Total Quality Management- Assignment 1 Summer 2011

Total Quality Management- Assignment 1 Summer 2011

Q1- Describe organization you know or have worked for. How effective was the organization? How were you able to draw that conclusion? In todays highly competitive global marketplace, a company that excels is one that continually strives to identify and focus critical to its customer and improve its processes in order to provide the highest quality product or services possible. For this reason companies has variety of strategies that can be used to enhance their position in market. Creating an effective organization requires an understanding of what makes an organization tick. Meezan Bank Limited, a publicly listed company, is the first and largest Islamic Bank in Pakistan. Meezan Bank aims to fulfil its prime objective of providing customers accessibility and convenience, within an atmosphere and culture of dedicated service and recognition of their needs. In order to be more effective MBL must know that where it stands. Knowing the current level of performance provides a foundation on which to stand when developing strategic plans for future. To be effective MBL focuses on its key factor i.e. to provide its customer with product and services. It has customer oriented approach. Besides that it has also maintained a system approach, emphasizing the improvement of system and processes that enables MBL to provide better product and services to its customers. It has adopted many new methods of managing in order to establish a customer focus and encourage management. It provides better training and utilizes continuous improvement through prevention of defects and improvement processes. In order to be more effective MBL constantly ask their customer suggestions. As we know that an effective organizations provide greater value to their customers and look ways to delight its customers more than their competitors. It concentrates more on what is important. Meeting both their internal and external customer needs and reasonable expectation, encourage team work, maintaining long term continuous improvements etc. Meezan Bank Limited is focusing on all these facts and is finding better solutions rather than faults. Every individual working there is involved in the process of creating and maintaining an effective organization. Q2- How would you measure the relative overall organizational effectiveness of any organization? Understanding organizational goals and strategies, as well as the concept of fitting design to various contingencies, is a first step toward understanding organizational effectiveness. Organizational goals represent the reason for an organizations existence and the outcomes it seeks to achieve. Organizational effectiveness is the degree to which an organization realizes its goals. In other organizations, efficiency and effectiveness are not related. An organization may be highly efficient but fail to achieve its goals because it makes a product for which there is no demand. Overall effectiveness is difficult to measure in organizations and thats what is faced by Meezan Bank Limited. Its one of the leading Islamic Bank in Pakistan and performs many activities simultaneously. Managers working there determine what indicators to measure in order to gauge the effectiveness of their organization. In order to measure effectiveness they use indicators such as customer delight and employee satisfaction.

Total Quality Management- Assignment 1 Summer 2011

There are number of approaches to measuring effectiveness of MBL which are further discussed as: Goal Approach Resource based Approach Internal Process Approach Balanced Effectiveness Approach Stakeholder Approach

Goal Approach: The goal approach to effectiveness consists of identifying an organizations output goals and assessing how well the organization has attained hose goals. This is a logical approach because organizations do try to attain certain levels of output, profit, or client satisfaction. The goal approach measures progress toward attainment of those goals. The goal approach is used in MBL because output goals can be readily measured. Business firms typically evaluate performance in terms of profitability, growth, market share, and return on investment. However, identifying operative goal and measuring performance of an organization are not always easy. Since MBL have multiple and conflicting goals, effectiveness often cannot be assessed by a single indicator, high achievement on one goal may mean low achievement on another. The full assessment of effectiveness should take into consideration several goals simultaneously. Taking this thing in mind MBLs managers tracks measurements in four goal areas; financial performance, customer service and satisfaction, internal process, and innovation and learning. Resource Based Approach: The resource based approach looks at the input side of the transformation process. It assumes organizations must be successful in obtaining and managing valued resources in order to be effective. Obtaining and successfully managing resources is the criterion by which organizational effectiveness is assessed. Effectiveness according to the resource-based approach encompass the following dimensions: Bargaining Position: The ability of MBL to obtain from its environment scarce and valued resources, including financial resources, human resources, knowledge, and technology. The abilities of the MBLs decision makers to perceive and correctly interpret the real properties of the external environment. The abilities of managers to use tangible (e.g. people) and intangible (e.g. knowledge, corporate culture) resources in day to day MBLs activities to achieve superior performance.

The ability of MBL to respond to changes in the environment.

Total Quality Management- Assignment 1 Summer 2011

Al though the resource based approach is valuable when other measures of effectiveness are not available, it does have shortcomings. For one thing, the approach only vaguely considers the MBLs link to the needs of customers in the external environment. A superior ability to acquire and use resources is important only if resources and capabilities are used to achieve something that meets a need in the environment. Internal Process Approach: In the internal process approach, effectiveness is measured as internal MBLs health and efficiency. MBL has a smooth, well oiled internal process. Employees are happy and satisfied. Departmental activities mesh with one another to ensure high productivity. This approach does not consider the external environment.

There are seven indicators of an effective organization as seen from an internal process approach: Strong corporate culture and positive work climate Team spirit, group loyalty , and team work Confidence, trust, and communication between workers and management Decision making near sources of information, regardless of where those sources are on the organizational chart. Undistorted horizontal and vertical communication: sharing of relevant facts and feelings Rewards to mangers for performance, growth, and development of subordinates and for creating an effective working group Interaction between the organization and its parts, with conflict that occurs over projects resolved in the interest of the organization. The internal process approach is important because the efficient use of resources and harmonious internal functioning are ways to measure effectiveness. Today most managers believe that happy, committed, actively involved employees and positive corporate culture are important measures of effectiveness. Balanced Effectiveness Approach: The three approaches goal, resources based, internal process to MBLs effectiveness described earlier all have something to offer, but each one tells only part of the story. Some approaches try to balance a concern with various parts of MBL rather than focusing on one part. These integrative, balanced approaches to effectiveness acknowledge that MBL do many things and have many outcomes. These approaches combine several indictors of effectiveness into a single framework. They include the stakeholder and competing values approaches. Stakeholder Approach: One proposed approach integrates diverse MBL activities by focusing on MBLs stakeholders. A stakeholder is any group within or outside an organization that has a stake in the organizations performance, Creditors, suppliers, employees, and owner are all stakeholders. In the stakeholder

Total Quality Management- Assignment 1 Summer 2011 approach the satisfaction of such groups can be assessed as an indicator of the MBLs performance. Each stakeholder will have a different criterion of effectiveness because it has a different interest in MBL. The following table shows each stakeholder and its criterion of effectiveness. Stakeholder Effectiveness Criteria 1. Owners Financial return 2. Employees Worker satisfaction, pay, supervision 3. Customers Quality of goods and services 4. Creditors Creditworthiness 5. Community Contribution to community affairs 6. Suppliers Satisfactory transactions 7. Government Obedience to laws, regulations

Conclusion:

Total Quality Management- Assignment 1 Summer 2011

Q3- How are the teachings of Dr. Edward Deming, Philip Crosby and Jospeh Juran are similar? Where do they agree? All three major quality leaders have their own ideas on how quality should be measured and managed; it is clear that Deming, Juran, and Crosby all point in the same direction. Deming defines Quality is multidimensional and must be defines in terms of customer satisfaction. Quality exist to differing degrees. Crosby defines quality as Conformance Requirement and Juran says that quality is Fitness for use. Similarities exist of creating and sustaining organizational effectiveness. Each recognizes that effectives organizations must: Determine who their customers are. Determine the critical key success factors for meeting their customers need requirement and expectations. Establish effective processes that enable them to provide products and services that meet their customers needs, requirements, and expectations. Focus on measurement and improvement. Provide management with the involvement and commitment required for organizations success. To conclude, while one might at first glance think that Deming, Juran, and Crosby have different approaches to the management of quality, in the final analysis all three insist on the same basic principles. As Crosby aptly pointed out, the main difference lies in the perspective one takes. While an inherently subjective term such as quality can easily take on a multitude of definitions, it is clear that these three leaders of the quality movement are pointing in the same direction. Q4- How are the teachings of Dr. Edward Deming, Philip Crosby and Jospeh Juran are different? Where do they disagree? Deming and Juran have mainly focused on quality as seen from a customer perspective, Crosby tends to take a more narrow, management-centered view. Crosby sees many of the more nebulous statements about quality as simply extension of a very basic definition: conformance to requirements. In Crosbys view, if requirements are clearly communicated to all levels of the organization, then an attitude of "no reason for not doing it right" can be built throughout the company. Like Deming, Crosby does focus on prevention as a means to achieving quality; however, Crosby downplays the role of statistical analysis in favor of strategic planning. The numbers, according to Crosby, are guidelines and should not dictate the process. However, Crosby makes a point of mentioning that drawing comparisons between himself and other quality leaders (particularly Deming and Juran) is meaningless, as each is focusing on his own field of expertise: Deming as a statistician, Juran as an engineer, and Crosby as a manager. The difference, as stated before, lies mainly in perspective. Demings perspective is customer-driven and relies heavily on market research to determine what the customer will define as a quality product or service. Jurans, while not independent of the marketplace, is more engineering-driven, designed to translate the customers vision of quality into that which can be produced. Crosbys perspective

Total Quality Management- Assignment 1 Summer 2011

transcends both of these, taking the high-road view of management: how one achieves quality is less important at the upper management level than whether or not the goals of quality are being met, and at what cost.