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Achieving Sustainable Performance Through TQM and Market Orientation: A Proposed Framework for Empirical Investigations - Page 7

Market Focus Initiatives

Customer focus has been traditionally construed as being equivalents to the marketing concept (echoes Levitt, 1969: and subsequent writers (Webster, 1994; Kohli and Jaworski, 1990; Narver and Slater, 1990). Recent literatures have indicated that customer orientation is also a pillar of TQM thus enlarging the concept into a much broader dimension. The view that customer orientation with obsession with quality and customer satisfaction advocated by Deming in 1950’s implied that customer orientation is the pillar of TQM. Also, Kotler’s total quality marketing concept (1997.) links quality and market orientation through customer orientation. These arguments and others place customer orientation as one of the common factors in the conceptual model to be studied. Customer orientation, under the new marketing concept and TQM thinking means that:

  1. Firm is able to create value for customers because it understand their value chain (Porter, 1985),
  2. Firm is committed to the generation of market intelligence and organisation-wide response to it (Jaworski and Kohli, 1993; Kohli and Jaworski, 1990; Narver and Slater, 1990).
  3. Firm position itself to the target market based on the capabilities and competence to provide superior value, stay close to customer, and ahead of competition (Day, 1990: 357).
  4. Firm constantly innovates or continuously improves its business process to enhance customer value and amaze customer (Deming, 1986, Hamel and Prahalad, 1993).
  5. Firm Manages customer portfolio, competitive market including technology to improve customer relationships (Webster, 1994; Wayland and Cole, 1997).

The degree of customer orientation reflects the relative emphasis the firm places between the customer (and other market orientation factors) and the internal efficiency or ‘company focus’ in implementing TQM (refer figure 1.1). In other words a firm pursuing TQM can strive to be either customer focus or operation focus or emphasise both. Literatures accepted that TQM is a business culture and resource consuming to implement thus firm only pay attention to a particular emphasis during different phases of its implementation. If it is suggested to be mutually exclusive like differentiation and low-cost duality of Porter’s (1980), TQM orientation thus assumed along unidimensional scale between customer and operation focus (see Figure 1.2). Consequently, it is argued that TQM firm with external orientation emphasis and exhibits high customer focus is market oriented.

Since TQM also emphasises both quality of conformance (producing product to customer specification) and quality of performance (serving customers by improving product quality) (Deming, 1986; Juran, 1992), customer needs become a key input to TQM. Quality inputs derived from effective environmental scanning, competitor analysis, technological forecasting, and customer feedback among others are subsumed under intelligence generation. The customer and competitor information: intelligence generation and dissemination are the processes of market orientation (Kohli and Jaworski, 1990) but involve interdepartmental role, though suggested could be championed by marketing personnel (Webster, 1998; 1994). These market-based activities aim at meeting “quality of performance”: customer perceived quality in the marketplace leading to market advantage, whereas ensuring the “quality of conformance to design” is the job of the internal operation. However, both require interfunctional co-ordination.

High market orientation, particularly of customer orientation will directly affect ‘quality of design’ since market-oriented TQM companies will be able to improve all practices associated to quality of design. Optimisation of design processes is the result of team participation especially by marketing and operations personnel. Moreover, communication, networks and involvement with suppliers and customers have been shown to facilitate innovation.

Since TQM emphasises the use of cross-functional team approach towards solving quality problems, this practice and teamwork that it creates will enhance interfunctional coordination. This in turn improves internal information flow, though not necessarily reduces departmental conflicts, but help to keep members focus on important issues. It is postulated that TQM companies achieve greater interfunctional co-ordination through cross-functional activities and greater flow of quality and customer information, which result in improved response to market. This, conceptually clarify linkages between quality orientation and market-based behaviour in terms of improved organisational co-ordination.

Furthermore, quality award models such as MBNQA, Deming prize, and EFQM award consider customer’s requirements, expectation and satisfaction as criteria for effective quality programmes, which are consistent with contents of marketing concept: customer primacy and long-term satisfaction. Conceptually, TQM and market orientations are two parallel concepts, mutually supportive and rely on common elements such as customer orientation, competitive orientation, innovation, and interfunctional co-ordination. However, only selective deployment of both orientations simultaneously can lead to firms exhibit the highest form of customer orientation.

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