Quality Management: Business Ethics

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Introduction

The business world has a lot of literature concerning how organizations can improve their operations in order to be competitive. Generally, principles have been developed by different authors that largely characterize how best performance in companies can be realized. Of much interest in the recent past has been the effort by many organizations, both in public and private, to be involved, in one way or another, in designing initiatives aimed at improving the quality of their operations and relationships which include quality management, quality circles and empowerment (Geuras and Garofalo, 2005, p.307).

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Schminke (1998, p.115) has articulated that the enormous research that has been carried out in the field of managing organizational integrity has been unintegrated in business, education and the management practice, yet the research findings literature constitutes useful information to the practicing managers. Moreover, the concepts of ethics development and quality management have been ignored to an extent that they only emerge when major problems befall companies or when they become global disasters (Schminke, 1998, p.115); indeed, when such crises occur, the responsibility of finding the solution is normally heaped to the middle managers and the technical experts. Schminke (1998, p.115) proposes that organizations do not need to wait for the worst to happen, but rather, what is required is an integrated strategic leadership that continuously develops organizational integrity and quality systems to influence their reciprocal benefits.

Realizing the importance of the organization development and the need for quality improvement, many organizations have incorporated ethics in their quality management functions. Therefore, the discussion in this paper will largely concentrate on analyzing the concept of ethics in quality management in the organizational context.

Introduction to quality management

Businesses continue to play a great ethical role in modern society (Malachowski, 2001, p.1). The contemporary world continues to experience a changing business environment that has in turn forced management of most organizations to remain dynamic (Stahl and Grigsby, 1997, p.2). Lauuisset (2009) has extensively observed how organizations are fast becoming excellence-conscious and says that organizations continue to adopt various programs and methodologies to improve their global performance and therefore, they total quality management policies and practices have become extensively entrenched in organizational mindsets (p1). According to the authors, the principal function of managers of companies needs to be that of keeping the organization in touch with the external environment. “With such close contact, the manager is prepared to capitalize on opportunities and avoid threats in the external environment; therefore, effective managers need to relate the organization to its environment and then guide internal activities to maximize the external opportunities and minimize external threats” (Stahl and Grigsby, 1997, p.2). For example, Japanese and most Western European countries have been expanding in new technology and other new forms of industrial capital.

To effectively function and realize results, countries have devised new management systems based upon ideas of total quality management that in turn have increased the quality and lowered the costs of products and services (Stahl and Grigsby, 1997, p.3). Total quality management (TQM) refers to “the system approach to management that aims at continuously improving value to customers by designing and continuously improving organizational processes and systems” (Stahl and Grigsby, 1997, p. 3). The TQM in many organizations has involved the majority of employees and it has operates backward and forward which has also included the supply chain and the customer chain (Stahl and Grigsby, 1997, p.3). Further, TQM is concerned with managing the entire system as opposed to subsystems or functional departments and in this case, systems constitute the collections of processes and resources while processes involve groups of activities that take an output, add value to it and then provide an output to an internal or external customer (Stahl and Grigsby, 1997, p.12). Gilks (1990, p.1) offers suggestion that total quality programs need to be tailored in order to fit their unique features; he presents six essential elements that portray a successful TQ programs across industries irrespective of their nature, which are; “customer focus, meeting commitments by the company, involved in process management, ensuring the elimination of waste, initiating employee empowerment and being committed to continuous improvement” (Gilks, 1990, p.1).

It is Edwards Deming who gave a 14-point model that tried to illustrate the concept of quality management. His approach borrowed heavily from the industry and the points define the technical procedures which adopt a philosophical approach (American College of Medical Quality, 2005, p. 3). The 14 philosophical interventions which Deming says should be the focus of company managers are: create constancy of purpose; adopt a new philosophy; cease dependence on inspection; cease awarding business on the basis of price alone; improve continuously and forever; institute training and retraining on the job; adopt an institute leadership; drive out fear; break down barriers between staff members; eliminate slogans, exhortations, targets for the workplace; eliminate numerical quotas for workers and numerical goals for managers; remove barriers that rob people of pride in workmanship; institute a vigorous program of education and self-improvement; and lastly put everybody in the organization to work on the transformation (American College of Medical Quality, 2005, p. 3). These points define and provide the scope of quality management.

Gardner and Cariopio (1996), in their analysis of the quality management in a company stated that, many companies are turning to quality management programmes that are aimed at improving corporate performance, and that when an organization is in the process of initiating a quality program, it usually intends to improve product and service quality. Such improvement programs may include; involving employees in the organizational decision-making process, empowering and training employees as well as increasing attention to organizational systems and always increasing the use of data collection and analysis tools (Gardner and Cariopio, 1996). Therefore, what is observed today is the increasing approach and initiatives by companies to set goals to be achieved. However, according to Ron (2002), “setting a goal is one thing—staying with the game plan is another; remaining on track to put an effective quality management system (QMS) in place demands a corporate culture change more than a technical transformation and that the benefits the organization achieves once there, are real and tangible.” Therefore, any successful system will generate both earning gains and greater customer satisfaction for the organization.

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Organizational ethics

Many organizations are today paying attention to business ethics and corporate social responsibility (Lamberti and Lettieri, 2009). Ethics can be defined as “the systematic attempt to make sense of individual, group, organizational, professional, social, market and global moral experience in such a way as to determine the desirable, prioritized ends that are worth pursuing, the right rules and obligations that ought to govern human conduct, the virtuous intentions and character traits that deserve development in life, and to act accordingly” (Petrick and Quinn, 1997, p. 42). When simplified, ethics can be seen as the study of individual and collective moral awareness, judgment, character and also conduct. Indeed, modern organizations and especially business oriented ones are moving fast, embracing ethics in their places of operations.

Management ethics can be defined as the descriptive and normative study of moral awareness, judgment, character and conduct as they relate to all levels of managerial practice (Petrick and Quinn, 1997, p. 44; Spencer, 2000, p.5). In addition, Petrick and Manning (1990) observe that, “organizational ethics has become a vital part of the business strategy, product quality and service image of any firm that wants to be taken seriously in the marketplace.” They appreciate the ongoing and balanced concern for the ultimate values of individual merit, recognize the efforts being put in economic equality and organizational growth, and lastly point out the positive quality of life in these organizations. Moreover, the authors see the importance of organizational integrity which to them entails the articulation of and adherence to organization-specific value ideas (Petrick and Manning, 1990).

On the other hand, Nielsen is convinced that in any attempt to understand organizational ethics phenomena, complex understanding of organizational practices in their real world is required (Nielsen, 2009, p.1). Further, Sekerka, Bagozzi and Charnigo (2009, p.1) state that many organizational ethics scholars have in the past recognized the need to encourage the development of moral strength in the workplace, and that this calls for more than the usual reinvention of programs, policies and penalties; hence, organizations need to adopt a behavioral shift that calls for revolution of character and a reintroduction of personal conscience, responsibility and values. The author regrets the much favored penalty-approach that most organizations resort to, instead of the necessity to build moral strength at the workplace (Sekerka, Bagozzi and Charnigo, 2009, p.1).

The most asked question is about who can institute business ethics. But according to recent research, it has been found in most organizations, the senior managers are important and key people to the successful management of ethics in their organizations and therefore their views in regards to organization ethics is very important (Anonymous, 2008). It has been identified that the senior managers do have the tendency to portray a positive perception of the organizational ethics than the junior employees partly due to the fact that the seniors largely identify with the organization more than the juniors and also their role as the managers requires them to protect the image of the organization than the juniors can do (Anonymous, 2008). But Murchland (2008) offers the comprehensive view and analysis of the corporate culture when he states that, the corporate is ordered around “five dimensions of corporate stories that include the cultural, the interpersonal, the organizational, the civic, and environmental.” In addition, any planned ethics incorporation into the organization needs to factor in these main dimensions. Murchland (2008) is convinced that as much as the organization pursues its goal of providing the necessary needs it has to ensure that human rights are maintained and observed. However, it is Brandt (2007) who highlights the nature of business in relation to ethics by stating that “the ethical issues in organizational behavior have become more evident in recent years especially with the emergence of a more explicit market approach.” Moreover, the business and other organizations needs to take into account the values and other moral positions that are greatly defined both internally and externally in the business. Further, Brandt (2007) portrays the ethical tension that exists as a result of pressure in many businesses and he warns that the pressure should not distract the organizations from providing quality services and reducing costs.

Summing it up, Emanuel, (2000, cited in Wall, 2007, p. 2) states that “moral demand exists not only on the individual but also on organizations, systems and the institutions.” In addition, organizations can have the moral obligation even though they are not animate; because structures involve relationships and that when organizations come into being they become animated. And hence, “morality is directed to what we owe each other and what we owe institutions and what they owe us” (Wall, 2007, p.2). From this, it can be deduced that an organization ethics framework generally allows organizations to be other-focused by working at the level of dilemmas associated with the economic, political and social aspects (Wall, 2007, p.2).

Ethics from the quality management perspective

“Quality affects every moment of our lives; even if we are not always aware of them, there are professionals everywhere ensuring that products and services are of good quality” (Anonymous, 2010). To date, the term quality has received varying definitions based on what constitutes quality, for example, IBM has used the phrase “market-driven quality”, which refers to initiatives based on achieving total customer satisfaction (Duggan and Reichgelt, 2006, p.30). Crosby (1979) defined quality as “conformance to user requirements” (cited in Duggan and Reichgelt, 2006, p.30). Naagarazan (2005, p.1) stated that quality means “productivity, competitive costs, on-time delivery and the satisfaction of the customer” while Watts (1990) looked at the issue of quality in the software industry and defined quality as “achieving excellent levels of fitness for use” (Duggan and Reichgelt, 2006, p.30). But in recent times, quality has been defined specifically by the ISO 9001 as “the degree to which a set of inherent characteristics fulfills the requirements’ ‘ (Duggan and Reichgelt, 2006, p.30). According to the American National Standard Institute (ANSI) together with the American Society for Quality (ASQ), (1978) quality may be defined as “the totality of features and characteristics of a product or service that bears on its ability to satisfy given needs” (cited in; Schminke, 1998, p.117).

Quality management comprises three basic processes that include; quality planning, quality control and quality improvement (Duggan and Reichgelt, 2006, p.35). The issue of quality in many organizations has become central to the Code of ethics, whereby ethics has been regarded as the supreme ringmaster that keeps the players within the circle of standards that represent quality (Al-Assaf and Schmele, 1993). Chryssides and Kaler (1993, p. 3) state that in the recent past, there has been great interest in business ethics and this has been accelerated by the total quality management (TQM), and that TQM is a concept that needs organizations to define in advance what kind of quality is acceptable within the firm and particularly to ensure the use of appropriate systems that will ensure that predetermined standard of quality exists. Further, the TQM has a two-fold consequence for business ethics: The first consequence is the need to define the level of quality which is to be maintained, forcing the management to consider, in great depth, what is acceptable to the consumer at the end of the process and answer questions such as: do consumers want a product that is built to last, or will they be content with the one that is cheap. Therefore, such questions raise the concerns for the quality of goods and services and that consumer’s interests cannot be ignored (Chryssides and Kaler, 1993, p.3). The second consequence is that management is highly required to define appropriate procedures and to codify them strictly. This prompts the introduction of the codes of practice which largely elaborate what management expects of employees at various points in a production process and also the expectations of the employees on what the management should do at the various levels (Chryssides and Kaler, 1993, p.3).

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Schminke (1998) has introduced different types of perspectives on ethics and quality that normally shape managerial judgment in building organizational integrity and quality.

Types of perspectives on ethics and quality. Source: Marshall Schminke, 1998.
Figure 1. Types of perspectives on ethics and quality. Source: Marshall Schminke, 1998.

According to the table, Type 1 perspective to quality ethics indicate that differences in quality amount to differences in some desired ingredient or the input in to the product. Organizations that rely on this perspective sometimes are confronted with difficulties, as ethical character and quality attributes may be unnecessary, counterproductive or inappropriate rather than superior desirability (Schminke, 1998, p.117). Type II approach to ethics emphasizes the need to use proper methods by an individual in performing the duty, while at the same time observing traditional moral rules, respecting rights and abiding to contractual agreements. The quality viewpoint of this perspective identifies quality as conformance to supply requirements, operational variance and specification standards, and in many cases, this has led to quality control (Schminke, 1998, p.118). Type III perspective approach regards the need to maximize beneficial results and minimize costs. The quality perspective of this view focuses on the users of products, and those goods and services that best meet or exceed customer expectations have the highest quality (Schminke, 1998, p.118). The problem that has been associated with this type is that it largely encourages satisfying expectations by any means, avoiding critical evaluations, discriminating among customer satisfaction, ethical desirability and quality standards (Schminke, 1998, p.118).

Type IV approach largely maintains that the nature and the extent of the supportive environments influence the morality of action and that organizational ethic systems shape moral action (Schminke, 1998, p.118) whereby, quality can be seen as the outcome of externally adapted resources and the internally integrated processes (Schminke, 1998, p.118). Type V approach to ethics regards the sustained balancing of virtues, duties, results and contexts with the constraints of internal and external forces to be the main essentials to ethics (Schminke, 1997, p.118).

In summing up, paradigm to ethics of quality management is necessary and organizational ethics can be cultivated when the top leadership accords strategic importance to building and maintaining collective commitment to the organizational ethics development systems (OEDS). The OEDS should involve a good leadership by moral example that will guide and align all ethics initiatives, conduct regular organizational ethics needs assessments, incorporate ethics training to improve judgment and conduct, strictly enforcing ethics and commendation procedures, adopting audit mechanisms to monitor organizational moral progress and lastly develop processes to measure and enhance moral reputation for system integrity (Schminke, 1998, p.122).

Conclusion

Today, globalization has accelerated the development of a consumer conscious market that seeks excellent quality products and higher satisfaction (Deng, Sung and Huang, 2010). From the study and analysis of many organizations, it has been found that quality initiatives obtain their operational power to reduce costs, improve competitiveness and generate customer value by relying on the soundness of management processes. At the same time, research evidence shows that piecemeal quality initiatives cannot be continued without dedicated integrity at work, and that organization integrity efforts are likely to be accepted when combined with quality processes. This is expressed by Schminke when he says that “To honor customer demands, courageously acknowledge performance gaps, truthfully monitor process improvements, cooperatively engage in teamwork and resolutely improve product/service quality while reducing costly variations in a fair manner requires competencies in both ethics and quality at the individual and collective levels” (Schminke,1998, pp.115-116). Therefore, for the performance of organizations to be effective and result-oriented, what is necessary is the quality capability (QC) and integrity capacity(IC) in place (Schminke, 1998, p.116).

Business ethics therefore have become the necessary functional tools in most organizations. Since businesses focus on providing the best for its customers, quality management ethics that are intended to direct and define control systems in an organization are necessary. Overall, organizational integrity is necessary to sustain the organizational quality, hence, organizational ethics and integrity processes should be formulated in line with the organizational quality mechanisms that are established to ensure adherence to quality management ethics.

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