ENGINEERING AND TECHNOLOGY MANAGEMENT, MPSW 5033

1. Introduction

Total Quality Management (TQM) is a process that begins with a vision which is actively promoted
by the organizational leader. Its achievement requires an effective leadership that will be in a position to
build a healthy organizational culture that later under his leadership will be easily transformed into a
TQM. Nowadays, an interesting topic of discussion is the quality control, the behavior and expectation of
top management, the importance of leadership and its different styles, the leader’s personal characteristic
and so on. But, very often in spite of all the effort the TQM implementation process will end in failure
because of the mistakes made by the management. The principles and practices of Total Quality
Management can be deferent between various industries and enterprises, but there is a universal
agreement about the importance of leadership for its achievement.
The use of TQM encourages employees at all levels of the organization to participate not just in
resolving the problem of quality, but also in continual work improvement and achieving the projected
goals. From this we can conclude that many of the activities occur in the lower levels of the organization.
Yet, only the leadership of top management is in position to create a necessary organizational culture that
is capable to lead and support TQM actions among employees from the lower levels of the organization.
With the visionary leadership the healthy organizational culture can be easily transformed into TQM. The
work of the leaders needs to be oriented from the inside to the outside of the organization, because only a
healthy organization can reflect success into the environment. To illustrate the relationship between total
quality management (TQM) and leadership, three case studies about David kearns in Xerox company,
Steve Jobs in apple company and Gayle C. Avery and Harald Bergsteiner in BMW company are
presented.

2. Applied concept/principle
CASE STUDY1:
Company background:
Xerox is the world’s leading manufacturing company of copiers (black and white, colour), printers,
scanners and fax machines. It is also a leader in document management software and office
consumables. In the early 1980s, Xerox found itself increasingly vulnerable to intense competition from
both the US and Japanese competitors. According to analysts, Xerox's management failed to give the
company strategic direction. It ignored new entrants (Ricoh, Canon, and Sevin) who were consolidating
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Xerox also suffered from its highly centralized decision-making processes.' As part of this quality program. Critical areas like design. Between 1980 and 1984.L. Bean in distribution. return on assets fell to less than 8% and market share in copiers came down sharply from 86% in 1974 to just 17% in 1984. Xerox implemented the benchmarking program.15 billion to $ 290 million. Xerox's profits decreased from $ 1.261 million and growth of 8. .4%. 2 . the prices of its products) was high and its products were of relatively inferior quality in comparison to its competitors. As a result. production. David T. Competitor's total costs to produce a comparable product were found to equal Xerox's direct labor costs. employing over 57. and staff functions were analyzed. like Procter & Gamble in marketing and L. Japanese companies were able to undercut Xerox's prices effortlessly. The company even went on to become one of the best examples of the successful implementation of benchmarking. By 1997. Japanese firms priced their models at Xerox’s production costs. These initiatives played a major role in pulling Xerox out of trouble in the years to come. evaluated Japanese competitors and discovered annual productivity improvements of 18% compared to 8% for Xerox. Xerox chose non-competitive companies. In administrative areas. Establishing Competitive Benchmarks: Xerox began studying other companies to see how they ran similar operations. Kearns quickly began emphasizing reduction of manufacturing costs and gave new thrust to quality control by launching a program that was popularly referred to as 'Leadership through Quality. Kearns (Kearns) took over as the CEO. that were the best in their fields. Fuji Xerox.ENGINEERING AND TECHNOLOGY MANAGEMENT. MPSW 5033 their positions in the lower-end market and in niche segments. Reverse-engineering revealed that Xerox’s manufacturing techniques were no longer competitive in price or quality. a 50/50 joint venture in Japan. He discovered that the average manufacturing cost of copiers in Japanese companies was 40-50% of that of Xerox. it had sales of 8. supplier relations. inventory management.400 people worldwide. The company's operating cost (and therefore. In 1982. As a result of this.

ENGINEERING AND TECHNOLOGY MANAGEMENT. and evaluating the solution. MPSW 5033 Figure1: Benchmarking and Total Quality Management. evaluate results. using the LUTI (learn. with all employees expected to receive 48 hours by 1988. teach. implementing the solution. Kearns began training his reports as a team. identify customer requirements. selecting and planning a solution. Leadership through Quality: Beginning in 1984. · Competitive benchmarking: The continuous process of measuring Xerox products. determine process capability. inspect) technique. select measurements. then inspect their own usage. analyzing the problem. identify customer. identify steps in work process. use. The quality strategy extended employee-involvement teams across the organization to implement five programs: A six step problem-solving process: identifying and selecting a problem. · Universal employee training. · A nine step quality improvement process: identify output. Senior management were to learn leadership through quality. · Closer ties with the best suppliers reduced supplier numbers from 5000 to 300 and improved quality and delivery capabilities. then use it. 3 . then teach it to the next lower management level. services and practices against the company’s toughest competitors or those companies recognized as the leaders. and recycle. · Cross-functional design teams that included suppliers and customers in the early stages of new designs. generating potential solutions. translate requirements into supplier specifications.

Their goal is to improve the user-friendliness of their products and to encourage an open-minded approach when developing new technologies and services.ENGINEERING AND TECHNOLOGY MANAGEMENT. CASE STUDY2: Company Background Apple Computer was formed in April 1976 by 25 year-old Steve Wozniak and 21 yearold Steve Jobs both college dropouts. After selling a van for some extra start-up cash. In fact. The company has become well-known through their commitment to challenge the so-called “possibilities” of the computer industry. California. Apple Computer stands out from similar companies with their unconventional business ideas that constantly redefine the standards for product. to start building computers. The ideas and early innovation techniques that emerged from this location would set the foundation for building one of the most important and globally effective technology companies the world has ever seen. four million man-hours of training had been given at a cost of $125 million. by 1986. and industry innovation techniques.500 quality improvement teams were operating. MPSW 5033 Figure 2: David kearns CEO. all 100.Xerox By 1985. all middle and senior managers had been trained in the use of quality tools and. By the end of 1988. In four years. the two set up shop in the Jobs’ family garage at 2066 Crist Drive in Los Altos. 2. 4 .000 of Xerox employees had received a minimum of 28 hours of quality training. some diehard Apple fans come from all over the globe just to pose for pictures in front of this now-famous garage. marketing.

album. the Apple I. spent the summer of 1976 building the company’s very first computer. “Why do we need that screen?” Jobs demanded. Wozniak and Jobs began building the Apple II with the help of a few technically savvy friends and classmates.ENGINEERING AND TECHNOLOGY MANAGEMENT. he began by writing a maxim on his whiteboard: “Don’t compromise. At one point Jobs made the simplest of all suggestions: Let’s get rid of the on/off button. At his first retreat with the Macintosh team.” He never spoke of profit maximization or cost trade-offs. California.000. proved to be Apple’s first major customer and. just specify the computer’s abilities. in the early 1980s.” The machine that resulted cost too much and led to Jobs’s ouster from Apple. but then they realized the button was unnecessary. One navigation screen. The Byte Shop in Mountain View. Markkula worked with Jobs in coming up with a solid business plan and even purchased one-third of the company for $250. “It takes a lot of hard work.” he told the original team leader. Jobs aimed for the simplicity that comes from conquering. “to make something simple. During the design of the iPod interface. During this consultation. or artist. his injunction was to make it “insanely great. The device would gradually power down if it wasn’t being used and would spring to life when reengaged. Jobs tried at every meeting to find ways to cut clutter. would produce a machine that felt as if it deferred to users in a friendly way. rather than merely ignoring. all from within the confined space of the Jobs family’s single-car garage. It was at this time that Jobs first realized his true passion for the burgeoning computer industry. Achieving this depth of simplicity.4 Apple Computer was officially incorporated on January 3. To fuel this passion. the true technical mind behind the building process of Apple’s early computers. At first the team members were taken aback. complexity. Later that summer. “Don’t worry about price. The two Steves were able to build and sell fifty Apple I computers that summer. The designers realized they didn’t. to truly understand the underlying challenges and come up with elegant solutions. Leadership in TQM When Jobs and his small team designed the original Macintosh. He insisted on being able to get to whatever he wanted in three clicks. Jobs began creating advertisements and found a buyer for the computer. the first retail computer store chain in the world. 1977. asked users whether they wanted to search by song. coincidentally.” 5 . he realized. rather than challenging them. by accelerating the home computer revolution. This would mark the first of many successful products to come from the company. And in the long run he got the balance right: Focus on making the product great and the profits will follow. But the Macintosh also “put a dent in the universe.” as he said.” he said. Jobs consulted with retired Intel Corporation marketing manager Michael Markkula regarding the possible future of Apple Computer. MPSW 5033 Wozniak. Meanwhile. for example.

every aspect of the customer experience was tightly linked together. just before the global financial crisis. BMW produces cars and motorbikes under three premium brands which are Rolls Royce. not just investors. CASE STUDY3: Company background BMW is founded in 1916 and the headquarters is in Munich. At the time of difficulties. and reporting the best results in his history in 2010.000 people to serve at 24 production facilities in near 13 countries. the honeybee leadership takes a broader perspective. It has been one of the ten largest car manufacturers in the world and owns three of the strongest quality brands in the car industry. This helps BMW to emerge from the recession strongly despite badly hit by the crisis like the rest of the automotive industry. The honeybee principles are more sustainable. This is because honeybee leaders regard their firm as an interdependent part of a much wider community and understand that their true ultimate aim should be to promote a sustainable growth. therefore more reliable in leading to higher performance and are more socially responsible than locust behaviors. Jobs and Apple took end-to-end responsibility for the user experience something too few companies do. and glitches to be rarer. Thus. Up until 2011. the company has been employed about 96. It also operates a global sales network in more than 140 countries. MINI and BMW themselves.ENGINEERING AND TECHNOLOGY MANAGEMENT. syncing to be smoother. this principle is important to ensure that a company is able to promote sustaining enterprises. From the performance of the ARM microprocessor in the iPhone to the act of buying that phone in an Apple Store. Besides. considering the long-term interests of a full range of stakeholders. allowing the iPod to have fewer functions and buttons. An Apple ecosystem an iPod connected to a Mac with iTunes software. MPSW 5033 Jobs knew that the best way to achieve simplicity was to make sure that hardware. The recipe of BMW’s excellence is in accordance to Honeybee Leadership approaches. Moreover. BMW is an extremely strong brand and is associated with high performance. BMW succeed to maintain his reputation in a strong financial position following a decade of continually rising revenues. and peripheral devices were seamlessly integrated. BMW has issued 6 . According to table below. for example allowed devices to be simpler. could be done on the computer. engineering excellence and creative innovation. software. This type of leadership forms communities adopts collaboration among stakeholders and promotes long-term value. such as making new playlists. The more complex tasks.

gained three-day weekend and retained the job. BMW paid wages for the four days. BMW’s business model embodies flexibility for customers. Table1: BMW's revenues and after-tax profit record The outcome of the research highlighted three important factors that contribute to BMW flexible condition. During the economic crisis in 2008. employees and the company. the government benefited by not forced to pay a full week’s unemployment benefits to terminated workers. The company also practiced different unique step to avoid losing too many of its highly skilled workers by collaborated with German government to shift them to a four-day work week. the company made a principle of making cars that customers have already ordered. MPSW 5033 its highest ever shareholder dividend and became the best performing stock on the German stock exchange. and the government agreed to pick up the tab for 80 percent of the fifth day. involved seeking voluntary redundancies. and not filling vacant positions or renewing contracts for temporary workers. Business Model: In terms of business model. This makes the workers able to get additional hours in busy periods and draw on them when workload slows. encouraging early retirement. BMW 7 . and the company reduced its expenditures while holding its skilled workforce. instead of firing employees. All of these factors are driven by the company’s long-term strategy which is creating dynamic efficiency and performance while embedding sustainability in everything it does. the creative initiatives. the BMW measured workforce reduction which is conducted in close partnership with unions. business model. Furthermore. which allows the company to scale production and working times up and down. On the other hands.ENGINEERING AND TECHNOLOGY MANAGEMENT. This gives mutual benefit for all sides whereby he only lost 20 percent of a day’s pay. Besides that. depending on demand. BMW practiced creative solutions by implementing creative initiatives. and the sustainable leadership approach.

staff engagement and quality. and other assistance to keep those suppliers afloat. is expected to come from every worker through quality circles and other continuous improvement programs. Figure3: Sustainable Leadership Pyramid Figure shows how BMW retains its high revenues by the sustainable leadership principles which can be presented in the form of a four-tier pyramid. company or organization has to take into account other competitors. The model is dynamic and various practices influence each other in multiple ways. In the pyramid. the Sustainable Leadership Pyramid suggests three key performance drivers for honeybee organizations which are innovation. 8 . Moreover. All members of BMW’s staffs are fully responsible for the quality of their work and can be penalized for passing poor quality on to next team. At BMW.ENGINEERING AND TECHNOLOGY MANAGEMENT. each of these drivers is both central to the customers’ premium brand strategy. BMW shows an example of a firm operating on honeybee principles over several years and decades. Learning points of the case study CASE STUDY1 From case study of david kearn in Xerox. loans. 3. many lessons can be leant such as:  For continuous improvement and increasing t in market share. the lower three tiers constituting 23 honeybee practices and the top level indicating the resultant organizational performance outcomes. Lastly. MPSW 5033 is very generous since it applied its risk management system to identify suppliers in needs of insolvency and then extended expert advice.

based on the feedback of the audit. Overview/opinion CASE STUDY1 This case study of Xerox emphasizes the strong relationship between leadership and Total Quality Management.  Consider simplicity that comes from conquering. MPSW 5033  Cost of product or service provided is important to be as low as possible so that company which can be achieved through reduction in the manufacturing cost. Therefore.  Awareness of employee and their skills of solving problem can affect the overall company performance. software. so do the process of improving management system of a company. CASE STUDY2  Specifications and abilities of the product are more important than price.  The leader is the most important factor that can affect the team work. complexity. Everything needs the fundamental. and peripheral devices are seamlessly integrated.  Quality is very important factor that can increase the market share of the company and it must be the job of every employee in the company. Xerox company where to lose its business if there was no david kearns.  Take responsibility for the user experience to improve the product. the particular firm should assess which part should be focused in order to make the business eventually better than ever. Then.  The best way to achieve simplicity is to make sure that hardware. rather than merely ignoring.ENGINEERING AND TECHNOLOGY MANAGEMENT. the leaders have to continually make clear to the markets where the company is going and to pursue its strategy without safeguarding under pressures of the financial markets. Each manager should be able to conduct an audit of the extent to which the practices on the Sustainable Leadership Pyramid are routinely practiced in the firm. Kearns has 9 . CASE STUDY3 BMW is a reliable excellent example for the Honeybee Principles which is very important to sustain a business and maintaining revenues of a company. 4.  Satisfaction of customers + satisfaction of employee& motivation= increased market share.

from small tiny things to big larger important factors in order to ensure there will be no lack in information gathered. Furthermore. CASE STUDY2 Steve Jobs example illustrates how a transformational leader as him can be a key factor in successfully turning round the fortunes of a company. we can say that it is important for us to be certain in revising work plan and plan better for better achievement.This solution helped the company to be opened on other competitors. key success of any company or organization is by considering quality and human comfort as their first goals. Jobs offered a vision of the future that was both inspiring and attractive for Apple people. From the case study of BMW’s sustainable leadership practice or as known as Honeybee Principles. especially during the global financial crisis in 2008 onwards.ENGINEERING AND TECHNOLOGY MANAGEMENT. Unlike many leaders who appear to succeed only once. as shown by BMW. and learnt from them. CASE STUDY3 Honeybee Principles concerns on all different types of stakeholders which are the important part in building a good business. in order to cut the cost and satisfy customers. BMW has successfully gained investors’ confidence devoting into the company by promising best promising practices. The dominant logic of Apple was strongly determined by its founder. Every manager should consider all. In my opinion. 10 . MPSW 5033 successfully diagnosed the problem of Xerox Company and gave the solution of benchmarking and Leadership though quality . he constantly repeated his success.