The Impact of Total Quality Management Practices on Organizational Performance

ABSTRACT

Total Quality Management (TQM) is a management approach for an organization centred on quality, based on the participation of all its members and aiming at long term success through customer satisfaction and benefits to all members of the organization and to society .This research work therefore aimed at assessing the TQM practices and its effect on organizational performance at Cameroon Development Cooperation (CDC). The company needs to find ways to surviving in the increasing competitive market and TQM as a strategic Management tool can be used for improving the competitiveness, effectiveness and flexibility of the whole organization. A population of 20 workers comprising both senior and junior staff was used for the study. Due to the relatively small number of workers at CDC the whole population was used for the study. Primary data for this research was collected using a well-designed and structured questionnaire which was made up of both close ended and open ended questions. The key findings showed that CDC is practicing TQM but it is yet to implement it to the highest level of subscribing to a quality award system. The implementation of TQM is at the quality assurance level. It was found out that management inactions undermined leadership commitment to quality and rendered TQM practices ineffective. It was concluded that there was the need to procure modern equipment to boost production. Again the firm needs to diversify key portfolio in order to spread the overhead cost. Management must work to build trust amongst staff to improve on team work. It is also recommended that the company subscribe to a quality award system.

CHAPTER ONE

INTRODUCTION

Background to the study

The history of quality management can be traced all the way back to the middle ages. Work completed by journeymen and apprentices were evaluated and inspected by the skilled worker to ensure that quality standards were met in all aspects of the finished product, ensuring satisfaction of the buyer. And while the history of quality management has gone through a number of changes since that time, the end goal is still the same.

In the globalisation era, quality is the most important element of competitive source in every company or industry.  The fastest change in the competitive business environment is to drive many enterprises to create the ability to win the competition in the domestic and international market. Today, in order to still exist in a market place, companies should adopt and implement the management best practices in operation management, which is: total quality management (TQM) and supply chain management. (Heizer and render, 2004). These practices can help organisation to identify change in the dynamic environment and to respond proactively through continuous improvement activity in operation functions to achieve best performance (chase et al., 2005).

One form of best management practices in the company is total quality management (TQM). Since the early 1980’s TQM has received the most attention from the managers, because it can help managers to improve the company performance. Total quality management (TQM) is a new paradigm in doing business. TQM attempts to maximize the competitiveness of the organization through focus on customer satisfaction, employee involvement, and continuous improvement of the quality of products, services, people, processes and organisational environment (Krajewski et al., 2003).

Implementation of TQM has a positive impact on revenue and production costs (Gaspersz, 2005). Other evidence also suggests that companies that pursue best practices of TQM will achieve higher profits and shareholder value as well as greater cash flows (Corbett and Rastrick, 2000).

Performance measurement is an important factor for effective management. The evidence suggests that without performing a measurement of the performance, managers are very difficult to fix performance. Therefore, improving the organisations performance should begin from identification of some variables that influence performance and measure it accurately. Measurement of quality performance is essential for many organisations in order to achieve both operational efficiency and optimal business performance (Demirbag et al., 2006).

Organisational performance can be measured in two dimensions, namely operational performance or quality performance and organisational performance. Operating performance reflects the performance of the internal operations in terms of cost and waste reduction, product quality improvement, new product development, delivery performance improvement, and increased productivity. Indicators and variables are considered as a major factor because they follow directly from the actions taken in the company’s operations, while the performance of an organisation is measured by financial measures such as revenue growth, net income, the ratio of profit to revenue and return on assets (ROA), and non-financial measures such as investment in research and development and the capacity of companies to develop a competitive profile (Brah and Lim, 2006).

Based on the description above, the purpose of the study are to analyse the effect of practices of total quality management (TQM) to product quality performance based on product/operation managers in the CDC processing palm at Mundony South West region Cameroon.

1.2 statement of the problem

It seems that challenges in improving the performance in competition era are continuous improvement of business activities which focus on customers, flexibility and quality. Therefore, the management of quality should be done by companies in order to increase their market share and to gain competitive advantage. Companies couldn’t be able to manage the change would be decline gradually in marketplace.

Irrespective of the fact that the implementation of TQM is becoming very popular in our society today, not all processing companies have found it easy to successfully implement and manage this program (Tata et al. 1999). While some firms are unable to correlate their organisational operations to the kind of TQM programs most appropriate in its functioning, a few who do choose the appropriate ones are unable to sustain them. This shortcoming is partly due to the fact that, these companies fail to assess the role of TQM in influencing sales. Given that sales is the foundation for measuring growth in any institution, it is necessary for companies to place importance on TQM. Sales figures are bound to fall when there is inappropriate quality management of the production channel. This affects sales in that the value chain of production is the direct determinant of the sales price. Hence when total quality management is not implemented in the organisation, sales eventually drop.

Again, total quality management leads to effective cost control. However, when cost is not controlled, the expected results as determined by sales may not be realised.

Further, total quality management is ignored, product quality falls which will lead to a reduction in the sales volume of the institutions. However, it appears TQM does not influence sales solely as there are some interwoven factors that play to influence the level of sales in all companies. Having therefore the problem of different interwoven factors built up to form the determining factor of sales, it is apparent that TQM has a relatively greater influence on sales. With this, it is incumbent therefore in this research to be preoccupied amongst other factors the effectiveness of total quality management on sales in CDC.

1.2.1 Research question

This studies sick to investigate the effectiveness of TQM on sales.

• What are the activities performed by CDC that make up the TQM concept?
• To what extent does TQM relate to the sales of CDC palm production unit?

1.3 Research objectives

The objectives of this study are too;

• Examine the activities performed by CDC that make up the TQM concept.
• Access the extent to which TQM relate to the sales of CDC palm production unit?
• Make recommendations based on the findings of the study

1.4 Hypotheses

This study therefore will be guided by the following hypothesis. This will assist us check into the relationship between the independent variable and the dependent variable.

• H₀: total quality management has no influence on sales
• H₁: total quality management has an influence on sales

1.5 significance of the study

The importance of this research work is to contribute to the method of enhancing performance in processing firms through the process of total quality management.

It is hoped that by discovering efficient ways and methods for improving performance, the organisation will make maximum use of its resources and spared of wastages. Practically, this piece of work is to provide business operators with the knowledge of making TQM a top priority in their organization. Processing, manufacturing and service companies as well as stakeholders, students and other researchers will be beneficiaries to this piece of work.

From the fore going, the research will attempt to make recommendations to the management of CDC, the manufacturing and service sector just like the processing company is a major beneficiary to this piece of work. 

Another major area of significance of this study will be to the major stakeholders of CDC which will include it consumers, the local population, employees and the government. Through the application of the results of TQM concept, the consumers will benefit from a high quality performance product at affordable prices. Given that TQM is a new concept that gives support to the entire organisation, it application provide a better means that does not only gives a product high quality but also provide a faster means that eliminate waste and reduce cost of production. In this light, the customers benefit from a low cost product and enjoy a high quality product.

In another dimension, the concept of TQM takes in to consideration the interest of   the local community. This piece of work through it application will make surjection’s that will enable the corporation to be corporate socially responsible. By so doing, the local population will be able to live well in a health and friendly environment. This work will also attempt to make recommendations to the management on the provision of some basic social amenities that are absent in the area but useful to the local communities.