Employing Total Quality Management (TQM) is considered one of the most successful choices that the management of a company might make. Many companies have decided to use TQM to improve their productivity and increase customer satisfaction. One well-known organization that relies on TQM is Ford Motor Company. The present paper offers an analysis of Ford’s main competitors as well as the company’s implementation of TQM, along with challenges accompanying this process and the results that have been achieved.
The Company and Its Major Competitors
The organization selected for the research is Ford Motor Company, one of the most popular and renowned car manufacturers in the world. The company was incorporated in 1903, having only twelve investors and 1,000 shares (“Our history: Company timeline,” 2018). In the more than 100 years of its existence, Ford has evolved significantly and currently offers some of the best products in the vehicle market. Company profits are stable, inviting new shareholders and keeping existing investors confident about their choice (Rosevear, 2017). However, Ford’s success has caused competitors to come up with alternatives to attract customers. Thus, several rival companies are seeking to undermine Ford’s success.
While many important players populate the car industry, two are closest to Ford in popularity. Global giants Toyota and General Motors are considered Ford’s greatest rivals (Rosevear, 2017). Data available for the period from October 1, 2016, to September 30, 2017, indicate that Toyota and General Motors sold more vehicles than Ford during that time. Also, competitors’ earnings per share and price-to-earnings ratio were higher than those of Ford (Rosevear, 2017). Despite these statistics, Ford pays sustainable dividends to its stakeholders, and the company’s profits and competitiveness remain stable. Thus, even though General Motors and Toyota prevail in some areas, Ford Motor Company has a secure future that is based on successful management decisions.
The Specific Issue That Led to Embarking on a TQM Program
Ford decided to implement TQM for reasons related to the company’s aim of reaching the highest levels of productivity and customer satisfaction. In the 1960s, Ford was a pioneer in terms of TQM introduction (Kumar & Sharma, 2017). The organization was focused on adopting a management system approach that would increase quality standards. Ford’s practice of TQM began in the 1980s when the slogan of the company was “Quality is job 1” (Kumar & Sharma, 2017, p. 228). However, in the course of this discussion, it is important to keep in mind the considerable difference between quality and total quality. Whereas the former presupposes customer satisfaction with the outcomes, the latter involves several crucial aspects (Goetsch & Davis, 2014).
By deciding to implement TQM, Ford was aiming at enhancing the quality of its processes and employees rather than merely improving customer satisfaction. Researchers note that the company succeeded in reaching its goals, becoming one of the most successful users of TQM (Kumar & Sharma, 2017). Thus, the issue that led to Ford’s embarking on a TQM program was concerned with the desire to gain the highest quality not only in customer service but also in process and employee quality.
Whenever an organization introduces a new process, risks and difficulties will arise. In the case of Ford’s TQM implementation, several challenges were involved. The major problem lay in persuading employees that alterations in the company’s products were necessary and would not diminish the company’s image. The next risk was that shareholders might not approve of the innovations. Finally, the company recognized the possibility that consumers might disapprove of changes. However, the management team wisely overcame all challenges (Scheid, 2011), and all stakeholders gradually came to recognize the benefits of the new approach.
As a consequence of implementing TQM, Ford Motor Company achieved considerable positive results. The major constituents of total quality—strategic orientation, customer focus, “obsession with quality,” teamwork, long-term commitment, and more—helped Ford to enhance its productivity (Goetsch & Davis, 2014, p. 6). Ford introduced TQM by way of a joint venture with ChemFil, the PPG Industries division (Scheid, 2011). With the help of ChemFil, Ford was able to enhance its work environment and profitability by implementing a less harmful painting process (Scheid, 2011).
Thus, TQM came to the forefront in painting design since the preparation done by ChemFil was grounded on customer quality regulations. Moreover, work at all levels was modified by standardized rules, which meant the “days of guessing” were gone (Scheid, 2011, para. 7). As a result, the slogan of the company changed from “Quality is job 1” to “Quality people, quality products” (Scheid, 2011, para. 5). Therefore, the major outcome of implementing TQM at Ford Motor Company was an increase in quality at all levels.
Despite the successful implementation of TQM and its positive effect on Ford’s productivity, the emergence of new approaches such as business process reengineering (BPR) is prompting the organization to alter its methods to achieve better results. Currently, the problem that Ford is facing concerns discontinuous improvement (Oakland, 2014). In order to improve the situation, Ford needs to employ information technology (IT) as a major driver of BPR as, according to Oakland (2014), IT helps to analyze and disseminate data obtained from customers and suppliers at a new, much improved, level. Such options as client-server architecture and computer networks can considerably enhance the process of the company’s operation.
Several decades ago, Ford managers made attempts to decrease “the headcount by around 20%” with the help of new IT systems, but this endeavor did not reach the desired outcomes (Mohapatra, 2013, p. 46). However, the need to develop BPR is considered an urgent demand in the modern business world. Thus, Ford should pay more attention to resolving the issue of IT, which could make the company more stable and profitable.
Conclusion: Lessons from Research
Research has provided insight into the peculiarities of total quality management, its advantages and disadvantages, and the way Ford Motor Company has implemented this tool. The discussion has identified that despite the competition, Ford continues to offer great potential, satisfying its customers and providing shareholders with high dividends. The analysis performed raises several important lessons.
First, it is crucial for organizations to include all aspects of the production process in their quality management. In this way, companies will be able to reach the best outcomes, gain the highest profits, and increase employee and customer satisfaction levels. Second, it is necessary not to neglect the development of new approaches even if the current strategy is yielding positive results. In particular, although TQM has enhanced Ford’s productivity, the organization should also pay attention to BPR since this process is more capable of satisfying IT needs. Finally, research has shown that even if a company has powerful competitors, a good reputation and high-quality products will continue to attract customers. Thus, overall, research has provided essential data on management in organizations.
Goetsch, D. L., & Davis, S. (2014). Quality management for organizational excellence: Introduction to total quality (7th ed.). London, England: Pearson.
Kumar, M., & Sharma, R. R. K. (2017). Exploring critical success factors for TQM implementation using interpretive structural modelling approach: Extract from case studies. International Journal of Productivity and Quality Management, 21(2), 203-228.
Mohapatra, S. (2013). Business process reengineering: Automation decision points in process reengineering. Boston, MA: Springer.
Oakland, J. S. (2014). Total quality management and operational excellence: Text with cases (4th ed.). New York, NY: Routledge.
Our history: Company timeline. (2018). Web.
Rosevear, J. (2017). Best buy: General Motors, Ford, or Toyota?. The Motley Fool. Web.
Scheid, J. (2011). TQM and Ford Motor Company. Web.