ORGANIZATIONAL CHANGE AND DEVELOPMENT

TOTAL QUALITY MANAGEMENT - AS A PRACTICAL APPROACH IN TODAYS COMPANYS

ABSTRACT
This case paper talks about Total Quality Management , its history, its benefits, its 7 tools- old and new, how it is related to Organizational Development(OD) and how it leads to an error or defects free processes, products and services. It is a project management technique or strategy that is implemented to assure that an awareness of quality is embedded in all phases of the project from conception to completion. Used in industries from manufacturing to aerospace, total quality management requires the careful and consistent review of all phases of a project, and the coordinated effort of all involved. Standards must be developed, procedures well defined, and all involved must follow strict adherence to the plan to assure its success. The first paradigm of the strategy, total, calls for an integrated system of dependent variables. Here, planning is of the utmost importance. In the planning stage obstacles to success can be identified, confronted, and conquered. All parties involved, from workers to management must become familiar with the process and committed to its success. The second paradigm of the total quality management (TQM) strategy, quality, requires that once a standard has been established it must never be violated. This necessitates a certain amount of cross training, so that one party along the chain of project management can spot the errors that might have occurred at a prior stage in the process. This not only assures quality, but also tends to inspire greater commitment and conscientiousness among the individuals involved. The third paradigm of total quality management (TQM) is management itself. In order to insure success, the strategy must function as a cohesive element that unites the individual efforts of all involved. The system must be managed properly in order to insure the quality of the strategy itself.

1. INTRODUCTION
1.1) TOTAL QUALITY MANAGEMENT Total Quality Management or TQM is an integrative philosophy of management for continuously improving the quality of products and processes. It is a management philosophy, a paradigm, a continuous improvement approach of doing business through a new management model. Under TQM, emphasizing the quality of the product or service predominates. TQM expands beyond statistical process control to embrace a wider scope of management activities of how we manage people and organizations by focusing on the entire process, not just simple measurements. The TQM philosophy evolved from the continuous improvement philosophy with a focus on quality as the main dimension of business.

TQM is a comprehensive management system which: Views an organization as an internal system with a common aim rather than as individuals working to maximize their own performances. Focuses on meeting owners/customers needs by providing quality services at a cost that provides value to the owners/customers Emphasizes on teamwork and a high level of participation by all employees Drive for continuous improvement in all operations Recognizes that everyone in the organization has owners/customers who are either internal or external Focuses on the way tasks are accomplished rather than simply what tasks are accomplished Total= Made up of whole Quality= Degree of excellence a product/service provides. Management= Act/art (manner of handling, controlling, directing, etc.) TQM is an art of Managing the whole to achieve excellence. TQM is an organizational change intervention that is concerned with quality. According to Goetsch & Davi TQM is an approach to doing business that attempts to maximize the competitiveness of an organization through the continual improvement of the quality of its products, services, people, processes and environment 1.2) HISTORY OF TQM The roots of Total Quality Management (TQM) can be traced back to early 1920s when statistical theory was first applied to product quality control. This concept was further developed in Japan in the 40s led by Americans, such as Deming, Juran and Feigenbaum. The focus widened from quality of products to quality of all issues within an organization. Total quality management (TQM) became extremely popular during the 1980s and early 1990s as OD intervention. 3

TQM interventions utilized and established quality techniques and programs that emphasize quality processes, rather than achieving quality by inspecting products and services after processes had been completed. The important concept of continuous improvement embodied by TQM has carried over into other OD interventions. TQM appears to be highly congruent with OD approaches and values because of the emphasis on creating an organizational culture that features extensive participation, an emphasis on teams and teamwork, cooperation between teams and units, the generation of valid data and continuous learning.

1.3) TQM BELIEFS Presented here are universal total quality management beliefs. Customer satisfaction is the measure of quality Everyone has owners/customers; everyone is an owner/customer Quality improvement is a continuous process Analyzing the processes used to create products and services is the key to quality improvement Measurement, a skilled use of analytical tools, and employee involvement are critical sources of quality improvement ideas and innovations Sustained total quality management is not possible without active, visible, consistent, and enabling leadership by managers at all levels If improvement of the quality of products and services is not continuous then its tough to survive in the market. 4

1.4 NEED OF TQM Rising Customer Expectations Increasing Competitive Pressure Changing perceptions of customers Internal pressure for improvement Managers and workforce perceptions to survive

2. RESEARCH OBJECTIVES The following objectives of this dissertation an be stated: To study the concept of TQM, its tools and how it benefits company performance. The research on TQM methods used by various companies in todays time. To identify new trends and needs in TQM. 3. RESEARCH METHODOLOGY The entire case will represent TQM in todays times based on the secondary data available. Secondary data collection: large amount of secondary data is available in the forms of articles, journals, and previously conducted researches on the similar topics. This data will be collected to determine some of the broad trends prevalent in TQM. We will be going through books on TQM , annual reports of companies that use TQM, interviews given by TQM specialists etc.

4. REVIEW OF LITRATURE
4.1) TQM as operational strategy The literature presents so many denitions and descriptions of TQM that sometimes it seems as if each author has its own denition and each organization has its own implementation (Watson & Korukonda, 1995). However, no TQM discussion is complete without acknowledging the work of the ve best known TQM experts, or quality gurus: Deming, Juran, Feigenbaum, Crosby and Ishikawa. In a recent study, Reed, Lemark, and Mero (2000) systematically reviewed the work and ideas of these TQM experts Deming (1982, 1986), Juran (1974, 1988, 1989, 1992), Crosby (1979, 1996), Feigenbaum (1951, 1983, 1991), and Ishikawa (1985) and pointed out the shared similarities on TQM elements. This review revealed that they all agreed on the importance of the following six key elements: customer satisfaction, cost reduction, leadership and top management commitment, training and education, teamwork and organizational culture. In addition to the complete agreement reected in the above six elements, Reed et al. (2000) also found commonly shared differences regarding the other TQM elements. The role statistical tools play in improving quality control was emphasised by everyone except Crosby (1996), who implied that the use of statistical

control was not a core quality management issue. Similarly, while Feigenbaum, Ishikawa, and Juran stressed product design, Deming and Crosby did not. With the exception of Crosby, all mentioned planning, but each dealt with different aspects of it. Juran covered all facets of planning, Deming was concerned mostly with the stages of planned action, while Feigenbaum and Ishikawa focused on feedback and control. Some of the denitions and TQM elements that other researchers had proposed were: TQM can be dened as a set of techniques and procedures used to reduce or eliminate variation from a production process or servicedelivery system in order to improve efciency, reliability, and quality (Steingrad & Fitzgibbons, 1993). Vuppalapati, Ahire, and Gupta (1995) stated that TQM is an integrative philosophy of management for the continuous improvement of product and process quality in order to achieve customer satisfaction. According to Dean and Bowen (1994), TQM is a management philosophy or an approach characterised by principles, practices, and techniques. They pointed out three principles that most quality frameworks had in common customer focus, continuous improvement, and teamwork. Each principle is implemented through a set of practices, and these practices, in turn, are supported by a broad set of techniques. Anderson, Rungtusanatham, and Schroeder (1994) identied some core TQM components derived from Demings 14-point programme using the Delphi method. These components reect Demings principles and are either explicitly or implicitly similar to the factors included in the other quality management frameworks. However, its weakness is the lack of a systematic scale development and content validity (Motwani, 2001). Joseph, Rajendran, and Kamalanabhan (1999) identied the following 10 TQM factors organisational commitment, human resource management, supplier integration, quality policy, product design, the role of the quality department, quality information systems, technology utilisation, operating procedures and training. They also developed a measurement that can be used to evaluate the extent to which these TQM practices are deployed in an organisation. According to Motwani (2001), the philosophy of TQM could be visualised as constructing a house with top management commitment being the foundation or base. On top of a solid foundation, four pillars are constructed that include process management, quality measurement and control, employee training, and customer focus. In a recent empirical study, Rahman and Bullock (2005) also explored the relationship between TQM practices and organisational performance using data from 261 Australian manufacturing companies. Adopted from Dow et al. (1999) and Power, Amrik, and Rahman (2001), they formed a model with 10 TQM constructs: workforce commitment, shared vision, customer focus, use of teams, personnel training, cooperative supplier relations, computer base technologies, just-in-time principles, technology utilisation, and continuous improvement enablers. The rst six constructs were considered as the soft elements, and the remaining four constructs as the 6

hard elements of TQM. Elements of soft TQM are essentially dimensions of human resource management, like workforce commitment, training and so on, while hard elements relate to continuous improvement or treat organisations as total systems (Rahman & Bullock, 2005). The results of this study suggested that, in general, the soft TQM dimensions are signicantly related to organisational performance. These ndings are broadly similar to that of Samson and Terziovski (1999), Powell (1995), and Dow et al. (1999). In addition to direct effects, soft TQM elements also have an indirect effect on performance through their effect on hard TQM elements. This study also provided evidence that certain hard TQM elements have a signicant impact on performance and suggested that for having such an impact, hard TQM elements need a support from elements of soft TQM.

4.2) Stages of TQM and its Tools The first stage of development is a preparation phase in which managers discuss the approach toward TQM. They identify and collect information about the organization in the prime areas where improvement will have most impact on performance, while exploring their knowledge on TQM by attending internal and external seminars. Commitment and leadership are two of the most important elements in quality management. Therefore, management needs to be fully familiarized with TQM and fully understand the objectives, the methodology, and its impacts on the company operations before disseminating them company-wide. According to Kume (1996), many companies do not introduce TQM throughout the company straight away. They try it in one part of the organization to see if it can be applied in other departments of responsibility. After TQM effectiveness is assured, the second stage is for management to decide which department will be responsible for its promotion. Many companies assign this role to their planning office or QC Circle Office. Then management formally announces that TQM will be introduced in the company and it will be implemented in company-wide operation. At the same time, specific training is provided and the activities are conducted among the different levels of the company. According to Kume, at this stage, the most important challenge for the organization is how to overcome the negative attitude of the part of the people who are showing resistance to change. The third phase involves linkage of the TQM with management policy, and communicating that linkage. As Kume suggests, it is often the case that policy is only a written document of management and never really is implemented. Thus, linking the policy with improvement activity enables the activity to be implemented systematically across the whole company. Once the activities are seen to be effective, they are standardized and expanded company wide. As a cross-functional operation, after activities are well established, the company often tries to tackle problems that affect the company as a whole. Also a management audit takes place so as to see how the policy is 7

implemented in the organization. Management is expected to examine not only the implementation of the activities but also the outcome of those activities and provide appropriate comments and guidance. Application for a quality award such as the Malcolm Baldrige Award or the Deming Prize can be one of the stimuli for the organization. In the final phase, the main issues will be in regard to how to maintain the improved company-wide quality management. Kume describes if not looked after properly how a system deteriorates with time. It is important to make sure that the quality level does not deteriorate once it has been improved. This underscores the importance for the company to improve and enhance its activities in a systematic manner from time to time. Total Quality Management (TQM) has seven basic tools. Kaoru Ishikawa contends that 95% of a company's problems can be solved using these seven tools. The tools are designed for simplicity. Only one, control charts require any significant training. The tools are: Flow Charts Ishikawa Diagrams (fishbone charts) Checklists Pareto Charts Histograms Scattergrams Control Charts

5. COMPANIES USING TQM PRINCIPLES 5.1 Exxon Mobil:

TQM ensures quality, considering the customer or the end-user. With the fuel business ever so competitive, Exxon felt the need to explore customer-related issues by using TQM rather than only relying on competitive pricingbecoming one of the companies that benefited from TQM. According to BrainMass, Exxon treated quality as an opportunity for process improvement rather than as cost. The challenge for Exxon was to rebrand the company as a trusted fuel provider, and that also meant their service stationsowners were asked to emulate Exxons corporate beliefs into their franchises or gas stations that bore the Exxon name and sold their products. Through analyzing customers' need and wants and by using TQM to implement those wants and needsthey re-branded themselves from the disaster of the Exxon-Valdez oil spill of 1989. They looked at 4 areas of the 8

end-user and consumer confidence including higher quality products, efficient and easy-to-use services and products, better explanations of warranties and guarantees, and being truthful in all of their advertising efforts. By doing so, the company was able to embark on the new and the workable and leave the consumer view of the company on the back burner.

5.2 XEROX

According to Mark Chatfields article TQM: It Really Works, published on the All Business website, many American companies between 1960 to 1990 lost 40 percent of market share to foreign competitors, while Japan increased its foreign market by 500 percent. With fear of closing down, Xerox fought back using TQM to regain their market share. They implemented TQM by opening the Palo Alto Research Center (PARC), which focused on ways to emerge as a leader in the printer/copy/fax market. Their main goal: Innovation is everywhere; the problem is learning from it. They also focused on benchmarking and leadership and re-thought their suppliers to come up with the best quality products that could compete globally. Xerox later went on to win the Baldridge Award for their TQM efforts.

5.3 RELIANCE INDUSTRIES:

During the year, several new initiatives were taken to improve and strengthen quality management systems at our sites. At the RPCL facility, Quality Control systems were put in place at the time of plant start up - resulting in reliable results from the start. Total Quality Management was introduced in all the laboratories at Jamnagar. The 5S programme was introduced at laboratories for inventory and document management. Inter laboratory testing across the Reliance group has been made a regular feature to monitor the reliability of analytical services. Suggestion schemes have been introduced to encourage the involvement of all employees in quality related activities - eighteen employees received awards. Reliance's efforts on the quality front continued to receive recognitions. 9

 The Jamnagar laboratory received recognition on the analytical front from CEMILAC Reliance Industries Limited, Maker Chambers IV, Nariman Point, Mumbai (Centre for Military Airworthiness and Certification) for its high level of Quality Confidence and Control Measures. For each month during the year, Reliance received Golden certificates from Shell Global Services for Excellence in Reliability of Testing and Results. Reliance's laboratory was accredited for conforming to QMS as per ISO/IEC 17025 by NABL.

5.4 GE (General Electric):

GE has taken the six sigma process and developed it into an amazing feat that has brought about a change in their organization that cannot be looked over or disregarded when trying to fine an example of an exemplary performance of any organization. They have done so by using the six sigma quality system and implementing it every aspect of their business. GE defines six sigma as a highly disciplined process that helps us focus on developing and delivering near-perfect products and services. The article from the website goes on to say that to achieve six sigma qualities a process must produce no more than 3.4 defects per million opportunities. An "opportunity" is defined as a chance for a nonconformance or an issue with a raw material or supplier. We all know the jingle that we have seen on GE commercials for years, GE, we bring good things to life. Their people are among the most highly trained work force on the planet as they try and solve the issues that are plaguing the world today. They are also involved in environmental movements as the website boasts that GE employees are responsible for, reducing GHG emissions by 250,000 metric tons and saving the company 130 million dollars by organizing treasure hunts worldwide.

5.5 FORD:
While a believer in Six Sigma these days, back in the 1980s, Ford believed in TQM after its executives saw what the methodology did for Toyota. A new slogan Quality People, Quality Products emerged, especially after Ford partnered with ChemFil, their paint suppliera company that helped produce quality paint products customers desired. As with many other automakers, the emergence of customer surveys was vast and from survey responses came more quality based on customer needs. Actually, top executives at Ford say TQM was a light-bulb idea from Henry Ford who improved on his assembly line practices to manufacture even more vehicles, while keeping quality levels high. With their entrance into the Six Sigma methodology, the slogan has changed again at FordWeve got a better idea! 10

6. DATA ANALYSIS & FINDINGS:

6.1 COMPARISON BETWEEN TQM SYSTEMS OF GE AND MOTOROLA:
GENERAL ELECTRICAL COMPANY
Amongst the first few companies to implement TQM, by using 6 sigma process. Professionals are highly trained and are called Black Belts. Identification of problems and its solution is their full time job in the organization.

MOTOROLA INC.
Amongst the first few companies to implement TQM, by using 6 sigma process. Motorola was one of the first companies to win the Malcolm Baldrige National Quality Award (MBNQ) in 1988, due to its very high focus on quality.

The level of defects have been reduced to approx 3.4 parts per million. Due to their consideration of quality as most important factor, it has resulted in the increase of sales and profit of the company. GEs tool kit: o Change Acceleration Process (CAP)framework to implement change o Design for Six Sigma (DFSS)to ensure that the products are designed for reliability and for process capability. o LEAN looks at different processes from the customers perspective. o Six Sigma Extensive data driven problem solving methodology used for eliminating the defects and variability in the processes. o Quality Management Systems (QMS)- It ensures quality control and improve the effectiveness of the processes. o Work Out (WO)- To identify dramatic process improvement opportunities and implement plans for improvement by bringing together the stake holders .

They have ended up to eliminating most of the defects from products, process and transaction.

The quality commitments of Motorola are: o Customer Advocacycustomer feedback o Quality management system quality policy o History of quality- 6 sigma improvement processes.

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6.2 PRESENT AGE TRENDS IN TQM

TREND#1: One of the important concepts of TQM is employee involvement. This is a relatively new method, which is a contrast to conventional management practices, wherein management takes all decisions and workers just follow them to accomplish their jobs. This top-down management style is slow and inflexible with little room for competition. Survival in todays time-starved, customer driven market requires rapid response times from manufacturers and other businesses to the ever-changing customer needs. Employee involvement is a system wherein employees are encouraged to use their expertise and knowledge to suggest methods for improvements in their work areas. These suggestions could pertain to improvements in the job, the product, the work atmosphere or the company as a whole. Many companies have ventured into a participative style of management by involving employees in the problem solving and decision making processes. For example, when Ford faced continuous threat of competition from Japanese car manufacturers, it ventured to study how the Japanese were excelling in their performance efficiency. It established a task force to study the Japanese manufacturing process. Results showed that the key to Japanese performance and efficiency was their empowered workforce and the teamwork involved. Employees were given the responsibility and authority to stop a process if the quality failed to meet the standards specified. TREND#2: In today's competitive environment every company is looking for ways to enhance the quality of human capital so as to improve their productivity and ultimately boost the company's bottom line. The aim is to have the foundation of TQP (Total Quality People) because effective organisations depend on effective people. In order to improve the productivity and boost the economic conditions of a company, it is imperative that companies pay attention to the improvement of the quality of human capital as they are the real force behind it says Gyan Daultani, vice president-HR & RMG, Nihilent Technologies opines.

TREND#3: The Seven New Tools of TQM are said to be:

Affinity Diagram (KJ Method) Interrelationship Digraph (ID) Tree Diagram Prioritization Matrix Activity Network Diagram Matrix Diagram Process Decision Program Chart (PDPC)

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7. CONCLUSIONS
The shrinking global market has led to stiff competition in the business and industrial arena. The entry of a number of new companies, both local and global into various markets has given the customer a wide array of product choices. Many of these new companies are able to produce the same or similar products at almost the same or lower costs. Thus customers today have a wide range of products to choose from. These products not only meet their specifications closely, but also their budgets. Competition has extended far beyond the manufacturing or private sector. Today, the service, government and non-profit sectors also face stiff competition.

The need to grow and succeed in an increasingly competitive market has seen the implementation of various quality initiatives in different organisations. Problem-solving and process improvements are two vital aspects of the quality initiatives, and proactive actions are being taken to prevent problems. Total Quality Management (TQM) is a continuous process that strives to increase customer satisfaction, lower costs, and minimise defects and variations in every aspect and every process of the business.

TQM involves a number of catchwords like Just-In-Time, quality circles, employee involvement, continuous process improvement, empowerment, Kaizen, self-directed work groups and world-class quality. Basically, the philosophy of TQM is to involve every employee in the organisation along with its suppliers and distributors to improve product quality and enhance customer satisfaction.

Co-operation and co-ordination among employees from different departments is very important for organisations to lay the foundation of TQP in order to progress. The performance attributes of Total Quality People is to achieve success and have the winning spirit. Organisations must continuously improve, innovate or re-design their business processes in order to stay ahead in the competition. Researches highlight that a culture of learning and development foster employee creativity, engagement and result with successful business results. Without these, none of the improvement activities will be flourished within the company. Organisations must be transformed and accept people participation and respect on their improvement ideas as indispensable parts of their corporate culture. For achieving high levels of innovativeness, companies must first convert their culture into a more participative and respective one.

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BIBLIOGRAPHY
1. http://www.ijest.info/docs/IJEST11-03-02-060.pdf 2. http://www.ijest.info/docs/IJEST11-03-02-060.pdf 3. http://mitiq.mit.edu/iciq/pdf/relevance%20of%20total%20quality%20management%20%28tqm%29%20or%20bu siness%20excellence%20strategy%20implementation%20for%20enterprise%20resource%20planning%20%28er p%29%20a%20conceptual%20study.pdf 4. http://www.towers.fr/essays/The%20state%20of%20total%20quality%20management-a%20review.pdf 5. http://www.wiley.com/college/sc/reid/chap5.pdf 6. http://www.stfrancis.edu/content/ba/ghkickul/stuwebs/btopics/works/tqmxerox.htm

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