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ABSTRACT
CHAPTER1 INTRODUCTION
BACKGROUND
RESEARCH PURPOSE
HYPOTHESIS
SIGNIFICANCE
CHAPTER2 LITERATURE REVIEW
2.1 INTRODUCTION
2.2 KEY CONSTRUCTS OF TQM IMPLEMENTATION
2.2.1 LEADERSHIP
2.2.2
2.2.3
2.3 DEFINATION OF TOTAL QUALITY MANAGEMENT
2.4 EFFECTS OF TQM IMPLEMENTATION IN CHINA
2.5 KEY IMPACTS OF TQM IMPLEMENTATION
2.6TQM IMPLEMENTATION BARRIERS IN CHINESE ENTERPRISES
2.6.1 STRATEGIC BARRIERS
2.6.2 STRUCTUAL BARRIERS
2.6.3 HUMAN RESOURCES BARRIERS
2.6.4 CULTURE BARRIERS
CHAPTER3 METHODOLOGY
3.1 RESEARCH PHILOSOPHY
3.2 RESEARCH APPROACH
3.3 DATA COLLECTION
3.4 LIMITATION
CHAPTER4 CASE STUDIES ANALYSIS
4.1 HAIER COMPANY
4.1.1 A BRIEF INTRODUCTION
4.1.2 TQM PRACTICE PROCESS AND DISCUSSION
4.2 BO TIN COMPANY
4.2.1 A BRIEF INTRODUCTION
4.2.2 TQM PRACTICE PROCESS AND DISCUSSION
CHAPTER 5 CONCLUSION
CHAPTER6 IMPLICATIONS
APPENDICES
REFERENCES
CHAPTER1 Introduction
1.1 Background
Due to the significant development of globalization, competitions between companies have become more intense (Mosadeghrad, 2013). The business environment is increasing complex in this situation. On the one hand, the marketplace also has become bigger than before which from local to global. On the other hand, customers become more aware of rising standards, because the market provides the wide range of products and services for them to choose. Numerous companies try to find an appropriate way to improve the quality of their products or services. In 1990s, Total Quality Management (TQM) has become one of the most competitive management methods (Singh and Singh, 2014). Quality is gradually become the key slogan as organizations strive for a competitive advantage in markets especially in the competition of attract globalization, liberalization and knowledgeable customers. Lanji and Tambi (1999) pointed out that a good quality service or product is the must for an organization to retain old customers and even more attract new customers. In order to achieve a better organizational performance, many firms applied TQM program (Mosadeghrad, 2014). For instance, US applied TQM successfully in many firms, such as Xerox, Texas Instruments and IBM since 1980s (Lanji and Tambi, 1999). Total quality management as a management process helped organizations to improve their business positions by overcoming threats from global competition and other changes in the business environment.
Because of the China’s open door policy and economy reform (1978), a large number of foreign companies tended to invest in China by the cheap labor cost and land cost (Chan et al, 2000). However, these investors received customer complaints time to time due to the quality problem that were manufactured in China. As a result, China’s manufactories need to change the situation of the quality problem in order to deal with the complaints and avoid the complaints which may happen in the future. For above-mentioned successful practices, many Chinese companies also showed a great interest on TQM program and then started to implement the TQM. The early TQM Standard Achievement Certificate Scheme has been implemented in China since the Hong Kong Quality Mark (Q-Mark) Scheme was established by the Federation of Hong Kong Industries in 1978 (Chan et al., 2000). Followed by this, Qinghe Woolen Mill Company started to implement TQM in cooperation with foreign companies in the same year (Lee, 2004). However, many Chinese organizations failed to apply the TQM implementation. Even now, only a few Chinese companies successfully implemented an effective TQM.
1.2 Research purpose
Most previous studies are focusing on the relationship between company’s performance and TQM implementation. While, there were few studies to investigate the barriers, which could influence the TQM implementation in Chinese manufacturing. Though TQM has many advantages on manufacture industry, in China, most manufacturers cannot achieve the effect of TQM. This paper aims at exploring the potential reasons that result in the failure of Chinese manufactures’ TQM implementation, and proposing some effective suggestions for Chinese manufactures to implement TQM. This will be achieved by completing four objectives as follows:
To evaluate the implementation of TQM
To Identify why the implementation of TQM in some Chinese manufacturing failed so frequently (e.g. barriers)
To analyzing how TQM implementation influences an organization’s performance
Exploring the successful implementation of TQM could result in what kinds of benefits.
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1.3 Hypothesis
As the previous researches mentioned, it could be supposed that the main barriers of TQM implementation in Chinese manufacturing firms could be separated in four aspects: firstly, strategic barriers (include lack of top management support); secondly, human resource barriers (include lack of employee education and training, and poor satisfaction and involvement of employees); thirdly, contextual barriers such as inappropriate organizational culture; finally, cultural barriers include national and institutional cultural integration. As a result, it could build four hypotheses below:
H1: Strategic barriers may influence the implementation of TQM in Chinese manufactories.
H2: Human resource barriers may influence the implementation of TQM in Chinese manufactories
H3: Structual barriers may influence the implementation of TQM in Chinese manufactories.
H4: Cultural barriers may influence the implementation of TQM in Chinese manufactories.
The significance of TQM implementation
Chapter 2 Literature review
2.1 Introduction
The concept of product quality has been generally brought to the attention of companies in developing and developed countries in the modern business world (Kondo, 1999). According to this, quality management has become an essential aspect during the business operation. In addition, quality is an indispensable and important item as far as customers are concerned. Quality has become a fundamental way of managing any business anywhere for creation and expansion of market and profitability. Some quality gurus also pointed out some theories around the topic of quality. For instance, Crosby (1979) is famous for his "zero defects" concept, five absolutes of quality management, and fourteen-step program for quality improvement. Juran (1980) offered his "quality-planning road map" and 10 steps to quality improvement. As the literature developed thousands of articles and books made TQM a popular research topic. In 1960s, Feigenbaum A.V. who worked in GE quality management department, proposed a system which called ‘Total Quality Management’ (Zhang, 2000). Deming (1986) stressed that leadership acted a vital role in ensuring the success of quality management, because the responsibilities of top management is help firm move toward continuous improvement. Juran also advocated that the implementation of TQM should following three managerial processes include quality planning, quality control and quality improvement which named as ‘Trilogy of Juran’ (Jiran and Gryna, 1993). TQM has been widely used in many companies all over the world, especially in the western world. Manufacturing and service manufactories have implemented this system aiming to improve quality; either from the product or the service management aspect. Thus, this literature review tends to evaluate available literature regarding the barriers to TQM implementation in Chinese manufactories. At the beginning, this literature review will introduce the definition and connotations of TQM. Then, it will point out the key constructs during the TQM implementation. Thirdly, the effects of the TQM implementation in China will be evaluated. Finally, the key impacts and the main barriers of the TQM implementation will be discussed.
2.2 Definition of Total Quality Management
Prajogo and McDermott (2005) defined TQM as a quality centered, all staff’ participation based management way that an enterprise gets long term success through letting customers, all members and society benefit from it. In Feigenbaum (1991)’s opinion, TQM is an effective system that combines each department’s quality research, maintenance, with improvement together. This system makes market research, design, production and after-sales service on the most economical level and at the premise of satisfying with customers’ requirements fully (Bahri et al., 2012).
Hence, TQM can be defined as
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“a management strategy aims to enhance customer satisfaction and organizational performance through providing high-quality products and services through the participation and collaboration of all stakeholders, teamwork, customer-driven quality and continuously improving the performance of inputs and processes by applying quality management techniques and tools”(Mosadeghrad, 2013).
TQM has several connotations. Firstly, it requires focusing on customers strongly. Presently, customer-centered management model has become the main stream of modern enterprises. TQM requires making the customer-centered thinking get through all the procedures. Secondly, it requires improving continuously. Enterprises need to improve their products and services persistently, so as to ensure their opponents cannot imitate their advantages. Thirdly, TQM requires improving the quality of each work (Zhang, 2000). It does not limited on products, but also covers some service after sale, for example product delivery, response to claim and after-sale sevices. Fourthly, TQM requires measuring each key variable of the organization, and then making comparison with its standard, so as to remove problems and improve quality. Fifthly, TQM requires give authority to staff. It absorbs workers to join in the improvement process. According to Zatzick and Christopher (2012), TQM has two connotations. One is to satisfy with customers, and another is to improve continuously.
Key constructs of the TQM implementation
Leadership
A good leader would inspire employees’ confidence and support their needs in order to achieve organizational goals (DuBrin, 1995). Anderson et al. (1994) explained the concept of leadership as: The ability of top management to establish, practice, and lead a long-term vision for the firm, driven by changing customer requirements, as opposed to an internal management control role. A predominant theme in TQM literature is that strong commitment from top management is indispensable. If the company lack of top management, it may become the main reason why TQM fails. Significantly, leadership could be exemplified by several aspects, such as clarity of vision and long-term orientation, coaching participative change and management style, employee empowerment, planning and implementing organizational change. Juran and Gryna (1993) pointed out that certain roles of top management can be considered as: Establish and deploy quality goals, establish quality policies, provide problem-oriented training, resources and stimulate improvement.
In addition, top management support for quality is a vital factor in quality improvement. Several previous studies also revealed that leadership is an association be effective product design and produce quality enhancement (Zhang, 2000). Kamcharoen (2009) stated that concluded good leaders must be consistent with the purpose of product and service improvements for the organization’s survival in a competitive environment. For example, if quality has been committed by top management department, they should not only actively be involved in quality management and development process, but also strongly encourage employee participation in this process. Due to pursue long-term business success, top management should pay more attention to product quality than yields.
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Supplier quality management
Without leadership, Supplier quality management also is an important aspect of TQM since materials and purchased parts are often a major source of quality problems. The Malcolm Baldrige Quality Award (1997) also recognises the importance of supplier quality. Garvin (1983) finds that organizations that manufacture the highest quality products have purchasing departments that rank quality rather cost minimisation as their major objective. Conversely, in organizations with the lowest quality performance, he finds that the primary objective of the purchasing department was to obtain the lowest price for technically acceptable components. Poor quality of supplier products results in extra costs for the purchaser; e.g., for one appliance manufacturer, 75 percent of all warranty claims were traced to purchase components for the appliances (Juran and Gryna, 1993). If organizations pursue good supplier quality management, they should establish long-term co-operative relations with their suppliers, often participate in supplier quality activities, have detailed information concerning supplier performance, give feedback on the performance of suppliers’ products, regularly conduct supplier quality audits, and regard product quality as the most important factor for selecting suppliers.
Vision and plan statement
Vision and plan statement seem to another major construct of TQM application, which may have a vital impact on determining whether TQM could be properly applied or not. Vision and plan statements in fact, refer to ‘how a company tends to be seen in its chosen business’ (Zhang, et al., 2000). According to Kano (1993), employees can be encouraged to work hard to increase product quality through a vision statement. A study conducted by Bart and Baetz (1998) argued that there may be a significant difference whether a firm implements a vision statement or not in terms of product quality. More specifically, the behavior of an organizational member may be affected and resource allocation could be increased by a vision statement. In addition to a vision statement, a plan statement is also important for TQM implementation. For instance, a plan statement could be detailed quality goal, a quality improvement plan and a business plan (Zhang, et al., 2000). If a quality improvement plan is implemented effectively, it is possible that product quality can be improved. Thus, vision and plan statement may have a positive impact on TQM implementation.
Product design
Product design is an important dimension of quality management. For complex products, errors during product development cause about 50 percent of fitness-foruse problems (Juran and Gryna, 1993). Sound product design meets or exceeds the requirements and expectations of customers better than the competitors, leading to an increased market share. For improving product design, design engineers are required to have some shop floor and marketing experiences. Customer requirements and production cost should be thoroughly considered during the process of product design. Different departments in an organisation should participate in new product development. Before production, new product design should be thoroughly reviewed in order to avoid problems happening during production. Experimental design (Zhang, 1998b) and quality function deployment (Daetz et al., 1995) are two important and effective methods in product design.
Quality system improvement
Employee participation
Employee involvement might be a vital dimension to TQM implementation as workers can achieve new skills and information and acquire the benefits of quality disciplines through employee involvement in quality enhancement activities (Zhang, et al., 2000). TQM may encourage all employees in such firms to become more closely related to the firms’ objectives. For instance, employee involvement may be able to increase personal abilities, offer increased commitment to the success of their firms and encourage them to understand the importance of product quality (Juran and Gryna, 1993). In addition, Taylor and Wright (2003) found that the success of TQM could depend on effective participation of employees, and approximately 80% of the cohort demonstrated that very successful TQM programmes had high levels of employee involvement. In contrast, because most of the employees might be afraid of being fired they might not apply their own ideas, make decisions and get involved in product quality activities.
Recognition and reward
Education and training
Customer focus
Effects of TQM implementation in China
As the previous studies mentioned, TQM could improve company’s performance that produce high quality products and services, and then satisfy consumers demand and expectation. Due to such reason, more and more companies tend to apply TQM program universally (Chin and Pun, 2002). In addition, many organizations realize that implement effective TQM may not only enhance their competitiveness but can also offer strategic advantages in the marketplace. Kumar et al. (2009) mentioned that the implementation of TQM on company performance, employee and consumer satisfaction, and financial performance have improved significantly (e.g. the enhancement rate is nearly 90%). While, the success rate of the company to implement an initiated TQM practice is less than five percent (GAO, 1991).
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In Chinese manufacturing industry, TQM implementation could be tracked back to 1978. Since then, in order to improve product quality, Chinese government has made a lot of efforts to stimulate firms on the implementation of TQM (Zhang, 2000). Yu et al. (1998) conducted a survey to investigate the rate of TQM implementation in Chinese manufactures; this rate is as high as 96%. However, the outcomes seem to be not quite satisfactory (ibid). More specifically, due to lack of empirical studies in the field of TQM, there is insufficient information for Chinese manufacturing to analyze, and then result in ineffective implementation of TQM (Zhang. 2000). According to Zhao et al. (1995)’s survey, that there was few companies could implement successful TQM program in Chinese manufacturing enterprises. Therefore, the outlook of TQM implementation in Chinese manufacturing enterprises seems to be unclear (ibid).
2.5 Key impacts of TQM
TQM implementation could be considered as one of the most effective management tools, which brings a lot of benefits. Firstly, in term of organization, TQM program has been widely applied as the most useful tool, because it could be effective to reduce the operating cost (Seetharaman et al., 2006). However, the benefits of TQM implementation for organizations not only restrict on reducing costs but also contributing to maximize the interests of the company (Kondo. 1999). According to Kumar et al. (2009)’s foundation, the cost of quality decreased by 3% (from 12% to 9%); and the operating profits increased seven times. In addition, TQM also could enhance the organizations’ competitive advantage by providing high quality service and products (Gordon and Sohal, 2001). For example, after applying TQM program, the rate of firms’ on-time delivery of their products and reduce mistakes have been increased by ten percent (Kumar et al., 2009). Secondly, for the employee’s aspect, a variety of studies argued that TQM implementation might contribute to improve employee satisfaction and involvement (Yang, 2006; Karia and Asaari, 2006; Fuentes et al., 2006). Moreover, higher employee satisfaction could lead to higher attendance rate and less turnover and accidents (Kumar et al. 2009). Thirdly, in terms of customer, as the above mentioned, TQM program has positive impact on company performance (e.g. high quality products and service) which result in higher customer satisfaction while fewer complaints, and also contribute to improve customer loyalty (ibid). A survey data that collected from 20 firms could support this view that the customer complaints decreased by 11.6% (Huarng and Chen, 2002). Finally, in the financial section, the company who successfully applied the TQM program may have outstanding performance in the stock market, which could be reflected in a high share price (GAO (1991) and Ou et al. 2007).
Nevertheless, although the successful implementation of TQM could help organizations to achieve the desired effects namely increased organization performance and improved customer and employee satisfaction, the inappropriate implementation still have adverse impacts. Failing to adopt an appropriate TQM implementation would result in low or even no improvement, which also has negative impact on employees (e.g. negative psychological effect) and thus make them lose confidence and interests on TQM (Mosadeghrad. 2013). For example, approximately 66.7% of organizations failed to implement TQM in USA, which is because of the negative impact on profit and organizations’ performance (Hubiak and O’Donnell, 1996). In addition, due to lack of positive impacts, an increasing number of organizations tend to cancel their TQM implementation (Krumwiede et al, 1998). Therefore, the next section will mainly discuss the obstacles that produce adverse impacts on TQM implementation.
2.6 TQM implementation barriers in Chinese enterprises
The barriers of TQM implementation could be divided into 5 categories (Mosadeghrad. 2014):
Human resource barriers (e.g. lack of employee involvement, lack of training).
Contextual barriers (e.g. difficulties in changing organizational culture, communication barriers).
Strategic barriers (e.g. poor leadership and lack of government support).
Procedural barriers (e.g. Lack of proper process management).
Structural barriers (e.g. inappropriate organizational structure).
In addition, in developing countries, three of them (mentioned above) have been identified as main obstacles including strategic, human resource and structural barriers (ibid). More importantly, inappropriate culture also became an issue of crucial importance. Therefore, in order to avoid the TQM program’s failure, this section aims at identifying the obstacles that would occur during the TQM implementation in Chinese manufacturing industry and three hypotheses have been put forward:
2.6.1 Strategic barriers
To start with strategic barriers, the finding of previous studies indicated that lack of top management support is one of the most vital barriers which could obstruct TQM implementation (Atkinson, 1990; Juran &Gryna, 1993; Jaehn, 2000). The reason for this might be that managers often play an important role in decision-making and they also have responsibility to motivate and empower employee to get better organizational performance. Moreover, due to lack of top management commitment and involvement, nearly 80% of firms were failed to adopt TQM implementation (Jaehn. 2000). Furthermore, Hamidi and Zamanparvar (2008) also confirmed this point of view. They conducted a survey in several areas including North America, Europe, Asia and Africa, the finding shows that low level of top management support seems to be the most important barrier for TQM program. However, although some top managers offered sufficient support, most of Chinese companies still face the failure in TQM implementation (Li et al., 2003). More specifically, comparing with quality objectives, Chinese enterprises are more interested in immediate profits or short-term profits, which results in most firms tend to concentrate on speed of production and pursue quantity, while ignore the service quality, product quality, process quality, and even consumers demand. Some of interviewees regard this situation as human resource barriers and also mention that human resource barrier is another most significant reason which contributes to TQM program’s failure in China (Zhang, 2000). More specifically, the Chinese employees’ income is relatively low compared with developed countries, which resulting in low employees’ satisfaction and poor training and education (Zhihai et al., 2000). Therefore, next section is going to discuss the human resource barrier.
2.6.2 Human resource barriers
Several previous studies have identified that human resource barriers such as lack of education and training, high employee turnover, lack of employees’ satisfaction and motivation are human resource barriers in successful implementation of TQM in healthcare industry (Alexander et al., 2007; Withanachchi et al., 2007; Ozturk and Swiss, 2008). While, Mosadeghrad (2014) demonstrated that poor education and training seems to be the main obstacle in manufacturing industry. To be specific, education and training could provide and improve employees’ relevant knowledge, skills and expertise, which contribute to the TQM programs’ development and implementation. Meanwhile, it also plays vital roles in guarantee commitment and behavioral change towards continuous quality perfection (Huq, 2005). Cooney and Sohal (2008) conducted a survey in 48 American states, and found that employees’ job-related knowledge, skills and even communication skills could be improved by training and education. In addition, training and education might have positive impact on employees’ involvement which means it could conquer staffs’ resistance towards TQM, and then result in a satisfied environment (Jacobsen. 2008). However, numerous small Chinese companies might not have such ability to afford training fees (Mosadeghrad, 2014). Besides, even though many Chinese manufactures realize the importance of training and education, because lack of sufficient training facilities, they have no good ways to avoid low product quality (Li et al. 2003).
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2.6.3 Contextual barrier
Although human resource barriers seems to be the biggest problem for TQM implementation in Chinese manufacturing, the contextual barrier is more likely the most significant obstacle such as inappropriate organizational culture, lack of teamwork, lack of employee trust in senior management (Mosadeghrad, 2014). Without a supportive organizational culture, TQM initiatives would not be successful (Mandal et al., 2000, Tata and Prasad, 1998). In other words, organizational culture seems to be the most important element of contextual barriers. Specifically, several previous studies found that an underlying logic (e.g. paternalistic approach to management) has been existed for many centuries in Chinese social and industrial organization. This situation result in Chinese management system tends to adopt centralization (e.g. bureaucratic and hierarchy structure)(Pun et al., 2000). Thus, Chinese culture and Chinese management system are closely associated with each other. Moreover, according to Chin and Pun (2002), the effectiveness of TQM implementation could be determined by the appropriateness of organizational culture. In addition, In the case of Chinese traditional management model, senior managers seemed to be unwilling to disperse their rights and they also did not encourage the active participation of their subordinates, which might influence TQM’s implementation in China (Yusuf et al., 2007). However, the above-mentioned views also have limitations. There is insufficient evidence to support such view that culture has impact on implementation of TQM (Jacobsen. 2008). More specifically, TQM focuses on improve the processes of production rather than organizational culture. While, due to China become increasingly international, Chinese top managers are more able to accept new changes like culture (Li et al., 2003). If the culture changes were conducive to the long-term development of the company, whether it is Western culture or Eastern culture, the firm would force their employee to learn and to adapt such new culture (Mosadeghrad, 2006).
2.6.4 Cultural barriers
Several studies indicate that national culture could substantially affect the attitudes and behavior of workers as well as managers. As the TQM philosophy is implemented in different countries, it is expected that management will face different challenges. Knotts and Tomlin (1994) found that certain aspects of TQM philosophy such as worker participation need to be carefully implemented in Mexico plants. Sadur (1995) studied Australian firms and confirmed the effects of national culture on TQM implementation. Dobbins (1995) suggested that international companies must adapt the TQM process to the host country culture. Many of these studies followed Hofstede’s “cultural dimensions” study (1980) to investigate the effects of cultural difference on TQM implementation. Hofstede surveyed managers across 70 countries and proposed four cultural dimensions (power distance, uncertainty avoidance, individualism and masculinity) to study how workers perceive and conduct business in different countries. In general the adoption of TQM must be consistent with a culture having a higher level of collectivism, power distance, uncertainty avoidance and femininity.
Other than these four dimensions the literature also suggests that top management personality and leadership behavior in different cultures are also important factors to consider in implementing TQM philosophy. For instance, Japanese management displays a very different leadership style from American management. Many have credited the success of TQM implementation in Japan to its management style (Kondo, 1990; Katz et al, 1998; Yusof & Aspinwall, 2000). Since top management personality is likely to affect leadership style, the fit between TQM philosophies and personality could be used to explain the resistance to TQM adoption and results in certain countries.
Conclusion
In conclusion, this literature review mainly focus on investigate the barriers that may hinder TQM implementation. However, due to most evidences and studies were conducted by USA, which seems to be unrepresentative of Chinese manufacturing. In addition, many researches are likely to concentrate on TQM implementation and its impact on organizational performance, while, few studies pay attention to Chinese manufacturing and its TQM implementation obstacles. Therefore, this gap will be addressed in this study.
Methodology
4.1 Research philosophy
This research will use positivism philosophies rather than interpretivism. Positivism philosophies prefer quantitative methods such as social survey, case study and official statistics, because these secondary data have better reliability and representativeness. By using quantitative researches, positivisms could easily get an overview of a certain social phenomenon and uncover social trends so that this type of philosophies is more interested in trends and patterns rather than individuals (Macionis and Gerber, 2010). Therefore, researcher has to collect data, analyze them, so as to find why many Chinese enterprises failed on TQM implementation do.
4.2 Research approach
This research will adopt deductive way to analyze why Chinese enterprises failed on TQM implementation, because the deductive approach focuses on developing hypotheses based on existing theory, and designing a research model to test the hypotheses (Goddard and Melville, 2004). In this research, the hypotheses about three barriers which may influence the implementation performance in China manufacturers will be examined.
4.3 Data collection
According to identify and examine the hypotheses, this research will take secondary data analysis to analyze the barriers of influencing Chinese enterprises’ TQM implementation. The research will initially collects lots of secondary data which could be cited from the documentary including organizations’ databases, organizations’ annual reports, journals and newspapers, the multiple source including industry statistics and reports, government publications, and the survey including governments’ surveys and organizations’ surveys. All of the secondary data could provide a certain quantitative supporting.
Moreover, a qualitative research (e.g. 2 case studies) will be adopted in the future dissertation. Yin (2003) indicated that case studies could offer a better understanding of the research’s context. Moreover, Saunders et al. (2009) also pointed out that case study strategy are likely to formulate answers, in other words, it try to answer the questions in a more detailed way including not only “when ” and “where” but also “why” “how” and “what”. Due to the special nature of Chinese culture, and few relevant study have been done in this area, this research will adopt 2 cases to investigate the contextual barriers. One case is a SME (small and medium-sized enterprises) in China (Jacobsen, 2008); the other one is Haier Company (Xu et al., 2007). Compared to single case study, two case studies’ results seem to be more generalized and representative (Yin, 2003).
Limitation
Apart from the research inherent limitation (e.g. erroneous analysis and data collection), this research also has other drawback that the further research will mainly depend on two case studies. To be specific, these two case studies may not fulfil the particular research objectives. In addition, these two case studies’ own limitations are also difficult to avoid. For example, this research’s aim is to identify the barriers which could influence the implementation of TQM, while, the information and data of these two study cases may not meet this research’s specific aims or objectives.
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Chapter 5:
Case Studies Analysis
Feigenbaum (1991) postulated that TQM as an efficacious device that puts together the upkeep, quality research and development of every branch in a corporation. In this way TQM will become a vital organ of operation management across many businesses of numerous stratums. But operation control is an important, dynamic and all pervasive technique that could simplest be completed favourably by using highly competent individuals (Gordon and Sohal, 2001). New operations technologies and manage structures are drastically affecting the approaches corporations conduct their enterprise. Information of operations is crucial in making informed managerial choices. Worldwide opposition and generating excessive first-rate products that may be bought at competitive expenses is the primary duty of the operations control. Operations management is important to service companies in addition to manufacturing firms. No carrier company can be splendid without advanced operations management that is well complemented by an effective TQM system (Huarng and Chen, 2002).
It is worth noting the field of production management inside the past has centered almost entirely on manufacturing management, with a heavy emphasis at the methods and strategies utilized in working a manufacturing unit. However, inside the latest years, with development in technological advancement, exchange in hard work patterns and boom in competition within the international marketplace; the sports of the production and operations control of companies has taken a prime go with the flow. As a result of these rapid modifications in ideas of manufacturing and operations management in China, the scope of production management has broadened substantially.
Operations management is the enterprise feature that plans, organizes, coordinates and controls the assets had to produce a corporation’s items and services (Zhihai, Waszink and Wijngaard, 2000). Operations control is a control function and entails managing human beings, equipment, generation, records, and many different assets. TQM on the other hand follows three management constructs that include quality control, quality improvement and quality planning (Jiran and Gryna, 1993). Thus, each business enterprise, whether public or personal, manufacturing or carrier, has an operations feature. The role of operations control is to convert organizational inputs into outputs. Inputs include human sources, facilities and procedures as well as substances, generation, and facts. Outputs are the goods and services an agency produces. TQM is important for a company in that it ensures conformance to specifications, value for rates charged, support services, fitness for use, and psychological influences (Reid and Sanders, 2010) thus supplementing the operations management. In this way TQM ensure that the organisation contends against its rivals in the highly dynamic market (Kumar et al., 2009). Selecting two competitive companies will, therefore, be effective in helping to bring out the process of TQM implementation and the various barriers that undermines this implementation process. Haier Company and Bo Tin Company limited have been highlighted for this case analysis.
The review of the two companies will build the theory for factors that determine TQM implementation through reflecting on the following hypotheses:
Table: Haier Company and Bo Tin Company hypothesis summary
Hypothesis
Haier Company
Bo Tin Company
Conclusion
H1
Lack of enough management support in Haier slowed the process of TQM implementation
Effective management philosophy led to faster implementation of TQM in Bo Tin Company
Strategic barriers will affect the process of implementing TQM in China manufacturing companies.
H2
The adoption of efficient employee education and development programs in Haier Company facilitated TQM implementation
The basic functions of human resource of hiring, training and development of members of the staff was not effective causing poor TQM implementation
TQM implantation in Chinese firm is affected by human resource issues
H3
Proper integration of organization culture into Haier Company led to success of TQM implementation in the firm
Because of lack of institutional and national integration together with cultural integration proper TQM could not be implemented in Bo Tin
TQM implementation program in China is influenced by contextual barriers
5.1 Haier Company
5.1.1 A brief introduction
Haier Company was founded in the year 1984. The Haier group company has a speciality in high quality appliance brands that have captured the attention of a large market throughout the world. However, the appliance Company has not stopped at this strength but it has explored many opportunities in the market environment to put it above other appliance industries of its class. As a matter of fact, Haier has been recognised and ranked by world’s leading marketing organisations like Euromonitor International (Haier.net, 2016) for exemplary performance in terms of quality productions and customer service provision. The firm is a multinational company that operates in many countries including China and India. The most important operational bases for Haier China Company are the Shenyang that deals with refrigerators (Haier.net, 2016) and the Zhengzhou factory whose speciality is in air conditioner manufacture (ibid).
Haier Company has undergone a period of restructuring and development over the years to offer wide range of products to ensure that their customers are motivated. The main appliances that the company deals with include: Refrigerators, Air Conditioners, Wine Cellars Ovens Washing Machines, Water Heaters, Panels (LED TV’s),Commercial Refrigerators and Microwave. However, the firm has transfigured from a factor that produces domestic appliances to an organization that nurtures talent through support for entrepreneurial activities (Haier.net, 2016). The company has a state of the art R&D branch and an efficacious human resource management that utilise the era of technology to ensure continuous improvement and customer focus.
5.1.2 TQM practice process and discussion
According to Reid and Sanders (2010), there are seven basic general ideas that TQM philosophies are dependent on. This constructs include continuous improvement, employee empowerment, process management, product design, management of supplier quality and the focus on customer. Thus, when referring to the TQM practice processes that are undertaken in Haier Company we have to consider the strategic changes that have enabled the enterprise to beat off competition and contend well against other key rivals in the highly dynamic business environment. There are six major constituents that form the part of Haier TQM implementation and processes that has mad the company to stand up over the last years (Xu et al., 2007). Long-term profitability and sustainability of Haier Company has always revolved around a better management and administration, company culture, technological advancement, organization and marketing plan.
One of the major setbacks of Haier Company before it picked up the mantle to lead appliance companies around the world was poor quality fridges. It required the insight of a strong leader to come up with an innovation to counter the firm’s incompetency. The first step to deal with the shoddy fridges began with Director Zhang Ruimin to destroy the inoperative refrigerators. Haier accomplished technological innovation a good way to flip out true refrigerators. Although dealing with chaotic manufacturing facility conditions while he became the employer director, Zhang Ruimin understood that, in an effort to survive, his top precedence had to be to establish, after which continue to enhance product conditions by breaking the annihilating effect of human resource barriers to effective TQM implementation in his firm.
Thus, 13 vital management guidelines had been quickly formulated. One in all them become that employees needed to be vigilant everywhere within the workshop. Failing to fulfil high-quality requirements was the most frustrating scenario that faced Haier within the starting. Therefore, in embracing a technological perspective through and efficient TQM Haier competitiveness was realized. The new system that involved the staff in innovative processes, offered employee education and training ensured that the staffs in the organization was satisfied with the activities of the firm signifying unanimity of purpose with Haier Company objectives.
The strategy of merger and acquisition is another break way that has ensured that Haier China Company remains highly competitive with regard to TQM. For instance, in the early Nineteen Nineties, Haier Company was popular within the home market for fast class appliances that were no match to local firms. Consequently, the following intention was to benefit a reputation within the overseas market and to be listed in Fortune 500 global (Xu et al., 2007). Haier observed that, by way of evaluation with overseas establishments, its annual sales was extraordinarily low. Constructing on a hit management, Zhang Ruimin decided to adopt a diversification strategy in place of depending upon a single product in a highly rivalled marketplace.
From 1992 to 1998, Haier started to expand through merging with and obtaining other firms (XU et al., 2007). The main targets for Haier Company were organizations with hardware in desirable condition, but with unstable management. Haier management had now come to terms with the fact that strategic barriers such as lack of top management support were detrimental to TQM process formulation and implementation. Haier believed that with their strong management, they would turn around the opportunities to their advantage through introducing right control (Palepu, Tarun and Ingrid, 2005).
Even today, effective TQM policy of continuous improvement is synonymous with Haier Company. In fact, the culture of innovation has been inculcated into the Haier Company. The organization sees everyone as an innovator (XU et al., 2007). As Haier advanced with Mr Zhang’s guidance, a progressive lifestyle was shaped and regularly strengthened. Haier’s innovations in approach, enterprise, organization and era have been correctly included into a complete system with a unique modern tradition. This corporate culture has helped every employee in Haier, from managers to ordinary employees, to shape the organisation values of Haier. It is stipulated that each person need to be innovation-minded.
According to the company website, (Haier.net, 2016), Haier acquired GE electricals USA to further its advantage in quality consumer electrical appliances and home appliances. Nonetheless, Haier Company is aware of the constructs of TQM that include supplier quality management, quality system improvement and product design. The firm positions itself in the market in such a way that it only merges with already established brands, or brands that will offer a profitability value to the organization to ensure its long-term financial gain or profit.
5.2 BO Tin Company
5.2.1 A brief introduction
The BO Tin Building Material Company Ltd was formed in 1994. Ever since it was formed, the firm has established itself as the leader in the building and construction industry in the republic of China. The BO Tin Company sells and markets the high quality building materials all over China. The headquarters of BO Tin Company Ltd. is located in the Kowloon, Hong Kong. Moreover, the company employs many individuals, both qualified and support staff, to assist in production of the super grade building materials in China. BO Tin Company is a private company limited by shares and is listed in the China security market by the China Securities Regulation Commission (Buildersdirectory.com.hk, 2016). The firm has ensured that it has continued to register positive growth both financially and in terms of market share through the adoption of effective operation management systems within the organization.
The company has produced selling brands in the market. The Company’s brand experience offers wide selection of building materials and equipment (Buildersdirectory.com.hk, 2016). The building and construction materials are differentiated into a range of products namely lightings, insulation materials, ceilings, fire protection materials, rockwool and partitions. However, the company’s product brand names include; fine point, boral, daiken, kirii, lyrids, among others (Buildersdirectory.com.hk, 2016). The company has been involved in layout and installations on primary purchasing shops in Hong Kong, government organizations and airport ceilings. BO Tin Company Ltd. has many years of revel in to adopt distinctive tasks, in order to meet the realistic and monetary principles for the premise of imparting great and innovative merchandise to ensure customer satisfaction and the benefit of all stakeholders.
5.2.2 TQM practice process and discussion
The choice for Bo Tin to adopt TQM procedures was motivated by the growing population that implied a bigger market for building and construction materials, and the market was becoming more aware of standards. According to Chan et al., (2000)’s study good quality is what is defined by the customer. Moreover, total quality management refers to a system that concentrates on the demands of the customer (Cooney and Sohal, 2008). As a matter of fact the rash for Bo Tin Building and manufacturing Company Ltd. was instigated by many complains that the customers were raising concerning the produced products.
Bo Tin manufactures glass mosaic tiles which are used commonly in the production industry. The exceptional glass mosaic tiles usually have an immediate effect at the building challenge. Some years in the past before imposing TQM, Bo Tin experienced a decline in commercial enterprise. At the same time, more and more customer complained about the deterioration in quality, in particular regarding the peeling trouble, shade variation, and the sawed edges in the products (Cooney and Sohal, 2008). There were fundamental reasons for the decline. First, Bo Tin moved its production plant from Hong Kong to China. This was accompanied by change from the usage of electric furnaces to gasoline-oil furnaces in the production process that prompted the decline in the standards of the product. Secondly, the varying labour patterns in China had also induced difficulties inside the organization. Thus, the technique of production changed resulting to poor quality of glass mosaic.
The major barrier to effective TQM program at this stage as put forward by Mosadeghrad (2004) was cultural barrier. The culture of the people of China impacted on the quality of tiles that were now produced in China. Different cultures determine the quality of labour that will be available to a manufacturing company as is postulated by Hofstede. In view of the difficult state of affairs, the discerned firm had once taken into consideration closing down the business. However, it changed into a resolve that it would subsequently lease a brand new team of control for Bo Tin, and the brand new management became determined to enforce a TQM program that would restructure the activity of the enterprise. The consequences institutional and national integration together with cultural integration are evident in the management orientation that Bo Tin Company adopted.
However, the human resource department of the BO Tin Company would not perform their basic functions of hiring, recruiting, selecting, training and development of members of the staff that would carry out the activity of ensuring that the objectives of the firm are unanimous with the individual aims of the employees. Thus, human resource barriers are very detrimental to TQM processes and continuous improvement of the organisation (Mosadeghrad, 2004). Bo Tin Company started the TQM venture by hiring a consultancy company to manage its employees and offer advices that would shape the firm towards achieving a competitive edge. A companion of the firm had had years of experience in imposing TQM for some of organizations, and was appointed to lead the Bo Tin project. The leader of the consulted team assisted with the aid of his group of workers, monitored closely each phase of the TQM mission and pronounced the progress regularly to the pinnacle control of Bo Tin. The associate familiarized himself with Bo Tin earlier than he worked out a detailed plan for implementing TQM inside the employer. One among his major tasks becomes to make each person inside the business enterprise aware of and understand the idea of "effective management." The idea not only conformed to "meeting the better standards for every individual," but also to a comprehensive method that would make sure that there will be uniformity between every product output in the future. TQM training programs changed to incorporate what was initially prepared by the hired firm for the senior staff in the enterprise.
All in all, an effective TQM programs raises the standards of the company and improves its competitive advantage in the market place. An efficacious TQM will align the hindrances of better performances such as inappropriate organization cultures, poor human resource management and ensure a long-term sustainability of the firm. Before Bo Tin could adopt a better TQM system, the company suffered negative feedback from the market, losses that impacted on the ratio of return on investment of the shareholders and overall poor quality of tiles and building materials (Cooney and Sohal, 2008). However, the consulted firm restored the structure of Bo Tin Building and Manufacturing Company to a top selling brand in the market today (Buildersdirectory.com.hk, 2016).
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