Exploring the Effect of Total Quality

Management on Competitiveness: Case Study in

Public Sector Hospitals in Egypt

By,
Asmaa Mohamed El-Bokl
Nohier Abd El-Hakim Ahmed
Mennallah Ahmed Fouad
Ream Mostafa El-Khamesy

Pre-Master of Business Administration Department

Submitted to

Professor Said El Khouli

15/4/2014

1) Introduction
Quality as a concept appeared in business world for more than two
decades. It is very important for any organization in business world to let
its business being established based on quality and quality management
system.
Quality is defined as a conformance to customers` expectations through
producing
production

products

or

specification.

providing
The

services

service

based

quality

is

on

its

involves

design

and

comparing

comparison of customer expectations with feeling and customer perception

of actual performance (Jung Et al 2003).
It has achieved many stages till it reached to be a backbone of any
successful business and quality issues in business have been responsible
for the development of organizations and industries as a customer needs to
satisfy this needs with high-quality product for a price paid.
Quality management in recent years have been developed, as now it has
improved processes that can make products with guaranteed high quality;
high quality gives producers a competitive advantage; consumers have
become used to high-quality products, and will not accept anything less;
high quality reduces costs.

From this point of view, it appeared the link between the Total Quality
Management and competitiveness. The total quality management overall is
the

ways

improving

management

effectiveness,

flexibility

and

competitiveness in manufacturing and services organizations (Ebert 2005).

Competitiveness reflects the ability and willingness to compete.
TQM has the whole organization working together, every department,
every activity and every single person to guarantee, and systematically
improve quality. The aim of TQM is to satisfy customers by making
products

with

zero

defects

(Phil

Crosby

(1979))

which

is

mean

perfectionism and zero mistakes and errors regardless how many products
are produced.
Egypt is a country with the least expenditure on health, where the share of
the budget 2011 - 2012/2012 - 2013/2013 - 2014 is limited to 4.9%,
despite the fact that the international average, which was adopted at the
Millennium Summit of the United Nations, is 15%. And even Afghanistan
spends at a rate higher than 7.6%, and 8.4% of occupied Iraq, Burundi and
the African countries of 11.7%. The number of beds in hospitals in Egypt
fell from 125.457 beds in 1998 to 115.735 in 2011, rather than to increase
to keep pace with the significant increase in the number of people!
Number of beds in public hospitals at the Ministry of Health, decreased

from 71.694 beds in 1998 to 41.647 beds in 2011, and in contrast, number
of beds in the high-cost private sector increased from 15.259 beds in 98 to
29.393 in 2011. Ratio of hospital beds to population in Egypt is 1.6 beds
per 1,000 citizens, while the ratio in India, 5 beds per 1,000 citizens, and in
the United States 10, and in Sweden 12.The rate of entry of patients to
public hospitals is falling gradually, from 2,468,871 cases in 2009, to
2,011,619 in 2011, and in contrast ratios of the dead rise, from 0.84% in
2009 to 1% in 2011, which witnesses the death of 20.038 patients in public
hospitals. (WHO Site)
The number of Ministry of Health (MOH) hospitals is 539. Classified into
6 sectors namely; curative sector 409, health insurance 37, teaching
hospitals 20, mental hospitals 20, medical institutions 11, specialized
centers 42. (MOH Site)

2) Literature review
Increasing

the

competitiveness

of

Small

and

Medium

Enterprises

in

Indonesia become interesting and important to be examined, thus (La

Hatani

&

Sri

implementation

Wiyati
of

Total

Mahrani,
Quality

2013)

tested

Management

the

(TQM)

influence
and

of

Strategic

Human Resources Management (SHRM) in small and medium enterprises

(SME`s)

towards

competitiveness

in

Kendari

southeast

Sulawesi

in

Indonesia by using applied structural equation modeling as a methodology.

Researchers used the survey method in order to collecting the data by
questionnaire. After testing, the research is proved that the Total Quality
Management

has

significant

influence

on

competitiveness

and

the

Strategic Human Resources Management (SHRM) was proved to be a

mediation link between the implementation of TQM and competitiveness.
The role of managers in applying quality is very important and critical
through

design

strategies.

From

this

point

of

view

the

researchers

Mohammad Taleghani, Esmaeil Malek Akhlagh and Azamossadat Hoseini

tested the effect of Total Quality Management (TQM) on organization
performance

the

model

T-test.

and

mediation
Data

of

market

was

been

orientation
collected

through
through

Regression
questionnaire

submitted to 246 from managers, BS and MS of insurance companies in

the city of Rasht. After testing variables from which total quality
management as independent variable and service quality as a dependent
variable, it proved that there are significant effect between Total Quality
Management

and

organizational

performance

Esmaeil Malek Akhlagh, Azamossadat Hoseini, 2013).

(Mohammad

Taleghani,

TQM is a management system, a managerial principle, a fundamental

implementation of continuous improvement, the use of human resource
management and quantitative methods, and the quality improvement of service and
all processes in the organization to satisfy the present and future requirements
(Reed et al., 2000; Hartz & Kanji, 1998; Sorensen & Weber, 1994; Rao et al.,
1997; Sureshchandar et al., 2002; Lai et al., 2002; Black & Porter, 1996; Quazi et
al., 2002).
Quality, productivity, and competitiveness can be improved through quality
management (Deming, 1981; Warwood & Roberts, 2004; Quazi et al., 2002;
Meegan & Taylor, 1997; Rao et al., 1997).
Quality improvement can result in rework cost reduction, on time delivery, error
reduction, incident delay prevention, lead time reduction, machine and material
efficiency improvement, productivity improvement, the increase in market share
with better quality and lower price, continuous management, more work
opportunity and higher morality (Deming, 1982).
Quality improvement can also be used to reduce the cost, and then enhance the
reputation, the control over the price, the market share, and the financial benefit
(Garvin, 1984).

Quality is crucial to increase the reliability and productivity, enhance the

competitiveness, reduce the rework and scrap costs, reduce the customers
complaint, reduce after-service and production costs, and increase the financial
benefit (Ferdows et al., 1992).
Douglas and Judge (2001) studied the relationship between the degree to which
total quality management practices were adopted within organizations and the
corresponding competitive advantages achieved. Relatively strong support for this
relationship is found.
By drawing on the market-based theory of competitive advantage, resource-based
theory of the firm, and systems theory, Reed et al (2000) were able to conclude that
the content of TQM is capable of producing a cost- or differentiation-based
advantage.

3) Research problem
Although a lot of researchers studied the impact of TQM on competitiveness in
different fields, few studies were conducted in the field of healthcare especially
public sector in Egypt.

4) Research aims and objectives

Study the impact of applying TQM in public hospitals on competitiveness through:
1. Measuring revenue of a public hospital before and after applying TQM.
2. Measuring cost of service of a public hospital before and after applying
TQM.
3. Measuring occupancy rate and number of patients attending out-patient
clinics before and after applying TQM.

5) Research hypothesis
TQM improves revenue of public hospitals.
TQM reduce cost of service of public hospitals.
TQM improves hospitals occupancy rate and number of patients
attending out-patient clinics in public hospitals.

6) Nature of study:
Case Study
7) Research methodology
7.1) population and sampling:
Public sector hospitals applying TQM
7.2) variables:
o Independent variable: TQM
o Dependent variables: Indicators of competitiveness in form of:
Revenues
Cost of services

 Occupancy rate
Number of patients attending out-patient clinics.

7.3) data collection

o Data collection tools:
Data collection sheet will be formulated to collect revenue 1
year before and after applying TQM.
Data collection sheet will be formulated to collect cost of
services 1 year before and after applying TQM.
Data collection sheet will be formulated to collect data about
occupancy rate and number of patients attending out-patient
clinics 1 year before and after applying TQM.

7.4) data analysis

o Data will be collected, reviewed, and cleaned and data entry will be
done using SPSS version 22
o Descriptive analysis will be done using mean and standard deviation
for quantitative data, while qualitative data will be presented in
frequency and percentage. Comparison of quantitative data will be
done by independent T test or ANOVA. Comparison of qualitative
data will be using the Chi-square test.

8) References
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between product, process and organisational innovation. International Journal of
Technology Management, 22(1): 83-107.

Bou, J. and I. Beltrn, 2005. Total quality management, high-commitment human

resource strategy and firm performance: an empirical study. Total Quality
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Chen, S., H. Chen, et al., 2005. An empirical study of software process maturity,
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Cooke, P., 2004. The role of research in regional innovation systems: new models
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Corrigan, J., 1994. Is ISO 9000 the path to TQM? Quality Progress, 27(5): 33-38.
Dooley, K. and R. Flor, 1998. Perceptions of success and failure in TQM
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Douglas T. J., Judge Jr. (2001), Total quality management implementation and
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