In Search of Glocalization of Total Quality Practices: Cultural and Institutional Aspects of TQM Adoption in South Eastern European Region

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1 In Search of Glocalization of Total Quality Practices: Cultural and Institutional Aspects of TQM Adoption in South Eastern European Region Alexandros G. Psychogios Senior Lecturer City College International Faculty of the University of Sheffield Leslie T. Szamosi Senior Lecturer City College International Faculty of the University of Sheffield Dialechti Fotopoulou Doctoral Researcher South-East European Research Center Introduction In the management literature an issue that has received particular attention is that globalization is often related to the Anglo-Saxonization or Liberalization of the business world. Varieties of Capitalism (VOC) theories (Wood & Frynas, 2005; Della Sala, 2004; Whitley, 1999) suggest that while general similarities between Liberal (Anglo-Saxon) and non-liberal markets exist, national peculiarities endure. In other words, non-liberal market economies are not convergent with the Anglo-Saxon ones and are likely to continue to evolve on distinct lines. Moreover, the majority of management concepts have Anglo- Saxon origin and therefore incorporating the cultural and institutional aspects of these systems (Djelic 1998). However, local cultural and structural constraints can impact the way that globally available Anglo-Saxon management concepts, can be adapted in non-liberal contexts (Meyer, 2004). Total Quality Management (TQM) is a prime example of a global management practice, mainly incorporated Anglo-Saxon ideology (Cole, 1999), that influence the shaping and operation of various business systems. Hence, a critical research question is how Anglo-American management practices can be applied in non-anglo-saxon business systems? These systems set a challenge for TQM given their institutional and cultural constraints in its implementation process (Psychogios, et. al,. 2008). In other words, from the implementation point of view it is quite difficult to easily apply TQM values globally (Noronha 2003) due to local cultural and institutional peculiarities. Therefore, the examination of the transfer of Anglo-Saxon management concepts to non-anglo-saxon systems is of great interest. An 1

2 interesting example of non-anglo-saxon business systems that are keen in the adoption of global management practices can be found at the South Eastern European (SEE) region. Country studies on European non-anglo- Saxon business systems are categorized to Western or Collaborative (Lane, C. 2003; Ferner et al, 2001), Eastern or Transitional (Lane, D. 2005) and Southern or Mediterranean (Della Salla, 2004). The SEE business environment might be viewed as either a distinct Mediterranean capitalism or a transitional model, en route to either a Collaborative or a Liberal Market Economy (Fotopoulou, et. al., 2007). The latter might suggest that SEE institutions are relatively fluid and hence particularly prone to any pressures towards convergence with the Anglo-Saxon model. In this respect, this paper sought to investigate the implementation of TQM programmes in the SEE regional context. In particular, this study explores the cultural and institutional factors in SEE counties that seem to influence the application of TQM. TQM Implementation in Context Perhaps the most interesting study that developed a conceptual model that contributes to an understanding of the differences which occur in quality practices and its application in different regions around the world comes from Prasad and Tata (2003). They argue that a series of socio-cultural, politicallegal, economic, and educational factors should be taken into account in the application of quality management practices across different countries. Beyond, this study there are several others exploring the application of TQM in different national contexts. The major conclusion from this literature is that the application of TQM varies as well as it is highly depended on the hostcountry cultural and institutional aspects. According to Maccoby (1994) TQM is successfully implemented in the Eastern World, where interpersonal relationships are valued more than individual work, as well as in the Western World where individual work is valued rather more. Especially, US, UK and Japanese organizations seem very keen towards the implementation of TQM-oriented practices (Aspinwall and Magana-Campos, 2003). However, differences can be observed. For instance, Yong and Wilkinson (1999) note that even thought the failure of 2

3 quality control circles at first was explained by the differences in culture, researchers found out that the failure was due to misunderstanding of the philosophical orientation underlying Japanese management (p.143). A lot of researchers examined the business system influence on TQM implementation through several cultural and institutional dimensions, like the use of power and education. For example, in total quality culture power is assigned through achievements and individual s decision upon ones destiny. According to Hope and Muchleman (2001) the problem arise in the company where workers see power assigned through ascription and where shared belief is that they cannot change anything because they do not have power to do so. Moreover, USA and Australia have different approaches in implementing TQM (Hope and Muchleman, 2001). In addition, Hergüner and Reeves (2000) state that power of higher education, in implementing TQM, can be challenging when change of culture is taking place. Higher education changes the way people think their needs in organization and requirements. More evidence can be drawn from the exploration of the application of TQM in a variety of other countries around the globe. For instance, in China the Confucian philosophy is strongly related to the TQM s one (Noronha, 2002). Confucian management style is strongly appreciated by the Chinese managers and, thus, they do believe that it is applicable to quality management as well. In addition, Lo (1998) explains that Chinese managers like having a formal hierarchy that is beneficiary to TQM. However, some other studies (Huyton and Ingold, 1995; Janner et al., 1998; Chen and Lu, 1998; Hope and Muhlemann, 2001) show a negative correlation between Chinese culture and TQM. In contrast, companies with Scandinavian culture have a strong need to emphasize work place democracy and employee participation (Tonnessen, 1997), which is vital element of TQM. In Mediterranean countries like Italy and Greece the lack of top and middle managers support and commitment can be seen as a great problem towards TQM adoption (Ruggiery and Merly, 1998; Psychogios and Wilkinson, 2007; Psychogios and Szamosi, 2007). Furthermore, according to Littrell and Valentin (2005) found that managers, and leaders of the company in the East are more predictable and more security-oriented than the West side business leaders, and that for example. 3

4 The above studies support a more contingency view that is likely to occur concerning TQM implementation in a specific business context, since specific features of cultural and institutional aspects strongly influence the adoption and implementation of TQM. Thus, as Roney (1997) explains, TQM must be applied within the context of the greater society. In other words, TQM approach has some potential for successful implementation in different national contexts insofar as their cultural and institutional determinants are not neglected during its application. However, the majority of the above studies explored TQM application in mainly Anglo-Saxon contexts. Less has been said about the cultural and institutional features of non-anglo-saxon systems. The latter, due to their late development, tend to be keen towards the adoption of sophisticated and structured management initiatives (Koufopoulos and Chrisohoidis, 2000). Moreover, few studies emphasise the exploration of TQM adoption in a regional level. The adoption of TQM programmes by a variety of private and public organisations in SEE is a prime example of such a region. According to Noronha (2002a, 2002b and 2003) TQM must be culturespecific in so far as its adoption in certain national environments depends on the underlying cultural factors. The present study expands this view by suggesting that TQM must be culturally as well as institutionally specific. Research Methodology This study adopted an exploratory research mode aimed at providing a wide range of quantitative and qualitative data concerning issues influencing TQM in SEE. In particular, managers working in variety of organizations in Romania, Serbia, Bulgaria and Greece were investigated. Although, this study was not targeting on a comparative analysis between different counties, it could be considered as primary ground for further research regarding the adoption of TQM programmes in SEE industries as well as other countries which have been slower, but keen, to implement global management concepts. Nearly 1800 questionnaires were distributed among managers identified through the National Management Associations and the 4

5 Economical/Commercial Chambers. A representative range of responses was based on both individual and organizational criteria. The former refers to managers : (1) age, (2) educational background, (3) the level of experience represented by their years of work in the particular position, and (4) the functions that they represent (HR, operations, administration, accounting/auditing, etc). The latter refers to: (1) organizational size, (2) organizational life cycle, (3) the country that they operate and (4) organizational policies and procedures towards quality improvement efforts. 782 questionnaires were returned from managers working in 123 service organizations in both sectors of employment, providing a response rate of 43.4%. Initially, Exploratory Factor Analysis (EFA) was used in order to develop groups of items that best represent the complex concept of soft and hard TQM and they have been analytically explored in previous studies (Psychogios, 2005; Vouzas and Psychogios, 2007). The EFA provided three main factors emerged for soft TQM principles and one factor from the hard side of it. Afterwards, variety of non-linear regression models were been developed that included six major control variables (age group, educational background, sector of employment, organizational size and organizational age, country of operation), which aimed to determine and investigate their potential impact on TQM. The qualitative part of the study was based on 34 follow-up semistructured interviews with managers who participated in the first part of the research project, and were randomly chosen. This stage aimed to investigate the hidden agenda of managers attitudes towards the adoption of TQM. For the purpose of data analysis, open ended answers were subjected to content analysis and close-ended questions were straightforwardly tabulated. Major Findings The analysis of the quantitative and qualitative data provide strong evidence towards the view that adaptation of global management practices, such as TQM seems to substantially affected by two groups of aspects. The cultural, including business-culture and the modernization forces, and the institutional, 5

6 including the education level of employees and the sector of employment (figure 1). Figure 1 Determinants of TQM Application in SEE Countries The first cultural component is the business/management culture of SEE countries, which is dominated by features that are mainly antithetical to TQM rhetoric. The data analysis addressed four elements that play a significant role in determining managers responses to TQM adoption. The first element is the top managers dominance over the system. The second one is managers autocratic/authoritative style of leadership. The third is the limited development of management practices in SEE. Finally, the wellestablished notion of specialists within SEE countries emphasises more the hard side of TQM rather than the soft one. The second cultural factor is that of modernisation movement. The background assumption is that the pressures of globalisation and increased competition have altered the way that SEE business systems operate. They attempt to change by modernising several business aspects. A part of this modernisation process is the adoption of global management concepts mainly from Anglo-Saxon countries (mimetic approach). The evidence suggests that these pressures of modernisation influence managers views towards the application of TQM. The first institutional component is the sector of employment. The critical question emerges: This study supports the view that the vast 6

7 difference between private and public organisations affected TQM application in SEE. In other words, centralised, politically controlled and non-competitive public sectors seem to influence public managers views on TQM application. In addition, the fact that private organisations emphasize competition and press for target s achievement have led private sector managers to adopt a more positive view about the implementation of TQM. The second institutional factor that seems to be of quite importance is the educational background of managers. The study s argument herein lies in the fact that there were differences in the perception of the TQM approach between managers with higher educational background (Masters Degrees or PhDs) and those with lower educational qualifications (Bachelors Degrees or Diplomas). The former seem to be more aware about TQM and also more willing to implement its aspects. The latter seem to mainly neglect its principles and therefore, see it as a potential obstacle in their personal development. In conclusion, this study attempts to investigate the glocalization process of TQM practices by arguing that the application of TQM, in business environments different from those TQM emerged, like the SEE one, should be seen in the light of both cultural and institutional factors. The former include the business culture and the modernisation movement, while the latter is related to the educational background and the sector of employment. It seems that the combination of these elements may push the system forward adopting TQM aspects, or pull it backwards inhibiting its fully integration. The present study gives strong evidence towards the fact that managers see the implementation of TQM passing through these aspects. However, more research is needed in order to investigate further this approach attempting to identify with more factors affecting the application of TQM, or to see specific differences among countries in SEE. References Aspinwall, E. and Magana-Campos, A. J. (2003) Comparative study of Western and Japanese improvement systems, Total Quality Management, 14,(4), pp

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