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TOTAL QUALITY MANAGEMENT:
MIDDLE AND TOP MANAGEMENT PERCEPTIONS OF THE SUCCESSFUL
APPLICATION OF A QUALITY MANAGEMENT SYSTEM FROM A
GENERAL MANAGEMENT, STRATEGIC MANAGEMENT, QUALITY MANAGEMENT
AND HUMAN RESOURCES MANAGEMENT VIEW
Andries J. Fourie
Research report
presented in partial fulfilment
of the requirements for the degree of
Master of Business Administration
at the University of Stellenbosch
Supervisor: Prof C.J. Brown
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Declaration
Hereby I, Andries Johannes Fourie, declare that this research report is my own original
work, that all sources have been accurately reported and acknowledged, and that this
document has not previously been submitted, in its entirety or in part, at any universityin order to obtain an academic qualification.
Signature:
Date: January 2009
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ABSTRACT
Total quality management (TQM) can be defined as a systemic approach on a globallevel, based on process management of continuous quality improvement by all human
resources within the business or company environment, with the specific intent to satisfy
the implicit expectations of all stakeholders in the specific business environment.
Various factors play a role in the active drive towards a quality-driven learning
environment. These factors include increasingly changing market forces, changes in
customer requirements and the very way in which quality is perceived by the employees
within a company.
The above statement raises some important questions, such as
What is the quantifiable value of quality, and Why is it very easily ignored by various companies?
The reason for such questions is the significant shift needed in the thought patterns of
management, difficulty in abandoning misconceptions about TQM and difficulty in
learning from own mistakes and those of others.
It seems that the biggest barrier to the implementation of a total quality system is the
misconception that quality will immediately be perfect and is a quick solution which is
self-sustaining. TQM is, in fact, not a model that is built in concrete, but a journey
consisting of sequential steps. As with any staircase, it can only be sustainable if it is
solidly founded on factors such as managerial commitment, drive, fairness, motivation
and mobilisation of human resources.
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OPSOMMING
Totale gehaltebestuur word gedefinieer as n sistemiese metode op n globale vlak,
gebaseer op die bestuur van deurlopende gehalteverbetering deur al die menslike
hulpbronne binne 'n onderneming, dit wil s die sake- of maatskappy-omgewing, met
die spesifieke oogmerk om aan die implisiete verwagtinge van die aandeelhouers in die
onderneming (besigheidsomgewing) te voldoen.
Daar is verskeie faktore wat 'n rol speel in die aktiewe strewe na n kwaliteitsgedrewe
leeromgewing. Hierdie faktore behels onder meer die voortdurend veranderende
markkragte, veranderinge in die verwagtings van klinte, en die kwaliteitsbeskouing van
die werkers binne n maatskappy.
Bogenoemde ontlok belangrike vrae, soos
Hoe word die meetbare waarde van kwaliteit bepaal, en
waarom word dit so maklik deur ondernemings gegnoreer?
Hierdie soort bevraagtekening is 'n aanduiding dat daar n merkbare en betekenisvolle
gedagteskuif by bestuur nodig is ten opsigte van hul beskouing van gehalte, dat
wanbegrippe oor totale gehaltebestuur verander moet word, en dat probleme in verband
met die leer van lesse uit eie foute en di van ander oorbrug sal moet word.
Die grootste probleem ten opsigte van die ontwikkeling van n totale
gehaltebestuurstelsel, is die wanpersepsie dat gehalte meteens foutloos sal wees, dat
dit n vinnige oplossing is en dat dit selfonderhoudend sal wees. Totale gehaltebestuur
is nie n model wat, by wyse van spreke, in beton gegiet is nie, maar n proses met
opeenvolgende stappe. Soos met enige stel "trappe", kan dit net volhoubaar wees as dit
n sterk fundering het, wat gerugsteun word deur bestuursbetrokkenheid en -
deursettingsvermo, dryfkrag, regverdigheid, motivering en die mobilisasie van die
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TABLE OF CONTENTS
Page
Declaration i
Abstract ii
Opsomming iii
Acknowledgements iv
Table of Contents v
List of tables x
List of figures xi
List of appendices xii
List of acronyms and abbreviations xiii
CHAPTER 1: INTRODUCTION AND OVERVIEW
1.1 Introduction 1
1.2 Background 2
1.3 Defining the research problem 2
1.4 Research question 3
1.5 Aim of the study 3
1.6 Research design and methodology 4
1.7 Summary 4
CHAPTER 2: THE HISTORY OF TOTAL QUALITY MANAGEMENT
2.1 Introduction 6
2.2 The history of TQM 6
2.3 Summary 9
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3.1 Introduction 11
3.2 Assessment of company readiness for TQM 12
3.2.1 Organisational characteristics 13
3.2.1.1 Influence 13
3.2.1.2 Responsibility and autonomy 13
3.2.1.3 Satisfaction 14
3.2.1.4 The desire and ability to change 15
3.2.1.5 Common vision and benchmarking 16
3.2.1.6 Innovativeness 16
3.2.1.7 Teamwork 17
3.2.2 Total, partial and contingent TQM 17
3.2.3 The essence of TQM 18
3.3 Implementing a quality management system 18
3.3.1 Commitment 19
3.3.1.1 Level 1 Uncommitted 20
3.3.1.2 Level 2 Drifters 22
3.3.1.3 Level 3 Tool pushers 23
3.3.1.4 Level 4 Improvers 24
3.3.1.5 Level 5 Award winners 25
3.3.1.6 Level 6 World class 26
3.3.2 Culture 26
3.4 Measuring total quality management 26
3.4.1 Business performance management 28
3.4.2 TQM and business performance measures 28
3.4.3 Success measurement instruments 30
3.5 Summary 32
CHAPTER 4: TOTAL QUALITY MANAGEMENT AND BUSINESS
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4.5 The philosophical dimensions of total quality management 37
4.5.1 The TOTAL component of TQM 37
4.5.1 The QUALITY component of TQM 38
4.5.2 The MANAGEMENT component of TQM 38
4.6 Systematic view of the organisational change process 39
4.6.1 Defining organisational change 39
4.6.2 Interrelated but different types of organisational change 39
4.6.2.1 Organisational process change 40
4.6.2.2 Changes in the organisational, coordination and control
functions of the company 40
4.6.2.3 Belief, values and human behaviour changes in terms of
the relationships with social rules and practices 40
4.6.2.4 Changes in the way organisational issues are influenced
and changes in power distribution 41
4.7 The determinants of organisational change 41
4.7.1 Resistance to change 42
4.7.2 Organisational readiness 42
4.7.3 Leadership and change 42
4.7.4 Top management commitment 43
4.8 Summary 43
CHAPTER 5: THE CRITICAL LINKS IN MANAGING QUALITY AND
CONTINUOUS IMPROVEMENT
5.1 Introduction 44
5.2 The critical links of quality management 45
5.2.1 Process versus outcome 45
5.2.2 The functional relationship and dual function of quality
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5.3 Continuous improvement and organisational design 48
5.4 Barriers to sustain CI implementation 52
5.5 Summary 52
CHAPTER 6: TQM vs. LEVELS OF MANAGEMENT vs.
HUMAN RESOURCES MANAGEMENT
6.1 Introduction 54
6.2 Senior management 54
6.2.1 From a strategic perspective 54
6.2.2 Organisational credibility 55
6.2.3 Not just a passing fad 56
6.2.4 Quality confidence 56
6.3 The role of the middle manager 57
6.4 Human resource management 58
6.4.1 Work organisation 69
6.4.2 Planning 60
6.4.3 Performance appraisal and remuneration 60
6.4.4 Training and development 61
6.5 Rewarding quality 62
6.6 Performance management 63
6.6.1 Individual-based responsibility versus collective
responsibility for quality 64
6.6.2 Providing feedback 64
6.6.3 Emphasis on both personal and job related training 65
6.6.4 Customer orientation 66
6.6.5 Participation in the determination of work objectives 66
6.6.6 Precise performance standards and objectives 67
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6.6.11 Team-based compensation 69
6.7 Summary 70
CHAPTER 7: ANALYSIS OF DATA AND RESULTS
7.1 Introduction 72
7.2 The questionnaire 73
7.3 Discussion of results 74
7.3.1 Quality management 74
7.3.2 Operational management 79
7.3.3 Human resources management 85
7.3.4 Strategic management 94
CHAPTER 8: RECOMMENDATIONS AND CONCLUSION
8.1 Introduction 105
8.2 Recommendations 105
8.2.1 Quality management 106
8.2.2 Operational management 108
8.2.3 Human resources management 109
8.2.4 Strategic management 110
8.3 Conclusion 111
List of references 113
Appendices 120
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List of tables
Page
Table 2.1 Important events in the development of TQM 7
Table 2.2 Differences between the most important gurus
approaches to quality management and the actual,
widely accepted vision of TQM
10
Table 4.1 Major elements of TQM 39
Table 5.1 Continuous versus radical improvement. 51
Table 6.1 Impact of the personnel department on TQM 62
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List of figures
Page
Figure 3.1 Levels of TQM adoption 20
Figure 4.1 TQM in strategy and operations 36
Figure 4.2 TQM in strategies and operations 37
Figure 6.1 The quality improvement process cycle 57
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List of appendices
Page
Appendix A: Management perception assessment questionnaire 120
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List of acronyms and abbreviations
CEO: chief executive officer
CI: continuous improvement
FMEA: failure mode and effect analysis
HRM: human resources management
ISO: International Organisation for Standardisation
QFD: quality function deployment
QA: quality assurance
SHRM: strategic human resources management
SPC: statistical process control
TQM: total quality management
UMIST: University of Manchester Institute of Science and Technology
UK: United Kingdom
USA: United States of America
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CHAPTER 1
INTRODUCTION AND OVERVIEW
1.1 Introduction
Total quality management (TQM) can be defined as a systemic approach on a global level,based on process management of continuous quality improvement by all human resources
within a business or company environment, with the specific intent to satisfy the implicit
expectations of all stakeholders within that specific business environment.
The practice of TQM has evolved significantly in recent years due to the rapid changes in
the global economy and the ever increasing demand put on market forces. Although quality
and the control thereof is not a new concept, the adoption of TQM systems is still a very
recent practice.
TQM is regarded as an integration of various processes characterising the behavioural
dynamics of an organisation (Lakhe & Mohanty, 1994: 10).
This thesis is a report following an in-depth study of the integration and success of four
integral parts of the management of a successful, quality-driven company, the integral
parts being operational management, strategic management, quality management, and the
management of human resources. This study consisted of an in-depth literature study of
existing theory on quality management, as well as comparing the results of an informal
questionnaire, completed by members of the case study organisation, with the existing
literature.
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1.2 Background
Various factors play a role in the active drive towards a quality-driven learning environment.
These factors include pressure from government in terms of implementing quality
measuring tools and systems, black economic empowerment and international clients that
require some form of quality guarantees.
Some very important question arise from the preceding statement, namely
What is the quantifiable value of quality, and
Why is it so very easily ignored by various companies?
The reason for such questions is the significant shift needed in the thought patterns of
management, the difficulty in abandoning misconceptions about TQM and difficulty in
learning from own mistakes and those of others.
It seems that the biggest barrier to the implementation of a total quality system is the
misconception that quality will immediately be perfect and is a quick solution which is self-
sustaining. TQM is, in fact, not a model that is built in concrete, but a journey (or process)consisting of sequential steps. As with any staircase, it can only be sustainable if it is
solidly founded on factors such as managerial commitment, drive, fairness, motivation and
mobilisation of human resources.
This journey needs to be measured and adjusted continuously. Quality can only be
measured and maintained to the satisfaction of the various stakeholders within a business
environment by means of a quality management system that is measurable by national and
international standards and instruments.
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feeling of low morale within the management fraternity, which in turn spirals down to the
labourer on the shop floor. Other common issues, which can seriously damage a running
quality management programme, are management (both middle and top) losing trust in the
building blocks of the system and the promotion of employees without proper induction into
the existing TQM system.
The research problem in this study is to take measurement of the true essence and quality
of a quality management system, focusing on the existing theory behind different
management concepts, and measuring the perceptions of middle and top management
within a functioning system against the existing literature.
The research shows the input and buy-in of different management levels into the idea of
quality management systems, and serve as a possible benchmarking tool with which
improvement programmes in the current system can be measured.
1.4 Research question
From the problem stated above the research question has been formulated as follows:What is the perception of middle and top management levels within a functioning TQM
system, of the system, measured against existing TQM theory?
1.5 Aim of the study
This study aims at measuring the level of TQM application within the chosen company, by
assessing the perceptions of middle and top management with regard to the existing TQM
system. The results of this perception study are subsequently evaluated against existing
li i h f l h i l i i f i TQM
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1.6 Research design and methodology
The research method used in the completion of this research report was, firstly, an in-depth
study of current total quality management (TQM) theory, done by means of a literature
review. This review of the existing theory focuses on general management, strategy,
human resources and quality improvement.
The second part of the research entailed the formulation of a questionnaire which focuses
specifically on the management aspects researched in this study. This questionnaire was
hence circulated among the middle and top managers of a sector leading company which
has a functioning total quality management system in place.
Response to the questionnaire has been evaluated against the existing literature, with
specific reference to the perceptions of the respondents of the existing structures and
processes that are in place in the company. The questionnaire has four subsections, i.e.
operational management, strategic management, human resource management and
quality management. The questions have been formulated in such a way that the
respondent had to rate the question on a scale from zero to ten, where zero is I do not
know, one (1) is I strongly disagree, and ten (10) represents I strongly agree.
Reponses to each question have been evaluated separately and compared with and rated
against existing theory. All responses to the questionnaire are treated as confidential, and
all the respondents remain anonymous. All the data have been treated in a qualitativemanner and no statistical inferences have been made.
1.7 Summary
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Within such a culture of continuous improvement, a company should have a unified front of
focused strategy in terms of the management styles, structures and levels of leadership it
incorporates into adding value to the services and products it renders.
It is often at a management level that the greatest resistance to a TQM system is found,
due to the imminent role change that the manager must undergo. His role effectively
changes from controller to facilitator. Resistance to the new organisational quality
management system can be mitigated through training, education, communication andproper leadership and support.
Chapter two gives a brief historical review of the development of the term "Total Quality
Management", looking at its development through the years, as well as showing the
viewpoints of the masters of TQM in respect of the different levels of application of TQM.
Chapter three focuses on assessment of company readiness for a total quality
management system, as well as the different levels of application of TQM, and also
discusses different measurement instruments.
Chapter four assesses the role that total quality management plays in business strategy
and discusses the philosophical ideals behind TQM.
Chapter five describes the critical links in the management of quality, as well as the
importance of continuous improvement.
Chapter six focuses on the different levels of management involved in the quality
management process and the crucial role that human resources management plays in a
successful TQM system.
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CHAPTER 2
THE HISTORY OF TOTAL QUALITY MANAGEMENT
2.1 Introduction
Geronte: It seems that you are locating them wrongly; the heart is on the left and the liver
is on the right.
Signarelle: Yes, in the old days that was so, but we have changed all that, and now we
practice medicine by a completely new method.
Molire (1622-1673)
TQM is a relative recent term in organisational development, but historical roots of this
theory go back a long way. Because of the demand of market forces and changes in the
global economy, TQM was forced to evolve. Quality control has for many years been
practiced in many industries, but the adoption of TQM by businesses worldwide has
happened very recently. Traditional methods of quality control used by industries did not
give the expected results. Rapidly changing technology and customer expectations have
necessitated a need for a new outlook on quality.
2.2 The history of TQM
The system of techniques, concepts, tools and facts known today as "Total Quality
Management", did not start out that way (MacDonald, 1998: 323). Powel (1995: 15-37)
pointed out that the origins of TQM can be traced back to 1949, when committees of
scholars, engineers and government officials were formed under the banner of the Union of
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Many TQM dimensions were applied by organisations long before the TQM movement
appeared on the scene (MartinezLorente, Dewhurst & Dale, 1998: 380). Consequently, it
is not easy to pinpoint the date of birth of Total Quality Management.
The origin of the term comes from the idea that quality is not just a matter of control, but
needs to be managed.
Table 2.1 briefly recaps the historical events that influenced the development of the TQM
theory and practice.
Table 2.1: Important events in the development of TQM
1924-1932 Hawthornes studies demonstrated the importance of the social andpsychological climate in work.
1924 Shewhart developed statistical process control.
1926 The Bell Telephone began to apply statistical control methods.
Mid-1940s The American army pushed the use of sampling methods during World
War II.1950s A large number of attempts at work improvement was undertaken (e.g. job
enrichment, work redesign, participative management, quality of work life and
worker involvement).
1950 First visit of Deming to Japan.
1951 Creation of Deming Application Prize in Japan.
First edition of Jurans Quality Control Handbook.
1954 First visit of Juran to Japan.
Maslows theories about human needs.
1960 Lib li i f i J i h i li
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1962 The idea of quality circles appeared in the first issue of the Japanese journal
Quality Control for the Foreman.
Late 1960s and early 1970s the pressure of Japanese companies began to be felt in
American companies.
1972 QFD was developed at Mitsubishis Kobe shipyard site.
1973 After the 1973 oil crisis the JIT system was adopted by a vast number of
Japanese companies. A small number of American and European companiesbegan to apply this system in the 1980s.
Mid-1970s Quality circles began to be widely introduced in the USA, the first quality circle
programme was launched in Lockheed in 1974 and in the UK it was Rolls-
Royce which introduced the concept in 1979.
1979 First edition of Crosbys Quality is Free.
Xerox Corp. started to apply the benchmarking concept to processes
Publication of the BS 5750 quality management series.
1980 An NBC television documentary about the Japanese miracle proposed
Deming as a key element in this miracle.
1981 Ouchis Z theory
1982 First edition of Demings Quality, Productivity and Competitive Position
1983 Quality on the line, published by Garvin in Harvard Business Review,
analysed the differences between Japanese and American companies,
showing some of the reasons for the better performance of the former.
A paper about Taguchis design of experiments is published in Harvard
Business Review.
1985 The Naval Air Systems Command named its Japanese-style management
approach total quality management.
1986 First edition of Demings Out of the Crisis. It became a bestseller.
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Although it is generally considered that Crosby, Deming, Feigenbaum, Ishikawa and Juran
are the essential masters of total quality management, it is not to say that their approaches
are the same. Table 2.2 shows the essential differences of the above total quality
management masters views of TQM.
2.3 Summary
TQM is seen as a comprehensive way to improve and increase organisational performance
and quality. Improving quality used to be seen as an element only of the production
process. Today TQM is seen as an organisational philosophy, as well as a toolkit to
implement this philosophy in the organisation. Various principles are applied within the
philosophy of total quality management (Radovilsky, et al. 1996: 10)
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CHAPTER 3
ASSESSMENT OF COMPANY READINESS FOR TOTAL QUALITY
MANAGEMENT AND MEASURING THE LEVEL OF IMPLEMENTATION
3.1 Introduction
TQM should be tailored according to a companys needs. It is important to clearly
identify which organisational factors should be investigated when considering if a
company is indeed ready for TQM. The specific characteristics of a company can even
affect the way in which TQM is implemented at different points within a company.
It is of utmost importance that management be the instigator and driving force behind a
successful TQM system. Unfortunately, management is not always considerate of the
level of commitment and effort that the TQM initiative requires. If a company is not
properly prepared to focus on the TQM effort, implementing of such a system may
place the future of the company in jeopardy.
When a TQM system is introduced into a company, the next challenge faced by
management is how to assess the outcomes and functioning of the system. It is often
difficult to acquire information against which to measure the system outcomes. This
problem can, however, be measured by periodic surveys and questionnaires.
Some factors can, however, still hamper the success of the TQM system and lead to
possible failure if not addressed. Some of these factors are (Lakhe & Mohanty, 1993:
27):
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Difficulties in measuring TQMs effectiveness may be experienced in:
(a) Resistance to change at different levels
(b) Lack of strong commitment from all senior managers
(c) Insufficient education and training resources
(d) Lack of awareness among customers and difficulty in assessing
(e) Customer expectations and satisfaction.
3.2 Assessment of company readiness for TQM
Research on quality management has identified seven factors that are critical to
develop a quality excellence programme (Weeks, Helms & Ettkin, 1995: 43). These
characteristics include factors such as influence, responsibility, autonomy, innovative-
ness, desire for change, satisfaction, teamwork, benchmarking and a common vision.To measure these organisational characteristics the perceptions of managers and non-
managers should be important, because these perceptions, even if inaccurate, could
form the basis for individual or group actions.
A company should have a good look at itself in determining its readiness for a totalquality system (Weeks, et al, 1995: 43). To increase the probability for success, the
programme must be driven by the managers who were responsible for the
implementation of the system. The system will fail if top management refrains from
providing support or even supplies only meagre support.
Assessments of the readiness of an organisation for TQM should begin with the
attitudes of top management (Weeks, et al, 1995: 43). Top management members
should be willing to put in as much time and support as is needed to make the system
k A h i l d k h ld h h h i i
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These groups must consist of key members from all departments within the
organisation, with process specific knowledge and applicable levels of decision making.
3.2.1 Organisational characteristics
Seven critical organisational characteristics should be judged to attain an image of the
organisations readiness for a successful total quality management plan. Strengths and
weaknesses, and differences in perceptions between management and employees in
terms of these characteristics, should be considered (Weeks, et al, 1995: 44).
3.2.1.1 Influence
The degree to which employees feel they have influence in the organisation, plays anintegral role in the TQM process (Weeks, et al, 1995: 44). If the sense is healthy, the
employees will accept autonomy and responsibility more easily. Resistance to change
is lower when the employees have a significant feeling of importance to the
organisation. Resistance to change is higher when employees have a limited feeling of
ownership over the process, and when the level of confidence regarding the ability to
change conditions is very low. Such employees are also not motivated, driven and
committed to work in teams, and are not interested in taking any responsibility.
Questions on influence include receptiveness to new ideas and suggestions and
flexibility to decide which job-method to use, the ability of individuals to effect change
and input into unit goals.
3.2.1.2 Responsibility and autonomy
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Delegation of responsibility is very important and should at least include the authority to
recommend changes and action. A constant need for approval in a vertical
management hierarchy limits the acceptance of responsibility by individuals and can
limit the involvement in total quality management efforts. A commonly used method to
foster responsibility is by reducing the levels for decision approval. However, when
employees are not properly prepared for the responsibility, frustration in the system sets
in.
Responsibility and autonomy issues include the amount of approval required and clarity
of job goals.
3.2.1.3 Satisfaction
The need to achieve, to be recognised, for group identity, and for the authority to
exercise influence, are all psychological needs of the individual in the new, more
competitive, quality-driven organisation (Weeks, et al, 1995: 45). How these needs are
met, is the indicative factor, indicating job satisfaction.
Achievement can only be recognised and measured if performance evaluations are
done efficiently, which should include the functioning of appropriate feedback channels.
Without these channels, employees cannot adjust their performance levels, while
inappropriate feedback might negatively influence the responsibility factor of the
employee. There should not be too much emphasis on the recognition of the individual,
since it might undermine and have a negative influence on the collective team effort.
A high level of satisfaction within the working environment will lead to positive
h hi h li l l l b i l l
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Issues included in the satisfaction component are the praise versus criticism factor,
promotions for advancement, fairness of promotions and fairness in performance
evaluations (Weeks, et al, 1995: 45).
3.2.1.4 The desire and ability to change
Dissatisfaction with the status quo is often the most important factor that leads to
change. Sometimes this dissatisfaction is needed. To overcome this dissatisfaction,
effective planning and effective communication are the most important factors.
Traditionally, many organisations may be averse to change and be conservative,
therefore special measures and efforts may be needed to encourage the employees to
adapt to changing environments.
It is typical for a company where the employees are less willing to adapt to change to
be less innovative. These organisations tend to find it difficult to imbed a sense of
influence in their employees, which is necessary to assure more decision-making and
thus a bigger sense of responsibility.
A large driving force behind policy change is the decision-making authority (Weeks, et
al, 1995: 45). Companies trying to implement a Total Quality Management system
should take great care when the company is structured in such a way that decision-
making authority cannot be delegated to employees. Organisations are also advised to
take great care to assure that the problem and not the symptoms are addressed. Such
change can be very traumatic to the company and a TQM system would be easier to
accept than a radical change to programmes and structures.
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3.2.1.5 Common vision and benchmarking
Basic factors ensuring a successful TQM implementation include that the future vision
of the company needs to be very clearly presented; that it should be compelling to all
employees; and that it should be presented such that it is clear to all employees within
the organisation.
An organisation also needs to assess its current position in terms of where it wants to
be and use this as a motivating factor to ensure maximum progress.
It is very important that the TQM system is an integral part of an organisations business
plan, and that it is measurable to ascertain where the progress of the organisation lies
in terms of a specified level of performance. Benchmarking is used by someorganisations to measure the performance of their TQM system and to improve the
system.
Issues related to a common vision and benchmarking include a clearly defined mission
statement, clear goals (understandable to all employees), common and shared vision
for the organisation, the presence of a measuring system to measure the progress of
the quality system, an emphasis on customer satisfaction and monitoring of
performance indicators.
3.2.1.6 Innovativeness
Innovative companies exhibit characteristics such as free experimentation which do not
lead to negative feedback, the regular operation of taskforces and small teams,
di h l i h h b id d l d hi i h i i d
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Successful TQM systems foster processes within an organisation where problems and
setbacks are seen as opportunities for innovation, and where prior mindsets are
discarded to attain quality improvements.
3.2.1.7 Teamwork
Skills of various employees are combined in a synergetic way to solve problems and
respond to opportunities. Co-operation between co-workers and departments are
essential to the idea of teamwork.
This can only succeed if management and non-management can work together in
symbiosis. A supporting communication-chain is essential to attain a competitive
advantage. To stimulate teamwork further, incentives can be incorporated.Unfortunately, in some instances, these incentives are not focused on the
organisational goals and might lead to diminished teamwork and less successful quality
efforts.
3.2.2 Total, partial and contingent TQM
There seem to be many companies that pick up bits and pieces of TQM, and then
report that they are operating a full-fledged TQM system (Hill & Wilkinson, 1995: 10). In
essence, companies will only incorporate the easy to implement, easily acceptable by
all the employees parts of a TQM system, which will look like the real thing, but will not
deliver all the functionality of a full fledged TQM system.In reality most of these
organisations seem to run a system of non-conforming and ill-matched quality circles,
employee involvement, quality tools and long established quality assurance systems.
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process that TQM is a quick fix approach, with specifically designed beginning and
ending points.
Not only is there partial and full TQM, but TQM may be contingent with various versions
manifested under different upmarket conditions, in different size organisations, and at
different levels of development (Hill & Wilkinson, 1995: 12). It becomes clear that TQM
is not a one-size-fits-all programme, but that it must take the conditions at each
company into account.
What is hardly surprising is that TQM programmes end up concentrating on the tools
and technology of the system, and do not produce any better results than the company
not using it (Page & Curry, 2000: 13). The worst case scenario is where the company
adapts a system of TQM to justify systems of downsizing, delaying and outsourcing. Itseems then that TQM has become a problem and not a solution.
3.2.3 The essence of TQM (Babber & Aspelin, 1994: 32)
3.2.3.1 The reason for your organisations existence is the customer.
3.2.3.2 Give your customer the best product you are capable of giving, if you want to
keep your company profitable.
3.2.3.3 Understand why customers go to your opposition and do not come to you.
3.2.3.4 Keep adding real value to your product.
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organisation. Existing thought processes should incorporate TQM philosophy, which
includes constantly looking for better ways to accomplish activities. The end result
should be that employees would use various TQM tools as the definitive way of
solving problems.
Implementation of a TQM system can only be successful when the thinking patterns of
the whole organisation are recalibrated, accompanied by training in quality assurance
methods (Laszlo, 1998: 281). A solid TQM programme generates excellence in
thinking, high quality work methods, improvement of efficiency and high service quality.
The three main drivers of TQM can be classified as follows:
3.3.1 Commitment
There should be recognition by management that the principal objective of a quality
assurance system should be to provide goods and services that meet the expectation of
the customer.
An increasing number of customers demands a system of quality management.
Management commitment to quality assurance stems from seeing how customer
acceptance benefits the organisation in terms of improved market share and increased
profits. Because of the complexity of a TQM system, although the initial attraction to
management is favourable, the long-term commitment and support for initiative is
difficult to retain (Dale & Lascelles, 1997: 418).
The recognition that management has a social responsibility towards all stakeholders,
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Figure 3.1: Levels of TQM adoption
Source: Dale & Lascelles, 1997: 419
3.3.1.1 Level 1 - Uncommitted
These organisations could be regarded as being ignorant of the TQM process and have
not started any formal process of continuous improvement (Dale & Lascelles, 1997:
419). Obtaining ISO 9000 quality management system registration and applying a few
loose quality management tools and techniques is as far as their quality managementsystem goes. This is normally in reaction to customer pressure. The extent to which the
tools and techniques are applied is directly proportional to the amount of time spent by
client representatives on site, monitoring their use.
The ISO 9000 is seen by management as a quality system and not a management tool.
The quality department drives the quality management system, and the upkeep and
success is solely dependent on its efforts. Success of audits by third and fourth parties
shows management that the quality system is successful.
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Management thinks that they are above any type of quality training and very little
investment takes place in quality education and training of management (Dale &
Lascelles, 1997: 419). Consequently, management tends to refrain from becoming
involved and taking responsibility for the system. Problems with certain systems within a
TQM will cause that some senior managers will see TQM as a costly bureaucratic
system that puts unreasonable demands on their time and limit their autonomy.
Typical characteristics of Level 1 organisations include (Dale & Lascelles, 1997: 420):
(a) Output and sales targets are the major objectives, whatever the costs.
(b) A lack of quality assurance and behaviour regulating systems will lead to
alternative measures being employed to meet unrealistic production targets.
(c) Quality gets discarded, leading to internal and external failures.
(d) Short-term think processes will be evident in the lack of investment in people,research and development, infrastructure and cost cutting.
(e) The threat of competition is not recognised.
(f) The organisational system is filled with negative factors like the blame game,
inflexible working practices, job demarcation, disregard for worker potential and
lack of innovation.
(g) People steal ideas and proposals from fellow employees to look better before
management.
(h) Data collected from the production process are filed and never inspected to see
trends and major non-conformances.
(i) Improvement initiatives are normally from the lowest employee upwards and
product related.
(j) Customer contact is minimal.
(k) Communication in the vertical spheres of the organisation is lacking.
(l) E l d hif bl ll i b
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3.3.1.2 Level 2 - Drifters
These are organisations that have been engaged in a system of continuous
improvement for up to three years, have followed advice and received the wisdom of
TQM (Dale & Lascelles, 1997: 421). The initial enthusiasm has worn off and ways of
reviving the programme are being investigated. The employees with short-term views
are disappointed with the results and are investigating the next method or process for
excellence.
Organisations like these tend to follow every new fad without getting involved and
understanding the key concepts. These organisations have followed the step by step
system for quality management, as stated in Crosbys 14 steps (1979), but where it is
stated to do it all again, they tend to be hesitant, because the initial initiative has notbeen universally successful through the organisation. These organisations might enter
a vicious circle of renewal and decline, frustration and constant disappointment.
Typical characteristics of level 2 organisations are as follows:
(a) Continuous improvement is still seen as a programme and not a strategy, and
has a very low priority within the organisation.
(b) TQM does not reach the shop floor and office levels due to the lack of a plan to
deploy a TQM philosophy through the whole organisation.
(c) New fads to increase profit tend to distract leadership and management from the
TQM initiation.
(d) Within the organisation the quality department plays a very small role.
(e) Continuous improvement does not reach the overall business direction and is
little more than a cosmetic tool.
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(h) Middle and senior management look at TQM with cynicism and scepticism, with
a large part of these managers discarding the system and, in addition, they see
TQM as a short-term tool to squeeze more productivity out of the operating level.
3.3.1.3 Level 3 Tool pushers
At this level the organisation has had 35 years of operating experience with TQM
(Dale & Lascelles, 1997: 422). These organisations have ISO 9000 registration and/orhave met requirements in terms of quality from external sources. Quality tools like
statistical process control, quality circles, mistake proofing and quality improvement
tools, are commonly used and they might even be learning about more advanced
techniques such as quality function deployment.
Quality planning systems and management tools and techniques are employed in an
exacting and stringent manner to meet the exact requirements as set by customers.
A number of level 3 organisations follow a particular quality improvement tool and follow
the advice given, to the letter. Although this might be successful in some instances,
after a period of 23 years these tools will have lost their impact and the methodology
would have been discarded. These companies buy ready-made tools and packages for
quality management, but discard them when the novelty has worn off, often blaming the
tools as being ineffective when they realise that the incorrect application of the tool led
to failure.
Typical characteristics of these companies are:
( ) S i i f ll i d TQM d h h d
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(c) Interdepartmental function is evident.
(d) The management style is reactionary.
(e) Quality procedures are detailed and focused on the current status, looking at
solving current problems and not future problems.
This type of organisation finds it difficult to keep the momentum of its improvement
programme going, and is always looking out for new ideas and quick fixes.
3.3.1.4 Level 4 - Improvers
Big advances on the process of continuous improvement have been made by
organisations in the 38 years they have been involved with it (Dale & Lascelles, 1997:
424). These organisations understand that customer-driven, continuous improvement isof utmost importance, and realise that organisational culture changes are necessary for
the process to succeed. TQM strategies are formulated and driven by management,
which is committed to the process. These strategies run in conjunction with the other
business strategies. At this level the impact that TQM has on business performance can
be clearly seen.
Typical characteristics are:
(a) A quality and strong quality system includes a policy department, as well as the
necessary problem solving infrastructure.
(b) A company-wide, long-term training and education system is in place.
The cross-functional working of teams is recognised and communicated.
(c) Data gathered throughout the company is used to facilitate improvement
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(g) The hype of TQM is replaced with good management practice and principles.
At this level TQM is unfortunately still dependent on a small number of individuals to
sustain the drive and momentum. Any restructuring, people leaving or changes in the
economic environment can put the TQM system under pressure. Although these level
of organisations are moving in the right direction, the TQM system is not yet an integral
part of the business process, and not yet self-sustaining. All the quality initiatives are
heavily dependent on the individuals driving TQM, and the strategy of pulling the qualitysegments within the organisation, is not fully in place.
3.3.1.5 Level 5 Award winners
These are the organisations that are eligible for receiving international accolades fortheir performance in implementing a system of continuous improvement (Dale &
Lascelles, 1997: 425). At this point these organisations are at a point where their
continuous improvement has become total, and has matured into the kind of culture,
values, trust, employee involvement and relationship required to win such a reward.
Characteristics of such an organisation are:
(a) Improvement is organisation-wide and all employees are involved.
(b) Organisational changes have been successful.
(c) Customer needs lead to responsive and effective business procedures and
processes.
(d) All levels practice strategic benchmarking.
(e) Employees see TQM as a system to manage business in such a way, as to cater
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3.3.1.6 Level 6 World class
Continuous improvement and business strategy are totally integrated (Dale & Lascelles,
1997: 426). An indication of a world-class quality performer is when an organisation can
apply for the Japan quality medal five years after they have received the Deming
Application Prize.
Characteristics of such an organisation include:
(a) Values and purpose are defined and communicated.
(b) A unique success model is developed and applied.
(c) Employees, suppliers and customers fully understand the company values.
(d) Emphasis falls on company-wide dependability.(e) No tolerance for waste.
(f) Competition against other world class organisations happens constantly.
(g) The right things are done right the first time, every time.
3.3.2 Culture
Permeation of the TQM system throughout the whole organisation is the only way for it
to succeed (Laszlo, 1998: 284). Synergy between associates from different business
functions are fostered through partnering, teamwork and co-operation. An organisation
with a culture of learning is defined by the ability to encourage innovation, focus on
improvement and not blame, respect for employees and a factual approach to decision-
making.
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organisations can evaluate the state of their current positions through self-assessment.
A need exists for strategic thinking to determine what is best for an organisation, and
what the unique pattern of a TQM system can offer.
For TQM programmes to succeed factors like management commitment, employee
involvement, ongoing training, communication and commitment to quality must be
implemented throughout the organisation (Scheuermann, et al, 1997: 264).
It is often difficult for organisations that adopted business improvement philosophies
and approaches such as TQM, to measure or quantify the difference these approaches
have made to organisational performance (McAdam & Bannister, 2001: 88).
Four interlocking assumptions underpin the bases to which TQM generally can bemeasured (Hackman & Wageman, 1995: 310):
(a) Quality is assumed to be less costly to an organisation than poor workmanship.
(b) Employees will take initiative to improve quality due to their natural care for the
quality of the work as long as they are provided with the necessary tools and
knowledge.
(c) Because organisations consist of systems of interdependent parts, any problems
they face may cross traditional functional lines.
(d) Quality is ultimately the responsibility of top management.
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3.4.1 Business performance management
It has been argued that most western companies are driven by profit, whereas TQM
companies are ultimately driven by the profits due to customer satisfaction.
In the modern business environment a certain level of consistency, both external and
internal, should be reflected in terms of business performance measurement (McAdam
& Bannister, 2001: 91). Internal measures establish a standard of effectiveness withinsight into business strengths, as well as an external standard reflecting the
organisation's ability to compete. Attributes showing an effective performance
measurement system include factors such as the following:
Activities are streamlined, processes are simple and easily understandable, everything
is important, every individual adds value to the customer, measurement reflects
problem elimination as well as visible progress, and measurement is everybody's
responsibility. These measurements and indicators should be dictated by external
customer requirements. It therefore becomes evident that performance measurement
should move away from manager centred to customer centred.
3.4.2 TQM and business performance measures
Before any business performance improvement can be attributed to TQM, it must first
be established if TQM has indeed been implemented within an effective performance
measuring system. Only then can meaningful questions be asked regarding the effects
of TQM on companies and their employees.
Another challenge is to collect data on process changes and improvements that can be
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Hackman & Wageman (1995: 321) suggested three criteria for unit effectiveness:
(a) The level at which task orientated effort is exhibited by unit members;
(b) the amount of skills and knowledge that employees apply to their work; and
(c) the appropriateness of task performance strategies in the work process.
Overall unit effectiveness will suffer if members efforts are insufficient, if insufficient
talent is borne on the work or if task inappropriate strategies are used.
The first point is to consider the efforts that the team produces. If the team is
challenged to collaborate to improve the product to meet specific customer
requirements with work of a higher standard, then by implication the collective effort by
the team should be enhanced. Losses through misdirection and non-coordination
should be decreased through process management which is an integral part of TQM.
Secondly, by using coordinated cross-functional team members, more talent will be
available to work on collective tasks. This optimises the process because single
workers operating alone and single function teams would be eliminated. The interaction
between cross-functional team members can lead to increased learning, increasing the
total pool of talent that is available.
Thirdly, with regard to the strategy behind performance, task orientated work teams can
sometimes veer away from the strategic path or simply become inefficient, because
members might not be entirely sure of what they are supposed to do or who they must
satisfy. TQM structures clarify and identify customers and their individual requirements.
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3.4.3 Success measurement instruments
In the past, quality as a standard has been measured by the percentage of failures.
Subsequently, preventative measures and quality assurance became more prevalent
(Capon, Kaye, Wood, 1994: 9). In the 1980s, when cultural change demanded
continuous improvement, employee attitude surveys became popular. In the 1990s
however, as TQM became more of a holistic management theory, customer,
shareholder and competitor reactions and perceptions became more important.
It is not easy to measure total quality. Many intricate techniques are available, but very
few measure the TQM system as a whole. The following are systems of measurement
and what they measure (Capon, et al, 1994: 9):
(a) Sampling techniques reduces monitoring workload
(b) SPC methods measures processes rather than finished products
(c) FMEA and Taguchi Measuring quality at the design stage
(d) Pareto analysis and Fukuda measuring improvement teams.
Unfortunately, the weakness of these systems is that they do not measure company-
wide progress.
A competent way of measuring company-wide TQM success is to measure the cost of
quality (Capon, et al, 1994: 9). This includes the cost of prevention, appraisal and
failures, both from the customers point of view, as well as within the company.
Unfortunately, this measure only gives a very short-term picture of the effectiveness of
the TQM system and no long-term view of likely future results, allowing only limited
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Another company-wide measure is measuring or auditing compliance to company
standards (Capon, et al, 1994: 10). This measures the consistency of administration,
which is a big reason for a majority of quality problems. A problem with this system is
that it could lead to a big drive towards procedural compliance, virtually eliminating and
avoiding progress.
Another method of measuring and evaluating the process is through measuring
customer perception. This tool measures the strength of the relationship between thecustomer and the supplier (Capon, et al, 1994: 10). Questionnaires are affective and
valuable to measure this relationship strength, ranking success against customer
concerns after each sale. Although this is a softer method of measurement, it does
reveal significant trends in TQM success.
Using employee surveys is another valuable method of measuring TQM by defining the
level of employee commitment to the TQM system (Capon, et al, 1994: 10). The best
methods of attaining these results are through random satisfaction and remark
questionnaires as well as group feedback sessions. Although this method is very
subjective, it does measure at which level necessary organisational and cultural
changes are occurring.
Two attempts of combining all the above-mentioned factors into one measurement
instrument have been made, one being the Baldrige awards in the USA, and the other
being the European quality awards in Europe. The Baldrige award uses seven
categories, 89 areas of assessment with varied weightings, adding up to a score of
1000. The European quality award covers the same area as the Baldrige award plus
two extra categories, impact on society and business results. Both awards give useful
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3.5 Summary
In this chapter the factors needed for the implementation of a successful TQM system
has been considered, the different levels at which TQM are implemented in different
companies, as well as the different ways and methods TQM can be and are measured
in companies.
It is clear that total quality management is a continuous process of incrementalimprovements. Even if a company has been investigated and all the organisational
factors that will be included in the system have been investigated, it may still take years
to establish the system. But as soon as the process of putting the system in place is
started, short-term successes will start to show themselves.
At this stage of TQM system implementation, TQM should be seen as process
orientated and not result orientated. But results will follow if the system is implemented
successfully. Implementing a system of TQM will give the company a competitive edge
by redefining the quality of work life for employees, redefining the level of involvement
of employees in work processes and add organisational strength to the company.
It should be clearly stated that the level of TQM implementation is a direct result of the
strategic vision that the management of a company has for its future. This includes the
influence of rapidly changing market forces, the level of commitment the management
has to change, as well as managements perception of quality.
Measuring the success of a TQM system can be conducted by means of various
methods, most of which only measure the success in specific areas within the company,
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CHAPTER 4
TOTAL QUALITY MANAGEMENT AND BUSINESS STRATEGY
4.1 Introduction
The term "strategic quality management" was used as far back as 1988 in literature:
"strategic quality management" is the most radical departure of all, many have
insisted that quality be viewed as an aggressive competitive weapon(Garvin, 1988: 21)
Garvin viewed TQM as an era of quality with inspection, statistical quality control and
quality assurance (Leonard & McAdam, 2002: 51)
He identified the eight dimensions of strategic quality management as:
(a) performance
(b) features
(c) reliability(d) conformance
(e) durability
(f) serviceability
(g) aesthetics
(h) perceived quality.
Based on the philosophy of TQM, TQM needs to emphasise integrity, environmental
issues and social responsibilities as key elements, and serve as the key to being
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4.2 Strategic quality management
The uncertainty in today's business environment is forcing organisations to re-evaluate
their business strategies (Love, Li, Irani & Holt, 2000: 108). Many managers are
reluctant to make long-term investments, and are more dedicated to make short-term,
low-risk, strategic decisions to protect the client's need for immediate profitable projects.
This is a concern due to the fact that TQM instruments deliver long-term positive results
rather than short-term gains.
Due to the initial costs incurred in developing a TQM system, it might seem an
unprofitable organisational strategy in the short run. Many managers see long-term
benefits as a financial burden, due to the fact that they get rewarded on short-term
financial results. Thus managers self-interest may take precedence over long-term
profits. TQM can be interpreted as a type of business strategy consisting of two parts,
content and process, which, on their own, are necessary, but not sufficient, conditions
for organisational success (Reed, Lemak & Montgomery,1996: 174).
A balance must be found between these components. Focusing only on the quality
assurance mechanisms and procedures will lead to improved service and products, but
to reduced profits (Love, et al, 2000: 108). To successfully implement a TQM system a
strategic fit should be found between the operational environment of the organisation
and its business orientation and strategy.
Most TQM literature and applications consider TQM on an operational level (Leonard &
McAdam, 2004: 255). At this operational level TQM leads to improved operational
performance and an associated culture change. In many cases though, TQM-based
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foundation are sometimes lacking, as is the misconception that TQM is only an
operational tool for company leaders.
4.3 The strategic and operational impact of TQM
According to Leonard and Mc Adam (2004: 259), the key points of TQM application
within organisations are represented in the model as shown in figure 4.1.
This model was developed over a period consistent with the grounded theory model
(McAdam & Henderson, 2004: 61). It starts with corporate mission and vision and then
moves towards corporate objectives. These are the key starting points for TQM within a
top-down organisational approach.
TQM has an organisational impact focusing on the customer at a strategic level. TQM
can also act as a catalyst to change the direction of corporate strategy and its
emphasis. This figure also shows that TQM has a dynamic cyclical life, changing as
needed.
The operational element of TQM in organisations achieves the strategic visions and
objectives by fulfilling strategy through the dissemination of action plans and objectives
between different business units.
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Figure 4.1: TQM in strategy and operations
Source: Leonard & McAdam, 2004: 259
4.4 The strategic application of TQM
Figure 4.2 below illustrates a model that places the strategic level at the top andextends down to operational levels within a hierarchic structure (Leonard & McAdam,
2004: 259),
In this figure the highest level of TQM application is at strategic level. Senior
management commits to the system and TQM is fully understood by managementteams as a philosophy and not just an operational tool. This resultant operational
operation is the cause of strategic thinking.
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Figure 4.2: TQM in strategies and operations
Source: Leonard & Mc Adam, 2004: 259
The vertical dividing line differentiates between the pre-strategic and post-strategic
TQM influence.
4.5 The philosophical dimensions of total quality management
4.5.1 The TOTAL component of TQM
company wide quality control In 1988 Juran cited the three main reasons why
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company-wide quality control. In 1988 Juran cited the three main reasons why
company-wide quality control was so successful in Japan (Lau & Anderson, 1998: 88):
4.5.2.1 The quality revolution was led by top management with strong leadership.
4.5.2.2 All employees at all levels received the proper quality training.
4.5.2.3 Gradual, continuous improvement was emphasised.
The total component of TQM basically calls for everyone, including all suppliers, to be
involved in doing the utmost to maintain and upgrade the quality of their work.
4.5.2 The QUALITY component of TQM
Deming and Juran recognised the customer in judging quality (Lau & Anderson, 1998:
88). In the end the final, major goal of quality management is meeting and exceeding
customer expectations. Continuous improvement must be an integral part of the
management of all systems and processes. The whole system has to be systematically
planned from production to distribution to realise the full benefit of continuous
improvement.
One of the most important challenges for management is to commit critical resources
on a long-term basis so as to share and spread skills and knowledge on quality
management to employees. Training will teach and empower the employees to better
solve and understand quality related problems.
4 5 3 Th MANAGEMENT t f TQM
Table 4 1: Major elements of TQM
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Table 4.1: Major elements of TQM
Total Quality Management1. Require employee
participation and
teamwork
1. Customer (internal
and external) driven
1. Require commitment
from top management
2. Everyone must
develop a sense of
quality ownership
2. Emphasis on
continuous
improvement (kaizen)
2. Establish purposes
and values for the
company
3. Involve every leveland function of the
company
3. Technical issues:training for skills and
knowledge
3. Leadership is critical
4. Apply systems
thinking
4. Human issues:
encourage innovation
4. Make appropriate
change in
organisation culture
Source: Lau & Anderson, 1998: 88
4.6 Systematic view of the organisational change process
4.6.1 Defining organisational change
Various views exist on what organisational change is. From the viewpoint of the
individual it might be seen as a new job description, a new post or such. This might
seem inconsequent to higher management. Changes that are important to higher
management might seem inconsequent from the perspective of people outside theorganisation. Perspective is, therefore, very important when looking at the phenomenon
of change.
activities the organisation within its environment and organisational design and the
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activities, the organisation within its environment and organisational design, and the
style of management (Cao, Clarke & Lehaney, 2000: 188).
A classification of the four types of organisational change is necessary to distinguish
between the key dimensions of organisational change (Cao, et al, 2000: 188).
4.6.2.1 Organisational process change
Hammer (1996: 5-9), stated that a process is a related group of tasks that together
create a result of value to a customer. One of the key issues in dealing with change
management is dealing with control through changes in organisational processes.
These processes involve material flows from raw material to finished goods, cash flow
and human resources input.
4.6.2.2 Changes in the organisational, coordination and control functions of the
company
This includes changes in the vertical and horizontal management structures, and
changing the basis on which activities are grouped into resource allocation systems,
policy and decision systems (Cao, et al, 2000: 188). It can also include changing the
system of recruitment, appraisal, compensation and career development. How
authorities and responsibilities are differentiated and integrated vertically and
horizontally, are the main concern of organisational design.
4.6.2.3 Belief, values and human behaviour changes in terms of the
relationships with social rules and practices
organisational members will be fostered, which will help in keeping the company
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o ga sat o a e be s be oste ed, c e p eep g t e co pa y
abreast of the competition.
4.6.2.4 Changes in the way organisational issues are influenced and changes
in power distribution
An organisation is in essence a conglomerate of different interest groups, constantly in
tension (Cao, et al, 2000: 188). These groups, or forces, should be in constant balanceand must be open to constant modification. In order to explore who holds the power in
an organisation, and how that power is exercised, an appreciation of the specific
political dynamics is a very helpful means.
4.7 The determinants of organisational change
TQM refers to a process of managing and establishing organised, continuous process
improvement activities, with the involvement of everybody in the organisation, moving
with an integrated effort towards improving performance at every level (Almaraz,
1994: 9).
Due to the current movement within organisations to become more complex, the types
of changes required within organisations have also become more complex. Change
seldom occurs in slow-moving, stable environments. Within complex organisations the
changes are major changes in the core functioning of the organisation and a radical
movement away from the traditional way of doing business. Tichy (1983: 24) defines
major organisational change as non-routine, non-incremental, discontinuous change
which alters the overall orientation of the organisation and/ or its components.
The four key determinants to organisational change are:
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y g g
4.7.1 Resistance to change
People are for the most part resistant to change. In organisational change this
resistance is even more prominent. Fear of the unknown, habit, economic insecurity,
threats to social relationships, and a failure to notice the need for change are all factors
that add to this resistance. If the organisational leaders do not step up and facilitate
acceptance of change, the change that does happen will only be for a short period
before everything returns to the original form.
4.7.2 Organisational readiness
The difference between how an organisation looks before, and after change, is an
important issue when discussing change.
The readiness for change depends on the existing culture of the organisation, and how
much the change differs from that culture. It is very difficult to open up the
receptiveness to change in an organisation where there is no apparent crisis, but only
the long range vision of leaders who anticipate the time it will take to implement
organisational change (Almaraz, 1994: 11).
When the vision of the leaders differs from the existing values and beliefs of the
organisational culture, resistance to change will occur and can be expected. The
desired change will never happen and will never be accepted if the organisational
culture does not adapt to the vision of the leaders and its implications.
will only be successful if the leadership is dedicated to the process of change and
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transformation and drives the process actively.
4.7.4 Top management commitment
Top management commitment is vital to the successful implementation of an
organisational change programme. Management is the key that unlocks quality
improvements in organisations. Unfortunately, not all managers realise that their own
values and beliefs must change in order to nourish and encourage the new culture of
quality within the organisation.
4.8 Summary
Due to the initial cost incurred in developing a TQM system, it is seen by many
managers as an unprofitable strategy in the short run. The long-term benefits are often
overlooked due to the focus of companies on short-term results. To successfully
implement a TQM system a strategic fit must be found between the operational
environment of the organisation and its business orientation.
In order to successfully introduce TQM into the business strategy of a company it is
essential that a change should occur within the organisation. Different views and
perceptions exist with regard to organisational change. Management perceives it
different than employees. Although this is the case, it must still be seen as crucial to
creating maximum value to the customer.
The next chapter deals with the critical links in what quality means to different role
l i hi h I di h d l h ld
CHAPTER 5
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THE CRITICAL LINKS OF MANAGING QUALITY AND CONTINUOUS
IMPROVEMENT
5.1 Introduction
Although quality has always been known to be an important issue in both management
theory and practice, it still means different things to different stakeholders (Saad &
Siha, 2000: 1146).
Critical factors and dynamic relationships exist between the various variables that make
up quality. Only if these article relationships are understood, true insight into the
effective management of quality can be obtained.
Employees have in recent years become familiar with a variety of concepts and
strategies on how to improve the effectiveness of business processes (Emiliani, 1998:
29). The term continuous improvement means incremental improvement of products,processes and services over time, with the goal of reducing waste to improve
workplace functionality and product performance (Emiliani, 1998: 30). Continuous
improvement principles result in incredible improvements in performance that are
nearly impossible to be matched by competition. The term, continuous improvement,
challenges the basic notion that people cannot change.
Continuous improvement challenges employees and management alike to modify their
own behaviour and recognise that self development is a never ending task Striving for
From an organisational viewpoint continuous improvement must be seen as a
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company-wide process of focused and continual innovation. It involves everyone
working together in making improvements without necessarily making huge capitalinvestments (Bhuiyan and Baghel, 2005: 761).
5.2 The critical links of quality management
Some of the critical links for managing quality are as follows (Saad & Siha, 2000:
1150):
5.2.1 Process versus outcome
Theory dictates that a desired outcome prescribes the process of attaining that
outcome. The actual outcome, however, depends on the actual process that was
followed. Deviations to the outcome will occur if the process is influenced by
uncontrollable factors. Thus, whereas in theory the outcome determines the process, in
reality the process followed determines the actual goal achieved. This implies that a
quality process as planned might not guarantee a quality product.
It is therefore crucial that a clear boundary should be set between the planning and
execution stages of a quality system, and the different perceptions of quality that exist
on the other hand. During the planning stage the process allowed is a function of the
final product desired, whereas at the execution stage the quality attained is dually
influenced by the customers perception of quality as well as the process followed. This
implies that in the execution stage certain uncontrollable factors may arise that cannot
be accounted for in the planning stage.
5.2.2 The functional relationship and dual function of quality drivers.
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Quality is affected by various factors, which include time, market segment, place, cost,business performance and the type of customer that is serviced. Each of these different
factors has both a cause and effect nature simultaneously. Each factor may feature
alone or in relation to another. For example, each of the above-mentioned factors can
affect quality but at the same time quality also influences each factor.
On the other hand, the functional relationship between the drivers of quality and quality
itself is also not consistent. A quality focus may have a positive result on
competitiveness in the short run, but might reduce profitability in the long run. In other
instances, introducing a quality system might put pressure on profits in the short run,
but introduce higher profits and increased market shares in the long run. These
patterns change with different product characteristics and market elasticity.
It is therefore crucial that quality should be managed in practice with strict security of
the relationship between quality drivers and the specific business environment. This
implies that management should be fully aware of the direct relationship between rate
and direction of quality specifications, and the change and consequences a quality
policy might have over time. Quality policy should not only be reactive to market needs,
but be proactive to trigger desired market results.
5.2.3 Quality is not a static outcome but rather a dynamic process
Quality is treated as a sequential set of steps and rules in literature, but in practice
quality programmes are very integrative. This implies that a quality programme should
f i ff d b ib d ll f i l f h b i
Quality standards should be seen as a dynamic process rather than steps in achieving
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a set fixed goal. Therefore, it can be stated that quality is a dynamic process of value
creation.
For management practices the perspective of quality has important policy implications,
namely:
(a) For quality to be seen as a value creation process, it should include new
product usages, intangible values, time value, and place value, in addition to
direct economic and financial values.
(b) Value creation should not only focus on shareholders interests but also on
stakeholders needs and requirements. These stakeholders include both
internal and external customers of the business.
(c) Management should have a quality vision. They should have a partially ideal
position in mind. A definite end product will not be the intended outcome,
rather a flexible and agile system that can quickly respond to an ever
changing market.
(d) Management should clearly define which processes are static and which are
dynamic within the quality process.
5.2.4 The link between product quality and organisational quality
Evidence shows that TQM programmes have failed miserably in many companies, but
have triumphed in others. Implementation seems the phase in which most TQMprogrammes fail (Saad & Siha, 2000: 1150). Visible factors such as structures, strategy
and technology have a very small effect on TQM effectiveness. The main influences
that impact positively on TQM programmes are intangible variables like values
5.2.5 TQM design versus implementation.
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Although it is necessary to have an effectively designed TQM system, it is not the onlycondition for successful implementation of TQM. The design and implementation
stages complement each other, but each of them is driven by different determinants.
The design is made necessary by economic and technical determinants, while the
execution largely relies on the quality of management and its ability to influence the
perceptions and behaviour of employees.
The economic benefits of the TQM programme are realised by these more intangible
ingredients. Managers have to take more cognizance of the intangible parts of the TQM
system to assure effective implementation. In the short run organisational culture
influences the quality policy that is used, but in the long run the quality programme will
influence behaviours, attitudes and values within the company.
5.3 Continuous improvement (CI) and organisational design
CI programmes were initially developed in organisations that focused extensively on
repetitive processes and production focused activities. Processes and products were
standardised. Improvement tasks can be incorporated into the regular work of individual
employees and continuous improvement must be adapted to the level of process
standardisation required (Bhuiyan and Baghel, 2005: 766). Continuous improvement
can be based on two dimensions, namely basic task design and improvement tasks.
Basic task design relies on work process and product standardisation. Low
standardisation is normally prevalent in group activities, but individual tasks can be
highly standardised. The improvement task would traditionally lie with a professional
i hi hi hl d di d
Berger (1997: 110 - 117) presents five typical organisational designs based on the
i di i
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previous two dimensions.
(a) Quality control circles:
A group of employees that meets regularly to discuss problems and issues
related to quality and come up with solutions.
(b) Wide-focus CI:
This is a mixture of organic continuous improvement and expert task forceCI. It combines continuous improvement process teams for temporary
operations and for CI self-managed groups.
(c) Organic CI:
Multifunctional work groups are integrated with improvement activities: It
differs from other models because the design and decision making authority
lies within the group.
(d) Expert task force CI:
The span of improvement tasks requires a lot of time and investments
because this form of CI relies on a temporary task force of professionals.
(e) Individual CI:
A suggestion system organises improvement as set by individuals.
Individuals come up with ideas and specialists implement them. Continuous
improvement can be defined as the ability of an organisation to gain strategic
advantages by exuding involvement in innovation to a significant proportionof its employees (Caffyn, 1999: 1142).
It is comprised of a set of 10 generic CI behaviours that are essential fundamentals in
i ti f ll t d i
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organisations of all types and sizes:
(a) Employees demonstrate awareness and understanding of the organisations
aims and objectives.
(b) Improvement activities by individual groups come through the use of the
organisations strategic goals and objectives.
(c) The enabling mechanisms used to encourage involvement in CI are
monitored and developed.
(d) Constant reinforcement and support to the organisational structure, systems,
approach and mechanisms are ensured by ongoing assessments.
(e) Managers at all levels are committed to CI and leadership of the system.
(f) Productive incremental improvement occurs throughout the organisation.
(g) There is effective working across internal and external boundaries at all
levels.
(h) People learn from their own and others experience, both positive and
negative.
(I) The learning of individuals and groups are captured and deployed.
(j) An underlying culture of improvement is present and guides all employees.
CI can occur through evolutionary improvement, in which case it would happen
incrementally, or through radical changes that take place due to an innovative idea or
new technology.
TABLE 5.1: Continuous versus radical improvement.
Continuous improvement Radical improvement
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Continuous improvement Radical improvementManagement believes that results belong
to processes which, in turn, belong toorganisations; thus, rewards are given forefforts to improve processes
Primary responsibility for improving aprocess belongs to those who work in thatprocess
All processes can be targeted forimprovement all the time (because manyemployees are involved in improvement)
Workers are expected to help raise
performance standards
Standards change frequently
Process changes are frequent, and usuallysmall, incremental and inexpensive
Process changes are usually initiated by
those actually performing the processes.Improvements are usually created using in-depth knowledge of the organisationsprocesses; this knowledge is gainedprimarily through work experience
Improvements are numerous and affectboth major and minor processes in the
organisation
Improvements are often tightly linked toprevious improvements, and takeadvantage of process characteristics
Management believes that results belong
to individuals; thus rewards are given forresults and not for the processes used toachieve those results
Primary responsibility for improving aprocess belongs to professional andtechnical experts, usually corporate staffor external consultants who do not
themselves work in that process
Only a few processes (selected by theexperts and management) can betargeted for improvement at any time(because of limited numbers of involvedexperts and managers)
Workers are expected to meet existing
performance standards
Standards change infrequently
Process changes are infrequent, andusually large, radical and expensive
Process changes are usually initiated by
experts not actually performing theprocesses. Improvements are usuallycreated using in-depth knowledge oftechnical or other subjects, gained morethrough formal education than workexperience
Improvements are relatively few andaffect major processes in the organisation
Improvements are often loosely linked toprevious improvements that originatedfrom a different group of experts and take
5.4 Barriers to sustain CI im
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