This document provides an introduction to a study on the impact of implementing Total Quality Management (TQM) on the productivity of an engineering plant in Malaysia. It discusses 5 key TQM factors: committed leadership, employee empowerment, process improvement, benchmarking, and increased training. The study aims to examine the relationship between implementing these TQM factors and the plant's productivity index. It hopes to identify the most impactful factor and determine if TQM has had a positive effect on productivity. Correlation analysis will be used to analyze the data and test the hypotheses.

1. A Study on the Impact of TQM Implementation on Malaysia Engineering Plant’s
Productivity.
Introduction
Starting from 1980s, when quality management was introduced among the practitioners,
scholars and consulters like Deming, Joran and Crospy, a new management philosophy
evolved under the name Total Quality Management (TQM) which is a cost added value. This
concept was then defined as an approach for continuously improvement on quality of products
or services delivered through the involvement of individuals at all levels of an organisation
(Pfau, 1989).
Furthermore, TQM has been expanded on more than a program in an organisation but as the
way of business management. It is a holistic corporate philosophy which includes 3
fundamental principles of “Total-as the participation of every people and every department”;
“Quality-as meeting or exceeds customers‟ need and expectation”; while “Management-as to
enable conditions for total quality” (Whyte &Witcher, 1992).
According to Zandin (2001), TQM concept was highly influenced by the Japanese
manufacturers on the experiences of Japanese approaches to quality management. Later on,
TQM practices have been extensively published in the measurement studies, also the studies
of the relationship of it practices with different dependent variables which have been
investigated. In the results, TQM emphasises that customer desires and management goals are
inseparable which this affirms an integrated management approach based on a set of
techniques to achieve these objectives (Yusuf et al., 2007).
For the past 20 years, a number of authors have concentrated their studies on the TQM factors
and dimensions. According to Ross (1993), TQM is set of practices, continuous improvement,
meeting customer needs or expectations, reducing job errors, employee empowerment or

2. teamwork on problem solving, process redesign, benchmarking with the best in the industry,
constant result measurement, close relationship with external customer like suppliers.
Followed by Powell (1995), suggesting the 12 factors in TQM programs and later on
proposed by Rahman and Bullock (2005) to a more logical approach on the TQM factors
study, and the relationship with organisation performance. In the year 2007, Al-Marri et al.
found that overall there are 16 critical success factors on TQM implementation in a service
industry which includes top management support, strategy, continuous improvement,
benchmarking, customer focus, quality department, quality system, human resource
management, recognition and reward, problem analysis, quality service technologies, service
design, employees, service capes, service culture and social responsibility, whereby in
Powell‟s framework, it is more descriptive on the flexible manufacturing and measurement
which are related in the aspects and factors in TQM.
Since then, many researchers like FardosHussain (2001), Rachin Jain (2001), Shegan Fan
(1997) had argued and defended on the positive effects of TQM practices on performance and
productivity in their studies. Productivity is refer to how effective or efficient a firm or any
other organisation can turn inputs like capital and resources into outputs in the form of
product or service compared with the same inputs or producing the same quantity of product
or service with less input (John Janseen& Simon McLaughlin, 2008). In order words,
according to Jamshed H. Khan (2000), productivity can be defined as the ratio of total annual
output out of the total annual cost. Therefore, any factor that may positively affects the
revenue or negatively affects the total annual costs will positively enhance the productivity.
Of course, the quality improvement which brings benefits not only reflected on reducing
unwanted costs but also on maximising the business profits. In this terms, what really
accountable to a firm is not only cost minimisation but it is also about the effect of superior
quality which impact the profits maximisation (Freiesleben J., 2005).
Therefore, the aim of this study is to explore the interrelationships between the degrees of
implementation of TQM based on implemented TQM models in quality practises and the
corresponding productivity index. In this case, correlation analysis will be used to find the

3. relationships among the TQM factors, to prioritise the addressed factors and to investigate the
feasibility of implemented TQM on the engineering plant located in Malaysia.
Problem Statement
A new managerial philosophy approach- Total Quality Management (TQM) has becomes an
urgent need factor for any organisation to remain their competitive edge on the rivalry of
engineering industry over their competitors. The aim of this research is to seek and
accomplish the objective of determining the correlation between the implemented TQM
factors and the impacts on an engineering plant‟s productivity index. First of all, the
characteristics of the respondent profile are considered the important domain of this research
in regards to their demographics knowledge and background in engineering industry which
are the records in profiling the respondents‟ age, tenure in present occupation, education level,
gender, field specialised, and manager status, in order to help us to identify and evaluate TQM
factors on its implementation and the effects on plant‟s productivity. The age (20-29, 30-39,
40-49, 50-59, and above 60) is one of the important factors to determine its range matching
with the tenure of years working in the plant (1-3 years, 4-6 years, 7-9 years, 10-12 years, 13-
15 years, 16-18 years, and above 19 years) to seek for whether the experience in TQM factors
brought positive effect on the productivity and which factor is prioritise?
In engineering firm, education level (high school, diploma, associates, bachelor, master or
doctorate) and the specialisation field (electronicengineering, industrialengineering,
civilengineering, mechanicalengineering, economics, accounting, material, and software
engineering) which is also accountable to verify the importance of TQM factors. Whereby
gender (female or male) and managerial status (supervisor or non-supervisor) also take counts
on the apparels of TQM aspects. Into this, which demographic factor of respondent profile is
the top to determine the existence of TQM factors? And which demographic factor can
prioritise the positive effect of its existence?
TQM factors
1) Committed Leadership

4. Management leadership is an important factor in TQM implementation because it improves
performance through influencing other TQM practices (Wilson & Collier, 2000). The lack of
commitment in the top management levels may lead to some problems in the process of
implementing TQM. Top management is completely involved in implementing and
stimulating the TQM approach. Leadership is also responsible for the product and service
which are offered (Gonzalez-Benito & Martinez-Lorente, 1999). Successful implementation
of TQM requires effective changes in an organization‟s culture and it is somehow impossible
without management leadership (Ho et al., 1999). In a TQM process, effective leadership
should develop a clear mission statement and then build up suitable strategies in order to
support the mission. The top management needs to identify the critical success factors and to
review the management structure. Leadership must ensure that the principles of quality
management are implemented continually (Yusuf et al., 2007). The four distinctive ways that
top management can support TQM implementation include allocating budgets and resources;
control through visibility; monitoring progress; and planning for change (Motwani, 2001).
2) Employee Empowerment
Employee empowerment is an integral part of any successful quality improvement process
which helps employees to make decisions about their own work and environment. This also
encourages people to apply the most appropriate tools and techniques (McQuater et al., 1995).
In general, empowerment is a core concept in a humanistic management movement that is
distinguishable from the more mechanistic 'scientific management' traditions. According to
the conceptual logic, people are the principle resource of organizations. Empowerment is a
central concept in TQM that has been credited with making a major contribution to the
Japanese revival and has been adopted with enthusiasm in other parts of the world (Lloyd et
al., 1999). specific measures of employee empowerment include the degree to which cross-
departmental and work teams are used; the extent of employee autonomy in decision making;
the extent of employee interaction with customers; and the extent to which employee
suggestion systems are being used (Powell, 1995).
3) Process Improvement
Process improvement is a key aspect in TQM programs (Sinclair &Zairi, 1995). Process
analysis has its primary objective, i.e., the reduction or elimination of variance, which
Deming (1986) saw as the source of problems in providing quality products and services. A
reduction in process variation leads to benefits such as increasing output uniformity, continual

5. reduction of waste of staffing, machine time, and materials (Anderson et al., 1994). This
factor emphasizes adding value to processes, increasing quality levels, and raising
productivity per employee (Motwani, 2001) and contains improving work center methods and
installing operator-controlled processes that lead to a lower unit cost, embracing kaizen
(continuous improvement) philosophies, reducing the operator material handling duties,
promoting a design for a manufacturing program, and achieving a compact process flow
(Kasul&Motwani, 1995a; Kasul&Motwani, 1995b). Continuous improvement can be
efficiently achieved in organizations only if a structured continuous improvement process is
in place to guide managers (Sinclair &Zairi, 1995).
4) Benchmarking
Benchmarking is a continuous process of comparing an organization‟s products, services and
processes against those of its best competitors or those of organizations renowned as world
class or industry leaders. In many companies, benchmarking is a key component of the TQM
process, profitability and growth flow from a clear understanding of how the business is
performing, not just against its previous accomplishment, but against the best competitors or
world-class organizations (Ghobadian& Woo, 1996). Benchmarking involves the
identification of best practices among competitors in a given industry, among the recognized
leaders in any industry, for the purpose of improving organizational processes and enhancing
competitive position (Hackman &Wageman, 1995; Jefferson, 2002). It also includes
measuring performance in the company which seeks improvement of activities. In the
benchmarking process, managers should understand the reason of why their performance
differs. An understanding of differences allows managers to organize their improvement
efforts to meet the goal. Benchmarking is about setting goals and objectives and meeting them
by improving processes (Besterfield et al., 1995). Benchmarking may contribute to an
organization‟s ability to achieve competitive advantage by monitoring the best practices in the
industry and diagnosing measure of performance. The typical classification of benchmarking
which are pinpointed in the literature includes internal benchmarking; competitive
benchmarking; functional benchmarking; and generic benchmarking (Carpinetti&Melo, 2002).
5) Increased Training
Training of employees is crucial for building the 'human capital' of the organization. Training
and education are essential to provide employees with new techniques and practices necessary
to implement TQM successfully. Training and education arealso necessary for teaching the

6. TQM philosophy that requires permanent change in individual behaviors and attitudes and
leads to strengthening the organization‟s culture (Shenawy et al., 2007). Training and
education are primary levers for change, and they have significant influence on the change
process (Buch&Talentino, 2006). Training should focus on building quality skills with equal
attention paid to behavioral skills and quality tools needed for change in performance
management and recognition (Palo &Padhi, 2005). Training includes explanation of overall
company operations and product quality specifications. Specific measures for evaluating
training include the time and money spent by organizations in training employees and
management in quality principles, problem solving skills, and teamwork (Black & Porter,
1996).
Since total quality management is a cost factor in organisation levels, there should be a
clarified explanation on its implementation which the value added comparatively with the
quality cost (Jamshed H. Khan, 2000). Productivity as a business excellence determinant has
to be measured against the degree of TQM implementation to clarify the importance of TQM
implementation. Therefore, the main question of this study is: Does the implementation of
TQM have brought positive effects on an engineering plant‟s productivity? With the stated
key question to this research, there are some factors which positively, negatively or no effects
on affecting the total revenue or the total cost of the plant which can be postulated in to
another hypothetical question: Among the factors on the TQM implementation, which one is
the most impactful to the productivity?
Research Objective
General Objective
To explore and highlight the impact of implementation of total quality management (TQM)
on a Malaysia engineering plant‟s productivity based on the specified TQM factors.
Specific Objective
• To examine the feasibility of implementing TQM in an engineering plant.

7. • To determine the level of TQM factors (Committed Leadership, Employee
Empowerment, Process Improvement, Benchmarking, Increased Training) on
engineering plant‟s productivity.
• To identify the positivity or negativity correlation of the TQM factorsin engineering
plant‟s productivity with the respondent demographic factors.
• To identify the Top implemented factors and the Least in engineering plant‟s
productivity.
Hypothesis of Study
H01. Committed Leadership has no positive correlation on firm‟s productivity.
H02. Employee Empowerment has no positive correlation on firm‟s productivity.
H03. Process Improvement has no positive correlation on firm‟s productivity.
H04. Benchmarking has no positive correlation on firm‟s productivity.
H05. Increased Training has no positive correlation on firm‟s productivity.
Types of Analysis
The construct of this study will be tested using Cronbach‟s Alpha Correlation analysis and
SPSS.
Significant of Study
In Malaysia context, there are many studies conducted to determine the correlations of total
quality management and firm‟s productivity especially food and beverage industry due to the
meeting of product quality. In this research, there will be some variance compared to previous
studies done by other researchers, as this research is not only to test the correlation but also
the positive or negative effect towards the engineering plant‟s productivity index whether it
brings better profit or in return? Also, an additional to the research is identifying the top TQM

8. factor which bring the positive effect and the least TQM factor whereby none of any author
has ever specific this.Thus, this research could bring a clear and clarified picture for any
organisation management team, since it identified the factors that arouse in the
implementation of TQM and applying the right concept to achieve management goals and
over their competitors.
The findings in the study would imply that committed leadership has the most correlation and
highest value in positivity among the TQM factors, while training is only the factor which is
not correlated to other factors.
In conclude, the addressed TQM factors which have been designed and distributed in the
plant‟s organisation would act as the enablers of improving not only the productivity, but also
help to reduce the unwanted cost (internal and external), reduce wastage in resources and
material handling, and also reduce the error in operation. All this would bring the firm to have
a good quality management and continuously improvement to make products or services in
meeting or exceeding customers‟ need, requirement and even expectation.
Limitation of Study
The data reliability and validity of this research is depends on the memory and honesty of the
respondent in the organisation in giving the information and answering the questionnaires.
Since the present study is a correlation and causal study,the findings should not be generalised
due to the small respondent (employees) numbers which only limited to one company
only.Also, obtaining the data and the process of the research would be costly and time
consuming due to the large number of questions hold.
Terminology Definition
The conceptual and operational definitions of key terms in this study are as follows:
Terms Conceptual Operational
Productivity Productivity is how efficiently a firm or any
other organisation can turn inputs such as
labour and capital, into outputs in the form

9. of goods and services with the same inputs
or producing the same quality of goods and
services less input (John Janseen& Simon
Laughlin, 2008).
Committed Direct participation by the highest level
Leadership executives in a specific and critically
important aspect or program of an
organization (Ho et al., 1999). In quality
management it includes setting up and
serving on a quality committee, formulating
and establishing quality policies and
objectives, providing resources and training,
overseeing implementation at all levels of
the organization, and evaluating and
revising the policy in light of results
achieved (Wilson & Collier, 2000).
Employee Employee empowerment is a term used to
Empowerment express the ways in which non-managerial
staff can make autonomous decisions
without consulting a manager. These self-
willed decisions can be small or large
depending upon the degree of power with
which the company wishes to invest
employees. Employee empowerment can
begin with training and converting a whole
company to an empowerment model.
Conversely it may merely mean giving
employees the ability to make some
decisions on their own (McQuater et al.,
1995).
Process Process Improvement is the accepted

10. Improvement methodology for improving businesses. The
principal quality systems -- Total Quality
Management (TQM), Six Sigma, ISO9000,
QS9000 -- are all focused on process
improvement. ISO9000 and QS9000 focus
on the quality system. TQM and Six Sigma
(in the broad sense) address the whole
business. The greatest Value (return for
invested effort) from any quality system is
obtained when the processes being
improved align with the strategic and
financial plans for the business (Deming,
1986).
Benchmarking Benchmarking can be simply defined as a
continuous process to find and implement
best practices that will lead to superior
performance. As the definition implies,
benchmarking is a process that will make a
company s operations lean, and improve
quality and productivity (Ghobadian& Woo,
1996).
Increased Employee training generally refers to
Training programs that provide workers with
information, new skills, or professional
development opportunities. For example,
people might be required to participate in a
new employee orientation or on-the-job
training when they are hired. Other types of
employee training programs include those
that encourage staff members to brush up on
certain skills, or to stay current with

11. developments in their field (Shenawy et al.,
2007).
Research Framework
Respondent Profile
1. Age
2. Gender
3. Tenure in
present
occupation
4. Specialisation
Field TQM Factors
5. Education level
1. Committed Company Productivity
6. Manager status
Leadership
2. Employee Ratio of total annual
Empowerment output out of total
3. Process annual cost.
Company Profile Improvement
1. History & 4. Benchmarking
Background 5. Increased Training
2. Involvement of
Industry
3. Market
Scope/Work
scope
Input Throughput Output
Figure 1.1: The impact of implementation of Total Quality Management on a Malaysia
engineering plant‟s productivity.
Organisation of the Study

12. This final year project begins with causal contents on the various aspect of TQM in which
problem statement and objectives are investigated. Then the second chapter is the review of
related literature which includes Committed Leadership, Employee Empowerment, Process
Improvement, Benchmarking, and Increased Training. The methodology of the research
related with the design and the selection of study areas is later present in Chapter 3.
Furthermore, chapter 4 will be about the study results and the data analysis then ended by the
conclusions, implications, limitations and recommendation.
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