III. PRODUCTIVITY/QUALITY MANAGEMENT
Concerns for declines in the nation's annual rate of growth in productivity and loss of competitive position have spawned a host of new management initiatives to increase productivity and quality.
More recently, the debate has extended into the quality arena in which managers in the public and private sectors are focusing on problems of performance and productivity as quality of service problems.
Three Management Models
Management methods have always evolved--and continue to evolve--to address changing organizational and societal needs.
As in other fields of endeavor, management methods evolves by redoing, sometimes discarding, and often building on what has gone before. [1]
Mechanical model draws analogy between an organization and a machine.
o Each worker is assigned particular procedure and taught to follow it rigorously.
o Assumes a static environment in which a machine can be built to carry out repetitive tasks.
o Organizations based on variations of the mechanical model were common around 1900 and are still frequently seen today.
Biological model draws parallels between an organization and a biological organism.
o Workers are the arms, legs and sensory and other organs, ultimately serving the needs of the organism as a whole.
o Assumes that the parts do their jobs according to their own program (including communication among themselves).
o The biological model is more appropriate for situations requiring accommodations to change; if change is slow enough, the organism can gradually evolve to cope with it.
Social model uses an analogy between an organization and a society of individuals where each individual has the ability to think and learn for himself or herself.
o Much interaction among individuals who depend on each other for mutual adaptation and survival.
o The social model is well suited to situations in which change in unpredictable--and to situations in which it is possible for the society to create its own future.
o the social model is the basis of a learning system: it is well suited to situations that require the continual development of new capabilities.
Interpretations of the Social Model
Several interpretations of the social model that seek to address the issues of performance, productivity, and quality tend to be hybrid approaches
o The comprehensive productivity measurement approach incorporates measures of productivity into organizational processes for goal setting and budgeting, going well beyond the simple control/accountability systems.
o The use of participative management approaches to focus correctional efforts usually results in a more integrated performance/productivity improvement effort that includes more sophisticated measurement devices.
o Major experiments are underway to develop methods by which to analyze and evaluate knowledge-based, white collar organizations in terms of resource and management requirements and service and production capacity.
o Team building involves a number of strategies designed to deal with , intra- and inter-group competition and structural rigidities and unresponsiveness within an organization.
o The underlying concept of the Quality Circle is that small voluntary groups of key participants can do more than discuss problems--they can plan for and implement actual solutions.
o In Quality of Worklife (QWL) approaches focus on measurements of the quality of life in the work environment: employees participate in all phases--research, planning, implementation of change, and evaluation.
Total Quality Management
Total Quality Management (TQM) is "a structural system for creating organization-wide participation in planning and implementing a continuous improvement process that exceeds the expectations of the customer. It is built on the assumption that 90 percent of problems are process, not employee, problems." [2]
TQM builds on four basic concepts:
o Continuous improvements--necessary for survival in a rapidly changing and highly competitive world--advocates the continued search for ways to do things better, even when the existing ways work reasonably well.
o Customer focus: organizations must keep an eye on their customers/service users to respond quickly to new customer needs and to make sure that the finite resources of the organization's resources are deployed as effectively as possible to provide customer satisfaction.
o Total participation fosters the integration of insights and skills from people throughout the organization through the use of quality circles, teamwork, cross-functional teams, and so forth.
o Societal networking involves participate in a quality culture, sharing quality methods and "best practices", and encourages the improvement of quality and management methods through the participation in a mutual learning system.
Taken together, these four components of TQM form a comprehensive system of management.
o TQM's continuous improvement and customer focus have completed the move away from the mechanical model and begun the move to the social model.
o TQM's total participation and societal networking are moving away from some aspects of the biological model and toward the social model.
Hoshin Planning
The concept of Hoshin Kanri--one of the pillars of TQM--evolved in Japan from Management by Objectives (MBO) and is now used around the world by many leading companies.
o The term Hoshin translates from the Japanese as "policy".
o Various names have been used for this approach in the West, such as Hoshin Planning, Management by Planning, and Policy Deployment. Hoshin often is defined as strategic planning; however, these two planning approaches are different as applied in TQM.
o Strategic planning involves developing a vision for the organization and a mission statement as to how the vision is to be achieved within a certain time frame.
o These statements of goals and objectives form the basis for the establishment of an integrated business plan which identifies the long-term targets and the means for achieving organizational goals in terms of quality, cost, delivery, and morale.
Hoshin is a one-year plan for achieving the objectives developed in conjunction with management's choice of specific targets and means in terms of quality, cost, delivery, and morale.
o A target statement can be established by combining at least one direction word (e.g., to increase or decrease), with a performance measure, target value, and time period.
o Depending on the organization, the means may differ from other organizations that share the same targets. Usually, there are a few means for each target.
Under the Hoshin or plan-do-check-act paradigm, planning must involve all levels of management in the organization.
o Plans at all levels are aligned by a process of "catchball", in which the plans are communicated and conflicts between plans are identified and resolved.
o It is important to identify the relationships between targets and means at each level and targets between the different levels of the organization.
o Plans must be clearly documented and monitored--they are not just a once-a-year exercise that is put on a shelf to collect dust.
o During the implementation of the Hoshin plan, each target should be measured using performance measures from the target statement.
o If the Hoshin target is achieved, the target value should be adjusted accordingly.
Variations of the TQM Theme
The Quality Improvement Process (QIP) builds on three basic elements: (1) problem-solving teams established at various levels within the organization; (2) formal mechanisms for the systematic identification and deployment of policy; and (3) the application of Plan-Do-Check-Act procedures to involve workers at all levels in quality improvement on a day-by-day basis
Productivity gainsharing ties employee motivation directly to productivity efforts through "shared savings plans," in which a portion of the savings created by improvements in productivity is returned to the employees in the form of bonuses.
It has been suggested that TQM does not go far enough toward the social model of management.
There is a need to strengthen TQM through its integration with other management methodologies.
Perhaps the most important lesson to learn from the efforts in the 1980s and 1990s to improve productivity and the quality of services is the fact that it is relatively easy to establish a productivity/quality improvement program. The hard part is to sustain such efforts.
Endnotes
[1] Russell L. Ackoff and Jamshid Gharajedaghi, "Mechanisms, Organisms and Social Systems," Strategic Management Journal, Vol. 5 (1984),, pp. 289-300
[2] L. Edwin Coate, "TQM on Campus: Implementing Total Quality Management in a University Setting," Business Officer (November 1990).