Dissertation Final (submitted)

DE MONTFORT UNIVERSITY

LEICESTER BUSINESS SCHOOL

Impacts of TQM on Firm’s Organic

Growth- A Case Study of Mitsumaru

Group (BD)

SM Kudrate Khuda

A dissertation submitted in part requirement for the award of

MSc Accounting & Finance

[September, 2010]

Impacts of TQM on Firm’s Organic Growth- A Case Study of

Mitsumaru Group (BD)

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Impact of TQM on Firm’s Organic Growth – A Case Study of Mitsumaru Group (BD)

by SM K Khuda

Abstract

This case study intended to develop the grounded theory regarding the impact and

relationships of TQM practice on firm’s internal growth in developing countries,

particularly in Bangladesh where different cultural settings. This case study also

investigated constrain relating to organisational culture and practice on TQM

implementation in Bangladesh. For this research purposes, an extensive literature

review has taken and developed the comparable criteria between TQM constructs (e.g.

employee satisfaction, customer satisfaction, process development, and management

approaches) and firm’s growth parameters (e.g. productivity, sales, net profits, and

market share), and necessary data has been collected through questionnaire and

company reports from Mitsumaru Group (BD) in Bangladesh. 100 questionnaires have

been sent in July 2010 from top management to general staffs within five departments,

e.g. sales, marketing, production, accounts and finance, and human resources

department and 37% of valid responds rate has been obtained. The results of analysis

show that TQM practice in Mitsumaru Group (BD) has significant positive impacts on

customer satisfaction, employee satisfaction, process development, and management

approaches. Result of the research also indicates that there are significant direct

relationship exist and have positive impact in between TQM construct employee

satisfaction and growth parameter productivity, between customer satisfactions and

sales, between customer satisfaction and market share. However, result of this case

study, on the other hand, identified that though TQM construct management

approaches may have positive impact on growth parameters, it is not directly relates

with any growth parameters; and although growth parameter net profit may affected by

all TQM constructs, it is not directly related with any TQM constructs. Result also

suggests that organisational culture and practice may appear as a great limitation on the

way of successful TQM implementation in Mitsumaru Group (BD) in Bangladesh.



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Acknowledgements

My cordial kind gratitude and thanks should be gone many people who ha ve been

supporting me throughout my successful career. Some words are not enough to

express my feelings to thanks them. Firstly, it should be remember cordially the

contribution of my mother, family members, and relatives in my life. My thanks

should be gone to my beloved friend Faria Khan who always has been giving me

confidence and support. It should also be appreciated to the management, staffs,

and all associated people of Mitsumaru Group (BD) for giving me opportunity of

conducting this research.

This research may not be possible for me without helps, support, and advice from

my supervisor and also my course module leader Miss Alexandra Charles and other

teachers, administrative staffs of De Montfort University; my thanks and kind

gratitude should be gone to all of them. My thanks also should go to all of my class

mates and friends.



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Table of Contents

Chapter One: Introduction and Rationale

Introduction............................................................................................... ..................9

Rationale....................................................................................................................12

Research Objectives..................................................................................................17

Research Questions..................................................................................................18

Chapter Two: Review of Quality Principles and TQM Constructs

Introduction................................................................................................................19

Customer Focus........................................................................................................20

Leadership.................................................................................................................22

Involvement of People...............................................................................................23

Process Approach.....................................................................................................25

System Approach to Management............................................................................26

Continual Improvement......................................................................................... .....27

Factual Approach to Decision Making.......................................................................28

Mutually Beneficial Supplier Relationships................................................................29

Conclusion.................................................................................................................30

Chapter Three: Review of Quality Award Models

Introduction.................................................................................................... ............31



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Malcolm Baldrige National Quality Award (MBNQA).................................................33

The European Quality Award (EQA)..........................................................................36

The Deming Prize......................................................................................................40

The Bangladesh Business Awards............................................................................43

Conclusion.................................................................................................................44

Chapter Four: Review of Integrated System of TQM with JIT and Six Sigma

Introduction........................................................................................................ ........45

TQM and JIT Integrated System................................................................................46

TQM and Six Sigma Integrated System....................................................................48

Conclusion.................................................................................................................49

Chapter Five: TQM in Developing Countries

Introduction...................................................................................................... ..........50

Conclusion.................................................................................................................51

Chapter Six: Research Methodology

Introduction…………………………………………………………………………………52



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Grounded Theory…………………………………………………………………………..53

Research Design…………………………………………………………………………..54

The Survey………………………………………………………………………………….56

Sample Size………………………………………………………………………………...58

Research Questions……………………………………………………………………….58

Research Scope and Limitation.................................................................................60

Mitsumaru Group (BD) and Air Condition Industry in Bangladesh............................62

Chapter Seven: Analysis and Findings

Introduction................................................................................................................64

Analysis of Data from Questionnaires.......................................................................64

Analysis of Secondary Data.......................................................................................80

Conclusion.................................................................................................................82

Chapter Eight: Interpretation of Findings

Introduction................................................................................................................83

Involvement of People...............................................................................................83



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TQM Practice, Customer Satisfaction, and Sales......................................................84

TQM Practice, Customer Satisfaction, and Market Share.........................................85

TQM Practice, Process Development, and Productivity............................................87

TQM Practice, Employee Satisfaction, and Productivity...........................................88

TQM Practice, Management Approaches, Customer Satisfaction, Employee

Satisfaction, and Process Development…………………………………………………90

TQM Practice and Mutual Relationship between Organization and Outside

Entities………………………………………………………………………………………92

TQM Practice and Constrains....................................................................................92

Conclusion.................................................................................................................93

Chapter Nine: Conclusion and Recommendations

Conclusion.................................................................................................................95

Recommendations.....................................................................................................99

Reflective Statement.............................................................................................101

Appendices: Sample of Questionnaire...................................................................105

References.............................................................................................................112



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List of chats, diagrams, and tables

Figure 1: Distribution of respondents according to the departments........................65

Figure 2: Distribution of respondents according to years spent in Mitsumaru Group

(BD)………………………………………………………………………………………….66

Figure 3: Distribution of respondents according to the positions..............................67

Figure 4: Distribution of respondents according to awareness about TQM

implementation in Mitsumaru Group (BD).................................................................68

Figure 5: Distribution according to the impact of TQM on customer satisfaction......69

Figure 6: Distribution according to the impact of TQM on employee satisfaction.....70

Figure 7: Distribution According to the impact of TQM on process development.....71

Figure 8: Distribution according to the impact of TQM on management

approaches................................................................................................................72

Figure 9: Distribution according to the impact of TQM on mutual relationship

between organisation and outside entities.................................................................73

Figure 10: Distribution according to the impact of customer satisfaction on sales. ..74

Figure 11: Distribution according to the impact of customer satisfaction on market

share..........................................................................................................................75



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Figure 12: Distribution according to the impact of employee satisfaction on

productivity.................................................................................................................76

Figure 13: Distribution according to the impact of process development on

productivity.................................................................................................................77

Figure 14: Distribution according to the impact of management approaches on

customer satisfaction, employee satisfaction, and process development.................78

Figure 15: Distribution according to the impact of organisational culture and practice

on TQM practice........................................................................................................79

Figure 16: Increases of growth paramiters under TQM practice from 2007 to

2009...........................................................................................................................80

.

Figure 17: Impact of TQM on sales and market share in Mitsumaru Group.............86

Figure 18: Impact of TQM on productivity in Mitsumaru Group................................89

Figure19: Impact of management approaches on customer satisfaction, employee

satisfaction, and process development by TQM practice..........................................91

Figure 20: Internal growth model under QTM practice.............................................94



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Chapter One

Introduction and Rationale

Introduction

After 20 years of Second World War, management faced the most challenging task

within an organisation was productivity, in particular capacity of production

(Withers,B.E. et al., 1997). However, in today‘s globalisation era, this issue has

gone. Now consumers are more demanding and perceptive, so strategic planning,

comparative possibility and firm‘s growth are the most challenging issues in

operational activities of management. Growing demands by consumers for value, in

other words, more comparative quality against price have been forcing management

to develop quality in firm‘s performances. Thus, in order to capture share in global

competitive market, a most critical and challenging task of management to improve

quality in every aspect within optimal cost limits (Vasilash, 1995).

The total quality approach was represented by Japan‘s strategies which focused

more on developing in every operational process rather than depending on

inspection of products. Consequently, higher quality products were produced and

exported by Japanese firms at lower price which helps to capture global market (The

American Society for Quality, n.d.). During the 1970s and 1980s, Japanese products

emerged to catch attention of global market and got success which specially has got



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attention by US management in the area of quality issues. Followed by, US

management took initiatives and implemented various quality procedures and

methodologies in order to develop quality in products and thereby come back in

global market competition. Quality control, total quality management and just-in-time

were included in these initiatives. However, a greatest attention has been captured

about quality initiatives taken by firms that considered quality as a key factor to face

national and global competitiveness. Therefore, firms, practitioners, researchers and

institutions have acknowledged the role of quality (Withers,B.E. et al., 1997;Yusof,

1995).

By taking initiative as the leadership role by the most of The CEO of major U.S.

corporations moved forward to quality movement. More emphasis has been given by

the U.S. firms on approaches rather than statistics that press the all organisational

processes in quality improvement, recognised as Total Quality Management (The

American Society for Quality, n.d.). In 1950s, from the orientation of total quality

management has emerged in business practice and become prominent in early

1980s. ―Total Quality Control was the key concept of Armand Feigenbaum‘s 1951

book, Quality control: Principles Practice, and Administration, a book that was

subsequently released in 1961 under the ti tle Total Quality Control‖ (Metha, 2008 , p.

8). Followed by many other scholars have contributed to develop from total quality

control concept to total quality management (TQM) philosophy, e.g. Crosby,

Ishikawa, Deming, and Juran are the most prominent scholars in this area.



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However, in corporate management, firms‘ growth may be one of the prominent

issues as returns market recognition and firms achievement (Glancey, 1998). By

improving quality standard, a high quality of products and services offering could

help to increase productivity, sales, net profits, market share, and size of operational

activity ; therefore, capture new market share and increase profit which are easier

for organisational control, management control one of the significant issues that lead

to influence management to drive for organic growth( Wilson, 2010).

Over the last twenty years, many researchers have tried to find out the relationship

between Total Quality Management (TQM) and performance of firms. Mann and

Kehoe (1994, p.29) stated that ―TQM in the 1990s, organizations have sought to

refine their TQM methodologies and in particular to identify those quality activities

which most directly affect business performance‖. In literature, there are many

arguments have been taken place about impacts of TQM implementation on firms.

Prajogo and McDermott (2005, p.1101) ―Literature has noted numerous stories on

the problematic issues relating to the implementation process and how they affect its

outcomes‖. However, scholars have paid very small attention on the impact of

TQM on a firm‘s organic growth and organisational culture, especially in Southeast

Asia, where firms most likely depend on internal growth as well operating within

different cultural settings.

However, now days, besides U.S., Japan TQM practice is going more prominent in

developing countries in Asia, e.g. China, India (Woon, 2000). Nevertheless, It could



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be mentioned that ―Confucianism has been found to be useful for efficient

implementation of TQM in Southeast Asian countries‖ (Tan and Khoo, 2002 cited in

Kumar and Sankaran, 2007, p.176). Kull and Wacker (2010) have found that though

TQM practice has implemented, a certain cultural fact has exist in Asia which is one

of the significant elements of TQM practice in Asian countries. Further, Mohammad

and Rad (2006, p.607) discussed that ―Cultural change is essential for the successful

implementation of TQM. The relationships between organizational design and TQM

success may indeed be varied in a particular degree of cultural values‖.

Rationale

Having an influence of worldwide competitive business environment, government

bodies have tried to give confidence firms to get better quality by setting up

recognised certificates for firms getting precise quality standards. In this regards,

within TQM process, local culture should be adjusted and considered with employee

training and development, diversification of power, decision making process, group

problem solving, and receptiveness to customers. The development of different

products or services and processes may meet customer satisfaction through

continues improvement of employee and customer engagement, sharing information

and training and empowerment of employee by Successful implementation of TQM

(Withers,B.E. et al., 1997).



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Black and Porter (1996) carried out a work to find out the essential achievement of

the TQM concerns through members of the European Foundation for Quality

Management. They considerably agreed that customer relationship, supplier

relationship, developed communication system, consumer satisfaction orientation,

strategic quality management effective arrangement for quality improvement

measurement, functional quality forecast and altogether company quality culture

were the foundation of TQM achievement.

On the other hand, it seems that firms may not face any cultural problem by internal

growth considering the culture of a particular organisation. Organisational and local

culture may important issues considering producing innovative idea to developed

quality, implementing new philosophy for any kind of growth (Wilson, 2010;

Mazzarol, et al., 2009; Glancey, 1998). However, regarding internal growth of firms,

it would be easy to adjust with any kind of changes bring new philosophy like TQM,

because firms may get long time to prepare for adjusting with new environments. In

this regard, in developing countries, particularly in Bangladesh, where different

cultural settings and firms mainly depend on internal growth; internal growth

parameters e.g. increase in sales, profits, and capture market share, improvement in

employee efficiency, distribution and service networks and products ranges may be

influenced significantly by TQM implementation.



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TQM has the prospective to create economical benefit. Reed et al. (2000) argued

that creating economical gain not only depend on TQM but also on the setting

culture, company direction and the best fit among the strategy. Sousa and Voss

(2002) implied that further research should be carried out to formulate guiding

principle about what practices organisations should go through at diverse phase of

TQM development and what may be the best TQM practice operation cycle to arrive

at the expected out comes.

Kaynak, 2003; Fuentes et al., 2004; chong and Rundus, 2004; Sadikoglu, 2004; York

and Miree, 2004; Kannan and Tan, 2005; Ranhman and Bullock, 2005;Prajogo and

Sohal 2006; Nair, 2006 along with many scholars conducted their research to

understand the link between TQM and firm‘s performance. Some researchers

argued that performance could be different of the impacts of a TQM practice on

various types of firms. However, high or low performance of a firm may determined

by some certain TQM elements (Kaynak, 2003).

Ojanen et al. (2002, p120) discussed that ―the quality of the R& D process is one of

the critical success factors influencing the performance and success of a company‘s

R&D activities‖. According to a study by Cooper (1998), a high quality innovative

product procedure is the strongest general denominator surrounded by sky-scraping

performance of firms. The successful management of R&D necessitate suitable



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metrics for measuring the quality. ―TQM is much more than a number of critical

factors; it also includes other components, such as tools and techniques for quality

improvement‖ (Tari and Sabater, 2004, p.267 as cited to Hellsten and Klefsj . o,

2000).On the other hand, (Sousa and Voss, 2002 as discussed by Tari and Sabater,

2004, p.268), ―in some cases, the impact of TQM practices on a firm‘s performance

is weaker and not always significant‖.

However, Withers,B.E. et al. (1997) further discussed that firms have weaker

assurance in highest management that are not incorporated with TQM .TQM

operation appears to consider for significant development of dissimilarity that are

occurred within organisation. TQM incorporated firms are stable and noticeably

diverse from the firms that do not have TQM system. From the TQM standpoint,

higher management‘s insights of crucial tasks are for successful operation of every

quality programme.

On the other hand, York and Miree (2004) have found that there is no significant

relationship between practice of TQM and firms performance. They also stated that

before and after the winning of the Baldrige or state quality award, financial

performance of TQM companies were better than non TQM companies and a

covariance relationship exists rather that fundamental relationship between financial

performance and TQM practice. Moreover, many researchers, e.g. Sadikoglu, 2004;



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Prajogo and Sohal , 2004; 2006; have established that apart from having a directly

effect on quality performance, there is no important impact of TQM practice on the

operational performance, quality and innovation performance, and product and

process innovation performance. Lagrosen, (2000, p. 467) noted that TQM has

positive effects in increased in creativity and capability to innovative changes‘

implementation; however, ―only two negative effects were found: a temporarily

increased workload, and envy from the other clinics‖.

However, some scholars found that a number of subgroups of TQM are significantly

inter related; e.g., product innovation is more associated with leadership and people

management; similarly, product quality is significantly related to Customer focuses

and process management (Prajogo and Sohal, 2004). Moreover, a number of

researchers argued that financial performance, quality performance, operational

performance, customer satisfaction, product and process innovation, market share,

and firm performance are significantly positively associated with TQM practices

(Zehir and Sadikoglu, 2010; Lau et al., 2004; Sanchez-Rodriguez and Martinez-

Lorente, 2004; Douglas and Judge, 2001; Das et al., 2000; Samson and Terziouski,

1999).



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Research Objectives

Broad objectives:

The objectives of this research are based on the TQM practice and implementation

within organisational culture and practice in Bangladesh, these are as follows:

- To assess the impacts of TQM implementation on the internal growth of

Mitsumaru Group (BD) in Bangladesh.

- To assess the constraints associate with TQM implementation model within

organisational culture and practices in Mitsumaru Group (BD) in Bangladesh.

Therefore, this research would be able to extent and develop knowledge about

implementation of TQM in different organisational cultural settings and practices,

particularly in Bangladesh which could be helpful for firms in Bangladesh for

removing the constraints and successful practice of TQM philosophy.

Specific objectives:

Based on the broad objectives and the TQM implementation in Mitsumaru Group

(BD) in Bangladesh; and the major internal growth parameters, the specific

objectives are follows:

- To assess the impacts of TQM on sales of Mitsumaru Group (BD in

Bangladesh.

- To assess the impacts of TQM on market share of Mitsumaru Group (BD) in

Bangladesh.



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- To assess the impacts of TQM on productivity of Mitsumaru Group (BD) in

Bangladesh.

- To assess the impacts of TQM on net profits of Mitsumaru Group (BD) in

Bangladesh.

- To assess the constraints association with organisational cultural and

practices and its impacts to implement TQM in Mitsumaru Group (BD) in

Bangladesh as different cultural settings.

Research Questions

For this research, following two research questions have been proposed on the basis

of research objectives and empirical literature review:

- Does TQM have positive impacts on internal growth of Mitsumaru Group (BD)

in Bangladesh?

- What type of firm‘s growth model should be developed under TQM practice

that can be adjusted within organisational culture and practices of Air

Condition manufacturing industry in Bangladesh?



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Chapter Two

Review of Quality Principles and TQM Constructs

Introduction

Concept of quality principles of TQM have been introduced by Crosby, 1979;

Ishikawa, 1985; Deming, 1986; Feigenbaum, 1991; and Juran, 1993. In many

literatures, they discussed about different factors and principles of TQM. However,

there are some common principles have been found which are management

commitment, strategic process, employee training and involvement, improvement of

quality control and development process, and systematic approach in all activities

(Metha, 2008). Samson and Terziovski (1999, p.393) stated that ―Most

manufacturing companies in Europe, the USA, Japan and Australia have tried

working in some way on improving the following key components of TQM:

Leadership, Management of people, Customer focus, Use of information and

analysis Process, improvement Strategic and quality planning.‖

However, International Organization for Standardization (ISO) has introduced eight

quality management principles based on ISO 9000:2000and ISO 9000:2008 series

of quality management system standards; which are customer focus, leadership,

involvement of people, process approach, system approach of management,

continual improvement, factual approach to decision making, and mutual beneficial



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supplier relationships(ISO, 2008). Researched carried out by Sila and Ebrahipour,

2003; Claver et al.; 2003; Conca et al., 2004, suggested that these principles are the

most key elements of TQM (Zehir and Sadikoglu, 2010).

Customer Focus

Customer focus means that to fulfil customers‘ present and future expectations; even

try to exceed the expectations for long term value creation through producing and

delivering products or service (Dean and Bowen, 1994). ISO (2008) emphasised on

customer focus and described that ―Organizations depend on their customers and

therefore should understand current and future customer needs, should meet

customer requirements and strive to exceed customer expectations‖ . Sadikoglu,and

Zehir (2010) commented that company success depends on serving the customer

and this can be achieved by top management commitment focusing the

organization‘s resources on satisfying customers and group effort in all aspects.

Customers are the final judge of quality standards, thus companies should consider

fulfilling the customers‘ requirement as a goal. Therefore, varieties course of actions

should be taken place to maintain customers‘ relationship closely, understand the

changing needs and cultures (Bullington et al., 2002).



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Customer satisfaction is a process to fulfil customers‘ requirements by providing

services or making products. As earliest discussion, customers are the final

determiner of quality, so these determined factors should be the scale of customer

satisfaction (Anderson et al., 1994). Company image could be ruined by unsatisfied

customers, therefore employees who maintain the customer relationship should give

emphasis more to satisfy customer. In contrasts, by satisfying customers, company

may create loyal and dependable markets. Having a good amount of satisfied

customers, company could keep continue its growth. Therefore, customer

satisfaction culture should be driven internally and externally and importantly

employees and suppliers should treat themselves as customers (Dean and Bowen,

1994).

There are many significant positive relation have been found among customer focus

and other organisational factors, e.g. financial performance, operational

performance(Nair,2006); customer satisfaction(Forza and Flippini, 1998); product

and service quality (Ahire and O‘Shaughnessy, 1998); and firm performance (Chong

and Rundus, 2004). Nevertheless, Rahman and Bullock (2005) stated that there may

not have any direct significant relation between customer focus and quality

performance. In addition, innovative improvement could lead to satisfy underlying

expectations of present and future customers for long term rather than customer

focus that may meet current need of existing customers through gradual

improvement of existing product and services.



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Leadership

Leadership is the key driver of an organisation to lead , utilise, and manage people

and resources, internal management control, and internal and external relationships

(e.g. customers, suppliers, workers, and social and governmental bodies) for fulfilling

the firm‘s objectives. Long term strategic decision making, participating for

accomplishment of planning, creative management style, employee empowerment,

and intelligibility of objectives are main characteristics of successful leadership

(Anderson et al., 1994).

The confident has been created by leaderships inside the organisation is significant

factor for his or her effectiveness. Organisational purposes and direction should be

controlled and leaded by leaders. Having commitment to give a great effort, leaders

motivate and organise themselves as well as people to achieve firm‘s objectives. As

to Deming, having clear visions and leading people towards the visions makes

leaders different from management (Gluckman and Roome, 1993).

There are many significant positive relation have been found among leadership and

others components of organisation in many literatures such as Nair (2006) financial

performance and operational performance; Kannan and Tan (2005) customer

service performance, and market share and competitiveness; Ahire and

O‘Shaughnessy (1998) product and service quality, and firm performance; Shieh and



23

Wu (2002) project performance. Conversely, Choi and Eboch (1998) found that

financial performance is very slightly related to leadership.

Involvement of People

According to point 9 of Deming, every department has driven to achieve own goal,

therefore, there are many conflicts exist among various departments which resulted

some constrains to achieve common objectives of a firm. Works should be done by

co-ordinating among departments and people should give emphasis on

interdependent responsibility as a part of team rather than acting independently.

Similarly, in order to improve quality, people should play their role as a team that

may help to solve anticipated problems in production or service delivered as well.

Loss of time and extra cost may be incurred, if designing of teamwork and

coordination are not been done perfectly from the beginning (Hackman and

Wageman, 1995).



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However, joint effort takes place between managers and non-managers, between

operations, and between suppliers and consumers. Non-managerial workforce could

make important contribution when they are authorized to hold power, so employee

suggestions and involvement should be positive. Operational performances should

work as a squad in order to achieve a common objective and stop subunit

optimization (Dean and Bowen, 1994).

Nair (2006) has found that financial performance and firm performance are

significantly related to involvement of people, e.g. employee empowerment,

teamwork. In addition, Rahman and Bullock (2005); and Anderson et al. (1994) have

found that there is a significant relation among involvement of people, quality

performance and customer satisfaction. However, Fuentes et al. (2004) discussed

that there is a negative relation between financial performance and people‘

involvement. It could be argued that ―employees involve to improve the existing

system incrementally by focusing on the details of the current quality process instead

of on new ideas to change the current system of working substantially since they

have pre-designed production system, thus, involvement of people in TQM is not

compatible with re-engineering and breakthrough improvement‖ (Prajogo and Sohal,

2004 cited in Zehir and Sadikoglu, 2010: p.8).



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Process Approach

TQM is a systematic and scientific thinking process that gives emphasis on constant

development of performance in every department of firms in order to make available

the best value to consumers. Li, L. et al. (2008, p.570) discussed that ―TQM

necessitates organizational changes and seeks to improve all processes and every

business activity‖. Within business process, TQM set a profound weight on employee

engagement; judge and modify the people‘s approaches and performance. Being

committed to continuous learning, having endeavoured of accepted wisdom, being

enthusiastic to accept technology and innovativeness are the main factors of Total

Quality Management philosophy.

By setting up effective procedural and behavioural systems, management should

focus on functional process rather than the result or output in order to reduce the

time and labour loses, and reworks which incur extra costs. Anderson et al. (1994)

argued that customer satisfaction could be increased by reducing product or service

costs through process improvement. Forza and Filippini (1998) mentioned that The

TQM come up to maintain significantly the process controlling system to make sure

that these courses of action do not only perform normally but also the performance

of these courses of action do not make exertion for the future. Therefore, Firms

should give great attention in the controlling system of the functions of the processes

that produce the goods rather than to manufactured goods consistently controlled.



26

Process management has a strong relation with quality performance (Forza and

Flippini, 1998); financial performance and firm performance (Nair, 2006); customer

satisfaction (Choi and Eboch, 1998). On the other hand, by reducing various wastes,

process management gives emphasis on improvement of process which could

improve efficiency as well as quality of exist products or services that is not

significantly related with innovation (Prajogo and Sohal, 2004).

System Approach to Management

In order to rationalising the tasks designing, people and technology, systematic

approach should be stabilised from top to bottom within organisation. Task design

could help to make fruitful the individual and team efforts. Moreover, an improved

information system should be implemented so that management can be aware and

take immediate action in case of any internal and external factors have changed. In

addition, system could help to make cooperation among all department and level; as

a result, it may increase internal and external confident (Gluckman and Roome,

1993). Sadikoglu and Zehir (2010) discussed that TQM is a systematic approach of



27

quality development with many dimensions and company-wide application for the

purpose of improving performance such as quality, productivity, and profitability.

Continual Improvement

From input to output, continual improvement should be assured by developing

process and methodology. It means that job has to be better in time to time and day

to day. Dean and Bowen (1994) stated that customers‘ expectations could be

satisfied by developing and coordinating methodology and improving process.

Moreover, Constant development should be measured i n every department of

organisation such as employee performance, innovation performance and as a

whole firm performance put importance improvement of the engagement of

customers and suppliers in organisational process (Naor et al., 2008). Although not

meticulous, these aspects have frequently been measured the key factors of TQM

(Sila and Ebrahimpour, 2003; Claver et al., 2003; Conca et al., 2004). However,



28

Anderson et al. (1994) discussed that logics exist behind the continual quality

improvement is lower production costs comparing with quality which could help to

expand market share.

Many literatures suggested that continual improvement has a strong relation with

customer satisfaction, financial performance, and operational performance (Rahman

and Bullock, 2005; Fuentes et al., 2004). However, Rahman and Bullock (2005)

further argued that there is not a strong relation between continual improvement and

quality performance.

Factual Approach to Decision Making

Decision should be made based on factual data and information analysed. In order

to take action in internal and external changing circumstances, management need to

review and analysis information and data this may help to achieve organisational

objectives. Therefore, management should make sure a better system and analytical

approach within organisation to obtain relevant data and information at required time

in order to increase organisational efficiency in decision making process. Hackman

and Wageman (1995) suggested that hypotheses should be tested in work process



29

by formulating critical and scientific methodology to evaluate and improve

performance.

Many literatures suggested that decision making process is highly related to

customer satisfaction, quality performance, operational performance, and firm

performance (Choi and Eboch, 1998; Cua et al., 2001; and Nair, 2006).

Mutually Beneficial Supplier Relationships

In order to reduce the costs and develop the quality, a strong coordination should be

implemented among firm, suppliers and buyers due to reduce internal conflicts.

Hackman and Wageman (1995) discussed that according to the point 4 of Deming,

in order to improve quality, suppliers should be selected on the basis of quality not

the costs.

Kannan and Tan (2005) have found that supplier management has a strong positive

relation with product quality and customer service. Moreover, Kaynak(2003) and

Nair(2006) have described that there are positive relation between supplier

management and inventory management, supplier management, operational



30

performance and firm performance. However, Market share and financial

performance are not strongly related to supplier management (Kannan and Tan,

2005).

Conclusion

After review of quality principles and TQM constructs, it could be summarised that

there are so many confusions among positive performance of these principles. In

addition, none of these principles has certain positive performance in all over the

world. The performance of any of these principles could be depending on

organisational internal factors, characteristics, objectives, strategies and

circumstances where they are operating. However, most of the scholars recognised

that these principles have a degree of positive impact on various components of

firms; e.g. customer focus has positive impacts on sales and market share financial

performance, operational performance(Nair,2006); product and service quality

(Ahire and O‘Shaughnessy, 1998); and firm performance (Chong and Rundus,

2004); financial performance, firm performance, quality performance, customer

satisfaction, and productivity have been strongly impacted by Process management

(Forza and Flippini, 1998; Nair, 2006; Choi and Eboch, 1998).



31

Chapter Three

Review of Quality Award Models

Introduction

From the late 1980s; many developed countries have set up quality award

programmes in order to chase and recognise quality and performance excellence

(Miguel, 2001). Having a scope for comparing and evaluating with national and

international standards, firms have been running to achieve for various quality

awards all over the world. A well set of factors, e.g. encourage systematic self-

assessment, prompt cooperation, stimulate sharing and distribution were to key

elements to influence many countries to set up national and internationally

recognised quality awards. Having competitive advantages of quality to improve

performance through self- assessment and benchmarking was the main significant

focus light of these awards (Ghobadian and Woo, 1996).

The concepts of the most prominent quality awards which are internationally

recognised have come up from the USA, Europe, Japan, Australia, and Canada e.g.

the Malcolm Baldrige National Quality Award (MBNQA) in 1999, the European

Quality Award in 1994; the Deming Prize of Japan in 1951; the Australian Quality

Award in 1993; and the Canadian Quality Award in 1989 (Ghobadian and Woo,

1996; Miguel, 2001; and Vokurka et al., 2000; Metha, 2008). Furthermore, ―Since,



32

the initiation of the Deming Prize in Japan, Malcolm Baldrige Na tional Quality Award

(MBNQA) in the USA and the European Quality Award (EQA) in Western Europe,

several national quality awards have been established to stimulate systematic quality

improvement and to promote quality awareness in different places of the world‖ (

Mavroidis, et al., 2007, p.455). However, being encourage from the success of these

prominent Quality Awards, various initiatives have been developed in South Asia, for

instance, Rajiv Gandhi National Awards in India (1991), Bangladesh Business Award

in Bangladesh (2000). Mavroidis, et al., (2007, p.455) discussed that ―many

countries have modelled their award programs based on these three awards .

Nevertheless, the principles and model of total quality management is the main base

for evaluating of most of these awards. Only traditional quality control system or

service or product perfection may not be focused by these awarding bodies. Rather

than, focusing traditional way, they have put more emphasis on behaviour,

processes, and management activities that are main influencing factors for quality

improvement within an organisation. The end result of wide range of quality

improvement initiatives in process and human resources activities could be the

determined criteria of keystones of the quality awards models (Vokurka et al., 2000;

Ghobadian and Woo, 1996). Although, all of these quality awards models have

some common fundamentals, each of them has some limitations. Ghobadian and

Woo, (1996) further noted that ―The models underpinning the quality awards, like

most models, have limitations



33

Malcolm Baldrige National Quality Award (MBNQA)

In order to increase competitiveness among U.S by improving quality and quality

management practices, The Malcolm Baldrige National Quality Implement Act was

signed by President Ronald Reagan on august 20, 1987. Successful quality

strategies and benefits sharing, identifying the requirement of quality excellence, and

promoting quality awareness were the main objectives to introduce the Malcolm

Baldrige National Quality Award (MBNQA) (Vokurka et al., 2000). A number of key

principles of quality standards were introduced by The National Institute of Standards

and Technology (NIST), the administrative in charge of MBNQA. According to

criteria for Performance excellence framework 2009-2010, seven categories of

criteria for performance excellence has been formed, these are as follows:

1. Leadership: under this category, how organisation‘s top leaders‘ actions and

guide effect on organisation, how organisation does regarding governance systems

of organisation, legal, ethical and social responsibilities would be examined.

2. Strategic Planning: development of strategic actions and plans within

organisation would be examined under this category. If the environment changed,

how those actions and plans deployed, and its progress would be examined under

this category.



34

3. Customer Focus: for long term sustainability, this category examines the

strategies of customer management, customers‘ voice and response to use that

information, customer focus culture.

4. Measurements, Analysis, and Knowledge Management: this category

examines the processes of information technology, systems, analysis process,

review, and uses of review for performance improvement of organisations.

5. Workforce Focus: strategies, plans and actions to assess and utilise of

capability, engagement process, management process, and development process of

work forces would be examined under this category.

6. Process Management: work system and the development of key process for

implementation of work systems, and preparation for emergency would be examined

by this category.

7. Results: performance, improvement and out comes in all areas including

leadership, process management, workforce focus, and customer focus, financial

and market results, market competitiveness of organisations should be examined by

this category.



35

However, evaluation and guides for self assessment and required areas for

improvement within an organisation in order to improve and satisfy customers; retain

continuous improvement flows and improvement culture, MBNQA has been worked

like an audit framework. However, any specific process, programme or method does

not be provided by this model. Considering the fundamental values and

philosophies, the MBNQA model may be rather rigid like the European Quality

Award (EQA) (Ghobadian and Woo, 1996). MBNQA has given more emphasis on

results (e.g. 450 points in results out of 1000 points) rather than other important key

measures of an organisation (Performance excellence framework, 2009-2010). Conti

(2007, p.119) noted that ―The problem was that the Malcolm Baldrige Model was still

conditioned by the ―quality assurance syndrome‖, where conformity to the model was

the predominant judgment criterion. The customers‘ voice came a poor second‖.



36

The European Quality Award (EQA)

In 1991, the European Quality Award (EQA) was launched and managed officially by

the European Foundation for Quality Management (EFQM). Supporting,

encouraging, and recognising the development of effective TQM practice by

European firms are the main objectives of EQA (Vokurka et al., 2000; Ghobadian

and Woo, 1996,). Enablers and results are two parts of the EQA. The transformation

of inputs to outputs and outcomes of the business and facilities are driven by that

policies and process are distinguished as enablers. Impacts of the effective

implementation of the enablers out come on customers‘ satisfaction, people

satisfaction, and effects on business results and society. The elements of TQM

concepts including leaderships, policy and strategy, people management, resources,

and processes are attempted to represent by the EQA mode (Vokurka et al., 2000;

Ghobadian and Woo, 1996; Conti, 2007).

Gemoets,(2009) translated and described that according to the EFQM excellence

model 2010, number of significant improvements have been done within its

enablers and results parts as follows;

Development in Enablers criteria:

Leadership: More emphasised has been given on ethics of leadership as a face of

focusing position. As the drivers of an organisation, leaders‘ performance and

capability development should be measured including to engage with stakeholders,



37

practice of transparency and feed back to stakeholders. How the capability of

leaders‘ decision making effects during perceptive and forceful adjustment also be

included.

Strategy: given emphasis to clear focus on understanding the external and internal

environment, and sustainability‘ built into the strategy. The timely modification of

strategic choices adds business drivers to understand the direct link of processes to

results.

People: People engagement into process effectiveness and increase efficiency are

linked with capabilities used and future oriented alignment. Care, mutual support,

and work life balance have engaged people in the wider society by positioning

themselves as the communications and the actors.

Partnerships and Resources: given more emphasised on mutual benefits for long

term relationships with suppliers and other related parties, complete coverage should

be developed e.g. strategic decisions, application of technology, financial planning

and consistency and clarity.

Processes, Products and Services: as part of the management system, integrating

and optimisation are been emphasized essential activities to enhance the offering

value delivered and strengthening the life cycle of products and services for more

engagement of customers.



38

Development in results criteria:

Customer Results: Rather than just measurement, more emphasised given on the

impact the organisation has on perceptions.

People Results: strategic effectiveness particularly in the human resources

management part would be integrated with how people distinguish it.

Society Results: within strategy, clear direction should be given to support the

environmental and social aspects. It also would be clarified to consider impacts of

performance of specific external Society and stakeholder stakeholders on

organisation would be clarified and considered and the scope of results to be

presented.

Key Results: the strategic intent would be integrated with the field of measures may

focus upon enhanced and developed within an organisation.

Regarding to meet the output and outcomes goals of organisations, the model

recognises that a major role has been played by management in necessary

development of structural processes management and infrastructures. ―A higher

weighting (scoring) is given on both the impact on society and people management

criteria in EQA model. European directors recognize the need for their companies to

act within a social as well as an economic environment‖ (Mavroidis, et al., 2007,



39

p.456). The EQA has emphasised more on the important development of process

capability, planning and human resources. Conversely, performance measurement

may not only depend on financial results that have been considered in the results

side of the EQA model (Ghobadian and Woo, 1996; Mavroidis, et al., 2007; Vokurka

et al., 2000). However, Ghobadian and Woo, (1996, p.19) further noted that ―The

model is prescriptive in terms of the philosophy and values which it expounds, but it

does not stipulate any particular tools, methods, procedures, or practices‖.



40

The Deming Prize

In 1951, Union of Scientists and Engineers (JUSE) established the Deming Prize

(Union of Japanese Scientists and Engineers, n.d.; Ghobadian and Woo, 1996).

For the Deming Prize, approaches to quality management of applicant organisation

or divisions of firms need to meet their business environment and challenges by

developing effective quality management methods, implementation and practices. By

the Deming Prize examinations, organisations would be able to assess their present

condition; processes used which whether the activities are suitable in their

circumstances in line to fulfi l organisations‘ present and future objectives (Union of

Japanese Scientists and Engineers, n.d). Within the Deming Prize, a set of

checklist contains ten primary factors which further divided into four to eleven

secondary factors. Equally weighted all of these factors of checklists clearly

emphasis on total quality control process of organisations. A checklist is also

provided for top management known as table III which fulfil two significant factions

e.g. first, emphasises on the involvement and realisation of top managements‘ needs

in QC development initiatives; second, a list is to be provided of what management

should to do (Ghobadian and Woo, 1996).

According to Ghobadian and Woo, (1996), the Deming Application Prize checklist for

senior executives evaluates the following six factors:



41

1. Understanding and enthusiasm: under this category, it would be examined

senior managements‘ understanding on the concept of quality assurance, reliability,

statistical methods; enthusiasm to use these concepts as well.

2. Policies, objectives and targets: it examines management‘s policies and long

term plan for QC development initiatives, measurement procedures have been

taken.

3. The organization, systems and human resources: organizational procedures

and structures for quality control , human resources, the role of top management for

in quality control management, allocation procedures of power, accountability and

responsibility review and improvement, policies, procedures and its application for

managing and support of external activities, and organizational education and

training systems would be judge within this frame.

4. Education, dissemination and thorough implementation: it would be

measured under this category that the educational policies related to QC

management, necessary systematic knowledge, expertises, equipments, and

administrative practice and methods.

5. Implementation: the budget for QC facilities development and maintain; the QC

development program implementation, conditions, functions, and social



42

responsibilities identification, measurement, review and evaluation would be

examined within this category.

6. Future policies, plans and measures: this category examines the future

policies, plans, management and measurement methods, uses of advance

technology, economic growth and business scope of firms.

Apart from the Deming Prize, continuous analysis and improvement are emphasised

by most of the models. The Deming Prize emphasises more on the organisational

quality management such as strategic plans, customer focus, modernised

processes, leaderships, human resource development. However, although quality

improvement through processes control has been more emphasised in the Deming

Prize, there is a relatively little lack exists on customer and market knowledge.

Ghobadian and Woo, (1996, P.17) also implied that ―The Deming Prize unlike the

European Quality Award and the Baldrige Award, is not competitive‖.

Business results have the greatest weight for the MBNQA, customer satisfaction for

the European Quality Award, organizational performance for the Canadian Quality

Award, and people or process for the Australian Quality Award. However, all of the

checkpoints in the Deming Prize are equally weighted.



43

The Bangladesh Business Awards

The Bangladesh Business Awards introduced in 2000 by DHL and Daily Star.

The primary objective to launch this awards to be a worthy partner of global

economy through creating excellence and competitiveness environment, well

discipline and innovative management; , increase in efficiency, high productivity.

The Bangladesh Business Awards are divided into four parts; which are Business

Person of the Year, Outstanding Woman in Bangladesh, Enterprise of the Year, and

Best Financial Institution of the Year (DHL, 2008).

According to DHL (2008), criteria of evaluation for Enterprise of the Year and Best

Financial Institution of the Year are as follows:

Innovation: company‘s plan, policy and innovation in products, services, and new

market, its expertise of Bangladesh base for accessing overseas markets would be

focused under this criterion.

Financial Performance/Productivity: profits, relation track between company age

and profit, growth, and productivity level would be considered by this criterion.

Company Management: Effectiveness of management style and approaches,

organisational structure, and harmonious relationships would be examined within this

category.



44

Contribution to the Community and Bangladesh's Development: A merit point

would be given under this category for company‘s contribution to the community and

Corporate Social Responsibility practice.

Conclusion

Although, every quality award model has some distinctive characteristics, all of the

major quality awards models have some common measurement scales to evaluate

TQM practice of firms. Moreover, some of these models also provide guidance that

could be influential factors to successful application of quality initiatives and thereby

to get the end results. Given differential emphasised on leadership and

management approaches and system, customer management, employee training

procedures and development, strategies and policies, evaluation procedures,

process management by all of these quality awards models may not carry equal

weight. For instance, development of process capability is more emphasised by the

EQA, on the other hand, MBNQA put emphasised on business results. However,

although these quality models carry a significant influence for forms to get market

attention and customers‘ confidence, within south Asian countries particularly in

Bangladesh, ISO certification and local quality award model have a great influence to

catch customers‘ attention that recognised the quality standards practice maintaining

by firms.



45

Chapter Four

Review of Integrated System of TQM with JIT and Six Sigma

Introduction

Over the past few years, just in time, supply chain management, total quality

management, and six sigma approaches have got numerous attentions in operations

and quality performance (Rao et al., 1996; McKone et al., 2001; Zu, et al., 2010;

Kannan and Tan, 2005). Some researchers implied that integrated approaches of

these philosophies may produce better performance than applying individually one of

them. Kannan and Tan, (2005, p. 153) noted that ―Just in time, TQM, and supply

chain management are sometimes viewed and implemented as if they were

independent and distinct, they can also be used as three prongs of an integrated

operations strategy‖. In addition, a significant value of an integrated operation

element and strategy has been represented by this kind of approaches which

contains an important strategic potential.



46

TQM and JIT Integrated System

An emergent fact is that organisations have got a great result that analysis and give

efforts in root of quality (Mohrman et al., 1995). Companies have comprehensively

used TQM with JIT incorporated quality programmes generate more efficiency, cost-

effective and competitiveness. Many researchers implied that IS0 9000 list shows

only some key quality programs firms could practise towards continuous perfection

of quality; firms that have put into practice JIT and TQM integrated methods have got

extensively recognized quality programs (Withers, et al., 1997).

Successful operation of TQM show the way to the progress of various courses of

actions or stuff to congregate or go beyond consumer satisfactions. Conversely, JIT

operation integrates quality control performance with every day activities and evades

the manufacturing of imperfect objects. Successful performance of TQM and JIT

could be a turning point on the pledge and support of top management (Rao et al.,

1996).

General value is the recognition of quality that the customers are the best evaluator

of the quality of the finishing commodities (Garvin, 1996). However, the fundamental

viewpoint of firms should be principles for processes perfections. Firms with

concrete functions and courses of action would be root focus point to develop the

quality of their goods and services. Thus, ―the IS0 9000 series, which regulates or

controls process quality rather than product quality, leads to quality consistency and



47

thereby, competitiveness‖ (Korane, 1993, Mahmoud et al., 1992 as discussed by

Withers, et al., 1997, p.210). However, Withers, et al., (1997) further discussed that

top management dedication to quality upgrading showed major dissimilarity for the

most important outcome and by sort of quality initiative in practice between TQM and

JIT.

On the other hand, the numerical results proposed that management approaches

could be upsetting significantly by the impact of TQM. In addition, JIT organisations

may essentially de-emphasise quality education comparatively to other phases of

this system of activity. In all companies, communication function encompasses a

central and key factor of both TQM and JIT organisational systems (Withers, et al.,

1997).

McKone et al. (2001) in some way look at the connection of TPM with JIT and TQM

when inspect the performance and impact of TPM. They discover that TPM has an

encouraging and important direct impacts as well as an indirect association in the

course of JIT and TQM with low down cost, high standard of quality and well-bui lt

deliverance performance. Having a common goal to achieve firm‘s objective through

continual improvement and waste reduction, TQM have a fundamental similarity with

JIT (Schonberger, 1986; Nakajima, 1988; Ohno, 1988; Powell, 1995 as discussed by

Cua, et al., 2001). It is contend that safeguarding management might be the main

challenge facing firms that put into practice TQM and JIT. Similarly, the significance

is to be measured the incorporation of JIT, TPM, TQM and factory mechanisation

with employee participation (Cua , et al., 2001; Imai, 1998)



48

TQM and Six Sigma Integrated System

Some scholars believe that a TQM with Six Sigma incorporated system may produce

the best outcomes for the firms that have or not TQM. ―an organized and systematic

method for strategic process improvement and new product and service

development that relies on statistical methods and the scientific method to make

dramatic reductions in customer defined defect rates‘‘ (Linderman et al., 2003, p.

195). ‗‗TQM makes many of the same claims that Six Sigma makes and with some

justification‘‘ (Flott, 2000, p. 43). Schroeder et al. (2008) argued that Six Sigma refers

such a traditional quality management system to organise of the equipments and the

techniques and organisational construction that are not before seen.

Moreover, Six Sigma significantly presents ‗‗an organized, parallel structure to

reduce variation in organizational processes by using improvement specialists, a

structured method, and performance metrics with the aim of achieving strategic

objectives‘‘ (Schroeder et al., 2008, p. 5). It would be recommended that in order to

get an interactive result from quality development; Six Sigma should be incorporated

with TQM (Ferng and Price, 2005; Revere and Black, 2003; Ricondo and Viles,

2005; Yang, 2004 as discussed by Zu, et al. (2010).



49

Conclusion:

TQM approach more emphasis on develop the all courses of action relating to quality

in order to increase customer satisfaction Successful. Six sigma influences to reduce

variation in processes by statistical methods and performance metrics. JIT

emphasises more on every day quality development and cost reduction by reducing

imperfection into the production process. An integrated approach of TQM with either

JIT or Six sigma or both of them may be effective solution of quality constrains and it

could also lead to produce better performance than applying any one of these

methods. However, it may not necessarily able to prove and give the question

relating universal effectiveness of these approaches. Therefore, more research

should be conducted to assess effectiveness of this kind of integrated approaches

particularly in developing countries.



50

Chapter Five

TQM in Developing Countries

Introduction

Multi efficient aptitude boost labour efficiency and these could be achieved through

training. Any progress in labour efficiency through training might not be enough cost

effective for firms in many developing countries, while the employment of labour

costs may be noticeably low compare to the training costs. ―Productivity is affected

from the level of the automation used. Low labour costs together with the high costs

of the imported technology discourage investments towards automation‖ (Oral et al.,

2003, p.855).

Oral et al. (2003, p.855) further mentioned that ―The relationship between the

managers and the subordinates are characterized by low trust, with the latter

avoiding disagreement and preferring to be directed by the manager‖. Singh (2000)

argued that Training is a requirement to transform the outlook of the employees

about innovative philosophy systems like TQM. However, the vital issue that should

not to be overlooked is that, most training systems have been come up from the

West, and might not be suitable for other cultural and environmental settings. In

addition, research should be carried out to find out that how this system fit perfectly



51

in developing countries. Still it may be questionable that how is it possible to

implement all of these philosophy or do they fit in developing countries?

Conclusion

Empirical study has suggested that many scholars have worked on TQM to approve

quality and therefore firm‘s performance. Most of these endeavours has concerned

on the firms in developed countries. These firms are producing large quantity

products. However, there are very small amount of research have been carried out

by scholars that what is the outcomes of TQM especially in developing countries

where is different cultural settings, where companies mostly depend on internal

growth. Although, having cheap labour, in many developing countries, it may be a

significant concern to survive in local and global market under free market concept

because of being smaller volume with lower productivity; having lack of quality,

consequently, incurring high costs. To resolve these problems, it seems that further

research should be conducted on implementation of TQM and its impacts on organic

growth of a firm; specially firms of developing countries.



52

Chapter Six

Research Methodology

Introduction

The purpose of this study is to assess the impacts of TQM on internal growth of

Mitsumaru Group (BD) in Bangladesh. The constraints of TQM implementation in

Mitsumaru Group (BD) in Bangladesh, where different organizational cultural setting

and firms are more likely depend on internal growth are to be identified and thereby

developed the general theories by investigation throughout this study. Furthermore,

derived from the basic aims and objectives of this research, successful achievement

of research would be depending on selecting an appropriate methodology. However,

research design is discussed in this chapter which distinguishes the necessary data

collection procedures and uses to provide appropriate evidence and support the

theories of this work.

In addition, adequate answers to the research questions would be provided by this

research design. Moreover, another significant aim was to assess a few pre-

conceived notions on the constrains of TQM Implementation faced by Mitsumaru

Group (BD) in Bangladesh reported as an outcome of literature review and also

prove some insight into the TQM constructs influencing the internal growth of



53

Mtsumaru Group (BD). An integrated method (mix of quantitative and quantitative

methods) would be used for conducting this research.

Grounded Theory

The literature related constraints to assess the impacts of TQM on internal growth of

firms within different culture specifically in South Asia has been summarized in

earlier chapter. It is suggested that the impacts of TQM on internal growth identified

from the research undertaken for this paper are mostly internal. From the literature

review, the most critical TQM constructs e.g. customer satisfaction, employee

satisfaction, process development, and management approaches and firm‘s growth

parameters e.g. productivity, sales, net profit, and market share have been identified

for this research to develop and determine the underlying grounded theories

regarding impacts and relationships between TQM constructs and growth

parameters. The impacts of TQM on internal growth often lie in the firm‘s ability to

match its goals and resources to the opportunities and threats presented by the

organizational culture and practices. In this context, the major growth parameters

e.g. sales, market share, employee productivity and net profit made the management

able to assess the impacts of TQM on internal growth.

Literature review on the impacts of TQM on internal growth of firm‘s indicates that

the constraints faced by firms are many and complex, and a number of studies using



54

a variety of research methodologies and techniques have attempted to examine

them (e.g. Kaynak, 2003; Fuentes et al., 2004; chong and Rundus, 2004; Sadikoglu,

2004; York and Miree, 2004; Kannan and Tan, 2005; Ranhman and Bullock, 2005;

Prajogo and Sohal 2006; Nair, 2006). However, a lack of consensus amongst

researchers exists in literatures regarding to importance of different factors. As a

result, constraints to implement TQM in firms and its impacts on internal growth are

ambiguous, thus presenting an image of the firm as being prey to forces beyond its

control.

Research Design

The five specific research objectives are employed to address by the primary

research. A survey research method has been undertaken. A survey generally could

be understood as primary data collection method by communicating with sample.

Collecting primary data, congregating data, and assembling data are the common

objectives of driving for survey; in particularly needs for ongoing research. Moreover,

in order to eliminate bias where possible, survey also applies within a repetitive

sample of the population (Zikmund, 1996). However, some researchers have argued

that none of individual method is enough to conduct an empirical research in any

area. ―Study of budgeting in the nationalised jute industry in Bangladesh is a good



55

example of an attempt to address all three validity issues in a systematic manner

through between-method triangulation‖. (Hoque and Hopper, 1994; 1997 cited by

Modell, 2005, p.240)

Behind the rationales is to choose survey method that it is easy to get access into

information which also could provide accurate data about the facts within short time

frame; also financially economic and efficient (Zikmund, 1996). The survey

instrument adopted was questionnaire. The questionnaires ware designed carefully

taking all the relevant factors outlined in the literature review and objective sections.

Within the questionnaire, every question was two parts; the first part was closed end

for expressing specific answer of the question and the second part was open for

expressing respondents‘ logic and explanation. However, annual accounting and

financial data from the year 2007 and 2009 and industry data also has been

collected and used as secondary data to compare with the result of analytical

findings from primary data.

The research‘s focus is:

- To assess the impacts of TQM implementation on the internal growth of

Mitsumaru Group (BD) in Bangladesh.

- To assess the constraints associate with TQM implementation model within

specific organisational culture and practices in Bangladesh.



56

To assess the impacts and relationship of TQM constructs on firm‘s internal growth,

as growth parameters impact on sales, net profits, market share, and employee

productivity would be used from 2007 to 2009 taking 2007 as the base year.

Impacts of TQM on firm‘s internal growth has either positive, or no impacts/neutral,

or may having experienced negative impacts in some components, impacts

predicted in the short-term (Lagrosen, 2000;Prajogo and Sohal, 2004; Zehir and

Sadikoglu, 2010; Douglas and Judge, 2001; Samson and Terziouski, 1999). The

sample for survey has been chosen from top management and five departments of

Mitsumaru Group (BD) e.g. sales, marketing, production, accounts and finance, and

human resources where TQM has been implemented for data to be consistent in

analysis and findings.

The Survey

The introduction describes the salient features of the design and conduct of the

survey and the characteristics of the sample respondents in terms of their job

responsibility within the organization in general and association with TQM

implementation in particular, their involvement in organization reporting.

The survey addressed:



57

· To employ this framework to analyze empirically, the limitations and

constraints upon organizational culture and practices to implement TQM in

Mitsumaru Group (BD) in Bangladesh;

· To use the results of the theoretical and empirical research programmers to

evaluate policy proposals on a range of issues affecting the successful TQM

implementation and its outcomes in Mitsumaru Group (BD) in Bangladesh.

Respondents were asked their views on TQM implementation and impacts on

internal growth; general characteristics of the impacts, where the questions were

related to the strategy, management activities and operational actives related to

quality improvement initiatives of the groups and how they / firm affects by TQM

implementation and ways how to overcome the challenges they face in

implementation of TQM. Other section covered: factors affecting to TQM

implementation in employees‘ productivity (designed to help with the understanding

of principal factors of TQM which affect the improvement of the productivity by using

their efficiency); sales (questions on the role of TQM in improvement of customer

satisfaction); market share (intended to explore the role of TQM to capture market for

long term growth); and accounting and finance (designed to obtain some basic

financial information about the net profit, production costs and units, and sources of

finance available to the business related to impacts of TQM implementation).



58

Sample Size

A total of 100 employees were initially considered for this research including 6

employees from top management, 9 employees from managerial level, 16

employees from team leader, and 69 employees from general staffs within five

departments. The questionnaires were distributed in Sales department 20 copies,

Marketing department 20 copies, Production department 20, Accounting and

Finance department 15 copies, HR department 15 copies; and 10 questionnaires

were sent to top management, e.g. chairman, managing director, directors. They

were sent questionnaires in July 2010. However, a total of 39 filled-in questionnaires

were received. 2 questionnaires were not considered in the analysis because they

were not filled-in properly and completely. So, finally the number of valid sample size

stands at 37 for carrying out analysis having a valid response rate of 37%. The

criterion used for selecting sample employees was that they have working for a long

time in Mitsumaru Group (BD) and closely involved with TQM implementation. Also it

has been considered carefully that sample employees represent the economic,

cultural and ethical characteristics within the group.

Research Questions

Before designing the questionnaire (please see appendix 1), a wide-ranging

literature review was undertaken to identify the key issues related to this research.

The key issues are impacts of TQM on internal growth of TQM implementation in



59

firms which are identified as strategic process, systematic approach, management

commitment, improvement of quality control and development process, and

employee training and involvement of a firm (Terziovski, 1999; Zehir and Sadikoglu,

2010;. Sila and Ebrahipour, 2003; Conca et al., 2004; Metha, 2008).

The constraint of TQM implementation in firms in South Asia have identified and

summarized from the literature review is organizational culture and practices,

specifically in South Asia (Kull and Wacker, 2010). The issue has been come into

view is the level of significance that organizational culture and practice in South Asia;

particularly in Bangladesh which are more incorporated with TQM implementation

that could affect and make constraint to successful TQM implementation program, or

could be affected by TQM implementation.

The questionnaire was developed to measure variable of interest. It was divided into

three sections. The first section-A requires the respondents to address general

information about their job responsibility and understanding about TQM. The second

section-B requires the respondents to indicate the impacts of TQM implementation

on internal growth of Mitsumaru Group (BD). It requires the respondents to indicate

their views on the impacts on sales, market growth, net profits, and productivity.

Respondents also needed to address the issues relating to constraints to TQM

implementation e.g. organizational culture and practices in section C.



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Research Scope and Limitation

Research Scope:

Mitsumaru group (BD) is locally well known Air Conditioner manufacturer and one of

the growing firms in Bangladesh which introduced TQM implementation program in

2007 within its fiver departments, e.g. Sales, Marketing, Production, Accounts and

Finance, Human Resources department. It also has well experienced employee

forces. All of these criteria are initially able to fulfil the requirements for the research.

However, a good amount of study was also undertaken on the industry culture,

operation and business, in which Mitsumaru operates. This helped developing the

questionnaire; identify the relevant industry data for analysis purpose.

Research Limitation:

Although having a great scope to conduct this research, there are some limitations

incorporated during driving this research, these are as follows:

- The time limitation to conduct the research.

- There is a lack within firm to maintain necessary records.

- Hiding mentality of management about the true profit.



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- Any quantitative statements would be required a large and statistical study

for which, specific to constraints of time and resources, this research could

not afford.

- Internal growth of the firm would possibly a result of multiple factors –

TQM is only one of them. The expected outcome of the analysis would not

identify the fare share of TQM in the overall growth of the firm. To know

this fare share a comprehensive research including other issues affecting

the growth would need to be undertaken on same set of data, issues,

environment, time and controller.

- An accurate growth rate of TQM implementation would only be possible

when the other factors leading to firm‘s growth would be possible to keep

constant and be used as a controller. In really this would never be

possible.



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Mitsumaru Group (BD) and Air Condition Industry in Bangladesh

Mitsumaru group (BD) is locally well known Air Conditioner manufacturer and one of

the growing firms in Bangladesh. Mitsumaru group (BD) has been operating from

1994 in Bangladesh. Mitsumaru is a brand name of air-condition which catches

customers‘ faith and confident. It has more than 350 employees in various

departments. Mitsumaru Group (BD) is manufacturing all kinds of air-conditions, and

also involves with installation and after sales services. Mitsumaru Group (BD) has

tried to diverse business portfolio through investing in diverse sectors like properties,

chemicals, powder coating colours consists, mineral water plant, restaurants

business.

However, having favourable weather and environmental conditions, air condition

business is one of the fastest growing industries in Bangladesh. According to Dhaka

Chamber of Commerce and Industry, an increasing buying capacity and changes in

life style of middle income population in Bangladesh have made a great opportunity

for air condition manufacturing and marketing industries. Total 23 air condition

manufacturing and marketing companies are operating their business in Bangladesh.

Nevertheless, more than 50% market share has been captured by few leading

companies like Mitsumaru, Mitsubishi, Rangs, and General (DCCI, 2009).

The growing competition has forced management of Mitsumaru Group (BD) to take a



63

great drive for quality that could help to retain present market share and growth,

access new market, satisfy present and future customers. In this regards, in 2007,

board of Mitsumaru Group (BD) has agreed to implement Total Quality Management

within its five departments, e.g. sales, marketing, production, accounts and finance,

and human resources (Mitsumaru Group (BD), 2008).



64

Chapter Seven

Analysis and Findings

Introduction

The analysis and finding of questionnaires and secondary data would be done in

this section. There are total three sections in questionnaire. The first section was

related to general information about employment and knowledge about TQM of

respondents. The second section was releted to impacts of TQM practice in

Mitsumaru Group(BD) and firm‘s growth; and the third section was about impact of

organisational culture and practice on TQM implementation within Mirtumaru

Group(BD). For the analysis, various technics would be applied, e.g. pie chat,

column chat, and table.

Analysis of Data from Questionnaires

Department:

Here the respondents were asked in which department he/she is employed. The total

number of respondents were 37 and the valid respones rate was 37% which is a



65

good response rate for carring out this research . The figure-1 has described that the

questionnaires were collected from five departments; Sales 35%, Marketing 19%,

Production 22%, Accounting and Finance 11%, and 13% from HR departments

which were the number of respondents 13, 7, 8, 4, and 5 accordingly.



66

Employment Years with Mitsumaru Group (BD):

Respondents were asked about their service periods with Mitsumaru Group (BD).

Figure-2 has expressed that from 1 to 5 years were spent by 49% respondents, 6 to

10 years were spent by 32% respondents, and 19% respondents were above 10

years with Mitsumaru Group (BD). A long and great career progression of

respondents have been indicated by these figure.



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Position:

Figure-3 indicates that the percetages of response rates from various postion holding

by respondents which were 8% from top management, 16% from managerial level,

22% from team leader, and 54% from general staffs.



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Awarness about TQM Implementation:

Respondents were asked about their awareness on TQM implementation in

Mitsumaru Group (BD). Figure-4 shows that a mejor portion of respondents ara

aware about TQM implementation; the number of percentage is 97, where as only

3% respondents are not aware about TQM implementation in Mitsumaru Group

(BD).



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Impact of TQM on Customer Satisfaction:

By this question, respondents were asked about positive impact of TQM practice on

customer satisfaction in Mitsumaru Group. Figure-5 represents that 76% of

respondents replied yes, 13% of respondents replied no, and 11% of respondents do

not have any idea. Respondents who think TQM have positive impact on customer

satisfaction argueed that by implementing TQM, Mitsumaru Group (BD) has been

able to reduce the errors in every sector manufacture to sales. So customers are

getting better service, quality products and value of their money. After

implementation the TQM, firm‘s management has become more skilled who have

vast knowledge about products; dealing with customer queries swiftly and efficiently,

therefore has managed to boost customer satisfaction by boosting quality in every

aspect.



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Impact of TQM on Employee Satisfaction

Respondents were asked in this question about positive impact of TQM practice on

employee satisfaction in Mitsumaru Group (BD). Figure -6 expresses that 62% of

respondents has been recognised that TQM has positive impact on employee

satisfaction, whereas, 24% and 14% of respondents says ―no‖ and ―unknown‖

respectively. 62% of respondents who believe that TQM has positive impact on

employee satisfaction give opinion that TQM has allowed Mitsumaru Group (BD) to

offer its employees top management leadership & employee empowerment in

several stages of the organisation, give positive feedback, good reward and step up

system which in returns have improved employee satisfaction over the years.



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Impact of TQM on Process Development

In this question, respondents were asked about positive impact of TQM on process

development in Mitsumaru Group (BD). Figure-7 shows that 65% of respondents

believe TQM has positive impact on process development; they explain that TQM

enabled Mitsumaru Group to accomplish its delivery of products through various

processes in right orders by inventing of new ways to work for reducing errors and

improving quality. As the ultimate goal for firm is to provide better quality products

they had to ensure that all the processes involved in that are improved. On the other

hand, only 13% of respondents have given their opinion that TQM does not have

impact on process development; 22% of respondents have said unknown.



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Impact of TQM on Management Approches

Respondents were asked about the positive impact of TQM practice on management

approaches in Mitsumaru Group (BD). figure-8 shows that 67% of respondents has

said TQM has positive impact on management approaches, whereas, 22% of

respondents has said TQM does not have positive impact on management

approaches and 11% of respondents does not have any idea about it.

67% of respondents who believe TQM has positive impact on management

approaches explained that because mmanagement approach has been used within

Mitsumaru Group since the implementation of TQM which had an increased

productivity effect on managers in terms of their departmental performances;

therefore, managers are more inclined to think from a customer perspective



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Impact of TQM on Mutual Relationship

In this question, respondents were asked about the positive impact of TQM practice

on mutual relationship between organisation and out side entities. Figure-9 shows

that 59% of respondents has said yes and explain that TQM has helped gain

employee satisfaction, suppliers satisfaction, environmental organisations

satisfaction, government satisfaction in term of quality for Mitsumaru Group (BD)

which in return elevated the level of customer satisfaction by providing good qualit y

of product/services and the overall effect is increased profitability for the company to

deliver good value for stakeholders‘ investment.

Whereas, 19% of respondents has said TQM does not have positive impact on

mutual relationship between organisation and outside entities and 22% of

respondents does not know any thing about it.



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Impact of Customer Satisfaction on Sales

Respondents were asked about the positive impact of customer satisfaction on sales

in this question. Figure-10 describes that 87% of respondents beleive customer

satisfaction has positive impact on sales, where as only 8% and 5% rof respondents

have said no and unknown accordingly. 87% of respondents who has said customer

satisfaction has positive impact on sales explained that sales has increased because

TQM practice has been forcing Mitsumaru Group (BD) to improve customer

satisfaction by delivering quality products which helps to increase confident and faith

of customers; therefore, helps to increase a number of fixed customers for

Mitsumaru Group (BD).



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Impact of Customer Satisfaction on Market Share

In this question respondents were asked about the positive impact of customer

satisfaction on market share. Figure-11 shows that 65% of respondents has said

yes and explained that customer satisfaction has increased sales and increased

profitability for Mitsumaru Group (BD) and therefore provide solid base, consistent

growth for the company over last three years which later helped gain increased the

market share. On the other hand, only 13% of respondents have said customer

satisfaction does not have positive impact on market share and 22% of respondents

have said ―unknown‖.



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Impact of Employee Satisfaction on Productivity

Respondents were asked about the positive impact of employee satisfaction on

productivity in this question. Figure-12 shows that 78% of respondents has said

employee satisfaction has positive impact on productivity, whereas, 8% of

respondents has said employee satisfaction does not have positive impact on

productivity and 14% of respondents has said ―unknown‖. 78% of respondents who

believe that employee satisfaction has positive impact on productivity explain that

satisfied employees have proven to be a great success of TQM particularly increase

in productivity by increasing employees‘ efficiency, making an ideal working

environment including training, idea sharing, innovativeness, and employee benefits

in Mitsumaru Group (BD).



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Impact of Process Development on Productivity

In this question, respondents were asked about the positive impact of process

development on productivity. Figure-13 shows that 67% of respondents believes

process development has positive impact on productivity and said yes, whereas,

22% of respondents has said process development does not have positive impact

on productivity and 11% of respondents has said ―unknown‖. 67% of respondents

who believe that process develoment has positive impact on productivity explain that

ensuring quality product services to the customer through TQM require process

development while implementing. Current employee and customer satisfaction rate

along with sales growth provides farm evidences for processed being developed

having positive impact on Mitsumaru Group.



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Impact of Management Approaches on Customer Satisfaction, Employee

Satisfaction, and Process Development

Respondents were asked about the positive impact of management approaches on

customer satisfaction, employee satisfaction, and process development. Figure-14

descrives that 70% of respondents has said yes and explained after starting of TQM

implementation in Mitsumaru Group (BD), productivity, sales and market share have

increased because customer satisfaction, employee satisfaction, and process

development have been effeceted positively by management approaches under

present TQM practice.

Whereas, only 11% of respondents has said, management approaches does not

have positive impact on above factors and 19% of respondents has said ―unknown‖.



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Impact of Organisational Culture And Practice on TQM Practice

In this question, respondents were asked about the impact of organisational culture

and practice on TQM implementation in Mitsumaru Group (BD). Figure-15 shows

that 43% of respondents has given thier opiniton ―positive impact‖, whereas, 38%

and 19% of respondents have said ―no impact‖ and ― negative impact‖ accordingly.

Respondents who believe organisational culture and practice have positive impact

on TQM practice in Mitsumaru Group (BD) explained that increased employee

satisfaction have helped retain increased profitability by achieving customer

satisfaction. This gives Mitsumaru Group (BD) more opportunities to get involved

with the society where they are operating and contribute more sincerely as a leading

corporate citizen in Bangladesh.

On the other hand, 19% respondents who think organisational culture and practice

have negative impact on TQM argue that TQM force to practice highly professional

culture that contradict with local culture of developing countries as Bangladesh



80

because organisational culture and practice are an unit and part of national culture

and pride which contains emotional relation, bureaucracy, local priority.

Analysis of Secondary Data

Impact of TQM on growth paramiters

Secondary data has been collected from annual report and financial stement of

Mitsumaru Group(BD), and DCCI journal ―Bangladesh Business Repots‖ from 2007

to 2010, these are summarised as bellow in figure 16:

Fig.16: Increases of growth paramiters under TQM practice from 2007 to 2009

Year 2009 2007 % of Increases

Productivity 410 Units per

person per year

385 Units per

person per year

6.49%

Sales TK. 5,982,420,000 TK. 5,677,260,000 5.37%

Net Profit TK. 285,420,000 TK. 274,510,000 3.97%

Market Share 14.67% 10.32% 4.35%

( sources: Annualt report and financial statement of Mitsumaru Group (BD), 2010;

2008, and Bangladesh Business Reports, 2007;2009)



81

Figure16 descrides that in Mitsumaru Group (BD) productivity was 385 units per

person per year involes with production in the year 2007 which increased to 410

units per person per year in 2009; the percentage of increase was 6.49%. Sales of

Mitsumaru group(BD) was TK. 5,677,260,000 in 2007 that has been increased to TK.

5,982,420,000 in the year 2009; the percentage of increase was 5.37%.

Furthermore, in the year 2007, net profits of Mitsumaru Group (BD) was TK.

274,510,000 which has been increased at TK. 285,420,000 in the year 2009; the

percentage of increase was 3.97%. In 2007, 10.32% of Market share was

capchured by Mitsumaru Group(BD) that was increased to 14.67%; the percentage

of increase was 4.35%.



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Conclusion

The analysis of dara from questionnaires and secondary data from company annual

reports, financial reports and industry journal have been summarised in this chapter.

The positive impact of TQM implementation on internal growth of Mitsumaru Group

(BD) has been addressed by the questionnaires, analysis of which has come up with

the findings of the views of top management employees to ganreal staffs. In addition,

analysis has been done about how various TQM constructs (e.g. customer

satisfaction, employee satisfaction, management approaches, and process

development) have been impacted positively by TQM practice. Thereby, it has

analysed that growth paramiters productivity, sales, net profit, and market share of

Mitsumaru group(BD) have been inter related and impacted positively by above

TQM construct because of TQM practice.

On the other hand, the constrains related to organisational culture and practice of

TQM practice in Mitsumaru Group (BD) also has been analysed from the

questionnaires.



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Chapter Eight

Interpretation of Findings

Introduction

The analysis of data from questionnaires has been done and summarised in earlier

chapter. In this chapter, results would be explained and compared among the

findings from data analysis , company data from the finansial statements, and

previous researchs‘ results available from secondary sources .

Involvement of People:

Analysis of the replied questionnaires significantly indicates that a high proportion of

employees from top management to general staffs of five departments were aware

about TQM practice in Mitsumaru. The percentages of positive beedback was 97%

which could comfirm that Mitsumaru Group(BD) has taken TQM implementation

course of actions that meet initial requirement of the successful TQM implementation

criteria. According to Hackman and Wageman, (1995), in order to achieve



84

successful quality initiatives, every department has to be aware about their

responsibility to make sure effective co-ordination and team work relating to quality

improvement actions. Company success can be achieved by making a commitment

from top management to grass root level focusing the organization‘s resources on

satisfying customers and group effort in all aspects (Sadikoglu,and Zehir, 2010).

TQM Practice, Customer Satisfaction, and Sales

The analysis of data has confirmed that TQM practice in Mitsumaru Group has

positive impact on customer satisfaction. 76% positive responds of respondents

indicates that in Mitsumaru Group (BD), TQM practice is significanly and positively

retaled to customer satisfaction which could prove firm is more customer focusing

and efficient in customer management by TQM implementation. Sadikoglu,and Zehir

(2010) implied that customer satisfaction should be one of the important goal

because company success depends on satisfying the customers. Many scholars

have found TQM is positively related to customer satisfaction (Nair, 2006; Forza and

Flippini, 1998; Ahire).

Analysis of the data also has confirmed that customer satisfaction has positive

impact on sales. 87% of positive responds of questions no. 10 imply that customer



85

satisfaction has a significant level of positive impact on sales in Mitsumaru Group.

According to annual reports of Mitsumaru Group (BD) in 2007 and 2009, sales have

been increased by 5.37% (Mitsumaru Group (BD), 2010; 2008). O‘Shaughnessy,

(1998), and Chong and Rundus, (2004) also noted that customer satisfaction has

positive impact on sales. From the above understanding, it could be summarised that

in Mitsumaru Group (BD), TQM practice has positive impact on sales through

customer satisfaction.

TQM Practice, Customer Satisfaction, and Market Share

Furthermore, analysis of the data also has confirmed that customer satisfaction has

positive impact on market share. 65% of positive responds of questions no. 11 imply

that customer satisfaction has positive impact on market share in Mitsumaru Group.

In addition, market share of Mitsumaru group (BD) has increase from 10.30% to

14.67% from 2007 to 2009 (DCCI, 2009). Dean and Bowen, (1994) stated that

market share also could be affected positively by customer satisfaction. From the

above understanding, it could be drown that in Mitsumaru Group (BD), TQM practice

has positive impact on market shares through customer satisfaction. However,

growth parameters productivity and net profit may not directly affected by customer

satisfaction in Mitsumaru Group (BD).



86

From the analysis and theoretical arguments, a positive impact of TQM on sales and

market share through customer satisfaction in Mitsumaru Group (BD) could be

described by following diagram:

Fig. 17: Impact of TQM on sales and market share in Mitsumaru Group

TQM practice

in Mitsumaru

GROUP (BD)

Customer

satisfaction

Sales

Market Share



87

TQM Practice, Employee Satisfaction, and Productivity

It could be confirmed from the findings of data analysis that in Mitsumaru Group

(BD), TQM practice has significantly positive impact on employee satisfaction. 62%

of positive responds indicates that TQM is positively reletaed to employee

satisfaction and has enabled to manage and motivate employees in proper ways in

Mitsumaru Group. Anderson et al. (1994), Rahman and Bullock (2005) have also

noted that there is a significant positive relationship between TQM implementation

and employee satisfaction in firms.

Analysis of the data has confirmed that employee satisfaction has positive impact on

productivity. 78% of positive responds of questions no. 12 indicates that employee

satisfaction has a significant level of positive impact on productivity in Mitsumaru

Group. According to annual reports of Mitsumaru Group (BD) in 2007 and 2009,

productivity has been increased from 385 units to 410 units per person per year from

2007 to 2009 (Mitsumaru Group (BD), 2010; 2008). Sila and Ebrahimpour, (2003);

Conca et al., (2004) also implied that employee satisfaction has positive impact on

productivity. From the above understanding, it could be concluded that in Mitsumaru

Group (BD), TQM practice has positive impact on productivity through employee

satisfaction. However, in Mitsumaru Group (BD), TQM construct employee

satisfaction may not directly relate with sales and market share.



88

TQM Practice, Process Development, and Productivity

From the findings of data analysis, it could be summarised that in Mitsumaru Group

(BD), TQM practice has positive impact on process development. 65% of positive

responds indicates that TQM is positively reletaed to process development and has

helped management to manage quality improvement activites through utilising

people and technology in Mitsumaru Group. The TQM come up with organizational

changes and seeks to develop the process controlling system and every business

activity (Li, L. et al. 2008; Forza and Filippini 1998)

Analysis of the data has confirmed that process development has positive impact on

productivity. 67% of positive responds of questions no. 13 indicates that process

development has positive impact on productivity in Mitsumaru Group. According to

annual reports of Mitsumaru Group (BD) in 2007 and 2009, productivity has been

increased by 6.49% from 2007 to 2009 (Mitsumaru Group (BD), 2010; 2008). Nair,

(2006); Choi and Eboch, (1998) noted that TQM force to organisation to reduce

waste and increase productivity by process development. From the above

understanding, it could be summarised that in Mitsumaru Group (BD), TQM practice

has positive impact on productivity through process development. However, TQM

construct process development may not directly relate with all other growth

parameters e.g. sales, net profits, and market share.



89

From the above understandings and theoretical arguments, a positive impact of

TQM on productivity through employee satisfaction and process development in

Mitsumaru Group (BD) could be described by following diagram:

Fig. 18: Impact of TQM on productivity in Mitsumaru Group

TQM practice

in Mitsumaru

GROUP (BD)

Employee

satisfaction

Productivity

Process

development



90

TQM Practice, Management Approaches, Customer Satisfaction, Employee

Satisfaction, and Process Development

The analysis of data has confirmed that TQM practice in Mitsumaru Group has

positive impact on management approaches. 67% positive responds of respondents

indicates that in Mitsumaru Group (BD), TQM practice is positively retaled to

management approaches which could prove that TQM has enabled management to

be more commited and caried positive views regarding quality development

initiatives. Gluckman and Roome, (1993); Sadikoglu and Zehir (2010) discussed that

TQM has significantly positive relationship with management approaches which

make sure systematic approaches for quality development.

Analysis of the data also has confirmed that management approaches has positive

impact on customer satisfaction, employee satisfaction, and process development.

70% of positive responds of questions no. 14 suggests that management

approaches has a significant level of positive impact on customer satisfaction,

employee satisfaction, and process development in Mitsumaru Group. According to

annual reports of Mitsumaru Group (BD) in 2007 and 2009, productivity have been

increased by 6.49%; sales from TK. 5677260,000 to TK. 5982420,000 which is

5.37%; net profit from TK. 274510,000 to TK. 285420,000 which is 3.97% ; and

market share increased by 4.35% in the preriod of 2007 to 2009 (Mitsumaru Group

(BD), 2010; 2008). Above all of these achievements could prove that management of

Mitsumaru Group (BD) has positive approaches to drive the organisation for

successful quality programs by TQM practice. Gluckman and Roome, (1993);

Sadikoglu and Zehir (2010) further discussed that TQM is a systematic management



91

approaches for the purpose of improving performance such as quality, productivity,

and profitability. From the above understanding, it could be summarised that in

Mitsumaru Group (BD), management approaches have positive impact on customer

satisfaction, employee satisfaction, and process development by TQM practice

which may influence indirectly to growth parameters productivity, sales, and net

profit. However, management approaches may not have direct impact on growth

parameters e.g. productivity, sales, net profit, and market share.

From the above understandings and theoretical arguments, positive impact of

management approaches on customer satisfaction, employee satisfaction, and

process development by TQM practice in Mitsumaru Group (BD) could be described

by following diagram:

Fig.19: Impact of management approaches on customer satisfaction, employee

satisfaction, and process development by TQM practice.

TQM practice

in Mitsumaru

GROUP (BD)

Employee

Satisfaction

Process

Development

Customer

Satisfaction

Management

Approaches



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TQM Practice and Mutual Relationship between Organization and Outside

Entities

It could be confirmed from the findings of data analysis that in Mitsumaru Group

(BD), TQM practice has positive impact on mutual relationship between organization

and outside entities. 59% of positive responds indicates that TQM is positively

reletaed to mutual relationship between organization and outside entities and has

enabled to manage stakeholders requirements in proper ways in Mitsumaru Group.

Kannan and Tan (2005); Kaynak(2003) have found that mutual relationship between

organisation and outside entities is positively related to product quality and customer

service, inventory management, operational performance and firm performance.

TQM Practice and Constrains

Analisis of the replyed questionnaires clearly indicates that 43% of positive

responds of employees from top management to general staffs of five departments

believe organisational culture and practice has a positive impact on TQM practice

which suggest that management of Mitsumaru Group (BD) was pre prepared to

implement TQM; and followed by has taken effective innitiatives to acheive TQM

implementation programme. However, 38% of negative responds of respondents

suggests that the constrain related to organisational culture and practice may still



93

exist in organisation because of having very low difference between positive and

negative responds. Woon, (2000); Tan and Khoo, (2002); Kumar and Sankaran,(

2007); Kull and Wacker (2010) mentioned that a certain cultural fact exists in Asia,

particularly in South Asian counties that may create a great confusion and has

significant influence on effective TQM practice.

Conclusion

It could be summarized from the above interpretation of analysis that TQM practice

in Mitsumaru Group (BD) has positive impact on customer satisfaction, employee

satisfaction, process development, and management approaches. Thereby, apart

from net profits, internal growth parameters of Mitsumaru Group (e.g. productivity,

sales, and market share) are impacted positive by all of these TQM constructs (BD).

On the other hand, TQM construct management approaches may not have direct

relationship and positive impact on any growth parameters.

Although organizational culture and practice may have slight positive impact on TQM

practice. However, there is a slight passivity may exists in Mitsumaru Group (BD)



94

that organizational culture and practice may affect negatively to TQM practice in

future.

However, from the above understandings and theoretical arguments, positive impact

of TQM practice on internal growth of Mitsumaru Group (BD) could be described by

following diagram:

Fig. 20: Internal growth model under QTM practice.

TQM

Implementation

Employee

Satisfaction

Productivity

Customer

Satisfaction

Processes

Development

Management

Approaches

Sales

Net Profits

Market Share



95

Chapter Nine

Conclusion and Recommendations

Conclusion

Within literature review chapter constrains and theoretical arguments related to

impact of TQM on internal growth of firm‘s has have been identified and

summarized. An appropriate research methodology has been taken for this research

to seek the answer of research questions. Thereby, data analysis and interpretations

have pulled out the grounded theory to answer the research question.

The research result has suggested that TQM has positive impact of internal growth

of Mitsumaru Group (BD) through customer satisfaction, employee satisfaction,

process development, and management approaches. Internal growth parameters

e.g. productivity, sales, net profit, and market share have been affecting by TQM

constructs e.g. employee satisfaction, customer satisfaction, process development,

and management approaches. However, all of these TQM constructs may not

necessarily affect and related to all of growth parameters.



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In Mitsumaru Group (BD), impact and relationship of TQM constructs on internal

growth parameters could be summarized as followings:

Productivity

In Mitsumaru group (BD), research result has showed that growth parameter

productivity has been positively and directly impacted by TQM constructs employee

satisfaction and process development. In addition, employee satisfaction has

affected positively to customer satisfaction as well. There is also a positive relation

has been found between productivity and net profit. Although, productivity may not

be directly impacted and related by TQM constructs customer satisfaction and

management approaches, management approaches may have indirect and positive

influence on productivity through employee satisfaction and process development.

Sales

Research result has suggested that in Mitsumaru Group (BD), second growth

parameter, sales, has been positively impacted and directly related to TQM construct

customer satisfaction. Moreover, sales are significantly and positively co-related with

market share. Although this research result may have not found any direct relation

of customer satisfaction with productivity and net profits, however, customer

satisfaction may have indirect positive impact on productivity and net profits.



97

Net Profits

The result of this research has also suggested that In Mitsumaru Group (BD), third

growth parameter net profits may neither directly related to employee satisfaction,

nor customer satisfaction, nor process development, and nor management

approaches. Therefore, it could be assumed that TQM may not have any direct

impact on net profit or financial performance of firms. However, employee

satisfaction, customer satisfaction, process development, and management

approaches all of these TQM constructs may have important indirect influence on net

profits.

Market Share

It has been found by the result of this research, in Mitsumaru Group (BD), market

share is positively impacted and related by TQM construct customer satisfaction.

There is also a relation has been found between market share and sales. Market

share also may be influenced indirectly by TQM constructs employee satisfaction,

process development, and management approaches. However, market share may

not directly relate with TQM constructs employee satisfaction, process development,

and management approaches in Mitsumaru Group (BD).



98

Although, apart from net profits and management approaches, there are significant

relationships and direct positive impact have been identified among TQM constructs

and growth parameters, e.g. employee satisfaction with productivity, customer

satisfaction with sales and market share, process development with productivity,

however, result of this research also suggest that in Mitsumaru group (BD)

organizational culture and practice may appear as limitation on the way of TQM

practice.



99

Recommendations

This research has identified and summarized the TQM implementation and its impact

and relationships on internal growth of Mitsumaru Group (BD). The assessment has

been done through this research also summarized the strengths and weaknesses of

TQM practice and its impact on firm‘s internal growth of the companies who are

involved in air condition business and operate in Bangladesh with different cultural

settings. Although the research result has indicated that by TQM practice, customer

satisfaction, employee satisfaction, process development, and management

approaches are significantly and positively influenced and have positive impact on

firm‘s internal growth parameters productivity, sales, and market share, however, in

terms of degree of impacts, apart from employee satisfaction, TQM constructs may

not have significant level of positive impacts on net profits of Mitsumaru Group (BD).

Another weakness has been identified that TQM construct management approaches

is not directly related with any growth parameters, though it has positive indirect

impact on all growth parameters. On the other hand, in long term, organizational

culture and practice could appear to have a great limitation on the way of TQM

practice and therefore, firm‘s internal growth.

From the above weaknesses, it should be assumed that in Mitsumaru Group (BD),

full package of TQM implementation program has not done yet, or there is a gap to

implement TQM, or TQM has implemented partially, or firm is still on the journey to

implement TQM.



100

However, result of this research has drown internal growth model under TQM

practice which suggests that management of Mitsumaru Group (BD) should give

more emphasis to improve close relationships between management approaches

and growth parameters, and between TQM constructs and net profits. Drown model

from this research also suggests that keep the journey of TQM implementation more

effective and fruitfulness, management should emphasis to make changes in TQM

practice which should be adjusted with local organizational culture and practice, or

changes in organizational culture and practice which should be harmonized with

TQM philosophy.

However, TQM is a philosophy of continuous improvement which never ending, thus

successful TQM implementation may take long time depends on firm‘s

characteristics and circumstances. Every firm has its own characteristics, objectives,

and strategies that direct firm‘s growth strategies either internal or external.

Therefore, none of TQM model may fit for every company universally. Nevertheless,

the identified model may take some time to implement in full-fledge and be more

helpful and effective for Mitsumaru Group (BD) and other companies related with air-

condition business in Bangladesh to implement TQM and self-assess its impact on

internal growth of firm.



101

Reflective Statement

Reflective Statement

In general, according to plan, this research project was carried out and has been

able to come up with valuable conclusions and results regarding the positive impact

of TQM on firm‘s internal growth of Mitsumaru Group (BD). A range of differing

opinion from the views of employees and company data has been found within

replied questionnaires, which helped to come up with a great value in that the

majority of the respondents agreed with the views of positive impact of TQM on

firm‘s internal growth of Mitsumaru Group (BD), this process was positively

supported through the access I had to the company and employees for conducting

this research. For that reason, the process of data analysis and a multiple

evaluation processes was able to offer the answer of the specific research questions

and able to meet research objectives, and therefore, the research was in generally

successful.

Alternatively, the chance of studying this area would be offered again, I would

expand the research beyond internal boundaries of the organisation and include

customers, suppliers, other related social and government organisations, which

would be able to offer the best result and help to assess more accurate the impact of

TQM on within organisation as well as on outside of organisation. It also could help



102

to identify the constraints on the way of TQM implementation relating to the social

culture and behaviours of social entities.

The research plan and time frame was made for each section required to complete

according to plan and given time. Because delay response from the respondents, the

time frame and plan was need to change and expanded. However, by using email

and phone, an effective communication and request were made to the respondents

in order to overcome this problem and collect the replied questionnaires within

rescheduled time frame. Apart from to two questionnaires, all replied questionnaires

were able to provide useful and valuable data to make this research successful.

There was a very minor language obstacle that I faced to understand and illustrate

the respondents‘ main logics and views from the second part of questions. However,

this problem was solved by get in touch with them through email and phone.

However, a wide range and depth of literature review was done in early stage with

long time as the requirement of course design that was effectively helpful to

examine the work of previous fellow student in same area and identify the key areas

where should be developed and improved that are ignored or misunderstood

previously. In research, it is general scenario to miss the key areas. In this case, an

extensive literature review and the previous work made easy to plan and get

direction to conduct this research in early stage.



103

The helps and advice were provided from the advisor were meaningful in that how to

produce, construct, and present the best research primarily. In general, most of the

courses of actions of this work were taken with agreed in principle by arranging

group, personal meeting in early stages and some sort of email feedback that was

eventually very useful for every stage throughout the work. Certainly, it should be

recognised the changes was done in the questionnaires according to advice of

supervisor provided me the right direction to produce the valuable outcomes.

This research has been able develop my knowledge and the decision making

process that how to examine and evaluate via logical and critical analysing existing

theories, present theoretical arguments, gaps between theories and practices,

differential result of application of theories and practice in different cultural and social

contexts, limitation of theoretical development. By this research, my potential career

path would be supported and stand me on the strongest starting position of future

employment.

Cross and multiple analysis methods have been applied to compare and contrast

among of the opinion of respondents, data available from financial statements, and

previous research‘ results from literature reviews, which was the right choice for this

research to draw the relevant and valuable results and conclusion. My understanding



104

has been developed by this research process regarding how the best analysis and

evaluation would be done in real life practice of any theories.

As a general, it is believed that it was an enormously successful the research project

which was able to produce the right outcomes. The findings from questionnaires and

secondary data were logically supported by the theoretical arguments of literatures

and produced the valuable conclusion and recommendation. Success of this

research would offer the helpful guide for future researches in broaden areas with

different literatures, research aims and objectives by taking in to account all the

related factors and entities e.g. the customer, suppliers, other social and

governmental entities.



105

Appendices

Dear Respondent,

I am a post graduate student at De Montfort University, Leicester, UK. I am present ly

conducting a research on ―The impacts of TQM on internal growth of Mitsumaru

Group (BD)‖ in Bangladesh.

This study is partial fulfilment of award of an MSc degree in Accounting and Finance.

Your help and co-operation in completing the attached questionnaire will be highly

appreciated.

Thank you,

SM Kudrate Khuda



106

QUESTIONNAIRE

Section A:

(1) Department‘s name: ......................................................................................

(Please any one from the possible answers of every question.)

(2) How many years are you with Mitsumaru Group (BD)?

A. 1 to 5 years B. 6 to 10 years C. Above 10 years

(3) Which position do you hold?

A. Top Management

B. Managerial level

C. Team Leader

D. General Staff

(4) Do you know that Mitsumaru Group has implemented TQM?

A. Yes B. No

Section B:

(5) In Mitsumaru Group (BD), is customer satisfaction impacted positively by TQM

implementation?

A. Yes

B. No

C. Unknown



107

If your answer is YES of question-5, why do you think TQM has positive impact?

............................................................................................................................

.......................................................................................................................................

.......................................................................................................................................

(6) In Mitsumaru Group (BD), is employee satisfaction impacted positively by TQM

implementation?

A. Yes

B. No

C. Unknown


............................................................................................................................

.......................................................................................................................................

.......................................................................................................................................

(7) In Mitsumaru Group (BD), is process development impacted positively by TQM

implementation?

A. Yes

B. No

C. Unknown


................................................................................................................ ............

.......................................................................................................................................

.......................................................................................................................................



108

(8) In Mitsumaru Group (BD), is management approaches impacted positively by

TQM implementation?

A. Yes

B. No

C. Unknown


............................................................................................................................

.......................................................................................................................................

.......................................................................................................................................

(9) In Mitsumaru Group (BD), is mutual relationship between organisation and

outside entities impacted positively by TQM implementation?

A. Yes

B. No

C. Unknown

If your answer is YES of question -9, why do you think TQM has positive impact?

............................................................................................................................

.......................................................................................................................................

.......................................................................................................................................

(10) In Mitsumaru Group (BD), is sales impacted positively by customer satisfaction?

A. Yes

B. No

C. Unknown



109

If your answer is YES of question -10, why do you think customer satisfaction has

positive impact?

............................................................................................................................

.......................................................................................................................................

.......................................................................................................................................

(11) In Mitsumaru Group (BD), is market share impacted positively by customer

satisfaction?

A. Yes

B. No

C. Unknown

If your answer is YES of question -11, why do you think customer satisfaction has

positive impact?

............................................................................................................................

.......................................................................................................................................

......................................................................................................................................

(12) In Mitsumaru Group (BD), is productivity impacted positi vely by employee

satisfaction?

A. Yes

B. No

C. Unknown

If your answer is YES of question -12, why do you think employee satisfaction has

positive impact?



110

............................................................................................................................

.......................................................................................................................................

.......................................................................................................................................

(13) In Mitsumaru Group (BD), is productivity impacted positively by process

development?

A. Yes

B. No

C. Unknown

If your answer is YES of question -13, why do you think process development has

positive impact?

............................................................................................................................

............................................................................................................................ ...........

.......................................................................................................................................

(14) In Mitsumaru Group (BD), are customer satisfaction, employee satisfaction, and

processes development impacted positively by management approaches?

A. Yes

B. No

C. Unknown

If your answer is YES of question -14, why do you think management approaches

has positive impact?

............................................................................................................................

.......................................................................................................................................

.....................................................................................................................................



111

Section C:

(15) In Mitsumaru Group (BD), what is the impact of organisational culture and

practice on TQM practice?

A. Positive

B. No impact

C. Negative

If your answer is POSITIVE/NEGATIVE of question -15, why do you think it?

............................................................................................................................

.......................................................................................................... .............................

.....................................................................................................................................



112

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Documents

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