Business Policy with Total Quality Management

Module 005 Total Quality in

Organizations
This module tackles of quality in manufacturing and service
organizations, large and small, including education, health care, not-
for-profit, and government. This module focuses mainly on the role
that each component of an organization plays in achieving high
quality.
At the end of this module, you will be able to:
1. Understand quality in different areas
2. Understand terms that affect total quality in organization
3. Explain factors that affect improving quality in different areas

Total Quality in Organization

Quality does not happen by chance. It needs to be developed. As consumers’
expectation grows, a focus on quality has permeated other key sectors of the
economy, most specially health cares, education, not-for-profits, and public sectors.
Today, the idea of quality has moved far beyond its manufacturing roots.
Quality, in all kinds of organizations is unquestionably important to keep the
customers, sustain the profitability and gain market share
.
Quality and System Thinking
System is defined as set of functions or activities within an
organization that worked together for the aim of the organization. It
is composed of many smaller, interrelating subsystems. For an
instance, Jollibee’s restaurant is a system that includes the order-
taker/cashier subsystem, grill and food preparation subsystem, drive-
through subsystem, purchasing subsystem, and training subsystem.
These subsystems are linked to each other as internal customers and
suppliers. System perspective acknowledges the value of the
subsystems but their individual actions.
Business Policy with Total Quality Management

Quality in Service
Service is said to be the primary or corresponding activity that does
not directly produce a physical product that is, the non- good part of
the transaction between the customer and the seller. Services are also
described as more labor-intensive than manufacturing.
In Management Association in America found out that companies lose
as high as 35 percent of their customer due to poor customer service.

Quality in Manufacturing
Manufacturing is a process of producing specified-quality
outputs.Traditionally, quality in manufacturing focus primarily on
technical issues such as equipment reliability, inspection, defect
measurement, and process control. To make a quality manufacturing,
final product inspection is made to judge the quality of product. This
will not only help the producers to solve production problems but this
will also ensure the producers that there will be no defective product
reach the consumer. In this case, technology and people play an
important part in manufacturing.

Quality of Health Care

According to Edwards Deming, quality is a strategy aimed at the needs
of customer for present and for the future. Health Cares aim to
provide quality, efficient, and economic management system and to
satisfy the stated and implied needs of the patients.
Deming Principles to Healthcare Systems
Business Policy with Total Quality Management

Quality in Small Business and Not-for-profits

The adoption of quality initiatives of small business and not-for-
profits have been generally been dawdling. Dawdling is an effect of
lack of understanding and knowledge of what needs to be done and
how to do it since managers focused mainly on entrepreneurial
activities like sales strategies and market growth, day-to-day flow
problems, and routine fire fighting. Moreover, small business and not-
for-profits often lack of resources needed to establish and maintain
more formal quality systems. However, in viewing the three principles
of TQ, a focus on customer is definitely important to small businesses;
the company president or founder is often the principal contact with
key customers and knows them intimately. Most small business live
and die due to their customer relationship practice, but the other two
TQ principles – teamwork and participation, and a process focusand
continuous improvement – are generally not well addressed. Small
firms executives, especially in a family-owned enterprises, often have
a “command-and-control” attitude directs decision making and
leaving little discretion and empowerment to employees.
Many other characteristics of small business undesirably affect the
implementation of TQ principles. These characteristics include the
following:
 The absence of market clout, which may affect small business’s
ability to get suppliers involve in quality efforts
 Failure to recognize the importance of human resource
management strategies in quality, and therefore experiencing
lower levels of employee empowerment, participation, and
quality related training
 Deficiency in professional management expertise and the
short=term focus, which sometimes results in inadequate
allocation of resources to TQ efforts
 Lower technical knowledge and expertise, making it hard to
smaller firms to effectively use quality equipment and
improvement techniques.
 The informal nature of communication and lack of structured
information systems, which inhibit implementation.

On the other hand, many successful smallbusinesses have shown that

quality initiatives can be successfully accomplished.
Business Policy with Total Quality Management

Small business have this idea that as their business grow or as they
face critical market challenges; they simply cannot afford to be
managed as they were in the past, and that they require a more
systematic process-oriented infrastructure. One example is Texas
Nameplate Company, Inc. (TNC), which manufactures and sells
information labels that are affixed to refrigerators, oil-filled
equipment, high pressure valves, trucks, computer equipment, and
other products made by more than 1000 customers throughout the
United States and in 9 foreign countries. With only 66 employees, it
was the smallest company to receive a Baldridge Award when it did so
in 1998. Their quality journey began when a large customer
threatened to cut them off if they fail to apply the quality control tools.
However, it was the persistence of the Dale Crownover, TNC’s
president, who made the difference and kept faith in his people.
Crownover, did not only trained his employees but he also instituted
profit-sharing and gainsharing incentives, along with higher-than-
industry-average pay scales, to reinforce the workforce’s commitment
to quality and foster company loyalty. Customer contact employees
are empowered to resolve customer complaints without consulting
the management.

Quality in Education
Education represents one of the most interesting and challenging
areas for quality improvement. Total quality in education has the idea
that every student has the worth and demands the best possible
chance in life. In line with this, total quality in education
emphasizes leadership, strategy, teamwork, rigorous analysis, and
self-assessment.
How Total Quality Management applied in school setting?
The hierarchy looks like this:
1. Students are the workers and the products. The success and
failure of the school depends on the quality of their
performance.
2. Teachers are the first level managers. Teachers should be the
leader inside the classroom, accentuating quality through non-
coercive management featuring student as worker and teacher
as coach or facilitator, motivating the students how to learn
and thus to teach themselves.
Business Policy with Total Quality Management

3. Administrators are the middle or the upper level of

management. The productivity of the school greatly depends
on the performance of those who directly manage the workers
i.e., teachers. According to Deming, teachers’ success in turn
depends on how well they are managed by the administration
ruling them.
4. Board of Education is the board of directors and the direct
responsible to the clients. Board members are the overseers of
the administration.
In a study, Management by Result is no longer sufficient to
handle the problems schools are facing. To promote total
quality in education, there is a need to have a new
management philosophy which focuses on achieving quality
and meeting and exceeding the needs and expectations of the
clients. They also focus on the acceptance and pursuit of
continuous improvement as the only useful goal in education.
The philosophy holds that example and experience teach little
about theory, and that experience is not always useful
knowledge. However, the new philosophy is based on the
acquisition and application of knowledge. This knowledge is
what we called profound knowledge.

Quality in Public Sector

Quality in the public sector – federal, state, and municipal
governments- has not achieved growth and momentum as rapidly as
in the private sector. However, many public sector entities had made
remarkable strides to incorporate the principles of quality into their
operations.

Quality in the Federal Government

Federal government has a surprisingly long history of quality
improvement activities.
 Business Policy with Total Quality Management

State and Local Efforts

Agencies in the local government have gained momentum in
developing their own quality programs and processes, albeit at a
much slower rate than the private sector.

Glossary

Dawdling: It is an effect due to lack of understanding and knowledge of what it is to

be done.
Subsystems: these are smaller, interrelating parts of a system.
Profound Knowledge: It is an acquired and applied knowledge.
Not-for-profits: organizations whose primary purpose is not to gain income.

References and Supplementary Materials

Total Quality Management Philippine Edition

James R. Evans and William M. Lindsay pp. 110 – 139
Recreating the Corporation: A design of Organizations for the 21st
Century, Oxford, 1999
Ackoff, Russell L.
Hyundai Gets Hot, Business Week, December 2001, 84-84
www.hcqualitycommission.gov
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