Self-assessment of TQM practices: a case analysis October 6, 2009Posted by Bima Hermastho in TQM Domain.
V. Arumugam, Faculty of Management, Multimedia University, Cyberjaya, Malaysia
Hiaw Wei Chang, University of Warwick, Coventry, UK
Keng-Boon Ooi, Faculty of Management, Multimedia University, Cyberjaya, Malaysia
Pei-Lee Teh, Faculty of Management, Multimedia University, Cyberjaya, Malaysia
Journal: The TQM Journal, Volume: 21, Number: 1, Year: 2009, pp: 46-58
Purpose – The purpose of this paper is to assess the current level of TQM practices within a major computer hard disk USA based manufacturing company in Malaysia and to identify improvement opportunities.
Design/methodology/approach – Original research using self-administered questionnaires, distributed to all staff within this organization, is thoroughly reported. The study sample consisted of 299 employees, resulting in a response rate of 66.4 percent. The data were analyzed using descriptive and multiple regression analyses.
Findings – The analysis revealed that the strengths of the company, in its quality management implementation, lie in customer focus and process management. It was also perceived to attain a “good” level of practices in leadership, strategic planning, human resource development and management. On the other hand, supplier relationship and information and analysis both received only moderate scores. This suggested that more effort needs to be focused on improving supplier quality and relationship management and the information distribution system.
Research limitations/implications – The research paper was derived from a single organization; therefore generalization of these findings to other organizations should be applied with care.
Originality/value – The approach and methods outlined may be adopted or used as a guideline in conducting any subsequent surveys in the company or, in a broader sense, they can be referenced by practitioners or researchers engaged in similar research or survey studies.
The effectiveness of quality management initiatives resulting in sustainable competitive advantage and enhanced business performance has been a major subject of interest for business and academia alike. Much has been written about the philosophy of Total Quality Management (TQM) and its impact on competitive success. Quality management has been identified as the prime driver for enhanced business performance (Corbett et al., 1998).
Over the past two decades, companies experienced dramatic changes in business environment characterized by such phenomenon as increasing consumer consciousness of quality, rapid technology transfer, globalization and low cost competition. In response to these challenges, many companies have joined the quality movement and implemented various quality improvement initiatives as a means to enhanced competitiveness. However, there seems to be a lack of systematic study of the status of TQM-based research studies to understand the current practices and improvement opportunities on their quality management journey towards Total Quality Organizations.
To facilitate their drive towards higher quality levels, many companies are using self-assessment tools to measure their current status on TQM and to plan future process improvement activities (Azhashemi and Ho, 1999; Zink and Schmidt, 1998). Correctly managing self-assessment of TQM towards achieving business performance is strategically and tactically vital for gaining a competitive advantage. Previous studies (e.g. Cangas, 1996; Larsstuen and Mikkelsen, 1999; Jørgensen et al., 2004) report that members of an organization who participate in the process of self-assessment of quality management or continuous improvement may develop deeper understanding of the fundamental principles of continuous improvement and an increased motivation to participate in subsequent improvement activities. In order to bridge the gap and provide the organizations with practical assistance in dealing with self-assessment of TQM practices, this paper uses a major computer hard disk USA based manufacturing company in Malaysia to examine, whether the application of self-assessment of TQM practices result in an improvement of the firm’s business performance.
Given the above reasons, this paper presents an empirical study with the main objective is to assess the current level of TQM practices in a major computer hard disk manufacturing company in Malaysia and to identify improvement opportunities. The remainder of this research paper is structured as follows. In Section 2, the theories laid down in the literatures of TQM and self-assessment of TQM is reviewed. Section 3 presents the conceptual framework. Section 4 describes the research design and the development of research instruments. Section 5 presents the methodology. Section 6 describes the research methodology. Finally, the results are discussed followed by conclusions, implications, limitations of the study and recommendation for future research.
2. Literature review
2.1 Total quality management
Since the 1980s, Total Quality Management (TQM) has become among the most commonly used management acronym. As a change management tool, TQM has been well accepted by managers (Huczynski, 1993). TQM is increasingly being seen as a new management paradigm (Grant et al., 1994; Witcher, 1995). Oakland (1993) calls TQM a new way of managing to improve effectiveness, flexibility and competitiveness of a business to meet customers’ requirements. Most TQM writers (Bounds et al., 1994; Hill and Wilkinson, 1995) recognize TQM as incorporating elements of preceding quality management eras, particularly the contributions of Shewhart, Deming, Juran and Feigenbaum. Thus, TQM has evolved into a philosophy incorporating the hard aspects of quality management and also soft aspects.
TQM is a key strategy for maintaining competitive advantage and is a way of managing organizations to improve its overall effectiveness and performance towards achieving world-class status over the past few decades (Zhang et al., 2000). Research has confirmed the strategic benefits of quality programmes and better quality is visible in contributing to greater market share and return on investment (Cole, 1992; Phillips et al., 1983), improved the area of strategic performance (Zhang, 2000) as well as lower manufacturing costs and improved productivity (Garvin, 1983).
Several studies on TQM (e.g. Christensen, 1995; Hendriks and Singhal, 1997; Opara, 1996😉 have indicated that TQM implementation would bring improvement to the overall financial performance of an organization. Likewise, Walton (1986), Hendriks and Singhal (1997), and Garvin (1988) claimed that successful implementation of TQM could generate improved products and services, reduced costs, more satisfied customers and employees, and improved financial performance. Kanji (1998) stated that TQM could lead to business excellence. Powell (1995) examined TQM as a potential source of sustainable competitive advantage and found that performance was positively associated with TQM practices. He concluded that organizations that acquired TQM would outperform their competitors.
Studies by Saraph et al. (1989), Flynn et al. (1994) and Ahire et al. (1996) indicated the importance of TQM towards customer satisfaction. Similarly, Malcolm Baldrige National Quality Award (MBNQA) (1992), and Garvin (1983, 1988) highlighted the importance of customer satisfaction on financial performance. Choi and Eboch (1998) attempted to investigate the impact of TQM on plant performance but found that the relationship is mediated by customer satisfaction.
Agus et al. (2000) investigated the linkages between TQM, customer satisfaction and financial performance. The results indicated that proper implementation of TQM can positively influence customer satisfaction, ultimately leading to enhanced financial performance. A research work by Powell (1995) provided valuable insights on the “soft issues” of TQM. The work explored TQM as a potential source of sustainable competitive advantage and found that the most generally acceptable features associated with TQM, such as quality training, process improvement, benchmarking, etc. may not be that useful for effective TQM implementation. Instead, certain tacit and behavioural features like open culture, employee empowerment and executive commitment are vital for an environment conducive to TQM.
2.2 Self-assessment of total quality management
The origin of self-assessment of TQM can be directly traced to the initiation of quality award programs and business excellence models, such as the Malcolm Baldrige National Quality Award (MBNQA), the European Foundation for Quality Management (EFQM), the Deming Prize (DP), and the Australian Quality Award (AQA). The launch of MBNQA in 1987 has developed from a measurement of organizational quality to a guideline for companies striving toward performance excellence (Pannirselvam and Ferguson, 2001). Its popularity is not surprising as the Baldrige criteria put forward a comprehensive framework for assessing companies’ progress or tool for self-assessment (Garvin, 1991). As an evidence of continuous improvement, each local authority is required to perform a self-assessment of their performance. This requirement has led to the implementation of the EFQM Business Excellence Model as a self-assessment tool by several of Scotland’s 32 local councils (Douglas et al., 1999). The EFQM excellence model encourages precise assessment of an organization and highlights issues on performance results as well as the inputs and processes needed to realize them (George et al., 2003). Essentially, the “self-assessment tools were designed in order to allow an organization to ascertain its current level of performance on measures related to quality and overall business improvement” (Hillman, 1994; Jørgensen et al., 2004). The techniques used to monitor the health and performance of organizations is termed self-assessment (Dzus, 1991; Van Nuland, 1990; Jørgensen et al., 2004). Thus, “self-assessment could provide a form of gap analysis indicating the areas in need of improvement and utilize self-assessment for a number of reasons, many of those are not related in any way to the quality awards” (Jørgensen et al., 2004).
European Foundation for Quality Management (1992) defined self-assessment as a cyclic and systematic review of an organization’s activities and results against a model such as Total Quality Management models. Guidelines for the various international awards usually make reference to the self-assessment process. This is where self-assessment provides a more tangible means of guiding the quality drive.
Many organizations have difficulties with measuring TQM progress, which is one of the reasons for the failure of attempts to introduce TQM (Boyce, 1992). There is support for conducting a cultural assessment before implementing TQM or similar initiatives in order to identify possible barriers and to assist in designing the implementation programme (Davies et al., 2007). Self-assessment on the basis of the award criteria is one means of measuring the overall effects of TQM efforts, and go through the plan-do-check cycle by evaluating the results of the self-assessment and taking action for the following period.
There are many ways to carry out self-assessment in an organization. Many of the approaches share common key processes but differ substantially in how the data is collected to produce the information to be assessed. The data collection methods range from discussion or focus group approaches to full award type processes (Ghobadian and Woo, 1996). “The practice of self-assessment is relatively new, and therefore, there is not an abundance of literature concerning how the process is actually conducted and who is actually involved in that process” (Jørgensen et al., 2004). While there appears to be broad variation among organizations in terms of who is responsible for conducting the assessment (Jørgensen et al., 2004; Hillman, 1994; Zink and Schmidt, 1998; Larsstuen and Mikkelsen, 1999), it is generally recommended for and initially implemented almost exclusively by management. Some organizations choose to delegate the task to a quality focus team, others a group of supervisors or managers, and still others from teams from various departments and levels within the organization (Larsstuen and Mikkelsen, 1999; Jørgensen et al., 2004). One of the authors of this study is the TQM manager who is responsible for the self-assessment exercise in the company.
3. Conceptual framework
The conceptual model of this study is based on the six MBNQA criteria for performance excellence with an additional criterion Supplier Relationship. The seven constructs chosen for the study are leadership, strategic planning, customer focus, information and analysis, human resource development and management, process management, and supplier relationship. Figure 1 presents the conceptual model of the study with business performance as the dependent variable and the remaining seven constructs as independent variables.
4. Research instrument
The research instrument in this study consists of two major sections. The first section comprises seven constructs measuring self-assessment of TQM practices and the second section comprises eight items that measure the overall performance of the company in key business areas. The instrument used is a seven-point Likert scale, representing a range of attitudes from strongly disagree to strongly agree.
4.1 Self-assessment of TQM measures
A comprehensive review of the prior empirical studies on TQM advocate that researchers have defined TQM practices in various ways although they are complementary to each other (Prajogo and Amrik, 2003; Terziovski and Samson, 1999). Zhang et al. (2000) reported that Quality Award models such as the Deming Prize in Japan, the European Quality Award in Europe; and the Malcolm Baldrige National Quality Award (MBNQA) in the USA provides a useful audit or assessment framework against which firms can evaluate their quality management methods, the deployment of these methods, and the end business performance. In this study, we decided to use one of these models as a framework for the self-assessment of TQM construct and supplementary analyses by several other models. Based on the above literature research, criteria of the MBNQA model was selected as the foundation of the self-assessment as compared to other business excellence models such as the European Quality Award in Europe and the Deming Prize. The main reason for this choice is that many companies, that use the MBNQA criteria for self-assessment, have shown success in enhancing their quality performance. The MBNQA model was selected for the reason that it has been used in the study of the Australian and USA companies conducted thus far (for example, Samson and Terziovski, 1999; Prajogo and Amrik, 2003; Loomba and Johannessen, 1997). Prajogo and Evans (1996, p. 7, as cited by Rawabdeh (2008) further described that the “MBNQA criteria as being easy to classify processes along the traditional management activity classification of organizing, planning, directing and controlling, along with continuous improvement”. Moreover, this model has been accepted as representing TQM constructs by several well-known scholars such as Ahire et al. (1996); Saraph et al. (1989), Dean and Bowen (1994); Juran (1995) and Flynn et al. (1994). Previous studies also indicate that a majority of large USA firms have used the MBNQA criteria for self-improvement and the evidence suggest a long-term link between use of the MBNQA criteria and improved business performance (e.g. National Institute of Standards and Technology (NIST), 1995; Loomba and Johannessen, 1997).
The MBNQA encompasses six criteria of organizational practices, namely, leadership, strategic and planning, customer focus, information and analysis, people management and process management and one criterion of organizational performance (Prajogo and Amrik, 2003). Thus, the self-assessment of TQM practices selected in this study comprises of six criteria of MBNQA with an additional criterion, i.e. supplier relationship. According to Hackman and Wageman (1995), developing partnership with suppliers is one of the major TQM implementation process. Moreover, due to the increasing importance of supplier relationships in today’s business, the authors have decided to include this construct since it has been accepted as representing one of the main TQM constructs (Ahire et al. (1996); Saraph et al. (1989); Flynn et al. (1994)). Thus, the seven constructs chosen for the study are leadership, strategic planning, customer focus, information and analysis, human resource development and management, process management, and supplier relationship.
4.2 Business performance measures
Similar to self-assessment of TQM constructs, business performance has been reflected and measured in numerous ways in a previous empirical study on TQM (Zhang, 2000; Zhang et al., 2000). However, most of the typical dependent variables used in these studies are associated with a model which focused on customer satisfaction, work processes improvement (such as cycle time and productivity), supplier quality improvement, employee satisfaction, financial and marketplace performance, achievement of strategic goals and objectives, and regulatory requirements compliance. Among this variation, the dimension for measuring business performance used by MBNQA was the one that most closely matched our objective. Thus, we choose these eight activities of business performance as one of our research dimensions.
In this section we discuss sample and data collection procedures, operational measures of variables used in the study and the evaluation method.
5.1 Sampling and data collection
The target population of this study is a major computer hard disk USA based manufacturing company. The company was selected and viewed as the best and most valid representation of the entire hard disk industry in Malaysia for the exploratory survey for two main reasons. Firstly, the Company operating in Malaysia is the world’s largest independent manufacturer of cutting-edge thin-film media and it has the largest substrate manufacturing facilities in the world ( Malaysian Industrial Development Authority News, 2004). Second, this company was chosen because TQM practices were likely to be sophisticated and established. The authors felt that sampling would be appropriate to collect sufficient information from the total population to make statistical inferences. This can be achieved with adequate sampling design and sample size. According to Bowen and Starr (1987), stratification can be used to improve sample estimates of population characteristics. To improve the reliability of sampling and ensure that the sample collected is representative of the company, the population was stratified. The number of employees in the firm is approximately 1,100.
The study was conducted based on individual job function. Only full-time employees will be used for data analysis. It is worthy to note that the temporary workers were excluded from this study because they normally work for the company for just short periods of time and may either have, neither the basis to assess the company adequately, nor the standing to represent the company. Three large non-overlapping strata groups based on the types of job classification were included in the sample (i.e. Managers and above, Exempt and Non-exempt employees). The managerial group included middle and senior managers responsible for a single section or several work areas. Non-exempt can be classified into direct and indirect employees. Direct employees are referring to those who are directly involved in production, whereas indirect employees are those who support production.
The mail survey was the main form of data collection. The questionnaires were distributed to 450 employees, of which 19 of them were senior managers; 72 of them were managers; 359 were supervisors, executives and non-executives. 305 questionnaires were returned of which 299 were valid for data analysis, yielding a respond rate of about 66.4 percent.
5.2 Variables measurement
5.2.1 Independent variables: self-assessment of TQM practices
A total of 39 items were adopted to measure self-assessment of TQM practices (Davis, 1992, Lai et al., 2002, Spencer and Loomba, 2001, Yavas, 1995, Yong and Wilkinson, 2001, Baldrige National Quality Program, 2002). All items were assessed on a 7-point Likert scale with value “7” representing a very strongly agree and value “1” representing a very strongly disagree.
5.2.2 Dependent variable: business performance
Eight measurement items (i.e. customer satisfaction, work process improvement – such as cycle time and productivity, supplier quality improvement, financial and marketplace performance, employee satisfaction, achievement of strategic goals and aspects and regulatory requirements compliance) were adopted from the Baldrige National Quality Program (2002) to evaluate the overall business performance of the company in key business area. A 7-point Likert scale was used to capture business performance, with score “7” representing very strongly agree and “1” representing very strongly disagree.
5.3 Analyses of data
Factor analysis and scale reliabilities, as well as descriptive statistics analyses were initially undertaken for the study variables. The hypothesis was tested using multiple regression analysis.
6. Results of the survey
6.1 Factor analysis and scale reliabilities
A principle component factor analysis with varimax rotation was employed to validate the underlying self-assessment of TQM practices. The item loading range for each component (factor) was rather high with a minimum loading of 0.592 (process management). According to Rollins (1992), a loading of 0.4 or higher is generally considered good in statistical terms. Thus, the survey instrument had been validated to have construct validity. The results of the factor analysis for each construct are presented in Table I. The reliability coefficient of the independent variables (Self-assessment of TQM practices) and the dependent variable (Business performance) were above 0.70, which concurs with the suggestion made by Nunnally and Bernstein (1994). The results are presented in Table I.
6.2 Descriptive analysis
The various mean scores of the constructs were computed and analyzed for estimating the level of TQM practices perceived by the respondents. The results are presented in Table II.
An overall mean score of 5.03 with a standard deviation of 0.657 indicated that the company generally has a positive level of TQM implementation. This score is at the upper middle end of the seven point Likert scale, where 7 represents the maximum positive evaluation and 1 the maximum negative evaluation with 4 being the average value. The mean score of constructs ranged from 4.84 to 5.16 with two scores corresponding to a moderate level and the remaining six scores at a ‘good’ level of practice. This suggested that in general, equal importance had been given to all aspects of TQM practices rather than emphasizing individual TQM constructs. Hence it may be concluded that TQM had been viewed and implemented in an integrated approach. Customer focus received the highest mean score of 5.16. This indicated that the company stressed the importance of customer satisfaction and requirements in their TQM implementation process. The second highest emphasized TQM construct is Process Management with a mean score of 5.14. This showed that the company emphasized management and continual improvement of processes. The importance of Business Performance is also indicated by the results. On the other hand, the two lowest mean scores come from Supplier Relationship (4.84) and Information and Analysis (4.99). Both received only moderate scores. This suggested that more effort needs to be focused on improving supplier quality and relationship management and information distribution system.
6.3 Multiple regression analysis
A multiple regression analysis was carried out to determine the effect of the seven constructs on business performance. The results presented in Table III indicate that the business performance is significantly affected by all the constructs. The results also indicate that the seven constructs and the Business Performance is highly correlated (R 2 of 0.728). 72.8 percent of the variance in Business Results has been significantly explained by the seven constructs
7. Conclusion and implications
In conclusion, the study offered an understanding of the level of quality management practices at the company. The overall mean score of 5.03 indicates a positive level of quality management implementation at the company. The analysis revealed that the strengths of the company in its quality management implementation lie in customer focus (5.16) and process management (5.14). It was also perceived to attain a ‘good’ level of practices in leadership, strategic planning, human resource development and management and business performance. It is clear from multiple regression analysis that all the seven constructs affected the business performance. Hence it is imperative that management must concentrate on all the seven constructs in order to achieve world class status in TQM implementation. Since the mean score is 5.03 on a seven-point scale with a minimum score of 4.84 and a maximum of 5.16. Thus, it can be concluded that the company has achieved a “balanced” and an “integrated TQM implementation, with moderate to good levels of practice for the constructs identified. Nevertheless, based on its current status of TQM practices, the company is still some distance away from being “excellent” against world-class performance excellence (MBNQA) criteria. This paper provides a comprehensive step-by-step approach on how a research survey study may be carried out: from research design, data collection, instrument testing and validating, data analysis, to conclusions. On the other hand, the study is the first-of-its-kind to have been conducted in the Malaysian company. The approach and methods outlined in this paper may be adopted or used as a guideline in conducting any subsequent surveys in the company or in a broader sense, and it can be referenced by practitioners or researchers engaged in similar research/survey studies.
This study offers several important implications to the company under study, quality practitioners who are considering self-assessment and other researchers. In terms of theoretical contributions, this study has extended previous research conducted in most of the Western countries and provides great potential by advancing the TQM literature with a better understanding of the self-assessment of TQM within the context of Malaysia’s computer hard disk manufacturing company.
Regarding the robustness of the research methodology, the survey instrument developed has been tested to have adequate reliability and validity. Hence, it may be adopted for other survey studies related to quality management or as a self-assessment tool.
With regard to the practical contributions, the survey instrument proposed here allows practitioners to assess the level of an organization’s quality management against world-class MBNQA performance excellence criteria (modified) and also its readiness to embrace a formal TQM program. The instrument can provide a baseline measure for the extent of TQM practices that is in place at a company. Knowledge of this baseline can be used to track progress and achieve continual improvement. It also measures the distinct dimensions of quality management practices. This allows the practitioners to concentrate only on those dimensions that require attention; thus saving on overall resources.
8. Limitations and future research
The authors realize that there are some limitations, which must be considered for future research. Firstly, business performance data were obtained from respondents rather than organizations. Thus, the data would not be very reliable and the research findings might have been biased to a certain degree. Secondly, the findings are based on the use of self-administrated survey data, which may be affected by response biases. It is difficult to determine through surveys whether respondents’ attitudes to self-assessment of TQM practices are pervasive or apparent. This study needs to be followed by interviews of full-time employees from the sample. Finally, since the company is the sole subject in this study, the results reported may not be generalized for other situations or setting. This study was conducted in a preliminary phase in exploring the issue which later could be expanded into a larger-scale research study. Thus, future research may collect data from other regions, e.g. UK, other Asian countries, and Europe, in order to have a more comprehensive study of the global computer hard disk manufacturing industry.
Figure 1Conceptual model of the study
Table IResults of factor analysis and scale reliabilities
Table IIDescriptive statistics of TQM constructs
Table IIIResults of multiple regression analysis
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