Chapter 3: NEED FOR TOTAL QUALITY MANAGEMENT

IN INDIAN CONTEXT

3.1 INTRODUCTION

India has a long and formidable history of entrepreneurship. From the ancient times up to

the colonial period, it has been a long and everlasting saga of Indian entrepreneurship that

had hosted the Indian tri-colour on foreign shores. After her independence, Indian

industry continued her march forward under the stewardship of her favourite sons, who

had taken the initiative to put the Indian industry on the international map. The year 1991

saw the formal announcement of globalization, as finally the barriers for entry of foreign

multinational corporations were removed forever. Post 1991 saw the Indian industry

going for ISO 9000 Certification in a big way. However, at the turn of the century, TQM

made its advent on Indian shores. The need of the hour is for TQM to take firm roots in

the Indian soil so that it can nourish the Indian industry for years to come. India has

emerged as an important economic powerhouse in the post 1991 period. India’s economic

importance on the world stage can be gauged from the fact that India is now categorized

as a Newly Industrialized Country courtesy being a member of the elite G8+ 5 Group of

countries. According to the ‘International Yearbook of Industrial Statistics-2011’ Report

by the UNIDO, the only international publication of its kind in the world, India is now

one of the top 10 industrial nations in the world (Business Standard, March 30, 2011). In

2009, India had overtaken Canada, Brazil and Mexico and moved -up to the ninth

position, three places up from the 12th position it held in 2008 (The Hindu, March 8,

36
2010). The growing trend of productivity of the Indian manufacturing industries has

positioned Indian industry to be the backbone of the Indian economy in the years to

come.

This research work primarily caters to the need of Indian companies to chart its own

TQM pathway in the course of becoming a global economic super-power. According to

the 2010 UNIDO Report, the United States of America, China and Japan jointly

accounted for 50 percent of the world’s manufacturing output. In fact, Japan is still the

most industrialized country globally in terms of MVA per capita criterion. Incidentally, it

was in Japan, the land of the rising sun, that the philosophy of TQM first took full bloom.

Japan is now reaping the rich harvests from following the pathway of TQM. India has

still a long way to go before it can become a powerful industrialized country like Japan.

To pose a serious challenge to the economic supremacy of the United States, China and

Japan, India may follow a strict pathway of upgrading the quality of its products and

services by adhering to TQM.

TQM is an all-encompassing philosophy that can cast its protective shade over the entire

Indian industry and can equip it to face the oncoming waves of competitiveness that the

globalization process inevitably brings along with it. That is why there is an urgent need

for studying the relevance of TQM in Indian context This chapter is designed to cover

the evolution of quality standards in India, need for TQM in India and future roadmap for

Indian industry. The fifth section of this chapter draws up the conclusion of this chapter.

37
3.2 EVOLUTION OF QUALITY STANDARDS IN INDIA

As mentioned in the opening few lines in the Introduction Chapter, India had been the

cradle of world civilization from the ancient times of the Indus Valley Civilization. The

ruins of Mohenjodaro and the Harappa civilizations still bears testimony to the startling

and amazing fact of the extent of progress and prosperity that had been achieved by the

ancient civilizations that resided in the Indian sub-continent, much earlier than most of

the western countries. Unlike those of most of their western counterparts, India can boast

of her proud lineage that is steeped in a rich vein of culture and progress. The very name

of India evokes a sense of harmony, peace and prosperity, that perhaps no other nation

can lay claim to. In the backdrop of such a cascading flow of history, not only did the

ancient civilizations flourish, but so did their trade and commerce. With the advent of

time, Indian business slowly transformed itself to the requirements of time, but

nevertheless flourished through the ages. Slowly and steadily, keeping pace with the

passage of time, business in India evolved into its modem avatar/form. The colonial

period offered new forms of entrepreneurship to the resolute Indian entrepreneurs who

had the opportunity to form new companies, which threw up a challenge to the then

prevailing British hegemony which held sway not only over the Indian sub-continent but

also over the rest of the world. It gave an opportunity to Indian businessmen to build their

own companies and create their own niche in the corporate world. So, the prototype of

Indian company was bom.

38
After achieving her independence, built upon the historical foundations of business in

ancient and colonial India, Indian business slowly transformed itself into world class

companies of today. Immediately after independence, the mixed economy model pursued

by India gave equal emphasis to public, private and small sectors. This period of the first

half of the twentieth century, before India’s independence, was a transformational period,

in the history of India, as leading business luminaries like Jamsetji Tata and later on,

Ghanshyam Das Birla set about upon embarking on a blazing and bold trail of remarkable

entrepreneurship leaving in its wake a path for the indigenous Indian industry to follow

and build up its base. It is thanks to these visionaries, who had charted out their own

paths, that the Indian corporate form of business not only grew roots deep down in the

Indian soil, but gave the necessary nourishment to the Indian companies to grow up and

become strong and powerful. Family businesses, public sector enterprises, new

entrepreneurs and small scale enterprises - all flourished across the length and breadth of

the country. The establishment of flagship public sector companies laid a strong base for

private industry to prosper, and new business groups became prominent. It also marked

the setting up of certain iconic sectors like railways, automotives, Informational

Technology and pharmaceuticals, which captured the imagination of the world, like never

before.

The year 1991 saw the formal announcement of globalization in India, even as Indian

companies seized upon the initiative to make their presence felt to the rest of the world.

In truth, it can be said that though 1991 was marked as the formal announcement of

globalisation in India, much before that, Indian companies had started to make their

39
presence felt to the rest of the world. For example, Aditya Birla, a grandson of

Ghanshyam Das Birla, had established business ventures in South-East Asia way back in

1969. Elis factories in Malaysia and Thailand, set amidst lush green gardens, were a

marvelous treat to watch. Aditya Birla’s Thai Acrylic Fibre Company had received the

Thailand government’s award for environmental excellence. Within a short period of

time, his business empire expanded across Malaysia, Thailand, Indonesia and Philippines

in such a manner, that the Forbes magazine had no qualms in hailing him as ‘India’s only

international businessman.’ Similarly, Jehangir Ratanji Dadabhoy Tata, the son of R. D.

Tata, had very astutely, built upon Jamsetji Tata’s legacy, the Tata and Sons, the largest

industrial group in India. Besides, he created the reputed Tata Airlines in 1932, founded

the Tata Motors in 1945, created the Tata Consultancy Services in 1968, established

Asia’s first cancer hospital, the Tata Memorial Center for Cancer, Research and

Treatment in 1941, the Tata Institute for Social Sciences in 1936, the Tata Institute for

Fundamental Research in 1945 and the National center for Performing Arts. In this way,

J. R. D. Tata catered to the nation’s needs, right from tea to trucks and from cosmetics to

common salt. With legendary figures like Aditya Birla and J. R. D. Tata placing the

Indian corporate on the map of world economy, the globalization process had started in

India well before it’s formal announcement in 1991. However, the year 1991 can be

marked as a watershed in the history of Indian companies, as the liberalization process

initiated in that year started opening up the Indian market to foreign companies and the

fierce competition faced by the Indian companies from their foreign counterparts made

the Indian companies have a re-look at their own quality policies.

40
Economic reforms in 1991 led to a new and interesting phase in the growth of Indian

companies. Suddenly, the economic environment started to change dramatically, as most

of the Indian companies were faced with the urgent task of upgrading the quality of their

products and services, without which they would not be able to meet the competition

thrown at them by their foreign counterparts. The quality policies pursued by the Indian

companies started to being revamped after a careful study of the requirements. It took

almost another decade before the principles of Total Quality Management were finally

put into practice by Indian companies. It was not that the Indian companies were found

lacking in their quality endeavors. But, to meet the stringent quality norms and standards

set by foreign companies required an urgent re-visit by the Indian companies at their own

quality policies and restructuring of their quality infrastructure in such a way so that they

could compete with the very best in business. Needless, to say that this period of

globalization provided ample opportunities to Indian companies to grow , expand and

diversify not only in their own domestic market but also to make successful forays into

the foreign market. The Indian companies were not found wanting in this aspect. They

very successfully restructured themselves on the quality front, pushed forward with a

renewed energy on the journey towards achieving higher quality in their products and

services and ultimately, emerged as an economic powerhouse globally.

The post-1991 period saw a flurry of activities on the quality front by the Indian

companies that heralded in the arrival of the principles of Total Quality Management on

the Indian shores. The ISO 9000 series of standards provide important guidelines for

quality management. The ISO 9000 Series of Standards are internationally recognised

41
quality standards which are analogous to a warrant of fitness and a re applied to an

organisation’s procedures and systems. In a way, ISO 9000 series of standards is the

harbinger of the more important principles of Total Quality Management. First and

foremost, there was the rush for ISO 9000 Certification by the Indian companies in a big

way. Though, it is a common mistake to confuse the broad philosophy of Total Quality

Management with documented quality systems, but it is a safe bet to say that good quality

standards usher in quality much faster than the other way round. The active pursuit of

ISO 9000 Certification by the Indian companies bode well for the future. Secondly, the

compliance with the requirement of ISO 9000 series of standards mandated for a

compulsory re-construction of the quality systems by the Indian companies in such a

way that the implementation of stringent quality systems paved the way for the smooth

passage of the principles of Total Quality Management to flow into the factory floors in

India, In a path breaking findings from the largest and most wide-ranging survey at that

time, covering over 1,200 ISO 9000 certified organizations of all sizes in India, U.H.

Acharya and Sanjit Ray (1997) had pointed out that ‘Indian industries have gone for ISO

9000 certification in a big way since the beginning of1990’.

The important findings by Acharya et. al. (1997) had revealed that since the beginning of

1990, several hundreds of organizations had secured ISO 9000 certification and at the

time if the survey, several hundreds more were aiming to obtain ISO 9000 certification.

This was of immense significance on the quality front of Indian companies. The findings

of this survey clearly showed that the formal opening of the globalisation process in India

in 1991 had a direct and significant effect on Indian companies obtaining Quality

42
Standards like ISO 9000 certification. The survey was conducted on those companies

who were certified by ISO certifying agencies like BVQI, RWTUV, IRQS, BIS, LRQA

and DNV. That the rush for ISO certification by the Indian companies had a positive

effect on bringing in the principles of Total Quality Management on their work-floors,

were borne out by the responses to their intended reason for ISO 9000 certification. The

responses of the management of the Indian companies as to the reason for ISO 9000

certification are given in Table 1.

Table 1 shows that the largest response to the reason for adoption of ISO 9000

certification by the Indian companies was for continuous improvement (68%). This was a

land mark finding, as continuous improvement is one of the main pillars of Total Quality

Management. The Indian companies, in the post globalization period, were prepared to

undertake the rigorous process of ISO 9000 certification from the reputed auditing

agencies operating in India at that time because they were motivated to make continuous

improvement. It was not that in the period before 1991 the Indian companies were not

making efforts for continuous improvement. But, post 1991, there was a concerted

endeavor in a systematic manner to upgrade their quality standards for continuous

improvement. Very significantly, the other reasons for ISO 9000 certification were

installation of quality systems (44%), global deployment (54%), focus on quality (24%),

competitive edge (22%), prevent of non-conformance (18%) and Customer demand

(12%). All these are related to improvement of quality. Out of these, prevention of non­

conformance, customer demand and focus on quality relates directly to Total Quality

Management, which is facilitated by the installation of formal quality standards, which

43
will help the Indian companies to achieve competitive edge and make their presence felt

globally. So, the significant expected contributions that from ISO 9000 certification that

were expected to be realised by the Indian companies, were actually, all related to the

Total Quality Management.

Table 1: Reason for ISO 9000 Certification

Reason for ISO 9000 Certification Percentage Responded

(%)
Continuous Improvement 68
Global Deployment 54
Installation of a Formal System 44
Focusing on Quality 24
Competitive Edge 22
Prevent Non-Conformance 18
Customer Demanded 12
Source: Acharya & Ray, 1997

3.3 NEED FOR TOTAL QUALITY MANAGEMENT

But, there was a need to go beyond just mere ISO 9000 certification. Even though ISO

9000 certification had rung in major changes on the quality front of the India companies,

especially through the deployment of well documented quality systems, still there arose

the need for going beyond ISO 9000 certification The Indian companies themselves

realized that to keep on the momentum going, there was ample scope beyond the

mandatory inspections required for ISO 9000 certification. Ironically, during the same

survey, it was found that after implementation of the ISO 900 certification guidelines, the

focus was mainly on Continuous Improvement.

44
 Table 2: Focus after Implementation of ISO 9000

Focus after Implementation of ISO 9000 Percentage Responded

(%)
Continuous Improvement 45
Delivery Performance 29
Retaining the Certificate 10
Other 8
Source: ibid

So, during the post implementation stage of ISO 9000 certification, the Indian companies

more on continuous improvement in their activities in order to deliver their performance

rather than stick to just limiting their progress to retaining the ISO 9000 certification.

Continuous improvement is one of the basis pillars of Total Quality Management.

Evidently, the obtaining of ISO 9000 standards and their continuous audit did not

necessarily guarantee continuous improvement in the performance of the Indian

companies. The Indian companies needed to pursue the path of continuous improvement

in order to deliver their required performance, which could not be guaranteed by mere

ISO 9000 certification.

Also, the same had survey revealed that the three most important lessons learnt by the

Indian companies during the course of obtaining their ISO 9000 certification were:-

45
 Table 3: Lessons Learnt by Indian Companies During the Course of
Obtaining ISO 9000

Lessons Learnt by Indian Companies During the Course Percentage Responded

of Obtaining ISO 9000 (%)
Teamwork 79
People Make the System Work 63
Co-operation and Information Sharing are Needed 43
Source: ibid

Obtaining ISO 9000 certification made the Indian companies realize that teamwork was

essential for their business to flourish. An overwhelming 79% of the respondent

companies thought so. Teamwork is one of the basic pillars of Total Quality

Management. Evidently, the process of obtaining ISO 9000 certification made the Indian

companies realize the value of teamwork, which is one of the hallmarks of successful

Total Quality Management practices. That the value of people is much more than mere

quality system documentation and it is the very employees who have the power to make a

quality system work was reflected when 63% of the respondent companies gave answer

in the affirmative. Also, 43% of the respondent companies thought cooperation among

the different employees working in the various departments of the same company who

shared information about their respective progress could provide for a platform for the

company to move ahead. So, most of the Indian companies placed teamwork ahead of

mere ISO 9000 certification.

Also, the same survey had revealed that if an Indian company were to go for ISO 9000

certification at that very moment, then the things that they would do differently were:-

46
 Table 4: Things Indian Companies Would Do Differently if Going for
ISO 9000 at That Very Moment

Things Indian Companies Would Do Differently if Going Percentage Responded

for ISO 9000 at That Very Moment (%)
More Emphasis on Training 47
Better Process Management 41
Top-Down Commitment 26
Proper Documentation of Procedures 24
Source: ibid

The above percentage figures implied that after having obtained ISO 9000 certification

and tasted the benefits accruing there from, the Indian companies had a re-think and gave

more emphasis on training (47%), better process management (41%) and top-down

commitment (26%) rather than on proper documentation of procedures (24%). This

showed that the Indian companies valued training, process management and top down

commitment than just paper work to actually make the ISO 9000 certification work. This

brings to light a very crucial point that ISO 9000 series of standards merely provide

guidelines for quality management. How the guidelines are implemented and practices is

the prerogative of the company. Often, the documented quality systems, based upon the

ISO 9000 series of standards, are a mere cosmetic treatment of existing procedures and

practices rather than designated to meet ISO 9000 guidelines. So, there arose an urgent

need for Indian companies to shift from ISO 9000 Quality Management System Based

Approach to a Total Quality Management Process Based Approach.

41
With the advent of this century, as the euphoria surrounding the ISO 9000 Certification

began to subside among Indian companies, the need for adopting and implementing TQM

practices began to be felt by them. Indian companies to imbibe the best TQM practices

from all around the globe and this gave dawn to a new era of quality, competitiveness and

success of Indian companies as they began to make their mark in the field of quality. The

strive forward for achieving business excellence through TQM began to bear fruit when

between 2000-2003, nine Indian companies won the coveted Deming Prize, which is a

by-word in excellence and quality. Only two companies outside Japan, chosen from all

the companies around the world, were conferred the highest Deming Award, that is the

Japan Quality Metal. One Indian company was amongst the two companies from outside

Japan who were conferred the prestigious Deming Award. This was a major

breakthrough, as it signified for the first time, the advances being made by Indian

companies in the field of TQM. Another noteworthy achievement during the same period

was that among the 17 companies that that successfully challenged the Deming

Application Prize, 6 were Indian companies. Only two companies were awarded the

Deming Quality Control Award for Operations Business Unit, and both of them were

Indian companies. These milestones achieved by the Indian companies served as a

benchmark for Indian companies in their pursuit for excellence through adopting TQM

practices.

3.4 FUTURE ROADMAP FOR INDIA

As mentioned in the second sub-section of this chapter, the roots of Indian

entrepreneurship had its roots deep in ancient times. Today, it is a thriving sector that

48
propels the Indian economy forward. The Indian economy in the early years of the

current century experienced a transition phase when the growth rate of her aggregate

GDP, till the global crisis caused an interruption, moved to levels unprecedented in

history (Mazumdar, 2010). This was largely achieved on the back of some robust

performance by the Indian industry. India is today among the top ten industrialized nation

and the second largest economy in the world. The brand India is revered as a quality

brand worldwide, as Indian companies are making their mark globally. Economic growth

has led to an explosion in the linkages of Indian companies with rural India, with the

small entrepreneurs and with the world at large. In 2001, the CII had introduces TQM in

small and medium enterprises. The future roadmap for India depicts an interesting

scenario between the government and Indian companies. The Ministry of Corporate

Affairs with its affiliated bodies will play a key role as a facilitator, enabler and regulator

in the whole process. This reflects the dynamism of the Indian companies today and

presents the multi-dimensional facets of Indian entrepreneurship available currently.

In his deliverance on ‘Vision 2020: Leading the Change India Needs: New Imperatives

for Quality’, that was held at Bengaluru on the 1st of June, 2011, Dr. A.P.J.Abdul Kalam

had underlined the importance of creativity and quality as the driving force for economic

growth that should be based on integrity and ethics. He had acknowledged the role of the

Confederation of Indian Industries (CII) in introducing Total Quality Management in the

Indian industry. According to the former President of India, quality should not be seen in

isolation for product or service excellence. He had remarked, “profit with integrity leads

to sustained growth.....the nation needs branding for its products and services’'’ (CII

Institute of Quality, 2011). This speech was an important watershed in the quality

49
 roadmap of Indian industry as it marked the 10th Anniversary Day celebrations of the

premier quality institute of India, that of the CD Institute of Quality. According to him,

while it was imperative for Indian products and services to meet all the performance and

quality parameters as laid down by the manufacturer, it was from his wealth of

experience that 60% of the total efforts needed to be devoted to the design of the product

or service, 20% of the total efforts needed to devoted to the development of the product

or service and the remaining 20% of the total efforts needed to be devoted to the testing

of the product and service by a team of dedicated personnel, in order to create a quality

brand encompassing all walks of life. In other words, the visionary of modem day nuclear

powered India, was highlighting the importance of design, development and testing

activities, as the cornerstone for the future roadmap of India.

The future of Indian companies lies firmly in participating in inclusive growth through

sustainable quality processes. The common man of India should avail of the benefits from

enhancement of quality by Indian companies. For example, the Indian farmers must have

access to quality seeds, fertilizers and pesticides that wijl -help him reap rich harvests. In

this way, the Indian agriculture sector can derive succor and sustenance from the

advancement made on the ^quality front by Indian companies.

-Ultimately, the main objective of quality improvement prorammmes is in obtaining a

level of competitiveness that will enable Indian companies to hold their own against the

the best in the world. In this quest for attaining competitiveness, the mantra is education.

Dr. A. P. J. Abdul Kalam had referred to Finland, a small but highly competitive country

50
that has stressed on education, life-long learning and women empowered with education

to attain a high level of competiveness. He had rounded up the discussion by saying, the

“real quality in education is fundamental to the quality of the human resource of the

nation as a whole which is responsible for delivering products and service to the

community” (CD Institute of Quality, 2011),

Quite appropriately, the CD has taken up for the time period of 2011-2012 the important

agenda of ‘Business for Livelihood’. This converges the fundamental themes of

spreading growth to disadvantaged sections of society, building skills for meeting

emerging economic compulsions, and fostering a climate of good governance. In line

with this, CII is placing increased focus on Affirmative Action, Skills Development and

Governance during this time period.

3.5 CONCLUSIONS

“Quality should go beyond the uni-dimensional to multi-dimensional approach, covering

the entire gamut of social and business structure for driving efficiency and excellence”

(CII Institute of Quality, 2011). The above comments by Mr. Tarun Das, President,

Aspen Institute, and former Chief Mentor, CII, in his address at Bengaluru on the 1st of

June, 2011, in the august presence of Dr. A. P. J. Abdul Kalam and other luminaries from

the Indian industry, aptly sums up the gist of this chapter. Indian companies have moved

forward from being just satisfied with the attainment of quality system standards, like the

ISO 9000 Series of Standards. In truth, the ISO 9000 Series of Standards does have its

utility. But, in the light of globalisation, just the mere attainment of ISO 9000 Series of

51
Standards is not enough to make the Indian companies competitive globally. There is an

urgent need for Indian companies to embark on a journey of quality that will take it

forward towards inclusive growth. Quality on the industry front will set off a cascading

effect on the rest of the economy. In this way, Indian companies will be able to lead the -

Indian economy forward in the twenty-first century.

The future of Indian economy seems bright. In the first decade of this century, India,

along with its other BRIC counterparts, Brazil, Russia and China, has made a lasting

impression on the economic landscape of the world. In the last ten years, they have

together combined over a third global GDP growth and this trend seems to continue in

the future. Before 1991, India was restricted by extensive regulation and protectionism.

After 1991, the liberalized Indian economy made rapid economic strides which raised

about roughly 95 million people above the World Bank’s measure of absolute poverty

within a span of ten years, a feat unparallel in world history, except for China. In addition

to the huge boost to economics, liberalization brought in competition that forced quality

upwards, allowing India to begin some serious trade with the rest of the world. An open

market brought other more subtle changes such as broadening the Indian perspective on

quality as it is perceived round the world. Business practices began to change prerequisite

for tendering were made on evidence of compliance to quality standards. The future of

India will evolve around its abundant natural and human resources. Spread of education

amongst the population and propelled by inclusive growth strategy followed by Indian

companies, will bring about a progressive change for India.

52
 REFERENCES

Acharya, U. H. & Ray, S. (1997), ISO-9000 Survey findings, SQC & OR Division news
letter, 2(3), Bangalore, Indian Statistical Institute.

Business Standard (2011), India among top 10 industrial nations, International Yearbook
of Industrial Statistics-2011, March 30, New Delhi.

CII Institute of Quality (2011), Quality to Build Brand India, Communique, 20 (6), pp.
41-44.

The Hindu (2010), India among global top 10 in industrial production, March 8, New
Delhi.

Mazumdar, S. (2010), Current Account Balances, Investment and Growth in Developing

Countries: The Old Case of India, Institute for Studies in Industrial Development
Newsletter, 3(1), p.l.

53