Western management versus TQM

Monthly Labor Review, Dec, 1995 by Polly A. Phipps

Writing in the Sloan Management Review (winter 1994), Robert M. Grant, Rami Shani, and R. Krishnan argue that the assumptions and theories underlying total quality management (TQM) are incompatible with the economic model of the firm that underlies western management practices.

According to the authors, TQM differs from conventional practices in several ways. First, it is developed by industrial engineers and based in statistical theory, while conventional management practices are developed at leading business schools and based on microeconomic theory. Second, TQM is international in origin and has been disseminated by middle management and smaller companies, while new innovations in western management practices are usually developed in the United States and disseminated from the top down by leading industrial companies.

Grant, Shani, and Krishnan argue that TQM requires major changes in management practices, including work and organizational redesign, a redefinition of managerial roles, and changes in organizational goals. In contrast to TQM, with its primary objective of customer satisfaction, maximization of profit or shareholder wealth takes priority in the economic model of the firm. The authors argue that the top-down strategic planning, financial control systems, and active asset management deaf to the economic model inevitably conflict with quality improvement in production operations and bottom-up change. Companies that have obtained long-lasting performance with TQM have let programs drive system-wide change; companies that allow other strategic initiatives to take precedence have not achieved similar benefits, and in most cases, the programs ultimately fall apart.