Many European organizations still believe that the quality is much too costly to achieve and difficult to justify. Some of the old-fashioned British organizations still think that, beyond a certain point, investing in quality is no longer profitable and is subject to the loss of diminishing returns, i. e. the cost of eliminating all errors cannot be justified by the savings made. Such thinking fails to see quality as a strategic issue and fails to understand that the quality is a much broader issue than just making the product properly.
The consequences of such a miopic approach may be the loss of customer goodwill, and loss of market share. However, those organizations who have achieved quality excellence will tell you that the increased productivity and reduced cost from quality production processes or service operations almost adequately cover the investment required by the organization. Another general misunderstanding about the quality is that it is only concerned with objects.
This is not true, as we know that banks, hotels and retail shops have already recognized the fact that the quality of service is a crucial factor in the customer's decision to be a regular customer. Manufacturing companies are also beginning to understand the necessity of quality of service to retain customers, and need of well-trained, obliging and well-informed staff to maintain the quality of service.
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It is not only the person with the direct involvement with the customer that has to demonstrate these qualities, but also the other host of support persons who must have the same goals of fulfilling the customer's needs (Beer et al 1990). Overcoming these misunderstandings requires a proper structure of quality management development and can be obtained by the 'Total Quality Management' approach which is both a practical working process and a quality philosophy for the organizations committed to growth and survival.
From the outset the total quality management approach starts with the vision that a concentrated management action can improve the quality of services and products of the organization, at a very competitive cost satisfying customer's need and increasing the market share. This increased market share will be stable because it has been earned with the help of solid customer's goodwill and not by gimmicky advertising. To develop the total quality management process the organization has to be guided through the seven basic rules of action and is given by the following principles and actions:
The rewards of establishing a quality company are immense. Look at the growth, profitability and image of Marks & Spencer and British Airways through focusing on quality. Any company in any industry can follow their path and share their success provided its management is serious about meeting customer requirements. Total quality management is the route to creating a quality company and requires complete commitment and dedication from the top.
It also requires strength of leadership and willingness to listen and learn and accept suggestions from wherever they come and to make changes. To start with, a Managing Director will find the task of quality improvement across the whole company daunting and he will get very little comfort from the teachings of the quality gurus. Just deciding where to begin is so difficult that they may never get off the starting block. The condition is so common it even has a name 'Total Quality Paralysis'! However, how to overcome total quality paralysis can be seen in the following section.
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