Role of Strategic Quality Planning for Quality Minded Organizations - Case Study Example

?The Role of Strategic Quality Planning for Quality Minded Organizations Table of Contents Introduction 3 Role and Scope of Strategic Quality Planning in the Post-Modern Era 4 Need for Strategic Quality Planning in Toyota As A Quality Minded Organization 7 Critical Evaluation of the Effectiveness of Strategic Quality Planning 10 Conclusion 12 References 13 Introduction The aspect of ‘Quality’ has emerged to be a highly significant concept in the post-modern era of business management. Effective quality measures are stated to enhance the customer satisfaction of an organization and thus reward the company with competitive advantage (Prajogo & Sohal, 2006). It is in this context that the organizations in the current era are considering quality management with greater significance with the purpose of creating higher profitability in terms of customer satisfaction and competitive advantage. The significance of quality also gets enhanced due to the rapidly increasing competition in the business environment and the continuous requirement of innovative ideas to satisfy the global customers (Mehra & Et. Al., 2001). In this regard, the concept of Total Quality Management (TQM) has been introduced to the managerial implication trends of 21st century with the purpose to scientifically manage quality with due consideration to the multifaceted nature of business organizations. Another significant approach to the management decisions in the current phenomenon is the inclusion of strategic management to control, direct, enhance, and organize the managerial decisions in attaining its ultimate objectives. It is worth mentioning, that currently organizations have been witnessed to integrate the two concepts, i.e. TQM and strategic management to enhance their efficiency in achieving competitive advantage, e.g. Toyota (Amasaka, 2005). With this concern, the paper will emphasize on the study of strategic quality management in Toyota as a quality minded organization. Role and Scope of Strategic Quality Planning in the Post-Modern Era Quality planning and management has evolved as a crucial aspect in the post-modern era of organizational management due to two major reasons which are quite apparent from an overall perspective. These are the continuously changing external business environment and the intensification of competition in the global scenario. Effective strategic management is also considered to be crucial in determining the success of an organization in relation to its ultimate organizational objective (Stahl & Grigsby, 1997). Strategic management in the post-modern context is defined to “refer to the managerial decisions that relate the organization its environment, guide internal activities, and determine organizational long-term performance” (Stahl & Grigsby, 1997, pp. 2). On the similar context, TQM is defined as “a systems approach to management that aims to continuously improve value to customers by designing and continuously improving organizational process and systems” (Stahl & Grigsby, 1997, pp. 4). TQM is also defined as “a process-oriented philosophy of enhancing customer satisfaction through the production of higher quality goods and services” (Mehra & Et. Al., 2001). Simultaneously, strategic management can also be defined as object-oriented and future-oriented process, i.e. strategic management implications of an organization intends toward the attainment of future objective of the organization (Teece & Et. Al., 1997). Emphasizing on the above mentioned definitions of the two concepts, it can be stated that both strategic management and TQM are interrelated with the purpose of enhancing the organizational efficiency in the attainment of its ultimate objective. Therefore, attainment of a quality efficient organizational process through the implication of TQM can be regarded as the organizational goal and strategic management can be termed as the scientific and organized method aimed at attaining the objective. Furthermore, both the concepts tend to be related to a diversified and broad category of organizational management (Mellat-Parast & Digman, 2008). Considering the role and significance of the two concepts independently, it can be stated that both the concepts are based on dynamic frameworks with similar kind of affectivity in an organization in the modern day context. For instance, strategic management is termed to be broad and dynamic. In this regard, Teece & Et. Al. (1997) stated that strategic management plays a significant role in providing the organization with an enhanced competitive advantage in relation to both external efficiency and internal affectivity of the organization. Evidences reveal that effective implication of strategic management in global companies have not only enhanced their mechanism to face the challenges existing in the external environment in relation but have also directed their internal organizational operations in a structured and beneficial form. This in turn plays a crucial role in enhancing the overall competency of the organization (Teece & Et. Al., 1997). With due consideration to the concept of TQM, it can further be stated that similar to strategic management, TQM also tends to be dynamic and highly beneficial for organizations. The fundamental objective of TQM is to enhance the efficiency of the organizational structure and process executed in the organization. Another fundamental objective of TQM is to direct the organizational operations in a cost-effective way in order to increase the profitability of the organization. It is due to the purpose of providing the organization with enhanced quality of the service or goods rendered that in turn will enhance the customer satisfaction and thus reward a competitive advantage to the organization (Mehra & Et. Al., 2001; Yaacob, 2010). It is in this context that experts have stated to integrate the concepts with the purpose of gaining efficiency in quality management through the implication of beneficial strategic alliances. However, the relationship between the two concepts tends to be interdependent, i.e. strategic management defines the efficiency of TQM in a practical perspective and on the similar context TQM defines the quality of strategic alliances implemented in the organization. Undoubtedly, these factors not only contribute to the efficiency of both the concepts in an integrated manner but also raise the constraint of complexity in their ultimate execution (Mellat-Parast & Digman, 2008). Need for Strategic Quality Planning in Toyota As A Quality Minded Organization Toyota is renowned to be one of the leading automobile companies in the global industry scenario. It was incorporated in the year 1935 and has been recorded to be a successful organization in providing sufficient importance to the aspect of quality. To be specific, Toyota has been witnessed to incorporate quality management system in its production as well as supply chain management context. In this regard, the company was rewarded with ISO 9000 recognition in the year 1996 (Hino, 2006). The quality management measures undertaken by the company focused on its product development strategies and quality assurance policy measures to attain higher customer satisfaction and thus obtain competitive advantage. The inclusion of both strategic management and quality management concepts in the organizational operations of Toyota can be witnessed apparently with due consideration to the business principles signified by the organization. For instance, the company tends to emphasize on its long-term philosophy with greater significance than that of its short-term financial objectives. It is in this context that the company provides extensive significance to the aspect of customer as well as employee satisfaction with the enhancement of quality irrespective of its short-term effect on the cost structure of the company (Liker, 2004). With this concern, the organization tends to consider almost every aspect of its organizational structure from employees, operational costs to market demand and customer needs. In relation to the concept of TQM, it can be further stated that Toyota focuses on the implementation of Total Quality Control (TQC) with due consideration to its overall organizational objective and strategic decision making (Hino, 2006). The multifaceted approach considered by Toyota in enhancing its quality of organizational operations can be well observed from the diagram below: Fig 1: Quality Management in Toyota Source: (Hino, 2006) Furthermore, the strategic objective of the organization to attain waste management efficiency in controlling the utilization process of resources with an intention to support the quality management system also contributes to the thought of strategic quality planning. To be precise, Toyota was recorded to focus on its organizational processes with due consideration to the wastage of resources and to develop a fresh idea to minimize the wastes to a significant level. With this purpose, the company adopted the strategic decision to retrench its costs in overproduction, unnecessary transport, excess inventory, over-processing, and unused employee creativity. This enhanced the flow of information and resources in the organization to be more time-effective and cost-efficient (Liker, 2004). With reference to the discussion in the above context, it can be stated that quality management possesses a significant impact on the organizational principles and objectives of Toyota. Based on its requirement of TQC, the organization also emphasizes on the implication of effective strategic alliances in relation to the management of resource utilization and attainment of the ultimate organizational goal, i.e. overall competitive advantage in the global industry scenario (Thenmozhi, n.d.). Critical Evaluation of the Effectiveness of Strategic Quality Planning The strategic quality planning in Toyota has evidently rewarded the organization with various advantages in the post-modern market scenario. For instance, the organization has gained the advantage of effective organizational planning with minimum waste of resources and cost efficiency. Due to the intense significance on the development of product quality, Toyota has also gained the advantage of superior customer satisfaction in the global context. With enhanced customer satisfaction and efficient organizational process restructuring the company was also able to attain larger market share. From an overall perspective, the company attained efficiency both in its internal organizational environment and in the external business scenario through the implication of strategic quality planning (Hino, 2006). However with an in-depth perspective, various shortcomings can be identified in the strategic quality planning of Toyota. For instance, the organization considers its long-term strategic objective to be more significant than its short-term organizational goals. In this context, it is worth mentioning that both the short-term benefits and long-term benefits are quite significant to reward overall competitive advantages to an organization. Thus, ignoring the benefits of short-term benefits and concentrating specifically on the long-term organizational objectives shall hamper the competency of the organization to a large extent. On the similar context, the implication of TQC through strategic management tends to be a broad, complex and multifaceted concept to be implied in the organizational hierarchy (Liker, 2004). Moreover, the company focuses in almost every direction of its organizational structure ranging from its marketing department to its strategies incorporated to manage human resources influencing the process to be broader and challenging. For instance, the company considers quality assurance in its strategic decision making process that involves various phases and thus emerges to be time-consuming and perplex to a significant extent (Hino, 2006). From a short-term perspective, it can also be stated that the strategies considered by Toyota in the implementation process of quality management was cost-consuming. For instance, the organization concentrated on the development of high quality product that required effective human resource management in terms of training and development (Liker, 2004). This in turn implies that the organization had to consider additional costs and extensive effort to manage the human resources with due consideration to the waste management philosophy adopted by the organization. But, from an overall perspective, the implication of strategic quality planning proved to be quite beneficial for the organization in rewarding it with significant competitive advantage in the global market. Therefore, it can be stated that strategic quality planning is quite beneficial in providing an organization with competitive advantage but is subject to effective management in short-term as well as long-term perspective. Conclusion In a nutshell, it can be observed that the concept of strategic management and TQM are both interdependent for their effective implication in the organizational processes. For instance, in case of Toyota, the organization has been witnessed to imply quality management to enhance the affectivity of its strategic decision making process. Simultaneously, the organization incorporated strategic alliances to implement TQC with significant efficiency. With this virtue, the organization was also able to gain competitive advantages in the global industry scenario with the attainment of greater customer satisfaction and larger market share. However, the two concepts are also identified to be significantly broad and complex that in turn causes various limitations in terms of implications. Toyota also had to face various limitations such as increased cost in the short-term period, complex procedure in the organizational structure and need of extensive as well as continuous evaluation of the process. It is in this context that the organizations, intending to implement strategic quality planning should also emphasize on developing a comprehensive and concise procedure with focus on the organizational objectives for both short-term and long-term periods (Scribd, n.d.). References Amasaka, K., (2005). Applying New JIT - A Management Technology Strategy Model at Toyota - Strategic QCD Studies with Affiliated and Non-affiliated Suppliers. Aoyama Gakuin University. Hino, S., (2006). Inside The Mind of Toyota: Management Principles for Enduring Growth. Productivity Press. Liker, J. K., (2004). The Toyota Way: 14 Management Principles from the World's Greatest Manufacturer. McGraw-Hill Professional. Mehra, S. & Et. Al., (2001). TQM as A Management Strategy for the Next Millennia. International Journal of Operations & Production Management, Vol. 21. pp. 855-876. Mellat-Parast, M. & Digman, L. A., (2008). Learning: The Interface of Quality Management and Strategic Alliances. International Journal of Production Economics, Vol: 114, pp. 820-829. Prajogo, D. I. & Sohal, A. S., (2006). The Relationship between Organization Strategy, Total Quality Management (TQM), and Organization Performance––The Mediating Role of TQM. European Journal of Operational Research, Vol: 168, pp. 35–50. Scribd, (No Date). Strategic Management – MGT 603. Strategic Management. Retrieved Online on July 18, 2011 from http://www.scribd.com/doc/2516371/Strategic-Management Stahl, M. J. & Grigsby, D. W., (1997). Strategic Management: Total Quality And Global Competition. Wiley-Blackwell. Teece, D. J. & Et. Al., (1997). Dynamic Capabilities and Strategic Management. Strategic Management Journal, Vol: 18, pp. 509-533. Thenmozhi, M. (No Date). Management Science. IIT Madras. Retrieved Online on July 18, 2011 from http://nptel.iitm.ac.in/courses/IIT-MADRAS/Management_Science_I/Pdfs/9_1.pdf Yaacob, Z., (2010). Quality Management as an Effective Strategy of Cost Savings. African Journal of Business Management, Vol: 4, pp. 1844-1855. Read More