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Impact of Total Quality Management on customer satisfaction and Retention

Executive summary

Total quality management is a method which states that, every employee working in an

organisation should work for the long-term success of the organisation. In TQM practices can

be implemented with right leadership and team work. Aim of an organisation is to customer

satisfaction and retention and in that regards companies implement TQM practices. Most of

the preceding studies were undertaken with different situations and aspects, the present study

focuses on the impacts of TQM practices on the customer’s retention and satisfaction in the

UK.
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Table of Contents

1. Introduction ............................................................................................................................ 5

1.1 Quality Management Practices and Customer Retention ................................................. 6

1.2 Rationale........................................................................................................................... 6

1.3 Objective of the study ...................................................................................................... 7

1.4 Research questions ........................................................................................................... 7

2. Literature review .................................................................................................................... 7

2.1 Impact of Total Quality Management on Customer Satisfaction ..................................... 9

2.2 Impact of Total Quality Management on Customer Retention ........................................ 9

3. Research Methodology ........................................................................................................ 10

3.1 Introduction .................................................................................................................... 10

3.2 Research Design ............................................................................................................. 10

3.2 Data collection method................................................................................................... 11

3.4 Ethical consideration ...................................................................................................... 11

4. Reference ............................................................................................................................. 12
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1. Introduction

Total quality management is a system that focuses on every employee working in an

organisation to work and commit in order to achieve company's high standards. The main

objective of any organisation is to satisfy their potential customers and in that regard, TQM

plays a critical role. TQM practices are accelerated in the past few years by the effects of

globalisation and an increase in trading activities (Noe et al., 2017). Nowadays, in a stiff

competitive environment, the demands of customers have increased towards more affordable

and high-quality products. The main reason for the change in customers demand is

globalisation, and it has been given precedence by many developing countries with an idea to

achieve and compete in the international market environment. TQM is one of the main

driving force for high-quality services and products (Owusu and Duah, 2018).

Industrialisation and globalisation have pushed organisations to focus more on TQM

management in order to cope with the dynamic expectations and competition that demand

efficient and quality products. The current study aims to analyse the effects of TQM practices

in the UK on customer’s satisfaction and retention ratio.

Total quality management is essential in today's global market to keep an eye on

management and employees to achieve long-term goals and objectives. Two main objectives

apart from the company's own benefits are customer satisfaction and customer retention, and

in order to achieve them, firms try to enforce TQM practices within the organisation. External

and internal satisfaction and retention of customers are the main objectives of the company's,

and that will determine how long the company will stay in the market and compete (Sila,

2018). According to Androwis et al. (2018), the TQM practices involve a complete change of

culture within an organisation, and aiming towards more goal-oriented changes and meet and

even exceed customer retention and satisfaction. Similarly (Honarpour,2018) states that TQM

practices help a company to set up new boundaries for the employees to achieve which keeps
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them motivated and helps the organisation to equip with techniques and tools that help them

to attain quality products and long-term growth. Likewise, a study on the impacts of quality

management on client preservation and gratification in the UK will contribute massively to

improving management practices in the country.

Total quality management practices are applied worldwide to attain competitive

advantage and better management and financial performance in the market, which leads to

customer satisfaction and retention. According to (Rizescu and Bucata, 2017), management

practices in organisations must be implemented to ensure managerial efficiency, effective

management practices and overall improve organisational structure. Organisations which

implement TQM practices in organisations are likely to get more satisfied and loyal

customers.

1.1 Quality Management Practices and Customer Retention

Customer retention and satisfaction are the primary reasons why companies adopt strict

management practices within organisations. Evaluating the quality of product and services

and how satisfied customers are with the product is all about customer retention, and the

organisations are adopting customer retention strategies to attain long-term growth

(Santouridis and Veraki, 2017). In today's dynamic environment, companies operate in high

stiff competition that surrounds emerging technologies in such environment organisations are

forced to change their complete structure to sustain and better operate their business. In that

regards, organisations try to evaluate customers’ expectations and need and then apply certain

TQM practices to achieve customer loyalty.

1.2 Rationale

The study focuses on the impacts of TQM practices on customer's satisfaction and retention.

In the new competitive market environment, a need to develop strong quality management

within an organisation is vital to achieving competitive advantage and long-term success

(Jarrett, 2015). In general, quality management practices are mostly implemented in macro

organisations, and no study has been done on micro or SMEs in the UK. The current study

will examine the effects of quality management practices on customer retention and

satisfaction in SMEs working in the UK.

1.3 Objective of the study

 To examine the effects of TQM practices on customer satisfaction

 To analyse the impacts of TQM practices in customer retention

 To determine the factors which affect TQM practices in organisations

1.4 Research questions

 What is the impact of TQM practices on customer retention?

 What is the impact of TQM practices on customer satisfaction?

 What are the factors which can affect TQM practices in an organisation?

2. Literature review

The current chapter will examine the impacts of TQM practices on customer satisfaction and

retention by revisiting previous studies and it will provide a detail examination of QM

practices around the globe and how it affects customer’s retention and satisfaction.

Quality of products and services is every organisation’s objective, and this objective

is achieved by applying diverse TQM practices. The primary purpose is to build teamwork,

and TQM stresses on solving and building organisation with joint effort "two heads are better

than one". Joint effort or team can play a critical part in the success of an organisation, and a

team can be effective only if management practices within the company are strong, and it

leads to consumer satisfaction and retention.

2.1 Total Quality Management

With the growing competition, every organisation and firm wants to adopt new

strategies and techniques in order to be different from other firms. The TQM tool is important
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to achieve success and continuous improvements within the organisation and company. It’s a

process where all the employees participate equally and work together to achieve aims and

objectives (Fu et al., 2015). Overall, TQM has eight key principals which are essential for

companies who want to adopt management practices. Customer focus is the most critical and

important part of quality management practice, for example, McDonald's is the prime

example of focusing more on customer satisfaction to develop competitive advantage; they

make sure that food is cooked properly and in the given time (Dugmore and Wang, 2018).

Customer satisfaction is their ultimate goal, and they achieved it by implementing strong

quality management practices. The second principle which was effectively implemented by

McDonald's is employee involvement; the employees cover their hands and head to ensure

hygiene and quality, and they work in groups that show teamwork. The current study will

examine the impacts of quality management of customer satisfaction in the UK SMEs.

According to Qasrawi (2017), TQM practices are important and they are executing in

order to secure long-term benefits of an organisation. It is a concept that helps to manage

employees and operations to gain customer retention and satisfaction. With TQM practices, a

key factor for long-term sustainability is an effective leadership, in the presence of both the

features the company can aim for a longer stay in the domestic and international market. The

framework of TQM is comprised of participation of all the employees and staff in the

betterment of the organisation. Total quality management has two important components,

customer satisfaction and continuous improvement, and for continuous improvement TQM

practices are necessary and organisations should implement Plan-Do-Study-Act technique for

continuous improvement in the future.

2.2 Impact of Total Quality Management on Customer Satisfaction

Total quality management practices in organisations are vital in achieving customer's

satisfaction, and the topic has gained significant attention over the past few years among

researchers. Management practices in the organisation allow employees to work together and

in teams to provide better experiences to the customers. According to a survey by ISO 9000,

organisations have started to understand the importance of management practices within the

organisations (Psomas and Jaca, 2016). Organisations which have implemented such

practices have attained considerable customer satisfaction over the years. Similarly, the

implementation of TQM practices in organisations leads to overall quality improvement in

terms of operations and management that increase customer satisfaction. The current study

will focus on the small multinational enterprises working in the UK to analyse the barriers

they have faced in implementing management practices and similarly, to examine the impacts

on management practices on customer retention and satisfaction.

2.3 Impact of Total Quality Management on Customer Retention

The main goal of any organisation is to achieve profits, and long-term success and customers

are the topmost priority of every organisation to achieve such objectives. Similarly, in the

past few years, customer retention has been the ultimate goal of business entities. According

to (Rahimi and Kozak, 2017), there is a significant relationship between customer retention

and performance. The customer retention defines how a company is going to perform in the

future; the company’s profits can increases substantially up to 30% if they focus more on

increasing customer retention. The current study will analyse the impacts of TQM practices

on customer retention by analysing what customers want and how their priorities change

according to the services they get.

2.4 Employees Involvement in Executing Quality Management Practices

The employees of an organisation are important to execute quality management

practices properly and making accurate decisions. Therefore, employee's involvements in

quality management practices are vital where they obtain new knowledge and skills and

motivated and encouraged employees leads to employee's satisfaction and retention.

Likewise, the future of organisations depends on TQM practices, and it is on a key factor in

providing customer satisfaction and retention. Such practices will allow employees to

understand the organisational structure and employees will also contribute in a systematic

way for a better supplier and customer relationship.

3. Research Methodology

3.1 Introduction

The current chapter will examine the research method opted for the study to answer the

research questions. The next section focuses on the data collection technique that is

questionnaires.

3.2 Research Design

The study research design is based on the qualitative method, as it will help to analyses the

situation in detail. Considering the research objectives and questions of the study, the

research method adopted for the study is completely reliable and aligned.

In order to conduct the study, primary data approach will be used to achieve the study

objectives and to answer the research questions. Generally, there are two types of techniques

primary data and secondary data, the present study has selected primary data techniques as it

help to gather raw data that helps to attain the best results from the data (Dooley, 2001).

Similarly, it will also help to collect the data as per the demand of the current study

objectives.
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3.2 Data collection method

To study the dynamic of TQM practices in an organisation, the study has selected Kano's

two-dimensional questionnaires as a study collection technique. The main objective to choose

the Kano's questionnaire is that it will help to analyse the two different aspects; firstly it will

help to analyse how the customers will react and feel if a particular service is provided by the

firm and secondly, their reaction if that service is not offered by the firm. The questionnaire

will help to analyse the behaviour of customer towards the total quality management of firms

and their impacts on customer's retention and satisfaction. Similarly, the data will be analyses

by using SPSS version 20. The customer satisfaction method was adopted to identify the

relationship between dependent and independent variables. Questionnaires will be distributed

among the managers and customers in order to examine the relationship.

3.4 Ethical consideration

The present study has followed all the ethical standards and examined everything under the

law. Respondents of the study participated willingly, and they were not forced. The consent

form was signed by every contestant who participated, and meanwhile, the transparency and

anonymity were ensured (Blumberg, Cooper and Schindler, 2014).

4. Reference

Androwis, N., Sweis, R.J., Tarhini, A., Moarefi, A. and Hosseini Amiri, M., 2018. Total

quality management practices and organizational performance in the construction

chemicals companies in Jordan. Benchmarking: An International Journal, 25(8),

pp.3180-3205.

Blumberg, B.F., Cooper, D.R. and Schindler, P.S., 2014. Business research methods.

McGraw- hill education.

Dugmore, P. and Wang, Y., 2018, September. Product Design in Food Industry-A

McDonald’s Case. In International Workshop of Advanced Manufacturing and

Automation (pp. 448-452). Springer, Singapore

Dooley, K., 2001. Social research methods. In 4 th ed. Upper Saddle River, NJ.

Fu, S.L., Chou, S.Y., Chen, C.K. and Wang, C.W., 2015. Assessment and cultivation of total

quality management organisational culture–an empirical investigation. Total Quality

Management & Business Excellence, 26(1-2), pp.123-139.

Honarpour, A., Jusoh, A. and Md Nor, K., 2018. Total quality management, knowledge

management, and innovation: an empirical study in R&D units. Total Quality

Management & Business Excellence, 29(7-8), pp.798-816.

Jarrett, J.E., 2015. Total quality management (TQM) movement in public

health. International journal of quality & reliability management.

Noe, R.A., Hollenbeck, J.R., Gerhart, B. and Wright, P.M., 2017. Human resource

management: Gaining a competitive advantage. New York, NY: McGraw-Hill

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Owusu, P.A. and Duah, H.K., 2018. Evaluating total quality management as a competitive

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Qasrawi, B.T., Almahamid, S.M. and Qasrawi, S.T., 2017. The impact of TQM practices and

KM processes on organisational performance: An empirical

investigation. International Journal of Quality & Reliability Management, 34(7),

pp.1034-1055.

Rizescu, A.M. and Bucata, G., 2017. Factors influencing sustained managerial

efficiency. journal of defense resources management, 8(1), pp.149-157.

Santouridis, I. and Veraki, A., 2017. Customer relationship management and customer

satisfaction: the mediating role of relationship quality. Total Quality Management &

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Sila, I., 2018. Country and sector effects on the relationships among TQM practices and key

performance measures. International Journal of Productivity and Performance

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Rahimi, R. and Kozak, M., 2017. Impact of customer relationship management on customer

satisfaction: The case of a budget hotel chain. Journal of Travel & Tourism

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Psomas, E.L. and Jaca, C., 2016. The impact of total quality management on service

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