THE BUILDING BLOCKS OF TOTAL QUALITY MANAGEMENT: PROCESSES, PEOPLE, PERFORMANCE MEASUREMENT, AND MANAGEMENT SYSTEMS.

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1 INTERDISCIPLINARY JOURNAL OF CONTEMPORARY RESEARCH IN BUSINESS VOL 4, NO 7 THE BUILDING BLOCKS OF TOTAL QUALITY MANAGEMENT: PROCESSES, PEOPLE, PERFORMANCE MEASUREMENT, AND MANAGEMENT SYSTEMS. Rahim Ajao Ganiyu * (Corresponding author) Department of Business Administration University of Lagos, Nigeria. Ignatius Ikechukwu Uche Department of Business Administration University of Lagos, Nigeria. Adeoti Olusola Elizabeth Department of Business Administration University of Lagos, Nigeria. Abstract During the last two decades, the drive for total quality management (TQM) has been on top of the agenda of many organizations in the private sector and recently in public sector to improve productivity, quality and firm s competitiveness. In order to survive in a modern and competitive environment, organizations in industrial and service sectors need to carefully organize their activities regarding quality management to solve intricate quality problems in products and services. The study reveals that organization s should transform the traditional way of doing business into an organizational approach focusing on continuous improvement through the core building blocks of total quality management (i.e. process, people, performance measurement and management systems) in order to become competitive. Keywords: Product, service, quality, total quality management, process, people, performance measurement and management system. 1.Introduction Everyone has had one form of experiences or the other regarding poor quality of product or service when dealing with business organizations. These experiences might involve loss of a passenger s luggage by an airline, dry cleaner that has left clothes wrinkled or stained, poor course offerings and scheduling in university, a purchased product that is damaged or broken, or a pharmacy store that sells expired drugs etc. The experience of poor quality is exacerbated when employees/management of the company are either not empowered to correct quality inadequacies COPY RIGHT 2012 Institute of Interdisciplinary Business Research 629

2 or do not seem willing to do so. The consequences of such an attitude are loss of customers and opportunities for competitors to take advantage of the market need. Total quality management (TQM) is a management approach that originated in the 1950's and has steadily become more popular since the early 1980's. The use of TQM has become widespread among organizations. The aims of the businesses in pursuing quality goal may differ, but the importance of customers satisfaction, loyalty and retention is a matter of common interest, and the ability of organizations to adapt to dynamic customer requirements is of vital importance for firm long-term success. The development of systems and approaches for managing and controlling quality has also evolved rapidly. One of such is the growing interest in the use of international standard certification (ISO) for quality systems which has increased the number of certificates awarded in both developed and developing countries. Since the economic decline of the 1970s, simple inspection task or activities have been replaced or supplemented by quality control, quality assurance, and now total quality management (Dale, 1994). To successfully implement TQM, an organization must concentrate on eight key elements: Trust Ethics Training Integrity Teamwork Leadership Recognition Communication Total quality management (TQM) is a journey that has a beginning and it never ends. The word total implies that all members of the organization make consistent efforts to achieve the objective for a customer through systematic efforts for the improvements. Such participation will require specific efforts towards the acquisition of knowledge and skills facing day to day problems and making fast but low-risk strategic decisions (Thamizhmanil and Hassan, 2010). During the late 1990s, increasing globalization and market competition had made it necessary for every proactive business organization to strive for quality improvement. This new and challenging environment has COPY RIGHT 2012 Institute of Interdisciplinary Business Research 630

3 motivated management of many business organizations to assess and re-evaluate their competitive strategies and management practices with the aim of improving organizational performance in the area of quality. TQM is a management philosophy that integrates strategy, management practices and organizational outcomes to create a quality organization that continuously improves and sustain performance (Deros, 2004). Today s customers demand and expect high quality and companies that do not make quality a priority risk long-run survival. World-class organizations such as General Electric and Motorola attribute their success to having one of the best quality management programs in the world. These companies were some of the first to implement a quality program called, Six- Sigma, where the level of defects is reduced to approximately 3.4 parts per million. Review of literature revealed that there is no universally agreed definitions of TQM, however, as observed by Mann and Kehoe (1994) basically the variety of TQM definitions can be classified into two types, namely: definitions which describe TQM in terms of its ultimate goal; and definitions that describe TQM in terms of activities or functions that need to be addressed to achieve its objectives. Kanji and Baker (1990) defines TQM as a way of life and process an organization committed to customer satisfaction through continuous improvement. This way of life varies from organization to organization and from one country to another but has certain principles, which can be implemented to secure market share, increase profits and reduce costs. Dale (1994) defines TQM as the mutual cooperation and commitment of everyone in an organization and associated business process to produce products and services, which meet the needs and expectations of the customers. Meanwhile, Juran and Gryna (1993) defines TQM as a strategic philosophy aimed at achieving business excellence through the use and application of processes, and tools/techniques, as well as management of soft aspects, such as human motivation at work. An effort for quality product and service has been one of the private sector's main desire and preoccupations for a long time. It remains so today. In the early years of the quality trend, the focus on quality was structured around quality circles (Barra, 1988), quality control and quality assurance (Ishikawa, 1991). In the late 1980 s and early 1990 s, the definition of quality shifted its emphasis to a broader perspective; quality is now defined and driven by customer demand and satisfaction (Deming, 1986). Since the 2000 s, quality has often been referred to as the Lean Six Sigma process improvement management (Thomsett, 2005). Recently, the concept is synonymous with New Gold Standard which has been mostly used and applicable in the service and hospitality industry (Michelli, 2008). Since the 1990 s, TQM has begun to spread far beyond the private sector into the public sector as well (Carr and Littman, 1993). Academic research focusing on public productivity has also grown significantly during this period and assumes that TQM practices are indeed applicable to government services (Milakovich, 1990). COPY RIGHT 2012 Institute of Interdisciplinary Business Research 631

4 One issue that is still controversial from the literature on TQM is the definition of quality. To date, there is no consensus on this definition (Wicks, 2009). Quality has different meanings to different people in different institutions, public or private, depending on their specific perspective. By whatever definition, different approaches to quality have been applied by different organizations. Also in practice, many organizations recognize that TQM is a philosophy to improve quality performance. A review of the current literature on TQM practices indicated that much have been written about TQM implementation in large manufacturing companies in Europe, USA and the Far East (Rahman, 2001; Petroni, 2002; Sila, 2007). However, recent literature indicates that over time as TQM has entered its maturity, it also has become more controversial. Some scholars ask whether there is such a thing as TQM (Hackman and Wageman, 1995). This line of enquiry provides a basis for further study of TQM in theory and in practice (Lederer and Udey, 1997; Westphal, et al., 1997; Swift, et al., 1998; Zink, 2009; Dale, 1994; Gummer, 2000; Brown, 2006; Gregory et al., 2009 to mention a few). Yet it is still an empirical question whether or not TQM philosophy can be applied smoothly and successfully to any process, corporate environment or government agency (Aguayo, 1991). A growing body of literature deals on total quality management and it relevance for company survival and competitive advantage. Very few of these studies attempt to address the issue of the importance of the building blocks of total quality management i.e. process, people, performance measurement and management systems and how they can be successfully harness to achieve sustainable competitive advantage. The objective of this paper are three fold: (1) to fill some of the identified gap in the literature, (2) to contribute to the growing body of literature on quality management (3) to describe and evaluate TQM building blocks elements and how they can be properly utilized to achieve quality performance improvement. 2.0 Literature Review 2.1 Historical Evolution of TQM Literature In the early 1900 s, Frederick Taylor, founder of the Scientific Management movement, promoted his "one best way" principle as a set of scientific approaches and principles to measure the efficiency and productivity of any given task (Fredericks, 1903, 1911, 1947). Taylor s basic principles require four tasks that can be described as follows: (1) The development of performance standards; (2) The fitting of a worker to a specific task; (3) The provision of means to encourage best utilization of worker ability and (4) The organization control systems (Kanigel, 2005). COPY RIGHT 2012 Institute of Interdisciplinary Business Research 632

5 INTERDISCIPLINARY JOURNAL OF CONTEMPORARY RESEARCH IN BUSINESS VOL 4, NO 7 In the late 1980 s, the quality improvement movement and its potential impact on organizational theory and practice, often under the banner of TQM, appear to have several parallels with Taylor s principles (Kronenberg and Renee, 2005). In this context, TQM is more than just a slogan or a program; it is a paradigm shift that professes a fundamental change in values, theory, and practice of modern organizations. Virtually everything that has been written about TOM explicitly draws on the works of W. Edwards Deming, Joseph Juran, and Kaoru Ishikawa, (for a review, see Crosby, 1989). Creech (1994) praises Deming for what he contributed to the quality movement, but also places his contributions in the needed perspective of those companies striving for competitiveness. For that reason, the author offers a practical approach to structure and management of organizations for competitiveness. His management philosophy is summarized as empowerment with accountability and is based on the believe and realization that loyalty is a two-way thing and that an organization can only be as successful as those at the bottom are willing to make it. His emphasis is on the need to attend to all five pillars of TQM: (1) Product; (2) Process; (3) Organization; (4) Leadership; and (5) Commitment. The historical origin and development of TQM has been clearly established through the quality movement for most of the twentieth century. Garvin (1988) classified the historical evolution of TQM into four distinct stages: Quality inspection (1910s); Quality control (1924s); Quality assurance (1950s) and Total quality management (1980s). In recent years, TOM has become something of a social movement. It has spread from its industrial origins to health care organizations, service organizations, public bureaucracies, nonprofit organizations, and educational institutions. It has become increasingly prominent in the popular press, in the portfolios trainings and consultancy firms, and more recently creating wave in the scholarly literature. Some writers have asserted that TOM provides a historically unique approach to improving organizational effectiveness, one that has a solid conceptual background and at the same time offers a strategy for improving performance that takes account of how people and organizations actually operate (Wruck and Jensen, 1994). A more skeptical view is that TOM is but one in a long line of programs-in the tradition of task groups, job enrichment, and management by objectives. 2.2 What is Quality The concept of quality has existed for many years, though it s meaning has changed and evolved over time. In the early twentieth century, quality management implies inspecting products to ensure that they met specifications. In the 1940s, and during World War II, quality became more statistical in nature. Statistical sampling techniques were used to evaluate quality, and quality control charts were used to monitor the production process. In the 1960s, with the help of so-called quality gurus, the concept took on a broader meaning. Quality began to be viewed and perceived as something that encompassed the entire organization, not only the production process. Since all functions were responsible for product quality and all shared the costs of poor quality, quality was seen as a concept that affected the entire organization. COPY RIGHT 2012 Institute of Interdisciplinary Business Research 633

6 INTERDISCIPLINARY JOURNAL OF CONTEMPORARY RESEARCH IN BUSINESS VOL 4, NO 7 The meaning of quality for businesses changed dramatically in the late 1970s. Before then quality was still viewed as something that needed to be inspected and corrected. Today, successful companies understand that quality provides a competitive advantage. They put the customer first and define quality as meeting or exceeding customer expectations. Since the 1970s, competition based on quality has grown in importance and has generated tremendous interest, concern, enthusiasm, and controversy over its meaning. The term used for today s new concept of quality is total quality management (TQM). TQM is an integrated organizational effort designed to improve quality at every level of the organization which span from top to bottom and across all functions, all people, all departments and all activities must strive for improvement. However, defining quality is not as easy as it may seem, because different people have different ideas of what constitutes high quality. Today, there is no single universal definition of quality. Some people view quality as performance to standards. Others view it as meeting the customer s needs, conformance to specifications fitness for use, value for price paid or satisfying the customer. A frequently used definition of quality is Delighting the customer by fully meeting their needs and expectations. These may include performance, appearance, availability, delivery, reliability, maintainability, cost effectiveness and price. It is, therefore, imperative that the organization knows what customers needs and expectations are. In addition, having identified them, the organization must understand them, and measure its own ability to achieve them. 2.3 The building blocks of TQM: Processes, People, Performance Measurement and Management Systems. An organization's primary purpose is to stay in business, so that it can promote the stability of the community, generate products and services that are useful to customers, and provide a mechanism for the satisfaction and growth of organization members (Juran, 1969; Ishikawa, 1985 and Deming, 2000). The focus is on the preservation and enhancement of the growth, stability and competitiveness of the organization, but there are also explicitly stated values about the organization's context (the community and customers) and about the well-being of individual organization members: The total quality management (TOM) strategy for achieving its normative goals and outcomes is rooted in four interlocked assumptions-about quality, people, organizations, and the role of senior management. The major task of every organization involve a process, which is the transformation of a set of inputs, which can include action, materials, methods and operations, into the desired outputs, which satisfy the customers needs and expectations. In each area or function within an organization there will be many processes taking place, and each can be analyzed by an examination of the inputs and outputs to determine the action require or necessary to improve COPY RIGHT 2012 Institute of Interdisciplinary Business Research 634

7 quality. In every organization there are some very large processes, called key or core business processes. These must be carried out well if an organization is to achieve its mission and objectives. The only point at which true responsibility for performance and quality can lie is with the employees who actually do the job or carry out the process. An efficient and effective way to tackle process or quality improvement start with employees across all functions and is enhance through teamwork. However, people will not engage in improvement activities without commitment, recognition and reward from the management. In TQM, the role of employees is very different from what it was in the traditional settings or systems. Workers are empowered to make decisions relative to quality in the production process. They are considered a key element of the effort to achieve high quality. Their inputs and contributions are highly valued, and their suggestions are implemented. In order to perform this function, employees are given continual and extensive training in quality measurement tools and techniques. The Total Quality Management Process provides the basis for analyzing customer requirements, defining the processes that contribute to the achievement of a product or service that is acceptable to the customer, and the provisions for keeping these processes in control. Quality management system will help an organization not only to achieve the objectives set out in its marketing plan, but also, to sustain and build upon them. It is imperative that the leaders take responsibility for the adoption and documentation of an appropriate management system in their organization if they are serious and truly committed to the quality journey. Once the strategic direction and focus for the organization s quality journey has been set and established, it needs performance measures to monitor and control the journey. This should be establish at all levels in the organization, cascaded down and effectively undertaken as a team activities. Finally, attention and effort should be directed to sustain and enhance the level of performance consider satisfactory for the company s profitability and competitiveness. 3. Research Methodology and Methods 3.1 Descriptive/Explanatory Research Method This study being descriptive and explanatory relied on secondary data to describe and clarify the inter-connection between the building blocks of total quality management (TQM). This approach saves time that would otherwise be spent collecting data and, particularly in the case of qualitative study, provides larger and high quality data base that would be unfeasible for any individual researcher to collect on their own. Therefore, it is always wise to begin any research activity with a review of the secondary data in view of its attendant benefits (Novak, 1996). COPY RIGHT 2012 Institute of Interdisciplinary Business Research 635

8 INTERDISCIPLINARY JOURNAL OF CONTEMPORARY RESEARCH IN BUSINESS 4. Discussion and conclusions VOL 4, NO 7 Several names have been applied to TQM since the first days of the quality movement: Just-In-Time (JIT) and Total Quality Control (TQC) in the 1980 s, Total Quality Management (TQM) in the 1990 s, and then the Lean Six Sigma since the 2000 s. However, by whatever names it is called, these names all refer to quality and continuous improvement process in organizations with a focus on the customer. In other words, TQM has not gone away; it has just been renamed over time and it is still very much one of the approaches that have been successfully used in solving intricate problems in products and services. Total quality management (TQM) is a structured approach for meeting and exceeding customer needs and expectations by creating organization-wide participation in the planning and implementation of breakthrough and continuous improvement processes. It integrates with the business and strategic planning of the organization and can positively influence customer satisfaction and market share growth. It is also a system of management and a way of working, not a program that an organization simply sets in motion and then walks away from. It is a discrete form of organizational management approach that encompasses all levels of the organization in a focused and continuous effort design to provide products and services that satisfy customer demands. TQM is also unique because it is a system that is applicable across a wide variety of business sectors and functions. Successful companies understand the powerful impact customer-defined quality can have on business performance and growth. For this reason many competitive firms continually increase their quality standards. The bottom line is that quality has become an important business phenomenon. Crosby (1984) posits that quality may be free, but it is not a gift. However, it not given, because the cost of quality is the expense or price paid for doing things wrong. Therefore, the concept of quality should be clearly defined and understood from ontological, epistemological and practical perspectives. Only then can the quest for quality be justified. According to Creech (1994) organizations need to get a clear picture of what constitutes quality in their products and services; organize the work processes with small teams; provide appropriate training to everyone, from top leaders to employees; and provide clear feedback on how well the organization s is doing. TQM as a business philosophy requires that organizations maintain quality standards in all aspects of its activities. As such, the concept of TQM involves the integration of all functions and processes in an organization to ensure that it achieves continuous improvement of its products and services to meet customer needs. TQM as a concept starts with understanding customer needs and ends when those needs are satisfied. This approach ensures that things are done right the first time and that defects and waste are eliminated from operations. Specifically, from a business aspect, marketing processes should establish the true requirements for products or services; and these must be communicated properly throughout the organization in the form of specifications. Summers (2009) provides useful insights into a real organizations pursuit of excellence by exploring how quality management has progressed from an emphasis on the management of quality to a focus on the quality of managing, operating, and integrating all aspects of the organization encompassing customer service, marketing, production, information technology, and COPY RIGHT 2012 Institute of Interdisciplinary Business Research 636

9 finance. In an ever-changing world, the author concludes that the philosophies, tools, and techniques of quality management helps organizations manage their business effectively. TQM is the way of managing for the future, and is far wider in application than just ensuring product or service quality it is a way of managing people and business processes to ensure complete customer satisfaction at every stage, internally and externally. TQM, combined with effective leadership, results in an organization doing the right things right, from the first time. The core of TQM is the customer-supplier interface, both external and internal, and at each interface lie a number of processes. This core must be surrounded by commitment to quality, communication of the quality message, and recognition of the need to change the culture of the organization to create total quality. These are the foundations of TQM, and they are influence by the core element of TQM (i.e. process, people, performance measurement and management systems in the organization). TQM authorities specify four principles that should guide any organizational interventions intended to improve quality. The first is to focus on work processes. The quality of products and services depends most of all on the processes by which they are designed and produced. It is not sufficient to provide clear direction and hope for outcomes; in addition, management must train and coach employees to understand, analyze, and improve work processes (Juran, 1993; Ishikawa, 1985; Deming, 2000). The third principle according to these authors is management by fact. TOM calls for the use of systematically collected data at every point in a problem-solving cycle-from determining high-priority problems, through analyzing their causes, to selecting and proffering solutions. The fourth principle according to them is learning and continuous improvement. The long-term survival of an enterprise depends on treating quality improvement as a never-ending quest. Opportunities to develop better methods for carrying out work always exist, and a commitment to continuous improvement ensures that people will never stop learning about the work they do. COPY RIGHT 2012 Institute of Interdisciplinary Business Research 637

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