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TQM implementation: organisation practices and information infrastructures
PII:
Omega, Int. J. Mgmt Sci. Vol. 26, No. 6, pp. 715±727, 1998 # 1998 Elsevier Science Ltd. All rights reserved Printed in Great Britain 0305-0483/98 $19.00 + 0.00 S0305-0483(98)00022-X
TQM Implementation: Organisation Practices and Information Infrastructures W. ANDREW TAYLOR The University of Bradford, Bradford, U.K. (Received July 1997; accepted after revision January 1998) This paper provides deeper exploration of the attitudes and perceptions of senior executives reported in an earlier paper. In particular, it investigates two issues; (a) dierences in TQM implementation practices due to organisation size and (b) inconsistencies between the senior executives' attitudes and perceptions and their organisations' practices. The method used is to compare the attitudes and perceptions from earlier work with actions, practices and behaviours, including the propensity for measurement and information management. The results underline the central role of data and information, and hence measurement, in successful TQM implementations. Further questions arise which suggest the need for still deeper investigation via in-company case research. The data did not support the interim prediction that TQM implementation is poorer in small ®rms. Moreover, the more optimistic perceptions of TQM reported in medium and large ®rms were not sustainable when compared with their actual practices. The paper also provides a foundation for the next phase of this longitudinal research programme, which will track this cohort of ®rms (n = 113) beyond the socalled ``two year barrier'' to see how many are still practising TQM thereafter. Finally the data shows TQM for this regional sample to be predominantly internally focused on cost reduction at operational levels. # 1998 Elsevier Science Ltd. All rights reserved Key wordsÐtotal quality management, implementation, small organisations, top management, organisational studies, regional
1. INTRODUCTION
1.1. Small ®rm dierences However, some dierences in the responses were highlighted, which did align with organisation size, viz.;
IN AN EARLIER paper [1] leadership attitudes to and perceptions of TQM were explored, especially to investigate dierences due to organisational size (details of classifying the ®rms according to size were given in full in the previous paper). The results suggested that there was a very positive overall orientation towards:
. When asked about the purpose of TQM, small ®rms showed a signi®cantly poorer grasp of the customer dimension of TQM. It is possible therefore that they were being positive about TQM, while not really knowing what TQM actually was. . Small ®rms were signi®cantly more likely to confuse TQM with quality assurance and ISO 9000. . Small ®rms showed a correspondingly less outward focus in their motivations for pursuing TQM while, at the same time, claiming
(i) The strategic dimension of quality. (ii) Its impact upon customer satisfaction levels. (iii) Its impact upon organisational performance across the whole of the sample (n = 113), irrespective of size of organisation. 715
[ [
[ [
Perceptions of levels of employee involvement Understanding of ISO 9000
signi®cant at the 1% level
[
[
Perceptions of the management of quality as strategic issue Priority assigned to quality (relative to other strategic factors) Motivation for pursuing TQM Perceptions of impact of TQM Perceptions of extent of positive impact of TQM
[ signi®cant at the 5% level signi®cant at the 1% level
No size dierences Dierences due to size?
Such apparent inconsistencies raised some scepticism that these leaders could be painting an over-optimistic picture of TQM implementation, albeit most frequently in smaller organisations (<100 employees). It was hypothesised that many of these ®rms were probably only practising ``partial TQM'' or some kind of broadened quality management system along the lines of ISO 9000 principles. Table 1 summarises these attitudes to and perceptions of TQM as well as the comments already made with respect to attitudes and perceptions. In the rest of this paper some of the behaviours and organisational practices of this same sample are compared, to test both the ``small ®rms factor'' and the ``inconsistency theory'' from the preceding work. Section 2 develops some theory and hypotheses based upon these issues. Results of TQM practices are presented in Section 3 for this cohort of 113 ®rms, analysed again by size of organisation. Sections 4 and 5 discuss the implications of these ®ndings for industrial policy, organizational self-assessment and the development of information infrastructures.
Table 1. Summary of leaders' attitudes to and perceptions of TQM [1]
. 10% of respondents claimed not to be doing anything to improve organisational performance, despite claiming to practice TQM. . Many appeared to perceive TQM as an internally focused problem-solving activity at operational levels only, despite claiming quality to be a strategic issue in their organisations. . Many could not comment on customer satisfaction levels or the ®nancial eect of TQM on the business, despite claiming to manage quality as a strategic issue. . Finally the claimed levels of employee involvement were much higher than observed or reported elsewhere in the literature.
Attitudes and perceptions (dierences discussed in Part I)
1.2. General inconsistencies As well as these size-related dierences, there were some apparent inconsistencies in the data overall. For example:
Comments (based on attitudes and perceptions)
that the management of quality was perceived to be a strategic issue in their organisations. . Small ®rms were signi®cantly less prepared to speculate on their perceptions of customer satisfaction levels.
high perceptions overall although many small ®rms did not feel able to answer poor understanding of TQM overall and worse in small ®rms respondents optimistic about their levels of activity, most said they were doing something (but it depends on what is being done) high priority claimed for strategic quality management but ``knee-jerk'' reactions suspected high priority claimed but inconsistencies with understandings of and motivations for, TQM small ®rms more focused on cost reduction and eciency gains positive overall but ``levels of ignorance'' high, i.e. many did not know no obvious pattern; high levels of positive impact claimed, but may be overoptimistic optimistic, very high percentages claimed; no obvious pattern poor understanding of ISO 9000 overall, consistent with ``partial TQM'' theory
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Perceptions of customer satisfaction Understanding of purpose of TQM Improvement of organisational performance
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2. THEORY AND HYPOTHESES
2.1. Theoretical background It is not surprising that the data have already been shown to contain possible inconsistencies in leaders' answers, since according to Argyris [2], there can often be contradictions between what managers say and do, as manifest in their actual behaviours. These contradictions between words and actions are often unconscious and unintentional. Moreover, Weick comments on Argyris' theory, that ``this split carries the cautionary message... that observations of action are crucial to oset the possibility that what people tell us.... has limited relevance to how they function'' (Ref. [3, p. 123]). This section examines some of the management practices and the extent to which opinions and perceptions were based on and could be sustained by, tangible data. In other words, it would be all too easy in a survey setting to give positive answers, but by asking supplementary questions about actual TQM implementation practices, it may be possible to expose this possibility. Put more directly, what is the degree of consistency and alignment between perceptions and practices? There are two complementary lines of investigation being conducted. The ®rst, as outlined above, to compare actions with attitudes and perceptions and to see what inconsistencies existed, if any. The second, to explore if the comparative weaknesses of smaller organisations already highlighted in the earlier paper are also re¯ected in this additional analysis of practice, i.e. the dierences with respect to: (a) The practices and methods of customer satisfaction measurement. (b) The measurement of the ®nancial impact of TQM on the business. (c) The focus of organisational improvement activity and the balance between internal and external improvement initiatives. The literature is still unclear about the capacity of small ®rms to embrace TQM eectively. For example, Wernick asserts that while large organisations have been more active in embracing TQM, ``smaller organisations with limited resources can equally apply the TQM principles with measurable success'' [4]. Ghobadian and Gallear [5] also subscribe
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to this view although they use the number of small ®rm applicants to the Malcolm Baldrige Awards as support for their argument, where small ®rms have a higher upper bound of 500 employees. There is still a lack of empirical data to provide a conclusive answer to this question. Ghobadian and Gallear do observe that ``probably the biggest obstacle to the introduction of TQM in SMEs is the management realization and the ability of owner managers to modify their behaviour and management style'' (Ref. [5, p. 91]). Consequently the objective of the research reported here was to go deeper than most conventional studies of TQM, which tend to report on outcomes without really establishing underlying factors. Going deeper can however be fraught with diculty but the basis of the argument is that attitudes and perceptions should be mirrored in associated behaviours, which in their turn will impact upon performance outcomes. Therefore, if this is true, one of the keys to socalled ``success'' in TQM implementation may be to focus more on these speci®c antecedents, i.e. to become more ``process'' oriented. The paper adds further to the sparse knowledge about TQM implementation in the literature. Its contribution is considered all the more important at a time when TQM is in danger of becoming passe in research communities. As research moves into other related domains such as Business Process Re-engineering and World Class Manufacturing there is a risk of assuming that an abundance of research knowledge about TQM exists. This appears to be far from the truth. 2.2. Hypotheses Table 2 extends the reasoning for the ®ndings from Table 1, suggesting areas for further investigation. Table 2 appends to the summary of Table 1 the perceptual paradigms being espoused by the respondents. In the ®nal column of Table 2 are the kinds of issues which are explored in this paper to shed light on the veracity of these espousals. Consequently there are four initial hypotheses which arise from Table 2. Firstly, because small ®rms appear to have a narrow and more internal understanding of TQM (as con®rmed by their stated motiv-
what is being done to bring about these improvements in organisational performance? how do practices compare with perceptions?
how do practices compare with perceptions?
is employee involvement actually measured; is there evidence that it has led to results? how is the impact measured?
are such systems in evidence?
we all believe that quality is a strategic issue
we think we run a ``happy ship'' and large numbers of employees are involved in TQM we ``know'' that TQM has been good for us
ISO 9000 principles are a key part of TQM
signi®cant at the 1% level
none
Motivations for pursuing TQM
Improvement of organisational performance Perceptions of the management of quality as strategic issue Priority assigned to quality relative to other strategic factors Perceptions of levels of employee involvement Perceptions of extent of positive impact of TQM Understanding of ISO 9000
ations for pursuing it), we can derive two hypotheses: H1: In smaller organisations there will be lower levels of actual measurement of customer satisfaction. H2: Smaller organisations will be less likely to practice ``direct'' measurement of customer satisfaction, i.e. to use methods which put them in direct and comprehensive contact with customers' views. Secondly, since small ®rms claimed to be equally active in improving organisational performance, we can postulate H3 with respect to what activities they are actually engaged in to this end: H3: There will be no size dierences in the types of activities and practices being engaged in to improve organisational performance. Then, since there were no signi®cant size dierences in the perceptions of the impact of TQM on business performance, we can speculate that these perceptions are just as likely to be based on measurements, irrespective of size of ®rm: H4: Small organisations will be no dierent in their propensity to measure the ®nancial impact of TQM. These four hypotheses will help to clarify the extent to which perceptions were likely to have been based on reliable data and on a complete understanding of TQM. This may therefore cast further light on the size-related dierences as reported previously. These will now be explored in turn.
none
none
none
none
3. RESULTS none
is customer satisfaction being measured, and how? what has been implemented in each ®rm to represent TQM? what is actually being measured?
we think we know what our customers think we think we know what TQM is, and therefore what its implementation involves we became involved in TQM because we are concerned about improving customer satisfaction we all want to initiate things in our organisations to improve organisational performance we all like to believe that we are strategic managers signi®cant at the 5% level signi®cant at the 1% level Perceptions of customer satisfaction Understanding of purpose of TQM
Areas of practice for further investigation Espoused perceptual paradigm Dierences due to size ?
Table 2. Typically espoused TQM paradigms and areas for further investigation
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Attitudes and perceptions (dierences already discussed)
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3.1. Measurement of customer satisfaction There were high levels of optimism about perceived customer satisfaction levels with only 1% perceiving any deterioration. However, this question could have been answered in the absence of any data by many senior executives who believed they ``knew'' their markets and their customers. Small organisations had already shown higher levels of reluctance to speculate on satisfaction levels of their customers, either because they chose not to answer or else believed it was still too soon to comment (previously referred to as the ``categories of ignorance'').
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The supplementary question, ``what are your measures/indicators of customer satisfaction?'' was posed, based upon the author's belief that measures which proactively make direct contact with customers, e.g. using surveys or focus groups, are more eective than methods which make indirect inferences about customer satisfaction from the likes of complaint data or measurement of repeat business. The results for customer satisfaction measurement were as follows. 3.1.1. Measurement activity levels. Overall, 68% of organisations claimed to be using at least one measure of customer satisfaction as the basis of their perceptions of how this parameter was changing. Table 3 gives this ®gure categorised by organisation size, suggesting that the likelihood of using such measures increases with size, but not signi®cantly so (w2=0.7602, 1 d.f.). The lower level of measurement activity in small organisations is consistent with the earlier ®nding that small ®rms had opted for the ``categories of ignorance'' in greater numbers. 3.1.2. Methods of customer satisfaction measurement. As regards the speci®c customer satisfaction measures used in each size category (Table 4), the data suggests that while 68% claimed to be measuring customer satisfaction, looking at the numbers of respondents using so called ``direct'' methods, i.e. surveys, the overall utilisation ®gure fell to 56% with large ®rms highest at 82% and medium lowest at 42%. Very few used more than one measure. The overall levels of reliance on customer complaints data and the monitoring of repeat business is surprisingly low. The trend showing that surveys, complaints and delivery are all used more often in larger organisations could support the hypothesis (H2) that smaller organisations are less customer focused (although again, no signi®cant size-related
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Table 3. Organisations claiming to actually measure customer satisfaction Size of organisation
Yes
Small (n = 56) Medium (n = 40) Large (n = 17)
63% 67% 87%
Overall 68% said yes. w2=0.7602, 1 d.f., not signi®cant.
dierence was detected). Countering this argument, to some extent, are the data for the use of surveys in medium sized organisations. Of prime importance however is the internal use made of these customer data after being gathered. Information usage was not investigated at this stage for two reasons: (i) The length of the questionnaire was approaching its practical limit (already ten pages long). (ii) Such issues were to be the subject of another phase of the research design (and have been explored subsequently by in-depth case studies). Whatever else may be concluded from the data, it is clear that the respondents' earlier optimism about customer satisfaction levels is not well founded. 3.2. Organisational performance improvement activities Previous analysis of the data suggested that most leaders aspired to improving their organisation's performance and those in small organisations were no dierent in terms of the numbers claiming to undertake such initiatives. Since this was potentially a question which invited a ``knee-jerk'' response, the respondents were subsequently asked to describe the speci®c activities they were engaging in to this end, the hypothesis (H3) being that:
Table 4. Methods of measuring customer satisfaction Methods used Surveys Customer complaints Delivery times Repeat business Sales data Others
Small, n = 35
Medium, n = 26
Large, n = 14
58% 18% 5% 5% 5% 9%
42% 25% 17% 5% 5% 7%
82% 29% 17% 6% 0% 17%
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H3: There will be no size dierences in the types of activities being engaged in to improve organisational performance. Table 5 con®rms widespread association of TQM with organisational performance improvement. However, it also shows that 44% of TQM practitioners highlighted neither TQM nor any kind of customer initiative in response to this question. Such a high ®gure may re¯ect confusion about TQM, perhaps even suggesting that some were not really yet practising TQM at all. The 13% who cited quality assurance as their improvement vehicle add more fuel to this argument. Nevertheless the questionnaire had directly asked respondents to say whether their ®rms were pursuing TQM or quality assurance and this, together with other TQMrelated questions was the basis of the cohort's selection. It is very unlikely that any responses came from ®rms which were not trying to implement TQM. Moreover in Table 5 there was surprisingly little mention of supplier partnerships, innovation, marketing initiatives or strategic alliances and relatively little importance assigned to capital investment despite the normal business rhetoric and the emphasis placed upon it by some government agencies. Possibly the aftermath of the 1992±1993 U.K. recession at the time of the initial study was a factor in this situation, but even at the time of writing there is continuing concern about the reluctance of organisations to invest, even in the face of apparent national economic recovery. The other major organisational improvement initiative in the data was ``training'' which could well be a consequence of government policies for industrial support in the
region. Inspection of the data gave no grounds for rejecting H3, i.e. that small ®rms are any dierent in their improvement practices. However, taking a wider view of the data, the implications for competitiveness are disturbing for this cohort of U.K. organisations as they experience increasingly global competition. 3.3. Dierences in propensity to measure ®nancial impact 3.3.1. Measurement activity levels. It was hypothesised (H4) that: H4: Small organisations will be no dierent in their propensity to measure the ®nancial impact of TQM. The only factor which might cause one to revise this hypothesis is the earlier ®nding that small organisations have already shown tendencies to measure customer satisfaction in smaller numbers. Indeed, Table 6 shows that there are parallel dierences in the tendency to measure ®nancial impact, with the aversion to measurement being greatest in the ``small ®rm'' category, where 80% had no data whatsoever on the impact of TQM, as compared with 72% of medium and 53% of large organisations. This dierence is signi®cant at the 5% level (w2=6.368, 2 d.f.). 3.3.2. Methods of ®nancial impact measurement. However, while there was a greater tendency for larger organisations to measure the business impact, Table 6 also suggests that this was mostly in terms of cost data, which again is consistent with an internal view of TQM as ``cost reduction'' rather than a more external view as ``increased sales through customer focus and satisfaction''. Since small organisations were shown above to be less likely to have any data on the ®nancial impact of TQM, their reported perceptions on the extent
Table 5. Speci®c organisational performance improvement activities Activity TQM/customer initiatives Training Quality assurance Cost reduction Restructuring Worker participation Performance measurement Capital investment Other
Small, n = 56
Medium/large, n = 57
Overall, n = 113
50% 24% 13% 10% 7% 5% 0% 1% 2%
58% 22% 12% 4% 6% 12% 6% 0% 2%
56% 23% 13% 8% 7% 9% 6% 1% 2%
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Table 6. Method of quanti®cation of Impact of TQM Method of quanti®cation
Small, n = 56
Medium, n = 40
Large, n = 17
No data Both costs and sales data Sales data only Costs only
80% 14% 5% 1%
72% 11% 1% 16%
53% 21% 5% 21%
w2=6.368, 2 d.f., signi®cant at the 5% level.
of its ®nancial impact may not be as reliable at all. 3.4. Small ®rms' practices and overall inconsistencies In summary, these additional data suggest that while small ®rms may not be signi®cantly less likely to measure customer satisfaction and no less likely to incorporate direct measurement methods, the overall lack of measurement of customer satisfaction gives grounds for questioning the optimistic perceptions of customer satisfaction levels reported previously. Secondly, while small ®rms are indeed engaging in similar activities to improve organisational performance, there are many overall which did not cite a TQM-related initiative in this context, casting some doubt over what they perceive TQM to be. Thirdly, small ®rms have been shown to be less likely to measure the impact of TQM on their business and so their positive perceptions of ®nancial impact may also be unrepresentative of reality. There was also some evidence of more internal focus in measurement practice than was espoused previously. The data do con®rm the general need to explore actions as well as perceptions in any study of this kind. Turning then to the perceived high levels of employee involvement, it is argued (H5) that these ®rms should also have perceptions of signi®cant ®nancial impact from TQM on business performance. The basis of this argument is that the more improvement activities there are, the greater the probability of mak-
ing a bigger improvement on the business, providing the right projects are chosen, hence: H5: Firms with higher perceived levels of employee involvement will also have higher perceived levels of business impact from TQM. Table 7 does highlight certain overall trends in the data. As was suggested, as the proportion of employees involved increases, the perceived results also improve. However this was not statistically signi®cant. So for example, in Table 7, 19% of organisations had dramatic impact and also had more than 60% involvement.
3.5. Measurement as a driver of improvement Some writers argue that the act of measuring can be as much a cause of improvement as a mere con®rmation. Hence, it is possible that measurement of the likes of customer satisfaction will also be associated with greater levels of TQM impact as encapsulated in hypothesis (H6) viz.: H6: Organisations which are measuring customer satisfaction are also more likely to perceive a dramatic ®nancial impact from TQM on business performance. This may have appeared to be a seemingly naive assertion, but interestingly, Table 8 supports this hypothesis, showing that there is a signi®cant dierence between the numbers getting what they believe to be dramatic levels of improvement and those with lesser perceptions, this dierence being associated with having measures of customer satisfaction in
Table 7. Size of perceived impact by percentage of employees involved Percent involved >60% 20±60% <20%
Dramatic, n = 22
Moderate, n = 38
Marginal, n = 7
19% 8% 1%
31% 13% 9%
6% 5% 8%
74%
small ®rms likely to be less active in actually measuring customer satisfaction (H1)
small ®rms likely to be less active in direct measurement methods (of customer satisfaction) (H2)
How is customer satisfaction measured? What is being done to bring about improvements in organisational performance? How is the business impact of TQM measured? Is employee involvement measured; is there evidence that it has led to results? Is measurement a cause or mere con®rmation of improvement?
Summarising thus far, small ®rms are not signi®cantly dierent from other ®rms in terms of their practices, i.e. measuring customer satisfaction (H1), their use of direct methods of customer satisfaction measurement (H2) which involve asking the customer, or the activities they engage in to improve organisational performance (H3), see Table 9. It appears that the signi®cant size dierences in perceptions, previously highlighted, may have been connected with the more conservative and apparently more accurate answers given by respondents from the small ®rms than with any poorer levels of implementation practice, as had previously been surmised. The comparatively better practices suggested by the perceptions of the medium and large ®rms have not been sustained by examination of their practices as outlined here.
Is customer satisfaction measured?
4.1. Small ®rm dierences
Associated predictions about TQM practices
4. DISCUSSION
Areas of practice for further investigation
place (w2=6.8, 2 d.f., signi®cant at the 1% level) The message seems to be that measurement may itself be a positive intervention as much as a con®rmation of progress. However, the level of impact from TQM may be dependent on several other factors including the way each respondent interpreted the terms ``dramatic'', ``moderate'' etc. and the extent of improvement which had already been achieved in the organisation before embracing TQM. Hence, dramatic levels of improvement are not necessarily indications of better progress than marginal improvement. These are some of the reasons why follow up visits to these organisations will be important.
Table 9. Summary of ®ndings
w2=6.8, 2 d.f., signi®cant at the 1% level.
signi®cant at the 1% level
26%
organisations measuring customer satisfaction will be more likely to perceive a dramatic impact from TQM (H6)
41%
the greater the percentage of employees involved in TQM, the greater the (perceived) impact on the business (H5)
59%
small ®rms will be no dierent in their propensity to measure the ®nancial impact of TQM (H4)
No measures, n = 64
there will be no size-related dierences in the activities and practices to improve organisational performance (H3)
Dramatic improvement Other than dramatic improvement
Customer satisfaction measures in place, n = 33
Size dierence in practices
Table 8. Association between measuring customer satisfaction and extent of perceived improvement
signi®cant at the 5% level no signi®cant dierence observed
TaylorÐTQM Implementation no signi®cant dierence observed no signi®cant dierence observed no signi®cant dierence observed
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Small organisations were found to display some signi®cantly poorer management behaviours, being less likely to have any data on the ®nancial impact of TQM on business performance (H4). The overall inconsistencies between perceptions and practices across all the 113 ®rms studied seem much more widespread and serious than any problems associated speci®cally with size of ®rm. 4.2. The importance measurement
of
information
and
The main problem appears to be associated with lack of measurement of key indicators and the absence of information infrastructures which enable senior executives to understand the eectiveness of their TQM implementations. Even in the 56% of organisations which claimed to be measuring customer satisfaction by direct methods such as surveys, there is a need for further exploration of the frequency with which they were administered, the accuracy and scope of such surveys and the deployment of the results. This will be followed up in the next phase of the research, probably by the case-study method. Moreover, heavy reliance on a singular indicator of customer satisfaction also seems unwise and combinations of measures should be promoted. Emphasis upon the importance of customer focus has been stressed by others, such as Grant et al. [6] who point out that customer focus and the orientation of serving customer needs has a number of vital implications including: (a) It focuses an organisation on one external goal. (b) It provides a unifying mechanism for organisational processes. (c) It extends the role of quality beyond its traditional operations dimension and stimulates a strategic focus by top management. (d) It clari®es the role of customer satisfaction as a driver and enabler of long-run pro®tability rather than the converse. Others underline the importance of measurement to give feedback to employees about how the organisation is doing and to engender employee involvement [7]. The same authors highlight this absence of measurement again in a later report [9], broadening the discussion to other relevant factors such as the
723
cost of quality and service dimensions. In fact the widely reported study [8], which was interpreted by many as signalling the widespread failure of TQM, actually revealed that 50% of respondents had no information with which to quantify improvement in the ®rst place. More recently Fuchs (Ref. [10, p. 28]) referred to a lack of metrics as one of the four obstacles to progress in TQM. Voss also mentions this issue in a study of 202 manufacturing sites, concluding that there are ``... optimists... many companies who have little real understanding of where they stand'' (Ref. [11, p. 5]). One counter-argument about measurement is that in the face of closer supplier±customer relationships, encouraged by single-sourcing and reduced supplier bases generally, the need for a lot of measurement is minimised. For example, the need for quanti®cation of customer satisfaction is reduced, so long as customer requirements and expectations are met by quick response and close co-operation. This, it is argued, can be especially true when the suppliers are SMEs. Certainly in close supplier±customer relationships there is much greater opportunity to be aware of what the customer wants. It may also be more obvious when the customer is not satis®ed with products or services. However, unless these parameters are measured, monitored and managed, the close contact with a customer can lead to a false sense of security and, in the absence of regular measurement, the ®rst indicator of a dissatis®ed customer may be the loss of their business, perhaps irretrievably. In the case of SMEs, it is fair to argue that measurement systems should be appropriate for the size of ®rm. Yet in the face of growing global competition and the reductions in trading barriers across countries, it is dicult to see why SMEs should be exempt from the need to measure such important parameters. Surely ``informed management'' is preferable to management by assumption and anecdote? What is more, the absence of business results from TQM may impact upon its continuance in an organisation. This notion will also be part of the next full phase of longitudinal analysis. From the survey, the importance of measurement was underlined in two further
724
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ways; ®rstly in relation to how employee involvement was actually being quanti®ed (H5) and secondly in terms of the potential role of measurement generally as a catalyst for improvement (H6), not simply as a con®rmation. Certainly Table 6 has indicated that most ®rms were unlikely to have any data upon which to base their perceptions of TQM's business impact and these ®gures raised the broader issue of how employee involvement was measured, whether as a snapshot of activity, a cumulative total of all who had ever participated in improvement activity, or more crudely, as a measure of anyone who had received training in TQM.
4.3. How to address these problems Methods of eective measurement of (a) customer satisfaction, (b) business impact of TQM and (c) levels of employee involvement, are all areas where guidance appears to be needed for ®rms. In the case of employee involvement, it is not obvious whether the intuitive correlation between involvement levels and the extent of improvement is real or not, i.e. the perceptions of involvement levels could be as suspect as the perceptions of ®nancial impact, in the absence of tangible data. Neither is it obvious whether the lack of measurement (for information, feedback and improvement) is due to poor knowledge of
measurement techniques, or whether there are deeper issues such as complacency. It could be that senior executives spend too little time on planning and re¯ection, or perhaps the dearth of measurement may be attributable to a lack of awareness or resolve on their part, or the constraint of inadequate accounting and information systems. Other underlying reasons for this state of aairs could be the calibre of the senior management, or it could be a regional problem con®ned to this particular sample, although this is unlikely due to the origins of ownership of the ®rms and the markets being served.
4.4. Exposing the perception-reality gap In any case, an organisation cannot be said to be truly practising total quality if it is not actually measuring important attributes such as customer satisfaction. Organisations such as these ought to focus on developing their knowledge infrastructure along two key dimensions, see Fig. 1. These two key dimensions are: (a) That which provides knowledge of the organisation's connections with its environment, i.e. to yield better feedback on performance gaps and to remove any blindness about customer needs and expectations, customer satisfaction levels and business performance relative to competitors.
Fig. 1. Dimensions of knowledge infrastructure
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(b) That which removes the ``rose-tinted glasses'' and provides a more accurate view of the actual behaviours and performance of the organisation, i.e. a better organisational selfknowledge through examination of employee satisfaction and involvement levels, conducted in a climate of openness. Otherwise, that which is known within the organisation will inevitably become known to external constituencies; the mask of pretence and self deception will eventually slip. Without this complementary understanding of a ®rm's resources and capabilities, the additional knowledge deriving from better connectedness with the external environment will simply lead to greater internal tension and dysfunctionality. ``Some will wrongly believe they have the complementary resources needed to make TQM work (such as the capacity to commit). Others will behave irrationally, joining the bandwagon without regard to TQM's demands or to their own resources or suitability for TQM'' (Ref. [12, p. 22]). Building on this idea of knowledge infrastructure, Fig. 1 eectively suggests three types of learning which are highlighted in Fig. 2: Type I: where there is learning which leads to knowledge about gaps in both product and process performance related to the delivery of products and/or services to external constituencies.
725
Type II: where the learning enhances knowledge about the ``corporate self'', i.e. self knowledge about behaviours of people and processes within the organisation. Type III (which is perhaps the most dicult to embrace): where the learning relates to the discovery or creation of new knowledge [15] about things currently unknown to either the organisation or its external constituencies. More tools and techniques are necessary to bring about all three types of learning and to facilitate the extension of the current organisational improvement focus. Certainly many of the questions raised by the data presented here are best answered by those within the organisations themselves. For example, why did the Medium and Large ®rms give more optimistic answers to the questions about attitudes and perceptions? Did they truly not know, or are they more severe examples of the Argyris phenomenon, or did they intentionally falsify their answers? Unless these ®rms develop the desire to address these issues without blame or reproach, they will continue to suer from the resultant gaps between perceptions and practice, and ultimately they will not derive the competitive advantage from TQM that ought to be achieved. The presence of these problems ought to concern all organisations, together with those in government and industrial support agencies
Fig. 2. Types of corporate learning
726
TaylorÐTQM Implementation
who have responsibility for promoting productivity and competitiveness. The widespread lack of measurement in particular casts some doubt over the claimed levels of customer satisfaction, employee involvement and ®nancial impact of TQM, characterising many of the data as representative of ``feel-good factors'' which may diminish in the light of further investigation. Continued neglect of such measurement is likely to lead to a slowing down of progress and the ultimate collapse of many TQM initiatives. The biggest exposure was the gap between the large numbers claiming to manage quality as a strategic issue and the practices which showed TQM to be (a) largely focused on cost reduction and problem solving at operational levels, irrespective of organisation size and (b) poorly connected to customers, business strategy or information systems support. On a positive note there was little detectable dissatisfaction with TQM, which runs counter to the impression created elsewhere in the literature. The general perception was that TQM was having a positive eect, although these initiatives were still comparatively young and many had yet to pass through the ``two year barrier'' at that time. Small organisations have been less likely to experience dramatic improvement from TQM, which is not that surprising since, in these organisations it has been found to be more predominantly internally focused. Alternatively this may be a consequence of the relatively greater initial launch costs of TQM. 5. IMPLICATIONS AND CONCLUSIONS
This work lays the foundation for subsequent phases of longitudinal research in this cohort of ®rms and raises further questions about: (1) The sustainability of TQM in the absence of measurement and customer focus. (2) The need for greater organisational selfawareness through the practices of self-assessment and benchmarking. (3) Investigation of the reasons for such absence of measurement and the adequacy of management information systems. (4) The adequacy of senior executive development programmes in areas such as strategic
planning, and their appropriateness for the needs of small organisations. (5) The business performance of this cohort of 113 organisations over time and possible correlations with ``good'' practice as de®ned herein. (6) The energising and enabling role of information to inform and transform the management process. That many of these problems may be unintentional, or unconscious deviations from espoused behaviours, is all the more serious. Many organisational leaders are in need of ``enlightenment''. Organisational self-assessment may be one way forward, providing the approach is presented to them in a userfriendly format. Several writers, e.g. Foster et al. [13], indicate an initial watershed for many TQM endeavours after 18±24 months. As such, many of the respondents to this survey had yet to encounter this milestone when the data were gathered. What may be even more illuminating therefore will be the follow up phases of this longitudinal research to explore how TQM has developed in this cohort of organisations. It does take time for TQM to develop and evolve in any organisation. Information, measurement and benchmarking are not the only important issues. Firms must move beyond a focus on TQM instruments, ultimately to address the management of ``intangibles'' such as executive commitment, open organization and employee empowerment, resources which ``appear to produce success with or without formal TQM adoption: TQM ®rms that lack them do not succeed and nonTQM ®rms that have them do'' (Ref. [12, p. 31]). Hence, part of the longitudinal study will be to explore this transition of focus from TQM instruments to TQM intangibles. More speci®cally, it will be revealing to test this author's prediction, based on preliminary analysis of the data, that ``many of these initiatives will stall or die in the next few years... only a minority will survive and prosper'' [14]. Extending this prediction based on the current analysis, it is not clear whether any particular group of ®rms may suer most from this TQM fall-out.
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REFERENCES 1. Taylor, W. A., Leadership challenges for smaller organisations: Self-perceptions of TQM implementation. Omega International Journal of Management Science, 1997, 25(5), 567±579. 2. Argyris, C., Overcoming Organisational Defences: Facilitating Organisational Learning. Allyn and Bacon, 1990. 3. Weick, K. E., Sensemaking in Organizations. Sage Publications, 1995. 4. Wernick, S., TQM keys job shop pro®tability, survival. Quality, 1991, May, 14±17. 5. Ghobadian, A. and Gallear, D. N., Total quality management in SMEs. Omega International Journal of Management Science, 1996, 24(1), 83±106. 6. Grant, R. M., Shani, S. and Krishnan, R., TQM's challenge to management theory and practice. Sloan Management Review, 1994, 25±35. 7. Kearney, A. T., Creating the Environment for TQM. 1991, 18 pp. 8. Kearney, A. T., Total Quality: Time to take o the Rose Tinted Spectacles. 1991, 12 pp. 9. Kearney, A. T., Achieving Customer Satisfaction Leadership in Europe. 1992, 19 pp.
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10. Fuchs, E., Total quality management from the future: Practices and paradigms. Quality Management JournalIssue, 1993, 10(Premier), 26±34. 11. Voss, C. A., Made in Britain. The True State of Britain's Manufacturing Industry. IBM (U.K.) and London Business School, 1993, 16 p. 12. Powell, T. C., Total quality management as competitive advantage: a review and empirical study. Strategic Management Journal, 1995, 16, 15±37. 13. Foster, M., Smith, S., Whittle, S. and Tran®eld, D., Regenerating your TQM eort: What to do when it runs out of steam? TQM Magazine, 1994, 6(4), 42±47. 14. Taylor, W. A., TQM and the need for organisational self assessment: some empirical evidence. Total Quality Management, 1995, 6(1), 3±12. 15. Nonaka, I. and Takeuchi, H., The Knowledge Creating Company. Oxford University Press, New York, NY, 1995. FOR CORRESPONDENCE: Professor W Andrew Taylor, Management Centre, The University of Bradford, Emm Lane, Bradford, West Yorkshire BD9 4JL, UK. Tel.: +44-1274-384424; Fax: +441274-546866; E-mail: [email protected].
ADDRESS
Omega, Int. J. Mgmt Sci. Vol. 26, No. 6, pp. 715±727, 1998 # 1998 Elsevier Science Ltd. All rights reserved Printed in Great Britain 0305-0483/98 $19.00 + 0.00 S0305-0483(98)00022-X
TQM Implementation: Organisation Practices and Information Infrastructures W. ANDREW TAYLOR The University of Bradford, Bradford, U.K. (Received July 1997; accepted after revision January 1998) This paper provides deeper exploration of the attitudes and perceptions of senior executives reported in an earlier paper. In particular, it investigates two issues; (a) dierences in TQM implementation practices due to organisation size and (b) inconsistencies between the senior executives' attitudes and perceptions and their organisations' practices. The method used is to compare the attitudes and perceptions from earlier work with actions, practices and behaviours, including the propensity for measurement and information management. The results underline the central role of data and information, and hence measurement, in successful TQM implementations. Further questions arise which suggest the need for still deeper investigation via in-company case research. The data did not support the interim prediction that TQM implementation is poorer in small ®rms. Moreover, the more optimistic perceptions of TQM reported in medium and large ®rms were not sustainable when compared with their actual practices. The paper also provides a foundation for the next phase of this longitudinal research programme, which will track this cohort of ®rms (n = 113) beyond the socalled ``two year barrier'' to see how many are still practising TQM thereafter. Finally the data shows TQM for this regional sample to be predominantly internally focused on cost reduction at operational levels. # 1998 Elsevier Science Ltd. All rights reserved Key wordsÐtotal quality management, implementation, small organisations, top management, organisational studies, regional
1. INTRODUCTION
1.1. Small ®rm dierences However, some dierences in the responses were highlighted, which did align with organisation size, viz.;
IN AN EARLIER paper [1] leadership attitudes to and perceptions of TQM were explored, especially to investigate dierences due to organisational size (details of classifying the ®rms according to size were given in full in the previous paper). The results suggested that there was a very positive overall orientation towards:
. When asked about the purpose of TQM, small ®rms showed a signi®cantly poorer grasp of the customer dimension of TQM. It is possible therefore that they were being positive about TQM, while not really knowing what TQM actually was. . Small ®rms were signi®cantly more likely to confuse TQM with quality assurance and ISO 9000. . Small ®rms showed a correspondingly less outward focus in their motivations for pursuing TQM while, at the same time, claiming
(i) The strategic dimension of quality. (ii) Its impact upon customer satisfaction levels. (iii) Its impact upon organisational performance across the whole of the sample (n = 113), irrespective of size of organisation. 715
[ [
[ [
Perceptions of levels of employee involvement Understanding of ISO 9000
signi®cant at the 1% level
[
[
Perceptions of the management of quality as strategic issue Priority assigned to quality (relative to other strategic factors) Motivation for pursuing TQM Perceptions of impact of TQM Perceptions of extent of positive impact of TQM
[ signi®cant at the 5% level signi®cant at the 1% level
No size dierences Dierences due to size?
Such apparent inconsistencies raised some scepticism that these leaders could be painting an over-optimistic picture of TQM implementation, albeit most frequently in smaller organisations (<100 employees). It was hypothesised that many of these ®rms were probably only practising ``partial TQM'' or some kind of broadened quality management system along the lines of ISO 9000 principles. Table 1 summarises these attitudes to and perceptions of TQM as well as the comments already made with respect to attitudes and perceptions. In the rest of this paper some of the behaviours and organisational practices of this same sample are compared, to test both the ``small ®rms factor'' and the ``inconsistency theory'' from the preceding work. Section 2 develops some theory and hypotheses based upon these issues. Results of TQM practices are presented in Section 3 for this cohort of 113 ®rms, analysed again by size of organisation. Sections 4 and 5 discuss the implications of these ®ndings for industrial policy, organizational self-assessment and the development of information infrastructures.
Table 1. Summary of leaders' attitudes to and perceptions of TQM [1]
. 10% of respondents claimed not to be doing anything to improve organisational performance, despite claiming to practice TQM. . Many appeared to perceive TQM as an internally focused problem-solving activity at operational levels only, despite claiming quality to be a strategic issue in their organisations. . Many could not comment on customer satisfaction levels or the ®nancial eect of TQM on the business, despite claiming to manage quality as a strategic issue. . Finally the claimed levels of employee involvement were much higher than observed or reported elsewhere in the literature.
Attitudes and perceptions (dierences discussed in Part I)
1.2. General inconsistencies As well as these size-related dierences, there were some apparent inconsistencies in the data overall. For example:
Comments (based on attitudes and perceptions)
that the management of quality was perceived to be a strategic issue in their organisations. . Small ®rms were signi®cantly less prepared to speculate on their perceptions of customer satisfaction levels.
high perceptions overall although many small ®rms did not feel able to answer poor understanding of TQM overall and worse in small ®rms respondents optimistic about their levels of activity, most said they were doing something (but it depends on what is being done) high priority claimed for strategic quality management but ``knee-jerk'' reactions suspected high priority claimed but inconsistencies with understandings of and motivations for, TQM small ®rms more focused on cost reduction and eciency gains positive overall but ``levels of ignorance'' high, i.e. many did not know no obvious pattern; high levels of positive impact claimed, but may be overoptimistic optimistic, very high percentages claimed; no obvious pattern poor understanding of ISO 9000 overall, consistent with ``partial TQM'' theory
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Perceptions of customer satisfaction Understanding of purpose of TQM Improvement of organisational performance
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2. THEORY AND HYPOTHESES
2.1. Theoretical background It is not surprising that the data have already been shown to contain possible inconsistencies in leaders' answers, since according to Argyris [2], there can often be contradictions between what managers say and do, as manifest in their actual behaviours. These contradictions between words and actions are often unconscious and unintentional. Moreover, Weick comments on Argyris' theory, that ``this split carries the cautionary message... that observations of action are crucial to oset the possibility that what people tell us.... has limited relevance to how they function'' (Ref. [3, p. 123]). This section examines some of the management practices and the extent to which opinions and perceptions were based on and could be sustained by, tangible data. In other words, it would be all too easy in a survey setting to give positive answers, but by asking supplementary questions about actual TQM implementation practices, it may be possible to expose this possibility. Put more directly, what is the degree of consistency and alignment between perceptions and practices? There are two complementary lines of investigation being conducted. The ®rst, as outlined above, to compare actions with attitudes and perceptions and to see what inconsistencies existed, if any. The second, to explore if the comparative weaknesses of smaller organisations already highlighted in the earlier paper are also re¯ected in this additional analysis of practice, i.e. the dierences with respect to: (a) The practices and methods of customer satisfaction measurement. (b) The measurement of the ®nancial impact of TQM on the business. (c) The focus of organisational improvement activity and the balance between internal and external improvement initiatives. The literature is still unclear about the capacity of small ®rms to embrace TQM eectively. For example, Wernick asserts that while large organisations have been more active in embracing TQM, ``smaller organisations with limited resources can equally apply the TQM principles with measurable success'' [4]. Ghobadian and Gallear [5] also subscribe
717
to this view although they use the number of small ®rm applicants to the Malcolm Baldrige Awards as support for their argument, where small ®rms have a higher upper bound of 500 employees. There is still a lack of empirical data to provide a conclusive answer to this question. Ghobadian and Gallear do observe that ``probably the biggest obstacle to the introduction of TQM in SMEs is the management realization and the ability of owner managers to modify their behaviour and management style'' (Ref. [5, p. 91]). Consequently the objective of the research reported here was to go deeper than most conventional studies of TQM, which tend to report on outcomes without really establishing underlying factors. Going deeper can however be fraught with diculty but the basis of the argument is that attitudes and perceptions should be mirrored in associated behaviours, which in their turn will impact upon performance outcomes. Therefore, if this is true, one of the keys to socalled ``success'' in TQM implementation may be to focus more on these speci®c antecedents, i.e. to become more ``process'' oriented. The paper adds further to the sparse knowledge about TQM implementation in the literature. Its contribution is considered all the more important at a time when TQM is in danger of becoming passe in research communities. As research moves into other related domains such as Business Process Re-engineering and World Class Manufacturing there is a risk of assuming that an abundance of research knowledge about TQM exists. This appears to be far from the truth. 2.2. Hypotheses Table 2 extends the reasoning for the ®ndings from Table 1, suggesting areas for further investigation. Table 2 appends to the summary of Table 1 the perceptual paradigms being espoused by the respondents. In the ®nal column of Table 2 are the kinds of issues which are explored in this paper to shed light on the veracity of these espousals. Consequently there are four initial hypotheses which arise from Table 2. Firstly, because small ®rms appear to have a narrow and more internal understanding of TQM (as con®rmed by their stated motiv-
what is being done to bring about these improvements in organisational performance? how do practices compare with perceptions?
how do practices compare with perceptions?
is employee involvement actually measured; is there evidence that it has led to results? how is the impact measured?
are such systems in evidence?
we all believe that quality is a strategic issue
we think we run a ``happy ship'' and large numbers of employees are involved in TQM we ``know'' that TQM has been good for us
ISO 9000 principles are a key part of TQM
signi®cant at the 1% level
none
Motivations for pursuing TQM
Improvement of organisational performance Perceptions of the management of quality as strategic issue Priority assigned to quality relative to other strategic factors Perceptions of levels of employee involvement Perceptions of extent of positive impact of TQM Understanding of ISO 9000
ations for pursuing it), we can derive two hypotheses: H1: In smaller organisations there will be lower levels of actual measurement of customer satisfaction. H2: Smaller organisations will be less likely to practice ``direct'' measurement of customer satisfaction, i.e. to use methods which put them in direct and comprehensive contact with customers' views. Secondly, since small ®rms claimed to be equally active in improving organisational performance, we can postulate H3 with respect to what activities they are actually engaged in to this end: H3: There will be no size dierences in the types of activities and practices being engaged in to improve organisational performance. Then, since there were no signi®cant size dierences in the perceptions of the impact of TQM on business performance, we can speculate that these perceptions are just as likely to be based on measurements, irrespective of size of ®rm: H4: Small organisations will be no dierent in their propensity to measure the ®nancial impact of TQM. These four hypotheses will help to clarify the extent to which perceptions were likely to have been based on reliable data and on a complete understanding of TQM. This may therefore cast further light on the size-related dierences as reported previously. These will now be explored in turn.
none
none
none
none
3. RESULTS none
is customer satisfaction being measured, and how? what has been implemented in each ®rm to represent TQM? what is actually being measured?
we think we know what our customers think we think we know what TQM is, and therefore what its implementation involves we became involved in TQM because we are concerned about improving customer satisfaction we all want to initiate things in our organisations to improve organisational performance we all like to believe that we are strategic managers signi®cant at the 5% level signi®cant at the 1% level Perceptions of customer satisfaction Understanding of purpose of TQM
Areas of practice for further investigation Espoused perceptual paradigm Dierences due to size ?
Table 2. Typically espoused TQM paradigms and areas for further investigation
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Attitudes and perceptions (dierences already discussed)
718
3.1. Measurement of customer satisfaction There were high levels of optimism about perceived customer satisfaction levels with only 1% perceiving any deterioration. However, this question could have been answered in the absence of any data by many senior executives who believed they ``knew'' their markets and their customers. Small organisations had already shown higher levels of reluctance to speculate on satisfaction levels of their customers, either because they chose not to answer or else believed it was still too soon to comment (previously referred to as the ``categories of ignorance'').
Omega, Vol. 26, No. 6
The supplementary question, ``what are your measures/indicators of customer satisfaction?'' was posed, based upon the author's belief that measures which proactively make direct contact with customers, e.g. using surveys or focus groups, are more eective than methods which make indirect inferences about customer satisfaction from the likes of complaint data or measurement of repeat business. The results for customer satisfaction measurement were as follows. 3.1.1. Measurement activity levels. Overall, 68% of organisations claimed to be using at least one measure of customer satisfaction as the basis of their perceptions of how this parameter was changing. Table 3 gives this ®gure categorised by organisation size, suggesting that the likelihood of using such measures increases with size, but not signi®cantly so (w2=0.7602, 1 d.f.). The lower level of measurement activity in small organisations is consistent with the earlier ®nding that small ®rms had opted for the ``categories of ignorance'' in greater numbers. 3.1.2. Methods of customer satisfaction measurement. As regards the speci®c customer satisfaction measures used in each size category (Table 4), the data suggests that while 68% claimed to be measuring customer satisfaction, looking at the numbers of respondents using so called ``direct'' methods, i.e. surveys, the overall utilisation ®gure fell to 56% with large ®rms highest at 82% and medium lowest at 42%. Very few used more than one measure. The overall levels of reliance on customer complaints data and the monitoring of repeat business is surprisingly low. The trend showing that surveys, complaints and delivery are all used more often in larger organisations could support the hypothesis (H2) that smaller organisations are less customer focused (although again, no signi®cant size-related
719
Table 3. Organisations claiming to actually measure customer satisfaction Size of organisation
Yes
Small (n = 56) Medium (n = 40) Large (n = 17)
63% 67% 87%
Overall 68% said yes. w2=0.7602, 1 d.f., not signi®cant.
dierence was detected). Countering this argument, to some extent, are the data for the use of surveys in medium sized organisations. Of prime importance however is the internal use made of these customer data after being gathered. Information usage was not investigated at this stage for two reasons: (i) The length of the questionnaire was approaching its practical limit (already ten pages long). (ii) Such issues were to be the subject of another phase of the research design (and have been explored subsequently by in-depth case studies). Whatever else may be concluded from the data, it is clear that the respondents' earlier optimism about customer satisfaction levels is not well founded. 3.2. Organisational performance improvement activities Previous analysis of the data suggested that most leaders aspired to improving their organisation's performance and those in small organisations were no dierent in terms of the numbers claiming to undertake such initiatives. Since this was potentially a question which invited a ``knee-jerk'' response, the respondents were subsequently asked to describe the speci®c activities they were engaging in to this end, the hypothesis (H3) being that:
Table 4. Methods of measuring customer satisfaction Methods used Surveys Customer complaints Delivery times Repeat business Sales data Others
Small, n = 35
Medium, n = 26
Large, n = 14
58% 18% 5% 5% 5% 9%
42% 25% 17% 5% 5% 7%
82% 29% 17% 6% 0% 17%
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TaylorÐTQM Implementation
H3: There will be no size dierences in the types of activities being engaged in to improve organisational performance. Table 5 con®rms widespread association of TQM with organisational performance improvement. However, it also shows that 44% of TQM practitioners highlighted neither TQM nor any kind of customer initiative in response to this question. Such a high ®gure may re¯ect confusion about TQM, perhaps even suggesting that some were not really yet practising TQM at all. The 13% who cited quality assurance as their improvement vehicle add more fuel to this argument. Nevertheless the questionnaire had directly asked respondents to say whether their ®rms were pursuing TQM or quality assurance and this, together with other TQMrelated questions was the basis of the cohort's selection. It is very unlikely that any responses came from ®rms which were not trying to implement TQM. Moreover in Table 5 there was surprisingly little mention of supplier partnerships, innovation, marketing initiatives or strategic alliances and relatively little importance assigned to capital investment despite the normal business rhetoric and the emphasis placed upon it by some government agencies. Possibly the aftermath of the 1992±1993 U.K. recession at the time of the initial study was a factor in this situation, but even at the time of writing there is continuing concern about the reluctance of organisations to invest, even in the face of apparent national economic recovery. The other major organisational improvement initiative in the data was ``training'' which could well be a consequence of government policies for industrial support in the
region. Inspection of the data gave no grounds for rejecting H3, i.e. that small ®rms are any dierent in their improvement practices. However, taking a wider view of the data, the implications for competitiveness are disturbing for this cohort of U.K. organisations as they experience increasingly global competition. 3.3. Dierences in propensity to measure ®nancial impact 3.3.1. Measurement activity levels. It was hypothesised (H4) that: H4: Small organisations will be no dierent in their propensity to measure the ®nancial impact of TQM. The only factor which might cause one to revise this hypothesis is the earlier ®nding that small organisations have already shown tendencies to measure customer satisfaction in smaller numbers. Indeed, Table 6 shows that there are parallel dierences in the tendency to measure ®nancial impact, with the aversion to measurement being greatest in the ``small ®rm'' category, where 80% had no data whatsoever on the impact of TQM, as compared with 72% of medium and 53% of large organisations. This dierence is signi®cant at the 5% level (w2=6.368, 2 d.f.). 3.3.2. Methods of ®nancial impact measurement. However, while there was a greater tendency for larger organisations to measure the business impact, Table 6 also suggests that this was mostly in terms of cost data, which again is consistent with an internal view of TQM as ``cost reduction'' rather than a more external view as ``increased sales through customer focus and satisfaction''. Since small organisations were shown above to be less likely to have any data on the ®nancial impact of TQM, their reported perceptions on the extent
Table 5. Speci®c organisational performance improvement activities Activity TQM/customer initiatives Training Quality assurance Cost reduction Restructuring Worker participation Performance measurement Capital investment Other
Small, n = 56
Medium/large, n = 57
Overall, n = 113
50% 24% 13% 10% 7% 5% 0% 1% 2%
58% 22% 12% 4% 6% 12% 6% 0% 2%
56% 23% 13% 8% 7% 9% 6% 1% 2%
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Table 6. Method of quanti®cation of Impact of TQM Method of quanti®cation
Small, n = 56
Medium, n = 40
Large, n = 17
No data Both costs and sales data Sales data only Costs only
80% 14% 5% 1%
72% 11% 1% 16%
53% 21% 5% 21%
w2=6.368, 2 d.f., signi®cant at the 5% level.
of its ®nancial impact may not be as reliable at all. 3.4. Small ®rms' practices and overall inconsistencies In summary, these additional data suggest that while small ®rms may not be signi®cantly less likely to measure customer satisfaction and no less likely to incorporate direct measurement methods, the overall lack of measurement of customer satisfaction gives grounds for questioning the optimistic perceptions of customer satisfaction levels reported previously. Secondly, while small ®rms are indeed engaging in similar activities to improve organisational performance, there are many overall which did not cite a TQM-related initiative in this context, casting some doubt over what they perceive TQM to be. Thirdly, small ®rms have been shown to be less likely to measure the impact of TQM on their business and so their positive perceptions of ®nancial impact may also be unrepresentative of reality. There was also some evidence of more internal focus in measurement practice than was espoused previously. The data do con®rm the general need to explore actions as well as perceptions in any study of this kind. Turning then to the perceived high levels of employee involvement, it is argued (H5) that these ®rms should also have perceptions of signi®cant ®nancial impact from TQM on business performance. The basis of this argument is that the more improvement activities there are, the greater the probability of mak-
ing a bigger improvement on the business, providing the right projects are chosen, hence: H5: Firms with higher perceived levels of employee involvement will also have higher perceived levels of business impact from TQM. Table 7 does highlight certain overall trends in the data. As was suggested, as the proportion of employees involved increases, the perceived results also improve. However this was not statistically signi®cant. So for example, in Table 7, 19% of organisations had dramatic impact and also had more than 60% involvement.
3.5. Measurement as a driver of improvement Some writers argue that the act of measuring can be as much a cause of improvement as a mere con®rmation. Hence, it is possible that measurement of the likes of customer satisfaction will also be associated with greater levels of TQM impact as encapsulated in hypothesis (H6) viz.: H6: Organisations which are measuring customer satisfaction are also more likely to perceive a dramatic ®nancial impact from TQM on business performance. This may have appeared to be a seemingly naive assertion, but interestingly, Table 8 supports this hypothesis, showing that there is a signi®cant dierence between the numbers getting what they believe to be dramatic levels of improvement and those with lesser perceptions, this dierence being associated with having measures of customer satisfaction in
Table 7. Size of perceived impact by percentage of employees involved Percent involved >60% 20±60% <20%
Dramatic, n = 22
Moderate, n = 38
Marginal, n = 7
19% 8% 1%
31% 13% 9%
6% 5% 8%
74%
small ®rms likely to be less active in actually measuring customer satisfaction (H1)
small ®rms likely to be less active in direct measurement methods (of customer satisfaction) (H2)
How is customer satisfaction measured? What is being done to bring about improvements in organisational performance? How is the business impact of TQM measured? Is employee involvement measured; is there evidence that it has led to results? Is measurement a cause or mere con®rmation of improvement?
Summarising thus far, small ®rms are not signi®cantly dierent from other ®rms in terms of their practices, i.e. measuring customer satisfaction (H1), their use of direct methods of customer satisfaction measurement (H2) which involve asking the customer, or the activities they engage in to improve organisational performance (H3), see Table 9. It appears that the signi®cant size dierences in perceptions, previously highlighted, may have been connected with the more conservative and apparently more accurate answers given by respondents from the small ®rms than with any poorer levels of implementation practice, as had previously been surmised. The comparatively better practices suggested by the perceptions of the medium and large ®rms have not been sustained by examination of their practices as outlined here.
Is customer satisfaction measured?
4.1. Small ®rm dierences
Associated predictions about TQM practices
4. DISCUSSION
Areas of practice for further investigation
place (w2=6.8, 2 d.f., signi®cant at the 1% level) The message seems to be that measurement may itself be a positive intervention as much as a con®rmation of progress. However, the level of impact from TQM may be dependent on several other factors including the way each respondent interpreted the terms ``dramatic'', ``moderate'' etc. and the extent of improvement which had already been achieved in the organisation before embracing TQM. Hence, dramatic levels of improvement are not necessarily indications of better progress than marginal improvement. These are some of the reasons why follow up visits to these organisations will be important.
Table 9. Summary of ®ndings
w2=6.8, 2 d.f., signi®cant at the 1% level.
signi®cant at the 1% level
26%
organisations measuring customer satisfaction will be more likely to perceive a dramatic impact from TQM (H6)
41%
the greater the percentage of employees involved in TQM, the greater the (perceived) impact on the business (H5)
59%
small ®rms will be no dierent in their propensity to measure the ®nancial impact of TQM (H4)
No measures, n = 64
there will be no size-related dierences in the activities and practices to improve organisational performance (H3)
Dramatic improvement Other than dramatic improvement
Customer satisfaction measures in place, n = 33
Size dierence in practices
Table 8. Association between measuring customer satisfaction and extent of perceived improvement
signi®cant at the 5% level no signi®cant dierence observed
TaylorÐTQM Implementation no signi®cant dierence observed no signi®cant dierence observed no signi®cant dierence observed
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Small organisations were found to display some signi®cantly poorer management behaviours, being less likely to have any data on the ®nancial impact of TQM on business performance (H4). The overall inconsistencies between perceptions and practices across all the 113 ®rms studied seem much more widespread and serious than any problems associated speci®cally with size of ®rm. 4.2. The importance measurement
of
information
and
The main problem appears to be associated with lack of measurement of key indicators and the absence of information infrastructures which enable senior executives to understand the eectiveness of their TQM implementations. Even in the 56% of organisations which claimed to be measuring customer satisfaction by direct methods such as surveys, there is a need for further exploration of the frequency with which they were administered, the accuracy and scope of such surveys and the deployment of the results. This will be followed up in the next phase of the research, probably by the case-study method. Moreover, heavy reliance on a singular indicator of customer satisfaction also seems unwise and combinations of measures should be promoted. Emphasis upon the importance of customer focus has been stressed by others, such as Grant et al. [6] who point out that customer focus and the orientation of serving customer needs has a number of vital implications including: (a) It focuses an organisation on one external goal. (b) It provides a unifying mechanism for organisational processes. (c) It extends the role of quality beyond its traditional operations dimension and stimulates a strategic focus by top management. (d) It clari®es the role of customer satisfaction as a driver and enabler of long-run pro®tability rather than the converse. Others underline the importance of measurement to give feedback to employees about how the organisation is doing and to engender employee involvement [7]. The same authors highlight this absence of measurement again in a later report [9], broadening the discussion to other relevant factors such as the
723
cost of quality and service dimensions. In fact the widely reported study [8], which was interpreted by many as signalling the widespread failure of TQM, actually revealed that 50% of respondents had no information with which to quantify improvement in the ®rst place. More recently Fuchs (Ref. [10, p. 28]) referred to a lack of metrics as one of the four obstacles to progress in TQM. Voss also mentions this issue in a study of 202 manufacturing sites, concluding that there are ``... optimists... many companies who have little real understanding of where they stand'' (Ref. [11, p. 5]). One counter-argument about measurement is that in the face of closer supplier±customer relationships, encouraged by single-sourcing and reduced supplier bases generally, the need for a lot of measurement is minimised. For example, the need for quanti®cation of customer satisfaction is reduced, so long as customer requirements and expectations are met by quick response and close co-operation. This, it is argued, can be especially true when the suppliers are SMEs. Certainly in close supplier±customer relationships there is much greater opportunity to be aware of what the customer wants. It may also be more obvious when the customer is not satis®ed with products or services. However, unless these parameters are measured, monitored and managed, the close contact with a customer can lead to a false sense of security and, in the absence of regular measurement, the ®rst indicator of a dissatis®ed customer may be the loss of their business, perhaps irretrievably. In the case of SMEs, it is fair to argue that measurement systems should be appropriate for the size of ®rm. Yet in the face of growing global competition and the reductions in trading barriers across countries, it is dicult to see why SMEs should be exempt from the need to measure such important parameters. Surely ``informed management'' is preferable to management by assumption and anecdote? What is more, the absence of business results from TQM may impact upon its continuance in an organisation. This notion will also be part of the next full phase of longitudinal analysis. From the survey, the importance of measurement was underlined in two further
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ways; ®rstly in relation to how employee involvement was actually being quanti®ed (H5) and secondly in terms of the potential role of measurement generally as a catalyst for improvement (H6), not simply as a con®rmation. Certainly Table 6 has indicated that most ®rms were unlikely to have any data upon which to base their perceptions of TQM's business impact and these ®gures raised the broader issue of how employee involvement was measured, whether as a snapshot of activity, a cumulative total of all who had ever participated in improvement activity, or more crudely, as a measure of anyone who had received training in TQM.
4.3. How to address these problems Methods of eective measurement of (a) customer satisfaction, (b) business impact of TQM and (c) levels of employee involvement, are all areas where guidance appears to be needed for ®rms. In the case of employee involvement, it is not obvious whether the intuitive correlation between involvement levels and the extent of improvement is real or not, i.e. the perceptions of involvement levels could be as suspect as the perceptions of ®nancial impact, in the absence of tangible data. Neither is it obvious whether the lack of measurement (for information, feedback and improvement) is due to poor knowledge of
measurement techniques, or whether there are deeper issues such as complacency. It could be that senior executives spend too little time on planning and re¯ection, or perhaps the dearth of measurement may be attributable to a lack of awareness or resolve on their part, or the constraint of inadequate accounting and information systems. Other underlying reasons for this state of aairs could be the calibre of the senior management, or it could be a regional problem con®ned to this particular sample, although this is unlikely due to the origins of ownership of the ®rms and the markets being served.
4.4. Exposing the perception-reality gap In any case, an organisation cannot be said to be truly practising total quality if it is not actually measuring important attributes such as customer satisfaction. Organisations such as these ought to focus on developing their knowledge infrastructure along two key dimensions, see Fig. 1. These two key dimensions are: (a) That which provides knowledge of the organisation's connections with its environment, i.e. to yield better feedback on performance gaps and to remove any blindness about customer needs and expectations, customer satisfaction levels and business performance relative to competitors.
Fig. 1. Dimensions of knowledge infrastructure
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(b) That which removes the ``rose-tinted glasses'' and provides a more accurate view of the actual behaviours and performance of the organisation, i.e. a better organisational selfknowledge through examination of employee satisfaction and involvement levels, conducted in a climate of openness. Otherwise, that which is known within the organisation will inevitably become known to external constituencies; the mask of pretence and self deception will eventually slip. Without this complementary understanding of a ®rm's resources and capabilities, the additional knowledge deriving from better connectedness with the external environment will simply lead to greater internal tension and dysfunctionality. ``Some will wrongly believe they have the complementary resources needed to make TQM work (such as the capacity to commit). Others will behave irrationally, joining the bandwagon without regard to TQM's demands or to their own resources or suitability for TQM'' (Ref. [12, p. 22]). Building on this idea of knowledge infrastructure, Fig. 1 eectively suggests three types of learning which are highlighted in Fig. 2: Type I: where there is learning which leads to knowledge about gaps in both product and process performance related to the delivery of products and/or services to external constituencies.
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Type II: where the learning enhances knowledge about the ``corporate self'', i.e. self knowledge about behaviours of people and processes within the organisation. Type III (which is perhaps the most dicult to embrace): where the learning relates to the discovery or creation of new knowledge [15] about things currently unknown to either the organisation or its external constituencies. More tools and techniques are necessary to bring about all three types of learning and to facilitate the extension of the current organisational improvement focus. Certainly many of the questions raised by the data presented here are best answered by those within the organisations themselves. For example, why did the Medium and Large ®rms give more optimistic answers to the questions about attitudes and perceptions? Did they truly not know, or are they more severe examples of the Argyris phenomenon, or did they intentionally falsify their answers? Unless these ®rms develop the desire to address these issues without blame or reproach, they will continue to suer from the resultant gaps between perceptions and practice, and ultimately they will not derive the competitive advantage from TQM that ought to be achieved. The presence of these problems ought to concern all organisations, together with those in government and industrial support agencies
Fig. 2. Types of corporate learning
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TaylorÐTQM Implementation
who have responsibility for promoting productivity and competitiveness. The widespread lack of measurement in particular casts some doubt over the claimed levels of customer satisfaction, employee involvement and ®nancial impact of TQM, characterising many of the data as representative of ``feel-good factors'' which may diminish in the light of further investigation. Continued neglect of such measurement is likely to lead to a slowing down of progress and the ultimate collapse of many TQM initiatives. The biggest exposure was the gap between the large numbers claiming to manage quality as a strategic issue and the practices which showed TQM to be (a) largely focused on cost reduction and problem solving at operational levels, irrespective of organisation size and (b) poorly connected to customers, business strategy or information systems support. On a positive note there was little detectable dissatisfaction with TQM, which runs counter to the impression created elsewhere in the literature. The general perception was that TQM was having a positive eect, although these initiatives were still comparatively young and many had yet to pass through the ``two year barrier'' at that time. Small organisations have been less likely to experience dramatic improvement from TQM, which is not that surprising since, in these organisations it has been found to be more predominantly internally focused. Alternatively this may be a consequence of the relatively greater initial launch costs of TQM. 5. IMPLICATIONS AND CONCLUSIONS
This work lays the foundation for subsequent phases of longitudinal research in this cohort of ®rms and raises further questions about: (1) The sustainability of TQM in the absence of measurement and customer focus. (2) The need for greater organisational selfawareness through the practices of self-assessment and benchmarking. (3) Investigation of the reasons for such absence of measurement and the adequacy of management information systems. (4) The adequacy of senior executive development programmes in areas such as strategic
planning, and their appropriateness for the needs of small organisations. (5) The business performance of this cohort of 113 organisations over time and possible correlations with ``good'' practice as de®ned herein. (6) The energising and enabling role of information to inform and transform the management process. That many of these problems may be unintentional, or unconscious deviations from espoused behaviours, is all the more serious. Many organisational leaders are in need of ``enlightenment''. Organisational self-assessment may be one way forward, providing the approach is presented to them in a userfriendly format. Several writers, e.g. Foster et al. [13], indicate an initial watershed for many TQM endeavours after 18±24 months. As such, many of the respondents to this survey had yet to encounter this milestone when the data were gathered. What may be even more illuminating therefore will be the follow up phases of this longitudinal research to explore how TQM has developed in this cohort of organisations. It does take time for TQM to develop and evolve in any organisation. Information, measurement and benchmarking are not the only important issues. Firms must move beyond a focus on TQM instruments, ultimately to address the management of ``intangibles'' such as executive commitment, open organization and employee empowerment, resources which ``appear to produce success with or without formal TQM adoption: TQM ®rms that lack them do not succeed and nonTQM ®rms that have them do'' (Ref. [12, p. 31]). Hence, part of the longitudinal study will be to explore this transition of focus from TQM instruments to TQM intangibles. More speci®cally, it will be revealing to test this author's prediction, based on preliminary analysis of the data, that ``many of these initiatives will stall or die in the next few years... only a minority will survive and prosper'' [14]. Extending this prediction based on the current analysis, it is not clear whether any particular group of ®rms may suer most from this TQM fall-out.
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REFERENCES 1. Taylor, W. A., Leadership challenges for smaller organisations: Self-perceptions of TQM implementation. Omega International Journal of Management Science, 1997, 25(5), 567±579. 2. Argyris, C., Overcoming Organisational Defences: Facilitating Organisational Learning. Allyn and Bacon, 1990. 3. Weick, K. E., Sensemaking in Organizations. Sage Publications, 1995. 4. Wernick, S., TQM keys job shop pro®tability, survival. Quality, 1991, May, 14±17. 5. Ghobadian, A. and Gallear, D. N., Total quality management in SMEs. Omega International Journal of Management Science, 1996, 24(1), 83±106. 6. Grant, R. M., Shani, S. and Krishnan, R., TQM's challenge to management theory and practice. Sloan Management Review, 1994, 25±35. 7. Kearney, A. T., Creating the Environment for TQM. 1991, 18 pp. 8. Kearney, A. T., Total Quality: Time to take o the Rose Tinted Spectacles. 1991, 12 pp. 9. Kearney, A. T., Achieving Customer Satisfaction Leadership in Europe. 1992, 19 pp.
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10. Fuchs, E., Total quality management from the future: Practices and paradigms. Quality Management JournalIssue, 1993, 10(Premier), 26±34. 11. Voss, C. A., Made in Britain. The True State of Britain's Manufacturing Industry. IBM (U.K.) and London Business School, 1993, 16 p. 12. Powell, T. C., Total quality management as competitive advantage: a review and empirical study. Strategic Management Journal, 1995, 16, 15±37. 13. Foster, M., Smith, S., Whittle, S. and Tran®eld, D., Regenerating your TQM eort: What to do when it runs out of steam? TQM Magazine, 1994, 6(4), 42±47. 14. Taylor, W. A., TQM and the need for organisational self assessment: some empirical evidence. Total Quality Management, 1995, 6(1), 3±12. 15. Nonaka, I. and Takeuchi, H., The Knowledge Creating Company. Oxford University Press, New York, NY, 1995. FOR CORRESPONDENCE: Professor W Andrew Taylor, Management Centre, The University of Bradford, Emm Lane, Bradford, West Yorkshire BD9 4JL, UK. Tel.: +44-1274-384424; Fax: +441274-546866; E-mail: [email protected].
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