The Impact Of Total Quality Management (TQM) On Productivity (A Case Study Of Union Bank, Auchi)

Project and Seminar Material for Business Administration and Management BAM

The Impact Of Total Quality Management (TQM) On Productivity (A Case Study Of Union Bank, Auchi)


Abstract


This study is an attempt to examine the Impact of Total Quality Management (TQM) on organizational productivity, A Case Study of Union Bank Auchi. The research further focuses on the approach adopted by organizations that has implemented the concept and the rate of success achieved. These is a prove that effective TQM implementation can improve their competitive abilities and provide strategic advantages in the market place. The effects of not participating in TQM implementation by all management levels, challenges disrupting the TQM implement in an organization and failure to organize frequent employee training have been a big problem. This research work tries to ascertain the impact of TQM implementation in the organization, level of management involvement, challenges disrupting the implementation, impact of employee training and TQM principles application to goal attainment. It is through the questionnaire method and oral interview that data are collected from aforementioned organization.

References were made to journals, related books, internet and magazines when writing this project. The aforementioned organization agreed that TQM have impact in organizational productivity. It is not all management levels in Union Bank contribute in TQM implementation. The failure to organize frequent employee training have been a major setback to their organization, while some management challenges disrupt TQM implementation in the organization. They should engage in frequent employee training in order to increase the level of individual and organizational competence.

All management levels should join hands in TQM implementation so that quality will be attained. Researches can be made for further information on all related textbooks from foreign country.


Table of Content


Chapter One:

Introduction

  • 1.1 Background of the Study
  • 1.2 Statement of the Problem
  • 1.3 Purpose of the Study
  • 1.4 Objectives of the Study
  • 1.5 Research Questions
  • 1.6 Research Hypotheses
  • 1.7 Significance of the Study
  • 1.8 Scope of the Study
  • 1.9 Limitation of the Study
  • 1.10 Definitions of Terms
  • 1.11 Organization of the Study

Chapter Two:

Review of Related Literature

  • 2.1 Conceptual Review
  • 2.2 Theoretical Review
  • 2.3 Empirical Review

Chapter Three:

Research Methodology

  • 3.1 Research Design
  • 3.2 Sources of Data
  • 3.3 Area of Study
  • 3.4 Population of Study
  • 3.5 Sample and Sample Procedures
  • 3.6 Instruments of Data Collection
  • 3.7 Validity of Instruments
  • 3.8 Reliability of Instrument
  • 3.9 Methods of Data Collection
  • 3.10 Methods of Data Analysis
  • 3.11 Ethical Consideration

Chapter Four:

Data Analysis and Result Presentation

  • 4.1 Data Presentation
  • 4.2 Answering Research Questions
  • 4.3 Testing of Hypothesis

Chapter Five:

Summary of Findings, Conclusion and Recommendations

  • 5.1 Summary of Findings
  • 5.2 Conclusion
  • 5.3 Recommendation
  • REFERENCES
  • APPENDIX

Chapter One


Introduction

1.1 Background of the Study

Total Quality Management (TQM) has become a world-wide topic in the twenty-first century. Having its roots partly in the USA and partly in Japan, it was primarily adopted by some Japanese companies in the decades immediately after world war II with the greater successes of Japanese companies during the 1980s.

Companies all over the world found that it was necessary to have good quality management practices in order to stay competitive (Lagrosen, 2002). Total Quality Management is an enhancement of the traditional way of doing business. It is a proven technique to guarantee survival in world competition. Only by changing the actions of management will the culture and actions of an entire organization be transformed. Total quality management (TQM) as a management approach of an organization is centred on quality based on the participation of all its members and aiming at long term success. This is achieved through customer satisfaction and benefits to all members of the organization and society.

In other words, TQM is a philosophy for managing an organization in a way, which enables it to meet stakeholders need and expectations efficiently and effectively without compromising ethical values (ISO, 8404, 1994). TQM has been widely implemented throughout the world. Many firms have arrived at the conclusion that effective TQM implementation can improve their competitive abilities and provide strategic advantages in the market place. (Anderson, Fornell & Lehmann, 1994) several studies have shown that the adoption of TQM practices can allow firms to compete globally (Easton, 1993), (Ernst and Young, 1996; Womack & Roos, 1990). Several researchers also reported that TQM implementation has led to improvements in quality, productivity and competitiveness in only 20 – 30% of the firms that have implemented it (Benson, 1993). According to a survey of manufacturing firms in Georgia, the benefits of TQM are improved quality, employee participation, teamwork, working relationship, customer satisfaction, employee, satisfaction, productivity, communication, profitability and market share (Dale, Zairi, Vanfder Wiele & Williams, 2000).

A study conducted by Rategan (1992) indicated that a 90% improvement rate in employee relations, operating procedures, customer satisfaction, and financial performance is achieved due to TQM implementation. However, Burrows (1992) reported a 95% failure rate for initiated TQM implementation programs; Eskildson (1994), Tomow and Wiley (1991) reported that TQM implementation has uncertain or even negative effects on performance. Longenecker and Scazzero (1993) indicated that achieving high product quality and pursuing successful TQM implementation are highly dependent on top management support.

Total quality management is seen as a holistic approach to managing project. It includes continuous improvement, training and re-training of staff, customers satisfaction, top management support, defect-free product at first attempt, elimination of rework, cost effectiveness etc.

Haris and McCaffer (2002) stated that total quality management consists of all activities that managers perform to improve their quality and policy such as quality planning, quality control, quality assurance and quality improvement. It is a process of getting assurance and quality rid of poor quality from production rather than getting rid of poor quality products. Total quality management (TQM) is a philosophy that involves everyone in an organization in continual efforts to improve quality and achieve customers’ satisfaction.

Continuous improvement is the philosophy that seeks to make never ending improvements to the process of converting inputs into outputs. The three key philosophies in TQM according to Telsang (2004) are;

  • Continuous improvement is never-ending push to improve.
  • Involvement of everyone in the organization goal of customers satisfaction.
  • Constant training of employees on the methods and concepts of quality.

According to Bamiscile (2004), quality can be measured by clearly laid down requirements Newlove (1987) and Pateman (2004) used the concept of conformity with requirement as the definition of quality in productive organization. All team members who perform quality functions should endeavour to produce quality products at first attempt. This will ensure clients satisfaction and save cost for rework. Quality affects all aspects of the organization and has dramatic cost implications. The most obvious consequence occurs when poor quality creates dissatisfied customers and eventually leads to loss of business.


1.2 Statement of the Problem

New competitive strategies have ruptured established management doctrines and rendered conventional methods or products/services development and delivery obsolete. Competition has become so high in all fronts that the time is now when organizations will only survive by making a difference. This is the reason John Young, president of Hwelett – Packard once said “in order to compete in a global economy, our products, systems and services must be of a higher quality than our competition increased expectation and demands on the part of customers in every area of organizational life have taken the centre stage.

The days are gone when organizations could rest on their Laurels and claim to hold franchise to best quality products and services. The continually wave of technological and environmental change have turned several organizations into bystanders on the road to the future and have made their structures, processes and skill become progressively less attained to the ever-changing realities of the demands and expectations of present day customers.

While the rule of the game today in all industry segments is continuous improvement of processes, systems and skills, many organizations do not possess a keen sense of urgency required to reinvent the needs of the current business model. Quality improvement and service delivery is still seen by many organizations today not as a way of survival but as optional extras. Even on occasions where a good number of organizations attempt improvement efforts.


1.3 Purpose of the Study

The purpose of the Study is to evaluate the impact of total quality management (TQM) on productivity


1.4 Objectives of the Study

  1. To ascertain the impact of TQM in Union Bank.
  2. To ascertain the level of managements involvement in TQM implementation.
  3. To determine the challenges disrupting TQM implementation in Union Bank.
  4. To access the impact of employee training in the achievement of quality.
  5. To investigate if the application of TQM principles in Union Bank has led to the significant success of their project.

1.5 Research Questions

  1. Do TQM implementation affect the organizational productivity.
  2. In what ways (if any) does all management level involvement in TQM implementation affect productivity in Union Bank.
  3. Do some challenges disrupt the TQM implementation in the Organization.
  4. In what ways does the failure to organize frequent TQM implementation.
  5. In what ways does the failure to apply all TQM principles during its implementation affect the organization.

1.6 Research Hypotheses

It is in consideration of the problems stated above and the objective of the studied environment that the researcher propounded the following hypotheses.

  1. Ho: The implementation of TQM in the organization have no impact in the organizational productivity?
    Hi: The implementation of TQM have impact in the organizational productivity.
  2. Ho: Failure of all the management levels to participate in TQM implementation have no side effect on organizational productivity.
    Hi: Failure of all the management levels of participate in TQM implementation have side effect on organizational productivity
  3. Ho: There are no challenges disrupting implementation in the organization
    HI: There are challenges disrupting implementation in the organization.
  4. Ho: The failure to organize frequent employees training have no effect in the TQM implementation.
    HI: The failure to organize frequent employee training have affect in the TQM implementation.
  5. Ho: Failure to apply all TQM principle during its implementation does not affect the organization.
    Hi: The failure to apply all TQM principles during its implementation, affects the organization.,

1.7 Significance of the Study

These research work will help management/organizations to understand the new definition of total quality management (TQM) and its importance in competitive industries. TQM is not only important to Union Bank but to all organizations in the areas of purchasing, manufacturing, product service, and marketing. Total quality management (TQM) affects purchasing, manufacturing, product service and marketing. These study is significant in many aspects the benefits are:

  1. Economic Improvement (In the form of reduced operating costs and loses).
  2. Customer Satisfaction (Especially regarding product quality, service and design).
  3. Increases employee morale.

Total quality management (TQM) encourages innovation, makes the organization adaptable to change, motivates people for better quality and integrates the business arising out of a common purpose and all these provide the organization with valuable and distinctive competitive edge.

It would also enable management, especially the management of Union Bank Plc to create an environment in which the quality of service and their products will be the vision and concern of not only the production quality department but of every staff of the organizations.


1.8 Scope of the Study

This study is intended to focus on the impact of total quality management in organizational productivity with particular reference to Nigerian Breweries Plc, Union Bank Edo where the goal is not only to enhance customer satisfaction but also to manage the business effectively. With a view to finding out the level of success recorded in their organization as a result of total quality management (TQM) implementation.


1.9 Limitation of the Study

The difficulty in obtaining information from Nigerian brewery, poly road Edo was the major limitation of
the study. The questionnaire was administered on a hundred and sixty-eight (168) and only one hundred and forty employees responded. The unavailability of some organizational document equally was a set back to this work.
The limited time available within my disposal also posed a major handicap on the proper execution of the research paper. Their workers were usually on a shifting schedule, there by making it difficult for me to meet those that were supposed to issue me with vital information.


1.10 Definitions of Terms

Process

Any interrelated group of work activities that receives inputs from supplier and blends resources to transform and add value to the inputs in order to produce a product or service to meet customers’ needs and expectations.

Quality

The extent to which a product satisfies the customers.

Total Quality Management

It is a comprehensive and structured approach to organizational management that seeks to improve the quality of products and services through ongoing requirements in response to continuous feedback.

Quality Delivery

All activities engaged in an organization process aimed at delivery quality products and services to customers.

Quality Function Deployment

A structured and disciplined process of identifying the requirements of customer for process realignment and product or services re-design.

System

In an organization, the functions and activities that work together to fulfil the purpose of the organization.
Total Quality The culture of an organization where continuous improvement is integrated into all activities.


1.10 Organization of the Study

This study is divided into five chapters.

  • Chapter one is introduction which consists of the background to the study, statement of problem, research questions, research hypotheses, objectives of the study, the significance of the study, the scope and limitations of the study and finally the organization of the study.
  • Chapter two deals with the literature review which consists of the conceptual literature, theoretical literature, empirical literature, theoretical framework.
  • Chapter three gives the research methodology including research design, population of study, sample size, sampling technique, method of data collection, instrument of data analysis, method of data analysis, validity/reliability of instrument.
  • Chapter four is presentation and analysis of data, discussion of findings.
  • Chapter five gives the summary, conclusion and recommendations.

Chapter Five


Summary of Findings, Conclusion and Recommendations

5.1 Summary of Findings

Based on the analysis made after the data have been presented in a logical and sequential manner, the following findings were made;

  1. The aforementioned organization agreed that implementation of TQM have an impact in the organizational productivity.
  2. The failure of all management levels involvement in Total Quality Management (TQM) implementation affect productivity in Union Bank. Not all their management levels are involved in TQM implementation.
  3. Some management challenges disrupt the TQM implementation in the Organization.
  4. The failure to organize frequent employee training affects the TQM implementation effectively in Union Bank.
  5. The failure to apply all TQM principles during implementation affect the organization.

5.2 Conclusion

  1. The increase in demand of quality products and sophistication of customers have virtually re-written the rules of competition and forced organizations to focus on quality.
  2. All management levels involvement in the implementation of TQM in an organization increases cohesive teamwork, effective communication and quality attainment and other things.
  3. Management challenges disrupting the TQM implementation should be tackled by the management team and not by individual alone.
  4. Frequent employee training will help management in various ways like,
    • It will help in acquisition of new knowledge and technology that will aid better performance in the organization.
    • It will help increase the level of individual and organizational competence.
    • It will help to reconcile the gap between what should happen and what is happening between desired targets or standards and actual level of work performance.
    • To improve quality
  5. Application of all TQM principles is necessary in the TQM implementation.

5.3 Recommendation

  1. Organization should see TQM as a continuous project which should not be ignored.
  2. Management at all levels should join hand in the implementation of TQM in the organization in order to achieve their goal target and satisfy its customers.
  3. All management challenges should be treated by teams of the employees and not be individual self solution.
  4. Union Bank organization should engage in frequent employee training in order to foster its quality attainment.
  5. All the TQM principles must be implemented in order to achieve organizational goal targets.

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