Total Quality Management (TQM) is an operational philosophy committed to customer satisfaction and continuous improvement. TQM is committed to quality/excellence and to being the best in all functions. Because TQM aims to reduce costs and improve quality, it can be used as a program to implement an overall low-cost or a differentiation business strategy. Many TQM principles have been incorporated into the ISO 9000 series of standards and certifications. While TQM is focused upon employee participation, refinement, and improvement, the ISO standards are tied to the reporting and data analysis of the process. The two can go hand in hand with ISO 9000 series approaches used to document and measure the efforts.
According to TQM, faulty processes, not poorly motivated employees, are the cause of defects in quality. The program involves a significant change in corporate culture, requiring strong leadership from top management, employee training, empowerment of lower-level employees (giving people more control over their work), and teamwork in order to succeed in a company. TQM emphasizes prevention, not correction. Inspection for quality still takes place, but the emphasis is on improving the process to prevent errors and deficiencies. Thus, quality circles or quality improvement teams are formed to identify problems and to suggest how to improve the processes that may be causing the problems.
TQM’s essential ingredients are:
■■ An intense focus on customer satisfaction: Everyone (not just people in the sales and marketing departments) understands that their jobs exist only because of customer needs. Thus all jobs must be approached in terms of how they will affect customer satisfaction.
■■ Internal as well as external customers: An employee in the shipping department may be the internal customer of another employee who completes the assembly of a product, just as a person who buys the product is a customer of the entire company. An employee must be just as concerned with pleasing the internal customer as in satisfying the external customer.
■■ Accurate measurement of every critical variable in a company’s operations: This means that employees have to be trained in what to measure, how to measure, and how to interpret the data. A rule of TQM is that you only improve what you measure.
■■ Continuous improvement of products and services: Everyone realizes that operations need to be continuously monitored to find ways to improve products and services.
■■ New work relationships based on trust and teamwork: Important is the idea of empowerment—giving employees wide latitude in how they go about achieving the company’s goals. Research indicates that the keys to TQM success lie in executive commitment, an open organizational culture, and employee empowerment.
Strategic Management and Business Policy: Globalization, Innovation, and Sustainability, 15th Edition, ISBN 978-0-13-452205-0 by Thomas L. Wheelen, David Hunger, Alan N. Hoffman, and Charles E. Bamford, published by Pearson Education © 2018.
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