8 ORGANIZATIONAL ENGINEERING METHODOLOGY, MANAGEMENT IMPROVEMENT
TOOL FOR SMALL AND MEDIUM ENTERPRISES Dr. Uttam Kumar Regmi
Associate Prof., Purbanchal University Dr. Alona Revko
Associate Prof., Chernihiv Polytechnic National University Ramesh Ghimire
Assistant Professor, Kathmandu University Prof. Mihail Kitanovski
International Business and Management Consultant Rudra Prasad Ghimire
Ph. D. Tribhuvan University, Visiting Faculty Kathmandu University
Abstract - Particularly in today's fast-changing world, it is indispensable to have people in the organization who will challenge the status quo or who is prepared to question decisions and propose radical new alternatives. So is it with Organizational Engineering (OE) in the modem organization. The key to managing Organizational Engineering is to recognize that Organizational Engineering is energy and changes such as organization, employee’s motivation, inter-personal communication , awareness business objectives, job description, procedures, instructions & records, competence, organizational changes and many more.
Channeling the energy towards common goals and ensuring that the Organizational Engineering is dealt with maturely is what it takes to turn Organizational Engineering into a source of competitive advantage. This means also dealing with the negative expressions of Organizational Engineering – lack of planning, high company objectives, various competencies and prioritizing profit running processes. In order to work efficiently all SME organizations are divided into small groups, which are responsible for specialized aspects of various tasks. It is assumed that the groups will co-operate in order to effectively carry out the work of the organization. In fact, co-operation for a number of reasons is not always forthcoming. The result is often Organizational engineering, which is not in itself undesirable; only through the expression of differences can good problem solving take place. It is when Organizational Engineering is so severe as to disable the groups, and prevent the effective performance of tasks and achievement of results that it becomes a hindrance.
Keywords: Organizational engineering, profit, planning, management, improvement.
1 INTRODUCTION
The first reason why Organizational Engineering methodology is necessary is because there is a degree of incompleteness in every organization design (Burton et al, 2015). Managers are needed to structuring the tasks, decide who should do what, and delegate work assignments, level. Leaders help the people they lead to accomplish their collective goals. The second reason why Organizational Engineering methodology is necessary is because the organization exists in a changing environment. As the external environment changes, leaders are needed to identify the strategic mission (Terry & Payne, 2013) of the organization and help it adapt to its changing environment. Change management becomes one of the most relevant 1st level processes such as
sales, production, finance, purchasing or quality assurance and/or quality management. The third reason for Organizational Engineering methodology stems from the dynamics of internal change in the organization.
Organizational Engineering methodology is needed to coordinate the efforts of diverse organizational units, particularly during periods of rapid growth or decline.
Organizational Engineering methodology is necessary to solve internal conflicts and settle differences of opinion. Finally, the fourth reason why organizations require Organizational Engineering methodology stems from the need to motivate people and maintain their involvement in the organization.
Individuals are not permanent employees always within the organization. Instead,
9 they come and go, and when they are
present, their needs and interests change. Effective Organizational Engineering provides meaning and purpose by creating a vision of where the organization is going. This ability to inspire and motivate others and transform them into committed contributors to the organization is the function of Organizational Engineering methodology that has captured the interest of owners and shareholders and boosted the learning processes of Organizational Engineering methodology.
2 THE NEED FOR ORGANIZATIONAL ENGINEERING AND INTEGRATED INTELLIGENCE
Different management approaches of Organizational Engineering are typically performed at different levels in the organization and require different abilities and skills. The origination of new programs and policies, which may involve a change in the organization’s structure or a reinterpretation of the organization’s mission, occurs at the top level of the organization. Individuals at this level must have an understanding of the entire organization and of the ways it interacts
with the external environment (Anthony, 2008).
Top-level managers symbolize the organization and what it stands for.Lower-level supervisors administer the policies and procedures of the organization. Successful supervisors need to possess both technical knowledge and a clear understanding of the organization’s rules. Lower-level supervisors must be concerned with equity and with the administration of rewards and punishments, since they continually deal with these issues in leading others, contingency theories of Organizational Engineering.
Organizational Engineering plays an essential role in organizational dynamics and often makes the difference between effective and ineffective organizations.
Organizational Engineering occurs when one person influences others to do something of their own volition they would not ordinarily do. Organizational Engineering (figure 1) is an essential organizational structure and, like other processes it can be studied on three different levels—the individual, the group, and the organization.
Figure 1: The structure of Organizational Engineer
Figure 2: The structure of Organizational Engineering Organizational Engineering behaviors
(Kitchin, 2010) of both formal and informal managers. The organizational level of analysis has examined how organizational effectiveness is determined by the interaction between the leader, the
follower, and the situation. These studies have given rise to The need for organizational management integrated intelligence. Each part will be analyzed separately, beginning with Organizational Engineering traits.A variety of methods
10 was used to study Organizational
Engineering traits, and this variety is probably one reason why the results were so inconsistent. Most studies compared effective leaders with ineffective leaders or leaders with non-leaders. The studies were inconsistent in the methods used to identify leaders Some were identified by outside observers, some were selected by the group via nominations or voting, others were named by qualified observers such as teachers, and1 some were selected because they occupied a position of Organizational Engineering such as student-body president or team captain.
One approach of Organizational Engineering studies reported many experiments showing that leaders were brighter and had greater levels of intelligence. Only few projects reported that intelligence made no difference. In general, it appears safe to conclude that leaders are more intelligent than non- leaders, but again the correlations are small. Obviously, many other variables besides intelligence influence Organizational Engineering effectiveness.
An interesting conclusion coming from these studies is the suggestion that leaders should be more intelligent than
the group but not by too wide a margin.
Members who are significantly more educated than other group members are seldom selected as leaders. Because of their superior intellect, other group members tend to reject them; they are too different from and out of touch with the rest of the group. Organizational Engineering effectiveness also appears to be related to two other variables closely associated with intelligence: documented QMS and knowledge. Leaders generally excel scholastically and receive better than average grades. General information, practical knowledge, and simply knowing how to get things done appears to be important for effective Organizational Engineering, and several studies have shown a positive relationship between general knowledge and Organizational Engineering ability.These two factors were identified by OM Model containing numerous descriptions of leader behaviors and combining the items that seemed to measure the same dimension, through a statistical technique called Organizational engineering factor analysis. (figure 2).
Figure 2: Organizational engineering factor analyses Employees
OE Model
Processes Relation intelligence
Most effective intelligence
Sectors Documented
QMS Process
Approach
3 SITUATIONAL MODEL OF ORGANIZATIONAL ENGINEERING In analyzing Organizational Engineering at the organizational level of analysis, the effectiveness of the different Organizational Engineering styles must be combined with different organizational factors to assess their effect effectiveness.The situational model of organizational engineering(Situational OE Model) is based upon a theory of quality
management system and motivationof emploees theory (Henderson-Sellers et al, 2016). The Situational OE model model explains how managers can facilitate task performance by showing subordinates how their performance can be instrumental in achieving desired goals. Motivation theory explains how an individual’s attitudes and behavior are influenced by the relationships between effort and performance (engineering) and
11 the importance of the rewards
(motivation). Therefore, individuals are satisfied and productive when they see a strong relationship between their effort and performance and when their performance results in allready defined rewards. The Situational OE model model claims that the most effective managers are those who help subordinates process realization to receiving valued rewards.
Essentially, the model explains what leaders should do to influence the perceptions of subordinates about their work, the personal goals of subordinates, and the various engineering methods to goal achievement. The model claims that leader behavior is motivating and satisfying to the extent that it clarifies the engineering methods to the goals and increases goal achievement.
3.1. Situational Organizational Engineering Factors
Three types of situational factors are identified: the Infulence to the followers, organizational environmental factors and organizational knowledge. This three factors as a set of information have been identified as significant variables determining the appropriate organizational engineering model. The ability and experience of the followers will influence leader whether they are able to work more successfully with an achievement oriented leader who sets challenging goals and expects high performance, or a supportive leader who is willing to patiently encourage and instruct them. Also, the Situational OE model model identifies environmental factors moderating the effects of the organizational structure. These environmental factors can influence the effectiveness of different leadership styles in a variety of ways. A highly structured task (Morgenstern, 2009), for example, may reduce the need for a directive leader and even make a directive leader’s attempt to provide additional structure seem unwanted. However, a pitchfork leader would be more likely to succeed than a participative leader if the organization had a highly formal authority structure that followed a strict chain of command. In this model shows how organizational knowledge interact with employees and environmental
factors to influence the personal percep- tions and motivation of other employees.
𝐎𝐄
=∫ (𝐨𝐫𝐠𝐚𝐧𝐢𝐳𝐚𝐭𝐢𝐨𝐧𝐚𝐥 𝐟𝐚𝐜𝐭𝐨𝐫𝐬 ∗ 𝐨𝐫𝐠𝐚𝐧𝐢𝐳𝐚𝐭𝐢𝐨𝐧𝐚𝐥 𝐤𝐧𝐨𝐰𝐥𝐞𝐝𝐠𝐞)𝒅𝒕 (𝐭𝐡𝐞 𝐈𝐧𝐟𝐮𝐥𝐞𝐧𝐜𝐞 𝐭𝐨 𝐭𝐡𝐞 𝐟𝐨𝐥𝐥𝐨𝐰𝐞𝐫𝐬)
Finally, organizational factors are directly connected to organizational knowledge and Organizational engineering is in direct relation with the infulence to the followers/employees.
3.2 Organizational Engineering in Production Processes
Perhaps the major contribution of the Situational OE model is that it provides a method for viewing critical control points in terms of the deployment of production processes. As industry face with the emergence of global competition, continuous business development and improvement are becoming increasingly crucial to the future of all manufacturers.
Implementing Organizational Engineering through a continuous improvement process is a practice of ongoing identification and elimination of production failure, thus maximizing production series and providing customers with highly attractive product and/or service. In the last decade, turbulence of competition in the business environment have made ground for a new business era, and ―change‖ has become a main characteristic of the new era. With the rapid advance of technology, manufacturing companies experience volatile demand and few repeat orders.
However, a successful Organizational engineering implementation will increase a company’s business efficiency and the capability to maximize its turnover.
Organizational Engineering methodology introduce the means for industry to achieve or improve the ability of coping with continuous and unanticipated changes in their business environment and proactively capture opportunities from the turbulent business environment. The core of Organizational Engineering is about increasing profits by maximizing competitiveness, and outwardly focuses on the market place in order to anticipate and take advantage of competitive opportunities. According to this model, manufacturing SME experience varieties of changes in their
12 business environments, which drive the
enterprises to identify ―OE capabilities‖
that need to be enhanced in order to respond to and take advantage of changes. The Organizational engineering implementation methodology with benchmarking, modelling, and prediction capability taking into consideration of company characteristics. The following elements are necessitated to be included into the proposed method:
● Qualitative metrics (Drozdova &
Gaubatz, 2017) to enable companies to objectively analyze, and continuously monitor, changes in the business environment, as well as performances;
● Improvement methods to enable companies to identify, model and prioritize OE capabilities that need to be improved, determine the required level of improvements, and predict performances;
● Management review meetings to help identify best practices continuously for improving agile capabilities, and to model relationships between practices and capabilities.
The Organizational Engineering Model provides a structured way of modelling information related to production analysis, including a company’s internal and external characteristics, its business factors and turbulence, available resources and capabilities and its current performance. Four sets of Organizational Engineering Tools develop measure- manufacturing organizations’ capability in terms of Organizational Engineering improvements:
Project management
Agile management (Highsmith, 2010)
Management of finance
Quality management
This OE tools are the driving forces from a turbulent business environment that necessitate a company to achieve/improve organizational status.
OE capabilities are the abilities to rapidly and cost effectively respond to, capture, and create windows of opportunities within a turbulent environment driven by individualizing customer requirements.
OE Performances are a company’s performances in coping with the changes caused by turbulent environment.
The Organizational Engineering Tool (Ahmed & Nielsen, 1968)is a mechanism to facilitate best practice detection and improvement organization structure. This model is used in two ways. First, when the Organizational Engineering Models for a number of enterprises are established, similar enterprises are identified and benchmarked against one another to establish relationships between subsets of agility drivers, capabilities, and performances. The best
practices for achieving
individual/subsets of capabilities are identified through this process. Second, given the Organizational Engineering Model (Pergl et al., 2019) of an enterprise, the company will be benchmarked against similar enterprises in the database and weak capabilities could be identified based on the established parameter relationships. The agility strategy formulation methodology is also proposed as a process benchmarking mechanism. Manufacturing organizations could access the website and self-assess Organizational
Engineering processes Agile
Management
Project Management
Management
of finance Quality
Management Figure 3: Organizational Engineering Tools
13 Organizational Engineering drivers,
capabilities and performances to identify weak capabilities and formulate strategies by using the Organizational Engineering tools and the benchmarking mechanism to identify best practices.
The good manufacturing practice (Oechslein, 2018) provides a mechanism to identify best practices for improving an agile capability, a modelling platform to help evaluate potential improvements to a capability from the implementation of a practice, and a method to document best practices. Best practices for improving a capability (or a subset of capabilities) are identified by comparing business factors, processes and technology related to the capability in different companies. The practices will then be documented in a database using a modelling tool.
Information concerning the practices includes a description of the practice, applicable situations, capabilities to be improved, implementation procedures, resources required, maturity metrics, likely improvement to capabilities, and case materials. The database is continuously updated as new practices are identified, and searched to identify and evaluate potential practices for a given enterprise.
Service/Product improvement looks at the ability of products and components to be configured in order to produce necessary variations with a minimum number of components types and the ability to use alternative components parts or have components/parts manufactured/
sourced from alternative
processes/suppliers in case of unforeseen manufacturing/supply problem. It also looks the ability of products and components to be adapted and utilized in new product development, both in terms of structures and functions. The objective is to evaluate how well an enterprise rationalizes its products and product development so as to be able to respond to customer needs in a most cost effective and efficient manner. The term used here is product but the tool is expected to apply to both product and service.
Process Flexibility (Sushil et al, 2016) measures the ability of available processes to be configured to meet
demand and product variations, to cope with unexpected problems, and to facilitate new product introduction in the most cost effective and efficient manner.
People Flexibility assesses the level of skills and skills flexibility in the workforce, levels of motivations and empowerment, and flexibility in terms of changes in task allocation, roles/
responsibilities, time constraints, etc. Set of operations measures the ability of a company and its supply/distribution network to respond to market changes and capture opportunities in the shortest possible time and in the most cost effective and efficient manner.
Organizational Engineering assesses the ability of a company to form/implement effective strategies, to communicate effectively within its hierarchy, to be innovative and able to create partnerships with customers and suppliers, to be able to work with others to exploit market opportunities and to scale up/down in response to changes.
Continual Customer
Requirements are those elements driven by the customer and show how the demands of customers are changing and placing additional targets on individual companies. They also show the extent to which customer needs are diversifying and customer expectations are increasing. Supply Chain Management describes changes that occur within the supply chain. The supply chain used here is the integrated network of facilities and options that perform the functions of procurement of materials, transformation of those materials into intermediate and finished products, and the distribution of finished products to customers. It includes supplier, manufacturing and distribution. Supply is a crucial element of the production process, because of the domino effect that supply chain problems have on the rest of the production process. The distribution elements are one of the key factors in customer satisfaction. Organizational Engineering Performance Measurement is used to assess a company’s performances in coping with changes in terms of customers’ requirements, market trend, and supply chain and business environment. Customer service performance and call center performance
14 assesses the performance of a company’s
customer service which includes pre-sale customer service, post-sale customer service, responsiveness to customers, delivery dependability and delivery speed.
Manufacturing Performance assesses the performance of the company manufacturing products in response to changing product characteristics, material supply, and demand, and employing technological process enhancements. Supplychain performance assesses the performance of the supply chain responding to changes from both the business environment and itself.
Organizational Design (Burton, 2011) assesses the performance of the design of products and processes coping with the changes in business environments. It includes the design of products to be configured in order to produce necessary variations with a minimum number of components types, products, and components to be adapted and utilized in new product development, both in terms of structures and functions.
4 ORGANIZATIONAL ENGINEERING DEVELOPMENT AND D2EM FINDINGS The D2EM case study started with the understanding of the company’s background and organization structure.
Assessment tools developed within the proposed methodology are tailored by considering the company’s business characters and operations. The tailored assessment tools were applied in the company to analyze the changes in its business environment, the capabilities and performances in coping with the
changes. The continuous improvement technique - root cause analysis, was also applied to identify the true root cause of problems. Finally, cost benefit analysis was conducted to identify which problems would bring the greatest gains if addressed, and a manageable Lean and Agile implementation plan was subsequently developed. The main competencies of the company are specialist skills and experiences in product design, and supply development.
Two thirds of this company’s business comes from bidding individual contracts from its customers. Therefore, it is important to analyze the combinations of activities of fulfilling contacts as this company’s products. The initial results of the analysis show that dramatic changes have taken place in the business environment. The changes in the customer base mentioned above directly affect the customers’ ordering behavior, and the structure and operations of the supply chain, which in turn add more turbulence to the business environment.
Price is no longer the sole reason for getting orders from customers.
Measurable delivery lead-time, quality and delivery reliability have more influence on the customers’ decisions than ever. The analysis showed that dynamic customer requirements, in terms of the timing of order placement and the required engineering skills, were a major driving factor As a result, the company has focused on enhancing its human resource management capabilities, with the development of an Organizational Engineering scheduling system (figure 4).
Figure 4: Development of Organizational Engineering of D2EM case study
28 In order to sustain continuous
improvement, a set of Key Performance Indicators (KPIs) was set up. It was unrealistic to expect the company to measure the entire set of metrics each month, due to the amount of time required to do so. The KPIs comprised a small selection of fundamental Lean and Agile metrics, specific to the company.
The monthly measured KPIs allowed the company to monitor the effectiveness of the improvement tools, and to make adjustments accordingly.
Activities that were perform in order to develop appropriate approach to successful Organizational Engineering application engine and implemented quality management system:
Specify the technical standards, policies, and procedures governing development and/or modification of the work products.
Specify the plan for establishing and maintaining the development environment
Specify the plan for customer acceptance of the deliverables generated by the project.
Specify objective criteria for determining acceptability of the deliverables.
Reference a formal agreement of the acceptance criteria signed by representatives of the organization and the customer.
Specify any technical processes, methods, or tools required for deliverable acceptance, such as testing, demonstration, analysis and inspection.
5 CONCLUSION
Organizational Management and Organizational Design are two different perspectives on continuous business development and improvement with supporting and conflicting aspects.
Therefore, it is important to reach an effective balance to suit a company’s unique circumstances. This Organizational Engineering methodology suggested an integrated approached to achieve the balance by implementing operations within a process business framework. This framework provides a method for companies to assess their specific requirements, enabling them to implement the correct operations and business capabilities in a complimentary manner through plans, employee’s motivation, inter-personal communication, awareness business objectives, job description, procedures, instructions & records, competence, organizational changes and continual improvement.
The practical implications of the framework are the potential enhancements of profitability and turnover in any manufacturing or engineering company, by eliminating waste and maximizing competitiveness respectively. Successful utilization of the Organizational Engineering methodology will place a company in a stronger market position.
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Acknowledgments
This scientific article was created at the School of Economic Policy Studies in 2019 -2021 research education project work supervision of Rudra Prasad Ghimire Chair of School of Economic Policy Studies (Excellence in Research and Innovation).
Conflict of interests
The authors declares no conflict of interest.
Authors Short Bio
Associate Prof. Dr. Uttam Regmi
Dr. Regmi is an associate professor of Purbanchal University. Currently, he is the Director of Ph. D.
and M. Phil. Program at Purbanchal University, Morang - Biratnagar, Nepal.
AssociateProf. Dr. Alona Revko
Alona Revko is Doctor of Economics Sciences, Professor at Chernihiv Polytechnic National University, Ukraine. The main results of her research were approbated on international forums, summits, scientific conferences in Norway, Denmark, Sweden, Poland, Austria, Hungary, Slovakia, Ukraine. The outcomes of her research are reflected in more than 90 publications. In 2016, Alona Revko has been granted a scholarship for an exchange visit to Fil. Dr. Jan-U. Sandal Institute (Norway). Mrs. Alona Revko took part as an expert in research which was as part of the preparation of an educational program in the field of social entrepreneurship for children and youth in Polish primary schools. Prof. Alona Revko has been granted a scientific internship within Lane Kirkland Scholarship Program ( Polish-American Freedom Foundation ) since October 2017 tillJune 2018 at the Poznan University of Economics and Business (Poland).In 2018, Prof. Revko has special distinction by the Marshal of the Kujawsko-Pomorskie Region for Extraordinary Commitment in the Development of Social Economy, Torun, Poland (2018).https://www.linkedin.com/feed/?trk=404_p age.
Assistant Professor Ramesh Ghimire
Professor Ramesh Ghimire is an Assistant Professor of Finance and Accountancy of Kathmandu University School of Management. He is MPhil graduate of same University. He is a passionate
facilitator and learning enthusiast. He has teaching experience of more than a decade at University level. He teaches subjects related with Finance, engineering economy, entrepreneurship and management. He is also a trainer of statistical software packages such as spss and stata.He is involved in various research and his areas of interest are stock market, financial literacy and financial inclusion. He is a member secretary of Hostel Management Committee at Kathmandu University. He has very great human skills. He is the Chairperson of Kashibhanjyang Savings and Credit Cooperatives Limited.
Mr. Mihail Kitanovski
Mr. Mihail Kitanovski is one of the world's most established business and management consultants.
Since 1996, he has worked with more than 700 clients all over the world in more than 80 different fields of work. Exhibiting specific knowledge and tremendous interest in the industries and ways of work of his clients, he is bound to be of great help and support to them to the greatest extent of his abilities. Furthermore, his consulting focuses on helping clients in their work and business lives but also encourages them into leading lives that are ethical, with a strong set of values, and an ability to increase competence in any area required for the growth and well-being of their businesses.
Kitanovski instructs students in a wide variety of academic and vocational subjects beyond the academic school level and conduct research and publish scholarly papers and books. A superb piano player, he employs the use of humor throughout his workshops – something highly appreciated by his clients in the many seemingly difficult situations, which can arise throughout the consulting process as new issues are being discovered and resolved on the spot.
Rudra Prasad Ghimire Ph. D
Mr. Ghimire is Principal/Campus chief of DAV Business School MBA Program Jawalakhel Lalitpur, Nepal affiliated to Purbanchal University, Morang, Nepal. He is a Research Cell Member Secretary/Faculty of Economics at DAV Business School (MBA Program). Mr. Ghimire is visiting faculty of Kathmandu University Department of Management Informatics and Communication. He has served as an expert member of Ministry of Industry Commerce and Supplies, Government of Nepal, Supply Chain Analyst of International Development Agencies and private sectors’
organization in Nepal. He is an expert of trade competitiveness in South Asia regional economy and dependency of economy on its partner countries of South Asia and the world economy. He is the Chairperson of School of Economic Policy Studies [SEPS] in Nepal. And he is the national consultant of strategic plan for insurance sector of Nepal (2021-2025). Mr. Ghimire is also graduated with Diploma from Social Entrepreneur School IBS from Fil. Dr. Jan-U. Sandal Institute. Norway.
Besides, He had presented his Key Note speech in 59th summit and 67th summit organized by Fil. Dr.
Jan-U Sandal Institute Norway in Nepal. Recently, he is admitted to four years Affiliated Honorary Research Fellowship program at Fil. Dr. Jan-U.
Sandal Institute.
