ASSIGNMENT 2

CASE STUDY

The objective of this case study is to enhance course participants in understanding in the areas of
research in management. There are TWO (2) case studies:

I - After 20 years, what has remained of TQM? (10 marks)

II - Small businesses in the new creative industries: innovation (10 marks)
as a people management challenge.

No. Case Study Title What to Write Marks

1. After 20 years, what has remained of TQM? Abstract 10

2. Small businesses in the new creative industries: innovation as a Findings 10

people management challenge.

INSTRUCTIONS TO INDIVIDUAL ASSIGNMENT

 Content (Introduction, Problem Identification, Suggestion and Conclusion)

 The general assessment criteria are Substance, Originality of work, Presentation, Use of
illustrations / examples, where appropriate.
 The assignment should be about 500 words (+/- 10%)
Assignment 2
1. After 20 years, what has remained of TQM?
Recent studies on total quality management (TQM) show that there is sudden shift in the
application of TQM from manufacturing to service organization and voluminous studies have
been undertaken in it. TQM has taken a strong place in all sectors and emerged out as an
approach for process improvement, waste reduction, business optimization and quality
performance. Additionally, numerous researchers and academicians have acknowledged the
applicability of TQM for sustainable competitive advantage especially for service organizations.
In light of this, the purpose of the present study is to understand the concept of TQM as
applicable to the service system. It also explores the literature on TQM in service organizations
as well as reasons for its failure. Lastly, the study provides systematic guidelines for effective
implementation of TQM in the service organizations. Finally, the study proposes a ten step
approach for effective implementation of TQM in the service organizations. This study provides a
framework for better understanding the fundamentals of TQM in service organizations and seeks
an in-depth knowledge of TQM theory to the service managers and practitioners.

Total quality management (TQM) is the continual process of detecting and reducing or
eliminating errors in manufacturing, streamlining supply chain management, systematic approach
to planning and implementing a constant organizational improvement process. Its approach is
focused on exceeding customers' expectations, identifying problems, building commitment, and
promoting open decision-making among workers, improving the customer experience, and
ensuring that employees are up to speed with training. Total quality management aims to hold all
parties involved in the production process accountable for the overall quality of the final product
or service. TQM can have an important and beneficial effect on employee and organizational
development. By having all employees focus on quality management and continuous
improvement, companies can establish and uphold cultural values that create long-term success
to both customers and the organization itself.
Total quality management (TQM) is a structured approach to overall organizational management.
The focus of the process is to improve the quality of an organization's outputs, including goods
and services, through continual improvement of internal practices. The standards set as part of
the TQM approach can reflect both internal priorities and any industry standards currently in
place. Industry standards can be defined at multiple levels and may include adherence to various
laws and regulations governing the operation of the particular business. Industry standards can
also include the production of items to an understood norm, even if the norm is not backed by
official regulations.

While TQM originated in the manufacturing sector, its principles can be applied to a variety of
industries. With a focus on long-term change over short-term goals, it is designed to provide a
cohesive vision for systemic change. With this in mind, TQM is used in many industries,
including, but not limited to, manufacturing, banking and finance, and medicine. These
techniques can be applied to all departments within an individual organization as well. This helps
ensure all employees are working toward the goals set forth for the company, improving function
in each area. Involved departments can include administration, marketing, production, and
employee training.

Perhaps the most famous example of TQM is Toyota's implementation of the Kanban system. A
kanban is a physical signal that creates a chain reaction, resulting in a specific action. Toyota
used this idea to implement its just-in-time (JIT) inventory process. To make its assembly line
more efficient, the company decided to keep just enough inventory on hand to fill customer
orders as they were generated. Therefore, all parts of Toyota's assembly line are assigned a
physical card that has an associated inventory number. Right before a part is installed in a car,
the card is removed and moved up the supply chain, effectively requesting another of the same
part. This allows the company to keep its inventory lean and not overstock unnecessary assets.
Effective quality management resulted in better automobiles that could be produced at an
affordable price.

# Steps to Creating a Total Quality Management System:-

1. Clarify Vision, Mission, and Values:- 
Employees need to know how what they do is tied to organizational strategy
and objectives. All employees need to understand where the organization is
headed (its vision), what it hopes to accomplish (mission), and the operational
principles (values) that will steer its priorities and decision making. Develop a
process to educate employees during new employee orientation and
communicate the mission, vision, and values as a first step.
2. Identify Critical Success Factors (CSF):-
 Critical success factors help an organization focus on those things that help
it meet objectives and move a little closer to achieving its mission. These
performance-based measures provide a gauge for determining how well the
organization is meeting objectives.

3. Develop Measures and Metrics to Track CSF Data:-

Once critical success factors are identified, there need to be measurements
put in place to monitor and track progress. This can be done through a reporting
process that is used to collect specified data and share information with senior
leaders

4. Identify Key Customer Group:-

Every organization has customers. Those that understand who the key
customer groups are can create products and services based on customer
requirements. The mistake a lot of organizations make is not acknowledging
employees as a key customer group.

5. Solicit Customer Feedback:-

The only way for an organization to know how well they are meeting
customer requirements is by simply asking the question. Create a structured
process to solicit feedback from each customer group in an effort to identify what
is important to them. This type of feedback is obtained through customer focus
groups.

6. Develop a Survey Tool:-

Next, develop a customer satisfaction survey tool that is based on finding
out what is important to customers

7. Survey Each Customer Group:-

Create a customized survey for each customer group. This survey will
help to establish baseline data on the customers’ perception of current practice.
Now you will have a starting point for improvements and will be able to
demonstrate progress as improvement plans are implemented.
8. Develop Improvement Plan:-
Once the baseline is established you should develop an improvement plan
based on customer feedback from each group. Improvement plans should be
written in SMART goals format with assignments to specific staff for follow-
through.
Goals May Include Some of the Following:-
Process improvement initiatives: such as customer call hold times,
Leadership Development: Walk-the-Talk, Management
Training/Development:  How to manage employees in a quality environment,
Staff Training/Development: Customer Service, Performance Management:
Setting expectations, creating job descriptionsthat support the vision, and holding
staff accountable.
 9. Resurvey:-
After a period of time (12-18 months), resurvey key customers to see if scores
have improved. Customer needs and expectations change over time so we need
to do the resurvey repeatedly.
10. Monitor CSF:-
It is important to monitor CSF monthly to ensure there is consistent progress
toward goals. This also allows for course correction should priorities and
objectives change during the review period.
11. Incorporate Satisfaction Data into Marketing Plans:-
Once you’ve achieved some positive results with your satisfaction data, use it
as a marketing tool. A lot of successful organizations miss the boat by not letting
others know what they do well. Customers want to know how an organization’s
internal processes work, especially if those processes help to deliver an
outstanding product or service.
12. Technology:-
Make sure technology is user-friendly and supports targeted improvements.
For example, a website should be easy to navigate as well as easy to find (SEO)
and the content should be easy to understand.

# Why quality management systems fail:-

Quality Management Systems can only be as successful as the managers themselves allow.
Quality managers should educate themselves thoroughly on the system being used and be well
versed on the potential of said systems.  Quality management systems often fail when managers
do not use them to their full advantage or lack the knowledge on how to use them properly.

Below are seven reasons why quality management systems might fail:

1. Lack of Proper Training:- Quality management systems will not only involve

quality managers, but also employees. Running through procedures and proper
controls placed to avoid miscommunication makes all the difference.
2. Lack of Communication:- Negative assessments should never be ignored and
should immediately be communicated to quality managers. Ignoring analytics and
failure to use quality management systems as a means of communication can
lead to disastrous results.
3. Inability to Integrate cross-functional Interactions:- Integration with varying
business systems is an advantage that quality managers should utilize. Audit
management systems should be paralleled with quality management systems to
get better results. MES audit systems are integral for keeping compliant with
regulations.
4. No Focus on Metrics:- More companies should be metric-minded and take
advantage of the analytics provided by management systems. Systems can
measure data gathered from the productivity of different departments within a
business to show overall improvements or where there is room for further
improvement.
5. Low levels of Camaraderie:- Employees need to be appreciated rather than
reprimanded. Use management systems to improve the quality of your business
without condemning the work of your employees. Find areas that need to be
worked on and assure employees that procedures are set in place as a means to
offer support.
6. Standards are Not Set:- Define what “good quality” means from the start and hold
leadership responsible for meeting those standards. Encourage leadership to
unify their employees and implement strategies for improvement.
7. No Incentives for Improvement:- It is easy to monitor and reward employees for
meeting deadlines, but be sure to apply special emphasis on meeting quality
standards. Providing incentives for meeting those standards encourages
employees and sets the stage for long-term results.  
Maintaining communication, support and standards is key to being successful in using quality
management services. When leaders and employees are kept in the loop and entrusted with
responsibilities to improve quality, the overall environment will have a more positive
atmosphere.  

2. Some businesses in the new creative industries: innovation as a people management challenge.
The global business environment is changing very quickly. To the most important changes in the
business sector belong trade liberalization and movement of financial capital, information and
communication technological processes, changes in international division of labour and
international trade, a huge concentration of capital connected with qualitative and quantitative
changes in the size as well as in a character of enterprises. Strategic answer to all challenges
resulting from changes in global business environment can be only development of economy
based on innovations, knowledge and educated people. Innovation is meaningful, dynamic,
developing process, which result is positive change oriented on improving of transformation
process in enterprises and better satisfying of customer needs.

Innovation as a restoration and widening of products and markets portfolio, as a new designing,
manufacturing and distributing methods, implementation of changes in work organization and
labor force skills, etc. Innovation is the introduction to the practice in the enterprise a new or
significantly improved solutions for the product (goods or services), process, marketing or
organization. The essence of innovation is the implementation of innovations into practice.
Implementation of the new product, new marketing methods or new organization means its
application in the current functioning of the enterprise. Present approach to innovations prefers
that innovation is a key word for entrepreneur; emphases global approach to innovations as a
philosophy (way of managing of enterprises), which influences all parts of transformation process
in enterprise (marketing, research and development, planning, manufacturing, managing, etc.) .
The ability to compete in innovations plays very important role as a factor of their
competitiveness.

# Barriers to develop innovation activities by small businesses:-

 Lack of financial sources:- As innovation is an ongoing endeavor that often has
long-term goals, it can be difficult to measure its impact. This can lead to a
frustrating back-and-forth with those allocating the company budget because if
innovation takes time to deliver, funds may be cut. But if innovation funds are cut,
then it is virtually impossible to deliver. According to the Harvard Business
Review, the key to making your innovation budget a priority is to start small and
to stop thinking about innovation as a one-size-fits-all undertaking. In the
beginning, only start a few projects. Don’t overextend your resources, but think of
it as an investment. Once one of those smaller projects begins showing results,
then you can slowly expand until you have a thriving innovation culture that
cannot be stopped.
 Low awareness:- Its necessary to develop the innovation awareness in small and
medium enterprises. Special attention has to be given to human resources for
innovation. Fulfillment of this task requires professionally trained, educated and
creative human resources. A priority area of the innovation strategy therefore
must be the education and gaining experience and knowledge concerning
applied research and new innovation methods that can be implemented in the
business sphere. It is also important to develop effective and efficient
communication on the topic of innovations.
 Lack of Strategy & Vision:- For many companies, the benefits of innovation are
well understood. For those companies, staying relevant is important and they
 encourage disruption wherever possible. Many innovation experts cited a lack of
vision and strategy as one of the biggest issues facing potential innovators.This is
yet another reason why every innovation program needs a clearly defined leader
who presides over a dedicated innovation department. What companies need to
avoid is having several different departments sinking resources into overlapping
issues. It’s a waste of money, and a sure way to prevent any real innovation
because every department will have diverging goals. A dedicated innovation unit
can streamline the innovation process and ensure that nobody is doubling up on
the work and the research.
 Inability to Act on Signals:- A large part of enacting an innovative new product,
service or procedure is recognizing the need for the change in the first place.
KPMG states that executives identified the inability to act on signaled market
changes as the third highest obstacle to innovation. Businesses can sometimes
stagnate in their past successes. They spend most of their time optimizing their
current model and their current processes that they forget to take a step back and
evaluate what is working and what is not in their industry. This is how Uber
surprised the taxi industry and AirBnB upended the vacation rental sector. These
service companies recognized how their respective industries were failing to take
advantage of the benefits of new technology and changing market demands, and
they innovated to fill that void. Make sure that your business has a dedicated
innovation program with an established leader at the helm who has experience in
the technical and/or business side of innovation, and the knowledge to recognize
relevant trends.
 Cultural Issues:- Risk and innovation go hand-in-hand. As the cliche goes, you
can’t make an omelet without breaking a few eggs. Innovation will inevitably lead
to some failures, and for some businesses, any missteps are viewed as
unacceptable. This stigma of failure can slow down a company’s innovation
processes, and in many cases even grind them to a halt. Considering that
innovation can save a company by helping them to avoid becoming obsolete, this
can be a big issue. One great way to minimize risk aversion in an innovation
program is by optimizing your proof-of-concept process. While this will not
completely eliminate risk, it can allow your company to make informed decisions
that will have a higher rate of success.
 Politics/Turf Wars/No Alignment:- As a company grows, so does the complexity
of its internal politics. This is why smaller startups often have an easier time
innovating than larger corporations. Implementing a new innovation program can
require sweeping internal changes, meaning that some employee roles will
change for the better, and others will change for the worse. As such, people
begin to think politically when the idea of organized innovation efforts come up.
Those who feel threatened by the change might then actively work to undermine
it. Avoiding these issues can be quite tricky, and sometimes impossible, but there
are a few things to keep in mind. First, create an environment where people feel
comfortable being open and honest. Many times, people will voice objections to a
change, but remain silent on what truly drives their hesitation. In order to steer
clear of rumors, hearsay and personal attacks, make sure everyone’s cards are
on the table in order to even the playing field when advocating for innovation.
Also, be sure to illustrate how innovation as a whole and individual innovation
initiatives can benefit the company, to pull everyone together on the same team.
 Lack of innovation & infrastructure:- Only a small part of small and medium
enterprises possesses sufficient capacities as well as knowhow for realization of
all activities of innovative process, therefore it is needed to fill this gap with
services of specialized consulting organizations. The aim is to create effective
system of specialized consulting services for support of innovations. It will be also
helpful to complete and extend existing infrastructure for support of innovations to
the same level as those of leading European countries.
# Systematic approach to innovation activities in small businesses:-
  Generating ideas and permanent accumulation of all impulses which could lead
to innovations
 Creative human resources
 Ability to judge the reality of innovation ideas
 Effective team work
 Ability to manage innovation projects
 Cooperation with external institutions (universities, research institutes, consulting
agencies)
 Ability to judge the risk
 Ability to possess the right courage and spirit
 Motivating all workers
 Implementing systematic education
In today´s entrepreneurial practice innovations must be natural part of any entrepreneurship.
Permanent and regular innovation is becoming a competitive necessity; to be successful in the
future requires interrupting conventions. There is a time of changes and the only way how
enterprise can be successful is to accept these changes, adapt to them and utilize them.

# Innovativeness in activities of small businesses:-

When managers talk about the need of changes in an enterprise, they usually mean encouraging
the innovativeness of the employees. Innovativeness means creativity, the ability to come up with
new thoughts, ideas and a unique way of combining or connecting. Small and medium enterprise
that encourages innovativeness creates preconditions for new procedures and solutions.
Accordingly, we understand the term innovative management as the management whose
methods and techniques of managing are based on accentuating innovativeness, i.e.
encouraging new, creative solutions. This requires some creativity of human potential in SME,
implementations of new, progressive methods and techniques of personnel development,
implementation of knowledge management, as well as pro-innovative firm’s behaviour. Every
improved, changed or new solution is a result of an innovative and creative approach. Being
creative means seeing ideas or objects in a different context, either by recognizing their inherent
potential to be used in a different way, or by putting previously unconnected ideas together to
create something completely new. Employees’ interest to develop innovation activities requires a
certain level of pro-innovative culture in a firm, where employees are involved into the process of
business policy formulating and are challenged to submit new innovative ideas.

The system “Innovativeness action”, which was developed by Consultations and Training Centre
of Creativity and Innovation in Canada, serves as a support of organizations innovativeness by
applying creative potential of human resources (Adair, 2009). It aims to create new products,
new production procedures, new markets and new strategies in order not to stay ahead of
competition. The system uses creative process to transform the knowledge of organization´s
employees to the knowledge with added value. It consists of five steps:

1. The structure and program of voluntary participation with an aim to develop,

support and assess initiative and creativity:- It is evident, that developing the
innovative environment in SME calls for the distinctive quality of leadership,
coupled with management knowledge and abilities. Innovative organizations do
not happen by chance. They are the end products of good leadership and
management. The essence lies in getting the balance right between freedom and
order, between the anatomy of the parts and the integrity of the world. A
leadership team that is eager for innovation is much more likely to enjoy a
successful and profitable Suggestion Scheme. The Suggestion Scheme should
be as simple as possible. The more complicated and bureaucratic it becomes,
the less effective it will be. Suggestion scheme is the innovative system that is
highly individualistic. By contrast, Quality Circles do employ team creativity. For a
Quality Circle is a group of 4 to 12 people coming from the same work area,
performing similar work, who voluntarily meet on a regular basis to identify,
investigate, analyze and solve their own work-related problems. The Circle
presents solutions to management and is usually involved in implementing and
 later monitoring them. Each Circle has a team leader. Within an organization the
groups are supported and coordinated by a facilitator. Quality Circles have
flourished best in Japan (the Japanese are usually much more creative in groups
than as individuals).
2. Develop organizational culture and positive environment for creativity development
in the organization:- Personal qualities, the attitudes and skills of leaders in
organizations stand out as a group of vitally important factors in innovation. Be
they supervisors or first-line managers, middle managers or executive directors,
the leaders of an enterprise can do a great deal to encourage creativity. The top
leadership team needs to show visibly that they are committed to the strategy of
innovations. Their weight and influence is necessary to overcome the barriers
and resistance to useful change which innovators often encounter. The top
management team should seek ways of making their commitment to positive and
useful change visible to all concerned. Building innovative organization is a long-
term perspective. Flexibility is the key quality to the truly innovative organization.
The flexible person, team or organization is capable of responding or confirming
to changing or new situation. That places a high premium on communication. In
organizational terms it means to create an entrepreneurial and matrix-type
management structure while preserving the efficient monitoring system. It is
virtually impossible to innovate without accepting an element of risk.
Management commitment, a long-term perspective, responsiveness to change
and acceptance of risk are all contributors to the right culture or climate in which
new ideas can arise and significant changes implemented. Innovative
organizations encourage participation in decision making, problem solving and
creative thinking. They have policies or guidelines rather than rules, keeping the
latter to the maximum. They have good communications, more by word of mouth
than by memo or letter. Team creativity cannot be organized, but there are
structures how to encourage it. The ethos of a group or organization is obviously
important. The right climate will encourage people to express ideas, however
halfformed. Members are able to discipline themselves in order to suspend
judgment. They listen for ideas. They build and improve on one another´s
contributions. In other words, the conversation in that organization is positive,
confident but realistic, and essentially constructive. Criticism is necessary too,
because it is a vital ingredient in effective thinking.
3. Develop a diagnostic tool that would enable the assessment of the performance in
creativity and innovation:- It means that the special system how to assess the
performance in creativity and innovation is implemented. Without systems and
proper controls sensibly applied, there can be no organization worthy of name. It
requires leadership and management to achieve productive order without
sacrificing freedom and creativity. Developing the diagnostic tool to assess the
performance in creativity it should be taken into accounts that:
 Creative people tend to be more open and flexible than their less creative
neighbors. They bring a freshness of mind to problems. They have usually
exhibited the courage to be different and to think for themselves. They are
comparatively more self-motivated and often addicted to their work.
 Creative people stand in special need of encouragement and appreciation. The
recognition of the value or worth of their contribution is especially important to
them, particularly if it comes from those whose opinions they respect.
 A creative person tends to be most effective if allowed to choose the area of
work, and the problems or opportunities within that area, which arouses deep
interest.
 Creative people need conversation with colleagues in order to think, not for social
intercourse. Organizational structure should facilitate these formal and informal
interactions.
 Creative people respond well to an organization which encourages them to take
calculated risks.
The above conditions become motivational in conjunction with the inner interests and drivers of
creative individuals. The quality of an innovative organization depends ultimately and largely
upon the quality of the employed people. Creative leadership means the kind of leadership that
encourages, stimulates and guides the process of innovation from beginning to end. The
challenge of innovation is largely the challenge of leading creative people.

4. Think of develop, implement and assess a training program focused on development of

creative potential of individuals:- To operate an innovative organization with a culture of
team creativity does presuppose a trained and educated workforce. Apart from technical
training, everyone today needs training in the skills and techniques of effective thinking:
analyzing, imaging (using the brainstorming technique), valuing, and how the mind works
– especially the positive part played by the unconscious mind in restructuring problems
and providing solutions. A broader education is also to be encouraged, for an innovative
organization is by definition also a learning organization.

5. Introduce reward system (financial or other) designated for employees that contribute
significantly to the efforts in creativity development in the organization:- There are various
more or less important but still significant factors which matter to the creative individual,
such as its tolerance of a degree of unconformity, the opportunity to work alone as
opposed to always being a member of a group and the level of financial reward. There are
many examples how the right implemented reward system can support the employee´s
effort in creativity development in the organization.

It can be stated, that the central aspect of innovative management is a human being as a
unique personality with his/her own development, with a need to learn and pass on the
knowledge, a man producing values, who is creative, able to understand the necessity of
change and is willing to adapt to it. Sensible managers support innovative ideas that can
form a base and space for new opportunities. It is obvious that an effort to innovate (in the
broadest sense of word) should be inherent in every small and medium enterprise.

# Conclusion:
Small businesses has to build their own prosperity and competitiveness especially through the
ability to acquire and to implement new knowledge into the new products, processes,
technologies and services.

Small businesses are forced to make innovations because they are under permanent pressure of
competitors at the market. From this point of view the ability to compete in innovations plays very
important role as a factor of their competitiveness.

Today more than ever, economic growth and progress requires the promotion of innovation and
the development of proper tools to that end. Support must target the areas of efficient system for
innovation development, high quality human resources and efficient tools for innovation. All these
areas represent the main priorities of the innovation policy of the small businesses. The
contemporaneous financial and economic crisis has impact on all areas of business activities and
results in problems with free accessible financial sources which are needed to finance
investments, especially innovations. Despite the crisis there is just the time to support
innovativeness, education and to use all aaccessible financial sources on innovation activities in
order to raise their competitiveness.