Total Quality Management
Week # 4
Leadership, Commitment, & Strategy
Prepared by: Khalid Dahleez
Faculty of Commerce – the Islamic University of Gaza
This material was collected from different sources
Total Quality Management - Spring 2010
1
Total Quality Management Model – major features
Teams
Process
Customer
Supplier
Systems
Commitment
Tools
Total Quality Management - Spring 2010
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The total quality management approach

What is quality management?
‘something that is best left to the experts’  wrong
answer
 Quality cannot be achieved on a company-wide
basis if it is left to the experts.
 Using the traditional control techniques is NOT
the way to achieve quality.
 Quality is not the responsibility of the QC or QA
departments only.
 TQM is far more than shifting the responsibility of
detection of problems from the customer to the
producer.
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The total quality management approach
TQM requires a comprehensive approach that
must first be recognized and then implemented.
 Today, managers must plan strategically to
maintain a hold on market share, let alone
increase it.
 Consumers choice quality or price?
 TQM is an approach to improving the
competitiveness, effectiveness and flexibility of a
whole organization.
 For an organization to be truly effective, each part
of it must work properly together towards the
same goals.

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The total quality management approach

The methods and techniques used in TQM can be
applied throughout any organization (manufacturing,
public service, health care, education and hospitality
industries).

Toward TQ, management must focus on
developing a problem-prevention mentality.
Many people will need to undergo a
complete change of ‘mindset’.
The correct mindset may be achieved by
looking at the sort of barriers that exist in
key areas.


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The total quality management approach
Staff will need to be trained and shown how to
reallocate their time and energy to studying
their processes in teams, searching for causes of
problems, and correcting the causes, not the
symptoms a positive management.
 The managements of many firms may think that
their scale of operation is not sufficiently large,
that their resources are too slim.

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Quality Assessment - Questions
Managers should examine the existing quality
performance by asking the following questions:
1. Is any attempt made to assess the costs arising
from errors, defects, waste, customer
complaints, lost sales, etc?
2. Are the organization’s quality systemsdocumentation, procedures, operations etc-in
good order?
3. Have personnel been trained in how to prevent
errors and quality problems?
4. What is being done to motivate and train
employees to do work right first time?
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Quality Assessment - Questions



If satisfactory answers given to most of these
questions an organization in the way to using
quality procedures and management.
If answers to the previous questions indicate
problem areas, it will be beneficial to review the
top management’s attitude to quality.
Time and money spent on quality-related
activities are not limitations of profitability.
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Ten Points for Senior Management – TQM Foundation
1. The Organisation needs long term commitment to
constant improvement.
2. Adopt the philosophy of zero errors/defects to change
the CULTURE to right first time.
3. Train the people to understand the CUSTOMERSUPPLIER relationship.
4. Do not buy products or services on price alone. Look at
the TOTAL cost.
5. Recognize that improvement of the SYSTEM needs to be
managed.
6. Adopt modern methods of SUPERVISION and
TRAINING – eliminate fear.
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Ten Points for Senior Management – TQM Foundation
7. Eliminate Barriers between departments by managing the
PROCESS – improve COMMUNICATION and TEAMWORK.
8. Eliminate the following:
• Arbitrary goals without methods,
• All Standards based only on numbers,
• Barriers to pride of workmanship,
•Get FACTS by Using the correct TOOLS.
9. Constantly educate and retrain – develop the EXPERTS in the
business
10. Develop a SYSTEMATIC approach to manage the implementation
of TQM.
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Leadership as a Major Component of TQM
Teach & Institute Leadership - Deming
◦ Leadership is management’s job.
◦ Most managers/supervisors do not truly know (how to
perform) the duties of the employees they supervise.
Three Steps to Quality - A.V. Feigenbaum
◦ Quality Leadership, with a strong focus on planning
◦ Modern Quality Technology, involving the entire work force
◦ Organizational Commitment, supported by continuous
training and motivation
Leadership can’t be delegated - Juran
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Leadership as a Major Component of TQM
◦ One of the main categories of Malcolm Baldrige
National Quality Award (leadership – 125
points)
◦ EFQM Model (Leadership – 10%)
◦ ISO 9000 Quality Management Principles
(leadership & people involvement)
◦ British Model (TQM, combined with
effective leadership, results in an
organization doing the right things, first
time)
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Leadership as a Major Component of TQM

Leaders must have (Yoshio Kondo)
◦
◦
◦
◦
a dream (vision and shared goals)
strength of will and tenacity of purpose
ability to win the support of followers
ability to do more than their followers,
without interfering when they can do it alone
◦ successes
◦ ability to give the right advice
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Leadership & Commitment

Leaders establish unity of purpose, direction, and internal
environment of the organization. They create the environment in
which people can become fully involved in achieving the
organization´s objectives.
•
The ability of top management to establish, practice, and lead a
long-term vision for the firm, driven by changing customer
requirements, as opposed to an internal management control
role.
•
Lack of top management commitment is one of the reasons for
the failure of TQM efforts (Brown et al. 1994).
•
A predominant requirement for quality management is that
strong commitment from top management is vital.
•
To be an effective leader in most modern firms, the top manager
must continue to develop and learn.
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Leadership & Commitment
•
Knowledge of the business and continual learning are essential
prerequisites to effective leadership (DuBrin, 1995).
•
In order to effectively lead the firm, top management must be
committed to provide education and training to employees and
regarding them as valuable resources of the firm.
•
Top management must be committed to allocating sufficient
resources to prevent, as well as repair, quality problems.
•
Top management should discuss quality frequently; by having
session on the topic and asking questions about quality at every
staff meeting.
•
Top management must train and coach employees to assess,
analyze, and improve work processes (Deming, 1986).
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Characteristics of excellent leadership - Dr. Curt Reimann,
director of the Malcolm Baldrige National Quality Award

Visible, committed, and knowledgeable — They
promote the emphasis on quality and know the details and
how well the company is doing. Personal involvement in
education, training, and recognition. Accessible to and
routine contact with employees, customers, and suppliers.

A missionary zeal — The leaders are trying to effect as
much change as possible through their suppliers, through
the government, and through any other vehicle that
promotes quality. They are active in promoting quality
outside the company.

Aggressive targets — Going beyond incremental
improvements and looking at the possibility of making
large gains, getting the whole work force thinking about
different processes — not just improving processes.
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Characteristics of excellent leadership - Dr. Curt Reimann,
director of the Malcolm Baldrige National Quality Award
— Cycle time, zero defects, six sigma, or other
targets to drive improvements. Clearly defined customer
satisfaction andquality improvement objectives.

Strong drivers

Communication of values

Organization —

Customer contact —
— Effecting cultural change related to
quality. Written policy, mission, guidelines, and other documented
statements of quality values, or other bases for clear and
consistent communications.
Flat structures that allow more authority at lower
levels. Empowering employees. Managers as coaches rather than
bosses. Cross-functional management processes and focus on
internal as well as external customers. Interdepartmental
improvement teams.
customers.
CEO and all senior managers are accessible to
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Good Leaders
1.
Give priority attention to customers and their needs
2.
Empower, rather than control, subordinates.
3.
Emphasize improvement rather than maintenance.
4.
They emphasize prevention.
5.
Encourage collaboration rather than competition.
6.
They train and coach, rather than direct and
supervise.
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Good Leaders
7.
Learn from problems.
8.
They continually try to improve communications.
9.
They continually demonstrate their commitment to
quality.
10.
Choose suppliers on the basis of quality, not price.
11.
Establish organizational systems to support the
quality effort.
12.
Encourage and recognize team effort.
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Role of TQM leaders
All are responsible for quality improvement especially
the senior management & CEO’s
 Ensure that the team’s decision is in harmony with the
quality statements of the organization
 Senior TQM leaders must read TQM literature and
attend conferences to be aware of TQM tools and
methods
 Senior managers must take part in award and
recognition ceremonies for celebrating the quality
successes of the organization
 Coaching others and teaching in TQM seminars
 Senior managers must liaise with internal ,external and
suppliers through visits, focus groups, surveys
 They must live and communicate TQM.

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Effective leadership

Effective leadership starts with the Chief Executive’s vision,
capitalizing on market or service opportunities, continues
through a strategy that will give the organization
competitive advantage, and leads to business or service
success.

Together, effective leadership and TQM result in
the company or organization doing the right
things, right first time.
The five requirements for effective leadership are
the following:

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Effective leadership
1.
Developing and publishing clear documented
corporate beliefs and objectives – a mission
statement
The beliefs and objectives should address:
◦
◦
◦
◦
◦
2.
The definition of the business.
A commitment to effective leadership & Quality
Target sectors and relationships with customers.
Indications for future direction. (principal plans)
Commitment to monitoring performance against customers'
needs and expectations, and continuous improvement.
Developing clear and effective strategies and
supporting plans for achieving the mission and
objectives.
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Effective leadership
3.
4.
5.
Identifying the critical success factors and critical
processes.
Reviewing the management structure
Empowerment – encouraging effective employee
participation
particular attention must be paid to the following:
A.
Attitudes
◦ The key attitude for managing any winning organization may be
expressed as “I will personally understand who my customers are
and what are their needs and expectations of me”.
◦ This attitude must start at the top, then it must percolate down to
be adopted by every employee.
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Effective leadership
B.
Abilities
◦ Every employee must be able to do what is needed and
expected of him or her.
◦ Training and its effectiveness
C.
Participation
◦ For effective employees participation in making the company or
organization successful, employees must be trained to:
E Evaluate – the situation and define their objectives.
P Plan – to achieve those objectives fully.
D Do, implement the plans.
C Check – that the objectives are being achieved.
A Amend, take corrective action if they are not.
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Leadership: Guiding the Organization in the Pursuit of Excellence: Key Issues
 Is the leadership and
governance structure clearly
defined and understood?
 Are leaders actively engaged in
campus activities?
 Are senior leaders effective
role models?
 Are leaders actively engaged
with public, professional, and/or
academic groups?
 Do leaders promote leadership
at all levels?
 Are ethics and integrity
emphasized?
 Are leadership goals
established?
 Are the organization’s pertinent
legal and regulatory risks and
issues addressed?
 Are there informal and formal
methods for reviewing
leadership and governance
effectiveness throughout the
organization?
 Do leaders encourage public
responsibility and attention to the
organization’s impact on the
physical and social environment?
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Leadership benefits
 for policy and strategy formulation, establishing
and communicating a clear vision of the
organisation's future;
 for goal and target setting, translating the vision
of the organisation into measurable goals and
targets;
 for operational management, empowered and
involved people achieve the organisation's
objectives;
 for human resource management, having an
empowered, motivated, well informed and stable
workforce.
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LEADERSHIP FOR INSPIRING CHANGE IN QUALITY
Why leadership for change?
• Eighty per cent of TQM initiatives fail because
they do not have the backing of the senior
management.
• Commitment is the foundation of an effective
TQM initiative.
• Leadership is the key in promoting
commitment.
• Leadership and commitment go hand in hand.
• TQM needs leaders who are committed to
change.
Leadership for Total Quality - Total quality is
defined as “performance leadership in meeting
customer requirements by doing the right the
first time.”
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Change Leadership





The most challenging aspect of business is
leading and managing change
The business environment is subject to fastpaced economic and social change
Modern business must adapt and be flexible to
survive
Problems in leading change stem mainly from
human resource management
Leaders need to be aware of how change
impacts on workers
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Leadership in TQM Role Model
TRANSFORMATIONAL
LEADERS
TRANSACTIONAL MANAGERS:
VERSUS
Transformational leaders: They provide mission
for others to follow and they expect the same
high standards from their people. They are
interested in ‘ends’ rather than ‘means’.
Transactional managers: They are good at
achieving short-term results, foster teamwork
and work in a practical manner.
Evidently,
transformational
leaders
and
transactional managers need to work together.
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Leadership Characteristics
Jim Collins, “Good To Great”
 Level One
◦ Highly capable
◦ Contributes through talent, knowledge, skills,
and good work habits
 Level Two
◦ Team member
◦ Contributes individual capabilities to the group
and works effectively with others
 Level Three
◦ Competent manager
◦ Organizes people and resources toward the
effective and efficient pursuit of predetermined
objectives
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Leadership Characteristics
Jim Collins, “Good To Great”
 Level Four
◦ Catalyst leader
◦ Makes a commitment to and vigorous pursuit of
a clear and compelling vision, stimulating higher
performance standards
 Level Five
◦ Executive leader
◦ Builds enduring greatness through a paradoxical
blend of personal humility and professional will
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How all leaders drive the organisation towards a position
of Business Excellence
Give & Receive
Training
Develop
Goals
Communicate
Effectively
Leadership
Make
Themselves
Accessible
Recognition
Listen & Respond
to People
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Comparison of Traditional Management and TQM
S.
1.
NAspect
o
.
Quality definition
Traditional Management
TQM
(a)
Products meet specifications.
(a)
Products fit for customer us.
(b)
Focus on post-production
inspection.
(b)
Focus on building quality into
the work process.
2.
Customers
Ambiguous understanding of
customer requirements.
Systematic approach to seek,
understand and satisfy
internal and external
customers.
3.
Errors
A certain margin of error,
waste and rework is
tolerable.
No tolerance for errors: do it
right the first time and
every time approach.
4.
Improvement
emphasis
Technological break-through
such as automation.
Gradual but continuous
improvement of each
function.
5.
Problem solving
Unstructured problem solving
and decision making by
individual managers and
specialists.
Participative and disciplined
problem solving and
decision making based
on hard data.
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STRATEGY AND THE STRATEGIC PLANNING PROCESS

Evidence suggests that those companies with strategies based
on TQM have achieved stunning successes.

Most of these successful companies will attribute their progress
to a quality-based strategy that was developed through a formal
structured approach to planning.

Total Quality begins with a strategic decision — a decision that
can only be made by top management — and that decision,
simply put, is the decision to compete as a world-class company.
Total Quality concentrates on quality performance — in every
facet of the business — and the primary strategy to achieve and
maintain competitive advantage. It requires taking a sys-tematic
look at an organization — looking at how each part interrelates
to the whole process. In addition, it demands continuous
improvement as a “way of life.”
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STRATEGY AND THE STRATEGIC PLANNING PROCESS
Professors Andrews, Christensen, and others in
the Policy group at the Harvard Business
School argue that corporate strategy is the
pattern of decisions in a company that:
(1) determines, shapes, and reveals its objectives,
purposes, or goals;
(2) produces the principal policies and plans for
achieving these goals; and
(3) defines the business the company intends to be in,
the kind of economic and human organization it
intends to be, and the nature of the economic and
non economic contribution it intends to make to
its shareholders, employees, customers, and
communities.
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STRATEGY AND THE STRATEGIC PLANNING PROCESS
Michael
Porter describes the development
of a competitive strategy as “a broad
formula for how a business is going to
compete, what its goals should be, and what
policies will be needed to carry out those
goals.”
Strategic Planning is a deliberate process
used by organizations to develop a mission,
vision, guiding values, strategic objectives,
and specific strategies for achieving the
objectives.
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Strategic Planning
Strategic business planning is similar to strategic
quality planning.
7 steps to strategic planning
1.
2.
3.
4.
5.
6.
7.
Customer needs
Customer positioning
Predict the future
Gap analysis
Closing the gap
Alignment
Implementation
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TQM - Strategy Approach

an approach to improving the competitiveness,
effectiveness and flexibility of a whole
organisation..... a way of planning, organising and
understanding each activity and it depends on
each individual at each level. TQM is a way of ......
bringing everyone into the processes of
improvement (Oakland 1995)

a TQM programme promotes "quality" as a
strategic imperative. Comprehensive TQM
programme requires re-evaluation how
organisational members address the quality of
their work and production /service processes.
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TQM supported by policy commitment







culture & practice
change strategy & organisational renewal
injection of energy
staff encouraged to practice positive, initiative taking
behaviours
a prevention ethic
quality improvement teams/circles
use of methods and techniques (tools)
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The organisations mission, values, strategic direction & the
manner in which it achieves them
Employees
Suppliers
Customers
Benchmarking
Use Appropriate
Information
Legislation
Competitors
Set
Targets
Communicate
to all
Strategy &
Planning
Review &
Improve
Develop
Changes
Check
Understanding
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Determine
strategic intent
Define
organizational mission
Strategic
Management
Process
Analyze environment
Set objectives
Assess
resources
Determine requirements
Develop action plans
Implement plans
Strategic
Planning
Monitor outcomes
Feedback
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FACTORS DETERMINING COMPETITIVE STRATEGY
STRENGTHS
&
WEAKNESSES
OPPORTUNITIES
&
THREATS
Factors
Factors
Internal
External
COMPETITIVE
STRATEGY
to the
to the
Company
Company
PERSONAL
VALUES
BROADER
SOCIETAL
EXPECTATIONS
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Objective Setting through SWOT
SWOT ANALYSIS
Internal
Strengths
External
Opportunities
Weaknesses
Threats
SWOT
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STRATEGIC PLANNING PROCESS (major questions)
Following a SWOT analysis, the strategic plan
will involve a process to search for the answers
to the following questions:
1. Who are we?
2. What are we known for?
3. What do we do better than 90% of our
competitors?
4. What do our competitors beat us on?
5. What do we wish to be known for?
6. Where are we headed as an organization?
7. Where do we wish to be headed?
8. How would we get there?
9. What would it take to get us there?
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Components of Strategy
The major role that quality plays in strategic
planning can best be understood by examining
the components of a strategy:
◦
◦
◦
◦
◦
◦
Mission, vision, and guiding values
Product/market scope
Competitive edge (differentiation)
Supporting policies
Objectives
Organizational culture
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Quality statements
Besterfield
 The quality statements include the vision
statement, mission statement, and quality
policy statement.
 Once developed, they are only occasionally
reviewed and updated. They are part of the
strategic planning process.
 There may be considerable overlap among
the three statements.
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Quality statements
Vision statement- a short declaration of
what the organization hopes to be
tomorrow
Mission statement – a statement of
purpose –who we are, who are our
customers, what we do , and how we do it.
Quality policy – is a guide for everyone in
the organization ,how they should provide
products and services to the customers.
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Quality Statements
1.
Vision statement :is the declaration of what an
organization should look like five to ten years in the
future.
2.
Mission statement : answers the questions that who
we are ,who are the customers ,what we do and how we
do it. This statement is usually one paragraph or less in
length ,is easy to understand and describes the function
of the organization.
3.
Quality policy statement : is a guide for everyone in
the organization as to how they should provide products
and service to the customers
It should be written by CEO with feed back from work force and be approved by
quality council.
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STRATEGIC QUALITY MANAGEMENT (Environment)
Environment
 The major determinant of a mission is the
environment in which the firm plans to
operate: the general environment, the industry
environment, and the competitive
environment. Strategy is essentially the
process of positioning oneself in that
environment as trends and changes unfold.
Thus, it is necessary to identify trends in the
environment and how they affect the strategy
of the firm.
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STRATEGIC QUALITY MANAGEMENT
Product/Market Scope
 This answers the questions: What am I selling
and to whom am I selling it? The answers are
more complex than they appear.
 in today’s heightened competitive environment,
a product or service is not simply sold to
anyone who will buy it.
 To be effective, value must be sold to a
particular market or customer segment.
 Strategic planning involves the determination
of these strategy components, and quality plays
a major role in this process.
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Vision statement:




A short declaration of what an organization aspires to be
in the future. It is an ideal state that an organization
continually strives to achieve. It is timeless, inspirational,
and becomes deeply shared within the organization.
Successful vision – a concise statement of the desired end
– provides a succinct guideline for sound decision making.
Although mission and vision are often used as
synonymous, sometimes a distinction is made in which
case mission evolves from the vision.
Example:“We will be the provider of safe, reliable, cost-effective
products and services that satisfy the electric-related needs of all
customer segments.” [Florida Power & Light Company].
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Vision statement:
A vision reflects where the organization is
headed or wishes to be. It is like a
destination dreamed up by the organization.
Every decision made by the organization
must be informed by its vision. An
organization’s
vision must come from top management, and
must be well articulated and understood by
all. The guiding values reflect the beliefs that
shape and mold the decisions and choices an
organization makes.

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Mission statement:


The mission statement answers the following
questions: who we are, who are our customers,
what we do, and how we do it.
This statement is usually one paragraph or less
in length, is easy to understand, and describes
the function of the organization. It provides a
clear statement of purpose for employees,
customers, and suppliers.
Example:“Our mission is to improve continually our
products and services to meet our customers’ needs,
allowing us to prosper as a business and provide a reasonable
return to our shareholders.” [Ford Motor Company].
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Mission statement:
The mission is the primary overall purpose
of an organization and its expressed reason
for existence. The simplest statement of
mission might be to “meet the needs/values
of constituents.”
Example:The mission of NCR is stated simply: “Create Value for
Our Stakeholders.” Stakeholders are identified as employees,
shareholders, suppliers, communities, and customers.13 The
mission can be operationalized by statements of how it will be
implemented for each stakeholder.
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Mission & Vision
If the vision deals with ‘what’, the mission deals
with ‘why’ and ‘how’. It identifies the roles or
activities to which an organization is committed
and provides overall direction for achieving the
mission.
 The mission provides the guide map, milestones
for achieving the vision.

Example: “To be the leading manufacturer and
supplier of measurement and computing solutions
whilst achieving the highest levels of customer
satisfaction, quality, and business ethics and
contributing to India’s technological, economic and
social needs.” [Hewlett-Packard India].
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Quality policy statement:
Besterfield
 The quality policy is a guide for everyone in the
organization as to how they should provide
products/service to the customers. It is written
after obtaining feedback from the workforce and
is approved by the quality council.
 A quality policy is a requirement of ISO9000.
 Some common characteristics are:
‘Quality is first priority’; ‘Continually improve the
quality’; ‘Equal or exceed the competition’; ‘Meet
the needs of internal and external customers’, etc.
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Quality policy statement:

Example: “Xerox is a quality company. Quality is
the basic business principle of Xerox. Quality
means providing our external and internal
customers with innovative products and
services that fully satisfy their requirements.
Quality is the job of every employee.” [Xerox
Corporation].
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Vision & Plan Statement
Vision statement describes how a firm wants to be seen in its chosen
business.Vision describes standards, values, and beliefs of the
organization.
Intent of a vision statement is to communicate the firm’s values,
aspirations and purpose, so that employees can make decisions that
are consistent with and supportive of these objectives.
Plan statement is a detailed road map of actions; what and how
organization intended execute that plan in future.
Organization may have many kinds of plan;
- Strategic business performance plan
- Quality goal plan
- Quality improvement plan
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Vision & Plan Statement
Strategic business performance plan can be divided into long- and
short-term business performance plans that include, for example,
market share, profits, annual sales, exports, and sales growth.
Quality goal plan can involve, for example, conformity rate, defect
rate, internal failure costs, external failure costs, performance,
reliability, and durability.
Quality improvement plan aims for quality improvement, which are
actions taken throughout the organization to increase the
effectiveness and efficiency of activities and processes in order to
provide added benefits to both the organization and its customers
(ISO 8402, 1994).
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Strategic Quality Goals and Objectives
Goals
must be focused
Goals must be concrete
Goals must be based on statistical evidence
Goals must have a plan or method with
resources
Goals must have a time-frame
Goals must be challenging yet achievable
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Top Management Commitment

Above all, demonstration of commitment
by top management is essential. This
commitment is demonstrated by behaviors
and activities that are exhibited throughout
the company. Categories of behaviors
include the following:
◦ Signaling — Make statements or take actions
that support the vision of quality, such as
mission statements, creeds, or charters
directed toward customer satisfaction. Publix
supermarkets’ “Where shopping is a pleasure”
and JC Penney’s “The customer is always right”
are examples of such statements.
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Top Management Commitment
Focus — Every employee must know the mission,
his or her part in it, and what has to be done to
achieve it. What management pays attention to and
how management reacts to crisis is indicative of
this focus. When all functions and systems are
aligned and when practice supports the culture,
everyone is more likely to support the vision.
Johnson and Johnson’s cool reaction to the Tylenol
scare is such an example.
 Employee policies — These may be the clearest
expression of culture, at least from the viewpoint
of the employee. A culture of quality can be easily
demonstrated in such policies as the reward and
promotion system, status symbols, and other
human resource actions.

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Commitment and policy





TQM must start at the top with the chief
Executive or equivalent.
The Leader (Top Management) is responsible for
coordination the work between the different departments
in the company (Marketing, Design Production, Purchasing,
Distribution, and Service Functions).
The middle management must explain the
principles of TQM to the people for whom they are
responsible, and ensure that their own
commitment is communicated.
The chief Executive must accept the responsibility
for and commitment to a quality policy in which he
must really believe.
Within each and every department of the
organization at all levels, starting at the top, basic
changes of attitude will be required to operate
TQM.
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Commitment and policy





Controls, systems and techniques are very
important in TQM, but they are not the primary
requirement.
TQM requires from the management total
commitment, which must then be extended to all
employees at all levels and in all departments.
Going into organizations sporting postercampaigning for quality instead of belief, one is
quickly able to detect the falseness.
The opposite is an organization where TQ means
something, can be seen, heard, felt.
Commitment is an essential element of a TQM
drive. Commitment must exist at every level. it is
adherence to plans, principles and procedures.
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Supporting Policies
Policies are guidelines for action and
decision making that facilitate the
attainment of objectives. Taken together, a
company’s policies delineate its strategy
fairly well. Tell me your policies and I can
tell you your strategy.
 A firm’s policy choices are essential as
drivers of differentiation. They determine
what activities to perform and how to
perform them.

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Supporting Policies
 The
role of policies as a critical element of strategy is
displayed in the policy wheel.
 In the center are the mission (the purpose of the
organization), the differentiation (how to compete in
the market), and the key objectives of the business.
The spokes of the wheel represent the functions of
the business.
 Each function requires supporting policies (functional
strategies) to achieve the hub. If the firm’s strategy
calls for competing on quality, then this becomes the
impetus for policy determination.
 Each functional policy supports this central strategy
and the objectives that are determined during the
planning process.
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Supporting Policies
The quality policy:



Every organization should develop and state its
policy on quality, together with arrangements for
its implementation.
The contents of the policy should be made known
to all employees.
Management must be dedicated to the regular
improvement of quality, not simply a one-step
improvement to an acceptable plateau.
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Supporting Policies
Ideas must be set out in a quality policy that
requires top management to:

1.
2.
3.
4.
5.
6.
7.

Establish an ‘organization’ for quality.
Identify customer’s needs and perception of needs
Assess the ability of the organization to meet these needs
economically.
Ensure that bought-in materials and services reliably meet the
required standards of performance and efficiency.
Concentrate on the prevention rather than detection philosophy.
Educate and train for quality improvement.
Review the quality management systems to maintain progress.
The quality policy must be publicized and
understood at all levels of the organization.
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Elements of a Quality Policy











organisation structure for quality: roles, responsibilities
how client/customer needs & perceptions are identified
product-service development
technical/economic resource allocation
QMS scheme & operation
how suppliers & supplies are required to meet standards
prevention & zero defects
communication, knowledge, information & staff
development
audit of QMS in operation
partnership with staff, customers & suppliers.
physical manifestation not just conceptual
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STRATEGIC QUALITY MANAGEMENT (Competitive Advantage)
Differentiation
 Michael Porter, in his landmark book Competitive Strategy, identified
two generic competitive strategies:
(1) overall cost leadership and
(2) differentiation.





Cost leadership in turn can be broad in market scope (e.g., Ivory Soap,
Emerson Electric, Black & Decker) or market segment focused (e.g.,
La Quinta Motels, Porter Paint).
The second strategy involves differentiating the product or service by
creating something that is perceived by the buyer as unique.
Differentiation, frequently called the competitive edge, answers the
question: Why should I buy from you?
Differentiation can also be broad in scope (American Airlines in ontime service, Caterpillar for spare parts support) or focused (e.g.,
Godiva chocolates, Mercedes automobiles).
Thus, there are four generic strategies, but each depends on
something different — something unique or distinguishing. Even an
effective cost leadership strategy must start with a good product.
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STRATEGIC QUALITY MANAGEMENT (Competitive Advantage)
◦ Differentiation may depend on one or more or a
combination of Quality dimensions (Performance,
Features, Reliability, Conformance, Durability,
Serviceability, Aesthetics, Perceived quality);
◦ but the point is that when differentiating based on
quality, quality must be defined in terms that meet
customer expectations, even if this is only what the
customer perceives as quality.
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STRATEGIC QUALITY MANAGEMENT (Competitive Advantage)
Market Segmentation (Niche) Quality
 Quality means different things to different
people. In terms of strategic quality
management, this means that the firm must
define that segment of the industry, that
generic strategy, and that particular
customer group which it intends to pursue.
This can be called a segmented quality
strategy.
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WHEEL OF COMPETITIVE STRATEGY
Product
Line
Target
Markets
Marketing
Finance &
Control
Sales
Differentiation
Mission
GOALS
R&D
Distribution
Purchasing
Mfging
Labor
Competitive Strategy is a combination of the Ends (Goals) for which the
firm is striving and the Means (Policies) by which is it seeking to get
there
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Summary Slide

The following Slides are for understanding
only (subject to indirect Questions): “
9,10,14,15,18,19,20,25,26,27,28,33”

Other slides are required and subjects to
any type of Questions
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