Total Quality Management (TQM): A Complete Overview and Practical Implementation

UPI Study › Courses › Business Essentials › Free lessons › Lesson 7.5 Free with a free account

Total Quality Management (TQM): A Complete Overview and Practical Implementation

Business Essentials · Chapter 7: Organizational Design and BehaviorSection 7.5 · lesson 40 of 10514 min · free with a free account

← Behavioral Dynamics in Organizational SettingsNext lesson: The Modern Theory of Management →

Earn 3 college credits for Business EssentialsRecommended for credit by NCCRS · Business 100 · self-paced · one payment, lifetime access

In this lesson

A complete overview and practical implementation: improve the system, don't blame the people.

  • State the principles of Total Quality Management
  • Describe the quality pioneers and the core quality tools
  • Distinguish common cause from special cause variation
  • Explain how TQM is implemented, and why it fails

Free study notes

Get this lesson's notes by email

The key points and 4 practice questions with answers, in your inbox. One email, free.

One email. Unsubscribe in one click.

Transcript

Everything said in the video, section by section (1,943 words). Read along, or search it.

Organizational Design and Behavior

Total Quality Management (TQM)

When a defect appears, the natural question is, who did this? Total Quality Management asks a different question first. What in the process allowed it? This section treats TQM as a philosophy, not a toolkit. We'll set out its eight principles, and what each one asks of a manager. We'll meet the pioneers, and their most important idea, the difference between common and special cause variation. Then the cost of quality, the plan-do-check-act cycle, and the core tools. And we'll see why so many implementations fail, and finish with a machine that never seems to settle. Along the way, notice how often the fix is to change the system, not the person.

TQM as a Philosophy

A Way of Running the Organization

Start with quality itself. Quality is how far a product or service meets or exceeds what customers require and expect. It's judged by the customer, not only by the producer's specification. Total Quality Management is a management philosophy. It commits the whole organization to continually improving its products, services, and processes. It does that by focusing on customers, and by involving every employee. The word philosophy is chosen deliberately. TQM uses tools, but it isn't a toolkit you can install. And it isn't a program with a start and a finish. It's a way of deciding how the organization is run. That has a direct consequence. It can't be delegated to a quality department. A quality department can teach methods, gather data, and audit results. But quality is decided by the people who operate a process, and the managers who design and resource it. Make quality a specialist unit's job, and everyone else is relieved of it.

The Principles, 1 to 3

Customers, Everyone, and the Process

TQM is usually described by eight principles. The first is customer focus. The customer's requirements define quality. So a manager must find out what customers actually want, through surveys, complaint analysis, and direct contact. The internal customer concept extends this. The next person in a workflow is the customer of the one before. A billing clerk who gets an incomplete order form is the internal customer of the order-entry clerk. That makes handoffs visible. But units can perfect their service to one another, while the actual buyer is neglected. The second principle is total employee involvement. Everyone improves quality, because those who do the work know it best. That means giving people the authority, training, and time to act on what they see. The third is process orientation. Results are produced by processes, linked activities that turn inputs into outputs. This is the philosophical core of TQM. It shifts the response to a defect from blaming individuals to examining systems. It isn't a refusal to hold anyone accountable. It reflects an observation. A well-designed process gets good results from ordinary people. A poor one gets defects from excellent people.

The Principles, 4 to 8

What Each Asks of a Manager

The other five principles follow. An integrated system means units are linked and managed as a whole, since improving one part can harm another. When it's missing, units meet their own targets while the whole organization suffers. A strategic and systematic approach builds quality into strategy, using planned methods. Without it, quality drives appear as one-off campaigns that fade. Continual improvement means no process is ever finished. Without it, effort stops once a target is met. Fact-based decision making rests decisions on data, rather than impression or seniority. So a manager asks what the evidence is, and invests in collecting it. Communication means information about goals, results, and problems flows in every direction. When it's absent, customers discover problems first, and bad news is delayed. Here's the practical point. An organization can claim all eight principles while lacking most of them. So look for the signs of absence. They're a more reliable test than the claims.

The Quality Pioneers

4 Pioneers, 1 Key Distinction

Several people shaped these ideas. Walter Shewhart, an American engineer and statistician in the nineteen twenties, developed the control chart. W. Edwards Deming, an American statistician, taught statistical quality methods in Japan after the Second World War. He argued that most performance problems originate in the system, which management controls, not in the worker. Joseph Juran framed quality management as three linked activities, and is associated with the Pareto principle. Kaoru Ishikawa popularized the cause-and-effect diagram, and quality control involving workers at every level. The most important idea comes from the statistical tradition. Common cause variation is inherent in a process. Many small influences mean no two outputs are exactly alike. Nothing has gone wrong. And it can only be reduced by changing the process itself, which is management's task. Special cause variation comes from an identifiable source outside the normal process. A machine fault, a defective batch of material, or a new untrained operator. Here something has changed. So the cause should be found, and eliminated.

Figure 7.5.1

Reading a Control Chart

A control chart makes that distinction visible. The values here are illustrative. Measurements are plotted in order, around a center line. The limits sit three standard deviations from the center, by the usual convention. Almost all the points scatter between the limits. That's common cause variation. It calls for improving the system, not reacting to each point. One point, sample eighteen, lies outside. That justifies a search for a specific cause. Now the warning the literature states plainly. Responding to common cause variation as if it were special makes performance worse. Each adjustment to a normal result adds a new disturbance on top of the existing one. Say a supervisor reprimands an operator whenever this hour's output is lower than last hour's. That adds variation. So is one who resets a machine after every reading slightly off target. A well-known illustration, the funnel experiment, shows that adjusting a stable process after each result widens the spread.

Juran and the Cost of Quality

Prevention Is Cheapest

Juran contributed the quality trilogy. Quality planning designs processes that can meet customer needs. Quality control keeps performance at the planned level. Quality improvement deliberately reaches new, better levels. Another contribution is the cost of quality framework, associated with writers such as Armand Feigenbaum and Juran. It sorts quality costs into four categories. Take a fictional bakery, Pellam Bakery. Prevention costs stop defects occurring. Training bakers to follow standard recipes is prevention. Appraisal costs detect defects, like inspecting each batch. Internal failure costs come from defects found before the customer. Throwing out a spoiled batch. External failure costs come from defects the customer finds. Refunding a customer who got stale bread. The claim is that prevention is cheapest. A dollar spent on prevention cuts appraisal and failure costs by more than a dollar. External failure is the most expensive, because it damages the relationship as well as costing the repair. But this is a general argument, not a guarantee. Whether it holds for a process is a question for the organization's own data.

The Improvement Cycle

Plan, Do, Check, Act

The plan-do-check-act cycle is a four-step method for improving a process, by testing a change on a small scale. In plan, the team identifies a problem, analyzes it, and designs a change. In do, it carries out the change on a small trial basis. In check, it compares the actual results with what was expected. In act, it adopts the change if it worked, adjusts it if it partly worked, or abandons it. Then the cycle begins again. It's associated with Shewhart and was popularized by Deming. A common variant replaces check with study. Its central discipline is prediction. At the planning step, the team writes down what it expects the change to accomplish. Without that record, checking becomes interpretation after the fact. And almost any result can be called a success. Recording the prediction is what makes the cycle a test, and not a formality.

The Core Quality Tools

Each Tool Answers a Question

The core tools are best understood by the question each one answers. A check sheet is a structured form for collecting data where it arises. How often does each problem occur? Pareto analysis ranks problems by frequency or cost, because a few causes often produce most of the effect. It answers, which few problems deserve attention first? A run chart plots a measurement in time order, and shows the pattern over time. A cause-and-effect diagram, also called a fishbone, arranges possible causes by category. What might be producing the problem? A control chart plots measurements against limits computed from the process's own behavior. It answers whether the variation is common cause or special cause. A prioritization matrix scores options against agreed criteria, to decide which to take on first. The tools are used in sequence more often than alone. A check sheet gathers the data, Pareto picks the leading problem, and a fishbone explores its causes. Then a control chart shows whether the fix held.

Culture and Certification

Small Steps, Safe Voices, and What a Certificate Proves

Continuous improvement means many small improvements, made steadily, by the people who do the work. It replaces reliance on occasional large changes designed by specialists. The people closest to a process see its problems first, and small changes are cheap to test and easy to reverse. But it depends on psychological safety. That's a shared belief that you can speak up with questions, ideas, or mistakes without being punished or humiliated. Without it, employees won't report the errors and near-misses that improvement feeds on. An organization that welcomes problem reports, but reprimands the person who brings one, has a familiar gap. In the terms of section seven point four, its espoused value is contradicted by its actual culture. Finally, certification. Quality management standards describe how an organization documents, controls, and reviews its processes. Certification is an independent audit confirming that the system meets such a standard. It shows a documented system that is actually followed. It doesn't show that products are excellent, or customers delighted. An organization could follow its process reliably, and still make a mediocre product.

Implementation

4 Supports, 4 Failure Modes

Successful implementation rests on four supports. Leadership commitment means senior managers visibly own the effort, join reviews, and give it time and money. Training gives employees the methods, including the statistical thinking to tell common from special cause. Measurement sets a baseline and tracks results, so claims of improvement can be tested. And a sustaining structure, teams, reviews, and recognition, keeps the effort going after early enthusiasm. Implementations fail in identifiable ways. First, delegation. Leadership hands the program to a quality unit, and line managers conclude quality is someone else's job. Second, no measurement. No one can say whether anything improved, so the effort loses credibility. Third, nothing changes in what's rewarded. If bonuses still depend on volume and speed, people follow the bonuses. Fourth, reversion under deadline pressure. The routines are dropped to ship the product. That teaches everyone that quality is a fair-weather commitment. All four share a root. The philosophy was treated as a toolkit or a program, and the actual management didn't change.

Case Vignette (Composite)

The Adjusted Filler

Here's a composite case, with a fictional company and person. Rosa is a production supervisor at Aldous Packaging, overseeing a machine that fills jars to a target weight. Fill weights vary slightly from jar to jar. Whenever a jar comes out noticeably above or below target, Rosa has the operator adjust the machine. Over several weeks, the spread widens. Customers complain about underfilled jars, and operators are frustrated. She could keep adjusting, which looks responsive. She could tighten the tolerance and inspect more, which raises appraisal costs. Or she could stop adjusting on individual results, chart the weights, and study the process. A customer is watching the complaints. So the trade-off is between appearing to act, and actually reducing variation. The jar-to-jar differences are mostly the machine's normal behavior. So every adjustment adds a new disturbance. The sound decision is to stop reacting, plot a control chart, and remove any special cause it reveals. If the spread is still too wide, change the process, its equipment or material handling. Only a system change reduces common cause variation.

About Business Essentials at UPI Study

Business Essentials (Business 100) is a self-paced online course of 105 video lessons in 24 chapters, from the business environment, economics and global markets to ownership, management, leadership, operations, people, marketing, accounting, finance and banking. It carries a NCCRS credit recommendation for 3 semester credits.

Every lesson transcript is free on pages like this one, and the videos are free with a free UPI Study account. Enrolling adds a practice quiz after each lesson, the graded work and final exam that earn the credit, lifetime access, and an official transcript on completion. UPI Study has helped over 130,000 students with college credits. ACE and NCCRS have over 2,100 cooperating colleges that will consider accepting credits; the final decision is with the universities.

Compare: Business Essentials vs Principles of Management · Entrepreneurship vs Business Essentials

Why take it here

Why students take Business Essentials with UPI Study

How a business works, end to endBusiness Essentials is a survey of how companies work: economic systems, global trade, forms of ownership, management and leadership, operations, human resources, marketing, accounting, finance and the banking system. It is a common first course in business, management and accounting degrees.
Credit at a fraction of the priceThe same 3 credits can cost $750 or more at a US college. Here it is one payment, self-paced, with lifetime access.
Finish your degree soonerTransfer credits reduce the courses you still owe, so you can graduate earlier or lighten a heavy semester.
Strengthen an applicationA completed college-level course on an official transcript shows admissions and scholarship committees you can do the work.
Study on your own scheduleNo start dates, no deadlines. Watch the lessons, practice, and take the final when you are ready.
130,000+students helped with college creditsACE and NCCRS have over 2,100 cooperating colleges that will consider accepting credits; the final decision is with the universities.

Where the credit goes

Universities that work with NCCRS

Business Essentials carries a NCCRS credit recommendation. These universities work with NCCRS; some are UPI Study's signed partners. ACE and NCCRS have over 2,100 cooperating colleges that will consider accepting credits; the final decision is with the universities.

Find my college → Not listed? Ask Athena in the corner of this page, or book a 15-minute call.

FAQ

Questions students ask us

About Total Quality Management (TQM): A Complete Overview and Practical Implementation

What are the eight principles of TQM?
The eight principles of Total Quality Management are customer focus, total employee involvement, process orientation, integrated system, strategic and systematic approach, continual improvement, fact-based decision making, and communication. Process orientation is the philosophical core: it shifts the response to a defect from blaming individuals to examining the system. Because TQM is a management philosophy rather than a toolkit, it can't be delegated to a quality department.
What is the difference between common cause and special cause variation?
Common cause variation is the natural variation built into a process from many small influences; nothing has gone wrong, and only changing the process reduces it. Special cause variation comes from an identifiable source outside the normal process, such as a machine fault or a defective batch, and should be found and removed. A control chart separates the two. Treating common cause variation as special, by adjusting after every result, makes performance worse.
What are the four costs of quality?
The four costs of quality are prevention, appraisal, internal failure, and external failure. In a bakery, training bakers on standard recipes is prevention, inspecting batches is appraisal, throwing out a spoiled batch is internal failure, and refunding a customer for stale bread is external failure. The framework, associated with Armand Feigenbaum and Joseph Juran, argues prevention is cheapest and external failure costliest, though each organization should check that against its own data.
What is the PDCA cycle?
The plan-do-check-act cycle is a four-step method for improving a process by testing a change on a small scale. Plan identifies a problem and designs a change; do runs a small trial; check compares results with what was expected; act adopts, adjusts, or abandons the change before the cycle repeats. Associated with Walter Shewhart and popularized by W. Edwards Deming, it works as a test only if the team records its prediction while planning.

About the Business Essentials course

How many college credits is Business Essentials?
Business Essentials (Business 100) carries a NCCRS credit recommendation for 3 semester credits. ACE and NCCRS have over 2,100 cooperating colleges that will consider accepting credits; the final decision is with the universities.
How much does Business Essentials cost and what is included?
$250, paid once, with lifetime access: all 105 video lessons, a practice quiz after each, the graded work and final exam, and an official transcript when you finish. Students who want several courses choose UPI Study PRO instead.
Which universities accept UPI Study credits?
UPI Study has signed partner agreements with universities such as Thomas Edison State University, University of the People and Charter Oak State College, and works with universities such as Penn State, SNHU and SUNY. ACE and NCCRS have over 2,100 cooperating colleges that will consider accepting credits; the final decision is with the universities. Use "Find my college" on this page to check yours.
How long does Business Essentials take?
It is self-paced with no deadlines. The 105 lessons total about 24 hours of video; most students add reading and practice time and finish in a few weeks to a few months, on their own schedule.
How are the exams done?
Quizzes and assignments are online in the course. The final exam is taken online with proctoring; a person on the UPI Study team checks assignments, usually within two days.
How do my credits reach my college?
When the course shows 100% complete, request the official transcript from your dashboard. It is sent to the college you name, and you can send it to more than one. Check your college first with "Find my college" on this page, or ask Athena.

Ready for the full course? Earn 3 credits in Business Essentials.

105 video lessons, a quiz after each one, and the graded work that earns the credit. Recommended for credit by NCCRS.

Business Essentials
3 credits · NCCRS
Enroll →