CHAPTER II REVIEW OF RELATED LITERATURE AND STUDIES

This chapter presents the review of related studies and literature on the subject. There are several studies that will discuss some aspects of the research work, or in some way may give a better insight into the problem, and those in which one way or another will prove to be useful to the writer. The review of related foreign and local literature and studies will focus in one variable, namely the Total Quality Management.

Foreign Literature During the early years of manufacturing, inspection was used to decide whether a workers job or a product met the requirements; therefore, acceptable. It was not done in a systematic way, but worked well when the volume of production was reasonably low. However, as organizations became larger, the need for more effective operations became apparent. This need was satisfied by Frederick W. Taylor when he published his book The Principles of Scientific Management in 1911. His work provided a framework for the effective use of people in industrial organizations. emergence of a separate inspection department. This movement led to the

An important new idea that emerged

from this new department was defect prevention, which led to quality control. (http://www.bpir.com/total-quality-management-history-of-tqm-and-business-excellencebpir.com.html.Retrieved August 14, 2009). Indeed, inspection has become part of quality practices up to the modern area; however, inspection does not answer all quality problems.

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In 1920s, Dr. W. Shewhart introduced the application of statistical methods to quality control and this has resulted to the elimination of the variation in the process that led a better standard of productions' end product. This advocacy of Shewhart was further developed by William Edwards Deming with Dodge and Roming but until 1940s, manufacturing companies were not successful in utilizing this technique. Control charts, sampling techniques, and economic analysis tools laid the foundation for modern quality assurance activity and influenced the thinking of W. Edwards Deming and Joseph M. Juran. Deming and Juran introduced statistical quality control to Japanese workers after World War II as part of General MacArthur's rebuilding program. Although this was not much different from what was being done in America, there was one vital difference. They convinced top Japanese managers that quality improvement would open new world markets and was necessary for the survival of their nation. The managers believed in, and fully supported, the concept of quality

improvement. The Japanese were in an ideal position to embrace this philosophy. The country was devastated from the war, and they had few natural resources with which to compete, except their people. The term total quality was used for the first time in a paper by Feigenbaum at the first international conference on quality control in Tokyo in 1969. The term referred to wider issues within an organization. Total quality is a comprehensive, organizationwide effort to improve the quality of products and services applies not only to such large manufacturers, but also to small companies. All organization large and small, manufacturing and service, profit and not-for-profit can benefit from applying the principles of total quality. Empirical evidence shows that firms implementing effective

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total quality approaches improve their performance on measures of income, sales growth, cost control, and growth in employment and total assets. Ishikawa also discussed total quality control in Japan, which is different from the western idea of total quality. According to his explanation, it means company-wide quality control that involves all employees, from top management to the workers, in quality control. In the 1980s to the 1990s, a new phase of quality control and management began. This became known as Total Quality Management (TQM). Having observed Japans success of employing quality issues, western companies started to introduce their own quality initiatives. TQM, has been identified for the broad spectrum of quality-focused strategies, programs and techniques during this period, became the center of focus for the western quality movement. Heizer and Render (2006) refer Total Quality Management as the management of an entire organization so that it excels in all aspects of products and services that are important to the customer. Total Quality Management stresses a commitment by

management to have a continuing companywide drive toward excellence in all aspects of products and services that are important to the customers. International Organization for Standardization (ISO) defined Total Quality Management (TQM) as a management approach for an organization, centered on quality, based on the participation of all its members and aiming at long-term success through customer satisfaction, and benefits to all members of the organization and to society (http://en.wikipedia.org/wiki/Total_Quality_Management.Retrieved August 14, 2009). At its core, Total Quality Management (TQM) is a management approach to long-

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term success through customer satisfaction.

In a TQM effort, all members of an

organization participate in improving processes, products, services and the culture in which they work. The methods for implementing this approach come from the teachings of such quality leaders as Philip B. Crosby, W. Edwards Deming, Armand V. Feigenbaum, Kaoru Ishikawa and Joseph M. Juran. A core concept in implementing TQM is Demings 14 points, a set of management practices to help companies increase their quality and productivity: 1. Create consistency of purpose. 2. Lead to promote change. 3. Build quality into the product; stop depending on inspections to catch problems. 4. Build long term relationships based on performance instead of awarding

business on the basis of price. 5. Continuously improve product, quality and service. 6. Start training. 7. Emphasize leadership. 8. Drive out fear. 9. Break down barriers between departments. 10. Stop haranguing workers. 11. Support, help, and improve. 12. Remove barriers to pride in work. 13. Institute a vigorous program of education and self improvement. 14. Put everybody in the company to work on the transformation.

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These Deming's 14 points for implementing quality improvement were developed into seven concepts for an effective TQM program, namely: (1) Kaizen or continuous improvement, (2) Six Sigma, (3) Employee Empowerment, (4) Benchmarking, (5) Just in Time, (6) Taguchi Concepts, and (7) Knowledge of TQM tools. Kaizen. In Japan, after World War II, American occupation forces brought in American experts in statistical control methods and who were familiar with the War Department's Training Within Industry (TWI) training programs to restore the nation. TWI programs included Job Instruction (standard work) and Job Methods (process improvement). In conjunction with the Shewhart cycle taught by W. Edwards Deming, and other statistics-based methods taught by Joseph M. Juran, these became the basis of the kaizen revolution in Japan that took place in the 1950s. The word Kaizen means "continuous improvement". It comes from the Japanese words ("kai") which means "change" or "to correct" and ("zen") which means "good". It is a system that involves every employee - from upper management to the cleaning crew. In most cases these are not ideas for major changes. Kaizen is based on making little changes on a regular basis: always improving productivity, safety and effectiveness while reducing waste. It is based on making changes anywhere that improvements can be made. The Kaizen philosophy is to "do it better, make it better, and improve it even if it isn't broken, because if we don't, we can't compete with those who do." Kaizen is a daily activity, the purpose of which goes beyond simple productivity improvement. It is also a process that, when done correctly, humanizes the workplace, eliminates overly hard work ("muri"), and teaches people how to perform experiments on

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their work using the scientific method and how to learn to spot and eliminate waste in business processes. The philosophy can be defined as bringing back the thought process into the automated production environment dominated by repetitive tasks that traditionally required little mental participation from the employees. People at all levels of an organization can participate in kaizen, from the CEO down, as well as external stakeholders when applicable. The format for kaizen can be individual, suggestion system, small group, or large group. At Toyota, it is usually a local improvement within a workstation or local area and involves a small group in improving their own work environment and productivity. This group is often guided through the kaizen process by a line supervisor; sometimes this is the line supervisor's key role. While kaizen (at Toyota) usually delivers small improvements, the culture of continual aligned small improvements and standardization yields large results in the form of compound productivity improvement. Hence the English usage of "kaizen" can be: "continuous improvement" or "continual improvement." Literally, it translates to: "good change." Continuous improvement is part of the management of all systems and processes. Achieving the highest levels of performance requires a well-defined and well-executed approach to continuous improvement. Continuous improvement refers to incremental and breakthrough improvement. Improvement may be of several types: o enhancing value to the customer through new and improved products and services; o developing new business opportunities; o reducing errors, defects, and errors;

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o improving responsiveness; and o improving productivity and effectiveness in the use of all resources (Evans & Dean,Jr., 2000). The Benefits of Kaizen. Kaizen is focused on making small improvements on a continuous basis. It involves every employee in making change in most cases small, incremental changes. It focuses on identifying problems at their source, solving them at their source, and changing standards to ensure the problem stays solved. It's not unusual for Kaizen to result in 25 to 30 suggestions per employee, per year, and to have over 90% of those implemented. These continual small improvements add up to major benefits. They result in improved productivity, improved quality, better safety, faster delivery, lower costs, and greater customer satisfaction. On top of these benefits to the company, employees working in Kaizen-based companies generally find work to be easier and more enjoyable resulting in higher employee morale and job satisfaction, and lower turn-over. Kaizen reduces waste in areas such as inventory, waiting times, transportation, worker motion, employee skills, over production, excess quality and in processes. It improves space utilization, product quality, use of capital, communications, and production capacity and employee retention. It provides immediate results. Instead of focusing on large, capital intensive improvements, Kaizen focuses on creative investments that continually solve large numbers of small problems. Large, capital projects and major changes will still be needed, and Kaizen will also improve the capital projects process, but the real power of Kaizen is in the on-going process of continually making small improvements that improve processes and reduce waste.

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For most American companies Kaizen involves a significant change in the corporate culture. This is the key. The attitudes of employees - from top management down to new hires will need to change. Kaizen needs to become something all employees do because they want to, and because they know it is good for them and the company. It cannot be something employees do because management dictates that it be done. Employee training and communication is important. Combined with that, direct involvement by the management is critical. To get Kaizen started it can be helpful to bring in outside experts. They can work in the facility and thus identifying problems that those close to the work may not see. This serves as a "seed" allowing employees to see how Kaizen works and to experience the benefits of Kaizen

(http://en.wikipedia.org/wiki/Kaizen.Retrieved August 14, 2009). Six Sigma. Six Sigma was originally developed as a set of practices designed to improve manufacturing processes and eliminate defects, but its application was subsequently extended to other types of business processes as well. In Six Sigma, a defect is defined as anything that could lead to customer dissatisfaction. The particulars of the methodology were first formulated by Bill Smith at Motorola in 1986. Six Sigma was heavily inspired by six preceding decades of quality improvement methodologies such as quality control, TQM, and Zero Defects, based on the work of pioneers such as Shewhart, Deming, Juran, Ishikawa, Taguchi and others. Like its predecessors, Six Sigma asserts that, (1) continuous efforts to achieve stable and predictable process results are of vital importance to business success. (2) Manufacturing and business processes have characteristics that can be measured, analyzed, improved and controlled and (3) achieving sustained quality improvement

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requires commitment from the entire organization, particularly from top-level management. Features that set Six Sigma apart from previous quality improvement initiatives include A clear focus on achieving measurable and quantifiable financial returns from any Six Sigma project. An increased emphasis on strong and passionate management leadership and support. A special infrastructure of "Champions," "Master Black Belts," "Black Belts," etc. to lead and implement the Six Sigma approach. A clear commitment to making decisions on the basis of verifiable data, rather than assumptions and guesswork. Six Sigma seeks to improve the quality of process outputs by identifying and removing the causes of defects and variation in manufacturing and business processes. It uses a set of quality management methods, including statistical methods, and creates a special infrastructure of people within the organization who are experts in these methods. Each Six Sigma project carried out within an organization follows a defined sequence of steps and has quantified financial targets that is cost reduction or profit increase. Either ways it promotes the profitability of the firm. The term "Six Sigma" is derived from a field of statistics known as process capability studies. Originally, it referred to the ability of manufacturing processes to produce a very high proportion of output within specification. Six Sigma's implicit goal is to improve all processes to that level of quality or better. Six Sigma is a business

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management strategy, initially implemented by Motorola that today enjoys widespread application in many sectors of industry. It is a highly disciplined process that helps us focus on developing and delivering near-perfect products and services

(http://www.ge.com/en/company/companyinfo/quality/whatis.htm.Retrieved August 14, 2009). Origin and meaning of the term "six sigma process" The term "six sigma process" comes from the notion that if one has six standard deviations between the process mean and the nearest specification limit, there will be practically no items that fail to meet specifications. This is based on the calculation method employed in process capability studies. In a capability study, the number of standard deviations between the process mean and the nearest specification limit is given in sigma units. As process standard deviation goes up, or the mean of the process moves away from the center of the tolerance, fewer standard deviations will fit between the mean and the nearest specification limit, decreasing the sigma number and increasing the likelihood of items outside specification. Benchmarking. It is widely recognized that the primary message in Total Quality Management (TQM) is total dedication to customer satisfaction by delivering more value using fewer resources. While the "doing more with less" concept is not new to business managers, the appeal of TQM is beyond that of building. A low-cost, efficient production operation requires management to examine the value of the activities being performed from a customer's perspective. Hence, TQM is not just about doing things right, it requires corporations to focus on what customers value and doing the right thing right. The Evolution of Benchmarking

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The method may have evolved in the early 1950s, when W. Edward Deming taught the Japanese the idea of quality control. Other American management innovations followed. The best example is Toyota Motor Corporations following the footsteps of Ford Motor Corporation albeit with the adaptation of the Fords Just-in-case System into Toyotas Just-in-Time System. The term benchmarking whoever, was not coined by that time yet. To do the right thing, a company must first find out what activities are valued by its customers. To do this, ask customers directly by conducting customer satisfaction surveys. While this is the most direct approach, it may not be effective when the customers are not clear on their expectations or when the company is selling to a large number of customers. If this is the case, find out what customers value by learning from top performing companies. This activity is known as benchmarking (Chung, 1993). The term benchmarking emerged when the idea took ground in US during 1980s when Xerox, Ford and Motorola became the pioneers of benchmarking in USA. Robert Camp, the logistics engineer who initiated Xeroxs benchmarking program and who is generally regarded as the guru of the benchmarking movement, defines it: Benchmarking is the search for industry best practices that lead to superior performance. The essence of benchmarking is the continuous process of comparing a companys strategy, products, processes with those of the world leaders and best -in-class organizations. The purpose is to learn how the achieved excellence, and then setting out to match and even surpass it. However, Benchmarking is not a panacea that can replace

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all

other

quality

efforts

or

management

processes August

(http://findarticles.com/p/articles/mi_m4422/is_n6_v11/ai_16097718/.Retrieved 14, 2009).

One of the benefits of Benchmarking is, it allows organizations to set realistic, rigorous new performance targets, and this process helps convince people of the credibility of these targets. It helps people to understand that there are other organizations that know and do job better than their own organization. Also, it allows the organization to define specific gaps in performance and to select the processes to improve. These gaps provide objectives and action plans for improvement at all levels of organization and promote improved performance for individual and group participants. And, it provides a basis for training. Employees begin to see gap between what they are doing and what best-in-class are doing. Closing the gap points out the need of personnel to be trained to learn techniques of problem solving and process improvement August

(http://findarticles.com/p/articles/mi_m4422/is_n6_v11/ai_16097718/.Retrived 14, 2009).

While benchmarking can be a useful tool to assist management to identify areas that need improvement, the technique frequently fails to produce the results expected. Causes of failure are results of unrealistic expectations and flaws in the overall approach to implementation. Frequently, companies engaged in benchmarking want to see turnarounds in a short period of time. However, it must be emphasized that the role of benchmarking is to assist management to identify areas that need improvement; it does not represent quick solutions to problems. In fact, benchmarking is more of a process to learn about ones' operation and what

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can be done to improve it. Hence, it only represents a first step toward TQM rather than an end in itself. After getting benchmarking results, it is time to start the necessary initiatives for achieving total quality (Chung, 1993, par. 28). Just in Time. JIT presentations often employ the analogy of a stream when describing proper inventory management. Well-managed systems achieve a flow of inventory from raw material to the customer like a smooth river, unimpeded by shoals of scrap or machine breakdown or other problems. This concept did not originate with the Japanese. Henry Ford's River Rouge plant regularly converted iron ore into a Model T in four days. However, in recent years, especially the 1970s, American business has not improved its manufacturing capability quickly enough to maintain a competitive position in cost or quality or market responsiveness or flexibility. JIT is a philosophy embodying various concepts that result in a different way of doing business for most organizations. The basic tenets of this philosophy include: A. All waste, anything that does not add value to the product or service, should be eliminated Value is anything that increases the usefulness of the product or service to the customer or reduces the cost to the customer. B. JIT is a never ending journey, but with rewarding steps and milestones. C. Inventory is a waste. It covers up problems that should be solved rather than concealed. Waste can gradually be eliminated by removing small amounts of inventory from the system, correcting the problems that ensue, and then removing more inventory. D. The customers' definitions of quality, their criteria for evaluating the product, should drive product design and the manufacturing system. This implies a trend toward increasingly customized products.

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E.

Manufacturing flexibility, including quick response to delivery requests,

design changes, and quantity changes, is essential to maintain high quality and low cost with an increasingly differentiated product line. F. Mutual respect and support based on openness and trust should exist among an organization, its employees, its suppliers, and its customers. G. A team effort is required to achieve world class manufacturing capability. Management, staff, and labor must participate. This implies increasing the flexibility, responsibility, and authority provided to the hourly worker. H. The employee who performs a task often is the best source of suggested improvements in the operation. It is important to employ the workers' brains, not merely their hands. JIT is a very eclectic approach. It includes many old ideas and some new ones and relies on basic concepts from many disciplines, including statistics, industrial engineering, production management, and the behavioral sciences. But first and foremost, it is pragmatic and, thus, empirical. Discovering "what works" and why it works requires that plant operations be studied thoroughly. This requires the collection and analysis of relevant data concerning the plant's operation and its performance. This pragmatism causes the manufacturing process and its environment to be viewed as a research laboratory, similar to a university hospital, in that the primary task may be to produce quality output but another important goal is to learn how to do it better the next time. Traditionally, inventory has been viewed as an asset, one that can be converted to cash. The Just-in-Time view is that inventory does not add value but instead incurs costs, and thus is a waste. Holding inventory is analogous to not receiving any interest for a

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deposit in a bank and, furthermore, paying to keep it there. Traditionally, holding inventory was seen as being less costly than correcting the production and distribution efficiencies that inventory overcame. Taguchi Concepts. The word quality cannot have a specific meaning when

applied to the manufacturing industry. This is basically because the word quality changes within the context it is being used. For a long time, manufacturing industries in European and American countries have worked from the basis of a tolerance. This tends to suggests that the manufactured item would be passed as acceptable if its quality was within the specified tolerance range. Taguchi's response to quality differs rather greatly from the goalpost philosophy of the European and American countries. The Japanese implementation of Taguchi's concept sees them working on the principle that when designing a product, it should be designed with minimum loss, with the relative product being designed as close to the optimum value as is feasibly possible. This would result in the product being manufactured in regards to its life cycle and customer satisfaction from the design stages. It would also mean that less repair work would be required in the long run. Taguchi Philosophy It is being increasingly recognized that the high quality of a product or service and the associated customer satisfaction are the key for enterprise survival. Also recognized is the fact that pre-production experiments, assuming properly designed and analyzed, can contribute significantly towards quality improvements of a product. A traditional (but still very popular) method of improving the quality of a product is the method of adjusting one factor at a time during pre-production experimentation. In this method, the engineer

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observes the result of an experiment after changing the setting of only one factor (parameter). This method has the major disadvantages of being very costly and unreliable. The Japanese were the first to realize the potential of another method using Statistical Design of Experiments (SDE) - originally developed by R. Fisher. SDE, in contrast to the one factor method, advocates the changing of many factors simultaneously in a systematic way (ensuring an independent study of the product factors). In either method, once factors have been adequately characterized, steps are taken to control the production process so that causes of poor quality in a product are minimized. In the manufacturing industry, one area of current development is concerned with the application of modern off-line quality control techniques (pre-production experimentation and analysis) to product and process engineering. Most of the ideas for these quality control techniques are derived from W. E. Deming. These ideas were built upon by Professor Genichi Taguchi. While Deming's main achievements was to convince companies to shift quality improvements to statistical control of the production process , Taguchi makes a further step back from production to design, to make a design robust against variability in both production and user environments. Total Loss Function In the early 1980s, Dr Taguchi proposed the following statement relating to the quality of a product: "Quality is the financial Loss to society after the article is shipped". This is one of the many concepts which were developed by Dr Taguchi. However, the above statement somehow depicts inequality, since a loss to society is not a desirable characteristic. The idea of quality is related to something which is new, beautiful and

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good which in the engineering sense, must have many features or functionalities. The above definition can be rearrange and still retain the basic concept of Quality to denote a positive attribute as follows: "Quality is the avoidance of financial loss to society after the product is shipped" The important point here is the fact that quality is related to monetary loss and not to any other factors or conditions. Even though the actual loss maybe the loss of functionality to the product, or other losses such as pollution, time, noise, etc., the overall effect is a financial loss. It can also be expanded to include the development, and manufacturing phases of a product. Taguchi viewed poor quality as a lack of consistency in the ingredients of the product. Because of this inconsistency, the manufactured products may not satisfy the quality (product variation) and specification (target value) demands of the customers. The product mean value is off target and the variation around the mean is large. Employee Empowerment. Although no two businesses use TQM in exactly the same way, its theory rests on two basic tenets. According to Deming (1986), the first and most important is that customers are vital to the operation of the organization. Without customers, there is no business, and without business, there is no organization. Consequently, it should be the primary aim of any group to keep customers satisfied by providing them with quality products. And, management needs to listen to non-

traditional sources of information in order to institute quality, is based on the belief that people want to do quality work and that they would do it if managers would listen to them and create a workplace based on their ideas (cited at

http://www.ericdigests.org/1992-2/total.htm.Retrieved August 14, 2009). These ideas are

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not foreign to most organizations; what makes TQM unique is its call for a restructuring of management methods to create that quality. TQM proponents urge organizations to turn nearsighted, top-down management "on its head" by involving both customers and employees in decisions. A company will see continuous improvement in products only when managers realize all systems consist of interdependent parts and work to aim all those parts toward a vision of quality, proponents argue. This type of leadership is needed to ensure that product quality improves "constantly and forever" and truly satisfies the customers. A sound total quality management (TQM) implementation process should be concerned with more than just the mechanical aspects of the change. Instead, it should focus on improving the more indirect value characteristics of the organization such as trust, responsibility, participation, and harmony and group affiliation. According to Stevens (1993), Employee empowerment is the most important concept in TQM, is many things, since employees must be empowered to make the necessary organizational changes. The concept of empowerment is based upon the belief that employees need the organization as much as the organization needs them and that leaders understand that employees are the most valuable asset in the firm (cited at

http://www.geocities.com/TimesSquare/1848/org.html.Retrieved August 14, 2009). According to Hollander & Offerman (1990), Research has shown that there is a positive link between participation and satisfaction, motivation and performance (cited in Weaver, 1992). Employee involvement teams, which consist of small groups of

employees who work on solving specific problems related to quality and productivity, represent one way of participative management. Such teams have proved effective in

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resolving problems related to productivity and quality, as well as improved employee morale and job satisfaction. Hence, Participative management has become a key word in empowerment. It requires responsibility and thrust to employees. It is important that management recognizes the potential of employees to identify and to derive corrective actions to quality problems. However, according to Stevens (1993), if management refuses to act upon team recommendations, the team members' faith in the quality program will be destroyed. Furthermore, according to Scully (1993) critics argue that employees may be given the impression that TQM and employee empowerment is just another management buzzword, and that the decision making process is still dominated at the top of the organizational hierarchy. In many organizations, this traditional labor division is the principal cause why managers find it difficult to delegate responsibility. Scully (1993) also argues that to some people empowerment means more delegation in form of indirect control. Moreover, Stevens (1993) stresses that some subordinates may view empowerment as abandonment and that it leads to organizational anarchy (cited in Weaver, 1992). "Workers affected by proposed changes must be involved in the decision to change, else they will fight progress" (Magjuka, 1993). In an empowered organization, people should not expect to be told what to do, but they should know what to do. The primary role of management is "to support and stimulate their people, co-operate to overcome cross functional barriers and work to eliminate fear within their own team" (cited in Weaver, 1992). However, many supervisors think that empowerment may lead to them loosing authority and ultimately their jobs. Therefore, it is logical that most of the resistance to

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empowerment comes from the middle management. Keighley (1993) argues that this resistance to change can be reduced by setting, measuring and evaluating performance together with the team. Likewise, Hand argues that supervisors and managers should be trained in order to cope with organizational change (cited in Weaver, 1992). In addition, managers argue that employees are unable to get the whole picture of the organization, and that they are not all qualified to make decisions. Dobbs (1993) argues that work-teams are unable to see the connection between process improvements and the overall strategy and profitability of the firm (cited in Weaver, 1992). According to Lawler (1994), the most important concept of empowerment is to delegate responsibility to the lowest levels in the organization. The decision making process should be to a high degree decentralized and individuals or work designed teams should be responsible for a complete part of work processes. Lawler (1994) does to a certain extent oppose the ideas mentioned in this section. He argues that employee empowerment does not directly constitute to the success of a TQM program since quality is always on the center stage in such a strategy. Opposite to this, employee empowerment is usually the result of an organization's strategy and technology, focusing not only on how to improve cost, speed, and efficiency through quality improvements (cited in Weaver, 1992). Turney (1993) stresses Empowered personnel have responsibility, a sense of ownership, satisfaction in accomplishments, power over what and how things are done, recognition for their ideas, and the knowledge that they are important to the organization (cited in Weaver, 1992). Without productive employees, the organization is nothing and can do nothing. Empowerment works the best when employees need their organization as

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much as the organization needs them.

Furthermore, Mahoney & McMillan (1994)

stresses that the empowerment process is only successful when there is room for feedback and autonomy in the organizational culture (cited in Weaver, 1992). According to Johnson (1993) the most crucial critical success factor in TQM is to recognize the importance of living up to customers expectations. It is important to understand that there is a positive correlation between satisfying internal customers and meeting external customers needs. "Employees who are not treated correctly cannot be expected to treat external customers differently" (Johnson, 1993: 47). Internal satisfaction can be achieved in the following ways: establish a high degree of participative management, decentralization of hierarchy power structures, create a large degree of autonomy throughout the organization and finally the development of effective work groups. All these ways are based on the concept of employee empowerment (cited in Weaver, 1992). Employee empowerment is more than a management buzzword and a text-book definition. It is a new way of managing organizations towards a more complex and competitive future. A TQM strategy is deemed to fail if empowerment of employees is absent. Quality starts with engaging the people responsible for processes- the people who know the processes the best. The people whom critics argue are unable to understand the holistic aspects of the organization. However, participative management has proven very successful in fostering responsibility, motivation and belonging in organizations with high autonomy and flexibility (Weaver, 1992, par. 14).

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TQM Tools.

Total quality management (TQM) tools help organizations to

identify, analyze and assess qualitative and quantitative data that is relevant to their business. These tools can identify procedures, ideas, statistics, cause and effect concerns and other issues relevant to their organizations. Each of which can be examined and used to enhance the effectiveness, efficiency, standardization and overall quality of procedures, products or work environment, in accordance with ISO 9000 standards (SQ, 2004). The number of TQM tools is close to 100 and come in various forms, such as brainstorming, focus groups, check lists, charts and graphs, diagrams and other analysis tools. In a different vein, manuals and standards are TQM tools as well, as they give direction and best practice guidelines to you and/or your staff. The Pareto principle suggests that most effects come from relatively few causes. General use, to decide where to apply initial effort for maximum effect. A scatter plot is effectively a line graph with no line - i.e. the point intersections between the two data sets are plotted but no attempt is made to physically draw a line. Control charts are a method of Statistical Process Control, SPC. (Control system for production processes). They enable the control of distribution of variation rather than attempting to control each individual variation. Upper and lower control and tolerance limits are calculated for a process and sampled measures are regularly plotted about a central line between the two sets of limits. The plotted line corresponds to the stability/trend of the process. Action can be taken based on trend rather than on individual variation. This prevents over-correction/compensation for random variation, which would lead to many rejects. The cause-and-effect diagram is a method for analysing process dispersion. The diagram's purpose is to relate causes and effects.

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A Histogram is a graphic summary of variation in a set of data. It enables us to see patterns that are difficult to see in a simple table of numbers. Can be analysed to draw conclusions about the data set. A histogram is a graph in which the continuous variable is clustered into categories and the value of each cluster is plotted to give a series of bars as above. The above example reveals the skewed distribution of a set of product measurements that remain nevertheless within specified limits. Without using some form of graphic this kind of problem can be difficult to analyze, recognize or identify. A Check Sheet is a data recording form that has been designed to readily interpret results from the form itself. It needs to be designed for the specific data it is to gather. Used for the collection of quantitative or qualitative repetitive data. Adaptable to different data gathering situations. Minimal interpretation of results required. Easy and quick to use. No control for various forms of bias - exclusion, interaction, perception, operational, non-response, estimation. A Checklist contains items that are important or relevant to a specific issue or situation. Checklists are used under operational conditions to ensure that all important steps or actions have been taken. Their primary purpose is for guiding operations, not for collecting data. Generally used to check that all aspects of a situation have been taken into account before action or decision making. Simple, yet effective

(http://www.ifm.eng.cam.ac.uk/dstools/.../tqm.html.Retrieved August 14, 2009).

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Local Literature In the Philippines, the Total Quality Management implementors must realize that the positivitation of cultural values, attitudes, and behaviors must precede all other kinds of improvement initiatives. There must first be a foundation of proper and positive knowledge, attitudes, skills, habits, experience and values. Thus, a Total Quality Management implementor in the Philippine setting must be a managerial leader who can realize higher family, individual and organizational goals while lowering costs and raising quality, productivity, and profitability by taking into account the cultural values of the people and his organization's total assets. Total Quality Management requires a change from policy of correction to a policy of prevention. Thomas H. Berry defines quality in this manner: A customer who buys your product or service has certain expectations. If the product or service meets or exceeds those expectations time and time again, then, in the mind of that customer, it is a quality product or quality service. The basic definition of quality, then, is: meeting customers' needs and reasonable expectations (Andres, 1996)

With the increasing competition in various manufacturing and service industries, it has become imperative for firms to adapt to these changes and ensure that the processes and systems that they employ are the best in their class. According to Robert C. Camp, Benchmarking is the search for and implementation of best practices. The adaptation of the best practices allows an

organization to raise the performance to leadership levels (Talavera, 2001). Furthermore it is important for the companies to analyze their operations through (1) assessment of strengths and weaknesses of current work processes, (2) analysis of critical cost of

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components, (3) consideration of customer complaints, (4) spotting areas for improvement, (5) finding ways to reduce errors and defects to increase asset turns. Talavera (2001) has enumerated different benchmarking strategies, namely: Internal Benchmarking, this involves comparison among similar operations within the firm's own organization. Competitive Benchmarking, involves a comparison of the firm's business processes to the best of the firms where it has direct competition or to other companies in its industry. Functional Benchmarking involves comparison of practices at companies with similar practices in the same function but outside the industry takes place. Generic Benchmarking, involves comparison of work

processes to that of others who are judged to have innovative processes.

Foreign Studies In the undergraduate thesis of Hansson (2003) entitiled Total quality management: aspects of implementation and performance, he expressed that, Total Quality Management (TQM) has become a frequently used term in discussions concerning quality. The international and national competitive environment is in a process of constant change by the globalization of markets and the increased interdependence of economic agents. This process of change has brought increased demands on the organizations competitiveness and the customers have gained a central role in the organizations focus. TQM is considered to be an important management philosophy, which sustains the organizations in their efforts to obtain satisfied customers. This thesis presents results from two different research projects, described in five appended papers. The first project concerns the relationship between TQM

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implementation and financial performance within a Swedish context. The results, obtained by studying Swedish quality award recipients, indicate that organizations that have successfully implemented TQM perform better than the general mass of organizations, during a period following the award acknowledgment. The second project concerns implementation and use of TQM in small organizations. In this project, two multiple-case studies have been conducted in order to describe experiences from implementing and working with TQM. These multiple-case studies have been conducted by studying quality award recipients among small organizations. The analysis of these organizations indicates that some of the core values of TQM, which are often described as the basis of the concept, are more adequate than others when initiating the quality development work. These core values were leadership, everybodys commitment and customer focus. The results also point out how small TQM organizations organize their quality activities and what their actual quality related work constitutes. In addition, the studies also visualize the importance of committed management and co-workers in order to accomplish the substantial organizational change that is necessary in order to implement TQM. Important areas for facilitating the development of commitment among the involved actors in the change process are described. Furthermore, the problems related to the work with the core value process orientation were a distinct feature of the studied organizations. These problems were mainly due to the knowledge situation in the organizations. The experiences from the successful implementation processes emerge in an overarching tentative implementation model consisting of three phases.

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Local Studies The undergraduate thesis entitled Employees perception on Total Quality Management practices of UCPB General Insurance Company Incorporated (Chua, G., Corpen, H., Mercado, K., Nava, M., Nabarte, E., et al., 2006) is research that used

descriptive method to determine and illustrate the effectiveness of Total Quality Management (TQM) practices in the UCPB General Insurance Company Inc. (1) What is the profile of

Specifically, it tried to answer the following questions:

employees in terms of: age, sex, civil status, number of economic dependents, monthly income, educational attainment, position ion the company, length in of service with the company? (2) What is the perception of employees regarding Total Quality Management (TQM) practices in terms of: Strategic Quality Planning, Focus on Customer Satisfaction, Improvement of Key Processes, Collection and Analysis of Information, Use of Teamwork and Training, Design of Product and Services, and Leadership? (3) Is there a significant relationship between the profile of the employee and their perceptions on the Total Quality Management (TQM) practices? In the course of the study, the researchers disclosed that Total Quality Management should also consider increase in income or benefits to increase motivation to work efficiently and employees have enough

knowledge and experience to adopt to Total Quality Management practices that is implemented in the company. In the practice of strategic quality planning, company's evaluation of the performance of the employees to assess whether goals and objectives are achieved, are agreed upon by the employees thus it placed an emphasis on the employees and the responsibility of each in achieving quality.

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The study also stressed that it is very important that employees give correct and proper answers to customer inquiries. It is vital that employees have fully grasped the product or service information to preserve customer loyalty and superior service quality. Employee assent when management and employees work together to improve process shortcomings. As they work to improve processes, employees accumulate more

information as they solve the problems and thus gathering more knowledge about the processes implemented by the company. Furthermore, customer needs, expectations and perceptions serve as a tool for the analysis of data which proved that customers' feedback serve as reliable information for the improvement of service quality. Employees also agree when management and employees can work hand-in-hand in pursuing long-range planning that gives attention to quality. It is concluded that strong teamwork is

established between employees and management gives value to employees' active participation in planning and most specifically, giving attention to quality. Total Quality Management is used as a tool to carefully plan the design of company's services in considering the customer demands and specifications. When TQM is applied, the services do not only satisfy the customer, but also exceed their expectations.

Synthesis The studies reviewed and presented by the researchers have helped the researchers in determining the importance of a sound personnel management correlates of the company. The studies considered in this research have shown how organizational

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movement, in which everyone and part of organization participates in this competitive action, have resulted to functional changes of companys quality management strategies and eventually led to overall organizational edge. That all members of an organization participate in improving processes, products, services and the culture in which they work. Furthermore, the studies ascertained that total quality referred to wider, comprehensive, and integrated companywide issues and efforts on how to advance production process and products. It accentuates, through empirical evidence, that the aftermath of quality

improving are improvement of performance measure of income, sales growth, cost control, and growth in employment of total assets and how these resulted to cost

reduction and increased revenue, or in both ways profitability in so far as quality is concerned. The company must take into full account what is important and what has to be accomplished. Through this, quality principles may be acted upon in the company's course of business. Consequently, empowerment and organizational commitment arises. All of these would lead no other than to competitive advantage of the firm, and attaining its edge among others. This recent study of the reseachers somehow bears a resemblance with the thesis entitled Employees perception on Total Quality Management practices of UCPB General Insurance Company Incorporated (Chua et al., 2006). The study emphasized on total quality management, applied in services, as perceived by the UCPB operating employees. The study impliedly stated how benchmarking, through continuous assessment of the employees' performance, achieved overall organization's goal and objectives. In addition,

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employee empowerment has been a morale uplifting course of action that eventuated to a competitive advantage of the company against adversaries. Thus, total quality

management practices in the UCPB General Insurance Company has hastened its operations as a whole. Since UCPB General Insurance Company operates as a service providing firm, some total quality management principles tackled in this recent study has not been stressed upon in their operations. Furthermore, not all total quality

management issues has beeen discussed upon in the course of the study. In view of the foregoing, the studies cited in the present study are relevant.

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