to management. Many other firms, however, have experienced almost insignificant quality increases when compared to the massive scale of the firm's quality effort.
Horizontal Management Structure
The horizontal corporation may be the most radical of the new management systems being touted. A horizontal management structure is defined as managing across an organization rather than in a top-down, hierarchical fashion by identifying key processes and creating teams to manage them. The main premise of horizontal management structure borrows a dimension from TQM: the downward, hierarchical authority of an organization must be dismantled to take advantage of all corporate resources. In place of vertical authority, a new horizontal system is proposed that organizes a firm around processes rather than tasks. Such a horizontal structure is said to eliminate a task orientation and focus company resources on customers instead
The following are the seven key elements of a horizontal structure management system:
A Process Organizational Structure.Create a structure around processes rather than tasks. The entire company can be built around three to five core processes. A process owner is assigned to each.
Horizontal Structure.Levels of supervision should be kept to a minimum by combining tasks within processes. The hierarchical nature of the organization should be flattened to resemble the activities.
Team Management.Teams rather than managers will run processes. Each team is held accountable for performance within processes.
Customer Satisfaction Drives Performance.Do away with old measures of performance like stock appreciation or profitability and use customer satisfaction instead: profits will follow if customers are satisfied?
Team Performance Rewards.The evaluation and pay system should emphasize team not individual performance. Encourage the development of multiple skills rather than specialization.
Maximum Supplier, Customer, Employee Contact.Employees must have direct and frequent contact with suppliers and customers. Find in-house teams where suppliers and customers can be participants.
Inform and Train All Employees.Employees must be trusted with critical data and important decisions. Include all employees, not just leaders.
The horizontal structure, like others, is intended to increase the speed and efficiency of activities and decision-making. So far, it has met with considerable success. AT&T Network Systems Division has reorganized all of its 130 activities around 13 core processes and employee bonuses are based on customer satisfaction evaluations. Kodak has eliminated several vice-president level positions and uses self-directed teams to manage the areas instead. Finally, Xerox now handles its new product development through multi-disciplinary teams that work in a single process structure rather than vertical or even simultaneous functions.
Re-engineering
Reengineering as a management imperative is similar to the horizontal structure system with one major exception. Re-engineering focuses on the redesign of processes within an organization just as the horizontal system does. However, reengineering is not restricted to any particular redesign of processes. Rather, the entire organization is scrutinized from top to bottom to search for opportunities for improvement. Re-engineering is defined as "the radical redesign of business processes to achieve major gains in cost, service, or time." Changing processes to achieve productivity or effectiveness gains does not distinguish
