Fourie Total 2009

8/13/2019 Fourie Total 2009

1/137

TOTAL QUALITY MANAGEMENT:

MIDDLE AND TOP MANAGEMENT PERCEPTIONS OF THE SUCCESSFUL

APPLICATION OF A QUALITY MANAGEMENT SYSTEM FROM A

GENERAL MANAGEMENT, STRATEGIC MANAGEMENT, QUALITY MANAGEMENT

AND HUMAN RESOURCES MANAGEMENT VIEW

Andries J. Fourie

Research report

presented in partial fulfilment

of the requirements for the degree of

Master of Business Administration

at the University of Stellenbosch

Supervisor: Prof C.J. Brown


2/137

Declaration

Hereby I, Andries Johannes Fourie, declare that this research report is my own original

work, that all sources have been accurately reported and acknowledged, and that this

document has not previously been submitted, in its entirety or in part, at any universityin order to obtain an academic qualification.

Signature:

Date: January 2009


3/137

ABSTRACT

Total quality management (TQM) can be defined as a systemic approach on a globallevel, based on process management of continuous quality improvement by all human

resources within the business or company environment, with the specific intent to satisfy

the implicit expectations of all stakeholders in the specific business environment.

Various factors play a role in the active drive towards a quality-driven learning

environment. These factors include increasingly changing market forces, changes in

customer requirements and the very way in which quality is perceived by the employees

within a company.

The above statement raises some important questions, such as

What is the quantifiable value of quality, and Why is it very easily ignored by various companies?

The reason for such questions is the significant shift needed in the thought patterns of

management, difficulty in abandoning misconceptions about TQM and difficulty in

learning from own mistakes and those of others.

It seems that the biggest barrier to the implementation of a total quality system is the

misconception that quality will immediately be perfect and is a quick solution which is

self-sustaining. TQM is, in fact, not a model that is built in concrete, but a journey

consisting of sequential steps. As with any staircase, it can only be sustainable if it is

solidly founded on factors such as managerial commitment, drive, fairness, motivation

and mobilisation of human resources.


4/137

OPSOMMING

Totale gehaltebestuur word gedefinieer as n sistemiese metode op n globale vlak,

gebaseer op die bestuur van deurlopende gehalteverbetering deur al die menslike

hulpbronne binne 'n onderneming, dit wil s die sake- of maatskappy-omgewing, met

die spesifieke oogmerk om aan die implisiete verwagtinge van die aandeelhouers in die

onderneming (besigheidsomgewing) te voldoen.

Daar is verskeie faktore wat 'n rol speel in die aktiewe strewe na n kwaliteitsgedrewe

leeromgewing. Hierdie faktore behels onder meer die voortdurend veranderende

markkragte, veranderinge in die verwagtings van klinte, en die kwaliteitsbeskouing van

die werkers binne n maatskappy.

Bogenoemde ontlok belangrike vrae, soos

Hoe word die meetbare waarde van kwaliteit bepaal, en

waarom word dit so maklik deur ondernemings gegnoreer?

Hierdie soort bevraagtekening is 'n aanduiding dat daar n merkbare en betekenisvolle

gedagteskuif by bestuur nodig is ten opsigte van hul beskouing van gehalte, dat

wanbegrippe oor totale gehaltebestuur verander moet word, en dat probleme in verband

met die leer van lesse uit eie foute en di van ander oorbrug sal moet word.

Die grootste probleem ten opsigte van die ontwikkeling van n totale

gehaltebestuurstelsel, is die wanpersepsie dat gehalte meteens foutloos sal wees, dat

dit n vinnige oplossing is en dat dit selfonderhoudend sal wees. Totale gehaltebestuur

is nie n model wat, by wyse van spreke, in beton gegiet is nie, maar n proses met

opeenvolgende stappe. Soos met enige stel "trappe", kan dit net volhoubaar wees as dit

n sterk fundering het, wat gerugsteun word deur bestuursbetrokkenheid en -

deursettingsvermo, dryfkrag, regverdigheid, motivering en die mobilisasie van die


5/137


6/137

TABLE OF CONTENTS

Page

Declaration i

Abstract ii

Opsomming iii

Acknowledgements iv

Table of Contents v

List of tables x

List of figures xi

List of appendices xii

List of acronyms and abbreviations xiii

CHAPTER 1: INTRODUCTION AND OVERVIEW

1.1 Introduction 1

1.2 Background 2

1.3 Defining the research problem 2

1.4 Research question 3

1.5 Aim of the study 3

1.6 Research design and methodology 4

1.7 Summary 4

CHAPTER 2: THE HISTORY OF TOTAL QUALITY MANAGEMENT

2.1 Introduction 6

2.2 The history of TQM 6

2.3 Summary 9


7/137

3.1 Introduction 11

3.2 Assessment of company readiness for TQM 12

3.2.1 Organisational characteristics 13

3.2.1.1 Influence 13

3.2.1.2 Responsibility and autonomy 13

3.2.1.3 Satisfaction 14

3.2.1.4 The desire and ability to change 15

3.2.1.5 Common vision and benchmarking 16

3.2.1.6 Innovativeness 16

3.2.1.7 Teamwork 17

3.2.2 Total, partial and contingent TQM 17

3.2.3 The essence of TQM 18

3.3 Implementing a quality management system 18

3.3.1 Commitment 19

3.3.1.1 Level 1 Uncommitted 20

3.3.1.2 Level 2 Drifters 22

3.3.1.3 Level 3 Tool pushers 23

3.3.1.4 Level 4 Improvers 24

3.3.1.5 Level 5 Award winners 25

3.3.1.6 Level 6 World class 26

3.3.2 Culture 26

3.4 Measuring total quality management 26

3.4.1 Business performance management 28

3.4.2 TQM and business performance measures 28

3.4.3 Success measurement instruments 30

3.5 Summary 32

CHAPTER 4: TOTAL QUALITY MANAGEMENT AND BUSINESS


8/137

4.5 The philosophical dimensions of total quality management 37

4.5.1 The TOTAL component of TQM 37

4.5.1 The QUALITY component of TQM 38

4.5.2 The MANAGEMENT component of TQM 38

4.6 Systematic view of the organisational change process 39

4.6.1 Defining organisational change 39

4.6.2 Interrelated but different types of organisational change 39

4.6.2.1 Organisational process change 40

4.6.2.2 Changes in the organisational, coordination and control

functions of the company 40

4.6.2.3 Belief, values and human behaviour changes in terms of

the relationships with social rules and practices 40

4.6.2.4 Changes in the way organisational issues are influenced

and changes in power distribution 41

4.7 The determinants of organisational change 41

4.7.1 Resistance to change 42

4.7.2 Organisational readiness 42

4.7.3 Leadership and change 42

4.7.4 Top management commitment 43

4.8 Summary 43

CHAPTER 5: THE CRITICAL LINKS IN MANAGING QUALITY AND

CONTINUOUS IMPROVEMENT

5.1 Introduction 44

5.2 The critical links of quality management 45

5.2.1 Process versus outcome 45

5.2.2 The functional relationship and dual function of quality


9/137

5.3 Continuous improvement and organisational design 48

5.4 Barriers to sustain CI implementation 52

5.5 Summary 52

CHAPTER 6: TQM vs. LEVELS OF MANAGEMENT vs.

HUMAN RESOURCES MANAGEMENT

6.1 Introduction 54

6.2 Senior management 54

6.2.1 From a strategic perspective 54

6.2.2 Organisational credibility 55

6.2.3 Not just a passing fad 56

6.2.4 Quality confidence 56

6.3 The role of the middle manager 57

6.4 Human resource management 58

6.4.1 Work organisation 69

6.4.2 Planning 60

6.4.3 Performance appraisal and remuneration 60

6.4.4 Training and development 61

6.5 Rewarding quality 62

6.6 Performance management 63

6.6.1 Individual-based responsibility versus collective

responsibility for quality 64

6.6.2 Providing feedback 64

6.6.3 Emphasis on both personal and job related training 65

6.6.4 Customer orientation 66

6.6.5 Participation in the determination of work objectives 66

6.6.6 Precise performance standards and objectives 67


10/137

6.6.11 Team-based compensation 69

6.7 Summary 70

CHAPTER 7: ANALYSIS OF DATA AND RESULTS

7.1 Introduction 72

7.2 The questionnaire 73

7.3 Discussion of results 74

7.3.1 Quality management 74

7.3.2 Operational management 79

7.3.3 Human resources management 85

7.3.4 Strategic management 94

CHAPTER 8: RECOMMENDATIONS AND CONCLUSION

8.1 Introduction 105

8.2 Recommendations 105

8.2.1 Quality management 106

8.2.2 Operational management 108

8.2.3 Human resources management 109

8.2.4 Strategic management 110

8.3 Conclusion 111

List of references 113

Appendices 120


11/137

List of tables

Page

Table 2.1 Important events in the development of TQM 7

Table 2.2 Differences between the most important gurus

approaches to quality management and the actual,

widely accepted vision of TQM

10

Table 4.1 Major elements of TQM 39

Table 5.1 Continuous versus radical improvement. 51

Table 6.1 Impact of the personnel department on TQM 62


12/137

List of figures

Page

Figure 3.1 Levels of TQM adoption 20

Figure 4.1 TQM in strategy and operations 36

Figure 4.2 TQM in strategies and operations 37

Figure 6.1 The quality improvement process cycle 57


13/137

List of appendices

Page

Appendix A: Management perception assessment questionnaire 120


14/137

List of acronyms and abbreviations

CEO: chief executive officer

CI: continuous improvement

FMEA: failure mode and effect analysis

HRM: human resources management

ISO: International Organisation for Standardisation

QFD: quality function deployment

QA: quality assurance

SHRM: strategic human resources management

SPC: statistical process control

TQM: total quality management

UMIST: University of Manchester Institute of Science and Technology

UK: United Kingdom

USA: United States of America


15/137

CHAPTER 1

INTRODUCTION AND OVERVIEW

1.1 Introduction

Total quality management (TQM) can be defined as a systemic approach on a global level,based on process management of continuous quality improvement by all human resources

within a business or company environment, with the specific intent to satisfy the implicit

expectations of all stakeholders within that specific business environment.

The practice of TQM has evolved significantly in recent years due to the rapid changes in

the global economy and the ever increasing demand put on market forces. Although quality

and the control thereof is not a new concept, the adoption of TQM systems is still a very

recent practice.

TQM is regarded as an integration of various processes characterising the behavioural

dynamics of an organisation (Lakhe & Mohanty, 1994: 10).

This thesis is a report following an in-depth study of the integration and success of four

integral parts of the management of a successful, quality-driven company, the integral

parts being operational management, strategic management, quality management, and the

management of human resources. This study consisted of an in-depth literature study of

existing theory on quality management, as well as comparing the results of an informal

questionnaire, completed by members of the case study organisation, with the existing

literature.


16/137

1.2 Background

Various factors play a role in the active drive towards a quality-driven learning environment.

These factors include pressure from government in terms of implementing quality

measuring tools and systems, black economic empowerment and international clients that

require some form of quality guarantees.

Some very important question arise from the preceding statement, namely

What is the quantifiable value of quality, and

Why is it so very easily ignored by various companies?

The reason for such questions is the significant shift needed in the thought patterns of

management, the difficulty in abandoning misconceptions about TQM and difficulty in

learning from own mistakes and those of others.

It seems that the biggest barrier to the implementation of a total quality system is the

misconception that quality will immediately be perfect and is a quick solution which is self-

sustaining. TQM is, in fact, not a model that is built in concrete, but a journey (or process)consisting of sequential steps. As with any staircase, it can only be sustainable if it is

solidly founded on factors such as managerial commitment, drive, fairness, motivation and

mobilisation of human resources.

This journey needs to be measured and adjusted continuously. Quality can only be

measured and maintained to the satisfaction of the various stakeholders within a business

environment by means of a quality management system that is measurable by national and

international standards and instruments.


17/137

feeling of low morale within the management fraternity, which in turn spirals down to the

labourer on the shop floor. Other common issues, which can seriously damage a running

quality management programme, are management (both middle and top) losing trust in the

building blocks of the system and the promotion of employees without proper induction into

the existing TQM system.

The research problem in this study is to take measurement of the true essence and quality

of a quality management system, focusing on the existing theory behind different

management concepts, and measuring the perceptions of middle and top management

within a functioning system against the existing literature.

The research shows the input and buy-in of different management levels into the idea of

quality management systems, and serve as a possible benchmarking tool with which

improvement programmes in the current system can be measured.

1.4 Research question

From the problem stated above the research question has been formulated as follows:What is the perception of middle and top management levels within a functioning TQM

system, of the system, measured against existing TQM theory?

1.5 Aim of the study

This study aims at measuring the level of TQM application within the chosen company, by

assessing the perceptions of middle and top management with regard to the existing TQM

system. The results of this perception study are subsequently evaluated against existing

li i h f l h i l i i f i TQM


18/137

1.6 Research design and methodology

The research method used in the completion of this research report was, firstly, an in-depth

study of current total quality management (TQM) theory, done by means of a literature

review. This review of the existing theory focuses on general management, strategy,

human resources and quality improvement.

The second part of the research entailed the formulation of a questionnaire which focuses

specifically on the management aspects researched in this study. This questionnaire was

hence circulated among the middle and top managers of a sector leading company which

has a functioning total quality management system in place.

Response to the questionnaire has been evaluated against the existing literature, with

specific reference to the perceptions of the respondents of the existing structures and

processes that are in place in the company. The questionnaire has four subsections, i.e.

operational management, strategic management, human resource management and

quality management. The questions have been formulated in such a way that the

respondent had to rate the question on a scale from zero to ten, where zero is I do not

know, one (1) is I strongly disagree, and ten (10) represents I strongly agree.

Reponses to each question have been evaluated separately and compared with and rated

against existing theory. All responses to the questionnaire are treated as confidential, and

all the respondents remain anonymous. All the data have been treated in a qualitativemanner and no statistical inferences have been made.

1.7 Summary


19/137

Within such a culture of continuous improvement, a company should have a unified front of

focused strategy in terms of the management styles, structures and levels of leadership it

incorporates into adding value to the services and products it renders.

It is often at a management level that the greatest resistance to a TQM system is found,

due to the imminent role change that the manager must undergo. His role effectively

changes from controller to facilitator. Resistance to the new organisational quality

management system can be mitigated through training, education, communication andproper leadership and support.

Chapter two gives a brief historical review of the development of the term "Total Quality

Management", looking at its development through the years, as well as showing the

viewpoints of the masters of TQM in respect of the different levels of application of TQM.

Chapter three focuses on assessment of company readiness for a total quality

management system, as well as the different levels of application of TQM, and also

discusses different measurement instruments.

Chapter four assesses the role that total quality management plays in business strategy

and discusses the philosophical ideals behind TQM.

Chapter five describes the critical links in the management of quality, as well as the

importance of continuous improvement.

Chapter six focuses on the different levels of management involved in the quality

management process and the crucial role that human resources management plays in a

successful TQM system.


20/137

CHAPTER 2

THE HISTORY OF TOTAL QUALITY MANAGEMENT

2.1 Introduction

Geronte: It seems that you are locating them wrongly; the heart is on the left and the liver

is on the right.

Signarelle: Yes, in the old days that was so, but we have changed all that, and now we

practice medicine by a completely new method.

Molire (1622-1673)

TQM is a relative recent term in organisational development, but historical roots of this

theory go back a long way. Because of the demand of market forces and changes in the

global economy, TQM was forced to evolve. Quality control has for many years been

practiced in many industries, but the adoption of TQM by businesses worldwide has

happened very recently. Traditional methods of quality control used by industries did not

give the expected results. Rapidly changing technology and customer expectations have

necessitated a need for a new outlook on quality.

2.2 The history of TQM

The system of techniques, concepts, tools and facts known today as "Total Quality

Management", did not start out that way (MacDonald, 1998: 323). Powel (1995: 15-37)

pointed out that the origins of TQM can be traced back to 1949, when committees of

scholars, engineers and government officials were formed under the banner of the Union of


21/137

Many TQM dimensions were applied by organisations long before the TQM movement

appeared on the scene (MartinezLorente, Dewhurst & Dale, 1998: 380). Consequently, it

is not easy to pinpoint the date of birth of Total Quality Management.

The origin of the term comes from the idea that quality is not just a matter of control, but

needs to be managed.

Table 2.1 briefly recaps the historical events that influenced the development of the TQM

theory and practice.

Table 2.1: Important events in the development of TQM

1924-1932 Hawthornes studies demonstrated the importance of the social andpsychological climate in work.

1924 Shewhart developed statistical process control.

1926 The Bell Telephone began to apply statistical control methods.

Mid-1940s The American army pushed the use of sampling methods during World

War II.1950s A large number of attempts at work improvement was undertaken (e.g. job

enrichment, work redesign, participative management, quality of work life and

worker involvement).

1950 First visit of Deming to Japan.

1951 Creation of Deming Application Prize in Japan.

First edition of Jurans Quality Control Handbook.

1954 First visit of Juran to Japan.

Maslows theories about human needs.

1960 Lib li i f i J i h i li


22/137

1962 The idea of quality circles appeared in the first issue of the Japanese journal

Quality Control for the Foreman.

Late 1960s and early 1970s the pressure of Japanese companies began to be felt in

American companies.

1972 QFD was developed at Mitsubishis Kobe shipyard site.

1973 After the 1973 oil crisis the JIT system was adopted by a vast number of

Japanese companies. A small number of American and European companiesbegan to apply this system in the 1980s.

Mid-1970s Quality circles began to be widely introduced in the USA, the first quality circle

programme was launched in Lockheed in 1974 and in the UK it was Rolls-

Royce which introduced the concept in 1979.

1979 First edition of Crosbys Quality is Free.

Xerox Corp. started to apply the benchmarking concept to processes

Publication of the BS 5750 quality management series.

1980 An NBC television documentary about the Japanese miracle proposed

Deming as a key element in this miracle.

1981 Ouchis Z theory

1982 First edition of Demings Quality, Productivity and Competitive Position

1983 Quality on the line, published by Garvin in Harvard Business Review,

analysed the differences between Japanese and American companies,

showing some of the reasons for the better performance of the former.

A paper about Taguchis design of experiments is published in Harvard

Business Review.

1985 The Naval Air Systems Command named its Japanese-style management

approach total quality management.

1986 First edition of Demings Out of the Crisis. It became a bestseller.


23/137

Although it is generally considered that Crosby, Deming, Feigenbaum, Ishikawa and Juran

are the essential masters of total quality management, it is not to say that their approaches

are the same. Table 2.2 shows the essential differences of the above total quality

management masters views of TQM.

2.3 Summary

TQM is seen as a comprehensive way to improve and increase organisational performance

and quality. Improving quality used to be seen as an element only of the production

process. Today TQM is seen as an organisational philosophy, as well as a toolkit to

implement this philosophy in the organisation. Various principles are applied within the

philosophy of total quality management (Radovilsky, et al. 1996: 10)


24/137


25/137

CHAPTER 3

ASSESSMENT OF COMPANY READINESS FOR TOTAL QUALITY

MANAGEMENT AND MEASURING THE LEVEL OF IMPLEMENTATION

3.1 Introduction

TQM should be tailored according to a companys needs. It is important to clearly

identify which organisational factors should be investigated when considering if a

company is indeed ready for TQM. The specific characteristics of a company can even

affect the way in which TQM is implemented at different points within a company.

It is of utmost importance that management be the instigator and driving force behind a

successful TQM system. Unfortunately, management is not always considerate of the

level of commitment and effort that the TQM initiative requires. If a company is not

properly prepared to focus on the TQM effort, implementing of such a system may

place the future of the company in jeopardy.

When a TQM system is introduced into a company, the next challenge faced by

management is how to assess the outcomes and functioning of the system. It is often

difficult to acquire information against which to measure the system outcomes. This

problem can, however, be measured by periodic surveys and questionnaires.

Some factors can, however, still hamper the success of the TQM system and lead to

possible failure if not addressed. Some of these factors are (Lakhe & Mohanty, 1993:

27):


26/137

Difficulties in measuring TQMs effectiveness may be experienced in:

(a) Resistance to change at different levels

(b) Lack of strong commitment from all senior managers

(c) Insufficient education and training resources

(d) Lack of awareness among customers and difficulty in assessing

(e) Customer expectations and satisfaction.

3.2 Assessment of company readiness for TQM

Research on quality management has identified seven factors that are critical to

develop a quality excellence programme (Weeks, Helms & Ettkin, 1995: 43). These

characteristics include factors such as influence, responsibility, autonomy, innovative-

ness, desire for change, satisfaction, teamwork, benchmarking and a common vision.To measure these organisational characteristics the perceptions of managers and non-

managers should be important, because these perceptions, even if inaccurate, could

form the basis for individual or group actions.

A company should have a good look at itself in determining its readiness for a totalquality system (Weeks, et al, 1995: 43). To increase the probability for success, the

programme must be driven by the managers who were responsible for the

implementation of the system. The system will fail if top management refrains from

providing support or even supplies only meagre support.

Assessments of the readiness of an organisation for TQM should begin with the

attitudes of top management (Weeks, et al, 1995: 43). Top management members

should be willing to put in as much time and support as is needed to make the system

k A h i l d k h ld h h h i i


27/137

These groups must consist of key members from all departments within the

organisation, with process specific knowledge and applicable levels of decision making.

3.2.1 Organisational characteristics

Seven critical organisational characteristics should be judged to attain an image of the

organisations readiness for a successful total quality management plan. Strengths and

weaknesses, and differences in perceptions between management and employees in

terms of these characteristics, should be considered (Weeks, et al, 1995: 44).

3.2.1.1 Influence

The degree to which employees feel they have influence in the organisation, plays anintegral role in the TQM process (Weeks, et al, 1995: 44). If the sense is healthy, the

employees will accept autonomy and responsibility more easily. Resistance to change

is lower when the employees have a significant feeling of importance to the

organisation. Resistance to change is higher when employees have a limited feeling of

ownership over the process, and when the level of confidence regarding the ability to

change conditions is very low. Such employees are also not motivated, driven and

committed to work in teams, and are not interested in taking any responsibility.

Questions on influence include receptiveness to new ideas and suggestions and

flexibility to decide which job-method to use, the ability of individuals to effect change

and input into unit goals.

3.2.1.2 Responsibility and autonomy


28/137

Delegation of responsibility is very important and should at least include the authority to

recommend changes and action. A constant need for approval in a vertical

management hierarchy limits the acceptance of responsibility by individuals and can

limit the involvement in total quality management efforts. A commonly used method to

foster responsibility is by reducing the levels for decision approval. However, when

employees are not properly prepared for the responsibility, frustration in the system sets

in.

Responsibility and autonomy issues include the amount of approval required and clarity

of job goals.

3.2.1.3 Satisfaction

The need to achieve, to be recognised, for group identity, and for the authority to

exercise influence, are all psychological needs of the individual in the new, more

competitive, quality-driven organisation (Weeks, et al, 1995: 45). How these needs are

met, is the indicative factor, indicating job satisfaction.

Achievement can only be recognised and measured if performance evaluations are

done efficiently, which should include the functioning of appropriate feedback channels.

Without these channels, employees cannot adjust their performance levels, while

inappropriate feedback might negatively influence the responsibility factor of the

employee. There should not be too much emphasis on the recognition of the individual,

since it might undermine and have a negative influence on the collective team effort.

A high level of satisfaction within the working environment will lead to positive

h hi h li l l l b i l l


29/137

Issues included in the satisfaction component are the praise versus criticism factor,

promotions for advancement, fairness of promotions and fairness in performance

evaluations (Weeks, et al, 1995: 45).

3.2.1.4 The desire and ability to change

Dissatisfaction with the status quo is often the most important factor that leads to

change. Sometimes this dissatisfaction is needed. To overcome this dissatisfaction,

effective planning and effective communication are the most important factors.

Traditionally, many organisations may be averse to change and be conservative,

therefore special measures and efforts may be needed to encourage the employees to

adapt to changing environments.

It is typical for a company where the employees are less willing to adapt to change to

be less innovative. These organisations tend to find it difficult to imbed a sense of

influence in their employees, which is necessary to assure more decision-making and

thus a bigger sense of responsibility.

A large driving force behind policy change is the decision-making authority (Weeks, et

al, 1995: 45). Companies trying to implement a Total Quality Management system

should take great care when the company is structured in such a way that decision-

making authority cannot be delegated to employees. Organisations are also advised to

take great care to assure that the problem and not the symptoms are addressed. Such

change can be very traumatic to the company and a TQM system would be easier to

accept than a radical change to programmes and structures.


30/137

3.2.1.5 Common vision and benchmarking

Basic factors ensuring a successful TQM implementation include that the future vision

of the company needs to be very clearly presented; that it should be compelling to all

employees; and that it should be presented such that it is clear to all employees within

the organisation.

An organisation also needs to assess its current position in terms of where it wants to

be and use this as a motivating factor to ensure maximum progress.

It is very important that the TQM system is an integral part of an organisations business

plan, and that it is measurable to ascertain where the progress of the organisation lies

in terms of a specified level of performance. Benchmarking is used by someorganisations to measure the performance of their TQM system and to improve the

system.

Issues related to a common vision and benchmarking include a clearly defined mission

statement, clear goals (understandable to all employees), common and shared vision

for the organisation, the presence of a measuring system to measure the progress of

the quality system, an emphasis on customer satisfaction and monitoring of

performance indicators.

3.2.1.6 Innovativeness

Innovative companies exhibit characteristics such as free experimentation which do not

lead to negative feedback, the regular operation of taskforces and small teams,

di h l i h h b id d l d hi i h i i d


31/137

Successful TQM systems foster processes within an organisation where problems and

setbacks are seen as opportunities for innovation, and where prior mindsets are

discarded to attain quality improvements.

3.2.1.7 Teamwork

Skills of various employees are combined in a synergetic way to solve problems and

respond to opportunities. Co-operation between co-workers and departments are

essential to the idea of teamwork.

This can only succeed if management and non-management can work together in

symbiosis. A supporting communication-chain is essential to attain a competitive

advantage. To stimulate teamwork further, incentives can be incorporated.Unfortunately, in some instances, these incentives are not focused on the

organisational goals and might lead to diminished teamwork and less successful quality

efforts.

3.2.2 Total, partial and contingent TQM

There seem to be many companies that pick up bits and pieces of TQM, and then

report that they are operating a full-fledged TQM system (Hill & Wilkinson, 1995: 10). In

essence, companies will only incorporate the easy to implement, easily acceptable by

all the employees parts of a TQM system, which will look like the real thing, but will not

deliver all the functionality of a full fledged TQM system.In reality most of these

organisations seem to run a system of non-conforming and ill-matched quality circles,

employee involvement, quality tools and long established quality assurance systems.


32/137

process that TQM is a quick fix approach, with specifically designed beginning and

ending points.

Not only is there partial and full TQM, but TQM may be contingent with various versions

manifested under different upmarket conditions, in different size organisations, and at

different levels of development (Hill & Wilkinson, 1995: 12). It becomes clear that TQM

is not a one-size-fits-all programme, but that it must take the conditions at each

company into account.

What is hardly surprising is that TQM programmes end up concentrating on the tools

and technology of the system, and do not produce any better results than the company

not using it (Page & Curry, 2000: 13). The worst case scenario is where the company

adapts a system of TQM to justify systems of downsizing, delaying and outsourcing. Itseems then that TQM has become a problem and not a solution.

3.2.3 The essence of TQM (Babber & Aspelin, 1994: 32)

3.2.3.1 The reason for your organisations existence is the customer.

3.2.3.2 Give your customer the best product you are capable of giving, if you want to

keep your company profitable.

3.2.3.3 Understand why customers go to your opposition and do not come to you.

3.2.3.4 Keep adding real value to your product.

3 3 I l ti lit t t


33/137

organisation. Existing thought processes should incorporate TQM philosophy, which

includes constantly looking for better ways to accomplish activities. The end result

should be that employees would use various TQM tools as the definitive way of

solving problems.

Implementation of a TQM system can only be successful when the thinking patterns of

the whole organisation are recalibrated, accompanied by training in quality assurance

methods (Laszlo, 1998: 281). A solid TQM programme generates excellence in

thinking, high quality work methods, improvement of efficiency and high service quality.

The three main drivers of TQM can be classified as follows:

3.3.1 Commitment

There should be recognition by management that the principal objective of a quality

assurance system should be to provide goods and services that meet the expectation of

the customer.

An increasing number of customers demands a system of quality management.

Management commitment to quality assurance stems from seeing how customer

acceptance benefits the organisation in terms of improved market share and increased

profits. Because of the complexity of a TQM system, although the initial attraction to

management is favourable, the long-term commitment and support for initiative is

difficult to retain (Dale & Lascelles, 1997: 418).

The recognition that management has a social responsibility towards all stakeholders,

l li d i h f d i hi h


34/137

Figure 3.1: Levels of TQM adoption

Source: Dale & Lascelles, 1997: 419

3.3.1.1 Level 1 - Uncommitted

These organisations could be regarded as being ignorant of the TQM process and have

not started any formal process of continuous improvement (Dale & Lascelles, 1997:

419). Obtaining ISO 9000 quality management system registration and applying a few

loose quality management tools and techniques is as far as their quality managementsystem goes. This is normally in reaction to customer pressure. The extent to which the

tools and techniques are applied is directly proportional to the amount of time spent by

client representatives on site, monitoring their use.

The ISO 9000 is seen by management as a quality system and not a management tool.

The quality department drives the quality management system, and the upkeep and

success is solely dependent on its efforts. Success of audits by third and fourth parties

shows management that the quality system is successful.


35/137

Management thinks that they are above any type of quality training and very little

investment takes place in quality education and training of management (Dale &

Lascelles, 1997: 419). Consequently, management tends to refrain from becoming

involved and taking responsibility for the system. Problems with certain systems within a

TQM will cause that some senior managers will see TQM as a costly bureaucratic

system that puts unreasonable demands on their time and limit their autonomy.

Typical characteristics of Level 1 organisations include (Dale & Lascelles, 1997: 420):

(a) Output and sales targets are the major objectives, whatever the costs.

(b) A lack of quality assurance and behaviour regulating systems will lead to

alternative measures being employed to meet unrealistic production targets.

(c) Quality gets discarded, leading to internal and external failures.

(d) Short-term think processes will be evident in the lack of investment in people,research and development, infrastructure and cost cutting.

(e) The threat of competition is not recognised.

(f) The organisational system is filled with negative factors like the blame game,

inflexible working practices, job demarcation, disregard for worker potential and

lack of innovation.

(g) People steal ideas and proposals from fellow employees to look better before

management.

(h) Data collected from the production process are filed and never inspected to see

trends and major non-conformances.

(i) Improvement initiatives are normally from the lowest employee upwards and

product related.

(j) Customer contact is minimal.

(k) Communication in the vertical spheres of the organisation is lacking.

(l) E l d hif bl ll i b


36/137

3.3.1.2 Level 2 - Drifters

These are organisations that have been engaged in a system of continuous

improvement for up to three years, have followed advice and received the wisdom of

TQM (Dale & Lascelles, 1997: 421). The initial enthusiasm has worn off and ways of

reviving the programme are being investigated. The employees with short-term views

are disappointed with the results and are investigating the next method or process for

excellence.

Organisations like these tend to follow every new fad without getting involved and

understanding the key concepts. These organisations have followed the step by step

system for quality management, as stated in Crosbys 14 steps (1979), but where it is

stated to do it all again, they tend to be hesitant, because the initial initiative has notbeen universally successful through the organisation. These organisations might enter

a vicious circle of renewal and decline, frustration and constant disappointment.

Typical characteristics of level 2 organisations are as follows:

(a) Continuous improvement is still seen as a programme and not a strategy, and

has a very low priority within the organisation.

(b) TQM does not reach the shop floor and office levels due to the lack of a plan to

deploy a TQM philosophy through the whole organisation.

(c) New fads to increase profit tend to distract leadership and management from the

TQM initiation.

(d) Within the organisation the quality department plays a very small role.

(e) Continuous improvement does not reach the overall business direction and is

little more than a cosmetic tool.

(f) Th TQM i i i i i h h i f ll i l b f i i


37/137

(h) Middle and senior management look at TQM with cynicism and scepticism, with

a large part of these managers discarding the system and, in addition, they see

TQM as a short-term tool to squeeze more productivity out of the operating level.

3.3.1.3 Level 3 Tool pushers

At this level the organisation has had 35 years of operating experience with TQM

(Dale & Lascelles, 1997: 422). These organisations have ISO 9000 registration and/orhave met requirements in terms of quality from external sources. Quality tools like

statistical process control, quality circles, mistake proofing and quality improvement

tools, are commonly used and they might even be learning about more advanced

techniques such as quality function deployment.

Quality planning systems and management tools and techniques are employed in an

exacting and stringent manner to meet the exact requirements as set by customers.

A number of level 3 organisations follow a particular quality improvement tool and follow

the advice given, to the letter. Although this might be successful in some instances,

after a period of 23 years these tools will have lost their impact and the methodology

would have been discarded. These companies buy ready-made tools and packages for

quality management, but discard them when the novelty has worn off, often blaming the

tools as being ineffective when they realise that the incorrect application of the tool led

to failure.

Typical characteristics of these companies are:

( ) S i i f ll i d TQM d h h d


38/137

(c) Interdepartmental function is evident.

(d) The management style is reactionary.

(e) Quality procedures are detailed and focused on the current status, looking at

solving current problems and not future problems.

This type of organisation finds it difficult to keep the momentum of its improvement

programme going, and is always looking out for new ideas and quick fixes.

3.3.1.4 Level 4 - Improvers

Big advances on the process of continuous improvement have been made by

organisations in the 38 years they have been involved with it (Dale & Lascelles, 1997:

424). These organisations understand that customer-driven, continuous improvement isof utmost importance, and realise that organisational culture changes are necessary for

the process to succeed. TQM strategies are formulated and driven by management,

which is committed to the process. These strategies run in conjunction with the other

business strategies. At this level the impact that TQM has on business performance can

be clearly seen.

Typical characteristics are:

(a) A quality and strong quality system includes a policy department, as well as the

necessary problem solving infrastructure.

(b) A company-wide, long-term training and education system is in place.

The cross-functional working of teams is recognised and communicated.

(c) Data gathered throughout the company is used to facilitate improvement

i i i


39/137

(g) The hype of TQM is replaced with good management practice and principles.

At this level TQM is unfortunately still dependent on a small number of individuals to

sustain the drive and momentum. Any restructuring, people leaving or changes in the

economic environment can put the TQM system under pressure. Although these level

of organisations are moving in the right direction, the TQM system is not yet an integral

part of the business process, and not yet self-sustaining. All the quality initiatives are

heavily dependent on the individuals driving TQM, and the strategy of pulling the qualitysegments within the organisation, is not fully in place.

3.3.1.5 Level 5 Award winners

These are the organisations that are eligible for receiving international accolades fortheir performance in implementing a system of continuous improvement (Dale &

Lascelles, 1997: 425). At this point these organisations are at a point where their

continuous improvement has become total, and has matured into the kind of culture,

values, trust, employee involvement and relationship required to win such a reward.

Characteristics of such an organisation are:

(a) Improvement is organisation-wide and all employees are involved.

(b) Organisational changes have been successful.

(c) Customer needs lead to responsive and effective business procedures and

processes.

(d) All levels practice strategic benchmarking.

(e) Employees see TQM as a system to manage business in such a way, as to cater

ll d


40/137

3.3.1.6 Level 6 World class

Continuous improvement and business strategy are totally integrated (Dale & Lascelles,

1997: 426). An indication of a world-class quality performer is when an organisation can

apply for the Japan quality medal five years after they have received the Deming

Application Prize.

Characteristics of such an organisation include:

(a) Values and purpose are defined and communicated.

(b) A unique success model is developed and applied.

(c) Employees, suppliers and customers fully understand the company values.

(d) Emphasis falls on company-wide dependability.(e) No tolerance for waste.

(f) Competition against other world class organisations happens constantly.

(g) The right things are done right the first time, every time.

3.3.2 Culture

Permeation of the TQM system throughout the whole organisation is the only way for it

to succeed (Laszlo, 1998: 284). Synergy between associates from different business

functions are fostered through partnering, teamwork and co-operation. An organisation

with a culture of learning is defined by the ability to encourage innovation, focus on

improvement and not blame, respect for employees and a factual approach to decision-

making.

3 4 M i t t l lit t


41/137

organisations can evaluate the state of their current positions through self-assessment.

A need exists for strategic thinking to determine what is best for an organisation, and

what the unique pattern of a TQM system can offer.

For TQM programmes to succeed factors like management commitment, employee

involvement, ongoing training, communication and commitment to quality must be

implemented throughout the organisation (Scheuermann, et al, 1997: 264).

It is often difficult for organisations that adopted business improvement philosophies

and approaches such as TQM, to measure or quantify the difference these approaches

have made to organisational performance (McAdam & Bannister, 2001: 88).

Four interlocking assumptions underpin the bases to which TQM generally can bemeasured (Hackman & Wageman, 1995: 310):

(a) Quality is assumed to be less costly to an organisation than poor workmanship.

(b) Employees will take initiative to improve quality due to their natural care for the

quality of the work as long as they are provided with the necessary tools and

knowledge.

(c) Because organisations consist of systems of interdependent parts, any problems

they face may cross traditional functional lines.

(d) Quality is ultimately the responsibility of top management.


42/137

3.4.1 Business performance management

It has been argued that most western companies are driven by profit, whereas TQM

companies are ultimately driven by the profits due to customer satisfaction.

In the modern business environment a certain level of consistency, both external and

internal, should be reflected in terms of business performance measurement (McAdam

& Bannister, 2001: 91). Internal measures establish a standard of effectiveness withinsight into business strengths, as well as an external standard reflecting the

organisation's ability to compete. Attributes showing an effective performance

measurement system include factors such as the following:

Activities are streamlined, processes are simple and easily understandable, everything

is important, every individual adds value to the customer, measurement reflects

problem elimination as well as visible progress, and measurement is everybody's

responsibility. These measurements and indicators should be dictated by external

customer requirements. It therefore becomes evident that performance measurement

should move away from manager centred to customer centred.

3.4.2 TQM and business performance measures

Before any business performance improvement can be attributed to TQM, it must first

be established if TQM has indeed been implemented within an effective performance

measuring system. Only then can meaningful questions be asked regarding the effects

of TQM on companies and their employees.

Another challenge is to collect data on process changes and improvements that can be

di l ib d TQM d hi h h ld b ib i i i l


43/137

Hackman & Wageman (1995: 321) suggested three criteria for unit effectiveness:

(a) The level at which task orientated effort is exhibited by unit members;

(b) the amount of skills and knowledge that employees apply to their work; and

(c) the appropriateness of task performance strategies in the work process.

Overall unit effectiveness will suffer if members efforts are insufficient, if insufficient

talent is borne on the work or if task inappropriate strategies are used.

The first point is to consider the efforts that the team produces. If the team is

challenged to collaborate to improve the product to meet specific customer

requirements with work of a higher standard, then by implication the collective effort by

the team should be enhanced. Losses through misdirection and non-coordination

should be decreased through process management which is an integral part of TQM.

Secondly, by using coordinated cross-functional team members, more talent will be

available to work on collective tasks. This optimises the process because single

workers operating alone and single function teams would be eliminated. The interaction

between cross-functional team members can lead to increased learning, increasing the

total pool of talent that is available.

Thirdly, with regard to the strategy behind performance, task orientated work teams can

sometimes veer away from the strategic path or simply become inefficient, because

members might not be entirely sure of what they are supposed to do or who they must

satisfy. TQM structures clarify and identify customers and their individual requirements.

Th h i i f l i i h i f TQM d h ll


44/137

3.4.3 Success measurement instruments

In the past, quality as a standard has been measured by the percentage of failures.

Subsequently, preventative measures and quality assurance became more prevalent

(Capon, Kaye, Wood, 1994: 9). In the 1980s, when cultural change demanded

continuous improvement, employee attitude surveys became popular. In the 1990s

however, as TQM became more of a holistic management theory, customer,

shareholder and competitor reactions and perceptions became more important.

It is not easy to measure total quality. Many intricate techniques are available, but very

few measure the TQM system as a whole. The following are systems of measurement

and what they measure (Capon, et al, 1994: 9):

(a) Sampling techniques reduces monitoring workload

(b) SPC methods measures processes rather than finished products

(c) FMEA and Taguchi Measuring quality at the design stage

(d) Pareto analysis and Fukuda measuring improvement teams.

Unfortunately, the weakness of these systems is that they do not measure company-

wide progress.

A competent way of measuring company-wide TQM success is to measure the cost of

quality (Capon, et al, 1994: 9). This includes the cost of prevention, appraisal and

failures, both from the customers point of view, as well as within the company.

Unfortunately, this measure only gives a very short-term picture of the effectiveness of

the TQM system and no long-term view of likely future results, allowing only limited

id i i h Th ll f d f db k h


45/137

Another company-wide measure is measuring or auditing compliance to company

standards (Capon, et al, 1994: 10). This measures the consistency of administration,

which is a big reason for a majority of quality problems. A problem with this system is

that it could lead to a big drive towards procedural compliance, virtually eliminating and

avoiding progress.

Another method of measuring and evaluating the process is through measuring

customer perception. This tool measures the strength of the relationship between thecustomer and the supplier (Capon, et al, 1994: 10). Questionnaires are affective and

valuable to measure this relationship strength, ranking success against customer

concerns after each sale. Although this is a softer method of measurement, it does

reveal significant trends in TQM success.

Using employee surveys is another valuable method of measuring TQM by defining the

level of employee commitment to the TQM system (Capon, et al, 1994: 10). The best

methods of attaining these results are through random satisfaction and remark

questionnaires as well as group feedback sessions. Although this method is very

subjective, it does measure at which level necessary organisational and cultural

changes are occurring.

Two attempts of combining all the above-mentioned factors into one measurement

instrument have been made, one being the Baldrige awards in the USA, and the other

being the European quality awards in Europe. The Baldrige award uses seven

categories, 89 areas of assessment with varied weightings, adding up to a score of

1000. The European quality award covers the same area as the Baldrige award plus

two extra categories, impact on society and business results. Both awards give useful

f k f b i d d f d il d


46/137

3.5 Summary

In this chapter the factors needed for the implementation of a successful TQM system

has been considered, the different levels at which TQM are implemented in different

companies, as well as the different ways and methods TQM can be and are measured

in companies.

It is clear that total quality management is a continuous process of incrementalimprovements. Even if a company has been investigated and all the organisational

factors that will be included in the system have been investigated, it may still take years

to establish the system. But as soon as the process of putting the system in place is

started, short-term successes will start to show themselves.

At this stage of TQM system implementation, TQM should be seen as process

orientated and not result orientated. But results will follow if the system is implemented

successfully. Implementing a system of TQM will give the company a competitive edge

by redefining the quality of work life for employees, redefining the level of involvement

of employees in work processes and add organisational strength to the company.

It should be clearly stated that the level of TQM implementation is a direct result of the

strategic vision that the management of a company has for its future. This includes the

influence of rapidly changing market forces, the level of commitment the management

has to change, as well as managements perception of quality.

Measuring the success of a TQM system can be conducted by means of various

methods, most of which only measure the success in specific areas within the company,

d h h l Thi i h l d i i i f h


47/137

CHAPTER 4

TOTAL QUALITY MANAGEMENT AND BUSINESS STRATEGY

4.1 Introduction

The term "strategic quality management" was used as far back as 1988 in literature:

"strategic quality management" is the most radical departure of all, many have

insisted that quality be viewed as an aggressive competitive weapon(Garvin, 1988: 21)

Garvin viewed TQM as an era of quality with inspection, statistical quality control and

quality assurance (Leonard & McAdam, 2002: 51)

He identified the eight dimensions of strategic quality management as:

(a) performance

(b) features

(c) reliability(d) conformance

(e) durability

(f) serviceability

(g) aesthetics

(h) perceived quality.

Based on the philosophy of TQM, TQM needs to emphasise integrity, environmental

issues and social responsibilities as key elements, and serve as the key to being


48/137

4.2 Strategic quality management

The uncertainty in today's business environment is forcing organisations to re-evaluate

their business strategies (Love, Li, Irani & Holt, 2000: 108). Many managers are

reluctant to make long-term investments, and are more dedicated to make short-term,

low-risk, strategic decisions to protect the client's need for immediate profitable projects.

This is a concern due to the fact that TQM instruments deliver long-term positive results

rather than short-term gains.

Due to the initial costs incurred in developing a TQM system, it might seem an

unprofitable organisational strategy in the short run. Many managers see long-term

benefits as a financial burden, due to the fact that they get rewarded on short-term

financial results. Thus managers self-interest may take precedence over long-term

profits. TQM can be interpreted as a type of business strategy consisting of two parts,

content and process, which, on their own, are necessary, but not sufficient, conditions

for organisational success (Reed, Lemak & Montgomery,1996: 174).

A balance must be found between these components. Focusing only on the quality

assurance mechanisms and procedures will lead to improved service and products, but

to reduced profits (Love, et al, 2000: 108). To successfully implement a TQM system a

strategic fit should be found between the operational environment of the organisation

and its business orientation and strategy.

Most TQM literature and applications consider TQM on an operational level (Leonard &

McAdam, 2004: 255). At this operational level TQM leads to improved operational

performance and an associated culture change. In many cases though, TQM-based

i l i b i li d i h h ' b i


49/137

foundation are sometimes lacking, as is the misconception that TQM is only an

operational tool for company leaders.

4.3 The strategic and operational impact of TQM

According to Leonard and Mc Adam (2004: 259), the key points of TQM application

within organisations are represented in the model as shown in figure 4.1.

This model was developed over a period consistent with the grounded theory model

(McAdam & Henderson, 2004: 61). It starts with corporate mission and vision and then

moves towards corporate objectives. These are the key starting points for TQM within a

top-down organisational approach.

TQM has an organisational impact focusing on the customer at a strategic level. TQM

can also act as a catalyst to change the direction of corporate strategy and its

emphasis. This figure also shows that TQM has a dynamic cyclical life, changing as

needed.

The operational element of TQM in organisations achieves the strategic visions and

objectives by fulfilling strategy through the dissemination of action plans and objectives

between different business units.


50/137

Figure 4.1: TQM in strategy and operations

Source: Leonard & McAdam, 2004: 259

4.4 The strategic application of TQM

Figure 4.2 below illustrates a model that places the strategic level at the top andextends down to operational levels within a hierarchic structure (Leonard & McAdam,

2004: 259),

In this figure the highest level of TQM application is at strategic level. Senior

management commits to the system and TQM is fully understood by managementteams as a philosophy and not just an operational tool. This resultant operational

operation is the cause of strategic thinking.


51/137

Figure 4.2: TQM in strategies and operations

Source: Leonard & Mc Adam, 2004: 259

The vertical dividing line differentiates between the pre-strategic and post-strategic

TQM influence.

4.5 The philosophical dimensions of total quality management

4.5.1 The TOTAL component of TQM

company wide quality control In 1988 Juran cited the three main reasons why


52/137

company-wide quality control. In 1988 Juran cited the three main reasons why

company-wide quality control was so successful in Japan (Lau & Anderson, 1998: 88):

4.5.2.1 The quality revolution was led by top management with strong leadership.

4.5.2.2 All employees at all levels received the proper quality training.

4.5.2.3 Gradual, continuous improvement was emphasised.

The total component of TQM basically calls for everyone, including all suppliers, to be

involved in doing the utmost to maintain and upgrade the quality of their work.

4.5.2 The QUALITY component of TQM

Deming and Juran recognised the customer in judging quality (Lau & Anderson, 1998:

88). In the end the final, major goal of quality management is meeting and exceeding

customer expectations. Continuous improvement must be an integral part of the

management of all systems and processes. The whole system has to be systematically

planned from production to distribution to realise the full benefit of continuous

improvement.

One of the most important challenges for management is to commit critical resources

on a long-term basis so as to share and spread skills and knowledge on quality

management to employees. Training will teach and empower the employees to better

solve and understand quality related problems.

4 5 3 Th MANAGEMENT t f TQM

Table 4 1: Major elements of TQM


53/137

Table 4.1: Major elements of TQM

Total Quality Management1. Require employee

participation and

teamwork

1. Customer (internal

and external) driven

1. Require commitment

from top management

2. Everyone must

develop a sense of

quality ownership

2. Emphasis on

continuous

improvement (kaizen)

2. Establish purposes

and values for the

company

3. Involve every leveland function of the

company

3. Technical issues:training for skills and

knowledge

3. Leadership is critical

4. Apply systems

thinking

4. Human issues:

encourage innovation

4. Make appropriate

change in

organisation culture

Source: Lau & Anderson, 1998: 88

4.6 Systematic view of the organisational change process

4.6.1 Defining organisational change

Various views exist on what organisational change is. From the viewpoint of the

individual it might be seen as a new job description, a new post or such. This might

seem inconsequent to higher management. Changes that are important to higher

management might seem inconsequent from the perspective of people outside theorganisation. Perspective is, therefore, very important when looking at the phenomenon

of change.

activities the organisation within its environment and organisational design and the


54/137

activities, the organisation within its environment and organisational design, and the

style of management (Cao, Clarke & Lehaney, 2000: 188).

A classification of the four types of organisational change is necessary to distinguish

between the key dimensions of organisational change (Cao, et al, 2000: 188).

4.6.2.1 Organisational process change

Hammer (1996: 5-9), stated that a process is a related group of tasks that together

create a result of value to a customer. One of the key issues in dealing with change

management is dealing with control through changes in organisational processes.

These processes involve material flows from raw material to finished goods, cash flow

and human resources input.

4.6.2.2 Changes in the organisational, coordination and control functions of the

company

This includes changes in the vertical and horizontal management structures, and

changing the basis on which activities are grouped into resource allocation systems,

policy and decision systems (Cao, et al, 2000: 188). It can also include changing the

system of recruitment, appraisal, compensation and career development. How

authorities and responsibilities are differentiated and integrated vertically and

horizontally, are the main concern of organisational design.

4.6.2.3 Belief, values and human behaviour changes in terms of the

relationships with social rules and practices

organisational members will be fostered, which will help in keeping the company


55/137

o ga sat o a e be s be oste ed, c e p eep g t e co pa y

abreast of the competition.

4.6.2.4 Changes in the way organisational issues are influenced and changes

in power distribution

An organisation is in essence a conglomerate of different interest groups, constantly in

tension (Cao, et al, 2000: 188). These groups, or forces, should be in constant balanceand must be open to constant modification. In order to explore who holds the power in

an organisation, and how that power is exercised, an appreciation of the specific

political dynamics is a very helpful means.

4.7 The determinants of organisational change

TQM refers to a process of managing and establishing organised, continuous process

improvement activities, with the involvement of everybody in the organisation, moving

with an integrated effort towards improving performance at every level (Almaraz,

1994: 9).

Due to the current movement within organisations to become more complex, the types

of changes required within organisations have also become more complex. Change

seldom occurs in slow-moving, stable environments. Within complex organisations the

changes are major changes in the core functioning of the organisation and a radical

movement away from the traditional way of doing business. Tichy (1983: 24) defines

major organisational change as non-routine, non-incremental, discontinuous change

which alters the overall orientation of the organisation and/ or its components.

The four key determinants to organisational change are:


56/137

y g g

4.7.1 Resistance to change

People are for the most part resistant to change. In organisational change this

resistance is even more prominent. Fear of the unknown, habit, economic insecurity,

threats to social relationships, and a failure to notice the need for change are all factors

that add to this resistance. If the organisational leaders do not step up and facilitate

acceptance of change, the change that does happen will only be for a short period

before everything returns to the original form.

4.7.2 Organisational readiness

The difference between how an organisation looks before, and after change, is an

important issue when discussing change.

The readiness for change depends on the existing culture of the organisation, and how

much the change differs from that culture. It is very difficult to open up the

receptiveness to change in an organisation where there is no apparent crisis, but only

the long range vision of leaders who anticipate the time it will take to implement

organisational change (Almaraz, 1994: 11).

When the vision of the leaders differs from the existing values and beliefs of the

organisational culture, resistance to change will occur and can be expected. The

desired change will never happen and will never be accepted if the organisational

culture does not adapt to the vision of the leaders and its implications.

will only be successful if the leadership is dedicated to the process of change and


57/137

transformation and drives the process actively.

4.7.4 Top management commitment

Top management commitment is vital to the successful implementation of an

organisational change programme. Management is the key that unlocks quality

improvements in organisations. Unfortunately, not all managers realise that their own

values and beliefs must change in order to nourish and encourage the new culture of

quality within the organisation.

4.8 Summary

Due to the initial cost incurred in developing a TQM system, it is seen by many

managers as an unprofitable strategy in the short run. The long-term benefits are often

overlooked due to the focus of companies on short-term results. To successfully

implement a TQM system a strategic fit must be found between the operational

environment of the organisation and its business orientation.

In order to successfully introduce TQM into the business strategy of a company it is

essential that a change should occur within the organisation. Different views and

perceptions exist with regard to organisational change. Management perceives it

different than employees. Although this is the case, it must still be seen as crucial to

creating maximum value to the customer.

The next chapter deals with the critical links in what quality means to different role

l i hi h I di h d l h ld

CHAPTER 5


58/137

THE CRITICAL LINKS OF MANAGING QUALITY AND CONTINUOUS

IMPROVEMENT

5.1 Introduction

Although quality has always been known to be an important issue in both management

theory and practice, it still means different things to different stakeholders (Saad &

Siha, 2000: 1146).

Critical factors and dynamic relationships exist between the various variables that make

up quality. Only if these article relationships are understood, true insight into the

effective management of quality can be obtained.

Employees have in recent years become familiar with a variety of concepts and

strategies on how to improve the effectiveness of business processes (Emiliani, 1998:

29). The term continuous improvement means incremental improvement of products,processes and services over time, with the goal of reducing waste to improve

workplace functionality and product performance (Emiliani, 1998: 30). Continuous

improvement principles result in incredible improvements in performance that are

nearly impossible to be matched by competition. The term, continuous improvement,

challenges the basic notion that people cannot change.

Continuous improvement challenges employees and management alike to modify their

own behaviour and recognise that self development is a never ending task Striving for

From an organisational viewpoint continuous improvement must be seen as a


59/137

company-wide process of focused and continual innovation. It involves everyone

working together in making improvements without necessarily making huge capitalinvestments (Bhuiyan and Baghel, 2005: 761).

5.2 The critical links of quality management

Some of the critical links for managing quality are as follows (Saad & Siha, 2000:

1150):

5.2.1 Process versus outcome

Theory dictates that a desired outcome prescribes the process of attaining that

outcome. The actual outcome, however, depends on the actual process that was

followed. Deviations to the outcome will occur if the process is influenced by

uncontrollable factors. Thus, whereas in theory the outcome determines the process, in

reality the process followed determines the actual goal achieved. This implies that a

quality process as planned might not guarantee a quality product.

It is therefore crucial that a clear boundary should be set between the planning and

execution stages of a quality system, and the different perceptions of quality that exist

on the other hand. During the planning stage the process allowed is a function of the

final product desired, whereas at the execution stage the quality attained is dually

influenced by the customers perception of quality as well as the process followed. This

implies that in the execution stage certain uncontrollable factors may arise that cannot

be accounted for in the planning stage.

5.2.2 The functional relationship and dual function of quality drivers.


60/137

Quality is affected by various factors, which include time, market segment, place, cost,business performance and the type of customer that is serviced. Each of these different

factors has both a cause and effect nature simultaneously. Each factor may feature

alone or in relation to another. For example, each of the above-mentioned factors can

affect quality but at the same time quality also influences each factor.

On the other hand, the functional relationship between the drivers of quality and quality

itself is also not consistent. A quality focus may have a positive result on

competitiveness in the short run, but might reduce profitability in the long run. In other

instances, introducing a quality system might put pressure on profits in the short run,

but introduce higher profits and increased market shares in the long run. These

patterns change with different product characteristics and market elasticity.

It is therefore crucial that quality should be managed in practice with strict security of

the relationship between quality drivers and the specific business environment. This

implies that management should be fully aware of the direct relationship between rate

and direction of quality specifications, and the change and consequences a quality

policy might have over time. Quality policy should not only be reactive to market needs,

but be proactive to trigger desired market results.

5.2.3 Quality is not a static outcome but rather a dynamic process

Quality is treated as a sequential set of steps and rules in literature, but in practice

quality programmes are very integrative. This implies that a quality programme should

f i ff d b ib d ll f i l f h b i

Quality standards should be seen as a dynamic process rather than steps in achieving


61/137

a set fixed goal. Therefore, it can be stated that quality is a dynamic process of value

creation.

For management practices the perspective of quality has important policy implications,

namely:

(a) For quality to be seen as a value creation process, it should include new

product usages, intangible values, time value, and place value, in addition to

direct economic and financial values.

(b) Value creation should not only focus on shareholders interests but also on

stakeholders needs and requirements. These stakeholders include both

internal and external customers of the business.

(c) Management should have a quality vision. They should have a partially ideal

position in mind. A definite end product will not be the intended outcome,

rather a flexible and agile system that can quickly respond to an ever

changing market.

(d) Management should clearly define which processes are static and which are

dynamic within the quality process.

5.2.4 The link between product quality and organisational quality

Evidence shows that TQM programmes have failed miserably in many companies, but

have triumphed in others. Implementation seems the phase in which most TQMprogrammes fail (Saad & Siha, 2000: 1150). Visible factors such as structures, strategy

and technology have a very small effect on TQM effectiveness. The main influences

that impact positively on TQM programmes are intangible variables like values

5.2.5 TQM design versus implementation.


62/137

Although it is necessary to have an effectively designed TQM system, it is not the onlycondition for successful implementation of TQM. The design and implementation

stages complement each other, but each of them is driven by different determinants.

The design is made necessary by economic and technical determinants, while the

execution largely relies on the quality of management and its ability to influence the

perceptions and behaviour of employees.

The economic benefits of the TQM programme are realised by these more intangible

ingredients. Managers have to take more cognizance of the intangible parts of the TQM

system to assure effective implementation. In the short run organisational culture

influences the quality policy that is used, but in the long run the quality programme will

influence behaviours, attitudes and values within the company.

5.3 Continuous improvement (CI) and organisational design

CI programmes were initially developed in organisations that focused extensively on

repetitive processes and production focused activities. Processes and products were

standardised. Improvement tasks can be incorporated into the regular work of individual

employees and continuous improvement must be adapted to the level of process

standardisation required (Bhuiyan and Baghel, 2005: 766). Continuous improvement

can be based on two dimensions, namely basic task design and improvement tasks.

Basic task design relies on work process and product standardisation. Low

standardisation is normally prevalent in group activities, but individual tasks can be

highly standardised. The improvement task would traditionally lie with a professional

i hi hi hl d di d

Berger (1997: 110 - 117) presents five typical organisational designs based on the

i di i


63/137

previous two dimensions.

(a) Quality control circles:

A group of employees that meets regularly to discuss problems and issues

related to quality and come up with solutions.

(b) Wide-focus CI:

This is a mixture of organic continuous improvement and expert task forceCI. It combines continuous improvement process teams for temporary

operations and for CI self-managed groups.

(c) Organic CI:

Multifunctional work groups are integrated with improvement activities: It

differs from other models because the design and decision making authority

lies within the group.

(d) Expert task force CI:

The span of improvement tasks requires a lot of time and investments

because this form of CI relies on a temporary task force of professionals.

(e) Individual CI:

A suggestion system organises improvement as set by individuals.

Individuals come up with ideas and specialists implement them. Continuous

improvement can be defined as the ability of an organisation to gain strategic

advantages by exuding involvement in innovation to a significant proportionof its employees (Caffyn, 1999: 1142).

It is comprised of a set of 10 generic CI behaviours that are essential fundamentals in

i ti f ll t d i


64/137

organisations of all types and sizes:

(a) Employees demonstrate awareness and understanding of the organisations

aims and objectives.

(b) Improvement activities by individual groups come through the use of the

organisations strategic goals and objectives.

(c) The enabling mechanisms used to encourage involvement in CI are

monitored and developed.

(d) Constant reinforcement and support to the organisational structure, systems,

approach and mechanisms are ensured by ongoing assessments.

(e) Managers at all levels are committed to CI and leadership of the system.

(f) Productive incremental improvement occurs throughout the organisation.

(g) There is effective working across internal and external boundaries at all

levels.

(h) People learn from their own and others experience, both positive and

negative.

(I) The learning of individuals and groups are captured and deployed.

(j) An underlying culture of improvement is present and guides all employees.

CI can occur through evolutionary improvement, in which case it would happen

incrementally, or through radical changes that take place due to an innovative idea or

new technology.

TABLE 5.1: Continuous versus radical improvement.

Continuous improvement Radical improvement


65/137

Continuous improvement Radical improvementManagement believes that results belong

to processes which, in turn, belong toorganisations; thus, rewards are given forefforts to improve processes

Primary responsibility for improving aprocess belongs to those who work in thatprocess

All processes can be targeted forimprovement all the time (because manyemployees are involved in improvement)

Workers are expected to help raise

performance standards

Standards change frequently

Process changes are frequent, and usuallysmall, incremental and inexpensive

Process changes are usually initiated by

those actually performing the processes.Improvements are usually created using in-depth knowledge of the organisationsprocesses; this knowledge is gainedprimarily through work experience

Improvements are numerous and affectboth major and minor processes in the

organisation

Improvements are often tightly linked toprevious improvements, and takeadvantage of process characteristics

Management believes that results belong

to individuals; thus rewards are given forresults and not for the processes used toachieve those results

Primary responsibility for improving aprocess belongs to professional andtechnical experts, usually corporate staffor external consultants who do not

themselves work in that process

Only a few processes (selected by theexperts and management) can betargeted for improvement at any time(because of limited numbers of involvedexperts and managers)

Workers are expected to meet existing

performance standards

Standards change infrequently

Process changes are infrequent, andusually large, radical and expensive

Process changes are usually initiated by

experts not actually performing theprocesses. Improvements are usuallycreated using in-depth knowledge oftechnical or other subjects, gained morethrough formal education than workexperience

Improvements are relatively few andaffect major processes in the organisation

Improvements are often loosely linked toprevious improvements that originatedfrom a different group of experts and take

5.4 Barriers to sustain CI im

Documents

Fourie Total 2009