Sachin Sankar K 215118041

Strategic Total Quality Management, Strategic Planning, and

Management

The concept of strategic total quality management (STQM) was introduced in 1993 by Madu and
Kuei (1993). They defined STQM as a quality measure that reflects an organization's overall
performance. Quality is not viewed from the standpoint of direct products and services but as the
driving force to ensure the survivability and competitiveness of an organization. In that view, quality
is quite encompassing and includes several factors such as management, environmental quality, social
responsibility, technology management, and human resources management. Several dimensions of
STQM have been proposed by the authors. In this chapter, we further the discussion by looking at
specific elements of STQM and how they have evolved since the original article. But before we
continue, we shall discuss in greater depth, the concept of strategic total quality management.1
INTRODUCTION AND DEFINITION OF QUALITY
Quality is perceived differently by different people. Yet, everyone understands what is meant by
“quality.” In a manufactured product, the customer as a user recognizes the quality of fit, finish,
appearance, function, and performance. The quality of service may be rated based on the degree of
satisfaction by the customer receiving the service. The relevant dictionary meaning of quality is “the
degree of excellence.” However, this definition is relative in nature. The ultimate test in this
evaluation process lies with the consumer. The customer’s needs must be translated into measurable
characteristics in a product or service. Once the specifications are developed, ways to measure and
monitor the characteristics need to be found. This provides the basis for continuous improvement in
the product or service. The ultimate aim is to ensure that the customer will be satisfied to pay for the
product or service. This should result in a reasonable profit for the producer or the service provider.
The relationship with a customer is a lasting one. The reliability of a product plays an important role
in developing this relationship.2
History
In the late 1970s and early 1980s, the developed countries of North America and Western
Europe suffered economically in the face of stiff competition from Japan's ability to produce high-
quality goods at competitive cost. For the first time since the start of the Industrial Revolution, the
United Kingdom became a net importer of finished goods. The United States undertook its own soul-
searching, expressed most pointedly in the television broadcast of If Japan Can... Why Can't
We?. Firms began reexamining the techniques of quality control invented over the past 50 years and
how those techniques had been so successfully employed by the Japanese. It was in the midst of this
economic turmoil that TQM took root.
The exact origin of the term "total quality management" is uncertain.] It is almost certainly inspired
by Armand V. Feigenbaum's multi-edition book Total Quality Control (OCLC 299383303) and Kaoru
Ishikawa's What Is Total Quality Control? The Japanese Way (OCLC 11467749). It may have been
first coined in the United Kingdom by the Department of Trade and Industry during its 1983
"National Quality Campaign". Or it may have been first coined in the United States by the Naval Air
Systems Command to describe its quality-improvement efforts in 1985.3
Steps to Creating a Total Quality Management System

1. Clarify Vision, Mission, and Values

Employees need to know how what they do is tied to organizational strategy and objectives.

All employees need to understand where the organization is headed (its vision), what it hopes to
accomplish (mission) and the operational principles (values) that will steer its priorities and decision
making.

Develop a process to educate employees during new employee orientation and communicate
the mission, vision, and values as a first step.

2. Identify Critical Success Factors (CSF)

Critical success factors help an organization focus on those things that help it meet objectives and
move a little closer to achieving its mission.

These performance-based measures provide a gauge for determining how well the organization is
meeting objectives.

Some example CSF:

 Financial Performance
 Customer Satisfaction
 Process Improvement
 Market Share
 Employee Satisfaction
 Product Quality

3. Develop Measures and Metrics to Track CSF Data

Once critical success factors are identified, there need to be measurements put in place to monitor and
track progress.

This can be done through a reporting process that is used to collect specified data and share
information with senior leaders.

For example, if a goal is to increase customer satisfaction survey scores, there should be a goal and a
measure to demonstrate the achievement of the goal.

4. Identify Key Customer Group

Every organization has customers. Those that understand who the key customer groups are can create
products and services based on customer requirements.

The mistake a lot of organizations make is not acknowledging employees as a key customer group.

Example Key Customer Groups:

  Employees
 Customers
 Suppliers
 Vendors
 Volunteers

5. Solicit Customer Feedback

The only way for an organization to know how well they are meeting customer requirements is by
simply asking the question

Create a structured process to solicit feedback from each customer group to identify what is important
to them.

Organizations often make the mistake of thinking they know what is important to customers and ask
the wrong survey questions. This type of feedback is obtained through customer focus groups.

6. Develop a Survey Tool

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

For example, customers might care more about quality than cost but if you are developing a product
and trying to keep the cost down and skimping on the quality, you are creating a product that might
not meet the needs of the customer.

7. Survey Each Customer Group

Create a customized survey for each customer group. This survey will help to establish baseline data
on the customers’ perception of current practice.

Now you will have a starting point for improvements and will be able to demonstrate progress as
improvement plans are implemented.

8. Develop Improvement Plan

Once the baseline is established you should develop an improvement plan based on customer
feedback from each group.

Improvement plans should be written in SMART goals format with assignments to specific staff for
follow-through.

Goals May Include Some of the Following:

 Process improvement initiatives: such as customer call hold times

 Leadership Development: Walk-the-Talk
 Management Training/Development: How to manage employees in a quality environment
 Staff Training/Development: Customer Service
 Performance Management: Setting expectations, creating job descriptions that support
the vision and holding staff accountable.
9. Resurvey

After a while (12-18 months), resurvey key customers to see if scores have improved. Customer needs
and expectations change over time so being in-tune to changing needs and expectations is critical to
long-term success.

10. Monitor CSF

It is important to monitor CSF monthly to ensure there is consistent progress toward goals. This also
allows for course correction should priorities and objectives change during the review period.

11. Incorporate Satisfaction Data into Marketing Plans

Once you’ve achieved some positive results with your satisfaction data, use it as a marketing tool!

A lot of successful organizations miss the boat by not letting others know what they do well.
Customers want to know how an organization’s internal processes work, especially if those processes
help to deliver an outstanding product or service!

12. Technology

Make sure technology is user-friendly and supports targeted improvements. For example, a website
should be easy to navigate as well as easy to find (SEO) and the content should be easy to understand.

Final Thoughts

Make sure employees understand the vision as well as their role in supporting it. Look for ways to
ensure that all internal processes are standardized and that employees receive the training to
understand the standardization.

Successful quality initiatives require ongoing Senior Leadership sponsorship and support through the
structure, process, and staff transitions. Designated resources are also critical in supporting these
endeavors.2

Strategic Planning

Strategic planning is the process of documenting and establishing the direction of your small
business—by assessing both where you are and where you're going. The strategic plan gives you a
place to record your mission, vision, and values, as well as your long-term goals and the action, plans
you’ll use to reach them. A well-written strategic plan can play a pivotal role in your small business’s
growth and success because it tells you and your employees how best to respond to opportunities and
challenges.

Despite the benefits of having a strategic plan in place, a growing number of small business owners
aren’t focusing on the long-term strategies of their businesses. In a 2018 Constant Contact
survey of 1,005 small business owners, 63% said they plan only a year (or less) in advance.

If you’re one of these small business owners, it’s not too late to think differently. Your future success
depends on effective strategic planning. It’s a process of looking ahead that should involve your entire
business, and the discussions can lead to meaningful changes in your business. Strategic planning
consists of analyzing the business and setting realistic goals and objectives. This leads to the creation
of a formal document that lays out the company’s views and goals for the future.3

What does strategic planning look like? Its most basic formal requirement is a series of discussions
and decisions among key decision-makers and managers about what is truly important for the
organization. And those discussions arc the big innovation that strategic planning brings to most
organizations because in most organizations key decision-makers and managers from different levels
and functions rarely get together to talk about what is truly important. They may come together
periodically at staff meetings, but usually to discuss nothing more important than, for example,
alternatives to the organization’s sick leave policy. Or they may attend the same social functions, but
there, too, it is rare to have sustained discussions of organizationally relevant topics.

The process consists of the following eight steps:

1. development of an initial agreement concerning the strategic planning effort. The agreement should
cover the purpose of the effort; preferred steps in the process; the form and timing of reports; the role,
functions, and membership of a strategic planning coordinating committee; the role, functions and
membership of the strategic planning team; and commitment of necessary resource to proceed with
the effort.
2. IdentI$catiotz and clart3cation of mandates. The purpose of this step is to identify and clarify the
externally imposed formal and informal mandates placed on the organization. These are the musts
confronting the organization. For most public and non-profit organizations these mandates will bc
contained legislation, articles of incorporation or charters, regulations, and so on. Unless mandates arc
identified and clarified two difficulties arc likely to arise: the mandates are unlikely to be met, and the
organization is unlikely to know what pursuits are allowed and not allowed.
3. Development and clar{fication of mission and values. The third step is the development and
clarification of the organization’s mission and values. An organization’s mission-in tandem with its
mandates- provides its raison d’ltue, the social justification for its existence. Before the development
of a mission statement, an organization should complete a stakeholder analysis. A stakeholder is
defined as any person, group or organization that can place a claim on an organization’s attention,
resources or output, or is affected by that output. Examples of a government’s stakeholders arc
citizens, taxpayers, service recipients, the governing body, employees, unions, interest groups,
political parties, the financial community, and other governments.
In the simplest form of stakeholder analysis, the organization identifies its stakeholders and their
‘stakes’ in the organization, along with the stakeholders’ criteria for judging the performance of the
organization. The organization also explores how well it does against the stakeholders’ criteria. Once
a stakeholder analysis is completed, the organization can develop a mission statement that takes key
stakeholder interests into account.
4. External environmental assessment. The fourth step is the exploration of the environment outside
the
organization to identify the opportunities and threats the organization faces. Political, economic,
social and technological trends and events might be assessed, along with the nature and status of
various stakeholder groups, such as the organization’s customers, clients or users, and actual or
potential competitors or collaborators.
5. Internal environmental assessment. The next step is an assessment of the organization itself to
identify its strengths and weaknesses. Three assessment categories include-following simple systems
model-organizational resources (inputs), present strategy (process) and performance (outputs).
Unfortunately, most organizations can tell you a great deal about the resources they have, much less
about their current strategy, and even less about how well they perform. The nature of accountability
is changing, however, in that public and non-profit organizations are increasingly held accountable for
their outputs as well as their inputs. A stakeholder analysis can help organizations adapt to this
changing nature of accountability because the analysis forces organizations to focus on the criteria
stakeholders use to judge organizational performance. Those criteria are typically related to output.4
For example, stakeholders are increasingly concerned with whether or not state-financed schools
are producing educated citizens. In many states in the United States, the ability of public schools to
garner public financing is becoming contingent on the schools’ ability to demonstrate that they do an
effective job of educating their students. The identification of strengths, weaknesses, opportunities
and threats-or SWOT analysis-in Steps 4 and 5 is very important because every effective strategy will
build on strengths and take advantage of opportunities, while it overcomes or minimizes
weaknesses and threats.
6. Strategic issue identl3cation. Together the first five elements of the process lead to the sixth, the
identification of strategic issues. Strategic issues are fundamental policy questions affecting the
organization’s mandates; mission and values; product or service level and mix, clients, users or
payers, cost, financing, the management or organizational design. Usually, it is vital that strategic
issues bc dealt with expeditiously and effectively if the organization is to survive and prosper. An
organization that does not address a strategic issue may bc unable to head off a threat, unable to
capitalize on an important opportunity or both.

7. Strategy development. In this step, the strategies are developed to deal with the issues identified in
the
previous step. A strategy is a pattern of purposes, policies, programs, actions, decisions and/or
resource allocations that define what an organization is, what it does and why it does it. Strategies can
vary by level, function and time frame.
This definition is purposely broad, to focus attention on the creation of consistency across
rhetoric (what people say), choices (what people decide and are willing to pay for) and actions (what
people do). Effective strategy formulation and implementation processes will link rhetoric, choices
, and actions into a coherent and consistent pattern across levels, functions and time.

8. Description of the organization in the future. In the final (and not always necessary) step in the
process, the organization describes what it should look like as it successfully implements its strategies
and achieves its full potential. This description is the organization’s ‘vision of success’. Few
organizations have such description or vision, yet the importance of such descriptions has long been
recognized by well-managed companies and organizational psychologists.’ Typically included in
such descriptions are the organization’s mission, its basic strategies, its performance criteria, some
important decision rules, and the ethical standards expected of all employees.

Strategic Management

Strategic management is the ongoing planning, monitoring, analysis and assessment of all that is
necessary for an organization to meet its goals and objectives. Changes in the business environment
require organizations to constantly assess their strategies for success. The strategic management
process helps organizations take stock of their present situation, chalk out strategies, deploy them and
analyze the effectiveness of the implemented management strategies.

Strategic management concepts

Strategic management is predicated on an organization's clear understanding of its mission, or the

purpose for existing; its vision for where it wants to be in the future; and the values that will guide its
actions. It requires a commitment to strategic planning, the subset of business management that
involves an organization's ability to set both short- and long-term goals and plan the strategic
decisions, activities and resource allocation needed to achieve those goals.

A process for managing an institution's strategies helps organizations make logical decisions and
develop new goals quickly to keep pace with evolving technology, market, and business conditions.
Strategic management can, thus, help an organization gain competitive advantage, improve market
share and plan for its future.5
The process of strategic management includes goal setting, analysis, strategy formation, strategy
implementation, and strategy monitoring. Let’s take a look at how each of these steps ties into the
overall strategic management process.
Goal Setting
The first part of strategic management is to plan and set your goals. Set the short- and long-term goals
of the organization and make sure that these are shared with all members of the organization. Explain
and share how each member of the team will have an impact on the organization reaching this goal.
This will help give each member of the team a sense of purpose and will give their job meaning.
Analysis
During this stage of the process, it is important to gather as much information and data as possible.
This information will be integral to creating your strategy to reach your goals. This step of strategic
management entails becoming aware of any issues within the organization and understand all of the
needs of the organization.
Strategy Formation
In this strategic management step, you will use all the intelligence and data you have gathered to
formulate the strategy that you will use to reach whatever goal you set. Identify useful resources you
have, and also seek out other resources you will need to set up your strategy.
Strategy Implementation
This is arguably the most important part of the entire strategic management process. At this point,
each member of the team should have a clear understanding of the plan and should know how they
play a part within it. This is the stage where your strategy is put into action.
Strategy Monitoring
During this stage, your strategy will already be in play. At this point, you should be managing,
evaluating, and monitoring each part of your strategy, and ensuring that it aligns with the end goal. If
it does not, this is the time where you would make tweaks and adjustments to strengthen the overall
plan. This is the stage where you will track progress and have the opportunity to deal with any
unexpected shifts in the strategy.6
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