The Quality Management theories have been essentially popular during the past century. The need for effective strategies in management is obvious, concerning any company. The issue becomes even more significant when we start speaking about the quality of the products and services that the company has been lately producing. One may argue about the effectiveness of one or other theory of management, however, from my point of view, the best identification of company’s success is the reputation of its product’s or services’ quality. I strongly support the view that management of the company permanently has to be in the process of investigation of current external and internal situations for the company. Management also needs to be constantly concerned about ways to improve sales, customer satisfaction, and employees’ effectiveness.
If management performs their functions correctly, the employees are going to be eager to show high performance, the quality of the product is going to be high, demand for it is going to rise, sales will grow, and customers are going to be satisfied. For the purpose of achieving the goal of effective work of the company, there were developed several theories for the Quality Management. These theories have been tried on practice and proved to be either effective (and received wide popularity among the strategists), or turned out to be ineffective and left the business environment together with those who have been testing them.
Along this research paper I am going to speak about some theories and theorists of the quality management. I am also going to show on the example of existing company how one of the quality theories management implementation can potentially assist the company in achieving further improvement.
The concept of quality management has identified in its definition several “gurus” who have been shaping it during the past century. First of all I would like to clear out the term “guru” that I am going to be using along this essay frequently. In our case guru – is one of the major contributors to the quality management. Among most famous gurus there are: W. Edwards Deming, Joseph M. Juran, Philip M. Crosby, and some others. Theories for the quality management suggested by these individuals have proved to be the most effective in the business world. Besides, their ideas were found to be innovative, compared to what has been available before, and therefore, they are viewed as geniuses or in other words, gurus in their field of studies and research.
In spite of the fact, that there were a number of quality management gurus, two most prominent are considered to be Edwards Deming and Joseph M. Juran. They both have been famous for contributing significantly to the development of Japanese economy with the help of their view on quality management. Deming has introduced to the world his four concepts of quality management: appreciation for a system, theory of variation, theory of knowledge and psychology; together with his fourteen points of successful management. His theory was practiced by such famous companies as General Motors, Ford, and Toyota. Marshal industries and Gallery Furnitures are still using Deming Management Method.
Deming theory claims that the primary role of management is to remove the barriers that prevent the firm from showing high quality performance. He also believes that workers should participate in the process of decision-making. According to Deming the fundamental goal that needs to be sought to ensure the improvement of the product – is improvement of the working process.
Juran, in his turn, supports the idea that the problems that management faces are resulted from the errors of human element. His main suggestion for solution of the quality management problem is providing training to all levels of management. Juran believes that there is a need to train management in quality concepts, use of quality circles for improvement of employee communication crosswise.
From my point of view, the best effect in the Quality management can be achieved if these two views are used in combination. In the first case we possess a wonderful set of prescribed rules for achieving success. The second [Juran’s] view emphasizes the necessity for constant education of all levels of management. But since I have to choose just one approach, I am going to use Deming Theory for my example.
For the research I have decided to choose somewhat unusual type of analysis. I am going to provide the analysis of the European Audit company KPMG, which operates globally. I will analyze its performance both globally, and particularly in the CIS countries. Below is some general information about the company:
Company’s key operations:
KPMG characterizes itself as a global network of professional firms providing Audit, Tax and Advisory services. (Official site of KPMG Company <http://kpmg.com/about/index.asp>)The company provides its services in 144 countries.
KPMG Company is considered to be one of the largest companies in their industry, and in many countries of the world it is considered prestigious to work for the business. At the same time, the situation with company’s operations is not as perfect as it looks from the first glance, especially in the countries of CIS.
Quality ‘wastes’ or other issues that the company is currently or potentially facing:
KPMG Company has adopted a sophisticated management system. When an employee decides to work for the company – he has a certain hierarchy of positions, which he has to go through in order to be promoted. There is a possibility that the person will receive “double” promotion, however there is still not many examples when the young person has been promoted to some top management position due to his professional qualities before doing “what he is supposed to be doing” for several years. Certainly his ideas are going to be considered, but what is the point of expressing them if you are not going to get any credit for it except for “thank you” from you supervisor, who you are supposed to turn to, when you have some thoughts regarding the company, or problems.
Another important issue that is left unseen by the management of the company, which currently takes place in the countries of CIS, is the following. After the breakdown of the Soviet Union, the economic systems of the countries have been experiencing a constant change. The demand for the quality auditing and advisory services is growing constantly in those countries, and this allows such companies as KPMG to increase the number of clients there. At the same time, due to the fact that potential employees posses a low level of knowledge in the field of the company’s operations, the firm was forced to spend money for educating them, which is a positive thing. KPMG has added three entry positions for CIS auditors that required mechanic work and good learning abilities. After 3-5 years the newcomer is expected to pass the ACCA exam and then enter the management position, if he succeeds. The ACCA education process is provided by the company.
The problem occurs, however in several facts. Due to the conservatism, both in CIS and Western World, the company often looses smart people, who are not eager to spend years before they would be allowed to implement their decisions themselves and participate in the strategic planning of the path of the company. In the CIS countries there is one more problem. Due to the fact that the standards of living there are rather low, and salaries, that the companies like KPMG suggest are above average, people are often ready to sacrifice additional time and resources in order to keep the job. At the same time, as I mentioned earlier the market for KPMG services in CIS is constantly growing. The company’s problem is that instead of hiring new people they attempt to put more work on those who are already present. Employees work overtime under pressure, however internally they are “encouraged” to be “nice” and not to record their overtimes. Besides, in CIS countries the company is not paying for overtime work. The level of social rights education and legal system that protects the workers in these countries is quite low. As a result, the company gets unsatisfied employees, whose work is driven by fear. Consequently the quality of the service is falling. The quality is suffering also due to the fact that people physically are not able to do so much work well. Another issue that contributes to the fall of the quality is that those who are working more effectively then others are not financially encouraged, but rather are given a greater amount of work. That leads to the fact that people are leaving the company right after receiving ACCA, or even earlier.
Deming Management Method could be helping in solving all these problems. Here is my vision of how some of the 14 points of Deming Method are going to be helpful for this company:
- Create constancy of purpose for improving products and services: There is a strong need for the company to ensure that the services that they suggest are corresponding to the highest standards, and that firm’s internal policies stimulate it.
- Adopt new philosophy: From my point of view, this is one of the most important points that must be considered by the top management of the company. The company needs to change philosophy of conservatism. It is necessary to extract as much benefit from the potential of every employee as possible. An example: the young employee has arrived to the company. His performance is higher then the performance of people working in the company for several years, he has leading potential and is able to see the strategy that could improve company’s work. The proper actions toward this person are: suggestion of the promotion, and increase in salary. Otherwise the person is likely to leave, if he realizes that in order to implement his potential he will need to wait for another 10 years.
- Stop dependence on inspection to achieve quality: It is more significant to make sure that there are professionals working for you, than using a system of checking the same set of documents on every level from Audit Assistant to the Partner.
- Improve constantly and forever every process for planning, production and service. In the case with KPMG Company it could be helpful to adopt the system of payment based on the project performance. For example if there is a team of four people auditing the object, where a half of work was done by one person, he should be paid for this project more, then the rest.
- Adopt and institute leadership: it is important to spot employees, who have excellent leadership skills and provide them with opportunities and financial interest to perform them. An example from the second point could also be applicable for this point.
- Drive out fear: there is no need to fear that elimination of conservative system will lead to less efficiency. Experience has proved the opposite.
- Break down barriers between staff areas: In order to be able to see real leaders in the company, there is a necessity to encourage less formality among top and beginning positions in the corporation. Otherwise there is a threat that a supervisor of the real leader is going to be promoted for someone else’s achievements.
- Eliminate slogans, exhortations and targets for the workforce: the financial stimulation together with respectful treatment has proved to be the best stimulation for effective performance in the world of business. KPMG Company lacks it.
- Put everybody in the company to work accomplishing the transformation. I am not sure whether this needs any comments. In relevance to KPMG Company it is simply necessary to stimulate all the points suggested above among all workers.
I have provided only 9 points instead of fourteen, since I find them most relevant for this particular company. Certainly attempts to implement suggested approach will come across certain barriers. Main preventions of suggested strategy are going to be people who are not eager to carry responsibility for their own actions, from my point of view.
Official Site of KPMG. February 9, 2006 retrieved from: <http://kpmg.com/index.asp >.
Deming, W. Edwards. Quality, Productivity, and Competitive Position, MIT Center for Advanced Engineering Study, Cambridge, MA, 1982.
Juran, Joseph M. Juran’s Leadership for Quality, An Executive Handook, N.Y Freepress, 1989.
Lavigne, Marie. The Economics of Transition: From Socialist Economy to Market Economy. 2nd ed. (1999). Palgrave Macmillan.
Summers, Donna C.S. Quality Management: Creating and Sustaining Organizational Effectiveness. (2004). Prentice Hall.
Goetsh, David L.; Davis, Stanley B. Quality Management: Introduction to Total Quality Management for Production, Processing, and Services. 4th ed. (2002). Prentice Hall.
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