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Literature Review on models used in TQM implementation

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Assignment:

The assignment is literature review based only. No need for any field
or first order data collection. It consists of two parts (A and B) as
follows:

A) Literature review [14 marks]: Select one of the following models
used in TQM implementation and write an essay (around 1500 words),
from published literature and reliable resources, focusing on the
principles used, practical perspectives of the implementation
(including pros and cons), and the extent of its use in our region
(form the available published resources, if any).

1. Balanced Scorecard (BSC)

2. Malcolm Bridge National Quality Award (MBNQA)

3. European Framework for Quality Management (EFQM)

B) Reflection [6 marks]: reflecting on the literature about the
selected topic in Part A, please discuss the following points from
your own perspectives (around 500 words):

1. As a top executive, in a public or private organisation, what will
be your focus areas in the implementation of such tool?

2. how the modern information technology can support the
implementation of such tool?

Note: Please observe plagiarism rules and referencing standards and
styles throughout!

Solution
Part A

Recent years have witnessed increased interests towards systems for integrated measurement of performance and control systems. Balanced Scorecards (BSC) and Total Quality Management (TQM) are philosophies in management that its discussion has been widely discussed in both business and academic world. TQM forms a philosophy that offers the addition of value to customers effectively and increases profits. BSC, on the other hand, is a performance measurement tool and is a method of strategic management with four perspectives in achieving the success of a company (Angel et al., 2014). BSC also incorporates non-financial measures of performance and the objectives that drive towards improving performance.
The main aim of the paper is to make a comparison of the contents in BSC and TQM by building a hierarchy of concepts between the two concepts of management. Both objectives and goals of BSC and TQM should be most similar. The leading efforts in this paper concentrate on the presence of combined vision of possibilities in using BSC as a tool in the implementation of TQM.
Hoque (2014) argues that the usage of BSC comes from a natural follow-up of the implementation of TQM in a sense that while TQM is viewed as an initiative that is strategic, BSC forms a system that provides information that supports the process of decision making while undertaking the evaluation of the strategic initiative. Pimentel & Major (2014) explain that the use of both financial and non-financial measures of performance, Balanced Score Cards approach concentrates on sets of integrated ideas of strategic management that assist in the appraisal of the performance of an organization while looking at four perspectives: the customers, growth and learning, financial perspectives, and internal or processes of the business.
Although this concept of balanced scorecards is not new, researchers argue that using this approach gives great benefits to organizations. BSC assists organization in the translation of its strategies and visions to form measures for operation. It also performs the task of communicating the strategies across all the organizational levels. Thus, there is an improvement in communication through goal setting and the linking of rewards to performance. It further combines strategic planning operational budgeting by allocating resources among all the strategic plan’s management initiatives. About this, a BSC provides room for learning and feedback.
Given that strategies have been coupled with objectives and their measurement becoming strategic management evaluation component, this gives room for learning whether strategies are working of even if changes are needed to be made. Pimentel & Major (2014) also comments that TQM organizations should apply BSC with an aim of identifying the specific multidimensional, financial and non-financial, indicators that help in motivation and rewarding workers that have achieved the perceived outcomes. They should also be encouraged to give feedback on areas that need to be improved.
Andjelkovic & Dahlgaard (2013) acknowledges that worldwide competition directs firms into the enhancement of performance through the adoption of TQM and advance the notion that it should be developed together with systems of evaluation of performance with specific measures on processes of manufacturing. Lin et al., (2013) have found that gains in performance emerge from complementarities between JIT and TQM and their specific features of systems of accounting management. They further maintain that there is a possibility that a key reason some firm has not achieved improvement in performance after implementing TQM and JIT relies majorly on an accounting system that is inappropriate.
On the other hand, those who adhere to BSC claim that its suitability is best in the implementation of any strategy. Wu (2012) argues that a firm with TQM relies on a BSC-like system for performance management to achieve performance improvement in the long-run. Literature proposes that there should be linkages between management control systems and strategy and matching the two congruently is a key to improved performance. The performance measurement system should encourage actions that are linked to the strategy of the organization. Failure to that, the strategic control system can deter performance.
Concerning the relatedness of BSC and TQM, Lin et al., (2013) explains that the four dimensions of BSC contribute to the effectiveness of TQM plans. The systems in BSC integrate a large range of indicators of performance, whether financial or non-financial that its combination can give managers continuous signals concerning what is important in their daily operations and which area requires directed efforts. Achieving such strategic goals requires TQM firms to perform implementation of BSC to identify the relevant multidimensional, financial and non-financial, indicators for employee motivation and reward for an achievement of desirable outcomes. The achievement of TQM relies greatly on employee empowerment.
Strategic management accounting literature put forward those customary accounting systems does not support the key players of quality and its evaluation. It suggests that management control systems should change to pave the way for TQM. The traditional accounting chains the analysis of cost and production but does not allow for problem solving and quality analysis (Molina et al., 2014). The main reason behind this is that quality is supported by non-financial factors. These factors can include the design of the products, how the process is designed, deliveries that are prompt and focus on rework.
Wu (2012) identified that the achievement of a balance demands that managers perform well on varied dimensions. It recognizes that managers need to focus greatly on financial and non-financial measures to achieve the goals of the organization at the strategic and corporate business unit levels. Given the traditional financial focus, the executive is not capable of adopting a holistic view of the relationship between their actions and organizational tactical goals’ attainment.
Views are also there that measures that are non-financial measures of performance are better off compared to financial performance. The non-financial measure should, therefore, complement the financial measures towards supporting the TQM. Both objectives and goals for the non-financial issue can be put in place and gauges used in providing feedbacks and rewards. BSC with its stress on complimenting financial information, therefore, supports TQM.
Perkins & Remmers (2014) argue that pursuing continuous quality improvement requires organizations to make an identification of workers’ cognitive needs with an aim of creating shared values approach to quality. Identifying the cognitive needs for customers helps in understanding their buying behaviors. Succeeding requires the firm to do an alignment of the customers’ values cognitive needs and the available resources. The force behind the philosophy of TQM is that the management of quality has to be done in from the start and achieving quality standards plus improvement is the duty of all the stakeholders. From the above perspective, it is important for firms in TQM to put in place a relevant strategic management control system such as Basic Score Cards. Therefore, a relationship exists between practices of TQM and BSC.

BSC and Performance
Hansen & Schaltegger (2014) contends that BSC can affect performance positively because of its capability of providing signals continuously and the motivation of breakthrough improvement in important activities in important areas such as the product itself, the processes, the development of the market and the customer. Furthermore, BSC can give continuous signals given the incorporation of both financial and non-financial measures. The key aspect of financial measures is to provide information about performance in the past. It is an indication of whether the company’s strategies, their implementation, and executions are impacting positively on improvement.
Non-financial measures, on the other hand, give information on success drivers in the future. Madsen & Slåtten (2013) also argued that BSC can work as a pillar of success in the future because a combination of customers, finance, innovation and other internal processes assists managers in the understanding of the varied interrelatedness and can assist the executives in improving solving of problems and in making strategic decisions. A scorecard that is balanced combines outcome measures and measures that give a description of resource utilized or the activities that were performed. Customarily, control of management puts emphasis on decentralization of profits and its goals thus increased focus on outcomes.
Creating focus only on short-term profits through decentralization can lead to failure of presenting a larger part of the larger picture of operations. Wynder (2013) argued that given profits as a good measure of performance, it does not fully inform on managing an operation, and the best scorecard will make a combination of outcome measures together with drivers of performance. BSC has been adopted by many organizations and their contents and formats meet several needs of the management. Scorecards act as protectors against sub-optimization through forceful consideration to top-management in considering all the key operational measures altogether. It acts as an alert to senior management in improving one area in achieving it at the expense of another or comparing it to an objective that is being made badly.
A balanced scorecard assumes that workers can accept any action essential to achieving goals. A BSC is more than a technique for measuring performance but a tool in the management system. The offering of a template as a sample that is used by all the incorporated firms ensures that the specified BSC should be tailored to every company specified. The result of the scorecards indicated should be driven by the strategy of the firm given that it should not entail indicators’ listing. BSC has been viewed as to helping executives to measure how divisions and the business units that are strategic within the organization create value for the current and prospective customers (Lee et al., 2013).
BSC further controls how the companies relate to the internal structure and investing in the workforce, the systems and how to perk up the drivers of the business for performance in the future. Several authors have come up with criticism of the philosophies of BSC. The ideas of BSC have been viewed to be generalized, and they tend to ignore the culture of corporations that are complex. BSC further makes incorrect assumptions that can lead to anticipated indicators of performances that are invalid (Garengo & Biazzo 2012). Regardless of the criticisms, some scholars take BSC as a strong tool for management, and one of its main strengths is its emphasis on the linkage between performance measures and strategies of business units.
Despite some of its weaknesses, BSC forms a potentially strong tool through which the senior management ought to be encouraged to deal with the key issue of deploying the strategic intent of an organization. It mainly gives focus on the establishment of links between strategic objectives and the measures of performance. It further gives attention to measurement of component’s achievement in the promoted strategic plan of an organization

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