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NAME: Carlos Manuel S.

Abalos DATE: September 4, 2017

SUBJECT: BEC102 – Total Quality Management SECTION: III-BSBA-H

CHAPTER 3 Leadership


 Total Quality Management is a way of managing an organization with the objective of carrying
out right jobs right – the first time and every time.
 In quality management, there is a thumb rule called 85/15 rule. It means that the root causes of
85 percent of the problems in the organization are due to faulty systems and 15 percent are a result
of the behavior of the employee
 The most important prerequisite to practice TQM is that the senior management should firmly
believe that TQM is the only way to do business and manage the organization and that TQM would
lead the organization to prosperity in the long run.
 Principles that the top management should have faith in to build quality values in the organization:
o Customers are the only reason for being in business and hence they should be
o Zero defect is possible to achieve
o Teamwork results in a win-win situation
o CEO has to lead the quality movement
o Proper communication is essential
o Continuous improvement is needed in processes

Definition of TQM

 ISO 9000: Defines Total Quality Management (TQM) as “ a management approach of an

organization, centered on quality, based on the participation of all its members and aiming at long
term success through customer satisfaction and benefits to the members of the organization and to
the society”
 British Standards Institution (BSI), UK: Defines TQM “Management philosophy and
organization practices that aim to harness the human and material resources of an organization in
the most effective way to achieve the objectives of the organization.
 The standard also says that there are so many other names, which are used essentially to represent
o Continuous quality improvement
o Total quality
o Total business management
o Organization wide quality management
o Cost effective quality management

Elements of TQM

 Consistency of purpose/Long-term commitment

 Focus on process
 Quantitative methods
 Continuous process improvement
 Supplier partnership
 Customer focus
 Leadership
 Total employee involvement/Team Work
 Training

Leadership for TQM

 The management is solely responsible for the success of TQM as it is responsible for selecting
people, forming teams, providing resources and establishing the system in the organization
 Crosby says senior management is 100 percent responsible for the problem of quality and its
 According to Harrington, between 70 and 85 percent of all errors can only be corrected by

Deming’s 14 Points for Top Management

 Deming addressed the Japanese top managers several times in the 1950s. he gave the 14 points
for top management. These initiatives of Deming transformed the nation.

Points for Top Management Explanation

The top management must believe their business will continue for
100 years. Such a confidence will motivate them to aim long-term
Create constancy of purpose for the
success. It will infuse a constant quest for innovation,
improvement of products and
improvement of processes, products, and services. They have to
constantly reiterate their intention to practice TQM and improve
products and services.
The new philosophy is to practice the Japanese CWQC, which
was renamed as TQM much later. The new philosophy means
Adapt the new philosophy elimination of wastes, delays and radically changing the work
culture. The new philosophy means Just-in-Time (JIT)
manufacturing is possible with zero defects
Doing things right and doing it right the first time would reduce
Cease dependence on mass the dependence on inspection, in fact it would be eliminated.
inspection TQM is aimed at eliminating inspection in the long run through
This point addresses supplier partnership. The supplier should be
selected on the basis of the following 4 parameters:
End the practice of awarding
 Quality
business on the basis of price tag
 Price
 Delivery
 Service
The processes in the organization need continuous improvement,
Constantly improve the system of
Kaizen in Japanese. TQM is aimed at continuous improvement of
production and services
processes so that the quality of products and services improve
continuously. The very purpose of TQM is the constant
improvement of the system of production and services
The abilities of employees should be improved and harnessed
only through training. Deming advocates, “management needs
Institute training
training to learn about the organization, all the way from incoming
material to the customer”
Deming urges that senior employees must conduct themselves as
leaders not managers.

Characteristics of leaders and managers

Adopt and institute leadership
Leaders: Proactive, coaches, understands process, moves around,
improves process, communicates frequently, seeks suggestions
Managers: reactive, finds fault, doesn’t care to understand, sits
in his chair, maintains process, communicates rarely, questions
Employees should be encouraged to suggest improvements and
Drive out fear new ideas, ask questions about the existing process, etc. fear is
detrimental to improvement of processes
Quite often, the various teams in the organization stop
Break down barriers between staff communicating with each other. The teams over the years become
areas watertight compartments. TQM dictates removal of barriers
between the departments
Here Deming talks about slogans and targets for increasing
productivity. He says that barriers to quality and productivity exist
Eliminate slogans, exhortations and within the organization itself. Hence, to achieve productivity, the
targets for the work force system has to be improved for which, management is responsible.
The best strategy for improvement is to correct defects in the
system, not slogans or posters.
Setting a target for production may affect the quality of
Eliminate numerical quota for the workmanship. This forces the worker to ignore quality and
work force and numerical goals for concentrate on quantity. Setting goals without the necessary
people in management wherewithal does not work. Such improvements should arise out
of improving processes and not by passage of time.
The organization should establish the right processes and a proper
Remove barriers that rob people of system for quality management. This will lead to carrying out jobs
pride of workmanship correctly. If the work is carried out correctly, it gives pride to
those who did it.
Employees should be encouraged to pursue higher education and
training while in service, for improving the skills or upgrading
Encourage education and self-
knowledge. If an employee undergoes education or training, it
improvement for everyone
will improve his ability, which will be beneficial to the
The top management should be able to understand the above 13
Take action to accomplish the points and then enable their employees to understand them. They
transformation should interpret the 13 points properly and educate their
employees appropriately. The final point is all about the
implementation of the 13 points, which in essence are the TQM
principles and strategies.

Ten Strategies for Top Management

Strategy Explanation
 It means that management should be able to nip the problems in
the bud, so that the problems will not recur.
 Its role is for the organization to be able to manufacture an item
or deliver a defect free service by controlling the processes and
improving the skills of the employees

Proactive management needs proper system: The problem can

be identified before occurring only if there is a proper system in
Proactive Management the organization. Unless a system is in order, the roles and
responsibilities are clear, the organizational structure is in place,
the procedures set and the system of recording everything laid
out, it will be extremely difficult to think of prevention

TQM calls for proactive management: TQM envisages taking

preventive actions so that mistakes do not occur. Quality can only
be improved through preventive actions. The corrective action
resulting out of failure is only a post-mortem.
Nobody likes change: Changing anything in an organization is a
difficult task and requires tactful handling. The resistance to
change will eventually reduce. Quite often, the processes have to
be changed proactively by the top management in an adventurous
manner. Initial results of change might not be positive. But if
persisted, the subsequent results would convince the employees
that the change was for good.

Change is essential: An organization has to continuously change

for the better or else it will not progress. There should be an
Adventurous and bold change
ongoing rethinking and restructuring of the organization, so that
the organization is receptive to the needs of the customers.
Changes are required in a number of activities such as in the
process, machinery, materials, inventory control, methods of
carrying out an activity, inspection, and so on,

Three requirements of change and change management:

 Be adventurous –It is important that if an executive wants to
grow, he should be ambitious as far as the organization’s
improvement is concerned. Only ambition could lead to success.
Therefore, one should develop an adventurous attitude for the
larger good of the organization. Business process reengineering
(BPR) concept calls for adventurous decisions.
 Be bold – the other prerequisite for change management are
boldness, self-confidence or self-esteem. Boldness is very
essential for making bold decisions for improvement. It is the
basic requirement for making an efficient organization.
 Role of CEO for adventurous and bold change management
– Adventurous and bold change management depends on the
personal qualities of the CEO. The CEO should support
innovative change management initiated by his employees,
motivate and encourage his colleagues to change the unproductive
ways of the organization, and give them the confidence and
support till the successful completion of the initiative. Tom Peters
says, knowing when to retreat is as important as knowing when to
Do It Right The First Time concept was advocated by Philip
Crosby. This is a time-tested concept that employees and
organizations should adapt

Take Right Decisions: before making every business decision,

the leaders should carry out the following sequence of activities:
 Plan the decisions – weigh the pros and cons
 Foresee the impact of the decision on the organization
 Take opinion of the right people
 Involve the concerned employees who will be affected by the
 Implement the decision
 Persist

Why things are done wrong?

DIRFT – Do It Right The First Time
 The employee does not know what to do clearly, leave alone
how to do.
 If he knows how to do, he is not motivated enough to do it right
the first time.
 He may not have the right tools to do a good job.
 He does not have the necessary education or training to know
how to DIRFT
 Probably his seniors have trained him to do the wrong way
 He is not proud of the job he is doing
 He does not get appreciated when he does it right.

Problems of not doing it right

 In some cases, not doing it right the first time may result in not
doing it right ever thereafter.
 Leads to unnecessary expenditure
 Increases the failure costs
 Demotivates employees
 Causes hassle to employees and customers
 Brings down the reputation of the organization
 Leads to schedule slippages
 Increases scraps leading to more cost on account of storage,
accounting, disposal, etc.
 Forces the organization to buy additional components to take
care of defects in the process
 The productivity gets affected due to holding up of the process
to correct the defective product shunting from place to place for
fault diagnosis, altercation between employees as to who or which
machine caused the defect, wastage of supervisor’s time and the
top management’s time in resolving disputes.

Basic Requirements for DIRFT – the top management should

carry out the following for DIRFT to become a reality in the
organization. The top management should:
 Define the requirement for each employees
 Provide the wherewithal to achieve the requirement
 Keep on motivating and encouraging the employees

Right the first time and every time: “It” in DIRFT refers to
every activity in the organization. It is not only the making of the
final product or service, but also many things done by the
employees in the organization on a daily basis. They should only
do the right things – right first time and every time

Set right goals: It is essential for every organization to set the

right objectives towards which the organization should be
moving. As part of the TQM journey, an organization has to arrive
at a vision, mission and the goals. The statement containing the
goals should be concise but from that , the goals for each
employees or each team should be deducible.

Select right personnel: If a person is not suitable for the job, then
definitely it is going to be counter-productive. One bad employee
will spoil the rest. Therefore, it is important that the right
personnel is selected first time and every time.

Establish right processes: It is essential that an organization

establish a right process. A company has to necessarily invest
resources for identifying, establishing and commissioning the
right process. Training is essential for new employees for them to
know the right process. Documentation is one way of building
memory into the organization, helping the organization to update
the methods based on experience and serving as a basis for further

Choose durable raw materials: Right materials should be

selected from the right vendors. It should be ensured that the
vendors supply good quality raw materials which doesn’t call for
an inspection.

Choose right machinery: The process consist of people,

machinery, material, and methods, out of which machinery
generally is very expensive. Therefore, machinery should be
selected properly so that production can start from day one.
Corrective action is a post-mortem: Corrective action is the
registration and correction of defects and problems customers find
on a product or service that is offered or delivered by the
organization. A corrective action is merely a post-mortem. It does
not satisfy the customer. However, corrective action is better than
no action at all.

Continuous preventive action Prevention is better than cure: A manager has to be proactive,
i.e. should carry out all the tasks as per standards and foresee if
any problem is going to arise and prevent it.

One shot prevention is not good enough: Preventive actions

have to be continuous and should cut across all sections in the
organization. No organization can afford to stop after one or two
preventive actions.
The management should aim at scaling greater heights through
small and continuous improvement in every process.

Caring for small things: Every tool used, whether sophisticated

or small things, should be maintained properly, calibrated at
periodic intervals, and handled properly.

Care for little things and accumulate Communicate with junior employees: Junior employees are
gains also equally important in an organization. The senior management
should establish a channel of communication with the junior
employees in the organization.

Keep on accumulating: Small gains accrued due to conscious

initiatives by the management should be accumulated. These
small rewards will be more permanent than the bigger gains
attained all of a sudden.
Economic performance is a clear indicator of the health of the
Ensure economic performance organization. It motivates the customers to do business with the
organization that is doing well.
Importance of economic performance: The goal of an
organization should be higher Return on Investment (ROI), as
economic performance is one of the key measures of success of
every organization on their journey towards TQM.

Quality should increase productivity also: The establishment of

quality system leading to ISO 9000 certification, following TQM
principles, establishing strategies for TQM implementation, all
should lead to reduced defects, reduced rework, reduced hassles,
improved clarity in operations, thereby improving and increasing
productivity and profitability.

Talk about success in economic performance: There is no harm

in talking about their achievements and feeling proud of it.
Therefore, the CEO should talk about economic performance. It
will help him to motivate the employees and customers alike.

Stakeholders will understand economics better: The

motivation of employees depends upon many factors like their
personal development, happiness, sense of fulfillment, security,
achievement, etc. motivation goes up, when they find that the
organization is performing well.
Management by Wandering/Walking Around – It is a concept
postulated by Tom Peters as one of the most effective tools of
management and leadership for the growth of the organization. It
can be defined as an unannounced visit of the CEO to various
work spots for getting direct first-hand information from the
employees, the customers, and the supplier.

State visit – It is an announced visit by the CEO accompanied by

the by all the deputies in line and is a formal visit. The employees
or customers or suppliers may not reveal the absolute truth and
will try to play safe.
Management by Walking Around
Major activities done together simultaneously:
 Listening
 Teaching
 Facilitating

Barriers to practicing MBWA: MBWA appears to violate the

chain of command.

Advantages of MBWA:
 It helps the organizations to consolidate the talents, wisdom of
all the employees, customers and the suppliers.
 It helps the CEOs to remain touch with the people, customers
and suppliers
 It also gives the message to the customers, employees, suppliers
that they are important to the organization
 It helps in attracting more business, improving the quality of
suppliers, workmanship in the organization, and customer
Measuring for success primarily involves, looking for, measuring,
and analyzing the feedback from customers either internal or

Measure 3Ps: The parameters for measurement of success are:

process, personnel, and product.

PDSA for measurement – PDSA cycle popularized by Deming

is an important tool for any activity. It is more so for measuring
success, since it is a tricky affair and if not carried out
systematically, can lead to wrong conclusions and costly

Plan for measuring success: In a manufacturing organization,

the quality of the final product is the most important measure. In
a service organization however, it is difficult to measure the
quality of the end product objectively. Some of the common
measures for service industries are:
 Planned delivery time and actual delivery time
Measure for success  Repeat customers
 Perception of customers about quality
 Perception among customers about competitors
 Productivity
 Revenue generated per employee
 Revenue vs expenditure ratio
 Return on investment
 Customer complaints
 Rejects in process
 Rejects at customers site
 Rework
 Reminders given by customers
 Errors in invoices
 Under payment/ over payment
 Result of field survey

Do phase of measuring: At this stage, the identified measurements

should be carried out on a trial basis with direction from the
quality council.
Study phase of measuring: In this phase, the quality council could
check the effectiveness of the measure, the methods of
measurement, and the relationships of the measures with actual
customer satisfaction achieved. The correctness of measure
identified and the measurement process should be analyzed
objectively and independently in this phase.

Act phase of measurement: In this phase, the measures and

methods of measurements are confirmed. The organization starts
making measurements
The Tale of Tortoise and the Rabbit – It teaches the lesson that
one should never rest on past laurels, but continue to improve.
Slow and steady wins the race and overconfidence can lead to

The need to improve continuously: Two factors that contributes

to high turnovers or growth rates:
 Cutting down the costs by doing right things, right the first time
 A higher output of the motivated employees through extensive
Never rest on past laurels, continue training
to improve
Areas that can be improved upon:
 Improved system in the organization due to management based
on TQM
 Gaining more confidence due to achieving success
 Accumulation of the right experience and hence cutting down
lead time for jobs
 Enhanced productivity due to improvement in teamwork
Empowered employees expanding output due to enthusiasm and
Vertical integration – It means that whatever subunits,
components/materials, fixtures, etc. needed for manufacturing a
product are all manufactured by the same organization

Build a virtual organization Requirements for virtual enterprise:

 Identify the most critical parts
 Identify the other part
 Develop/identify vendors for the other parts
 Continuously increase sub-contracting