We Are In A New Economic Age Management

Past studies done by academic scholars are critically reviewed in this chapter. Each variable is introduced and discussed extensively. Theoretical framework and hypothesis developed are presented in this chapter as well.

Total Quality Management (TQM) is a comprehensive and structured approach to organizational management that seeks to improve the quality of products and services through ongoing refinements in response to continuous feedback (Rouse, 2005).

TQM practices are the practices that consist of a few elements which had been conceptualized by several quality gurus. There are a number of approaches to conceptualize TQM practices (Roa, 1996; Samson & Terziovski, 1999; Oakland J. S., 2004). The first approach is by adopting the concepts and methods suggested by quality gurus such as Deming (Deming, 1982), Juran (Juran, 1988), Crosby (Crosby, 1979), and Ishikawa (Ishikawa, 1985) while the second approach uses ISO 9000 framework and principles. The third approach uses quality award frameworks such as the Malcolm Baldrige National Quality Award (MBNQA) (Baldrige, 2006) and the European Foundation for Quality Management (EQFM) framework (EFQM, 2006). Finally, the fourth approach is based on empirical evidence or critical success factors in real practices (Black & Porter, 1996; Kanji & Tambi, 1999; Samson & Terziovski, 1999).

Deming's (1986) 14 Points for Management is developed by Edward W Deming to help the American economy. It was initially formed to help top management in Japan after 1950. The 14 points in this method are applicable ranging from small organizations to large organizations for every industry (Knouse, Carson, Carson, & Heady, 2009).

According to (Wilkinson, Snape, & Marchington, 1998), HRM performance management and Deming TQM view benefit both organizations and employees. Besides that, TQM and Deming's are the only systems that consider corporate social responsibility (CSR) and the stakeholders as a whole. Management should be involved and participate in all the systems. Deming's is the only system that points out that managers should act like psychologists, trying to improve internal people's potential (Andrea, 2011).

Following global trends, TQM became the quality buzzword in USA during 1980s. Businesses all over USA tried to implement the Deming of quality in their firms (Goldman, 2005). Many firms adopted TQM in their operations and saved millions of dollars (Agus, 2004; Yusuf, Gunasekaran, & Dan, 2007).

Thus, Deming's (1986) 14 Points for Management will be adopted as TQM practices for this study.

Table-2.1: Deming (1986) 14 points for Management and Definitions

1

Create constancy of purpose toward improvement of product and service.

Create constancy of purpose toward improvement of product and service, with the aim to become competitive and to stay in business, and to provide jobs.

2

Adopt the new philosophy.

Adopt the new philosophy. We are in a new economic age. Western Management must awaken to challenge, must learn their responsibilities, and take on leadership for change.

3

Cease dependence on mass inspection.

Cease dependence on inspection to achieve quality. Eliminate the need for inspection on mass basis by building quality into the product in the first place.

4

End the practice of awarding business on the basis of price tag.

End the practice of awarding business on the basis of price tag. Instead, minimize total cost. Move toward a single supplier for any one item, on a long-term relationship of loyalty and trust.

5

Improve constantly and forever the system of production and service.

Improve constantly and forever the system of production and service, to improve quality and productivity, and thus constantly decrease costs.

6

Institute training on the job.

Institute training on the job. Training must be totally reconstructed in order for management to learn about the company from services to customers.

7

Institute leadership.

Institute leadership. The aim of supervision should be to help people and machines and gadgets to do a better job. Supervision of management is in need of overhaul, as well as supervision of production workers.

8

Drive out fear.

Drive out fear, so that everyone may work effectively for the company. Break down barriers between departments. People in research, design, sales, and production and in use that may be encountered with product or service.

9

Break down barriers between staff areas.

Break down barriers between departments.

People in research, design, sales, and production must work as a team, to foresee problems of production and in use that may be encountered with the product or service.

10

Eliminate slogans, exhortations, and targets for the work force.

Eliminate slogans, exhortations, and targets for the work force asking for zero defects and new levels of productivity.

Such exhortations only create adversarial relationships, as the bulk of the causes of low quality and low productivity belong to the system and thus lie beyond the power of the work force.

11

Eliminate numerical quotas.

Eliminate work standards (quotas) on the factory floor. Substitute leadership.

Eliminate management by objective. Eliminate management by numbers, numerical goals. Substitute leadership.

12

Remove barriers to pride of workmanship.

Remove barriers that rob the hourly worker of his right to pride of workmanship. The responsibility of supervisors must be changed from sheer numbers to quality.

Remove barriers that rob people in management in engineering of their right to pride of workmanship. This means, inter alia, abolishment of annual or merit rating and of management by objective.

13

Institute a vigorous program of education and retraining.

Institute a vigorous program of education and self-improvement.

14

Take action to accomplish the transformation.

Put everybody in the company to work to accomplish the transformation. The transformation is everybody's job.

Source: Deming, W.E. (1986). Out of Crisis, MIT Centre for advanced engineering study,

Cambridge University Press, Cambridge, MA.

2.1.2

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