Matrix Organizational Structure

Matrix Organization

An organizational structure that facilitates the both horizontal as well as vertical flow of skills and information, referred as matrix structure, also called grid structure or project structure. Mainly used for managing large products like product development processes, arranging mega events, etc. In this management structure we have to assign different duties and responsibilities to execute a project to the individuals working in different departments without removing them from their respective positions.

For Example

President

V.P V.P V.P
Manufacturing R&D Sales

Project Manager Product A Product A Product A

Product A Manufacturing R&D Sales

Product Manager Product B Product B Product B

Product B Manufacturing R&D Sales

In matrix structure we have:

1. Top Management like President, CEO, etc who has to look after the whole structure

2. Two Matrix Managers, one is the head of specific technical department like, R&D, Manufacturing and sales, second is project manager.

3. Employees who are headed by both project manager and their respective departmental heads and having dual reporting responsibilities. They comes into communication with project manager for project activities like planning, execution, etc and project manager also exercise administrative authority over people in team for all matters, hence formulating horizontal flow of relationship. And they also come into communication with their respective departmental head for technical reasons that ensure adequate technical supervision and support and hence formulating vertical flow of relationships.

What is Project Stakeholders? its Types, Definition, explanation, all details...

A stakeholder is a servant or a whole party who works for a company and plays its best role in bringing it to fruition. A stakeholder is a party that works hard for a project because it has its own interests in it, directly or indirectly. A stakeholder's party usually consists of employees, customers and suppliers. But the rest of the people are involved to get it out to more people.

You should know that each of you is a stakeholder directly or indirectly because you will come to believe when we talk about it later. Today we will talk about two major stakeholders. I think you should read this whole article to make your project. It will help you a lot.

Primary stakeholders:

The stakeholders who actively take part in any phase (planning, execution, controlling and closure) of a project and also who are actually entitled for end result of a project are called primary stakeholders. Such as, supplier, consumer, sponsors, employees, etc.

Example Of Primary or Internal Stakeholder:

You should know that all those who invest in the project and all the employees who work on the project are known as Primary stakeholders.

For example, if you want to set up a large company, you have to get approval from the government first, and then you have to find employees for it. Project managers will be needed, and money will also be needed, they are all internal or primary stakeholders.

This is because they all relate to the project for their own benefit and they rely entirely on the outcome.

Types of primary or internal stakeholder:

Project Manager:

The project manager is responsible for everything from the beginning to the end of the work. He will be fully responsible for the loss and benefit and he will be accountable to the project owner for everything.

Sponsor:

You will find that it takes a lot of money to do any work and that is the purpose of the people, the job of the sponsor is to give money and usually the sponsors are the owners, who bring it from anywhere. And it is his responsibility.

Project Steering Committee:

We can also call the project steering committee the project board, this committee is mostly for large projects which are for a longer period of months and years.

Their work is very important. They can turn the whole project in the right direction for the betterment of the project. And they are responsible if it damages the project. Most of these people are highly experienced people who have more experience in their field.

Client/Customer:

For whom you are building your service or product, if your service or product does not please your customers, all your hard work may be wasted and your instrument may be wasted, so some people think of it as indirect. And some people consider them indirect. However, it is very important to take care of them.

Project team:

You will know that in any project the officer only orders the work done by the project team no matter what type of project. Their responsibility is also very important and big because the entire project depends on them to be completed.by the way, all the project teams are the same, but everyone has a different job.

Suppliers/vender:

Different types of companies on the other side of the project that are involved in the project for their own benefit, their job is to meet the needs of each type of project and they are all people from the other company.

Project Contractor:

Most of this work is done in construction projects. You can call it the key to the whole project. For example, if you want to make a software, this work can only be done by these project contractors and the whole project depends on it.

Project Consultant:

These are the people who are very expert about the project and they have a lot of knowledge about your project and all these people who are working on the project are fully aware of the project. I guide.

Project Champion:

There is a servant who helps every project official and his work is for all big projects. The job of the project champion is to make a commitment on the whole project whether our project is working properly or not and this is benefiting us that we are going in the wrong direction.

Secondary Stakeholders:

The stakeholders who affect a organization externally or affected by the project end results are called secondary stakeholders.

This affection may be positive or negative. Such as Gove. may increase interest rates to control money supply, hence resulting in decreasing of interest revenue for financial institution involved in money lending. So for a financial institution govt. is a secondary stakeholder that affected it negatively.

At the same time for the govt. financial institutions are secondary stakeholders those are affected negatively.

Example Of Secondary or external Stakeholder:

External Stakeholders As you may know from the name, they are not affiliated with the company but are external stakeholders. All those people who are affected by the business and choose it for themselves.

For example, in a country where you run a company, your company affects the people living in that country in any way, whether mentally or as a pollution, or for their benefit. But keep in mind that these do not directly affect the project but can certainly affect it indirectly.

Types of Secondary or external Stakeholder:

Comparator:

You must take care of your competitor because if your company's competitors are better than yours then your company may be affected immensely but indirectly. This will make you better at your company.

Tourists:

You should know that if your company is big and good then people are more inclined towards your country. And people come to your country from other countries and it is definitely great and beneficial for you. But remember, it will not benefit you personally but will benefit you externally, i:e. your country.

The Media :

You have to remember that there are people who are against your success who are your opponents, of course they can use the media to defame you, you should be aware of that and take care of it. They do not seem to harm you, but they try to harm you from behind. It also benefits you.

Families :

You should know that there are a lot of people connected to your company and they can be your team members, it is your responsibility to take care of them then you will benefit and you will There is no harm in indirect but can be indirect.

Also, take care of families who are not members of your team. This is your personal responsibility.

Why to manage & engage stakeholders?

Each and every stakeholder expects something different from the organization in pursuit of their own interest, taking risks and receiving benefits in return.

Some of these can feel free to withdraw any time when the conditions are no longer favorable but some of them are in contractual agreement with organization. Now it is up to the organization that how it manage and protect the interest of stakeholders either those are in contractual agreement or not.

We know that communication is key to success and if an organization is being in contact with its stakeholders, this will help it to identify different kind of perception they have. By communication and interacting with stakeholders an organization will able to know its strength, weakness, consumers need, degree of product satisfaction, stakeholders expectation, and making them involved in decision making process will ultimately turn stakeholders loyal to organization whether these are consumers, employees, sponsors, etc.

in return they will make every effort to do better things and so helping the organization to remain completive in long run.

Conclusion:

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Project Management Processes (Case Study)

Our Design Process for Project Management

Project Management Processes:

This is the process of applying knowledge, skill, tools and techniques for the execution and successful completion of a project to achieve some rational or irrational, tangible or intangible objectives.

IF we assume that we have to invest in a project providing Financial Services to a specific group of individual or organization. So we have to pass through number of steps and processes for this.

Project Initiation Stage:

The first step in project management process is the initiation stage, when we are at the beginning of a project. In this we have to perform following functions:

I. Project Charted

The document showing what actually is project all about and can be accessed by anyone.

In this we will answer some question like, why to undergo this project? What are our expectations from this project? Who will be our target customer? In this we have to identify that what sources we have to accumulate either these will be internally or externally.

How funds will be generated. The budget and duration of the project will also be talked about and will be noted in this document.

II. Identifying Stakeholders:

At this stage we have to identify our stakeholder that who are the stakeholders in this project. It is to be define internal stakeholders like investors (banks in our case), employees, management and connected stakeholders like customer (govt. or non-govt. organizations in our case), suppliers, competitors (banks, insurance companies, saving centers etc. in our case), etc. and also external stakeholders like government, pressure groups (substitute product producers), etc.

Project Planning Stage:

Project planning comes next to initiation stage and it is the most critical point in time and contributes much in project success and failure.

1. Project Management Plan:

It is consists of series of plans that guide the project manager and its team during the execution and controlling of a project. Project management plan covers the whole theory and guide line of the project.

One of the valuable project management plans includes the project strategies with scope, objective and goals to achieve.

2. Project Management Planning Process:

a. Collecting requirement for project – we have to allocate our sources and resources

b. Defining Scope – in scope we have to decide that how large our project will be?

c. Creating WBD – In work break-down structure we will have to break our project into number of different activities. Steps include will be,

· Define activities – what are our key activities to perform and what types of activities we have to perform?

· Define resources for activities – We have to think out that by whom these activities will be carried out?

· Estimate the duration of activities – what is the time limit for each activity.

· Arrange or sequence the activities – Arrangement of activities in executing order will be made.

· Develop schedule for activities – We have plan that when what activity will be carried out?

d. Estimate costs – what are costs associated with each activity and in total project:

· Determine Budget – In budget we have to estimate our costs and how these cost should met?

e. Quality Plan – What quality product we are offering to customers?

f. Planning for HR – what kind of skill will be need by the employee to execution of project.

g. Procurement Plan – what kind of customers we are looking for. Who will be our suppliers of raw material and what our customer’s target group is.

h. Risk Management Plan –in this stage we have to decide how risks will be handled.

· Identifying Risks - what kind of risk (internal or external) may arise.

· Qualitative Risk Analysis – SWOT analysis will generally help us to determine. qualitative risks

· Quantitative Risk Analysis – these can be found by analysis historic data, determining beta co-efficient, variances, etc.

· Plant risk responses – in which a project manager determines that if certain risk appears how it will be handled or responded

i. Communication Plan – In project management the communication is multi-dimensional and project manager has to respond to employees, customers, external stakeholders and top management. So we have to develop proper communication channels before the execution of a project because communication is the key to success.

Execution Stage:

After planning being a project manger we have to execute the work as planned. But before execution we must ensure that all before has done well and in future there will be not any hurdle that will badly affect the project and if there will be, it could be handled in easy way. Steps in execution may involve:

1. Acquire project team – that will handle or execute the project. They can be acquired from inside the organization as well as out side the organization. But in our case we have to find that how experienced and non-experienced personnel will be hired.

Being a project manager the only thing which must be ensured, is the capability of project team, either they will better execute the project or not.

2. Develop Project Team – If our team has some deficit or nature of work in our project is different from the market then we have to provide some specific training that will help the project team to learn the methodologies for execution of work. So, that in future there should not be any miss-conception.

3. Management Project Team – During the executing we will have to manage the project team in such a way so that each and every activity that is planned should be executed in time and completed in time.

4. Managing Stakeholder’s Expectations – Here we will have to meet the stakeholder’s expectation. In other words, we have to see that whether our financier’s expectations are met for which he is providing us the capital. And whether or not the potential customers are getting more and more benefit from our services.

5. Distributing Information – the best way I think to get work done from the employee is to getting them involved in decision making and providing all the information about the project. So we will have to ensure that our communication channels are working properly.

6. Performing quality assurance – At this we will have to perform quality checking that all the quality standards are set because it is the stage when actual work starts if there is any discrepancy this will lead to customer dissatisfaction in the future .

Compare our work done with the quality standards that were established at the time of planning. If there is any kind of deficiency or otherwise, we may have take corrective action as well.

7. Conduct Procurements – at this stage we will have to make contracts and should interact with the suppliers specifying the quality, time, price, scope, payments, place of delivery, warranty, limitation of liability, incentives, and every thing that might affect our project either positive or negative.

Monitoring and Control:

At this stage we have monitor and control those things which we are executing in this project. In our case we have to see that whether our customers are getting maximum benefit from our project and if not so what are the mean reasons, where is the deficiency?

How internal stakeholders are performing their work and what are the expectations of our customers. Shortly, we have to monitor each and every thing we have planned.

1. Verifying Scope – In this we will have to ensure that whether our project is customer oriented and targeted the potential customers.

2. Quality control – whether or not our financial services are according to our customer’s needs.

3. Performance – All the employees are working effectively and efficiently.

4. Risks Control – what kind of risks are actually negatively affecting our project and what potential measure should we have to undertake. If the risks are systematic we will have to take preemptive measures to outcome these risks. And if the risks are un-systematic then we will have to take those steps which synthesize our project less-affective.

5. Control Costs – controlling the costs is to much critical because we will not like to project be costly and on the other hands if we cut the costs the quality standards does not met. We will also ensure that all the activities are done within the budgetary estimates.

6. Control Scope – We will have to does things that were discussed in project planning and will not exceed the boundaries of our project because this may result in delay of project and also costs and time may increase.

7. Control Schedules – The important thing we will have to see that whether all the organized activities (in WBS) are done at time with the same costs as proposed.

We will have execute all the activities at their time because it may that these activities are linked with one another and delay of activity may cause delay of other and so resulting in delay of the whole project.

8. Control Procurements – At this stage will have to see the performance of contract with supplier and manage the procurement relationship and make necessary changes as needed.

We will have to ensure that both parties are working under their limitations of liability and the consent of both has not been negatively affected.

Final Words:

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Porter's Five Forces Model (case study on UBL Pakistan)

Porter’s Five Forces Model

In 1980 M.E. Porter presented the five forces model for industry or competitive environment analysis.

1. Barriers to Entry:

The UBL is providing value added services to its customers. On the other hand market is getting more saturated and other organizations are getting involved in the bank operations. For example, Telenor is offering Easy Paisa, etc. At the beginning all the functions like money exchange, currency converter, FOREX, money transfer, etc.

were relates to bank but now a day other organizations are becoming more specialized in these and hence resulted in declining of profit (commission income or service charges).

2. Bargaining Power of Supplier:

Because of concentrated competition and new entrance of foreign banks in the industry the investors are becoming more conscious in providing the funds for deposits. The funds are dispersed among the banks because every bank in the industry wants to capture these funds (from potential investors) hence to increase its market share and to generate more and more profit. It is the fact that supplier’s funds are more critical to market success. Due to which the bargaining power of supplier has been increased.

Financial statements of UBL reveal that deposits with the bank are decreased from 83% to 79% during the last seven years.

3. Bargaining Power of Customers:

Customers can be powerful when the switching cost is very low and in the banking sector the customer’s needs includes favorable profit on investment and getting banking services with low cost. All the banks in

Pakistan

are competing for healthy market share so they are trying to provide the better services from other banks by giving more incentives on their services as a result of which the bargaining power of customers has been increased. Hence the UBL is facing great difficulty in sustaining his competitive position in the market and this is done by providing more are more value added services to its customers.

4. Availability of Substitute Product:

Substitute products are also available in the market like MobiCash services by Mobilink GSM, Easy Paisa by Telenor

Pakistan

both are used for transfer of money between two customers. There is also an example of PayPal, Alert Pay, etc are best alternatives for the transferring of money all across the globe with minimum charges or service fee. All these substitute products are creating a big hurdle in earning commission and generating revenue for the bank.

5. Rivalry among the Competitors:

The intensity of competition in an industry depends upon bulk of factors such as number of competitors, the presence of exit barriers, degree of product differentiation and growth rate.

Taking only one factor in due consideration “the degree of product differentiation” it can be seen that all the banks are providing same kind of services but with different names. It means that the degree of differentiation for the products is near to zero and it is fact that when the degree of product differentiation is less the competition is high because customer’s switching cost eliminates. For example, NBP, UBL, Summit Bank, BOK etc are offering the services for transfer of money with the help of Xpress Money. And some other banks like Bank Al-Habib, MCB, Bank Alflah etc are using Money Gram for the same activity.

Macro Environment Variables (Case Study of UBL Pakistan)

These are the variables which affect all the firms and all the industries and can occur all across the boundaries. These are the common issues but the individual firm or even the industry does not have capability to stop these factors from occurring.
Different authors used different terminologies to define these factors that are:
• PEST – Political Economic, Social and Technological
• PESTEL – Political, Economic, Social, Technological, Environmental and Legal
• SPENT – Social, Political, Economic, Natural and Technological
• STEEPLE – Social, Technological, Economical, Environmental, Political, Legal and Ethical
1. POLITICAL VARIABLES:
From the start when the Pakistan has taken part in the war against terror, the political, economical, and social environment is changed and all the industries and sectors in Pakistan have been negatively affected.
Many factors like fiscal policies on tax, exchange rates, inflation and government agencies regulating competition, are the major issues contributing to downturn of the UBL revenues.
The deposits with the UBL have been decreased from 25.1% to 19.9%, in last seven years. Looking in contrast, the total operating revenues diminished from 57.0% to 20.3% in recent years. And this is because the drastic changes in the political environment of the country.
2. ECONOMIC FACTORS:
As the economy of the Pakistan has shown downward trends in the recent years & the business activities became sluggish. UBL in this regard having the cash low from investment activities in the country declined from Rs.9,817(m) to Rs.6,530(m). From this it is quite easy to say that economics factors has seriously affected the growth and earning of the UBL. From the financial statement of UBL it is obvious that the operating cost increased from Rs.13,929(m) to Rs.11,664(m) in few years back.
Financial ratios analysis shows that in recent years the Net Profit Margin has been diminished from 31% to 21% and this is mainly because of economic down-turn in the country.
3. SOCIAL CONSTRAINTS:
UBL is also influenced by the social constraints in case of saving and investment habits of the people. Customers first need for investment is surety on safety of investment which the Pakistan’s economy is lacking, the potential investors are saving their money in foreign banks are also investing their capital outsides the country. But, besides to all this banks has fulfilled the social responsibility concept by donating to NGOs and NPOs in the field of education, health, etc.
4. TECHNOLOGICAL FORCES:
As the old technology is becoming obsolete and advanced technology is taking place. Parallel to this, customer’s needs are arising day by day, so to satisfy the customer’s need and remaining in competition UBL is also acquiring new technology. And this replacement leads to lots of money to acquire new technology, which has raised the operating cost of the bank.

Reference: www.ubl.com.pk

Decision Making

The decision-making process involves several distinct stages. The first step is to define the problem. Alternative solutions to a problem are then generated before one is chosen as the solution to implement.

After a solution is implemented, it should later be evaluated and altered if necessary.

Not all problems are the same and not all alternatives are acceptable.

Decision-making involves selecting an alternative to implement from among a number of possible alternatives. Many times, the alternatives that decis ion-makers select and implement are those with which they are familiar or those that are readily available.

For example, each day when I get into my car to return home from work, I choose an alternative that is very familiar and easy for me to implement.

However, on any given day I could choose a different alternative from among an almost unlimited number of other effective solutions.

I could bum a ride from one of my friends or acquaintances from work, call a taxi, ride a bus, walk, ride a bike or skateboard, or choose any combination of those alternatives.

In addition to those alternatives, there are also a number of illegal alternatives from which I could choose. I could steal or hijack a vehicle, sneak onto public transp ortation, or ride in a taxi and stiff the driver of the fare.

However, I never consider those alternatives as legitimate possibilities because they are not legal. Selecting and implementing one of those could result in criminal prosecution, fines, incarceration, and other unpleasant consequences.

Illegal alternatives are screened out as unacceptable before being evaluated as possible solutions.

Some alternatives, though legal, are likewise never considered as possible solutions.

For example, I could con a motorist into driving me home under the guise of a personal or family emergency.

I could play on the sympathy of a coworker by faking an injury for a ride or to borrow a vehicle. I could also concoct a hard-luck story to solicit money from friends or strangers for bus or cab fares.

Those alternatives never come up for consideration in my mind because they violate my sense of ethics and morality.

Violating my ethical principles would make me feel guilty and ashamed of my actions and could cost me the trust of those who helped me—if they ever learned that I had taken advantage of them.

Only the alternatives that are legal and ethical become possible solutions to a problem.

As more and more organizations embrace the notions of empowerment and shared decision-making, it is becoming increasingly important that workers know how to make decisions.

They must understand how to define problems and develop alternative solutions that are both legal and ethical.

To do that, workers need to understand the legal environments in which their organizations operate and the ethical guidelines that drive their operations.

Organizational leaders must continually train and educate their workers on these issues and clearly express their expectations for ethical and legal behavior. Failure to do so can be costly.

Role of Capital Budgeting

The Role of Capital Budgeting

The financial term capital is broad in scope. It is applied to non-human resources, physical or monetary, short or long. Similarly, budgeting takes many forms but invariably comprises the detailed, quantified planning of a scarce resource for commercial benefit. It implies a choice between alternatives. Thus, a combination of the two terms defines investment and financing decisions which relate to capital assets which are designed to increase corporate profitability and hence value.

To simplify matters, academics and practitioners categorise investment and financing decisions into long-term (strategic) medium (tactical) and short (operational). The latter define working capital management, which represents a firm’s total investment in current assets, (stocks, debtors and cash), irrespective of their financing source. It is supposed to lubricate the wheels of fixed asset investment once it is up and running. Tactics may then change the route. However, capital budgeting proper, by which we mean fixed asset formation , defines the engine that drives the firm forward characterized by three distinguishing features:

Longer term investment; larger financial outlay; greater uncertainty.

Combined with inflation and changing economic conditions, uncertainty complicates any investment decision. We shall therefore defer its effects until Chapter Four having reviewed the basic capital budgeting models in its absence.

With regard to a strategic classification of projects we can identify:

- Diversification defined in terms of new products, services, markets and core technologies which do not compromise long-term profits.

- Expansion of existing activities based on a comparison of long-run returns which stem from increased profitable volume.
- Improvement designed to produce additional revenue or cost savings from existing operations by investing in new or alternative technology.
- Buy or lease based on long-term profitability in relation to alternative financing schemes.
- Replacement intended to maintain the firm’s existing operating capability intact, without
necessarily applying the test of profitability.

Business Research

If you have ever used the phrase “research shows that…” in an assignment or conversation, you will not be doing this again. Understanding Research Methods helps us to be specific about the research we discuss, and to make sure that research comes from a valid source and was collected and analyzed appropriately. Many surveys are conducted every day throughout the world to prove a particular point, to support an ideological argument, or just to sound authoritative. We hear them and see them in the news media all the time. Some of this “research” is a “vox pop” where someone, often a journalist, has asked a few people in the street their view of a Government policy, or a product or service, or a current crisis. This is quite different from the kind of business research..

In business, and for academic research, the questions we ask must be valid and fair, relating directly to our need for information, in other words our research must have a clear objective purpose, we are not collecting information for its own sake.
We must also collect that information (data) in a fair and systematic way. For example, we should think about who we ask for information, and how they will understand our questions. If we cannot ask everyone involved, then we must be able to justify why we ask only a certain section of that population.

We must also analyze our data with great care in a systematic way. The rigour of our analysis will have a major effect on whether our research results are valid or not. If we are trying to determine which of a range of new technologies to invest in, then it will be very important that we don’t skew our results towards a technology created by someone we know, or that we don’t miss out certain relevant technologies, as these inaccuracies will lead to a poor investment decision.

Global Business Environment

To date, our world market is dominated mostly by many well established global brands. Over the last three decades, there have been a steady trend of global market convergence – the tendency that indigenous markets start converge on a set of similar products or services across the world. The end-result of the global market convergence is that companies have succeeded on their products or services now have the whole wide world to embrace for their marketing as well as sourcing.

The rationale of global market convergence lies partially in the irreversible growth of global mass media including Internet, TVs, radios, news papers and movies, through which our planet has become truly a small global village. Everybody knows what everybody else is doing, and everyone wants the same thing if it is perceived any good. It also lies in the rise of emerging economic powers led by BRICs (Brazil, Russia, India and China), which has significantly improved the living standard and the affordability of millions if not billions of people.

For organizations and their supply chains, the logic of going global is also clearly recognizable from economic perspective. They are merely seeking growth opportunities by expanding their markets to wherever there are more potentials for profit-making; and to wherever resources are cheaper in order to reduce the overall supply chain costs. Inter-organizational collaborations in technological frontier and market presences in the predominantly non-homogeneous markets can also be the strong drivers behind the scene.

One can also observe from a more theoretical perspective that the trends of globalization from Adam Smith’s law of “division of labour”. A global supply chain is destined to be stronger than a local supply chain because it takes the advantage of the International Division of Labor . Surely, the specialization and cooperation in the global scenario yields higher level of economy than that of any local supply chains. Thus the growth of global supply chain tends to give rise to the need for more coordination between the specialized activities along the supply chain in the global scale.

As the newly appointed Harvard Business School dean professor Nitin Nohria said “If the 20th century is American’s century, then the 21st century is definitely going to be the global century.” The shift of economic and political powers around world is all too visible and has become much more dynamic and complex. But, one thing is certain that there will be significantly and increasingly more participation of diverse industries from all around the world into the global supply chain network; hence bringing in the influences from many emerging economies around the world. Their roles in the globally stretched network of multinational supply chains are going to be pivotal and will lead towards a profoundly changed competitive landscape.

Six Sigma Definition

Definition of Six Sigma

Before we study the subject of Six Sigma in any depth, we need to define the term. Perhaps unusually, Six Sigma has 3 distinct elements to its definition:
•    A Measure: A statistical definition of how far a process deviates from perfection.
•    A Target: 3.4 defects per million opportunities.
•    A Philosophy: A long term business strategy focused on the reduction of cost through the reduction of
variability in products and processes.

Accordingly, it is defined in a variety of ways by several authors, but for the purposes of these notes the definition from Pande et al (2000) focused on the more comprehensive philosophy of Six Sigma will be used:
“A comprehensive and flexible system for achieving, sustaining and maximizing business success. Six Sigma is uniquely driven by close understanding of customer needs, disciplined use of facts, data, and statistical analysis, and diligent attention to managing, improving, and reinventing business processes.”

A strong structure and clear alignment to organizational goals (particularly financial) are a key part of the Six Sigma approach as defined by Eckes (2001). Leadership is provided by a team of Champions – Senior Champion, Deployment Champion, Project Champion at corporate, unit and department levels respectively supported by a team of experts. The experts are referred to as Black Belts (who work full time on projects at process level to solve critical problems and achieve bottom-line results) and Master Black Belts (who provide mentoring, training and expert support to the Black Belts). Ingle and Roe (2001) note that that this significant organizational structure can range from 4000 Black Belts in a corporate population of 340,000 in GE to 120 Black Belts in a corporate population of 100,000 in Motorola. Black Belt training is typically 16 –20 weeks in GE and a year in Motorola (Ingle and Roe, 2001), although both are interspersed with projects that bring value to the organization.