Introduction
Total quality management is defined as; the approach used by management to improve the quality of production and the organization’s performance to fit the needs of its customers. Quality management in this case is inclusive of all the elements of the organization related to the development, improvement, and maintenance of the operations. This includes factors such as employee performance; cost control, revenue accrual, and management functions all of which should be balanced for the organization to be assured of success. Goestsh et al (1995) define TQM as “management of processes and procedures aimed at accomplishing the delivery of quality products and services” (12). He suggested a set of principles which according to him are necessary for implanting the TQM processes and procedures. These include, first the executive management who create a conducive environment for the implementation of TQM. The second principle is training which requires employees to be trained regularly on the notions of quality.
The third principle involves an emphasis on the customers whose quality to them implies having their needs met. Next is decision making which is in itself a determinant for success. The other fundamental involves using the appropriate methodology, and this ensures that all the procedures and measures taken are strong and reliable. Continuous improvement is the other principle and TQM principle, and this is concerned with making sure that all the operations are up to date with the constantly changing technology (Edwards, 1982). Next is the culture of the company which should be aimed at improving the quality of employees who are the greatest determinants of the organization’s quality. Finally, is employee involvement, which relates to, ensuring that the employees participate in the identification of the quality needs and problems in the organization.
Recent research
Recent studies conducted on the total quality management implementation indicate that it has a direct relationship with organizational performance. This conclusion was drawn from a sample of around four hundred companies in Malaysia (Rooney, 2004; Kee-hung, 1999). The present and past performances of these organizations were evaluated, and it was determined whether the management incorporates total quality management techniques. The data collected was analyzed using chi-square data analysis techniques and the results thereof indicated a strong correlation between total quality management and “product quality and development, sales and profit, marketing, commitment to customers, respect for management, the contribution of employees and communication between divisions” (Juran, 1988).
Other researchers such as Bratton and Gold (2001) have come up with a suggestion that “total quality management has the prospect of improving the competitive position of an organization especially regarding performance improvement” (34). These studies are, however, more focused on the critical success factors related to total quality management implementation. Beaver (2003) suggests that, creating a dilemma in “generalization of the dimensions over which execution of TQM with connected business plans, affects the organization activities”. To come up with reliable conclusions, the researchers found it fit to look into the relationship between marketing and total quality management and their effects on the performance of an organization. An element referred to as total quality adjustment is a process that looks into the level of TQM under implementation in an organization. Market orientation on the other hand illustrates the magnitude of marketing that is implemented in the organization (Yin, 2008). The conclusion drawn from total quality orientation and marketing orientation is that both of them are important when it comes to performance improvement.
The implementation of both these strategies guarantees an improvement in the level of organizational performance. To develop the relationship between total quality management and organizational performance, another group of researchers comprising Adebanjo and Kehoe (1998) conducted qualitative and quantitative research in order to come up with empirical conclusions based on the case studies. These people proposed a model consisting of the total quality orientation and organizational performance modeled in the form of second-order derivatives which possess first-order derivatives which are interrelated in a way (Hoyle, 2007; Seaver, 2003). After developing this model, they evaluated it using the data collected from around 400 organizations that have implemented the total quality management procedures. When analyzing the data collected, these people performed what is statistically referred to as the two-step data analysis. This involves “testing the piecewise measurement models of the two constraints and then testing the structural model to estimate the hypothesized relationships between the constraints.
From this experiment, Adebanjo and Kehoe (1998) came up with a conclusion that “there exists a strong correlation between total quality orientation and organization’s performance” (42). They also came up with a number of factors that according to them are responsible for the difference observed in the TQM of different organizations. The first one of these factors is “the involvement and commitment of the top management, second is the organization of systems and third consecutive focus on the process of improvement” (Bryman, 1993). This study has contributed a great deal to the acquaintance of the total quality management boundary by providing the pragmatic substantiation of the impact of total quality management on performance. This is also an important study to the management as it enables them understand the role in organizational performance as far as total quality management is concerned.
Barriers and pitfalls for TQM implementation
According to the study conducted by Tamimi and Sebastianelli (1998), several factors are a hindrance to the implantation of total quality management in most organizations. Some of these barriers according to these two include failure to connect the manager’s compensation to the quest to achieve quality objectives. The other barrier is failing to determine appropriate training facilities in the most critical areas such as teamwork, workplace communication techniques, continuous improvement strategy, decision making and problem identification skills. The third and final barrier according to Tamimi and Sebastianelli is a lack of adequate resources to implement total quality management. Most organizations are young, thus, they lack an effective TQM system, and this is partly brought about by a lack of enough resources to carry out these procedures.
The other category of barriers to the implementation of total quality management was brought up by Masters (1996), and these included the following. The first one is the inefficient commitment on the part of the management. The organization’s management is on the foundation of the implementation of any set of policies inclusive of the total quality management policies. If they happen to be incompetent, then the entire organization suffers from this hence total quality management becomes unattainable. The other barrier, in this case, is the existence of “an inadequate understanding of quality management” (Creswell, 2003). This involves the lack of knowledge on the processes involved with total quality management. An organization could be having all the resources required to implement these procedures but still be unable to make it for lack of the required knowledge on this subject.
The third barrier is whereby the organization’s management lacks the will and the ability to change the cultures of the organization. Total quality management is a system that was established not so long ago, and it may seem difficult for some organizations to incorporate the procedures in their normal operations. These organizations are, therefore, expected to alter their entire culture to pave the way for TQM. In most cases, the management has calculated the opportunity cost of changing the culture of the organization against that of having to do without TQM and the former always supersedes the latter (Bengtsson, 1998). They always claim to do without the TQM and maintain the culture that has been the recognition of the organization over the years. Next is failure to insist on accuracy when planning for quality issues. Planning is usually the problem in most organizations that are not performing well, and this leaves no exception for total quality management.
The other barrier in the implementation of total quality management is the inconsistency in offering training and updating the employees on new developments in the industry (Dess and Taylor, 2004). In most organizations, the trend has been working towards the achievements of the organization’s goals, primarily on profitability and beating the deadlines. This leaves no time for training especially when it involves total quality management. In the past, most of these organizations have been surviving without this and so they feel it is not fair to the organization when they satisfy the employees in the training activities at the expense of the organizations’ profitability (Crotty, 1998). The final barrier is the lack of sufficient resources. The implementation of total quality management in the organization is an expensive process that requires a lot of resources including time. Most of the organizations find it hard to make this sacrifice and so they prefer to operate just as they are used to instead of having to incur the high cost of making the alterations required in the implementation of total quality management (Wheelen, 2008).
The connection between Micro Finance and TQM
Microfinance is involved with the disbursement of small amounts of loans to low-income earners primarily for investment purposes. Micro-finance institutions are part of the organizations which need a lot of total quality management procedures for them to be successful in the industry. One of the main aims of such institutions is to attract as many borrowers as possible so that they can lend out more money and as a result, earn more interest (Pfeifer, 2002). For them to attract these customers it is recommended that they have a total quality management system in place, which will ensure that the operations of the institutions are running smoothly. One of the effects of total quality management is that it ensures that the needs of the customers are met hence increasing the number of customers in the organization. This eventually results in a good reputation which is essential in micro-finance institutions in the sense that it increases their likelihood.
Reference List
Adebanjo, D., and Kehoe D., 1998. “An Evaluation of Quality Culture Problems in UK Companies”, International Journal of Quality Science, Vol. 3(3), pp.275-286.
Beaver, G., 2003. Management and the Small Firm, Strategic Change. London: Sage.
Bengtsson, M., 1998. Climates of Competition. London: Routledge.
Bratton, J. and Gold, J., 2001. Human Resource Management: Theory and Practice (2nd ed.). New York: Routledge.
Bryman, A., 1993. Quantity and Quality in Social Research. London: Unwin & Hyman.
Creswell, J. W., 2003. Research Design: Qualitative, Quantitative, and Mixed Method Approaches. California: SAGE.
Crotty, M., 1998.The Foundations of Social Research. London: Sage Publications.
Dess, G. G. and Taylor, M. L., 2004. Strategic Management: Creating Competitive Advantages (2nded.). London: McGraw Hill.
Edwards, D., 1982. Out of the Crisis. Cambridge Ma: MIT Press
Goetsch, David L., and Stanley D. 1995. Implementing Total Quality. Upper Saddle River, N.J.: Prentice-Hall.
Hoyle, D., 2007. Quality: Management essentials. Amsterdam: Butterworth-Heinemann
Juran, J. M. 1988. Quality Control Handbook. 4th ed. New York: McGraw-Hill.
Kee-Hung, L. (1999). Total quality management and organizational performance. Hong Kong: Hong Kong polytechnic university.
Masters, R.J., 1996. “Overcoming Barriers To TQM’s Success”, Quality Progress, 29(5), pp.53-55.
Pfeifer, T., 2002. Quality management: strategies, methods, techniques; with 3 tables. Cincinnati: HanserGardner. Quality Progress, 31(6), pp.57-60.
Roney, C. W., 2004. Strategic Management Methodology: Generally Accepted Principles for Practitioners. Connecticut: Greenwood Publishing Group.
Seaver, M., 2003. Gower Handbook of Quality Management. Aldershort: Gower Publishing, Ltd.
Tamimi, N., and R. Sebastianelli, 1998. “The Barriers to Total Quality Management”.
Wheelen, T. L., 2008. Concepts in Strategic Management and Business Policy. California: Pearson Education.
Yin, R. K., 2008. Case Study Research: Design and Methods (4thed.). Thousand Oaks, CA: Sage.