The Role of Culture in Multicultural Settings in Saudi Arabia - Thesis Example

1. Background of the study In the face of globalization firms have been trying to gain competitive advantage through different means and strategies.Porter (1989, 1986) had proposed two distinct strategies – cost leadership and differentiation – that could lead the firms towards sustained competitive advantage (Jung, Wang & Wu, 2009). In Porter’s models of competitive advantages, the success depends in overcoming the disadvantages and build on the comparative advantages (Jasimuddin, 2001). There are various alternatives for an organization to gain competitive advantage and a national competitive analysis helps. The favourable conditions can occur when the organization can take advantage of the oppurtunities that are external to the organization. Competitiveness also increases due to the proximity of the supportive industry around the city. The study of the relationship between competition and competitiveness has remained neglected (Shi-rong & Guang-kun, 2008). The ability of competition relies only on competition and not on capability. Firms are realigning their competitive strategies while trying to maintain or increase their competitive advantages (Jung, Wang & Wu, 2009). Studies have been conducted but researchers have not focused on how the three management domains - competitive strategy, TQM practice, and project management performance – linked together. Many organizations have failed to achieve much competitive advantage through the implementation of TQM practices while many have achieved great success. The failure could be due to lack of implementation of all of the key TQM practices. It could also be due to the absence of the complementary assets that must be combined with TQM to achieve competitive advantage (Douglas & Judge, 2001). Thus research is unable to provide the corrective functions for TQM. Only 4 percent of the 99 articles published between 1989 and 1993 on TQM could actually assess the degree to which the TQM interventions were in place. Powell (1995) finds that over the past ten years attention has shifted from competitive positioning towards firm-specific characteristics such as culture, capabilities, know-how, process improvement and organizational climate. In the same ten years, TQM has also gained importance but TQM’s impact on strategic management research remains unclear and under-examined. Critics point out the TQM requires retraining costs paperwork and formalities. TQM is a globally strategic pervasive force but its dissemination is a challenge because of the new attention on firm-specific resources. Porter’s model of competitive advantages suggests that an organization would have core strengths on which one can build. Hence competitive advantage is a dependent variable – it depends on the ease of entry into the market by competitors. It takes into account the challenges posed by the substitute of threats, by the bargaining power of the buyers as well as the suppliers and the rivalry among the existing players. An assessment of all these factors would reveal the potential strengths of the organization. It can then guide the organization to overcome the challenges or the comparative disadvantages and build on the strengths. This can maximize corporate value creation. Porter’s model guides organizational decision making while TQM is increasingly being adopted and implemented in varying degrees by a vast number of firms. It is not enough to be highly productive to be competitive or to beat competition (Kumar, Motwani, Douglas & Das, 1999). Globalization (Jung, Wang & Wu, 2009), shorter product life-cycles, new markets, and a demand for higher quality products and customer demands (Mohamed & YuanJian, 2008) challenge firms to be more competitive which is forcing them to adopt quality management (TQM) practices, in addition to flexibility and agility (Kumar, Motwani, Douglas & Das, 1999). Quality as a dimension of competitiveness can attract more customers thus improving the market share and profitability of operations. Quality management is an appropriate response to the challenges created by science and technology, new incentive structures and technologies, moral attitudes, environmental conditions and influence of rising costs (Rad, 2006). Media reports of successful enterprises because of one key factor – their proximity of the organization’s management practices to TQM, which is a socially transmitted pattern of behaviour (Bagchi, n.d.). Quality management (QM) can lead to competitive advantage as empirical research suggests that QM has positive impact on the firm performance (Mellat-Parast & Digman, 2008). Broad frameworks such as Crosbys ``14 Steps (1979), Demings ``14 Prescriptive Points (1982) and Jurans trilogy guide firms to attain competitive advantage but they do specify the initiation of quality or internal evaluation of progress (Kumar, Motwani, Douglas & Das, 1999; Motwani, 2001). Different authors have mentioned different dimensions of quality that include integration of quality into operations strategy, quality leadership, customer satisfaction, employee empowerment and organizational learning, quality cost system, problem solving, lean manufacturing, continuous improvement, and quality measurement. Through out the quality framework three factors have to be present - customer focus, continuous improvement, and teamwork. The TQM concept is well established in the US and Western Europe and is being increasingly implemented in developing countries (Mohamed & YuanJian, 2008). Proponents find that there are universal set of practices, if implemented, will lead to high performance. While studies describe that TQM implementation affects firm performance, the TQM elements differ across studies and researchers. While most focus on four characteristics - top management’s direct involvement, uncompromising customer orientation, company-wide participation in the attainment of customer satisfaction, and use of systematic methods used in resolving quality problems (Bagchi), others emphasize on TQM-oriented training, management by fact, and continuous improvement of processes (Douglas & Judge, 2001). TQM-adopting firms do gain a competitive advantage over firms that do not (Douglas & Judge, 2001). The degree of TQM implemented makes a difference on the success achieved. However, the success of TQM implementation ranges from marginal impact towards organizational performance to breakthrough impact towards customer satisfaction (Jung, Wang & Wu, 2009). Studies highlight the significance and insignificance of the TQM elements towards improving firm’s performance such as customer satisfaction, process improvement and business performance. TQM philosophies are dominated by business interests (to gain competitive advantage) and can be dehumanizing (Lee & Roberts, n.d.). The Malcolm Baldrige National Quality Award (MBNQA) framework contains seven result-oriented criteria focusing on business results (Motwani, 2001). Thus, the TQM philosophy suggests that business interests are at the core of its implementation as quality has become the focus to become sustainable and achieve competitive advantage. However, claims that TQM leads to improved services, reduced costs and more satisfied customers but the claims are controversial (Powell, 1995). Culture’s role in influencing organization’s quality management practices has been receiving much attention in the literature. An analysis of the organizational culture is essential before implementing TQM practices. The readiness of the organization is important and hence TQM programme can achieve success if the organizational culture is compatible with the values and the basic assumptions proposed by the TQM discipline (Mohamed & YuanJian, 2008). Failure in the success of TQM can occur due to a mismatch between the organizational goals the culture. Implementation of TQM causes significant changes that impact the organizational structure, organizational culture, leadership, or design process. TQM implementation should be based on the culture, beliefs, traditions and tailor-designed TQM strategies. Perfection (TQM) can come through learning, self-cultivation and constant renovation of the spirit, as per the Confucian philosophy (Lee & Roberts, n.d.). TQM is based on premise that all other business objectives such as profit, productivity, market share growth, happy employees, must follow from the single objective of satisfying the customer (Bagchi, n.d.). TQM, hence, requires non-stop efforts to eliminate tasks and processes that do not add value to the customer. TQM is a major organizational change that requires a transformation in the organization’s culture (Motwani, 2001). Universal set of practices is necessary to achieve high performance, claim the proponents of TQM. There is no consensus on what these set of practices should be. The improvement strategies in an organization must be supported by the overall organizational culture. Organizations must learn how to identify, prioritize and implement improvements (Lindbergh, 2009). Organizational cultural conditions have a strong relationship with project outcomes. Change initiatives should be integrated with organizational cultural changes. Organizational culture is influenced by societal culture and the culture guides employees on what behaviour is recognized or punishable. Culture affects the commitment and attention that people give to quality effort or interact with others. Cultural factions can bias TQM programme implementation and this is reflected in its organizational culture (Pinner, 2003). Thus once cultural biases are assessed specific assets of quality improvement can be targeted. Although TQM can lead to improvement in business performance, organizations fall short in implementing their TQM programmes. The relationship between TQM success and the organizational design may have varying degrees of cultural values. While cultural change is essential, there is not much of research on the linkages among different types of cultures, cultural strength and TQM success (Rad, 2006). If TQM implementation has to be studied, the organizational culture has to be taken into account. This is because of the practical orientation of the TQM philosophy towards the management of organizations. There is a natural relationship between TQM and organizational culture. Quality should become a state of the mind of the organizational members which implies that if the organizational culture is built around TQM, a foundation of quality can be prevalent (Yong & Pheng, 2008). Problem statement Competitive advantage can be achieved through quality practices. To implement TQM, major changes would have to be brought about in the organizational structure, culture, process and practices. Studies of success, even after all the key variables have been included, are limited. Quality should be the way of life, the state of mind; it should be the culture of the organization. Competitive advantage can be achieved through TQM but the studies and research on this is limited and theses studies too have limitations. These limitations arise because the real variables are not considered and universally valid causal relations are taken into consideration (Escrig-Tena, 2004). The limitations also arise due to the absence of a theoretical framework that explains how the effects of TQM are exerted on the results. Firms have been struggling to find the basis to gain competitive advantage. The real variables, as pointed out by Escrig-Tena (2004) include the organizational structure, the organizational culture and the organizational practices. Again, Mellat-Parast and Digman (2008) find that competitive advantage can be based on the resource-based approach which suggests that firms must have the resources and the capabilities that are difficult to imitate, to attain. At the same time, the relational view claims that inter-firm linkages can be a source of competitive advantage. Inter-firm linkages enhance the learning oppurtunities but inter-firm linkages would give rise to the degree of compatibility of corporate culture and the decision-making style. Thus, culture being a variable, the role of culture in quality management needs research because QM ultimately positively impacts firm performance. Again, Yong and Pheng (2008) find a natural relationship between TQM and organizational culture because the TQM practices would depend upon the organizational practices and decision-making. This was a study based on the construction firms in Singapore. The study found that the attitudes and expectations within the organization should be in line with the TQM’s philosophy. A balanced and strong culture facilitates TQM implementation. However, the cultural values have to be balanced across four cultural ideal types. In the SA context several problems can arise in the construction industry. The kingdom has not yet integrated into the global economy. While it has comparative advantages, SA also lags behind in business attitudes and capabilities. This is the reason that the country has not made much headway in the industries such as steel and electronics. Skill shortage and lack of sufficient English-speaking population forces the kingdom to employ foreign workers in these sectors. This means a high number of expatriate workers (35%) from different social and cultural backgrounds. This can impact the overall functioning of the organization. Moreover, the differences between the American and the Japanese supervisors in a single multicultural organization measured against five dimensions of organizational culture revealed that cultural factions within a project or a facility can bias the TQM implementation (Pinner, 2003). Powell (1995) suggests that an empirical study can be conducted to examine the relationships between organizational culture and TQM practices and the company’s competitiveness. Thus, a study in the construction industry of SA is proposed to be conducted with organizational culture as the moderator variable. Competitive advantage is dependent on several factors but in this study the competitive advantage that constructions firms in SA can achieve through cultural orientation would be examined. Research questions With the aim to examine the implementation and the barriers to quality management to gain competitive advantage in the construction firms in Saudi Arabia, this study proposes to evaluate the role of culture in multicultural settings. This is particularly important in the context of Saudi Arabia where faith plays an important role in their lives. High power distance and uncertainty avoidance are the typical characteristics of this region. This implies that leaders have the authority and they separate themselves from the group. There is inequality of power and wealth in the society and they follow highly regulated laws, which is natural in a situation with high uncertainty avoidance. Thus taking into consideration, the high rate of expatriate workers in Saudi Arabia and given their characteristics of high power distance and uncertainty avoidance, the research questions proposed are: 1. Is there any relationship between total quality management and Competitive advantage? 2. Does organizational culture moderate the relationship between total quality management and Competitive advantage? 3. Are there any barriers in the SA construction firms that prevent them from implementing TQM? 4. Are there any differences between the private and the public sector firms in SA as far as TQM implementation is concerned? To evaluate the answers, the study would examine: 1. The existing literature on TQM and the role that culture plays in achieving competitive advantage. 2. The business environment in Audi Arabia that impacts the implementation of TQM 3. The business environment in construction firms in SA and determine the role of culture in achieving competitive advantage. Significance of the study This is an independent study with no motives or vested interests in the outcome (Powell, 1995) as the studies conducted by consulting firms. There are no studies that have been conducted in the Saudi Arabian economy that determines the successes and failures based on cultural factors. While this has been examined in other nations and cultures, the studies are limited. Besides, it has been examined in a single multicultural organization (Pinner). Construction firms have inter-firm linkages and inter-firm linkages too impact the degree of compatibility of corporate culture (Mellat-Parast & Digman, 2008). This study would be significant because SA is under the development phase and construction and the real estate sector are in boom. Local companies are outsourcing contracts to foreign companies who send expatriates to work in SA. In developing countries organizations look for new methods of development. They tend to introduce new concepts such as TQM without understanding the implications and the factors that determine success. This study would bring to light the factors that are important or the causes of failure in trying to achieve competitive advantage. References Bagchi, T.P. (n.d.). Competitiveness and TQM: Is the Synergy Really a Surprise? Douglas, T.J., & Judge, W.Q. (2001). TOTAL QUALITY MANAGEMENT IMPLEMENTATION AND COMPETITIVEA DVANTAGE:T HE ROLEO F STRUCTURAL CONTROL AND EXPLORATION. Academy of Management Journal. 44 (1), 158-169 Escrig-Tena, A.B. (2004). TQM as a competitive factor A theoretical and empirical analysis. International Journal of Quality & Reliability Management. 21 (6), 612-637 Jasimuddin, S.J. (2001). Analyzing the competitive advantages of Saudi Arabia with Porters model. JOURNAL OF BUSINESS & INDUSTRIAL MARKETING. 16 (1), 59-68 Jung, J.Y., Wang, Y.J., & Wu, S. (2009). Competitive strategy, TQM practice, and continuous improvement of international project management A contingency study. International Journal of Quality & Reliability Management. 26 (2), 164-183 Kumar, A., Motwani, J., Douglas, C., & Das, N. (1999). A quality competitiveness index for benchmarking. Benchmarking: An International Journal. 6 (1), 12-21 Lee, S.F., & Roberts, P. (n.d.). Quality Management Strategy Evaluation Using Quality Function Deployment Methodology Under Chinese Culture. Lindbergh, L.B. (2009). THE RELATIONSHIP BETWEEN PROJECT MANAGER PERCEIVED CAPABILITY, ORGANIZATIONAL CULTURE, AND PROJECT OUTCOMES. ProQuest. Mellat-Parast, M., & Digman, L. (2008). Learning: The interface of quality management and strategic alliances. Int. J. Production Economics. 114, 820-829 Mohamed, S.S., & YuanJian, Q. (2008). The impact of the Organizational Culture on the implementation of TQM Programs. IEEE. Computer Society. Motwani, J. (2001). MEASURING CRITICAL FACTORS OF TQM. Measuring Business Excellence. 5 (2), 27-30 Pinner, J.W. (2003). TQM PRACTICES AND ORGANIZATIONAL CULTURE: JAPANESE VERSUS AMERICAN PERSPECTIVES. Powell, T.C. (1995). TOTAL QUALITY MANAGEMENT AS COMPETITIVE ADVANTAGE: A REVIEW AND EMPIRICAL STUDY. Strategic Management Journal, 16, 15-37 Rad, A.M.M. (2006). The impact of organizational culture on the successful implementation of total quality management. The TQM Magazine. 18 (6), 606-625 Shi-rong, L., & Guang-kun, C. (2008). Evaluation on Competitiveness of Construction projects from the perspective of Construction main bodies. IEEE. Yong, K.T., & Pheng, L.S. (2008). Organizational culture and TQM implementation in construction firms in Singapore. Construction Management and Economics. 26, 237-248 Read More