Principles of Management

Question:

Evaluate Total Quality Management as one of the most popular management trends of the past ten years.
 

Management is a principle that helps in managing people in an organization. Management comprises of planning, controlling, designing, executing, leading and directing to accomplish its goals and objectives. Management can also be considered as social science that manages social organization. Management includes both innovation and marketing of business and its product to target customers. Before starting any work or business all the organization needs planning. Planning helps the organizations set plan that helps the organization accomplish its goals and objectives. There are various management theories and concepts presented by different authors. The common management theories used in organization widely are the contingency theory, systems theory, chaos theory and theory X and theory Y that helps the workers stay motivated to produce better and efficiency. The principles of scientific management theory are presented by Taylor that uses the principles of science and knowledge in management. The bureaucratic theory of management is resented by Max Weber that is used in administrative environment and management (Hill et al. 2014).  The three major theories are administrative theory, scientific management theory and bureaucratic management theory. Henri Fayol has presented 14 principles of management that are applicable to all the organizations or businesses (Easterby et al. 2012). These include:

• Division of labor- The first principle of management is that that work should be divided and subdivided according to the field of specialization. This makes the work easier and can be completed in lesser time with more efficiency. The labors should be given the work in which it has expertise and specialization in order to increase performance and efficiency (March 2013).
• Party of authority and responsibility- a person who is given authority should be responsible to handle the operation and task efficiently.
• Principle of one boss- the organization should have one boss that controls the entire organization to avoid the clash. The theory of one boss is essential as it undermines authority and divides loyalty (Parnell 2013).
• Unity of direction- unity of direction is planning in a group that is related to similar activities and objectives. It refers to managing departments and organization as whole.
• Equity- it refers to combination of fairness, equality, kindness and justice in an organization. It is essential to treat the employees in an organization with justice and kindness.     
• Order- this principle refers to arrangement of social order and material order that is proper and systematic in nature.
• Discipline- discipline means following rules and regulation in an organization with sincerity, obedience, respect and authority.
• Initiative- all the employees in an organization should be encouraged to take responsibilities and initiatives in an organization for its proper management (Giacalone and Rosenfeld 2013).

The other principles of management presented are fair remuneration, stability of tenure, scalar chain, coordination of general interest to specific interest and centralization.  The rest part of the report discusses the theory of total quality management and explains the failure and success of an organization by taking the example from real life scenario. It critically evaluates the article presented in the Australian titled ‘the good, bas, ugly by Catherine Fox.’ The author discusses the total quality management theory and also various theories of management such as benchmark, six sigma and CRM (Hitt et al. 2012).

Total Quality Management (TQM) is a long term approach to manage the work in an organization to increase the customer satisfaction. It is a management success that is achieved in lone run through customer satisfaction. The main aim of the people in an organization is to improve products, services, quality and work productivity and profitability. Total quality management is also sometimes referred to as productive maintenance because the main principle of TQM is to increase productivity. The primary aim is to provide high quality service and products to its customers to increase their satisfaction through management. There is no particular approach or tool that the total quality management policy has developed but it is based on the previous theories of quality control itself (Shafritz et al. 2015).  The total quality management approach was very famous in the year 1980s and 1990s that was overtaken by other management theories such as Six Sigma and Customer Relationship Management recently. Total quality management aims at improving the performance and quality at each level of operation or development and all levels of responsibility. The origin of Total Quality management was in the year 1950s that has now become very popular. Total Quality Management is the description of culture, attitude, and organization to provide products and services to satisfy the needs of the customers. The total quality management process assesses the quality of the product and rejects the one that does not match the criteria set by the firm. Total Quality Management is the combination of management and quality control that helps in avoiding the loss of the organization by reducing the wasteful practices. It is a management process that integrates all the management theories and concepts such as finance, marketing, design, production and customer service. It is a collection of process that aims at including knowledge and skills in its experiences and operations (Wagner 2013). 

Management Theories

• Commitment by senior management and the employees
• Specific incorporation in strategic planning.
• Meeting customer requirement
• Improvement plans
• Reducing development cycle times
• Recognition and celebration
• Systems to facilitate improvement
• Goals and benchmarking that are challenging
• Improvement teams
• Reducing costs of services and products in an organization (Goetsch and Davis 2014).

Total Quality Management is not only applicable in business houses and corporate field but also is practiced in all activities such as manufacturing unit, engineering, research and development, Human resource, sales and purchasing, marketing and personal management.

Total quality management is used in organizations whose main focus is on its customers. There are various methods that the quality management approach uses such as strategy, data and effective communications to incorporate quality and discipline in culture and activities of an organization (Sallis 2014). There are eight principles of Total Quality Management that are as follows:

1. Customer focused – the first principle of Total Quality Management is to improve customer satisfaction. It is the clients that determine the level of quality because the whole judgment depends on them. No matter what an organization puts to improve the quality at the end it is the customers who decide that whether they like the product or not. The main aim of the organization should be on customers (Cummings and Worley 2014).
2. Total employee involvement- employees are an essential part if the organization. They are the ones on whom the total production depends. The employees should be trained in such a way that they provide good quality products to its customers. The workers should be motivated to give their best in the operation and should be treated with kindness and fairness to keep them included in the process of organization. Empowerment is self management team (Cummings and Worley 2014).
3. Process centered- another essential principle of Total Quality Management is approach towards process thinking. A process can be defined as transforming raw material or inputs into output that is valuable in nature. It is a step that involves both internal and external factors. The organizations should regularly monitor the process at each level of production starting from its core (Cummings and Worley 2014).
4. Integrated system- Total Quality Management focuses on horizontal integration of organization. It is essential for the people within an organization to understand the mission, vision and goals of the organization in order to carry out their work process in an efficient way. It is also essential for the organizations to understand the guiding principles by defining the quality objectives, policies and process. Every organization has its own unique culture that should be evaluated by the experts. The integrated system approach is used to improve the business system in such a way that it improves the expectations of employees. Customers and stakeholders (Cummings and Worley 2014).
5. Strategic and systematic approach- the organizations should adopt a strategic and systematic approach to improve its productivity and accomplish its goals and mission of the organization. Strategic management involves tactical planning, operational planning and marketing and promotional activities. The main strategic component of planning should be quality.
6. Continual improvement- another principle of Total Quality Management is continuous improvement of operations in an organization. It is the major thrust of TQM. It helps the organization to be analytical and innovative in its process. It also helps the firms become more competitive and effective while meeting its stakeholder’s expectation.
7. Fact based decision making- it is essential for all the organization to evaluate and collect the data regularly on its performance so that it can form strategies related to that. Data collection helps the organizations become more accurate and helps in providing prediction based on its history.
8. Communications- proper communication is the most essential part of Total Quality Management. Communication helps in motivating employees and maintaining their morale. Communication involves strategies, methods and timelines (Cummings and Worley 2014).

Total Quality Management principle provides the elements for the organization to improve their performance and quality. Basically the principles of Total Quality Management can be divided into five heads such as producing quality work at first time of production itself, focus in customers, strategic approach to improvement, continuous improvement and encouraging team work and mutual respect. The main principle is to meet the customer’s requirement and expectation (Madu 2012).  

The primary step to imply Total Quality Management in organization is to examine and assess its current reality. Proper data base should be formed related to its past trends, conditions, current needs and future expectation. It is also essential for the organization to analyze the working quality and performance of its employees. It is easy to implement Total Quality Management in its management process if the organization has a track record of its responsiveness to environment and its entire internal and external factor. Total Quality Management can be delayed in an organization if it is not in a state to achieve success. For the Total Quality Management to be accessible in firms it requires a well knowledge and skilled leader that can management the process. An organization should be healthy and well established before implying the Total Quality Management process in its approach. Implying Total Quality Management in its process needs to strategically outline. TQM should be purpose driven in nature with definite goals and strategies. It is a powerful tool that helps in improving employee productivity and potential, reducing bureaucracy and costs of the firm and improving service to its customers and the entire community. Total Quality Management is a long term process and approach in organizations (Conti 2012).

Many organizations have implied the concept of Total Quality Management in its process. The author takes the example of Ford Motor Company to explain the theory and evaluate whether it has proved to be a success or failure. 

Ford Motor Company is an American multinational company whose headquarter is in Dearborn. The company is indulged in producing auto locomotives and was founded in the year 1903 by Henry Ford as the name suggests. The company is involved in manufacturing and selling cars and motors under the brand name of Ford. It basically is involved in selling automobiles and commercial vehicles. It was responsible for introducing the largest scale manufacturing of cars and management of industrial workforce using engineering techniques and methods. The management theory used by Ford was classified under the heading of Fordism that was used by many other industries and organizations as well. It is the second largest automaker in United States after the general motors. Based on 2010 evaluation it is the fifth largest motor company in the world (Financial Review. 2015). 

Total Quality Management

Total Quality Management in Ford Motor Company started in the year 1980s when the slogan of the company was “Quality is job 1”. Total Quality Management worked in the company in 1980s to 1990s. Now the slogan of the company has changed to “Ford has better idea”. The six sigma theory of management plays a greater role in management process at present. When Total Quality Management process was introduced in Ford Company then the company involved itself in a joint venture. Total Quality Management was introduced in the organization to improve its process technology and methodology so that it could increase customer satisfaction in the organization.  The companies involved in a partnership with ChemFil to divide the work and produce a better quality product and motor, provide a stable environment for the workforce and manage the organization effectively to increase its profitability. The slogan of quality of job first was transformed into quality people and quality products. The main purpose of partnership with the paint company ChemFil was to improve the quality of the products to satisfy customer along with improving its financial condition.  Total Quality Management process in Ford Company was managed by the manager of ChemFil. The process of preparation was managed by painting design customer so that the company would be able to meet the customer standards. The workers in the industry were provided basic training so that it would be able to apply paint to a quality outcome (GABOR 2016).

In 1999 the Total Quality Management revisited the company when Terry Chennault joined the organization. Terry Chennault along with Phong Vu revisited the risk management and revived its Total Quality Management process in its operation and methodology.  Though many managers were involved in introducing Total Quality Management concept in organization but the real credit goes to the founder of the company Henry Ford in 1980. Total Quality Management helped the industry identify the waste products and helped to develop the innovative quality product. The Ford warranty scheme system improved and was far superior then many other systems. By adopting the six sigma strategy and Total Quality Management process the number of products that came for repair under warranty was reduced by sixty percent. The engineering analysis in the organization helped the company in launching many new products. The quality controlling system is essential in the company to identify and correct the problems identified in the manufacturing system. It involves coordination of engineering technician, cross functional unit, plant management and production specialists. The Total Quality Management process was overcome by six sigma roles. The company greatly relies on this process for its management (Qualitydigest.com. 2016).

Total Quality Management in Ford Motor Company helped in transforming the corporate culture from traditional hierarchy that transformed economic model to a total quality management.  Total Quality Management model puts forward quality control, customer satisfaction and work force satisfaction ahead of profit and other information implementation. V Total Quality Management helped the company not only reduce its cost and flexibility but also helped the company improve its working environment. Total Quality Management was specially designed for the construction standard of the company. The supply quality evaluation involves quality, production, technical, delivery and commercial methods and processes (Boulter et al. 2013).

Principles of Total Quality Management

Ford motor company uses the following Total Quality Management techniques that include as follows:

• Six sigma
• Quality operating System (QOS)
• Developed their own quality process or 5 S.
• The DMAIC process.

The result of the Total Quality Management was very stunning in Ford Motor Company that helped the company improve its quality to a great extent.  The company was facing loss in the year 1979 to 1982. The loss accounted for $3 billion of the company that greatly decreased the company’s profit. Adoption of Total Quality Management assessment helped the organization improve its profit condition after which it became the most profitable American auto company at the end of 1986. The question of quality rose again in Ford Company. In fact the survey shows that the quality and customer satisfaction of the Ford Company cannot be compared with its competitors. The adoption of the Total Quality Management was more beneficial for the company when compared to the six sigma quality control management process. Experts say that if Ford had stuck to Total Quality Management process then the problems that it faces currently would be less. The executives of the Ford Company who had acquired this technique were replaced by other technicians who had other priorities to look into. Management of quality was not their first priority.  Total Quality Management made the company realize that it is very important for the organization to increase its efficiency by reducing errors and be more customer focused working closely by looking into  supplies, design and manufacturing unit. Total Quality Management helps the organizations keep motivated that in turn helps the organization increase its productivity. Adoption of Total Quality Management has helped the organization grow in the past (Talib and Rahman 2012).

Ford and Toyota are the two companies that use the contrasting methods of management   as they are the rivals in the competitive world. Ford greatly uses the scientific management approach for its operation while Toyota uses Total Quality Management process for management of its process. Fords management process includes a quality department in its operation that is responsible for checking and evaluating the defects in its manufacturing products. The company checks the quality of the product after assembling the cars. The management process of both Ford Company and Toyota Company has proved to be one of the best management processes in the world (Talib 2013).  

The author critically evaluates the article titled ‘The good, bad and ugly by Catherine Fox on 17^th July 2015. The article evaluates and discusses the following terms in the article presented in The Australian. The article evaluates that it was difficult for the organizations to avoid six sigma in the management process in the Australian corporate business houses. The article presents a guide of good, bad and ugly of the past ten years by evaluating and discussing the following terms (Conti 2012).

Benchmarking is a term used to compare the business policies and strategies with its rivals in the competitive world. According to the article it is essential for the firm to evaluate the policies and strategies of its business but it is feasible only to some extent. Benchmarking is a term in management that describes the comparison of organizations policies, products, programs and strategies with its competitive to evaluate that whether the laid strategy will yield the benefit or not. The main aim of benchmarking is to check the scope for improvement. Comparing production time and cost is essential with its standard process but it also has some limitation. Benchmarking is essential for the commoditized process or services. The concept of benchmarking is evaluated in the book written by Kaplan and Norton ‘The Balanced scorecard’ in the year 1996. The concept of benchmarking was widely used across the organizations and executives in the year 1980s. But now the organizations and executives want the concept of benchmarking to expand and include the operational and employee skills. The Balanced Scorecard includes four parameters of measuring quality and performance of the organization. The experts say that it is difficult to implement the balanced scorecard in organizations because its lacks some efficiency and concept. It lacks efficient data collection method. The four parameters of balanced score card are measuring the time, quality and cists of the products produced by the firm. Measuring competencies and processes such as employee skills and productivity/ it includes monitoring of the product at time of the launch. It also includes cash flows operation efficiencies and return on equity. Balanced scorecard is still used by few organizations in its management process particularly in sectors that uses the ESG framework that is environmental, social and governance (Camp 2013).

Implementing Total Quality Management

The process of Total Quality Management had started losing its importance. It came in existence and revisited when six sigma was introduced in organizations. The concept of Total Quality Management has its origin from United States that is just an imitation of a manufacturing approach of Japans manufacturing unit after World War 2. It is an effort put by the organization to deliver high quality products to its customers. It typically draws heavily on the quality control of the organization. Total Quality Management gained its popularity during late 1980s and 1990s but was greatly overshadowed by ISO 9000, lean manufacturing and Six Sigma (Zehir et al. 2012).

Six Sigma is a statistics concept that uses standard deviation to evaluate the performance of the company. It is a concept that was developed by Motorola in the year 1986. The main aim of using the technique of Six Sigma is to find out the number of defects and errors in the business process to minimize the variability in the manufacturing unit. Six Sigma is a complex tool that requires the team of experts in an organization to evaluate the process critically. It is a set of quality management methods within an organization that requires special experts and champions classified into black belt and green belt (Basu and Wright 2012). The lean Six Sigma process or a concept is the technique that indicates removing the process in an organization that adds no value in the final product. Basically it is a concept to keep in the process only the valuable process escalating processes that don’t add any value to the final product. The approach of Six Sigma has mixed reviews with both drawbacks and advantages. It has mixed results over the past ten years. Few critics believe that the process of cost cutting is too narrow and does not allow the organizations to focus on innovation and customer relationships. The results and the survey shows that sixty percent of the organizations fail to yield the desired result by using the Six Sigma technique in its operation. The concept of Six Sigma is only used to improve the business performance by eradicating the processes that doesn’t add any value. It has no scope for the growth of the business. It can make the businesses more efficient by cutting the cost and fat but it cannot help the business to grow through acquisition or new ideas. Many Australia’s industries and firms still use BHP Billiton and Telstra (Pyzdek and Keller 2014).

The term customer relationship management was introduced in the year 1995. The main aim of the approach was to make the management of customers easier. It was a process to collaborate complex data’s in a meaningful way. Customer relationship is all about providing them good quality products and meeting their expectation. Maintaining customer relation is a complex term as it takes a plenty of time and requires more time in collecting data rather than encouraging actual selling. The basic aim of customer relationship management is to improve the customer service by providing high quality products. Customers are the end user and they are the ones to identify and conclude whether the quality or the product provided to them is of high quality or not. It is essential for the organizations to meet the expectations and requirements of customers. Maintaining customer relationship management requires good and quality training of employees in an organization. It is essential for the firms to evaluate the customer behavior before providing them any product (Neslin 2014).

Success of Total Quality Management

The main aim of the above article is to evaluate the article critically and discuss the good, bad and ugly phase of the management theories in the past ten years. The article uses then terms such as benchmarking, collaboration, customer relationship management, total quality management and Six Sigma (The Australian. 2015).

TQM has various tools that the business can use to improve its performance such as benchmarking, failure analysis, process management, statistical process control and product design control. It can be implemented in any part of the organization such as accounting, financial service, maintenance, and sales and marketing (Zehir et al. 2012). The advantages of total quality management are:

• Cost reduction- total quality management helps the firms to maintain it process at low cost. It reduces the cost especially in the areas of rework, scrap and warranty cost service. Hence this helps in increasing the profitability of the firm.
• Customer satisfaction- total quality management helps to satisfy the customer and gain brand loyalty because now the company produces better quality goods and services. It also helps the firm to increase its market share.
• Defect reduction- Total quality management helps the firms reduce errors and defects in an organization.
• Morale- it also helps in boosting employee morale that in turn reduces the employee turnover that results in increase in productivity (Talib and Rahman 2012).

Total quality management also has some disadvantages that are follows:

• Total quality management demands a change in culture of organization that is complex in nature. It requires change in the attitude of customers and others attached to the organization.
• It also requires planning, time, demands and resources because it includes planning time, and resource allocation.
• Quality is expensive in nature as it is expensive to implement it. It includes transaction cost, consultant fees and infrastructural development.
• It is a long term approach that takes years to show the effective result because of the competitive environment in which it operates globally. Many organizations cannot afford luxury time.
• Total quality management also discourages creativity as innovation is not encouraged. It discourages new ideas that can possibly decrease productivity.
• It is also not a quick fix solution. Many organizations have ended up losing financially (Madu 2012). 

Conclusion  

Total quality management is a management tool to assess the quality standards of organizations. It is an approach that is mainly used in an organization whose main focus is on customers. There are many tools and approaches that the organizations adopt to assess its quality. These include Six Sigma approach and ISO 9001. It is a long term approach used in organizations to satisfy the customer and increase its efficiency and productivity. Many organizations have applied total quality management in its management process. These organizations include Ford Motor Company, Toyota and Xerox Company. Total Quality Management has proved to be a better approach than six sigma approach in evaluating customers and rejecting the products that have not met the quality criteria of industries.  The author critically evaluates the article provided in The Australia that has used many terms such as benchmarking and balanced scorecard. Six Sigma is an approach that uses standard deviation to evaluate the number of defects in an organization. The main aim of the total quality management process is to improve the business performance by evaluating the quality of the product that the firms produce. It also aims at improving the customer relation. There are various management theories presented by various authors that many organizations use in its process to management the work. It is essential for the firms and organizations to plan the work ahead. Planning helps the work to strategies the work effectively and saves the time as well. It helps the fir operate in a low cost and makes its efficient. Total quality management helps the firms to improve its productivity and profitability. Various management theories that have been useful are scientific management theories, bureaucratic and administrative management theory. Total quality management theory is a holistic approach that helps the firms achieves success in long term. It has been proved to be better in Ford motor company as the management process has helped the firm increase its profit and productivity. Recently the company relies on six sigma approach that has increased the problems to the company. There are many advantages of total quality management that has helped businesses grow in long term. The good and bad article helps to identify the organizations pros and cons of management in past ten years. It is essential to manage the work in the competitive world to gain advantage. Management strategy is an essential part of organization. 

References

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