Economic Calculation and Managerial Decisions: A Misesian Examination of the Successes and Failures of Total Quality Management (original) (raw)
Related papers
Theorizing TQM: An Austrian and Evolutionary Economics Interpretation
Journal of Management Studies, 2000
Born out of management practice, the principles of TQM (total quality management) have had a profound and unparalleled impact on modern business history. However, as a body of practical knowledge, TQM has been largely atheoretical. As a consequence, this important management philosophy has remained amorphous and shrouded in considerable conceptual haziness and ambiguity. Recent theorizing, primarily emphasizing the application of organizational behaviour theories to TQM, has begun to provide greater clarity, but much work remains to be done. This paper attempts to contribute to this nascent theory-building literature by employing theory from market process economics (MPE), namely, Austrian and evolutionary economics, which explains how processes of dynamic change, adaptation, and learning are driven by entrepreneurial creativity. We contend that the patterns in this body of theory match, to a remarkable degree, the patterns of practical knowledge contained in the TQM literature. We demonstrate this 'pattern-matching' by showing that MPE effectively provides the theoretical underpinnings of TQM's three main principles-customer focus, continuous improvement and teamwork-as well as the respective TQM topics of customer perceptions, adaptation in dynamic environments, and knowledge creation. Having established MPE as a credible theoretical lens for interpreting TQM, it can be used to clarify fuzzy areas that have remained in the TQM literature with the potential to take us beyond what we know now. We illustrate this with three examples that show how we can resolve debates in TQM over incentive systems, recognize that TQM embraces methodological pluralism in the collection and analysis of data, and highlight hidden dangers that attend benchmarking. While MPE has no monopoly on theoretical interpretations of TQM, it is unique in its ability to comprehensively cover the incredible breadth of this practical body of knowledge, and in its interpretation of TQM as a dynamic economic endeavour.
On the Pitfalls of Total Quality Management: A literature evaluation from the managerial perspective
Eurasian Journal of Higher Education, 2021
As a management philosophy and a set of guiding principles Total Quality Management (TQM) aims an effective use of whole resources of an organization and contributes an organization to achieve its objectives. Since the philosophy of TQM was developed, TQM has been attracting the attention of academics and managers. Though there is a large number of literatures about success stories and benefits TQM, many TQM implementation programs fail because of various reasons. Because implementation of TQM is not without difficulties and there is no easy way to be successful. The main objective of the article is to present pitfalls of implementation of TQM based on reviewing the literature. It is asserted that obstacles to a successful implementation of TQM are managerial, not individual. The article may be useful for managers and practitioners to avoid pitfalls of implementing TQM.
Impact of Total Quality Management (TQM) on Profitability and Efficiency of Baldridge Award Winners
2007
N recent years, US manufacturers have shifted their focus from evaluating short-term measures to measures based on quality. Total Quality Management (TQM) movement was led by the Japanese electronic and auto goods manufacturers. This change in focus was due to the fact that the companies focusing on quality were more profitable in the long run. Baldridge Award recognizes the achievement of excellence in Quality. Our paper compares the performance of Baldridge Award winners to their counterparts in similar industry. Overall, the findings show that increase in earnings and sales growth for Baldridge Award winners is more that for the control group.
Indonesian Interdisciplinary Journal of Sharia Economics (IIJSE)
The study aimed to determine the effect of Total Quality Management (TQM) on quality cost efficiency and managerial performance and its implications on company performance. In the research, the researchers involved 100 companies in Indonesia. The analysis used is a structural approach to the Equation Model (SEM) assisted by the Smart PLS application. The results showed that there was a significant positive effect between total quality management, quality cost efficiency, managerial performance, and total management quality on company performance mediated by managerial performance. The amount of the r square of the company’s performance variable is explained by the total quality management, quality cost efficiency, and managerial performance of 88.9%.
TQM- terrific quality marvel or tragic quality malpractice
2005
Total Quality Management has seen a tremendous rise of popularity in the eighties and nineties. However, questions of effectiveness, utility and use of TQM arose among many people, practitioners as well as academics. In this paper, the lack of common interpretations when discussing TQM is emphasised, based on literature study. TQM should not be rejected as a whole if one or even if many applications fail. TQM should however be applied with considerable consideration of the specifics of the target organization, the purpose of the organization, and the purpose of applying TQM. 2
Impact of Total Quality Management in Productivity
Eonomic affairs, 2023
The goals of the study are to draw conclusions about the use of total quality management to increase the efficiency of the functioning of companies (especially in developing countries), and to assess what indicators of their performance it affects. The main methods in the framework of the study can be considered analysis, modelling, formalization, abstraction. The paper describes the essence of total quality management, its philosophy, and application features. Also, a statistical analysis was carried out on the basis of data from American enterprises, which assessed some main characteristics of the activities of enterprises using total quality management and not. A similar study was conducted for enterprises in some developing countries, in which the main indicators were revenue, net profit, and asset growth rates. During the analysis, the author came to the conclusion that the application of the overall quality management strategy increases the overall efficiency of the functioning of companies by increasing the growth rate of net profit. HIGHLIGHTS m In modern conditions of the functioning of the economy, competition between enterprises is becoming increasingly fierce.
TQM and performance: Is the relationship so obvious?
Journal of Business Research, 2011
The aim of this study is to explore more fully the relationship between total quality management (TQM) and firm performance, taking TQM as an internally consistent system of practices. The paper tests the link between the two variables using the universal approach, analyzes whether the most competitive firms are those adopting TQM, and tests for an isomorphic effect on other firms. The study uses a sample of Spanish firms that have received TQM prizes at the national or regional level between 1997 and 2003 and a control sample for comparison. The findings indicate that in the absence of any evidence to confirm the universal hypothesis, TQM pioneers experience performance gains, because of the early implementation of the system; however, late adopters do not experience similar results. Firms using a TQM system are not necessarily better than their counterparts are, before putting the system into action. One important aspect of the contribution of this study is of a methodological nature, since it uses panel data, which takes into account the unobservable heterogeneity between individuals and the dynamics of firms' financial variables.