OVERVIEW OF QUALITY MANAGEMENT Lecture# 18 TQM 1.

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OVERVIEW OF QUALITY MANAGEMENT

Lecture# 18TQM

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The link between empowerment and delegatedbudgets

• Self-managed teams have to work within an organization framework where the broad strategy and direction have already been set through leadership.

• Where the teams have autonomy is over how to make the strategy work for their particular client group.

• However, to make empowerment work, teams have to be properly resourced.

• This simple but important fact lies at the heart of the empowerment equation, although money is often the one element not delegated to teams.

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The link between empowerment and delegatedbudgets

• The move from a centrally controlled organization to a flatter structure based on teamwork is predicated on delegating sufficient resources to allow teams to make a range of significant decisions for themselves.

• Delegating responsibility for resource control give teams the wherewithal to make and take those decisions.

• Without such freedom it is difficult to make meaningful quality improvements in many situations.

• Linking quality improvement to decentralized budgeting increases the freedom of action available to staff teams.

• The move has a parallel objective to improve institutional efficiency and to provide better value for money.

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How delegated budgets can aid qualityimprovement

• Empowerment is the opportunity given to teams to decide on their own priorities for action within a specified envelope of resources and within a framework agreed with the leadership of the institution.

• In education such empowerment is often hampered by excessive controls over the command of resources, making it difficult for teams to use resources in an intelligent and creative fashion.

• Making the team a cost centre is the useful way forward. This allows the team to have greater control over curriculum design by giving them the resources to do the job.

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How delegated budgets can aid qualityimprovement

• It requires considerable trust on the part of managers as it passes power from the centre to the operational units.

• What the senior managers retain is the key quality monitoring function.

• They oversee the results of the process —retention rates, success rates and customer satisfaction rather than controlling resources.

• In a TQM organization teams have significant control over the inputs within the objectives laid down by the strategic plan, while managers monitor the effectiveness of the outcomes of the process.

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Resource allocation models

• There are a variety of ways in which financial delegation can be engineered, but the approach that is usually most effective is one that mirrors the way in which the institution itself is funded.

• This enables staff to understand institutional finances as well as those of their own unit and it helps them realize the environmental constraints under which it operates.

• There is usually a top slicing of the income to cover such central overheads as senior and support staff costs, building maintenance and central services.

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Resource allocation models

• The remainder of the income is delegated on a formula derived from the methodology on which the institution is funded.

• As most methodologies are based on the notion of ‘funding following students’, this principle is similarly applied to the funding of the teaching units.

• On the income side each unit is credited with a proportion of the funding it derives from the number of students it enrolls and teaches (in some more sophisticated models this is adjusted for drop-out and non-achievement).

• Teaching units also have to meet the total direct costs of curriculum delivery.

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Resource allocation models

• The direct costs include not just the cost of materials but also the total staffing costs involved in running programmes.

• Clearly, the difference between the income and the staff costs is available for the teaching teams to spend as they think fit (within the constraints of the financial regulations) to enable the curriculum to be delivered effectively and efficiently.

• It is usual in institutions where such models are used for teaching units to develop an annual business plan that demonstrates how the curriculum is to be delivered within the resource envelope.

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Resource allocation models

• It is the responsibility of each teaching unit to decide on the best way to deliver their programmes within the available resource after the agreement of its plan with senior management.

• Senior management make an agreement that certain clear output targets focusing on quality, completion and achievement will be reached in return for this high degree of financial autonomy.

• It is these output targets that senior management are concerned with, and they form the monitoring and accountability elements within the model.

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Links to case-loading

• Under this model, once the plan has been agreed it is the teaching unit’s decision as to how much resource is put into direct teaching, projects, tutorials, workshops, resource-based learning or any other approach to learning.

• Academic units are given the freedom to adopt new and innovative approaches if they feel it is to the students’ benefit.

• They can decide on the workloads of their staff and distribute work in ways that meet their curriculum goals rather than have staff workloads determined by senior management.

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Links to case-loading

• This is sometimes called ‘case-loading’, and refers to the approach used by many groups of professional workers to base staff workloads on professional judgements bounded only by the need to work within budget (Sallis, 1995, 1996).

• Such an approach when pursued in educational organizations allows academic units to cope with the varied and diverse features of the modern curriculum in ways that would not be practicable if traditional and hierarchical methods of resource allocation were employed.

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Links to case-loading

• This is a truly professional approach to curriculum management and one that allows the philosophy of total quality management to flourish.

• It returns the responsibility for the curriculum and students’ learning to staff teams.

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Concluding issues• Clearly, institutions that wish to go down this road will want to ask a

range of questions about the suitability of such a delegated budgetary system for their own institution.

• Because of the range of funding mechanisms it is only possible to deal with the generalities of the concept here. Issues of how management information systems cope with this form of delegated budgeting, about how inter-unit servicing is paid for, and what happens if teachers wish to reduce overall staffing or overspend their budgets, are key questions but are outside the scope of this book.

• However, what is outlined here is the underlying philosophy of a resource allocation mechanism that is workable and which gives practical effect to the key notion of empowerment in TQM.

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PROFESSIONAL MANAGERIAL ERA (1950)

TQM

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PROFESSIONAL MANAGERIAL ERA (1950)

• In our present age of market driven capitalism and futuristic knowledge driven economic markets, the decision are made and the trends are set by the professional managers.

• Unlike their predecessors, the captains of today’s business do not own their own companies.

• They must know the whole business but have control over only one small part.

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PROFESSIONAL MANAGERIAL ERA (1950)

• They must be product oriented, process conscious, financially responsible, and public spirited.

• They must be all things to all people, yet still function as only one cog in the wheel.

• If the history of management tells us anything, it is that, no matter what happens; peace or war, prosperity or famine, this world will always be in need of good managers . . . the kind who can get society from “where it is” to “where it wants to be.” Can you be one?

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What is an Organization?

• “An organization is an entity where two or more persons work together to achieve a goal or a common purpose.”

• There are so many organizations around us. Daily we visit and see many organizations, Hospitals, Colleges, Factories, Farms and Government offices. Mosque/Church is also an example of an organization. People go there and say prayers.

• Activities of praying are to achieve a certain goal.• Similarly, any unit in which two or more persons are

working together for some purpose is called an organization.

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Unit of Organization:

• People• Purpose• Process• POLCA• If there is an organization, then there must be some people. • They work as whole for a common purpose, so there must

be a defined purpose. If an organization doesn’t have any purpose, it will not survive for long run.

• To achieve the purposes by using people, the processes are needed. Without any process, you cannot achieve any type of purpose or goal.

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Unit of Organization:• If we see in our daily life, we have some goals.• For achieving these goals, we use some processes. • So that process is also obvious and important for an organization.

The last important thing for any organization is that it requires main pillars of management

• i.e. POLCA:• Planning• Organizing• Leading• Controlling• A manager must perform all theses management functions with

Assurance!

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Quality Assurance

• Quality assurance refers to any planned and systematic activity directed toward providing consumers with products (goods and services) of appropriate, along with the confidence that products meet consumers’ requirements.

• Quality assurance usually associated with some form of measurement and inspection activity has been an important aspect of production operations throughout history.

• Egyptian wall paintings circa 1450 B.C. show evidence of measurement and inspection.

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Quality Assurance

• Stones for the pyramids were cut so precisely that even today it is impossible to put a knife blade between the blocks.

• The Egyptians’ success was due to the consistent use of well-developed methods and procedures and precise measuring devices.

• Quality is, in fact, not just functional excellence of products or services, but it is about whole aspects of product characteristics.

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Quality Assurance

• Take a high quality watch produced by Company A for example.

• No matter if the craftsmanship is exceptionally high, if the production cost and sales price are so high that nobody can afford to buy such watches, no one can claim that the watch quality is truly high.

• In other words, quality assurance is not just about functional excellence, but includes all aspects of production.

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Quality Assurance

• When a company produces a product, its major tasks are to assure that its quality is beyond customers’ needs and that no defective units are delivered to customers.

• This, however, does not mean that it is acceptable for a company to produce defective units, as long as they are not delivered to customers.

• Why? Because producing non-conforming articles will bring financial loss to the company.

• In other words, if a company’s products cannot be sold in the market, it will have to bear the entire cost of production.

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Quality Assurance

• Therefore, the fewer the non-conforming articles produced, the lower the production cost, thus the lower their price.

• In this respect, it is important that not only does the company not circulate defective products in the market, but also it does not manufacture such products in the first place.

• Quality assurance is to bridge gaps in the dispersion of quality, aiming to attain the expected value.

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Quality Assurance

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Quality Assurance

• Disparity is caused by defective units, to reduce the number of defective articles means to manage the disparity (Karatsu 1995, 38).

• The causes of disparity can be found in various factors, such as raw materials, machinery conditions, and the weather.

• Quality assurance does not necessarily mean the achievement of the highest quality, but neither does it mean achieving the minimum quality that one can expect.

• It has to be value for money for both consumers and producers, where disparity suggests the ranges within the possible frequencies.

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Quality Focus Approach to Management

• “There are really only three types of people: those who make things happen, those who watch things happen, and those who say, ‘What happened?”

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Quality Focus Approach to Management

• The total quality concept as an approach to doing business began to gain wide acceptance in the west in the late 1980s and early 1990s.

• However, individual elements of the concept – such as the use of statistical data, teamwork, continual improvement, customer satisfaction, and employee involvement – have been used by visionary organizations for years.

• It is the pulling together and coordinated use of these and other previously disparate elements that gave birth to the comprehensive concept known as total quality.

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Why Focus on Quality?

• To understand total quality, one must first understand quality. • Customers of businesses will define quality very clearly using

specifications, standards, and other measures. • This makes the point that quality can be defined and

measured. • Although few consumers could define quality if asked, all

know it when they see it.• This makes the critical point that quality is in the eye of the

beholder. • With the total quality approach, customers ultimately define

quality.

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Why Focus on Quality?

• People deal with the issue of quality continually in their daily lives.

• We concern ourselves with quality when grocery shopping, eating in a restaurant, and making a major purchase such as an automobile, a home, a television, or a personal computer.

• Perceived quality is a major factor by which people make distinctions in the market place.

• Whether we articulate them openly or keep them in the back of our minds.

• We all apply a number of criteria when making a purchase.• The extent to which a purchase meets these criteria determines

its quality in our eyes.