1
CHAPTER 1
INTRODUCTION
1.1
Background
The rapid changes in political, economic and socio-cultural environment are affecting
business. Globalization, intense competition and removal of trade barriers have created
dynamic and uncertain environment for organizations. The changing environment has
generated opportunities as well as challenges for business to survive. Dedhia (1995) identified
these challenges as changing customers, increasing level of quality, profitability, cultural
change, firm’s reputation, competitive markets, government rules and regulations, environmental
impact, communication, new technology, workforce diversification and information management.
According to Mohanty and Lakhe (2002), the survival of organizations depends on pursuing a
quality strategy. The philosophy of Total Quality Management (TQM) enables organizations to
achieve superior performance and competitiveness (Anderson & Sohal, 1999; Powell, 1995;
Terziovski & Samson, 1999; Zhang, 2000). Mehra, Hoffman and Sinas (2001) affirmed TQM as a
management philosophy and predicted it as a strategy for next millennium.
1.2
TQM Initiatives in Pakistan
The success of quality initiatives needs strategic orientation at the national level.
In case of Pakistan, however, there had not been an integrated approach at national level till
2003. Asian Productivity Organization - APO (1998, p.9) noted that:
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Although the quality of products and services is a key indicator of a country’s socioeconomic prosperity, the quality movement in Pakistan is not integrated at the national
level. While the level of awareness about quality is increasing in the country, there has
still not been any breakthrough at the national level.
In 2004, however, the Government of Pakistan formulated a national quality policy and
planned to meet the global challenges for sustainable development of industries and the
protection of consumers. Preliminary work on the formulation of Pakistan National Quality
Award (PNQA) was initiated by the Government of Pakistan through National Productivity
Organization.
With emergence of total quality management philosophy, visionary companies in
Pakistan initiated individual efforts to pursue this new philosophy for sustainability. The study of
literature review indicated three streams of published articles on total quality management in
Pakistan. The first stream dealt with conceptual aspects of total quality management as a new
paradigm in changing global environment (Khan, 1997; Khan, 2006; Moosa, 2000a, b; Rashid,
2002). The second stream reported the individual firm’s experience in implementing total quality
management or some of its fundamentals (Abbasi, 1999; Chaudhry & Rehman, 2004; Khan,
2000; Khan & Aziz, 2000; Manzoor, 2000; Qureshi, 2002; Shaikh, 2006). The third stream
investigated the use of quality tools in individual firms (Amjad, 2002; Hashmi, 1999; Khan,
2002; Mustafa, 2002; Shahid, 1999). Some quality experts and researchers also focused on
quality dimensions in educational institutions (Ali, 2003; Ahmed, 2007; Hussainy, 2005; Jan,
2003; Khan, 2003; Khan & Khan, 2007; Mehdi, 2005; Moosa, 2003; Murad, 2001, Saeed, 2003;
Sajid, 2003; Warsi, 2005).
Asian Productivity Organization (APO) organized a national research on implementing
quality management practices in the firms in Asia and Pacific. According to APO (1998), during
3
1995-96, a national research was undertaken in three Pakistani organizations, two in
manufacturing (AEG Pakistan Private Limited, a medium- sized manufacturer of circuit breakers
and switches) ; Angor Textile Private Limited, a medium- sized producer of knitted garments)
and one in the service sector ( the Agha Khan University Hospital, a large full-service hospital).
Moosa (1998) carried out survey of five reputable quality-conscious Pakistani companies (four
were in the mechanical field and one in cargo handling), under assignment from Pakistan
Institute of Quality Control (PIQC). The research studies, under assignments from APO and
PIQC, used questionnaires, interviews and physical observations (cited in APO, 1998, p. 35).
Ahmed (2000) discussed the framework and the implementation experience of Global
Corporate & Investment Banking business of Citibank, Pakistan in embedding the total quality
initiative. Siddiqui (2000) noted that Deming Cycle provides solution to procedural tribulations
in a case study of an agency in the public sector. Khan (2000), in a case study of an engineering
company, noted the methodology of total quality management initiatives based on four major
steps of study, plan, implement and review. Bhatti (2006) studied the TQM culture in education
sector. The study was based on eight management schools in Lahore and 100 respondents were
selected for interview using stratified random sampling technique. The response rate was 60%.
The research instrument was based on 18 variables. Moosa (2000 b) identified common
attributes of the quality culture in Pakistani organizations. The study, done in 1999, used
ethnographic (external observation) method. Twelve consulting engineers were employed who
were qualified Quality Management Systems (QMS) Lead Auditors and Pakistan Institute of
Quality Control (PIQC) qualified consultants. Twenty manufacturing companies from diverse
industries were studied. The survey was based on seven aspects comprising organizational
behaviour, quality of management functions,continuous quality improvement, technological
status, human resource development, quality assurance, TQM tools and the status of organized
4
TQM programmes or processes. This research, however, did not cover the service sector and the
author identified it as one of the limitations. Khan (2000) carried out study of six successful
implementations of TQM initiatives in Pakistani companies. The companies studied included one
textile, two engineering goods, one consumers’ products, one pharmaceutical and one
automotive. The author identified that generally two approaches (revolutionary and evolutionary)
were used by successful Pakistani companies. Mehnaz and Ejaz (2006 a), in a case study of
Pakistan Knitwear Industry, found that quality management had a concentration in inspection
mode. Mehnaz and Ejaz (2006 b) also studied the quality management in Pakistan Bedwear
Industry. Pakistan State Oil (PSO, 2007), a state owned company, introduced total quality
management in its operations.
A comprehensive review of literature indicated that the research on TQM in Pakistan has
been focused primarily on individual firms especially in the manufacturing sectors. In service
sector, however, the main focus has been in the field of education covering selected educational
institutions. Little research has been conducted in this field in other services, especially in the
Telecommunication (Telecom) Sector; which is progressing at a galloping pace.
1.3
Growth of Services Sector in Pakistan
The importance of services sector to Pakistan’s economy has substantially increased over
the last 30 years whereby the share of services in Gross Domestic Product (GDP) has gone up
from 38.4% in 1969-70 to almost 53.3% in 2006- 07 (Siddiqui & Saleem 2008). Economic
Survey of Pakistan 2006-2007 indicated the growth of service sector by 8.5% in 2004-05, by
9.6% in 2005-06 and by 8.0% in 2006-07. State Bank of Pakistan (SBP 2007) noted that the
share of the services sector in GDP rose to a new high of 53.3% during financial year 2007.
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During financial year 2008, the service sector contributed 53.2% in GDP (SBP 2008). Telecom
Sector is the major contributor in the Services in Pakistan.
1.4
OVERVIEW OF PAKISTAN TELECOM SECTOR
It has been established that a sound infrastructure in the Telecom Sector is vital for
sustainable economic growth of a country. Since independence, this sector remained a
monopoly for a very long time. The advancement in telecom services was far greater than the
developments undertaken by the state; hence the country was not able to keep pace with the
galloping developments in the field of telecommunication. The slow response to the
development resulted in a digital divide and Pakistan remained far behind its neighbours and
other comparable countries in terms of telecom access. The promulgation of the
Telecommunication (Reorganization) Act in 1996 laid the foundation for the development of
Telecom Sector. The government established a quasi-independent regulator, the Pakistan
Telecommunication Authority (PTA) to oversee the sector. The announcement of Deregulation
Policy in 2000 ushered a new era in the development of Telecom Sector. This sector was
declared as an industry in 2005.
1.4.1. Teledensity in Pakistan
Teledensity in Pakistan has improved manifolds with opening up of Telecom Sector for
private investment in the country. Table 1 shows the growth of Teledensity in Pakistan over the
last 12 years. The total teledensity of the country reached around 12% in year 2004-5. There had
been a gradual decline in teledensity of fixed line. This was due to the availability of choices
of mobile and Wireless Local Loop (WLL) services to the customers. The teledensity jumped
from 26% in 2005-06 to 58.8% in 2007-08. However, this jump was much bigger in 2006-07.
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Table 1
Teledensity in Pakistan 1996 – 2008
Year
Fixed
(%)
Cellular
(%)
WLL
(%)
Total
(%)
1996-97
1.96
0.10
-
2.06
1997-98
1.99
0.15
-
2.14
1998-99
2.11
0.19
-
2.30
1999-00
2.18
0.22
-
2.40
2000-01
2.28
0.52
-
2.80
2001-02
2.50
1.20
-
3.66
2002-03
2.69
1.60
-
4.31
2003-04
2.94
3.30
-
6.52
2004-05
3.43
8.13
0.17
11.90
2005-06
3.37
22.2
0.66
26.24
2006-07
3.04
40.90
1.08
45.04
2007-08
2.70
54.70
1.40
58.80
Dec 08
2.30
55.80
1.50
59.60
Source: Adapted from PTA (2007), PTA (2008)
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The total teledensity of fixed, cellular and WLL reached 59.60 in December 2008 (PTA 2008).
1.4.2 Foreign Direct Investment in Pakistan
There has been a steady flow of Foreign Direct Investment (FDI) in Telecom Sector in
Pakistan since 2002. Table 2 shows the contribution of FDI in this sector. The sector has
enormous potential for growth and remains lucrative for foreign investors. It has attracted more
than US $ 5.6 billion FDI since 2002-3 (PTA 2008). This development has created employment
opportunities in Pakistan. During 2007-08, a sum of US $1.4 billion FDI was made in Telecom
Sector of Pakistan (SBP 2008). The sector ranked second as major recipient of FDI in the
country.
1.4.3 Telecom Sector Share in GDP
Service sector of Pakistan’s economy, telecom being part of it, is the largest contributor
in the composition of GDP. In 2007-08, the services sector contribution to the real GDP of the
country was reported at 73% compared to 58% in 2006-07(Economic Survey 2007-08). Table 3
shows the share of Telecom Sector in the GDP of the country. There has been a gradual increase
of telecom share in the GDP. The percentage share has risen from 1.6% in 2000-01 to 2% in
2007. Over US$ one billion investment is expected in this sector during 2009.
1.4.4 Revenues of Telecom Sector
Due to substantial increase in the telecom traffic, lower tariffs and vast coverage of
cellular mobile and WLL operators, the revenues of telecom companies have shot up. Table 4
shows the revenues of telecom sector since 2003. Total revenues of telecom sector in 2006-07
grew by about 21% compared to the last year. However, this increase is over 100% if
compared with revenues of 2003-04. Cellular Mobile Sector share in total telecom revenue was
about 57% in 2006-07 which was just 24% four years earlier. Total Mobile Sector revenues had
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Table 2
Foreign Direct Investment in Telecom Sector
Year
% Share
2002-03
13.5
2003-04
21.8
2004-05
32.4
2005-06
54.1
2006-07
35.6
2007-08
27.9
July - December 2008
31.00
Source: Adapted from PTA (2008); SBP (2008)
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Table 3
Telecom Sector Share in GDP
Year
% Share
2000-01
1.6
2001-02
1.6
2002-03
1.7
2003-04
1.7
2004-05
1.9
2006-07
2.0
2007-08
2.1
Source: Adapted from Economic Survey of Pakistan (2007-8);
PTA (2007); PTA (2008), SBP (2008)
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Table 4
Revenues of Telecom Sector
Year
Rupees in Billion
2003
10.200
2004
11.6827
2005
14.4226
2005-06
19.4562
2006-07
23.5613
2007-08
27.8459
July – December 2008
23.1000
Source: Adapted from PTA (2008); Federal Board of Revenue (2008)
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increased by 378% during the last four years (PTA 2007). The revenues, however, decreased
during the second half of 2008 due to negative impact of increase in taxes.
1.5
Cellular Mobile Telephone Industry
The mobile service was introduced in Pakistan in 1990. As a result of prudent policies of
the government, the sector has witnessed phenomenal growth during the last 18 years. Table 5
highlights the impressive growth over the years. PTA (2006) indicated that Pakistan has been
experiencing more than 150% continuous growth rate for years 2003-04 to 2005 -06. The report
noted that there were 36.8 million subscribers in the country showing subscribers’ growth rate of
109% in 2003-04, 154% in 2004-2005 and had crossed 170% in 2005-06. The total subscribers
crossed 88 million at the end of 2007-08 (PTA 2008). This tremendous growth is attributed to
many internal and external factors starting from deregulation down to implementation of Mobile
Number Portability to the Calling Party Pay (CPP) Regime which made the incoming calls free.
Pakistan Mobile industry has been witnessing increasing net addition to total subscriber
base for last five years. In 2004, the net addition was more than 21 million in one year showing
1.75 million average addition per month whereas in 2007, the net addition was more than 27
million increasing average addition to 2.3 million per month (PTA 2007). During 2008, all
companies together added 25 million subscribers to their net (PTA 2008).
Despite impressive addition of cellular subscribers by Operators during 2007-08, Cellular
Mobile market could not maintain its growth pattern of the last 3-4 years. Generally, the growth
of subscribers has declined considerably in 2007-08, which is evident from Table 6. Total
subscribers growth has been reported 40% in 2007-08, which has declined from 82% in the year
2006-07. Growth of cellular subscribers has declined by all major companies (PTA 2008). This
decline has been attributed to the imposition of additional taxes by the government, rising costs
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of the service and overall economic situation which has affected the consumption pattern of the
customers.
1.5.1 Cellular Mobile Telephone Penetration
Since 2003 the mobile penetration in the country has been increasing from 1.6% (PTA
2003) to 40.1% PTA (2007). Table 7 shows the cellular penetration since 2002. In five years the
penetration grew at an average rate of more than 100%. Maximum penetration of mobile services
is in Sindh and Punjab Provinces because of higher business activity, higher literacy rate, easy
terrain for network roll out and densely populated areas. By end 2007-8, the cellular mobile
penetration had reached 54.7 % which is 15.3 % higher than the last year.
1.5.2 Cellular Mobile Telephone Franchises
Despite aggressive cellular subscriber growth, franchises increased normally at 3%.
During the year 2007-08, total CMTOs franchises increased to 1,679 which were 1,619 the
previous year. Table 8 shows the growth of franchises of CMTOs. One reason for this slow
growth could be the closure of some franchises by PTA on account of their involvement in
unauthorized sale of Subscriber Identity Modules (SIMs) which was causing problem of law and
order in the country. Other reason could be that expansion is going on in unpopulated areas
where CMTOs had already allotted franchises.
1.6
CELLULAR MOBILE TELEPHONE OPERATORS (CMTOs) IN
PAKISTAN
Presently six cellular mobile telephone operators are operating in Pakistan. With the exception of
one operator, all are subsidiary of multinationals corporations. Mobilink GSM (PMCL), a
subsidiary of Orascom Telecom, started its operations in 1994. Presently it has 28 million
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Table 5
Cellular Mobile Telephone Growth
Year
Subscribers in Million
1995-96
.06
1996-97
.135
1997-98
.196
1998-99
.265
1999-0
.306
2000-01
.742
2001-02
1.23
2003
1.90
2004
5.00
2005
12.70
2006
34.40
2007
62.90
2008
89.90
Source: Adapted from PTA (2005); PTA (2008)
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Table 6
Growth (%) of Cellular Mobile Telephone Subscribers
Year
% Growth
2000-01
142
2001-02
129
2002-03
42
2003-04
109
2004-05
154
2005-06
170
2006-07
82
2007-08
40
Source: Adapted from PTA (2008)
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Table 7
Cellular Mobile Telephone Penetration
Year
% Penetration
2002
1.6
2003
2.4
2004
3.3
2005
8.3
2006
23.7
2007
39.4
2008
55.6
Source: Adapted from PTA (2008)
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Table 8
Cellular Mobile Telephone Franchises
Year
Numbers of Franchises
2003-04
618
2004-05
984
2005-06
1202
2006-07
1619
2007-08
1686
Source: Adapted from PTA (2008)
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subscribers. It has 31.7 % of the market share and covers over 10,000 destinations having 449
franchises and 7805 cell sites (PTA 2008).
Ufone GSM is a subsidiary of Pakistan Telecommunication Company. On account of
privatization, 26% of its shares were acquired by Emirates Telecommunication Corporation
(Etisalat). The Company has a market share of 21.5%, covers 277 cities with 361 franchises and
4314 cell sites (PTA 2008).
Telenor Pakistan is a subsidiary of Telenor Sweden. The company launched its
operations in March 2005. It has over 19 millions subscribers. Its market share is 21.6%, covers
1146 destinations, and has 239 franchises and 5998 cell sites (PTA 2008).
Warid is operated by Abu Dhabi Group. Warid started its services in Pakistan in May
2005. It has over 16 million subscribers. The company has market share of 18.8 % with
coverage to 117 destinations, having 285 franchises and 4047 cell sites (PTA 2008).
China Mobile Pakistan (CM Pak) entered telecom sector in January 2007, after its
acquisition of Paktel from Millicom Corporation. Presently it has a market share of 6.1% covers
291 destinations, has 164 franchises and 3925 cell sites (PTA 2008).
Instaphone started its operations in 1990. Its market share is 0.4%. The company covers
73 destinations, has 235 franchises and 211 cell sites (PTA 2008).
1.6.1 Market Share of Cellular Mobile Telephone Operators (CMTOs)
Market share of CMTOs is considered an important tool to gauge the level of
competition in any sector of the economy. Market shares of CMTOs indicate that market is
moving towards perfect competition where the share of major operators are declining and new
entrants are able to grab more share in the market. Table 9 shows the market share of mobile
operators for 2005-06, 2006-07 and 2007-08.
Mobilink maintained its market leadership position with 60% of market share while
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Ufone with a market share of 18% held the second position during 2005-06. During the year
2007-08, Telenor has emerged as fastest growing CMTO which has improved its market share
from 17% in 2007 to above 21% slightly higher than Ufone that also has 21.5% market share. On
the other hand, the leading mobile operator, Mobilink is rapidly losing its significant market
power place and its share has declined to 31.7% in 2008. This is attributed to tough competition
and quality of service differentiation from its competitors. CM Pak is also growing very fast and
it has added over 5 million subscribers, which is an impressive number. During 2008, its share
stood at 6.1% and with additional infrastructure in place, the share is likely to go up.
1.7
MANUFACTURING FACILITIES IN TELECOM SECTOR
Global telecom equipment manufacturing scenario is dominated by few players including
Ericsson, Nokia, Siemens, Alcatel, Samsung, Lucent, Nortel and Motorola. Pakistan in early
years was dependent on imported telecom equipment. In 1990, foreign telecom equipment
manufacturers set up their facilities under local joint ventures in Pakistan. Pakistan has a sizeable
equipment manufacturing base to meet the requirements of local telecom operators to some
extent (PTA 2004). Important manufacturers are Carrier Telephone Industries (CTI), Telephone
Industry of Pakistan (TIP), National Radio Telecommunication Corporation, Siemens, Alcatel
Pakistan Limited (APL), Zhongxing Telecom Pakistan (Pvt) Ltd (ZTE), Nortel Networks and
Ericsson Pakistan (Pvt) Ltd.
The demand for telecom equipment including cellular mobile sets has increased over the
years due to unprecedented growth of Telecom Sector. During Jul 06-March 07, telecom
equipment worth US $ 1.05 billion were imported in the country. There are no indigenous
production facilities of mobile phones. The total value of handsets imported in Pakistan during
2005-06 crossed US $ 1 billion and forecasted growth in these imports is 25% annually.
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Table 9
Percentage of Market Share of Cellular Mobile Telephone Operators (CMTOs)
Operator
2005-06
2007
2008
Mobilink
60%
39.9%
31.7%
Ufone
18%
21%
21.5%
Telenor
9%
19%
21.6%
Warid
7%
17.2%
18.8%
Paktel
4%
-
-
Instaphone
2%
0.4%
0.4%
CMPak
-
2.6%
6.1%
Source: Adapted from PTA (2005); PTA (2007); PTA (2008)
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PTA (2007) noted that imports of mobile phone alone have reached US $ 506.2 million
during Jul 06- March 07. Imports for Telecom Sector in 2007-08 have declined marginally and
stood at US$1.33 billion, which were 4% of the total imports.
Imports of cellular mobile handsets reduced significantly by about 33% during the year
2007-08. During July-December 2008, cellular mobile sets worth US $ 88.7 millions were
imported. The overall import of Telecom Sector stood at US $ 356 million as compared to US $
885.1 million in 2007-08. This indicates saturation of the market while imports of the telecom
equipment have increased by 31% in the same period on account for competitive environment
among CMTOs and their pursuits for expansion of their infrastructure ( PTA 2008).
The manufacturing capacity of Telecom Sector in Pakistan is not in a position to
meet the growing demands of equipments for CMTOs’ network expansion and other operational
requirements and services. Therefore, CMTOs are dependent on foreign suppliers for
provisioning of equipment. Following are the main suppliers of CMTOs for technical and
operational support:
1. Nokia Siemens Networks Pakistan (Private) Limited.
2. Alcatel- Lucant, Pakistan Limited.
3. Erricsson Pakistan (Private) Limied.
4. Huawei Technologies Company Limited, Pakistan.
5. Zxongxing Telecom Pakistan (Private) Limited.
6. Motorola Pakistan.
For administrative support, CMTOs are dependent on reputed local suppliers
1.8
BACKGROUND OF THE STUDY
The quality of service of Cellular Mobile Telephone Operators (CMTOs) has been the
main concern for the end users. PTA had been carrying out periodic quality of service surveys of
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these Operators. Till late 2008, the results of these surveys had not been made public. Quality of
Service (2002) reported that connectivity and drop calls service of all major cellular service
providers were found below the required standards laid down by the regulator.
PTA (2003) indicated that as a result of second survey during the period covered under
report, the quality of services to telecom consumers was not up to the quality of services
standards as per license conditions. A public hearing followed this issue. One CMTO was fined
Rupees 60 million and the rest three CMTOs were issued show cause notices as a consequence
of their poor quality of service.
PTA (2004) concluded that all CMTOs had shown improvement. However, the services
were still not up to the satisfactory level of end users and international benchmarks. Quality of
Service (2005) quoted PTA Chairman and reported that the Mobile Operators will have to
improve quality of service otherwise strict action would be taken against these Operators.
PTA (2007, p.27) reported:
Seventy percent increase in the overall complaints of the mobile companies. The issue
raised by the customers was mainly quality of service which includes issues of dropped
calls, busy circuits, and weak signals. Many customers voiced serious concern regarding
billing practices, complexity and obscurity in billing procedures, and over charging.
During 2008, the survey was carried out to measure network accessibility, service
accessibility, access delay, voice quality and short messaging. The results of quality of survey
were made public for the first time. According to the survey, the quality of service of CMTOs
showed improvement. However, the quality of service stills needs further improvement.
All CMTOs have business excellence, meeting and exceeding customers’ satisfaction,
exceeding employees’ expectations, continuous improvement, and relationship with stakeholders
as core elements of their vision and values (Mobilink Vision & Values, 2007; Ufone Profile,
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2007; Telenor Values, 2008). During the past five years, there has been significant improvement
in Key Performance Indicators of all CMTOs based on revenues, average revenue per user, new
subscribers, growth in infrastructure, market share, income before interest/taxes/ depreciation
and amortization, and profit after tax.
PTA carries out regular quality of service surveys to assess the performance of CMTOs
against the benchmark standards as per the license agreements. CMTOs have been fined up to
Pakistan Rupees 60 million for failure to meet the required standards of quality of service. In
addition 18 franchises had been closed by PTA for violating the instructions for issuing the SIMs
(Quality of Service, 2008). However, PTA does not have any leverage on the management of
CMTOs.
These organizations are committed to provide excellent services to customers to remain
competitive in fast growing telecom market. There is, however, a gap between the commitment
of CMTOs and its manifestation in tangible dimensions based on the quality of service
benchmarks identified by PTA. The failure of Operators to meet quality of service standards is,
therefore, a cause of concern for regulators, customers and the organizations. This study has
provided an opportunity to examine this gap and furnish an objective assessment about the
problem.
1.9
PURPOSE OF THE STUDY
The objective of the study is to assess the extent to which the fundamentals of total
quality management are being practiced by CMTOs in Pakistan, identify barriers and to suggest
measures for improving their competitiveness by adopting TQM best practices. The study was
undertaken to address the lack of empirical findings concerning application of fundamentals of
total quality management within Cellular Mobile Industry (CMTOs) in Pakistan in the context of
23
galloping development in the industry. Much of the work on TQM in Pakistan is focused on the
manufacturing industries. However, selected case studies of individual firms in different services
had been undertaken. The study aims at exploring the application of TQM philosophy based on
Deming Management Method in CMTOs and helps identifying problems areas and possible
remedies to make these organizations competitive.
1.10 SIGNIFICANCE OF THE STUDY
Implementation of fundamentals of total quality management has been introduced and
practiced in individual firms in Pakistan for quite some time. Empirical evidence of its
application in Telecom Industry has not been done. The significant contribution of study includes
the following:
1. The study will provide empirical evidence of application of TQM fundamentals based
on Deming Management Methods in Cellular Mobile Industry (Cellular Mobile Telephone
Operators) in Pakistan.
2. The study will generate information that can be useful for organizational leaders in
evaluating TQM practices in their own organizations using Deming Management Method,
identify weaknesses and initiate appropriate measures to enhance organizational performance.
The results will provide an objective insight to CMTOs to plan necessary course of action to
achieve and sustain competitive advantage.
3. The study will be useful to both theoreticians and practicing managers as it will
provide insight into the factors that contribute to the competitiveness of service firms in fast
growing industry.
4. More generally, however, since TQM is an attempt to bring about organizational
change, an appreciation of factors influencing its implementation will be useful in helping
managers implement change initiatives with regard to TQM in organizations.
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5. The study will provide quality management researchers with evidence of empirical
testing of Deming Management Method Model in different cultural context.
6. The study will provide the researchers in the field of quality management the
information that can be useful in determining needs for further research.
1.11 RESEARCH QUESTIONS
The study seeks to answer the following questions:
To what extent Cellular Mobile Telephone Operators (CMTOs) in Pakistan practice
fundamentals of total quality management based on Deming Management Method criteria in
their organizations?
2. What are the barriers that Cellular Mobile Telephone Operators (CMTOs) in Pakistan
experience in practicing fundamentals of total quality management based on Deming
Management Methods criteria in their organizations?
3. How these organizations can improve their competitiveness by adopting the best TQM
practices?
1.12 DEFINITION OF TERMS
1.12.1 Total Quality Management
TQM philosophy constitutes a new paradigm of management. It is a way to continuously
improve performance at every level of operation, in every functional area of organization
through integration of people and systems. This embodies provision of supporting environment
based on senior management explicit commitment, developing employees’ competency,
collaboration with stakeholders and change of organizational culture. The ultimate objective is
customer satisfaction. (Brocka & Brocka, 1992; Mohanty & Lakhe,2002).
25
1.12.2 Visionary Leadership
Management’s ability to articulate organizational vision, a shared philosophy, and value
based practices driven by customer focus. This manifests in strategic thinking, collaboration,
empowerment and development of workforce, social innovation, participative style of
management, and creating enabling environment to plan, affect and sustain quality focused
organizational change. (Anderson, Rungtusanathan & Schroeder, 1994; Obeng & Ugboro, 2000).
1.12.3 Internal and External Cooperation
The tendency of the organization to promote team milieu with dynamic and flexible
boundaries that develops beneficial relationship internally and externally. This relationship
increases partnership with suppliers, creates collaborative organization, promotes workforce
empowerment, trust and eliminates fear. The internal and external partnership fosters innovation
and learning and enhances organizational effectiveness (Anderson et al.,1994; Warner, 1999).
. 1.12.4 Learning
The organizational capability to recognize and nurture the development of its skills,
abilities, and knowledge base. This is exemplified by companywide training, foundational
knowledge, process knowledge, educational development, continuous self-improvement, and
managerial learning (Anderson et al.,1994).
1.12.5 Process Management
Methodical and behavioural practices that focus on planning, organizing, implementing
and controlling of processes. The main emphasis is on prevention, statistical process control and
reduction of variation, limiting mass inspection, quality in designing, elimination of merit-rating
reward systems, understanding motivation, total cost accounting and stable employment
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(Anderson et al.,1994; Ishikawa 1985).
1.12.6 Continuous improvement
The efforts of the organization to follow gradual and novel improvement of its products,
services, processes and performance. This is an ongoing process for organization to achieve
flexibility, responsiveness and ability to change to achieve customer satisfaction (Anderson et.
al.,1994; Kaye & Dyason, 1995; Noori, Jha & Michela,1996).
1.12.7 Employee Fulfillment
The extent to which employees believe and experience organizational pursuits in meeting
and exceeding their needs. This manifests in commitment of employees to organizational goals
and generates a sense of belonging with the organization. The employees are energized and do
their best to achieve superior performance for sustained excellence (Anderson et al. 1994; Obeng
& Ugboro, 2000).
1.12.8 Customer Satisfaction
The degree to which the organization is customer driven, meeting and exceeding
customers’ expectations, and dedicated to creating satisfied customers consistently
(Agus, Krishnan & Kadir, 2000; Saraph, Bensen & Schroeder,1989; Sun, 2000).
1.13 RESEARCH LIMITATIONS
The present study has some limitations that offer opportunities for future research.
The data is based on individual opinion. There is a general tendency to inflate the opinion with
regard to the questions in the instrument with a view to give good impression of the organization.
Since the findings are based on the use of self-reported survey data and semi structured
interviews, these may be affected by response biases.
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The customer satisfaction data has been obtained from the respondents rather than
customers. Since the data is not based on an external measure of this dimension, the responses
are likely to be biased and may not provide a realistic evaluation of Customer Satisfaction.
Deming Management Method is applied to one industry in this study. In order to
establish the generalization of the Model within the context of Pakistan, it needs to be tested in
other industries setting, both in public and private sectors.