Total quality management as a business concept has evolved in meaning to encompass not only the improvement in the quality of processes and systems but to encompass the multi-dimensional aspects of quality-based business operations and product or service delivery to customers. The change was due to the failures experienced by business firms in engaging in total quality management that just focuses on improving production processes without linking this area of change to the culture or values of the business firm. In recognition of the failures experienced by a significant number of business firms applying the limited concept of total quality management, the concept of TQM has been expanded to encompass the different dimensions of business operations to include human resource management, change management, operations management, organisational culture, customer relations, and customer satisfaction. Total quality management has re-emerged to become a promising business philosophy because of its radical and long-term implications to business firms. Its radical nature is due to its direction towards change in the overall culture and value system of the organization, to become customer-centred, with the participation of managers and employees. Change or the management of change is a complex and often long-term process that involves multiple interests and players requiring the need for prioritization or the weighing of interests and risks. As such, the failures of business firms in successfully applying total quality management lies in the inability of firms to recognize the encompassing scope of this business philosophy and effectively utilise tools to achieve the goals or objectives established for the engagement in total quality management.
Problems in TQM Implementation
A number of problems in the implementation of total quality management have been recognised to fall under the four general issues. First issue is the lack of limited attention given by business to the various core quality factors available to business firms for application. The quality factors are important in the successful implementation of TQM because these provide both the areas that require focus by the firms together with the tools in dealing with potential issues or assessing the achievement of objectives. This constitutes the most common cited problem as the cause of failures of most firms in realising the benefits promised by TQM. Second issue is the failure to develop a context-based implementation strategy that is fitted to the specific business needs and objectives of the firm. Although there are general elements and tools that guide business firms, firms engaging in TQM should be able to develop an implementation plan unique to its business context instead of merely implementing a generic plan or copying the implementation plans of firms that have successfully engaged in TQM. Third issue is the limited perspective of TQM as a mere add-on programme within a business-as-usual environment. TQM becomes a motivational or training strategy or the application of techniques and tools. In this instance, business firms are likely not to achieve bigger TQM goals. Fourth issue is the setting of very high expectations from the firm’s TQM initiatives that could be due to the oversimplification of the process or limited realisation of the complexities of implementation. (Thiagarajan & Zairi 1997)
With the understanding of the causes of the failures of business firms in implementing TQM together with the development of best practices on an industry or sector-wide level, more successes could be expected in the future. Total quality management still constitutes a sound business philosophy with long-term benefits to business firms that commit to the TQM implementation process by understanding the elements of TQM and its remedies in order to develop context-based implementation plans based on realistic expectations of outcomes.
Elements of TQM as a Business Philosophy
Total quality management involves hard and soft factors, with the hard factors pertaining to the physical or material infrastructures or tools that are in place while soft factors relate to the values, working environment and relationships within the business firm. The hard and soft factors required by total quality implementation need equal consideration for a successful implementation.
Corporate culture constitutes one key soft factor in TQM because this caries the important role of allowing the smooth process of information sharing and harmony building among the members of the organisation (Irani, Beskese & Love 2004). Through corporate culture geared towards customer satisfaction, internal communications and task-completion culture are improved that in turn enhances the products or service delivered to end-consumers. Customer satisfaction in turn, influences long-term revenue generation and market growth. This means the need for a strong corporate culture that develops the value alignment of members of the organisation to the customer-oriented direction of the firm. However, cultures are not that easy to cultivate as seen in the case of Appor Limited that experienced stagnation because of the frustration of employees that demand innovative change but without the support of management (‘Case study: Appor Limited’ 2008).
Development of corporate culture involves difficulties especially when the business firm has not been able to define its business values or experience divergence in beliefs among managers or between managers and employees such as in Appor Limited. These problems hamper or prevent the derivation of a unique firm-wide culture directed towards customer satisfaction. It is in the sense that leadership becomes important. Implementing total quality management involves a change in the belief systems and practices of the business firm and the adoption of alternative values that target customer satisfaction (Irani, Beskese & Love 2004). A strong leader, with a comprehensive understanding of the requirements of total quality management based on its target customers, becomes necessary in settling differences, establishing alternative values, and implementing policies that highlight primary concern for customer satisfaction.
To become an effective leader in implementing culture change as part of TQM implementation, leaders of business firms need to become flexible or resilient to changes to emerging needs and changes in their environment. Flexibility is achieved by focusing on the current processes and strategies of the business firm to encourage continuous learning and improve ways of providing customer satisfaction at a level that also favours the financial and business viability objectives of the business firm (Irani, Beskese & Love 2004).
In implementing TQM, the business firm has to commit to the continuous process of contextual change and learning, with the commitment starting with the firm leaders charged with the implementation of policies intended to develop customer value in product or service delivery among employees.
Customer-supplier alliances comprise another soft factor in total quality management implementation. Since total quality management involves focus on customer satisfaction, business firms applying this practical philosophy should build customer-supplier alliances under supply chain management initiatives. Customer-supplier alliances allow business firms to speedily recognise any changes in demand, by looking at changes in customer demand, which could affect its current operations. (Love & Gunasekaran 1999) Strategic alliances with other business firms, such as in the case of BAE Systems & Waer Systems Limited that highlighted the importance of open communication and information sharing (‘Case study: BAE Systems’ 2008), allow business firms to gain continuous knowledge of developments in customer demand trends to be able to respond and adjust accordingly and in a timely manner. Building alliances with suppliers enabled business firms to understand and gain control over its ability to meet changes in demand. The development of customer and supplier alliances enhances the competitiveness of business firms.
Business firms can engage in two kinds of strategic alliances with customers and suppliers. One is collaborative alliance that involves partnerships with customers and suppliers for purposes of information and competency sharing to improve the manner that business firms meet demand and obtain continuity in its supply chain through a reliable supply partnership. However, this does not always work out as expected since business firms operate in a competitive environment so that business firms have to outdo the value offered by its competitors in order to gain quality-driven business partners. In addition, there could be a difficulty in gaining information especially in a partnership when the exchange involved in collaborative sharing is deemed uneven. Another is cooperative alliance involves the allocation of the necessary resources to derive mutual learning between or among the parties involved in the alliance. This involves the development of trust in order to facilitate mutual sharing of knowledge and skills. However, this is not always easy to do especially in the case of supplier alliances because of the intervention of the varying interests of the business firm and its preferred supply partners. When divergence happens, the partnerships may not become sustainable in the long-run in a competitive business environment. Consistency in the core values delivered to customers would ensure a cooperative partnership with suppliers that allow business firms to create market base of loyal consumers.
Although the building of customer-supplier alliances can involve difficulties resting on the complexity of developing trust, achieving competitive advantage through supplier partnerships and enhancing customer satisfaction can be achieved through the development of learning alliances, which refer to strategic alliances that fosters mutual reflective information sharing and learning with partners in the supply chain. Since this type of alliance is cooperative, this builds mutual trust and stronger commitment. (Love & Gunasekaran 1999) Encouraging an environment of mutual learning contributes mutual benefits to allied business firms, with the sup plying partner able to ensure the firm’s commitment in purchasing its products and the producing firm ensured of the continuity of supply especially with expectations of increases in demand. Business firms involved in learning alliances are able to develop means of providing a consistent standard or quality to consumers in a manner that involves less cost and greater profit.
Development and participation of employees in the implementation of total quality management constitutes another soft factor. Since TQM involves culture change reflected in the conduct of work of employees, who deliver products and services directly to consumers, employees become a necessary participant in the TQM implementation process. This is because employee participation empowers employees. Employee empowerment determines the success of TQM initiatives because employees are the ultimate implementing parties in delivering quality products or services to consumers. By providing employees with the opportunity to be involved in the planning instead of just the implementation of plans, there would be greater degree of initiative exerted in the process of enhancing TQM implementation. Exertion of initiative leads to knowledge on the part of employees about their roles and contributions and the knowledge and skills necessary in exercising good judgment, responsibility and accountability. (Gatchalian 1997)
However, people participation also involves a number of potential problems. One is the rigidly top-down organisational structure and decision-making of the firm that limits the involvement of employees in the planning process. Business firms that have established a top-down structure have to make infrastructural changes in order to involve employees even in the planning process. Another is the resistance from managers to the policy of increasing employee participation. The resistance could be due to their achievement of a certain degree of comfort in the existing system together with the perception of risks involved in increasing the participation of employees in the planning process. This degree of resistance could hamper or slow down the process of implementing total quality management. Still another problem is the limited knowledge and skills of employees that is unable to support their effective participation in the planning process. This could be due to the long time application of a people management system that discourages employees to engage in the planning process and decision-making or the presence of disincentives to employee participation such as lack of merit or recognition of work as well as rewards for the initiative contributions of employees to the business firm. These problems could affect the successful implementation of TQM by the business firm through the achievement of intended outcomes.
To address these problems, business firms engaged in total quality management have to implement a number of changes. First is the consideration of employees as valuable partners in TQM instead of just mere tools in implementation. This would enhance the development of a greater worth of employees relative to their role in the organisation that could influence employee commitment and loyalty. Second is the implementation of continuous training programs for employees to ensure that the organisation holds the competencies necessary in fulfilling TQM in the long-term. Third is the involvement of employees in the formation of the firm’s mission, vision and objectives that ensures their commitment to the achievement of this direction. Fourth is the development of employee values such as open communications, teamwork, cooperation, and other values contributing to people empowerment. (Gatchalian 1997)
Apart from these soft factors, comprising important elements in the implementation of total quality management, there are also hard factors that also need equal consideration such as systems, techniques and tools (Seetharaman, Sreenivasan & Boon 2006). As necessary elements to the successful implementation of total quality management, the failure to consider hard factors could hamper the achievement of TQM objectives.
One hard factor in total quality management is benchmarking, which involves the utilisation of measures to compare the business firm with its competitors for purposes of determining relative competitive advantage (Delbridge, Lowe & Oliver 1995). Application of benchmarking by business firms engaging in TQM can contribute a number of benefits to the firm such as the derivation of the relative position of the business firm in a particular industry or market, enhancement of the firm’s awareness of important changes in customer needs, encouragement of innovation, development of realistic or context-based goals, and establishment of realistic strategic plans.
However, the actual utilisation of benchmarking can involve problems. First is the determination of measures able to capture the areas that the business firm seeks to derive comparative data. In the case of manufacturing firms, the common measures include productivity, lead time, plant features, and process functions. In the case of services, the measures have to be changed to include other factors such as communication and customer relations. Since there could be a number of measures to be used, business firms may not be able to include all pertinent measures in conducting the comparison. In addition, measures involves quantitative data so that the result of the benchmarking analysis could provide data on the relative position of the business firm and the areas of strengths but the results may not be able to explain causes of strengths and weaknesses that involve qualitative data. As such, benchmarking cannot be used as the sole mode of comparison. Second is the possible issue in the interpretation of results. Business firms could have experience problems in the implementation of benchmarking results that could in turn adversely affect decision-making on competitive strategies. Third is the application of benchmarking based on the perspective of the business firm, which may not necessarily coincide with the overall industry perspective. (Spendolini 1992) In effect, the business ends up clueless about its objective competitive position. In addressing these problems, Vista Optics Limited outsourced assessment but ensured that the external team works within the specific business context of the firm (‘Case study: Vista’ 2008).
In using benchmarking to support the achievement of total quality management, a number of crucial steps have to be made. One important step is for the business firm to determine clear objectives for the benchmarking even before the commencement of the comparison process. These objectives are then translated into the measures used in the comparative analysis. Another important step is the determination of a well-bounded process that involves a clearly articulated focus in order to minimise any undue adjustments. Another step is the derivation of understanding of the benchmarking process by the people involved in the process. Another step is the inclusion of qualitative data collection to substantiate qualitative data. A last step is ensuring the development of competencies such as focus on detail and consistency in analysis and the utilisation of external verification processes. (Delbridge, Lowe & Oliver 1995)
Management systems and quality tools have been developed to support the implementation of total quality management by business firms. Overall, total quality management is a management system in itself but because of the encompassing scope of TQM, this overlaps with the two other management systems of organisation management system and human resource management. These two management systems should be aligned with TQM in order to achieve success in implementation.
However, in the integration of these three systems, two approaches emerged. One is the traditional approach that considers total quality management as a superimposition on the other previously existing systems. This means that TQM becomes a mere addition imposed upon the two management systems without efforts for actual integration. This is due to the competition for resources that occurs as the business firm allocates funds for TQM that affects the resources available in the two systems. As such, competition and resistance to TQM emerges from the two systems resulting to the perspective of TQM as a superimposition that have to be tolerated. Integration does not occur because of the aversion or reservations to total quality management. The use of this approach has been accorded with the failures of TQM implementation. (Ho 1999)
Another, less common approach, is integrated management, which intends to merge in a balanced manner cultural initiatives for continuous learning and quality improvement with organisation management and human resource management. This can be achieved in the form of the two systems committing to quality initiatives or participating in quality management teams. The important thing is that the three systems are aligned, blended and integrated in a manner that allows the achievement of the objectives of these management systems towards the fulfilment of the long-term goals of the business. This management approach accounts for the successes in TQM implementation. To implement this management approach, the business firm needs to change its perspective of TQM from a mere superimposition to an encompassing management process that involves integration with the other management systems. (Ho 1999)
Since total quality management seeks to continuously enhance quality, quality tools have been developed to allow business firms to assess current relative levels of quality for purposes of decisions on the direction of quality strategies. There are traditional quality tools derived from statistical analysis including histograms, Pareto and scatter diagrams, cause and effect diagrams. There are also quality planning tools such as force field analysis and matrix diagrams. In addition, Six Sigma has also been applied as a quality tool. To determine industry and international quality standards from which to benchmark the quality level of the business firm, quality standards have been issue by the International Standards Organisation (ISO) to support the quality initiatives of organisations. (Evans 2004)
However, the application of measures could involve difficulties such as in the collection of data that have to be based on objectives measures to ensure that results reflect the objective situation of the firm and not represent the results that the firm wants to achieve. In addition, results of measures have to be analysed and interpreted within the business context of the firm.
Remedies from TQM
There are issues arising in the actualisation of the hard and soft factors of total quality management that requires business firms to exercise greater commitment and diligence in considering the encompassing elements of TQM together with the selection of the appropriate management systems and tools. Nevertheless, total quality management remains an important and timely business philosophy and management system that can contribute a number of solutions to the operational, organisational and competitive challenges faced by business firms. However, it should be kept in mind that total quality management is a long-term process that requires culture change, systems integration, resources allocation, and organisational commitment to succeed. By changing business perspectives and values, the success rate of total quality management implementation should increase.
One solution offered by total quality management involves focus on quality and quality measures (George & Weimerskirch 1998). Business firms operate in a competitive business environment, which means that every business firm has to meet the challenges posed by their rivals and ensure that they successfully address these challenges to survive or to maintain a top industry position. Business firms have to decide what competitive strategies to implement depending upon their understanding of the problem and their objectives. Firms also need to tap into their strengths and deal with their weaknesses in order to optimise outcomes. Business organisations also need to consider the specific needs of the target market to be able to provide products and services that match demand.
There are a number of ways of achieving competitive advantage including cost leadership by offering products and services at a price lower than the competitors. This works effectively when the business firm is able to offer products and services of the same quality as competitors but at a lower price. Another way of achieving competitive advantage is by offering products and services of a higher quality and at a higher price than competitors. This constitutes one way of implementing differentiation. This works for products and services that derive value to customers from the extent of quality. Competitive advantage can also be achieved through the delivery of products on time through an efficient logistics system together with an excellent customer service through human resource management initiatives involving training and skills developments with a customer orientation. (Porter 1998) Business firms can employ any or a combination of these strategies to achieve competitive advantage depending upon their specific needs and objectives.
Quality becomes an important solution to the objectives of business firms in achieving competitive advantage since all the strategies targeting the fulfilment of competitive advantage involve quality considerations (Omachonu & Ross 2004). In cost leadership, even if the core strategy is the achievement of the lowest price among competitors, this works well in instances when the business firm is able to sell at a lower price product or service of a similar quality as the competitors. This means that the strategy would likely not work when the quality of products and services offered at a lower price are also of a lower quality, especially for commodities that draw customer value from a minimum quality standard. In differentiation, the core strategic value is the derivation of unique value to customers. This necessarily involves quality whether the unique value pertains to the delivery of unique customer service to consumers or consistent on-time delivery of products and services. This means that total quality management that targets the continuous focus on quality improvement greatly contributes to the achievement of a firm’s competitive advantage.
Another solution offered by total quality management is targeting revenue expansion or cost reduction (Omachonu & Ross 2004). Financial outcomes of quality improvement initiatives involve increases in revenue and reduction in cost. Improving quality of products and services through enhancements in the quality of processes and systems involved in the manufacturing of products and delivery of services. This works effectively when the business firm carries a market perspective that considers the needs and demands of the target market and seeks to meet these customer requirements. By doing this, customers are likely to exhibit satisfaction with their experiences of the products and services. At the minimum, this could result to repeat purchases of satisfied customers and at the most, this could lead to the increase in market base through customer referrals. When this happens, the business firm expects to increase its revenue from the greater frequency of actual purchases.
By focusing on the continuous improvement of operating processes and systems, errors are minimised. When mistakes are experienced by the firm minimally or even eliminated totally, the cost involved in correcting errors and the resulting delays are addressed. In addition, the conscious quality direction of managers and employees also ensures that the products or service delivered to end consumers are of the quality intended by the firm. The development of this value also supports the minimisation of errors and delays that allows the firm to save on costs. (Omachonu & Ross 2004)
The experiences of business firms have shown that focusing on quality improvements are able to usher revenue generation or cost savings to business firms. However, the achievement of both revenue generation and cost savings is not always easy because of the need to balance or reconcile competing factors involved in increasing revenue and decreasing cost. This difficulty arises because of the need to balance exploitation with exploration objectives. Exploitation objectives are aligned with cost reduction because this focuses on improvements in existing systems or market while exploration objectives fall under revenue generation because this centres on the retention of the market base together with the expansion of the market. There could a pulling effect between exploitation and exploration because exploration involves the utilisation of resources and increase in cost while exploitation shifts focus away from expansion. A consideration of business firms focusing on revenue generation and expansion have experienced greater success more than firms that focused on cost reduction or attempts to balance revenue generation and cost reduction. (Rust, Moorman & Dickson 2002)
As such, business firms need to determine the primary financial target of their quality improvement initiative. However, regardless of the financial objectives of business firms, it is clear that total quality management has strong effects on the reduction of costs or expansion of revenue that supports the overall goal of firms to achieve long-term viability.
Another solution provided by total quality management is the consideration of the importance of customer service and customer demand timing. Total quality management establishes processes and policies intended to guide managers and employees in meeting customer expectations in a consistent manner. This means that the focus is more on the provision of products and services that are driven by quality instead of price in order to enable the firm to develop loyalty among its customers to support the generation of profit in the long-term. Linkages between employees and customers become important in order to continuously derive data on changing demand. Customer information is derived by the firm through the interactions of its employees directly with customers in delivering service and providing after-sales services. (Evans 2004)
Since customer service and demand timing constitute important considerations of total quality management, business firms implementing TQM focus on the continuous improvement of its products and services, eliminate defects, prevent mistakes, and place due importance on the role of front line employees. By focusing on these aspects, business firms should be able to develop strong relationships with consumers for purposes of deriving information on customer demands and feedback to deliver products and services that meet these demands and communicating the value offerings to customers as a competitive strategy. Business firms that are implementing total quality management also focus on the quality of exchanges between the firm and consumers to determine factors such as the extent of responsiveness of customers to products and services improvements, reliability of the product or service delivery performance of the firm, and the assurances provided by front line employees to consumers regarding factors product or service quality as well as firm competencies. (Evans 2004)
In addition, business firms implementing total quality management assign personnel to hold customer support functions and decrease staff positions. When this happens, the firm saves on management cost. Lesser management levels also enable business firms to achieve flexibility, which is necessary in addressing changing consumer demands and emerging market opportunities. (George & Weimerskirch 1998) Hydrapower Dynamics Limited implemented the bubble system that involved the creation of bubble teams that increases or decreases depending on the need as part of its customer support strategy. This allows the firm to always have a team in charge of customer issues but flexible to only include necessary parties and prevent the accrual of undue costs (‘Case study: Hydrapower’ 2008) Through the process of total quality management, business firms are not only able to enhance the value to customers of products or service to ensure customer satisfaction but also allows the business firm to establish direct linkages with customers for the sharing of information needed in strategy building and decision-making. All of these contribute to the achievement of the competitive and viability objectives of the firm.
Another solution provided by total quality management constitutes improvements in the process of problem solving and team building. Problem solving comprises the techniques used in the identification of the causes of problems based on the collected facts. Implementing total quality management involves problem solving competencies and the utilisation of tools such as rational and creative thinking, risk analysis, cause and effect relations, and trend analysis. Problem solving competency is important because this is necessary in business decision-making. (Finlow-Bates, Visser & Finlow-Bates 2000)
Since total quality management is encompassing, this involves the integration of efforts of different individuals requiring team building efforts. Problem solving in the context of team work offers a number of benefits. First is the resolution of complicated problems emerging in instances when the information involved is too complicated for the handling of only a single person in the organisation. Second is the resolution of special or common cause problems by considering the different perspectives of various individuals to have an encompassing understanding of the problem. Third is the lack of need for each individual member of the decision-making team in learning about the technical aspects of the study since each member of the decision-making team can provide technical insight to the other team members. Fourth is the promotion of standards since the members of the deciding team eventually reach a common perspective that ensures consistency and effectiveness. Fifth is the design of problems with indeterminable root causes in order to discover the underlying causes and suggest corrective solutions. (Finlow-Bates, Visser & Finlow-Bates 2000) Hydrapower Dynamics Limited was able to achieve these benefits through its bubble team involved of flexible members moving in or out of the team depending on the nature of the problem and technical expertise needs (‘Case study: Hydrapower’ 2008)
By developing team building competencies in decision-making, total quality management is able to develop the team-based decision-making skills of managers and employees to allow the firm to gain the knowledge and skills needed in developing effective strategies intended to support continuous quality improvement that in turn enable business firms to achieve long-term viability objectives and competitive goals.
TQM remains to be an important and timely business philosophy because it promises the achievement of long-term change in the values and culture of the business firm to support long-term strategies that support the achievement of a favourable competitive position by the business firm translating into viability. However, the implementation of TQM based on the experiences of business firms does not always result to success. In fact, the rate of failures in implementing TQM is greater than the rate of success. TQM could involve a number of problems such as the inability to achieve the desired change or the utilisation of resources without experiencing the expected outcomes. The problems experienced by business firms in implementing total quality management emanate from the limited understanding of this business philosophy in terms of its elements and solutions that limit the effective implementation of continuous quality improvement. The application of elements of total quality management could also include problems such as the identification of the appropriate quality measures but these are addressed by understanding TQM as an encompassing process that covers the entire firm and alls systems and processes applied so that quality measures encompass hard and soft factors. In addition, most firms fail to realise that TQM involves a long-term commitment from the firm because it leads to significant results in the long run. By considering these characteristics of TQM, implementation could lead to more successes.
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