The Impact Of Total Quality Management On Organizational Profitability

Project and Seminar Material for Business Administration and Management BAM

The Impact Of Total Quality Management On Organizational Profitability


This study came to investigate the impact of Total Quality management (TQM) practices and strategies on organizational profitability. TQM is defined as a strategy that essentially aimed to establish and deliver high quality products and services that cover all customers’ demands and achieve a high level of customer satisfaction. This research discusses the implementation of total quality management in JJK IN Lagos and explores the relationship between the effective implementation and organizational performance. TQM in Nigeria was implemented in three categories of implementation methods which are; quality control, quality assurance and continuous improvement. The findings indicate that TQM has two organizational performances, either is TQM practices effect the organizational performance, or it hinders organizations to achieve their goals in which this will negatively affect the organizational performance.

Chapter One

1.0 Introduction

This chapter will would discuss the intricacies of this project work ranging from background of the study, statement of problem, objective of the study, research questions, research hypothesis, significance of the study, scope and limitation etc.

1.1 Background of the Study

Total quality management, which is the elixir for management success all over the world. In particular, it has helped to uplift the Asian economic from grass to grace. TQM as the current “Bride” of management which must be reckoned with by all entrepreneurs who value profitability, effectiveness, employee loyalty, sustainable growth and development as well as continued existence and relevance.

Total quality management advocates doing the right things right at first attempt so as to gain and retain the confidence of customer who is the ultimate appraiser of an organization performance.

Total quality management is a systematic way of guaranteeing that all activities within an organisation happen the way they have been planned in order to meet the defined needs of customers and clients. The emphasis is on involving everyone in the organisation in activities, which provide the continuous improvement, and for achieving sustained high levels of quality performance.

It is a customer focused performance, tool which can be applied to any type of organisation. It balances the diverse elements of business (leadership, strategic planning, human resources development and management, work processes, management information system, external customers, employees and stake holders) and aligns them to achieve excellent result.

Therefore, to understand the nature of this revolutionary management tool that secure for us committed practitioners phenomenal business benefits and organisation excellence. It is therefore, suffice to say that owning to the fact that T.Q.M. is tailored towards customer oriented performance enhancing tool and its sustainable growth and continuous strive to improve upon services at all times, that is why it is embraced whole heartedly by Jkk ltd.

Total quality management has increasingly becomes a key management issue in several organisation. Apart from valuable benefits being derived from various quality improvement projects, the introduction of T.QM has had significant impact on both the company’s operation and employees. There has been, for example a noticeable improvement in inter-fictional co-operation and teamwork. This has resulted from mutual appreciation and understanding of the objectives of interface between different functions.

In future, it is expected that TQM will play an increasingly important role not only in the achievement of corporate business objectives but also in realizing the organisation’s vision of the world’s leading company. We must therefore embark on business improvement efforts which are geared towards the achievement of these stated goals.

1.2 Statement of Problem

The relevance of TQM in business operation in Nigeria at this crucial period cannot be ignored.

This research study is therefore designed to identify.

  1. The working apparatus of TQM.
  2. How it works.
  3. Why it is a “bride” of management
  4. What are the pitfalls of TQM

1.3 Objective of the Study

The objective of this research, project is to appraise critically the impact of total quality management on organisation profitability especially to service industries like JKK with a view to examining whether the practice of TQM concept will evolve positive change in the industry motioned and how this can be achieved.

1.4 Research Question

  1. Is TQM necessary cost reduction?
  2. Whether there is any relationship between TQM and customer loyalty
  3. Does TQM has impart on company profitability.
  4. Does it worth management effort.

1.5 Research Hypotheses

H1: That introduction of total quality management leads to reduction in cost of services provided.

H2: That there is a significance relationship between total quality management and customer loyalty in the bank.

H3: That proper implementation of total quality management would boost employees morale and hence high returns and profitability.

1.7 Significance of the Study

The study is necessary especially now that we are in the era of sophisticated business environment, in which customer are a must to satisfy.

1.7 Scope and Limitation

It is impossible to discuss in details on the whole concept of TQM in business organizations in Nigeria due to lack of time and limited funds to cover some area of study coupled with lack of co-operation of some personnel in getting some materials to be used for this research works, hence this research work would have covered a wider areas.

However, in order to effect on empirical analysis of the research and also for convenience sake, the scope of study will be limited to JKK Ltd. Occasional, however, in the course of carrying out the research information will be sought from all those who are in one way or the other stake holders in the organisation.

1.8 Definition of Term

1. TQM:

Total quality management is a connection link between various arms of the organization that allows unhindered and efficient operation

Chapter Five

Summary, Conclusion and Recommendation

5.1 Summary of Findings

Based on the analysis carried out, the following findings were revealed

  1. There is a significant relationship between TQM and organizational profitability.
  2. Most staffs of JJK PLC, Lagos are not conversant with the concept of TQM.
  3. There is a relationship between Top Management Commitment and support and organizational profitability in JJK PLC Lagos state.
  4. There is significant relationship between total employee involvement and organizational profitability in JJK PLC Lagos State.
  5. The researcher also discovered that education and training of the employees do improve the quality of services at JJK PLC Lagos State.
  6. There is significant relationship between employee’s continuous training and organizational profitability inJJK PLC Lagos State.

5.2 Concluding

The study provided and analyzed relevant data on Total Quality Management and organizational profitability a study of JJK PLC Ama. It concludes that TQM has a positive, although relatively high impact on the performance of JJK PLC Ama. The research also concludes that external influences like the business environment can limit the operation of TQM in JJK PLC Lagos. However, modern Accounting techniques such as Enterprise Resource Planning (ERP), Just in Time (JIT), and Activity Based Costing (ABC) could also be considered as an alternate concept that would increase organizational profitability.

Finally, this researcher concludes that based on past research works, a TQM program will be more effective in increasing the profitability, reducing cost through waste removal and increasing organizations revenue in Nigeria.

5.3 Recommendations

Based on the findings, it was recommended that organizations not just breweries should devote more attention to waste removal and zero inventory through the practice of just in time system of production. Also, TQM should be spread through training of every organization employees and above all, the Leadership of JJK and other organization should be committed to TQM.

Standard organization of Nigeria (SON), which is the apex regulatory body for standard products in Nigeria, should issue standard guidelines to all industries in the country and these should be a pointer to core areas of quality improvement of brewery products. The body should inspect breweries plants from time to time through impromptu visits to ensure adequate facilities are put in place and that quality of products and sustainable development are not jeopardized.

Finally, regulatory bodies in Nigeria should encourage all industries operating in the country to practice Total Quality Management. Government at all levels should also put in place the necessary facilities such as power and transportation to enhance effective delivery of services.

From the above the researcher made the following recommendations

  1. Periodic training should be organized by the management of the company, to equip the employees with the knowledge of quality improvement techniques.
  2. Stipulated measures should be put in place on how materials for production would be selected.
  3. The management should spell out standards of their products, so as to ensure that any product that is below standard would be improved upon by their correction measure.

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