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A core value model for implementing total quality management in small organisations October 5, 2009

Posted by Bima Hermastho in TQM Domain.
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Jonas Hansson, Bengt Klefsjo. The TQM Magazine. Bedford: 2003. Vol. 15, Iss. 2; pg. 71, 11 pgs

Total quality management (TQM) has been recognised and used during the last decades by organisations all over the world to develop a quality focus and improve organisational performance. In spite of this, TQM implementation is still problematic for many organisations. In this perspective important factors to succeed with the organisational change that TQM implementation implies will be discussed in this paper. Also presented is a multiple-case study of TQM implementation processes in small organisations with a focus on core value aspects. An overarching implementation model is presented based on the multiple-case study analysis and the theoretical frame. This model implies that TQM implementation will start with core values committed leadership, everybody’s commitment and customer orientation.

Background

The ability of organisations to adapt to new customer requirements on a global market is of vital importance for a long-term success. During the last decades, this has influenced many organisations to work with quality issues on a strategic level and total quality management (TQM), has frequently been used as a management strategy to develop organisations’ quality strategies and initiatives.

However, many organisations do not realise that the implementation of TQM, in most cases, is a comprehensive organisational change. As a consequence, several organisations have not succeeded as expected (Eskildson, 1994). Based on these experiences, some authors have expressed doubt as to whether implementation of TQM really is profitable.

Today, small organisations constitute a large part of the economy. However, small organisations have been slow to adopt and implement TQM (Lee and Oaks, 1995). There are several reasons for this. One barrier for small organisations is lack of resources, which limits the feasible initiatives that a small organisation can implement (Lee and Oaks, 1995). Another one is that most advocates of TQM consider the concept as a fixed entity to be utilised by any organisation in any circumstance (Lawler, 1993). This tendency to adopt a universal approach to TQM indicates a need for adjustment of the TQM– work to a more customised approach for small organisations. Since larger companies have met considerable difficulties, the prospect of adapting TQM must be daunting for small organisations, where lack of resources, if not the motivation, could easily impede the adoption of such fundamental change (Huxtable, 1995).

On the other hand, several authors indicate that small organisations also have advantages compared to large ones when implementing TQM. For example, Ahire and Golkar (1996) emphasise greater flexibility, Taylor and Adair (1994) point at more effective communication, Lee and Oaks (1995) state that small organisations have advantages when changing the organisational culture, and Brown (1993) states that management participation is more visible.

From this perspective it is of great interest to study small organisations, which successfully have implemented TQM, in order to find common experiences, which can constitute the base of an implementation model for small organisations.

In this paper important factors to succeeding with the organisational change that TQM implementation implies will be discussed. We will also present a multiple– case study of TQM implementation processes in small organisations with a focus on core value aspects. An overarching implementation model is presented based on the study.

TQM, performance and profitability arguments for and against

The relation between TQM on one hand and performance and profitability on the other has been discussed frequently during recent years. Several authors emphasise that a successful use of TQM is closely related to economic and performance success; see e.g. Moreno-Luzon (1993), Zairi et al. (1994), Hendricks and Singhal (1997), Lemak and Reed (1997), Easton and Jarrell (1998), Samson and Terziovski (1999) and Wrolstad and Krueger (2001).

However, some authors also question the actual benefits of implementing TQM. One of these is Harari (1997), who presents ten major reasons for the failure of TQM initiatives. Another one is, Eskildson (1994), who states, based on survey results, that many organisations do not succeed with their TQM efforts. The two main reasons are here said to be vague definitions of TQM and inappropriate implementation. Pyzdek (1999) summarizes the criticism of TQM over the years and adds some new aspects.

One problem with this type of discussion is that the concept of TQM in the different investigations often is unclear, partly since the concept has evolved during the last decades, and partly because the authors use different, and sometimes vague, descriptions of what TQM really constitutes. For instance, Harari (1997) does not define TQM, but rather studies organisations, which claim they are working with TQM. A discussion about this problem can be found in Lindmark (1999).

Several authors use quality award criteria as a model of TQM and accordingly quality award reception as a measure of TQM maturity. For instance, the investigation by Hendricks and Singhal (1997) shows that American companies, which have received a quality award, similar to the Malcolm Baldrige National Quality Award (MBNQA), have considerably better financial results than a selected control group. A similar investigation related to Swedish quality award recipients is presented by Eriksson and Hansson (2002). Furthermore, Przasnyski and Tai (1999) studied the stock development for receivers of the MBNQA in the USA and surprisingly found that the award recipients’ stocks as a group performed worse than similar firms in similar industries. This investigation might be compared to the so called NIST study in which the stock development for award recipients is compared to the Standard and Poor (S&P) 500 index; see e.g. http://www.nist.gov. Here the award recipients outperform the S&P index; see also Helton (1995).

Some authors posit that it is not the concept of TQM, which fails, but the implementation process; see e.g. Becker (1993) and Shin et al. (1998). Our own experience supports that hypothesis. We strongly believe that many of the failures of TQM are related to bad implementation strategies and processes. Implementation work can be seen as a transformation made by actors in a human activity system (Pidd, 1999) and TQM implementation could therefore be considered as a comprehensive organisational change. The process of change involved in integrating the TQM philosophy into an organisation is complex and wide ranging (Dale et al., 1997; Spector and Beer, 1994). The changes refer to, for instance, training, coaching and development of employees as well as changes in organisational structure, values, attitudes, management style and the adoption of new working practices (McNulty and Canty, 1995; Dale et al., 1997).

Altogether, this means, in our opinion, that TQM is proven to be profitable when implemented in a successful way, but also that there are problems with the implementation. This means, in turn, that there is a need for an increased focus on the area of organisational change related to TQM. In particular this holds for small organisations, which have specific characteristics calling for a tailored implementation process.

Theoretical frame of reference Total quality management

Several attempts have been made to define TQM. Most of these definitions are, in our opinion, rather vague. We can often see formulations such as “a way to …”, “a philosophy for …”, “a culture of…”, “an approach for …”, “a business strategy that …” and so on. Examples of such definitions can be found in e.g. Tenner and DeToro (1992), Oakland (1993), Dahlgaard et al. (1994) and Kanji (1995).

In recent years some TQM definitions based on a system view have been proposed; see e.g. Shiba et al. (1993), Dean and Bowen (1994) and Hellsten and Klefsjo (2000). In this paper we choose the definition by Hellsten and Klefsjo (2000). According to them, TQM can be defined as a management system, which consists of three interdependent units, namely core values, techniques and tools. The idea is that the core values must be supported by techniques, such as process management, benchmarking, customer focused planning, or improvement teams, and tools, such as control charts, the quality house or Ishikawa diagrams, in order to be part of a culture (see Figure 1). The goal of TQM is, according to Hellsten and Klefsjo (2000), increased customer satisfaction with a reduced amount of resources. Hellsten and Klefsjo (2000) argue that this system definition will facilitate for organisations to understand and implement TQM. The implementation work should begin with the acceptance of the core values that should characterize the culture of the organisation. The next step is to continuously choose techniques that are suitable as support for the selected values. Ultimately, suitable tools have to be identified and used in an efficient way in order to support the chosen techniques.

The basis of TQM is the core values, which should establish the quality culture. Although the number of core values, and even the exact formulations, differs somewhat between different authors, those chosen for our discussion are (see Figure 1 and Bergman and Klefsjo, 2002):

* committed leadership focus on customers base decision on facts;

* improve continuously focus on processes let everybody be committed;

* focus on customers;

* focus on processes;

* base decisions on facts;

* let everybody be committed.

A strategy for TQM in an organisation must be built on the management’s continuous commitment for questions concerning quality. The management must establish a quality policy and support quality activities morally and by providing resources (Bergman and Klefsjo, 2002). But management also have to set a good example by actively taking part in the practical work. If the management does not show, in actions, that quality is at least as important as, for example, costs and delivery time the co-operators will not do it either. Successful work towards TQM must be built with the management’s continuous involvement as a basis. The core values are important parts of this work.

We want to mention that the use of core values for managing organisational change is not unquestioned. For example, Senge (1995) discusses the question concerning management’s limited ability to change individual values and stresses that the change has to come from the inside out, rather than from the outside in. However, we are of the opinion that management can stimulate individual values by managing resources, supporting quality activities and working with techniques and tools that support the core values.

Organisational change and implementation of TQM

Thomsen et al. (1994) state that one important experience from the accomplishment of TQM is that there is a need for an increasing awareness of the fact that TQM implementation also is a question of organisational development. They also argue for improved knowledge among leaders concerning change management. Organisational development is a discipline with many approaches, in which TQM is overlapping some; see for example Grieves (2000). In order to create a foundation for the case study and its analysis and the implementation model discussed in this paper, aspects from both the organisational development discipline and the TQM discipline will be briefly discussed from an implementation perspective. For more details, see Hansson (2001a).

One necessity to achieve a successful implementation is that the managers present discuss and motivate why the TQM way of working is better than the present one (Sandberg, 1994). The new way of working in the organisation has to be implemented by means of systematic procedures based on properly chosen methodologies that are understood and accepted by all parties involved (Sandberg and Targama, 1998; Ljungstrom, 2000). Therefore, studying the process of implementation includes the setting of goals toward which the implementation is directed. Senge (1990) discusses one important quality of leadership, the ability of building a shared vision in the organisation. When there is a strong and common vision, and not only a desire in the top management, individuals are developing; see Senge (1990). Kotter (1996), and others, also emphasise the importance of a shared vision.

The change process – general recommendations and pitfalls

There are many different descriptions and recommendations concerning how to accomplish and manage a change process, for references see e.g. Hansson (2001a). A compilation and synthesis of three different strategies for change realisation, by Beer et al. (1990), Kotter (1996) and Juran (1995), is presented in Table I. Our synthesis of the described change strategies, presented in the left column, consists of five overarching recommendations for change realisation.

On the other hand, there are many possible causes for failure with organisational change. Problem areas are discussed by, for instance, Sandstrom (2000), Kotter (1996) and Pressman and Wildavsky (1973). All these authors mention the permeation of the vision, the lack of strong teams and lack of committed leadership as vital factors for the change process.

Implementation of TQM

Newall and Dale (1991) describe the results of a study performed at seven industrial organisations and one organisation within the financial service sector. Despite different interpretations and descriptions, it is evident that they had, in fact, passed through the same basic stages, although under different names and in somewhat different sequences.

Oakland (1993) states that by integrating TQM into the strategy of the business, organisations will avoid the problems of change programmes by concentrating on process alignment recognising that people’s roles and responsibilities must be related to the processes in which they work.

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Figure 1

According to Oakland (1993), some of the obstacles to TQM implementation are that it can be seen as time-consuming, bureaucratic, formalistic, rigid and impersonal. Some of the resistance to TQM is typical resistance to any change. This resistance may be more severe if the organisation is successful, if there is a particularly deep-seated culture, if there has been a great deal of change already, or if the change lacks legitimacy, training and communication.

Implementation of TQM in small organisations

There are many ways of defining small organisations. Some are based on sector, market share, owner type and independency. However, most definitions are based on the number of employees. In this study, the classification by the European Commission is adopted (see e.g. Wilkes and Dale, 1998), which defines small organisations as the ones with between ten and 49 employees. Employment figures are easily available from data registers and, furthermore, employment figures are frequently used for sample selection in other studies, which facilitates comparisons. With organisation we, in this paper, mean any private or public business.

The strategies and recommendations discussed earlier are mainly described from a large organisation’s perspective. It is imperative that an implementation framework should be developed that “fits the purpose” of small organisations and so paves the way for better TQM adoption in this particular sector (Yusof and Aspinwall, 2000).

Small organisations are believed to have an advantage over larger ones in implementation of TQM, due to their flexible organisational structure, innovation ability, lack of hierarchical positions, and strong organisational culture (Haksever, 1996). Since the work with TQM demands strong commitment of the management, the small organisation has the advantage that the management actions are very apparent (Ghobadian and Gallear, 1997). In a large organisation it is more difficult to demonstrate management commitment to the entire workforce. The size of the workforce also affects the time it takes to introduce and establish the TQM system among the employees and also the costs for developing co-workers and implementing TQM.

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Table I

Furthermore, the manager and the owner of the organisation often is the same person. This means that the manager feels strong solidarity with the organisation, and that the manager’s and the organisation’s goals often correspond (Deeks, 1976). Due to the manager’s dominant position, the organisation strongly depends on the manager’s interest and competence.

Ghobadian and Gallear (1997) present ten key steps for implementing TQM in small organisations based on empirical material from four case studies, see Table II. One of their conclusions is that there is support for the hypothesis that small organisations can readily adopt the TQM principles, although the implementation process has some specific requirements. Also Huxtable (1995) presents an implementation guide for the small business manager with roughly the same steps. The main difference between the two implementation sequences is not the actual sense of the steps, but more at which detail level they are described.

Methodology

The objective of the research project behind this paper was to investigate core value aspects of TQM implementation processes in small businesses. A multiple case study of nine small organisations was carried out in order to study their TQM implementation processes. The organisations studied are all organisations in Sweden with between ten and 49 employees, which have received a national or regional quality award up to 1999. The selected organisations show differences in several ways:

* both external and joint ownership structures are represented;

* the organisations are from the private sector as well as from the public sector;

* both the service sector and the manufacturing sector are represented.

This gives opportunities of finding as many different natural cases of the phenomenon as possible, which in turn is important in order to discover many different characteristics of the phenomenon (Eneroth, 1986).

Three different data collection methods have been chosen: interviews; documentation collection; and to a certain extent direct observations. The approach for each organisation consisted of tape-recorded interviews, one interview with the management group, and one interview with a co-worker representative. The questions asked during the interviews were related to the organisation’s implementation process, from when the actual quality development work started to the point of receiving the award. The core values, techniques and tools, as described in the TQM definition by Hellsten and Klefsjo (2000), served as areas on which the questions were based. The two respondent groups described the successful implementation process of TQM and the pros and cons they could recollect of their quality journey, connected to their resource situation, knowledge situation and the theory of TQM.

First a within-case analysis was performed in which the core values that were perceived as part of the culture and the problematic core values were analysed for the different management groups and the co-workers separately. Furthermore, the order in which the core values were recommended to be introduced, according to the two groups, was analysed. Then a cross-case analysis was performed leading to the empirical model discussed in the next section. For further methodological details, see Hansson (2001 a, b).

Empirical findings and analysis

The comparison between the cases, referring to which core values the respondents considered permeating the organisation, shows both similarities and differences, see Hansson (2001 a).

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Table II

The major result is which of the six core values (see Figure 1) that permeates the organisations, since it indicates both which core values the organisations mainly have been working with and which core values that presumably are advantageous to focus on at the beginning of the implementation process. Two groups of core values could be identified in the analysis, one group considered permeating all organisations and one group permeating just some organisations.

One significant similarity is that the three core values (committed leadership, everybody’s commitment and customer orientation) are permeating all organisations at the time when they received the quality award. In a majority of the cases at least one of these three core values was partly permeating the organisation even before the formal quality development work started. The fact that all organisations had implemented these core values implies that they are both necessary and suitable to start with when implementing TQM.

During the implementation process, some of the core values were problematic to implement in the organisations. One similarity between the cases is the problems related to the core value process focus. All respondents in all cases, except one respondent in one organisation, described process focus as problematic.

The similarities between the nine cases can best be described for the core values committed leadership, everybody’s commitment and customer orientation. In all cases the respondents stated that these three core values should be among the first to be implemented among the six available. For the remaining core values it is difficult to see any clear connection between the different cases. Table III illustrates the respondents’ recommendations concerning the succession for introducing the core values in the different organisations.

Tangible strategies and structures for the use of techniques and tools rarely occurred from the within-case analysis. This affects our possibility to formulate an implementation model with distinguished strategies, methods and activities. The area in which one could see evident structures and patterns was the work with and implementation of core values.

The suggested model

Comparing the empirical findings concerning the implementation and permeation of the core values with the theoretical frame of reference one could interpret three discernible phases in the change process. By combining the empirical regularities with these steps, an overarching model structure is obtained. The model structure, depicted in Figure 2, describes the three phases where work with core values and activities interact and affect each other. This means that the extent to which the described core values permeate the organisation affects the work with the activities at the same time as the activities positively affect the permeation of the core values. The three phases of the model in Figure 2 are shortly discussed below.

The first phase

When discussing the introduction of core values in relation to organisational change and TQM implementation in small organisations committed leadership is crucial. For most cases in this study committed leadership was a core value that to a great extent permeated the organisations even before the implementation process started. This emphasises that committed leadership should be the first core value that needs to be addressed in an effort to implement TQM. This is also in agreement with the core value model discussed by Bergman and Klefsjo (2002); see also, for instance, Kotter (1996) and Spector and Beer (1994).

The main objective for the involvement of management in this phase is to establish a sense of urgency that the change is needed, i.e. a changed attitude among the staff concerning the necessary transformation; see Table I. This has, in the different cases, been attained by information and by involving the employees at an early stage, which stresses the importance of developing the core value of everybody’s commitment. The kind of information used has been dependent on the initial cause for the change. The management has in some way described the alarming situation that the organisation turned out to be in. In other cases, where an anticipated need of change was present, seminars introducing the quality concept have been used. Another objective for the management in this phase is to create funds for carrying out the change process. It can be external funds or resources taken from the budget. Concerning investments based on budget means, the establishment of a “change attitude” among the staff is of importance.

The second phase

When a positive sense and attitude towards the change process is established among the staff and a joint view of how to change is created, the next proposed stage is to establish a structure to work towards the joint view. If this view includes starting to work with a quality award model, cross-functional teams for the different criteria with continuous follow-ups are recommended. Otherwise, cross-functional teams working with techniques and tools supporting customer orientation are proposed. Training must take place before and during the work within the groups. For suitable techniques and tools, see for example Ehresman (1995). The core values that should be the main focus in this phase are everybody’s commitment and customer orientation. Everybody’s commitment was also pointed out in phase one as a condition for establishing a change attitude among the staff. In this phase this core value is mainly a part of the objective with the work with cross-functional teams, but also a necessary condition for that work to be fruitful. Since process focus has shown to be a complicated core value to embrace, the recommendation is also to begin some educational efforts with respect to this core value in this phase.

The third phase

In the third phase the organisation should continue to work according to the new structure. The different teams should work with the different assignments that involved different techniques and tools. Different tools and approaches that support the core values formally and informally are, for example, described in Ehresman (1995). Working with quality award criteria is a formal approach that supports the different core values (Hellsten and Klefsjo, 2000). Training is also here an important investment for the accomplishment of these activities. It is also important that the activities in phases two and three result in apparent gains, such as increased customer satisfaction, and that the educational efforts have evident pay-offs. These gains should be visualised in order to keep the inclination to change and further development among the employees consistent. The three core values that are recommended to be in focus during this phase are process focus, fact-based decisions and continuous improvements.

Conclusions and discussion

The core value-based model consisting of three phases in Figure 2 describes an overarching recommendation for how to implement TQM in a small organisation. Activities in combination with working with core values demonstrate the authors’ conclusions from successful implementation processes in nine organisations compared and analysed with the theoretical base. The study also confirms the ideas by Hellsten and Klefsjo (2000) that it is important that suitable techniques and tools support the core values in order to establish a quality culture.

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Table III

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Figure 2

The described theoretical frame of reference, together with the empirical findings, creates a knowledge foundation that hopefully will facilitate the understanding of small organisations’ implementation of TQM. We also want to say that although the study focused on small organisations, we strongly believe that the findings also are of value for larger organisations.

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The current issue and full text archive of this journal is available at http://www.emeraldinsight.com/0954-478X.htm

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The financial support from “Sparbankstiftelsen i Norrbotten”, which made the thesis Hansson (2001 a) possible, and the financial support from the Swedish Institute for Quality, SIQ, are gratefully acknowledged.

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[Author Affiliation]

The authors

[Author Affiliation]

Jonas Hansson and Bengt Klefsjo are based in the Division of Quality Technology and Statistics, University of Lulea, Lulea, Sweden.

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