Total Quality Management in the Hospitality Industry

Total Quality Management in the Hospitality Industry

Total Quality Management – A theoretical frame work is a conceptual model of how one makes logical sense of the relationship among the several factors that have been identified as important to the problem (Sekeran, 2003). However for the purpose of this study the following models are being considered;

2.1.1 Deming’s Quality Management model

Deming is widely regarded as the master who developed Japan’s “road map” to quality. The road map is basic, simple, consists of readily available technology, and relies on common sense. Deming defines quality as “satisfying the customer, not merely to meet his expectations, but to exceed them”. Deming’s philosophy thus starts and finishes with the customer. The means to improve quality lie in the ability to control and manage systems and processes properly, and the role of management responsibilities in achieving this.

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Deming is associated with statistical process control and other problem-solving methods which aim to improve processes and reduce the inevitable variation which occurs from “common causes” and “special causes” in production. “Common causes” of variations are systemic and are shared by many operators, machines or products. They include poor product design, non-conforming incoming materials, and poor working conditions. These are the responsibilities of management. “Special causes” relate to the lack of knowledge or skill or poor performance. These are the responsibilities of employees.

Deming stresses the responsibilities of top management to take the lead in changing processes and systems. Top management is responsible for most quality problems. Management should give employees clear standards for what is considered acceptable work, and provide the methods to achieve it. These methods include the appropriate working environment and climate for work – free of faultfinding, blame or fear. Deming also strongly promotes employee participation. These are set out in his 14 points or guidelines for managers (Deming, 1986).

The 14 points put forward by Deming are listed below.

  • Create a constancy of purpose to improve products and services – take a longer term view, and innovate;
  • Adopt the new philosophy – accept the management style which promotes constant improvement;
  • Cease dependence on mass inspection – concentrate on improving processes;
  • End the practice of awarding business on the basis of price tag alone, building up relationships with fewer suppliers to understand jointly specifications of and uses for materials and other inputs;
  • Constantly and forever improve the system – search continually for problems in all processes. It is management’s job to work on the system;
  • Institute modern methods of training on the job – for all, to make the best use of every employee;
  • Institute modern methods of supervision – managers to focus on quality not numbers;
  • Drive out fear – so that people work more effectively;
  • Break down barriers between departments – teamworking to tackle problems;
  • Eliminate numerical goals for the workforce – eliminate slogans and exhortation, make reasonable requests of the workforce;
  • Eliminate work standards and numerical quotas – focus on quality and provide support;
  • Remove barriers that rob workers of pride in their work – for example, defective materials, poor tools, lack of management support;
  • Institute a vigorous program of education and training – for continual updating and improvement;
  • Create a top management structure to push every day on the above 13 points.

2.1.2 EFQM (European Foundation Quality Model)

According to Omachuno and Ross (1994), the European Foundation Quality Model (EFQM) Excellence Model is a non-prescriptive framework based on nine criteria. Five of these are Enablers and four are Results. The Enabler criteria cover what an organization does. The Results criteria cover what an organization achieves. Results are caused by Enablers and feedbacks from Results help to improve Enablers. It contains a set of nine weighted criteria that are utilized in the assessment process. The Model is based on the premise that: Excellent results with respect to Performance, Customers, People and Society are achieved through Leadership driving Policy and Strategy, that is delivered through People Partnerships and Resources, and Processes. The EFQM Excellence Model is depicted below in Figure 1.

Fig 1: Innovation and Learning Source- (Dimitrades, 2000).

The EFQM model is based on the idea that customer satisfaction, people satisfaction and impact on the society are achieved through the leadership driving policy and strategy, people management, resources and processes, leading ultimately to business results. Organizations that are characterized by a relatively high degree of customer and employee satisfaction are believed to have a positive effect on society, will excel and achieve business results (Porter, 1996). This is based on the fact that results are achieved through key processes which are funded and supported by skilled people with a clear direction. For an organization to achieve results, it must have an able executive leadership which drives the enablers of business success.

2.2 The concept of Total Quality Management

Total quality management is concerned with the management of quality principle in all the facets of a business including customers and suppliers (Dale, 1997). Total Quality Management (TQM) involves the application of quality management principles to all aspects of the organization, including customers and suppliers, and their integration with the key business processes. It is an approach which involves continuous improvement by everyone in the organization. TQM is a principle which involves the mutual cooperation of everyone that aids the business process of an organization and it involves all the stake holders of an organization.

According to Mohammed (2006), TQM is an effective system for integrating the quality development, quality maintenance and quality improvement efforts of various aspects of a system so as to enable services at most economical level and derive full satisfaction. TQM is aimed at the satisfaction of customers needs in an efficient, reliable and profitable way. It involves a radical direction through which an organization perform her day to day operations in other to ensure that quality is put at the top of mind of every employee and departments in which they operate.

Vorley and Tickle (2001), defined TQM as the synthesis of the organizational, technical and cultural elements of a company. They opined that TQM is a heart and mind philosophy which recognizes that company culture affects behaviour which in turn affects quality Oakland (1989), describes TQM as an approach to improve competitiveness efficiently and flexibility for the whole organisation.

According to Hellsten and Klefsjo (2000), TQM can be defined as a management system which consist of interdependent unit namely core values, techniques such as process management, benchmarking customer focused planning or improvement teams and tools such as control charts. Dahlgaurd, Kristensen and Kanji (1999) saw TQM as a corporate culture that is characterized by increased customer satisfaction through continuous improvement involving all employees in the organization. Oakland (1989), noted that for an organization to be truly effective each part of it must work properly together towards the same goal, recognising that each person and each activity affects and in turn is affected by each other.

2.3 Stages of TQM Implementation

Dale,(1993) identified six different levels of TQM implementation, these includes uncommitted, drifters, tool pushers, improvers’ award winners and world class. These stages do not necessarily represent the stages through which organisations pass on their TQM journey. These levels are to help organization in identifying their weaknesses and proffering solutions to them through the use of continuous improvement.

  1. Uncommitted: – This stage represents organizations that have not started a formal procedure of quality improvement. Organizations in this stage view quality improvement as an added cost and thus have no investment in quality improvement programmes such as training of employees. Organizations in this stage are termed uncommitted because they are not aware of the benefit of quality improvement and lack an appropriate quality improvement plan (Dale,1997).

The management of these organizations are characterized by an emphasis on return of sales and net asset employed. Other common features of this level as highlighted by Dale, (1994), include;

  • A major concern for meeting sales target.
  • Employees show little or no concern for quality.
  • Full inspection of materials is carried on incoming material and at strategic points during the process of production.
  • Lack of communication among the various units of production even between the top management and front line employees.
  • Minimal contact with customers.
  1. Drifters: – These are organizations that have engaged in a process of quality improvement for up to three years and have followed the available advice and wisdom of TQM. The management of the organizations in this stage tend to review the performance of the firm based on the implementation of TQM and expect immediate gains from it. These organizations view TQM as a programme rather than a process thus making the policy have a low profile among employees.

Dale, (1993) noted that organizations with such an approach to management are termed drifter because they drift from one programme to the other in a start stop fashion with concepts, ideas and initiative being reborn and re-launched under different guises. Organizations which fall within this stage usually have no plan for the deployment of TQM philosophy through out the organization thus limiting the implementation of TQM to the managers while leaving the shop floor out of the implementation process.

  1. Tool pushers: Organizations in this category look at quality improvement programs but in most cases fail to use such tools appropriately. They adopt quality management tools such as quality cycles, quality improvement groups. These organizations often blame the failure of TQM on the tools adopted.

Dale, (1997,) explained that organizations in this stage find it difficult to sustain the momentum of its improvement initiatives and it is continually on the look out for new ideas. Some characteristics of the drifters includes –

  • A major concern for meeting sales target.
  • Solving current problems rather than future problems
  • Non commitment of every senior management to TQM
  • TQM does not operate in every facet of the organisation.

Companies under this category are more experienced in quality improvement when compared with the drifters.

  1. Improvers: – Organizations in this category have engaged in a process of quality improvement for between five and eight years and during this time made important advances (Dale 1994). They understand that total quality involves long term cultural change and have recognized the importance of cultural change and the importance of quality improvement.

Dale (1993) explained that organizations in this category are termed improvers because they are moving in the right direction and have made significant progress but still have a long way to go. This is because the implementation of TQM is dependent on a few managers to sustain the drive and direction of the improvement strategy.

  1. Award Winners: – These organizations are termed award winners because they have attained a point in their TQM maturity where the kind of culture, values and trust capabilities relationship and employee involvement has become total in nature and encompasses the whole organization (Dale,1994). In these type of organisation every member of staff recognizes the importance of quality and all effort is made to maintain a quality standard. True competition based on product or service quality can only be attained when an organisation has gotten to a stage where it can compete for awards (Dale,1994)

Organizations in this stage are believed to have manned the process of quality improvement as the organizations have all it takes to achieve greater heights.

  1. World class:-According to Dale,(1994) these organizations are characterized by the total quality improvement and business strategies to the delight of customers. The organizations that have attained this stage are always in search of opportunities to improve their services to satisfy customers. It was further explained that the focus of TQM here is on enhancing competitiveness by influencing the perception of customers to the company through the continuous innovation of the service offering. The impact of TQM is felt more here as it is aimed at continuous improvement to enhance customer appeal. The task of satisfying customers is a goal for every one in the organization.

2.4 Benefits Of TQM Implementation

Omachonu and Ross, (1994), noted that, the effective implementation of TQM will increase customer satisfaction with the service offerings Quality enhances customer loyalty through satisfaction, this in turn can generate repeat business and lead to the attraction of new customers through positive word of mouth. The word of mouth communication will help in cost reduction. This Omachonu and Ross (1994), further noted will provide competitive edge to the company Total quality management is a management philosophy which emphasizes the devolution of authority to the front line staff. It ensures the participation of every one in the decision making process through activities such as quality cycles and team work. The question is, does this devolution of authority leads to employees’ satisfaction or not? Motivations theories indicate that two major forms of motivation exist ; the intrinsic and the extrinsic motivation. While some will argue that the best form of motivation is monetary incentive, others argue for self fulfillment and recognition. The motive behind the intrinsic reward is to provide the employee with some autonomy which empowers him to take decisions that affects his job, thus making him responsible and accountable. This is said to increase the employee’s level of job satisfaction (Dimitrades, 2000).

The implementation of TQM ensures that every worker in the organisation does his work with quality the first time, thus improving the efficiency of operation and avoiding some cost associated with waste. This in turn will offer more value to customers in terms of price and service quality, thus making them satisfied. Implementation of TQM further ensures that organisations change how they perform activities so as to eliminate inefficiency, improve customer satisfaction and achieve the best practice (Porter,1996).

Porter,(1996) noted that constant improvement in the effectiveness of operation is essential but not a sufficient factor for organization to be profitable. According to Sila (2007), TQM helps in improving the quality of products and also reduces the scrap, rework and the need for buffer stock by establishing a stable production process. He argued that TQM will reduce the cost of production and time of production. Continuous improvement which is a feature of TQM is said to reduce the product cycle time thus improving productivity (Huang and Lin, 2002). Many other TQM practices such as training, information system management, relationship with suppliers etc have a positive impact on operational performance. The efficient management handling of these practices will improve efficiency and no doubt affect the profitability of the firm .

According to Sila (2007), TQM can minimize the total cost of production through ‘sole sourcing’. The cost in this case is reduced by limiting the number of suppliers used by the firm and providing them with necessary training and technology. The efficient functioning of an operation will then depend on how well the suppliers meet up with the expectations of the organization. This is why the TQM principle emphasizes the totality of quality in all facets which includes the suppliers. TQM endorses the total quality approach in creating customer satisfaction. The total quality approach creates an integrated method of analyzing operation by focusing the processes of production on customer satisfaction. Thus, it requires that quality be built into all the processes so as to be efficient in the overall operation (Andrle, 1994).

Kaynak (2003), suggested that the effectiveness of TQM

organisations should be measured by the degree of integration with their supplier bases because supplier quality management is a critical component of TQM. Operational effectiveness is then a

function of how well the various units of an organisation carry out their functions with quality.

2.5 Limitations to the Implementation Of TQM

Oakland, (1995) identified factors that hinder the implementation of TQM. These include the thought that its implementation can be time consuming, bureaucratic, formalistic, rigid and impersonal. Ugboro and Obeng, (2000) in their research they found out that the half hearted implementation of TQM is a major reason for its failure in most organizations. According to them, organizations are only willing to implement just those aspects of TQM which is supported by existing organizational culture. Their findings revealed that employees did not feel as part of the decision making process and their ability to make contributions to quality improvement were restricted due to the limited authority granted them to carry out their activities.

Smith, (2004) explained that quality management programs have failed because they were ‘programs of the month’. Implementing quality through out an organization is not the result of a formalized programme but requires a cultural change in the way activities is conducted. Andrle, (1994) on his own assessment, claims that the adoption of incompatible quality approach by organizations results in the failure of TQM implementation, he further stressed that the delegation of quality leadership by managers might lead to the development of TQM bureaucracies that are ineffective like other functional departments.

According to Wilkinson, (1998) the lack of commitment from any particular group within the organization can be a serious barrier in management of quality. Most especially the non commitment by management to quality management is a major hindrance to the successful implementation of TQM. Asher (1996) observes that there is a need for management to drive the ideology of TQM process in order to encourage employees to follow and also to prove to them about management’s commitment to quality.

Porter (1996) noted that TQM is essential for an organisation’s productivity and effectiveness but will not necessarily give an organisation competitive advantage over her competitors. TQM does not address strategic business issues like differentiation and positioning strategies. McCabe and Wilkinson (1998) noted that the failure of TQM can be attributed to the inappropriate implementation method adopted by the firms employed and not because of the principles of TQM itself. They believed TQM could be successful if it is adequately planned for and implemented according to plan.

Another reason for the failure of TQM is the emphasis given to individual rewards for TQM effort. This negates the recommendation made by Deming (1986), who argued that rewards needs to be tied to team work or department rather than individual. The failure of organizations to implement the rewards to group might lead to internal competition amongst employee and this will have a negative impact on team performance which TQM promotes.

 2.6 TQM implementation and organizational performance

Having identified the critical success factors underlying a successful employment of TQM and examined the performance measures applied in empirical studies, it is pertinent to investigate the relationship between TQM employment and organizational performance identified in the empirical literature. As mentioned previously, the underlying objectives of implementing quality programs may be diverging, spanning over maintaining a competitive profile, surviving in a highly competitive market and increasing performance and productivity.

The section below provides an overview of an extract of empirical studies investigating the effects of TQM on organizational performance, seen from a quantitative as well as a qualitative viewpoint. Studies investigating the relationship between TQM factors and organizational performance have revealed somewhat diverging results. It is though noticeable that a part of this nonconformity may be attributed to the focus on different TQM constructs, the examination of diverse populations as well as the use of different methods for measuring organizational performance across different studies.

Despite the existence of nonconformity, there seems to be an agreement about the positive effects of TQM implementation on financial results. As previously mentioned, Porter, (1996) argue, that many studies have suggested and found a strong and identifiable link between a TQM approach and superior financial performance. Hendricks and Sila,(2007) found that business performance, measured by various financial and operational measures like operating income, return on assets and the like, was enhanced by the employment of TQM practices. In a meta-analysis conducted by Andrle (1994), investigating 421 items relating to TQM practices in 50 refereed articles, it was found that the adoption of TQM had a high impact on both financial performance and productivity.

Kaynak (2003) examined a sample of 139 hotels and found that operational factors are not only related to the effectiveness of TQM, as expressed by operational performance, but that they are also drivers of the success of TQM, as expressed by financial performance.

Deming (1997) investigated a set of multidimensional constructs and found that financial performance was a function of operating performance, while operating performance among others was proved to be a function of continuous improvements. Thus, several interrelationships between the various TQM constructs employed, are found in the empirical literature. However a successful implementation of TQM has not only proven to exert a positive influence on financial and operational performance. In point of fact, Dermirbag (2006) examined the impact of TQM implementation on the performance of manufacturing SMEs and reported a highly positive impact on non financial performance but a vastly lower impact on financial performance. Several other studies are found to be in alignment with this observation. Customer satisfaction is an often cited reason for implementing a quality management system and is often perceived as one of the enablers for improving financial results. In the above definitions of TQM, it is apparent that many authors and practitioners perceive customer satisfaction as a focus area of TQM, thus naturally there is a great possibility that implementing TQM leads to increased customer satisfaction. Hellesten & Klefsjo (2000) argue that increased customer satisfaction as well as reduced costs are some of the benefitts underlying the implementation of quality management.

In a study conducted by Powell (1995), behavioural factors such as top management commitment, employee empowerment and a quality oriented and open minded culture were found to produce competitive advantages more strongly than the application of data and analysis. Dow (1999) found that the combination of employee commitment, shared vision and customer focus has a large positive impact on the performance of organizations. Lau and Idris (2001) and Fuentes (2006) likewise stressed the importance of people management and alignment of strategies and TQM objectives as essential factors underlying and sustaining business growth.

Based on an extensive literature review, six critical success factors underlying the implementation of TQM practices have been identified. In the efforts of identifying the impact of TQM critical success factors on organizational performance, researchers have employed various performance measures related to operational, financial as well as non financial performance. Despite some diverging results on the impact of TQM critical success factors on organizational performance, there is a general empirical agreement, that the adoption of TQM practices exerts a positive influence on the performance of organizations.

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