Perception and Development of Total Quality Management in Small Manufacturers: An Exploratory Study in China

Abstract

Introduction The economic achievement of China during the last two decades has been impressive. The manufacturing industry has made the most significant contribution to the spectacular economic growth in China (Lee and Yu 1997). However, the Chinese manufacturing industry is now in a critical stage of its development. The business environment in global markets is very turbulent, reflecting keen competition both in price and in product advantages. Manufacturers in the developed nations provide high-quality products at reasonably low prices, while other developing countries' manufacturers are challenging Chinese firms seriously by producing the similar products at a lesser cost. Furthermore, consumers from all over the world are becoming more quality-conscious. The new wave of quality awareness and emphasis has given a significant impact on business operations in the world. These recent developments force Chinese firms to consider quality management practices to enhance the quality of their products. China must move away from its reactive, low-cost-based strategy that relies on cheap labor. Chinese firms must develop a new competitive edge based on quality. To meet these challenges, Chinese firms have been paying more attention to quality management (Lee and Yu 1997). Actually, many Chinese firms now try to implement quality management practices, such as total quality management (TQM), as a part of their manufacturing/business strategies (Lee and Zhou 2000; Zhao, Young, and Zhang 1995). Investment for quality improvement is being made mostly in large corporations in China. However, there are few studies about TQM implementation in Chinese small manufacturing firms even though most of the Chinese manufacturers are small or medium-sized firms (Lee and Yu 1997). Small firms are still dominant in many areas, such as services, trade, construction, textiles, and satellite suppliers to the larger firms in China. This research will provide analysis of TQM implementation in Chinese small manufacturing firms by investigating how TQM was introduced to them and how it was perceived. It examines the present status of TQM practices and its development and impacts on organizational performance in Chinese small manufacturing firms and makes suggestions for the successful implementation of TQM. Even though this study is focused on Chinese small manufacturing firms, most of the considerations and suggestions can be applied to small manufacturing firms in other countries. Although the United States Small Business Administration (SBA) defines a manufacturing firm with fewer than 500 employees as a small firm, this study considers firms to be small in size if they employ less than 300 workers. This definition of small business size is based on Lee and Yu (1997). Applicability of TQM to Small Manufacturers There are several articles published on the applicability of TQM and its practices in small firms (Lee 1998; Ahire and Golhar 1996; Price and Chen 1993; Yam and Tang 1993). Most of these studies focus on U.S. or Japanese small firms, with little thought being given to their applicability to small manufacturing firms in developing countries, such as China. Small firms are very different from large ones in many areas, such as management style, production processes, available capital, purchasing practices, inventory systems, and negotiating power (Lee 1998; Ahire and Golhar 1996). However, some studies (Lee 1998; Ahire and Golhar 1996; Black and Porter 1996; Price and Chert 1993; Yam and Tang 1993) suggest application of TQM to small firms by identifying more attractive conditions in small firms than in large ones. Some of the TQM elements and programs appear to be more compatible with small manufacturers. Some TQM benefits may be relatively more significant to small firms. In addition, they indicated that most small firms are suitable for applying TQM because of certain basic features of TQM. …