BENCHMARKING

Total Quality Management

1.1

INTRODUCTION

In this unit, you will get a macro picture of the quality concepts, related thinking and the way quality has an impact on business performance. You will also realize the need to reflect upon the emerging business environments particularly in the shrinking world and with the advances in technology and the changing patterns of demography. This unit has significance from the academic angle too. The intention is to prepare you all as managers and perhaps as the leaders in business and enable you to contribute and influence the business performance. Intense global competition drives the quality initiatives in whatever form and nature specific to a business. You will also realize, after reading this unit, that your role is not limited to supervision or monitoring of quality but also in getting involved in it. As you progress, you come to know the definitions used in quality management and how, over the last century, the approach to quality in business has changed and continues to change. At the end of the unit, you will have adequate inputs to reflect upon the influence of managing quality on business performance and be ready to form your own attitude on the managing of business performance and quality.

1.2 CONCEPTS OF QUALITY AND QUALITY MANAGEMENT _______Meaning of a Concept Concept is a word meaning an idea or a perception or a view or a theory and thus amounts to various angles towards its understanding. But you can safely consider it as a way of application of a thought to management. There has been a spurt of ideas on the various aspects of business management and these ideas continue to come up as each one has the ability to think and reflect. This ability, developed purposefully, makes each one of you apply the concepts as appropriate to the business environment which you will be placed in. Quality by definition also has gone through a range of thoughts based upon how each one putting it forth was able to support the definition by facts or supporting literature or stories. You will understand why quality has different definitions when you study the contributions by great thinkers on the subject, though briefly, in the next unit. Concept of Quality Quality as perception: You will not be wrong when you state that the term quality is a perception which is personal to an individual. In plain terms, quality is "features" or "worth"

Unit

Evolution of Quality Concepts

or "value". You will realise how this is true when you read the following phrases picked from literature on quality. i) "Quality is not an act. It is a habit"- Aristotle. This is true and applicable to any act of a human being. if) "Quality is conformance to requirements": This in line with the concept that quality is decided by the customer. iff) "Quality is zero defects": No customer wants defects in the products or services he or she pays for. This is a totally different idea on quality and is true when you make quality a habit. iv) "Quality is free" - Phil Crosby. This is the Utopian situation. When there are no defects then there is no wastage and thus quality becomes free. v) "Quality is the degree to which a set of inherent characteristics fulfils requirements"-ISO 9000. This is an attempt to give universality to the term quality. Some myths about quality: Business has considered quality in variety of manners, depending upon the type of business. There is a perception that: i) Product failures are unavoidable! ii) Quality

Testing delivers quality!! I) costs money!!!

From the customers' point of view, presence of defects means lack of quality. For an organisation, defects have a range of impacts and the relationship with defects could be: (Read "=" as "equal to") Defects = rework = loss of productivity = less profits = organisation getting edged out of the market = loss of jobs = loss of image of organisation in society


Customers define quality: As managers, you must understand that quality is specific to customers whom an organisation serves and is also dependent in terms of time and space. For example, the quality of service of bus transportation in townships in underdeveloped nations, developing nations and developed nations has three different sets of features. In developing nations too, the features would be at two extremes for the simple reason that the expectations of commuters are different in different regions and certainly change with time as you would have realized in metres like New Delhi or Mumbai in comparison with mid-sized towns like Bhopal or Pune. Building quality: Quality of product or service is decided by the customer and is built into the service of product through the design for it. A customer has certain needs or requirements for product or service. It is the design of product or service which builds these requirements as product or service specifications into the product or service-including the way the product or service would be delivered to the customer. The way the product is made or the service is delivered is according to a set of processes which are in sequence. This set of processes, their sequence and interdependence gets defined while the design activity is performed and the design of process has a direct impact on the outcome, that is, the extent to which the outcome meets the specifications developed during design. Process design also contributes to quality. You must remember that quality is due only to design and cannot be added while manufacturing the product or while delivering the service. Quality is certainly not an add-on entity. You will get to know the importance of design when we discuss some people who have contributed to "quality" in the unit "Leading thinkers in Quality Management". Customers make the business happen: So meeting customer requirements is the key to the success of a business. This is at the root of the managing quality in any business. Businesses which have failed to meet quality consistently have been edged out of the market. You might have heard some stories of Japanese manufacturers who were out of business and suddenly in the late 70 and 80s created a business environment which made the western world focus on quality the way the Japanese did. This is the period when quality was a key issue to sustain business in the western world. Quality aspects contributing to business success : The above discussion leads you to a conclusion that i) ii) iii) Quality is customer defined Quality products are results of quality processes Higher quality results into higher productivity

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iv) v) vi)

Higher productivity brings higher profits Quality creates and maintains market share Quality needs to be managed as an organisational process

More on this at the paragraph on Quality and Business Performance. Evolution of quality in business : In India we had a sellers' market, costs were not a criteria and customers could wait for the products and pay for it even when the product features were not up to the mark. This created a management environment where quality was a secondary type of activity. However, in the early 90s the Indian markets opened up and the boundaries and protection vanished, bringing global players, particularly the eastern world manufacturers into the market. This was the beginning of Indian business focusing on quality as a built-in feature for the product and service. Also by the early 80s even in the western world, business was gearing up to meet head-on, the competition from eastern manufacturers of cars, electronics and a host of consumable products. This is the time a number of concepts and management theories or models were introduced and quality management became prevalent. The quality management, like any other management activity, is of course a continually evolving phenomenon. What you need to understand here is that the meaning of managing quality and the impact of these management practices on the total business performance. You may relate this to the management practices required to manage and maintain a culture of quality as discussed in unit 10. Concepts of quality management Quality management is defined as' 'coordinated activities to direct and control an organisation with regard to quality"(ISO 9000:2000). The activities are normally integrated into a system. This is known as the systems approach to managing quality and the same approach needs to be adapted to business operations. Starting from early 60s and migrating to the 70s, the practices of quality management have shown an evolution. In the following paragraphs, you will get an overview of the way these evolved starting from the activity or process of "Inspection". Inspection: Inspection is defined as "Activities such as measuring, testing and gauging one or more characteristics of a product or service and comparing with specifications as in design to determine its conformity". This approach is the "after the event" approach, meaning the things which have happened and then which you verify by, measuring or testing and screen out those which do not meet specifications. Organisation is said to be working in a


"detection" mode, having things or events which have happened! The result is that the non-conforming products are cost as they are a waste of material and as well as that of efforts or needing some rework or being sold as "seconds" at a lower price all resulting into a dent in profits. This also creates the culture of "somebody else will check my outcome and it is that somebody's responsibility to give the conforming product". This approach had several limitations and had to be replaced by another effective way of attaining quality and the concept of Quality Control was the result. Quality Control: Defined as "Operational techniques and activities that are used to fulfill requirements for quality". Organisations realized that "Inspection" alone was a costly affair as all that was segregated was a waste and a cost to the organisation, thus reducing profitability. The result was the idea of "control on operations," as Quality control. This was not necessarily very different from Inspection but had a new look at inspection. Under a system of quality control, there was a need to find controls for an activity, in the form of procedures, intermediate stage inspections and recording of performance of a process for giving feedback. The methods of inspection got sophisticated with addition of tools like sample checks, lot size, etc for inspections at identified stages. However, the intention and activity of preventing a non-conforming product reaching a customer depended solely on the screening inspection at the final stage of production or service delivery. Application of this concept of course resulted into lesser defects but remained in nature as "detection mode", which we have discussed earlier. Detection mode of working: This is mostly an "after the event" activity and promotes the "quick fix" mode of operations in an attempt to meet the delivery schedules promised to the customer. In the detection mode, a product goes through the cycle of sorted and graded, decisions on concessions (maybe by the customer), rework, reblending, repair, downgrading, scrap and disposal and often the cycle gets repeated. But in the first place, no attempt is made "to stop making defects". Here one remembers the famous saying by Dr. Edward Deming - "Defects are not free. Somebody makes them and gets paid for making them." You will appreciate that operating in a detection mode is the most inefficient way of running a business. Secondly, a lot of inspection creates a situation of mental stress and fatigue, thus further affecting productivity. This is an environment where the emphasis is on making good the non-conforming product instead of preventing a non-conformance happening. In the detection mode, organisations are engaged in "fire fighting", preoccupied with the survival of the business, with areactive approach to conducing business operations. This is certainly not in the interest of the future of the organisation as there is no intention of preventing the non-conformance of products and any improvements for the future. Since quality controls

Unit 1


lacked the assurance on quality which the business management needed, a concept promising "assurance" emerged. Quality Assurance: From the business point of view, eliminating non-conformance was the key to a better level of quality and assurance of quality. And then the concept of Quality Assurance (QA) was developed. The central idea is to identify the root cause of nonconformity, take steps to eliminate the cause and thus remove recurrence of the nonconformity in future deliveries to the customer. QA is defined as "All those planned and systematic actions necessary to provide an adequate confidence that a product or service will satisfy the given requirements for quality". Quality assurance is a prevention based system. The system improves product and service quality and increases productivity by placing emphasis on the design of product or service and relevant processes. The basis is that the process that makes the product or a service needs to be designed in such a manner that the variation in the process outcome is minimal in reference to design specifications, thus eliminating non-conformance. This is a proactive approach as compared to the reactive one in the "detection mode" discussed above. In this system of operations, quality is created in the design stage and not in the control stage. The premise is that the design of the products and the processes makes the quality happen and not any verification or inspection as in the detection mode. Changing from "detection mode" to "prevention based system" requires the use of a set of quality management tools and techniques along with a new operating philosophy and approach -even of thinking, by the top management. Schematically, this system is presented at Fig 1.1. The new philosophy demands a change in the management style to integrate various functions or departments to work together to discover the root cause of non-conformance or variation and to pursue elimination. Quality planning and improvements begin when the top management includes prevention, as opposed to detection, in organisational polices because this philosophy directs the business towards the future. Integrating various processes of the business into "a whole" was at the basis and thus a true system approach to business. Such thinking resulted into a new practice which came to be known as the "Total Quality Management" (TQM). To get an insight into this concept, you need to understand that the no-business process can work in isolation. Interdependence and an interaction between each of the business processes exist, and must be addressed while operating a business. This is the systems approach. The way TQM is practiced as a system, is discussed in the following paragraphs.


Design of a product & process

4

Actions on DesignAii

ProcessMethod ^ Environment Equipment

1

Actions on the process

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*,

Materials

t ! Informationabout Performance of process'' 1 i

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People

* Actions on the output

To be minimum

Fig. 1.1 : Schematic for a Prevention Based System Total Quality Management: TQM is an organisation-wide approach to quality with emphasis on the improvements taken for everyone in the organisation. Here the focus is that everyone in the organisation is involved in quality. TQM is defined as "A management philosophy embracing all activities through which the needs and expectations of customers and the community, and the objectives of the organisation are satisfied in the most efficient and cost effective way by maximizing the potential of all employees in a continuing drive for improvement." You can infer from the above definition that TQM is the mutual co-operation of everyone in an organisation as well as of the associated business processes to produce products or services which meet the needs and expectations of the customers. TQM is a way of managing a business, inclusive of managing people and the processes of business. You will get more details of the components or elements of TQM in the unit "Building Blocks of TQM".

Unit 1


^Activity A: Draw a flow chart to show or indicate the relationship between quality and people behaviour.

1.3 QUALITY AND BUSINESS PERFORMANCE In this section, we will discuss the way quality influences business performance. This discussion will give you some clarity on what the leadership needs to focus on while conducting business operations. This topic of leadership is further discussed in detail in the section, "Managerial Role". In this section, you get to know the relation between quality and business performance. A business at the macro level can be represented by a flow diagram as in Figure 1.2 below. Business is because of the customers which an organisation targets.Customers

Regulatory Bodies, Competition

Make the offeringMeasure Process Performance

I Customer Relationship' Corporate Strategies & N V ObjectivesPlan of Offering

Design Offering* Define parameters

* Identify controls Identify people skills* Validate design

Fig. 1.2 : A flow diagram of business at macro level


You may recall at this stage the point we discussed earlier. The quality of process is of prime importance as the process is responsible to give an output as a product or service. This is applicable to all processes in the Fig 1.2 above. This flow chart needs to be discussed in some details to make the understanding on the business system clear. As we go along you get to know how the mutual relationship impacts on each of the processes as depicted in the figure. The performance of each process is thus is important for the business performance. This performance of process means that the level of the quality of process has a direct bearing on the quality of business. In the flow diagram, customers are shown outside the boundary of business. These are external customers. Customer means an entity receiving the outcome of a process. It is important to understand that the customers are external as well as internal. And the concept that quality is decided by the customer is applicable to both types of customers. This understanding creates a unique culture within an organisation and gets people involved at all levels, starting from the top management. The organisation as a whole also integrates the customer very effectively into the business system as a strategy. Corporate Strategies and Objectives: This is essentially a top management process. The top management decides the market or customers to be targeted for business. Based on this, the top management works out the strategies for conducting business operations for a defined time frame. This strategy could apply not only to the core business operations j but to support processes too. The objectives emerge from these strategies and apply to alii the business processes as shown in the flow diagram. Objectives are measurable and thus! help the top management to assess the status of the business at any point of time in the time] frames for the strategy. The concerns of business success for top management could be: j i) Not just better, but the best quality - a strategy for excellence.

ii) Not just better, but the best customer service - a strategy for customer delight and: loyalty. in) Not just better, but the best response to changing market and customer expectations-; a strategy for positioning the organisation in a competitive slot is to not only make it j better, but still ahead of the competition. iv) Not just some, but total flexibility - a system for operations that absorbs variations in ] the external environment and readies the organisation in time. v) Not just occasional but continuous innovation - a strategy for people and processes \ where the focus is on a continual innovation for process as well as the products or service so that the competition is addressed in advance.

10

Unit


vi; Not just some, but a, 4itifltfiYe difference - a strategy for creating a differentiation that creates a p9itii for the organisation in the market, to lead the market.The quality of a top management process is that the leadership enables the organisation to

attain all or a set of the above and Mire-proof the organisation. This future-proofing Is not only vital for sustaining the business, but also assures its growth.CUtOflier PfilatiOHShijiJ Integrating customers into the business system of ppera.Jip.ng has a long term impact on the business performance. A sensitive or sensitized relationship with the customer has the following advantages: 0 Customer is free to express his own needs and requirements.NS\

c \xoxwtxin&sxsxands xVve way the design of the product or service would take place.

M

Early on, like the design team, the customer also participates in design verification diidprototype proofing or validation.

iv) Involvement of the customer in the stage of design of product or service obviates likely situations when the customer comes with frequent changes in requirements after the design activity commences, upsetting the design and thus the delivery plans or commitment. v) All the above enable the organisation to shorten the design cycle and the related costs.

To derive benefits as above, a process for customer relationship management is the solution. This process leads the business activities for an organisation and performance of this process impacts the total performance in the following ways: i) A process of customer relationship management when well defined and implemented results into all the above outcomes. It establishes a relationship with the customers and interlinks this with other internal processes. This process needs to be proactive and future-oriented. i) The customer is satisfied with the performance of the product or service.

i) The customer is satisfied with the organisation's way of working and that has a long term effect. It helps in building not only satisfaction but customer loyalty. Customer loyalty means repeat business and an image for the organisation which brings more customers. This process thus assures a place in the market and a future for the orsanisation.


Jg$ Activity B ; Make a list of businesses where the customer has no choice about the specifications.

L^sj-:

Design process: Design of product or service means i) ii) Understanding customer needs, expectations, requirements. Transforming these into specifications for the product or service.

iii) Transformation is through the design of process for producing the product or delivering j service. The quality of these processes decides the quality of the outcome, that is, of ] the product or service. iv) Design of process for production or service delivery includes the stages at which the \ activities would be verified and the acceptance criteria at that stage. The way it will, be verified is part of this verification. v) vi) Understanding the capabilities of organisation - technology, people and infrastructure-so as to design the production or service delivery processes Proving the design before the processes for production or service delivery are handed over.

vii) Training people form production or service delivery teams on using the transformation process designed. viii) Monitoring and helping production or delivery processes for assessing the effectiveness of the design of processes. The quality of this process means: i) building the customer requirements into the design - design of product specification/ service specifications ii) building all those parameters which enable production or delivery with the specification of design and to be usable at production or service delivery stages At the unit on "Leading Thinkers in Quality Management," you will get more insight in the process of design and its impact on quality.

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Unit


Plan of offering : Planning for offering the product or service is dependent upon the orders from the customers. Receiving and acknowledging the orders and interlinking within the organisation is part of the customer relationship process. Customer order may require the design and production/delivery processes or just the production or delivery processes. Thus planning has to consider these two different variables in the order. The objective or criteria for the success of the plan must include the way the time frame and the volume of order is to be delivered to the customer, within the organisational norms of cost and resource utilization for production and delivery. This plan accounts for the way people and the material would be utilised and other orders under progress at that time. The quality of this process means the way the plan is created and gets executed, without variations, and meets the objectives or success criteria of the plan. Make the offering: This is subsequent to planning and is an internal customer to the planning process. This process is an internal customer to the design process too. The quality of design and planning processes impacts the quality of this process. This process is a revenue earning process for an organisation and also has relatively more cost to the organisation. Cost of quality gets distributed with high shares at the design and at this process. The quality of this process means meeting the delivery schedule, achieving the organisational norms for cost, and a positive feedback from the customer on the level of satisfaction. Measure process performance: You may recall the well known statement of late Dr Peter Drucker. "To manage you must be able to measure" or in other words, managing is measuring. Measuring of process performance or product characteristics is required for the following: i) Understand or learn: On characteristics of process and its output ii) Predict: Behavior of process - the trend to decide actions proactively I) Plan: What to accomplish and how to accomplish in regards to a process iv) Control: Process using feed back in time before it gets out of control v) vi) Assess: Quality of the effectiveness /efficiency of the process against the norms or objective or benchmarks Improve: Process quality to assure more predictability and product quality to set it apart from the competitor

13


Measurement of processes show a complete picture as to how each process measured behaves. Measurement increases an organisation's predictive powers and early warning capability. When the measurement process is implemented at the organisation level for all selected processes - those which have a direct impact on the business performance- the managers have a tool with them for future-proofing the business. This is also known as quantitative management of business and is shown in Fig. 1.3 below.

Grow Analyse Improve Measure

ii)Fig. 1.3 : Measure and Grow Quality of a measurement process is when the measurements captured can be used for analysis on the performance parameters with reference to the objectives or bench marks set at corporate level and can lead to identifying steps for continual improvement in process and product quality. When you take up an organisational position as a manager, your participation in the measurement system will vary. But the purpose must be clear and then your contribution to what is known as the quantitative management of business will be worth it and will increase your potential for more participation in decision making. The above discussion prepares you for the next section, which brings out the managerial role in reference to the managing quality of business. 1.4 MANAGERIAL ROLE __________________________________________

iii)

Managerial role is an all - pervasive meaning. It is right from the top management to the lower levels where the process of "management" happens. As you read on, you will realize that the manager's role in managing quality is not just conventional activities like planning, resourcing and controlling or monitoring. It must be a leadership activity or a leadership process. As you have seen in section 1.3 above, the quality of business as you understand by now, originates at the top management - with strategies and objectives for the business and how well the organisation is led towards defining and attaining these. By now you also14

Unit


tedtall (the has

appreciate that quality means continual improvement in the business process. Look at this from a different view point. Improvement must lead to excellence so that your business leaves other businesses behind in an environment of competition. The mind set of "quality" and the one for "excellence" are one and the same except that in the latter one, the focus is on using the measurements for continually attaining excellence - not allowing the business to get stagnated or better still, future-proofing the business. What follows is a discussion on the role of managers in this regard. Creating excellence: The manager's role in creating excellence is deploying management practices which enable: i) Managing information to overcome people's limitations of knowledge and skills -the process and products get improved only because of the development of people for improved skills and the abilities of people ii) Overcoming deficiencies in the drive and motivation of people - the top management's drive for excellence must be equally supported by the people. This is achieved when the management practices create an internal environment that has a positive impact on the motivation and morale of people

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I)Involvement of people in deciding objectives and overcoming weakness in abilities -thus empowering people and "empowered organisation" managers have a role of facilitating and not that of controlling

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The three aspects, namely information, drive and motivation and involvement are discussed in the paragraphs that follow. An understanding of these will lead you to contribute positively when you join an organisation. Developing people: It is a well established fact that as globalisation - an oft repeated phrase - reduces the current technology to obsolescence rapidly and the customer globally demands newer features in products or service, businesses must keep pace with technology and demand. Managers have an increased role in developing people in abilities

othe jalize uiing, rship stand iness also

i) ii)HI

like absorbing newer techniques and technology, being creative to bring out or participate in introducing innovative products or service - related processes and lastly, to change continually or better still, to create a change to the advantage of the organisation

i)

1 5


Managers can perform to this criteria when they deploy specific management practices which will enable these abilities and result into enhancing organisational capabilities. Thus the identification of such practices, commitment to implement these and periodically ascertain the effectiveness through a measurement system is what managers must take on as their primary role. This role must be supplemented by the one maintaining a high level of motivation and morale. Motivation and morale: Motivation is "inspiring people to work" - individually and in groups - in ways to produce the best results. Motivating is an art and starts with learning how to influence the behavior of the target people. Managers need to acquire this ability to influence behaviors. Behavior is because of any of following which an individual may have: i) Direction ii)

Intensity and m) Persistence Managers certainly play important role in all the three. Leaders and managers set direction by way of a vision and mission or purpose for the organisation. Managers create an environment of intensity by their lead in quality initiatives leading to excellence and demonstrate persistence by their commitment to management practices for all above and the personal characteristic or ability to "walk the talk". As managers, you need to realize that morale is decided by the motivation level of people and that morale is time bound. Motivation level - which itself changes with time- needs to be managed by selecting management practices that maintain or renew motivation and thus the morale of people. Quality and Excellence are the outcomes of motivation. Involvement of people: Traditionally, the management role has been of taking decision on behalf of the employees and imposing these decisions for completing the assigne tasks. Even the tasks are decided by the management as well as the level of performance.! This role needs to change to achieve excellence in quality management. The changed role J is to get people involved or as the term "empowerment" suggests, enable people to: 0 ii) Take decisions in their are of work Set objectives within their boundaries of work but contributing to total corporate or I organisational objectives Learn from mistakes and solve problems in a participative manner

iii)

16

Unit 1


When managers facilitate development which enhances motivation, work of contribution to creating an environment of people involvement or empowerment is essential. In absence of this empowerment or involvement, the two process of development and motivation have no utility. Therefore the manager's role in establishing the total quality management must lead to the deriving of long term benefits of TQM and attain excellence in business performance.

J& Activity C;You have learnt the variables of business, that is, people processes and performance. Define a relationship in form of an equation the way you see relations in formula in Physics like V= d/t that is, velocity is the ratio of distance d travelled in the time t.

1.5 FUTUREWith this insight in philosophy of TQM and the managerial role, the obvious point that comes up is "What would be the future for this philosophy and particularly so in the fast changing nature of business approaches?" Management science is evolving and it is a fact of business life. The approach or concepts that find applicability in a situation or a time frame lose relevance with time. You have seen that the quality concepts have gone through a step by step evolution. All such changes were due to the need of addressing a particular situation in business operations at a time. As time changes, the situations change and business has to keep pace. With this principle of "adapting" continually, TQM philosophy may also evolve, but the principle of continual improvement will continue to have relevance because it is the basic principle or law of nature - "All that exists changes its form". The adjective may change like continuous or quantum or step improvement as people perceive it in a time frame and geographical region or industry wise. The future of any approach to business management like TQM is decided by its acceptance in terms of tangible gains to business and evidence which the approach gathers worldwide. Thus the use of TQM or for that matter, any quality or management concept, will be17


adapted to the complexity of the business in an organisation for deriving benefits. And if it fails to show tangible gains, it dies its own death. The future, therefore, is in the leaders in organisations envisioning and making the "future" for an organisation. These organisations will have systems and approaches that will be unique to their business. Quality models or approaches like TQM will have no direct applicability. Leaders and Systems that drive the success of businesses will be the model, but again specific to the business. 1.6 SUMMARY The evolution of quality concepts can be depicted as in Fig. 1.4 below. You will appreciate that the changes that have taken place were due to business requirements and not due to any outcome of academic research.

Policy deployment and setting objectives, Process management and systems approach, Total Quality Involving total operations, Employee involvement, Suppliers Management and customers involved, Performance measurement, Continuous improvement Developing quality system, Advance quality planning, Use of quality costs, Statistical techniques for Problem Solving. Involvement of non-production processes, Statistical process control.

Quality Assurance

Quality Control Inspection

Process performance data, Self-inspection, Product testing, Develop quality plans Sorting. Salvage, reworking etc

Fig. 1.4 : Evolution of Quality Management Concepts Each one had its own place in a situation, in a business environment and a time period. The need to evolve or bring about a new concept was dictated as the business realised the limitations of the prevailing concept. Each concept has its merits and limitations. The new concept removed some of the limitations. TQM as a philosophy has a wide acceptability and as it is to be driven by the top management or leadership of the organisation, it has

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Unit 1


better chances of applicability. However, the philosophy when not followed in its spirit, fails to demonstrate its utility and loses popularity. As you read further on about the quality models in this book, you will realise that a commitment by the leadership is the success factor for any quality initiatives and the applicability of a model. A demonstration of tangible results across business models earns popularity. 1.7 KEY WORDS ____________________________________________________ Empowerment: It is a concept of making people take responsibility for setting objectives in own boundaries of tasks, learn from mistakes - mistakes are not frowned upon - and participate in problem solving. This enable managers and leaders to devote more time on future actions. Motivation: Is an emotional state of human beings and is an indication of the willingness to perform. Motivation is at an individual as well as a team level. Morale: It is the emotional state of a person to respond to a situation. It has levels like high, low or medium. Morale is time and space related. Quantitative Management: A business need where the performance of a business process as well as the product characteristics are measured in a planned manner as per a measurement system. The intention is to use the captured measurements to analyse the trends in process or product. This analysis leads to actions to be initiated for maintaining or correcting the performance. Leaders get a factual picture for decision making. 1.8 SELF-ASSESSMENT QUESTIONS _________________________________ This set of questions is to assess your ability to relate the concept to the prevailing time frame and how you visualize the potential changes which may be the future for quality and its management in relation to business performance and or role as managers or to be more appropriate as a leader. Q1. What could be the thought process when Aristotle proclaimed that "Quality is not an act, but a habit"? Justify Aristotle's concept of quality. How would you implement it as a leader? State a few management practices you will advocate for attaining this status. How do you relate "quality" to business performance? Explain your views with points which have a direct bearing on performance.

Q2.

Q3.

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2.1

INTRODUCTION

This unit talks about the culture and leadership which are very closely related, as you will understand as we go along. It is essential that we understand both, the concept of culture and the types of leaderships. This certainly will help you in understanding the relationship and how these two impact the organisational performance and quality at the organisational level. At the core of learning of these two concepts is the basic principle that quality is not an entity in isolation but is a result of the culture and leadership that drives the culture. You will appreciate that business or organisational performance is because of various business processes - as we have discussed earlier. People perform these processes and leaders need to commit to enable the performance of people. Each process has its acceptance level and meeting this level is quality. This basic concept takes us to a new perception of quality. It simply means that quality is not a function or process superimposed on all processes but quality is a part of each business process, including that of people management and leadership process. At the end of the unit, you will have an adequate clarity on the relationship between these two concepts and how these two concepts are at the core of quality as integrated into organisational performance and not a separate business process or support process which could be assigned to a group as "Quality Management". As managers you need to have an insight into managing the culture, taking a lead in either designing the culture or effecting a change and demonstrate the effectiveness of your efforts by measuring the overall results on the performance at the organisational level - in both, behaviour and profitability. 2.2 CONCEPT OF CULTURE AND ORGANISATIONAL CULTURE

3.

Concept of Culture Culture is how humanity came to be where it is today. Culture is an evolutionary process and depends upon the human mind and the patterns which humans carry. This is the pointer that human minds can be programmed to build or design or change a culture. Culture as a behaviour pattern means the way people prefer or identify their needs, desires and wants and thus make up their lives. There are three views which can help you in this process of design of a culture. You will appreciate these on reading three paragraphs that follow.24

Unit 2

Quality Culture and Leadership

1.

Culture is the vehicle of human evolution: The word "Culture" has it's origin in the Latin language and literally means the "cultivation of soil". When referred to humans, it means cultivating human minds and thus the evolution of humanity through the vehicle of culture. Culture is the improvement through the human mind: Cultivation has a lager scope. Cultivation is to "plant a seed, grow and produce better or improve". Applied to the human mind, it is initiating the change; facilitating the change with the intention of improvement. You can very clearly map these activities as a process of a) identifying what we need to be in the future, b)continual learning to develop ourselves and c)absorb new skills or behaviour patterns that prepare us for the future.

2.

3. Cultural awareness is the key to people management and development: Cultures are specific to regions or geographical areas because the environment or physical surrounding in that region drives needs, wants and the desires of human beings and the values which they believe in. These make up their way of life. You could see the way the people in Punjab or those in Raj as than or those in Kerala have the needs, desires and values, all attributable to the environment and surroundings. Awareness of these cultural variations is crucial in managing people. And managing and developing people are critical for survival or performance of an organisation.

Concept of Organisational Culture:er is in i < >i-h. You can recall that an organisation by definition is "a process through which the management controls, directs and achieves co-ordination among different processes of the business to accomplish business plans, purpose, or objectives." Let us understand this definition. The management is leadership and people in an organisation perform different processes. These people have a set of patterns of behavior driven by the desires and values they carry in their mind. Again all these are because of the culture these people carry with them (We have discussed this at paragraph A above). Thus people in an organisation make up the culture specific to an organisation. Organisational culture is the result of human beings who perform the process and those human beings who manage the business processes including those of managing human beings. In a true sense, the word "manage" is misleading here and we must replace it by the word "lead". You will shortly come to understand why it is so. An organisational culture that inspires or motivates people to perform with a sense of commitment to give the specified outcome for a process is the result of the way people get led. This is the relationship between culture and leadership, which we will discuss later.2 5


Relating organisational people and organisational culture: Typically an organisation displays two distinct sets of management practices as per the organisational culture. 1. Management practices, driven by the urge to control process(es) and people, results into an environment where people comply with the organisational system. Whereas a leadership that encourages people to commit through the internalisation of processes is an entirely different management practice.

2.

There is a wide gap between the behavior of people complying with the process and the behavior of people internalising the process. Internalisation means absorbing the process as part of the behavior and is an indication that people have a mind-set that makes them perform a process to attain its outcome without any control, while the former entails control built in and some one else needs to take on this task of control. These practices set apart two organisations by their culture. 2.3 PSYCHOLOGICAL COMPONENTS OF ORGANISATIONAL CULTURE Human behaviour Human mind-set displays emotions and accounts for a set of behaviours which build a culture. Psychological components here means those attributes of human behaviour which make up the culture. You understand these components and you are ready to design and manage -change and measure - the organisational culture. Management practices for each psychological component are techniques to use the components for managing the culture. Generic nature of components These components we discuss here are generic. As you read on, you will understand that these are certain values an organisation stands for to manage the people and culture. These are in other words, a set of motivating factors too as they have a direct relation with human behaviour. As the organisation has specific products or services to offer or a purpose for existence, these components may vary but can be traced to the generic ones. Typically these components are: a) Identification: Each individual has an identity - "who" and "what" we are. i) You need to consider the following to know how you create an identification for self. Identification has two directions:

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Relating organisational people and organisational culture: Typically an organisation displays two distinct sets of management practices as per the organisational culture. 1. Management practices, driven by the urge to control process(es) and people, results into an environment where people comply with the organisational system. Whereas a leadership that encourages people to commit through the internalisation of processes is an entirely different management practice.

2.

There is a wide gap between the behavior of people complying with the process and the behavior of people internalising the process. Internalisation means absorbing the process as part of the behavior and is an indication that people have a mind-set that makes them perform a process to attain its outcome without any control, while the former entails control built in and some one else needs to take on this task of control. These practices set apart two organisations by their culture. 2.3 PSYCHOLOGICAL COMPONENTS OF ORGANISATIONAL CULTURE Human behaviour Human mind-set displays emotions and accounts for a set of behaviours which build a culture. Psychological components here means those attributes of human behaviour which make up the culture. You understand these components and you are ready to design and manage -change and measure - the organisational culture. Management practices for each psychological component are techniques to use the components for managing the culture. Generic nature of components These components we discuss here are generic. As you read on, you will understand that these are certain values an organisation stands for to manage the people and culture. These are in other words, a set of motivating factors too as they have a direct relation with human behaviour. As the organisation has specific products or services to offer or a purpose for existence, these components may vary but can be traced to the generic ones. Typically these components are: a) Identification: Each individual has an identity - "who" and "what" we are. i) You need to consider the following to know how you create an identification for self. Identification has two directions:

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a) b)

To influence others by what we say or do To be influenced by others in what we think and what we feel.

ii) Appropriate use of these two directions helps us in designing the culture in an organisation and managing it. I) Sources of identification are the images, successful behaviours, role models, the "language" used. iv) Identification with an organisation results into people aligning their own objectives with that of the organisation - contributing qualitatively v) The management practices in an organisation need to steer identification and could be creating an image, values that are clear and simple and leaders "walking the talk". b) Equality : Equality is the respect for the other person according to values and behaviours, irrespective of one's own status. i) Respect is not a right, it has to be earned through one's own behaviour.

ii) Equality satisfies basic needs for belonging, security and self esteem. It offers equal opportunities. i) iv) v) Inequality reduces self worth and causes indifference. Mutual respect builds powerful relationships. Management practices enabling identification and equality builds a holistic culture.

c) Consensus: It is much deeper than a compromise and depends upon shared values and harmony. Let us share some aspects of a consensus : i) ii) I) Consensus is a mutual understanding It promotes an ownership of the decisions taken It builds bridges between different viewpoints

iv) Consensus drives a learning environment as people listen and understand the other's view point v) Management practices of listening and encouraging employees for participation in decision making and the ownership of decisions.

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a) erthe b)

To influence others by what we say or do To be influenced by others in what we think and what we feel.

I) Appropriate use of these two directions helps us in designing the culture in an organisation and managing it. iii) Sources of identification are the images, successful behaviours, role models, the "language" used. iv) Identification with an organisation results into people aligning their own objectives with that of the organisation - contributing qualitatively ndthe v) The management practices in an organisation need to steer identification and could be creating an image, values that are clear and simple and leaders "walking the talk". b) Equality : Equality is the respect for the other person according to values and behaviours, irrespective of one's own status. i) Respect is not a right, it has to be earned through one's own behaviour.

ii) Equality satisfies basic needs for belonging, security and self esteem. It offers equal opportunities. I) iv) v) Inequality reduces self worth and causes indifference. Mutual respect builds powerful relationships. Management practices enabling identification and equality builds a holistic culture.

c) Consensus: It is much deeper than a compromise and depends upon shared values and harmony. Let us share some aspects of a consensus : i) ii) i) Consensus is a mutual understanding It promotes an ownership of the decisions taken It builds bridges between different viewpoints

iv) Consensus drives a learning environment as people listen and understand the other's view point v) Management practices of listening and encouraging employees for participation in decision making and the ownership of decisions.

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d)

Instrumentality: Instrumentality is a motivational force to direct human actions to achieve desirable goals and to avoid undesirable outcomes. Consider the following: i) It is a motivation in two directions: a) b) i) iii) iv) v) Feed-forward: a motivation by achievable goals, objectives or expectations Feed-back: recognition for accomplishments or corrections for not accomplishing

It is a sense of commitment ingrained by the influence management can have Expectations has force and directions and enables predicting attitudes and determines commitment Expectation is a feed-forward strategy, brings in commitment and recognition as the feedback strategy acts as an instrument Management practices of setting expectations for survival and for profits are a key to instrumentality.

e)

Rationality: Rationality enables people to get the real cause of problem. Rationality is: i) ii) Ability to find facts Analyse facts for corrective actions and resolve problems

iii) A sense of courage, integrity and compassion to solve problems iv) A balanced response to situations v) vi) Thinking that promotes a rational behaviour Management practices based on systems and knowledge management helps in building rational behaviour across the organisation

f)

Development: It is one essential activity or motivating factor that makes the organisation ready for the future. It is motivation for self improvement and applied across the organisation. It means: i) Training people on task so that they attain the organisational performance -training is for a task

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i) Educating people to be flexible and adapting through the process of learning, understanding and managing new knowledge - education is for life iii) iv) Adding value to people and in turn to the organisation An organisation develops itself through developing its people

v) Management practices of training for development, accepting errors as opportunity and enabling learning, emotional balance lead to creating this motivation factor. g) Group dynamics: It has two dimensions, namely a) inter-group and b) intra-group. A group working towards a goal exhibits the characteristics of organisational culture like consensus, sharing and equality. Following are the areas of concern for group dynamics: i) Within a group presence or absence of the feelings of "sharing", "caring" "belonging" and "friendliness" leads to the success of a group ii) iii) iv) Equality and consensus are the key factors for group cohesion Identification is a key motivator of belongingness and for group cohesions The aim is to achieve effective relationships of inter-group and intra- group

v) Management practices like developing a feeling of group belonging, focused team meetings for proactive responses, valuing each member of group and managers demonstrating leadership values lead to the success of group dynamics. h) Internalisation: Internalisation of cultural beliefs and values is the most powerful instrument for motivating people to perform to the expected outcome or quality. Internalisation determines our attitudes, conviction and thus behaviours. In a hierarchy, internalisation has these three levels-from bottom to top Compliance-obeying instructions Identification- to identify with and to believe in others Internalisation is to believe in one self.

i) Attitudes are highly resistant to change. But we need to ensure an attitude that allows us to see other view points and adapt.

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ii) Attitude change is difficult. Butit needs to be changed along with the culture needs to be changed. iii) iv) For attitudes, we must know that successful behaviour changes attitudes. Internalisation is the summation of the above psychological characteristics of organisational culture.

v) Management practices that could be listed are, managers who believe in culture and values, managers who are themselves models, managers demonstrat a commitment to quality parameters and the use of motivation to create a highly satisfying work environment. ^ Activity A: Identify which of the above components of culture you observe in the people in y< institute. Which behaviour-pattern demonstrates these? Make a table for components and behaviours.

2.4

A BRIEF ON THE DESIGN OF CULTURE Designing organisational culture Designing organisational culture is an activity that is proactive and strategic. You can see that culture is to organisation what personality is to an individual. You also need to realise that culture is the summation of the values we discussed above. It is like designing your personality. An effective value is a quality we believe in because it works. It sets a way of life in the organisation. Designing this "way of life" is designing the culture. It is an activity to prepare the organisation for its future. So it has far - reaching implications. This activity may be needed in any of the following business situations for an organisation:

i) Business objectives change because of external pressures like competition and threats,

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ii) Organisational performance shows a stagnation or downward trend. iii) Organisation decides to get into different business lines - because of

op po rtu nit ies an d tec hn ol og y

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iv)

External pressures like government regulations and takeovers or mergers.

Some considerations for design Before you start designing any thing, it is necessary that you understand, with clarity, the purpose of design. This means you must know a) where this design would take the organisation, b) how that would happen and c) how the success would be measured. The success of design is decided by these three parameters. i) Design has to attain its purpose: This is answering the question "why" we are taking up design or maybe we are taking up re-design. It is driven by one or more factors which we have discussed above. But the points there are very generic and vague for that matter. You need to think in a systematic way - this is also part of the organisational culture -thinking systematically. The systems thinking means having a "whole" view of the expected results - the way these factors have mutual impacts and an impact on related systems or organisations. Thus for revamping organisational performance from stagnation to the upward swing, the purpose would be to create a set of values which: People are encouraged to establish their own identify. Motivate employees to act responsively. Recognising that errors within a boundary are opportunities for improvements. People own the process and internalise them. Managers demonstrating the ability to develop people. The result of the change to be a behaviour pattern that demonstrates all above attributes.

n)

Defining management practices which would encourage the bullets above.

I) A system for measuring the new culture that supports development and a continual improvement. Schematic for design of culture A schematic will help you to appreciate the way an organisational culture may be designed. Of course it is necessary to keep in mind that the activity is not as simple as it appears. The schematic in Fig 2. 1 depicts the flow of activities for such a design. You will appreciate that the following are critical for the success of the new culture designed:

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Data on past performance

Recognise the need for new design Identify a team for the project Define or agree upon the Purpose List out management practices to meet each purpose Define the process for each management practice Review if these meet the purpose. If required make changes Conduct validation as pilot on identified section of department Assess the results for success level. Make changes in practices as applicable

Top management Design the system for measuring the practices; survey questionnaires and scales for measuring

v)VI)

Train the managers in the new practices; Involve people in the survey questionnaires

Make a report on success to top management

Freeze the design of new ''culture" after approval by top management

Fig. 2.1 : A Schematic Diagram for Design of Culture i) ii) Clarity of purpose Commitment and sponsorship by top management

in) Selection of team and their emotional support to the task iv) Resources and time allocated to the project

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v) vi)

Effectiveness of training and sensitivity of the managers involved Level of participation of people when the pilot is run

vii) Success of the validation of pilot viii) Evidence of consistency of results on implementing the management practices Design of Organisation Culture is a Management Function A direct connection of values that cause the outcomes - desired outcome - and the management practices is the basic criteria for design. The design needs to evolve around these values. Managing the new culture is the result of implementing the management practices and assessment or measurement of the new culture. You need to bear in mind that i) An organisational culture delivers the business results through the internalisation of its values by employees. Acceptance of the value system by all in the organisation is the basis for effective culture management. ii) An organisational culture adds value. To add value to anything is to increase its intrinsic worth. Like in the case of a listed company, it is to increase its share value. Culture adds value to the organisation in three way s: a. Increasing intrinsic worth through extrinsic values like increased profits, share value and competitive process and attributes of enhanced quality and service parameters.

b. Improving the morale and motivation of people through such intrinsic values like trust, loyalty, pride, enjoyment and job satisfaction which leads to improving quality and performance. c. Creating a synergy of organisational values and workforce motivation to increase the value of the organisation to its customers and suppliers. The result is that customers and suppliers opt for repeat business with the organisation.

i) Culture adds value through meaning and purpose. Culture brings meaning and purpose to the organisational life and work. In absence of meaning, there is no enjoyment and thus no motivation to work.

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There are three dimensions to culturei) Goal orientation: Purpose is the reason why an organisation exists.

ii) Motivation: Meaning is internalised by people within the organisation through the value of the work to them. iii) Organisation Structure: The relationship that is defined. The synergy of meaning and purpose adds value to both, the organisation and its employees through increased efficiency and performance.

Influence of mission statementA common thread for the three dimensions is the mission statement which conveys a sense of purpose and has a powerful motivating influence. Defining a mission and vision is the leadership process, and has an immense impact on these three dimensions. You will understand this influence when we discuss the topic of leadership.

Types of organisational culturesYou have seen at paragraph number 4, subparagraph A, the range of purposes for which an organisation culture may be designed for. Thus a culture will have unique characteristics depending upon the set of values it addresses. A brief description of possible cultures is given below: i) Team culture: Team members share common goal and the characteristics of team culture can be listed as (a) identification with team, (b) internalisation of values by team members and (c) motivation to achieve the the team goal. Team has the ability to synergise and innovate. ii) Culture of the individual: This promotes the development of the individual and supports the "employability" of an individual. Employability is enhanced and assured because of the development of skill set and the way new skills contribute to the performance and quality. Individual culture promotes the individual's value to an organisation. iii) Creative culture: The premise is that every human being is potentially creative. Creativity is an indication of the quality of a working environment. Problems get resolved more easily or new ideas find place for both product/service features and productivity. Creativity is at an individual level but adds to innovation when in a team.

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A designed creative culture not only responds to a change but creates a change that has the intrinsic value of putting an organisation ahead of competition. iv) The quality culture: Quality of business is the wealth created by the production process and is continually reinvested into the system and its people. This is the basic wealth-creating cycle. The principle that the cost of producing and the cost of purchase are amortized over the usable life of the product means that the quality is built into the economy related to this product. An organisational culture adds value to resources (which create the product) to create a quality culture. v) The culture of high performance or business improvement: In a rapidly changing business environment, a culture of improvement is the solution. Business improvement culture should be one that moderates the vision of the organisation with strategy, converts creativity into innovation and transforms inspiration into commitment. Managers with vision are the leaders in culture management. Leadership is at the root of cultural management and in bringing about a change in culture. vi) The culture of personality : You need to understand this concept as a potential manager and leader. We have discussed earlier that "The culture is to an organisation what personality is to an individual". This concept emerges from the fact that an organisation is as good as the motivational quality of its persons. We also observe but fail to focus on one very important aspect of the personality of organisational people-starting from the top management to the lowest level in the hierarchy. This aspect is that culture of a person enables us to apply tools and techniques of cultural management to develop our organisational personality. We discussed these techniques as management practices at paragraph 3- B - subparagraphs 1 to 8 above. Personal culture can be learned. This culture is the values that determine the character and need to be taught, learned and internalised. This is the role of leadership in managing culture. vii) The culture leadership : Leadership is a process for transformation. Leadership process is a causal entity for cultural change. Leadership is a process at all levels within an organisation. Leadership qualities add cultural values to personality. Leadership attributes enable person to shape, form and transform the living and working environments of others. Leadership is instrumental to change or to the redesign of organisational culture.

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2.5 LEADERSHIP IN BUSINESS Leadership and business vision The whole point of leadership is to establish a relationship with followers who have! emotional attachment to the leader and the leader's vision. Each business is driven by i vision and enabled by organisational culture. This is depicted in figure 10.2.Leadership Vision for Organisation Leadershi p Attributes Developing Leadership Practices Results and its measures

Set of Values

Organisational Cultural requirements

Design of organisational culture

Management Practices

Learning and experience

Results and its measures Need to change

Fig. 2.2 : Leadership and Organisational Culture Leadership and culture This relationship is at the core of culture and therefore leadership plays a vital role in^ organisational culture. Cultures and organisations are not only managed but they are led. The best leaders create a high-performance culture (See paragraph 4, sub paragraph G above for types of cultures).

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Role of leadershipLeadership role is best appreciated in terms of leadership attributes and developing these. Before you take on understanding the attributes, look at what leaders typically do. (Though this list is not exhaustive): i) ii) iii) Leaders make sure that people not only see the vision, they live it and breathe it Leaders upgrade their teams, using every encounter as an opportunity to evaluate, coach, and build self-confidence Leaders establish trust with candour or openness, transparency and faith, creating teams of followers

o have an ' ">y its

iv) Leaders inspire risk - taking and learning by setting the example, create role models v) vi) Leaders have the courage to make unpopular decisions and go on gut feeling, exhibiting risk- taking abilities Leaders probe and push with curiosity all that borders on uncertainty, making sure that their questions are answered with actions, driving the organisation into the future

vii) Leaders get into everyone's skin or personality, radiating positive energy and optimism, enabling a creativity culture ;onality and valuesjo enable people develop personality

culture. Attributes of leadership

a vital role in they are led ragraph C I

As Jack Welch has said "One day you become a leader" and it applies to all in business at every level. Leaders come in variety and their attributes therefore cover a broad spectrum. You know leaders like Bill Gates as innovative, political leaders of the distant past and those emerging who have impacted our lives. You also know business leaders in new economies like our own leaders in IT business or auto industry or service industry. These leaders show a wide range of leadership attributes. To make the discussions manageable let us once again ponder over the organisational culture we discussed earlier. You may once again go back to figure 2.2 to see the relationship of leadership and organisational culture. The close link between the two and the management practices we briefly discussed for the psychological components of the culture, lead us to identifying four attributes a leader must develop and demonstrate. While discussing these briefly, we relate them, all the time, to the psychological components of culture (paragraph at paragraph 3-B sub-paragraphs 1 to 8 above). You will come to understand from the following discussions,3 7


how leadership attributes facilitate managing cultures through management practices for these components. i) Setting Vision: The vision must be the cause of life in the organisation. Living and breathing the vision is identification and intemalisation with it. Leading by setting realistic but challenging objectives for the vision and enabling people in achieving objectives. reinforces the faith in leadership. ii) Seeing the Future: Seeing the future and sensing the outcomes for the organisation and empathising with people to transform them for identifying and internalising for the quality of organisational performance. iii) Enabling Thinking Process: Inspiring people to think creatively for innovation in processes, products or services which an organisation offers as well as in people behaviour. Shift in thinking changes the way people perceive values and the way people behave. This shift in thinking contributes to managing culture. iv) Shift in patterns : People carry patterns which are created over time because of variety in experience they accumulate. These patterns govern their behaviour. Leaders themselves need to shift their patterns from the pattern of control of process or activities to pattern of enabling people in the interpretation of values and objectives. This leads people into identification with the objective and intemalisation of the processes. This is managing the organisational culture - designing or changing.

Jg$ Activity C;Can you confidently state that you have come accross some of the above attributes you have observed amongst the leaders in your institution or organisation in which you may presently working? State these attributes.

Effectiveness of leadershipLeadership needs to be treated as an organisational capacity and not merely an individual's capacity. Two factors decide the effectiveness of leadership:

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cesfor

i) Extent to which people follow and give legitimacy (internal measurement). Measure of leadership performance as influencing organisational performance - processes, quality of products and service. ii) Extent to which the organisation or team succeeds and survives (external measurement). Impact of leadership performance on the business, the way customers see the business or organisation 2.6 LEADERSHIP PROCESS

ing and realistic ectives,

nisatio n jforthe

Mind patterns and leadership Patterns individuals carry have a firm grip on their behaviour. Leadership is leading beyond the patterns which have such firm grip on behaviour. Such a process of changing patterns helps one in shifting one's own patterns and developing new ones. Atrue leader is expected to enable such shifts across organisational people and create more leaders. This is the process of transformational leadership. Transformational leadership is effective in managing culture as this process identifies new values, and corresponding new management practices to reinforce the patterns. Examples of such leadership are Jack Welch of GE, Louis Gerstner of IBM, etc. to name a few. Some challenges leaders would face Leadership process will face some challenges in the future (Refer to the effectiveness criteria of leadership at paragraph 5, sub-paragraph E above).

yationin n people I the way

because of HIT. Leaders or activities 5. This leads cesses. This

ites you b you may be

You can reflect upon these and judge for yourself which of these you need to be prepared for as you progress in your profession as managers. i) Environment of uncertainty and unpredictability: This is happening day in and day out. Scanning the environment continuously will be the task, leaders will have to be included in the leadership process. Like steel or fossil fuel or telecom business worldwide takes into account the unpredictability and uncertainties to drive strategies for takeover or collaboration. ii) Global village: Distance and geographical boundaries are shrinking or have shrunk. The ability to lead and virtually manage the work force around the world is now demanded. Like Emerson carries out the business of designing the components of the system in India and integrating them elsewhere into a system to be offered to the client. It also demands the ability to manage cross cultural issues.

in .ndividual's

3 9


iii)

Demographic diversity : Globalisation and a better life - style have resulted into demographic changes - people culture and age groups show a variety of these. Leaders need to come up with innovative ways to satisfy differing needs and preferences of customers and a diverse work force. Call centres are the illustration of innovating business using time frame differences. Technology : Technology is enabling organisations to be without a boundary. Leaders have to adapt to this. It is complementing the global business environment. This demands a leader-learning life time and keeping pace with the changing technology for the self as well as for the organisation. New employee relationship : Employees display more loyalty or preference for lifetime employment. This demands leaders' ability to retain and motivate top talent for the advantage of the organisation's future. Business consolidation : This is a need in the global village as competition and unique capabilities region- wise are opportunities for distant markets. Leaders need to acquire skills to integrate organisations - bringing together distinct organisational cultures and business systems. Like iFlex in India merging with Oracle US. Activity D : "Cultural issues are delicate." Support this statement by illustrations which you come across in the organisation where you work or in the news items you read.

iv)

v)

vi)

Leaders of the Future : You would be taking up managerial positions in the future in organisations of differing businesses and complexities. The future leader or next Gen leader would need some important changes in capabilities. Some of them like: i) ii) Leaders must be "alive'' throughout the levels of organisation, Leaders need to act. Leaders must be models of behaviour.

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ilted into ;. Leaders ranees of inovating

I) iv)

Failure is inevitable. But a failure is an opportunity for learning. Agility: Leaders must be agile. Acting swiftly and proactively is the key.

v) Leaders are not always popular. Must put the collective good beyond the self-interest and not be concerned with their own interest alone. 2.7 A SYSTEM FOR MEASURING CULTURE AND LEADERSHIP Managing culture and the process of leadership is through a system of measurement. "To manage is to measure", said the late Dr. Peter Drucker. Measurement guides you in assessing the level of success in your endeavours as measurement shows the gap in the actual and the targeted or planned results. The gap is useful in initiating improvements or redefining the objectives. Measurement process or system designed for assessing the management of a culture or assessing the effectiveness of leadership is discussed here in brief. i) Measurement of management of culture: The system needs to be defined as part of the design of new culture because the values are built into the new cultural practices. The management practices that drive the values are candidate for measurements. Typically the measurement can be defined for each of management practices for each of the psychological components of the culture we discussed earlier. ii) Measuring leadership process: In an organisation, the leadership attributes would be specific to the organisational business and culture. But we can trace them to those discussed in paragraph 5 D and paragraph 6 above. A set of questions to get responses from those led and the collation of these will be the system for measuring the leadership process. A validation of this is necessary before its implementation.

y. Leaders lent. This ichnology

erence for 5 top talent

etition and ;aders need ranisational IS.

come across

2.8 SUMMARYFor an organisation to exist, a well defined purpose is necessary. The purpose emanates from the vision for the organisation. Leaders define and propagate the vision. A success of vision is demonstrated when the organisation has a culture that is driven by this vision. Culture is a way of organisational life and it is the personality of an organisation. The values which vision demands, are the basis for the psychological components of organisational culture. The psychological components help in designing a culture as well as in evaluating

is 01 differing W need some

Leadership and organisational culture are closely linked and leaders enable a cultural change and its management. For this task to be successful, leaders need to have qualities of

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visioning, motivating, transforming patterns of people into new patterns or creating an environment of transformational leadership. Leaders of the future will be performing in an uncertain and boundary less business environment. The skills required are different for them and have to be acquired. Prospective managers like you all must reflect and identify the gaps in current skills and make a mind map to acquire this to be ready for the future.Outcome: Meeting vision and Organisational purpose for future Meeting customer demand of Quality and value of Offering Business Performance Objectives for future Investing in Design of Culture & Developing Leadership

Ql.02.

Measurement: Management of Culture and Leadership

Fig. 2.3 : Business Performance and Quality Linkage to Culture and Leadership 2.9 KEY WORDS ___________________________________________________ Management Practices: These decide the way people in an organisation will carry out routine activities. These practices have an impact on behaviour and therefore an organisational culture can be managed through these practices. Patterns: Mind Maps created by human beings because of repeated experiences and cultural influences. Psychological components of culture: Human psychology decides the emotions and behaviours which humans display. Culture is result of behaviours and thus has psychological complements which decide the type of cultural behaviour. 2.10 SELF-ASSESSMENT QUESTIONS For answering this set of questions you need to think from the leader's point of view all the time. The intention is to prepare you to think from the systematic and strategic angle. The questions you need to answer are:4 2

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creating an inning in an Jifferent for andidentify it the future.

Q1. Q2. Q3.

How do you relate quality and organisational performance? Describe the concept of culture and list its psychological components. Explain the statement "these psychological components would vary from one organisation to another" with examples. Select any three components and describe the typical management practices which would be used to establish the said component as part of the organisational culture. How does the organisational culture drive the quality activities in an organisation? What are the areas to be in focus ?

Q4.

Q5.

Q6. Establish a relationship between organisational culture and leadership. Draw a schematic to show the links. Q7. Explore and compare two cultures like the one in an IT organisation like Wipro or Infosys and one in an engineering organisation like Tata Motors or Bajaj or Maruti.

and I

Q8.

Stretch you imagination to identify what must be the organisational psychological components of culture for a business which you would be in 2010.

Q9. What purpose does a measurement system serves for organisational culture and leadership? Describe in brief both the measurements. will carry out A therefore an Q10. What are the typical attributes of the leaders of the future? List them with reasons.

^experiences and

s the emotions and js has psychological

Dint of view all the ategic angle. The

4 3


3.1

INTRODUCTION

In unit one, you were given a brief account on the way quality is perceived and how a quality management process is used as a tool in an business environment. The unit prepared you to grasp at a macro level the various concepts of quality and quality management. In this unit, you will be introduced to many more insights into quality and quality management so that a framework is created to understand TQM in its practical sense for its implementation. You will be taken through the stages of review of TQM philosophy and the way the TQM elements are framed and applied to a typical business as an illustration. The intention is to familiarize you in greater detail on all that it takes to establish a quality management system as a business system in tune with TQM philosophy, how that system needs to be implemented and finally what the criteria for assessing the success of implementation are. As an illustration, this unit uses typical business processes in an educational institute, which is a service organisation. The choice is on such an institute because you can probably relate the elements better, irrespective of your background. A section is included as guidance so that when you join an organisation, you are in a position to be a part of the team tasked to define a quality management system, whether the organisation is planning for a quality model like ISO 9001 or TQM or CMMi. You will also get some insight into the probable resistance one can face in an organisation when TQM-like practices have been decided to be implemented. You will also get an overview of the management's interventions required to overcome such a resistance. The section on implementation also takes you through the process of assessing the level of implementation and thus prepares you to be aware of the criteria for the success of implementation. 3.2 REVISITING QUALITY CONCEPTS AND QUALITY MANAGEMENT

Revisiting quality concepts Quality has been in the forefront with different approaches and in different conceptual forms. The thinking on quality from the management point of view and that from product or service point of view are two ends of a continuum of quality wanted by the customer, Another thought process may lead you to consider whether the quality is eliminating flaws in" what is" or provide a lead to "what ought to be". These are thoughts of quality as an improvement or as an innovation to prepare for the future respectively.46

Unit 3

TQM : Elements and Implementation

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Quality has a direct relationship with the business performance of an organisation. According to Gary Hamel and CK Prahalad- two authors on business performance and management-they categorically state that "quality is but one requirement for market entry and continuing survival depends upon the learning and innovation to build new markets or leadership in markets." Extending this thought process are two aspects of quality, namely conformance quality as "doing things right" and strategic quality as "doing the right things". You must appreciate that the excellent organisations "do the right things right," that is, both strategic and conformance quality - in that order. You need to realise that an outstanding business performance is through the strategic quality and not through conformance quality alone. From a customer's point of view, all three, that is quality, cost and delivery of product or service are of concern. Thus quality in all three could be the thrust by an organisation while managing business operations. As per Charles Handy - another management authority - for a business "quality," is a truth. Thus the language of quality spells the level of truth. Language is very important as it makes up the mindset of people. The mindset that drives "quality" - whatever an organisation means by that - is at the root of success in making the quality as the culture (Refer to unit ten, Culture and Leadership). Language of quality must percolate all through the organisation, starting from the top management. Organisational strategies, policies and objectives must reflect the language. If the systems and procedures speak of quality, that language becomes a practice and people internalise it. Language is the means for internalising (Refer unit 10 Culture and Leadership). Internalisation must keep pace with changes. In any business, the market environment continues to change so the quality strategies and polices and the language must follow. As a part of the quality processes, the language for the process of quality assurance in many organisations demands that there are no deviations from the defined methods/standards. The effect of this language is discouraging learning from mistakes or people hesitating to innovate or to adapt to a particular situation. This language sets in a bureaucracy. This bureaucracy is an obstacle to learning and innovation. To get over such a bureaucratic system, the management faces a challenge and must have a different approach to system implementation, which you will read later in this unit under the section "Implementation."47

BENCHMARKING

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