Longitudinal analysis of quality management practices in Australian organizations

Abstract

Higher requirements for improved quality of products and services have led to three important changes in international business over the last decade: (i) the growing recognition of the strategic importance of total quality management (TQM) philosophy and methods; (ii) a major push by organizations world-wide to seek certification to the ISO 9000 quality standards; and (iii) the growing recognition and application of the Malcolm Baldrige National Quality Award, the Australian Quality Award and the European Quality Award. Despite these developments, there is still considerable confusion and frustration surrounding the applied role and business value of quality management practices in Australian industry. A review of the literature revealed a major gap in research in this area of operations/quality management. The purpose of the paper is to evaluate the results of three empirical studies conducted in 1991, 1993 and 1996 on the adoption of quality management practices in Australian manufacturing organizations. Quantitative studies were conducted primarily on large random populations of approximately 1000 manufacturing companies in Australia. The average response rate for the three studies was 30%. The data were analysed using techniques available on SPSS for Windows. Our findings show that there has been a shift in popularity in quality management practices in the Australian manufacturing industry over the last 5 years. The popularity of TQM and its related practices, such as statistical process control, quality circles, benchmarking and business process re-engineering, has decreased, while the popularity of ISO 9000 certification has increased significantly. A paradox has emerged from this finding. On one hand, business performance was found to be enhanced by the implementation of all TQM-related practices. On the other hand, ISO 9000-certified firms did not perform significantly better than firms that were not certified, and yet there has been a shift away from TQM practice to ISO 9000 certification. This raises the question: Why are managers so keen on ISO 9000 certification? The study concludes that managers are impatient with the rate of improvement of organizational performance from the implementation of quality management practices. This has led to the belief that gaining a certificate to ISO 9000 is synonymous with becoming a quality organization. This is a clear indication that managers lack understanding of the concepts and principles of quality management and are frustrated with the slow bottom-line payback from the implementation of quality management practices. Based on these findings, the paper recommends that managers should improve their understanding of quality management practices and the sources of their organization's quality performance. This will lead to quality management being perceived as a philosophy rather than as tools and techniques for problem-solving at the shop-floor level.