Comprehensive study of TQM on manufacturing industries
performance in India.
Abstract
This study aims to investigate the impact of Total Quality management (TQM) practices and strategies on
organisational performance of manufacturing industries of India. TQM is defined as a manageent philosophy
that essentially aims to establish and deliver high quality products and services that cover all consumers’
demands and achieve a high level of customer satisfaction. This paper discusses the critical elements of total
quality management, key indicators of organisational performance, and explores the relationship between
critical TQM elements and key indicators of organisational performance in Steel, Automobile, Power, Mining,
and Textile industries. After literature review, the chosenTQM elements for the purpose of study are Corporate
Ethics, Employee involvement, Continuous improvement, Leadership commitment, Employees recognitio, and
Quality training. The indicators which are identified to gauge firm’s success are fiscal performance, Market
presence, Asset management, Customer satisfaction, risk management, and Customer Relationship
Management. The specific objective of this research is to derive the significant correlation between critical
TQM elements and key performance indicatorsfor selected manufacturing industries.
This study is based on the inputs received from managerial level employees from selected industries. The
questionnaire has both open and close ended questions, data collecion would be purely quantitative and analyze
by descriptive analysis. The descriptive statistical tools such as SPSS (Statistical Package for Social Sciences)
and MS Excel will be used in this study to extract information. Tables and figures will be used to summarize
responses for further analysis and facilitate comparison. A multiple regression analysis and variance analysis
would be conducted to identify the correlation between variables.
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Table of Contents
1. Introduction.........................................................................................................................3
2. Background.........................................................................................................................4
3. Research Significance:........................................................................................................6
4. Research Questions:............................................................................................................7
5. Aim Statement....................................................................................................................7
6. Research Objectives:...........................................................................................................7
7. METHODOLOGY.............................................................................................................7
8. References.........................................................................................................................11
9. Research Plan....................................................................................................................12
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Comprehensive study of TQM on manufacturing industries
performance in India
1. Introduction
Total Quality Management (TQM) is one of the most popular management concepts that goes
back to the teaching of Freighbaum, Juran, Deming, Ishikawa and other people who gave
various quality concepts to refine the process of overall quality improvement. TQM is a
collection of techniques, methods, processes, practices etc. that aims at improving the quality
of products and services of a business. It is a holistic strategy which is being used in several
industries to gain an extra advantage while competing in a diverse market situations. TQM is
not limited to quality and process development but also aims at improving relations with all
supply chain partners and stakeholders. Manufacturing Industries, due to intense competition
and need to deliver high quality product and services, requires management concepts and the
adoption of ISO certification to deliver high quality performance (Arauz & Suzuki,
2004;Klefsjo,Bergquist&Edgerman,2006). Barney(2007)gave emphasis on improving the
quality of goods and services to enhance organisational performance. It is a known concept
that quality improves performance but experts have varied views to measure organizational
performance (Venkatraman& Ramanujam,1986;Feng etal.,2007). An organization’s
performance is linked with several factors like financial performance, product’s quality,
efficiency, and business results(Madu et al.,1999;Feng et al.,2007). Fotopoulos and Psomas
(2010) mentioned that quality has emerged to be the top most priority parameter for the
companies worldwide to gain a competitive edge in their respective industries. Terrein (2012)
states that an ideal quality performance in a manufacturing industry is defined by the latest
technology usage, up-to-date services, efficiency, customer satisfaction level and delivery of
effective services. Senior Executives have full awareness that quality is an important strategic
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issue and should be implemented at all levels of the organization (Crosby, 1979; Oakland,
2000).Oakland (2003) states that an organization should adapt a quality management system
after analysing its strategies, company’s goals, strategic thrusts, firm’s size and structure,
goods, and services offered. Manufacturing strategies are linked with corporate strategies to
enhance the overall performance of the firm (Abdullah,2010; Sharma and Kodali, 2008).
There is no uniform understanding of TQM today (Hackman&Oldham, 1995).
This study is aimed at identifying and measuring the important constructs of TQM and
linking it with firm’s organizational performances. The Primary goal of this research
report is to measure TQM constructs and link it with organizational performance in
selected manufacturing firms of India. Another research focus should be carried out to
study the implementation of TQM in the manufacturing sector to provide a better
understanding of TQM implementation. There are many studies on TQM and its
implication, but TQM critical constructs significance with key indicators of
organization performance in manufacturing industries are not pretty clear. This research
aims to fill that gap and establish a significant co-relation between TQM elements and
total performance. As the selected manufacturing industries are from India and quality
parameters may vary from country to country, so this research would have implications
only in Indian manufacturing industries.
2. Background
Total Quality Management is recognized since ancient times in Japan after World War 2.
Since then, several firms in manufacturing sector have focussed on utilising tools, techniques,
and practices to improve the quality of their product and services (Demirbag et al., 2006;
Talib et al.,2010). Subsequently, QM is known to meet internationalstandards such as in
the ISO 9000 and international entities have accepted these standards (Sachdeva et
al.,2007). Various techniques are developed to meet quality management concepts, and
TQM is one such comprehensive technique that links all the functions of the business with
the overall performance of the firm. Managerial Philosophy aims at improving Firm’s
quality and employee’s satisfaction by enhancing employee’s involvement in decision
making process through quality circle strategies (Yusufet al.,2007). It is considered that
customer acquisition, management commitment, organizational culture, and alterations
are some of the key focus of TQM. Therefore, TQM enhances organizational performance
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and efficiency by improving the quality standards of products and services
(Arumugametal.,2008).
During the last two decades, TQM is considered as an important field of study and
emphasised by the scholars (Yusof and Aspinwall, 1999; Arumugam et al., 2008). As per
Gharakhani et al. (2013), TQM is found to be enhancing organizational performance in
various service sectors. To satisfy customer demand, TQM is considered as the
comprehensive integration of processes, models, procedures, and communication
processes (Van Ho, 2011). “Components of TQM” model by Talib and Rahman (2010a)
mentions the practices that enhances organizational performances. According to Li et al.,
2006, performance of an organization can be measured by its ability to achieve strategic
and financial objectives. Performance of an organization is linked to its financial
performance in past researches (Katou, 2008). Stock et al. (2000) states to measure overall
performance by considering both financial and market harmonic performance. Brah et al.,
(2000) mentions that organizational performance can be measured by considering
financial performance, customer satisfaction level, and product quality. Operational
performance is measured by process productivity, efficiency, costs, and error
minimization (Nunnally, 1978).
As per Wen et al. (2009) and Leticia (2007), there is a significant and positive correlation
between TQM practices and employees commitment with the satisfaction level of
customers. The research findings also clarified that management commitment is also
linked with employee’s satisfaction level. While strategic planning and process
management has comparatively less effect on customer’s satisfaction level. Quality
process management must start at the beginning of the project and continues till achieving
quality standards. Improved performance of staff members, cost minimization, and higher
customer satisfaction level are some of the benefits by implementing TQM (Lakhal et al.
2002).
The study done by Al Qahtani et al (2015) found that customer satisfaction and quality
performance of products and services can be enhanced by implementing different quality
initiatives at organizations. Leadership commitment is considered a key element for
guaranteeing a successful implementation of TQM practices at organisations. As per Raja
et al (2011), top management commitment is vital for successful implementation of TQM
in the manufacturing [Link] charts are the most widely used quality tool used to
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enhance product quality in the selected manufacturing firms. They used descriptive
research study explaining in detail the concepts, theories and researches to identify the
different TQM practices implemented and their effect on business performance. Primary
data was collected by using a detail research questionnaire. The research done by Yusufu
et al (2019) on the effect of TQM on ceramic industries in Nigeria found a positive and
significant relationship between total quality management and organizational growth.
They also mentioned that continual improvement and Employee involvement have
significant effect on organizational performance.
The main problem identified after literature review of related work is that there is no clear
TQM constructs that are linked with organizational performance. Also, in manufacturing
industries of India, the key performance indicators are also not specified. This leads to
poor strategy management for maintaining the quality parameters in manufacturing
industries. The employees do not have the proper understanding of TQM philosophy and
the firm’s management lacks the adequate structure to train the employees. This results in
a huge impact on overall performance of the company in manufacturing industries. So,
quality parameters are required to be distinguished according to primary and secondary
significance. This would help the firms to know on which quality parameters more focus
is required to improve the total performance.
3. Research Significance:
This study is basically carried out to understand the philosophy of TQM, identify and
measure TQM constructs, performance indicators measurement, and co-relate elements of
TQM with performance indicators. Understanding TQM philosophy and analysing critical
elements would help to better understand quality standards. Maintaining quality in all
functions of the organization leads to efficient products and service delivery. This leads to
higher customer satisfaction level and improves customer loyalty which ultimately acquire
more customers for the company. Organizational performance is not only limited to financial
performance. Market performance, assets and employees management, manufacturing
productivity, and risk management also contributes to the total performance of the firm. Co-
relating TQM constructs with key performance indicators would help in identifying the
quality parameters that can be given more importance in improving the overall quality and
total performance of the company. Less significant quality factors can be considered second
in priority. This would help the management to make effective decisions and adapt an
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efficient strategy to reach the desired goals and objectives. Strategic thrusts would help the
company to focus and stay on one path that ultimately improves the total performance.
Manufacturing industries are selected for the study as there is a great need to imply TQM
constructs due to high competition and quality standards requirement. This research would
lead to better understanding of TQM philosophy and performance measurement.
4. Research Questions:
a) What are the critical elements of TQM?
b) How organizational performance can be measured in selected manufacturing
industries?
c) Which TQM elements have significant co-relation with organizational performance
indicators?
5. Aim Statement – The main aim of this study is identifying the critical constructs
of TQM and linking it with firm’s organizational performances in selected
manufacturing firms of India. Also, the indicators of overall performance are
required to be recognized.
6. Research Objectives:
a) To analyse and measure TQM constructs
b) To identify the key indicators of organizational performance
c) To co-relate TQM constructs with Organizational performance indicators
7. METHODOLOGY
The research process is based on the Onion Model given by Saunders, Lewis and Thornhill
(2009). Data collection and data analysis would be based on the questionnaire designed as per
the manufacturing industries of India. Questionnaire contents would be relative to Indian
market scenario. TQM constructs and performance indicators would be co-related by using
SPSS software. Positive and significant TQM elements would then be suggested to focus on
in these industries. As the investigation is concerned with the study being completed in a
specific time so cross-sectional time horizon is considered. Onion model for the research:
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Research Design: Research design according to Saunders, Lewis and Thornhill (2009) can
be classified into exploratory, descriptive and explanatory methods.
This research would be designed according to descriptive research methodology. The data
collected through questionnaire would be quantitative and qualitative both. This would help
in better analysing the critical elements of TQM and key indicators of performance
measurement through statistical interpretation. As this study would be based on the survey of
managerial employees and the Likert-Scale would be used to turn the inputs into quantitative
data. Thus, the descriptive research methodology is used for this study.
Research philosophy: According to Walliman (2010), research philosophy can be broadly
divided into three types: Positivism, Interpretivism and Realism.
This research is based on positivism philosophy as the data collected from managers would
be based on objective view point. The researcher and the nature of study remains unaffected.
Research Questions Alternatives
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What are the critical elements of TQM in Corporate Ethics, Employee involvement,
Indian manufacturing industries? Continuous improvement, Leadership
commitment, Employees recognition, Quality
training
What are the key indicators of organizational Financial performance, Market presence, Asset
performance in Indian manufacturing management, Customer satisfaction, risk
industries? management, Customer Relationship
Management
Which TQM elements have significant co- For example:
relation with organizational performance
TQM critical elements identified – a, b,c
indicators?
Key performance identified – x, y, z
Hypothesis Testing Element A has a significant impact on x, y, z
Element B has a significant impact on x, y, z
Element C has a significant impact on x, y, z
Research Approach: As per Saunders, Lewis and Thornhill (2009), research approach can
be divided in to two types: inductive and deductive approaches. Saunders, Lewis and
Thornhill (2009) differentiated between these two types of the research design.
TQM elements and key performance indicators are concluded from the questionnaire. The
hypothesis are formed on the basis of the TQM elements and key performance indicators
identified. So, both inductive and deductive approach is being used for this study.
Research Strategy
Research strategy in the view of Smith (2009) basically defines the basic approach to the
research investigation. Research strategy decides the tactics of data collection and can be
experimental, survey, case studies, observation, grounded theory and ethnography.
Since the researcher tries to study a cause-effect relationship between two or more variables
and as the research is based on the questionnaire inputs of managerial employees and the
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hypothesis are evaluated through comparative analysis, so the strategy is experimental and
survey based.
Data Collection and Sampling Techniques:
Primary data is collected through questionnaires and secondary data is collected from
academic journals, research articles, relevant academic reports, and works from previous
researchers. As TQM elements are co-related with organizational performance, the data is
quantified to set-up a relation between dependent and independent variables. The method of
sampling would be random probability sampling as the researchers don’t want the results to
be biased. The population for the sample would be managerial employees from the
manufacturing industries like Steel, Automobile, Power sector, Mining, and Textiles.
Sample Size:As per Rosce’s thumb rule for determining sample size, 30-500 should be the
sample size for most studies. Considering this, the Sample size for this study is limited to 100
respondents due to pandemic restrictions. 20 respondents from each of the 5 selected
industries.
Data Analysis Plan:
This study is planned to use primary and secondary data for finalizing the critical elements of
TQM and Performance indicators. Collected data is then correlated by using statistical
software like SPSS and Microsoft excel. Co-relation between dependent and independent
variables would be done by using tools like regression and ANOVA. Hypothesis testing
would be done by T-Test and P-Test.
Research Limitations: In the view of (Shamoo and Resnick 2009), there are certain
limitations that a researcher has to face with in any research.
The main limitation for this research would be pandemic restrictions and cost constraints.
Face to Face interview gives better responses as compared to floated questionnaire online.
Taking responses from different employees from selected manufacturing industries would not
be cost-effective for the research. This limits the sample size but precautionary methods
would be taken to make the research more authentic and relative to the practical scenarios in
selected manufacturing industries of India.
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8. References
1.
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9. Research Plan
Activitie Deadlin March April May June July
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3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2
Proposal 20-Mar-
submissi 22
on
Question 02-Apr-
naire 22
preparat
ion
Primary 02-May-
Data 22
Collectio
n
Seconda 02-May-
ry Data 22
Collectio
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Primary 24-May-
Data 22
Analysis
Seconda 24-May-
ry Data 22
Analysis
Interim 14-Jun-
Report 22
writing
Interim 14-Jun-
report 22
submissi
on
Final 14-Jul-
report 22
writing
Final 16-Jul-
report 22
submissi
on
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