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UNIVERSITI TEKNOLOGI MARA KAMPUS SEREMBAN 3

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AM1104B

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INTRODUCTION TO PUBLIC SECTOR QUALITY MANAGEMENT

ARTICLE : SUSTAINED QUALITY MANAGEMENT HOW TO RECEIVE THE SWEDISH


QUALITY AWARD TWICE

PREPARED BY:

NURUL FARHANA BINTI ABDUL HADI 2014239008

SITI HADHILA BINTI HAMZAH 2014694094

NOR AIENNIENATULNISA BINTI NOOR AZHAR 2014678124

AIN NABILA HUDA BINTI JIAT 2014660266

SITI AINABILA BINTI HASNAN 2014665034

PREPARED FOR:

NURUL AKMA BINTI KAMARUDIN


CONTENTS

NO TITLE PAGE

1.0 Summary 1-5

2.0 Introduction

 How it related to the topic 6-7

 Purpose of the article

3.0 Critical Discussion

 Issues in the article 8-10

 Arguments

4.0 Conclusions 11
1.0 SUMMARY

The article is to describe how Agria Animal Insurance Sweden (Agria) has organized its

quality-related work through a sustained and systematic focus on basic elements of quality

management such as value focused leadership, employee involvement, process management

and control, customer focus, and continuous improvement. In December 2003 Agria became

the first company ever to receive the Swedish Quality Award twice. How did Agria be able has

succeed in implementing the TQM programmes was the starting point of a research project.

One of the criteria for the success of TQM programmes is the sustainability over time

according to Edwards and Sohal (2003). Furthermore, it has been stated by Eriksson (2004) a

common proxy for a successful implementation of TQM is the reception of a quality award.

Hence, a study of this organization that already received twice awards could indicate some

factors that are characteristic of successful TQM programmes, and hence be of general interest.

Agria is a wholly owned subsidiary of the Swedish insurance company and it has

specialized in the provision of animal and crop insurance. Agria is divided into three business

areas: small pets, horses and agriculture. In addition to these areas Agria also has a process

organization. In 1998, Agria became the first Swedish insurance company to receive an ISO

9001 certification. The same year Agria participated in the Swedish Quality Award for the first

time, and one year later the award was received.

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Because of an ambition among the top management group to improve productivity in

operations and reduce operating costs per business item, they begin working with the criteria of

the Swedish Quality Award. With the criteria of the Swedish Quality Award they started with the

questions regarding business process management.

The first criteria is Customer Focus. Agria has developed several policies and guidelines.

One of them is the quality policy: Our customers are the ones who determine the quality of our

work. The organization is the ones who create satisfied customers. Our aim of continued

improvement is what increases our competitiveness.

The second criteria is the Value focused leadership. The representatives of Agria’s top

management often expressed an ambition to spread certain values in the organisation. All new

employees take part in five days of training, the “Agria school”, concerning Agria’s operations

and values.

The third criteria is the Employee involvement. The important role the employees have

played in the organization’s striving for success that often highlighted by the company. Besides,

the long-term and short-term goals for the company established with involvement of all

employees. The managers at Agria have worked with creating commitment and involvement

from the employees.

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The fourth criteria is the Process management and control. In 2000 Agria did the first

rework of the organizational chart towards a matrix-organization and at 1995 Agria has been

working consciously with “the flow from customer demand to a satisfied customer”. In 2002 a

second reorganization was made, resulting in the organizational structure that was present during

the time of the study. All of the processes at Agria have process owners assigned to them,

accountable for the performance of their process and for evaluating, developing and improving

the process continuously on the basis of customer demands, needs and expectations. Therefore,

the process management group is responsible for giving priority of goals, resources and measures

of congruence to ensure that all employees really understand the process-based organisation, a

part of the training of new employees is set aside to meet the process owners.

The last criteria is Continuous improvement. A tool for customer orientated operational

development, to evaluate its operations on a yearly basis since 1998 as a criteria of the Swedish

Quality Award has been used by Agria to improve the company’s operations.

Agria use different methodologies such as daily operations, strategic processes, input to

improvement and development and improvements. Daily operations is where the Agria’s

Company evaluate the results to ensure that every process meets the standards required while in

the Strategic processes, the Agria’s company compare the actual processes with the planned

processes.

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Other than that, in the Input to improvement, Agria’s company ensure that every input

is being considered whether it is positive or negative. The customer feedback, benchmarking,

employee suggestions are also taken into account as other sources still contributed in making a

different changes to an improvement. Furthermore, in Development and improvement, the

companies work continuously on improving the processes to meet the ever-changing state.

There are different kinds of improvement going on at Agria which is the first one is the

continuous improvement, it is basically someone makes a change in something but in a better

way. Secondly, is the technological innovation. It is when Agria is making an improvement in the

process to satisfy a known need with a new method using technologies. Thirdly, market

innovation where they were creating a new product that would satisfy in the existing processes.

Lastly is the business development, finding new areas that require new routines. The division

Agria International is an example of the business development.

At Agria, they believed that by involving the employees and other parties in decision

process, the implemented period could be shortened. By having the Agria’s meeting program

leadership which bring all the employees together can avoid the criticise the work of

management because all of them are the agents of the change.

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There are two factors that impact the management.First, is the role of top management in

the organization. It means that the charismatics CEO is a strong driving force and has effectively

united the team as agents of change. Second, the driving force behind the quality management

implementation over a long term. It means if the some of them are not satisfied with their

achievement, they need to strive to improve of change.

In conclusion, Agria’s focusing their leadership on values and mission rather than rules

and regulations. At Agria, their goals are set and measured through the use of balanced

scorecards. It measurements are measure daily and individually. Agria has been working with

operations improvements that consist of three different levels; based on management, time and

budget. Every organization needs to find tools that can value their working at different level of

change.

(1030 words)

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2.0 INTRODUCTION

The article written by Klara Palmberg and Rickard Garvare with the title of Sustained

quality management: how to receive the Swedish quality award twice, related in the Topic 3,

Total Quality Management (TQM) in the Public Sector.

In this chapter, it clearly stated that the definition of Total Quality Management (TQM), it

is a process of culture transformation through which the existing elements of the culture are

modified, replaced or strengthened with better elements which encompass values and attitudes,

systems and procedures, operational practices, organization structure and so forth.

While the purpose of this article is to describe how Agria Animal Insurance Sweden

(Agria) has organised its quality-related work through a sustained and systematic focus on basic

elements of quality management such as value focused leadership, employee involvement,

process management and control, customer focus, and continuous improvement.

This article somehow related to the Topic 3, which is Agria put the customer as their

priorities. In the chapter 3, the objective of TQM is probably to provide customer satisfaction

which is attained by producing outputs that conform to the requirements of the customer. Agria

also follow the steps in the process of continuous improvement in TQM, where one of the step is

engage in education and training for staff. Agria let the new employees take part in five days of

training, which allow the employee to get a clear understanding about the system, the rules and

regulations and the method.

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The main reason the Agria received the award is because they are completely put an

effort to make a different change and their main motive to improve the productivity in operations

and reduce operating costs per business item have led their way to start working with the criteria

of the Swedish Quality Award.

One of the features in the TQM, is focus. Under the focus, there is processes and systems.

If there is any changes in the processes, the effects of improvement should be evaluate either it

turns out to be good or not just like Agria did. If the improvement doesn’t meet the objectives,

then the corrective action should be taken immediately.

As for this article, it shows that if the concept of total quality management is being

implemented, any award can be achieved or to be exact nothing is possible if every steps have

been follow seriously. TQM is the guidelines to the company to maximize their effectiveness and

efficiency and to ensure the customer really satisfied.

TQM is a like a measurement for the company to realise what should be done and what

should not be done. In order to achieve TQM, everyone should be responsible in every each part

of the company as they are the main contribution to the company.

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3.0 CRITICAL DISCUSSION

The first issue in this article that will be discusses is about the quality management that arise

at Agria. In Agria, they keep searching for the new strategies by finding the new ways to improve

and develop their work procedures. This is to ensure that all the strategies been made could

strengthen their ability and quality in the organization. As for the customer focus, they are using

customer as the ones who determine their quality of work. They using the tools such as the

Agria’s satisfied customer index. Customer index is an activity the centre will call the customer

to do some research and examine their opinion towards their company.

For value focused leadership, Agria using the top management to separate values in the

organization. The employees will meet the manager to learn the process flows about the

management and using a good communication to ensure the employee received clear information.

For this method, the leaders needs to always show their respect and trust towards their employees

so that they will be having good communication in the organization.

In the point of process management and their control on the organization, it clearly can be

seen when the organization been organized, the process to delivered something to customer will

be getting easily by using an appropriate close through the department. This is because when

everyone in the organization taking their part according to their positions actively, the common

goals of the organization can be achieved.

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The second issues that arises in this article is how did Agria was able to sustain their quality

management and succeed in receiving the Swedish Quality Awards twice. According to the CEO

a primary reason, for him, to begin the work on systematic quality improvement was curiosity.

He points out that the company did not begin working with the criteria of the Swedish Quality

Award because of external pressure, but because of an ambition among the top management

group to improve productivity in operations and reduce operating costs per business item.

The study of this article can bring many benefits to other companies to make Agria as a role

model in becoming an organization as successful as them. Each person in an organization needs

to be ambitious to look for some kind of instrument that could help to strengthen and improve

the whole organizations. As an example, because of an ambition of the top management in Agria,

they finally succeed implementing the criteria of the Swedish Quality Award. Improvements are

described not as a result of work made by a few, but as a result of all efforts made by everyone in

the organisation.

Van der Wiele and Brown (2002) conclude that every organisation “needs to discover and

work out for themselves on how to apply the core principles behind such concepts in ways which

are meaningful to their business operations.” That is probably one of the most important

explanations to why Agria has succeeded so well. Methodologies and tools have been selected by

their end users on the basis of their opinion of what was needed, and have also been adjusted to

fit the operations of the company.

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The next issue is about an education and training of the employees and not letting

production demands undermine the benefits of training. In Agria, they have created “Agria-

School”. This school is for the new employees that started their job, to ensure that they are aware

towards the basic value and the principle of the organization. This school also produce the

training process to teach the new employees about the operations that will involve themselves.

In Agria programmes, they also include the management to develop their leadership skills

to organize the organization. For this school, they not only focus on the new employee skills but

it also includes the skill of the management. This will be able to create the strong relation

between the employees and the manager relations.

From the issues that has arisen, we agree that Agria deserve to win the award as they are

keep ensuring that the organization always running smoothly. Therefore, they are very particular

and concerned with a little matter because every decision that was made must parallel with the

success or goals that wants to be achieved by the organization. Besides, it is important for a

company to sustain their success in getting an award for the organization so that, it can increase

the employee’s spirit to improve the company’s image. The implementation or adaption of

quality principles alone does not guarantee that all the guiding principles of quality will be

effective in organizations. Others aspect that would help to ensure effective quality standards

expected by organizations and their customer is recognition or an awards. This is because these

recognitions could make a great impact on the self-image of the company.

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4.0 CONCLUSION

From our research, we conclude Total Quality Management (TQM) as everyone

responsibilities on that organization for ensuring the success of the quality improvement efforts.

If each of the element takes part to play their roles and initiatives, it is not impossible in

achieving any award like Agria did with their accomplishment of Swedish quality award for the

second times.

Next, we summarise the objective as to meet with customer satisfaction and expectation and

produce defect free or error free output. So that, we can maintain and retain our customer to

regularly and continuously subscribe our goods and services. On the other hand, staff education

and training also important in developing our organisation to make sure that all of our staff is

competitive in doing their tasks and responsibilities. Thus, we can upgrade the quality and the

outcome receive.

Then, the analysis drawn from this article shows that the top management at Agria has been

stong driving force that has effectively united leaders at all levels as agents of change. Additional

success factors have been the deployment of basic values, the “five always”, and the value

focused leadership. Further on the company has succeeded in creating a cultural basis and

structures for systematic work with improvements.

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