TQM: a knowledge enabler? October 6, 2009Posted by Bima Hermastho in TQM Domain.
Maria Colurcio, Business Analysis, Magna Græcia University of Catanzaro, Catanzaro, Italy
Journal: The TQM Magazine, Volume: 21, Number: 3, Year: 2009, pp: 236-248
Purpose – The purpose of this paper is to investigate the role of total quality management (TQM) as a knowledge enabler in the creation and exploitation of organisational knowledge.
Design/methodology/approach – This qualitative investigation adopts a case-study methodology to analyse the role of TQM in knowledge creation in 21 prominent firms, utilising an investigation framework based on the “socialisation,” “externalisation,” “combination,” and “internalisation” model of knowledge generation.
Findings – TQM is shown to be an effective enabler of knowledge generation. TQM provides policies and tools (such as general involvement of all employees, teamwork, feedback mechanisms, and widespread communication) that are inherently useful as enablers of knowledge creation and dissemination.
Research limitations/implications – Future studies should investigate the specific causal nexus between TQM and product innovation.
Practical implications – TQM can be utilised to support an organisation’s utilisation of corporate knowledge as a real source of competitive advantage.
Originality/value – Empirical research on knowledge and quality management is scanty. This paper addresses the gap by empirically examining the relationship between TQM and knowledge creation.
Firms have become increasingly interested in making effective use of the knowledge that continuously develops within their organisations. The capacity to organise and manage processes in a manner that facilitates the creation and sharing of knowledge within the organisation has become a significant competitive asset (Nonaka and Takeuchi, 1995; von Krogh and Roos, 1995; von Krogh et al., 1998). The important role played by intangible resources (such as knowledge) in gaining a sustained competitive advantage has been emphasised by various authors who have adopted a resource-based view (Itami, 1987; Vicari, 1991; Rullani, 1992; Barney, 1991) and by those who have applied Barney’s (1997) “valuable,” “rare,” “inimitable,” and “organised” framework to knowledge (Probst et al., 1998).
Against this background, the notion of “knowledge enablers” has received increasing attention from several authors (Ichijo et al., 1998; von Krogh et al., 2000). Knowledge enablers are organisational mechanisms that facilitate both the random occurrence and the systematic development of knowledge within an organisation. Five such knowledge enablers have been identified in the literature (Ichijo et al., 1998; von Krogh et al., 2000):
- instilling a knowledge vision;
- developing and managing an “organisational conversation”;
- creating the right context by developing an organisational structure that facilitates knowledge creation;
- managing caring relationships; and
- disseminating local knowledge across several organisational levels.
Such enablers are especially significant in facilitating knowledge sharing and interaction among members of the organisation, thereby transforming individual knowledge into organisational knowledge (Ichijo et al., 1998). In the view of von Krogh et al. (2000), knowledge creation requires an enabling context.
Several authors have adopted such a knowledge-based view of total quality management (TQM) and its potential to facilitate knowledge creation and sharing (Grant et al., 1994; Zairi and Yousef, 1995; Thiagarajan and Zairi, 1997; Sitkin et al., 1994; Shiba et al., 1990; Graham and Shiba, 1993). In this regard, it has been noted that the implementation of quality systems is inherently linked to organisational learning (Fine, 1986; Colurcio and Mele, 2006). The adoption of quality principles and methodologies throughout an organisation is recognised as a necessary pre-condition for the development of a modern and successful enterprise; similarly, it is acknowledged that a primary source of competitive advantage is constituted by a continuous process of knowledge creation (Nonaka and Takeuchi, 1995; Mele, 2003). TQM would thus seem to have the potential to satisfy some fundamental organisational needs by facilitating the attainment of advanced levels of knowledge that exceed actual operational needs and that can be translated into continuous improvement processes and innovative solutions.
Despite the apparent affinity that exists between TQM and enhanced organisational knowledge, empirical studies of the link between quality systems and knowledge creation are scanty. The objective of this study is, therefore, to investigate whether TQM really is a knowledge enabler in practice. More specifically, the study aims to discover whether TQM facilitates knowledge creation in terms of new product and process development.
The remainder of this paper is organised as follows. Section 2 reviews the relevant academic literature on knowledge creation, with particular reference to Nonaka’s (1994) theory of knowledge creation. The paper then presents an integrated framework for the empirical study that follows. Using this framework, the paper then discusses the findings of the empirical study. Finally, conclusions are drawn and managerial implications are discussed.
2 Literature review
Researchers have often noted the role played by knowledge in various quality practices, but only recently have academics specifically related knowledge creation and learning to quality management (Linderman et al., 2004). In this regard, Fine (1986) studied learning in terms of conformity and failure costs (that is, the impact of learning on quality levels); Tapiero (1987) analysed the effect of learning on quality control; and Sitkin et al. (1994) attributed an important role to knowledge within TQM in advocating the need for a “total quality learning system” in parallel to a “total quality control system”.
Until the latter half of the 1990s, studies of quality and knowledge in the academic literature were primarily focused on explicit knowledge – that is, knowledge that is easily shared and imitated (Linderman et al., 2004). It was only relatively recently that Dooley (2001, p. 135) noted that any consideration of TQM and knowledge must consider both tacit knowledge and explicit knowledge:
[…] since the ultimate value of firms depends on knowledge that cannot be imitated, it is reasonable to assume that knowledge which is tacit and not easily imitated, as opposed to explicit knowledge, will grow in importance. For this reason we might expect quality management systems will increasingly focus on tacit knowledge.
Several researchers have noted that a comprehensive theory of knowledge creation is required to develop an integrated perspective of the dynamic relationship between explicit knowledge and implicit knowledge (Colurcio, 2001; Linderman et al., 2004; Ichijo et al., 1998). In this regard, Nonaka’s (1994) four-step model of “socialisation,” “externalisation,” “combination,” and “internalisation” (SECI) proposed four modes of knowledge conversion from the tacit level to the explicit level (and vice versa). According to the SECI model (Nonaka, 1994; Nonaka and Takeuchi, 1995), organisational knowledge creation takes place in a dynamic way within an organisation when:
- Feelings, experiences, and mental models are shared (that is, tacit to tacit via “socialisation”).
- Tacit knowledge is exploited in a wider and more conscious way than in its original ambit and becomes conceptual knowledge (that is, tacit to explicit via “externalisation”).
- Explicit knowledge of different types interact (that is, explicit to explicit via “combination”).
- Explicit knowledge that is already “socialised,” “externalised,” and “combined” is again transferred into the tacit dimension as experience (that is, explicit to tacit via “internalisation”).
More recently, Linderman et al. (2004) integrated the quality dimensions proposed by Sitkin et al. (1994) and the knowledge-creation process proposed by Nonaka (1994) to develop a theoretical framework that links knowledge and quality. This integrated framework is shown in Table I.
3 Research methodology
3.1 Framework for the investigation
Figure 1 illustrates the framework adopted for this empirical study. The framework, which is based on the SECI model (Nonaka, 1994; Nonaka and Takeuchi, 1995), is focused on an organisational knowledge-creation process.
As shown in Figure 1, the socialisation phase is examined by identifying organisational actions that aim to promote interactive teamwork among individuals with a view to pre-existing tacit knowledge being shared.
To analyse the evolution from tacit group knowledge to explicit knowledge (that is, the externalisation phase, followed by the combination phase), the framework focuses on the formalisation of knowledge by the organisation and on internal communication actions that foster knowledge explication by each organisation member.
Finally, to investigate the internalisation phase, the framework focuses on feedback mechanisms to assess the effective implementation of elaborated procedures and tools.
3.2 Research design
The objective of the study was to explore the relationship between the adoption of TQM and the creation of knowledge in large enterprises. To obtain rich and varied data on these qualitative phenomena, the study adopted a case-study methodology (Yin, 1999).
The selection of cases for study was restricted to enterprises that had already adopted TQM and that had a reputation for excellence in quality issues through their involvement with the European Foundation for Quality Management. The final sample consisted of 20 large enterprises from a variety of industries, as shown in Table II.
The field study began with interviews with managers on the subjects of:
- the firm’s TQM model;
- the firm’s new product development (NPD) model;
- other relevant internal variables (operative procedures, organisational structure); and
- other relevant external variables (competitive positioning, business image).
The interviewees were all responsible for their particular company’s quality-management practices and NPD processes. This ensured that the study’s data were derived from people with first-hand knowledge and experience of the investigated phenomena.
Data triangulation (Mari, 1994) was also employed using a variety of tools, such as documentary analysis, direct observation, and informal conversations.
4.1 Socialisation stage
The socialisation process enables individuals to share experiences with each other and to share tacit knowledge (such as technical abilities and mental models). In the investigated firms, the key to the development of socialisation was identified as a form of on-the-job training, whereby individuals utilised observation and imitation to learn skills and work procedures.
In all of the firms studied here, the socialisation stage was dependent on leadership from senior management to engender a commitment to quality and to coordinate resources for the achievement of quality objectives. Several authors have noted the importance of leadership from senior management in this regard (Zairi and Youssef 1995a, b; Deming, 1986; Schoenberger, 1994; Scarnati and Scarnati, 2002). As Zairi and Youssef (1995a, p. 38) observed: “[…] leadership in the context of TQM is not about power, authority and control; it is more about empowerment, recognition, coaching and developing others”.
All of the studied firms fostered teamwork to facilitate the sharing of tacit knowledge and to encourage the involvement of employees.
In Siemens’ managerial guidelines (entitled “information for managers”), which contain managerial advice on TQM, all subsidiaries are encouraged to “share in house experience”. All business units are assessed annually with respect to the implementation of best practice with regard to the sharing of information. The leadership policy deployed by Siemens with respect to TQM and the management of human resources was systematic and effective in promoting teamwork.
At Texas Instruments, teamwork is understood to be a means of assisting employees in their individual careers, as well as being a means of helping employees to gain familiarity with the tools of TQM in their everyday tasks. Teams are trained in both “quality circle” techniques and leadership skills to ensure that TQM tools are shared for problem solving. Within each team, a leader is chosen, and when a particular project has been completed (or the problem that led to the team’s formation has been solved) the leadership role passes to another member.
Teamwork also played a prominent role in the socialisation process among organisation members at ABB-SAE. About four years ago, the company began an experimental project that aimed to stimulate the involvement of all employees in the sharing of objectives and cultural change. This involved the breaking down of all preconceived notions and mental habits. At the beginning, this project in teamwork and team building involved 80 employees who were chosen from among the youngest people in the organisation. Today, such teams are organised throughout the whole company, and teamwork is considered to be a daily routine by which all of the firm’s activities are managed. At ABB-SAE, team building has been developed concurrently with redesign and reengineering of all processes to facilitate learning and the sharing of experiences among all employees.
Teamwork also has a long history at Sodalia, where it is seen as an effective method for developing competencies, fostering knowledge interaction, and facilitating the development of a homogeneous corporate culture. More specifically, teams at Sodalia consist of six or seven individuals, of whom two-thirds have experience and knowledge of the particular matter under consideration whereas the remainder have absolutely no knowledge of it. This procedure highlights the role of so-called “tacit knowledge bags,” which are held by individuals who are not formally involved in specific activities and who are not usually inclined to share the experiences (for reasons of individual shyness or poor motivation).
Other methods to encourage knowledge sharing among employees have been trialled by 3M Italia and by Siemens, in which formal meetings have been constituted to stimulate individual knowledge and improve relationships among employees (Choi and Lee, 2000).
Table III presents a summary of the main actions implemented by the investigated firms to foster the socialisation process.
4.2 Externalisation stage
Formalisation of the knowledge that had been created by sharing and teamwork (in the socialisation stage) was a prominent feature (of the subsequent externalisation stage) in all of the investigated firms. Formalisation of concepts, routines, knowledge, and experiences facilitated the evolution of knowledge from the individual (tacit) level to the organisational (explicit) level. In this regard, it is of interest that formalisation is important within many quality systems for:
- legitimising the principles of the quality system; and
- overcoming any opposition to their implementation.
Moreover, formalisation is an important element in such regulatory models as ISO 9000, which had been applied in all of the investigated firms as a preliminary to the full implementation of TQM systems.
According to some of the interviewed managers, such formalisation of created knowledge stimulates access and consultation by everybody, and thus legitimises the crossing-over of functions and the formation of new relationships (Choi and Lee, 2002).
Interesting examples of “electronic formalisation” were apparent in Sodalia, 3M, and Xerox. With the support of efficient computer technology, formalisation in these firms overcame the bureaucratic obstacles that inevitably arise from written documentation. In these firms, formalisation through electronic networking ensured “leaner management” of the quality system because it enabled rapid interaction, consultation, and updating.
In other companies, such as Siemens, formalisation of quality policy was promoted by billposting and printed material delivered to employees with their salaries. Some companies (Nestlé, Kodak, Xerox, and 3M) distributed manuals of company procedure to both managers and employees. This is in accordance with common practice in the deployment of TQM, which, in general terms, is a strategy defined by corporate headquarters and then deployed throughout the organisation as the principles and action plan of TQM are formalised into specific documents, manuals, and quality plans.
Table IV summarises the main actions undertaken by the investigated firms in the externalisation stage.
4.3 Combination stage
All of the companies studied here had policies that aimed to ensure the sharing of knowledge and experiences among all members of the organisation. Human-resource training and management emphasised participation, individual knowledge development, teamwork, and interaction among individuals. Some of the companies had developed excellent programs for involvement of the whole organisation and the sharing of objectives, which stimulated the internalisation of a diffuse organisational culture among all employees and managers.
Within Siemens, senior management had created an enterprise culture based on trust and open dialogue through the Führunsgespräch (or “manager interview”), which aimed to optimise the collaboration between managers and their subordinates. The Führunsgespräch is a process of structured interviews during which subordinates inform their direct supervisors about what they have gained from their activities and the possibilities for improvement. The supervisor then uses this feedback from various subordinates to formulate the objectives to be achieved in the forthcoming year. This process supports the team-building process and enhances understanding between supervisors and dependants – thus optimising collaboration and the attainment of reciprocal trust.
In Texas Instruments, some programs were identified which, originating within the firm’s TQM system, explicitly recognised the value of cooperation and the results obtained by teamwork. In these programs, the authority to undertake actions is given to the employees. This empowerment moves decision making to parts of the organisation where it can effectively add value to the customer; however, this requires investment in training and communication.
Similarly, empowerment was a TQM factor that had been enthusiastically adopted by Kodak – a company that consciously sets out to stimulate employees’ creativity, encourages the development of quality teams, and promotes effective teamwork in pursuit of quality. A key element of management practice and philosophy in this company was open communication; formal and informal communication mechanisms have been deployed to stimulate an environment of open conversation, disseminated knowledge, and reciprocal trust.
Various other mechanisms for knowledge sharing and the transformation of individual knowledge to the organisational level were noted in 3M, Italtel, Nestlé, and Sodalia. These included such initiatives as:
- the promotion of individual ideas through the use of a suggestion box; and
- the design of a software program that enables all organisational members to express anonymous opinions freely through the company’s intranet.
All of the investigated companies promoted the involvement of employees in organisational sharing, with particular reference to quality targets. Appropriate training and education programs were apparent in all the firms.
Table V summarises the actions developed by the investigated firms to improve the involvement of employees.
4.4 Internalisation stage
Within their own TQM systems, the case companies developed appropriate feedback mechanisms regarding the degree of human resources involvement in TQM and employees’ perceptions of the company environment. Almost all of the companies conducted “climate surveys” to ascertain whether work procedures and routines had been transformed effectively. Such analysis enabled the firms to identify gaps in critical areas for which corrective actions were required to achieve desired organisational targets. In such “climate surveys,” all employees were required to complete an anonymous questionnaire about their opinions and perceptions of the current status of the organisation.
In Kodak, the implementation of enterprise resource planning has been used as launching platform for information-monitoring mechanisms. Texas Instruments has instituted an “attitude survey,” together with informal and formal staff meetings. At these meetings, which often originate at the request of employees, information is gathered through focus groups and question-and-answer sessions.
Table VI summarises the feedback mechanisms identified in the investigated firms. To avoid unnecessary repetition, some of the mechanisms identified in earlier stages have been omitted from this table.
The study has demonstrated that there is a relationship between the implementation of TQM systems and principles and the capacity for knowledge creation within a company. The application of the SECI model (Nonaka and Takeuchi, 1995; Nonaka et al., 2000) in the present study has shown that the fundamental values and procedures of TQM stimulate the development of mechanisms that facilitate the conversion of tacit knowledge into explicit knowledge (and vice versa). Table VII summarises the knowledge-creation process in the firms investigated in this study.
The widespread application of teamwork appeared to be especially effective in exploiting the so-called “tacit knowledge bags” that exist within all organisations. Through inter-functional sharing in a participatory organisational climate, individuals were encouraged to make their tacit knowledge explicit. Moreover, by sharing their knowledge with others, individual employees have become appreciated as thinking persons who are capable of making a valuable personal contribution to the improvement of their organisations. There is no doubt that, in the companies studied here, the fostering of teamwork and the encouragement of individual initiative and innovative ideas has meant that the socialisation phase has stimulated the effective sharing of tacit knowledge.
With respect to the externalisation phase, TQM was again shown to have a synergistic role in knowledge creation. This was in accordance with common practice in the deployment of TQM, which is typically disseminated throughout organisations in documents and manuals that specify the principles and action plans of TQM. These practices contributed to the creation of explicit knowledge and the sharing of that knowledge within groups.
With regard to the combination phase, various intra-organisational programs to encourage internal communication and job enrichment were identified in the studied companies. These programs facilitated the development of a common knowledge platform within an organisational culture of trust and open dialogue. It has been noted by Warglien (1990) that organisational knowledge does not exist in itself; rather, it results from the dynamic interaction of the knowledge of various individuals. In this regard, it is apparent that TQM stimulated the sharing of individual knowledge through the involvement of all organisational members, thus combining their knowledge to form a valuable company asset. Moreover, the strongly formulaic nature of TQM appeared to act as a legitimising factor in facilitating the explication and combination of individual knowledge.
With regard to the most delicate phase, the internalisation of knowledge created by all members of the organisation, it emerged that the feedback mechanisms of TQM were eminently suitable for assessing the knowledge of individual employees and for identifying any required corrective actions for improvement.
6 Conclusions and implications
TQM can be understood as a systematic and global approach to enterprise management, based on the logic of management by process, with the aim of continuous improvement in an enterprise’s performances (especially with respect to the utilisation of human resources) in order to satisfy the explicit or implicit expectations of customers and other stakeholders (Shiba et al., 1990; Dean and Bowen, 1994; Grant et al., 1994). On the basis of this study, it is apparent that TQM (as defined above) can be a potent knowledge enabler within an organisation.
Customer satisfaction is at the heart of the whole TQM apparatus, and its dynamic and continuous nature has an inherent capacity to generate creative innovation and knowledge creation. Moreover, TQM’s emphasis on the involvement of all employees, open communication, and the sharing of objectives stimulates individual ideas and empowerment.
The findings of this study have implications for future research. In particular, future research should investigate the specific causal nexus between TQM and product innovation.
In terms of managerial implications, the study clearly identified the fundamental role played by senior leadership in generating new organisational knowledge. An empowering and open-minded leadership, based on organisational values of sharing and trust, therefore represents an indispensable pre-condition to the generation of effective knowledge-creation mechanisms.
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Maria Colurcio can be contacted at: firstname.lastname@example.org