Assignement 1st 890 TQM Spring 2010

Total Quality Management (890)
Department of Business Administration

Block No. 13, H-8
Islamabad

Assignment No. 01
Submitted to:
MR. REHAN PERVAIZ
B- 116, Sub Block-05
Grey River Apartments
Bhitani Colony, Korangi Crossing
KARACHI (0321-224 2294)
Submitted By:
Muhammad Hammad Manzoor
MBA (HRM)-3rd Semester
Roll No. 508195394
th
508, 5 Floor, Continental Trade Centre (CTC)
Block – 08, Clifton, KARACHI
(0321-584 2326)
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By: M. Hammad Manzoor, MBA HRM-III, 508, 5th Floor, Continental Trade Centre (CTC), Clifton – 08, Karachi. (Roll No. 508195394)
Email: explorationist@gmail.com, Cell: 0321-584 2326
Q. No. 1: Critically discuss the Juran’s Ten Steps approach to quality

improvement keeping in view the private sector organization in Pakistan.
Answer)
Joseph M. Juran went to Japan in 1954 and assisted the Japanese in their quest to achieve
quality. Like Deming, Juran emphasized planning, organizing and controlling. However he
emphasized customer satisfaction more than Deming did and focused on management and
technical methods rather than worker satisfaction.
By 1960 Japan was using quality control circles and simple statistical techniques learned and
applied by Japanese workers. Juran developed basic steps that companies must take, however
he believed there was a point of diminishing return, a point at which quality goes beyond the
consumer needs.
Juran's trilogy involves:

1. Quality planning (determine customer needs, develop product in response to needs).
2. Quality controls (assess performance, compare performance with goals, act on
differences between performance and goals).
3. Quality improvement (develop infrastructure, identify areas of improvement and
implement projects, establish project team, provide teams with what they need).
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Juran's ten steps to quality improvement are:
1. Build awareness of opportunities to improve :-
Quality awareness is most essential topic for realizing quality and quality integration in practical
cases. Awareness is a profound totality of physical, psychological, and philosophical aspects of
sensations, perceptions, ideas, attitudes, and feelings related to an individual or a group having
knowledge of the abstract and comprehensive object of quality of a certain item, at any given
time, or within a given time span. In time dimension, developing of the knowledge and learning
become interesting aspects. It may be recognized different depth-levels of intellectual behavior
in learning that may be categorized. All these phenomena are very essential but also very
complex things when developing quality integration in any kind of organization in modern
business environments in Pakistan. Explicit knowledge is only a very minor part because most of
the knowledge is implicit in this context. There are always also complex connections between
consciousness and unconsciousness (sub consciousness).
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2. Set goals :-
Quality policy is an important concept for a professional integration for setting of goals.. Quality
policy means what is the overall intention and direction within an organization related to
quality. Again the genuine quality policy can be seen only in the awareness and actions of
people, not in documents. Documented quality policy statement issued and signed by the top
management of an organization is only a tip of iceberg of the actual policy. It may, however, be
a useful managerial tool. Anyway, it is not necessary to use the term "quality policy" in practical
business operations although people have always certain quality policies.
3. Organize to reach goals :-

To manage the goals, make a team leader. The leader will give direction and responsibilities to
the employees. Who report to whom, prepare the schedule for implementation of plan, how to
identify the problems and its significance. Improve the problem solving ability and prepared
alternative solution. Conduct meetings to communicate the all members.
4.
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4. Provide training :-
Purpose of Employees Training is the growth and development of personnel, which include:
• Creating a pool of readily available and adequate replacements for personnel who may
leave or move up in the organization.
• Enhancing the company's ability to adopt and use advances in technology because of a
sufficiently knowledgeable staff.
• Building a more efficient, effective and highly motivated team, which enhances the
company's competitive position and improves employee morale.
• Ensuring adequate human resources for expansion into new programs.
There are two broad types of training available: on-the-job and off-the-job techniques.
On-the-job training is delivered to employees while they perform their regular jobs. In this way,
they do not lose time while they are learning. After a plan is developed for what should be
taught, employees should be informed of the details. A timetable should be established with
periodic evaluations to inform employees about their progress. On-the-job techniques include
orientations, job instruction training, apprenticeships, internships and assistantships, job
rotation and coaching.
Off-the-job techniques include lectures, special study, films, television conferences or
discussions, case studies, role playing, simulation, programmed instruction and laboratory
training. Most of these techniques can be used by small businesses although, some may be too
costly.
5. Carry out projects to solve problems :-

The main purpose of this step is to improve employees problem solving abilities. There are
various techniques in the problem-solving process. The techniques generally used include the
following:
• Brainstorming
• Cause and Effect Analysis
• Check sheets
• Pareto Analysis
• Histograms
• Process Analysis
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6. Report progress :-
In this step team identified alternative solutions to the problem. The advantages and benefits
occurred from the suggested solution and explained one by one to the management. Financial
implications were also being considered. The team members select the best solution through
system of voting or a through analysis of the alternatives. Projects or problems to which
solutions have been identified were presented to the Management. The Management gave due
consideration to these solutions and arrive to a decision.
7. Give recognition :-
A Satisfied Work Force will produce a quality product more reliably, and with fewer turnovers.
When you consider the cost of training, the trust you build with employees over time and the
ebb and flow of an evolving workforce, you realize that your people are often your greatest
asset. Threat your team well, gives them creative control when it’s warranted, listen to their
feedback and provide rewards for their successes. A quality product is built by a team who
takes pride in their work, and it shows in every position from basic assembly to management.
8. Communicate results :-
This goes for both your internal operations and your external communications with suppliers
and customers. Communication that is well written, to the point, professional and succinct not
only makes for a better experience for the reader, but is actually quicker to write and more
effective once you get over the hump of producing communications of this quality.
Communication doesn’t only need to be clear and concise, it should also be regular. The most
effective project management teams I’ve seen have the success they do because they regularly
sent status updates, gave praise when appropriate and were quick with critiques and criticisms.
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9. Keep score
As the desired goals are successfully achieved, make the employees consistency regarding the
continuous improvement. It helps employees morale and improve employees problem solving
abilities.
10. Maintain momentum by making annual improvement part of the systems and
processes of the company
For improvement of processes and system documented all the above steps. After
implementation of all these steps, Private organizations in Pakistan can:
• It helps of improvement of processes and Quality system of organizations.
• Reduces no. of errors and non-conformities i.e. approaches to zero defect ratio.
• Improves Employees problems solving abilities.
• Enhances the morale of employees.
• It helps to develop new markets and enhances the market share of organizations.
• To win customers needs and customer satisfaction.
• Continuously improve the product quality.
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Q. No. 2: Communication is linked in the total quality management process.

Do you agree with this statement or not? Discuss your answer with agreements
in the light of banking sector in Pakistan?
Answer)
Organizations are totally reliant on communication, which is defined as the exchange of

ideas, messages, or information by speech, signals, or writing. Without communication,
organizations would not function. If communication is diminished or hampered, the entire
organization suffers. When communication is thorough, accurate, and timely, the
organization tends to be vibrant and effective.
Total Quality Management (TQM) is a structured system for meeting and exceeding customer
needs and expectations by creating organization-wide participation in the planning and
implementation of improvement (continuous and breakthrough) processes.
To be successful implementing TQM, an organization must concentrate on the eight key
elements:
1. Ethics
2. Integrity
3. Trust
4. Training
5. Teamwork
6. Leadership
7. Recognition
8. Communication
TQM has been coined to describe a philosophy that makes quality the driving force behind
leadership, design, planning, and improvement initiatives. For this, TQM requires the help of
those eight key elements. These elements can be divided into four groups according to their
function. The groups are:
I. Foundation: It includes Ethics, Integrity and Trust.

II. Building Bricks: It includes Training, Teamwork and Leadership.
III. Binding Mortar: It includes Communication.
IV. Roof: it includes Recognition.
Communication binds everything together. Starting from foundation to roof of the TQM house,
everything is bound by strong mortar of communication. It acts as a vital link between all
elements of TQM. Communication means a common understanding of ideas between the
sender and the receiver. The success of TQM demands communication with and among all the
organization members, suppliers and customers. Supervisors must keep open airways where
employees can send and receive information about the TQM process. Communication coupled
with the sharing of correct information is vital.
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For communication to be credible the message must be clear and receiver must interpret in the
way the sender intended.
There are different ways of communication such as:
A. Downward communication: This is the dominant form of communication in an organization.

Presentations and discussions basically do it. By this the supervisors are able to make the
employees clear about TQM.
B. Upward communication: By this the lower level of employees are able to provide
suggestions to upper management of the affects of TQM. As employees provide insight and
constructive criticism, supervisors must listen effectively to correct the situation that comes
about through the use of TQM. This forms a level of trust between supervisors and employees.
This is also similar to empowering communication, where supervisors keep open ears and listen
to others.
C. Sideways communication: This type of communication is important because it breaks down

barriers between departments. It also allows dealing with customers and suppliers in a more
professional manner.
Conclusion
It is concluded that this communication element is key in ensuring the success of TQM process
in an organization and that the supervisor is a huge part in developing this element in the work
place. Without this communication, the business entities cannot be successful TQM
implementers. It is very clear from the above discussion that TQM without involving integrity,
ethics and trust would be a great remiss, and in fact it would be incomplete. Training is the key
by which the organization creates a TQM environment. Leadership and teamwork go hand in
hand. Lack of communication between departments, supervisors and employees create a
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burden on the whole TQM process. Last but not the least; recognition should be given to
people who contributed to the overall completed task. Hence, lead by example, train
employees to provide a quality product, create an environment where there is no fear to share
knowledge, and give credit where credit is due is the motto of a successful TQM organization.
The Significance of Communication in Banking Sector of

Pakistan
The ability to communicate well, both orally and in writing is a critical managerial skill and
a foundation of effective leadership. Through communication, people exchange and share
information with one another and influence one another's attitudes, behaviors, and
understandings. Communication allows managers to establish and maintain interpersonal
relationships, listen to others, and otherwise gain the information needed to create an
inspirational workplace. No manager can handle conflict, negotiate successfully, and
succeed at leadership without being a good communicator.
Communication is central to the entire management process for four primary reasons:
• Communication is a linking process of management. Communication is the way

managers conduct the managerial functions of planning, organizing, staffing,
directing, and controlling. Communication is the heart of all organizations
• Communication is the primary means by which people obtain and exchange

information. Decisions are often dependent upon the quality and quantity of the
information received. If the information on which a decision is based is poor or
incomplete, the decision will often be incorrect.
• The most time-consuming activity a manager engages in is communication.

Managers spend between 70 to 90 percent of their time communicating with
employees and other internal and external customers.
• Information and communication represent power in organizations. An employee

cannot do anything constructive in a work unit unless he or she knows what is to be
done, when the task is to be accomplished, and who else is involved. The staff
members who have this information become centers of power.
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Q. No. 3: How does employee’s empowerment contribute to quality

improvement? Explain the three conditions of employee’s empowerment and
its contribution to the TQM in the service organization.
Answer
PURPOSE OF EMPLOYEE EMPOWERMENT:

Regarding the empowerment issues of the employee and their training needs, suggestion and
other issues related to empowerment, we need to discuss in details. Total quality management
(TQM) is a management technique adopted by the most manufacturing organizations. TQM in
general is viewed as organization set up which will help to manufacture products at lowest cost
by the applying the various techniques through continuous improvement. Employee
empowerment is providing decision making power for a team or an individual.
FINDINGS:
Employee empowerment is good for an organization and employee is empowered to make
specific decision for the interest of the organization. Empowerment helps to play a wider role in
an organization as a powered owner.
INTODUCTION TO EMPLOYEE EMPOWERMENT:

TQM is a journey and it never ends. A change is the only PERMANENT or CONSISTANCY. The
word total implies that all members of the organization make consistent efforts to achieve the
objectives for a customer through systematic efforts for the improvements. All employees must
participate in the development of shared vision, mission, plans and in quest for continuous
improvement. Such participation will require specific efforts toward the acquisition of
knowledge and skills facing day to day problems and making fast but low risk decisions.
TQM is not an approach to get things done at any cost attitude. It is a systematic approach to
quality, process improvement to delight the customers. The success of TQM is not easy from
the organization will be suspicious over management that may lead to higher requirements of
output and decrease the manpower requirements. TQM implantation is only in the range of 25
to 30 % of those who have initiated the practice. Even in Japan, when TQM was first initiated,
there was a lot of opposition by the work force or front liner. Here, the work force is referred as
front liners. They are like armed soldiers at the war front. So they are called as “FRONT
LINERS”.
TQM was not successful in certain organization due to sustainability of leadership and purpose,
communications, team work, quality improvement and lack of total commitment to the TQM
philosophy and practices. Success is the hall mark of the practice of the practicing TQM. Quality
management is the way firms are managed, which makes obtaining the efficiency success,
effectively success and competitiveness superiority possible assuming the long term success,
meeting customers and workers needs and financial results.
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EMPLOYEE EMPOWERMENT IN AN ORGANZATION:
Innovation can thrive when collaboration takes place and collaboration can occur best when
teams are empowered. Empowered is a concept that links individual strengths and
competencies, natural helping systems and pro-active behavior to social policy and social
change.
In the other words, empowerment links individual and his or her well being to wider social and
political environment in which he or she could function. Successful implementation at total
quality management depends heavily on changes in employee attitude and activities. But what
its impact on these changes on the employee, especially an employee turnover intentions?
Studies revealed from one company field test using 113 employees before TQM and a subset of
73 employee’s after TQM implementation. Results indicated significant improvements in a role
of ambiguity, job satisfaction, job involvement, organization commitments and employee
turnover intentions, but no significant changes in role conflict, task characteristics, and career
satisfaction. TQM managers are expected to gain employee’s trust, encourage employees
problems solving and promote cooperation among departments. In fact, many of the basic
elements of TQM deal with people, team work, participate management, creativity, innovation,
reward structure, extensive training, high level communications, reduction at fear of losing
security obsession with improvement, management commitment at all levels, customer
feedback, employees involvement, and empowerment, for improved communications through
organizations and quicker decision making. Empowerment does not mean that the
management has no role to play or no responsibility. In fact, the management has more
responsibilities. They have to mentor the skills continuously required for carrying out he ever
changing complexity of jobs of the teams. The management is to control the processes and not
the individual team members. It was proved that productivity increased by empowerment by
30%. The employees should be encouraged to their own responsibility and the top
management should help them to achieve it.
The top management should be responsible for the following;
1)- Management should listen to attitude. Good listener makes the difference.
2)- Accept the recommendations given by a team and believe that it is good for the
organizational growth.
3)- Invest time and money as requested by teams.
4)- Remain prepare to wait for the success of the teams and don’t pressure them to achieve
results immediately.
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5)- Spend more time at the initial stages and listen to the problems of the team. During
execution there may be some problems and should be heard instead of finding issues in them
6)- Reward the good teams and this motivate further
7)- Provide information technology based communication systems.
One of the criteria on European Foundation for Quality Manger (EFQM) model is people’s
development and innovation in maximizing the contribute of employees through their
development and involvement. The figures shown EFQM model with respect to its parameters.
EMPOWERMENT IS NOT WITHOUT BONDS:
Empowerment of employees is not without bounds and limitations. It should be structural and
planned to achieve the goal in the TQM way. The employees should be aligned with business
directions as brought out in the vision and mission statements by the CEO. They have to
understand their performance boundaries and expected performance / results.
An employee owns his processes, it means employees themselves improve the quality of their
processes, while the management is observing and is ready to help them when required.
Therefore, empowering means that they should do what they are authorized to do and with
management approval before making decision.
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EMPOWER TEAMS NOT INDIVIUALS:
A team of employees should be empowered and not the individuals. Even when an individual is
empowered it is done as in h is capacity as coordinator of the team. The team has to achieve
the objectives set for by the management. The team has to identify the best course of action in
every context. The team has to take decision on its own within prescribed boundaries. It also
has to carry out mid-course corrections whenever required.
The team should try to solve their problems within the organizational framework. The
management should have a mechanism for obtaining a feed back at the results. It is not
detachment of the teams from the management, but it is the process of equipping the teams
motivating and encouraging them to carry out assigned tasks, as per the requirements.
CONDITIONS OF THE EMPLOYEE EMPOWERMENT:
1)- Being a real team rather than a team in name only which really requires a team task,
clear team boundaries with inputs and thorough outputs, delimited and explicit team authority,
and the stability overtime.
2)- A compelling direction that energizes and orients attention and engages the talent of all
employees.
3)- An enabling team structure comprised of a deliberate team based design with output
measures, norms of conduct agreed upon by everyone, and a carefully planned and negotiated
team composition.
4)- A supportive organizational context including a supportive reward system, information

system and education system.
5)- Exemplary leadership and coaching available to the team and members as required by
them.
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Q. No. 04. Discuss the performance problems faced in the continuous quality
improvement. Explain some strategies to handle these problems effectively and
efficiently in the view of manufacturing organization.
ANSWER
1)- CONTINUOUS QUALITY IMPROVEMENT
A system that seeks to improve the provision of services with an emphasis on future results.
Like total quality management, CQI uses a set of statistical tools to understand subsystems and
uncover problems but its emphasis is on maintaining quality in the future ,not just controlling a
process. Once the process that needs the improvement is identified, a team of knowledgeable
individuals is gathered to research and document each step of the process. Once specific
expectations and the means to measure them have been established ,implementations aims at
preventing future failures and involves the setting of goals ,education and the measurement of
results. If necessary the plan may be revised on t he basis of the results, so that the
improvement is ongoing.
2)- WHAT IS CONTINUOUS QUALITY IMPROVEMENT?
CQI is an approach to quality management that builds upon traditional quality assurance
methods on emphasizing the organizations and systems. It focuses on PROCESS rather the
individual, it recognizes both external and internal customers, it promotes the need for the
objectives data to analyze and improve process.
CQI is a management philosophy which controls that most things can be improved. This
philosophy does not describe to the theory that If it aim’ broke, don’t fix it. At the Cox of CQI is
serial experimentation (the scientific method) applied to everybody work to meet the needs of
those we serve and improve the services we offer.
CORE CONCEPTS OF CQI

I. Quality is defined as meeting and/or exceeding the expectations of our
customers.
II. Success is achieved through meeting the needs as those we serve.
III. Most problems are found in processes, not in people. CQI does not seek to
blame, but rather to improve process.
IV. Unintended variation in processes can lead to unwanted variation in
customers, and therefore we seek to reduce or eliminate unwanted
variation.
V. It is possible to achieve continual improvement through small incremental
changes using the scientific method.
VI. Continuous improvement is most effective when it becomes a natural part of
the way everyday work is done.
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1. CORE STEPS IN CONTINUAL IMPROVEMENT:

I. Form a team that has knowledge of the system needing improvement.
II. Define a clear aim.
III. Understand the needs of the people who are served by the system.
IV. Identify and define measures of success.
V. Brainstorm potential change strategies for producing improvement.
VI. Plan, collect and use data for facilitating effective decision making.
VII. Apply the scientific method to test and refine changes.
2. CONTINUOUS QUALITY IMPROVEMENT IN MANUFACTURING:

In manufacturing phase, continuous product quality improvement is achieved by process
characterization and optimization. Fig-2 provides a road map for process optimization and
characterization. This road map starts with the identification of quality issues through data
analysis of CAQ (Computer aided quality) or some analytical tools such as cause and effect (fish
bone diagram). To leverage our resources, we should find out the quality bottleneck processes
through pare to charts or similar analysis. A cross functional team is highly recommended for
successful implementation of continuous quality improvement. To have a common
understanding at the process, the team should describe the process using process mapping.
ANOVA and multi-vary analysis are powerful tools to find out if the process quality
characterizes has single source of variation or multiple sources of variation so that we can
reduce and control the variation using SPC tools.
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Sometimes we often take it for granted that our measurement system is good but actually it is
not. It is always safe to calculate the R & R (Repeatability and Reprodceabilty) of a
measurement system see if it is less than 10 % at the total process variation. If R & R % is more
than 30%, a new measurement system should acceptable, a process capability analysis (Cp &
CPK Study) is conducted to see if it is capable. Different business may have different criteria for
Cp and Cpk. If the process is not capable, we can try to optimize it using experimental design.
Control charts or other similar SPC tools is u used to keep the process control after process is
optimized and Out Of Control Plan (OCAP) is developed for process control and adjustment.
This roading is also an endless loop. After a quality bottle neck is resolved, a new quality issue
may arise.
3. PROBLEMS FACING & STRATEGIES FOR CONTINUOUS QUALITY IMPROVEMENT:

During manufacturing of a product or improvement in a quality of a product we can face few
problems or may become successful throughout the continuous improvement of the product
quality.
TO successful implement continuous quality improvement program, we strongly recommend
the following strategies based on our consulting experience for several companies.
3.1 MANAGEMENT COMMITMENT:

Like the implementation of ISO-9000, management commitment is everything of CQI.
Management is responsible for setting goals, reviewing the progress, providing necessary
resources and evaluating the result of CQI program. In Motorola, they have a ten times quality
improvement goal for every two years. During weekly quality review, management requires
engineers to show the quality measures such as Defect per Unit (DPU) and see if it is reaches
the goal setting.
3.2 PROBLEMS FACING DURING PRODUCT QUALITY DESIGN:
Concurrent Quality Engineering And Cross Functional Team

Nearly 80% of quality problems can be traced to design. Concurrent development of product
and process does not reduce cycle time but also yield high quality. As we know Cp is tolerance
divided by process spread, the efficient way to increase Cp is through cooperation of design
engineers and process engineers. A design engineer can give a reasonable design margin on
condition that the process engineer tells him/her the width of the process spread. Other
business function such as equipment, quality assurance , production planning etc can give
useful input to design team. Customers and suppliers are also included in the design team
because their inputs are critical to successful design.
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Total Employees involvement

The key of TQM is total employees involvement, so it is true ti CQI(Continuous Quality
Improvement) . Everybody in a business has an impact on quality directly or indirectly.
Everybody’s performance can be and must be measured by quality matrices. The suggestion
system initiated by Japanese Companies has been proven to be good way to motivate
employees to participate in the quality improvement program.
CONCLUSION TO CQI:
Successful implementation of CQI requires integration at various quality tools. The paper gives
general guidelines on how to integrate quality tools to achieve continuous improvement. Some
world class companies such as Motorola, GE, KODAIC, and ALLIED SIGNAL are pushing Six Sigma
Black Belt Program implement CQI. The objective of CQI is to meet the growing demand of
Customers and gain quality competitiveness.
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Q. No. 5: Critically discuss the relationship of ethics with continuous quality

improvement in the present circumstances with special reference to banking
sector of Pakistan?
Answer:
DEFINITION OF ETHICS:
Ethics include personal behaviors and issues of character e.g. kindness, tolerance and
generosity. Ethics is derived from the word “ETHOS”. Ethos as defined by Bernard Harding
compromises distinction attitudes, which characterizes the cultural outlook of professional
group.
Ethics are the distinction between right and wrong based on the body of knowledge4, not just
based on options.
ETHICS & CONTINOUS QUALITY IMPROVEMENT:

Improving practices within an organization is generally registered as good management. The
use of continuous quality improvement (CQI), however beings to make innovation look like
research, and therein lies a problems.
The primary purpose of ethical review is to assure that a research design uses ethical methods
and otherwise conforms to ethical standards. External oversight is provided by committees
(often call IRB’s or institutional review boards) that are usually comprised of peers from the
scientific, professional and medical communities and people representing community
perspectives.
Research and quality improvement share many characteristics. In CQI, Endeavors, patients are
subject to the efforts to correct, enhance or otherwise change those practices. This process
may involve changes a patient will not notice, such as a new flowchart on which to record vital
signs, or the process may involve noticeable changes that are not burdensome or that a patient
might welcome, such a new practice of having attending physicians name and phone numbers
at the backside. However, the process may entail changes the result in practice contrary to a
worker’s expectations, for instance, visits from additional staff members or participation in
advance care planning discussions.
CQI endeavors are not usually regarded as research subjects. Improvements team may not have
any objections to obtain the informed have any obligation to obtain the informed consent of
their subjects, or even to notify their subjects of the changes being implemental and evaluated,
even when some risk to workers is possible. External reviews are not usually sought. However,
to assure that the “GOOD INTENSIONS” being examined are not merely the whim of the
improvement team, the endeavor should be grounded in the values shared across a community
of peers.
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TYPICAL CHARATERISTICS CQI AND RESEACH:

CQI RESEARCH
Develop Hypothesis X X
Gather Data X X
Analyze Data X X
Validate Hypothesis X X
Randomize Control Study - X
Immediate Practice Charge X -
Enrich Knowledge Base - X
Immediate Behavior Change X -
External Auditing - X
Applies to larger Group - X
Careful, Systematic Study - X
PAKISTAN’S BANKING SECTOR’S CURRENT SITUATION AND CIRITICAL ISUE OF ETHICS

RELATED TO CONTINOUS QUALITY IMPROVEMENT:
Pakistan’s banking sector reforms which were initiated in the early 1990’s have transformed the
sector into an efficient, sound and strong banking system. The most recent comprehensive
assessment carried out jointly by the Work Bank and the IMF in 2004 came to the following
conclusion;
“For reaching reforms have resulted in a more efficient and competitive financial
system. In particular, the predominantly state owned balancing system has been
transformed Into one that is predominantly under the control of the private sector.
The legislative frame work and the State Bank of Pakistan’s supervisory capacity have
been improved substantially. As a result, the financial sector is sounder and exhibits an
increased resilience to shocks”
CHANGES OCCURING DURING CONTIOUS QUALITY IMPROVEMENT:
The major changes that have occurred in the banking sector during the last decade or so can be
summarized as follows;
a)- 80% of the banking assets are held by the private sector banks and the privatization of
nationalized commercial banks has brought about a culture of bureaucracy and apathy.
b)- The banks that were losing money due to inefficiencies, waste and limited product
range have become highly profitable business. These profits are, however being used to
strengthen the capital base of the banks rather than paying out to be shareholders. The
minimum capital requirements have been raised from Rs. 500 Million to 6 Billion over an
extended period in a phased manner. The consolidation of the banking sector into fewer but
stronger banks will lead to better management at risk.
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c)- The banks that were bounded with the non-performing and defaulted loans have been
cleared up their balance sheets in an open transparent, across the board manner. Contrary to
the popular myth the main beneficiaries at the write of the old outstanding and uncover able
loans have been from almost 25% to 67% by December 2005. Small individuals borrowers the
ratio of non-performing loans at the commercial banks to the total advance has declined.
d)- The quality of new assets has improved as strongest measures are taken to appraise
new loans, and assure the underlying securities. Online credit information bureau reports
provide updated information to the banks about the credits history and track record at the
borrowers. Loan approval on political considerations have became passé. Non-performing loans
accounting less than 3 % of all new loans disbarred since 1997.
e)- The human resources base of the banks has been substantially upgraded by the
adoption at the principles of merit and performance through the industry. Recruitment is done
through a highly competitive process and promotions and compensations are linked to training,
skills and high performance. The banks now routinely employs MBA’s, M.Com’s, Chartered
Accountant, IT graduates, Economists and other highly educated persons rather than clerical
and non clerical workers. The banking industry has become a perfect choice of profession a
month the young graduates.
f)- Banking technology that was almost non-existent in Pakistan until a few years ago is
revolutionizing the customer services and access on-line banking, internet banking, ATM’s,
Mobile phone banking and other models of destiny have made it possible to provide
convenience to the customers while reducing the transactions costs to the banks. Credit cards,
Debit cards, Smart cards etc are a thriving and expanding business in Pakistan. One the RTGS is
put in place the payment system in Pakistan would enter a new phase of modernization.
g)- Competition among the banks has forced them to move away from the traditional
limited product range of Credits to the Government and the public sector enterprises, trade
financing, big name corporate loans, and credit to the multinationals to an ever-expanding
menu at products and services. The borrower base at the banks has expanded for fold in the
last six yeas as the banks have diversified into agriculture, SMEs, Consumers financing, motor
gages etc. The middle class that could not afford to buy car or apartments as they did not have
the financial strength for cash purchase are the biggest beneficiaries at these new products and
services.
h)- Along with strong regulation, supervision and enforcement capacity of the state banks
of Pakistan a number of measures have been taken to put best corporate governance practices
in the banking system. “FIT and PROPER” criteria have been prescribe for the Chief Executives,
members of the Boards of Directors, and top management positions. Accounting and audit
standards have been brought to the International Accounting Standards (IAS) and the
innervations audit codes. External audit firms are ranked according to their performance and
track record and those failing short of acceptable standards are debarred from auditing the
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banks. These practices were put in place in Pakistan long before the scandals of Enercon, World
Call and Pramalat had shaken the corporate world.
i)- The foreign exchange market that was highly regulated through a system of direct
exchange controls over suppliers and users of foreign exchange has been liberalized and all
purchases and sales take place through on active and vibrant inter-bank exchange market. All
restrictions have removed with full account convertibility and partial capital account
convertibility. Foreign investors can now bring foreign portfolio investors can also enter and
exist the market at their own discretion.
CONCLUSION:
The main lesson learnt from the last decade suggests the financial sector function effectively
and efficiently, only if macroeconomics situation is favorable and stable. They need to maintain
microeconomics stability will thus remain paramount in the years to come.
23/28
References:
http://www.skymark.com/resources/leaders/juran.asp
http://www.mftrou.com/joseph-juran.html
http://www.qualitycouncil.com/Juran_QCH.asp
24/28

Assignement 1st 890 TQM Spring 2010

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Total Quality Management (890)

Department of Business Administration

Total Quality Management (890)

Q. No. 1: Critically discuss the Juran’s Ten Steps approach to quality

Juran's trilogy involves:

Juran's ten steps to quality improvement are:

1. Build awareness of opportunities to improve :-

3. Organize to reach goals :-

5. Carry out projects to solve problems :-

Q. No. 2: Communication is linked in the total quality management process.

Organizations are totally reliant on communication, which is defined as the exchange of

I. Foundation: It includes Ethics, Integrity and Trust.

A. Downward communication: This is the dominant form of communication in an organization.

C. Sideways communication: This type of communication is important because it breaks down

The Significance of Communication in Banking Sector of

• Communication is a linking process of management. Communication is the way

• Communication is the primary means by which people obtain and exchange

• The most time-consuming activity a manager engages in is communication.

• Information and communication represent power in organizations. An employee

Q. No. 3: How does employee’s empowerment contribute to quality

PURPOSE OF EMPLOYEE EMPOWERMENT:

INTODUCTION TO EMPLOYEE EMPOWERMENT:

EMPLOYEE EMPOWERMENT IN AN ORGANZATION:

The top management should be responsible for the following;

3)- Invest time and money as requested by teams.

6)- Reward the good teams and this motivate further

7)- Provide information technology based communication systems.

EMPOWERMENT IS NOT WITHOUT BONDS:

EMPOWER TEAMS NOT INDIVIUALS:

CONDITIONS OF THE EMPLOYEE EMPOWERMENT:

4)- A supportive organizational context including a supportive reward system, information

2)- WHAT IS CONTINUOUS QUALITY IMPROVEMENT?

CORE CONCEPTS OF CQI

1. CORE STEPS IN CONTINUAL IMPROVEMENT:

2. CONTINUOUS QUALITY IMPROVEMENT IN MANUFACTURING:

3. PROBLEMS FACING & STRATEGIES FOR CONTINUOUS QUALITY IMPROVEMENT:

3.1 MANAGEMENT COMMITMENT:

3.2 PROBLEMS FACING DURING PRODUCT QUALITY DESIGN:

Concurrent Quality Engineering And Cross Functional Team

Total Employees involvement

Q. No. 5: Critically discuss the relationship of ethics with continuous quality

ETHICS & CONTINOUS QUALITY IMPROVEMENT:

TYPICAL CHARATERISTICS CQI AND RESEACH:

PAKISTAN’S BANKING SECTOR’S CURRENT SITUATION AND CIRITICAL ISUE OF ETHICS

CHANGES OCCURING DURING CONTIOUS QUALITY IMPROVEMENT:

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