Quality management and performance a review


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Quality management and performance a review

  1. 1. International Journal of Advanced Research in Management (IJARM), International Journal of 2010. pp. 01- 19http://www.iaeme.com/ijarm.html I J ARMVolume 1, Issue 1, JuneAdvanced Research in Management (IJARM), Dr. Rajesh K. Singh © IAEME QUALITY MANAGEMENT AND PERFORMANCE: A REVIEW Dr. Rajesh K. Singh Associate Professor Indian Institute of Foreign Trade (IIFT), Delhi, E-mail: rksingh@iift.ac.in rksdce@yahoo.comAbstract- In present scenario of globalization and economic slowdown, survival oforganizations has become a challenging task for the management. Customers expect highproduct quality along with low cost, timely deliver and best service. In such a situation, totalquality management in the organization is very relevant. This paper has tried to explore differentissues affecting implementation of TQM, effect of TQM on performance and circumstancesunder which TQM fails. One hundred twenty research papers, mainly from referred internationaljournals are reviewed to identify thrust areas of research. On the basis of review, gaps areidentified and research agenda is proposed. This paper has identified certain gaps fromliterature on issues related with TQM such as development of framework for evaluatingeffectiveness of TQM, prioritization of critical success factors, comparative study of TQM andeffect of TQM on performance of organizations from supply chain perspective etc on whichfurther study can be conducted.Keywords- Quality, TQM, Performance 1
  2. 2. International Journal of Advanced Research in Management (IJARM), Dr. Rajesh K. SinghQuality Management and Performance: A Review1. INTRODUCTIONToday, the wave of global competition has invaded every part of the world and business areas(Koberg et al., 2003). The main impact of global competition is the ever-increasing enhancementof customer expectations. Since customer expectations are never ending, the gaps between “whatcustomers want” and “what is being delivered” do ever exist. It is a well-established fact thatattaining higher and higher degrees of quality in totality paves the way for facing globalcompetition (Goh and Ridgway, 1994). Quality is the main driver for improving thecompetitiveness of organizations in globalised market (Singh, 2008). A high degree of qualitymeans achieving, enhancing and sustaining competitiveness is dependent on delivering superiorquality products/services to customer (Lai et al., 2002; Reed et al., 1999). Arumugam et al.(2009) have observed that companies experience dramatic changes in business environmentcharacterized by increasing consumer consciousness of quality, rapid technology transfer,globalization and low cost competition. In response to these challenges, many companies havejoined the quality movement and implemented various quality improvement initiatives as ameans to enhance competitiveness (Singh et al, 2007). Quality has emerged as a strategiccompetitive tool for organizational success (Yong and Wilkinson, 2002; Hansen, 2001). Intoday’s business environment, organizations cannot afford to ignore the strategic implications ofquality for its competitive position. Many organizations, have pursued some type of qualityphilosophy and initiative, for example, Total Quality Management (TQM), Just-In-Time (JIT),the Shing Prize, Deming Prize and ISO 9000 (Magad and Curry, 2003). In global competition acompany needs to apply quality methodologies in the form of strategic quality management;quality systems; quality assurance; quality control, etc (Sharma and Kodali, 2008).Quality is customer satisfaction through product or by service. Quality can also be defined as“the degree to which the product in use will meet the expectations of the customer” or simplydefined as “conformance to requirements”. Quality is an important factor in the value-addingprocess involved in the production and delivery of products along the supply chain. Supply chainmanagement (SCM) and total quality management (TQM) are two of the important tools thatmanufacturing companies use to achieve competitive advantage. Some of the importantcapabilities that these companies seek to acquire through the use of these tools to be able tocompete effectively include quality, efficiency, and innovation (Daghfous, 2004). Theproduction of defect-free components and parts that meet the requirements of customers alongthe supply chain is critical for the quality of the final products (Sila et al., 2006). Shrivastava(1995) pointed that competitive advantage can be achieved by harnessing existing capabilities inareas such as quality management.Mostly in all TQM definitions reference is made to its “soft” and “hard” side (Vouzas andPsyhogios, 2007). The “soft” side is associated with management concepts and principles such asleadership, strategic quality planning, employee empowerment and culture, suppliermanagement, customer focus, process management, continuous improvement, information andanalysis and knowledge and education while the “hard” side refers to quality improvement toolsand techniques (Vouzas and Psyhogios, 2007; Thiagaragan et al., 2001). These tools andtechniques include flow charts, relations diagram, scatter diagram, control charts, pareto analysis, 2
  3. 3. International Journal of Advanced Research in Management (IJARM), Dr. Rajesh K. Singhdesign process, statistical process control, quality function deployment, and other production andquality improvement techniques. The “soft” TQM elements are long-term issues and thereforemust be emphasized and addressed accordingly in an organization’s TQM implementation plan.The effective manipulation of the “soft” elements must be supported by the “hard” elements ofTQM (Zairi and Thiagarajan, 1997). Lagrosen and Lagrosen (2005) studied the effects of “soft”TQM elements, quality management models and tools on performance. Fotopoulos and Psomas(2009) have observed that quality improvement and the consolidation of the company’s marketposition are influenced mainly by adopting “soft” TQM elements and secondarily “hard” TQM.Douglas et al. (1999) also suggested that effective use of soft TQM practices (e.g. executivecommitment, employee empowerment, customer focus) can bring quality improvement.Motwani et al. (1994) suggested the opposite, i.e. that quality success could be achieved byincreasing use of hard TQM (e.g. process control and supplier quality management). This paperis organized as follows. Section 2 discusses about total quality management and various factorson which its implementation depends, section 3 discusses TQM issues in SMEs, Section 4discusses effect of TQM on organizations performance, Section 5 discusses TQM failures cases.It is followed by summary and gaps and finally concluding remarks.2. TOTAL QUALITY MANAGEMENTIn an increasingly competitive market-place businesses with a strong continuous improvementculture and external focus are more likely to survive and prosper. Attaining a high level ofcustomer satisfaction usually requires more than providing a high-quality product (Hendricks &Singhal, 1997). Total Quality Management (TQM) is considered an important catalyst in thiscontext. It emerged as a generic title for the process of quality improvement. Lagrosen (2001)observed that TQM has become well established system for improving both the performance ofcorporations and satisfaction of customers. According to Yang (2005), TQM is an integratedmanagement philosophy and a set of practices that emphasizes, among other things, continuousimprovement, meeting customer’s requirements, reducing rework, long-range thinking, increasedemployee involvement and team-work, process redesign, competitive benchmarking, team-basedproblem-solving, constant measurement of results, and closer relationships with suppliers. The primary focus of total quality management (TQM) is customer satisfaction.According to Ho’s (1999), every one in TQM organization, including the customers andsuppliers is involved in continuous improvement for the purpose of meeting customers’expressed and implied requirements with the full commitment of top management. According toEhigie and McAndrew (2005), TQM attempts at improving quality of product and processes oforganizations. Hellsten and Klefsjo (2002) and Hansson and Klefsjo (2003) also define TQM asa continuously evolving management system, which is consisting of values, methodologies andtools and the aim of which is to increase external and internal customer satisfaction with areduced amount of resources. TQM is a customer focused management philosophy that aims atthe continuous improvement of the processes and management of an organization throughstatistical control, procedure design, policy deployment and human resource managementtechniques (Au and Choi, 1999). According to Sharma and Kodali (2008), the concept of TQMprovides the approach to realize the manufacturing strategy leading to fulfillment of corporatestrategy. The principles and contents of TQM philosophy would increase firm’s commitment toquality and if they are applied correctly enhances the firm’s competitive position. This is becausethe TQM principles support the business practices of cost reduction, enhanced productivity andimproved quality of the products/outputs. It clearly shows that TQM is not a model or atechnique, but may best be described as a management philosophy (Dale, 1999; Neergaard, 3
  4. 4. International Journal of Advanced Research in Management (IJARM), Dr. Rajesh K. Singh2002). The methods and techniques used in TQM can be applied throughout any organization.They are equally useful in the manufacturing, public service, health care, education andhospitality industries. Hellsten and Klefsjo (2002) state that TQM consists of three components. These are corevalues, techniques and tools. Techniques and tools are supposed to support the core values.According to Flynn et al. (1995), TQM practices could be divided into two independent groups.The first is ‘core quality management practices’, which are expected to contribute to qualityperformance directly. The second is ‘quality management infrastructure’ practices, which areproposed to support and facilitate the effective use of core quality management practices.Samson and Terziovski (1999) lead to the identification of nine practices that are commonlycited as part of a TQM program. These practices are cross-functional product design, processmanagement, supplier quality management, customer involvement, information and feedback,committed leadership, strategic planning, cross-functional training, and employee involvement.Some of the important factors affecting implementation of TQM such as leadership/topmanagement support, organization culture, human resource management, customer orientation,information technology, supply chain management, ISO 9000 are discussed in followingsections.2.1 Leadership/Top Management SupportThe ISO 9001 standard defines top management as a person or group of people who direct andcontrol an organization at the highest level (ISO, 2000). The main objective is to create anenvironment where people are fully involved and in which a quality management system canoperate effectively and make recommendations to achieve this objective. Top managementleadership capabilities not only affect TQM implementation but also improve otherorganizational activities. It is essential for management to commit to their leadership andparticipate actively in the formulation and finalization of strategy (Pun, 2001). Top managementhas to be sincere and candid about why a practice like TQM is needed and must earn the respectand trust of the employees before and during the implementation process. Top managementsupport to quality management is an absolute precedence for preparing organizational culturebefore TQM practices can be implemented (Antony et al., 2002). Top management can facilitatethe unity of purpose as well as change process management and learning processes (Ahire et al.,1996; Hamlin et al., 1997). According to Lewis et al. (2005), top management support orcommitment can be divided into four factors for effective implementation of TQM. These factorsare strategy finalization, resource based strategy, environmental focus and quality culture. Topmanagement could use resource based strategy to create a “sustained” competitive advantage iftheir resources (or capabilities) are valuable, rare among competitors, imperfectly imitable andnot easily substitutable (Barney, 1991). Through a quality culture, employees can interactivelycreate and preserve a social order within the company. It provides the company with somemeasure of control over the business processes (Pun, 2001). Raghunathan et al. (1997) noticedthat leaders play an important role in how TQM practices are projected in a consistent mannerwhere it affects organizational performance and profitability. In a TQM framework, leadershipand top management support element can be positioned at the soft side.2.2 Organizational CultureOrganizational culture is a pattern of values, beliefs, and assumptions shared by members in anorganization, which are perceived by the organization as the valid, correct way to perceive andsolve problems (Sigler and Pearson, 2000). In the quality management, the values and beliefs 4
  5. 5. International Journal of Advanced Research in Management (IJARM), Dr. Rajesh K. Singhunderlying an organization’s culture are able to shape its philosophy and policies of managingbusiness, which in turn influence the development of the organization’s quality managementpractices (Waldman, 1993). TQM is a management approach in which the application ofpractices such as teamwork, internal customer relationship and supplier partnership are tools forcultural transformation and involves a major cultural change in the organization. TQM is acomplete change in an organization’s culture and the way people behave at work. On the otherhand, organizational culture appears to be a crucial factor in understanding the ability of anyorganization to perform and compete. In organization, managers are contending with rapidchanges in technology, shorter product life-cycles, new markets, and a demand for higher qualityproducts (Chowdhury and Menon, 1995). Managers for changing organizational culture have tochange their management style, from an authoritative to a participative management style toachieve continuous improvement through their employees. To achieve success in TQM, seniormanagers need to ensure that all facets of the organization, the organizational structure,management style, training, communications, compensation and promotion systems, andsystems, procedures, and processes reflect TQM values and principles (Rad, 2006). Companiestrying to gain a competitive edge in this marketplace have realized the importance of raising thequality of goods and services, and have implemented programs such as TQM (Total QualityManagement). Total quality management focuses on a continuous improvement process with anemphasis on people and their involvement and receptivity to continuous change. Thus, TQM isan integrated effort for gaining competitive advantage by continuously improving every fact ofan organization’s activities (Mohamed and YuanJian, 2008).TQM practices are significantly influenced by the organization culture and each dimension oforganization culture is related to TQM in different fashions. For instance, power distanceinfluences all the TQM elements, but masculinity has positive impact on business performanceof TQM practice only (Jung et al., 2008). TQM requires an organization culture where allindividuals are concerned with quality; want to produce quality products, and where they canfreely question practices that do not produce quality. The study of TQM from a culturalperspective pursues the understanding of the cultural dimensions of TQM discipline. The focus ison understanding the role of organizational culture in the TQM implementation process. TQMemphasizes the importance of corporate culture and uncovering current underlying culturalassumptions as primary condition for successful TQM implementation (Mohamed and YuanJian,2008).Hofstede (1980) identified four factors on which culture of different countries differ. The fourfactors are collectivism-individualism, power distance, uncertainty avoidance and masculinityfeminity. Kanungo and Mendonca (1996) have added an additional factor i.e. associativethinking-abstractive thinking to these factors for defining the culture of developing countries likeIndia. Lagrosen (2002) studied in European survey that two dimensions of culture – powerdistance and uncertainty avoidance affect the approach taken for implementation of TQM.Empowerment and participative management are important for TQM implementation in Indianorganizations (Wali et al. 2003). According to Kumar and Sankaran (2007), collectivism andhierarchy are two important factors for effective implementation of TQM concept in Indianculture.2.3 Human Resource Management (HRM)HRM practices include training and education, incentive compensation and employeedevelopment. HRM can reinforce human relationships and group consciousness, raise employeecompetence and achieve culture change; therefore it acts as the catalyst for the implementation of 5
  6. 6. International Journal of Advanced Research in Management (IJARM), Dr. Rajesh K. SinghTQM (Oakland and Oakland, 1998; Palo and Padhi, 2005). Hoogervorst et al. (2005) observedthat quality of human resource plays an important role in the implementation of TQM. Yang(2006) found that HRM practices have a significantly positive effect on the implementation ofTQM. Jung et al. (2009) have observed that human resource-based TQM elements have strongerinfluence on continuous improvement of performance than technology-based TQM elements.Implementing HRM practices can also have a significant effect on employee and customersatisfaction. It also positively affects employees’ quality awareness and corporate image.TQM focuses not only on the quality of product, but also on the quality of employees. TQMimplementations depend heavily on changes in employees’ attitudes and activities. Theemployees who are affected most directly are those who are the agents of change inimplementing TQM or other programs for continuous quality improvement (Karia and Asaari,2006). Butler (1996) found that companies that used TQM practices achieved improvements inemployee satisfaction, attendance, turnover, safety, and health. When fully implemented, TQMbrings benefits to organization in terms of quality, productivity, and employee development(Lawler et al., 1995) through improved teamwork, creativity, innovation, training,communication, trust, and decision making. Employee training is a very important tool forpromoting and developing skills related to an organization’s beliefs and values to change to aculture that places high value on quality (Rad, 2006). Karia and Assari (2006) studied that thereare four factors which helps in employee involvement for implementation of TQM. These factorsare job satisfaction, job involvement, career satisfaction and organizational commitment. TQM isbased on the assumption that the employees who are closest to the daily operating procedures arein the best position to understand and improve the quality of those procedures. It aims to createan environment in which positive relationships exist between managers and employees and inwhich people feel motivated to do their best (Karia and Assari, 2006).2.4 Customer OrientationCustomer focus is one of the most accepted precepts of TQM, observed and discussed by themajority of quality gurus and TQM researchers. Customer orientation and meeting customerrequirements is one of the basic principles underlying TQM as a generic approach to themanagement of organizations, and is frequently mentioned in the work of all qualitymanagement gurus. Customer orientation provides a common goal for all organizationalactivities and members, and incorporates both quality of design and conformance to qualityspecifications (Hill and Wilkinson, 1995). According to Williams et al. (2001), leadingorganizations transform themselves from internally focused TQM to a customer-focusedbusiness structure. Dale et al. (2001) provided a baseline for the advancement of TQM theory inwhich customer focus as well as management by fact, process orientation, and teamwork areconsidered the most important factors. The basic principle of TQM is to achieve customersatisfaction and continuous improvement. The key to successful implementation therefore beginswith the identification of key customer satisfaction variables (CSVs), such as price, performance,reliability, service, durability, appearance and added features (Soltani et al., 2004).2.5 Information Technology (IT)Information technology takes care of mundane and routine tasks like data input, computation,measurement and output. Users can concentrate their effort on fulfilling the more importantobjective of quality improvement by IT applications (Ang et al., 2000). Phusavat et al. (2007)asserted that the increasing competition has given the greater role of information technology inwhich the customers are able to convey higher demands such as lower cost, higher quality, 6
  7. 7. International Journal of Advanced Research in Management (IJARM), Dr. Rajesh K. Singhreliability and with better market delivery. Information technology works as an enabler of thestructural adjustments of the organization to TQM changes. Information systems have become anintegral part of most organizations (Au and Choi, 1999). Other tools/concepts likely to beimplemented are group decision making, process analysis, benchmarking, statistical processcontrol and concurrent engineering (Siddiqui and Rahman, 2007). According to Mjema et al.(2005), information technology and information systems generated quality tools such as paretocharts, histograms, statistical process control and flow charts helped to control work process inproduction and to deliver consistent product quality. According to Bandyopadhyay (2003),information technology helps to manufacturers striving to achieve ISO 9000/QS-9000registration which involves gathering, analyzing and documenting enormous amount of quality-related information. Han et al. (2009) have also observed that integrated IT and integratedlogistics management improved the quality management practices of the pork processors.2.6 Supply Chain Management (SCM)SCM has been associated with modern materials management, advanced informationtechnologies, rapid and responsive logistics service, effective supplier management, andincreasingly with customer relationship management (Fawcett and Magnan, 2002). It should benoted that for maintaining good supplier relations, teamwork among supply chain partners is acornerstone of TQM. TQM is a management philosophy that encourages cost reduction, thecreation of high quality goods and services, customer satisfaction, employee empowerment, andthe measurement of results. TQM can enhance communications along the supply chain throughenhancement of quality in ERP, partnership development, and CRM (Madu and Madu, 2003).According to Lee and Kincade (2003), there are six major dimensions of supply chainmanagement. These are partnership, information technology, operational flexibility, performancemeasurement, management commitment and demand characterization. TQM enablers such astraining and education, cross-functional teams, communication, teamwork, empowerment, jobsatisfaction and technological support can impact any one or all of the six major dimensions ofSCM. In integrated business processes of SCM, TQM enablers could play a major role inpromoting effective integration of suppliers and customers along the value chain. Therefore,effective implementation of TQM major factors such as training and education, employeeempowerment, top management support/leadership, organizational structure, performancemeasures and technology are required for success of supply chain management.2.7 ISO 9000The ISO 9000, set of international standards were created in 1987 with the objective ofstandardizing quality systems. Generally, organizations are implementing ISO 9000 standards toachieve improved quality and efficiency, improved communication, competitive advantage, anincrease in market share, reduced costs and a higher stock price (Najmi and Kehoe, 2001; Zhang,2000). The ISO 9000 standards are based on concept that certain minimum characteristics ofquality management system could be usefully standardized, giving mutual benefit to suppliersand customers, and they focus on process rather than product quality (Van der Wiele et al., 2000;Withers and Ebrahimpour, 1998). ISO 9000 is a management control procedure (Yahya and Goh,2001), which involves a business documenting process of design, production, distribution toensure that the quality of the products and services meets the need of customers (Quazi et al.,2002; Pun et al., 1999). The positive or optimistic view is based on the fact that the standards’implementation helps to improve internal organization and operation, internal and externalcommunication through clearly defined duties and responsibilities, employee’s awareness of 7
  8. 8. International Journal of Advanced Research in Management (IJARM), Dr. Rajesh K. Singhquality issues, quality variations and the related quality costs, and customers’ satisfaction andtrust through improved product conformance (Williams, 1997). ISO 9000 certification can beused as the “first” but not the “last” step towards quality improvement. Although the standard’simplementation helps companies to achieve an initial improvement in their quality performance,it cannot guarantee that this improvement continues after certification.Many research shows that ISO 9000 is different than TQM. According to Laszlo (1996), ISO9000 and TQM are totally different approaches, where ISO 9000 implementation is associatedwith line workers, while TQM is more related with top management. Moreover, the focus of ISO9000 is on proving compliance and gaining certification, while TQM focus on continuousimprovement and achieving and maintaining customer satisfaction. Furthermore, Yung (1997),in differentiating between ISO 9000 and TQM, claims that the concept of TQM is broader anddeeper than ISO 9000. TQM is identified to be for internal organizational use and tends to gobeyond customer satisfaction, while ISO 9000 is only for external assessment needs.3. TOTAL QUALITY MANAGEMENT IN SME’sQuality has become the basis of global competition for all firms regardless of location and size.Small firms are very different to large ones in many areas, such as management style, productionprocesses, available capital, purchasing practices, inventory systems, and negotiating power(Ahire and Golhar, 1996; Lee and Oakes, 1995). According to Yusof and Aspinwall (1999), totalquality management (TQM) is a philosophy mainly dominated by large companies but the fear oflosing contracts prompts SMEs to bring quality into their system. Today, SMEs are at the center of interest in the quality debate for several reasons. One,according to Wiele and Brown (1998), is that larger organizations will not be able to improve thequality of their products, services and processes, unless their suppliers or the second-tiersuppliers also grow to higher level of quality maturity. Amongst these suppliers there are manySMEs. SMEs have their own unique characteristics that differentiate them from larger firms.Yosuf and Aspinwall (1999) have divided the characteristics of SMEs in to five categories i.e.structure, systems and procedures, culture and behavior, human resources, markets andcustomers. According to Hartz and Kanzi (1998), SMEs can be characterized as easy to surveyand understand, having short lines of communication and flexibility in relation to theimplementation of new management philosophies and approach. Lee and Oakes (1995) arguethat if top management is convinced of the need for TQM, then it is easier for managers toinspire and motivate others in the organization. Because organizational systems and structuresare simple in SMEs, the process of TQM implementation can be made visible more easily.According to Ghobadian and Gallear (1996), visibility of leadership and improvement teams areeasier in SMEs. Employees are closer to the products and services and thus feel more responsiblefor quality, and they will have a better understanding of service and the overall profitability ofthe organization and also decision-making processes are simple in SMEs as compared to largefirms. SMEs can also gain competitive advantage through the quality of their products becausethey can implement JIT system with low defect rates or higher quality of products. It will alsohelp in reducing product cost through eliminating scrap and rework (Fullerton and McWatters,2001). For effective implementation of TQM, SMEs must include strategy finalization whichassesses structure and infrastructure, before policies are formulated and deployed (Ghobadianand Gallear, 1997). Some of the TQM elements and programs appear to be more compatible withsmall manufacturers. Some TQM benefits may be relatively more significant to small firms.Some of the observations of the researchers in this context are given in table 1. 8
  9. 9. International Journal of Advanced Research in Management (IJARM), Dr. Rajesh K. Singh Table 1: Total Quality Management in SMEsSr. Researcher Year Key FindingsNo. 1. Barrier 1992 Key to survival for SMEs. 2. Henricks 1992 Small companies are advised not to implement TQM all at once. 3. Henricks 1992 Difficult to afford expensive consultants. 4. Brown 1993 Seven basic quality-improvement tools generally poorly supported in SMEs. 5. Moreno-Luzon 1993 Small firms lag behind big ones in the application of TQM. 6. Azzone and 1993 Some quality related investments in large firms are rendered Cainarca unsuitable for small firms. 7. Moreno-Luzon 1993 Problems of small firms in developing a quality culture are resistance to change, lack of experience in QM, lack of resources. 8. Simons and Kerr 1993 The role of the smaller firms as suppliers to the larger firms places a substantial burden on the small companies. 9. Goh and Ridgway 1994 TQM and its benefits are out of SMEs league.10. Shrivastava 1995 Competitive advantage can derive by harnessing existing capabilities in areas such as quality management.11. Ghobadian and 1996 The lack of product quality from SMEs adversely affects the Gallear competitive ability of the larger organizations because SMEs are their suppliers.12. Chittenden et al. 1996 Impetus to attain certification comes not from a desire to improve, but from pressure by large companies.13. McTeer and Dale 1996 Elapsed time amount and paper work are major drawbacks in installing the new system (TQM) by SMEs.14. Haksever 1996 Lack of experience, knowledge, finance, human resources and time are the main problems to implement TQM in SMEs.15. Quazi and Padibjo 1997 ISO 9000 certification is a stepping stone towards TQM.16. Negri 1997 Italian SMEs prioritize process capability for quality improvement.17. Struebing and 1997 Lower costs of implementing and maintaining TQM in SMEs. Klaus18. Boon and Ram 1998 TQM practices are organizational quality policies developed in the planning phase and deployed in the implementation stage.19. Yusof and 1999 Training and education is one of the most important items on the Aspinwall agenda for small businesses in adopting TQM.20. Yusof and 2000 TQM should not be implemented at the expense of losing flexibility Aspinwall which is strength in small businesses.21. Hendricks and 2001 Financial performances depend on effective implementation of TQM. Singhal22. Pun 2002 The implementation of TQM involves a fundamental change in conducting business.23. Neergaard 2002 TQM can foster continual improvement (CI) through integrated, consistent, and involving everyone and everything in SMEs.24. Temtime 2003 Continuous planning and quality improvement a prerequisite for the survival of not only large firms but also for SMEs.25. Lewis et al. 2005 The potential benefits that could be derived from TQM criteria were lacking in the areas of Top management commitment and Gap 9
  10. 10. International Journal of Advanced Research in Management (IJARM), Dr. Rajesh K. Singh analysis.26. Sila and 2005 Leadership and information analysis play a significant role in shaping Ebrahimpour the quality focus of companies.27. Demirbag et al. 2006 Market orientation has a positive and significant impact on organizational performance through only a mediating role of TQM implementation in SMEs.28. Kumar and 2008 Lack of knowledge or understanding of the system and limited Antony resources are the main reasons for failures of six sigma in SMEs.4. EFFECT OF TQM IN ORGANIZATION PERFORMANCEToday growing number of companies uses TQM practices as strategic foundation for generatinga competitive advantage and improving organizational performance. The importance of qualityfor company’s performance and success on the market is widely recognized in business.Performance measurement is very important for the effective management of an organization.TQM is a holistic approach to improve quality, productivity and competitiveness in theinternational marketplace. According to Projogo and Sohal (2004), organizational performance ismeasured from quality performance (e.g. reliability, performance, durability and conformance tospecification) and innovation performance (e.g. product and process innovation). Lin et al.(2005) studied that organizational performance will be measured in two categories, which issatisfaction level and business results. Satisfaction level of organizational performance includesemployee satisfaction, customer satisfaction and supplier satisfaction.Yoo et al. (2006) indicates that higher levels of employee empowerment lead to higher level oforganizational performance. So employee satisfactions have a positive influence onorganizational performance. Gaining a better understanding of customer needs and the use of thisknowledge to produce a better product has a direct impact on organizational performance. Therelationship between buyer and supplier is an important factor in organizational performance.The need to improve supplier’s quality and delivery performance while at the same time,reducing the costs of supplied materials and parts has motivated buyers to engage in supplierdevelopment activities, which has a direct impact on organizational performance (Krause et al.1998). Another level of organizational performance, business results comprise four items:productivity, number of successful new product, cost performance, and profitability. TQMpractices also help to improve in reducing scrap, rework and stable the production process. Thesein turn minimize the production cost and increase productivity (Ahmad and Schroeder, 2002).Through continuous improvement, not only errors and defects can be prevented but also productcycle’s times can be reduced, thereby improving productivity and organizational performance(Huang and Lin, 2002). According to Buzzel and Gale (1987), financial performance orprofitability is an important measure of TQM outcomes. Quality improvement leads toelimination of waste, reduction of cost and increase of profit. According to Kumar et al. (2009),TQM has positive impact on company performance i.e. employee relations, operatingprocedures, customer satisfaction and financial results. Han et al. (2009) have also observeddirect relationship between quality management and firm performance.5. FAILURES OF TQMIn practice, TQM benefits are not easy to achieve. Several researchers reported the positiveimpact of TQM on employee performance and satisfaction, quality performance, business 10
  11. 11. International Journal of Advanced Research in Management (IJARM), Dr. Rajesh K. Singhresults, productivity and competitiveness in only 20 to 35 percent of the firms that haveimplemented it (Gatchalian, 1997). Hoogervorst et al. (2005) observed that there are two majorreasons responsible for limited success of TQM. First reason is TQM rests on crucialcontributions of employees, which is incompatible with the traditional, mechanistic view onorganizing. This creates a fundamental mismatch between TQM intentions and the dominantlogic the organization is using. The second reason for failures regards inconsistency andincoherence of employee behavior. According to Rad (2006), failure of the TQM is due to lackof consistent senior management commitment and support, leadership style of managers,superficial knowledge of the implementers of TQM, lack of a formalized strategic plan forchange, vague improvement goals, unclear strategies and conflicting priorities, lack ofdeveloping and sustaining a quality oriented culture, lack of employees’ motivation, participationand team working, employee apathy and resistance to change, lack of linkages betweenremuneration and firm’s performance. There is also a lack of recognition for success, lack oftraining, education and technical knowledge and experience about TQM, poor coordination,close vertical communication, lack of work discipline. Lack of resources and support, financialcrisis, an organizational approach, a long-term focus and failure in understanding the voice of thecustomer also affect TQM success (Rad, 2006).6. SUMMARY AND GAPS DENTIFIED FROM THE LITERATURThis paper has tried to review various issues of TQM from the literature available. Author hasreviewed about 120 research papers from reputed international/national journals such asInternational Journal of Quality and Reliability Management, The TQM Journal, Journal ofManagement, Asia-Pacific Journal of Quality Management, International Journal of Operations& Production Management, International Journal of Production Economics, International Journalof Automotive Industry and Management, Supply Chain Management: An International Journaletc. Major areas considered in this paper are role of top management support, organizationculture, human resource management, employee involvement, customer orientation, supply chainmanagement, ISO 9000, information technology, in implementation of TQM. This paper has alsosummarized TQM issues in SMEs and effect of TQM on performance of organizations. It hasbeen observed that in most of the cases, TQM helps in improving the performance oforganizations. It has been also observed that in many cases TQM has not been very successful.Reasons for failure may vary from company to company. All issues reviewed in this paper andtheir salient points are summarized in table 2.Although TQM had been very popular area for the research in the past but many of the gaps stillexist in the literature. Some of the gaps identified from the literature on which further researchcan be carried out are: • Development of frameworks for evaluating effectiveness of total quality management in manufacturing and service sectors. • Comparison of TQM issues between manufacturing and service sectors. • Framework for implementing TQM in SMEs. • Optimization of variables for maximization of TQM performance. • Prioritization of critical success factors for success of TQM. • Integration of TQM and information systems in supply chain. • Effect of quality management practices on performance of supply chains. 11
  12. 12. International Journal of Advanced Research in Management (IJARM), Dr. Rajesh K. Singh Table 2: Summary of issues Related to Total Quality Management (TQM)Sr. No. Areas of strategy development References 1. Leadership/Top management support Ahire et al. (1996), Hamlin et al. (1997), ISO • Group of people helps in quality performance (2000), Pun (2001) • Control of an organization or quality management system 2. Organization culture Waldman (1993), Chowdhury and Menon • Improve different organizations activities (1995), Sigler and Pearson (2000), Rad • Develop quality management Practices (2006), Mohamed and YuanJian (2008) 3. Human resource management Lawler et al. (1995), Butler (1996), Oakland • To motivate members of an organization and Oakland (1998), Palo and Padhi (2005), • Make strategy for employee development and Hoogervorst et al. (2005), Mjema et al. customer satisfaction (2005), Rad (2006), Karia and Assari (2006), • Employee attitude and activities • Organizational commitment Yang (2006) 4. Customer orientation Williams et al. (2001), Dale et al. (2001), • Customer satisfaction Soltani et al. (2004) • Continuous improvement 5. Information technology Au and Choi (1999), Ang et al. (2000), • Help in different quality related tools Bandyopadhyay (2003), Siddiqui and Rahman • To improve quality or high quality (2007), Phusavat et al. (2007) • Reliability 6. Supply chain management Fawcett and Magnan (2002), Madu and Madu • Maintaining supplier relationship (2003) • Teamwork among supply chain partners 7. ISO 9000 Williams (1997), Withers and Ebrahimpour • Help in quality, efficiency and (1998), Pon et al. (1999), Zhang (2000), Van communication der Wiele et al. (2000), Najmi and Kehoe • Increase market share and higher stock price (2001), Quazi et al. (2002), Tsiotras (2006) 8. TQM in SMEs Lee and Oakes (1995), Hartz and Kanzi • Improve quality of product and services (1998), Wiele and Brown (1998), Fullerton • Reducing product cost and McWatters (2001) • Implementation of new management • Philosophies and approach 9. Effect of TQM on performance Buzzel and Gale (1987), Ahmad and • Financial performance Schroeder (2002), Huang and Lin (2002) • Employee relations Karuse et al. (1998), Projogo and Sohal • Operating procedure (2004), Lin et al. (2005), Yoo et al. (2006), • Customer satisfaction Kumar et al. (2009) 10. Failures of TQM Hoogervorst et al. (2005), Rad (2006) • Crucial contributions of employees • Inconsistency and incoherence • Lack of knowledge 12
  13. 13. International Journal of Advanced Research in Management (IJARM), Dr. Rajesh K. Singh7. CONCLUDING REMARKSTotal quality management has become more important than ever due to the age of globalizationand changing customer demands. Present study has tried to explore different issues related withtotal quality management. It has been observed that major factors effecting TQM are topmanagement support, organization culture, human resource management, employee involvement,customer orientation etc. TQM plays important role in success of modern advanced managementapproaches such as six sigma, JITs and supply chain management. Based on literature review,this paper has identified many gaps in TQM research. Therefore further study can be conductedto explore these issues such as development of frameworks for evaluating effectiveness of totalquality management in manufacturing and service sectors, comparison of TQM issues betweenmanufacturing and service sectors, role of TQM in supply chain management, framework forimplementing TQM in SMEs etc. Empirical studies to compare TQM issues between developedand developing countries can be also carried out as a future scope.REFERENCES1. Ahire, S.L and Golhar, D.Y. (1996), “Quality management in large vs small firms”, Journal of small business management, January, pp. 1-3.2. Ahire, S.L., Golhar, D.Y. and Waller, M.A. (1996), “Development and validation of TQM implementation constructs”, Decision Sciences, Vol. 27, pp. 23-56.3. Ahmad, S. and Schroeder, R.G. (2002), “The importance of recruitment and selection process for sustainability of total quality management”, International Journal of Quality & Reliability Management, Vol. 19 No.5, pp. 540-550.4. Ang, C., Davies, M. and Finlay, P.N. (2000), “Measure to assess the impact of information technology on quality management”, International Journal of Quality & reliability Management, Vol. 17 No. 1, pp. 42-65.5. Antony, J., Leung, K., Knowles, G. and Gosh, S. (2002), “Critical success factors of TQM implementation in Hong Kong industries”, International Journal of Quality & Reliability Management, Vol. 19 No. 5, pp. 551-66.6. Arumugam, V., Chang, Hiaw Wei., Ooi, Keng-Boon., The, Pei-Lee. (2009), “Self- assessment of TQM practices: a case analysis”, The TQM Journal, Vol. 21 No. 1, pp. 46- 58.7. Au, G. and Choi, I. (1999), “Facilitating implementation of total quality management through information technology”, Information and Management, Vol. 36, pp. 287-99.8. Azzone, G. and Cainarca, G. C. (1993), “The strategic role of quality in small size firms”, Small Business Economics, Vol. 5, pp. 67-76.9. Bandyopadhyay, J.A. (2003), “Total quality management information systems for auto parts manufacturers in the United States”, International Journal of Management, Vol. 20 No. 2, pp. 187-93.10. Barney, J.B. (1991), “Firm resources and sustained competitive advantage”, Journal of Management, Vol. 17, pp. 99-120.11. Barrier, M. (1992), “Small firms put quality first”, Nation’s Business, , pp. 22-3212. Boon, S. and Ram, M. (1998), “Implementing quality in a small firm: an action research approach”, Personal Review, Vol. 27, No. 1/2, pp. 20-40.13. Brown, A. (1993), “Quality management in the smaller company”, Asia-Pacific Journal of Quality Management, Vol. 2 No. 3, pp. 67-76. 13
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