PA 514 TOTAL QUALITY MANAGEMENT respective fields of specialization by 2022 in

line with its vision and upgrade researchers’

Mandate, Vision, Mission, Goals and and extensionists’ capability through
Objectives continuous trainings and exposures;
2. Provide state-of-the art physical and
MANDATE (RA 9746) instructional facilities;
3. Re-align curricular offerings preferably towards
The University shall primarily provide advanced science and technology- based courses;
education, higher technological, professional 4. Achieve at least level 3 accreditation status in
instruction and training in the fields of education, all programs;
agriculture, forestry, fishery, maritime education, 5. Publish researches in national and
ecology, engineering, philosophy, information and international refereed journals;
communications technology, letters, arts and 6. Strengthen national and international linkages
sciences, nursing, medicine and other relevant with public and private institutions;
fields of study. It shall also undertake research and 7. Formulate and implement investment plans for
extension services in support of the financial sustainability;
socioeconomic development of Antique, and 8. Collaborate with funding agencies for resource
provide progressive leadership in its areas of generation;
specialization. 9. Conduct periodic management review for
quality delivery of service to the stakeholders.
VISION

Leading University in Science and Technology by Quality Policy

2022.
UA Quality Policy
MISSION

The University shall provide quality, relevant, and We commit to hone global citizens through the
responsive scientific technological and delivery of quality education of international
professional education and advanced training in standard anchored on scientific
different areas of specialization, and shall researches articulated through responsive
undertake research and extension services in instruction, extension and production, reinforced
support to socio-economic development of by effective and efficient support services and
Antique, the Filipino nation, and the global driven by quality management system.
community.
We, in partnership with our stakeholders shall
GOALS strive for continual improvement considering the
statutory and regulatory requirements,
client satisfaction and industry dynamic while
To elevate the university into national and
keeping the spirit of the Filipino and the ideals of
international distinction, it shall endeavor to:
an Antiqueño.
1. Deliver quality instruction of international
standards;
2. Implement innovative and research CHAPTER 1-QUALITY CONCEPTS
development system;
3. Undertake responsive and collaborative means Introduction
for technological transfer;
4. Develop viable and sustainable resource Customers of any organization, profitable or non-
generating strategies; and profitable always desire to purchase quality
5.Establish effective, efficient, and supportive products or avail of quality services. Also, owners
administration. of any business organization such as
manufacturing companies, service companies
OBJECTIVES always aim to sell quality products or provide
quality services to its customers in order to sustain
The University should be able to: its operations and become profitable. The
1. Ensure that at least 30% of the faculty dilemma is, how would an organization ensure that
members are doctorate degree holders and the it is producing quality products or providing quality
rest are master’s degree holders in their services at minimal costs?
In this chapter, we will tackle topics to include the
different quality perspectives, definition of the term
quality, dimensions or attributes of service quality,
quality gurus and costs of quality.
Objectives
At the end of this chapter, you should be able to:
a) identify and describe the different quality
perspectives;
b) define quality;
c) describe the dimensions or attributes of
service quality;
d) identify the quality gurus; and
e) identify and describe the different costs of
quality.
Lesson Proper
Quality Perspectives
The term quality has various definitions because
the quality of a product or service can be described
according to individual’s perspective. Before we
proceed with the concrete description of the
different quality perspectives, take time to view the
following video on quality perspectives.
According to Evans and Lindsay (2014), there are
six (6) different quality perspectives. These are as
follows:
1. Judgmental or Transcendent Perspective
In this quality perspective, the individual view
the product as quality when he sees it or feels
it. Quality here is synonymous to superiority or
excellence. This view is referred to as
transcendent (transcend, “to rise above or extend
notably beyond ordinary limits”) definition of
quality. In this sense, quality is “both absolute and
universally recognizable, a mark of
uncompromising standards and high
achievement.” As such, it cannot be defined
precisely – you just know it when you see
it. Excellence is abstract and subjective, however,
and standards of excellence may vary
considerably among individuals.
2. Product Perspective
In this perspective, a product or service is
considered quality by an individual when all the
attributes expected by the customer are
present. Again, individual customer has different
expected attributes that must be present in a
product or service, thus an individual might have
different view of the quality.
3. User Perspective
In this perspective, quality is defined as fitness
for intended use, or how well the product performs
its intended function as well as how well a service
is provided to the customer. Since an individual
customer views differently the functionality of a
product or views differently how the service is
provided, therefore defining quality is difficult.
4. Value Perspective
Quality is based on value – that is, the
relationship of usefulness or satisfaction to
price. From this perspective, a quality product is
one that is as useful as competing products and is
sold at a lower price.
5. Manufacturing Perspectives on Quality
In this perspective, quality is defined as the
desirable outcome of manufacturing practice, or
conformance to specifications. Specifications are
targets and tolerances determined.
6. Customer Perspective
In this perspective, a quality product or service is
something which has attributes that meet or even
exceed customer expectations.
With the aforementioned quality perspectives, the
term quality can be defined differently depending
on the individual’s perspective. The American
National Standards Institute (ANSI) and the
American Society for Quality (ASQ) standardized
official definitions of quality terminology in 1978
(Evans and Lindsay, 2014). These groups
defined quality as “the totality of features and
characteristics of a product or service that bears
on its ability to satisfy given needs”. By the end of
the 1980s, many companies had begun using a
simpler, yet powerful, customer-driven definition of
quality that remains popular today:
“Quality is meeting or exceeding
customer expectations”.
Service Quality Attributes or Dimensions
Ramasamy, 2010 presents the following additional
quality attributes applicable to both products and
services:
a. Regulatory Requirements – these are
regulatory requirements stipulated by the local
governments that should be fulfilled by the
products or service.
b. Requirements of the Society – the products
should fulfill both the stated and implied
requirements imposed by the society. The
customer requirement should not violate society or
regulatory requirements.
c. Conformance to Standards – product or
service should conform to the stated and implied
requirements of customers. Where applicable,
they should conform to applicable standards such
as national standards, international standards and
industry standards.
Quality Gurus
There are individuals known as “gurus” who
contributed concepts and principles with regard
quality. These quality gurus can be viewed from
the following video
Costs of Quality
To produce quality products or provide quality
service, costs have to be incurred. These costs
are known as costs of quality. Costs of
quality are the total expenses incurred by the
organization in achieving and maintaining good
quality as well as managing poor quality with the
aim of achieving customer satisfaction. These
include the costs of good quality and costs of poor
quality. The costs of good quality are costs
involved in making certain that things are done
right the first time. These include:
• preventive costs – these are costs to prevent
or avoid quality problems
• appraisal costs – these are costs incurred in
detecting defects
• Examples of preventive costs in an
organization include the following:
• costs in preparing the operations manual in
your organization
• costs in preparing the procedure or process
flow chart
• costs in training the employees
• costs in preparing the Quality Management
Manual
• costs in quality planning
• costs in preparing the citizens charter
The aforementioned costs are incurred by an
organization to prevent defects in the products or
services.
Some examples of appraisal costs in an
organization are as follows:
• costs incurred in checking the reports of a
subordinate
• costs in inspecting supplies when delivered
by suppliers
• costs involved in the conduct of evaluation
or accreditation of the organization
The costs of poor quality include the following:
• internal failure costs – these are costs or
money wasted when work fails to meet
customer requirements before products are
delivered or services are provided to the
customers.
• external failure costs – these are costs incurred
by the organization when products are
delivered or services are provided to the
customers.
• Examples of internal failure costs in an
organization are the following:
• costs of preparing reports because it needs
rework
• costs of re-structuring a building before
occupancy as a result of ineffective planning
• cost of office supplies used in printing the forms
because of errors in filling them out
• The following are some examples of external
failure costs in an organization:
• cost of re-working on the returned reports from
an agency outside your organization because
they are erroneous
• cost of losing customers because they are not
satisfied with the products or services provided
to them
• To enlighten you more on costs of quality, take
time to view the video from this link
CHAPTER 2-TQM CONCEPTS
Introduction
It is always the desire of many organizations, may
it be profitable or non-profitable, to produce quality
products or provide quality services for the reason
that they want to excel in the industry where they
belong. We already know what is quality products
or quality service. But, how about management
and total quality management (TQM)?
In this chapter, you will know what is management,
total quality management (TQM), evolution of
TQM, elements of TQM, objectives and limitations
of TQM.
OBJECTIVES
At the end of this chapter, you should be able to:
a. define management;
b. define Total Quality Management (TQM);
c. describe the evolution of TQM;
d. identify and describe the elements of TQM;
e. identify and discuss the objectives of TQM;
and
f. identify and discuss the limitations of TQM.
LESSON PROPER
I am sure you learned already the word
management, right? But, let’s have a review of
what “management” is. In its simplest definition,
“management” is getting things done through
people. Management is a function that directs
and coordinates the efforts of the people to
accomplish goals and objectives by using
available resources efficiently and effectively. It is
also a process of accomplishing the organization’s
goals by working with and through
people. Management involves planning,
organizing, staffing, leading, motivating and
controlling. How about TQM? The word “Total” in
TQM means involvement of everyone in the
organization. “Quality” means fully meeting
customer’s needs and requirements all the time.
“Management” means directing and coordinating
efforts of the people using available resources
efficiently and effectively to accomplish goals
and objectives. TQM can be defined differently as
follows:
TQM is a management philosophy which seeks to
integrate all organizational functions such as
marketing, finance, engineering, customer service,
etc. to focus on meeting customer needs and
organizational objectives. (Hashmi, K., 2007)
TQM is a way of managing an organization with
the objective of carrying out right jobs right – the
first time and every time (Ramasamy, S., 2005)
TQM is a management approach of an
organization, centered on quality, based on the
participation of all its satisfaction and benefits to
the members of the organization and to the
society. (International Standard, ISO 2000)
Total Quality (TQ) or TQM is a people-focused
management system that aims at continual
increase in customer satisfaction at continually
lower real cost. It is a total system approach and
an integral part of high-level strategy; it works
horizontally across functions and departments,
involves all employees, top to bottom, and extends
backward and forward to include the supply chain
and the customer chain. TQ stresses learning and
adaptation to continual change as keys to
organizational success.
Now, let us proceed to the evolution of TQM. How
did TQM originate?
TQM EVOLUTION
Different authors of TQM books and online
resources discuss the different stages
in TQM evolution. For our own discussions, there
are five (5) stages in the evolution of TQM. These
are the inspection stage, the quality control stage,
the quality assurance stage, the quality
management stage and the total quality
management stage.
Inspection Stage – in this stage, team of
inspectors is organized to inspect the products
or services if they meet the standards. If products
or services do not meet the standards, they are not
brought to the market. Instead, they are either
scrapped, rework or sold at lower
prices. Inspection is the focus in maintaining the
quality of the products or services.
Quality Control Stage – it is the stage
wherein quality is controlled through
supervised skills, written specifications,
measurement and standardization. In this
stage, process variation is monitored and the
management decides when to interact. Control
charts are used to monitor the process and
determine the variation based on the
standards. This is the stage wherein, quality
planning is in place, quality manuals are
developed, product testing is done, performance
data are considered and use of statistics is
prevalent to control the quality of products or
services. Quality control in the focus to maintain
quality.
Quality Assurance Stage – it is the stage in TQM
evolution which covers all the activities involved in
the previous stages. Unlike the two previous
stages wherein the focus is detection of non-
conformances, the focus of quality assurance
stage is prevention of non-conformances in the
quality of products or services. The salient
features of this stage are implementation of
quality planning, development of
comprehensive quality manuals, use of quality
costs, process control, and auditing of quality
systems. The focus of this stage is prevention of
non-conformances to maintain quality.
Quality Management Stage – it is the stage
wherein the main objective of the operations is the
prevention of non-conformances. It is also in this
stage wherein development of manuals
particularly quality manual and process
manual is done. Quality assurance software is
introduced to maintain quality. Realization that
quality is everyone’s responsibility happened in
this stage.
Total Quality Management – it is the stage in
TQM evolution wherein the focus of operations
is customer satisfaction. The salient features of
this stage are strategic planning, people and
change management, performance measure,
process improvement, and quality awards.
Let us now proceed with the objectives of
TQM. Why do we need to adopt and implement
TQM. The following are the objectives of TQM.
1. Meeting the customer’s requirements is the
primary objective and the key to organizational
survival and growth
2. The second objective of TQM is continuous
improvement of quality. The management should
stimulate the employees in becoming increasingly
competent and creative.
3. TQM aims at developing the relationship of
openness and trust among the employees at all
levels in the organization.
However, TQM has also limitations. The following
are the limitations of TQM:
1. Cost in Time and Money
Implementing TQM systems takes many years.
During these long years, substantial costs can
accrue due to lengthy process of training
employees. Also takes significant investment by
the company in terms of money and utilization of
resources. Adopting TQM process is quite
expensive and exhausting.
2. People Fear Change
Because of increasing global competition, many
organizations are replacing the traditional
approach with TQM approach. However, there are
those employees that resist change due to
uncertainty, doubt and fear from these rapid global
changes.
3. Reduction in Innovation
TQM systems are fundamentally designed to
mitigate risk. This is achieved by maximizing each
process taking place within an organization. In
some roles, such as engineering, marketing and
other fields that often require outside-the-box
thinking in order to break through. TQM’s
inherently systematic and process-oriented nature
can serve as a barrier. Development can occur
slowly-or not at all-creating a deadly status quo
environment that sometimes causes companies
fixated on TQM systems to watch more flexible
companies surpass them.
CHAPTER 3-TQM PRINCIPLES (CUSTOMER
FOCUS)
INTRODUCTION
Knowing the quality and TQM concepts, let us now
proceed to TQM principles. In order to be an
effective manager, we need to be equipped with
the TQM principles which serve as guidance for
our actions in implementing our plans to realize our
mission and working towards the attainment of our
vision. But, what are these principles?
In this chapter, we will discuss the first TQM
principle which is “Customer Focus”. Why do you
think we need to focus on our customers?
OBJECTIVES
At the end of this chapter, you should be able to:
a. differentiate customer satisfaction from
customer engagement;
b. describe how identify customer needs;
c. describe how to understand the needs of the
customers;
d. describe how to build a customer focused
organization;
e. describe how to manage customer
relationship; and
f. describe how to manage customer
satisfaction and engagement.
The first TQM principle is customer focus.
Customer Satisfaction is defined by the
American Society for Quality (ASQ) as the “result
of delivering a product or service that meets
customer requirements.” Customer satisfaction is
vital to keeping customers and growing a
business. It drives profitability. The typical
company gets 65 percent of its business from
existing customers and it costs five times more to
find a new customer than to keep an existing one
happy (Norman, J., 1998). Statistics show that
growth in market share and financial success are
strongly correlated with customer satisfaction.
Although satisfaction is important, organizations
need to look further. First, they must avoid
creating dissatisfied customers because of product
or service failures. Studies have shown that
dissatisfied customers tell at least twice as many
friends about bad experiences than they tell about
good ones. To quote Patrick Mehne, former chief
quality officer at The Ritz-Carlton Hotel Company:
“Satisfaction is an attitude; loyalty is a
behavior”. Customers who are merely satisfied
may often purchase from competitors because of
convenience, promotions, or other factors. Loyal
customers place a priority on doing business with
a particular organization, and will often go out of
their way or pay a premium to stay with the
company. Loyal customers spend more, are
willing to pay higher prices, refer new clients, and
are less costly to do business with.
Customer satisfaction and loyalty have evolved
into a new concept: customer
engagement. Customer Engagement refers to
customers’ investment in or commitment to a
brand and product offerings. Customer
engagement is an important outcome of a
customer-focused culture and the organization’s
listening, learning, and performance-excellence
strategy. Characteristics of customer engagement
include:
• Customer retention and loyalty
• Customers’ willingness to make an effort to
do business with the organization, and
• Customers willingness to actively advocate
for and recommend the brand and product
offerings
Customer engagement is influenced by an
organization’s integrity and the relationships it
builds with its customers.
Identifying Customers
The first step in being customer focused is to
understand who your customers are. Most
employees think that “customers” are those people
who ultimately purchase and use a company’s
products. However, consumers are not the only
customer group of concern. The easiest way to
identify customers is to think in terms of customer-
supplier relationships. In a customer-supplier
relationship, every process receives inputs from
suppliers and creates outputs for customers. The
feedback loop is in the customer-supplier
relationships suggest that suppliers must also be
considered as customers. They need appropriate
information about the requirements they must
meet. Within an organization, the recipient of
another’s output (which could be a product, service
or information) is called an internal
customer. Internal customers could be other
departments or processes within the organization
or individual workers. Internal customer-supplier
relationships help process owners and workers
understand how their work links to the final
product.
An organization may also have external
customers – those who fall between the
organization and the consumer, but are not part of
the organization. External customers have needs
and expectations different from consumers.
Eventually, everyone can better understand their
role in satisfying not only their internal customers,
but also the external customers. The natural
customer-supplier linkages among individuals,
departments, and functions build up the “chain of
customers” throughout an organization that
connect every individual and function to the
external customers and consumers, thus
characterizing the organization’s value chain.
It is also important to recognize that employees
and the public at large are important customers of
an organization. Viewing employees as
customers, an organization then must consciously
strive to build and maintain a work environment
conducive to the well-being and growth of all
employees by paying attention to health, safety,
and ergonomics (the study of physical capabilities
of people in the design of workplaces, tools,
instruments) issues. An organization must also
anticipate public concerns and assess the possible
impacts on society of its products, services, and
operations, such as safety and the environment.
In order to focus very well on the customers, there
is a need for the organization to do segmentation.
Understanding Customer Needs
The KANO Model of Customer Requirements
Noriaki Kano, professor emeritus of the Tokyo
University of Science, suggested segmenting
customer requirements into three groups. These
are as follows:
1. Dissatisfier (“must haves”) - these are the
basic requirements that customers expect in a
product or service. If these features are not
present, the customer is dissatisfied.
2. Satisfiers (“wants”) – these are the
requirements that customers expressly say they
want. Although these requirements are not
expected, fulfilling them creates satisfaction.
3. Exciters/delighters (“never thought of”) –
these are new or innovative features that
customers do not expect or even anticipate.
Gathering the Voice of the Customer
Let us now proceed to determining the needs of
the customers.
Innovations can delight the customers however,
when customers are familiar with them, delighters
will become satisfiers and later will be
dissatisfiers. Since customers have different
requirements, there is a need to determine these
requirements in order to have sustainable
operations through the following techniques:
1. Comment Cards and Formal Surveys
Comment cards and formal surveys are easy ways
to solicit customer information. These approaches
typically concentrate on measuring customer
satisfaction, and often include questions pertaining
to customers’ perception of the importance of
particular quality dimensions as well as open-
ended questions. Formal surveys can be
designed to scientifically sample a customer base,
but can also suffer from nonresponse
bias. However, some organizations find that they
work well.
2. Focus Group
A focus group is a panel of individuals (customers
or non-customers) who answer questions about a
company’s products and services as well as those
of competitors. This interview approach allows a
company to carefully select the composition of the
panel and probe panel members about important
issues, such as comparing experiences with
expectations, in depth. Focus groups offer a
substantial advantage by providing the direct voice
of the customer to an organization. A
disadvantage of focus group is their higher cost of
implementation compared to other approaches.
3. Direct Customer Contact
In customer-driven organizations, top executives
commonly visit with customers
personally. Hearing issues and complaints
firsthand is often an eye-opening experience.
4. Field Intelligence
Any employee who comes in direct contact with
customers, such as salespeople, repair
technicians, telephone operators, and
receptionists, can obtain useful information simply
by engaging in conversation and listening to
customers. The effectiveness of this method
depends upon a culture that encourages open
communication with superiors. As another
approach, employees simply observe customer
behavior. Field intelligence is perhaps one of the
least-exploited approaches to listening and
learning. To do it well, organizations need to build
awareness of the need to gather information,
develop a system to feed information to a central
collecting place for analysis and dissemination,
train employees who have frequent direct
customer contact to actively listen to the voice of
the customer and feed information back through
the system, make review of the information a
standard part of the company’s management
review process, and ensure that the right
individuals take action and follow up.
5. Complaints
 Complaints, although undesirable from a service
point of view, can be a key source of customer
information. Complaints allow an organization to
learn about product failures and service problems,
particularly the gaps between expectations and
performance.
6. Internet and Social Media Monitoring
The Internet and social media such as Facebook
offer organizations a fertile arena for finding out
what consumers think of their products. Internet
users frequently seek advice from other users on
strengths and weaknesses of products, share
experiences on service quality, or pose specific
problems they need to resolve. By monitoring the
conversations on discussion groups and blogs, for
example, managers can obtain valuable insights
on customer perceptions and product or service
quality problems. In open forums, customer
comments can often be translated into creative
product improvements. In addition, the Internet
can be a good source of information about
competitors’ products. The cost of monitoring
Internet conversations is minimal compared to the
costs of other types of survey approaches, and
customers are not biased by any questions that
may be asked. However, the conversations may
be considerably less structured and unfocused,
and thus may contain less usable
information. Also, unlike a focus group or
telephone interview, inaccurate perceptions or
factual errors cannot be corrected.
Analyzing Voice of the Customer Data
Because voice of the customer data typically
consists of a large number of verbal comments or
other textual information, it needs to be sorted and
consolidated into logical groups so that managers
can understand the key issues. One useful tool for
organizing large volumes of information efficiently
and identifying natural patterns or groupings in the
information is the affinity diagram. An affinity
diagram is a main ingredient of the KJ method,
developed in the 1960s by Kawakita Jiro, a
Japanese anthropologist. The affinity diagram is a
technique for gathering and organizing a large
number of ideas or facts.
Through organization of an affinity diagram,
information can be used to better design a
company’s products and processes to meet
customer requirements.
Please watch the following videos to explain how
to use an affinity diagram in addressing an issue
on a product or service.
Building A Customer-Focused Organization
Creating a customer-focused organization takes
hard work and discipline. It must be built on good
policies, good people, and good processes.
An organization fosters customer satisfaction and
engagement by developing trust, communicating
with customers, and effectively managing the
interactions and relationships with customers
through its processes and its people. Customer-
focused organizations focus on four key
processes:
1. Making sincere commitments to customers
Organizations that truly believe in the quality of
their products make sincere commitments to their
customers. Effective commitments address the
principal concerns of customers, are free from
conditions that might weaken customers’ trust and
confidence, and are communicated clearly and
simply to customers. A customer commitment
might be as simple as guaranteeing that your call
or e-mail inquiry will be returned promptly. Many
commitments take the form of explicit guarantees
and warranties.
2. Ensuring quality customer contact
Customers interact with organizations in many
different ways. Every interaction between a
customer and the organization – whether it be a
face-to-face with a salesperson or customer
service representative or online on a website – is
called a moment of truth. During moments of truth,
customers form perceptions about the quality of
the service by comparing their expectations with
the actual outcomes. Thus, customer satisfaction
or dissatisfaction takes place during moments of
truth.
3. Selecting and developing customer contact
employees
Customer-contact employees are particularly
important in creating customer satisfaction as they
often are the only means by which a customer
interacts with an organization.
Businesses must carefully select customer contact
employees, train them well, and empower them to
meet and exceed customer expectations. Many
businesses begin with the recruiting process,
selecting those employees who show the ability
and desire to develop good customer
relationships. Next, organizations must train
them. For many organizations, customer
relationship training involves every person who
comes in contact with customers.
4. Managing complaints and service recovery
Despite all efforts to satisfy customers, every
business experiences unhappy
customers. Complaints can adversely affect
business if not dealt with effectively.
Service recovery is a vital element to maintaining
customer relationships. Studies in the service
management literature suggest that customers
who rated service quality highly also had the
highest expectations for service recovery. Loyal
customers are most likely to become dissatisfied
when problems are not resolved but are most likely
to increase or maintain loyalty whenever the
problem is deemed to have been resolved
successfully. However, non-loyal customers show
the greatest likelihood of decreasing their loyalty
even when a failure is resolved. This suggests that
there is much to gain from responding to service
failures to non-loyal customers, but it also
highlights how difficult this may be to accomplish.
Managing Customer Relationships
Excellent organizations foster close relationships
with customers that lead to high levels of
satisfaction and loyalty. Customer relationships
can be fostered through strategic partnerships and
alliances and using technology to facilitate better
communication with customers and linkages to
internal operations.
Strategic Partnerships and Alliances
Today’s suppliers are being asked to take on
greater responsibilities to help their customers. As
organizations focus more on their core-
competencies – the things they do best – they are
looking outside their organizations for assistance
with noncritical support processes. Customer-
supplier partnerships – long term relationships
characterized by teamwork and mutual confidence
– represent an important strategic alliance in
achieving excellence and business
success. Benefits of such partnerships include
access to technology or distribution channels not
available internally, shared risks in new
investments and product development, improved
products through early design recommendations
based on supplier capabilities, and reduced
operations costs through better communications.
Customer-Focused Technology
Technology can greatly enhance an organization’s
ability to leverage customer-related information
and provide improved customer
service. Technology is a key enabler of customer
relationship management (CRM) software, which
is designed to help organizations increase
customer loyalty, target their most profitable
customers, and streamline customer
communication processes.
Managing Customer Satisfaction and
Engagement
Customer feedback is vital to a business. Through
feedback, a company learns how satisfied its
customers are with its products and services and
sometimes about competitor’s products and
services.
An effective customer satisfaction measurement
system results in reliable information about
customer ratings of specific product and service
features and about the relationship between these
ratings and the customer’s likely future market
behavior.
Customer satisfaction measures may include
product attributes such as product quality, product
performance, usability, and maintainability; service
attributes such as attitude, service time, on-time
delivery, exception handling, accountability, and
technical support; image attributes such as
reliability and price; and overall satisfaction
measures.
Designing Satisfaction Surveys
The first step in developing a customer satisfaction
survey is to determine its purpose. Survey
should be designed to clearly provide the users of
the survey results with the information they need
to make decisions.
Customer satisfaction measurement should not be
confined to external customers. Information from
internal customers also contributes to the
assessment of the organization’s strengths and
weaknesses. Often the problems that cause
employee dissatisfaction are the same issues that
cause dissatisfaction in external customers. Many
organizations use employee opinion surveys or
similar vehicles to seek employee feedback on the Deming stressed the importance of using customer
work environment, benefits, compensation, feedback to improve a company’s products and
management, team activities, rewards and processes. By examining trends in customer
recognition, and company plans and satisfaction measures and linking satisfaction data
values. However, other indicators of employee to its internal processes, a business can see its
dissatisfaction are absenteeism, turnover, progress and areas for improvement. Someone
grievances, and strikes, which can often supply must have the responsibility for developing
better information than surveys that many improvement plans based on customer
employees may not take seriously. satisfaction results. This practice act as an
incentive for managers and a direction for their
The next issue to address is who should conduct efforts.
the survey. Independent third-party organizations
often have more credibility to respondents and can
ensure objectivity in the results. After these
preliminary steps are completed, it is necessary to
define the sample frame; that is, the target group
from which a sample is chosen. Depending on the
purpose of the survey, the frame might be the
entire customer base or a specific segment.

Next, we must select the appropriate survey

instrument. Formal written surveys by mail or e-
mail are the most common means of measuring
customer satisfaction, although other techniques,
such as face-to-face interviews, telephone
interviews, and focus groups are used. Written
surveys have the advantage of low data collection
costs, self-administration, and ease of analysis;
when used, they should be kept short and
simple. In addition, they can probe deeply into the
issues. However, they suffer from high
nonresponse bias, require large sample sizes, and
generally measure predetermined perceptions of
what is important to customers, thus reducing the
scope of qualitative information that can be
obtained. Face-to-face interviews and focus
groups, on the other hand, require much smaller
sample sizes and can generate a significant
amount of qualitative information, but incur high
costs and participant time commitments.

The final task is to design the reporting format

and the data entry methods. Modern
technology, such as computer databases in
conjunction with a variety of statistical analysis
tools, assist in tracking customer satisfaction and
provides information for continuous
improvement. As a final note, surveys should
always be pretested to: determine whether
instructions are understandable, identify questions
that may be misunderstood or poorly worded,
determine how long it takes to complete the
survey, and determine the level of customer
interest

Analyzing and Using Customer Feedback

 CHAPTER 4 - LEADERSHIP
Introduction
Another principle of TQM which a manager has to
embrace is “Leadership”. Do you think leadership
in important in quality management of an
organization? What principles and strategies will
management adopt to implement Total Quality
Management? Do you think an organization needs
competent leaders? What leadership theories and
styles could be applied in implementing quality
management?
In this chapter, we will discuss the principles and
strategies in Total Quality Management, the
required competencies of a leader and the different
leadership theories and styles which could be
applied in implementing quality management in an
organization.
Objectives
At the end of this chapter, you should be able to:
a) discuss the fourteen (14) principles of Deming
for top management;
b) discuss the ten (10) strategies for
management to implement TQM;
c) discuss the different leadership theories; and
d) discuss the different leadership styles.
Leadership for TQM
When we peruse the teachings of the quality
gurus, we gather that the higher echelon of
management has an important role to play for TQM
to be implemented. In fact, the management is
solely responsible for the success of TQM as it is
responsible for selecting people, forming teams,
providing resources and establishing the system in
the organization. As Crosby says senior
management is 100 per cent responsible for the
problem of quality and its continuance. According
to Harrington, between 70 and 85 per cent of all
errors can only be corrected by
management. Thus, it is important that top
management understands TQM and leads the
organization through the TQM journey.
Deming’s 14 Points for Top Management
1. Create Constancy of Purpose for Improvement
of Products and Services
The top management must believe that their
business will continue for 100 years. Such a
confidence will motivate them to aim long-term
success. It will infuse a constant quest for
innovation, improvement of processes, products
and services. They will invest in research to
innovate new products and will train their
employees without fear of loosing them. If the
employees understand that the company is
interested in long-term success, then the
employees will follow suit. Therefore, it is the role
of the top management to create constancy of
purpose for improvement of products and services,
which is essential for TQM. They have to
constantly reiterate their intention to practice TQM
and improve products and services.
2. Adopt the New Philosophy
The new philosophy is to practice the Japanese
Company Wide Quality Control (CWQC), which
was renamed as TQM much later. The new
philosophy means elimination of wastes, delays
and radically changing the work culture. The new
philosophy means, Just-In-Time (JIT)
manufacturing is possible with zero defects. All
the 14 points of Deming should be adopted by the
top management to result in long-term success
through the implementation of TQM in the
organization.
3. Cease Dependence on Mass Inspection
Doing things right and doing it right the first time
would reduce the dependence on inspection, in
fact it would be eliminated. TQM is aimed at
eliminating inspection in the long run through
prevention.
4. End the Practice of Awarding Business on the
Basis of Price Tag Alone
This point addresses supplier partnership. The
supplier should be selected on the basis of the
following:
• Quality
• Price
• Delivery
• Service
Therefore price alone should not be the criterion
for selection of supplier.
5. Constantly Improve the System of Production
and Services
The processes in the organization need
continuous improvement, Kaizen in
Japanese. TQM is aimed at continuous
improvement of processes so that quality of
products and services improve continuously. The
very purpose of TQM is the constant improvement
of the system for production and services.
6. Institute Training
The abilities of employees should be improved
and harnessed only through training. Deming
advocates, “Management needs training to learn
about the organization, all the way from incoming
material to the customer.”
7. Adopt and Institute Leadership
Deming urges that the senior employees must
conduct themselves as leaders rather than
managers. Thus, the senior employees should be
trained on leadership qualities.
8. Drive Out Fear
Employees should be encouraged to suggest
improvements and new ideas, ask questions about
the existing process, etc. If freedom to express
new ideas is curtailed, then the employees will
continue to do what they are doing. This will stunt
improvement. Fear is detrimental to improvement
of processes.
9. Break Down Barriers Between Staff Areas
Quite often, the various teams in the organization
stop communicating with each other. The teams,
over the years become watertight
compartments. Every team may prove that it is the
best. But organization as a whole may be doing
poorly due to lack of communications between the
teams. TQM dictates removal of barriers between
the departments.
10. Eliminate Slogans, Exhortations and Targets
for the Work Force
Here Deming talks about slogans and targets for
increasing productivity. He says that barriers to
quality and productivity exist within the
organization itself. Hence, to achieve higher
productivity, the system has to be improved for
which, management is responsible. The posters
are directed at the wrong people, namely the
workers. They only generate “frustration and
resentment” among workers. The best strategy for
improvement is to correct defects in the system,
not slogans or posters.
11. (a) Eliminate Numerical Quota for the Work
Force
Setting a target for production, say producing
1000 bolts per shift, etc. may affect the quality of
workmanship. This forces the worker to ignore
quality and concentrate on quantity. This is
detrimental to the organization. On the contrary,
standards for quality workmanship, etc. could be
prescribed. Numeric quota is given assuming that
the worker may be idling. That is not the right
approach.
11. (b) Eliminate Numerical Goals for People in
Management
Setting goals without the necessary means does
not work. Goals such as growth of business by 15
per cent or reduction of quality cost by 5 per cent
given in a New Year day will end like New Year
promises. Such improvements should arise out of
improving processes and not by passage of time.
12. Remove Barriers that Rob People of Pride of
Workmanship
The organization should establish the right
processes and a proper system for quality
management. This will lead to carrying out jobs
correctly. If the work is carried out correctly, it
gives pride to those who did. Any barrier that robs
the managers or workers their pride of
workmanship should be removed. Every
employee should be encouraged to work as much
as he can. Removing the obstacles to this pursuit
is the responsibility of the top management.
13. Encourage Education and Self-Improvement
for Every One
Employees should be encouraged to pursue
higher education and training while in service, for
improving the skills or updating knowledge. If an
employee undergoes education or training, it will
improve his ability, which will be beneficial to the
organization. Hence, employees should be
motivated and encouraged to improve their
knowledge and skills through various channels.
14. Take Action to Accomplish the Transformation
The top management should understand the
above 13 points and then enable their employees
to understand them. They should interpret the 13
points properly and educate their employees
appropriately. They should have the courage to
break the status quo and improve their employees,
processes, system and thereby their products or
services continually. They should identify all the
processes in the organization and improve each
one of them using the PDCA cycle. Therefore, the
final point is about the implementation of the 13
points, which in essence are the TQM principles
and strategies.
Ten Strategies for Top Management
The 10 strategies for top management are the
following:
1. Proactive Management
The leaders have to be proactive. They have to
foresee what will happen in the future and take
advance action to prevent the occurrence of the
problems as prevention is always better than
cure. If the management is actively engaged in
managing the organization, then they will be able
to foresee the problems.
Proactive Management Needs Proper System
Proactive management needs a proper system in
the organization. The problem can be identified
before occurring, only if there is a proper system in
the organization. Unless a system is in order, the
roles and responsibilities are clear, the
organizational structure is in place, the procedures
set and the system of recording everything laid out,
it will be extremely difficult to think of prevention. If
these measures are not taken then, it will only be
fire fighting, which is reactive management. Fire
fighting does not add value. Unless timely action
is taken to prevent problems, it may lead to losses
in terms of revenue, reputation and employee
morale. Thus, proactive management calls for
establishment of proper system for quality as well
as the operations.
TQM Calls for Proactive Management
Inspite of best efforts, if an error has occurred,
then corrective action has to be taken after an
analysis so that such errors are not
repeated. TQM expects taking preventive actions
so that mistakes do not occur. Quality can be
improved only through preventive
actions. Preventive action enables achieving the
organization’s goals without hurting
anybody. Therefore, one should take preventive
action and save the organization from
disaster. Such concepts should be inculcated
even among the vendors, so that they supply only
quality materials. According to Deming, the
dependence on inspections is a bad sign. A level
should be attained when the inspection of
materials is not required. By controlling the
processes and by improving the skills of the
employees, the organization should be able to
manufacture an item or deliver a defect free
service. This is the role of proactive management.
2. Adventurous and Bold Change Management
Nobody likes Change
Human beings by their very nature resist
change. Even, if a change is going to make them
much more comfortable, they may not agree to it
straightaway. They cannot visualize that the
changes are in fact for their good. They resist
change as they feel they may have to work more
or learn new techniques. Each employee
develops unique attitudes and values and they are
strongly wedded to them. Anything different is
unacceptable. Therefore, changing anything in an
organization is a difficult task and requires tactful
handling. Even, if the people concerned are
consulted before change and explained in detail
how the proposed change is going to be beneficial,
they may not see the merit. However, the
resistance to change will reduce. Quite often, the
processes have to be changed proactively by the
top management in an adventurous manner. The
initial results of change might not be positive. But
if persisted, the subsequent results would
convince the employees that the change was for
good.
Change is Essential
An organization cannot progress without
change. It has to continuously change for
better. There should be an on-going rethinking
and restructuring of the organization, so that the
organization is receptive to the needs of the
customers. The management should look at every
process without any bias. Each employee looks at
his or her activity from their own angle. Sometimes
they do not understand the problems faced by the
organization. In their own small shells they feel
uncomfortable about change. But, the
management should not give in because of the
reluctance on the part of the employees.
Changes are required in a number of activities
such as in the process, machinery, materials,
inventory control, methods of carrying out an
activity, inspection, and so on. The executives
should check at periodic intervals whether the
process is carried out efficiently. If not, they should
try to change it. Change management is an
important activity in TQM environment and is
crucial for continuous improvement of processes
and the organization. The essential requirements
of change and change management are:
Be Adventurous. Successful people are those
who have taken the challenges and grown beyond
expectations. This calls for adventurous decision-
making and high self-esteem among the senior
management persons. They should visualize the
improvements needed and make every effort to
achieve it. Any improvement is not going to be
easy. If the organization wants to maintain status
quo, it will not improve. In fact, most successful
executives should be dreamers with the necessary
drive. They should aim high and make every effort
to achieve it. Those who have aimed high have
reached high. They should feel that the impossible
is within reach. It is important that if an executive
wants to grow, he should be ambitious as far as
the organization’s improvement is
concerned. Only ambition can lead to
success. Therefore, one should develop an
adventurous attitude for the larger good of the
organization.
Be Bold. The other prerequisite for change
management are boldness, self-confidence or self-
esteem. Boldness is very essential for making
bold decisions for improvement, bade upon the
study and analysis of the current practices and
system in the organization. Such boldness may be
required for many purposes from fighting lethargy
among employees to guarding against vested
interests. Therefore, boldness is the basic
requirement for making an efficient organization.
Role of CEO for Adventurous and Bold Change
Management. Like many other aspects, the
adventurous and bold change management
depends on the personalities of the CEO. The
CEO, in addition to his own bold initiatives, should
support innovative change management initiated
by his employees. He should motivate and
encourage his colleagues to change the
unproductive ways of the organization. Therefore,
the primary responsibility for adventurous and bold
change management lies with the CEO. He
should give them the confidence and support till
the successful completion of the initiative. Such a
confidence bestowed by the CEO will help them in
achieving adventurous and bold changes.
3. DIRFT – Do it Right First Time
Take the Right Decisions. In every organization
a number of decisions have to be taken by the
CEOs, managers and supervisors. They are the
leaders in the organizations. Before making every
business decision, the leaders should carry out the
following sequence of activities:
· Plan the decision – weigh the pros and cons
· Foresee the impact of the decision on the
organization
· Take opinion of the right people
· Involve the concerned (employees who will
be affected by the decision)
· Implement the decision
· Persist
Basic Requirements for DIRFT
Philip Crosby has suggested three simple
requirements for DIRFT to happen which are given
below:
The top management should carry out the
following for DIRFT to become a reality in the
organization. The top management should:
1. Define the requirement for each of the
employees;
2. Provide the means to achieve the requirement;
and
3. Keep on motivating and encouraging the
employees.
Right the First Time and Every Time. The “It” in
the “Do it Right First Time” refers to every activity
in the organization. It is not only the making of the
final product or service, but also many things done
by the employees in their organization on a daily
basis. They should do only the right things – right
first time and every time. Therefore, the
management cannot just define the requirements
once and forget about it in the fond hope that
things will always be done perfectly. They have to
consistently look for improvements, find out the
aspects overlooked earlier and correct them. They
should always be preventing errors, defects,
hassles, demotivation of employees and the
like. Such a determination is not only applicable to
the management, but also to the employees and
the like. Such a determination is not only
applicable to the management, but also to the
employees in the organization. They should
always strive to rise to the occasion.
Set Right Goals. It is essential for every
organization to set the right objectives towards
which the organization should be moving. As part
of the TQM journey, an organization has to arrive
at a vision, mission, and the goals. The statement
containing the goals should be concise but from
that, the goals for each employees or each team
should be deducible. Formulating goals is an
important activity and it is also a difficult task. The
goals of each employee/team/section in the
organization should be set to match with the goals
of the organization. Every employee should be
clearly informed of the goals of the organization,
their team goals and the goals of their internal
customers and suppliers. The goals should be
appropriate so that the whole company
prospers. If the goals are logically incorrect, it will
send wrong signals to the employees. The general
human tendency is to question the wisdom of the
management. Therefore, if the goals are not very
clear, then the response of employees to achieve
the goals will not be encouraging . Hence, it is
important that right goals are set and
communicated to the employees in the most
appropriate manner.
Select Right Personnel. The whole process of
recruitment starting from advertisement,
conducting interviews, etc. should aim at selecting
the right personnel for the right job. If a person is
not suitable for the Job-in-hand, then definitely it is
going to be counter-productive. One bad
employee will spoil the rest. Therefore, it is
important that the right personnel is selected first
time and every time. The situation with regard to
employees is similar to cultivating a good crop. No
doubt, each crop needs watering and care, but, if
the seed itself is defective, no one can expect to
get a right tree whatever may be the further
investments. Therefore selecting the right
employees is essential.
Establish Right Processes. Organizations
should establish a right process, which is very
essential. If the right process is not selected, how
can we expect the right products? Therefore, the
company has to necessarily invest time, energy,
money and right team of employees for identifying,
establishing and commissioning the right process.
Within the organizations, the supervisors should
train the new employees in the process. It is
essential that the management establish the
proper guidelines and train the employees to
perform accordingly. Simple and appropriate
methods should be developed in an organization
for getting the desired results. Therefore, the right
methods should be identified and deployed for
each one of the work operations. Documentation
has many advantages such as building memory
into the organization, helping the organization to
update the methods based on experience and
serving as a basis for further improvements, and
quality auditing. Therefore, the right methodology
should be identified and documented.
Choose Durable Raw Materials. Materials can
be converted into products only through the right
process. Therefore, without the proper raw
material, expecting quality would be
farce. Therefore, right materials should be
selected from the right vendors. It should be
ensured that the vendors supply good quality raw
materials which doesn’t call for an inspection.
Choose Right Machinery. The process
consists of people, machinery, material and
methods, out of which machinery generally is very
expensive. Therefore, machinery should be
selected properly so that the production can start
from day one. There are many important
considerations for selecting the right machinery
including formulating specifications, calling for
competitive bids, arriving at criteria for objective
assessment of bids, getting a demo organized and
thereafter placement of orders. A right method
should be adopted and implemented so that there
are no glitches later on. Along with the machinery,
the required accessories and spare parts are also
to be procured so that the equipment can be used
effectively.
4. Continuous Preventive Action
Corrective Action is a Post-mortem. When a
product or service is delivered, if the customer
finds defects or faces problem, then deficiencies
are registered and corrected by the organization. It
would only be a post-mortem of the process. It
does not satisfy the customer, in fact the customer
is frustrated. However, a corrective action is better
than no action at all when a defect is found.
Prevention is Better than Cure. There are two
ways of handling a problem, one is to cure it and
the other to prevent it. All of us give full justification
as to why a problem could not be prevented early
enough. Not preventing a problem is a reactive
approach. However, a manager cannot be
reactive, if he wants to practice TQM. He has, to
be proactive, i.e. should carry out all his tasks as
per standards and foresee if any problem is going
to arise and prevent it. Being proactive may be
considered to be an in-born quality. But it can be
developed by anybody who is willing to put an
extra effort.
One Shot Prevention is not Good Enough. Like
other TQM principles and practices, preventive
actions have to be continuous and should cut
across all sections in the organization. No
organization can afford to stop after taking one or
two preventive actions. If they do so, the quality of
the product would decline and no amount of
corrective action will help. The organization will
earn bad reputation. Therefore preventive actions
should be taken at periodic intervals.
5. Care for Little Things and Accumulate Gains
TQM is a continuous process improvement
program and aims at one step at a
time. Therefore, the management should aim at
scaling greater heights through small and
continuous improvement in every process.
Caring for Small Things. While efforts will be
made to maintain sophisticated and expensive
machinery and equipment, the same care may not
be taken of small things such as accessories, jigs
and tools. Every tool used, should be maintained
properly, calibrated at periodic intervals and
handled properly. If that is not done, the weakest
link is going to break the chain. Therefore, every
employee should take care to maintain every tool
whatever may be its cost or importance.
Communicate with Junior Employees. No
doubt, overall economic performance, strategies,
quality council meetings, visit of customers are all-
important, but at the same time, the junior most
employees are also equally important in an
organization. Hence, the senior management
should establish a channel of communication with
the junior employees in the organization. Adopting
techniques of Tom Peter’s MBWA will help the
management to know the real customer reaction
with regard to quality and other matters. Hence,
management should allocate time to communicate
with the junior employees.
Keep on Accumulating. Small gains accrued
due to conscious initiatives by the management
should be accumulated. These small rewards will
be more permanent than the bigger gains attained
all of a sudden. Once a major initiative is taken,
many small improvements will take place side by
side. They should not be ignored and such side
effects should be given the official seal of approval
and made part of the regular system.
The management should consider little things and
improve everything in the organization. The CEO
should take care to improve even simple process
aids. Since the TQM journey is continuous such
small gains accrued will give substantial benefit to
the organization. Many times, simple problems
may be the cause for major failure of
processes. The CEO should also communicate
with junior employees as part of his
MBWA. Accumulation of small gains needs
unending enthusiasm of every employee in the
organization.
6. Ensure Economic Performance
Importance of Economic Performance. While
marching on the TQM path, the CEO should not
lose track of economic performance of the
organization. All TQM activities should lead to
better economic performance in the long run. If an
organization is implementing TQM correctly, then
the bottom line will improve automatically. Inspite
of other goals like satisfying one’s aspirations,
serving society, providing employment, etc., the
primary purpose of a business is to earn
profits. Similarly, the primary goal of an employee
is to earn higher salaries. The goal of an
organization should be higher Return on
Investment (ROI), as economic performance is
one of the key measures of success of every
organization on their journey towards TQM.
Quality should Increase Productivity Also. The
objective of continuous quality improvements is to
satisfy the customers. Improving quality for
customer satisfaction should definitely lead to
increase in overall productivity. This not only
satisfies external customers, but also the internal
customers. Satisfied internal customers all over
the organization will deliver more, thus improving
productivity. Improved quality leads to improved
productivity due to reduction in scrap, rework and
associated hassles. When the executives aim at
improved quality, it should also result in improved
productivity. The establishment of quality system
leading to ISO 9000 certification, following TQM
principles, establishing strategies for TQM
implementation, all should lead to reduced defects,
reduced rework, reduced hassles, improved clarity
in operations, thereby improving and increasing
productivity and profitability. This point should be
clearly understood, not only by the CEO, but also
by every employee in an organization.
Talk about Success in Economic
Performance. There is no harm in managers
talking about their achievements and feeling proud
of it. Therefore, the CEO should talk about
economic performance. It will help him to motivate
the employees and customers alike. There is no
end for improvement in economic
performance. By its very nature, the business
will block the improvement of economic
performance continuously. Year after year, the
organization will face different problems not only
from the customers, but also, from the employees,
shareholders, society and the suppliers. If the
management is not careful, the expenditure will
increase without any corresponding increase in the
organization’s economic output. Therefore, TQM
should be implemented, with a view to reduce the
blocks and overcome the barriers to
success. TQM should help the organizations to
climb up the ladder of economic performance. It is
therefore important that a sound foundation for
quality is laid through proper education, training
and determination of the employees. The aim
should be to improve quality and productivity,
thereby keeping the flag of the organization flying
high.
Stakeholders will Understand Economic
Better. The motivation of employees depends
upon many factors like their personal
development, happiness, sense of fulfillment,
security, achievement, etc. Motivation goes up,
when they find that the organization is performing
well. The employees will be proud to work with an
organization, which continuous to make profits and
sustain improvements over growth rates and
growth of profits and whose share price is on the
rise.
Economic performance is a clear indicator of the
health of the organization. Thus, it motivates the
customers to do business with the organization,
which is doing well. The suppliers too would like
to supply only to those firms, which are
economically sound, irrespective of the quality of
the product or service. The shareholders or the
proprietors would like to see profits. They are also
interested in the long-term benefits to the
organization. Similarly, every country should look
forward to better performance of its organizations,
so that it is able to achieve social goals. Thus, all
the stakeholders will equally gain on the best
economic performance of the
organizations. Therefore, every organization
should make efforts to see that the organization is
performing well, with regard to quality, employee
motivation, satisfaction of the customers as well as
in the economic front.
7. Management by Walking Around (MBWA)
MBWA ca be defined as the unannounced visit of
the CEO to the various work spots for getting direct
and first hand information, from the employees, the
customers and the suppliers. MBWA is not a
“State” visit. To quote Tom Peters, “State visit is
an announced visit by the CEO accompanied by
all the deputies in line and is a formal visit”. In
State visits, the employees or customers or
suppliers may not reveal the absolute truth and will
try to play safe. Therefore, this unannounced visit
has to be carried out at random. The CEO goes to
various work spots and talks to the employees
about what they are doing, how they are doing,
what are their problems, what help they require
and so on. The CEO has to make employees
comfortable to make them speak freely and
frankly. In fact, Tom Peters advocates that the
CEOs should spend more than 25 per cent of their
time in MBWA.
Barriers to Practicing MBWA. The problem
occurs mainly because MBWA appears to violate
the chain of command. The first line supervisors
feel agitated about the idea that information
directly reaches the CEO. They feel that they are
loosing their authority. The first line managers
should accept this concept and cooperate with the
CEO, in his MBWA in the larger interest of the
organization. The CEO, while ne can obtain
information and promise action within the
stipulated time, should ensure that the action is
taken through the chain of command. This way,
the problem could be solved fast, without making
the first line supervisors feel too
unhappy. However, in an appropriate manner the
CEO should also make attempts to convince the
first line supervisors that he is not going to destroy
the chain of command.
Advantages of MBWA. MBWA helps the
organization to consolidate the talents, wisdom of
all the employees, customers and suppliers. The
process helps the CEOs to remain in touch with the
people, customers and suppliers. It also gives the
message to the customers, employees and
suppliers that they are important to the
organization. It helps in attracting more business,
improving the quality of suppliers, workmanship in
the organization and customer relationship.
8. Measure for Success
Measuring for success primarily involves, looking
for, measuring and analyzing the feedback from
customers, either internal or external. An
organization marching towards Total Quality
Management (TQM) has to make efforts to
measure how well the organization is performing in
terms of fulfilling the customers needs and
expectations. The management should help
employees to know how well they are
doing. Employees should be helped to measure
and report performance. Each employee should
be helped to measure his own performance. Thus,
measurement should be part of routine work.
Measure 3 Ps. In a TQM environment, the
measurements have to encompass the total
system. The entire quality system should be
measured. Successful implementation of any
process means higher profits, improved
productivity, efficiency and above all improved
morale of the employees and satisfaction of all
other stakeholders. Therefore, the measuring of
success has to encompass all the phases and all
characteristics of the business. The measures
should be formulated for measuring the
performance of each one of the parameters, which
has an impact on the stakeholders. The
measurement should cut across 3 Ps, Process,
Personnel and Product.
PDSA for Measurement. PDSA Cycle
popularized by Deming, is an important tool for any
activity. It is more so for measuring success, since
it is a tricky affair and if not carried out
systematically can lead to wrong conclusions and
costly mistakes.
Plan for Measuring Success. In the planning
stage, the organization should identify the various
measures for success. It is very difficult to identify
the measures in a service organization. If it is a
manufacturing organization, it may be concluded,
for instance, that quality of the final product is the
most important measure. But in a service
organization, it is difficult to measure the quality of
the end product objectively.
The service organization has to first identify what
measures could be adopted to determine the
quality of service delivered. All such measures
need not be totally objective, some of them could
also be subjective in a service
organization. Experienced personnel in the field
would be able to suggest appropriate
measures. The employees themselves could
identify measures so that it would find easy
acceptance by the employees later at the time of
measurements as well as analyzing and
concluding. Employees may also be awarded for
suggesting good measures. The organization may
also solicit ideas for measures from its customers,
suppliers and even consultants. This is due to the
difficulty in finding appropriate measures in a
service industry. Such measures identified should
be placed before the quality council for a thorough
discussion. The quality council could also
nominate, if necessary, a set of employees to carry
out brainstorming of the ideas and prioritize the
same. Thereafter the quality council can finalize
the measures for success in the
organization. Some of the common measures for
service industries are:
1. Planned delivery time and actual delivery
time
2. Repeat customers
3. Perception of the customer about quality
4. Perception amongst customers about
competitors
5. Productivity
6. Revenue generated per employee
7. Revenue vs. expenditure ratio
8. Return on investment
9. Customer complaints
10. Rejects in process
11. Rejects at customer site
12. Rework
13. Reminders given by customers
14. Errors in invoices
15. Under payment/over payment
16. Result of field survey, etc.
Too many measures will complicate the
measurement process and may lead to
unnecessary expenditure. Therefore, the
management should identify a few vital measures
which when measured will indicate the successful
conduct of business in the entire organization.
The Do Phase of Measuring. The next step is the
do phase. At this stage, the identified
measurements should be carried out on trial basis
with direction from the quality council. The senior
executives should educate the junior employees
about the intent of the measures. Generally, no
employee would accept assessment of his work by
a third party. Such inhibitions and insecurity
should be eradicated from the minds of the
employees in the interest of the organization and
employees themselves. This is also essential for
the success of the measurement program as well
as the TQM program. If the employees are not
convinced about the need to measure, then there
is no way that the measurements could be carried
out in the organization for determining
success. Hence, educating employees is
important. Senior management should make
efforts to see that the employees accept the steps
to measure. The involvement of employees in the
identification and describing the measures is thus
helpful to overcome resistance from employees.
Study Phase of Measurement. The organization
should experiment with the proposed measures for
about two to three months. At the end of three
months, the quality council should meet again to
take stock of the situation, they should discuss and
see whether they need to carry out any changes in
the measures. In this phase, the quality council
could check the effectiveness of the measure, the
methods of measurement and the relationships of
the measures with actual customer satisfaction
achieved.
Quite often, people in the field of measurement
may look for perfection. Some non-starters or dis-
interested parties may seek perfection. They use
perfection as a lame excuse for not carrying out the
task. Perfection is definitely right. But, the drive
for perfection cannot stall innovative
idea. Therefore, there is nothing wrong in making
a start in the measurement process and do
corrections as experience gained. The
organization should start the measurement
process in the do phase and once the results of
measurements are available, they should be
analyzed by the quality council in the study phase
to find out if some more measures are required or
some are to be dropped or modified and so
on. This way an organization would be able to
come out with clear, objective oriented and perfect
measures.
The Act Phase of Measurement. In this phase
the measures and methods of measurements are
confirmed. The organization starts
measurements. Measure for success is a
continuing activity. However, results of the
measurements of various parameters could be
studied at regular intervals, analyzed and
communicated to the employees. It is essential
that the results of measurements be
communicated to the employees at regular
intervals, as it will motivate the employees to do
better than before. If the results are extremely
good, the employees will be motivated to do better,
if such results are coupled with awards for the
worthy teams. Even when there is no change in
the performance between two consecutive
measurements, the status quo will make the
employees feel shy and motivate them to do better
next time. Depending on the results, the
management should also initiate improvement
actions to keep up the tempo in the organization
and further improve. They should strive
continuously to be better than before. Therefore,
displaying results will not demoralize the
employees when the going is not good and will not
make the employees complacent when the going
is good, if the management is active.
9. Never Rest on Laurels, Continue to Improve.
The Tale of Tortoise and Rabbit. The tale of
tortoise and rabbit teaches us the lesson that one
should never rest on past laurels, but continue to
improve. Slow and steady wins the race and over-
confidence can lead to failure. It is important to
learn from the story that since rabbit was resting
on its laurels and past glory, it relaxed and lost the
race. No organization can afford to lose by resting
on its past laurels.
The Need to Improve Continuously. An
organization should aim at doubling the turnover
every two years, without additional manpower or
machinery. Many organizations have achieved
such growth rates. Such a growth rate is
achievable primarily due to two factors:
1. Cutting down the costs by doing right things,
right the first time
2. A higher output of the motivated employees
through extensive training.
1. Both factors are further expandable. The
quality level can reach zero defect
level. Even at that stage, the productivity of
the employees can further grow due to
improvement in the following:
1. Improved system in the organization due to
management based on TQM
2. Gaining more confidence due to achieving
success
3. Accumulation of the right experience and
hence cutting down lead time for jobs
4. Enhanced productivity due to improvement in
teamwork
5. Empowered employees expanding output due
to enthusiasm and motivation
Thus, an individual or organization should never be
resting on past success or laurel. They should
strive towards continuous success.
10. Build a Virtual Organization
Gone are the days when vertical integration was a
preferred strategy. But the situation has changed
now. A smarter way of doing business is to create
a near virtual corporation. Hence, the core part is
manufactured and the rest bought from qualified
vendors. This has been found to be highly
effective and profitable.
Vertical Integration. There are two extremes of
manufacturing. In the first extreme, everything,
from the raw materials to the final product is
manufactured under one roof. The other extreme
is buying everything from others and putting them
together and selling the assembled product. The
right way is to be selective in manufacturing and
buying the non-critical items from the
market. Vertical integration means that whatever
sub-units, components/materials, fixtures, etc.
needed for manufacturing a product are all
manufactured by the same organization. Materials
available in the market are not used. Efforts are
made to manufacture all that is needed in-
house. They don’t look at aspects such as the cost
effectiveness, specialization, etc. In this method,
they have to spend more for manufacturing non-
critical items available, with better quality and at a
lower cost from other sources. The pride of
ownership of everything overtakes other
considerations. This led organizations to waste
their efforts in manufacturing standard parts, which
could have been easily bought from others who
were specializing and selling at much lower costs
and with the right quality. This type of vertical
integration practiced in the 1970s failed to deliver
and gave way to virtual enterprise or virtual
organization.
Requirements For Virtual Enterprise. The
following steps are involved in running a virtual
enterprise:
1. Identify the most critical parts.
The first task is to identify the most critical parts of
a system to be manufactured. The critical parts
should be vital few from the many trivial parts,
which are the core or the nucleus for the product
or service. The strength of the organization should
lie in developing and manufacturing the critical
part, in the most competitive manner. In a
business environment, cost and quality are the
major considerations for selling. Therefore, the
organization should have the best engineers, who
specialize in designing and manufacturing critical
parts. Since only bulk production will bring in more
profits, everybody should try to concentrate and
manufacture in large numbers. Therefore, the
organization has to identify their core product. The
core product is in turn the critical product or crucial
product. The core product will fetch more revenue
compared to the secondary products or materials
of sub-assemblies since there are so many others
who are specializing in making them. The
organization should identify its primary product or
service and put in all efforts in manufacturing them
more efficiently.
2. Identify the other parts.
The next task is to identify all other items or
materials, which will enable delivering a product or
service. The organization should then formulate
specifications for all the secondary items. It should
do a market survey and identify all those suppliers
who can deliver them with quality and at
competitive prices and schedules.
3. Develop/identify vendors for the other parts. It
is very important to concentrate on developing
good vendors, rather than trying to carry out
vertical integration. Developing vendors and
buying from vendors is definitely cheaper than
making them all under one roof, due to their
specialization and bulk manufacture and thereby
reduced costs. Therefore, the task of the
organization is to identify good vendors and enter
into agreements or contracts, so that they will be
able to get the materials of the right specifications,
just in time and with zero defects.
4. Continuously increase sub-contracting. Times
have changed and it is the day of virtual
corporations. Therefore, the organization should
try to sub-contract more and more items, retaining
the core of the system for its own
manufacturing. The aim is to sub-contract as
much as possible. This will reduce the time,
energy, money and infrastructure to do better in
business, day by day. Therefore, the aim of virtual
corporations is to shed the unnecessary
manufacturing activity for earning more profits.
The same strategy may not work in all the
organizations in the same manner. Therefore,
strategies are to be selected or tailored to suit the
unique nature of the organization.
Leadership, Competencies and Practices
Leadership is the ability to positively influence
people and systems under one’s authority so as to
have a meaningful impact and achieve important
results.
The Human Development and Leadership Division
of the American Society for Quality has
summarized six competencies for leadership
based on more than 50 authors’ thoughts on
leadership. These are:
Navigator. Creates shared meaning and provides
direction towards a vision, mission, goal or end-
result. This competency may entail risk taking and
requires constant evaluation of the operating
environment to ensure progress in the appropriate
direction is achieved.
Communicator. Effectively listens and articulates
messages to provide shared meaning. This
competency involves the creation of an
environment that reduces barriers and fosters
open, honest and honorable communication.
Mentor. Provides others with a role to guide their
actions. This competency requires the
development of personal relationships that help
others develop trust, integrity, and ethical decision-
making.
Learner. Continuously develops personal
knowledge, skills, and abilities through formal
study, experience, reflection, and recreation.
Builder. Shapes processes and structures to
allow for the achievement of goals and
outcomes. This competency also entails
assuming responsibility for ensuring necessary
resources are available and the evaluation of
processes to ensure effective resource use.
Motivator. Influences others to take action in a
desirable manner. This competency also includes
the evaluation of people’s actions to ensure they
are performing consistently with the mission, goal,
or end result.
Personal Leadership Characteristics
1. Accountability. Taking responsibility for the
organization, community, or self that the leader
serves. This provides the means for measuring
performance and dealing with performance that is
not good.
2. Courage. The mental or moral strength to
venture, persevere, and withstand danger, fear, or
difficulty with a firmness of mind and will, allowing
leaders to navigate into the unknown.
3. Humility. What gives excellent leaders their
ability to mentor, communicate, and learn, and
understand that they are servants of those that
follow.
4. Integrity. The ability to discern what is right from
wrong and commit to the right path.
5. Creativity. The ability to see possibilities,
horizons, and futures that don’t yet exist, enabling
the leader to help create a shared vision.
6. Perseverance. Sticking to a task or purpose, no
matter how hard or troublesome. This is vital to
overcoming obstacles and motivating
subordinates.
7. Well-Being. The ability to stay healthy in both
work and play, demonstrating the importance of
being ready to implement leadership
competencies when needed.
Key Practices for Performance Excellence
Leadership
The following are the practices for performance
excellence leadership:
1. Set organizational vision and values and deploy
them through the organization’s leadership
system, to the workforce, to key suppliers and
partners, and to customers and other stakeholders
as appropriate.
2. Demonstrate a commitment to organizational
values through personal actions.
3. Promote an organizational environment that
fosters, requires, and leads to legal and ethical
behavior.
4. Foster a sustainable organization by creating (a)
an environment for organizational performance
improvement, the accomplishment of the
organization’s mission and strategic objectives,
innovation, competitive or role-model performance
leadership, and organizational agility; (b) an
environment for organizational and workforce
learning; (c) a culture that fosters customer
engagement; and developing and enhancing
leadership skills and developing future
organizational leaders.
5. Communicate with and engage the entire
workforce by encouraging frank, two-way
communication throughout the organization,
communicating key decisions, and taking an active
role in reward and recognition programs to
reinforce high performance and a customer and
business focus.
6. Create a focus on action to accomplish the
organization’s objectives, improve performance,
and attain the organization’s vision.
7. Create and balance value for customers and
other stakeholders in their organizational
performance expectations.
8. Maintain an effective governance system that
provides for accountability for management’s
actions, transparency, and protection of
stakeholder and stockholder interests.
9. Evaluate performance of senior leadership and
use performance reviews to improve personal
leadership effectiveness.
10. Actively support and strengthen key
communities such as charitable organizations,
education, and others.
Leadership Theories

Let us now proceed to the leadership theories

which will serve as your guiding principles in being
a leader in your organization. Kindly watch the
following video on these leadership theories:

Leadership Styles

Please watch the video on the different leadership

styles from the following URL.

This is the end of our discussion on the second

principle of TQM. The next chapter will present to
your the next principle of TQM which is employee
engagement.
CHAPTER 5 - EMPLOYEE ENGAGEMENT
Introduction
The employees are the strength of an
organization. They are the prime contributors to its
success. When an organization wants to expand
its business or increase its profits, only the
employees can make it happen. The only
expandable resource in the organization are the
employees. Any improvement will happen only
because of the employees. Therefore, employee
involvement is essential for TQM.
Objectives
At the end of this chapter, you should be able to:
1. describe the different theories of
motivation;
2. describe the importance of teamwork;
3. identify and describe the communication
process;
4. describe the importance of training and
mentoring;
5. describe the importance of recognition
and reward;
6. describe the importance of feedback and
performance appraisal;
7. define empowerment;
8. identify the steps in empowering; and
9. identify the management actions to
practice empowerment.
People are categorized into three (Ramasamy,
2010). These are the top notch or self-actualized
(10%), the fence sitters (80%), and the difficult to
improve (10%). It is believed that about 5 to 10 per
cent of the employees are self-motivated and
whatever be the circumstances in the organization,
they continue to do their best. They never get
demotivated, even if there are demotivating factors
in the organization. The bottom 5 to 10 per cent
are the difficult people who do not want to get
motivated. However, 80 to 90 per cent of the
people are fence sitters. Their motivation level
depends on management strategies. They join the
top 10 per cent, if management is effective,
otherwise they join the bottom 10 per
cent. Essentially, they look at the treatment
received both by the top 10 per cent and the
bottom 10 per cent. If the top 10 per cent are
recognized, rewarded and treated well, then the
middle 80 per cent are drawn to join them. If the
management does not differentiate and treat
everyone alike, then there is likelihood that the
middle group may join the bottom 10 per cent
causing organizational problems.
Let us now discuss why people need to be
motivated. The different theories of motivation
explain the different kind of employees and why
they need to be motivated.
Motivation Theory of Individual Employees
Theory X
Sigmund Freud is the author of Theory X and is
his theory, he characterizes employees as
follows:
· Avoid work
· No ambition
· No initiative
· Do not take responsibility
· Needs security
According to Freud, to make these employees
work the management has to do the following:
· Reward
· Coerce
· Intimidate
· Punish
If this theory is applicable to any employee, then
the organization cannot function with such
employees. This theory assumes that the
employees cannot be trusted and the employees
have to be supervised all the time.
Theory Y
Douglas McGregor is the author of Theory
Y. According to McGregor, people are are
described as follows:
• Want to learn
• Work is a natural activity
• Have self-discipline
• Develop themselves
This type of employees does not get motivated as
much by any reward, but they seek freedom to do
difficult and challenging jobs, all by themselves. If
the manager can guide the employees in
identifying challenging jobs, the potentials of the
employees will be realized. If all employees are of
this type, then there is no need for supervision.
Theory Z
Abraham Maslow is the author of Theory
Z. According to Maslow, there are five (5) basic
human needs. These are physiological needs,
safety needs, love needs, esteem needs and self-
actualization needs.
Self-actualization needs are the greatest
motivators for human beings. Maslow believes
that human beings are always dissatisfied and they
would like to achieve more and more. That is the
reason for achievements.
Physiological needs belong to the lowest level of
needs. These are the basic needs for any human
being. Every human being wants to earn a living
for himself and his family. When the physiological
needs are satisfied, the safety need takes over. At
this stage, the human beings look for job
security. After this, the need for love or belonging
arises. Every human being wants to belong to a
reputed organization. When all the above three
are satisfied, then the human beings look for self
esteem and self-respect. He looks for recognition
and appreciation. In the next stage, the human
beings look for self-actualizing fulfillment. They
would like to develop themselves as creative
persons and want job satisfaction. Thus, an
employee’s need rises to the higher level when he
attains satisfaction at the current level.
Herzberg’s Theory
Frederick Herzberg has divided the motivational
aspects of human beings into the following:
· Hygiene Theory
· Motivation
The hygiene theory is the minimum that every
employee requires for being satisfied. Without
them, the employee will get dissatisfied.
Hygiene Theory
The hygiene factors include:
· The company
· Its policies and its administration
· The kind of supervision which people
receive while on the job
· Working conditions
· Interpersonal relations
· Salary
· Security
Motivation
The motivation factors include:
· Achievement
· Recognition for achievement
· Interest in the task
· Responsibility for enlarged task
· Growth and advancement to higher level
tasks
Teamwork
Every organization may start initially with one
person. Personnel are added in the organization
to do more work. Each person is recruited for a
specific job. As the organization grows, a formal
structure is evolved to enable better management
and communication. Teams are formed to fulfill
the objectives. It is part of the regular
organizational structure of the organization. The
team will coordinate the day-to-day activities of
the team. He is responsible for the output of his
team while each member of the team is
responsible for the work assigned to him. It is
very clear that teams are made to do more work,
which individuals can’t.
Effective Communications
Effective communication is very important in the
organization. There are three ways of
communicating in the organization. These are
upward, downward and horizontal
communication. Upward communication involves
communicating with supervisors or
managers. Downward communication involves
communicating to subordinates or junior
employees while horizontal communication
involves communicating with peers, counterparts,
customers and suppliers (both internal and
external)
Training and Mentoring
An organization is affected by both internal and
external factors in the environment. Since there
is dynamism in the organization’s environment,
there is a need for continuous training. There are
employees who can adapt quickly to the changes
in the environment but there are employees who
are slow to adjust to these changes. It is
therefore necessary to implement training
continuously so that the employees will be
equipped with knowledge and skills to do their job
with confidence.
Training is considered as a formal activity of the
organization. After the training, it is not expected
that employees could master the knowledge and
skills learned during the training. It is therefore
necessary for mentoring the employees until such
time that they have mastered the knowledge and
skills in doing the work independently.
Recognition and Reward
In a TQM environment, it is important to
recognize achievement of employee, customers
and suppliers. Every employee or supplier is to
meet the requirements to satisfy his
customers. Meeting customer requirements is
not enough for recognition. Exceeding customer
requirements or satisfying customers, whether
internal or external, can be considered to be an
achievement. Such achievements, if they are
recognized and appreciated, should enable the
achievers to perform with more interest,
enthusiasm and by putting in more efforts. If
achievement is not recognized then they may
drop from the normal level of
performance. Recognition has to aim at
transforming each employee as a performer and
an achiever, as this is important step towards
achieving the goals and objectives of the
organization.
Awards should be given to the real achievers but
it should not be a routine affair. The selection of
the awardees should be given due consideration,
so that the few who have performed a top notch
job are awarded. Awards should cut across the
entire organization and the awardees should be
accepted by others.
There is no harm in awarding individual for his
meritorious service. But it may cause hurdles in
practicing teamwork in some cases. Hence, the
organization should as a far as possible, reward
the teams. The organization should give
emphasis on recognizing the teams as against
the individuals, so that there is a good harmony in
the organization.
Feedback and Performance Appraisal
Feedback
For continual improvement in the organization, it
is better to know the result of an action. Actions
are taken not only by management, but also by
junior employees in organization. Therefore, both
the management and the employees should look
forward to getting a feedback on the action taken,
the employees from the management and vice
versa, in the interest of improving quality
continuously. Such feedback should be analyzed
by the concerned individuals, which would be a
good input for the next decision to be taken.
In TQM, the management should seek feedback
as well as the employee should receive a
feedback on the quality of his output. When a
feedback is given, it should be the most
appropriate. Feedback should never be
accumulated forever. The feedback should be
given at the appropriate time. The feedback
session could be short and brief so that it will be
taken seriously.
Each feedback session is a corrective action of
the system, therefore, the effect of feedback has
to be monitored, studied and analyzed. If the
feedback is given in an appropriate manner and if
it is right then definitely the employee will be
motivated to correct himself. As a result of
feedback if the employee is not improving the
performance, then the management has to find
out the reasons, so as to give again the feedback
of the employee’s behavior and workmanship.
Feedback should be given continuously. Some
employees who are doing extremely well also
need feedback. The feedback will be never
ending for any of the supervisory persons, since
the system will try to drift away from the set goals
often and the management will be required to
correct the system through the feedback
mechanism. Thus, feedback is a continuous
mechanism.
Performance Appraisal
Performance appraisal is to be used for the
development of employees. The performance of
each employee should be reviewed and the
reports submitted to the management should be
used for the following purposes:
· Promotion
· Granting of additional increments
· Training the employees
· Reallocation of duties
The performance appraisal is a formal activity
carried out by the supervisor for each
employee. Innovative techniques can be used for
motivating the employees, based on performance
appraisal. It must be ensured that the
performance appraisal in no way demotivates the
employees. The most important requirement for
carrying out performance appraisal is giving
awards and continuing it successfully.
Empowerment
Empowerment of employees is one of the latest
management techniques deployed to result in
continuous improvement in the
organizations. Empowerment means
involvement of all the employees for improvement
of processes on continual
basis. Empowerment is “an organizational state,
where people are aligned with business direction
and understand their performance boundaries,
thus enabling them to take responsibility and
ownership while seeking improvements,
identifying the best course of action and initiating
steps to satisfy customer
requirements”. Empowerment means transfer of
responsibility of satisfying customers to
employees. It means that the employees own the
process of satisfying the customers. They
conduct themselves as if they are the owners of
the process who know that they cannot get profit
if the customers, both internal and external, are
not satisfied. The initiative for improvements
have to be taken by employees themselves and
they should not wait for the management to
initiate. For this purpose, they have to identify the
best course of action.
7. Provide support and tools wherever required
for problem solving
8. Reward worthy teams
9. Provide communications infrastructure and
Information Technology infrastructure for the
teams to carry on the tasks, without difficulty.
The topics presented earlier are the principles in
involving employees to work with the
management in contributing to the attainment of
organizational goals and objectives towards it’s
the fulfillment of the vision.

Such delegation of authority to employees cuts

across the organization. The empowered teams
should conduct themselves with delegated
authority and responsibility.

Empowerment of employees is not without

bounds or limitations. It should be structured and
planned to achieve the corporate goal in the TQM
way. Empowerment should be done in a team
and not the individuals. Even when an individual
is empowered, it is done so in his capacity as the
coordinator of the team. It is not personal to the
individual. The team has to achieve
the objectives set forth by the management.

Let us now proceed to the steps in empowering

self-managed teams. The following are the steps
in empowering teams:

1. Agree on what they will produce or carry out.

2. Decide how to organize the team.
3. Decide on the responsibility within the team.
4. Decide on flow of work.
5. Audit the process.
6. Decide on improvements and restart.
Finally, the following are the actions that the
management will take to practice empowerment:
1. Accept that teamwork is more beneficial than
hierarchical management
2. Invest time and money on the team building
and training before empowerment
3. Formulate a clear-cut, unambiguous vision
and mission statement and the system for quality.
4. Be prepared to spend more time at the initial
stages and later on to listen to the problems of
the team members
5. Prepare to wait patiently for the success of
the empowered teams
6. Prepare to equip the teams with facts and
trust them
 CHAPTER 6 - PROCESS FOCUS
INTRODUCTION
Everything that is done in an organization is a
process. According to Deming and Juran, the
overwhelming majority of quality problems are
associated with processes, few are caused by the
workforce directly. Thus, it is important to
understand how to design, manage, and improve
processes, and this responsibility belongs to
management.
Objectives
At the end of this chapter, you should be able to:
1. define process;
2. define process management;
3. identify the categories of processes and
requirements;
4. describe process design;
5. describe process control; and
6. describe process improvement;
Process Management
A process is a sequence of linked activities that is
intended to achieve some result, such as
producing a good or service for a customer within
or outside the organization. Generally, processes
involve combinations of people, machines, tools,
techniques, materials, and improvements in a
defined series of steps or actions.
Process management involves planning and
administering the activities necessary to achieve a
high level of performance in key organizational
processes, and identifying opportunities for
improving quality and operational performance,
and ultimately, customer satisfaction. Process
management consists of three major
activities. These re design, control, and
improvement.
Design focuses on ensuring that the inputs to the
process, such as materials, technology, work
methods, and a trained workforce are adequate
and that the process can achieve its
requirements.
Control focuses on maintaining consistency in
output by assessing performance and taking
corrective action when necessary.
Improvement focuses on continually seeking to
achieve higher levels of performance, such as
reduced variation, higher yields, fewer defects and
errors, smaller cycle times, and so on. Cycle time
refers to the time it takes to accomplish one cycle
of a process (e.g. the time from when a customer
orders a product to the time that it is delivered, or
the total time needed to introduce a new product).
Cycle time is one of the most important metrics in
process management.
Individuals or groups, known as process owners,
are accountable for process performance and
have the authority to control and improve their
process. Process owners may range from high-
level executives who manage cross-functional
processes . someone is responsible to manage
the process and optimize its effectiveness.
Identifying Processes and Requirements
Processes can be categorized into value-creation
and support processes. Value-creation
processes (sometimes called core processes) are
those most important to “running the business” and
maintaining or achieving a sustainable competitive
advantage. Value-creation processes frequently
align closely to an organization’s core
competencies and strategic objectives. They drive
the creation of products and services, are critical
to customer satisfaction, and have a major impact
on the strategic goals of an organization.
Support processes are those that are the most
important to an organization’s value-creation
processes, employees, and daily
operations. They provide infrastructure for value-
creation processes, but generally do not add value
directly to the product or service. Support
processes might include processes for finance and
accounting, facilities management, legal services,
human resource services, public relations, and
other administrative services. Value-creation
processes generally require a higher level of
attention than do support processes, however,
failure to adequately manage support processes
can certainly impede the functioning of value-
creation processes.
Processes can be broken down in a hierarchical
fashion. At the top level, an organization must
identify the major value-creation and support
processes that require attention by senior
managers. Each major process consists of many
subprocess that are managed by functional
managers or cross-functional teams. Finally, each
subprocess consists of many specific work steps
performed by individuals at the performer level.
Understanding the requirements that processes
should meet is vital to designing them. In general,
value-creation process requirements are driven by
consumer or external customer needs. Support
process requirements, on the other hand, are
driven by internal customer needs and must be
aligned with the needs of key value-creation
processes.
Process Design
The goal of process design is to develop an
efficient process that satisfies both internal and
external customer requirements and is capable of
achieving the requisite level of quality and
performance. Other factors that might need to be
considered in process design include safety, cost,
variability, productivity, environmental impact,
measurement capability, and maintainability of
equipment. Because processes generally cut
across traditional organizational functions and
rarely operate in isolation, process designs must
be considered in relation to other processes that
impact them. Process design begins with
understanding its purpose and requirements, who
the customer is, and what outputs are produced.
Designing a process requires a systematic
approach. For most processes, this includes
defining the sequence of steps that need to be
performed, along with formal documentation of
procedures and requirements. To describe the
specific steps in a process and their sequence, we
generally develop a process map or flowchart,
along with standard operating procedures and
work instructions. To give you an idea on the
different flowchart symbols, kindly watch the
following video:
Process Control
Control is the activity of ensuring conformance to
the requirements and taking corrective action
when necessary to correct problems and maintain
stable performance. Any process performance
measure naturally fluctuates around some
average level. Abnormal conditions or unusual
events may cause a departure from this
pattern. Removing the causes of such
abnormalities and maintaining consistent
performance is the essence of control. However,
even a controlled process that has too much
variation can be detrimental to customer
satisfaction and financial performance. Process
control is the responsibility of those who directly
accomplish the work. Long-term improvement is
generally the responsibility of management, with
the help and engagement of the workforce.
Any control system has four elements: (1) a
standard or goal, (2) a means of measuring
accomplishment, (3) comparison of results with the
standard to provide feedback, and (4) the ability to
make corrections as appropriate. Goals and
standards are defined during planning and design
processes. They establish what is supposed to be
accomplished. These goals and standards are
reflected by measurable quality characteristics,
such as product dimensions, service times, or
employee behavior. Measuring quality
characteristics may be accomplished through
some sort of inspection activity. By comparing
results with the standards or goals, one can
determine whether corrective action is needed.
Process Improvement
Continuous improvement refers to both
incremental changes, which are small and gradual,
and breakthrough improvements, which are large
and rapid. Continuous improvement is one of the
foundation principles of total quality. It is an
important business strategy in competitive markets
because
· Customer loyalty is driven by delivered
value.
· Delivered value is created by business
processes.
· Sustained success is competitive markets
requires a business to continuously improve
delivered value.
· To continuously improve value-creation
ability, a business must continuously improve its
value-creation processes.
Improvement should be a proactive task of
management and be viewed as an opportunity, not
simply as a reaction to problems and competitive
threats. One important area for improvement is
reducing cycle time. Reductions in cycle time
serve two purposes. First, they speed up work
processes so that customer response is
improved. Second, reductions in cycle time can
only be accomplished by streamlining and
simplifying processes to eliminate non-value-
added steps such as rework. This approach forces
improvements in quality by reducing the potential
for mistakes and errors. By reducing non-value-
added steps costs are reduced as well. Thus,
cycle time reductions often drive simultaneous
improvements in organization, quality, cost, and
productivity. Significant reductions in cycle time
cannot be achieved simply by focusing on
individual subprocesses; cross-functional
processes must be examined all across the
organization. Through these activities, the
company comes to understand work at the
organizational level and engage in cooperative
behaviors. Thus, cycle time reduction often drives
simultaneous improvements in quality and
productivity.
Breakthrough improvement refers
discontinuous change, as opposed to the gradual,
continuous improvement philosophy
kaizen. Breakthrough improvements result from
innovative and creative thinking; often these are
motivated by stretch goals,
breakthrough objectives. Stretch goals force an
organization to think in a radically different way and
to encourage major improvements as well as
incremental ones.
The development and realization of
improvement objectives, particularly
stretch objectives, is often aided through the
process of benchmarking.
Benchmarking is defined as “measuring your
performance against that of best-in-class
companies, determining how the best-in-class
achieve those performance levels, and using the
information as a basis for your own company’s
targets, strategies, and implementation”, or more
simply, “the search of industry best practices that
lead to superior performance”.
The term best practices refers to approaches that
produce exceptional results, are usually innovative
in terms of the use of technology or human
resources, and are recognized by customers or
industry experts.
benchmarking identifies the most effective
practices in key work processes in organizations
that perform similar functions, no matter in what
industry.
Through benchmarking, an organization discovers
its strengths and weaknesses and those of other
industry leaders and learns how to incorporate the
best practices into its own
to operations. Benchmarking can provide motivation
to achieve stretch goals by helping employees to
of see what others can accomplish.
Reengineering has been defined as “the
or fundamental rethinking and radical redesign of
business processes to achieve dramatic
improvements in critical, contemporary measures
of performance, such as cost, quality, service, and
speed. Such questioning often uncovers obsolete,
erroneous, or inappropriate assumptions. Radical
redesign involves tossing out existing procedures
and reinventing the process, not just incrementally
improving it. The goal is to achieve quantum leaps
in performance. Successful reengineering
requires fundamental understanding of processes,
creative thinking to break away from old traditions
and assumptions, and effective use of information
technology.
Benchmarking can greatly assist reengineering
efforts. Reengineering without benchmarking
probably will produce 5 to 10 percent
improvements; benchmarking can increase this
percentage to 50 or 75 percent (Evans and
Lindsay, 2014).

An organization may decide to engage in

benchmarking for several reasons. It eliminates
“reinventing the wheel” along with associated
wasted time and resources. It helps identify
performance gaps between an organization and
competitors, leading to realistic goals. It
encourages employees to continuously
innovate. Finally, because it is a process of
continuous learning, benchmarking emphasizes
sensitivity to the changing needs of customers.

There are two (2) types of benchmarking. These

are competitive benchmarking and process
benchmarking. Competitive benchmarking is
studying products or business results against
competitors to compare pricing, technical quality,
features, and other quality or performance
characteristics. Process
 CHAPTER 7 - IMPROVEMENT
Introduction
In order for the organization to survive or
become a leader in the industry, it has to
implement continuous or continual
improvement. TQM means gradual and
continuous or continual improvement of the
processes within the organization. TQM
consists of finding new opportunities for
improvements of processes, improving them,
measuring improvement and then repeating the
cycle again and again. The different
methodologies or techniques for continuous
process improvement will be discussed in this
chapter.
Objectives
At the end of this chapter, you should be able
to:
1. describe the Juran’s Trilogy;
2. describe the basic principles of Kaizen;
3. describe Kaizen Blitz;
4. describe the steps in 5S practices;
5. define business process reengineering;
and
6. describe the steps in business process
reengineering.
JURAN’S TRILOGY
According to Juran, quality results from the three
managerial processes, namely: quality
planning, quality control and quality
improvement.
Quality planning is the process of preparing to
meet quality goals. Quality control is the
process of meeting quality goals during
operations and quality improvement is the
process of breaking through to unprecedented
levels of performance. Quality planning is
completed before the operations begin. Quality
control is helpful to keep the operations under
control, namely the defects under control. The
defects are caused by defects in planning. To
reduce the high level of defects, the organization
initiates quality improvements which decreases
the defect level. Juran’s trilogy should be
applied to improve quality at periodic
intervals. Thus, it is useful for continuous
improvement of quality. Therefore, an
organization should initiate quality improvement
efforts on a continuing basis and update the
quality planning.
KAIZEN
Kaizen is a Japanese word which means
gradual, orderly and continuous
improvement. Kaizen has two activities carried
out simultaneously. These are maintenance
and improvement. An organization function with
a set of processes. Maintenance involves
activities directed at maintaining current
technological, managerial and operating
standards. While efforts are going on for
improving the processes, the present activities
should continue as per the current standards
without any interruption. It should not come to a
halt. Kaizen involves small, continuous
improvements of the current processes. Thus,
an organization will be involved in two distinct
activities simultaneously namely, maintenance
and Kaizen. The improvement function aims at
revising the current standards. Kaizen is
different from innovation. Innovation aims at
dramatic improvement of the existing processes,
whereas, Kaizen aims at small , incremental
improvement in the existing processes.
Three Basic Principles of Kaizen
The three basic principles of Kaizen are:
1. Workplace effectiveness
2. Elimination of waste, strain and
discrepancy
3. Standardization
Workplace effectiveness. Japanese have
developed the 5S tools for addressing the work
place effectiveness which we will discuss later.
Eliminating waste, strain and
discrepancy. Kaizen is achieved through
application of 5S tools for workplace
effectiveness and elimination of the three MUs
which stand for Muda (waste), Muri (strain) and
Mura (discrepancy). The wastes are not free,
but have been paid for by the organization, since
those who produces wastes also get paid and
the material wasted costs money. Therefore,
one has to minimize and ultimately eliminate the
waste in an organization.
Standardization. Kaizen stresses
standardization of processes, materials,
machinery, etc. with the following objectives:
• Represent the best, easiest and safest
way to carry out a job in the form of
operating procedures and work
instructions
• Represent the best way to preserve know-
how and expertise and standardize the
procedures for the same
• Evolve effective means to measure
performance and standardize the same
• Standardize all the procedures that are
used in the organization for maintenance
and improvement of process
• Standardize the training programs
• Standardize the audit for diagnosing
problems
• Standardize the procedure for preventing
occurrence of errors and minimizing
variability
Thus, Kaizen consists of three basic principles
namely the application of 5S for improving
workplace effectiveness and simultaneously
reducing and eliminating three MUs as well as
standardization of methodologies.
KAIZEN BLITZ
Kaizen Blitz, on the contrary, is a quick
improvement methodology. A large number of
organizations embark upon Kaizen Blitz to
unleash employee creativity and dramatically
improve the operations overnight. Usually, the
Kaizen Blitz is completed in a single week. The
solutions are implemented quickly.
While Kaizen event takes place within the span
of one week, the advance preparation may take
much longer. The first step is to identify target
areas where improvements will have a
significant competitive impact. It’s also
important to analyze the physical layout to
determine what equipment would be difficult to
relocate.
Whether it is a Kaizen Blitz or Kaizen in the
traditional sense, it involves the following:
• Application of 5S for improving workplace
effectiveness
• Reduction and finally elimination of three
MUs
• Standardization of effective methodologies
for carrying out the work.
5S PRACTICES
Kaizen is a carefully evolved strategy by
Japanese for improved competitiveness of
business. It is a collection of tools. The Kaizen
toolbox includes the 5S for improving workplace
effectiveness. 5S is rather a management tool
focused on fostering and sustaining high quality
housekeeping. The 5S practices are:
• Sort
• Straighten
• Scrub
• Systematize
• Standardize
1.Seiri – Sort
The objective of Seiri is to sort and throw away
unnecessary items. Separate tools, machinery,
products, inspection, work in progress, and
documentation into necessary and unnecessary
and discard unnecessary items.
2. Seiton – Straighten
The purpose of this tool is to arrange necessary
items in a neat, proper manner so that they can
be easily retrieved for use and to return them to
their proper locations after use. For easy and
fast access when needed, everything has a
place and everything in its place. The following
are the steps involved in this practice:
• Plan to arrange neatly
• Decide where things should be stored
• Be consistent in following the rules
3.Seiso – Scrub
The objective of Seiso tool is to clean and
inspect the respective work places thoroughly,
so that there is no dust on the floor, machinery
and equipment. Keep machinery and work
environment clean.
4.Seiketsu – Systematize
The objective of this tool is to maintain high
standards of work place organization by
keeping everything clean and orderly at all
times. Develop routine practices for cleaning STEPS IN BUSINESS PROCESS
and checking. REENGINEERING

5.Shitsuke – Standardize The steps involved in BPR are similar to those in

TQM. However, in reengineering, much bigger
The objective of the last 5S tool is to make the results are expected and not incremental
previous four steps part of the daily routine and improvements. The five phases of
to observe self-discipline through continuous reengineering cycle are as follows:
practice. Follow procedures and standardize
continuously to improve processes and 1. Planning
reestablish standards.
2. Process Study
BUSINESS PROCESS REENGINEERING
(BPR) 3. Study of the best practices

BPR is undertaken essentially to result in a 4. Redesign

quantum jump in performance of
processes. BPR is synonymous with innovation 5. Implementation
because it is more than just automating or
applying Information Technology to the existing This cycle repeats itself whenever the
processes or operations. It will bring in benefits management wants dramatic improvements in
to all stakeholders of the organization. BPR is the performance of the
the fundamental rethinking and radical organization. Reengineering does not fit in
redesign of business processes to achieve Kaizen. However, reengineering may be called
dramatic improvement in critical, contemporary for occasionally to make quick and dramatic
measures of performance, such as cost, quality, improvements in the process.
service and speed. A dramatic improvement
can take place only when the change in the
process is radical and bold. Dramatic
improvements will only help the organization to
leapfrog in performance or achievements. The
objective of BPR is to reduce the cost of
maintaining quality, improving service features
and delivering the products and services fast.

Fundamental Rethinking

Dramatic improvements can take place through

elimination of redundant operations,
unnecessary operations and operations, which
add cost, but, not value to the products and
services. BPR is an opportunity for innovative
persons to decide, after due considerations,
which processes are redundant and make a
recommendation accordingly to the
management. Then, the management will take
a final decision to eliminate the process.

Radical Redesign

Dramatic improvements cannot be achieved

only through fundamental rethinking. It calls for
design of new processes. Redundant
processes, processes that inhibit quick action
and need unnecessary approvals should be
dispensed with.
 CHAPTER 9 - RELATIONSHIP
MANAGEMENT
INTRODUCTION
An organization exists as a system. In a system,
there are inputs, processes and outputs. The
suppliers provide inputs to the organization
which definitely affect the operations of the
entire system. Thus, it is but important to focus
on the 7th TQM principle which is Relationship
Management. Here, relationship management
is the relationship between the supplier and the
organization needing inputs either materials,
supplies, equipment or services.
OBJECTIVES
At the end of this chapter, you should be able
to:
1. explain the importance of suppliers;
2. describe supplier selection;
3. describe incoming inspection;
4. describe how to rate supplier;
5. describe proper communications with
supplier;
6. describe how seminars are provided by
the organization;
7. describe the support for improving
infrastructure of the supplier; and
8. describe when to give bonus and
penalties to vendors or suppliers.
IMPORTANCE OF SUPPLIERS
The quality of the products or services is
determined by the quality of raw materials and
supplies. If the quality of the raw materials
bought does not meet the standard or
questionable, then the quality of the end product
will also be questionable. Therefore, the quality
of supplier is quite important. Hence,
organizations are paying attention to suppliers’
quality. The organization has to consistently
make efforts to see that the vendor’s supply is
up to the mark.
SUPPLIER SELECTION
An organization should evolve a suitable
methodology for selection of right
suppliers. Selection of right suppliers is the
most important activity with regard to supplier
partnership. The organization has to organize a
team of executives to assess the quality of
proposed suppliers. The same team has to
decide on the criteria on selecting the right
suppliers.
INCOMING INSPECTION
Appraisal or incoming inspection of materials on
sampling basis may be required although the
supplier would have already inspected the items
before shipment. The organization should
gradually make the supplier to take full
responsibility for the quality of the
supplies. However, the organization should not
accept the materials without any
checking. Initially, the organization may be
carrying out the inspection on sampling basis,
with more detailed measurements on the
incoming materials. As confidence is gained,
the organization can reduce the level of
inspection. Nevertheless, they should continue
to carry out inspection on sampling basis. The
results of inspection should be communicated to
the vendors, immediately without loss of time, so
that it will alert them for improving quality.
SUPPLIER RATING
The vendors are to be continuously
assessed/rated, based upon the performance of
the supplies with respect to some or all of the
following parameters:
• Quality
• Price
• Delivery
• Services
PROPER COMMUNICATIONS
In order to have effective communications
between the vendor and the vendee, the
acquiring organization has to prepare clear
specifications for the materials they are
supposed to purchase from the vendor. The
purchase order should contain the requirements
in clear terms. The quantity required, the style
or applicable specifications, inspection
requirements, delivery instructions, etc. should
all be communicated clearly. Faster
communication modes such as email and fax
could be utilized to improve the communication
between the vendor and the vendee. The
supplier’s seminars, the visit of the executives
from the organization to the vendor and vice
versa should be utilized to improve the
communications and bridge gaps, if any. No
doubt, it costs money and time for proper
communication with the vendors. But there is no
escape from this. If vendor’s quality is poor, then
the quality of the end product will also be poor.

SUPPLIER SEMINARS

At regular intervals, the executives of the

organization should visit the vendors. During
the visit, they should also conduct seminar for
the employees of the vendors. During the
seminar, they should educate them about the
latest trends in quality assurance and other
related matters. They should also make use of
this opportunity to bring out the defects noticed
in the materials supplied by the vendor.

SUPPORT FOR IMPROVING

INFRASTRUCTURE

The organization can help the vendors in

improving their infrastructure. If allowed, they
could give short-term loans to help them buy
necessary instruments or machinery. They
could also allow them to use some of the spare
facilities available in the organization. The
organization should give all possible assistance
so that the vendor is able to supply the materials
as per requirements, as otherwise the
organization has to take additional responsibility
for making them in-house or in identifying and
developing another vendor.

BONUS AND PENALTIES

The vendors should also be treated carefully and

tactfully. They should be motivated to perform
better. The measures of motivation can be as
simple as timely payment or early payment or
even advance payment depending upon the
quality of the product supplied. The award-
winning suppliers will further improve by
conforming to quality and delivery schedules. If
the vendor is not performing well, minor
punishments such as delayed payments may be
good enough to correct the performance of the
vendors. It is important for the vendor to know
that the organization monitors his
performance. For this purpose, a database on
the vendor’s history should be maintained by the
organizations and regular feedback given to
improve their performance continuously.