CHAPTER ONE
INTRODUCTION
1.1 Background of the Study
Quality has been an important part of human activities since the emergence of human history. Before now, manufacturing was essentially conducted by the cottage industry and heavily relied on craftsmen. The manufacturers were merely in seller’s market; however, the trend has changed from seller’s market to the buyer’s market. The consumers have become more aware of the variety of products in the market. Thus, customers are the focus of manufacturing such that every organization has to study what customers needs are and satisfy them in order to remain in business by offering products of desired quality. Arora (2009) stated that quality of goods are determined by customers, customers become a key factor that can create competition among organizations and this make firms to focus more on quality to sustain their competitive advantage. This is because effective quality determines the rate of productivity and thus become an important factor in organization and also contributes to the growth of the economy.
Meanwhile in the light of increasing complexities and the change from local to global tiers of market places, there have been constant pressures applied on the management to improve competitiveness by lowering operating cost and improving logistics. The customers are becoming increasingly aware of rising standards, having access to wide range of products and services to choose from. There is an ever-increasing demand for quality product and/or services and this global revolution had forced organizations to invest substantial resources in adopting and implementing Total Quality Management (TQM) strategies.A mélange of terminology evolved from private consultants and government offices. In no particular order of succession, Deming, Crosby and Juranexperienced various levels of success with disciplined approaches aimed at dramatically improving quality of products and services and of having the effect of dramatically improving productivity and other organizational attributes (Westbrook, I993). Total Quality Management refers to a total commitment to quality.
Shankar (2012) views, TQMas a management approach of organization, centered on quality, based on the participation of members and aiming at long term success through which customer satisfaction and benefits to members of the organization and society at large. In fact the focus of any organization that aspires to be a quality oriented must be to achieve a corporate culture of quality in everything it has or does- its people, processes and products as well as services.Quality is far from being a novel idea. The concept of quality control entered into management in the 1930’s, it found its expression mainly in two areas:- inspection of finished products or services and statistical sampling. Two things have changed since then:- (i) quality has now become universally defined in terms of customer perceptions and expectations rather than in terms of production specifications as was the care in the past and (ii) relative increase in customer requirements m terms of quality.Quality is a measure of customer satisfaction. It refers to the combination of a product, process, or .service that determines the products quality to satisfy specific needs. A business philosophy that embodies the belief that management process must be focus on integrating systems, the idea of customer driven quality through the organization ( Zikmund, 2013).
Savolainen (2000) posits that Total Quality Management (TQM) is a management approach which aims at incorporating awareness of quality in all organizational process. Many organizations are striving for quality products and services that will meet or exceed customers’ expectations, as a result of this, there are production systems that will be put in place to assure the transformation of input into quality output. Pheng and Jasmine (2004) point out that with the adoption of TQM that there are the benefits of higher customer’ satisfaction, better quality products and higher market shares. Thus customer satisfaction is one of the prime objectives of Total Quality Management and it is the most widely discussed approach to directing organizational efforts towards the goal of customer satisfaction. Ogboro and Obeng (2000) reiterate that TQM theory is based on, continuous improvement, top management leadership and commitment to the goal of customer satisfaction, employee empowerment and customer focus.
Thus, the Total Quality Management (TQM) is about people and their attitudes to work in the process of creating and managing change and values in the organization. It is not about techniques and procedure as such. It includes them, and it needs them. However, it is people who actually use them, inspired with a simple idea that the purpose of work is to provide customers with something that will delight and make them want to keep paying for your salaries, by buying/patronizing their products or services you provide. It is focused on a belief that customers (people that use the products or services) have the ultimate say in the kinds of products or services put out to them and that if brewing output does not meet their expectations, they have a choice to switch to other products which can effectively compete with others. And that, your customer can as a matter of fact determine how well you perform in a competitive market. Because it is important that your business stay afloat and competitive all the time, it is expedient that we take a critical look at the fundamental factors that influence product efficiency, that is; human resources; those individuals in the system who operate your machine, computers, carryout instructions on what is to be done and at what time, who in fact assist the organization in achieving its corporate goals.
Total Quality Management can usefully viewed as a cycle; first of all customer needs must be identified and addressed. Their needs are basically what they say they are, not necessarily what the organization would like them to be; and the brewing organization should seek to provide their customers with exactly what they want, delivering the right services at the right time (Thompson, 1990). In satisfying these needs, the brewing organization should seek to improve the quality of their operations in term of people, systems and technology or overall performance. Improving people can be relatively inexpensive, but it requires that they are seen and treated as a key resource. Total Quality Management therefore should start with the strategic leader who must emphasize a commitment to it, but it must spread throughout the brewing organization. Hence, these factors prompt this study to investigate the impact of TQM on organizational performance in brewing industry.
1.2 Statement of Problem
Total quality management is a style of management that gives everyone in the company responsibility for delivering quality to the final consumers. Quality being described as a fitness for purpose or as a delight to the customer’s needs.TQM views each task in the organization as fundamentally a process in a customer-supplier relationship with the next process. The aim at each stage is to define and meet the customer requirements in order to maximize the satisfaction of the final consumer at the lowest possible cost. Incompetence on the part of employees could result to poor quality output. This undermining of the product quality affects the standard, organization repute, quality control and patronage.
However, over the years organizations have witnessed different negative impacts because of sub-standard products or fake adulterated ones. If products are not of the required specifications, this could make the products un-competitive both at national and international markets. Money spent in the production may not be recovered or waste of resources and returns on investment will fall drastically. Often, lives are lost as a result of the consumption of products produced below specifications or sub-standard. Also inferior products affect the customer health and satisfaction. The organizations corporate image and profitability are also affected negatively, due to non adherence to total quality management principles. It is against this backdrop that this study intends to examine the impact of total quality management on organizational performance with focus on organizational profitability.
The above situation if not corrected, customers will shift their loyalty to other products ofother organizations. Anorganization reputation can quickly be lost. As one executive said‘if you ship an inferior product, your employees will disengage and your customers will depart’. Organizations cannotachieve financial success, there will be high level of tension and anxiety, productivity and effectiveness’ drop and the bottom line suffer.
1.3 Objectives of the Study
The broad objective of this study is to ascertain the impact of total quality management on organizational performance. However, the specific objectives were tailored:
