Total Quality Management (TQM) is more than a fad or a buzzword, argue the authors. It is even more than a technique for controlling and motivating employees. TQM is a challenge to conventional management techniques and to the theories that underlie them. Therefore it cannot simply be grafted onto existing management structures and systems. If its benefits are to be fully realized, then companies need to prepare themselves for organization-wide change — including top management’s relinquishing of power. Furthermore, TQM practices cannot be combined with strategic initiatives, such as corporate restructuring, that are based on conventional management theories. The failure of one or both programs is inevitable.
1. Kodak Annual Report, 1984.
2. For an account of the origins and development of quality management, see:
D.A. Garvin, Managing Quality: The Strategic and Competitive Edge (New York: Free Press, 1988).
3. M. Walton, The Deming Management Method (New York: Dodd, Mead, 1986), pp. 140–144.
5. G. Bushe and A.B. Shani, Parallel Learning Structures (Reading, Massachusetts: Addison-Wesley, 1991).
6. Annual Report, 1988, Texaco, Inc. (White Plains, New York, 1989), p. 24.
7. B. Rayner, “Trial-by-Fire Transformation: An Interview with Globe Metallurgical’s Arden C. Sims,” Harvard Business Review, May–June 1992, pp. 117–129.
8. E.E. Lawler, S.A. Mohrman, and G.E. Ledford, Employee Involvement and Total Quality Management (San Francisco, Jossey-Bass, 1992), p. 96.
9. J.M. Juran, Quality Control Handbook (New York: McGraw Hill, 1974).
10. HP Measures of Marketing Excellence, Hewlett-Packard, January 1989.
11. G. Taguchi and D. Clausing, “Robust Quality,” Harvard Business Review, January–February 1990, pp. 65–75.
12. W. Lazer, S. Murata, and H. Kosaka, “Japanese Marketing: Toward a Better Understanding,” Journal of Marketing 49 (1985): 69–81.
13. P.F. Drucker, “The Emerging Theory of Manufacturing,” Harvard Business Review, May–June 1990, pp. 94–102.
14. The best exposition of the economic model of the firm can be found in:
P. Milgrom and J. Roberts, Economics, Organization, and Management (Englewood Cliffs, New Jersey: Prentice-Hall, 1992).
15. A. Rappaport, Creating Shareholder Value: The New Standard for Performance (New York: Free Press, 1986); and
T. Copeland, T. Koller, and J. Murrin, Valuation: Measuring and Managing the Value of Companies (New York: John Wiley, 1990).
16. See Walton (1986), p. 55.
18. H. Simon, “Organizations and Markets,” Journal of Economic Perspectives 5 (1991): 35.
19. R. Hayes, S. Wheelwright, and K. Clark, Dynamic Manufacturing: Creating the Learning Organization (New York: Free Press, 1988).
20. M.C. Jensen, “The Eclipse of the Public Corporation,” Harvard Business Review, September–October 1989, pp. 61–75.
21. See R.M. Grant, Strategic Change and Restructuring within the Oil Industry (Milan: Franco Angeli, 1993), pp. 128–150; and
D. Quinn Mills, Rebirth of the Corporation (New York: Free Press, 1991), pp. 91–107.
22. T. Burns and G.M. Stalker, The Management of Innovation (London: Tavistock, 1961); and
H. Mintzberg, The Structuring of Organizations (Englewood Cliffs, New Jersey: Prentice-Hall, 1979).
23. Juran (1974), pp. 203–204.
24. M. Hammer and J. Champy, Reengineering the Corporation: A Manifesto for Business Revolution (New York: HarperBusiness, 1993).
25. A. Alchian and H. Demsetz, “Production, Information Costs, and Economic Organization,” American Economic Review 62 (1972), pp. 777–795.
26. J.F. Rockart and J.E. Short, “IT in the 1990s: Managing Organizational Interdependence,” Sloan Management Review, Winter 1989, pp. 7–17.
27. J.M. Juran, Managerial Breakthrough (New York: McGraw-Hill, 1964).
28. K. Clark, R. Hayes, and S. Wheelwright, Dynamic Manufacturing (New York: Free Press, 1988).
29. R.M. Grant, “The Resource-Based Theory of Competitive Advantage: Implications for Strategy Formulation,” California Management Review, Spring 1991, pp. 114–135.
30. R. Coase, “The Nature of the Firm,” Economica 4 (1937): 386–405.
We acknowledge financial support for our research from Northern Telecom’s University Interaction Program.