Business 101: Principles of Management

Total quality management (TQM) is achieved and becomes part of the overall organizational culture when the five principles - produce quality work the first time, focus on the customer, have a strategic approach to improvement, improve continuously and encourage mutual respect and teamwork - are practiced by all employees.

What is Total Quality Management?

Why is online shopping a better experience on some sites than on others? Let's look at total quality management (TQM) for the reasons.

Total quality management is an organization-wide philosophy with its core values centered on continually improving the quality of its product and services, and the quality of its processes, to meet and exceed customer expectations.

This means that everyone in the organization - from top management to the employees - plays a role in providing quality products and services to customers. Even suppliers and the customers themselves are part of the TQM.

Five Principles of TQM

In order to exceed customer expectations, an organization must embrace five principles:

• Produce quality work the first time
• Focus on the customer
• Have a strategic approach to improvement
• Improve continuously
• Encourage mutual respect and teamwork

Let's see how Fun Time Travel, an online travel booking website, applies the five principles.

Information technology technicians monitor the website for client activity.

Producing quality work (the first time) means quality is built into the processes for producing products or providing services, and continual improvement measures are taken to ensure the processes work every time. Employees are empowered to make decisions to improve a process and are provided with continual training to develop their skills.

The purchasing department at Fun Time Travel evaluates data on client purchases to determine which packages are most popular with clients. This helps them to determine what stays and what goes. The information technology technicians monitor the website continually to assess whether clients are just browsing or actually making purchases. The IT guys also evaluate how long a booking takes to determine whether changes need to be made to the check-out process.

Focusing on the customer involves designing products or services that meet or exceed the customer's expectations. This involves the product itself, its functionality, attributes, convenience and even the means by which the information about a product is received by a client.

The marketing department is responsible to get the cyber-word out to potential clients. Marketers use a wide variety of media sources, like social networking, email and even texting, to get the word out about Fun Time's website. If they notice traffic is not moving toward the website or that clients are not staying online long enough, they will make strong suggestions to the IT department and the research and development department to make changes immediately.

Marketers use a wide variety of media sources, like social networking, e-mail and texting.

By having a strategic approach to improvement, processes are developed and tested to ensure the product or service's quality. This also involves making sure suppliers offer quality supplies needed to produce products.

The purchasing department monitors client reviews to determine whether the ratings on the website are similar to those of actual past customers. This makes it possible for purchasing to add more travel packages to the company's inventory.

Improving continuously means always analyzing the way work is being performed to determine if more effective or efficient ways are possible, making improvements and striving for excellence all the time.

The human resources department is interested in making sure employees are qualified to perform their jobs. By having qualified and trained employees on the team, the website will run effectively. Calls to the travel desk will be handled efficiently. Any interruption to the booking process will be quickly fixed, and improvements will be made.

By having qualified employees on the team, the website will run effectively.

Encouraging mutual respect and teamwork is important because it fosters a single-organizational culture of excellence by knowing that every employee from top to bottom of the hierarchy holds the same core principles at heart.

The entire team at Fun Time Travel work together to make viewing, planning and booking a vacation on their website a pleasurable and easy experience. This requires an inter-departmental approach to TQM.

How Does this Work Inter-Departmentally?

In a large organization (like Fun Time Travel), many departments work together to provide quality travel packages for its online clients. All departments must work together to ensure that the travel arrangements a client makes are successfully executed.

When a client books a vacation on funtimetravel.com, the marketing department quickly sends a survey asking the client about this or her recent purchase. Questions include ease of website use, variety of travel packages offered, convenience of payment methods and overall satisfaction with the experience. The information gathered from this survey is collected and sorted for further use by other departments.

Information on travel packages will be sent to the purchasing team to use to assess the quality of the travel packages offered on the website. Information obtained from the survey may include client preferences for pet-friendly hotels or even culinary tours. The purchasing team can look into improving the selection of travel packages available to clients.

The survey may reveal that the website is not so easy to use. This information will be given to research and development and to information technology teams to use to determine whether upgrades are necessary to the server or the website itself. If a client finds it difficult to book a vacation, they will go to a competing website.

The purchasing team can assess the quality of the travel packages offered on the website.

The finance department will review information, like 'convenience of payment methods' data, to assess whether clients are happy with the credit card choices. If clients are not satisfied with the choices, an alternative method of payment may be offered, like taking installment payments rather than only one payment on a credit card.

Finally, human resources will receive information about employee-related issues. If a client had to call the 800 number to ask a question, the information received from the survey may indicate a need for additional training or even new job specifications for telephone salespeople.

Lesson Summary

Total quality management (TQM) is achieved and becomes part of the overall organizational culture when the five principles - produce quality work the first time, focus on the customer, have a strategic approach to improvement, improve continuously and encourage mutual respect and teamwork - are practiced by all employees.

Producing quality work (the first time) means quality is built into the processes for producing products or providing services. Employees are trained and empowered to identify problems and fix them right away.

Focusing on the customer involves designing products or services that meet or exceed the customer's expectations. Data can be gathered from surveys to measure customer satisfaction. This information is then disseminated to all departments to continually improve products and services.

Having a strategic approach to improvement means processes are developed and tested to ensure the product or service's quality. This is a never-ending process that involves everyone from top to bottom, even suppliers and customers themselves.

Improving continuously means always analyzing the way work is being performed to determine if more effective or efficient ways are possible. Management and employees are always making improvements and striving for excellence.

Encouraging mutual respect and teamwork is important because it fosters a single-organizational culture of excellence.