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TQM, strategic management and business process re-engineering: The future

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Article  in  International Journal of Technology Management · January 1998

DOI: 10.1504/IJTM.1998.002665

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Int. J. Technology Management, Vol. 16, Nos. 4/5/6, 1998 383

TQM, strategic management and business process

re-engineering: the future challenge

Abbass F. Alkhafaji
Department of Management, Slippery Rock University, Slippery Rock,
PA16057, USA

Mohamed A. Youssef
Department of Management and Decision Sciences, School of Business
and Entrepreneurship, Norfolk State University, Norfolk, VA 23504,
USA.

Ron Sardessia
University of Houston, Victoria, 2506 E Red River, Victoria, TX 77901,
USA

Abstract: American industry was forced to realize that in order to

succeed in today’s global market, they must produce high quality
products. This paper addresses the importance of integrating TQM,
Strategic Management and Business Process Re -engineering. It also
shows how US commitment to quality is paying off. Finally, the paper
dis cusses the impact of quality on US industry both today and in the
future.

Keywords: TQM; BPR; strategic management.

Reference to this paper should be made as follows: Alkhafaji, A.F.,

Youssef, M.A. and Sardessia, R. (1998) ‘TQM, strategic management
and business process re -engineering: the future challenge’, Int. J.
Technology Management, Vol. 16, Nos. 4/5/6, pp.383–392.

1 Introduction

In the 1990s, TQM has become an international language and one of the most talked-
about issues in both private and public sectors. It is a concept that intends to
revolutionize US industries by focusing upon customer needs. It is the change of
corporate culture from top down toward continuous quality improvement through modern
techniques, new organizational vision that is linked to customer satisfaction, and open
communication among cross functional teams of managers and workers.
After World War II, Japanese companies embraced the TQM concept which was
presented to them by American advisers such as W. Edwards Deming and J.M. Juran. The

Copyright © 1998 Inderscience Enterprises Ltd.

384 A.F. Alkhafaji, M.A. Youssef, and R. Sardessia

result was a remarkable success. Japanese products had acquired the high quality
reputation and a large global market share. American business responded slowly at first.
However, after realizing the need for better products and services to remain competitive,
many of them fought back with Total Quality programs at a quickening pace.

2 The TQM concept

There have been many definitions for the TQM concept. TQM is usually regarded as a
cooperative form of doing business [1], an approach for improving effectiveness and the
flexibility of business as a whole [2], a positive attempt ... [3], or a total philosophy [5].
Youssef defines TQM as
“A total philosophy whose objective is to meet or exceed the needs of
the internal and external customers by creating an organizational culture
in which everyone at every stage of creating the product and every
level of management is committed to quality and clearly understands its
strategic importance” [5].

Youssef’s definition is pictorially depicted below:

Figure 1 Horizontal and vertical TQM

 TQM, strategic management and business process re-engineering 385

Source: Youssef et al. (1996)

In this paper we extend these definitions of TQM. We consider it as a management

philosophy that extends beyond meeting or exceeding customer needs. Furthermore, its
emphasis on extensive commitment across the organization gives it an attraction based as
much on its instrumentality as on the appealing notion of organizational democracy.
Total Quality Management (TQM) is defined here as the systematic improvement of
quality and cultural transformation in management techniques through the involvement of
everyone in the organization and in all aspects of the business operation. It is also
defined as: the integration of all functions and processes within an organization in order to
achieve continuous improvement of the quality of goods and services provided to meet
customer needs.
This paper is organized as follows. Section 1 is an introduction to the concept of
TQM. In Section 2 we present a number of definitions for TQM and project our definition
pictorially. We also address the benefits of TQM and the importance of leadership in
implementing TQM. In addition, important issues such as: quality cultures, management
systems, and organization visions are discussed. In Section 3 we discuss the relationship
between TQM and strategic management. In Section 4 we examine TQM from a re-
engineering perspective. Section 5 concludes our paper.
TQM is a long term concept, not a quick fix. Evidence of the importance of TQM can
be seen in the enthusiastic response to the Baldrige Award which was initiated in 1987 to
recognize high quality businesses. The award recognizes American companies who have
achieved outstanding levels of quality management. The award attempts to promote
quality awareness, acknowledge quality achievements of US companies, and publicize
successful quality strategies.
Higher education is no exception. Because of the highly competitive environment,
there is an opportunity to apply TQM techniques to higher education in every level. The
Department of Education has called for the education system to become the leader in the
world.
After more than a decade of quality management programs there is wide agreement on
its essential ingredients. Among these ingredients are organizational vision, the
establishment of a new performance measurement system, continuous improvement,
empowering employees, open communication, and more importantly, quality must be
embodied into the company’s culture.
Most organizations begin their quality initiatives within single departments then
expand their efforts throughout their organization. The degree of TQM implementation
can vary from one organization to another, depending on the maturity of the effort and the
degree of receptiveness and commitment by individual business units or departments. In
many companies however, each department determines how to implement TQM and the
degree of commitment in other companies.
The philosophy of TQM is fully integrated into the company’s culture and it is no
longer dependent on the sponsorship of one ‘champion’ to keep the initiatives alive.
Feedback is crucial to the Total Quality Management process. Managers need to track
quality levels and quality improvement based upon objective measures derived from
analysis of business operations. This process requires a control system that:
1) the executives set certain standard, related to customer satisfaction, and make it
386 A.F. Alkhafaji, M.A. Youssef, and R. Sardessia

known to the employees.

2) provides information about various operations to each employee for self control, and
3) measures performance against a pre-established standard. Total Quality Management
control should also be ‘feedforward’ and predictive in addition to the feedback
process.
The term customer is used here to refer to internal as well as external customers. Customer
Focus and Satisfaction is also one of the seven main criteria for a TQM program being
evaluated for the prestigious Baldrige Award. To be more specific, it is the relationships
with customers, the knowledge of customer requirements and the key quality factors that
determine marketplace competitiveness. This includes methods to determine customer
satisfaction, current trends and levels of satisfaction and competition. Quality Function
Deployment (QFD) is a vehicle that the Japanese companies have been utilizing for this
purpose.

2.1 Benefits of TQM

There is no doubt that quality and profitability are strongly related whether the profit
measure is ROS, or ROI.
The ultimate benefits of TQM are greater customer loyalty, market share
improvements, higher stock prices, reduced service calls, higher prices and greater
productivity. Youssef [5] discusses some of the TQM benefits. His list includes: better
quality, faster learning, promoting continuous improvement, increasing flexibility, and
more importantly increasing firms responsiveness to customer needs.
Organizations that have successfully incorporated TQM philosophy share a number
of positive effects in their efforts. The extensive review of literature identified the
following benefits:
• Worker empowerment. This in turn provides higher motivation, reduced employee
turnover, increased productivity and increased profits.
• Employees gain a personal understanding of TQM which in turn leads to more
effective worker involvement.
• TQM offers employees higher participation in decision making and thus makes the
achievement of company’s objectives more feasible.
• TQM allows employees to get more involved in the process of improvement by
offering their own suggestions. This leads to increased productivity and increased
internal consumer satisfaction
• TQM allows for in-time consideration of potential problems.
• TQM reduces management bureaucracy. Teams are self-managing and able to make
decisions that will affect their performance.
• TQM promotes reduction in production cycle. Empowered workers feel responsible
for the quality of their processes, they strive for defect reduction and delay
reduction.
The success in total quality efforts and the growing attention they have received do not
 TQM, strategic management and business process re-engineering 387

mean that the quality movement is without failures. Some firms achieved only modest
improvements which were often unrelated to the firm’s strategy.

One of the most crucial components of a successful TQM effort is the commitment of
top leadership. Without the support of top executives to lead by example, allocate
resources, and function as a corporate cheerleader, TQM initiatives will not succeed.
Training and education are critical in the TQM process. Training should include the basics
of TQM, its philosophy, coping with change and the need for change. Training should
start by focusing on executive management, then middle management and finally on other
employees and teams. As groups become more sophisticated, they are taught advanced
tools which are mostly statistical.
Teamwork and communication are also critical in the TQM process. Delegation of the
decision-making authority to employees who are closest to customer and the process.
Participation encourages ownership, commitment and future participation. Teamwork is
one of the most useful TQM tools because it creates structure and synergy to continually
improve. With proper training in group dynamics, people participate even more efficiently in
teams and begin to use tools such as brainstorming to generate alternative solutions to
problems. By bringing together people with individual perspectives and technical skills,
organizations are able to thoroughly evaluate the many options available to assess the
consequences and arrive at more effective decisions.
For teams to function optimally, good communication, information sharing and
feedback, both within the group and throughout the organization are essential. Employees
should know the good and bad news. Organizations such as Xerox provide special
communication training for employees and managers. This imply that:
1. Success must be attributed to the team.
2. An emphasis upon team work and team regards, such as productivity gain sharing
with the team, but also upon individual regards for facilitating the team effort [6].
TQM involves a change of organization culture, which drives out fear, breaks down
barriers and improves the workers pride in workmanship. When this transition has
occurred in an organization, the focus will change from an emphasis upon individual
performance to an emphasis upon organization performance.

2.2 The importance of leadership in implementing TQM

Quality depends upon a vision of excellence. A vision becomes reality through excellent
and compelling leadership. Leadership of top management is a prerequisite to all strategy
and action plans - It cannot be delegated. A US general accounting office study
concluded that “ultimately, strong visionary leaders are the most important element of a
quality management approach.”
Dr. Curt Reimann, Director of the Malcolm Baldrige Award summarizes the
characteristics of excellent leadership in seven factors. These are: visible, committed and
knowledgeable, a missionary zeal, aggressive targets, strong drivers, communication of
values, organization, and customer contact.
US managers focus on technology and hard assets rather than soft assets such as
human resources and organization competence. They must balance the need for structural
dimension (i.e. hierarchy, budgets, plans, controls, procedures) with the behaviour or
388 A.F. Alkhafaji, M.A. Youssef, and R. Sardessia

personnel dimension.

2.3 Embedding a culture of quality

The basic vehicle for embedding an organization culture is a teaching process in which
desired behaviours and activity are learned through experiences, symbols, and explicit
behaviour. Categories of behaviours include:
1) Signalling: making statements or taking actions that support the vision of quality,
such as mission statements, creeds or charters directed toward customer satisfaction.
2) Focus: every employee must know the mission, his or her part in it, and what has to be
done to achieve it.
3) Employee policies: these may be the clearest expression of culture, at least from the
viewpoint of the employee. A culture of quality can be easily demonstrated in such
policies as the reward and promotion system.

2.4 Management systems

Quality management systems are vehicles for change and should be designed to integrate
all areas, not only in the quality assurance department. They must be expanded through
the company to include white collar activities ranging from market research to shipping
and customer service. They are directed toward achievement and commitment to purpose
through four universal processes:
1) the specialization of task responsibilities through structure;
2) the provision of information systems that enable employees to know what they need
to do in order to achieve goals;
3) the necessary achievement of results through action plans and projects; and
4) control through the establishment of benchmarks, standards, and feedback.
The job of top management is to ensure that these goals are defined, disseminated, and
implemented.

2.5 Organization vision and strategic planning

A company needs to know where are they now, where do they want to be (in the future),
and how do they get there? These must be communicated to all members of the
organization. Development of strategic plans differs by organization: usually, the process
starts with senior staff and descending into all levels of the organization to gain maximum
input and acceptance. The changing of Category three of the 1992 Malcolm Baldrige
Award criteria - to integrate quality planning into strategic business planning, by shifting
the category’s focus from strategic quality plan to the strategic business plan -
emphasizes the increasing realization of the inter-relationship between TQM and strategic
planning.
In order for the TQM efforts to be effective the organization must be ready to accept
and integrate this change.
 TQM, strategic management and business process re-engineering 389

Vision => where the organization wants to be.

Mission=> what the organization does.

3 TQM and strategic management

TQM and strategic management are a management-led process. The senior leaders in a
company must create clear and visible quality values and high expectations.
Reinforcement of the values and expectations requires substantial personal commitment
and involvement. Leaders in TQM as in strategic management are guided by clear, visible
statements of values, usually in the form of mission statements [7].
Policies provide the necessary direction for the TQM process which supports the
goals and objectives of an organization. These guidelines ensure every employee
understands and is responsible and accountable for TQM in the daily business activities.
For example, McDonalds has incorporated environmental policies into its TQM process to
emphasize a part of its corporate mission. The policy as stated by Bennett, Freierman, and
George [8] says that “McDonalds believes it has a special responsibility to protect our
environment and future generations…We will lead in word and in deed.” The policy
further states according to Bennett et al [8] that the company is guided by four principles:
“effectively managing solid waste, conserving and protecting natural resources,
encouraging environmental values and practices, and ensuring accountability
procedures.”
TQM and the strategic management process are not two separate structures. Quality
is made a part of the business through integration in the strategic planning process
according to George and Weimerskirch [7]. One of the goals for TQM is continuous
improvement toward the ideal of zero defects. this concept plays a major role in the
strategic plans that guide a company. Further, strategic management defines policies and
ensures the acceptance and implementation of TQM throughout the company.
The goals of TQM and strategic management compliment each other. The ultimate
goal of both processes is customer satisfaction. Most quality leaders and strategists
define customers as the people who actually purchase their products and services, as well
as shareholders, employees, suppliers, and surrounding communities.
In addition, employee involvement is the key to the success of both processes. One of
TQM’s cornerstones is that full participation by all employees is necessary for
continuous improvements. Also, a major aim of the strategic management process is to
achieve understanding and commitment from all managers and employees. Both
processes provide for the empowerment of individuals through training and team-work
tools [7].
The TQM approach like strategic management involves extending the improvement
process into the future. Achieving the highest levels of quality and competitiveness
require a well-defined and well-executed approach to continuous improvement, a process
which must contain regular cycles of planning, execution, and evaluation [7]. These
cycles are vital to the strategic management process.
In conclusion, the benefits of TQM mirror the overall goals of strategic management.
They consist of:
1) improved customer satisfaction;
390 A.F. Alkhafaji, M.A. Youssef, and R. Sardessia

2) improved organizational effectiveness, and

3) improved competitiveness.

4 TQM and reengineering

In today’s competitive environment, corporations are being required to find new and
improved methods of doing business. this in itself is not difficult but add in the necessity
of reducing cost while being innovative and the task becomes extremely difficult.
Reengineering is the term used to describe the concept and method of radically re-
designing business processes to significantly change organizations’ ways of doing
business.
Reengineering plays a critical role in the strategic management process to help
organizations significantly change to develop and create superior business processes to
produce unique goods and services customers value highly [9]. Before reengineering the
organization structure, a company must understand the markets and the customer that it
wants to reach and complete an analysis of what it will take to be successful [10]. The first
step in the strategic management process is to devise a vision of what the company will
become and a strategy of how it will get there. Success of reengineering depends not only
on management’s ability to lead the corporation in change, but management’s ability to
diagnose what that change should be [11]. There are three questions that Champy (as
cited in Brandt, [12]) gives that management must answer before reengineering: What is
the purpose and the focus of the business? What is the culture of the business? What are
the processes we must effect?
Once the vision and strategy are finalized, then companies can begin planning the
reengineering. This type of change does not come about from moving a few people
around or from changing a couple of boxes on the organizational chart. This type of
success comes from completely redesigning the organization from scratch. That means
beginning with the corporate vision and strategy. From this point, start with a blank piece
of paper and design the organization that will best accomplish those strategies. Many
companies say they are reengineering when in fact they are squandering corporate
resources on projects that have too narrow a scope to have any impact on the bottom line
[13]. In order to affect the results of the business unit or corporation, you must restructure
the things that are fundamental to the functioning of the unit. Anything less will have
little impact on the bottom line.
During this process, it is critical that management not only creates the right vision and
the right structure but is involved in communicating why change is necessary. Top
management must be on the front lines expanding to people why the reengineering is
necessary and what the company hopes to accomplish. Siemens Nixdorf Service
communicated this very clearly during this phase of reengineering. They explained what
they had determined during the earlier diagnostic phase, how much they would have to
reduce head count and why head count had to be reduced. They have done this with the
“focus on building the morale of the work force by defining a clear vision of the more
professional, more efficient, and more successful company” that they hope to become
[13]. Management must realize that this type for change is very upsetting to the
employees. Failing to provide information only increases anxiety and makes the changes
harder to implement [14]. Reengineering can only be successful when the entire company
 TQM, strategic management and business process re-engineering 391

believes in the vision and mission for the company and strives, without fail, to make is
succeed.
Strategic management is a process by which an organization keeps itself aligned with
changing conditions. Reengineering is linked to strategic management because
reengineering is doomed to failure if corporate strategy is not part of the process.
According to Furey and Diorio [9], the initiatives to redesign businesses fail due to critical
strategic issues not being addressed. Corporate mission statements define an
organization’s purpose and reason for existence and corporate vision statements define
where an organization wants to be in the future. Successful reengineering must be aligned
with mission and vision, which are part of strategic management, to help an organization
change those business processes that are fundamental to the success of the organization.

5 Concluding remarks

Quality is extremely important. Its importance is growing and it will be around for a long
time. Companies that adopt quality as a norm (not the exception) and take careful
consideration to its implementation will have an increased probability of success. With
this higher success rate companies will be able to forge ahead of their competition. The
TQM strategy must be included in the strategic planning process form its onset. It needs
to be included from the business’ mission to its supporting objectives and policies.
The Total Quality Management approach has companies moving toward proactive
improvement to match customer needs and provide superior customer value for
competing in today’s competitive environment. In the last decade momentum has been
building up. Federal initiatives such as the US Department of Commerce Malcolm Baldrige
National Quality Award and local initiatives were launched. Managers began to respond
and quality improvements proliferated. TQM is widely accepted because:
1. The reaction to increasing domestic and global competition;
2. The pervasive need to integrate the several organizational functions; and
3. The acceptance of TQM in a variety of service industries.
The TQM concept applies to all organizations whether manufacturing, service, or
information industries. Telecommunications, public utilities, and health care all have
applied TQM. Even government agencies and departments have joined the movement.
According to 1992 report (UAO), 68% of the Federal organizations and institutions
surveyed had some kind of TQM effort under way, and quality improvement programs
were expected in about 700 Federal programs in 1993 and even more in 1994. The Defence
Contractors will be particularly affected as the government moves toward requiring
suppliers to adopt the TQM concept.

References
1 Jablonski, J.R. (1992) Implementing TQM: Competing in the Nineties Through Total Quality
Management, Albuguergue, NM, Technical Management Consortium.
2 Oakland, J.S. (1982)Total Quality Management, London, Heinemann.
3 Zairi, M., Ietza, S.R. and Oakla nd, J.S. (1994) TQM: Its Impact on Bottom Line Results,
392 A.F. Alkhafaji, M.A. Youssef, and R. Sardessia

Letchworth, Technical Communication.

4 Youssef, M. (1995)’The impact of computer-based technologies on quality’,
International Journal of Operations and Production Management, Vol. 12, No. (4), pp.6–23.

5 Youssef, M., Boyd, J.L. and Williams, E. ‘The impact of total quality management on
firms’ responsiveness: an empirical analysis’, Total Quality Management Journal, Vol. 7,
No. 1, pp.127–144.
6 Walton, Mary. (1993) ‘A debt to Deming’, New York Times 12 January: C7.
7 George, S., and Wemerskirch, A. (1994). Total Quality Management: Strategies and
Techniques Proven at Today’s Most Successful Companies, pp.1-65. New York: John Wiley
& Sons, Inc.
8 Bennett, S., Freierman, R. and George, S. (1993) Corporate Realities and Environmental
Truths: Strategies for Leading Your Business in the Environmental Era, New York: John
Wiley & Sons, Inc. pp.35–38.
9 Furey, T.R. and Diorio, S.G. (1994). ‘Making reengineering strategic’. Planning Review,
July -August, pp.6–11.
10 Byrne, J.A. (1993) ‘The horizontal corporation’. Business Week, 20 December, pp.76–81.
11 Blumenthal, B. and Haspeslagh, P. (1994), ‘Toward a definition of corporate
transformation’, Sloan Management Review , Spring, pp.101–106.
12 Brandt, J.R. (1994). ‘Reengineering must be radical’. Industry Week, 72, 21 November.
13 Hall, G., Rosenthal, J., and Wade, J. (1993), ‘How to make reengineering really work’.
Harvard Business Review, November-December, pp.119–131.
14 Greengard, S. (1993) ‘Reengineering: Ou t of the rubble’, Personnel Journal, December,
48B-48O.

Further readings
1 A Report Of The Total Quality Leadership Steering Committee and Working
Councils, (1992). The Procter & Gamble Co.
2 Bacon, Donald C., ‘How the Baldrige winners did it’, Nation’s Business 77 (1989):
pp.32–33.
3 Bush, D. and Dooley, K. (1989) The Deming Prize and Baldrige Award: How they
compare’, Quality Progress 22:1 (1989): pp.28–30.
4 Byrne, John A. (1994) ‘Remembering Deming, the godfather of quality’ Business
Week 10 January: p.44.
5 Champy, J. (1995,. ‘Reengineering management: Mandate for new leadership’.
Industry Week, 20 February, pp.33–44.
6 Chalk, Mary Beth. (1993) ‘Implementing total quality within corporate real estate’,
Industrial Development Section April,: pp.433–436.
7 Hayes, Robert H., and Cary P. Pisano. (1994) ‘Beyond world -class: the new
manufacturing strategy’, Harvard Business Review January/February: pp.7786.
8 McKenna, Joseph F., (1993). ‘Empowerment thins a forest of bureaucracy’, Industry
Week,. 242 (7): p.64.
 TQM, strategic management and business process re-engineering 393

9 Roger, Rhonda., Gustafson, L.T., Demarie, S.M. and Mullane, J.V. (1994) ‘Reframing
the organization: why implementing total quality is easier said than done’, Academy
of Management Review , July: pp.565–583.
10 Youssef, Mohamed A. (1992) ‘Agile manufacturing: a necessary condition for
competing in global markets’, Industrial Engineering, Vol. 24, No.12, pp.18–21.
11 Youssef, Mohamed A. (1993) ‘The impact of computer-based technologies on
flexibility’, International Journal of Technology Management, Vol. 8, Nos. 3-5, pp.355–
370.

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