IMPACT OF TOTAL QUALITY MANAGEMENT ON THE PERFORMANCES OF AN ORGANIZATION
CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND TO THE STUDY
Edwards (2010) describe Total Quality Management (TQM) as a management tool in which its basis is to reduce the errors produced during the manufacturing or service process, increases the customer satisfaction, streamline supply chain management and aim for modernization of equipment and ensure that workers have the highest level of training. Olamade (2000) describes that one of the principal aims of TQM is to limit errors to the barest minimum during production of a production and service and that TQM is often associated with the development, deployment and maintenance of organizational systems that are required for various business processes.
Total quality management (TQM) has been acknowledged as an important subject in management theory and practice during the last decades. The use of TQM among many, western organizations has been relatively high during the 1990s, see for example, Lawler et al. (2011). However, the relationship between TQM practices and improved financial performance is discussed frequently in the TQM literature. Results have been published, which argue that TQM investments result in an improved financial performance, see, for instance, Shetty (2003), Hendricks and Singhal (2007), Easton and Jarrell (2008), Handsfield et al. (2008), Samson and Terziovski (2009), Reed et al. (2000), Allen and Kilmann (2001), Tena et al. (2001) and Wroistad and Krueger (2001). Bergquist and Ramsing (2009) argue, on the other hand, that it is difficult to establish a relationship between TQM and the performance of the company. Results have also been published, presenting a more negative picture of TQM implementation benefits. Eskildson (2004) states, based on survey results, that many organizations do not succeed with their TQM efforts. The two main reasons are here argued to be vague definitions of TQM and inappropriate implementation. Also, Harari (2003) argues, based on own experience, that TQM programs are ineffective, and that at best one third of the TQM programs have achieved significant improvements.
The differentiation among research conducted, to outline financial benefits of TQM implementation, imply that the area needs further investigation. The approaches used to determine the benefits of TQM programs, and to find a relationship between TQM and the financial performance, also differ between the different studies. One approach to measure the effects of TQM investment on financial performance is to compare companies that have received a quality award against companies that have not received any quality award, see, for example, Hendricks and Singhal (2007). These two researchers use American companies in order to measure the effects of successful TQM implementations on financial performance. The approach to study the performance development of quality award recipients has not been used, according to extensive literature, on Swedish quality award recipients. Such a study would be a complement to earlier studies, also considering the facts that Sweden and the USA have different company cultures and that the award models are somewhat different. As many still argue whether TQM programs are profitable, the purpose of this study is to form an opinion if companies in Nigeria that successfully have implemented TQM have better performance development than median branch indices and their stated competitors.
1.2 STATEMENT OF THE PROBLEM
Although there are many success stories of TQM implementation and its benefits, the real impact of TQM cannot be disregarded (Crosby, 1979; Juran, 1988; FQI, 1990,1991; Number of and Abrams, 1994; Rarnberg, 1994; Hill and Wilkinson, 1995 Mann and Kehoe, 1995; Ross, 1999; Evan and Lindsay, 2001). A number of failures have also been reported (e.g. Eskildson, 1995a; Harari, 1993), for example, Eskildson (1995) argues that TQM does not provide either a cure-all nor is it a single key to organizational success. He provides several examples one of which was the bankruptcy of the Wallace Company (one of the winners of the MBNQA) after receiving an award. The bankruptcy of the MBNQA winner to the unsustainable loss resulted from the high spending on quality (Hill, 1993). Therefore, the collapse of the company may indicate an ineffectiveness of the management system.
So also TQM implementation requires radical change to traditional management practices. For instance, traditional management paradigm stresses authorisationism. Therefore, even though managers may support the principle of employee participation and input, they are uneasy about giving up their authority (McConnell, 1995). The development of an effective work team may be problematic in organizational cultures where human resource systems emphasise individual performance reviews and compensation (Weidman, 1993). Despite the criticism, neither academics nor practitioners dispute the fact that the quality movement has been the most influential of all
1.3 AIMS AND OBJECTIVES OF THE STUDY
The aims and objectives of the study are as follows:
– To determine whether innovation has effect on productivity
– To determine whether quality control has effect on product development.
– To evaluate whether scope of work has effect on customer satisfaction.
1.4 RESEARCH QUESTIONS
· The research questions for the study are as follows;
· Does productivity has effect on new innovation?
· What is the effect of quality control on product development?
· Does scope of work has effect on customer satisfaction?
1.5 RESEARCH HYPOTHESIS
Three research hypotheses are to be carried out during the course of study which is as follows;
1. Null hypothesis (HO)
Productivity does not have effect on new innovation.
Alternative Hypothesis (H1)
Productivity has effect on new innovation.
2. Null Hypothesis (HO)
Quality control does not enhance product development.
Alternative Hypothesis (H1)
Quality control enhances product development.
3. Null Hypothesis (H0)
Scope of work does not increases customer satisfaction.
Alternative Hypothesis (H1)
Scope of work does help to increases customer satisfaction.
1.6 SCOPE OF THE STUDY
This study was carried out in various sub-departments in top quality management department located at Marina, Lagos with their various top quality managers, customer’s managers and their management team. Every organizations and manufacturing company cannot do without employing the efficient techniques and approaches of total quality management, thus that TQM helps the organization in achieving their basic and corporate goals and objectives. The approaches of TQM meets not only consumers specification but other quality and functionality expectation in terms of weight, reliability, size, maintainability and operating cost effectiveness, moreover its approaches is to reduce errors produced during the manufacturing processes increases productivity, improve customers satisfaction enhances profitability and increases sales turnover. As we have observed according to Edwards W. (1990) TQM enhances performance superiority and continuous improvement of quality of products and services.
1.7 LIMITATION OF THE STUDY
A need for Total Quality Management (TQM) normally arises where there is a marked deviation from the actual quality performance and standard. Therefore some of the constraints engaged in the course of the research work are financial constraints, lack of data on the use of Total Quality Management (TQM) techniques, unwillingness of the respondents to complete questionnaire logically and inability of the respondents to return questionnaire on time duly completed.
1.8 SIGNIFICANCE OF THE STUDY
A need for Total Quality Management (TQM) normally arises where there is a marked deviation from the actual Quality performance and standard. The need for the study is to ensure that errors are limited with an organization in order to render a quality services to the customers and a society at large; ensure that consumers specification and functional requirements expectation are met; to maintain operating cost efficiently and to reduce the errors are limited with an organization in order to render a quality services to the customers and a society at large; ensure that consumers specification and functional requirements expectation are met; to maintain operating cost efficiently and to reduce the errors produced during manufacturing and modernization of equipments to ensure workers have the highest level of training.
1.9 DEFINITION OF TERMS
TQM (Total Quality Management): This is a management technique to reduce the errors produced during the manufacturing or service process thus deals with quality prevention and correction.
Organizational performance: This is a rapid change in an organization to achieve the basic goals and objective such as customer’s satisfaction, productivity, sales turnover, profitability etc
Quality: This deals with character and attribute of a product and service that makes the product or service: different form each other,
Risk: This refers to as a degree of uncertainty from a specific outcome
Productivity: This refers to as the improvement in the level of production.
Cost: This refers to the amount of money needed to produce a product thus price to be paid. It can also be describe as something of value.
Profitability: This is the ability of a company to earn a profit it result the final result of business organization
Customers’ satisfaction: this refers to as a degree to which customers expectations of a service or product
Innovations” This can be describe as an incremental emergent or radical and revolutionary charges in thinking product process or organization
Sales turnover: This can be describe as a total amount sold within a specified period usually a year.