The Effects Of Total Quality Management

Published Date: 02 Nov 2017

In the 1980s and 1990s, a new phase of quality control and management began and it is known as Total Quality Management (TQM). Japan’s success at quality development have been observed and western companies have began to implement their own quality enterprise. TQM was developed as a handbag phrase for the broad spectrum of quality-focused strategies, programmes and techniques during this period, and it became the centre of focus for the western quality movement. TQM is direct to proportional customer satisfaction. The word "satisfaction" is established conjoining Latin words satis (enough) and facere (to do or make) (Rust et al. 1996). Since the mid-1980s and 1890s, when TQM has become a widely practiced way to develop product quality, decrease the costs of products and develop customer service, since the beginning of customer satisfaction was occured, it has brought a great deal of continual conflict (Gustafsson and Johnson, 2004; Wirtz and Lee, 2003). The firms which are Aselsan and Beko in Turkey adopt TQM. As a result, a typical definition of TQM contains customer focus, the involvement of all employees, continuous improvement and the integration of quality management into the total organisation.

1.2. Purpose of the report

The purpose of this report is to explain briefly Total Quality Management. Total Quality Management subscribes many firms in terms of customer satisfaction, employee satisfaction, high competitive power. Therefore, advantages of TQM which are cost reduction and customer satisfaction are explained and some factors of TQM are explained and then the future role of total quality management are explained to understand better this subject.

1.3. Statement of the problem

The prime objective of my study is to analyze the effects of Total Quality Management because total quality management contributes a lot to the firms in terms of consumer satisfaction. One of the most important advantages of total quality management is customer satisfaction. The second main advantage of employee is satisfaction of the products. The final significant area is high competitive power. Because of these reasons, TQM helps the company strategically such as focusing on customer, making decision and solving problem easily, working in group, enduring development.

2. METHODOLOGY

In this study, some methods include our observations about Total Quality Management. Case studies are commonly used in international business research. Almost all the articles in the net have impressions about the positive sides of Total Quality Management in marketing and there is a huge data on critical role of internationally marketing programs. Some necessary notes were collected in the books gathered from Yeditepe University Library. First, the books are searched from University’s site in the internet and in that site there is software, named YORDAM, helps students to access the book catalogs stored in the library. The books are read and important notes are taken. In this part of the study, there is a research. In the study, research tries to find out the effectiveness of product quality, price, and marketing communications on consumer brand choice. And some researched papers and articles are read on internet and some necessary notes are taken and written in this report about some researched papers are read on internet and some necessary notes are taken and written in this report about total quality management.

3. FINDINGS

3.1. Advantages of TQM 

3.1.1. Cost reduction 

Cost reduction is the easiest and most certain way to increase profits in the short term. It can also be a major driver of long term growth, if handled properly. It is easy because cost reduction is entirely within the control of the company. Simply determine an area for cost reduction and implement it. It is completely unlike the uncertainty of trying to increase revenue, where one must be concerned about pricing, margins, the actions of competitors, and governmental regulation. Cost reduction is the simplest road to increased profit ability and enhanced cash flow. Cost reduction also works well for long term profits, so long as the process becomes a core belief of the entire company and is constantly readdressed. The selection of cost reduction targets is key, since cost reduction over the long term cannot undercut a company’s profit - making capabilities. Instead, the focus should be on constantly paring away unnecessary expenses, increasing efficiencies, and streamlining processes. In addition, it helps to continually reinvest some portion or all of the cost reduction savings back into the company’s people, processes, and technology. A company that publicizes its continual efforts to reduce costs is effectively signaling to potential market entrants that they will have a very difficult time competing on price, since the company can likely weather any such attacks with ease. Conversely, a low cost company has a powerful tool available for undercutting companies in new markets and so can aggressively pursue its more bloated competitors. Due to all these reason, cost reduction is necessary in Total Quality Management because if you make cost reduction, consumers can prefer you easily.

3.1.2. Customer satisfaction

The word "satisfaction" is formed combining Latin words satis (enough) and facere (to do or make) (Rust et al. 1996). Since the mid-1980s, when quality management became a widely practiced way to improve product quality, reduce costs and improve customer service, the issue of customer satisfaction has brought about a great deal of ongoing debate (Gustafsson and Johnson, 2004; Wirtz and Lee, 2003). The definition of satisfaction also shows a strong heterogeneity (Florence et al. 2006). Different authors have defined satisfaction in different ways but Giese and Cote (2000) found that three overall components within virtually every definition of satisfaction might be identified as these capture the specifics of the concept. These components are

* A response (affective or cognitive).

* The response concerns a particular focus (e.g. expectations, product and

consumption experience).

* The response takes place at a particular point in time (e.g. after choice, after

transaction, after consumption, based on accumulated experience).

The primary thread of debate in the satisfaction literature nowadays is focused on the nature of the cognitive and affective processes that result in the consumer’s state of mind referenced to as satisfaction (Jaronski, 2004). The cognitive dimension is the set of information individuals accumulate through direct or indirect experience where as the affective dimension is positive or negative evaluation (Florence et al. 2006). According to this stream of satisfaction research, Yi (1991) categorized customer satisfaction definitions either as an evaluation process or as an outcome of evaluation process. Oliver (1981), Yi (1991) and Fornell (1992) describe satisfaction as an evaluation process where as Tse and Wilton (1988) describes satisfaction as an outcome of evaluation process. Satisfaction as an evaluation process is based on the disconfirmation of expectations paradigm. Consumers form expectations towards product/service performance and these expectations later serve as standards against which actual product/service performance is evaluated (Oliver, 1980; Churchill and Suprenant, 1982) so it is actually the comparison of expectations and actual perceived performance that results either in confirmation or disconfirmation. If expectations are met, confirmation takes place, otherwise disconfirmation occurs. Disconfirmation may be positive (when perceptions exceed expectations) or negative (when expectations exceed perceptions). Therefore satisfaction is the result of confirmation and positive disconfirmation where as negative disconfirmation guides to dissatisfaction. Use of the term "positive disconfirmation" was confusing so Anderson and Sullivan (1993) adopted the term "affirmation" as a substitute for the term "positive disconfirmation". Practically all research on customer satisfaction agrees that customer satisfaction is a key component of economic success (Horvath, 2001). There are two different types of evaluations of customer satisfaction from the economic psychology perspective. One is transaction-specific satisfaction and the other is cumulative satisfaction (Johnson et al., 1995).

3.2. Factors of TQM

3.2.1. Commitment and understanding from employees

It is key to ensure that all employees within your organization know about the Total Quality Management (TQM) policies and make them an fundamental part of their work. Your employees should know your corporate goals and recognize the importance of these goals to the overall success of your organization. Employees need to know what is expected from them and why. It may sound like a no-brainer but too often this is not driven home by management. When employees understand and share the same vision as management a world of potential is unleashed. If they are in the dark, commitment is lacking and policies will not be successfully deployed.

3.2.2. Quality improvement culture

The organizational culture needs to be modernized on a continuous basis to encourage employee feedback. Your employees are full of valuable knowledge- embrace it! Listen to those executing the processes that keep your business moving daily. If employees have an idea on how to improve operations, they need to know management respects their ideas or they will not share.

3.2.3. Continuous improvement in process

There is no standing still. If you are not moving forward, you are moving backwards. Total Quality Management (TQM) is a continuous process and not a program. This requires constant improvement in all the related policies, procedures and controls established by management.  Do your research. Keep your ear to the market and make an effort to routinely revise all aspects of your operation. There should be a constant effort to improve proficiency which will result in constant scopes for improvement.

3.2.4. Focus on customer requirements

In today’s market, customers require and expect perfect goods and services with zero defects.  Focusing on customer requirements is significant to long term survival and essential in order to build relationships with customers. People do business based on emotion. Competitors will always be a risk. Keep your customers close and happy. Make sure precise requirements of all customers are documented and understood by everyone that touches the account.

3.2.5. Effective control

It is essential to monitor and measure the performance of the business.  It’s easy to forget how many times in a year an employee does not conform to a controlled procedure or how many times a piece of equipment was down due to unplanned maintenance. If strict documentation is maintained, you will be able to objectively quantify areas for improvement and focus your efforts where they will provide the greatest return of both your time and financial resources.