Introduction
Global industries are becoming more competitive as technologies and economies evolve. Modern markets demand companies’ willingness to implement managerial philosophies focusing on customer satisfaction in particular. The expansion of a business often means its subsequent disregard of the product’s quality. Consumers value quality over quantity, so companies must hold themselves to high standards.
The most effective way to do that is to apply for quality management programs as a part of the companies’ operations. These programs include ISO 9000, Lean Six Sigma, and Total Quality Management (TQM). In this case study, the principles and advantages of TQM are going to be discussed in detail. A proposal for the implementation of TQM policies is going to be developed in the context of an airline company based in Saudi Arabia.
Saudi Arabian Airlines Overview
Saudi Arabian Airlines, also known as Saudia, is the flag airline carrier in Saudi Arabia, but it provides air transportation services worldwide with flights to more than 100 destinations around the world. It is a government-owned company that is supervised directly by the Ministry of Defense. Saudia was founded in 1945 and went international in the 1960s, and by the 1970s, it was benefiting significantly from the oil industry as more foreign companies started operating in the kingdom. Overall demand for internal and external flights increased, and Saudi Arabian Airlines emerged as one of the leaders in the Middle Eastern market. Being too dependent on foreign labor, the organization’s executives decided to intensify training programs in order to secure jobs for the Saudi people.
Saudia prides itself on a traditional approach to its corporate culture. For instance, they do not serve alcoholic beverages during flights, and specific guidelines for their employees are in place. A big part of the company’s revenue is an annual pilgrimage to the holiest Muslim destinations called the hajj. Thus, international networks with areas with large Muslim communities are established. Saudia benefited from the airline privatization as more foreign capital and investments were attracted to the company.
The Role of TQM
Total Quality Management is a management system that focuses on consumer satisfaction. It achieves a level of continual improvement by implementing strategic planning, effective communications, and systematic approaches to the company’s day-to-day operations. The main principle of TQM is that the customer directly determines the level of quality he or she expects from a product. As a result, the ultimate aim of the system is to involve all employees in achieving a common goal of meeting customer expectations. Total quality implies full control over each process the organization is involved in, including manufacturing, customer service, and interaction with suppliers. In this case study, however, human resources are going to be a primary focus of Saudia’s TQM implementation.
The Middle Eastern market grew to be hyper-competitive and inconsistent, creating a challenge for both small businesses and large establishments, such as Saudia, to cater to customer preferences and standards. It might be argued that the most practical way to manage that is “to enhance the performance of individuals and groups” (Aguinis, 2013, p. 26). Shifting the organization’s focus from expansion and acquirement of new markets to employee performance optimization is the main focus of Saudia’s strategy in this work. Aguinis (2013) states that the goal of performance management is aligning performance with the goals of the company. TQM is a process-centered, customer-focused system, and its main target is the long-term success of the company, which makes it a perfect managerial tool for Saudi Arabian Airlines.
Commercialization of airlines, which results in the growing competition in the aviation industry, urges Saudia to adopt new innovative approaches to the company’s operation system. One of the main issues the airline faces is the lack of direct flights.
The problem is not discussed enough among the company’s executives because of the absence of any form of customer response. Moreover, a current bureaucratic management system and ineffective inner corporate communications make it impossible for Saudia to implement any changes or organizational innovations. A recent study suggests that Total Quality Management “has a positive and significant impact on organization performance in the service sector” (Pambreni et al., 2019, p. 1404). So, it is clear that an integrated system of Total Quality Management can help by taking a long-term, consumer-oriented approach.
How TQM Can Enhance the Organization’s Performance
The adoption of TQM leads to Saudia’s overall competitive advantage as it helps the airline to become more flexible and adaptive to shifting markets and government regulations. Total Quality Management implementation requires the company to put customer satisfaction first, which produces high levels of customer loyalty. Such an approach may also positively influence Saudia’s public image.
In turn, it can lead to increases in profitability and stakeholder value of the organization. As for human resources, TQM’s focus on developing a corporate culture and inclusive communication channels among employees serves as a practical tool to increase their productivity and overall employee morale. A customer-based performance management system like TQM helps managers to “drive organizational change, encourage voice behavior, and improve employee engagement” (Aguinis, 2013, p.6).
Saudia has an excellent opportunity to become the largest airline carrier in the Middle East by attaining foreign capital and investments, as well as creating an effective system of both inner and outer communications with the help of TQM. In the early stages of Total Quality adoption, it is crucial to educate employees (especially top managers and regional representatives) on the airline’s mission and core values. The company’s primary goals should be an optimization of its operations strategy on every level as well as a gradual shift from a fully government-controlled agency to a more commercialized organization (mainly as a way to attract capital). Key factors that attribute to the achievement of these goals are:
- Continuous reduction of costs
- Providing excellent customer service
- Implementing an effective performance management system
It would be most beneficial for Saudia to take a complex approach. The company needs to improve “employee quality management, quality practices of top management, process management, employee knowledge, and education, and customer focus” (Bouranta et al., 2019, p.910). Based on these insights, certain steps for TQM implementation for Saudia can be taken:
- Analyze the current state of employee job satisfaction, efficiency in communications, the general attitude towards the company’s management
- Educate staff according to the standards of TQM (e.g. workshops, training, a written code of conduct, etc.)
- Change policies and procedures (so that they meet the TQM guidelines and Saudia’s goals mentioned above)
- Review the progress and make necessary changes
In conclusion, it is safe to assume that Saudia could gain competitive advantages from an organizational philosophy such as Total Quality Management. By taking a methodical consumer-based approach, the airline might retain its leading position on the market as well as expand its reach by providing quality services to customers and communicating efficiently with employees.
References
Aguinis, H. (2013). Performance Management. Pearson.
Bouranta, N., Psomas, E., Suárez-Barraza, M., & Jaca, C. (2019). The key factors of total quality management in the service sector: a cross-cultural study. Benchmarking: An International Journal, 26(3), 893-921. Web.
Pambreni, Y., Khatibi, A., Azam, S. M. F., & Tham, J. (2019). The influence of total quality management toward organization performance. Management Science Letters, 9(9), 1397–1406. Web.