TotalQuality Management in North America
TQMfocusesstronglyon thequalityof allactivitiesandfunctionsthata firm performs.Itnormallylooksupon customers’responseas thebestmeasureof quality.Itemploystheconceptof internalclientswhotakethepositionof externalcustomersin measuringthequalityof manyof theactivitiesof an entity.TQMprogramconsiderfocusingon qualityas a mechanismforgainingcompetitiveedgeanditisregularlystatedthatwhenqualityimproves,costsare likelyto decrease,andorganizationwill reactmoreswiftlyandefficientlyto clientrequests.Inthemodernoperational environment,TQMrequiredtremendouseffortfrom themanagementandtheinclusionof allemployeesin thedecision-makingprocess.In otherwords,fora TQM to workeffectivelytopexecutivesmust embracea participative approachcontinuously soas to achieveanymeaningfulprocessimprovement.
Toachievepositiveeffects,TQMcallfora sustainable holistic, plannedandcooperativeapproachto business,whatmany scholarreferto as ‘marketshare’insteadof ‘profitability’ approach.Thereforeafirm endeavorto controlits marketby increasingandmaintainingits marketsharevia continuousqualityandcostimprovement.TQMencompassesa setof toolsgearedtowards problem-solving,empoweringandmotivatingalllevels of a firm to focuson theneedsof thecustomer.WhenimplementedproperlyTQM has potential of reducingcostsandsignificantly improvingemployeeandcustomers’satisfaction.WhenTQM thrivesin thesenseof improvingresultsandcuttingdefectsandcosts,thechangeswitnessedoccursas a resultof employeespossessinghigherskillsandempowerment. Unfortunately,mostTQM effortsin North America are toopoorlydesignedandexecutedto resultinsustainedsuccess.
Itis quiteclearthatthepreceptsthat prop up Westerntheoriesare differentfrom theconventionalprinciplesthat underpin TQM, andas suchitbecomesextremelydifficultforfirms in North America to successfullyimplementTQM programs.TQMnot onlyincreasesthetransference of operational decisionbutalsoenhancestheparticipationofthe workforcein thelowerranksin thedecision-making.Thisis one of thefundamentalconceptsthat managersmust embraceto be in a positionto effectivelyimplementa TQM program.Inmostof thefirm in North America especiallyin theprivatesectorthisconceptsparks massiveresistance,since itmust beaccompaniedby substantialadjustmentsin manger’sroles.
Totalqualitymanagementcannot be effectivein North America becauseevenifTQM may denotesa returnto thevalueof craftsmanship that has fadedin the21st centurymanagementpractices,manyfirms both in publicandprivatesectorsstillholdtheperceptionthata businessentityis a profit-maximizingsystem,marketingis centeredprimarilyof transientdifferentiation in lieu of focusingon consumerprimaryneedsandproductionhas beensubjugatedby thenecessityof costminimization.Inadditionmajorityof firms in North America stilladhere to theoldhierarchical organizational designthat elevatestheownersof firmsat theapex.TQM worksbestin a horizontalstructurewherecommunicationandcoordination between variousdepartmentscan be easyandfast.TQM massiverevolutionaryeffectstranscendinto spheresthat manyNorth American firms are not willingto forfeit.Itnot onlyfrontschallengesto themodernmanagementmodelsbutalsoto theprinciplesandtheorieson which suchmanagementpracticesarebased.Itis quiteevidentthattheconceptsunderpinning TQM andeconomicmodelspursuedbythe majorityof thefirms in North America are simplyincompatible.
Totalquality management is a term that denotes a management methodemployed to augment productivity and quality in entities, especiallybusiness organizations. TQM is a wide-ranging system approach thatfunctions horizontally across an organization encompassing alldepartments and workforce and extending forward and backward toinclude customers and suppliers (Cornelison, 2013). TQM is just oneof the numerous acronyms employed to tag management systems thatfocus on quality. Other terms that have been employed to illustrateparallel quality management programs and viewpoints include qualityfunction deployment, continuous quality improvement, total qualitycontrol, statistical quality control and quality in daily work(Stenzel s & Stenzel, 2003).
Totalquality management offers a framework for the execution of effectiveproductivity and quality programs that can augment thecompetitiveness and profitability of an organization. TQM hasreceived an avalanche of criticism over the last two decades for itsinability to offer a sustainable competitive edge (Mukherjee, 2006).The discontent of business leaders with TQM in North America has beenvery high. In the United States more approximately 67 percent ofbusiness executives surveyed in a recent study indicated thatexecuting TQM had undesirable effects on their organizationscompetitiveness. Another survey conducted by the American ElectronicAssociation also showed that more than 63 percent of the respondentshad not noted any meaningful change in the reduction of defects afterimplementing TQM for more than two years (JensGhopal& Kai,2008).Many of the business executives abandoned the program because itfailed to yield the expected outcomes. The performance of someorganization has clearly shown that implementation of TQM program isnot a simple process and it does not necessarily prevent a firm formcollapsing due to other inefficiencies (Cornelison, 2013). Forexample the Wallace Company is one of the most conspicuous examplesof a damaging story for TQM. Wallace Company collapsed two yearsafter receiving the Malcolm Baldrige National Quality Award.
Surprisinglyit is not only award winning organizations that are losing theircompetitive edge. Studies have also indicated that some Canadianfirms are also experiencing a similar phenomenon. In spite of theseisolated cases of failure. There are many major companies andbusiness entities that live proof that confers competitive advantage(Cornelison, 2013). Large organizations such as GE, IBM and Xeroxhave stated that TQM is an important program in their survival in themarket.
Inthe last one decade TQM programs have become very popular managementapproach in North American as organization continue to faceincreased levels of competition in the market. Majority of the largeentities have a TQM program that encompasses some of the principlesand concepts of TQM. One of the most important principles in TQMrelates to employee involvement, what many scholars in the field ofmanagement refer to as employee empowerment (Kiritharan,2013). As indicated by the TQM program employee empowerment is acrucial management activity that props up the TQM program. This paperwill seek to exemplify whether the failure or success of TQM programand its effective implementation is affected by the differencebetween TQM as a part of involvement. We shall then be in a positionto indicate whether TQM can be effective in North America.
TQC: totalquality control
MakingTotal Quality Management Program Work Effectively
TQMprograms stress the importance of top executives acting as the keydrivers of the total quality management activities. TQM managementsupport from the top executive is vital in order ensure that theappropriate priorities are established and see to it that thecommitment to the principles of TQM exist throughout the entity(Cornelison, 2013). TQM focuses strongly on the quality of allactivities and functions that a firm performs. It normally looks uponcustomer’s response as the best measure of quality. It employs theconcept of internal clients who take the position of externalcustomers in measuring the quality of many of the activities of anentity. TQM program consider focusing on quality as a mechanism ofgaining competitive edge and it is regularly stated that when qualityimproves, costs are likely to decrease and organization will reactmore swiftly and effectively to client requests (Cornelison, 2013).
Inthe modern operational environment TQM required tremendous effortfrom the management and the inclusion of all employees in thedecision making process. In other words for a TQM to work effectivelytop executives must embrace a participative approach continuously soas to achieve any meaningful process improvement (Stenzel s &Stenzel, 2003). Management process is described as participative whenall the members in the organization are involved in the decisionmaking process, and as such doing away with the conservative top-downmanagement structure. When employees are involved in managementprocess managers make policies but incorporate their inputs.Therefore employee involvement is one the fundamental feature of aneffective TQM (Cornelison, 2013).
Thesecond characteristic is continuous improvement and it encompassesthe recognition of diminutive incremental gains towards the goal oftotal quality. Large gains are attained by small sustainableimprovements over a long duration. This model calls for a long-termapproach by managers and the willingness to invest in the currentbenefits that manifest themselves in the future (Cornelison, 2013). Asustainable continuous improvement is achieved when the workforce andthe top executives develop confidence and appreciation of the totalquality management program. Teamwork is the other requisite elementfor the effective implementation of teams TQM program (Kiritharan,2013). It entails the organization of cross-functional teams within afirm. This creates an opportunity for different teams to exchangeknowledge, establish available problems and gather amicablesolutions, generate comprehensive understanding of their duties inthe overall process and align their work objectives with those of thefirm. In this light the team is referred to as the ‘quality circle’(Kiritharan,2013).
Figure1: Changesin TQM over time
Toachieve positive effects TQM call for a sustainable holistic, plannedand cooperative approach to business, what may scholar refer to as‘market share’ instead of ‘profitability’ approach. Thereforea firm endeavors to control its market by increasing and maintainingits market share via continuous quality and cost improvement (Stenzels & Stenzel, 2003).
Themain factor behind the poor implementation and result of TQM programin North America is that emphases on the profitability approach thatonly stress on short-term shareholders returns. In the businessenvironment in North America, the short term results are very vitalto the management of many corporations, both public and private.Quarterly result are closely monitored and its effects on the valueof the stock (Cornelison, 2013). Due to pressure from stakeholders,top executives employ all the financial incentive available to pursueshort term goals and reward the workforce at all levels. Leaders aretherefore more empowered than the workforce, in spite of the changeof the business culture. Diagram below shows the percentage ofbusiness executives in North America who are aware of TQM.
Figure2: Percentageof business executives in North America aware of TQM
Thereis no doubt that for a TQM program to be implemented effectivelythere must be change in organization culture coupled with empowermentof employee. Recent studies have confirmed that organizations thatembrace the important elements of TQM (employee empowerment) haveoutperformed those that are loath to change their operationalculture. Similar studies have also indicated that the benefits of TQMprogram are visible after a period of about 10 years. For example astudy by Mukherjee (2006) found that, firms that receive qualityawards in North America exhibited better long –term stockperformance that firms that did not receive quality awards. Mostimportantly the improved stock performance was evident after fiveyears after the implementation of the TQM program. The fact thatbetter results are only distinctly visible after five years ofimplementation means that total quality management transformation isa long-term process that calls for fundamental changes in managementpractice and organizational culture (Cornelison, 2013). This perhapssheds lights on the reasons behind the plethora of studies seeking toestablish the value of TQM programs. Numerous consulting firms whoassist companies to implement TQM programs have questioned the valueof this process in improving firm’s competitive edge in the shortrun. They contend that TQM program is designed to help companiesbetter results in the long-term but there is no long-term withoutshort-term. Studies by Ernst and Young (2002) and American QualityFoundation have indicated that more than 65 percent of top executivesin companies concur that TQM has not amplified their capacity tocompete and has not led to execution of substantial number ofpractices connected with TQM. Many managers have not also focused TQMimprovements on improved services and products (Mukherjee, 2006). Thediagram below depicts the major objectives as reported by topexecutives of maintaining a TQM
Figure3: MajorObjectives As Reported by Top Executives of Maintaining TQM
TQMencompasses a set of tools geared towards problem solving, empoweringand motivating all levels of a firm to focus on the needs of thecustomer. When implemented properly TQM has potential of reducingcosts and significantly improving employee and customer’ssatisfaction. When TQM thrives in the sense of improving results andcutting defects and costs, the changes witnessed occurs as a resultof employees possessing higher skills and empowerment.Unfortunately, most TQM efforts in North America are too poorlydesigned and executed to result to sustained success. To be in aposition to state whether TQM can be effectively implemented in NornAmerica, one has to learn from both failures and successes(Cornelison, 2013).
Animportant facet of the TQM philosophy is employee empowerment andcultural change so that there is an excellent rapport between the topmanagement and the workforce. Employee empower, just like it has beenmentioned above is critical in the process f seeking out qualityproblems and amicable solutions to address them (Kiritharan,2013). In North America many firms still hold to the ancient conceptsof quality that instill fear among employee to the extent that theyare afraid to identify problems. With the new model of TQM the publicand private sector has found it worthwhile to provide incentives tothe workforce so that they are not afraid to identify problems. Inthe corporate world it is a common phenomenon to reward employees forunraveling quality problems. In TQM the responsibility served byemployee is very different from what it was in the traditionalsystems. TQM program recommends empowerment of employees so that theycan make decisions relating to quality in the production process. Inthis program employee are regarded as central constituents in theendeavor to attain high quality.
Conflictbetween Top Management and TQM
Thesuccess stories of TQM in North America are known both in the publicand private sector . As stated above companies such as Ford, Xerox,Hewlett-Packard Allen-Bradley, Harley-Davidson and Marriot are just afew of those operating n North America that are wholeheartedlycommitted to TQM (Grant, Shani & Krishnan, 2014). These companieshave tremendous changes in their management philosophies andpractices, and have recorded massive improvement in product qualityand general operational performance. Nonetheless, many firms havestrived to execute the TQM and have not managed to attain remarkablebenefits like companies mentioned above. Even though many havemanaged to record some intangible improvements in services andproduct quality, few have been able to achieve quality improvementprograms to significantly improve their competitive edge in themarket (Kiritharan,2013). In majority of the firs in North America that had sought toembrace TQM as a move to improve quality, the momentum was lostfewyears after implementation due to wrangles over goals and executionprocedures (Grant, Shani & Krishnan, 2014). As a consequence topexecutive opted to channel their attention to other paramountpriorities, and the workforce became increasingly skeptical about thecorporations commitment to the process. Other that managed toovercome such barriers were even faced with complex conundrums, asquality programs came head to head with other strategic initiatives(Cornelison, 2013).
Anexcellent example is Kodak Inc. which had embarked on a massivequality improvement operation in 1984 to shake off competition andmaintain its market share that was under threat from other upcomingcompanies. The top executive set a mission to be the global leader inquality of the services its delivered to customers and product itsold in the market. In this light the firm embarked on a mission toimplement TQM by training the workforce on statistical techniques,versed top executives with quality programs, called upon managers tocreate personal quality improvement projects and even circulatedinformation of quality development experiences throughout the company(Grant,Shani & Krishnan, 2014).Kodak also held annual global quality meetings to formulatestrategies to enable it attain the set quality goals. In a few yearsKodak had registered momentous improvements in its operations and hadsignificantly improved its competitive performance. Nonetheless, thefirm’s financial results had remained below average and thisamplified pressure from stakeholders for a corporate restructuring.One decade later the top executive at Kodak Inc had become overlyperplexed by the conundrum of managing incessant incrementalimprovement while at the same time making sweeping top-down changes(Kiritharan,2013).This was followed by a sequence of events that left that companywithout a financial officer and chief executive officer. First therestricting had consumed colossal sums of money, more than $ 1.6billion, which dealt a major blow to the savings on the operationalcosts (Grant,Shani & Krishnan, 2014).The pursuit of unreconcilable approaches to restructure managementcreated conflict between the financial officers and the chiefexecutive officer leading to their `departure.
Morerecent accounts at McDonnell Douglas and Alcoa suggest a similarstrife when management opt to implement TQM. At Douglas the enormousdownscaling in 1992 rendered impotent a once-ambitious TQM effort,while at Alcoa the new chief executive officer O’Neill regarded thetotal quality management program as an impediment to more radicaltransformations (Cornelison,2013).Thediagram below shows that only 52 percent of business entities inNorth America are willing to implement the TQM.
Figure4: Percentageof business entities in North America willing to implement the TQM
Thethree illustrations support one fundamental suggestion that totalquality management inescapably conflict with set Western managementpractices in North America. It is quite clear that the percepts thatprop up western theories are different from the conventionalprinciples that underpin TQM, and as such it becomes extremelydifficult for firms in North America to successfully implement TQMprograms (Cornelison,2013).It is also apparent that TQM can only yield expected results if theconventional practices are altered. The predisposition of TQM togenerate discord within companies occur not only because there is aconflict between it nd conventional western management concepts, butalso due to the fact that TQM collides violently with othercontemporary rends in the field of management that has been widelyembraced by many firms in North America (Kiritharan,2013).In this light it is important to states that new concept ofmanagement paradigm that have coerced a rethinking in managementpractices referred to as TQM, then the other that calls upon firmsmaximize shareholders value is referred to as economic model.Conflict that tends to derail the implementation of the TQM in NorthAmerica is therefore a clash between TQM and the economic model.Consequently it is vital to explore the difference between economicmodel and TQM in a bid to generate a sound conclusion on whether TQMcan be effective in North America.
Differencesbetween TQM and ‘Economic Model’
TQMencompasses a group of concepts and processes for boostingcompetitive performance by improving the quality of processes andproduct. Eventhough TQM has conferred immense benefits to Japanesefirms and is widely regarded as one the best strategies of meetingcustomers expectation and increasing business competitiveness, we areprofoundly concerned in its effects in North America (Jain,2001).Although the concepts of quality improvements can be traced back tothe 1930s, it only attained rapid dissemination in the 1980s in NorthAmerica. Business leaders started to rethink about theories ofmanagement that had been developed in America and only appliedsuccessfully in other countries such as Japan (Kiritharan,2013).
TheFunction of Management
TQMnot only increases the transference of operational decision but alsoenhances the participation of workforce in the lower ranks in thedecision making. This is one of the fundamental concepts thatmanagers must embrace to be in a position to effectively implement aTQM program. In most of the firm in North America especially in theprivate sector this concept sparks massive resistance, since it mustbe accompanied by substantial adjustments in manger’s roles (Grant,Shani & Krishnan, 2014). This concept fronts new trends ofbalance between self management and participative decision making.Until recently it has been the role of a manager to collectinformation, executing incentive and sanctions as he/she deemsnecessary to implement decisions that they make. With theimplementation of TQM this management priorities are reorganized, themost conspicuous change being the contraction of manager’s role andcontrol power. This means that the managerial duties are lessspecialized both vertically and horizontally. The only facet of themanagement roe that expands is their caching and consultants role.The lack of clear distinction between who should make decision andwho should execute them is one the main reason why top executives optto ignore some of the principles of TQM (Jain, 2001).
Itis evident that once the decision making capability is diffused itwill be accompanied automatically by diffusion of coordination , aphenomenon that does not augur well with managers. TQM calls for theinvolvement of the entire workforce regardless of their status andrank within the management hierarchy, the main reason being they arethe people who are going to implement the decisions made. Flow ofinformation must therefore flow more laterally than vertically. Thechanges mentioned above have significance impacts on the structure ofthe organizations (Cornelison, 2013).
TheChallenge to Management Theory
Inthe section above we have highlighted the conflicts that existbetween top executives and TQM. A thorough analysis of the work byprominent authors such as Deming, Ishikawa and Juran shows that TQMhas other effects for the theories and principles of management thatis widely applied by most managers in North America (Juran, 1992).The strife we have highlighted, that has compelled firms to conductorganizational restructuring and directed plans for strategic change,also underpin deep rooted irreconcilability between managementprinciples inherent within these practices.
However,this is not a new phenomenon, for the past five decades managementtheories have coalesced around two main school of thoughts: oneschool of thought is based on the theory of bureaucracy andscientific management referred to as the rationalist while the otherreferred to as the human relations is pegged on the position of theorganizations as social systems, placing immense emphasis on thesocial needs and psychological facets of human beings (Jain, 2001). TQM does not fall in either of the two schools of thoughts but isviewed as encompassing all the aspects that these school of thoughtsprojects and as such should serve a bridge between those in theumbrella of the Y theory and those in the X theory (Grant, Shani &Krishnan, 2014). TQM scientific model is consistent with the basicprecepts of the rationalists and its structural elements andfunctional design are consistent with the human relations approach.
Managersconstantly find themselves under pressure from the shareholders tomaximize their share value as much as possible. This s consistentwith the fundamental underpinnings of the economic model that statesthat profit maximization is core duty of any rational economic agent(Jain,2001).This principle is officially sanctioned in the obligation by board ofdirectors who oversee the operation of companies on behalf of thestock holders. The dominant wave in the management practice in NorthAmerica has been consistent with this statement and managers havebeen coerced by circumstance to pursue management principle thatconfers immediate benefits to the shareholders. In this light alldecisions made by the managers must be in reference to whether itconfers more value to the shareholder or not (Grant,Shani & Krishnan, 2014).This concept has made it extremely difficult for manager to createroom for other management principles, regardless of whether theywould lead to better outcomes. TQM stresses that a corporation’smain goal is to ensure customer satisfaction. Even though TQM doesnot refute the fact that business entities primary goal is togenerate income or deliver specific service or commodity as indicatedin the objective clause, it emphasis that this should not be thedriving force is the main reason why many firms has found itdifficult to implement the program. TQM lay emphasis on the need ofensuring customer satisfaction, and if the goal of profitmaximization is one that shapes decision making processes, entitiesare likely to lose focus of customer service. For example it servesno purpose for a firm to record an increase of 30 percent inshareholders’ value only to go out of business within five years(Kiritharan,2013).
Theincreased conflict between structural and strategic initiatives andTQM witnessed in North America, is a sign that management practicespursued by many firms are still rigid and based on traditionalprinciples of management that confers immense power to the manager atthe expense of other employee below them in the hierarchical ladder(Kiritharan,2013).As firms strive to react to the myriad of challenges in the turbulentbusiness environment of the information age, the major conflict s nolonger he one between the proponents and opponent of X and Y theoriesbut between modern approaches to management as embedded in theeconomic model versus the TQM model, and it is clear for everyone tosee that most top executives are want to follow the former (Grant,Shani & Krishnan, 2014).TQM envisions a union of the long-term interest of customers,workforce and the shareholders. By augmenting quality, the firmbuilds a safe future for itself and all of its employees. It mergesboth non-economic and economic objectives. Implementation of TQMshould lead to quality improvement which should create an avenue forfirms to lower their operational costs and bestow consumers thebenefit of lower prices and improved performance. These gains willsignificantly booster the competitive edge of an organization, and inthe process provide economic yields to both the owners and theworkforce (Jain,2001).TQM recognizes that economic agents are not only driven by economicprospects per se, because they are also social dependent agents whoare manageable, biddable and most importantly teachable. Byintegrating the common interest of shareholder(owners), consumers,and employees and by incorporating the social welfare instead of themyopic economic welfare, total quality management may can be said tobe a means for optimizing the corporations contribution to thesociety(Grant,Shani & Krishnan, 2014).
Totalquality management cannot be effective in North America because evenif TQM may denotes a return to the value of craftsmanship that hasfaded in the 21stcentury management practices, many firms both in public and privatesectors still hold the perception that a business entity is a profitmaximizing system, marketing is centered primarily of ephemeraldifferentiation in lieu of focusing on consumer primary needs andproduction has been subjugated by the necessity of cost minimization(Kiritharan,2013).In addition majority of firms in North America still adhere to theold hierarchical organizational design that elevates the owners offirms at the apex. TQM works best in a horizontal structure wherecommunication and coordination between various departments can beeasy and fast. The vertical structure is still popular in NorthAmerica, instead of diffusing power the current system areconcentrating more power on the top executives.
Itis evident that TQM has transformed firms in many ways that hasimproved competitive performance. Given the nature of TQM as has beenexemplified in this work, we maintain that TQM is an avant-gardeconcept that calls for insidious and sweeping adjustment within afirm. It is the very popularity of this program that has served asthe greatest impediment for top executive’s cavernous understandingof its principles and outcomes.
TQMrequires a complete adjustment in management practice, including thereformulation of task, the redesigning of organizational structure,redefinition of managerial roles and acquisition of new expertise andskills by the workforce working at different levels. Implementationof TQM fronts tremendous challenges to firms in North America thatfind it difficult to change their rigid organization structure.Implementation of TQM in North America has been considered to betantamount to introducing democracy to a dictatorial regime. Even insituation where there is good will from the management to implementTQM, top executives are still afraid of losing power and authorities.The TQM road in long and convoluted and takes firms through unknownlandscapes where decisions, power, authority and innovation arewidely shared. The moment a firm gets into this territory, it isdifficult for top executives to react to situations that appear tocall for unexpected strategic shifts. As has been highlighted usingthe Kodak illustration many years of TQM make it erect technicalbarriers that prevent inaugurate swift divestment and downsizing.TQMmassive revolutionary effects transcends into spheres that many NorthAmerican firms are not willing to forfeit. It not only frontschallenges to the modern management models but also to the principlesand theories on which such management practices are based. It isquite evident that the concepts underpinning TQM and economic modelspursued by majority of the firms in North America are simplyincompatible. There are companies such as Allen Bradley, Xerox andIBM that have succeed in conducting restructuring in the process ofimplementing TQM, but a closer assessment indicates that theapproaches have been applied consecutively instead of concurrently.Managers in North America for many year have prided themselves aspractical, open-minded and eclectic, but the conflict that emergesbetween TQM and management philosophies indicate that firms and topexecutives will increasingly need to choose, unambiguously if notunequivocally to which school of thought is more apt, but as it standTQM cannot be effective in North America.
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