Understanding the Concept of Total Quality Management

In the past decade, numerous businesses have emerged pertaining to various sectors of industry. This has given rise to a highly competitive market wherein survival for each business has become crucial. Due to the continuous changes in business environment, it is of utmost importance that businesses undergo an enhancement in the quality of their goods or services in order to achieve an organizational competitive advantage. Improvement in the quality can be attained by the implementation of Total Quality Management (TQM) principles. TQM is defined as a systematic set of principles or practices employed for the improvement of an organization in terms of the quality of its goods or services, productivity, customer satisfaction and profitability. The basic philosophy underlying the concept of TQM is that the cost of prevention is less than the cost of correction. The goal is to promote and encourage long-term and continuous improvement in the quality and productivity along with eliminating the fear of change in the employee’s mind. Eight principles are associated with the implementation of TQM which are given as follows: 1) focus on customer; 2) leadership driven; 3) employee/staff involvement; 4) process approach; 5) systematic approach towards management; 6) continuous improvement; 7) decision-making by considering facts; 8) mutual beneficial supplier relationship.

Purpose of Research

The general purpose of this research is to understand the concept of Total Quality Management (TQM), its importance, principles and its implementation. The research also helps understand how it helps improve the growth and competency of an organization by evaluating its effect on organizational performance in terms of various indicators such as financial, market share, customer satisfaction, productivity, profitability etc.

Review of Literature

Al-Qahtani, Alshehri, and Aziz (2015) discuss about the relationship between the implementation of TQM and the organizational performance. Implementation of TQM in Pakistan in terms of three categories namely, quality control, quality assurance and continuous improvement have been studied and discussed. The main goal of implementing a TQM in an organization is to achieve improved harmony and coordination amongst the organization’s employees so as to provide better and high-quality services to meet customer’s expectations. The managerial philosophy/strategy involved herein is of focusing on improving the business quality by considering customers as the key focus. Effective organizational management can be evaluated by conducting a performance measurement which in turn is directly related to organization’s achievement of their financial and strategic goals and objectives. Performance measurement can be in terms of finance, market share etc. It can also be measured as the performance of the whole organization which includes customer satisfaction, product quality or, performance in terms of organization’s operation which includes efficient delivery, process productivity, flexibility, reduction of errors and costs etc. The two major measurements which are directly affected by the implementation of TQM are quality and cost. It is of utmost importance that management of quality process begins at the time of initiation process and ends only after the expected quality standards are achieved.

The article later discusses the significance and results of implementing TQM strategies and practices in five categories in Pakistan such as: 1) Zero level (no control/no customer focus); 2) Level one (quality control); 3) Level two (quality assurance); 4) Level three (continuous improvement in quality); 5) Level four (quality award models).

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Literature reviews have suggested that just like there is a positive impact and relation between the organizational performance and TQM, the same TQM practices can also serve as a hindrance for the organization to achieve its goals. Efficient implementation of TQM also depends on various other categories serving as performance predictors such as leadership, individual management, etc.

Wang (2017) discusses in his article various TQM practices implemented by China’s retail stores which gives them an edge over the department stores. In the past couple of years, the profit margins of China’s traditional department stores have dropped down to only 3%. On the other hand, the profit margins of the online retail transactions have soared to as high as 64.7%. The market share and dominancy of the traditional department stores are decreasing gradually requiring the need for a huge reform and innovation in their business models. The department stores need to change their business model focusing more on the customer’s needs and expectations and developing service-oriented businesses. Implementation of TQM is suggested to emphasize creation of a circle focusing on innovation, creativity, risk-taking in meeting customer’s demands by the employees of an organization (Wang, 2017). Customer orientation is the main issue for increasing the profit margins for these department stores as customer loyalty, word-of-mouth, sustainable sales is what constitutes the objectives of every organization. The article discusses various methods by which the competency and growth of China’s department stores can be enhanced.

The author suggests the department stores to study the social and demand characteristics, purchasing behaviors and adjusting their products and services to have a firm grasp on such groups of people. Focus should be on making changes in terms of satisfying the customer’s body characteristics, emotional needs as well as their social status. E.g. If customers are more inclined to buy branded clothes and beauty products, the departmental store should emphasize on such products. Since the profits are usually obtained from the price gap between the wholesale price and the retail price, the stores need to have unique product or services which add more value and can include private brand strategy as a try for retailers etc. They can provide some fee-based quality services like delivery and health care. And since service quality subjectively depends on the interaction between the customer and the employee, improving it can be profitable for the stores. They can also improve the staff and their performance by providing training, evaluation, incentives, new recruitments etc. Increasing employee’s job satisfaction is important because satisfied employees lead to satisfied and happy customers and hence, an internal marketing strategy should be followed to create a unique brand and culture promise. Studies have shown that nowadays, the ‘store image’ has become more important for the customers than the ‘product brand’ (Wang, 2017). Hence, the author suggests that the department stores need to mobilize all tangibles (facilities, goods, price, communication, staff etc.) and intangibles relevant to the company’s image (company vision, mission, values, consumer experience etc.). The department stores can create long-lasting relationship with the customers by creating a corporate branding strategy wherein they build customer base by realizing and cultivating the brand work and company’s image. This followed by continuous provision of consistent and high-quality goods and services would help the company soar high in the market.

Conclusion

To conclude, TQM is a holistic management strategy that supports continuous improvement in an organization. It embeds into all the functions of an organization by making quality a strategic objective. The success relies on its effective implementation from the first step i.e. procurement of raw materials to the final step i.e. sale of goods or services to the final customers. Enhanced quality can be a critical factor when determining the price or value amongst the competitors and can lead to sustainable competitive advantage.

Personal Thoughts

TQM and its implementation play a very important role in the business market as it can help give an organization an edge over other competitors. In this competitive era, there is no scope of standing still. Either a company can move forward or go backward. Implementation of TQM principles is supposed to be endless process and cannot be considered as a program which once implemented can be forgotten. Moreover, its implementation has to be efficient and up to the par to see the desired results. It is important for all the employees of an organization to be on onboard for it to be truly successful. In case of inadequate resources or efforts, negative effects are bound to appear. For e.g. a lot of companies provide training to personnel but providing a simple training without making use of appropriate statistical tools and evaluating the continuous changes can lead to inadequate results. Continuous evaluation parameters in the form of periodic tests and coaching should be set up to reap the best results. To conclude, it can be assumed that, in this era of ever changing economic market, in order to constantly exceed the expectation of customers with the inclusion of the workers in the decision-making process, TQM is the best option to be considered for the continuous growth of any organization.

References

1. Al-Qahtani, N.D., Alshehri, S.S., & Aziz, A.A. (2015). The impact of total quality management on organizational performance. European Journal of Business and Management, 7(36), 119-127.
2. Wang, S. (2017). Improving china department stores through total quality management. The Chinese Economy, 50(2), 128-138. doi: 10.1080/10971475.2016.1227182