The Relationships between Organizational Culture and Operational Performance - Essay Example

?Aim of the Paper In this paper, an article from the International Journal of Operations and Production Management will be analyzed. The of the article, which will be analyzed, is ‘The Relationships between Organizational Culture, Total Quality Management Practices and Operational Performance’. The article describes the association between three main components of an organization, which include organizational culture, total quality management practices, and operational performance. The data used for the research was obtained from 364 companies and organizations belonging to the services and manufacturing industries of Australia. Total Quality Management Before going into the discussion regarding total quality management, let us get a better understanding of what quality actually is and why is it important for a company to integrate the element of quality in all of the business processes. Quality means to achieve excellence the business processes, such as, product manufacturing and provision of services to the customers. Any organization or a company can satisfy the stakeholders and the customers only if it provides them with quality in the products and services that they use. Quality is the key to organizational success as it leads the companies towards market domination. “Quality should be aimed at total customer satisfaction with the product or service you are selling” (Jacowski, 2010). Quality also means to seek continuous improvement in the products and services that are manufactured by any organization. Two important aspects of quality include quality control and quality assurance. Quality control is a process, which is employed in order to ensure the required level of excellence and quality in a product or service delivered by a company. Quality assurance, on the other hand, is a process in which products manufactured by a company are checked for quality in every stage in order to know whether those products meet customers’ expectations or not. If we talk about total quality management, we can say that it is implemented in a company to ensure that the products and services delivered by the company to the customers meet the quality standards. It is an integrated organization-wide philosophy, which aims to provide continuous improvement to the quality of the products and services in order to make them productive for a company. Total quality management practices should be based on some established quality standards, such as, ISO 9000 series and ISO 9001 series. The companies using TQM approach believe in the importance of knowledge for organization’s success. TQM makes use of employees’ knowledge to create innovative and high quality products for the customers. Talking about total quality management, we can say that it acts as the foundation for an organization’s success because without implementation of an effective quality management system, no organization can be able to manufacture premium quality products. The role of people in TQM is to put every effort in the development of high quality products in order to increase customer satisfaction. Employees and the management staff of a company put mutual efforts for achieving goals and objectives of the company. One of the main requirements of implementing quality standards is the establishment of measurable objectives by the company, which adopts any specific series of quality standards. Another requirement is that employees of a company should feel their responsibility and should know how to achieve the goals and objectives related to quality set by the managers of the company. For example, ISO 9000: 2000 requires quality to be the first priority for every employee working for any organization. According to the ISO 9000:2000 standards, for any product, managers should first identify the product requirements by analyzing the demands of the customers, analyzing basic and essential requirements of the product, analyzing statutory and legal regulations regarding the product, and determining any additional requirements related to the product. Companies using TQM approach for carrying out business activities, establish effective relationships with the suppliers. Such companies give priority to the quality of products over anything else and want their suppliers to provide them with quality raw material. When a company does not integrate the philosophy of total quality management in its business operations, it puts an adverse impact on the growth and development of the company. If a company wants to attract a large number of customers towards its products and services, it needs to deliver quality to the customers. The targets of competitive advantage and customer satisfaction can only be achieved if a company integrates the philosophy of total quality management into its business processes. Total quality management helps a company achieve many benefits, such as, increased sales, improved productivity, positive effect on investment, and increased market share. If we talk about ISO 9000:2000, we can say that there are such guidelines present in this series of quality standard that can provide a company with a comprehensive model of quality management. There are many advantages of implementing quality management system in a company. Some of those advantages include increased level of customer satisfaction and their retention, reduced audits and enhanced mode of marketing, increased level of profits for the company, and increased level of productivity. These advantages prove to be very beneficial for a company because they not only help a company increase the level of productivity and profits but also help the company attracting more customers. It is because when a company delivers quality products and services in the market, the customers do not think of going to some other company. The difference between total quality management practices and traditional management practices in relation with the management systems is that in TQM, all employees of a company play their role in improving quality of the products and efficiency of the company in order to achieve long-term success through customer satisfaction. “TQM takes into account all quality measures taken at all levels and involving all company employees” (Murray, 2010). TQM philosophy guides both managers and employees to make their efforts to improve the business processes and policies. On the other hand, if we talk about traditional management practices, we can say that the management staff practicing tradition management is more focused towards bringing improvement in the business processes whereas the customer side is often ignored or given less attention by the managers. The philosophy of TQM views organizational structure as a single unit whereas traditional management views organizational structure as different units working independently to achieve their respective goals. TQM gives importance to collective efforts to reach organizational goals and objectives whereas in traditional management practices, managers and views all departments as different units of the organization and do not want to take ideas of employees in making any kind of policy. Customers are the main focal pint of TQM. Kanji (1995) found that TQM believes in total customer focus (p. 591). The companies using TQM approach mainly emphasize on customers because the managers of such companies think customers as the foundation of the organizational success. Hardt (2011) states, “It typically requires every person in the organization to be focused on the customer and the service or product that the customer receives”. For example, in healthcare organizations in Australia, doctors provide high quality services to the patients in order to provide them with satisfaction and relief. TQM is the focus of this article. Whole research revolves around the two main objectives. First objective was to examine the characteristics of the organizational culture, which are most closely associated with the TQM practices. Whereas he second objective was to highlight the importance of organizational culture in improving operational performance of a company. Association between TQM and Organizational Culture Although TQM and organizational culture are two different philosophies, but there exists a close relationship between TQM practices and organizational culture. TQM practices represent organizational culture whereas the culture within an organization is more embedded with the organizational beliefs and experiences. Ashraf (n.d.) states, “Organizational culture is a concept developed by researchers to explain the values, psychology, attitudes, beliefs and experiences of an organization”. Organizational culture is a very broad aspect of a company whereas TQM is just a part of that organizational culture which provides a suitable environment to the managers to implement TQM practices. “It is unlikely that the implementation of one specific management practice such as TQM would have a substantial impact on an organizations’ culture” (Baird, Hu, & Reeve, 2011). Australia. Organizational culture influences the way people interact with each other within an organization. If we talk about the level of association between TQM practices and organizational culture, we can say that TQM is influenced by the culture of an organization rather than influencing the organization. Organizational culture promotes TQM practices, such as, quality data and reporting, product/service design, supplier quality management, and process management. Findings of the research show that in Australia, all of these practices play their roles in improving the levels of productivity and profitability of a company. Business units that are more focused towards improving the quality of products and services to gain competitive advantage over competitors make substantial use of TQM to enhance quality performance. Such business units implement TQM practices to improve customer experience. However, implementation of TQM practices is not possible without the support of the organizational culture. Organizational culture provides such environment to the managers, which facilitates them in the implementation of TQM practices in the company. Implementation of TQM practices also requires the employees to use statistical process control methods and conduct cause and effect analysis in order to be prepared to implement TQM (Baird, Hu, & Reeve, 2011). Innovation, teamwork, and attention to detail are some of the core dimensions of organizational culture that are closely related to the use of TQM practices in a company. Organizations and companies which are more innovative and team-oriented in nature make great use of TQM practices in order to attain a better place in the market through providing the customers with premium quality products and services. If the culture of a manufacturing organization promotes use of TQM practices, then every employee working for the organization needs to concentrate on quality in all manufacturing processes in order to make the organization achieve customer satisfaction and higher levels of productivity and profitability. Association between Operational Performance and TQM Practices The second objective of the research was to understand the level of association that exists between TQM practices and the operational performance. Operational performance is the actual performance of a company, which can be measured against some specific standards. The role of TQM practices in improving operational performance of a company is very important. Each of the TQM practices, which include, quality data and reporting, product/service design, supplier quality management, and process management play their roles in improving a company’s operational performance. Quality Data and Reporting Quality data and reporting is one of the most important practices of TQM, which really improve operational performance of a company. The core activities of this practice include collection of quality data and provision pf correct information top the concerned departments for quality improvement purposes. In Australia, companies tend to concentrate on meeting some specific quality standards in order to get ISO certification. Quality data and reporting is positively related to two other practices of TQM, which include supplier quality management and product/service design. However, there is no direct association between the practices of process management and quality data and reporting. Supplier Quality Management Supplier quality management involves parallel growth with the suppliers and development of strong relationships with the suppliers. A small supplier base ensures quality of raw material as compared to a large supplier base. Small supplier base not only improves quality of the products but also enhances product/service design. Supplier quality management is positively related to all other TQM practices. Strong relationships with the suppliers play a critical role in proper management of all manufacturing processes. Supplier quality management helps a company make efficient use of all the available raw material by reducing waste and improving process management. Moreover, supplier quality management also helps a company manage the inventory in a proper manner by getting quality stock on time by the suppliers and manufacturing the products to meet the customers’ demands on time. Product/Service Design This TQM practice includes customers’ expectations and suggestions in the process of product design and development. Customer involvement in the product development process of a company enhances product quality and the features of the newly developed products, which result in generating high sales for the company. Engaging customers in the product development process improves product’s image in the market whereas engaging marketers in the development process ensures marketability of a product. Product/service design is positively related to two other TQM practices, which include quality performance and process management. Process Management This TQM practice concentrates on reducing variations in manufacturing processes and ensuring stabilization of the manufacturing schedules. Francois (n.d.) states, “Process management is a series of techniques, skills, tools, and methods used to control and manage a business process within a large system or organization”. Process management ensures integration of quality in each of the product manufacturing stages. Process management reduces interruptions in the stages of production by improving reliability of the machines. Effective process management ensures high quality productions by ensuring quality of the products during product manufacturing process and reducing process variations. Process management puts a direct impact on inventory management process and quality performance. Summing it up, total quality management ensures quality of produces and services delivered to the customers. TQM practices have direct and close relationships with organizational culture and operational performance. Managers of the Australian companies need to be fully aware of these relationships in order to achieve desired results. References Ashraf, S. (n.d.). What is Organizational Culture?. Retrieved from http://www.wisegeek.com/what-is-organizational-culture.htm Baird, K., Hu, K., & Reeve, R. (2011). The Relationships between Organizational Culture, Total Quality Management Practices and Operational Performance. International Journal of Operations & Production Management, 31(7), 789-814. Francois, C. (n.d.). What Is Process Management?. Retrieved from http://www.wisegeek.com/what-is-process-management.htm Hardt, P. (2011). What is Total Quality Management?. Retrieved from http://www.wisegeek.com/what-is-total-quality-management.htm Jacowski, T. (2010). Advantages of Total Quality Management. Retrieved from http://ezinearticles.com/?Advantages-of-Total-Quality-Management&id=4763227 Kanji, G. (1995). Total Quality Management: Proceedings of the First World Congress. London: Chapman & Hall. Murray, M. (2010). Total Quality Management (TQM). Retrieved from http://logistics.about.com/od/qualityinthesupplychain/a/TQM.htm Read More