Achieving Sustainable Performance Through TQM and Market Orientation: A Proposed Framework for Empirical Investigations - Page 12

Continuous improvement and performance

Cost advantage is one of the routes to competitive advantage (Day and Wensley, 1988; Porter, 1985). For operation focus firm, a cost-based advantage may be seen as corresponding to market advantage in the customer oriented firm (Reed, et. al., 1996). Operation focus TQM companies are construed as relying on continuous improvement tool for improving design improvement, reliability improvement and process optimisation.

Continuous improvement in the context of people oriented efforts is seen as kaizen-incremental reduction in effort and time to conduct operation (Schmidt and Finnigan, 1992). Others see Continuous improvement as a broader concept which includes innovation in process resultant from the application of new technologies and research and development effort, while it resembles the economic concept of experience-curve effects (Reed et al., 1996). These arguments are consistent with Gilmore (1990), who projected that with continuous improvement, long-run average cost curves getting below the previous one as the firm adopted new methodologies in technology, manufacturing methods, or materials. Lowest cost producer strategy for Market-oriented firm is thus consistent with operation focused strategy for TQM company. In other words TQM firms pursuing continuous improvement in operation will achieve lower production cost, which in turn lead to improved market share and market performance.

Continuous improvement philosophy captures the desire to enhance the reliability and control of performance (doing it right first time and every time), and to enhance learning and experimentation (continuous learning) in order to develop new skills and capabilities. In practice, most quality programmes focus on enhancing the organisational performance through continuous improvement by systematically reduces or eliminates sources of customer dissatisfaction. Extensive data collection, analysis, and feedback systems that help to identify problems and direct the employees’ attention to those problems achieve this (Day, 1990). Continuous improvement is the lowest step in improvement activity as opposed to benchmarking and reengineering, which are more complex to implement.

Employee involvement, Empowerment and Teamwork.

TQM advocates employee involvement in decision making to solve workplace problems. This in normally achieved via project teams, QCC, suggestion system, or self-managed team and the like. For example, the QCC teams choose routine problems where members have ability to overcome them. Generally, the identified problems are routine and low in uncertainty (i.e. problems are analysable), therefore dramatic result in efficiency are some time achieved.

Similarly, the suggestion system also confines employees to suggest improvement within which employees themselves or their sections’ members can implement the improvement. The problems of interdepartmental in nature, often concerned with creation of customer value would be left unsolved. It can be proposed that organisation with TQM programmes that involve employees in enhancing control-oriented goals will not improve customer value delivery. These companies also fail to realise the full benefits of employee participation when the firm operates in a highly uncertain environment.

Empowerment is a ‘state of mind’ that exist in employees when companies implement practices that distribute power, information, knowledge, and rewards throughout the organisation. This ‘high-involvement-high-performance’ approach is guided by non-bureaucratic and participation-oriented philosophy (Bowen and Lawler, 1995). They argued that empowerment creates superior performance capabilities, which are organisationally embedded thus become a source of sustainable competitive advantage. Others also suggest that successful organisations empower their employees (e.g. Kotter and Haskett, 1992; Milliken, 19996; Scotto, 1996).

Teamwork is collaboration between managers and non-managers, between functions and between customers and suppliers. The non-managerial employees contribute to the organisation when they are empowered and prepared. Functional teamwork follows the notion of system optimisation, whereas the customer-supplier collaboration is based on the perceived benefits of partnerships (Dean and Bowen, 1994). Deming’s (1993) system thinking even suggests teamwork among competitors, where competition should be directed to expand the market thus meets the customers’ needs not yet served. To Deming, competition between people, teams, department, divisions are actually destructive.

Dean and Bowen (1994) echoed Ciampa (1992) regard teamwork practices include identifying the needs of all groups and organisation involved in decision making, searching for mutually benefited solutions, sharing responsibility and credit. These practices are promoted by forming teams and team building techniques such as role clarification and group feedback. Superior performing companies value cross-functional teams and people working together in teams (e.g. Beck and Yeager (1996); Kern, 1997; Milliken, 1996).

The complete elements of MBQ orientation are listed under table 1.2 as research constructs. Primarily, consisting of TQM elements therefore their meanings are consistent with the current definitions discussed in many related literatures. The main relationships among the elements and firm’s performance have been formulated into the research hypotheses to facilitate the empirical work.

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