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A Comparison of Japanese Total Quality Control and Deming's

Theory of Management


This article critically contrasts two schools of thought on QUALITY CONTROL
quality management: Japanese total quality control and
Deming's theory of management. An overview of each 3.1 Definition of Quality
school of thought is presented in respect to definition of
quality, purpose, structure, and intrinsic value. The differ- Japanese TQC defines quality in accordance to Japanese
ences between the two schools of thought are discussed in national standard JISZ8101-1981 as the following:
respect to five issues: purpose and structure, role of com- a system of means to economically produce goods or services
petition as a motivational tool to achieve customer satis- which satisfy customers' requirements. Implementing quality
faction, use of fear as a managerial tool, use of numeric control effectively necessitates the cooperation of all people in the
targets as tools of management, and use of performance company, involving top management, managers, supervisors, and
workers in all areas of corporate activities such as market research,
appraisal as a tool of management. research and development, product planning, design, preparation
for production, purchasing, vendor management, manufacturing,
inspection, sales and after-service, as well as financial control,
personnel administration, and training and education. Quality
control carried out in this manner is called company-wide quality
control or total quality control.
Deming taught the Japanese the Shewhart cycle, the
concept of special and common causes of variation, the
realization that statistics could be used on the shop floor, 3.2 Purpose
and an appreciation of a system. Juran taught the Japanese
Kano (1993) stated that the purpose of Japanese TQC
management principles and practices, such as the Pareto
principle. From these teachings, and more, the Japanese is to increase "customer satisfaction/quality assurance"
developed their own schools of thought on quality. (p. 13).

2. BACKGROUND 3.3 Structure

There are several schools of thought on quality manage- Kano (1993, pp. 13-14) described the structure of
ment in the United States, for example, those of Deming, Japanese TQC through an analogy to the structure of a
Juran, and Feigenbaum. This article focuses on Deming's building (see Fig. 1).
theory of quality management. Likewise, there are several 3.3.1 Intrinsic Technology. Kano explained that
schools of thought on quality management in Japan. In Japanese TQC assumes the existence of intrinsic technol-
the author's opinion, the dominant school of thought in ogy. Intrinsic technology is the basic theory and practice
Japan is espoused by the Union of Japanese Scientists and base specific to a particular industry. "For example, elec-
Engineers (JUSE). The JUSE awards the prestigious Dem- trical engineering is the technology intrinsic to the electric
ing Prizes each year. Some leaders of the JUSE school of industry; chemical engineering is intrinsic to the chemi-
thought include K. Ishikawa (deceased), S. Mizuno (de- cal industry. Intrinsic technology provides the necessary
ceased), and T. Asaka. In this article, the JUSE school of foundation upon which TQM is built" (Kano 1993, p. 13).
thought is called Japanese Total Quality Control (TQC). It
is this author's contention that Japanese TQC is different
from Deming's theory of management.
purpose Quality Assurance, etc .
Howard S. Gitlow is Executive Director, Institute for the Study
of Quality, University of Miami, Coral Gables, FL 33124. The au-
thor would like to acknowledge the support of the University of Miami Tools Concepts Tech- Vehicles
Institute for the Study of Quality in Manufacturing and Service, the niques
New York University Quality Control Fund, the Science University
of Tokyo, Florida Power and Light Company, Juki Company, Kansai
Electric Company, Aiphone Company, Nissan Motor Company, Limited Motivation
(Oppama Plant), Isuzu Motors Limited (Kawasaki Plant), and Noriaki

Figure 1. Structure of Japanese Total Quart}, Control. (Copyright

1993 by the Regents of the University of California. Reprinted
Kano (Science University of Tokyo). The author takes sole responsibil- from the California Management Review, Vol. 35, No. 3, p. 14
ity for the ideas expressed in this article.

The American Statistician, August 1994, Vol. 48, No. 3 197

3.3.2 Motivational Approach. Given the existence of Daily management involves developing and improving
intrinsic technology in an industry, top management must best-practice methods. The purpose of a best-practice
create the energy necessary to promote quality. Kano (1993, method is to achieve equal outcomes from different ma-
pp. 14-15) suggested that top management can cre- chines, workers, managers, areas, and so forth. This is ac-
ate this energy by communicating real or potential crises complished by developing the discipline to follow a best-
that face their organization to their interdependent system practice method. At a more advanced stage of quality
of stakeholders or by committing themselves to a vision management, flexibility in best-practice methods can be
for their organization. Either way, top management cre- allowed as employees are capable of yielding equal out-
ates a stimulus to motivate the people under them to exert comes by using methods tailored to their unique abilities.
the energy necessary to create quality. The development of best-practice methods is called
3.3.3 Tools. Customer satisfaction and quality as- housekeeping. Housekeeping is accomplished through the
surance are promoted through the tools of Japanese TQC. standardizedocheckact (SDCA) cycle: standard-
The tools of Japanese TQC form an interdependent system of ize (employees study processes and develop best-practice
concepts, techniques, and promotional vehicles. methods that define departmental management systems
Kano (1988), Iizuka and Osada (1988, p. 9), and best-practice methods can include traditional work stan-
Ishikawa (1985) defined four empirically derived princi- dards a la Frederick Taylor), do, check, and act (manage-
ples of Japanese TQC: ment formalizes best-practice methods through training).
The improvement of best-practice methods is called daily
(1) have a customer orientation; the next process is management. Daily management is performed by using the
our customer; think from the customer's perspective; PDCA cycle to improve the individual or departmental
break down barriers to sectionalism; management systems that are necessary for an individual or
(2) manage by fact, and use statistical methods; group (department) to achieve targets.
(3) use the plandocheckact (PDCA) cycle to decrease Cross-functional management includes the corporate-
the difference between process performance (actual level activities that are necessary to achieve the corporate
results) and targets; and targets concerned with quality, cost, scheduling, quantity,
(4) have respect for humanity, and use participatory man- and safety, which are the parameters of sales and profit.
agement. Japanese TQC has a humanistic view of the Cross functional management includes the following ac-
worker, namely that workers can contribute to cus- tivities: (1) deploying strategies for each corporate target
tomer satisfaction and quality assurance if they are into departmental targets, (2) ensuring that each depart-
given suitable education and training. ment performs its deployed targets in daily management,
Pascal said that a human being is a thinking reed. This (3) evaluating processes and results from a corporate level,
means that if you eliminate thinking from a human be- and (4) taking action through PDCA if necessary. Cross-
ing, all that remains is a reed (a thing with no soul or functional management is performed by using the PDCA
consciousness or an ability to think). Consequently, ac- cycle to improve the cross-departmental management sys-
cording to Pascal, a human being is defined by thinking; tems (methods) responsible for the difference between
according to Japanese TQC one must help human beings process (actual) performance and targets.
think to respect their humanity. Ishikawa (1985, pp. 59-71), King (1989), and Mizuno
The techniques of Japanese TQC include the seven ba- (1988) discussed policy management (hoshin kanri).
sic quality-control tools, the seven management tools, ad- Policy management includes the activities necessary to
vanced tools, and quality-control stories. The seven basic achieve presidential policy in the long run. There are five
quality-control tools include flow charts, brainstorming steps to policy management: (1) policy setting by the pres-
and cause-and-effect diagrams, check sheets and Pareto ident, (2) policy deployment, (3) policy implementation,
diagrams, histograms, run charts and control charts, scatter (4) policy evaluation and feedback, and (5) presidential
diagrams, and stratification. The seven management tools review of policy, and back to the first step. Policy man-
include affinity diagrams, interrelationship diagraphs, sys- agement assumes that housekeeping, daily management,
tematic diagrams, matrix diagrams, matrix data analysis, and cross-functional management are operational within the
process decision program chart (PDPC) analysis, and ar- organization.
row diagrams. The advanced tools include design of ex- Policy is best-practice methods and targets; manage-
periments, Taguchi experiments, quality function deploy- ment is PDCA. Hence, policy management is performed
ment, flag diagrams, and foolproof engineering, to name by using the PDCA cycle either to innovate (create break-
a few. through) the management systems (best-practice meth-
The vehicles of Japanese TQC are called promotional ods) responsible for the difference between process (ac-
activities or administrative systems. They were largely tual) performance and targets or to change the direction of
developed in the 1970s and 1980s and include daily man- a company.
agement, cross-functional management, policy manage- Quality-control circles (QCC's) are small groups of
ment, quality-control circle, and education and training. people from the same workshop who perform voluntary
The vehicles of Japanese TQC assume expertise in several quality-control functions. The QCC operates continu-
support mechanisms, such as control items (indicators), ously with all members participating as part of the or-
quality-control audit and quality-control diagnosis, vari- ganization's TQC activities and as part of the individual
ance analysis, and the Deming Prize. See the Appendix member's self-development plan. The circle members use
for a discussion of support mechanisms. statistical quality-control techniques for control and im-
provement of best-practice methods. Kano (1988) stated type of thinking is seen in the current practice of man-
that the basic ideas behind QCC's are to (1) contribute to agement by objectives; that is, if objectives are met at the
the improvement and development of TQC; (2) respect lowest levels of an organization, they will add up to the
humanity, build a bright workshop environment, and make it global objective(s) of the organization. This view does not
enjoyable to be alive; and (3) draw out and improve in- appreciate the synergistic effects that the components of
ifnite human potential. a system have on each other and on the functioning of the
Education and training promotes TQC and the develop- entire system.
ment of the individual. Education (to make people think)
is different from training (to facilitate job skills). Training
4.3 Structure
is critical to formalizing the best-practice methods devel-
oped and improved in the "act" stages of the SDCA and Deming (1993, pp. 94-118) developed a theory of man-
PDCA cycles. agement that helps individuals learn through the acquisi-
3.4 Intrinsic Value tion of process knowledge gained from experience coor-
dinated by theory. He called this theory a system of pro-
Japanese TQC is based on the idea that quality comes found knowledge. The system of profound knowledge is
from customer satisfaction and quality assurance. Some composed of four components: appreciation of a system,
Japanese quality experts believe that Japanese TQC has no theory of variation, theory of knowledge, and psychology.
intrinsic value beyond the pursuit of customer satisfac- All four components are interdependent and do not stand
tion and quality assurance. Other Japanese quality experts alone. Fortunately, it is not necessary to be expert in any
believe the converse. For example, Gitlow (1990) asked a of the components to understand and apply the system of
senior Japanese quality expert if TQC is a philosophy with profound knowledge.
wide application to life. He said yes; it is a combination of The following brief discussion of the system of pro-
techniques and spirituality. He said jujitsu is only tech- found knowledge is taken from Deming (1993, pp. 94-
niques, whereas judo is spirituality and techniques. He 118). This discussion is not meant to be complete; its
said that Japanese TQC is like judo. purpose is to present some of the highlights of Deming's
MANAGEMENT 4.3.1 Appreciation of a System. A system is a col-
4.1 Definition of Quality lection of components that interact and have a common
purpose (aim). It is the job of top management to optimize the
Deming (1993) defined quality as follows: "A prod- entire system toward its aim. It is the responsibility of the
uct or service possesses quality if it helps somebody and management of the components of the system to pro-
enjoys a good and sustainable market" (p. 2). This def- mote the aim of the entire system; this may require that
inition implies (paraphrased from Deming 1982, p. 229) they suboptimize their component.
that the product or service has predictable uniformity and
dependability at low cost and is suited to the market. 4.3.2 Theory of Variation. Variation is inherent in all
processes. There are two causes of variation: special causes
4.2 Purpose
and system causes. Special causes of variation are external to
The purpose of Deming's theory of management is to the system. It is the responsibility of local peo-
transform Western leaders to that they will do the follow- ple and engineers to determine and resolve special causes of
ing: (1) improve and innovate the system of interdepen- variation. System causes of variation are due to the in-
dent stakeholders of an organization over the long term herent design and structure of the system; they define the
to allow all people to experience joy in their work and system. It is the responsibility of management to isolate
pride in the outcome; (2) optimize the system of inter- and reduce system causes of variation.
dependent stakeholders of an organization over the long A system that does not exhibit special causes of varia-
term so that everybody wins; do not optimize one stake- tion is stable; that is, it is a predictable system of variation. Its
holder group's welfare at the expense of another stake- output is predictable in the near future.
holder group's welfare (stakeholders include employees, There are two types of mistakes that can be made in the
customers, suppliers, stockholders, the community, and management of a system. The first mistake is treating a
competitors); and (3) improve and innovate the condition system cause of variation as a special cause of variation.
of society. Society includes local, regional, national, and This is by far the more common of the two mistakes; it
international systems, for example, the entire educational is called tampering and will invariably increase the vari-
system (public and private schools, primary and secondary ability of the output of a system. The second mistake is
schools, and universities), the environment, public health, treating a special cause of variation as a system cause of
and the economic and social well being of communities variation. Walter Shewhart developed a control chart to
and countries. provide an economic rule for minimizing the loss from
A Western leader is defined by his or her belief in a both types of mistakes.
mechanistic or Newtonian view of the universe; this is a Management requires knowledge about the interactions
reductionistc view. It holds that all things can be reduced between the components of a system and its environment.
to their component parts. If the component parts are un- Interactions can be positive or negative; they must be man-
derstood, then the thing is understood. An example of this aged.
4.3.3 Theory of Knowledge. Information, no matter In a competitive environment, most people lose. The
how speedy or complete, is not knowledge. Knowledge costs resulting from competition are unknown and un-
is indicated by the ability to predict future events at the knowable, but they are huge. Competition causes indi-
risk of being wrong and the ability to explain past events viduals, or departments, to optimize their own efforts at the
without fail. Knowledge is developed by stating a theory, expense of other stakeholders. This form of optimiza-
using the theory to predict a future outcome, comparing tion seriously erodes the performance of the system of
the observed outcome with the predicted outcome, and interdependent stakeholders.
supporting, revising, or even abandoning the theory.
Commentary. Each leader's conception of the new
There is no true value of anything. Communication is
practice of management should be based on the system of
possible when people share operational definitions.
profound knowledge; however, even with the common the-
Experience is of no value without the aid of theory. The-
oretical base of the system of profound knowledge, leaders
ory allows people to understand and interpret experience,
in an organization will have different understandings of
and it allows people to ask questions and to learn.
how they should practice management. Top management
4.3.4 Psychology. Psychology helps one to under- must endeavor to reduce individual-to-individual varia-
stand people, the interactions between people, and the in- tion in respect to understanding the system of profound
teractions between people and the system of which they are knowledge. This will lead to consistency in the practice
part. Management must understand the differences among of management.
intrinsic motivation, extrinsic motivation, and overjustifi-
cation. All people require different amounts of intrinsic 4.5 Intrinsic Value
and extrinsic motivation. It is the job of a manager to learn Deming's theory of management has intrinsic value be-
the proper mix of the two types of motivation for each of yond the management of organizations. It can also be used to
his or her people. improve the lives of people.
The system of profound knowledge requires that West- AND DEMING'S THEORY OF
ern leaders accept several paradigms which are discussed as MANAGEMENT
5.1 Background
Paradigm 1. Manage to create a winwin environ-
ment, not a winlose environment. The focus of a win Japanese TQC and Deming's theory of management
win environment is the optimization of all stakeholders in have several common elements; however, they also have
the organization's system of interdependent stakeholders. several different elements. The different elements make
This system includes employees, customers, stockholders, a combination of the two schools of thought hazardous,
suppliers, subcontractors, regulators, and the community, although possible. Deming (1982, 1986, 1993), Gitlow
to name a few. and Gitlow (1987), Ishikawa (1985, p. 17), Imaii (1987),
Juran (1988, chap. 35F, pp. 35F.1-35F.30), Iizuka and
Paradigm 2. Manage to create a balance of intrin- Osada (1988), Kano (1988, 1993), Scherkenbach (1986,
sic motivation and extrinsic motivation, not just extrinsic 1991), and many private conversations between the author
motivation. Intrinsic motivation releases both human and and quality experts were used as the source references for
process energy that can be focused on the improvement this section. The differing elements are discussed in the
and innovation of the system of interdependent stakehold- following sections (see Fig. 2).
ers. Extrinsic motivation restricts the release of energy
from intrinsic motivation by judging, policing, and de- 5.2 Differences Caused by Purpose and Structure
stroying the process and the individual. 5.2.1 Purpose. The purpose of Japanese TQC is to
Paradigm 3. Manage with a long-term process and increase customer satisfaction. The purpose of Deming's
results orientation (called analytic management), not with a theory of management is to transform Western leaders so
short-term results-only orientation (called enumerative that they will allow all people to experience joy in their
management). Analytic management promotes the im- work and pride in the outcome, optimize the system of
provement and innovation of organizational processes. interdependent stakeholders so that everybody wins, and
Highly capable processes facilitate prediction of the near improve and innovate the condition of society.
future and consequently a higher likelihood of achieving 5.2.2 Structure in Respect to Theory and Practice.
the organizational purpose.
Japanese TQC is an empirically based paradigm that is
Paradigm 4. Manage to promote cooperation, not structured functionally for practical usefulness to increase
competition. In a cooperative environment, everybody customer satisfaction and quality assurance. Deming's
wins. The customer wins products and services that he or theory of management is a theoretically based paradigm
she can brag about and rejects commonly accepted levels that is structured philosophically for soundness in pursu-
of defects, rework, shoddy workmanship, and poor ser- ing the aims of the system of profound knowledge and the
vice. The firm wins returns for investors and secure jobs 14 points.
for employees. Suppliers win long-term customers for One possible explanation for the structural difference
their products. The community wins an excellent corpo- between Japanese TQC and Deming's theory of manage-
rate citizen. ment may be found in culture. One of the important roots
Assumptions of Dr. Deming's Theory of Management
of Western culture is Christianity. Christianity is meta-
Principles Win-Win v. Intrinsic Analytic Cooperation
physical in that it is concerned with developing theory to of Win-Lose v. v. v.
understand the real world. Three of the important roots of Japanese
Extrinsic Enumerative Competition

Japanese culture are Buddhism, Confucianism, and Shin- Next Moderate Weak
toism. Buddhism is composed of two streams, one old and process
one relatively new. The old stream is Therevada, which PDCA Strong
is nonmetaphysical, nontheoretical, and practical, and is Manage by Moderate
concerned with developing empirical rules to understand
Respect Weak
the real world. The newer stream is Mahayana, which for
is metaphysical. Mahayana, however, has developed into
two smaller streams, Chan and Zen. Zen, unlike meta-
Figure 3. A Comparison of the Principles and Assumptions of
Japanese Total Quality Control and Deming's Theory of Management.

Differences Japanese TQC Deming's Theory

Purpose Increase Create joy in

customer work and pride physical Chan, is a return toward nonmetaphysical, non-
satisfaction and in the outcome;
qual it y Optimize the
theoretical, and practical Therevada. Eber (1986, p. 63)
assurance entire system; stated that Confucianism and Shintoism, like Therevada
Improve society
or Zen Buddhism, are both nonmetaphysical, nontheoret-
Structure in Empirically T heoret icall y
respect to based and based and ical, and practical religions that are concerned with devel-
theory and structured structured
pract i ce functionally for phil osophi call y
oping empirical rules to understand the real world. Con-
pr a ct i c al to create joy in sequently, it is possible that the structural difference be-
usefulness work
tween the two schools of thought emanate in part from the
Structure in Next process is Win-win;
respect to customer; PDCA; Cooperation; cultural differences among Ishikawa, Mizuno, Asaka, and
principles and Manage by fact; Intri nsic other leading Japanese quality professionals, and Deming.
assumptions Respect humanity motivation;
management 5.2.3 Structure in Respect to Principles and Assump-
Structure in Highly Each tions. A comparison of Deming's theory of management
respect to structured organization
vehicles vehicles which must develop its and Japanese TQC reveals differences between their re-
were developed
empirically from
own situation
speci fi c
spective principles and assumptions (see Fig. 3).
successes in vehicles from Deming's assumption about a winwin environment is
Japanese the system of
organizations profound moderately related to TQC's principle of "next process is
knowledge customer." The recognition that customers are both
caused by views
satisfaction is
satisfaction is
internal and external to an organization is common to
of competition defined relative pursued for the both schools of thought, hence, the moderate relation-
as a to competition sheer joy of the
motivational experience ship. Deming's winwin assumption, however, also en-
tool to achieve compasses the notion of optimization of an organization's
sati sfacti on system of interdependent stakeholders; this includes com-
Differences No statement Fear has a petition in many circumstances.
caused by views about fear as a profoundly
of fear as a managerial tool negative impact Deming's assumption about intrinsic versus extrinsic
managerial tools on employees and
on the
motivation is weakly related to TQC's respect for human-
functioning of ity principle. The relationship is weak in that TQC's def-
an organization
inition of respect for humanity only includes improving
Differences No problem Many numeric
caused by views setting all t ar g et s (goals) an individual's ability to think and thereby improving the
of numeric manner of are viewed as individual's ability to increase customer satisfaction and
target s targets, even arbitrary and
targets which destructive. The quality assurance. Deming's concept of respect for hu-
serve a aim, methods,
motivational and numeric manity is fundamental to the entire purpose of his theory
function. targets of a of management, that being to create joy in work and pride
Targets may not system can not
(directly) be broken into in the outcome. Deming's concern for the individual is
reflect separate parts,
customer's they are far more complete and holistic than TQC's concern. The
needs. Targets i nt er r el a t e d. Japanese, however, are earnestly studying this point in a
may precede Methods must
methods. precede targets. program called New Work Way.
Differences No vehicle for Performance Deming's assumption about analytic management is
caused by views performance apprai sal
of performance appraisal. Use systems which
strongly related to TQC's PDCA principle. Analytic man-
apprai sal whatever promote ranking agement is concerned with control and improvement of
st ruct ure exists are not an
in the acceptable tool processes and so is the PDCA cycle, hence, the strong
organization of management.
They must be
relationship. One difference between the two schools of
replaced by a thought is how they handle the analysis of data. Deming's
practice called
"unbundling" theory of management denies the relevance of a population
and a sampling frame and consequently a standard error
Figure 2. A Comparison of the Different Elements of Japanese in studies of processes. The TQC school believes that
Total Quality Control (TQC) and Deming's Theory of Management. the notions of population, sampling frame, and standard
error can be applied in studies of processes. They both, to state explicitly that fear must not be used as a managerial
however, believe in the techniques of quality management, tool.
for example, the seven basic quality-control tools. Hence,
the moderate relationship between "analytic management" 5.5 Differences Caused by Views of Numeric Targets
and "manage by fact."
Deming's assumption about cooperation is weakly re- In Deming's theory of management, many numeric tar-
lated to TQC's "next process is customer" principle. The gets are viewed as arbitrary and destructive to the improve-
weak relationship is expressed in the cooperation shown ment of quality. Some examples of destructive numeric
between suppliers and customers in an organization's sys- targets are (1) numeric targets set on managerial desire
tem of interdependent stakeholders. Deming's theory of only, (2) work standards and piece rates, (3) zero variances
management and Japanese TQC, however, have funda- in cost accounting, and (4) return on investment calcula-
mentally different views on the role of competition to an tions that do not consider unknown and unknowable costs.
organization; see the section on competition later in this Numeric targets that are acceptable in Deming's theory of
article. management include facts of business such as, (1) break-
even values, (2) nominal values and specification limits
5.2.4 Structure in Respect to Vehicles. Japanese
that are based on customer needs and process capabilities,
TQC has a highly structured set of vehicles developed
(3) budgets, plans, and forecasts that are based on process
empirically from successes in Japanese organizations.
capabilities, and (4) customer deadlines.
Deming's theory of management promotes the idea that
In Deming's view, a group of components come together
each leader's paradigm for the new practice of manage-
to form a system with an aim. The aim requires that the
ment should be based on the system of profound knowl-
components organize in such a way that they create sub-
edge. It presents no set of universally accepted vehicles.
systems. The subsystems are complex combinations of the
Each leader must develop his or her own situation-specific
components. The subsystems require certain methods to
set of vehicles.
accomplish the aim. Resources are allocated between the
methods by setting goals, which may be numeric, which
5.3 Differences Caused by Views of Competition as optimize the overall system and not the subsystems, in re-
a Motivational Tool to Achieve Customer spect to the aim. For example, a group of individuals form
Satisfaction a team with an aim. The individuals must combine their
efforts to form subsystems. These combinations may re-
Japanese TQC holds that customer satisfaction is de- quire complex interactions between the individuals. The
ifned in relation to competition; that is, the organization subsystems require methods, and the methods require re-
that satisfies customers better than its competition wins sources. Resources are allocated between the methods,
the race for customer satisfaction. Competition is the and ultimately the subsystems and individuals, by setting
motivating force behind the desire to increase customer goals that optimize the aim of the team. The aim, methods,
satisfaction. and goals are all part of the same system; they cannot be
Deming's theory of management believes that customer broken into three separate entities. Separation of the aim,
satisfaction is defined in respect to optimization of the methods, and goals destroys them because they are defined
interdependent system of stakeholders. Improvement of by their interactions. In Deming's theory of management,
customer satisfaction is an aim that is pursued for the sheer the aim of a system defines its methods, and its methods
joy of the experience; competition is not the motivating defines its targets; hence, methods precede targets.
force behind the effort. The pursuit of customer satis- In Japanese TQC, managers have no problem setting
faction is internally motivated, not externally motivated. all manner of targets; for example, targets that serve a
This does not mean that leaders operating under Deming's motivational function only. Furthermore, the targets es-
theory of management ignore facts about competitors. tablished by management in a Japanese TQC organization
may not (directly) reflect customers' needs; for example,
5.4 Differences Caused by Views of Fear as if reducing down time to zero minutes per year is the ulti-
mate goal of management, and the current stable process
Managerial Tools
average down time is 100 minutes per year, a manager in
Deming's theory of management states that fear has a a Japanese TQC organization might set a numeric target
profoundly negative impact on employees and on the of reaching an average of 50 minutes down time per year
functioning of an organization. The losses to the individ- in two years; this could come from a survey of down time
ual and the company that are caused by fear are unknown, in similar companies in the same industry or similar in-
unknowable, and huge. dustries, or from a "spirited" challenge. The 50-minute
Japanese TQC has no statement about the use of fear target does not reflect customers' needs and is viewed as
as a managerial tool; however, an underlying principle arbitrary by proponents of the Deming school.
of Japanese TQC is respect for humanity, which means In Japanese TQC, it is believed that methods and targets go
that employees can contribute to customer satisfaction and hand in hand; they define policy. It is not necessary,
quality assurance if they are given suitable education and however, for a method to precede a target. A method can be
training. This interpretation of respect for humanity, in used to define a target, or a target can be used to define a
conjunction with an emphasis on process improvement, method. This is in contrast with the Deming view that a
creates an environment in which it may not be necessary method must precede a target.
5.6 Differences Caused by Views of Performance Quality-Control Audit and Quality-Control Diagnosis.
Appraisal A quality-control audit involves comparing a best-practice
method, as monitored through a control item, against a
In Japanese TQC, there is no administrative system
target. A quality-control diagnosis involves finding prob-
for performance appraisal. Japanese TQC uses what-
lems with a best-practice method and making appropri-
ever mechanism exists in an organization for performance
ate improvements or innovations; this involves the PDCA
appraisal; this includes systems that rank individuals.
cycle. The results from a quality-control audit and a
Consequently, it is reasonable to ask the proponents of
quality-control diagnosis should be incorporated into the
Japanese TQC the following question: What happens to
best-practice method that was audited. The focus of the
an individual who does not receive a good ranking because
quality-control diagnosis is on hidden chronic problems in
of poor results? The answer is that attention is focused on
the best-practice method as opposed to obvious occasional
the process that produced the undesirable results, not on
the individual. This reward system nurtures a focus that
Variance Analysis. The managerial reactions to differ-
is oriented on the process.
ences between actual results and targets are the subject of
In Deming's theory of management, performance ap-
variance analysis. Managerial reactions consider both
praisal systems that promote ranking of individuals or
special and common causes of variation.
areas are not an acceptable tool of management. Git-
Deming Prize. The Deming Prize is a quality-control
low and Gitlow (1987, pp. 120-122) state that ranking
audit and quality-control diagnosis process through which
is considered a dysfunctional practice in Deming's theory
an organization increases customer satisfaction and qual-
of management. Scholtes (1987, 1992) stated that tradi-
ity assurance. The Deming Prize is a journey, not a
tional performance appraisal systems must be replaced by
a practice called unbundling. Unbundling calls for de-
veloping separate systems for giving feedback to employ- [Received December 1993.]
ees, providing an alternative basis for salary and bonuses,
giving direction to employees, providing an occasion for
communication, identifying candidates for promotion, and
assessing training needs of employees.

Deming's theory of management and Japanese TQC are
viewed as similar by many people; for example, they both
use the same the seven basic quality-control tools. They
both promote different types of organizations, however.
In my opinion, the future of quality management rests in
the integration of both schools of thought into one school
of thought. Scherkenbach (1991) stated that quality has
emotional, logical, and physical foundations. I propose
that the logical and emotional foundation of the new school
of thought be Deming's system of profound knowledge
and 14 points, and the physical foundation of the new
school of thought be modified versions of the vehicles of
Japanese TQC.

The vehicles of Japanese TQC assume expertise in the
theory and practice of the following support mechanisms.
Development of Control Items (Indicators). Control
items are developed for a machine, a piece of equipment,
a facility, a process, a system, and so forth, to evaluate
its actual performance and to determine the best practice
methods necessary to accomplish its primary purpose or