategy and a process management approach, and then redesign the organizational structure, based on achieving the proposed objectives.
General concepts
The need to fulfill the social order of the company, leads to a direction whose main objective is to satisfy the needs of its customers, for which the results of the different processes are analyzed and the causes that affect it are diagnosed, to project the entire organization in order to increase the satisfaction of the needs of society and customers, with efficiency and effectiveness.
Today achieving full customer satisfaction is an essential requirement to earn a place in the target market. The objective of keeping "each client satisfied" has crossed the borders of the marketing department to constitute one of the main objectives of all functional areas (production, finance, human resources, etc.) of successful companies.
An approach from that point of view guarantees that the creation of value for the consumers who benefit from the offer, creates, at the same time, value for the owners who ensure the profits resulting from the increase in sales, with the satisfaction of the clients..
If you want to work with these new management approaches, then you need to first project the organization's strategy, that is, define the why? The why? and the how? The change will take place and, when the strategic objectives finally change, it becomes necessary to adapt the model to reality to produce the necessary changes in the organizational structure.
In other words: "the key to successfully implementing the strategy is a structure that integrates the capabilities and abilities of the value creation functions in the company, allowing it to follow a strategy at the business level."
customers
The long-term success of an organization lies in its relationships with customers; The economic and social justification for the existence of an Organization is the set of clients who have a certain need, before which they are willing to exchange resources (in terms of money, time or other type of resource) in exchange for receiving satisfactory services that be able to solve the problem that gave rise to your need.
Juran and Gryna in their book "Analysis and quality planning" define three categories of clients:
- External clients Internal clients Suppliers as clients
In this Article, reference is made to the category "external client", which is the persons or institutions, according to which the Entity applies all energy and resources with a view to creating the full satisfaction of its needs.
The orientation to the external client implies a comprehensive and integrated re-conceptualization of the Organization and that is based on several assumptions:
- The determination of the market (or markets) to which it is directed. The detailed knowledge of those clients, based on the deep study of their characteristics and expectations. The integration of the entire Organization, since the creation of value encompasses it in its entirety and It is not possible to insure it unilaterally from any area or function thereof. Profitability, since all the above actions are carried out so that the Organization also generates value for its owners.
Customer orientation is related to a paradigm shift that, in the sphere of production, can be identified as "stop selling what is produced, to produce what is sold". This paradigm shift is also valid for the sphere of services, since it starts from putting those needs, wishes and expectations of external customers first, and then designing an offer capable of fully satisfying them.
Philip Kotler defines customer satisfaction as "the level of mood of a person or group of people that results from comparing the perceived performance of a product or service with their expectations"
Every company that achieves customer satisfaction will obtain as benefits: 1) customer loyalty (which translates into future sales), 2) free distribution (which results in new customers) and 3) a certain market share.
Customer satisfaction is made up of three fundamental elements:
The Perceived Performance. It refers to the performance (in terms of value delivery) that the customer considers to have obtained after purchasing a product or service.
The perceived performance has the following characteristics:
- It is determined from the point of view of the client, not the company. It is based on the results that the client obtains with the product or service. It is based on the client's perceptions, not necessarily on reality. It suffers the impact of opinions from other people influencing the client.It depends on the state of mind of the client and his reasoning.
Expectations. Expectations are the "hopes" that customers have to achieve something and are produced by the effect of one or more of these four situations:
- Promises made by the same company about the benefits provided by the product or service. Past shopping experiences. Opinions of friends, family, acquaintances and opinion leaders (eg artists). Pledges offered by competitors.
Satisfaction Levels. After purchasing or acquiring a product or service, customers experience one of these three levels of satisfaction:
- Dissatisfaction: Occurs when the perceived performance of the product does not meet customer expectations. Satisfaction: Occurs when the perceived performance of the product matches customer expectations. Complacency: Occurs when the perceived performance exceeds customer expectations.
Depending on the level of customer satisfaction, the degree of loyalty to a brand or company can be known, for example: An unsatisfied customer will change brand or supplier immediately (disloyalty conditioned by the same company).
For its part, the satisfied customer will remain loyal; But, only until you find another provider that has a better offer (conditional loyalty).
Instead, the pleased customer will be loyal to a brand or supplier because he feels an emotional affinity that far outweighs a simple rational preference (unconditional loyalty).
Within this context, the challenge arises for all entrepreneurs to achieve satisfied customers through increased value delivery, and not so much growth in the customer portfolio, which was the goal of organizations some time ago.
You can ensure that customer loyalty ensures stability in the market with lower costs, which also allows for greater profitability for the company, a very important element to follow closely because, ultimately, every company justifies its existence by achieving a certain benefit.
Means
Resources are the assets of the company (physical, human, financial, organizational) that comprise technology, finance, capabilities, organizational processes or routines, information, knowledge, etc., owned by the organization.
As discussed in the previous section, the main objective of an administrative organization should be to build lasting relationships with its clients by understanding each individual's needs and preferences. It is getting customers to be loyal and that means knowing them, knowing who they are, what their preferences are so that they can offer them what they want, when they want it and how they want it.
This assumes a strategic orientation of the company towards the client, which means making efficient use of its resources, for which it is necessary that the strategy be based on three fundamental pillars:
- Technology: it must be able to collect all the information arising from the relationship with the client regardless of the channel through which it has been produced: fax, email, sales force, Internet, telephone…, and analyze it to thus meet their needs and be able to satisfy them.Processes: processes must also be oriented to satisfy customer needs as quickly as possible. This implies in most cases, changing them, that is, changing organizational routines or the way of doing things in order to improve customer service, which means offering what the customer needs and what the company has designed. Human resources: the people of the company are, in the end, the key to its success or failure and cannot be underestimated. It is essential that they know the project, resolve their fears,their fears, their doubts about their implantation. It is about making them see the importance of the relationship with the customer but, above all, training them in this new philosophy of customer service.
These three pieces of the gear form the basis of any customer relationship management strategy, to this it must be added that the rest of the resources (inventory, transportation, fuel, money, etc.) must be equally managed, in a manner such that they can be used in a timely manner based on the permanent satisfaction of the clients.
Services
Many authors have attempted to interpret definitive descriptions of a service, and yet no definition has emerged in which they all coincide. Here are some of them:
- When customers buy manufactured goods, they take possession of physical objects, but services, because they are intangible and ephemeral, are something that is experienced, not possessed. Services are all economic activities whose result is not a product or physical construction, which is generally consumed at the time it is produced and provides added value by adding aspects (such as convenience, entertainment, opportunity, comfort and health) that are essentially intangible concerns for the first-time purchaser. service is an identifiable and intangible product that includes an action, an execution or an effort that cannot be physically possessed. The services are provided through the application of human and / or mechanical efforts directed at people or objects.For example, the education, tourism or health service.
After reviewing several definitions of service, Adrian Payne's was taken, in his book "The essence of Service Marketing" as a reference:
“A service is an activity with a certain associated intangibility, which implies some interaction with clients or with property in their possession, and which does not result in a transfer of ownership. A change in conditions may occur; the production of a service may or may not be intimately associated with a physical product ”.
The four characteristics that are generally ascribed to services are:
- Intangibility: services are largely abstract and intangible.Insparability or Simultaneity: services are generally produced and consumed at the same time, with customer participation in the process.Heterogeneity: services are not standardized and have high variability.: It is not possible to store services in an inventory.
Any specific service combines a different degree of each one of them. An understanding of the degree to which a given service has a defined characteristic is of considerable importance, as it affects the design of a marketing program.
In the author's opinion, the first two are the most significant, because they are the ones that establish the need to give a different treatment to the management of services to achieve a quality that satisfies the requirements of the clients.
Intangibility induces the client to adopt certain attitudes, the main one being the perception of a much higher level of risk than in the case of tangible goods, with the consequences that this could cause, both for him and for the provider from service. This characteristic has as its most important consequences:
- The price is difficult to set because the services are intangible. It cannot be patented. Difficult to communicate. The service that is not sold today cannot be sold at another time.
In this way it is very difficult to regulate demand.
Regarding the simultaneity of production-consumption, this implies that:
- The product does not exist until the service is provided. Customer satisfaction cannot be fully evaluated until the service is provided.
This evidently sets out important guidelines when it comes to managing services, and very particularly when it comes to working for quality.
Processes
Today the most up-to-date techniques in management control reserve a special place for the concept of process. The success of any organization increasingly depends on its processes being aligned with its strategies, mission, vision and objectives. That is why one of the main points of analysis in the organization is precisely the management based on the processes that take place in it.
The International Standard ISO 9001, promotes the adoption of a process-based approach to increase customer satisfaction, it defines that an activity or a set of activities that uses resources, and that is managed in order to allow the elements input transform into results, it can be considered as a process.
In other words, a process is understood as a series of value-added tasks that are linked together to transform an input into a product.
Another significant aspect in this concept, mentioned by Dr. Carballal in her book "The Collaborative Structures", is that every process begins with an input, which constitutes the input to it and an output is produced, which is the result or product that is manages to satisfy the needs of a customer.
“The input consists of the information, materials and resources necessary to create products or services, it is the starting point of the process. The result is the product, information or service that you provide to another person or work group, it is the end point of the process. The points where the process begins (input) and ends (result or product) are the limits of the process. ”
Each process has clients and other interested parties (who may be internal or external to the organization) who are affected by the process and who define the required results according to their needs and expectations.
The application of a process system within the organization, together with the identification and interactions of these processes, as well as their management to produce the desired result, can be called: "process-based approach".
The first step to adopt a process-based approach is precisely to reflect on what are the key processes that must configure the system. It is necessary to remember that the processes already take place within the Organization, so that the effort should be focused on identifying and managing them properly. Therefore, it would be necessary to consider which of the activities that are usually carried out are representative enough so that they can form part of the process structure.
Once the processes have been identified and selected, the need arises to define and reflect this structure in a way that facilitates the determination and interpretation of the interrelationships between them. The most representative way of reflecting the processes that are identified and their interrelation is through a process map, which became the graphic representation of the structure of processes that make up the management system.
For the elaboration of a process map and in order to facilitate its interpretation, it is necessary to reflect on the possible groupings in which the identified processes are coupled. The grouping of the processes allows us to establish analogies between the processes, while facilitating the interpretation of the interrelation between them.
Process map
Figure No.1 Example of a Process Map scheme. Source: Guide to Process-Based Management
From the previous scheme, it can be understood that a possible process map design can be one that groups the identified processes in the organization into three large groups:
- Strategic processes. They are those linked to management processes and mainly in the long term. They refer to planning, organization and control processes. Key or operational processes. They are directly linked to the realization of the product or the provision of the service. They have a greater impact on customer satisfaction. Support processes. They provide the resources that the other processes need. They are related to support activities that support the successful execution of key processes.
Strategy
The business strategy contains the firm's fundamental purposes and long-term objectives, as well as the courses of action and the allocation of resources to achieve them.
The term strategy can be defined from at least two perspectives: (1) from the perspective of what an organization intends to do and (2) from the perspective of what an organization finally does.
According to the author, it is a creative-evaluative process regarding the definition of mission, values, attributes, vision, objectives and the proposal of actions; It requires an assessment of the internal and external conditions of the organization, constant monitoring and evaluation to determine deviations from the proposed purposes, make the necessary adjustments and take new actions.
The conception and design of the strategy imply the need to take into account the elements that will later serve as support; otherwise the coherence that must exist between the formulation of the strategy and its implementation will not be achieved.
The main components in the formulation of the strategy include: culture, organizational principles, mission, strategic diagnosis, vision, strategic objectives, and the development, evaluation, and selection of strategic alternatives.
Business culture can be inferred from the feelings and actions that members of the organization have in common. According to a Collective of Authors of the CEEC -UH21 organizational culture is the learned way of doing in the organization, it consists of a system of values and basic beliefs that are manifested in: norms, attitudes, behaviors, behaviors, the way of communicating, the interpersonal relationships, leadership style and shared history.
Business principles are the basic precepts of what is truly valuable to an organization. They are rooted in values and beliefs and cover a wide range of categories including, company staff, customers, quality service, company management, ethical conduct, community and society, among others.
The mission of an organization expresses its reason for being and what distinguishes it from other organizations of its type. Your approach must be fundamental and inspiring, comprehensive, comprehensive and long-lasting.
“The mission statement must be a visible document that can allow everyone to focus their efforts in a way that supports the overall purpose of the organization. Externally, the mission statement will provide clear and precise communication with stakeholders, such as customers, suppliers, financiers, higher levels of state and government, etc. ”
Diagnosis is a tool that helps to understand the past and the present and act in the present for a better future.
The success of any organization depends on how closely you look at everything outside it: competitors, economic conditions, technology, markets, political-social environment, etc. to identify opportunities and threats. And in its internal dimension: to know itself; look inside the company with a critical and objective spirit to identify strengths and weaknesses.
It requires scrutinizing in a “crystal ball” and predicting what is supposed to happen; however, the analysis process requires more than just a visionary role, since it is also necessary to make an assessment of the predictions and an examination of the different ways in which the identified issues would be addressed. All this forces us to observe both internal and external factors of the organization with a reasonably objective perspective. The process should start with what is commonly called “SWOT Analysis”, which stands for Weaknesses, Threats, Strengths and Opportunities.
The vision sets the broad outline of the strategy. It must be realistic and optimistic, be challenging and be a motivating and mobilizing factor.
A vision is an image of the organization in 5 or 10 years view. It is not static, it is dynamic. She constantly works with her, developing other overlapping visions.
The strategic objectives are: a preconceived or planned position to be achieved, or the ends towards which the behavior of an organization is directed.
Strategic objectives represent future positions that you want to achieve, they usually describe what you want to "have" or "become" at a future time to carry out your mission. They generally determine what the institution or company wants or has to achieve in the future, usually within three to five years (in some cases the horizon may be longer).27
After evaluating the previously conceptualized components, different strategic alternatives are assumed, one of them: competitive strategies, which are the set of offensive or defensive actions that allow the company to maintain its competitive position in the industrial sector, improve it according to a certain policy of development or seek a new position within or outside the business sector, to obtain a better return on invested capital.
But it is not enough to define what we must do, but the necessary resources must also be planned to carry it out, which is based on the administrative principle of: "Correspondence between authority, responsibility and means", which means that it is not You can hold anyone accountable if you have not been given the appropriate authority and resources to carry out the task. These resources could be specified in Financial, Operational and Human.
Structure
There are several categories that are essential to know when understanding and analyzing what happens in a Labor Organization. The first of these, the organization itself, understood as a social system, composed of a set of subsystems in interaction with each other and with the environment, which satisfy the needs of both the organization and this, based on a social good or service, hence also its psychosocial character.
The behavior of organizations is oriented towards certain goals, defined in the strategy, that the members of the group must know in some way.
Organizations use knowledge and techniques to accomplish their tasks. The organization involves structured and integrated activities; that is, individuals who work together or cooperate in relationships of interdependence.
It is of great importance that the act of organizing results in an Organizational Structure, which can be considered as the framework that holds the various functions together according to a scheme, which suggests order and harmonious relationships in order to achieve the objectives. strategic plans.
The design of a Structure involves answering several questions, such as:
- What criteria to use for the division of labor? How to group the workers? How to achieve coordination between the organizational units? To what level of detail establish the action procedures?
The answers to these and other questions are obtained from carrying out an analysis of the characteristics of the structure:
- Specialization: it constitutes, in a general sense, the way and the degree to which the division of labor in the organization is carried out. It is the answer to questions such as the following: How should we divide the work? To what degree of detail? Coordination: can be defined as the way in which collaboration between organizational units is achieved. There are five mechanisms through which organizations coordinate their work: mutual adaptation, direct supervision and standardization of processes, results and skills. Formalization: establishes the degree of precision and detail that exists in the definition of the functions, tasks and obligations of the personnel that make up the organization. Some organizations set very rigid rules for their operation, while others allow their staff a high degree of discretion to carry out their tasks.
For Henry Mintzberg, one of the most prestigious figures in the study of this subject, “The structure of the organization can be defined simply as the set of all the ways in which work is divided into different tasks, then achieving their coordination "
Following this same conception, for Dr. Esperanza Carballal: The structure expresses the ways in which men arrange the union of the different parts of an Entity, which as a result of the division of labor has been divided, but like the clock they need to Gears, organizations to function need to join their parts and this is achieved using a "glue" that is the coordination, essence and support of any structure.
In the aforementioned book, Dr. Carballal affirms that: Structures do not exist "per se", they are not an end, but a means for organizations to fulfill the reason that gives meaning to their existence, they must contribute to The creation of organizational products (products and services in the company) is linked to the corporate purpose. The structures must contribute to the achievement of the objectives, so prior to the start of the redesign, the strategy must be defined.
Mintzberg affirms that in any Organization, 5 essential parts of the Structure stand out:
- Operating Core; It includes those members who carry out the basic work in the organization, directly related to the production of products and / or services. Strategic Summit; Where are the people in charge of the general responsibility of the organization, it is the party in charge of ensuring that the organization effectively fulfills its corporate purpose and mission. Middle line; It is the chain of middle management or managers who connect the Strategic Summit with the Operations Center. They are the people in charge of converting the organization's strategy into an action plan and making the work in the Operations Nucleus respond to said strategy, they are also in charge of transmitting the exact information to the general managers (strategic summit) of what happens at the base (core of operations) as important feedback for the strategy reformulation process. Technostructure; It is made up of analysts who are outside the current of operational work and are responsible for the control and standardization of work associated with the fundamental activity of the organization. Support staff; it is the part of the organization that ensures, with its services, that the workflow of the operating core runs smoothly.
And that every Organization is drawn in five different directions, by each of its parts and insofar as conditions favor one over the others, the Organization is led to structure itself as one of the following configurations:
| STRUCTURAL CONFIGURATION | KEY PART OF THE ORGANIZATION |
| SIMPLE STRUCTURE | STRATEGIC SUMMIT |
| MACHINERY BUREAUCRACY | TECHNOSTRUCTURE |
| PROFESSIONAL BUREAUCRACY | OPERATING CORE |
| DIVISIONAL FORM | MIDDLE LINE |
| ADHOCRACY | SUPPORT STAFF |
The evolution of organizational structures is framed in how organizations have grown since their creation, depending on how their life cycle develops, which makes it necessary, therefore, to have new coordination mechanisms and devices or Organizational units that guarantee the "glue" that facilitates operation.
That is why Mintzberg points out that organizations move from the simple structural configuration to the adhocratic organizational configuration, a name that the author gives to those organizations that base their work on multifunctional teams of an “ad hoc” nature, for the development or achievement of a specific project in the organization.
The characteristic of this evolutionary process is how the life cycle of organizations normally behaves, where when the company is created it is normally born as a "small company", characterized by total centralization in the hands of the owner of the same and where the number of employees is very few, so everyone depends directly on him who is the one who gives the orders and has in his own mind the vision of the organization (Simple Structure).
Normally companies begin to grow and in this process, where new areas are needed for them to carry out specialized functional activities, such as sales, engineering, operations, etc., a division process is necessary. Then, coordination mechanisms arise to standardize or normalize the activities carried out in the organization, such as: the procedure manuals, the work regulations and detailed instructions, the purchase and sale policies, and these organizations begin to become what it has been called Bureaucratic Structures.
According to the criteria of Stephen P. Robbins, another expert in organizational matters: The Bureaucracy is a structure with highly routine operations that are achieved through specialization, highly formalized rules and regulations, tasks that are grouped into functional departments, centralized authority, short stretches of control and decision making that follows the chain of command. The main strength of the bureaucracy is its ability to develop standardized activities in a very effective way and one of the main weaknesses is that the saturation of rules and regulations replaces administrative discretion, that is: standardized operations, united with high formalization., allow the centralization of decision making. So there is little need for people to make decisions,innovative and experienced below the level of senior executives.
Returning to the analysis of the Mintzberg evolutionary process: Organizations continue a process of growth and development, venturing into new product lines or carrying out vertical or horizontal integration processes, until they become a mature organization. This complicates the process of managing them and the bureaucratic structure becomes a brake on the company's own development and expansion. That is why a new structural form named by Mintzberg himself arises as: Divisional Structure.
According to Dr. Carballal, in the aforementioned work: The fundamental objective of this type of structure is the need to create Business Units, which some authors call “Strategic Business Units (UEN)”, that work as independent companies and that are subordinate to a parent company.
This type of structural configuration corresponds to large and mature organizations, which is why the company has already advanced in the development curve of its life cycle and is at the highest point of the parable, therefore in this phase it is you can hold it for a while as a tangent, but later if you want to keep growing, so as not to fall into decline, you will have to take on a new structural design.
For what appears then the Adhocratic Configurations, it is about looking for new forms of coordination, with mechanisms that allow to increase the relations between the areas and the people that make up the structure, creating a new dynamic in the system, with a view to the organizations become more flexible to changes in the environment.
From all the aforementioned, it can be concluded that, while in the Bureaucratic Structures (Centralized Structures) each professional can operate by himself, in the Adhocracy (Decentralized Structure), the experts must amalgamate their efforts in search of a common purpose; or as Mintzberg himself puts it: "in Adhocracies, the different specialists have to gather their forces in multidisciplinary teams, each of which is formed around a certain Innovation project".
Decentralized Structures are made up of those types of structures whose intention is to provide greater powers to the different levels of command and expand the possibilities of workers in decision-making.37 An example of these are the so-called matrix structures, integrated management project (DIP), team structure, network organizations and collaborative organizations.
As mentioned at the beginning of this Article, the modern company is obliged to respond to the demands of the market, today it is the client who defines the path and only when all the workers of the organization are oriented to satisfy it and have the power to act expeditiously, the company succeeds.
Finally, particular emphasis is placed on matrix structures and collaborative structures because, in the author's opinion, they are the possible design alternatives to achieve the alignment of the entire Organization, in order to satisfy the needs and expectations of clients.
About the Matrix Structure, Robbins noted:
- It is a Structure that creates double lines of authority; It combines functional departmentalization with product departmentalization. Employees in the matrix structure have two managers: their functional department administrators and their product or project administrators. Consequently, the matrix structure has a double chain of command. The strength of the matrix structure is in its ability to facilitate coordination when the organization has multiple complex and interdependent activities. Direct and frequent contact between different specialties in the matrix structure can mean better communication and more flexibility. Information permeates the organization and reaches those who need it more quickly.The main disadvantage lies in the confusion created by their propensity to foment power struggles between functional and product managers. When the concept of unity of command disappears, ambiguity increases and this frequently leads to conflicts between individuals.
About Collaborative Structures, Dr. Carballal in her cited book, expresses the following:
- It is a structure in which the relationship between the elements that make it up is more important than the elements themselves. Systemic thinking based on the systems approach is necessary in this type of organization. They promote increased motivation in workers, Because the very change that must occur in the ways of thinking leads to an organization where creativity and innovation are present as a form of behavior. Dynamism is a characteristic of this type of structure. It is necessary that the processes and, therefore, the relationships established internally in the structure, change according to the strategy of the company. It will allow the exchange of information, the establishment of horizontal and vertical relationships.The grouping criterion of this type of structure must be by processes or projects and the coordination mechanism adapts muta.
Conclusions
To conclude the Article, with a view to ordering the process of redesigning the structure of a modern company, the methodology proposed is presented below:
Steps to follow for Organizational Redesign
Figure No.2: Steps to follow for Organizational Redesign. Source: Own elaboration, taking as a reference the outline presented in the article: "Methodology for the Design of Organizational Systems" by Dra. Esperanza Carballal.
