“TOTAL QUALITY MANAGEMENT APPLICATION IS APPARENTLY A MUST FOR

ANY MODERN ORGANISATIONS.”

BY

LUCKY NWAKEGO UGBOKO

DEPARTMENT OF BUSINESS ADMINISTRATION

FACULTY OF MANAGEMENT SCIENCES

UNIVERSITY OF CALABAR

CALABAR

JUNE, 2016

ABSTRACT

This discussion presents an analytical relationship between application of total quality

management (TQM) and organizational effectiveness in present day organizations. In order to

gain competitive edges, organizations, worldwide, have been exploring ways to improve

business practices. Implementation of TQM is not just a management challenge but also, a socio-

technological endeavor, which focuses on modifying and redesigning existing applications and

business processes to facilitate the emergence of superior quality products and services. This

paper critically examines the extent to which TQM and organizational effectiveness are related

and how TQM impacts various phases of business planning. It also attempts to address

organizational and cultural issues, which determine the success of TQM implementation. Whilst

also seeking to understand the importance of Total Quality Management (TQM) philosophy and

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attempting to integrate the concept of TQM implementation within a broader perspective of

business as a part of corporate strategy in an organization. The concerns and issues for TQM

implementation are discussed, to give a holistic perspective of TQM implementation as a part of

business excellence strategy. The paper also includes a comparative analysis between

organizations that applied TQM strategies with others that do not using secondary data form

previous studies to draw conclusions.

Keywords: Total Quality Management (TQM), organizational effectiveness, Strategy

implementation.

1.0 INTRODUCTION

In this era of globalization, the focus of modern organizations is to develop innovative brands of

quality products and services. Innovation and quality has been identified as key factors for

organizational success. TQM is the combination of techniques, theories and strategies applied in

an organization in order to obtain excellence and quality. This involves the managing of

resources, people, time and various business processes to ensure complete customer satisfaction

at every stage from procurement of material to the dispatch of finished goods.

According to Stahl, M. J. (1999), TQM is defined as the system approach to management that

aims at continually increasing value to customers by designing and continuously improving

organizational processes and systems. The prime focus of TQM is to seek for the point of zero

defects in any part of an organization, using teams, workers empowerment and creative problem

solving mechanism to achieve this goal. This was the wheel of technological revolution in Japan.

It builds on product quality to improve the quality of management processes and techniques,

focusing on customer satisfaction, since the goods and services produced where driven by

customer desire and tailored to their exact needs (Juran, 1993). The philosophy of TQM in

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organizational management is unarguably customer oriented, with all employees striving to

systematically improve the organization through their on-going participation in problem solving

efforts across functional and hierarchical boundaries.

TQM application has become a necessary tool in modern organizations in order to survive in the

global business environment that is increasingly becoming competitive.

The Japanese through the intervention of William Edward Deming, who has come to be viewed

as the father of quality control, quality circles and quality movement generally, demonstrated

TQM on a grand scale. Though the roots of the quality control can be traced back to the early

1920s, when statistical theory was first applied to product quality control. Americans like Joseph

Juran, Armand Feigenbaum and William Deming further developed this concept from Japan in

the 40s.

1.1 OBJECTIVES OF THE PAPER:

This paper is aimed at highlighting the importance of TQM in modern organizations by

investigating its relevance in business operations and on the improvement of products and

services as well as fostering competitive advantages.

1.2 STATEMENT OF THE PROBLEM:

Does Total Quality Management (TQM) application impact on modern business operations?

How does the application of TQM impact on modern organization’s effectiveness?

What are the benefits of TQM applications on modern organizations?

What are the factors that can hinder TQM in modern organizations?

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2.0 REVIEW OF RELATED LITERATURES

2.1 The Concept of Total Quality Management

The International Standard ISO 8402 using Quality Management and Quality Assurance

terminology defined Total Quality Managements as the management approach of an

organization, centered on quality, based on the participation of all its members and aiming at

long-term success through customer satisfaction, benefits to all members of the organization and

to society (Ljungstrom and Klefsjo, 2002).

Temtime and Solomon (2002) stated that Total Quality Management seeks continuous

improvement in the quality of all processes, people, products, and services of an organization.

The emphasis is on employee involvement and empowerment along with customer satisfaction

as the focal point.

Total Quality Management means that the organization’s culture is defined by and supports the

constant attainment of customer satisfaction through an integrated system of tools, techniques

and training, (Sashkin and Kiser, 1993). Total Quality Management encompasses a number of

different initiatives. For example, Six Sigma, which is popular today, is a methodology within

Total Quality Management, not an alternative to it (Klefsjo, Wiklund, and Edgeman, 2001). Lean

Sigma is another methodology that is widely used today that is included within Total Quality

Management. Total Quality Management also includes initiatives such as ISO 9000.

2.2 TQM impact on modern business operations

The reasons for implementing TQM in organizations is to gain customer satisfaction, improve

quality of products and services, increase productivity and capacity of production lines, boost

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employee performance, improve quality-of-work-life balance, upscale market share and

command competitive edge. TQM also addresses niggling management issues of reduction in

production development time, waste of inventory; work in process, cost, delivery times,

employee turnover, and complaints.

According to Davies (2003), Total Quality Management is a management philosophy, which

focuses on the work process and people with the major concern for satisfying customers and

improving the organizational performance. It involves the proper coordination of work processes

which allows for continuous improvement in all business units with the aim of meeting or

surpassing customer’s expectations. Total Quality Management is applicable to any organization

irrespective of size and motives.

2.3 TQM impact on the modern organizations effectiveness In his book, “Out of Crisis”

Deming (1986) established 14 quality management points that can help an organization to

operate effectively viz; continuous improvement of product and service, adopt quality

management as the new policy, stop dependence on mass inspection, ending the emphasis on

production cost in improving the system of production and service, new method of training, new

method of supervision, drive out of fear, cooperation between staff areas, elimination of

numerical goals for the workforce, elimination of numerical quotas, removing the barriers that

hinder the hourly worker, new program of education and training as well as top management

involvement of quality managements.

Juran (1986) in Tanninena, et al., (2010) further explained management was responsible for the

establishment of a quality council, quality policy, setting of time frame for quality goal and

provision of all necessary resource needed to achieve the quality goal.

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In the same vein, Crosby (1984) also contributed to TQM’s effectiveness in organizations by

introducing the following concepts; zero defects, do it right at the first time, the system of

prevention and the focusing on the measurement of quality.

Ishikawa (1985) who influenced the Japanese understanding of total quality management

concept was concerned with four aspects of TQM, which includes quality management, quality

circle, continuous training and quality tools such as fish bone diagram and quality chain.

Regardless of the different perspectives, the underlying theme common to all frameworks is that

Total Quality Management is based on a prevention work processes that strives to increase

quality and efficiency, improve productivity and enhance customer satisfaction (Waldman and

Addae, 1993; Kartha, 2004).

2.4 Implementing TQM In Modern Organizations

The main values that are essential in implementing a Total Quality

Management process involves the following elements: (1) Quality information must be used for

improvement, not to judge or control people. (2) Authority must be equal to responsibility (3)

There must be rewards for results (4) Cooperation, not competition, must be the basis for

working together; (5) Employees must have secure jobs (6) There must be a climate of fairness

(7) Compensation should be equitable (8) Employees should have an ownership stake (Sashkin

and Kiser, 1993). Kassicieh et al. (1998) studied the impact of Total Quality Management,

training, performance evaluation and rewards on the success of Total Quality Management

implementation. Aksu (2003) examined the preparedness of manufacturing industries to

implement the Total Quality Management practices.

Their conclusions revealed that TQM implementation, impacts positively on the effectiveness of

an organizations operations by contributing to improvement on employees efficiency and

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subsequently developing superior quality products and services. TQM could therefore be

described as the wind that gives sail to an organization’s business success.

2.5 The benefits of TQM applications on modern organizations

Juran (2001) opined that the benefits and goals of total quality are lowered costs, higher

revenues, delighted customers, and empowered employees.

Costs can be lowered by reducing errors, reducing re-work, and reducing non-value added work.

Higher quality can also equate to higher revenues through satisfied customers, increased market

share, improved retention, more loyal customers, and premium prices.

Customers continue to demand higher quality goods and services. Dudu and Agwu (2014)

posited that delighted customers always purchase over and over again, advertise goods and

services for the company, and check first when they are going to buy anything else to see what is

on offer by the company they are loyal to.

Empowered employees have the means to measure the quality of their own work processes, to

interpret the measurements, and compare these measurements to goals and take action when the

process is not on target. These empowered employees also understand who their customers are;

what the customers need, want, and expect; how to design new goods and services to meet these

needs; how to develop the necessary work processes; how to develop and use the necessary

quality measurements; and how to continuously improve these processes.

Other benefits of Total Quality Management include improved company image, improved

certainty in operations, improved morale, improved management, and loyal customers (Davies,

2003). Improvement of the process increases uniformity of product output, reduces mistakes, and

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reduces waste of manpower, machine-time, and materials.

There are three Total Quality Management practices that have direct effects on operating

performance (inventory management and quality performance), these are:

1. Supplier quality management,

2. Product/service design, and

3. Process management.

Each company should develop its own individual framework for Total Quality Management that

fits its situation and available resources. Total Quality Management involves teamwork and

commitment on the part of the employees and management. Well-conceived training, mentoring,

and feedback systems have proven to be effective in mitigating employees’ resistance to change

(Jun, Cai and Peterson, 2004).

2.6 The factors that hinder TQM in modern organizations

Managers often experiences certain brick walls in the implementation of Total Quality

Management, these includes inadequate human resources development and management; lack of

planning for quality; lack of leadership for quality; inadequate resources for Total Quality

Management; and lack of customer focus, (Dimitriades, 2006; Gberevbie and Isiavwe-Ogbari,

2007).

A primary reason for Total Quality Management failure in organization is due to half-heartedly

implemented Total Quality Management. Many organizations are not willing to undertake the

total cultural transformation that Total Quality Management requires (Atuma and Agwu 2014).

Senior management should knows exactly what culture change is and how best to approach

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cultural transformation, which is argued to be the most essential ingredient if Total Quality

Management is to succeed.

Other often-cited problems include getting everyone in the organization to move in the same

direction, the lack of goals, insufficient knowledge, poor planning, lack of management

commitment, lack of proper training, failure to use the right framework, lack of resources, lack

of effective management, and incompatibility of attitudes of top management and workers.

Some companies are already in poor health at the time during which Total Quality Management

is implemented. Total Quality Management demands that resources be available to sustain the

organization over the full period of implementation and beyond, and it could prove to be

demanding for the weak.

Moreover, Top-down programs undermine the unit leaders' commitment and their capacity to

lead a Total Quality Management transformation in their unit.

A study by Ljungstrom and Klefsjo (2002) determined that the six areas for obstacles to Total

Quality Management are:

1. Management 2. Continuous improvement 3. Quality methods and tools

4.Work development 5. Process orientation and 6. Unions.

Reasons for this include lack of knowledge about what Total Quality Management is,

ineffective internal communication between management and employees, and low

engagement of other levels of management within the organizations. So, top executives need

training that will help them to understand the philosophy and benefits of Total Quality

Management along with how to implement it effectively.

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Critics of Total Quality Management have suggested that it entails excessive retraining costs,

consumes huge amounts of management time, increases paperwork and documentation,

demands unrealistic employee commitments levels, emphasizes process over results, and

fails to address the needs of small firms, service firms, or non-profits.

2.7 Principles of Total Quality Management

Total quality management is an organization-wide philosophy with its core values centered on

continually improving the quality of its product and services, and the quality of its processes, to

meet and exceed customer expectations. This means that everyone in the organization - from top

management to the employees - plays a role in providing quality products and services to

customers. Even suppliers and the customers themselves are part of the TQM.

In order to exceed customer expectations, an organization must embrace five principles:

Produce quality work the first time

Focus on the customer

Have a strategic approach to improvement

Improve continuously

Encourage mutual respect and teamwork

Producing quality work (the first time) means quality is built into the processes for producing

products or providing services, and continual improvement measures are taken to ensure the

processes work every time. Employees are empowered to make decisions to improve a process

and are provided with continual training to develop their skills.

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Focusing on the customer involves designing products or services that meet or exceed the

customer's expectations. This involves the product itself, its functionality, attributes, convenience

and even the means by which the information about a product is received by a client.

Having a strategic approach to improvement, processes are developed and tested to ensure the

product or service's quality. This also involves making sure suppliers offer quality supplies

needed to produce products.

Improving continuously means always analyzing the way work is being performed to determine

if more effective or efficient ways are possible, making improvements and striving for excellence

all the time.

Encouraging mutual respect and teamwork is important because it fosters a single-organizational

culture of excellence by knowing that every employee from top to bottom of the hierarchy holds

the same core principles at heart.

3.0 METHODOLOGY

A comprehensive comparative technique was used to compare the operational processes of

organizations that applied total quality management against those that did not apply the TQM to

their operational processes. The data was secondarily gotten from previous researches and other

relevant materials that helped to elicit adequate information. Using examples from the

information technology industry, banking sectors and service oriented organizations as the

sample population for organizations with TQM, while small scale industries were used as the

sample population for organizations without TQM. The results of the analysis are discussed in

the findings of section 4.0.

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4.0 FINDINGS

The study revealed that organizations that applied total quality management techniques had

developed consistency in their product and service quality. Which amounted to organizational

effectiveness. Total Quality Management is also a systems approach to management that aims to

enhance value to customers by designing and continually improving organizational processes

and systems (Kartha, 2004).

The works of (Gberevbie and Isiavwe-Ogbari, 2007) also reveals that satisfying customers and

building customer loyalty can achieve favorable market shares. Customer satisfaction has

measurable impact on customer loyalty in that when satisfaction reaches a certain level; on the

high side, loyalty increases dramatically; at the same time, when satisfaction falls to a certain

point, loyalty reduces equally dramatically.

It was also observed that the employees were more enthusiastic on their assignments and they

worked efficiently in carrying out their task when there are well-established communication

channel within the organization. Communications empowered employees with knowledge to

have the means to measure the quality of their own work processes, to interpret the

measurements, and compare these measurements to goals and take action when the process is not

on target. These empowered employees also understand who their customers are; what the

customers need, want, and expect; how to design new goods and services to meet these needs;

how to develop the necessary work processes; how to develop and use the necessary quality

measurements; and how to continuously improve these processes.

Customer Retention; several research works have shown that there is positive relationship

between customer satisfaction and customer retention. Customer satisfaction affects customer

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retention. Customer satisfaction is positively related to customer retention (Anderson et al,

1994).

5.0 RECOMMENDATIONS

The philosophies of TQM can be applied in an organization in order to improve on their product

and service quality, as well as the management processes as follows.

1. Develop a visionary leadership culture among the employees.

2. Inculcate a customer driven mentality in ensuring excellence in product and service

delivery.

3. The management should set realistic and attainable goals.

4. There employees should be encouraged to work smart with the provision of right

tools and equipment.

5. There should be a constant organizational and personal training of employees

6. Encourage and value the employees through a proper motivational or reward system.

7. Encourage creativity and innovation by the employees

8. Imbibe the culture of social responsibility

9. Focus on the future and long term growth of the organizations business

10. Develop a result oriented culture

11. Develop a system of operation that involves all cadres of employees in the planning

and implementation of quality management procedures.

6.0 IMPLICATIONS OF THE STUDY

There has been a huge transformation in the way things are done in the developed countries

especially in the World Eight, which include the United States of America, United Kingdom,

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France, Germany, Spain, Italy, Russia and Japan. In the 1980s and 1990s, many companies in

the US, EU and Japan followed the quality management approach in order to improve their

products and service. As a result, the companies that implemented the total quality

management practice experienced huge savings in production costs and thus higher returns

on investments.

In the developing countries such as Nigeria, quality improvement and total quality

management in particular have become very popular for the past three decades. The force

that generated this movement is the fierce competitiveness of the global market. As the

relative decline of the Nigerian economy deepens, industries will continue to jettison the

traditional ways of doing business and focus on efficiency and continuous improvement in

order to remain competitive (Agwu, 2014).

Agus (1994) also counseled that Total Quality Management should be a mind-set that needs

to be established in an organization’s operations if it is to be successful. At all levels, in all

departments, a mind-set of quality management and continuous improvement should be

primary when expanding and developing as a whole, where new challenges would be dealt

with in the most efficient way. Moreover, Quality within the organization’s processes and

employee’s performance should also be recognized and promoted as a distinguishing factor.

Curry and Kolou (2004) further recommended that when Total Quality Management is

imbibed and driven by top management, it inspires other members of the organization to

inculcate it into their daily work and self-training. It is always a part of the continuous

improvement mind set to continue to improve through daily actions and quality finally takes

care of itself (Agwu, 2014).

7.0 LIMITATION OF THE STUDY

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Due to time constraints, secondary data sources were relied upon to arrive at the findings,

recommendations and conclusions of this study. Comparative techniques of concluded

researches were also used to analyze variables due to the same reason of time constraints.

8.0 CONCLUSION

The theoretical view reveals that total quality management and customer satisfaction are major

components to the success of any modern organization. The study provided evidence that total

quality management practices have a positive impact on customer satisfaction. More so, the

result also shows the important role each total quality management constituent plays in ensuring

the attainment of organizational objectives. The multilateral relationship between top

management commitments, quality of goods and services and continuous improvement to

customer satisfaction was also unveiled by the study. Modern organizations seeking to improve

on the quality of service delivery therefore will need to rely heavily on the application of total

quality management concepts.

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