One major component of strategic management is Total Quality Management (TQM). TQM originated in Japan in the 50s by Americans W. Edward Deming and J. M. Juran, but became popular in many countries during the 80s. Being a structured approach which aims to boost customer satisfaction and loyalty through continuous and innovative improvement of quality, TQM is a buzzword analyzed as follows:
- Total: quality is address to any organizational member of activity
- Quality: characteristics of a product or a service that satisfy customer requirements
- Management: quality can be managed
TQM focuses on meeting customer requirements, while reducing development cycle times and product/service costs. Aiming to achieve long-term customer satisfaction, TQM necessitates the equal participation of all organizational members in the effort for continuous improvement in organizational culture, attitude and operations.
Successful TQM implementation necessitates organizational change. This involves primarily education of all organizational members in order to pursue new strategic thinking and be able to identify the customer target groups and the required production outputs. Setting true customer requirements serves as the basis for pursuing a continuous improvement strategy. In addition, the ability to identify market opportunities that would improve the positioning of the organization with the use of value adding activities is important in the process of delivering the highest value for the customer at the lowest cost. In doing so, the organization focuses on prevention and not on correction, reducing the chronic waste and variations in product/service quality. The use of Standard Operations Procedures (S.O.Ps) and structured methodology to describe a process improvement facilitates the elimination of wasteful steps. Finally, the leaders of the organization must involve all organizational members in the strategic decision-making in order to boost employee motivation and adopt a new organizational culture which would inspire the will for innovative act in a climate of trust and respect.