There are a substantial number of studies that has been conducted exploring the relationship between total quality management and practices and its impact on organisational performance for both national and international comparisons. The concept of TQM is designed to measure a firm’s performance which includes: Financial performance, Customer satisfaction, Cost and Waste reduction, Safety, Employee Satisfaction, Quality product and Services, Market Performances, Business Results etc. Total Quality Management was introduced into the business world as far back in the 1920s by “quality gurus” Deming Edwards, Crosby Philip, Juran Joseph, Ishikawa Kaoru, Feigenbau Armand who have shaped the evolution of TQM concept (Singh and Dhalla 2010).
This sector discusses the various literatures that are relevant to the TQM principles. Section 2.2 discusses previous literature; section 2.3 will discuss the importance of total quality management (TQM) on overall business performance and the concept and principles of TQM. Sections 2.4 would focus on the impact of the TQM concept on employee’s performance in both the private and public sector.
These sections will also throw some light on the implementation process of TQM and its related issues. As indicated earlier, this research is motivated by the impression that there is paucity in the academic writing of the impact of TQM on employee’s management and performance. Most research tends to focus on TQM practices on overall business performance but this study would focus mainly on its impact on employees. This research hopes to fill in the gap by looking into the impact of TQM as a whole and what effects it has on employees. This chapter will then conclude with 2.5 giving a brief summary of the identified themes in the literature and its link with the research objectives.
1. Previous Research When looking at previous research of total quality management, one has to give credit to the “quality gurus” Deming, Juran, Crosby, Ishikawa and Feigenbaum who helped shape the evolution of total quality management. (Singh and Dhalla; 2010). Before implementing the TQM principles, it is very important for an organisation to gain understanding of the TQM concept and how it developed. TQM first began in Japan in the 1940s pioneered by the “quality gurus” after the world war two. (Dale, 2003a). At that time, Japanese goods were considered to be shoddy and after a visit from the Americans who gave them a lecture on quality management, the Japanese economy began to grow and only at that time did the western world decide to implement the quality management principles into their own business in the 1980s (Dale,2003b).
Deming (1982) proposed 14 principles of quality management which he claimed would help improve quality, productivity and performance through the use of statistical quality control techniques with TQM as its main focus. He states that quality is a continuous improvement process towards predictable degree of consistency. Some of his principles are: Top Management commitment to quality, Training and Education of employees in quality tools and management, Search for quality problems and method of controlling them, Effective communication between supervisor and employees. Juran (1974) defined quality as “fitness for use.” According to him, an organisation must develop a coherent relationship and every individual must participate in order to develop and produce quality products that are ‘fit for use’. He also developed the concept ‘Cost of Quality’. He has originated the idea of Quality Trilogy i.e. Quality planning, Quality control and Quality Improvement. (Butler et al, 2004).
Crosby (1979) defines quality as conformance to requirements. His focus has been on zero defects and doing it right the first time. Crosby developed the phrase arguing that there should be no room for waste and defects and that no amount of defects should be considered acceptable. Kaoru Ishikawa (1985) also placed emphases on the importance of total quality control to improve organizational performance. According to him quality does not only involve an organisation products, but extends also to after sales service, quality of management, the company itself and employee work situation.
He is best known for the development of quality tools called cause-and-effect diagrams, also called fishbone or Ishikawa diagrams. Feigenbaum (1983) defined total quality as a continuous work process that starts with customer needs and ends with the customers’ satisfaction. He proposed the concept of ‘Total Quality Control’ and the idea of a work environment where quality managements are integrated with the organisational goals.
There is no clear definition for ‘quality’, as the concept of quality has existed for many years, its meaning has begun to change and evolve over time. Lloyd and Payne (2004) describes that quality does not only lack a clear definition but also that there is a lack of agreement about the specific practices it should or should not integrate. The principles of TQM are very relevant to work process management today. Most companies have begun to realise the importance of its practices and as thus most have begun implementing such practices into its company management process. In the past decade, many researchers have tried to prove the element of TQM (Saraph et al., (1989), Flynn et al. (1994), Ahire et al. (1996), Brown et al (1998), Anderson et al. (1999)). Citied in Lorente and Costa (2004).
There have been many studies that examine what constitutes TQM, what quality activities have a direct influence on business performance, what barriers affect the implementation of TQM and what factors are critical for the success of TQM implementation. (Saraph et al. (1989), Ernst and Young (1993), Mann and Kehoe (1994), Powell, 1995; Plimpton et al. (1996), Black and Porter (1996). Adams et al., 1999; Sun (2000), Withers and Ebrahimpour (2000) Terziovski and Samson, (2000), Gotzamani and Tsiotras (2002)). In order to determine if quality truly improves an organisational performance and to identify the significant factors to the success of TQM these studies have identified some common principles that are considered crucial to the overall success of TQM program.
There are also researches that have been conducted to identify whether there exist any relationship between TQM dimension and organisational results and how these different dimensions affect the organisational results. (Mohrman et al. (1995), Anderson and Sohal, (1999), Dow et al. (1999), Samson and Terziovski, (1999)). Most of which agree that the most influential dimensions are factors like organisational culture, leadership, empowerment, employee commitment, etc. Of which only three of these dimension (customer focus, shared vision and employee commitment) had positive impact with quality of products.
1. The Total Quality Management Concept The concept of TQM has many descriptions but little clear definition. TQM has been defined as a set of management tools that focuses on providing superior qualities to the customers through identification of their specific needs and responding to the changing markets. York and Miree (2004). TQM as described by Dale et al. (2001) is an umbrella of concepts and ideas in various contexts related in the field of quality. According to some researchers, TQM involves or requires mutual cooperation from everybody in an organisation in order to produce quality goods and services which meet customer requirements. In this method, defects and waste are eliminated and an approach to improve competitive advantage, flexibility and efficiency for the whole organisation is achieved.
Shiba et al (1993). TQM involves the continuous improvement of organisational overall business performance. In the measurement of an organisation overall business performance, four qualities are also looked are: Product quality, Customer satisfaction, Employee satisfaction, and strategic business performance. As the definition of TQM varies, so does its principles and its implementation process. For example, Deming (1986) describes fourteen points for improvement of productivity, Crosby (1979) identified also fourteen principles, Powell (1995)suggest eleven attributes to the TQM program, Dale (1999)discusses eight key elements.
There have been arguments about the implementation of TQM in practice and its expectant benefits or lack. For some researchers, TQM is a widely recognised management tool for success in an organisation Demirbag et al. (2006). The argument on TQM concept and the ‘gurus’ of quality management have stated that every organisation varies and so also does their culture differ also across national boundaries. And as such before applying the concept of TQM in any industry or organisation, the firm must first have an understanding of the various principles and must know what would work for its organisation performance and quality management and what wouldn’t. Kanji and Wallace (2000).
TQM implementation and its benefit has produced somewhat similar results regardless of the country it was studies (Agus et al (2000); Agus and Sagir, (2001), Asim (2001), Warwood and Roberts, (2004), Chen et al., (2004)), but however if a firm wishes to be successful and benefit from its quality and performance management it has to recognise the programs that would be useful to it like employees training, business improvement process and quality application techniques. (Llorens and Jover, 2004).
1. Total Quality Management (TQM) on Business Performance Research has shown that there is a relationship between TQM and performance and that this relationship is significant (Samson & Terziovski, 1999; citied in Talib et al 2010). The benefits of implementing TQM have been studied from different perspectives. TQM has become very popular in the industry and academia because of its effectiveness and also because it is a management tool that enhances and/or improves business performance either globally or national. (Flynn et al., 1995; Samson and Terziovski, 1999).
According to Kaynak (2003) there are three dimensions of a firm’s performance that are relevant to TQM and they are: financial and market performance indicator which is a very important aspect in any organisation and it one of the most important aspects that determines the growth level and an important measure of TQM outcomes Buzzell and Gale (1987), other dimensions are inventory management performance and quality performance indicators. The quality performance indicators includes employee satisfactions, customer satisfaction (sales and after sales service) etc.
These various forms of performance have been the focus of most studies on TQM. Firms with effective TQM implementation can accomplish internal benefit like better income, improved quality and productivity enhancement. (Corbett et al., 2005). A standard quality management system would help organisation to achieve its objectives and goals set in its policy and strategy and also ensure that those set goals are maintained which further enhance business performance. To measure the degree to which TQM impacts on business performance, there are four levels of TQM which should be considered. And they are: employee satisfaction, product quality, customer satisfaction and strategic business performance.
