The Anatomy of Strategic Quality Management

STRATEGIC QUALITY MANAGEMENT

Total Quality Management (TQM)

Total Quality Management (TQM) is the American response to the challenge of the Japanese “Keidanren” and “Zaibatzus”. In the 1970s, Japan successfully penetrated American monopoly of international trade – registering a significant chunk of world trade business volume. Japanese products of the finest quality ranging from heavy machineries, cars, electronics, computers and component parts, communications equipment, etc. have flooded the international markets. This resulted into a balance of trade deficits have ran up to hundreds of billions of dollars.

But what is it that eventually changed the United States’ dominance of the world trade? What strategic weapon was devised by the Japanese that catapulted their business to lord it over the Americans? A flashback is in order.

Dr. W. Edwards Deming, a statistician, began to discuss the principles of industrial efficiency through his statistical quality control to big business owners and managers.

TQM is variously defined as a foundation for continuous improvement, a philosophy for running a business, the right way to manage, total people empowerment, customer- focused, a system-wide commitment to quality, and an investment in knowledge (Walton, 1991; Cali, 1993; Schmoker and Wilson, 1993; Creech, 1994; Kaufman et al., 2002). Dr. Deming emphasized that business should know and respond to customer demand. He states that managers should empower the workers with critical decision-making in the production processes. Having a say and listened to by managers develop the sense of trust, confidence, commitment and identify, he stressed the human aspects of management and the need to understand the way people work, think and act. These conditions obtaining in Japanese corporations as different from the Americans were highlighted by Ouchi (1993). These conditions are (a) lifetime employment, (b) slow evaluation and promotion, (c) nonspecialized career path, (d) implicit control mechanism, (e) collective decision-making and responsibility, and (f) holistic concern.

The Fourteen (14) Points

Dr. Deming had developed 14 points of prescriptions to management resulting from his vast and long experiences with quality control. He recommends that each company must work out its own adaptation suitable to its corporate culture. But Dr. Deming says, what management can accomplish using the Fourteen Points “is so enormous compared to what you get otherwise.”

Dr. Deming’s Fourteen Points are (Walton, 1997; Kaufman et al., 2002): 1. Create constancy of purpose for improvement of product and services. Dr. Deming suggests a radical new definition of a company’s role. Rather than making money, it is to stay in business and provide jobs through innovation, research, constant improvement, and maintenance. 2. Adopt the new philosophy. We need a new religion in which mistakes and negativism are unacceptable. 3. Cease dependence on mass inspection. Products are inspected as they come off the line or at major stages. Defective products are either thrown out or reworked; both are unnecessarily expensive. In effect a company is paying workers to make defects and then to correct them. Quality comes not from inspection but from improvement of the process. 4. End the practice of awarding business on price tag alone. Purchasing departments customarily operate on orders to seek the lowest-priced vendor. Frequently, this leads to supplies of low quality. Instead, they should seek the best quality and work to achieve it with a single supplier for any one item in a long-term relationship. 5. Improve constantly and forever the system of production and service. Improvement is not a one-time effort. Management is obligated to continually look for ways to reduce ways and improve quality. 6. Institute training. Too often, workers have learned their job from another worker who was never trained properly. They are forced to follow unintelligible instructions. They cannot do their jobs because no one tells them how. 7. Institute leadership. The job supervisor is not to tell people what to do or to punish them but to lead. Leading consists of helping people do a better job and of learning by objective methods by people who need individual help. 8. Drive out of fear. Many employees are afraid to ask questions or to take a position, even when they do not understand what the job is or what is right or wrong. People will continue to do things the wrong way, or not do them at all. The economic loss from fear is appalling. People should instead feel secure and confident for them to be productive and effective. 9. Break down barriers between staff areas. Often staff areas – departments, units, sections, - are competing with each other or have goals that conflict. They do not work as a team so they can solve or foresee problems. Worse, one department’s goals may cause trouble for another. 10. Reduce if not eliminate slogans, exhortation, and targets for the workforce. These never helped anybody do a good job. Let people set their own slogans. 11. Eliminate numerical quotas. Quotas take account only of numbers, not quality or methods. They are usually a guarantee of inefficiency and high cost. A person, to hold a job, meets a quota at any cost, without regard to damage to the company. 12. Remove barriers to pride of workmanship. People are eager to do a good job and distressed when they cannot. Too often, misguided supervisors, faulty equipment, and defective materials stand on the way. These barriers must be removed 13. Institute a vigorous program of education and retraining. Both management and the workforce will have to be educated in the new methods, including teamwork and statistical techniques. 14. Take action to accomplish the transformation. It will take a special top management team with a plan of action to carry out quality mission. Workers can’t do it on their own, nor can managers. A critical mass of people in the company must understand the fourteen points, the seven deadly diseases, and obstacles.

Components of Strategic Quality Management

Strategic Quality Management (SQM) requires both strategic thinking and strategic analysis. Each complements the other. Strategic analysis is as important as strategic thinking. It is a systematic and scientific method of studying and reasoning that starts with the facts about an organization or its environment and ends with a solution. Various methods of analysis are employed in the study.

To fully understand the relationships between strategic thinking and strategic analysis, the anatomy of Strategic Management (SM) originally developed by Rowe and associates (1994) is adapted. The model, (Figure 8) is renamed Strategic Quality Management (SQM). The concerns of strategic thinking in the model are the four components inside the circular model, namely, strategic planning, organizational structure, strategic control, and organizational resources. Following the same clockwise order, the concerns of strategic analysis are the external environment, organizational culture, internal environment, and availability of resources. Both internal and external components in the model are directed and mobilized by SQM.

Strategic Planning Strategic planning is the process of formulating plans, objectives, and strategies in the light of identified foreseeable threats and opportunities in the external environment and strengths and weaknesses of the organization and is managed to achieve a commonly-set desirable future.

Organizational Structure Structure is the established patterns of relationships among component units of the organization. These relationships are clearly depicted in the organizational chart, composed of boxes of positions and functions, that show which positions have power, in which decisions are made and in which activities are carried out (Koonzt and O’Donnell, 1990). External Environment

Strategic Planning

Resource Strategic Strategic Organizational Organizational Availability Management Management Structure Culture

Strategic Control

Internal Environment

Figure 8. Anatomy of Strategic Quality Management (Adapted from Rowe et al., 1994)

Strategic Control Strategic control is the measurement and correction of performance in plan implementation in order to make sure that organizational objectives and the plans are devised to attain them are accomplished. The basic control process involves three steps, namely, (a) establishing standards, (b) measuring performance against these standards, and (c) correcting variations from standards and plans (Ibid.).

Organizational Resources Resources are inputs to the organization in the form of manpower, monies, materials, physical, knowledge, and technology. The organization’s charter, mandate, articles of incorporation, and other documents as well as public demands and support are the other inputs.

In brief, SQM is the process by which an organization formulates plans, objectives, and strategies (strategic planning); allocates resources for plan, programs, and projects (organizational resources); and identifies accountable entities, managers, and frontline workers (organization structure) in the implementation, monitoring and evaluation of said programs and plans (strategic control). SQM intensely subscribes to the basic principles of TQM, namely, holistic or systematic, decentralization, empowerment, humanistic, teamwork, quality-focused, and client satisfaction. PERSPECTIVE IN STRATEGIC PLANNING

There are certain requirements for planners to seriously consider before any actual strategic planning is undertaken. If they aspire to experience the praxis dimension of strategic planning and formulate a realistic, achievable, responsive and effective strategic plan, they have to have the following perspectives, namely, down-board thinking, paradigm shift, and holistic and global orientation.

Down-board Thinking

Down-board thinking is a necessary component of effective strategic planning. This concept is similar to the way a chess grandmaster thinks and does when he plays the game. He does not just only think and decide on his immediate moves but he must look “down-board” and consider his opponent’s possible responses to his moves and plan a number of several moves ahead (Goodstein et al., 1993). Effective strategic planning creates scenarios and considers the consequences of these scenarios in the light of competition and the response of the environmental factors. This suits well Peter Drucker’s suggestion: “…if we cannot predict the future, we had best create it.”

Paradigm Shift

To better understand strategic planning and be able to formulate a strategic plan that is realistic, responsive, effective and achievable, planners need a shift in paradigm. Paradigm is basically a set of ideas, usually unwritten, that people have learned and developed through education and experiences that defines the conventional methods about the rules of nature and life (Cali, 1993). A paradigm acts as a mental filter or sieving device that delimits the way we think about things by erecting a set of boundary conditions that are often more perceived than real. Paradigm shift requires disassemblying our old and conventional ways of seeing, doing, thinking and assessing a thing because they no longer apply with reality and the present. The new paradigm calls for a broad, flexible, eclectic, creative and futuristic mental framework.

We must now change and enlarge our educational paradigm from teaching to learning, from rote mastery to process learning and dynamic citizenship, from input-oriented to output-oriented curriculum development. We have to be radical, if needed, and future shock-free to ascertain the success of our products and graduates both in school and in the real world of life. INPUTS CONVERSION PROCESS OUTPUTS OUTCOMES Effects/Impact

Demands Quantitative Mandate Teaching-learning number of Board exams Resources Co-curricular graduates, Employed graduates/ Manpower Research execution trainees and trainees Funds Training programs research Research awards Materials Technology apply Qualitative Self-reliance Physical Innovative management manifest Self-sufficiency Others systems competence Citizenship Physical plan researches Better quality of life implementation published technologies commercialized

Internal Organization Feedback

External Environment

Figure 9. A Systems Planning Framework of a University (Miclat, Jr., 1998)

Planning Orientation

There are three types of planning orientation that we have to develop and assume in strategic planning. These are systems, mega-level, and outside-in approaches.

Systems Approach A system is an organized unitary whole composed of two or more interdependent parts, components or subsystems and delineated by identifiable boundaries from its environmental suprasystem (Kast and Rosenzweig, 1990). The elements of a systems are inputs, conversion process, outputs, and outcomes. Figure 9 presents a systems framework and its major element in the context of a college or university.

With this as our framework, the inputs are demands, mandate, and resources in terms of manpower, monies, materials, equipment, and facilities. The conversion processes are teaching-learning process both formal and informal, cocurricular activities in and out of the institution, short-term training, interventions, and implementation of research and economic development projects. Viewed as outputs in quantitative terms are number of graduates and trainees, number of researches completed, number of mature technologies developed, and amount of monies generated. In terms of qualitative dimensions, the outputs are manifest competence of graduates and trainees, number of researches published, number of mature technologies commercialized and income generated.

Outcome is generated into two, namely, effect and impact with time dimension as their borderline. Effect is the immediate consequences of program outputs (Mathur and Inayatullah, 1998). Examples of effect are licensure board examination performance, number of employed graduated and trainees, research national awards received, and industrially-adopted technology. Impact, on the other hand, is change in the standard of living of the target group or within the target area stemming from the program (Ibid.). A period of four years or more is needed for the effect to gestate or mature into an impact. Consider as impact are self-reliance, self-sufficiency, socially responsible, economically independent and politically dynamic, and better quality of life.

The use of a systems approach to strategic planning affords the managers and planners a holistic and integrated perspective. This perspective can even be expanded into a global orientation if the college or university had attained some degree of regional and international reputation. This will ascertain that items under each element are not overlooked including organizational variables and external environmental factors.

Mega-level Environment Kaufman and associates (2002) identified three scopes of planning levels based on who the primary client is and who benefits. The authors equated mega-level to the society, macro-level to the educational system, and the micro-level to the individual learner, teacher or group on a one-to-one correspondence. They argue that mega-level planning views the society and the educational clients as the basis for everything the education system or organization uses, does, and delivers. In the macro-level, planning is primarily looking after the organization but without any substantial commitment to both client and society. Finally, in micro-level, planning is concerned only with individual or group jobs and tasks.

This book adopts a different perspective in the use of mega, macro, and micro concepts. Its frame of planning reference is the organization like a college or university and looks on its role in different level of planning environments. There is no permanent one-to-one correspondence. Rather the levels of planning environment vary and slide depending on the highest level of planning environment one adopts in planning. But all three are used in one planning activity. For instance, if society is the highest level of planning environment, then we use mega for society, macro for the region and micro for the province, city or town. If we go up our level of planning environment, so to the world, one result would be: mega-global, macro-Philippine society, and mircro-region say the National Capital Region. If we go down our level of environment, the pairings will be: mega-region, macro-province, and micro-district or town.

If the society chosen as the mega level of planning environment, we ask the question: “What is it that society needs that the organization, college or university will produce and deliver that gives the greatest payoffs to society?” At the macro level, we ask the question: “What is it that the college or university produces or delivers that the region needs?” For the micro level, the question is: “What does the college or university needs to produce or deliver that the province needs?” In this context, a college or university is viewed as an organization that is embedded in a given environment. It has to respond to that environment to maintain a dynamic state. If it does not, the organization dies a natural death. A college or university is an instrument of the state and of society in the pursuit of human resource development in terms of highly educated professional and skilled manpower. This manpower becomes a contributing citizen of society especially in his local area of abode.

Outside-In Planning If one plans for society as the mega-level of planning environment, then an alternative perspective – an enlarged perspective – is gained. Kaufman and associates (2002) say that planning in this way is as if one were looking into the organization from the outside – from the vantage point of society back into the organization and its results and efforts. Outside-in planning is proactive. It is a paradigm or frame of reference that continuously challenges the status quo while identifying possible scenarios and new opportunities that bring about positive change and growth to society.