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20<br />

Chapter 1 Organizational Behavior and Management<br />

Many organizations also need to increase their efficiency to survive against<br />

low-cost competition from factories in countries like Mexico or Malaysia, where<br />

workers are paid only $5 a day. Many jobs have already been lost to low-cost nations,<br />

and if further job losses are to be prevented, new ways must be found to encourage<br />

workers to increase efficiency. In this as in many other areas, pressures from the<br />

global environment have increased the pressure on organizations in the United<br />

States to find new ways to increase efficiency.<br />

Cross-functional teams<br />

Teams consisting of workers from<br />

different functions who pool their<br />

skills and knowledge to produce<br />

high-quality goods and services.<br />

Increasing Quality<br />

The challenge from global organizations such as Japanese car manufacturers and<br />

garment factories in Malaysia and Mexico has also increased pressure on U.S. companies<br />

to improve the skills of their workforces so that they can increase the quality<br />

of the goods and services they provide. One major trend in the attempt to increase<br />

quality has been the introduction and expansion in the United States of the total<br />

quality management (TQM) techniques developed in Japan. In an organization dedicated<br />

to TQM, for example, workers are often organized into teams or quality control<br />

circles that are given the responsibility to continually find new and better ways<br />

to perform their jobs and to monitor and evaluate the quality of the goods they produce<br />

(just as in the NUMMI plant). 21 Many organizations pursuing TQM have also<br />

sought to improve product quality by forming cross-functional teams in which<br />

workers from different functions such as manufacturing, sales, and purchasing pool<br />

their skills and knowledge to find better ways to produce high-quality goods and services.<br />

22 Total quality management involves a whole new philosophy of managing<br />

behavior in organizations, and we discuss this approach in detail in Chapter 19 when<br />

we discuss organizational change and development.<br />

Increasing Innovation<br />

U.S. companies are among the most innovative companies in the world, and innovation<br />

is the direct result or outcome of the level of creativity and organizational learning,<br />

as discussed above. Innovation has been<br />

defined as “the process of bringing any new<br />

problem-solving ideas into use. Ideas for<br />

reorganizing, cutting costs, putting in new<br />

budgeting systems, improving communications,<br />

or assembling products in teams are<br />

also innovations.” 23 Typically, innovation<br />

takes place in small groups or teams—real or<br />

virtual—and to encourage it, an organization<br />

and its managers give control over work<br />

activities to team members and create an<br />

organizational setting and culture that<br />

reward risk taking. Understanding how to<br />

manage innovation and creativity is one of<br />

the most difficult challenges that managers<br />

face. It especially taxes managers’ human<br />

skills, because creative people tend to be<br />

Teamwork led to innovation at Davidson Interiors, a division of Textron. One<br />

team innovated a new product called Flexible Bright, a coating that makes plastic<br />

look exactly like chrome, but does not rust or scratch. Here, the members of<br />

the team are shown holding grills coated with the new product, which Ford uses<br />

in many of its cars.<br />

among the most difficult to manage. One<br />

reason that Euan Baird leads Schlumberger<br />

is that he has a strong track record in using<br />

IT to speed the innovation process.

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