Why Quality Circles Failed

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Why Quality Circles Failed But Total Quality

Management Might Succeed
Article in British Journal of Industrial Relations · January 2009

DOI: 10.1111/j.1467-8543.1991.tb00371.x
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British Journal of Industrial Relations
29:4 December 1991 0007-1080 $3.00
Why Quality Circles Failed but Total

Quality Management Might Succeed
Stephen Hill*
Final version accepted 30 June 1991
Abstract
This paper examines how companies have sought to develop employee

participation in the quest f o r business improvement, f r o m the quality circle
( Q C )fad of the early and middle 1980s to total quality management ( T Q M ) at
the end of the decade. Thirteen companies provide evidence of the strategies
adopted and support previous findings that circles collapsed as the result of
inadequate organizational design which encouraged managerial recalci-
trance. Moreover, T Q M departs f r o m traditional ‘cyclesof control’ and looks
likely to institutionalize participation on a permanent basis, and managerial
employees as well as office and shop-poor staff now have more opportunity to
participate in decisions. T Q M is not another passing fashion, because it can
meet the interests of employees while providing top management with an
effective way of organizing in the new times.
1. Introduction
Quality circles (QCs) were hailed at the start of the 1980s as a major
innovation with the power to transform British and American companies.
There were three major elements in these claims. First, quality circles would
increase the involvement of employees in their organizations by means of
participation. Second, they would enhance business effectiveness. Initially
this claim was confined to their perceived role in raising the quality of
manufactured goods, but subsequently it was recognized that circles could
promote the continuous improvement of all kinds of activities within a firm
(Goldstein 1985). Finally, circles marked the commitment of companies to
changing organizational culture and were one of the ways to carry through
this change. Behind the enthusiasm for QCs was a much broader interest in
learning from the Japanese how to manage human resources for continuous
business improvement.
This paper assesses the experience of quality circles in the decade since
‘Professor of Sociology, London School of Economics
542 British Journal of Industrial Relations
their introduction and reports recent research into some of the British
pioneers. The argument is that circles were doomed to fail, not for the
reasons usually cited, but because British companies did not comprehend
the totality of quality and business improvement systems, failed to design
their organizations appropriately, and opted for circles separated from their
context. An analysis of total quality management (TQM) and its im-
plementation in various companies over the last few years highlights the
inadequacies of circles, but indicates that the claims made a decade ago are
now more capable of being realized.
2. The QC debate
There has long been a division of opinion regarding the ability of quality
circles to live up to the claims of their advocates, even of their chances of
survival. The positive position is found mainly in Britain. Between 1984 and
1986, Dale and various collaborators conducted a number of surveys which
showed that, leaving aside the minority of companies that abolished their
circle programmes entirely, most companies had a high survival rate among
their circles and only 20 per cent of these failed. (See Collard and Dale
(1989) for a summary of the findings.) Incomes Data Services (1985) reports
survey evidence to show that around 400 British companies operated Q C
programmes in 1985, which gave them a prominent place among planned
organizational change initiatives in numerical terms. Collard and Dale
(1989), writing in a volume on the current state of personnel management in
Britain, state that circles are now a permanent feature of many companies
and are no longer experimental with questionable long-term survival. They
have an assured future because they meet the objectives that companies
have for them.
On the negative side, they were criticized from the outset, particularly in
America. On the basis of research carried out in Britain and the USA at the
start of the QC movement, Bradley and Hill (1983; 1987) found circles to be
of limited value in terms of the managerial objectives of changing employee
attitudes, so as to increase involvement in work and the organization and
changing organizational culture towards greater trust, more open communi-
cations and greater participation. They report that circles did, however,
deliver reasonable financial returns which indicated some business improve-
ment. Companies found it difficult to keep circle programmes going, and
they promised to be short-lived. Ambler and Overholt (1982) found that 50
per cent of U S circles failed in the early 1980s. Lawler and Mohrman (1985),
reflecting on their consultancy experience, simply dismissed circles in the
USA as a fad which would pass away because they were unworkable. The
one positive feature they could identify was that circles might prove to be a
transition towards broader forms of participation and better strategies of
improvement. Cross-sectional research and consulting experience lack
rigour for the analysis of effects over time, however, so two longitudinal
Why Quality Circles Failed but TQM Might Succeed 543
studies provide particularly interesting evidence from the middle 1980s.
Marks ef al. (1986) found small but statistically significant benefits for
productivity, absenteeism and intentions to quit among circle members over
a two-year period. There was no enhancement of the quality of work-life,
however. Griffin (1988) reports a longitudinal study lasting three years,
between 1983 and 1986, which followed members and a control group of
nonmembers in one circle programme from the initial planning through
implementation to maturity. Circle members’ attitudes changed, with levels
of job satisfaction and involvement increasing in comparison with their base
scores prior to the start of the programme and the scores of the control
group. Managers reported improvements in quality and cost savings. But
both sets of effects began to decline after 18 months, while after three years
the gains had disappeared and the programme proved ineffective.
The difficulties that have to be overcome for circles to flourish were fairly
clear by the second half of the 1980s. There are technical problems
connected with the way circles operate. These include the way the
identification of a solution to a problem is often separated from its
implementation, the restriction of circle activity to a narrow range of issues
within the control of the work unit, the tendency for circles to run out of
things to do, and the lack of competence or the inadequacy of the training of
members (Goldstein 1985; Collard and Dale 1989). In addition, the
attitudes of employees are not always favourable. The major difficulty here
lies in the area of managerial attitudes and culture, notably among
supervisors and middle managers, which leads to a lack of co-operation
(Wells 1982; Russell and Dale 1989). One analysis of the managerial role,
however, suggests that managerial failings are less to do with attitudes than
with inappropriate reward systems and organizational structures which do
not facilitate participative improvement strategies (Bradley and Hill 1987).
Predictably, enthusiasts and sceptics have different views about how easily
these difficulties might be overcome.
The British industrial relations community paid little attention to quality
circles, despite their numerical significance and the interest shown by writers
in the human resource management tradition. When they were considered,
they were mainly dismissed. Batstone and Gourlay (1986: 117-20) claimed
that circles were not aimed at participation, nor did they allow employees to
apply their own ideas directly to the work process. They saw circles as part of
a strategy by managers to bypass trade unions and create an individualistic
relationship with employees, in order to increase the legitimacy of manage-
ment in employees’ eyes. Ramsay (1977; 1985) has argued, of participative
schemes in general, that companies extend participation on a cyclical basis.
His ‘cycles of control’ thesis is that over time top management has responded
to periods of crisis in industrial relations, when labour has challenged
legitimacy, by offering greater participation, only to revert to conventional
ways of managing when the crisis is over. Moreover, the offer of more
participation during crises is largely an ideological appeal with little real
substance in terms of changing the way of managing, because on investiga-
tion all participative schemes turn out to be small beer. The ideological aim
of schemes such as quality circles is to repair managerial legitimacy.
3. The investigation
Against the background of competing claims, it was decided to investigate

the status and effectiveness of mature circle programmes in Britain in the
late 1980s. In 1987 we contacted 11 companies in the South East and
Midlands which had been among the British pioneers in the early 1980s,
whose programmes at the time of the investigation would have been of more
than four years' duration.' They were all members of the National Society of
Quality Circles in 1987 and included the chemical company cited in Bradley
and Hill (1983; 1987).The intention was to carry out aseries of in-depth case
studies. The research immediately hit a snag, in that only five of the firms still
had quality circles. Of the five, one said that its programme was on the point
of collapse and two others with viable programmes said they were
dissatisfied with circles. Therefore, there were viable programmes that still
commanded the support of senior management in only two cases. The
company with the collapsing programme and one of the two with dissatisfied
managers were in the early stages of implementing total quality manage-
ment (TQM). Among the six that no longer had programmes, four had not
replaced circles with anything while two had devised alternative arrange-
ments for improvement by means of participation: one used project teams
comprising managers across a range of functions and selected rank-and-file
employees, these teams being created on an ad hoc basis, and one had
moved to TQM.
The objective of investigating the status and effectiveness of mature
programmes had to be interpreted in the light of the situation as it actually
was in the late 1980s. The aims now became to understand the reasons for
the declining interest that companies showed for quality circles, whether
companies still adhered to the objectives that had led them to establish
circles in the first place, and what they intended to do about involvement,
business improvement and cultural change if they felt that circles could not
deliver the goods. It was assumed that, if so many firms had started circles by
the time of the IDS survey of 1985 because they believed that the issues
circles could address were important to the future of their businesses, then
these issues would remain important even if circles proved to be the wrong
vehicle for tackling them -that is, unless circles were merely a response to a
particular stage in the industrial relations cycle.
Two of the firms without circles had disbanded their programmes before
they reached three years of age, more than two years before the investiga-
tion, and were not followed up. In the remaining nine cases, the relevant
personnel or quality managers were interviewed, including those with direct
oversight of programmes. In companies with active circle programmes or
alternative arrangements for participative quality management, other
senior establishment managers were normally consulted as well. A
questionnaire survey of circle members and control groups of nonmembers
was also administered in two establishments of one company with an
extensive circle programme, in order to replicate the study of Bradley and
Hill. This phase of the investigation was completed at the end of 1988.
Since circles were obviously reaching the end of their lives and several
companies were involved in total quality management, special attention was
paid to this new development and two of the companies with TQM were
investigated in depth. As the second phase, two additional Companies with
TQM strategies were investigated in late 1989 and early 1990.2 Both had
experimented with circles earlier in the decade. The whole investigation
therefore covered slightly less than three years, during which the search for
business improvement and cultural change in Britain was in a period of
transition. It should be noted that, by the end of 1989, only two of the 13
companies, all of which had previously introduced circles, still had a QC
programme.
4. The QC boom in context
Hindsight suggests that the rapid growth of quality circles can best be
understood as a response to two challenges facing British companies in the
late 1970s and early 1980s, particularly in the manufacturing sector. The first
was the issue of employee relations. These seemed to compare unfavourably
with those in other advanced industrial societies, in terms of industrial
conflict that received institutional expression in the activities of trade unions
and distrust of management and low involvement with the firm among
rank-and-file employees. Low levels of productivity and poor labour
utilization were widely seen to be the consequences of inadequate employee
relations and the ‘British worker question’, although it is now recognized
that these common perceptions in fact greatly exaggerated the case (Nicols
1986; Batstone 1988: 135-43). The reports of the 1980 and 1984 Workplace
Industrial Relations Survey by Daniel and Millward (1983) and Millward
and Stevens (1986) show how companies in the late 1970s and early 1980s
responded to poor employee relations with a new strategy of better
communication with union stewards, via joint consultative committees, and
more direct communication with individual employees via newspapers,
videos, team briefings and other forms of involvement, and attitude surveys
(Daniel and Millward 1983: 129-48; Millward and Stevens 1986: 138-68).
Quality circles have been linked with team briefings as a form of direct
communication aimed at involvement (Batstone and Gourlay 1986: 117).
The second challenge was the realization of just how uncompetitive British
manufacturing had become, particularly in the light of Japan’s ability to
produce innovative and high-quality products at low cost. This led initially to
the search for greater manufacturing quality, then to a wider conception of
innovation and business improvement. The failings in this area were more
clearly the responsibility of inadequate management than of other
employees.
The managers interviewed in this investigation agreed that the original
decision to embark on quality circles had been part of their companies’
response to the two problems of poor human relations and lack of
competitiveness in the early 1980s. Between 1978 and 1984, every company
had introduced new methods of communication with their unions and
employees, while four had also introduced single-status employment to
reduce the divisions between labour and other employees. (A fifth did this in
1987.) Quality circles were intended to do more than just improve
communications: the aim was for rank-and-file shop-floor and office
employees to participate actively in the improvement process. It was hoped
this would in turn increase job satisfaction, stimulate personal growth, lead
people to identify more with the quality of their own work and the
managerial objectives of higher quality and efficiency throughout the
company, and so increase employees’ sense of involvement in their firms.
Their reasons match those found in the surveys of British companies in the
early 1980s by Dale (1984) and Dale and Lees (1986). Thus, the role
envisioned for circles was more substantial than Batstone and Gourlay
suggested, although the part they might play in strengthening involvement
and legitimacy was not disputed.
Senior managers in four companies were quite clear that they had also
originally hoped that circles would initiate a process of cultural change
throughout their organizations. A new climate of openness and a commit-
ment to continuous improvement was the desired outcome, and managers as
well as other employees had to change their attitudes. A senior manager
with responsibility for quality put it thus: ‘quality circles promote personal
development and job satisfaction by harnessing ideas and opening up
communications, which in turn leads to improved quality, a more effective
company and a new attitude among everyone who works here.’
5. The QC experience
Managers in every company were asked to assess the experience of circles, in

particular how they saw the benefits for employees and companies and the
problems facing circles.
Academic analysis has long suggested that people gain from participation:
it is believed to lead employees to feel more satisfied with their work and
more involved in their organizations. However, there are some criticisms of
the assumption that participation has these positive benefits (Miller and
Monge 1986; Wagner and Gooding 1987). The managers I interviewed were
also sceptical that employees generally had either desired or benefited from
participation. They pointed to the small numbers of people volunteering to
participate in circles. One company had around 25 per cent of those eligible
to join in circles at the high point of its programme, another reached 20 per
cent; elsewhere, between 2 and 10 per cent opted for membership. In every
case, the majority of employees were at least indifferent while certain
groups remained actively opposed, even in the companies with viable
programmes. The unpopularity of circles led managers eventually to
question whether they should persist with something that was so obviously
of little value to most of their staff. Since most people refused to join circles,
they could not enjoy the benefits assumed to flow from participation, so
circles were simply not effective in spreading such benefits widely. The
experience of these organizations was that the Q C route did not meet
whatever aspirations their employees may have had for greater participa-
tion.
Earlier research has suggested that, even among those who do choose to
participate, quality circles are associated with few positive changes of
attitude and do not have strong effects (Bradley and Hill 1983,1987; Griffin
1988; Ledford et al. 1988). In order to illuminate attitudes in general and
perceptions of quality circles in particular, a survey was administered in
1988 among a sample of members and nonmembers ( n = 146) in two
establishments covered in this investigation. The plants belonged to
different divisions of an office automation company employing 22,000 staff.
This was a leading light in the British Q C movement, with circles since 1981
and approximately 150 in operation at the peak of its programme, although
at the time of the research senior managers were implementing TQM at the
top of the company and expressed dissatisfaction with the way circles were
going at the bottom. The questionnaire was a slightly modified version of
that used by Bradley and Hill (1983).
A cross-sectional survey has certain shortcomings for QC research. The
main problem arises from self-selection: any observed difference between
members and non-members may be due to prior differences, which lead
some to select themselves for membership, and not to the effects of circles. It
is also impossible to measure attitude change over time. But these
shortcomings are less of an issue here because there were in fact remarkably
few differences between the participants and others with regard to attitudes
on a number of general issues, although the perception of quality circles
specifically did differ. This repeats the pattern of responses reported in
Bradley and Hill (1987).
The mean scores of members and nonmembers showed no significant
differences in the four broad areas of job satisfaction (covering satisfaction
with intrinsic work content and social relations in the workplace), long-term
commitment to working for the company, perceptions of the company as a
‘fair’ employer, and the amount of trust and ‘us and them’ attitudes between
managers and other employees. There were significant differences between
the means in only one area, concerning the desirability of greater participa-
tion in managerial decision-making. Members endorsed more strongly the
statements that ‘employees should have more say in company decisions
affecting the way their work is organized’ (mean score of members = 1.6,
non-members = 2.0, significant at 0.01 level; using a 5-point Likert scale
where 1 equals the greatest agreement) and ‘employees should have more
say in decisions affecting the company as a whole’ (members = 2.1, non-
members = 2.5, significant at 0.01 level). There are no statistically
significant differences on a third participative item, that ‘employees should
have more say in company decisions affecting their own departments’. It is
also noteworthy that, despite the differences between the two groups, the
whole sample endorsed quite strongly the desirability of greater participa-
tion: the mean scores for ‘more say’ at the level of work organization,
department and company are 1.8, 1.8 and 2.3 respectively. These data
indicate that employees do value participation, despite the belief of their
managers that they do not.
Asking people to evaluate quality circles specifically did, however, reveal
large and consistent differences of perception. Nonmembers downplayed
the importance of circles while members endorsed them strongly: non-
members were far less likely to agree that circles had increased participation
by giving their members more say in working conditions and the way work
was done, that the company, their section and they themselves had benefited
from circles, or that circles had come up with useful ideas for improvement;
they were also less likely to favour having circles in their own work areas.
More than six years after the start of the programme, therefore, circles
continued to be disparaged by nonmembers. Despite welcoming the
principle of participative management at the place of work, this group
obviously was not convinced that circles were the appropriate vehicle.
Members were attached to their circles and saw them as valuable, but they
still showed no greater job satisfaction, no more involvement in the
company, and no more positive feelings towards management than their
colleagues outside.
Every company claimed that circles had delivered some business im-
provements with measurable results in terms of cost-saving and improved
quality. Only one firm had ever done a full analysis of all the measurable
costs and benefits, and then only once. The remainder recorded the future
gains estimated at the time a circle’s ideas were accepted and the most easily
identifiable costs associated with running the programme. The level of
measurable return was seen as disappointing and as declining over time until
circles contributed little. Those companies that kept circles going chose to
do so for ‘social’ rather than economic reasons, believing that they were
good for their members and the overall climate of human relations even if
they no longer delivered significant financial or technical improvements.
Quality circles and middle managers normally do not mix well, and this
research supports the earlier findings about the difficulties encountered at
this level. However, the interpretation offered here is that the problem of
middle management was less one of managerial attitudes and culture,
although respondents recognized that these were often less than ideally
suited to making circles work, and was more the inherent limitations of
quality circles as institutions and the way they were inserted into the host
organization. In essence, circles disrupted managers’ lives for small returns
and created an organizational complexity that confused existing structures,
and middle management had no reason to make them work.
Disruption resulted from the formalized procedures governing circles, in
particular the regular meetings during working time and the requirement
that managers service circles on a day-to-day basis and then spend time
listening to, assessing and perhaps implementing the periodic presentations
of circles’ proposals. Managers did not take to the permanent and
institutionalized nature of employee participation in improvement. Small
returns were the result of several factors. Companies followed the standard
policy of encouraging circles to tackle only a limited range of issues, with a
view to minimizing the outside help they needed to solve a problem and
maximizing the likelihood that they could implement their proposals
without reference up the hierarchy. (Despite this limitation, proposals still
frequently required the agreement of a higher authority because they
involved some expenditure of money.) It was also suggested that
rank-and-file employees were not competent to tackle broader issues,
because they had insufficient education and training. Moreover, circles
worked through problems systematically but slowly, which restricted the
number of issues they could deal with and ruled them out from considering
problems that required rapid solutions.
Organizational complexity is a result of establishing quality circles as a
parallel or dualistic structure which coexists with normal organizational
arrangements (Stein and Kanter 1980; Goldstein 1985; Ledford etal. 1988).
They are parallel to the normal bureaucratic organization and hierarchical
authority, but leave these existing arrangements untouched. One aspect of
dualism has already been mentioned: the use of a small number of
volunteers in special groups, meeting separately from their colleagues. The
present research indicates a number of other dimensions of dualism that are
particularly significant for organizational complexity and the response of
managers. The QC hierarchy usually consisted of circles, facilitators and, in
some companies, a senior management co-ordinator or steering committee,
and was parallel to, rather than integrated into, the existing organizational
hierarchy. Thus, managers found themselves in two structures, which in
itself was a confusion of the normal lines of command. Second, the QC
hierarchy allocated responsibility to managers for overseeing circles but
denied them the corresponding authority: membership was voluntary and
managers could not determine who joined, while circles determined their
own agenda and were not obliged to heed managers’ priorities. Circles might
even be able to appeal over the heads of their managers to the co-ordinator
or steering committee to help overcome obstruction (though in practice this
hardly ever occurred, since the active involvement of senior management
co-ordinators or steering committees was the first thing to decay as senior
management interest declined after the first burst of enthusiasm). Third, the
identification and solving of problems were often in practice separated from
the implementation of solutions, since in the majority of cases circles
proposed but managers decided and implemented. Managers’ tardiness in
550 British Journul of Industrial Relations
implementation or their outright refusal to implement have been cited as the
major obstacles facing circles (Collard and Dale 1989), and this was indeed
the problem most often mentioned by the circle members themselves in the
present investigation. Fourth, the circle activity of managers was not
integrated into the organization’s existing reward system.
Goldstein (1985) has hypothesized that the dualism created by circles is
positively functional for organizations. He suggests that a separate structure
to handle innovation is required, because routine management is largely
geared to maintaining equilibrium and so reproduces the status quo and is
less effective as a change agent. The premise that organizations need to
organize change separately will be challenged later, but it is sufficient here to
note how inappropriate are circles to perform this role, because of their
limited competence and the lack of articulation between structures. Bradley
and Hill (1987) described how one US company did successfully manage the
integration of structures via the managerial appraisal and reward systems in
the early 1980s, so that line managers had an incentive to work with circles.
However, none of the companies in the present investigation had taken this
step. Indeed, it was argued that to have done so would have violated the
spirit of quality improvement, with its emphasis on voluntarism and
participation on the basis of free choice.
A recent, highly detailed investigation of how ‘quality control’ circles
actually operate in Japan shows that, despite the weight given to the principle
of voluntarism in the Japanese literature, Japanese companies in practice do
use their organizational reward systems to put pressure on middle managers
to co-operate with circles: 70 per cent of a sample of managers drawn from 2 1
companies believed that their performance in supervising circles was
considered when promotions were being determined (Lillrank and Kano
1989: 61-3). Moreover, line managers themselves become intimately
involved in the parallel structure that oversees and promotes circle
programmes, in some cases so much so that it is difficult to separate the two
structures, and middle management appears to be less troubled by the
presenceoforganizationaldualism (pp. 65-7; 115-19). Evenso, the principle
that circles should operate as autonomous agencies is respected, and Lillrank
and Kano (1989: 115-19) refer to a ‘hybrid’ parallel organization, to convey
this interweaving of line management and semi-autonomous circles. Nor is
the participation of individual employees in circles voluntary in the American
and British manner: when a group of employees in a workshop agrees to
introduce quality control circles, two-thirds of companies require all the
relevant employees to become members and in the remainder considerable
informal pressure is exerted to ensure total coverage (pp. 95-6).
The failure in Britain to overcome dualism and integrate quality circles
into the mainstream of managing was one of several signals that top
management gave about their own apparent lack of commitment to the
programme of quality improvement after an initial period of enthusiasm.
The absence of appraisal and rewards and sanctions may also be interpreted
as a signal that the people at the top regarded quality improvement as an
optional extra that was voluntary, divorced from normal managerial duties
and with no penalties for those who chose to opt out. A third indicator of the
perceived unimportance of quality circles was the calibre of circle
facilitators: these were without exception either young and very junior
managers or people who were known to have reached their career limits and
who were seen to have been given the job as make-work rather than being
severed. In a situation where circles had limited efficacy, organizational
structures were not properly adapted and top management support was
equivocal, middle managers seemed to have behaved quite rationally when
they failed to co-operate with quality circles.
Not surprisingly, all the companies ultimately asked what quality circles
were for, even those that then decided to continue. The work-force and
human relations benefits were patchy since so few employees joined. By the
middle of the 1980s. the concern of earlier years with the issue of employee
relations had become less pressing, in part because of the new labour market
conditions and the new legal framework of industrial relations, but also
because the other personnel initiatives introduced by these companies were
thought to be bearing fruit. The business improvement benefits had also
proved disappointing over time, partly because middle managers had all too
often been the weak link between problem identification and the im-
plementation of solutions.
The dominant impression, conveyed by companies with and without
circles alike, was of fragility. Every programme needed constant stimulus to
keep it alive. The company used for the attitude survey had been forced to
relaunch its programme once before, after it collapsed in the mid-1980s.
Facilitators in two other firms gave identical accounts of how, after they had
been on sick leave for several months, they returned to find that more than
three-quarters of their circles had not met in their absence. Every company
experienced a continued ebb and flow as circles went into suspension or
collapsed and others started. The continued flux meant that companies were
never certain how many circles were in operation at any moment. This came
across forcefully when the quality director of the British company previously
studied by Bradley and Hill agreed to a replication of the earlier investiga-
tion, only to find that there were no circles left to be studied. Changes among
senior management personnel were always unsettling, since the newcomers
were always more likely to question the utility of circles. Thus, all the
evidence points to the widespread failure of circles to become institutional-
ized. The rhetoric of the early days of the boom, that circles would become a
normal way of doing business, was hollow. Circles never really took hold in
the great majority of these firms, remaining both experimental and marginal
throughout their lives.
6. The inherent limitation of QCs: the lesson of TQM
Aspects of the quality circle experience support the thesis of cycles of control.
First, participation was introduced partly to solve the perceived crisis in
industrial relations. Second, participation was restricted to a narrow range
of issues, and middle managers reduced its effectiveness even in this limited
area. Third, circles decayed once the crisis had passed. However, the history
of circles also produces evidence that qualifies the predicted pattern. In a
number of companies, senior management continued with circles long after
the changing environment of employee relations had reduced the need to
repair managerial legitimacy and the tangible economic returns from circles
were shown to be small. The circle members themselves reported that their
participation had real substance and disagreed with non-members who saw
it as a sham. Finally, more than half the companies have continued with
some form of participation after the demise of quality circles and demon-
strate a more consistent commitment to participation, as is shown below.
Lawler and Mohrman (1985) raise the possibility that circles may have a
role as a transitional mechanism, leading organizations to look for more
effective means of raising quality which include some element of participa-
tion. Of the 11 companies originally approached and the two added later,
five introduced formal schemes of TQM between 1983 and 1988. Four did
this after the abolition of circles and one alongside circles (the British office
automation company in which the survey of employee attitudes was carried
out). In the remaining eight companies, one kept circles while training
managers in the principles of quality management, one moved to project
teams to tackle quality improvement issues on an ad hoc basis with employee
participation where relevant, and six no longer had any arrangements for
quality improvement that involved the participation of employees. Thus,
seven out of the 13 companies continued to make provision for participative
quality improvement at the end of 1989. Three regarded their QC
programmes as an important learning experience that had taught them the
potential value of employee involvement in business improvement, and in
these companies quality circles did have a significant transitional role. The
British office automation company was one such firm. It had seriously
considered abolishing circles when TQM was introduced for all employees,
but decided that this might alienate the remaining members; the expecta-
tion, however, was that circles would wither and would not be renewed. The
other four stated that the business issues that had originally led them to
experiment with circles still remained, in particular the need for continuous
performance improvement and an organizational culture that would support
this; but their adoption of new techniques was not related to circles. Rather
than having a transitional role, the unsatisfactory experience of circles had if
anything delayed the adoption of new techniques in these four cases.
The management literature on QC failures identifies ‘attitudes’ as the
basic problem, primarily the wrong attitudes among middle managers and
secondarily the wrong attitudes among other employees, plus certain
technical issues. Given the fundamental importance of the objectives that
led senior management to quality circles and which in their view still hold
good today - notably, the need to raise quality and improve performance
and the desire to create a culture that sustains improvement - and the
abundant evidence that in general employees value more influence at work,
it seems odd that the attitudes of middle managers and other employees
should have been such a powerful force in derailing the most widely adopted
scheme of participative business improvement. This investigation has
pointed to the area of organizational design as an important explanation of
managerial recalcitrance and the technical limitations of circles, which
suggests that there was a mismatch between structures. The introduction of
TQM is particularly significant for this evaluation of quality circles, because
the two stand in a special relationship, because TQM can solve the
organizational design problem, and because TQM has been the direction
most often taken by organizations that still look for an effective way of
involving their employees in the realization of their quality management
objectives.
A few voices were heard in the early 1980s suggesting that circles would
not transplant when separated from their Japanese environment. What
people had in mind was the difficulty they anticipated in getting circles to
flourish outside the Japanese employment system, whose characteristic
features of high trust and welfare corporatism encouraged the participation
of employees and gave them an incentive to search for improvements (e.g.
Bradley and Hill 1983). The real significance of the Japanese context was not
appreciated at that time, however: namely, that quality circles were only one
part of the total system of quality improvement that we now call TQM.
Quality circles were among the early quality initiatives in Japan, but they
have not functioned as free-standing institutions for many years in major
companies and are firmly integrated into modern total quality management.
Japanese quality theorists are well aware of the pitfalls of taking circles out
of context, and Ishikawa (1985: 144), for example, is highly critical of the
Western use of circles, which he thinks is bound to fail: he believes that a
basic premise of starting quality circles must be that top management is also
embarking on total quality management. Lillrank and Kano (1989: 37) state
that it is rare in practice for Japanese companies to have circles without
TQM, while circles ‘are by definition part of a company-wide effort of
quality improvement and change’ (p. 40). It seems that organizations
outside Japan borrowed the part of a total system that was both the most
visible and apparently the easiest to implement, without an understanding of
the whole. In the light of the theory of quality management and British
experience with both quality circles and TQM, it is now clear that the part
could not survive on its own and, moreover, was the wrong thing to borrow.
It is worth noting that, while one of the reasons for introducing circles was
to enhance the involvement of lower-level employees in their firms and the
intrinsic rewards of work, the companies that moved to TQM did not cite
this in the context of TQM: enhanced business performance and a changed
culture were the explanations given for the new departure. Cultural change
did, however, subsume the participation, involvement and intrinsic reward
elements that circles had been aimed at. The crucial difference was that now
these desirable outcomes were seen to depend on prior changes in the
attitudes and behaviour of managers, which required an organization-wide
cultural change.
7. TQM theory
There is no single theoretical formalization of total quality, but the works of

the American quality gurus, Deming (1986) and Juran (1988), and the
Japanese writer Ishikawa (1985) provide a set of core assumptions and
specific principles of management which can be synthesized into a coherent
framework. Total quality management can be seen as a business discipline
and philosophy of management which institutionalizes planned and continu-
ous business improvement; indeed, many people prefer to talk of managing
for continuous improvement rather than for quality, which has a product-
centred connotation. ‘Quality’ is much the same as ‘excellence’ in the recent
management jargon, and the test of quality management is its ability to
satisfy customers in the market-place. Total quality management assumes
that quality is the outcome of all activities that take place within an
organization; that all functions and all employees have to participate in the
improvement process; that organizations need both quality systems and a
quality culture.
For the purposes of this discussion, certain principles of quality manage-
ment may be described briefly. First, top management is the main driver of
TQM. Quality is a strategic issue for corporate management and is not just
an operational issue for lower levels of the hierarchy. Quality includes
innovation, which is the search for more effective ways of managing to meet
customer requirements, as well as improving the efficiency of existing
operations. Top management determines quality priorities, establishes the
systems of quality management and the procedures to be followed, provides
resources, and leads by example. Oversight of the improvement process
normally resides in a steering committee of senior managers reporting
directly to the top of the organization.
Second, quality improvement occurs in two places. Much has to be
achieved within the existing ‘vertical’ structure, and improvement activity
takes place within naturally occurring organizational units, such as depart-
ments, sections and work teams, rather than outside. In addition, since
many issues cut across these units and the divisions between functions, new
arrangements for the ‘horizontal’ co-ordination of improvement are re-
quired. Cross-functional management is an essential feature of TQM. One
principle of horizontal activity is the idea of the internal customer:
organizational units discuss the quality of their performance with those who
receive their output, in order to improve the service they provide to these
‘customers’. The use of ad hoc, multi-functional or interdepartmental
project teams is a second way of organizing across the vertical lines. An
implication of this is that a matrix organizational design may provide a
particularly appropriate structure within which such activity can take place.
Third, the crucial role in business improvement lies with management.
Innovation is clearly a managerial task, but even the incremental improve-
ment of existing operations is primarily the responsibility of management.
Most quality problems are caused by systems controlled by managers rather
than being worker-related, and they in turn have the power to resolve these,
whereas rank-and-file employees contribute less to quality deficiencies and
normally lack the authority to put things right. Estimates of the proportion
of quality issues that can be tackled by workers and foremen range from 20-
25 per cent (Ishikawa 1985) to 10 per cent and less (Juran 1988; Deming
1986). Ishikawa (1985: 130-5) further suggests that, within the management
group, middle managers have a distinct place in quality improvement: they
stand at the crossroads of the vertical and horizontal planes, and they are
responsible for the quality improvement activities that take place among
rank-and-file employees, notably QC circles in the Japanese case.
Of particular relevance to the present discussion is Juran’s (1988) notion
of self-control. He maintains that responsibility for quality should be
assigned only to people who in fact control the quality of what they do.
People need to have both the ability to regulate what they do and the
authority to implement improvements. Even when they have the ability,
shop-floor and office employees usually lack the authority and should not be
asked to accept responsibility for what is beyond their control. An
implication of this analysis is that responsibility should be decentralized
downwards. Job enlargement and enrichment leading to semi-autonomous
work-groups could create the conditions necessary for greater self-control
among shop-floor employees.
Fourth, there are rigorous and systematic techniques of issue identifica-
tion and problem-solving which every employee should be trained to use.
They include statistical methods, measures of non-conformance and the cost
of quality, cause-and-effect analysis, and decision-making procedures.
These in turn rely on the availability of accurate and relevant information
and on the precise measurement and quantification of problems.
Finally, the improvement process both creates and depends on cultural
change within organizations. The appropriate culture has many elements,
including the internalization of quality and continuous improvement as a
goal of all activities; more open communications, so that those further down
are listened to by those further up; the greater involvement of a wider range
of people in the decision-making process; the creation of high-trust social
relationships; a systematic and rational approach to quality issues; and the
absolute priority of customer satisfaction. Deming (1986) and Juran (1988)
are particularly concerned that US companies should change their manage-
rial styles and personnel policies in order to incorporate rank-and-file
employees into this quality culture, recognizing that traditional practices
have led to a cultural divide between managers and other employees which
makes their participation in improvement problematic.
Against this background of the principles of quality management, the
inadequacies of British Q C programmes can be seen more sharply. The
evidence presented above shows that top management did not take an active
role in improvement, that responsibility for quality was not joined with the
requisite authority, that middle managers were excluded by the dual
structure, and that the issue of cultural change was only partly addressed.
The ultimate absurdity was to train rank-and-file employees to use modern
techniques of quality management while their managers remained largely in
ignorance of these. Quality circles were in any case not, on their own, the
appropriate vehicles to realize the objectives that senior management had
for them. The bulk of quality improvement issues and all the really
important ones are beyond the competence of circles, because they
transcend the workplace or exceed the authority of workers and foremen,
and poor management is the prime cause of lack of competitiveness. Outside
the framework of TQM, circles continually run up against the problem that
organizations are not structured to respond to bottom-up initiatives and that
all levels of management fail to understand the nature of the improvement
process, with the result that, even in the limited area where circles have
competence, managers may obstruct improvement. Employees are prob-
ably correct to disparage the circle method of enlisting their involvement in
improvement, which clearly fails to meet their aspirations for more say when
introduced into a quality management vacuum. While a number of
companies changed some of their communications and personnel practices
in a ‘quality’ direction, these changes plus quality circles were insufficient to
create the sort of quality culture that the literature suggests is required to
enlist the full involvement of people at the bottom and to increase their
commitment as senior managers desired.
The TQM literature regards quality management as a core component of
every job and the organizational arrangements for quality as integral to the
operating systems of companies; thus, dualism ceases to be an issue.
However, the analysis of how companies might successfully implement the
principles of quality so that continuous improvement is in fact established as
the normal organizational state is not entirely adequate. While solutions to
the technical issues of designing appropriate systems and procedures are
fully specified, there are lacunae in the treatment of the social factors.
Resistance to improvement is properly highlighted, but its nature and extent
are not understood and the proposed solutions are too restricted. First,
commitment is seen as a problem among rank-and-file employees and there
is little recognition that this is likely to be an issue throughout an
organization, including the managerial grades, and that different groups
typically do not share the objectives of top management. Second, the
mechanisms required to persuade people to ‘buy into’ quality management
are limited to leadership from the top, systematic education and training,
learning the benefits by doing, and recognition for achievements. The thrust
of these prescriptions is that top managers should win hearts and minds
without compulsion, and quality management theorists lack a proper under-
standing of how companies operate, the difficulties faced in introducing
planned change, and the academic literature on organizations. Cultural
change is the ultimate objective of quality management, and this has been
discussed extensively in the organizational design literature. In a recent
contribution, Schein (1985: 223-43) has noted that structures, systems and
procedures are important but secondary mechanisms of change. The
primary tools used to embed a culture include leadership and education,
plus the more coercive levers of persuasion available to top management by
virtue of their command of organizational power, namely the deployment of
organizational rewards and punishments. Yet the consensus among
advocates of TQM is that the financial incentive, for example, should never
be used, as this ‘does not form part of the TQM culture, and would defeat
many of the objectives’ (Oakland 1989: 303).
The following discussion shows how certain companies have implemented
TQM and largely overcome the pitfalls of circles, and in so doing have had to
go beyond what the quality gurus believe to be desirable.
8. TQM in practice
Four companies with TQM were investigated in the two phases of research.
These included the European subsidiary of a US office automation company
and the British company in the same industry that was used for the employee
survey cited above, from the first phase. In 1988, the US company was in the
fifth year of TQM and had extended this to all employees including those on
the shop-floor two years earlier. Most of the research was carried out in the
manufacturing division employing 5000 staff, slightly less than half of these
being located in Britain. The British company was in the second year of the
programme at the conclusion of the QC study in 1988 and shortly afterwards
extended TQM throughout the company. Follow-up visits in 1989 and 1990
tracked the programme through to its fourth year. In late 1989 and early
1990, two additional companies were investigated as part of the research for
the separate project on technological innovation. One was the British
subsidiary of a US manufacturer of components for the automotive industry
with 5500 UK staff. This started on TQM in 1985 and extended it to the
shop-floor in 1988. The other was a British manufacturer of precision
engineering components with 1200 UK staff. TQM was a year old and
confined to management, and the company was unsure when it would
extend the scheme. Case-study methods were used in all four companies,
involving interviews and discussions among all levels of management and
with union representatives and other employees, and inspection of the
companies’ own documentation. It would have been desirable to repeat the
survey originally administered to circle members and non-members in the
British office equipment company after the extension of TQM to the office
and shop-floors, but this proved impracticable: one of the two establish-
558 British Journal of Industrial Relutiotzs
ments had been closed down in the interim, while the company had started
to survey employees itself in the other and did not favour repetition.
These companies illustrate the seriousness and care with which top
managers approach TQM, in contrast to the ‘quick fix’ mentality that
typically marked the introduction of quality circles. The US office equip-
ment company spent nearly two years on preparatory work before intro-
ducing its scheme. Implementation started with top management and
slowly cascaded down the organization until it reached office and shop-
floor employees about two years later. The automotive company launched
TQM among its managers with far less preparation, but then spent three
years developing its procedures with extensive help from outside con-
sultants before extending them to all employees. The British office equip-
ment company had substantial experience with various aspects of quality
management in addition to circles, including a huge earlier programme to
train every manager in marketing and customer satisfaction, but still took
nearly two years to design and implement a scheme among its managers
before all employees were brought into the net. Top management commit-
ment was rarely questioned in any of the firms, since top managers
provided the substantial resources necessary for such a major and long-
drawn out change, created the appropriate systems, and were quick to iron
out any problems that arose as TQM developed.
The US office automation company differed from the others in two
important respects. It had the most explicit view of total quality as
requiring new ways of working and treating people and as covering all
transactions and employees. Managers were required to work more in
teams, to consult before making decisions, to encourage openness and
trust and show respect for others, to assist subordinates and to act as role
models. They were obliged to place the satisfaction of external and internal
customers ahead of other considerations. The company also prescribed the
use of formal techniques to identify, assess and resolve quality improve-
ment issues. In order to give the programme more bite, TQM was
subsequently incorporated into business objectives and performance ap-
praisal. The manufacturing division led the way in the third and fourth
years when it included adherence to TQM practices and behaviours in
annual appraisals, salary reviews, promotions and dismissals, followed
later by the other divisions. (It should be noted that it was adherence to
quality procedures rather than outcomes that were assessed.) Corporate
management later brought divisional business objectives into line and
placed customer satisfaction ahead of return on assets and market share in
the priorities of the marketing division. This was the only company to
make TQM obligatory in all these ways. Second, when it began to
implement TQM, it did so with a better and more fully worked out scheme
than the automotive company which was also in the fifth year at the time of
the research; in effect, its programme was about two years further on. This
may be significant for the following discussion, because it is generally
accepted that TQM takes several years to become established as a normal
Why Quality Circles Failed hut TQM Might Succeed 559
way of working and differences among the companies may reflect these
differences of timing.
Under TQM, middle managers in each company reported that they had
become more involved in quality management than before. The integration
of the improvement process into the existing organization and as part of
normal working practices meant that managers could now direct their
subordinates to work on specific issues and approve initiatives from below.
In every case, improvement activity was seen as more focused, coherent and
relevant, less time-consuming, and delivering quicker and more substantial
benefits, in comparison with circles and other schemes. In the British office
automation company where TQM was introduced alongside circles, these
continued to operate as before but managers could now assign all employees
including circle members to quality improvement groups and corrective
action teams. Indeed, quality circles achieved a new lease of life, and, far
from withering away as they were doing prior to TQM, new circles were
formed and their numbers grew, although they were few in number in
comparison with the other group activities. Managers found circles easier to
live with under TQM and dualism was less of an issue. The addition of
managerially directed groups allowed them to meet their own immediate
improvement objectives; the broader understanding they now had of quality
improvement made them more appreciative of the value of voluntary
commitment to quality; and they suggested that circle activities themselves
were now more tightly focused on issues relevant to the quality objectives of
the company. In the fourth year, following an internal survey which showed
many employees were not convinced of the company’s commitment to
quality as its first priority (see below), it was decided that managers should
be required to develop group improvement activities as an integral part of
their job and these were not optional activities. As a result, senior
departmental managers were set numerical targets for the involvement of
their subordinates in group activities, which carried financial bonuses. The
upshot was that group activity, including working with circles, was worth
getting right.
Managers in the US office automation firm reported that they had begun
to delegate more as they came to rely on the abilities of their subordinates to
solve problems. A notable example of this was the relocation of a production
facility from one building to another in one of the British plants. The
departmental production manager delegated the entire operation to his
first-line section managers and operatives, which meant their working with
production engineering on the design of the new layout, arranging the move
and supervising the installation of the equipment. His reasoning was that
they were more likely to get the transfer right than he was, given their
practical experience with the machinery. His role was to be kept informed of
progress and to sign the authorizations for the required expenditures.
Describing the event, the manager stated that prior to TQM he would have
taken charge of such an important change and involved his section
managers, but the idea of delegating and involving operatives would not
have crossed his mind. That it now seemed both sensible and natural to do
this had brought home to him how much TQM had changed his style of
managing over the years.
There was a movement towards more involvement of various layers of
management in decision-making in each company. The TQM structure of
participative issue identification and problem-solving gave managers more
input into decisions taken above them in the hierarchy and horizontally
across departments and functions. Discussions with managers suggested
that this had gone furthest in the manufacturing division of the US office
automation company, where all levels of management reported that
decisions were now routinely made after greater consultation, both vertic-
ally and horizontally, and on the basis of greater consensus.
The centre of activity also shifted over time. Each company noted a
tendency for middle rather than senior managers to become the main actors,
with senior managers responding to issues by delegating to subordinates and
not participating actively in the teams. In the early days, multi-level groups
of managers within naturally occurring units were common, but with time
managerial involvement in improvement teams tended to be among
managers of similar status on projects that ran horizontally across the
organization. All the companies except the US office automation case
regarded this development as evidence that quality management was
becoming ingrained and no longer needed to be driven from above,
although senior managers continued to monitor the process in terms of the
amount of improvement activity and reductions in non-conformance and
the cost of quality. The US office automation company regarded the with-
drawal of senior managers as a major threat, however, and at the time of the
research had just introduced measures to enforce their participation. A
major review of the TQM programme in its fourth year, commissioned by
US corporate management, had found that senior managers across the
company failed to exercise the required leadership, refusing to become
involved in teamwork and neglecting to use the formal improvement and
problem-solving processes routinely. (The failure to use formal techniques
was widespread among all levels of management .) Manufacturing opera-
tions, however, were seen to lead the way in the successful implementation
of the programme. Thereafter, senior managers were appraised more
rigorously in their use of procedures, while all managers were required to
convene at least one unit improvement team per annum.
The concern shown in this company to enforce the procedures among
senior managers is unusual and at first sight seems somewhat paradoxical.
Ishikawa (1985: 130-5) claims that a merit of TQM is precisely that it
promotes decentralization and delegation. His view is that the middle layers
of management can contribute greatly to quality improvement but conven-
tional organizational arrangements do not encourage their contributions, so
a shift to the middle is to be welcomed, provided senior staff oversee and
encourage improvement activities further down. Senior managers in the
other three companies were mainly involved in this supervisory manner. In
this case, however, those responsible for the programme argued that the
only way to sustain new attitudes and ways of working among the middle
layers of the organization and to ensure that all the desired aspects of
cultural change are achieved is for people at the top first to understand,
internalise and practise the new behaviours themselves, and then to lead the
rest of the organization.
Middle managers appreciated the increased decentralization and their
greater influence over the decisions taken elsewhere in the organization that
affected their activities. Many also believed that TQM could advance their
careers, by bringing them to the attention of more senior managers if they
performed well on a major improvement project, and that it gave them a
better understanding of the wider organization. Decentralization and
participation represent a major change in the style of managing for most
companies, a shift from individual decision-taking and authoritative, top-
down communication towards a more collective style with greater two-way
communication and less emphasis on giving and receiving commands. It can
also promote more teamwork and flexibility within the management group.
The literature on employee participation strangely has ignored the desire
among managerial employees for more influence and involvement; yet the
extension of managerial participation under TQM is a significant gain for
people who, like the employees they supervise, have a real interest in a more
participative system of managing. The language of teamwork is of course the
standard discourse among managers, but, in practice, this has been more
exhortatory than real among the middle and lower levels of management
where functional specialization and authoritative management have been
the norm. TQM has the potential to align reality with rhetoric by means of
participation.
Nevertheless, quality management is not universally welcomed, and these
organizations reported a lack of involvement on the part of some employees
at all levels. The British office automation company surveyed all its
employees in the third and fourth years of TQM. They were asked to rate
themselves, their immediate bosses and the company in terms of commit-
ment to quality on a number of dimensions of quality management. Two-
thirds of the respondents had a high personal commitment to quality, 60 per
cent reported that their immediate managers were highly committed, and 50
per cent regarded the company as giving quality an absolute priority. The
first two proportions increased slightly between the two surveys, while the
third declined. The US office automation company asked all employees to
assess the behaviour of their immediate bosses in a number of areas in the
third year of TQM, about 18 months before this investigation. In the
manufacturing division, which had above-average scores, between 60 and 70
per cent of subordinates assessed their bosses’ behaviour as conforming to
aspects of the company’s programme regarding new ways of working and
treating people and considering customer requirements, although the
assessments of how frequently the formal techniques of quality improve-
ment were used were lower. These results are obviously of unknown value,
given the limitations of company-sponsored surveys, but they are the only
data available that provide some idea of the level of acceptance. They give
flesh to the claim in every company that it takes a number of years to
persuade everyone to ‘buy into’ quality management and explain the
decisions to make adherence to quality procedures obligatory. On the other
hand, the self-assessments and assessments of others also suggest that a
majority of employees do subscribe to a culture of quality.
The quality improvement outcomes were significant. Every firm had
substantially reduced the level of defects in the final product and at
intermediate stages in the manufacturing process, had increased customer
satisfaction as assessed by customer surveys, and had reduced costs. New
measures of operating efficiency such as the cost of non-conformance and
the more all-embracing cost of quality were introduced as part of TQM and
showed continuously increasing efficiency each year. The two office
automation companies also measured levels of quality improvement ac-
tivity, although in slightly different ways, and the US firm logged over 600
projects in the European manufacturing division in the fourth year of TQM,
this division employing around 5000 people, while in the major manufac-
turing plant of the British company there were 250 improvement groups
covering 46 per cent of the 3000 employees in the fourth year.
Line managers in the three companies that had extended TQM to the
office and shop-floors were satisfied with the measurable outcomes of
quality improvement at these levels such as reduced defects and costs. In
every case, rank-and-file employees were assigned responsibility for inspect-
ing their own output, were routinely informed of any faults found
subsequently and were encouraged to solve problems with their co-workers.
The most significant change in working practices associated with TQM was
in the automotive company. Acting on Juran’s advice about control, this
firm had abolished supervision and introduced autonomous teamworking in
a new, automated assembly facility. Operators were trained in multiple
competences and the teams decided who would do what. Production
engineers and business co-ordinators (as middle line managers were now
titled) acted as facilitators and consultants to the labour force. In another
company, a work-group operating a CNC machining centre cell was given
responsibility for production scheduling, tool management and minor
changes to the cell’s programmes. In the absence of consistent and
independent information on attitudes, and before-and-after measurements,
the extent of rank-and-file involvement or cultural change cannot be
established. But there are indications that TQM may have an effect. People
do appear to identify with the quality improvement aspect of the new
culture. The attitude data collected by the British office automation com-
pany show that two-thirds of all employees report a high level of personal
commitment to improvement. One of the plants investigated during
the Q C project has closed, but in the other, quality circles have gained
a new lease of life since the extension of TQM throughout the firm: the
proportion of employees in circles has increased from 10 to 17 per cent. The
interview programme in the US office automation company covered
operators, union represcntativcsandforemen, andall said that large numbers
of the direct labour force had absorbed the ethos of quality improvement,
enjoyed the opportunity to put quality training into practice and seemed to
regard the company as a better employer as a result. However, the union
stewards in all three firms made the point that changes in personnel policy
during the 1980s, such as single-status employment, could also account for
any improvement in perceptions of the companies as employers.
Finally, TQM unites routine management and managing for innovation in
one set of organizational arrngements and practices. Most of the improve-
ment activity that takes place near the bottom of companies is addressed to
innovation for efficiency, that is, to finding better ways of doing existing
things. This was the thrust of quality circles and remains so with new forms of
employee involvement in improvement. Innovation in the sense of finding
new things to do is also central to quality management, as noted in the
previous section, and occurs mainly in the middle and higher reaches of
organizations. Indeed, top management is even more concerned to get TQM
working effectively in this part of the organization, because the potential
benefitsofimprovement herearegreaterthanfurtherdown (Hill 1991).In the
companies investigated here, new product development, new manufacturing
methods, new supplier relations were all handled by multi-functional project
teams arising out of TQM and using quality management techniques to work
to a conclusion. In some cases these were one-off teams, in others they were
permanent features of new structures of cross-functional liaison and
decision-making. An essential feature of both was that the people responsible
for dealing with the outcomes as part of their routine managerial duties
were also responsible for handling change and, far from reducing the
effectiveness of the innovation process, this linkage was thought universally
to produce better outcomes. The argument that change should be organized
separately because routine management is oriented to the reproduction of the
status quo ignores the superior performance of organizational arrangements
that successfully unite these two aspects of managing.
9. Discussion
Two of the companies had been working along TQM lines for more than four
years and a third for more than three; thus, it is reasonable to assume that the
halo effect that accompanies major organizational innovations, when
managers tend to be bullish and to talk up the latest activity, would no longer
have been a major distorting factor at the time these investigations were
conducted.
Most of the blame for the failure of quality circles to realize the business
improvement and cultural change objectives of senior managers should be
assigned to middle managers, and the response of the middle levels of the
organization must be related, in turn, to the failure of senior managers to
establish appropriate organizational designs. TQM avoids the problem of
parallel and dualistic structures by integrating quality management into
existing hierarchies. The point at which each reporting line converged in
these companies was the top establishment manager. This was also where
overall responsibility for quality management resided. Every company also
modified its operating systems and procedures to include quality manage-
ment as part of the normal method of managing and as a component of every
managerial job. Quality control professionals had a facilitating role, training
and advising people in other functional areas, but no direct responsibility for
quality improvement. Improvement was therefore part of a unified structure
that prevented organizational dualism.
An appropriate design is more than just the right structures, systems and
procedures, however, and the companies still found they had to contend
with backsliding and less than full commitment among certain middle and
senior managers. In particular, a number of people failed to develop
participative teamworking among subordinates and to pursue improvement
using the tools of quality management systematically. Both the office
automation companies had started with the assumption that TQM should be
taken up voluntarily and that managers would willingly adopt the required
attitudes and behaviour, provided the people at the top created the
appropriate organizational arrangements and climate, but they introduced
significant changes in the fourth years of their programmes when they
decided to use their normal methods of rewarding desired behaviours and
punishing deviations in order to make TQM stick. In the US company, the
widely publicized dismissal of a top corporate manager who resisted the
prescribed techniques was seen by managers in Britain as an important
symbolic act that would encourage the others to conform. These develop-
ments extended the assimilation of improvement into the everyday fabric of
these organizations. The automotive company remained less concerned
than the others to monitor the process and was more interested in quality
improvement results, but managers were quite clear that delivering
improvements would be rewarded in terms of their careers. In sum,
managers came to understand over time, as the result of their experience of
using quality management procedures and the actions of their bosses, that
TQM directly affected their own interests: it helped them to manage more
effectively, it increased their own participation, and it carried both positive
and negative sanctions. One may conclude with the simple proposition that
top management will increase the likelihood of a successful outcome to
planned organizational change, in this case the cultural shift required by
quality management, when it finds ways to align this with the self-interest of
individual managers.
While there is firm evidence of the tangible business benefits of TQM and
clear indications that cultural change within management was under way, it
is not possible to be so definite about cultural change among shop-floor and
office employees. Anthropologists and ethnographers define culture as
comprising standardized and patterned behaviours as well as mental
constructs such as values, beliefs, attitudes and assumptions (Singer 1968),
although organizational theorists have placed greater emphasis on the latter
than the former. Taking the attitudinal element, there is some indication
that people identify with elements of the TQM culture, but the quality of this
evidence is unclear. However, as previous research has shown that
rank-and-file employees in Britain value the more ‘egalitarian’ style of
managing and the opportunities that Japanese management systems provide
for high-quality work and rekindling the work ethic (White and Trevor
1983), a positive evaluation of TQM by people in the present study would
not be unexpected. Wilkinson et al. (1991) also report favourable employee
responses to TQM in two companies that have recently implemented quality
management. The behavioural evidence is firmer, and by their actions many
employees show that quality management has been internalized and is
becoming a normal way of working. The effects of the other changes that
preceded the formal adoption of TQM, such as the upwards harmonization
of terms and conditions of employment and new production concepts,
should not be regarded as confusing the issue, because such developments
are treated within TQM theory as components of quality management. Thus
there is some support for a second proposition, that people at the bottom of
company hierarchies are receptive to TQM culture; although to establish
whether this holds good, and how widely and under what conditions,
requires further research on attitudes and perceptions.
These firms have maintained participation at the base of their organiza-
tions beyond the point in the cycle of control and legitimation where one
might have expected it to be dropped; nor is it a sham. My own observations
of work tasks and improvement teams in action, together with the
perceptions of workers, stewards and supervisors, indicate that rank-
and-file employees have become more involved in issues that were
previously the prerogative of management. The examples given above of a
quality improvement team taking charge of a plant relocation and of work-
group autonomy are the most dramatic illustrations, but the routine use of
improvement teams and the enlargement of jobs confirms the picture. This
is not to be starry-eyed about the nature of participation at this level. In the
main, it has been confined to issues related to work tasks and work
organization at the point of production. The area of autonomous
decision-making varies from case to case and has been most extensive where
group working concepts are implemented. Where solutions to problems
involve financial expenditure or have repercussions elsewhere in the
organization, it is common for labour to propose while management makes
the decision. Nevertheless, rank-and-file employees do have more say than
before, so TQM meets at least part of their aspirations for more participa-
tion.
Finally, there are sound theoretical reasons for believing that top
management now has a real interest in making participation work at all
levels. These relate to other changes in organizations over the last few years
and give enhanced participation a basis in the material conditions of
production rather than just as an ideological prop of management. Quality
circles were introduced within conventional organizational structures that
combined bureaucratic and Taylorist principles. Despite their demise as the
result of the failure of companies to find appropriate mechanisms of
integration, some of them showed briefly that participation could deliver
efficiency gains, even in conventional firms, by accessing the local know-
ledge of those doing a particular job. The TQM firms, however, were trying
to change on a broad front and were using quality management as a method
of tying together the components of change and as a model of the desired
end state. In common with many American and British organizations, they
had delayered and destaffed their lower and middle management in order to
reduce costs, while at the same time looking for a more rapid and effective
response to the contemporary product market requirements of variety,
change and quality. Delayering management promotes some decentraliza-
tion of decision-making and an enlargement of jobs that affects roles at and
near the bottom of companies. Rapid response puts a new premium on
internal flexibility and better horizontal co-ordination, which gives an
additional impetus to wider roles at each hierarchical level as people
collaborate across the organization rather than push issues upwards, shifting
from mechanistic towards more organic ways of working. TQM provides a
workable method of handling such changes, and it must be viewed as an
influential and effective paradigm for flexible organizations (Hill 1991).
It is therefore obvious that the strategy of changing organizations from
below by means of quality circles was bound to fail. The belief that change
would convect upwards ignored the realities of organizational power and
inertia and underestimated the difficulty of transforming companies in a
‘quality’ direction. The unwillingness of top managers to deal with the issue
of organizational design by creating appropriate systems and structures and
attaching positive and negative sanctions - in other words, their refusal to
manage change - reduced what little chance quality circles may have had.
Even TQM, which is massively resourced, driven from the top and works
with the grain of management, is liable to falter without the additional
reinforcement of organizational controls. The difference now is that the
people who rule corporations appear far more determined to succeed with
this latest development than they ever were in the past.
Notes
1. Part of this research was funded by a Nuffield Foundation small grant and carried
out jointly with Keith Bradley of the LSE.
2. These were investigated as part of a project on the relationship between
organizational structure and technological change. This project, entitled
‘Decentralization and technological innovation: an Anglo-Bulgarian compar-
ison’, was funded by the ESRC (reference: R000231478) and conducted jointly
with Roderick Martin of Templeton College, Oxford.
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Why Quality Circles Failed But Total Quality

Article in British Journal of Industrial Relations · January 2009

Why Quality Circles Failed but Total

This paper examines how companies have sought to develop employee

Against the background of competing claims, it was decided to investigate

4. The QC boom in context

Managers in every company were asked to assess the experience of circles, in

6. The inherent limitation of QCs: the lesson of TQM

There is no single theoretical formalization of total quality, but the works of

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