ACES TAGUM COLLEGE

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Tagum City, 8100, Philippines
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Email Address: [email protected]

SCHOOL OF
ACCOUNTANCY, BUSINESS AND MANAGEMENT
Summer S.Y. 2021-2022

MODULE 2

ABM 2 – ORGANIZATION & MANAGEMENT

Name: ________________________________________ Date: ___________________

Year/Course: __________________________________ Week: ___________________
 LESSON 1: QUALITY MANAGEMENT

To be successful in today's business environment, organizations must my attention to quality. Indeed, one of the most
important developments of recent years is a renewed attention to the concept of “quality, also dubbed “total quality
management" or “total quality control.”
DEFINING QUALITY

“What is quality education?” A simple enough question but one that is difficult to answer. A quality education depends
on what your objectives are and what you are going" to do with the education. For example, a quality education will differ
depending on whether you want to get a management position at a small business or a PhD in Business Management.
Defining a quality, education depends on the stake you have in the institution that provides the education, whether you
are a professor, student, administrator, or a company that hires students and graduates. In addition, a definition of
quality education must recognize that any education is a part of a system. Quality in some part of the system may be fine
(facilities, library, classroom), but poorer quality in other parts of the system may still lead to a reduction in the overall
quality of the education (mediocre instruction, poor showing in the national government board examination, admission
policies, students).

Quality is a complex concept that has become one of the most universally appealing in all management theory. A quality
is truly afoot in business today. While this Concern with quality has historical roots, suffice to say that every business
today wants to have quality products and services, and by that they mean products and services that are better than
average, perform to the level needed, and are affordable.

Marshall Sashkin and Kenneth Riser (1993) defined quality based on Deming’s philosophy of quality.
Total Quality Management (TQM) means that the organization’s culture is defined by and supports the constant
attainment of customer satisfaction through an integrated system of tools, techniques, and training. This involves the
continuous improvement of organizational processes, resulting in high quality products and services.
Many people perceive attention to quality as one of the most important competitive issue of today and tomorrow. In fact,
quality may be one of the most important ways a manager can add value to product and services to set them apart from
those of a competitor. At one time, managers believed that there was an inevitable trade—off between productivity and
quality. They thought that the two were diametrically opposed—that increasing one meant decreasing the other. Today,
however, effective managers consider productivity and quality as two sides of the same coin—one that can increase profits
and builds customer loyalty.
A HISTORY OF QUALITY
Most scholars argue that a turning point in the history of quality occurred in Japan after World War II. Japanese industry
was completely destroyed and had to be rebuilt from the ground floor. A number of Americans went to Japan and helped
the Japanese build and operate modern manufacturing facilities. As one of those early Americans, Homer Sarasohn taught
the Japanese how to use statistics in manufacturing processes. In his own words, “My conception of all of this is that
what exists is a system... You’re not looking at one factory… you’re looking at a system, the input of which is your design,
the purpose for which you want this item to exist, and everything that it takes to get the customer and place that item in
his hands to his satisfaction (Dobins and Crawford, 1991, p. 14).

PROPONENTS OF QUALITY MANAGEMENT

W. EDWARDS DEMING
W. Edwards Deming is widely acknowledged for his contributions to the reemergence of post-war Japan. Deming went to
Japan in 1950 and lectured on the statistical process control technique that had been invented by William Shewhart, a
friend of Deming's, and others at Bell Laboratories. Ironically, few American manufacturing took Shewhart’s theories very
seriously. The ideas behind statistical process control are very simple.

STATISTICAL PROCESS CONTROL

This refers to the methods of measuring variation and continuously improving work processes before the final inspection
stage to prevent the production of flawed products. The point of using statistical quality charts is to give workers and
managers the information that they need to correct problems in the processes that lead to costly mistakes. With greater
sophistication in quality management, you would very likely take a further step and make improvements in the process
JOSEPH JURAN

At roughly the same time another American, Joseph Juran, also went to Japan, Juran had also worked with William
Shewhart and was involved with developing the concepts of statistical process control (Dobyns and Crawford, 1991). Some
Japanese industrial leaders used his book, The Quality Control Handbook, and invited him to Japan in 1954. While
Juran’s ideas are close to Deming’s, the two disagree on the amount of change management approach necessary to create
a total quality system. Deming believes that the focus on quality requires nothing short of a revolution and provides a
philosophy for guiding a big change effort. Juran believes that the change to quality can happen much like other shifts
within a company-that is, using the current framework for organizational decisions and actions. For instance, he describes
a “quality trilogy” of quality planning, quality control, and quality improvement and shows how they are like financial
planning, financial control, and profit improvement—processes very familiar to managers (Juran, 1986); Juran
acknowledges that managing for quality is not easy and requires important changes, but he does not believe it requires
as great a managerial effort as Deming considered necessary.
 KAORU ISHIKAWA
While the work of Deming and Juran was important in systematizing ideas about quality and applying them to the
rebuilding of the industrial base in Japan, many Japanese leaders also played key roles. Kaoru Ishikawa, for example,
made a series of important contributions to his native Japan (Dobyns and Crawford, 1991, pp. 76-83). He is recognized
for contributing to the emergence of quality circles, where workers meet to discuss suggestions for improvements. Many
American-companies initiated quality circles with hopes of emulating Japanese manufacturing success they failed to
understand, however, that much of the Japanese success with quality circles occurred because managers learned over
time to take the worker’s suggestions seriously and to allow them to be implemented. Many U.S. firms also failed to realize
that quality circles did not emerge until the workers and managers had been trained in quality management tools and
philosophy.
Another contribution of Ishikawa was his emphasis on focusing the total quality efforts on customers. He went so far as
to suggest that the output of one department be given to another department as if they were customers. Such an approach
fostered more intense communication and an attitude of service from one department to another, rather than the
bureaucratic attitude of making one’s own department look good at the expense of others. In fact, Motorola’s quality
program reflected the spirit of Ishikawa’s cooperative approach to quality.

DEMING’s FOURTEEN POINTS

We listed Deming's fourteen point system of thinking about quality management in Lesson 1. In this section, we will
discuss these fourteen points in content. Deming believed that to try for quality in everything that an organization does
requires a change in philosophy. Consequently, it is useful to look back at his system as a total and encompassing
philosophy of management.

1. CREATE CONSTANCY OF PURPOSE FOR IMPROVEMENT OF PRODUCT AND SERVICE. Deming argues that
management must maintain an unwavering commitment to quality and shift its focus from the short terms
to the long term. Quality, not profit, should lie at the heart of the organization’s purpose. According to
Deming, profit is a consequence that naturally follows when an organization targets quality.

2. ADOPT THE NEW PHILOSOPHY. According to Deming, the recognition that we are in a new era in which ever
increasing quality is necessary for corporate survival is based on "maintaining a constancy of purpose.
Management must reject inferior materials, poor workmanship, defective products, and slack service. It is
not enough that defects are minimized; they should be eliminated. The traditional system should be
dismantled and replaced. The new culture must be supported by all employees, and should reflect
commitment to quality.

3. CEASE DEPENDENCE ON MASS INSPECTION. Deming recognizes that once errors occur, efficiency and effectiveness
have already been lost. Mass inspection to catch errors after they have occurred therefore need to be replaced
 by building in quality from the start. Continuous process improvement reduces costs incurred when errors
are made and then corrected. The completion of high quality products also enhances employee Satisfaction,
because it enables employees to feel a sense of accomplishment and enables them to take pride in their
work—no one enjoys producing junk.
4. END THE PRACTICE OF AWARDING BUSINESS ON PRICE TAG ALONE. Deming encourages companies to end
adversarial relationships with their suppliers, and instead develop long-term relationships with them. He
argued that price is not relevant until it is linked to a measure of the quality being purchased. Statistical
tools are very important in enabling companies to evaluate the quality of vendors and purchased parts. He
urges companies to improve relationships with suppliers by developing partnerships based on trust with
single sources. Procter and Gamble used the single-source method to improve quality. Batches of the
company’s experimental drugs must be determined to be free of microbiological contamination before they
can be released for use in clinical studies. The service is performed by independent contractors. Before
instituting total quality management.
5. CONSTANTLY AND FOREVER IMPROVE THE SYSTEM OF PRODUCTION AND SERVICE. According to Deming,
management’s obligation to seek out methods for quality improvement is never-ending. He believes that
improvement follows from studying the process itself, not the defects and that the process improvement is
the responsibility of management. In this regard, the recent focus on corporate reengineering is consistent
with Deming’s technique.

6. INSTITUTE MODERN METHODS OF TRAINING ON THE JOB. In Deming’s eyes, training encompasses more than
merely teaching employees how to use tools, such as statistical quality control, for improving quality.
Training also translates into making sure that workers get adequate knowledge and skills for the jobs for
which they are responsible. PAL, MERALCO, Smart and Globe are built on this ideas.
7. INSTITUTE LEADERSHIP. The traditional actions of supervisors are not adequate, says Deming. He contends that
supervisors merely tell workers what to do and make sure they do it. They administer rewards and penalties,
and provide discipline when necessary. They do not see their jobs as providing leadership. Leaders, on the
other hand, begin with the assumption that workers aim to the best job they can, and endeavor to help
workers reach their full potential. For lower-level managers, this entails coaching and arranging for training.
Top managers must, in turn, help design and implement a strategic vision that grounds a TQM culture, and
make sure their own behavior exhibits the values that support such a culture.

8. DRIVE OUT FEAR. It is important to Deming that fear not prevent employees from being able to ask questions, report
problems, or express ideas. Employees must feel secure in order for quality to be pursued successfully in
the workplace. A culture of openness where people are not afraid of telling the truth remains essential.
Driving out fear of speaking up can have an ethical component. Many analysts are recommending that,
 especially in these competitive times, Open communication of ethical standards — and decisive action that
reinforces those standards — is needed to communicate a company commitment to ethics that involves
openness.

9. BREAK DOWN BARRIERS BETWEEN STAFF AREAS. Deming considers the barriers between functional
departments to be counterproductive. Employees can improve productivity by learning from one another
and coordinating efforts, regardless of their functional expertise. The tendency of traditional organizational
structures is to encourage competition between departments. According to Deming, employees recognize
that regardless of their expertise, they all share the same overriding goals. Competition should be with other
organizations, not within their own.

10. ELIMINATE SLOGANS, EXHORTATIONS, AND TARGETS FOR THE WORKFORCE. Continual improvement as a
general goal, says Deming, should replace supposedly motivational or inspirational signs, slogans, and the
like. He criticizes companies that attempt to motivate employees through speakers and inspirational tracts,
for it merely frustrates employees to be encouraged to do things the existing management system prevents
them from doing.

11. ELIMINATE NUMERICAL QUOTAS. Deming advocates the removal of quotas, because they end up encouraging
people to focus on quantity at the expense of quality. Companies should focus on quality issues instead of
blindly pursuing numbers. Singapore Airlines relies on high service quality to grow profits. It is actually
competing head to head with KLM, one of the world’s best airlines. Focusing on quality, not quantity enables
the company to attract profitable, full-fare business fliers. For more than ten years, revenues of Singapore
Airlines have grown 20 % higher than any other Asian airlines.

12. REMOVE BARRIERS TO PRIDE OF WORKMANSHIP. Deming maintains that annual rating or merit system should
be eliminated. If people inherently want to perform well, as Deming assumes, then they do not need such
incentive systems. What they need is assistance in overcoming obstacles imposed by inadequacies in
materials, equipment, and training. Systems that endeavor to remove such obstacles should replace systems
that attempt to coerce performance by making workers feel that they are always being judged, ranked, and
rated.

13. INSTITUTE A VIGOROUS PROGRAM OF EDUCATION AND TRAINING. Deming emphasizes training. This includes
a thorough foundation in the tools and techniques of quality Control, as well as additional instruction in
teamwork and the philosophy of a TQM culture.

14. TAKE ACTION TO ACCOMPLISH THE TRANSFORMATION. According to Deming, the entire organization must
work together to enable a quality culture to succeed. As top managers design and implement the strategy
workers can then cooperate in the pursuit of a TQM culture.
TQM: THE MAIN IDEAS
While Deming, Juran and others, have specific, detailed approaches to TQM, five main ideas provide the context for these
approaches and seem to apply to any TQM method (Stoner. Freeman. Gilbert Jr. 1995. p. 221). The five are:

1. A Systems Approach 4. The Role of Management

2. The Tools of TQM 5. Employees Participation

3. A Focus on Customers

A Systems Approach

The TQM approach depends on understanding organizations as systems. Dobyns and Crawford (1991) delineate
three main systems for which managers are responsible: the social or cultural system, the managerial system, and the
technical system. (See Table 5.1)

Table 5.1- The Three Systems for Which Managers Are Responsible

THE MANAGERIAL SYSTEM THE SOCIAL SYSTEM THE TECHNICAL SYSTEM

 Managerial diagnosis  Symbols  Tools and Equipment

 Managing and checking points  Rewards
 Policy deployment  Recognition
 Cross functional management  Customer is next in line
 Goal setting  Privilege

A system is “a series of functions or activities... within an organization that work together for the aim of the organization.”
(Dobyns and Crawford, 1991). Parts of the system must work to support each other. People must cooperate for the good
of the whole system or else “suboptimization” occurs. When parts of an organization do not support other parts, then the
organization cannot focus on total quality management. A task of management involves having everyone focus on the
system aim.
The cultural system, also referred to as the social system, is the set of beliefs and the resulting behaviors that are shared
throughout the organization. Some companies begin to implement their quality initiatives by trying to change the cultural
system.
 The technical system is “composed of such factors as the technologies used and the physical infrastructure ‘(including
ergonomic considerations, computer software, and hardware configurations, and the capital investments needed to
accomplish the company’s mission (Spechler, 1993).

The management system defines the effectiveness of those processes by which an organization manages its human and
physical assets (Spechler, 1993). Continuous quality improvement and worker empowerment translate into smaller, not
larger, quality departments. The responsibility for improving quality is given to everyone from workers on the factory floor
to senior executives. Total Quality Management requires that workers incorporate attention to quality at every step in the
manufacturing process and that managers seek out root causes of variations.

The Tools of TQM

1. Fishbone Diagram or Cause-and-effect diagram. This was popularized by Kaoru Ishikawa. It is a way of
diagramming how various factors determine a good or bad outcome. It helps to show possible causes of a problem.

2. Benchmarking. Another tool of TQM is benchmarking, or comparing your own products and processes against the
very best in the world. Benchmarking enables companies to cut manufacturing costs in half and reduce in —process
inventories by two-thirds. It is also possible that by benchmarking, service labor costs could be reduced and substantially
raided the productivity rate of its distribution organization. Managerial
System
Managerial Diagnosis
Managing and Checking Points
Cross Functional Management
Goal Setting

Social
System
Symbols
Rewards
Recognition
Customer is next in line
Privilege

Technical
System
Tools and Techniques
The Three Systems for Which Managers Are Responsible
THE ROLE OF MANAGEMENT
TQM implies that when there is a quality problem it begins in the boardroom and in the offices of the senior managers
and others who do not take quality seriously enough. For instance, Deming believes that until the system that is the
cause of a particular failure in quality can be identified, management cannot do its job. It is every manager’s job to seek
out and correct the causes of failure, rather than merely identity failures after they occur and affix blame to someone.

EMPLOYEE PARTICIPATION

Having the support and attention of senior management remains a necessary condition for making TQM work in an
organization, but without empowered employees it won’t go very far. Empowerment stands for substantial change that
businesses are implementing. It means letting employees make decisions at all levels of an organization without asking
for approval from managers. The idea is quite simple: the people, who actually do a job whether it is running a complex
machine or providing a simple service, are in the best position to learn how to do that job the best way. Therefore, when
there is chance to improve the job or the systems of which a job is a part, people should make those Improvements without
asking for permission.
SUMMARY:

1. Quality has become a factor that organizations can no longer ignore. Managers today are aiming for Total Quality
Management, which occurs when an entire organizational culture becomes focused on quality and customer
satisfaction through an integrated system of tools, techniques, and trainings.

2. Deming's fourteen points provide an all-encompassing framework for guiding management's pursuit of quality.

3. Top management commitment and leadership are necessary to attain and sustain revolutionary rates of quality
improvement.

4. Benchmarking and focusing on customers are two important things managers can do to increase quality.

Abelos, A., Aguinalde, L., Dela Cruz, R.B., Dalusong, M. (2006). ORGANIZATION AND MANAGEMENT (2006 Edition): Educational Publishing House