Total Quality and Stakeholder Management

The formation of total quality management (TQM) as an approach to the managing processes for projects and businesses started in the middle of the twentieth century (Zink 2007). During this time, the companies came to a realization that the concept of quality should not apply to goods and services exclusively while ignoring other crucial aspects. While the quality of the final product was still needed to be viewed as essential to the firm’s financial improvement and stability, other aspects of the business were recognized to be important as well. Thus, the idea of a “companywide” quality assurance process came into being, and companies began changing their policies, objectives, and guidelines to fit this model of management (Zink 2007). However, currently, TQM still has a variety of possible definitions and has a broad scope of applications (Chaudary, Zafar & Salman 2015). Furthermore, the effects of TQM on different elements of businesses are being investigated even now, although this management approach is not among the new ones.

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The variety of definitions that exists in the sphere of TQM highlights the importance of recognizing customers’ needs as a means to success. According to Chaudary, Zafar, and Salman (2015), TQM can be described as an approach to management that is centered on improving such aspects as competitiveness, flexibility, and efficiency of the company as a whole. Moreover, its strategy includes finding and adhering to customers’ both hidden and perceivable needs in order to bring better value to them with the firm’s products and services.

The essential ideas of TQM are based on quality control as an action that can lead a firm to success (Zink 2007). Any company is expected to integrate all functional parts of the organization in this process, including such areas as marketing, customer service, manufacturing, finance, and others. Here, the primary objective of ensuring total quality is to achieve the company’s short-term and, more importantly, long-term goals and meet all customer needs. Therefore, as this approach incorporates all activities into one system, it can be assumed that it views a company as a sum of all these elements.

According to this approach, a firm should strive to improve all its processes and focus on overall development through devoting enough attention to every aspect of the working process. Every small detail and every department can be updated in order to influence the final goal of the business. For instance, the experience of workers and their education should be valued by the firm in order to raise the quality of their work and influence other parts of the company’s structure as a result. Skilled workers make better products and can be more inclined to stay loyal to the company (Obeidat et al. 2016).

Moreover, the improvements are expected to be constant, numerous, and significant. This notion of continuous development lies at the foundation of TQM (Loghmani & Dadashpour 2015). Thus, a company that follows the principles of TQM expects to continually expand and improve new and existing qualifications and review its processes to make them better. Such a general description of this approach to management makes it not only highly flexible but also relatively easy to understand. In order to follow the rules of TQM, a firm needs to recognize that its every element and process should work together seamlessly and be focused on achieving the established goals (Westcott 2013). Furthermore, accidental innovations are not enough to adhere to this approach, and every worker of the company should participate in the process.

History

According to Zink (2007), the TQM approach first originated in Japan, where a unique way of management was then found by Western businesses to be more successful than an older focus on the quality of the final product. In the early literature describing TQM, the authors urged companies to apply a standard of quality not just to goods and services but the business as a whole. Edwards Deming, for example, developed a set of principles that were taught to managers and engineers to promote this approach and create a more structured system of management in firms, called Deming’s 14 Points (Zink 2007).

Notable Contributor: Deming

In the beginning, TQM’s implementation was driven by Japanese firms’ need to recreate their businesses after the war and develop a stable but growing system of companies (Powell 1995). Here, Deming became one of the main influencers whose philosophy of TQM implementation allowed Japanese manufacturers to innovate and develop their processes and increase the quality of their performance. Deming introduced a number of approaches based on TQM principles, including the Deming Cycle and Deming’s 14 Points. Both of these perspectives adhered to the main values of TQM and increased the focus on continuous improvement.

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First of all, the Deming Cycle was a way to show companies a strategy of creating, implementing, and assessing new practices that could be beneficial for businesses (Ranjan Senapati 2004). In most interpretations, it includes four steps – “plan, do, check, act” (Ranjan Senapati 2004, p. 684). The first step, “plan,” is a process during which the company creates a set of actions that it wants to incorporate in order to raise the quality of performance. Next, “do” is a step where the company implements the created plan and acts accordingly to it. This action is a major part of the process. However, it is not the main one as the following steps are vital to the company’s success in creating new practices.

The third step, “check,” is concerned with measurement and analysis, as the results of the plan’s implementation are evaluated by the dedicated team in order to see whether it was successful. Here, the deficiencies of the initial strategy are found and assessed to establish their severity. Finally, the last step, “act,” is the process of managing these problems and concerns that arose as a result of the implementation. The divide between the achieved results and the objectives needs to be reduced or eliminated during this step. Companies are encouraged to go through these steps for every innovation and change that has to be implemented. Its simple nature allows one to accommodate the approach to work for virtually every process in a firm.

Deming’s 14 Points are also concerned with the company’s strategy implementation. However, these principles cover more actions of a firm and have more detailed instructions that can be used by managers to encourage change and adhere to a more TQM-based structure. The first point is called “constancy of purpose” (Powell 1995, p. 18). It implies that the company should establish a clear path towards innovation and improvement for changing its products, services, and internal activities. The second one is “adopt the philosophy,” which means that the firm’s management has to adhere to a shared vision for the future and collaborate in order to overcome possible challenges (Powell 1995, p. 18). TQM usually uses a strong leadership philosophy with a clear focus on one’s deep understanding of professional responsibilities and the necessity to assume leadership to change and move the business forward (Sadikoglu & Olcay 2014).

The third point – “don’t rely on mass inspection” is a proposal to avoid practices that measure quality for the final product only (Powell 1995, p. 18). Instead, quality control should happen at all levels of work and be implemented from the start. Furthermore, the principle “don’t award business on price” urges companies to stop treating low bids as the best determinant for choosing future partners and contractors (Powell 1995, p. 18). A low price should not be the main reason to choose a company with which one will work. On the other hand, quality should be considered more important. The fifth point is “constant improvement” (Powell 1995, p. 18). It is one of the main concepts of TQM, and it stresses the need to continuously implement new innovative approaches to all spheres of the company.

The sixth principle, “training,” is strongly connected to the previous one as it emphasizes the need to educate workers in order to increase the quality of their performance (Powell 1995, p. 18). Training is supposed to bring new knowledge to employees and make them more active, reliable, and ready for continuous improvement (Obeidat et al. 2016). “Leadership” is the following point that restates the importance of helping employees to perform better (Powell 1995, p. 18). According to TQM, leaders are expected to assist other workers and encourage them to improve. Next, “drive out fear” is a point that was established by Deming as a way to increase the effectiveness of employees (Powell 1995, p. 18). A notion that fear could stagger progress and quality improvement is also mentioned in the following point, “break down barriers” (Powell 1995, p. 18). Here, barriers are seen as an issue that does not allow employees and managers to work as a team, decreasing the effectiveness of all new processes as a result.

The tenth point deals with the removal of adversarial relations between employees. In it, Deming encourages people to “eliminate slogans and exhortations” from employees’ daily routine to foster a more positive view of their work (Powell 1995, p. 18). According to this philosophy, quotas should also be removed, along with the focus on measuring performance based on achieved objectives (Powell 1995). By eliminating these approaches to quality control, employees become able to make better decisions related to their tasks and feel less pressure to fulfill a certain amount of objectives.

The following point, “pride of workmanship” ties in with the previous one as it also concerns the workers’ need for self-realization (Powell 1995, p. 18). Here, the company’s management has to increase employee’s pride in their work by allowing them to make individuals decisions, assume responsibility, and participate in the decision-making process. The next point is “education and retraining,” and it resembles one of the previous principles by stating that a program for employee education should be instituted by a company to achieve success (Powell 1995, p. 18). Finally, the last point, “plan of action,” encourages businesses to engage every employee in the process of strategy implementation (Powell 1995, p. 18). These 14 points can be considered the basis of TQM and be interpreted as its major guidelines. While they are more detailed than some general rules, their focus on employee empowerment and engaged leadership reveal the main course of this approach.

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Other Concepts

The name “total quality control” was used in the 1950s by Feigenbaum, who introduced the concept of TQM that is still being used by businesses to this day (Yusof & Aspinwall 2000; Zink 2007). This term incorporated a revolutionary understanding of the firm’s processes and their quality assurance methods because it emphasized the need to make everything important to the company’s path to goal achievement. Later works started to analyze this approach, finding more benefits to its implementation. For example, concepts as “zero defects” were introduced to executives and increased the interest in the process of quality improvement (Zink 2007). The main principles of TQM that were formed at the beginning of the approaches’ creation, including the one mentioned above, are discussed in more detail in the previous part of the paper.

Later Improvements

In the 1980s, TQM’s popularity began to rise among businesspeople around the world (Zink 2007). Quality became a deciding factor in all spheres of the business, helping firms evolve and shift from their focus on the final product to the overall quality. More attention was given to manufacturing, customer service, stakeholder integration, and other processes known to any company. TQM became a widely-recognized philosophy with defined principles and a broadening range of implementations. In the beginning, this approach to management gained recognition in manufacturing businesses. However, it was soon incorporated into different industries which could be explained by the approach’s high adaptability and enticing variety of benefits. The principles of total quality assurance were flexible enough to find their way into service businesses and small and large firms. Instead of the product’s final quality, continuous improvement of every aspect became the focus of firms during this time.

Current Situation

Currently, TQM is still considered to be a fundamental approach to companies’ development (Chaudary, Zafar & Salman 2015). Its positive outcomes have been a center of researchers’ examination for a long time, yielding mixed but mostly positive results linked to performance, customer satisfaction, and financial gain. The utilization of this strategy is often connected to businesses achieving international success and improving their system of production on all levels (Yusof & Aspinwall 2000). Recent studies also show that TQM remains relevant as it allows managers to expect high-quality performance during work as well as good results (Obeidat et al. 2016). The involvement of all worker levels in this approach and that fact that it outlines continuous innovation also help it to stay important in the rise of corporate social responsibility and sustainability (Benavides-Velasco, Quintana-García & Marchante-Lara 2014). For instance, focus on customer satisfaction is viewed as a major strength of TQM.

Main Principles and Implementation

Deming’s Points show the major principles of TQM. This approach is customer-focused. It values employee participation and encourages training and education. Moreover, it is focused on the process as much as the outcome, and it uses various strategies to achieve better results. The implementation of TQM can also follow Deming’s Cycle and be completed in four major steps. The principles of this management style consider every part of the company, leaving managers with a solid plan for future actions. Moreover, this approach does not have a definitive ending to the integration process as TQM values continuous improvement above else. This quality means that the company can use TQM’s principles for many years and decades. Its clear focus on long-term goal fulfillment also implies that it is a management style that cannot be implemented quickly.

Stakeholder Management and TQM

Stakeholder management is a combination of practices that allow a company to assess its main groups of influence and reveal their needs in order to create a strategy that would make the company’s services desirable and the working environment – friendly (Eskerod, Huemann & Savage 2015). Usually, most companies have a similar list of possible stakeholder groups, including customers, employees, suppliers, and investors. These types of people have a different relationship with the firm and have different needs. The purpose of stakeholder management is to analyze these groups and establish which of their needs the company has to address with its services and internal processes. The use of this approach in business is not new, because people – both clients and workers – are the primary building blocks of every industry.

The focus on customers and employees of TQM shows that this approach needs the company’s management to understand and assess its primary stakeholders. The relationships between employees are emphasized to be crucial to the style’s success. Moreover, the choice to establish an effective leadership structure in the company also shows that all stakeholders have to be considered in TQM. In this case, stakeholder management becomes an integral part of the approach. The philosophy of this approach corresponds with TQM in many aspects because it places the same amount of attention on people that participate in the processes of a business (Harrison, Freeman & Abreu 2015). Its use of such concepts as fairness and openness are also in line with TQM’s main points. The aspect of total control so heavily emphasized by TQM can be applied in this management style as well. The company that assesses the needs of its stakeholders and incorporates this data into its processes does not perceive the results as the only valuable outcome.

The aspects of stakeholder management can assist managers in implementing TQM. First of all, stakeholder identification can have a significant impact on the outcome of TQM integration. A company that is able to adequately assess the place of its clients, workers, and investors in the business can create a strategy for continuous improvement of all processes (Garcia-Castro & Francoeur 2016). For instance, the recognition of employees’ needs for personal and professional growth can be put at the base of developing required training programs. The use of stakeholder management can increase employee satisfaction and bring some beneficial results to the business in the long term. Workers’ performance, covered in TQM’s principles in detail, should be devoid of artificial barriers to freedom of choice and participation (Loghmani & Dadashpour 2015). Here, stakeholder analysis can help managers determine what practices and actions are interesting to workers and which incentives can be effective in raising their desire to participate. Moreover, the establishment of their primary concerns with the company’s future may also reveal some interesting strategies for further implementation.

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The importance of customers is also highlighted in TQM and stakeholder management. Customer satisfaction is seen as a significant goal of TQM and an objective that should constantly be reevaluated in order to deliver consistent, high-quality results. The company that follows the principles of TQM should realize that its clients have evolving needs and base its processes on these requirements for new products and services. Stakeholder management includes the analysis of customers’ needs as therefore is an essential part of any TQM implementation process. While the major focus of TQM may be placed on improvement as a set of instructions, it is also based on people’s personal needs. The programs for training mentioned before and the analysis of customers’ needs are an inherent process of TQM.

The need for supportive leadership is another point that shows how beneficial stakeholder management can be. In order to successfully follow TQM principles and remove barriers between management and other employees, the company should analyze its worker’s ability to take on responsibility and their attitude towards different types of leadership. Stakeholder prioritization and their proper engagement also reveal similarities between stakeholder management and TQM. The former strategy can and should become a part of the latter in order to increase their effectiveness.

The principles of stakeholder management are also helpful to analyze to improve the implementation of TQM in a company. For example, as it is a holistic management style it heavily relies on communication with stakeholders. In TQM, discussion and employee participation in decision making are highly valued and can lead to managers receiving more information about one stakeholder group. Furthermore, the focus on raising the quality of customer service can also be viewed as a part of stakeholder management. Clients, another critical stakeholder group, receive more attention and better care with improved processes in this department. Therefore, their needs are recognized and utilized to provide better services (Harrison, Freeman & Abreu 2015). The input of the firm concerned with these aspects of the business can produce an equally impactful output.

The correlation between these two styles of management shows that stakeholder management can be a part of TQM and add some necessary information about main groups that can influence one’s business. While TQM also considers other processes such as production management, improvement of operations, and sustainability, it is also concerned with issues that stakeholder management can answer. Many of the practices mentioned in TQM are present in stakeholder management and expanded upon by scholars (Eskerod, Huemann & Savage 2015). While TQM researchers may not openly suggest this approach in their works, it can be seen that both methods strive to achieve similar results with a long-term strategy and a focus on human interaction.

For instance, the notion of total control introduced in TQM does not mean that employees do not have the ability to contribute to the process, which might have lowered their levels of job satisfaction. On the contrary, control in TQM expected and not assumed, which raises worker’s active involvement in decision-making. Moreover, one of the leading principles of TQM that was introduced in its early stages is the need to increase worker’s self-worth which can be achieved with successful stakeholder management practices. Therefore, the use of such concepts is essential to TQM implementation. The integration of these two management approaches seems natural and logical as a way to increase the company’s performance.

Reference List

Benavides-Velasco, CA, Quintana-García, C & Marchante-Lara, M 2014, ‘Total quality management, corporate social responsibility and performance in the hotel industry’, International Journal of Hospitality Management, vol. 41, pp. 77-87.

Chaudary, S, Zafar, S & Salman, M 2015, ‘Does total quality management still shine? Re-examining the total quality management effect on financial performance’, Total Quality Management & Business Excellence, vol. 26, no. 7-8, pp. 811-824.

Eskerod, P, Huemann, M & Savage, G 2015, ‘Project stakeholder management—past and present’, Project Management Journal, vol. 46, no. 6, pp. 6-14.

Garcia-Castro, R & Francoeur, C 2016, ‘When more is not better: complementarities, costs and contingencies in stakeholder management’, Strategic Management Journal, vol. 37, no. 2, pp. 406-424.

Harrison, JS, Freeman, RE & Abreu, MCSD 2015, ‘Stakeholder theory as an ethical approach to effective management: applying the theory to multiple contexts’, Review of Business Management, vol. 17, no. 55, pp. 858-869.

Loghmani, M & Dadashpour, R 2015, ‘Investigating the affecting factors on total quality management case study: National Olympic Academy’, Jurnal UMP Social Sciences and Technology Management, vol. 3, no. 1, pp. 722-726.

Obeidat, BY, Hashem, L, Alansari, I, Tarhini, A & Al-Salti, Z 2016, ‘The effect of knowledge management uses on total quality management practices: a theoretical perspective’, Journal of Management and strategy, vol. 7, no. 4, pp. 18-29.

Powell, TC 1995, ‘Total quality management as competitive advantage: a review and empirical study’, Strategic Management Journal, vol. 16, no. 1, pp. 15-37.

Ranjan Senapati, N 2004, ‘Six Sigma: myths and realities’, International Journal of Quality & Reliability Management, vol. 21, no. 6, pp. 683-690.

Sadikoglu, E & Olcay, H 2014, ‘The effects of total quality management practices on performance and the reasons of and the barriers to TQM practices in Turkey’, Advances in Decision Sciences, vol. 2014, Web.

Westcott, RT (ed.) 2013, The certified manager of quality/organizational excellence handbook, 4th edn, ASQ, Milwaukee, WI.

Yusof, SRM & Aspinwall, E 2000, ‘Total quality management implementation frameworks: comparison and review’, Total Quality Management, vol. 11, no. 3, pp. 281-294.

Zink, KJ 2007, ‘From total quality management to corporate sustainability based on a stakeholder management’, Journal of Management History, vol. 13, no. 4, pp. 394-401.

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