TQM: A change management model for market orientation

Abstract

The regulation-protected environment of electric utilities has undergone massive changes to open market competition. The protection of the regulatory shield in the past has imposed obstacles and barriers for many electric utilities to change their business emphasis from internal focused to market orientation (MO). In order to face the new challenges, electric utilities have incorporated a large variety of piecemeal change management programmes to change their business emphasis. Many of them have experienced a lot of difficulties in fundamentally transforming themselves from their old ways of doing business. TQM philosophy and principles, targeting the generation of holistic and systematic changes for customer satisfaction, were suggested to be used in guiding the change process in electric utilities towards market orientation through continuous quality improvement. To investigate the possibility of using TQM as an integrative approach to guide market orientation change for electric utilities, an internationally-based questionnaire survey was conducted. Results of the study indicated that the influence of TQM applications on market orientation is positive and significant, and that the external business environment seems to have little interaction on the effectiveness of using TQM for change towards market orientation. TQM is empirically found to be a potentially effective approach for electric utilities to change to market orientation. The literature has so far been focused extensively on the effects of market orientation on business performance, organization innovativeness and product development performance etc. This paper investigates the mechanism to transform organizations towards market orientation.