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MAKERERE UNIVERSITY

COLLEDGE OF BUSINESS AND MANAGEMENT SCIENCES

ADOPTION OF TOTAL QUALITY MANAGEMENT PRACTICES AND

PERFOMANCE OF SMALL AND MEDUIM SCALE MANUFACTURING

ENTERPRISES.

A CASE STUDY OF KAMPALA DISTRICT

BY

MUTEBI RONALD

06/U/9650/EXT

SUPERVISOR: MR. KITALE C.CHARLES

A RESEARCH PROPOSAL SUBMITTED TO MAKERERE UNIVERSITY IN

PARTIAL FULFILLMENT OF THE REQUIREMENTS OF THE AWARD OF THE

DEGREE OF BACHELOR OF COMMERCE.

AUGUST -2011

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DECLARATION

I Mutebi Ronald declare that this research report is my original work and has never been

previously or currently presented to any university for the award of any degree .The

source used to compile it are presented and where another person‟s work has been used

or referred to, an acknowledgement been made respectively.

Signature ………………………………………………………………..

Date ……………………………………………………………………

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APPROVAL

This is to certify that this work has been submitted for examination with my approval as

university supervisor.

Signature

…………………………………………….............................

Date ……………………………………………………………….

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DEDICATION

To my father Mr. Kizito Austin who basically sacrificed his life to make certain that I get

a head start .And to my mother Mrs. Kizito Justine for the support above and beyond the

call. What would I do without two?

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ACKNOWLEDGEMENT

I would like to acknowledge the assistants, academic moral or material, which was

extended to me during the preparation of this research report.

I extended my sincere appreciation to my supervisor, Mr. Kitale Chris for his valuable

and brotherly guidance, encouragement, advice and collective comments throughout the

preparation of this research report .I am al so indebted to Mr. .Richard Kajumbula and

Mr. Isaac Shinyekwe who introduced me to Research Methods

I thank God and my paternal family members who have been by my side since I began

my university degree to date .Utmost special thanks to my aunt, M/s Nalongo Sylvia

sendi and Mr. Salongo sendi for the love ,care ,moral and financial support rendered to

me through out my life my brothers and sisters :Sserwanga john ,Jjuko henry, Kanyike

thomas, Nakizito teddy, Ndagire Justin, Demintria, Joseph and Edward and my God

mother M/s Sarka slozolova for all the shared triumphs and disasters over so many years .

I would like to appreciate the support and encouragement that my friends have rendered

to me during this study. Special thanks go to the following people Nassaka lindah

,Faridah ,Erinah, Paul, Wilson, Innocent ,Lawrence, Joseph, Partrick, Richard, Vanessa

,Hannington, Julius,Special thanks go to Mr.& Mrs. Ssebalamu, M/s Sarka slovilova

and all the workers at Afroplast (u) ltd.

Thank you all for the support accorded to me during the course and throughout the

research process.

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TABLE OF CONTENTS

DECLARATION……………………………………………………………..ii

APPROVAL………………………………………………………………….iii

DEDICATION………………………………………………………………..iv

ACKNOWLEDGEMENTS………………………………………………….v

TABLE OF CONTENTS……………………………………………………vi

LIST OF FIGURES………………………………………………………….xi

LIST OF TABLES……………………………………………………………xii

LIST OF ABBREVIATIONS AND ACRONYMS…………………………xiii

ABSTRACTS…………………………………………………………………..xiv

CHAPTER ONE

INTRODUCTION

1.1 BACKGROUND OF THE STUDY…………………………………………1

1.2 STATEMENT THE PROBLEM ……………………………………………2

1.3 PURPOSE OF THE STUDY………………………………………………...3

1.4 OBJECTIVE OF THE STUDY……………………………………………...3

1.5 RESEARCH QUESTIONS………………………………………………….3

1.6 SCOPE OF THE STUDY …………………………………………………..3

1.6.1 CONTENT SCOPE………………………………………………………3

1.6.2 GEOGRAPHICAL SCOPE……………………………………………....4

1.7 SIGNIFICANCY OF THE STUDY…………………………………………4

1.8 CONCEPTUAL FRAMEWORK……………………………………………4

CHAPTER TWO

LITERATURE REVIEW

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2.0 INTRODUCTGION…………………………………………………………..5

2.1 Definition of TQM…………………………………………………………….5

2.2 Definition of business performance……………………………………………8

2.3 Definition of quality……………………………………………………………9

2.4 Some of the general causes of poor performance in S.M.ES………………….11

2.5 Critical factors for effective TQM adoption……………………………….11

2.5.1 Management leadership and commitment…………………………………..11

2.5.2 Continuous improvement……………………………………………………12

2.5.3 Total customer satisfaction……………………………………………….....13

2.5.4 Employee involvement………………………………………………………14

2.5.5 Training and education………………………………………………………15

2.5.6 Reward and recognition……………………………………………………...16

2.6 Levels of TQM implementation……………………………………………..17

2.6.1 No customer concern/ No inspection………………………………………..17

2.6.2 Quality control……………………………………………………………....17

2.6.3 Quality assurance…........................................................................................18

2.6.4 Continuous quality improvement…………………………………………...18

2.6.5 Quality award model………………………………………………………..18

2.7 Dimensions of business performance…………………………………………19

2.7.1 Product quality and effectiveness…………………………………………...19

2.7.2 Customer satisfaction………………………………………………………..19

2.7.3 Financial performance……………………………………………………….19

2.8 Effects of TQM adoption on business performance………………………..20

2.8.1 TQM and organization performance…………………………………………20.

2.8.2 TQM and organization growth……………………………………………….20

2.8.3 TQM and organization competitive advantage……………………………….20

2.8.4 TQM and organization profits………………………………………………...21

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2.8.5 TQM and organization financial performance………………………………..21

2.8.6 TQM and product quality and price…………………………………………..21

2.8.7 TQM and customer protection………………………………………………..22

2.9 Relationship between adoptions of TQM techniques and

business performance…………………………………………………....22

2.10 Hypothesis developed

2.10.1 Customer focus……………………………………………………………25

2.10.2 Management leadership…………………………………………………...26

2.10.3 Human resource management…………………………………………….26

2.10.4 Quality data and reporting………………………………………………..27

2.10.5 Suppliers‟ management…………………………………………………..28

2.10.6 Design management……………………………………………………...39

2.10.7 Process management……………………………………………………..39

2.10.8 Conclusion……………………………………………………………….39

CHAPTER THREE

METHODOLOGY

3.0 Introduction ……………………………………………………………….31

3.1 Research design……………………………………………………………31

3.2 Survey population………………………………………………….............31

3.3 Sampling method…………………………………………………………...31

3.4 Sample size ………………………………………………………………....31

3.5 Source of data……………………………………………………………...32

3.6 Data collection tools……………………………………………...................32

3.7 Procedures of data collections ……………………………………………...32

3.8 Data presentation and analysis ……………………………………………..33

3.9 Problem s /limitations s of the study………………………………………..33

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CHAPTER FOUR

PRESENTATION, ANALYSIS AND INTERPRETATION P F FINDINGS

4.0 Introduction ……………………………………………………………34

4.1 Findings on demographic characteristics of respondents

4.1.1 Response rate………………………………………………………….34

4.1.2 Age of respondents …………………………………………………..35

4.1.3 Gender of respondents ……………………………………………….36

4.1.4 Educational levels of respondents ……………………………………37

4.1.5 Length of time respondents have worked at the company……………38

4.1.6 Length of time the company has been in existence…………………..39

4.2. Findings on adoption of TQM techniques

4.2.1 Findings on the factors for effective adoption/

implementation of TQM techniques………………………………..40

4.3 Findings on the effects of TQM on company performance……………..42

4.3.1 TQM and organization performance…………………………………..42

4.3.2 TQM and organization growth………………………………………...43

4.3.3 TQM and organization competitive advantage..………………………43

4.3.4 TQM and organization profits…………………………………………45

4.3.5 TQM and organization financial performance…………………………45

4.3.6 TQM and product quality and price……………………………………46

4.3.7 TQM and customer protection………………………………………….47

4.4 FINDINGS ON THE RELATIONSHIP BETWEEN ADOPTION OF TQM

TECHNIQUES AND PERFORMANCE OF SMALL AND MEDIUM ENTERPRISES

4.4.1 Whether effective adoption of TQM techniques affects the performance

of small and medium enterprises……………………………………….48

4.4.2 Whether there is a relationship between adoption of TQM

techniques and performance of S.M.Es…………………………..49

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CHAPTER FIVE

SUMMARY OF MAJOR FINDINGS, CONCLUSIONS AND RECOMMENDATIONS

5.0 Introduction……………………………………………………………………51

5.1 SUMMARY OF MAJOR FINDINGS ………………………………………..51

5.1.1 Summary of major findings on adoption of TQM techniques……………….52

5.1.2. Summary of major findings on business performance………………………52

5.1.3 Summary of major findings on the relationship between adoption

of TQM techniques and performance of S.M.E…………………………52

5.2 Conclusion…………………………………………………………………..52

5.2.1 Adoption of TQM techniques……………………………………………..52

5.2.2 Effects on company performance………………………………………….52

5.2.3 RRLATIONSHIP BETWEEN LOCAL REVENUE COLLECTION AND

QUALITY OF SERVICE DERIVERY

5.3 RECOMM ENDATIONS

5.3.2 Recommendations on quality service delivery

5.4 Areas for further research

BIBLIOGRATHY

APPENDICES

APPENDIX I

APPENMDIX II

APPERNDIX III

APPENDIX IV

APPENDIX V

APPENDIX VI

APPENDIX VIII

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APPENDIX

LIST OF FIGURES.

Figure 1; Response Rate…………………………………………………… 34

Figure 2; Age of Respondents………………………………………………35

Figure 3; Gender of the Respondents……………………………………….36

Figure 4; Education level of the Respondent………………………………..37

Figure 5; Time of work at the company………………………………......…38

Figure 6; Length of company existence……………………………………...39

Figure 7; Rating of the factors for effective adoption of TQM techniques…..41

Figure 8; Effects of TQM on company‟s competitive advantage……………44

Figure 9; Effect of TQM on product quality and price………………………47

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LIST OF TABLES

Table 1: Showing educational levels of the respondents…………………….37

Table 2: Length of time of work at the company…………………………….38

Table 3: Length of time of company‟s existence…………………………….39

Table 4: Factors for effective TQM adoption………………………………..40

Table 5: Showing effect of TQM on organization performance……………..42

Table 6: Showing whether TQM has an effect on organization growth……..43

Table 7: Showing effect of TQM on organization competitive advantage…..43

Table 8: Showing whether TQM leads to high profit in an organization…….46

Table 9: Showing effect of TQM on financial perspective…………………..46

Table 10: Showing whether TQM is relevant to product quality and price….47

Table 11: Showing whether there is a cause relation- effect between

TQM techniques and customer protection………………………..48

Table 12: Showing whether effective adoption of TQM techniques leads

High performance of S.M.Es………………………………………49

Table 13: Showing whether there is relationship between adoption of

TQM techniques and performance of S.M.Es……………………..49

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LIST OF ABBREVIATIONS AND ACRONYMS

TQM - Total quality management

S.M.Es - Small and medium enterprises

UBOS - Uganda bureau of statistics

NIST - National institute of standard and technology

UNCTAD - United nations conference on trade and development

MNBQA - Malcolm Baldrige National Quality Awards

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ABSTRACT

Total Quality Management (TQM) has been widely considered as the strategic, tactical

and operational tool in the quality management research field. It is one of the most

applied and well accepted approaches for business excellence. There is a great

enthusiasm among manufacturing and service industries in adopting and implementing

this strategy in order to maintain their sustainable competitive advantage.

The aim of this study is to establish the relationships between adoption of TQM

techniques and company’s performance particularly in the context of small and medium

manufacturing enterprises by measuring the product quality and effectiveness, customer

satisfaction and financial performance as performance indicator. A comprehensive review

of literature on TQM and company performance was carried out to accomplish the

objectives of this study.

Three research questions were proposed and 7 hypotheses were looked at to re-validate

the TQM practices. The adoption of such a theoretical model on TQM and company’s

company would help managers, decision makers, and practitioners of TQM in better

understanding of the TQM practices and to focus on the identified practices while

implementing TQM in their companies. The result finding is expected to be powerful

information for future research directions especially as an indicator for the development

of a suitable TQM framework for the local SMEs in Uganda

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CHAPTER ONE

1.0 Background of the study.

In such a competitive environment resulting from world globalization and liberalization,

firms survive with much difficulty unless they create the competitive advantage over their

competitor (Adam et al., 2001, Samson & Terzivzki, 1999). Around 12% of businesses

close within their first year, 25% are closed within two years, and around one thirds will

have disappeared by the end of the third year, Alan and Jamieson (2006).

With the increasing competition, business survival pressure and the dynamic, changing

customer-oriented environment, Total quality management (TQM) has been recognized

as one of the important management issues for every organization and it has generated

substantial amount of interest a monger managers and researchers (Achier et al., 1995;

Benson et al., 1991; Powel, 1980).

According to Stevenson (2002), TQM is defined as a quest for quality in an organization

and according to him there are three philosophies in this approach, namely; continuous

improvement, involvement of everyone in the organization, and the customer satisfaction.

Performance on the other hand is the effectiveness to the firm's ability to serve or produce

what the firm requires at particular time and efficiency which means meeting the

objectives at the lowest possible cost with the highest possible benefit (Grassing 2000).

Various authors have argued and empirically stated the positive impact of TQM adoption

on company‟s performance in terms of operating and financial results, quality, customer

satisfaction or employee satisfaction. However, most of these studies focus on identifying

the TQM practices that are most effective and crucial from the performance improvement

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point of view. Some of these studies focus only on a particular type of performance:

quality performance, financial performance, or operating performance. They do not

provide much evidence on how exactly TQM affects performance: are all performance

dimensions improved and what areas of performance are mostly improved by TQM

adoption?

Therefore the objective of this study is to understand and measure the impact of TQM on

different dimensions of company performance. In order to achieve the above objective,

the research is focused on answering the following questions: Is there a significant

company performance improvement after TQM adoption? Are these improvements more

of financial, operating, employee performance or customer satisfaction nature? How long

does it take to get significant positive benefits?

1.2 Statement of the Problem.

The Small and medium scale manufacturing sector is widely regarded as the driving force

in economic growth and job creation in Uganda. It plays a significant role as over 90% of

the active non farming population are employed in this sector, UBOS ;( 2003). However,

the performance of this sector is relatively poor. Despite the fact that the Government of

Uganda has provided non-fiscal incentives to stimulate its growth, the performance of

these small scale industries has remained low. S.M.E s are not growing. The industrial

sector, which is dominated by .S.M.Es, still contributes less than 20 percent to the GDP

and has not been performing impressively, James.M; (1994). From 1997/98 to 2005/2006

the manufacturing sector‟s annual growth rate was only 1.3%, Esther. K et al; 2008. The

sector‟s efficiency has been decreasing, and its technical efficiency is much lower (that

is, 0.19) than that of manufacturers in Cameroon, Ghana, Kenya, and Zimbabwe

(Gauthier 2001). There is concentration of S.M.Es in low-quality production (Sengendo

et al. 2001, and poor managerial and skills competence (Nalumansi et al. 2002; Nel and

Shapiro 2003). The industrial sector‟s annual growth rate was approximately 1.3%. The

capacity utilization of the Ugandan manufacturing sector when compared to that of other

African countries was around the mean (58%) but lower than that of the manufacturing

sectors in Kenya (63%) and Côted‟Ivoire (71%), This limits their levels of sales and

profits since most of them compete for the same customers, (Sengendo et al. 2001).

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This has been attributed to the lack of resources and knowledge to practice total quality

management techniques in their operations hence they continue producing low quality

products that do not meet customer need thus loosing the competitive advantage over

their rivals hence collapse.

1.3 Purpose of the Study

The purpose of the study is to investigate the effect of the adoption of total quality

management practices on the performance of Small scale industries in Kampala district

(Uganda)

1.4 Objectives of the Study

The study has the following objectives:

1. To identify the key factors for the successful adoption of TQM techniques.

2. To examine the effects of TQM techniques adoption on company performance.

3. To establish the relationship between company performance and the adoption of

total quality management practices.

1.5 Research Question

1. What are the key factors for the successful adoption of TQM techniques?

2. What are the effects of TQM adoption on the manufacturing firm‟s performance?

3. What is the relationship between the adoption of TQM practices and the company

performance?

1.6 Scope of the study.

1.6.1 Content scope.

The content of the study will be centered on total management techniques in my case

studies. It will include among other things, the key elements of TQM, the effect of TQM

adoption.

It will also analyze the firm‟s performance in terms of; product quality, business set goals

against the achieved one, profits, sales, and other related indicators of performance of the

company since their existence.

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1.6.2 Geographical Scope,

This will be in the area of the study location. This will be Kampala district specifically. It

will also involve all workers at different levels; officials from private sector foundation

will also be approached on this matter.

1.7 Significance of the Study

The study will help managers to establish a strong total quality management

system in their organization.

Academicians and future researchers will base on these findings to conduct future

related studies.

The study is to propose a model which can study TQM effects more effectively

and hence, implement TQM in a more efficient manner.

The study will help manager/owners of SMEs to recognize the need for an

efficient management system in an organization.

1.8 The Conceptual frame work

coll

ection

Customer satisfaction

Continuous improvement

Everyone involvement

Adoption of TQM

techniques

Performance of small and medium

enterprises

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CHAPTER TWO

2.0 LITERATURE REVIEW.

2.0 Introduction

This chapter looked at what other researchers and academicians have written about the

variables in the study and any other related literature. This chapter is aimed at giving an

insight into the related literature about Total quality management and performance of

S.M.Es. Under TQM, various definitions, principals, its effect on business performance,

the relationship between TQM and business performance, and the hypothesis developed

on TQM will be covered. With business performance, things like definitions, likely

causes for their poor performance and also an overview of the SME in Uganda will be

looked upon.

2.1 Definitions of TQM

Feigenbaum defined total quality as a continuous work process, starting with customer

requirements and ending with customer‟s satisfaction. According to him, the definitions

of quality have changed with the passage of time with the changing customer‟s needs and

requirements. But the essence has been more or less to develop an approach to problem

solving, conformation to standards for customer satisfaction. With management functions

getting complex, approaches to managing quality in functional areas are becoming

difficult. Organizations, which have successfully used TQM principles, have customer

satisfaction and quality embedded in their corporate strategy.

According to Jack P. Pekar, “any organization is a system of interrelated units. For TQM

to succeed, all of the components within the organization must be collectively involved.

Initially, organizations implemented TQM in hope that improvement in the shop-floor

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activities would solve all existing productivity and quality problems .Later; they have

realized that TQM is much more than just shop-floor improvement. the definitions of

quality incorporates factors like top management commitment, leadership, team work,

training and development, rewards and recognition, involvement and empowerment of

employees e.t.c. these critical factors are the foundation for transformational orientation

to create a sustainable improvement culture for competitive advantage on continuous

basis.

According to Kamukama Nixon, (2006), TQM is a technique in which management

develops policies and practices to ensure that firm's products and services exceeds

customer expectations. The approach includes increased product functionality, reliability,

durability and serviceability.

According to Professor Vinod Kumar, Total quality management has many definitions.

Gurus of the total quality management discipline like Deming, Juran, Crosby, Ishikawa

and Feigenbaum defined the concept in different ways but still the essence and spirit

remained the same.

According to Deming,E.W. (1986), TQM is a continuous quality improvement process

towards predictable degree of uniformity and dependability. Diming also identified 14

principles of quality management to improve productivity and performance of the

organization,

Juran,J.M.(1993), defined quality as “fitness for use”. According to him every person in

the organization must be involved in the effort to make products or services that are fit

for use. Crosby defines quality as conformance to requirements. His focus has been on

zero defects and doing it right the first time.

Ishikawa also emphasized the importance of total quality control to improve

organizational performance. According to him quality does not only mean the quality of

the product, but also of after sales service, quality of management, the company itself and

the human life.

.

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According to Selladurai Raj, TQM an interventions or activities must be guided by four

change principles, namely work processes, variability analysis, and continuous

improvement. Product design and production processes must be improved; variance must

be controlled to ensure high quality; data must be systematically collected and analyzed

in a problem solving cycle; and commitment made to continuous learning by employees

about their work.

Chase et al., (2001) defined TQM as managing the entire organization so that it excels on

all dimensions of products and services that are important to the customer.

According to Zairi, Letza, and Oakland (1994) TQM is defined as a positive attempt by

the organizations concerned to improve structural, infrastructural, attitudinal, behavioral,

and methodological ways of delivering to the end customer, with the emphasis on

consistency, improvement in quality, competitive enhancements, all with the aim of

satisfying or delighting the end customer.

TQM is an organizational cultural commitment to satisfying customers through the use of

an integrated system of tools, techniques and training. TQM involves the continuous

improvement of organizational processes resulting in high quality products and services.

Under this approach, all managers should be thinking about how every organizational

process can be conducted to provide products and services that are responsive to tougher

and tougher customer and competitive standards.

TQM believes in,

Zero defects

Get right the first time and every time

100% perfection; there is no room for error.

Working in a system where all departments work together.

It involves bench making, which means comparing your own products and

processes with the very best in the world.

TQM also traces that customers should be the starting point because they need

high quality products that are fit for use.

TQM needs participation for all the management team and employees they all

must devote time to get the possible cause for failure.

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Total quality management is a management philosophy embracing all activities

through which the needs and expectations of the customer and the community, and

the organization are satisfied in the most efficient and cost effective way by

maximizing the potential of all employees in a continuing drive for improvement.

Barrie G.Dale;(1994).

2.2 Definition of business performance

Performance in the context of business operations is the effectiveness to the firm's ability

to serve or produce what the firm requires at particular time and efficiency which means

meeting the objectives at the lowest possible cost with the highest possible benefit

(Grassing 2000).

According to the efforts of Kaplan (1992) and Keegan et al. (1982) observe that

performance measures used by the organization has to provide a balanced picture of the

organization. The set of measure would reflect the non financial and financial measures

that include income statement, cash flow statements, innovations and customer

satisfaction, internal and external measures that include the employees, suppliers,

creditors, effectiveness and the efficiency measures.

Performance is said to be a measurement tool that needs judgment and interpretations and

must therefore be qualified as good or bad Neily, (2002).

It has also been referred to as the ultimate economic results that are said to be produced

by the organization to be determined by the pattern and the conduct prevailing in the

industry Weily, (1982).

Armstrong (2001), defined performance as the record of outcomes achieved. It‟s a record

of a person‟s accomplishments.

According to United nations conference on trade and development (UNCTAD)

LDCIII/PRESS (2001 ), Small- and medium-sized enterprises (SMEs) play a crucial role

in stimulating broad-based, equitable and sustainable economic development through

employment and income generation. The main constraints affecting the development of a

globally competitive SME sector in Uganda include the lack of entrepreneurial and

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management skills; limited access to and high cost of financing; lack of business

development support services; limited access to information on market opportunities; and

poor economic infrastructure.

According to Oscar Ankunda (2010), Small and Medium Enterprises (SMEs) in Uganda

employ more than 2.5m people, constitute up to 90 percent of the private sector and

contribute over 70 percent to total GDP.

It must be noted that the newly launched National Development Plan 2010/11 - 2014/15

strongly emphasizes the fact that the private sector is the engine of growth, employment

creation and socio-economic transformation. This, therefore, means that SMEs must be

brought at the forefront of policy design and implementation if socio-economic

transformation is to be achieved. Issues of value chain development, value addition (agro-

processing for agribusiness SMEs), access to markets, etc, must be strongly focused on so

that the returns from the SME sector more than double.

A Micro Enterprise is defined as an enterprise employing maximum 4 people; annual

sales/revenue turnover of maximum Ugandan Shillings 12 million and total assets of

maximum Ugandan Shillings 12 million.

A Small Enterprise is defined as an enterprise employing maximum 50 people; annual

sales/revenue turnover of maximum Ugandan Shillings 360 million and total assets of

maximum Ugandan Shillings 360 million.

A Medium Enterprise is defined as an enterprise employing more than 50 people; annual

sales/revenue turnover of more than Ugandan Shillings 360 million and total assets of

more than Ugandan Shillings 360 million. Small and Medium Enterprises (SME) are the

backbone of the Ugandan economy. They contribute to job creation and poverty

reduction. SMEs need to be supported to grow from small enterprises to medium and

large businesses.

2.3 Definition of quality.

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. Today, there is no single universal definition of quality. Some people view quality as

“performance to standards.” Others view it as “meeting the customer‟s needs” or

“satisfying the customer.” Let‟s look at some of the more common definitions of quality.

Conformance to specifications measures how well the product or service meets

the targets and tolerances determined by its designers. For example, the

dimensions of a machine part may be specified by its design engineers as 3.05

inches. This would mean that the target dimension is 3 inches but the dimensions

can vary between 2.95 and 3.05 inches. Similarly, the wait for hotel room service

may be specified as 20 minutes, but there may be an acceptable delay of an

additional 10 minutes. Also, consider the amount of light delivered by a 60 watt

light bulb. If the bulb delivers 50 watts it does not conform to specifications. As

these examples illustrate, conformance to specification is directly measurable,

though it may not be directly related to the consumer‟s idea of quality.

• Fitness for use focuses on how well the product performs its intended function or use.

For example, a Mercedes Benz and a Jeep Cherokee both meet a fitness for use definition

if one considers transportation as the intended function. However, if the definition

becomes more specific and assumes that the intended use is for transportation on

mountain roads and carrying fishing gear, the Jeep Cherokee has a greater fitness for use.

You can also see that fitness for use is a user-based definition in that it is intended to

meet the needs of a specific user group.

• Value for price paid is a definition of quality that consumers often use for product or

service usefulness. This is the only definition that combines economics with consumer

criteria; it assumes that the definition of quality is price sensitive. For example, suppose

that you wish to sign up for a personal finance seminar and discover that the same class is

being taught at two different colleges at significantly different tuition rates. If you take

the less expensive seminar, you will feel that you have received greater value for the

price.

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• Support services provided are often how the quality of a product or service is judged.

Quality does not apply only to the product or service itself; it also applies to the people,

processes, and organizational environment associated with it. For example, the quality of

a university is judged not only by the quality of staff\ and course offerings, but also by

the efficiency and accuracy of processing paperwork.

2.4 Some of the causes of the poor performance of the SMES.

According to Alan Bryce and Jamieson Wilson, (2006), where these businesses have

goon wrong might be difficult to explain, but using the four major functional areas

(finance, human resources, marketing and operations) might be a start.

a). If your market research is faulty (bad survey, wrong questions, inappropriate sample

of the market), the expected sales do not happen.

b). If your operations are badly organized (too much stock, wrong stock, wrong type of

production), costs escalates and the products is too costly.

c). If your job and person specifications are wrong, recruitment of human resources will

be badly and inefficiently carried out and you will have a poor, unmotivated workforce.

d). Lastly, if your finance is in mess, the amount of money coming in and out will be out

of your control; ultimately, you are out of business

2.5 Critical factors for effective TQM adoption

TQM calls for a cultural transformation that requires employee involvement at all levels

and a spirit of teamwork among customers, suppliers, employees, and managers.

Employee involvement, participation and empowerment form the cornerstones of TQM

(Saylor, 1992). According to Barrie.B.Dale (1994), also talks about the factors or

principals for an effective implementation of TQM in an organization. These six

principles to guarantee success are:

• Management leadership and commitment

• Continuous improvement

• Total customer satisfaction

• Employee involvement

• Training and education

26

• Reward and recognition

2.5.1 Management leadership and commitment

The transformation to world-class quality is not possible without committed visionary,

hands-on leadership. Some principles and practices of TQM may differ among firms and

industries, but there is unanimous agreement as to the importance of leadership by top

management when implementing TQM. Leadership involves defining the need for

change, creating new frameworks to mobilize commitment to those vision- frameworks

for thinking about strategy, structure and people (Aalbregtse, 1991).

This requires management to actively participate in quality transformation. They have to

outline the quality goals, quality policies and quality plans so that employees are

constantly reminded that the customer, not the product, is the top priority (Besterfield,

1995). Quality goals give all employees clear indication of what is going to be achieved

concerning quality. Quality policies when described in detail will provide guideline on

how employees are to achieve that goal. Management commitment; requires developing

management systems that assure and ensure that quality is built into each and every

process in organization. Thus, meaningful plans, such as performing an annual quality

audit help top management acquire the necessary insight into problems the company

faces in realizing the quality plan. In short, management commitment and leadership

represent a paradigm shift from the traditional management role and responsibilities

towards a new role, supporting and enhancing the total quality culture and environment.

2.5.2 Continuous Improvement

It is only when management supports, in both word and deed, the goal of continuous

improvement that it will begin to see increases in both quality and productivity.

Continuous improvement of all systems and processes in an organization is essential for

TQM success. A continuous improvement system gears the organization toward

attainment of the vision (Richardson, 1997). The improvement system must not only be

continuously applied, but also consistently, throughout the organization. This requires a

27

disciplined continuous improvement system based on trust, with everyone in the

organization striving to improve the system (Crosby, 1979). Saylor (1992) suggested a

continuous system cycle that involves 5 stages.

The cycle starts by defining the vision or mission of the organization.

Top leadership determines the vision, with input from everyone. Then everyone in the

organization ascertains his specific mission to accomplish the overall vision. In doing so,

the focus and priorities of the vision are determined, established, understood and

supported by all.

The next phase after defining their vision includes listing all improvement

opportunities. It is important to obtain an understanding of the process of

determining improvement opportunity at this stage. Customers, both internal and

external, are identified and their needs and expectations understood. Suppliers

also are matched with requirements. Any potential problems are identified during

this process.

For the third stage of selecting improvement opportunity, specific improvement

opportunities are selected based on the critical processes that have the greatest

impact on customer satisfaction. These problems are solved using a disciplined

methodology such as statistical process control, quality function deployment and

process analysis and should be used consistently to complete a mission, improve

a process and solve problems throughout the organization.

Finally, similar to Shewhart PDCA cycle, the results for the impact of

improvements are evaluated against the overall mission. In this case, a sixth stage

can be added as a reminder: Do it again and again and again. The cycle is never

ending in a continuous improvement system.

2.5.3 Total Customer Satisfaction

If TQM is aimed at anything; it is aimed at winning and keeping customers keeping them

delighted. Increasingly, manufacturing and service organizations are using customer

satisfaction as the measure of quality. This fact is reflected in the Malcolm Baldridge

National Quality Award, wherein customer satisfaction accounts for 300 out of the

1000 total points.

28

An organization must give its customers a quality product or service that meets their

needs, at reasonable price, on-time delivery, and outstanding service.

Listening to the „customers‟ and responding quickly to their changing needs, expectations

and perceptions is one of the TQM basic approaches. By keeping close to their customer,

companies can establish customer needs; gather information on customer trend and

benchmarking them with their competitors. This can be a winning strategy towards

winning new customers and retaining customer loyalty. Total customer satisfaction also

means giving an unwavering focus on the internal customer. Before external customers

can be satisfied, obstacles faced by internal customers have to be eliminated in the first

place. This is because employees are the asset and part of the firm‟s process. It is

important to create a good working condition necessary for them to produce and deliver

quality by providing them proper training, tools, information and empowerment required

for self- management to work efficiently. Only then, the entire workforce can truly be

utilized through active involvement from committed and satisfied employees.

2.5.4 Employee Involvement

At the heart of TQM is the concept of intrinsic motivation. Empowerment- involvement

in decision making is commonly viewed as essential for assuring sustained results.

Deming‟s fourteen points for management are worth remembering. The basis of his

philosophy is contained in the following principle:

1. Institute training on the job.

2). Breakdown barriers between departments to build teamwork.

3). Drive out fear in the workplace.

4). Eliminate quotas on the shop floor.

5). Create conditions that allow employees to have pride in their workmanship and

abolish annual reviews and merit ratings

6). Institute a program of education and self-improvement (Saunders, 1995).

Employee involvement is a long-term commitment for a new way of doing business and

needs a fundamental change in culture (George, 1994). Binney (1992) described

unlocking people potential as one of the total quality principles whereby it creates an

29

environment in which people can readily learn, where teamwork can flourish and

individuals grow in self-confidence and self-esteem.

In the past, the focus in achieving such improvements was frequently the “system” –

traditional techniques and methods of quality control. Such a focus may overlook the fact

that operation of the system depends on people, and no system will work with

disinterested or poorly trained employees. It must be coordinating the system and people

at the same time.

Employee involvement is a process for empowering members of an organization to make

decisions and to solve problems appropriate to their levels in the organization

(Richardson, 1997). Empowerment is equally effective in service industries, where most

frequently customer perception of quality stands or falls based on the action of the

employee in a – one-on one relationship with the customer. This can be achieved by

making the employee part of the organization, which is essential to the success of the

organization. Employees who believe they are important will be motivated to ensure that

their efforts are consistent and dependable upon the contributions made.

2.5.5 Training and Education

World-class companies realize that all firms have access to the same equipment,

technology, financing, and people. The “half-life” of any academic degree is extremely

short; therefore, the real difference among companies is the degree to which employees

are developed. Training and education provide the necessary skills and knowledge- the

ability to make it happen (Saylor, 1992). This process is an investment that must be

made.

According to Dahlagaard et.al (1994) Japan, Estonia and India are reported to allocate

between 65 and 80 hours per year for each educational and training activities per

employee. They believe that satisfaction of the workforce and hence motivation and

ability to act as a constructive part in the process of continuous improvement depend on

education and training.

In the TQM environment, everyone is required to gain additional capabilities to improve

the process and perform work. Hence, a comprehensive training program is necessary and

30

must be institutionalized within the entire organization. Training in TQM philosophy,

guiding principles and tools and techniques is never ending.

Personal and team interaction skills must be continually refined. This training should be

given only as it is needed to the people who will use it immediately. It should start with

specific training for management. Once management has the skills to lead the TQM

process, the rest of the organization should be trained to ensure a systematic, integrated,

consistent organization- wide effort (Richardson, 1997).

Specific job skills training must be provided and constantly updated to reflect the

improved processes. All too often management exhorts employees to get things right first

time, to operate effectively in quality improvement teams and to participate in the never

ending search for excellence. Yet, at the same time, they often fail to provide the training,

tools, information and empowerment required for self- management to work effectively.

Hence, all training must be geared to specific, clearly define objectives; it must be

performed as close as possible to the time it is required and must be reinforced to ensure

the results needed to achieve victory. It should bear in mind that training and education

are never ending for everyone in the organization. Continuous improvement means

learning and companies seeking to adopt TQM, need to become learning organization

(Binney, 1992).

2.5.6 Rewards and Recognition

For worker to do quality work, they must be managed in a way that convinces them that

the work they are asked to do satisfy their needs. The more it does, the harder they will

work. Rewards are generally considered to be something given for quality work such as

money or other tangible things of financial value. Recognition is an act of

acknowledgement that is directed at an individual‟s self-esteem and social needs

(Richardson, 1997). Crosby‟s 12th

step and Juran‟s 7th

step indicate that reward and

recognition should be instituted to support TQM movement. They feel that recognition,

praise, coaching and show of concern are all vital forms of reward that must never be

neglected. Reward and recognition should be appropriate to the situation by being rank

ordered- the higher the achievement, the higher the reward. It could be such things as a

bonus, salary increase, and change in the title, promotion, theater tickets, or perhaps a pat

31

on the back (Besterfield, 1995). In a TQM environment, there must be a change in the

usual recognition system. One must give recognition for efforts, not just for goal

attainment. This recognition of effort provides a powerful incentive for everyone to

become involved in quality improvement. It helps illustrate the commitment from

management. It is also essential that employee involvement be used in planning and

executing any recognition or reward system. Programs that are developed with employee

involvement will most likely to succeed.

2.6 Level of TQM implementation.

According to the International Journal of Business and Social Science

Vol. 2 No. 9 [Special Issue - May 2011], different firms implement TQM in different

ways but in general TQM implementation can be classified in the following five

categories.

2.6.1 No customer concern / No inspection: (Zero Level)

These companies do not focus customers and incorporate management systems to

measure or control the quality characteristics of their product and services. According to

Kamran Moosa (1999) in countries like Pakistan in many firms usually there is no

accountability for poor performance and in some firms it is up to the level of torturing the

customers.

2.6.2 Quality Control: (Level 1)

These organizations consider laboratory and testing of products as a main activity of

quality management and invest in and develop their products/services management

systems, these firms usually have quality control labs and departments testing and

measurements make them react to non conformities. Researchers like Prakash J. Singh,

Damien Power and Sum Chee Chuong (2010), Shewhart (2000), Dodge (1999) have

identified that most companies use statistical process controls for such measurements.

While according to Kamran Moosa (2000) most manufacturing firm in Pakistan use

quality controls for implementing TQM in their organizations.

32

2.6.3 Quality Assurance: (Level 2)

These companies understand that a product is a result of many processes and unless these

are controlled effectively quality can not be delivered therefore they try to control all

these processes that effect product/service quality. According to Hale Kaynak (2004) and

Alessandro Burn (2010) most companies assure quality by using quality programs like

ISO 9000, ISO 9000-2000, and other quality tools like Deming prize, affinity diagrams,

Pareto charts.

2.6.4 Continuous Quality Improvements: (Level 3)

The companies which come under this category do not just confer to the quality

assurance but they realize that process improvements are directly proportional to

competence, commitment and team work of employees; such organizations mobilize

company wide campaigns for continuously developing skills of quality management at all

levels and give assignments on weekly and monthly basis in cross functional teams.

Researchers like M. Madi Bin Abdullah, Jegak Uli and Juan Jose Tari (2008) and Esin

Sadikoglu , Cemal Zehir (2010) identified that companies in the manufacturing industry

in Australia use different approaches for continuous quality improvements like just in

time (JIT), zero defect mentality and quality circles. While according to Jamshed H.

Khan (2000) there are very few firms operating in Pakistan which fall under the category

of continuous quality improvements.

2.6.5 Quality Award Models: (Level 4)

These companies are global champions and dominate markets with their

products/services. They set bench marks to others and for these companies quality means

complete satisfaction of their customers and publics. Henrick Eriksson & Jonas Hansson

(2003), K.A.S.P Kaluarachchi (2010) studied the effect of quality award

models in service firms , and identified that these firms use approaches like process

reengineering, and computer software packages to enhance quality performance.

33

2.7. Dimensions of business performance.

Since in this study all four levels of total quality management will be evaluated that is

why the effect of TQM implementation will be measured in terms of business

performance, after a detail literature review the following dimensions of business

performance were considered.

2.7.1 Product Quality and Effectiveness

The quality of a product or service is dependent on the customer expectation in contrast

with other suppliers, so when judging product quality it depends who is the customer.

According to Mehmet Demirbag and Ekrem Tatoglu (2006), Mahour Mellat Parast

(2010) when companies‟ judge product quality effectiveness internally they measure it in

terms of defects rate, rework cost, scrape cost. While Daniel I. Prajogo (2008) have

measured product quality effectiveness in terms of the level of reliability it offers and the

fitness of use and conformance with expectations.

2.7.2 Customer Satisfaction.

The focus on customer has become a part of quality movement. According to Jarrod M

Haar and Chester S. Spell (2008) successful implementation of TQM include customer

retention and increase in market share. While according to Carlos Bou Liusar, Ana B.

Escrig Tena (2009) customer focus leads to customer loyalty which can be achieved by

providing customers with reliable, durable product/service. So customer focus in firms

incorporates customer satisfaction, confidence, loyalty and reduction in complaints.

2.7.3 Financial Performance

The previous researches have shown strong positive relationship between quality

improvements and financial performance of a firm Wisner and Eakins (1999).

34

According to Mehmet. D;(2005) and Christos. B, et al; (2009) firms that focus on

improving the quality of their product and processes leads to improve revenues and

reduction of costs. So the financial performance of a firm as a result of quality initiatives

can be measured by the increase in the level of sales, revenue produced, and level of cost

performance, the return on investment and assets and by the increase in market share.

2.8 Effects of TQM on Business Performance

2.8.1 TQM and organization performance

According to Ishikawa, the importance of total quality control is to improve

organizational performance. According to him quality does not only mean the quality of

product, but also of after sales service, quality or management, the company itself and the

human life.

2.8.2 TQM and organization growth`

According to George A. Boyne and Richard M. Walker, totally quality management

(TQM) is a strategy aimed at achieving excellence in organizations. It is the cornerstone

of improving productivity, profitability and customer satisfaction in organizations. While

a quality performance is imperative to attain the competitive to advantage, innovation is

the catalyst for further growth.

2.8.3 TQM and organization competitive advantage

According to Flynn et al. 1995; Samson and Terziovski, 1999, the benefit of an effective

TQM can be studied using three different perspectives. Firstly, from the operating angle,

the reason that TQM has become a hot topic in both industry and academia is that can be

applied to improve or enhance global competitive. Firms with effective TQM

implementation can accomplish the internal benefits such as improving quality,

enhancing productivity, or realizing better operating income (Corbett et al., 2005;

Hendricks and Singhal, 1997).

35

2.8.4 TQM and organization profits

Eng and Yuof (2003) argued that quality holds the key competitiveness in today‟s

market. In addition, TQM has widely been considered as an effective management tool to

provide business with the stability, growth, and prosperity (Isaac et al. 2004). According

to Freisleben, (2005), the effect of TQM can not only be reflected on decreasing costs but

also on maximizing business profits. In terms of quality improvement, what really

accounts for a firm is not cost minimization but the effect of superior quality has on

maximizing profits.

2.8.5 TQM and organization financial perspectives

From the financial performance perspective, Corebett et al., 2005 says, careful design and

implementation of constituent and documented quality management systems can

contribute significantly to superior financial performance. Furthermore with an effective

TQM implantation can significantly out perform on the stock price performance

(Hendricks and Singhal, 2001).

2.8.6 TQM and product quality and price

According to A. Cole Mambim mipm MITD, TQM is a term intended to convey a

vertical approach to quality in an organization. That is to say, quality is a matter of

concern for everybody from the board of directors down to the humble employee. To him

the greatest influence from the total quality approach to management has been exercised

by two Americans and one Japanese. The first two, Edward Daming and Joseph Juran,

applied and developed earlier techniques such as statistical process control to the post

war industries in Japan. They showed that, by paying attention to continuous

improvement of production process and gaining employee commitment, tom the idea of

quality at every stage of production, it was possible to achieve continuous high standards

of finished goods at a price the customer is more than willing to pay in order to secure

reliability and acceptable performance.

According to him, quality management begins with the consideration of the customer, be

they internal, employees, business or members of the public. Their needs and wants have

36

to be translated into specifications of one kind or another and these specifications need to

be developed and tested.

2.8.7 TQM and customer protection

According to Garvin (1989), quality is not only a strategic weapon for competing in the

current marketplace, but it also means consumers, not just protecting them from

annoyances. Therefore, a company‟s specific advantage is to identify and compete on one

or more of the dimensions of quality.

2.9 Relationship between TQM adoption and business performance

According to Hoogervost et al. (2005), argued that TQM approach requires focus on

employee behavior, attention to organizational culture, management practices, and

organizational structures and systems.

Yang (2006) empirically confirmed that human resource management practices have a

significantly positive effect on the implementation of TQM, and therefore on the

improvement of employee and customer satisfaction and quality performance achieve

through TQM.

Fuentes et al (2006) examined the relationship between strategy and TQM adoption as

well as the impact of both on organizational performance. Their results suggested that

differences in TQM adoption depend on the selected strategy and that companies with the

greater degrees of co-alignment between their strategies and TQM achieve the highest

levels of performance improvement.

According to the International Journal of Quality & Reliability Management, 2009; TQM

adoption is believed to lead to company performance improvement. Numerous studies

indicate positive relation between TQM adoption and performance. Examples of benefits

37

achieved from TQM by companies around the world include: decreased inventory 23

percent in two years, order changes halved, delivery time reduced from 20 to 4.5 days,

quality terms saved 5.6 million over four years, customer claims frequency reduced by

over 40% , customer service response time reduced by 44%, lost time from injuries

reduced 46%, cost quality reduced from 12% to 9%, operating profits increased 7.4

times, 98% first pass yield, on-time delivery increased from 75% to 99% , customer

complaints reduced to 78 % $12 million saved in one year in suggestion system, 91% of

employees said proud to work for the company, positive responses on employees attitude

survey increased from 76 % to 83 %.

According to GAO, (1991) of 20 companies scoring high on wither the 1988 or the 1089

MNBQA, there is a cause-and-effect relationship between the total quality management

practices embodied in the Baldrige criteria and corporate performance, measured by

employee relations, productivity, customer satisfaction, or profitability. The following

four positive results have been shown.

1. Better Employee Relations. Employees experience more job satisfaction, there

was a higher rate of attendance, and there was less turnover, absenteeism and accidents.

The number of employee suggestions relating to quality rose 16.7 percent.

2. Improved operating procedures. Companies increased the reliability (improved by

an annual average of 11.3 percent) and on-time delivery of their products or services and

reduced errors (by 10.3 percent), product lead-time, and cost of quality.

3. Greater customer satisfaction. There were fewer customer complaints (declined

by 11.6 percent), and a greater number of customers stayed with the company.

4. Increased financial performance. Each also improved its market share (An annual

improvement of 13.7 percent) and increased profitability (yearly gains averaged 8.6

percent in sales per employee; 1.3 percent in return on assets; and 0.4 percent in return on

sales).

Huarg and Chen (2002) report evidence that TQM philosophy and TQM tools have a

positive relationship with business performance of small and medium companies in

38

Taiwan, that is to say, the integration of TQM philosophy and tools positively influenced

both cost reduction and business performance.

Hendricks and Singha,(1997), conducted a longitudinal analysis comparing the

performance of companies, before and after the adoption of TQM and concluded that

firms that have effectively implemented TQM outperforms the control sample of

companies without TQM on profitability, revenues, costs, capital expenditure, total

assets and number of employees.

Hasan and Kerr (2003) studied the relationship between TQM practices and organization

performance in service organizations and discovered that TQM practices like top-

management commitment; employee involvement; training; supplier quality; quality

costs; service design; quality techniques, benchmarking; and customer satisfaction leads

to higher productivity and quality performance.

Prajogo and Brown (2004) conducted an empirical study within Australian organizations

to investigate the relationship between TQM practices and quality performance, and the

results indicated a strong and positive linkage. A study on ISO9000 certified

organizations of Taiwan performed by Jeng (1998) examined linkage between six QM

practices and quality performance.

Talib et al;.( 2010) found customer focus as the most powerful discriminated practice of

quality performance while remaining five practices showed low discriminating powers.

Brah and Tee (2002) examined the relationship between TQM constructs and

organization performance by measuring quality performance of Singapore companies.

They found that implementation of TQM leads to quality performance and have positive

correlation.

Another study based on the comparative analysis of TQM practices and quality

performance between Australian manufacturing and service firms, Prajogo (2005)

reported that there exist no significant differences in the level of most of the TQM

practices and quality performance between two sectors. A study utilizing structural

39

equation modeling (SEM) approach by Sanchez-Rodriguez et al., (2006) provided the

insights into the current information technology (IT) and TQM theory and practice on

operational and quality performance. They found TQM initiatives generate significant

positive gains in operational and quality performance. In line to this, Prajogo and Sohal

(2004) also employed SEM approach to examine the multidimensionality of TQM in

association with organization performance. Using empirical data collected form 194

Australian firms the finding support the proposition in pairing the mechanistic elements

of TQM with quality performance and the organic elements with innovation performance.

A recent empirical study conducted by Arumugam et al. (2008) explored the relationship

between TQM practices and quality performance on ISO9001:2000 certified

manufacturing organizations in Malaysia. Analyzing empirical data drawn from 122

Malaysian organizations through correlation and multiple regression analyses, the finding

revealed that TQM practices were found to be partially correlated with quality

performance. They further found that customer focus and continuous improvement were

perceived as dominant TQM practices in quality performance.

2.10 Hypothesis developed.

According to Ahire et al.,(1995); Flynm et al.,(1994); Kaynak,(2003); Samson and

Terziovski,(1999); Sousa & Voss,(2002); there are seven factors to be the key driving

force to an effective implementation of TQM. Namely; customer focus, management

leadership, human resource, quality data & reporting, suppliers' management, design

management and process management.

2.10.1 Customer focus

For business enterprises, the significant driving force to establish the quality goals

basically originating from customer needs. Customer needs identify the operational goals

for firms to meet. And this type of quality goals is also referred as market-driven [juran,

1992]. Oakland [2005] mentioned that quality started with the understanding of customer

needs and ended when those needs were satisfied. In order to meet the requirement of

40

customers, top management should clarify the expectations of its customers. Further,

organizational strategy should also be developed based on customers' needs. Samson &

Terziovski [1999] pointed out that customer focus is the underpinning principles for firms

to implement TQM programs. Since senior management may have the influence and

authority to dominate the entire TQM implementation, dedicated commitment from top

management about implementing TQM is certainly a necessity. Therefore customer focus

is positively related to management leadership

.

2.10.2 Management leadership

Management leadership is considered to be another major driver of TQM and it has a

significant influence on determining whether or not a TQM program can be implemented

effectively [Soltani, 2005]. Management leadership in fact, refers to how management

level guides and supervises personnel of a firm in an appropriate manner. Management

level provides the necessary resources for training employee to meet the new

requirements and/or changes that are resulted from TQM implementation, and

consequently, creates a work environment which is conductive to employee involvement

in the process of changes [Kaynak, 2003; Wilson & Collier, 2000] .In addition, effective

management leadership is critical to influence the decision of selecting the qualified

supplier and certifying suppliers for quality materials (Flynn et al.,1995; Trents &

Monczka, ,1999).Management leadership is also responsible for monitoring product

design and considering market demands and consumer needs (Deming,1986; Fynn et a.,l

1995.) In other words, the focus of management is essential for firms to produce goods

that are manufacturability and meet the needs of customers (Fynn et al., 1995; Juran,

1981). In conclusion, management leadership plays a significant role on conducting

organizational operations and also highly influences the decision- making and resource

allocation processes for supplier management and design management, respectively.

Therefore the authors propose that management level has positive effects on human

resource, suppliers‟ management, and design management.

2.10.3 Human resource management

41

In terms of quality management, employees must be able to measure and utilize quality

data efficiently and effectively (Ahire & Dreyfus, 2000; Ho et al., 1999). The study of Ho

et al.,(2001) indicated that human resource, which include employee training and

employee relation, was positively related to quality improvement, which was mediated

through utilizing quality data and reporting. Thus, whether or not a TQM program will be

successfully implemented mainly depends on the collaboration and coordination a among

a firm‟s workforce. An effective implementation of TQM can derived from employees‟

understanding of the philosophy and principles of TQM implementation. Furthermore, if

employees have high consciousness of TQM, the data and reporting of quality control

prepared by working staffs will be easy to uncover the reality and thus, can be used to

correct quality flaws or mistakes immediately and effectively. In this way, the authors

propose that better human management will result in more positive effect on producing

quality data and reporting.

2.10.4 Quality data and reporting

Quality data and reporting utilize quality reports and control charts to identify explicit

and potential quality problems and provide timely information for correcting and

improving problems explored (Ho et al.,1999).In other words, a good data and reporting

system can timely And correctly reflect the actual circumstances/situation to

management level. It can also provide management level adequate information to make

timely decision. With regard to quality data reporting, it can help management or

employee to identify and solve problems stemming from input materials that are supplied

by cooperative suppliers (Adebanjo & Kehoe, 1999).In addition, several studies indicated

that the goals for firms to implement TQM were mainly focused on building quality into

the products rather than merely inspecting quality into the finished products or removing

defective products (Fynn et al., 1995; Handfield et al., 1999; Tan, 2001). Since effective

design management requires various resources to support, such as considering the

requirement of customer or coordination of procurement function, design function,

production function, and supply function merely inspecting quality into the finished,

design management can be effectively only implemented if quality data and reporting are

collected and shared throughout the organization in a timely manner (Ahire & Dreyfus,

42

2000; Easton & Jarrell,1998; Flynn et al.,1995; Handfield et al.,1999; Ho et al.,1999).

Additionally, quality data and reporting can provide employee timely information to deal

with changes or problems occurred and further examine the results with the

improvements made (Flynn et al., 1995; Handfield et al., 1999; Ho et al.,1999).Thus, an

effective quality data and reporting system will have positive impacts on enforcing

suppliers‟ management, design management, and process management aspects

(Kaynak,2003).Therefore, the authors propose that quality data and reporting is positively

related to suppliers management, design management, and process management.

2.10.5 Suppliers’ management

With regarding to suppliers‟ management, an effective suppliers‟ management will

enforce the cooperation between suppliers and firms by allowing suppliers‟ involvement

and/or participation not only in the process but also in the production process, and help

the procurements of materials or parts meet firm‟s requirement and be efficiently utilized

(Flynn et al., 1995; Shin et al., 2000; Tan, 2001).The research findings of Kaynak

(2003)showed that suppliers‟ management, this emerged as an important component of

TQM implementation, had directly positive effects on both design management and

process management. In addition, the quality of materials provided by suppliers is

important and the starting point for firms to produce quality products. Eventually, a good

quality of raw materials will reduce the occurrences rework, scrap, and/or defective

outputs. Ultimately, it can result in a good operational performance. From the discussion

above, suppliers‟ management can be used to streamline the suppliers‟ base to facilitate

the following tasks such as managing suppliers‟ relationship, developing strategic

alliances with suppliers, cooperating with suppliers to ensure meeting the customer

expectations, involving suppliers early in the product development process, and

enhancing the process management (Flynn et al.,1995; Kannan & Tah, 2005).Therefore,

the authors propose that suppliers‟ management is positively related to design

management, process management, and operating performance.

2.10.6 Design management

43

Effective design management can increase the efficiency of process management and

improve operating efficiency. The study of Ahire & Dreyfus (2000) showed that design

management has positive impacts on process management and internal quality, and

external quality. The empirical result of Kaynak (2003) showed that products/ services

management and quality performance, which in turn influenced operating performance.

Thus, the authors hypothesize that design management may have positive impact on

process management.

2.10.7 Process management

Inferior quality manufacturing process will result in higher scrap rate and rework rate

which will lead to more resource consumed to produce qualified products (Ahire

&Dreyfus, 2000). The goal of process management is to reduce process variation by

building quality into the production process (Flynn et al., 1995; Handfield et al.,

1999).The effects of reducing process variation will increase the quality of output as well

as decreasing the occurrences of unnecessary costs such as rework costs and waste costs

by finding and correcting quality problems immediately (Ahire &Dreyfus, 2000;

Anderson et al., 1994; Forza & Flippii et al., 1998; Hendricks & Singhal, 1997). It is

further noted that quality management can improve operating efficiency by reducing

defect rate, scrap rate, and the occurrence of rework .The improvement of operating

efficiency will improve customers‟ satisfaction and eventually the company‟s financial

performance. In addition, the improvement of customers‟ satisfaction and loyalty may

sustain or enlarge market share, which can be eventually transformed into better firm‟s

financial performance (Ahire & Dreyfus, 2000; Choi & Eboch, 1998). Thus, the authors

propose that operating performance resulting from TQM implementation will increase

customers‟ satisfaction and improve financial performance, respectively. In the

meantime, the improvement of customers‟ satisfaction will also have positive effect on

improving financial performance.

Conclusion

44

According to Noori (1990), who stresses in his book that competitiveness cannot be

achieved but through quality, the needs for quality are four fold: cost, competitive

advantage, reputation and staying alive.

Numerous empirical studies confirm that firms that have adopted a quality-oriented

strategy have achieved improved productivity, greater customer satisfaction, increased

employee morale, improved management-labor relations, and higher overall

performance. For example, the US National Institute of Standards and Technology

(NIST) tracked the performance of publicly traded companies which won the MBNQA

during 1988 through 1996, and reported that MBNQA winners significantly

outperformed the Standard & Poor‟s 500 Index (Goal/QPC, 1998). Similarly,

Saizanbirtoria; (2005) investigated how the implementation of quality systems based on

the ISO 9000 international standards and the Excellence Model of the European

Foundation for Quality Management of both TQM models had a positive influence on

company results, mainly through the improvement of operations, efficiency and the costs

of the company‟s internal activities.

45

CHAPTER THREE

3.0 Research methodology

3.0 Introduction

This chapter comprises of the methodology that was used in the field of study. It displays

the research design, survey population, data collection tools and methods that were used,

data presentation and limitation of the study.

3.1 Research design

The research design was cross sectional and analytical to examine the relationship

between the adoption of TQM and business performance covering a period of three

financial years for each sample. These designs guided the researcher throughout data

collection up to the final stage of data analysis.

3.2 Survey population

The survey population was comprised of the staffs, few selected medium enterprises like

officials at Muzinge food Ltd, and Afro plast(U)ltd. Workers at all levels were considered

and final consumers too were also approached. It was from this study population that a

representative sample to participate in the study was selected

3.3 Sampling method

46

Since information was sought from various companies, stratified sampling method was

used, as it covered the major priority areas of customer base, profitability, financial

strength, employee performance and satisfaction.

3.4 Sample size

The target was 2 companies and the breakdown of each company was top management 1,

operational managers 2, human resource 2, supervisors 3, workers 4, and 10 final

customers.

3.5 Sources of data

Data was collected from both primary and secondary sources. Primary data was collected

from the responses from the questionnaires administered and personal interviews with

company administrators. The secondary data was got from the company reports both

quarterly and annual reports, Private sector foundation annual report, business news

report and other reports.

3.6 Data collection tools

Questionnaires, interviews, and direct observation were dimmed appropriate instrument

for data collection. The researcher used all means available to link up with the survey

population. The questionnaires were circulated to the various respondents and

appointments were appropriately made to meet other respondents for interviews.

Interviews helped the researcher to capture information from especially company

administrators and workers. The researcher designed a list of precise and brief questions

as a guide for direct interviews, requesting for short answers.

Direct observations was a necessity for the researcher to see physically what is on the

ground as far as company performance in all dimensions is concerned.

Document review:

To obtain related secondary data for the subject under study, the researcher managed to

access all the secondary documents from the company accountants and from other

sources to review and analyze to supplement the primary data.

47

3.7 Procedure of data collection

The researcher visited the two company directors and workers, with an introduction letter

seeking to carry out research in their respective companies.

Permission was granted and the researcher introduced himself to the division managers,

lower level workers and residents/customers from who information was obtained.

Questionnaires were drafted and presented to respondents and to those who could read

and write the research. The researcher read and translates the questions to any common

language used in the area. Their responses were filled in the questionnaires by the

researcher.

On the other hand, interviews were arranged with the company directors, division

managers, lower level workers and residents/customers.

3.8 Data presentation and analysis.

After collecting data from different sources, using different tools/instruments, the data

was carefully studied, sorted, edited, organized and corrected where necessary. The data

was then tabulated to calculate the percentages, and correlation coefficient statistical

method used to analyze the data. The researcher used the statistical package (SPSS) to

analyze the data.

After analyzing the data, it was presented in the form of tables and graphs.

3.9 Problems/ limitations of the study

The researchers experienced the following limitations during the study.

a). Inadequate funds

b). Un cooperative respondents

c). Data analysis

d).Time limitation

48

CHAPTER FOUR

PRESENTATION, ANALYSIS AND INTERPRETATION OF THE FINDING

4.0 INTRODUCTION

This chapter deals with the presentation and discussion of the findings. The variables

constituting total quality management techniques that have been analyzed include

adoption, key elements, and effects. On the other hand, business performance was looked

at in terms of its dimensions that is, product quality and effectiveness, customer

satisfaction and financial performance.

Data was analyzed in an attempt to establish the relationship between total quality

management techniques adoption and business performance. The presentation is in charts

and tables showing frequencies.

4.1 FINDINGS ON DEMOGRAPHIC CHARACTERISTICS OF RESPONDENTS

4.1.1 RESPONSE RATE

The total number of questionnaires administered was 72 with an expected return of 66

questionnaires after considering for non response of 9.68%. However, after the exercise,

62 questionnaires were collected reflecting a response rate of 84% and non response of

16% as shown in figure 1 below

Figure 1 Response rate

49

Source: Primary date

4.1.2 AGE OF THE RESPONDENTS

According to the questionnaires, the age of the respondents are indicated in figure 2

Figure 2: Age of respondents.

Figure 4.1.2 Age of the Respondents

0

5

10

15

20

25

30

Below 18 18-25 26-32 33-40 41-48 49-56 Above 57

Age

Perc

enta

ge

0

Source: primary data

As shown in figure 2 above, 1.9% of the respondents were below 18 years,11.5% were

between 18 and 25 years,19.2%were between 26 and 32years, 26.9% were between

84% 16%

50

33and 40 years, 21.2% were between 41 and 48years, 7.7% were between 49 and 56

years and 11.5% were 57 years and above.

This could imply that most residents below the age of 18 are not well conversant with

total quality management techniques and performance of small and medium enterprises

since most of they are not part of the working group or they have little knowledge about

the subject compared to persons between 18 years and 48years

4.1.3 GENDER OF RESPONDENTS

As shown in figure 4.1.2 below, findings indicated that majority of the respondents were

male representing 73.1% compared to 26.9% who were females

This implies that probably more males are employed than their counterparts

Figure 3. Gender of the Respondents

51

Source: Primary data

4.1.4 EDUCATION LEVELS OF RESPONDENTS

Information on the educational level of the respondents is indicated in table 2(a) and

figure 4 below.

Table 1: educational level of the respondents

Educational levels Frequency Percentage

None 10 16.1

Primary 24 38.7

Secondary 16 25.8

University 12 19.4

Figure 4.1.3 Gender of Respondents

Male

Female

52

Total 62 100

Source: primary data

Figure 4: showing the educational of the respondents

Educational levels of Respondents

0

5

10

15

20

25

30

35

40

45

University Secondary Primary None

level of education

perc

en

tag

e

Series1

Source: Primary data

Of the respondents, 15.4% had never gone to school, 40.4% are of primary levels, who

are the majority, 28.9% are of secondary level and 17.3% are of university level. This

shows that 55.8% of the respondents have not attained education above primary level and

this could have led to the high non-response rate of 16% compared to the expected 10%

as shown in figure 1 above

4.1.6 LENGTH OF TIME RESPONDENTS HAS WORKED AT THE COMPANY

Table 3: Length of time of work of respondents

Years Frequency Percentage

53

0-2 24 38.2

3-5 14 23.1

6-8 12 19.2

9-11 7 11.5

Above 12 years 5 7.7

Total 62 100

Source: primary date

From the above table, 7.7% of the respondents have stayed at the company for more than

12 years, 11.5% for a period between 9 to 11 years, 19.2% for a period between 6 to 8

years, 23.1% for a period between 3 to 5 years and 38.2 % for a period below 2 years.

This implies that 80.5% of the respondents have stayed at the company for a period of

less than 5 years and thus this could have an effect on effective TQM adoption by the

company.

4.1.7 4.1.6 LENGTH OF TIME THE COMPANY HAS BEEN IN EXISTANCE.

Figure 5:Time of work of the Respondents

0

5

10

15

20

25

30

35

40

45

Below 2 3-5 years 6-8year 9-12years Above 13 Years

Percentage

Series1

54

Table 3: Length of time of existence by the company.

Years Frequency Percentage

0-2 22 30

3-5 14 25

6-8 12 20

9-11 8 15

Above 12 years 6 10

Total 62 100

Source: primary date

Figure 6: Time of existence by the company.

Time that the company has been in existance

0

5

10

15

20

25

30

35

1 2 3 4 5 6

Years

Perc

en

tag

e

Series2

Series1

4.2 FINDINGS ON ADOPTION OF TQM TECHNIQUES.

OBJECTIVE A; To identify the key factors for success adoption of TQM.

4.2.1 Findings on factors for success of TQM adoption

55

Information was sought on necessary factors for effective adoption/implementation of

TQM techniques in an organization.

The findings are presented in figure below

Table 4: Factors for effective implementation of TQM techniques

Factors Frequency Percentage

Management leadership and

commitment

15

24.2

Continuous improvement 13 21

Total customer satisfaction 12 19.4

Employee involvement 10 16.1

Training and education 7 11.3

Reward and recognition 5 8.1

Total 62 100

Source: primary data

56

Figure 6: Rating of factor for effective adoption of TQM

0

5

10

15

20

25

30

Mlc TCS EI CI T&E R&R

Factors

Perc

en

tag

e

From the figure above, the respondents ranked each factor according to its necessity

towards the effective adoption/ implementation of TQM techniques. Factors like

Management leadership and commitment, continuous improvement, Total customer

satisfaction, Employee involvement, Training and education and Reward and recognition

respectively too the highest rank.

This implies that though each factor had different rank, all factors in conjunction play an

important role towards effective implementation of TQM techniques.

57

4.3 FINDINGS ON THE EFFECTS OF TQM ON BUSINESS PERFORMANCE

Objective B. To examine the effects of adoption of TQM techniques on performance

of small and medium enterprises.

4.3.1 TQM leads to organization performance

Table 5: showing effect of TQM on organization performance.

Response Frequency Percentage

Strongly disagree

Disagree

Not sure

Agree

Strongly agree

Total

7

12

2

27

14

62

11.5

19.2

3.8

44.2

21

100

Source: primary data

From the table above, 21% of the respondents strongly agreed that TQM leads to

organization performance, 44.2%, the majority agreed, 19.2% disagreed, 11.5% strongly

disagreed and 3.8% were not sure on the effective of TQM on organization performance.

4.3.2 TQM and organization growth

Information was sought by the researcher on the effects of TQM on organization growth

and the findings are presented in the table below;

Table 6: showing whether TQM has an effect on organization growth.

Response Frequency Percentage

Strongly disagree

Disagree

Not sure

Agree

Strongly agree

Total

6

8

1

25

22

62

9.6

13

1.9

40.4

34.6

100

Source; primary data

58

Findings from the above table show that 34.6% strongly agreed that TQM has an effect

on organization growth, 40.4%, agreed, 1.9% were not sure,9.6% strongly disagree, while

13 disagreed, claiming that they do not see any relation between TQM and organization

growth.

This implies that the growth rate of companies that adopted TQM techniques is relatively

high.

4.3.3 TQM and organization competitive advantage

Table 7; showing effect of TQM techniques on organization competitive advantage

Response Frequency Percentage

Strongly disagree

Disagree

Not sure

Agree

Strongly agree

5

6

3

27

21

8.5

10

1

45.5

35

Total 62 100

Source; primary data

Figure 8: Showing effect of TQM on company’s competitive advantage

59

Showing effect of TQM on competitive advantage

Strongly agree

Agree

Not sure

Disagree

Strongly disagree

Findings according to table 4.3.3 above indicate that, 35% of the respondents strongly

agree that the manner in which services are provided involves a wide range of social

interaction between service providers and service users, 45.5% agreed, only 1% were not

sure, 10% disagreed and 8.5% strongly disagreed.

This implied that all companies that adopted TQM techniques attained a positive

competitive advantage over their competitors.

4.3.4 TQM and organization profits

Information was sought by the researcher on whether TQM techniques lead to highly

profitability levels in the organization. The findings are presented in the figure below:

Table 8; showing whether TQM leads to high profit in an organization

Response Frequency Percentage

60

Strongly disagree

Disagree

Not sure

Agree

Strongly agree

4

5

1

28

24

5.2

8.5

1.8

45

39

Total 62 100

Source; primary data

From the figure above, findings revealed that 39% strongly agreed that profits levels of

the company increase as a result of adoption of TQM techniques, 45% agreed, 1.8% were

not sure, 8.5% disagreed and 5.2% strongly disagreed.

This could conclusively imply, according to the 84% majority who at least agreed, that,

even though some other factors leads to high company profits, however TQM has a role

to play.

4.3.5 TQM and organization financial perspectives.

Table 9; showing the effect of TQM on financial perspective.

Response Frequency Percentage

Strongly disagree

Disagree

Not sure

Agree

Strongly agree

6

8

2

24

22

10.5

12.5

4

38

35

Total 62 100

Source; primary data

From the above, findings revealed that 35% strongly agree that the financial performance

of the company was higher due to adoption of TQM techniques,38% agreed, 4% were not

sure, 12.5% disagreed,10.5% strongly disagreed.

This implies that most companies that adopted TQM techniques have financially

improved.

61

4.3.6 TQM and product quality and price.

Data were sought on whether product quality and price improve as a result of TQM

adoption.

Table 10: showing whether TQM is relevant to product quality and price.

Response Frequency Percentage

Strongly disagree

Disagree

Not sure

Agree

Strongly agree

Total

3

3

0

34

22

62

4.5

5.6

0.0

55.0

35

100

Source: primary date.

Figure 9; Effect of TQM on product quality and price

Showing effect of TQM on product quality and price

0

10

20

30

40

50

60

Strongly agree Agree Not sure Disagree Strongly disagree

Response

perc

en

tag

e

Series1

62

From the table above, 35% strongly agreed that product quality and price really improve

has a result TQM adoption techniques, 55% agreed, 5.6% disagreed and 4.5% strongly

disagreed.

This implies that product quality becomes the best and price become affordable to

customer has a result TQM adoption.

4.3.7 TQM and customer protection.

Information was sought on whether customer rights and needs are catered for when a

company adopts TQM techniques .The findings are presented in the table below;

Table 11: showing whether there is a cause-relation effect between TQM techniques

and customer protection.

Response Frequency Percentage

Strongly disagree

Disagree

Not sure

Agree

Strongly agree

5

7

3

27

19

8.5

11.5

5.5

44.

30.5

Total 62 100

Source; primary data

From the table above, findings revealed that 30.5% of the respondents strongly agreed

that there is strong customer protection when a company adopts TQM techniques, 44%

agreed, 5.5% were not sure, 11.5% disagreed whereas 8.5% strongly disagreed.

This implies that product or service users can not be affected after consumption of such a

product.

63

4.4. FINDINGS ON THE RELATIONSHIP BETWEEN ADOPTION OF TQM

TECHNIQUES AND PERFORMANCE OF SMALL AND MEDIUM

ENTERPRISES.

Objective C. To examine the relationship between adoption of TQM techniques and

the performance of small and medium enterprises.

4.4.1, whether TQM adoption affects the performance of small and medium enterprises

Table 12; showing whether effective adoption of TQM techniques leads to high

performance of small and medium enterprises.

Response Frequency Percentage

Strongly disagree

Disagree

Not sure

Agree

Strongly agree

3

5

2

30

22

5.5

8.5

2.5

48.

35.5

Total 62 100

Source: primary source

From the table above, 35.5% agrees that effective adoption of TQM techniques in a

company leads to improved performance in all business circle like financial, product

quality and customer base, 48% agreed, 2.5% not sure,8.5% disagreed and 5.5% strongly

disagreed.

This implies that because TQM begins with the customer needs and ends with the lower

level worker, the company gets to know all the needs of the consumers and the potentials

of the workers hence achieving the best at the end.

64

4.4.2 Whether there is a positive relationship between TQM and performance of

small and medium enterprises.

Table 13 showing whether there is a relationship between adoption of TQM

techniques and performance of small and medium enterprises.

Response Frequency Percentage

Strongly disagree

Disagree

Not sure

Agree

Strongly agree

3

5

2

30

22

5.5

8.5

2.5

48.

35.5

Total 62 100

Source: primary source

The response on the relationship concluded that there is a positive relationship between

TQM adoption and performance of small and medium enterprise since over 83.5% agreed

and only 14.5% disagreed.

In addition, using a statistical package SPSS and Pearson‟s correlation coefficient, results

revealed that there is a significant positive relationship between TQM and performance of

small and medium enterprises.

Using correlation analysis, as seen in the table below, there is a positive relationship

between adoption of TQM techniques and performance of small and medium enterprises.

65

`

CHAPTER FIVE

SUMMARY OF MAJOR FINDINGS, CONCLUSIONS AND

RECOMMENDATIONS.

5.0 INTRODUCTION.

The study investigated, analyzed and presented the relationship between adoption of

TQM techniques and performance of small and medium enterprises. The independent

variable of the study was adoption of TQM techniques and the dependent variable was

performance of small and medium enterprises whose indicators are; product quality

effectiveness, customer satisfaction and financial performance.

In this chapter, a summary of major findings are presented, conclusions based on such

findings are made, recommendations given and areas of further studies suggested.

5.1 SUMMARY OF MAJOR FINDINGS

The main purpose of the study was to examine the key factors for effective adoption of

TQM techniques, effects of TQM adoption, and to establish the relationship between

adoption of TQM techniques and performance of small and medium enterprise taking

66

Muzinge foods Ltd and Afroplast (u) ltd as the case in point. The summary of the major

finding have been given based on the objectives of the study;

5.1.1 Summary of major findings on adoption of TQM techniques

According to the study, the adoption of TQM techniques in small and medium

manufacturing enterprises has been increasing for the last 3years due to notable effects it

has on company performance, increasing customer diversification and competitiveness in

the global market irrespective of the size of the company.

According to the Afroplast (u) Ltd and Muzinge Foods Ltd performance reports and year

plans however, despite the increasing performance a monger the small and medium

manufacturing sector, forecasted performance has always not achieved.

5.1.2 Summary of major findings on company performance

According to the study, finding indicate that the performance of Afroplast (U) ltd is

relatively good as products produced at the company are relatively of good quality,

comparably affordable and it is one of the 100 best small and medium manufacturing

enterprises in Uganda.

However some discrepancies that compromise company performance has been

discovered by the study as some products are not constantly available, and do not fully

meet customer requirement.

5.1.3 Summary of major findings on the relationship between adoption of TQM

techniques and performance of small and medium enterprises.

Findings of the study revealed that more 80% of the respondents acknowledged that there

is an effect and thus relationship between adoption of TQM techniques and performance

of small and medium enterprises although a small percentage did not include some who

were not sure of any correlation between the variables.

67

5.2 CONCLUSIONS

Like the summary, of major findings, conclusions are also presented in respect of the

research objectives.

5.2.1 ADOPTION OF TQM TECHNIQUES.

As earlier noted, TQM techniques includes customer focus, management leadership,

human resource management, quality data and reporting, suppliers‟ management, design

management, and process management.

Research findings and financial reports revealed that forecasted performance is not the

same the actual performance.

However, as earlier noted because of the size of the company, incapacitating the effective

adoption of TQM techniques, actual performance has always been below the forecasted.

5.2.2 EFFECT ON COMPANY PERFORMANCE

As earlier mentioned, company performance is characterized by; product quality and

effectiveness, customer satisfaction and financial performance.

Therefore, conclusions have been drawn from findings of each of the above trait.

5.2.2.1 Organization performance

The findings revealed that organization performance highly improves (see table 4.3.1).

However, while in interviews, claims were put forward on the extent to which TQM leads

to organization performance, the majority believed that to a large extent adoption of

TQM techniques leads to organization performance.

68

5.2.2.2 Organization growth

The research showed that 75% of the respondents recognized that total quality

management techniques leads to organizational growth. However, the growth is more so

customer base.

5.2.2.2 Competitive advantage.

Looking at competitive advantage, almost 81% of the respondents agreed with the

competitive advantage that a company attains when TQM techniques are adopted. This

means that a company can easily out compete its competitor when it appropriately

implements TQM techniques.

5.2.2.3 Organization profits

Company managers ought to have high sales necessary skills to effectively acquire high

profits, However, the research revealed that TQM does not only increase product quality,

but also leads to high profitability margin of the organization.46.2% of the respondent

agreed that services are provided by qualified staff.

5.2.2.4 Product quality and price

Research findings indicated that because TQM emphasises quality, the final product

quality will be high and also the price will be relatively affordable due to continuous

improvement

5.3 RECOMMENDATIONS

Recommendations have been made on the variables of the study which are adoption of

TQM techniques and performance of S.M.Es.

69

5.3.1 Recommendations on Adoption of TQM technique

If SM.Es in particular Muzinge foods and Afroplast (u) ltd are to play a significant role in

their economic development process, they must put more effort in quality management

techniques than they are currently doing. More effort is needed from the top level down

the bottom line for especially on customer focus, management leadership, human

resource management, quality data and reporting supplier‟s management, design

management and process management. All these factors should be enhanced for greater

performance

The company should put in place all the incentives to the employee to effectively

implement the total quality management techniques. Quality and performance yard sticks

should be put in place, employees must be recognized and rewarded for the work done

and also product performance should be followed to see whether the products meets the

intended use.

This can not go without the help of the government via its authority (the Uganda

investment authority and the revenue authority) and also the private sector foundation

because the technique looks to be costly compared to the size of the firm, so the help

from the above bodies is essential.

5.3.2 Recommendation on the performance of S.M.Es

Because performance includes the main yardsticks of product quality and effective,

customer satisfaction and financial performance, the company should ensure the balance

between the three. One should not compromise the other.

There should be terminal evaluation performance reports to compare the forecasted and

actual performance for the season and then mechanism to rectify the discrepancies should

be availed.

Areas for further research

Areas of further research may include;

1. It would be interesting to conduct further research to explain our finding that

TQM adoption leads to high performance in SMEs.

70

2. Another avenue for future research would be to survey on S.M.Es to determine

their motivation for adopting TQM.

3. Another alternative research area could be the main aim of TQM adopting firms.

Is it financial? , for quality reasons, or because it is a new management strategy?

4. Further research could also investigate the benefits of adopting TQM in SMEs

versus the costs associated to it.

5. Further research could also investigate whether TQM adoption is only beneficial

to firms above a certain size. That is, the costs associated with TQM adoption

may outweigh the benefits for firms below a certain size.

71

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APPENDICES

APPENDIX 1

MAKERERE UNIVERSITY

COLLEGE OF BUSINESS AND MANAGEMENT SCIENCE.

ADOPTION OF TQM TECHNIQUES AND PERFORMANCE OF SMALL AND

MEDIUM ENTERPRISES

QUESTIONNAIRES (For service users)

Dear respondents

I am a student of Makerere University pursuing a degree of Bachelor of commerce and I

am carrying out an academic research study on Adoption of TQM techniques and

performance of small and medium enterprises taking Kampala district as my case

study

For that pursuit, I kindly seek your option and answers to the questions raised in this

questionnaire to facilitate any study by either ticking the appropriate option or giving a

brief explanation as required. The information obtained thereafter shall be used for

education purposes only and shall be treated with utmost confidentiality. Its only through

your response that this study can be completed successfully.

Thanks for your cooperation and time

A. General information.

Please tick or fill in the space if necessary

1.Male . Female

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B. How long has the company been in existence?

5 years and below

6 years and above

2. If yes, for how long have you been an employee of that company?

1-3yrs 4-6 yrs

Above 6yrs

Please rate each opinion and answer according to the grades suggested below;

1=strongly agree

2=Agree

3=Not sure

4=Disagree

5=strongly disagree

ITEM 1 2 3 4 5

The company has had a positive performance since its existence.

There is full knowledge about TQM practices by both top and

lower level managers/ supervisors in the company

Total quality management techniques are practiced in the

company at all levels

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A. Factors for effective adoption of TQM techniques

Management leadership and commitment leads to effective

adoption of TQM in an organisation

Continuous improvement is one of the key factors for effective

adoption of TQM

To effectively adopt TQM in an organization, total customer

satisfaction is crucial

To successfully adopt TQM techniques, employee must fully get

involved

Training and education is an important factor for successful

adoption of TQM techniques in an organisation

Reward and recognition leads to the success of adoption the TQM

techniques.

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B. Effects of TQM adoption on the company performance

Organization profits are increased when TQM techniques are

adopted by the organization.

The company attains competitive advantage when TQM

techniques are adopted

The company‟s growth is assured when TQM techniques are

adopted.

The organization excels in financial perspectives when TQM

techniques are adopted.

Product quality and price are greatly improved when TQM

techniques are adopted.

The adoption of TQM techniques leads to customer protection

The adoption of TQM techniques leads to improvement in

organization performance.

C. Relationship between TQM techniques adoption and company performance

Poor management technique compromise the performance of

small and medium enterprises

Efficient implementation of TQM techniques leads to improved

performance of small and medium enterprises.

There is a strong relationship between adoption of TQM

techniques and company performance

Thanks, God bless you

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APPENDIX II

MAKERERE UNIVERSITY

SCHOOL OF BUSINESS AND MANGEMENT STUDIES

ADOPTION OF TQM TECHNIQUES AND PERFORMANCE OF SMALL AND

MEDIUM ENTERPRISES

INTERVIEW GUIDE

(For managers and proprietors).

For how long have you worked in the company?

How often is company performance evaluated?

Do TQM techniques fully practiced in the company?

What sensitization programs about TQM have you adopted?

Do have quality assurance unit in the company?

Do products produced meet customer needs and expectations?

Do you always meet targeted performance standards? If not

What are the possible causes?

What factors could improve the company performance?

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APPENDIX III

MAKERERE UNIVERSITY

COLLEDGE OF BUSINESS AND MANAGEMENT STUDIES

ADOPTION OF TQM TECHNIQUES AND PERFORMANCE OF SMALL AND

MEDIUM ENTERPRISES

INTERVIEW GUIDE

(For employees)

What procedures are followed to ensure the production of quality products?

How often do you get training?

Do you have team work at the work place?

How do detect in the production process? and

What steps do take?

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APPENDIX IV

NUMBER OF ADMINISTRATORS INTERVIEWED

Company Number

Afroplast (U) Ltd 2

Muzinge Foods Ltd 3

Total 5

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APPENDIX V

RESEARCH REPORT BUDGET

ITEMS AMOUNTS

Transport 110,000

Lodging costs 150,000

Secretarial services 95,000

Photocopying costs 20,000

Stationary (papers, pens and pencils) 11,000

Questionnaire preparation 40,000

Communication (Telephone calls) 20,000

Interview facilitation 50,000

Printing and binding of the report

Grand total

85

Some of the products produced by Muzinge Foods (U) Ltd

86