Reef Resources Assessment and Management Technical Paper ISSN: RRAMT Vol. 10, 2005, 2

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1 Reef Resources Assessment and Management Technical Paper ISSN: RRAMT Vol. 10, 2005, 2 THE IMPACT OF TOTAL QUALITY MANAGEMENT ON CORPORATE ORGANIZATIONAL SUCCESS Bhimaraya A. Metri * The construction industry has lagged behind other industries in implementing reform through total quality management. It has not followed the manufacturing industry in the implementation of TQM. The success of the total quality management (TQM) philosophy in manufacturing and other industries is forcing construction organizations to adopt TQM. This paper first outlines the imperatives of quality and its initiatives in the construction industry and then analyzes the critical success factors (CSFs) of the fourteen most prominent total quality management (TQM) frameworks. Based on the comprehensive analysis and examination of existing TQM frameworks and literature, the paper proposes the 10 critical success factors (CSFs) of TQM for construction industry. Finally, it describes the CSFs from the construction industry perspective. 1. INTRODUCTION The construction industry of any country is the backbone of its infrastructure and economy. Though it is a major contributor to the economy of any country, it faces the problems of high fragmentation, instability, low productivity, poor quality and lack of standards. Abd. Majid and McCaffer (1998) further established that most countries are dealing with the same common problems despite the differences in their economies. Due to the above mentioned quality problems, construction clients are not satisfied with the performance achieved on many of their projects (Kometa & Olomolaiye 1997). Kometa & Olomolaiye (1997) state that despite many efforts, apart from time * Ph.D., India Management Development Institute, P.O. Box No. 60, Mehrauli Road, Sukhrali, Gurgaon , India, Phone: , , , Ext 345, Fax: , [email protected] 61

2 and cost overruns, unsatisfied clients and other difficulties continue to plague the industry. Thus the reputation of the construction industry is ill suited for meeting the competitive challenges of today s fast changing market (Torbica & Stroh 1999), where the competitive edge is with those who manage their resources most effectively and offer a timely response to the demands of the market. Today, quality management has become one of the important forces leading to organizational growth and a company s success in national and international markets. The role of quality in construction has also been espoused by Belle (2000) and Burati et al. (1992). In order to emphasize the role of quality various aspects of quality tools and techniques have been also described in previous studies (Belle 2000, Metri 2004). Recently, efforts made to improve quality in construction are widely reflected in the relevant literature (Arditi and Gunayadin 1998, Rosenfed et al 1992, Mallon & Mulligan 1993, Kiwus & Williams 2001, Federley & Chase 1993). Many companies are frustrated in their effort to improve quality through TQM because these companies have exclusively focused on financial measures instead of quality measures (Torbica & Stroh 1999). Other studies, in the recent past also observed the failure of TQM. These failures are due to the too much- too soon effort without proper foundation and focus (Culp et al. 1993). Construction firms, therefore, need to understand the TQM CSFs for the successful implementation of TQM. Therefore, there is a pressing need to establish TQM CSFs for construction firms. This paper examines the TQM frameworks developed by scholars and businesses and develops the TQM CSFs for construction firms SELECTION AND ANALYSIS OF TQM FRAMEWORKS An extensive literature survey has been carried out to select TQM frameworks for this study. The relevant literature has revealed that different countries have adopted similar TQM frameworks in the form of quality awards with a different title. Today, there are more than a hundred quality awards existing in different countries. However, all these quality awards are basically derived from three basic and prestigious awards: the Malcolm Baldrige National Quality Award (MBNQA), the European Quality Award (EQA) and the Deming Prize. This study, therefore, includes only these three basic awards as TQM frameworks along with other frameworks developed by scholars. Furthermore, through the study of TQM literature, eleven TQM frameworks developed by researchers have been selected. In total, fourteen important TQM frameworks viz. Deming prize, MBNQA, EQA, Saraph et al., Oakland, Flynn et al., Babbar and Aspelin, Ahire et al., Black and Porter, Pheng and Teo, Ang et

3 al., Zhang et al., Nwabueze and Thiagarajan et al., were chosen from the TQM literature for the purpose of establishing TQM CSFs for the construction industry. A detailed analysis of the frameworks with respect to CSFs is carried out and presented in Table 1 Based on the frequency analysis, the CSFs are prioritised as shown in Table 2. Table 1. Analysis of TQM Frameworks TQM Critical success factors* frameworks Deming prize X X X X X X (2004) MBNQA (2004) X X X X X X X X X X EQA(2004) X X X X X X X X X X X Saraph et al X X X X X X X X (1989) Oakland (1993) X X X X X X X X X Flynn et al. X X X X X X X (1994) Babbar and X X X X Aspelin (1994) Ahire et al. X X X X X X X X X X X (1996) Black and Porter X X X X X X X X X (1996) Pheng and Wei X X X X (1996) Ang et al. X X X X X X X X (2000) Zhang et al. X X X X X X X X (2000) Nwabueze X X X X X X X X X (2001) Thiagarajan et al (2001) X X X X X *Note: 1 - Top management commitment; 2 - Strategic quality management; 3 - Process quality management; 4 - Design quality management; 5 - Education and Training; 6 - Supplier quality management; 7 - Customer satisfaction; 8 - Employee empowerment and involvement; 9 - Business results; 10 - Information and Analysis; 11 - Benchmarking; 12 - Resources; 13 - Impact on society and environment; 14 - Statistical process control; 15 - Culture. 63

4 Table 2. Prioritisation of CSFs Sr. No. Critical Success Factors Frequency of Occurrence Prioritised Rank 1 Process management Education and Training Customer satisfaction Top management commitment Supplier quality management Employee empowerment and involvement Information and Analysis Strategic quality management Design quality management Business results Impact on society and environment Benchmarking Resources Statistical process control Quality Culture ESTABLISHMENT OF CRITICAL SUCCESS FACTORS The frequency analysis shown in Tables 1. and 2. revealed that 13 out of the 14 frameworks have three CSFs in common: process management, education and training, and customer satisfaction. The analysis further revealed that 11 out of the 14 frameworks have four CSFs in common, viz., top management commitment, supplier quality management, employee empowerment and involvement and information and analysis. The strategic quality management and design quality management CSFs have their presence in nine and eight frameworks respectively. Quality culture, CSF, however, occurs only in the Black and Porter framework (Black and Porter, 1996). However there is ample evidence from the literature on the culture and success of quality initiatives. For instance, these researchers, Ahire and Ravichandran (2001), Ambroz (2004), Butch and Rivers (2001), Chan and Tse (2003), Jabnoun and Anwar (2002), Jenner et al. (1998), Laszlo (1998), Lewis (1996), Manley (1998), Perry (1997), Roney (1997), Sinclair and Collins (1994), 64

5 Waldman and Gopalakrishnan (1996), and Youssef and Zairi (1995) have all emphasised the importance of organizational culture for the implementation of quality initiatives in their studies. Culture is more powerful than anything else in the organization. Culture, ``how we do things around here in order to succeed,'' is an organization's way of behaving, identity, pattern of dynamic relationships, ``reality,'' or genetic code (Schneider, 1994). It has everything to do with implementation and how success is actually achieved. No management idea, no matter how good, will work in practice if it does not fit the culture. Therefore, quality culture is considered as one of the important CSFs of TQM. The other CSFs (namely, business results, impact on society & environment, benchmarking, resources and statistical process control) are presented in very few frameworks (Table 1and 2). It is a well known fact that the business results are the outcome of the above-mentioned nine important CSFs. Hence it is wise to consider them as a CSF. Similarly, impact on society and environment, and resources are mainly a part of top management commitment and partially other CSFs will take care of them. For example, design quality management may consider a product with a lower number of components which protect the environment with reduced maintenance cost. Also, the uses of recyclable materials reduce environmental harm. This way the design quality management CSF covers the impact on society and environment and resources. Benchmarking and statistical process controls are the techniques used normally for the process improvement. Hence in the real sense they are not considered as CSFs. They are part of the process management CSF. Thus, the examination of of TQM frameworks has revealed that not all the frameworks are comprehensive, but in many respects these frameworks complement one another. Therefore, a blending salient feature of these frameworks is the best approach for the establishment of critical factors for construction quality management. Therefore, the following ten CSFs have emerged out of the above analysis: 1. Top management commitment 2. Quality culture 3. Strategic quality management 4. Design quality management 5. Process management 6. Supplier quality management 7. Education and training 8. Empowerment and involvement 65

6 9. Information and analysis 10. Customer satisfaction. 4. DESCRIPTION OF TQM CSFs Top management commitment Research suggests that most quality tools associated with TQM do not generally produce an advantage, but a certain tacit behavioural feature such as executive commitment can produce an advantage. Many a time TQM initiatives have failed to fulfil their potential due to lack of senior management commitment to the quality process. Thus, for TQM, commitment by the management is essential. Without it; there is no need to proceed further Quality culture The factors like use of information for improvement, authority equal to responsibility, job security, climate of fairness, compensation based on equality, teamwork, collaboration, learning and involvement, ownership, and development form an organizational culture, which then leads to increases in productivity, quality, and customer and employee satisfaction. Failure of the TQM is attributed to a lack of developing and sustaining a quality oriented culture and mismatch of organizational culture. In a sense, TQM fundamentally requires a new culture. In the construction industry, company culture and project culture both co-exist and need integration Strategic quality management Strategic quality management concepts must be put into practice by the inclusion of quality objectives in the strategic planning process and through strategic planning frameworks, like quality function deployment (QFD), which provides specific instructions for approaching, executing, and evaluating the development of strategic concepts. Internal issues develop a long-term road map with the incorporation of core competencies concepts and emphasize the adoption of new technologies. External issues are the response of the organization to the economic swings in the industry, the impact of new market opportunities on existing business practices and protection against competitors Design quality management Superior designs result in distinct competitive capabilities such as fast delivery and flexibility. In construction projects, new designs are thoroughly

7 reviewed before construction and experimental design is used extensively in structure design. Clarity of specifications and avoidance of frequent redesigns is emphasized. Detail design, schedule and cost estimate, design evaluations, constructability in design, control of design activity are part of design quality management. Thus good design quality management results in an excellent quality of core service that positively influences customer perceptions of quality and an important aspect of TQM Process management Process management focuses on managing the construction process so that it operates as expected, without breakdowns, shortage/missing materials, tools, etc. It is needed to reduce rework and waste due to mis-specification of processing parameters. This provides clarity of ownership and less reliance on inspection. In the context of construction, specific activities like planning the sequence of field tasks, analysis of layout, access, temporary facilities, innovative use of materials, innovative use of construction equipment and tools, and the use of pre-assembly or pre-fabrication items are carried out. Also, constructability is included in the contract document. Pre-work, demobilization, execution are a part of process management 4.6. Supplier quality management Supplier quality management includes fewer dependable subcontractors, reliance on suppliers process control, strong inter dependence of supplier and customer, purchasing policy, emphasizing quality rather than price, supplier quality control and supplier assistance in quality development. Materials are often a major source of quality problems and affect buyer satisfaction. Instead of relying on tools such as acceptance sampling to establish the quality of incoming materials and component parts, it is preferable for constructors to purchase from a more limited number of qualified or certified suppliers Education and training Education and training forces employees to not only possess the adequate knowledge and skills to perform their jobs, but also to possess specific values, knowledge, and skills associated with TQM issues and activities. Reasons cited for the failure of TQM initiative include the lack of appropriate training and inadequate knowledge. Thus employees will be motivated to engage in qualityoriented behaviour when their roles and the relevance of their training to overall quality goals are clarified. 67

8 Empowerment and involvement Empowerment and involvement enhances the individual's self-esteem and improves his/her ability to solve problems and to make low-risk decisions. Worker motivation, responsibility, and accountability are generic concepts that can benefit any business organization. The causes of ongoing quality problems like lack of team work, conflict, and lack of worker involvement are overcome by personally participating in quality improvement activities, which leads to the success of TQM Information and analysis Information and analysis consist of evaluation for various policies and strategies, quality audit, analysis of quality costs, department/function performance evaluation, and employee and supplier performance evaluation. If there is inferior dissemination of the generated information, quality techniques like benchmarking and SPC tools will be rendered ineffective. To maintain a true customer focus, an organization must ensure prompt feedback of customer survey results to appropriate functional areas for effective actions Customer satisfaction A construction organization may outperform the competition by being able to anticipate and respond quickly to customers demands with new ideas and technologies and to produce constructed facilities that satisfy or exceed customers expectations. Despite the use of the latest process improvement techniques and capable management, a firm's neglect of its customers may lead to disaster. Without customer focus, the TQM programme will lack the foundations on which to build further. 5. CONCLUSION The construction industry does not follow the lead of manufacturing. The analysis of fourteen of the most prominent TQM frameworks has revealed that out of fifteen CSFs, nine CSFs, are common in most of the frameworks. The analysis further pointed out that none of the frameworks are comprehensive. Apart from the Black and Porter framework, quality culture CSF does not exist in other frameworks even though there is ample evidence in the literature on the culture and success of quality initiatives. Using the nine common CSFs and the

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