Name Saadia Hashmi

Registration No. 16433

Class 7B
Course Lecturer Mr. Firdous

1
S. No Topic Page no.
1 Comparison between Deming and Crosby’s Philosophies 3
a) Philip Crosby 3
b) William E. Deming 3
c) My Choice - Deming 3
2 Bank Al Habib Limited 5
a) Mission 5
b) Services 5
3 Scenario 5
4 Deming’s 14 Points in contrast to the Working Style of Bank Al Habib 6
Limited
5 Conclusion 8

Index

2
In our assignment we had been asked to visit any organization and discuss both Deming’s or Philip
Crosby’s philosophy there and how do they perceive their points in their staff.

Comparison between Philosophies of Deming to that of Crosby’s

Philip Crosby
Philip Crosby is an American who promoted the phrases “zero defects” and “right first time”. “Zero
defects” doesn’t mean mistakes never happen, rather that there is no allowable number of errors built
into a product or process and that you get it right first time.

Philip Crosby believes management should take prime responsibility for quality, and workers only follow
their managers’ example. He defined the Four Absolutes of Quality Management.

The Four Absolutes of Quality Management

Quality is conformance to requirements

Quality prevention is preferable to quality inspection

Zero defects is the quality performance standard

Quality is measured in monetary terms – the price of non-conformance.

William Edwards Deming

He was an American statistician, professor, author, lecturer, and consultant. Deming is widely credited
with improving production in the United States during the Cold War, although he is perhaps best known
for his work in Japan. There, from 1950 onward he taught top management how to improve design (and
thus service), product quality, testing and sales (the last through global markets) through various
methods, including the application of statistical methods.

He taught that by adopting appropriate principles of management, organizations can increase quality
and simultaneously reduce costs (by reducing waste, rework, staff attrition and litigation while
increasing customer loyalty). The key is to practice continual improvement and think of manufacturing
as a system, not as bits and pieces.”

My Choice – Deming
I choose Deming’s philosophy as the subject of my assignment because I feel Deming’s philosophy is far
better option than going for Crosby’s. The idea of Crosby is not as realistic as Deming’s. It gave light to all
questions regarding the Japanese mystery of success. The Deming philosophy deals with senses of the
whole brain - not just logistics and economics. He included ethics, empathy, feelings, beliefs, values,
logic, and system frequencies of interaction. Crosby also has a lot of ethical values in his approach and
he often speaks the language of the top.

3
As Crosby’s idea is concerned, I feel Crosby's 'Zero Defects' concept uses zero defects as a starting point.
This creates the arbitrary target in mind. No plan on how to get there, just get there. I know some out
there will point out that this is not what Crosby means. I would still agree with this. But, 'Zero Defects'
connotes to me a 'suggestion without a plan' and not a solution. No right or wrong about it. The idea of
zero defects or zero variation or any of these other "zero" philosophies is, in most practical situations,
impossible to achieve without a clear plan, and Crosby does not talk about to reach to a transformation
which is zero defect.

While Deming have mainly focused on quality as seen from a customer perspective, Crosby tends to
take a narrower, management-centered view.  Crosby sees many of the more nebulous statements
about quality (delight the customer, continuous improvement, etc.) as simply extension of a very basic
definition: conformance to requirements.

4
Bank Al Habib Limited
I choose bank al Habib as the organization where I chose to implement Deming’s points. Bank Al Habib
Limited is the largest bank in Pakistan. The bank has a network of over 1450 branches in Pakistan and 55
branches worldwide. It has a domestic market share of over 40%. It continues to dominate the
commercial banking sector with a major market share in inward foreign remittances (55%) and loans to
small industries, traders and farmers. Overseas, it has operations in the following countries:

Afghanistan, Australia, Bahrain, Bangladesh, Belgium, China, France, Hong Kong, Iran, Kenya, Lebanon,
Maldives, Nepal, Netherlands, Nigeria, Oman, Singapore, Sri Lanka, Tanzania, Turkey, UAE, UK & USA.

Mission
To be recognized as the leading financial institution of Pakistan and a dynamic international bank in the
emerging markets, providing our customers with a premium set of innovative products and services, and
granting superior value to our stakeholders – shareholders, customers and employees.

Services
Habib Bank offers the basic range of banking services to its customers, to include Commercial,
Corporate, Investment, and Retail Banking, Treasury, and Islamic Banking.

Scenario
I visited Bank Al Habib Limited, Gulistan-e- Jauhar branch and I happen to meet Mr. Syed Zulfiqar Ali
Abedi who is a manager in the operation department. I m glad that I got to speak with him as he shared
every minor detail regarding the company. I asked him questions like:

- How do they motivate their employees to reach their goal?

- How do they manage to be different from other banks?
- How do they differentiate themselves?

5
Deming’s 14 Points in contrast to the Working Style of Bank Al Habib Limited
The 14 points seem at first sight to be a rag-bag of radical ideas, but the key to understanding a number
of them lies in Deming's thoughts about variation. Variation was seen by Deming as the disease that
threatened US manufacturing. The more variation - in the length of parts supposed to be uniform, in
delivery times, in prices, in work practices - the more waste, he reasoned.

From this premise, he set out his 14 points for management, which we have paraphrased here:

1."Create constancy of purpose towards improvement"-Replace short-term reaction with long-term

planning.

Bank Al Habib believes in remaining constant through out for keeping up with the improvement process.
They perceive if things are going right, they must continue the process and reiterate again and again to
sustain constancy.

2."Adopt the new philosophy".

This implies is that management should actually adopt new philosophy, rather than merely expect the
workforce to do so. Bank Al Habib Limited strives to be different to be different from other banks and
therefore it has stood out from rest of the banks in Pakistan. It is continuously adopting new ideas and
philosophy and introducing new schemes everyday. The operational policies of Bank Al Habib deal with
the method of provision of better services to its customers through the means of new schemes as
means of satisfaction for their customers.

For instance, it has launched a scheme called Haryali Agricultural Loans; it entails all kinds of agricultural
finances facilities for the rural market.

There is one more innovative scheme they have launched for middle income serving people in various
public sectors called HBL Flexi Loan. It is basically for those people who earn more than 5000 rupees on
a monthly basis. This loan meets the petty requirements of salaried class since the introduction of this
scheme of Rs. 6 billion is advanced throughout the country. The maximum limit of this loan is Rs. 3
million.

3."Cease dependence on inspection".

If variation is reduced, there is no need to inspect manufactured items for defects, because there won't
be any.

4."Move towards a single supplier for any one item"

Multiple suppliers can induce variation between feedstock, which leads to confusion and therefore they
deal with one supplier for a particular item.

6
5."Improve constantly and forever"

Unlike Crosby’s philosophy of zero defects, Deming makes it clear how to attain positiveness in the goal
which is far-sighted. He says by constantly improving the workforce, they can reach the goal.

The management of Bank Al Habib Limited agrees to the fact that there is no stop for improvement in
any stage. The improvement process shall continue forever.

6."Institute training on the job".

Mr. Abedi, in regards to training on job told me that this is very significant for the bank. Traditionally
people were employed on the basis of their degree only but now time has changed, even an MBA
degree holder needs to be updated with upcoming technologies and necessities considering job and
therefore they have induced job training, which isvery essential for the employee to remain up-to-date.
If people are inadequately trained, they will not all work the same way, and this will introduce variation.

7."Institute leadership".

Deming makes a distinction between leadership and mere supervision. The latter is quota- and target-
based.

The bank encourages leadership as compared to supervision. Leadership is influencing people to get
things done to a standard and quality above their norm and doing it willingly. Leadership encourages
social interaction whereas supervision does not.

8."Drive out fear"

Deming sees management by fear as counter- productive in the long term, because it prevents workers
from acting in the organisation's best interests.

9."Break down barriers between departments"

Another idea central to TQM is the concept of the 'internal customer', that each department serves not
the management, but the other departments that use its outputs. Bank Al Habib identify with this idea
that work should not be restricted within a department but the firm has to work as a whole to reach the
goal.

10."Eliminate slogans".

Another central TQM idea is that it's not people who make most mistakes - it's the process they are
working within. Harassing the workforce without improving the processes they use is counter-
productive.

7
11."Eliminate management by objectives".

Deming saw production targets as encouraging the delivery of poor-quality goods.

12."Remove barriers to pride of workmanship"

Many of the other problems outlined reduce worker satisfaction. The firm has to be informed if there is
any problem which is making the employee uncomfortable.

13."Institute education and self-improvement"

These days having only an MBA degree wont work there are other certified courses as well to remain
update with the modern world.

14."The transformation is everyone's job".

The bank believes everyone has got the right to get promotion, as promotion is one of the basic
techniques for the employee to be motivated.

Conclusion

Bank Al Habib is clearly the first choice for everyone who believes in qualitative approach in banking.
They are continuously striving to improve their working skills and by focusing on Deming’s philosophy it
will remain as a leading bank of the country.