SECTION A (5Q*3%=15%)

CASE STUDY 2: TQM PRACTICES IN ZAMBIAN TOURISM INDUSTRY

Total Quality Management is a corporate business management philosophy which recognizes

that customer needs and business goals are inseparable. It is applicable within both industry and
commerce. TQM ensures maximum effectiveness and efficiency within a business and secures
commercial leadership by putting in place processes and systems which will promote excellence, prevent
errors and ensure that every aspect of the business is aligned to customer needs and the advancement of
business goals without duplication or waste of effort. The TQM factors revealed by the study were the
quality practices of the top management, employee involvement in the quality management system,
customer focus, process and data quality management and quality tools and techniques implementation.

According to the findings, these factors significantly affect the companies' performance with respect
to their internal procedures, customers, market share and the natural and social environment. The
subjective data was dependent on the perceptions of quality from Tourism Organizations’ point of view
and the fact that the sample organizations came from small tourism enterprises constitute the limitations.
From the findings, it is evident that not much has been done in the Zambian tourism industry in relation
to TQM. There is a need to improve infrastructure as well as transport networks to the remote areas.
A clear lack of a quality policy formulation and a lack of funding have adversely affected marketing
efforts. In addition to this, low wages and a bureaucratic system have contributed to a lack of motivation
for employees.
There is also a lack of training facilities leading to unskilled labor in the industry and Zambia was
also found to be an expensive tourist destination.

a) “TQM is a corporate business management philosophy which recognizes that customer needs
and business goals are inseparable”. Evaluate this statement.

Answer:

The above statement is true. Customer needs and business goals are inseparable in any organiza t io n
that places quality management system as a corporate business philosophy.

To justify, firstly, a look into how TQM is defined by various industries is necessary. Secondly,
examples on business goals as well as customer needs will also be looked into.

Definitions of TQM
The United States Navy, where TQM was branded in 1985, emphasizes quality to be defined by
customers' requirements as one of its TQM key concepts. [1]

Several other notable organizations have also attempted to define it.

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The United States Department of Defense (1988) defines TQM as a strategy for continuo us ly improving
performance at every level, and in all areas of responsibility that combines fundame nta l management
techniques, existing improvement efforts, and specialized technical tools under a disciplined structure
focused on continuously improving all processes. It further states that, improved performance is
directed at satisfying such broad goals as cost, quality, schedule, and mission need and suitability and
concludes that, increasing user satisfaction to be the overriding objective. [2]

The organization I am currently working with, Onkyo Asia Electronics Sdn. Bhd., has a quality policy
that reads, “Customer comes first. The next process is customer.”

Customer Needs and Business Goals

As can be seen from the inclusion of “customer” in most of the definitions by various industr ies, one
might ask, “Who are the customers?”

Customers are divided in two categories. One is internal and another is external. Internal customers can
be the next process. For example, the administration department is responsible the hiring of new
workers for the production department. In this case the production department is the customer. Moreover,
the production manufacture products and send them to shipping department for export. In this case,
the shipping department is the customer. So, everyone or every process in an organization can be a
customer.

On the other hand, external customers can be buyers of a product or a service. For example, a buyer
at a grocery store is a customer. A person who sends his car to a car wash is also a customer.
Stakeholders of a company can also be a customer that the management has to satisfy.The following
diagram summarizes the relationship between customer needs and business goals.

• WHAT THEY WANT

• Qua l ity
• Pri ce
Needs • Va l ue
• On-ti me delivery

• WHAT COMPANY WANTS

• Profi t
• Ma rket Share
Goals • Bra nd Reputation
• Sa l es

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For example, when a company offers poor quality products or services to customers, it will lose its
reputation, market share, sales or profit. Customers may complain and ask for a refund, or products
may be returned for repair and so on which only adds costs to the company. If quality is not
continuously improved, profitability will be hurt and the company may run of out of business sooner or
later.

b) Analyze the relationship between the employee involvements in the quality

management system company’s performance.

An analysis of how employee involvements affect company’s performance is discussed below.

Low employee involvement in the quality management system will only negatively affect company’s
performance. For example, if only employees in the QA department are concerned with quality, while
other employee think quality is not their job, the company will face serious problems. For example, if the
raw material purchaser believes that quality is not his or her concern, defective parts may be introduced
into the process and may cost the company downtime, defective products and expensive reworks.
c) Evaluate the factors that significantly affect the companies' performance with respect to
their internal procedures, customers, market share and the natural and social environment.

Factors that significantly affect company’s performance are evaluated based on each performance
criterion as follows:

Internal procedures
Internal procedures, also known as standard operating procedures (SOP), are the backbone of operations
in any industry. Total quality management system requires internal procedures to be in place so that
performance at each stage of the operations can be defined, measured, analyzed, improved and
controlled (DMAIC).
Customers
The measure of customer satisfaction is a very important indicator or a company’s performance. This
can be assessed by surveys or from customer complaints records. Customers are buyers or clients that
buy products or services from a company so it is important for a company to satisfy their customer
expectations.

In a study by Hwang J & Zhao J (2010) on Factors Influencing Customer Satisfaction or Dissatisfaction
in the Restaurant Business, customer satisfaction can be linked directly to sales. Their study indicates
three perceived quality factors (good value, tasty food, and restaurant cleanness) most affected satisfied
customers. Other three perceived quality factors (good value, tasty food, and employees’ knowledge
of menu) most affected dissatisfied customers. [8]

Factors that significantly affect customer satisfaction is how well customer expectations are met in
terms of quality, performance, delivery and value. A product that performs poorly can only result in
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dissatisfied customers who will not recommend the products to his friends and relatives. For example, a
product that breaks down within two days can cause dissatisfaction to the customer. He may be asking
for a refund or returning it to the seller for a replacement.

Market Share
The market share is also a very important performance of a company. This is an indicator of its dominance
in the industry. Maintaining its position in the market is crucial as this will likely ensures its survival
in the competitive market.

Natural and Social Environment

Natural environment consists of natural surroundings and is an important indicator of a company’s

performance. A company’s day-to-day operations can pose an ongoing threat to the natural environment
for example pollutions, waste and so on