The Concept of Total Quality Management - Essay Example

Introduction Total Quality Management (TQM) is a customer-oriented management principle that is centered on providing utmost customer satisfaction, improving products and services, and accomplishing organizational goals. TQM may be based on existing standards like the ISO 9001 or the Quality Management System (QMS), but could also differ from organization to organization depending on specific preferences. Organizations with successful TQM have a foundation of “integrity, ethics and trust” and provide training as a key ingredient to producing the ideal TQM environment (SearchCIO.com, 2002; Wicks, 2001, p.501). One example of such organizations with ideal TQM environments was Xerox during the leadership of David Kearns, who served as its CEO from 1982 to 1990. What Kearns did for the downward spiraling company became a landmark in the history of quality management. Henceforth, this essay will endeavor to examine Kearns’ role as a quality leader in Xerox, his management approach and the applicability and certain processes of such approach, and finally, the issues that followed Kearns’ administration. A Quality Leader David Kearns’ assumption as Chief Executive Officer (CEO) in 1982 was not without eventualities. Before bringing quality into the forefront of management, Kearns had to confront “skepticism and resistance” (Pfeffer, 1992, p.317). There was already a fixed mindset among top managers that Xerox was a world-class corporation and therefore need not change. Kearns said of his time as a leader: “One of the main things I learned at Xerox is that radical change in any organization is incredibly painful. In the language of change theorists, we were moving between several different states” (Kearns & Harvey, 2000, p.79). When statistics finally provided evidence of the company’s bad performance, Kearns and his management team formulated an integrated bottom-up and top-down TQM approach focused on increasing customer satisfaction and striking a balance between quality processes and quality outcomes. The approach was governed by the Leadership through Quality policy which revolved around four areas or goals where quality must be directed: customer, employee, the business, and process. This holistic policy “radically changed” Xerox’s business outlook. Throughout the whole ordeal, Kearns’ thought of himself as the “captain of a sinking ship.” When he became CEO, he believed Xerox was already on the brink of going under due to unsolved internal and external problems (Novgorod State University, n.d.; Kretchmar, 1992). Besides the two-pronged approach, Kearns’ leadership in Xerox involved extensive benchmarking, whereby the company assesses the efficacy of its own practices in comparison with the best practices of other renowned corporations, regardless of industry. Led by Kearns, Xerox benchmarked 200 processes from other industries, one of which was the production scheduling of Cummins Engine Company (Novgorod State University, n.d.). Kearns also pressed for a quality training program for senior managers. The program has a “pay-it-forward” style. Managers were first required to learn from quality technocrats themselves, and then proceeded to teach the principles they learned to their subordinates. This was a cost-efficient move since Xerox did not have to hire many technocrats. Additionally, this also gave senior managers more connection with employees and customers. Whether or not they have a meeting, the approach required managers to receive calls directly from customers for about once a month though it was not mentioned if the president himself was covered by this TQM scheme (Kretchmar, 1992; Evans, 2007, p.442). Kearns’ approach was not only customer-oriented but also sensitive to the needs of employees. As a corporate leader, he knew the important role unions play in quality management and established rapport with them to earn their trust. This was also to ensure that the company vision-mission was in line with union goals (Evans, 2007, p.442). It was Kearns’ leadership that earned Xerox recognitions for quality products. He personally defined quality in the same wavelength as excellent customer service: “It does not mean that a Xerox copier is better than a Ricoh… Excellence means that the product conforms to requirements… that the product meets customer expectations, that it does what it is supposed to do, and it does it well” (Kearns & Harvey, 2000, p.82). Kearns’ method was basically teamwork at every level – ordinary employees and managers help each other and not just their own ranks (Robinson, 1997, pp.12-15). Towards the culmination of his term in 1990, Xerox recovered its lost market share and went so far as to “take business away from Canon and Ricoh in Japan.” Its 13% share in the US copier market had also risen to 16% and 18% (Kretchmar, 1992). Broad-based Approach For the most part, Kearns’ approach was broad-based in the sense that it is applicable in any industry. He did not hit much on the product per se, but on the ideas and principles that would make the product a major success in the commercial market. As mentioned by Evans (2007), Kearns was reading Philip Crosby's book Quality Is Free at the time he ascended to CEO. This gave his management approach a resemblance to the principles drawn by Crosby (p.441). Along with Dr. W. Edwards Deming and Joseph Juran, Crosby was also influential to the Japanese industrial production practices, which became a major threat to the US market in the post-World War II decades. Kearns derived his definition of quality as “conformance to requirements” from Crosby himself but modified it a bit by adding the concept of customer satisfaction as a gauge for quality. According to Kearns, high quality cannot be achieved with “internal devising” but rather by conforming to “customer requirements” (Kearns, 1990, p.86; Cangemi, 1993, p.4). This certainly was a broad definition that could be applied in other industries besides those of Xerox’s competitors. Even if customer requirements vary per commercial industry, the tools and methods for getting information on customer satisfaction levels are pretty much universal such as feedback forms, focused group discussions (FSDs), or one-on-one interviews. Similarly, the same method can also be applied to meet employee or union requirements, whichever company they belong to. Crosby’s theory on “Zero Defects” was also visible in the practices of Xerox during Kearns’ leadership which highlighted “prevention over detection and focused on changing corporate culture rather than analytical or statistical tools.” Kearns attested how the manufacturing organization of Xerox began to adopt “statistical quality control” in the 1980s, and aimed to “prevent defects rather than screen them via inspection.” Such technique is equally broad-based and applicable to companies seeking for survival the way Xerox did before Kearns entered the picture. Xerox was able to apply it while benchmarking from “noncompetitive industries” (Kearns, 1990, p.86; Cangemi, 1993, p.4). The Post-Kearns Administration However, like a pendulum, Xerox’s performance in the market economy has been irregular after Kearns stepped down from his CEO pedestal. He was succeeded by Paul Allaire and Richard Thoman respectively, but disputes between the two ended up in the reinstatement of Allaire when Xerox was once more at the threshold of another crisis. Bianco and Moore (2001) from Businessweek somehow held Kearns obliquely responsible for the company’s later setbacks. They contended that “Kearns brought Xerox back from the abyss in the copier business only to jeopardize its future anew by putting the company into property and casualty insurance on a grand scale.” Yet by severing ties with insurance and financial service companies, CEO-successor Allaire saved the company from another epic failure. During his time, Xerox was repackaged as “The Document Company” along with new product innovations and cost-cutting methods. Allair already hinted at pursuing the desktop market, but such plans were thwarted during the fiasco and short-lived succession of Thoman. 1999 was the worst time for Xerox and the breakthrough TQM approach instigated by Kearns in the preceding decades were overshadowed by irreconcilable differences within Xerox’s top management. Though the company hit a record high in stocks in May of that year at the early part of Thoman’s leadership, there were indications of poor investor responses and company income dropped to 11%. The company’s mandated restructured “sales force and billing systems” was also one of the main causes for blame (Knowledge@Wharton, 2000). There were also disagreements between manufacturing workforce and Xerox management, something that had always been stable when Kearns was still CEO. In view of the rapid innovations in technology, many predicted that the workforce was bound to diminish in size. Top leaders were already pressured to outsource labor for “lower-cost alternatives” (Kochan, 1999). As of 2009, Xerox was set to buy an outsourcing firm, a strategy benchmarked from Hewlett-Packard (Outsourcing Insider, 2009). Conclusion Xerox during the time of David Kearns was indeed an ideal TQM environment. Not only did Kearns redefine the management principles of Crosby by focusing on customer needs, he was also able to establish labor-management relations that had helped Xerox overcome its foreign and local competitors. Though his successful regime was slightly upset by the problems of succeeding managers, “Xerox was able to regain more than ten market share points, beating back the Japanese and fighting off Kodak and IBM” even if its market share would never go back to 80 percent levels (Chesbrough, 2003). The management mindset left by Kearns would always serve as a guidepost for his successors to look up to whenever they lose their direction. The Xerox change of orbit in the 80s also serves as a case study for the academe, business aspirants and members of the corporate world. References Bianco, A., & Moore, P. (2001, March 5). Xerox: the downfall. Businessweek Online. Retrieved from http://www.businessweek.com/2001/01_10/b3722001.htm Cangemi, R. (1993). Total quality management: nature and evolution of total quality management. Journal of Food Distribution Research, pp.1-6. Retrieved from http://ageconsearch.umn.edu/bitstream/26579/1/24010001.pdf Chesbrough, H. (2003). XTV: Xerox's attempted recovery from "fumbling the future." Retrieved from http://hbswk.hbs.edu/archive/3413.html Evans, J. (2007). Quality and performance excellence: management, organization, & strategy. 5th ed. Thompson: Ohio. Kearns, D. (1990). Leadership through quality. Academy of Management Executive, 4 (2), 86-89. Kearns, D., & Harvey, J. (2000). A legacy of learning: your stake in standards and new kinds of public schools. 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