Effective Quality Management
Total quality management is an approach used by managers to ensure that the entire organization is aligned with creating a competitive advantage by meeting customer needs and expectations to generate the highest level of customer satisfaction among other things. All the members of an organization that practices TQM are expected to actively participate and support activities that are aimed at improving the organization’s business processes, products, services, and organizational culture. As such, it can be stated that TQM is mainly a process through which the concept of quality is instilled in every aspect of an organization’s operations with the cooperation and support of all members of the organization in question. This paper is about Dubai Electricity and Water Authority can use the concept of Total Quality Management to improve their service delivery to the people of Dubai. The paper focuses on the implementation of TQM in DEWA, focusing on how TQM can help the organization and how it should be implemented. Since the organization has already implemented TQM, the paper will offer critic and analysis of their TQM in relation to the organization’s strategic goals.
Aims and Objectives
The aim of this paper is to promote an understanding of the concept of total quality management and its implementation within a working organization. This paper focuses on the details of total quality management in terms of how it works in the organization as well as steps that should be taken in order to ensure that its implementation is successful. The organization used in the case study section is Dubai Electricity and Water Authority, which has already implemented TQM. Therefore, the focus will be on how the implementation has helped the organization to achieve its strategic goals.
Effective quality management involves a number of processes that must be carefully implemented to ensure that the organization works seamlessly towards their strategic goals. Dubai Electricity and Water Authority have already implemented TQM; however, it is not clear yet how effective its implementation has been in relation to achieving its strategic goals. This paper discusses the organization’s TQM implementation in relation to their strategic goals which are based on their Balanced Scorecard.
Background (Literature Review)
Total Quality Management can be defined as a management system that is often applied by a customer-oriented organization to improve not only the quality of their products and services but also business processes and organizational culture (Chaudary, Zafar & Salman 2015). Organizations implementing TQM understand that in order to improve the quality of products and services which they provide, they have to improve the quality of every aspect of organizational operations. The quality of products and services in an organization is a result of a number of business processes. Unless the quality of each of these processes is raised, the quality of products or services will improve temporarily and often inconsistently, thus being ineffective in ensuring customer satisfaction and creating a competitive advantage. There have been a variety of Quality Gurus associated with creating and broadening the TQM concept, and some of their views are highlighted below.
In his 14 point strategy, the W. Edward Deming Institute (2016) posits that management takes on a giant share of responsibility with regards to quality improvement within an organization. According to this strategy, managers must take on the fourteen-point plan if they are to effectively improve quality. Some of the features of this plan include breaking down barriers between the departments of an organization in order to promote seamless operations, eliminating mass inspection and providing more statistical evidence about the existing quality as well as finding problems in the system and continuously seeking solutions that would make the company better. These features define the role of the management with respect to quality, and they are all incorporated under elements of TQM.
Juran (2009), on the other hand, provides ten steps for improving quality within an organization. Some of these steps include building awareness, setting goals, solving problems, reporting progress and keeping score, recognizing performance and maintaining the momentum for sustainability of quality improvement. Without placing all the pressure on the management, Juran (2009) offers guidance on how the leaders within an organization can ensure that they are improving quality in the long term.
Using Taguchi’s model, Ree, Park and Yoo (2014) argue that quality management in business starts with designing systems and processes that correspond to the organization’s goals. To achieve this task, the management has to work towards an organizational system that eliminates any potential for defects in the operations. The Taguchi model prescribes steps that the management must initiate to achieve total quality (Ree, Park & Yoo 2014). These steps are based on the four absolutes of quality management, one of which states that quality is all about conforming to the specifications. This means that in order to achieve quality improvement, the management must create a strict set of specifications that the employees will use as a guide and a measure of their success. This translates into set goals and objectives that should guide each member of staff in the organization in question.
According to Becker and Glascoff (2014), Walter Shewhart, one of pioneers of the concept of total quality management, emphasized the role of quality information in the success of TQM in business. Walter Shewhart established that without all the right information being communicated effectively across the organization, it becomes difficult for the involved parties to live up to the organization’s expectations (Becker & Glascoff 2014). Failure to obtain relevant information, in turn, impedes the organization from meeting the needs and expectations of consumers. In this case, it becomes critical for the management to create an effective communication system that will ensure seamless operations in each department.
Furthermore, in recognizing the contribution of management expert Kaoru Ishikawa, Zairi (2013) argues that total quality management should involve six steps, the first of which is to determine the goals and objectives that the organization would like to pursue. Furthermore, Ishikawa recommended that for quality circles constituting small groups, employees must meet regularly to review their performance to encourage quality across the entire organization.
Once this is established, Zairi (2013) encourages the management to determine a clear method through which the set goals and objectives would follow. Once the path is clear, education and training should be the next most important steps in the process. Thus, information is a critical component of successful TQM in businesses. When all stakeholders in the organization are effectively informed and trained, the implementation can be followed by an evaluation of its effects and an appropriate reaction based on the established effects. All these steps work towards ensuring that whichever changes the organization implements, they will work to their benefit and not against them in relation to the set goals and objectives.
Other important factors under total quality management include performance management and balanced scorecards. The researchers on the concept of TQM tend to agree on the importance of evaluation and feedback in order to keep the momentum of the quality improvements. Cappelli and Tavis (2016) found that performance management is mainly about improving the effectiveness of employees through communication and provision of a positive feedback and other motivational practices aimed at keeping each employee working at optimal productivity. Balanced Scorecards are a management system that is used to align the goals and objectives of the organization with their business processes and operational activities. This helps to improve the company’s performance by ensuring that they invest time and resources in the right activities as defined by organizational mission and vision as well as organizational performance.
How Quality Management Frameworks Can Generally Contribute to Business/Service Organization’s Success
There are five advantages associated with the implementation of quality management frameworks such as TQM in an organization. These include cost reduction, customer satisfaction, long-term competitiveness, defect reduction and improved employee morale. Each of these advantages may have different implications in an organization depending on their line of business.
Cost reductions. Quality management frameworks ensure that the organization avoids a number of processes such as overworking and field service. Furthermore, the emphasis on quality management eliminates accumulation of scrap or the need to cover warranty costs. All these cost reductions show up in the company’s bottom line profits. However, they are not limited to the monetary aspect of business. With a reduced need for field service and rework, the company can focus their employees on more productive activities within the organization. This means that the company can spare on their manpower as well. In a business, any cost reductions are positive when considered from the bottom line perspective. Lower operational costs translate to higher profit margins.
Customer satisfaction. One of the main concerns when it comes to implementation of the quality management framework is the need to satisfy the demands and expectations of the customer. This means that the entire quality management framework is ideally designed to enable the company to meet the demands and expectations of their targeted customers. It is thus expected that the company will record higher levels of customer satisfaction upon implementation of the quality management framework. It must be noted that a good quality management framework does not simply focus on improving the quality of the product or service on offer. Rather, it improves all company’s business processes with the goal of increasing the quality of work that is done within the company in general (Martnez-Costa & Jimenez-Jimenez 2009). The improvements are thus not limited to the product or service but also refer to the attitudes of employees, thus translating into impressive customer relations as well. These improvements benefit the organization by attracting and retaining more customers, thus improving their corporate image and sales volumes.
Long-term competitiveness. This is often a product of cost reduction and customer satisfaction. When the organization has managed to attract and retain a large customer base and their operations are impressively cost-efficient, they have an opportunity to create a long-standing competitive advantage that keeps them ahead of their competitors for a very long time. Long-term competitiveness ensures that the business in question remains profitable and relevant in the market despite facing strong competition. Sustainability within a given market is often one of the underlying concerns for any given business, and implementation of the quality management strategy ensures that the business keeps running successfully.
Defect reduction. Quality management is about ensuring that the products or services provided by an organization always meet their set standards. Therefore, in one way or another, quality management results in reduction of defects within a company (Blenko, Mankins & Rogers 2010). Due to reduced defects, the company receives fewer complaints from customers and fewer cases of warranty claims. In addition, defect reduction leads to time efficiency as the organization is able to spend less time working on defects. Another aspect of this advantage is the limited wastage within the organization. Limited defects mean limited wastage as all resources are used as expected.
Improved employee morale. Quality management generally leads to successful operations within an organization. This success boosts employee morale because they can see positive results of their efforts. As expected, improved employee morale has many positive implications on the organization. First, it leads to job satisfaction as employees are content with what they do within the organization and are effectively rewarded for their input. Another impact is the reduced cases of absenteeism since employees appreciate their own work at the organization. All these factors lead to an improved organizational performance, which, in the end, also has a positive effect on the company’s profits.
Dubai Electricity and Water Authority
The formation of Dubai Electricity and Water Authority was followed by eight impressive steps that were meant to make the organization better and more effective in reaching their set goals and objectives as related to their customers. These steps can all be considered as a part of the organization’s implementation of total quality management since they started small and worked their way through tougher and more radical aspects of the quality management framework. Among other things, it can be stated that DEWA has been very thorough in their TQM implementation and use of a Balance Scorecard. Thus, the company has been able to enjoy a high level of success in their operations and business performance.
Stage 1: The merger. During this stage, three important actions were undertaken within DEWA. The first one was elimination of redundant staff in order to streamline the company’s human resources. Quality management involves creating a workforce that is not only relevant but also exceptional as related to the goals and objectives of the organization. Furthermore, eradicating unnecessary expenditure on staff members who are not needed in the organization contributes to the overall goal of quality management, namely cost effectiveness. By resigning redundant staff, this organization was able to nurture the necessary workforce with respect to their goals and objectives. It can also be noted that the process of resigning redundant staff was organized and executed with utmost consideration for customers. The management within the organization was mainly concerned with the welfare of their customers. This genuine concern and focus on the customers is also in line with TQM (Goetsch & Davis 2013). The other activities in this stage included improving the quality of the organization’s products and services by reducing cases of power supply interaction and water leakage as well as reducing the organization’s dependence on the government’s subsidy. This stage generally thus set the stage for the company to proceed with the more complex aspects of quality management.
Stage 2: New foundations. It is during this stage that the organization came up with a new operational plan as well as new strategic objectives that would guide them through TQM implementation. Strategic objectives define the direction that the organization is supposed to take with regards to what they hope to achieve and thus how they can achieve it. In a quality management framework, these objectives are often evaluated against the ultimate goal of customer satisfaction. For DEWA, the majority of objectives crafted in this stage were focused on improving the company’s ability to meet the needs of their clientele. The organization wanted to make their services more reliable, accessible and affordable. Thus they set out to create a functional management structure that covers the entire nation as opposed to their earlier divisions which left many local markets unaccounted for and thus not catered for. Hence, it can be stated that the organization’s second stage was up to the expected standards for the company that is working towards quality management as a long-term ambition.
Stage 3: Improvements. During the third stage, the management at DEWA maintained their focus on the organization’s set goals and objectives by making major improvements in how the company was operating and serving their consumers. The organization enhanced their operational efficiency while adopting quality concepts and complying with the international standards that are relevant to their line of business. The most important activity in this stage, however, was their focus on improving employee efficiency in relation to provision of products and services. The organization not only trained the employees but also provided them with a new capacity for technological self-reliance on their national markets. During this stage, the company empowered employees with the right skills and knowledge to meet the needs of the customers effectively. It is also very commendable that the improvements made at this stage were focused on improving customer experience, and the company received the International Quality Certification for their efforts towards improved quality.
Stage 4: Quality management. At this stage the company managed to implement the full TQM with an integrated operational system, which enabled the organization to fully focus on the needs of the clientele. During this stage, the organization was widely recognized both locally and internationally due to their improved performance. DEWA received their ISO 14001 certification for both power production and water distribution and an excellence award from the government for being distinguished in their activities within the nation (Dubai Electricity & Water Authority 2016). Implementing the TQM in this case enabled the company not only to meet the international standards for their power production and water distribution activities but also to become one of the best organizations with regards to health and safety of the employees. The company’s drive towards empowering their employees and creating a healthy and safe working environment was used to improve the quality of service that these employees were providing to the customers. One of the greatest components of TQM is related to customer satisfaction, and in this stage, DEWA managed to improve both their reputation and the capacity for accomplishing their mandate within the nation. This translated into higher levels of customer satisfaction, hence the numerous recognitions that the organization received from both local and international bodies such as the Dubai government and the British Safety Council.
In order to ensure a sustainable impact of the implementation of TQM in an organization, strategic planning and management are considered pivotal. This means that in order to be effective in the implementation of TQM, the remaining stages of DEWA’s growth and development must be focused on strategic planning and management and aimed at sustaining the company’s impressive performance and ensuring incremental improvements, which are continuous and aligned with the changing needs and expectations of the customers. Within Dubai, it would be critical for the company to anticipate significant growth in demand as the population and the economy grow.
Stage 5: Strategic phase 1. This stage saw the implementation of the Balanced Scorecard and the use of international organizations as benchmarks to the company’s operations with consideration of the organizational strategy. Since the strategic goal of the organization was to be a world-class utility company that makes its stakeholders happy, each aspect of the Balanced Scorecard would be evaluated based on its impact on the organization’s stakeholders, the most important of which are the customers.
DEWA’s Balanced Scorecard is incorporated into the company’s strategic map as shown above. One of the company’s most popular metrics for measuring performance of the organization is customers attitude. This means that one of the greatest concerns for the organizational strategic objectives and undertaken activities is related to their capacity to meet the needs and expectations of the customers. Electricity and water were particularly scarce resources in Dubai before the formation of DEWA mainly due to limited capacity of this organization’s predecessors. One of the best channels of customer satisfaction was establishing DEWA which involved making water and electricity available with minimal interruptions in supply. As an organization working towards becoming a world class utility, DEWA has had to ensure that they focus on improving customer experience with limited cases of power interruptions or water shortage within their markets. The Balanced Scorecard is a tool that has enabled this organization to effectively align their operations with specific objectives that bring them closer to their clientele in terms of effective operations.
Stage 6: Strategic phase 2. This stage featured creation and implementation of a clear strategy that follows the Five Principles of a Strategy-Focused Organization. The first principle is leadership drive and commitment, with the organization’s leaders showing commitment to the goals and objectives of the organization. The leadership at DEWA takes full responsibility for creating and implementing strategies that are aimed to reach their targeted vision of world class standards of operations. The second principle is about translating the strategy to operations. Most companies formulate impressive strategies but do not follow through when it comes to implementation. However, DEWA has followed through in their implementation processes from the start to the end and are currently focused on the sustainability of their strategic plan (Dubai Electricity & Water Authority 2016). The third principle is aligning the company’s strategy to the divisions and departments. When the company was restructured, the strategy was broken down as in the Balanced Scorecard and the KPIs and delegated to the organization’s divisions and departments. This means that each division in the organization has a specific role that is closely tied to the vision and mission of the organization. The fourth principle focuses on making the organization’s strategy a responsibility of every member within the organization. At DEWA, all job descriptions are clearly defined so that all employees fully understand their roles in relation to the organizational strategy and objectives. This makes it easier for employees to participate in the implementation and accomplishment of the DEWA strategic objectives. Lastly, the fifth principle is about continuity, with DEWA being very particular about making the strategy a continuous process in order to maintain the organization’s impressive performance. Even with their impeccable track record, DEWA continues to incrementally improve performance standards in order to match the rising expectations of their stakeholders.
Stage 7: World Class Status. During this stage, the company managed to improve their status as a strategy-focused organization by using the third-generation balanced scorecard in the strategic planning process while also empowering the leaders to create and drive the strategy at the division levels. The third-generation balanced scorecards incorporate destination statements that clearly define what the organization hopes to achieve with the implementation of a given activity and thus make monitoring and evaluation easy.
Stage 8: Sustaining the Attained Quality Standards. This is ideally the last stage in the company’s growth and development. In DEWA’s case, however, sustainability required incremental improvements based on the KPIs and the Balanced Scorecard used in the organization’s strategic planning. DEWA mainly changed their vision to commitment to sustainable development and socially responsible business, both being subjects of interest of their stakeholders.
Discussion and Conclusion
The Balanced Scorecard
It can be appreciated that DEWA’s Balanced Scorecard is highly effective in relation to the company’s TQM implementation. The organization goes beyond conventional considerations to incorporate destination statements. A destination statement clearly defines what the future is supposed to look like if the implementation succeeds. This enables the management of the organization to appreciate when things work out as planned or to notice and act when they do not. This part of the Balanced Scorecard is highly effective because it provides prompt corrections in the management process. In terms of impact on the organizational performance with regards to the strategic objectives, it must be noted that the organization has come a very long way from the merger in 1992 (Dubai Electricity & Water Authority 2016). The Balance Scorecard was implemented during the fifth stage in order to enable the company to follow a clear strategy towards becoming a world class utility that is committed to the happiness of the stakeholders. Thanks to the destination statements as a part of the Balanced Scorecard, the organization was able to revise many strategic implementations before they could become problematic. For example, at first they used to focus on the improved generation of electricity in order to reduce shortages and interruptions. At the beginning of the 21st century, however, the company had to reconsider their stand in social responsibility in terms of sustainable energy (Dubai Electricity & Water Authority 2016). The fact that the company fully understood the importance of their stakeholders, including customers and the government, enabled them to see the impact of their power generation activities on the happiness of these stakeholders. This is what prompted the organization to deviate towards sustainable energy in order to meet the growing demand for energy without destroying the planet or being inconsiderate to the growing concerns related to environmental sustainability. Such alterations contributed significantly to the happiness of this organization’s consumers while enabling the organization to reach its initial goal of improving energy supply in the nation.
The Five Principles of a Strategy-Focused Organization
In the sixth stage of DEWA’s growth and development, the organization decided to use Kaplan and Norton’s five principles in order to position themselves as a strategy-focused organization. This decision can be considered a success since it enabled the organization to clearly define and implement their strategies through effective leadership and inclusion (Arora 2009). The greatest success of this endeavor relates to the company’s leadership commitment. The UAE has a generally high power distance, which means that the leaders often do not feel obliged to share information with the rest of employees. They make all the critical decisions and expect their subordinates to comply with them. At DEWA, however, the leaders are committed to the company’s strategies and appreciate the importance of employees for the successful implementation process. Enabling employees to know that their input is valued helps the company integrate them into the process implementation not through consulting them but by communicating openly and effectively about the organizational strategy and the implementation plan that they would like to incorporate (Asif 2015). Eventually, synergy between the business leadership and employees enables the workforce to understand what they are meant to do within the organization and thus to offer their support since they understand the intended outcomes associated with each strategic initiative in the organization. This idea is expressed in the fourth principle of making strategy the responsibility of each employee within the organization. The leadership at DEWA managed to engage their employees to a very high degree so that it is not only the leader’s role to initiate and follow through with a strategic initiative. Once the annual strategic plan is created, all employees are expected to get a clear picture of what they are meant to work towards. This ensures that each of the organization’s business processes is focused towards the set strategic goals. A seamless focus enables the organization to be generally effective in achieving any set goals and objectives.
One of the most important KPIs used by DEWA is the electricity technical complaints rate, which stands for the number of complaints about technical hitches related to electricity supply. This organization has been working not only to increase the available energy supply for the growing demand but also to improve the ability of their employees to conduct professional and flawless technical work that would significantly limit the occurrence of these complaints. When a technical issue is reported, one of the organization’s greatest concerns is thus whether the issue could have been avoided provided that the technicians in charge had done things differently. Another KPI used by the company is the level of progress of the DEWA smart grid program. The smart grid program is mainly about installing smart meters all over the Emirate of Dubai in order to enable rationalization of electricity consumption in the region. The progress made in relation to the smart grid program is an indication of how close the organization is to achieving the sustainability strategy. It can be argued that both KPIs enable the organization to fully appreciate the progress that they have made in relation to their organizational strategies. They enable the company to focus on things that translate to the organizational performance as expected under their strategic plan.
Recommendations and Summary
It must be appreciated that DEWA has come a long way in the implementation of TQM, with many visible outcomes that are quite impressive. The organization has managed to receive many certifications and awards within a very short time span, and they maintain this momentum in order to be sustainable, especially in such a sensitive area as electricity. The TQM implementation has so far been exceedingly successful; thus, the management is on the right track. A great concern refers to the company’s consideration for the employees. In recent reports, it has been indicated that the company continues to lose employees despite being one of the most attractive employers in the country. The company policies seem attractive enough in relation to the working environment, which is created as a part of the drive towards ensuring that employees are satisfied enough to meet customers’ demands. However, the company continues to spend a lot of money on recruiting and hiring qualified personnel, especially for technical positions. In order to limit this challenge, the company must focus on the welfare of the employees, especially in relation to working hours and career development opportunities. Most technical employees are stuck on the field level of operations and have very limited opportunities to advance their careers while employees in finance and other office-bound operations advance to management and middle management levels within a reasonable time. The technical personnel may be more useful to the organization in this case but they need to advance their careers as well. This means that one of the KPIs used by the company should be turnover rates recorded in the technical job positions. On the Balanced Scorecard, one of the destination statements should feature maximum employee retention records, with only unavoidable dismissals, such as due to health-related or personal reasons and not due to better job offers.