Total Quality Management Within The UK Service Industry Management Essay

Total Quality Management Within The UK Service Industry Management Essay Total Quality Management is an approach that has been used over the years to improve quality and customer satisfaction. The implementation of TQM involves each member of an organisation from the top management to the entire workforce. The approach was first implemented in the manufacturing industry but it was later embraced in the service industry. The UK service industry which contributes greatly to the countrys economy is among the different industries that have been using TQM to improve its performance. Sectors such as banking, transport and communication, hotel and tourism are among some of the sectors that have implemented the approach in every transaction, process and service delivered to customers. However a critical analysis of the approach used within the UK service industry portrays the inadequacy of most companies to effectively implement the approach to gain maximally from its benefits. The concept of quality in project management has been in existence for a long time though its meaning has been evolving over time. In the early part of the 20th century, quality management was viewed as the inspection of products to ascertain that they met certain standards (Reid Sanders, 2005). Later in the 1960s quality was viewed to involve the entire organisation. All functions started being held responsible for the quality of the products and services. In the 1970s competition quality came to be with companies focusing on improving quality in order for them to be competitive. Companies that were not able to meet the quality standards set did not survive the competition. The concept of total quality management was later developed and it has led companies to build on quality of their products and processes. The efforts of the members within these organisations help improve the processes, culture, products and services in order to attain the quality standards expected. The concept was first developed in the manufacturing industry but it has spread to other industries such as the services sector (Pandian, 2007). In this sector total quality management focuses more on customer services and improving their satisfaction as they are considered to be very important in the sector. Companies that are considered to be in the service industry include hospitality and tourism companies, banking, insurance and financial companies, as well as telecommunication companies among others. Satisfying the customer is the main aim of these companies. The major challenge that these companies face while trying to attain this objective is the inability to establish smooth relations between them and the customers in order to retain them for future business. The total quality management approach helps these businesses to connect with their customers at every stage of the business process and in every transaction undertaken (Pandian, 2007). This paper undertakes a study of the total quality management approach that is used in the UK services sector and provides a critical analysis of the appropriateness of the approach in comparison to the academic models. The UK Services Industry The UK services sector is comprised of trades both wholesale and retail, restaurants and hotels, the financial services, transport and communication, real estate, government services, computing and IT among other business activities and services. The industry currently dominates the UK economy and remains a vital component of the economy. In the year 2000, the industry accounted for over 70% of the gross domestic product with the private part of the industry accounting for 50% (Skipper, 2000). The industry draws a lot of attention both locally and internationally in a bid to strengthen it and develop it further. During the year 2010, the industry experienced high growth and helped to improve the recovery process of the UK economy. According to BBC News (2010) the growth of the industry helped reduce job losses and grow the economy by 0.3%. The improved performance of the industry gave most companies confidence to increase their output in order to offset some of the challenges that the industry was facing such as the high fuel prices and VAT charges. The UK government has been putting pressure on most of the industries to improve on quality to enhance performance. Some of the industries have taken this up very seriously such as the service and manufacturing industries. In the service industry the health services, financial, hotel and tourism are among some of the sectors that have embraced the TQM approach. The concepts of quality, high standards and professionalism to improve customer satisfaction have been emphasised in these sectors to enhance competition. In the early 1980s the management of the UK financial services sector focussed mainly on administrative practises and personnel control rather than focussing on the customers (Hopwood Chapman, 2008 ). However with the deregulation of the banks the sector became similar to other industries such as manufacturing. The front office and back office services were formed and these led to the management now focussing on consultant services and pure administrative functions. Various techniques and approaches of management started being introduced and implemented such as the TQM, business process reengineering and activity based costing. Increased competition and lower interest rates started to define the banks as they engaged in marketing financial products to remain profitable (Hopwood Chapman, 2008 ). Interest in non financial performance measures engaged the banks in activities and processes that increased customer satisfaction, product quality, employee morale and job satisfaction, efficiency and productivity in order to improve market share. The management has now been focussing on the front line personnel who deal directly with the customers and influenced the service quality and delivery. They rely on the customer satisfaction and loyalty to maintain their market share and profitability. The banking industry which is the largest sector in the service industry in the UK benefits a lot from the TQM approach (Domingo, 2006). However the main issue that hinders the implementation of the approach is the lack of training in customer service. Most of the people in this sector are financial people who have little or no training on how to deal with customers. The TQM approach puts the customers at the centre and focuses on improving quality in order to satisfy them. A lot of planning and management is undertaken to ensure that the service quality is continually improved. All the people in the organisation need to be involved in the TQM approach for it to succeed and quality to be improved. Bankers and other employees in the financial sectors tend to concentrate more on the money issues and neglect the customers and quality (Frick, 1997). For this reason, the organisations in the financial sectors are not able to learn and apply the valuable lessons in customer service and people management to produce world class quality services. Presently the financial sector is ranked in terms of the financial resources and other quantitative measures such as asset base, number of transactions, depositors, loans released and other performance measures (Domingo, 2006). A lot of managerial focus is put on asset management, financial ratio analysis, cash flow and spread management among others. Most of the institutions use these measures to create satisfied customers. They ensure that their objectives, measurements and systems achieve this in order to improve the satisfaction levels of their customers. Empowerment of the workers in the service industry is one of the decisions that affect the implementation of the TQM approach. Workers need to be empowered for them to make decisions that regard quality of products and services and the satisfaction of customers. Employees also need to be involved and good communication channels set up for the approach to work. In this way each and every person in the organisation is involved in the total quality management programme and they improve in the way that they undertake their jobs in order to meet the objectives set. In most of the service industries in the UK, quality tends to be measured in terms of quantitative measures rather than qualitative. Companies simply use the approach that is used by the manufacturing companies which involve quantitative measures to determine the quality standards and the levels of customer satisfaction. However in the service industry, though it is difficult to quantify the customer satisfaction levels through their smiles and reviews, companies still continue to rely on quantitative measures. They focus on how quickly the customer got the service rather than focussing on whether the service that was delivered was good and in accordance to standards set. In order to gauge their quality standards and customer satisfaction, companies in the service industry focus on the customer complaints to provide a way of reviewing themselves (Hollins Shinkins, 2006). In the UK however studies have shown that most of the customers tend to accept the poor services offered and do not complain. They however move on to look for better services elsewhere. As part of the TQM approach noting and handling complaints is considered as a starting point of dealing with poor quality standards. Management should instead be more engaged in moving on to seeking the issues that lead to the complaints and handling them before the complaints are heard from the customers (Hollins Shinkins, 2006). This will help improve the image of the organisation since the UK dissatisfied customers who do not complain tend to tell others of their dissatisfaction with the services offered. The TQM approach used by the service providers should also focus on performing beyond the customers expectations. They should go a little further and attempt to satisfy the customers in more ways. The use of mystery shoppers has been used in the UK service sectors by companies like London Underground who used mystery shoppers to determine their quality performance (Hollins Shinkins, 2006). The shoppers were given booklets which had questions which required qualitative and quantitative answers. The quantitative questions required the mystery shoppers to give scores on standards such as cleanliness while the qualitative questions required the mystery shoppers to provide their own judgement. In order for the shoppers to provide some consistency in their answers to the qualitative questions, they were provided with some training on standards to that they could make sound judgements. In the UK transport sector, the government introduced contracts which allowed the local authorities and private bus operators to form partnerships that would help improve quality (House of Commons, 2006). This arrangement allows the bus operators to engage in high quality services, improve staff training and other facilities in order to improve customer satisfaction. Efforts have also been made by the operators to improve passenger information including how the buses are run to enhance service quality. The UK domestic and international tourism markets which are worth over  £17 billion every year have been attracting visitors from all over the world (Kandampully, Mok, Sparks, 2001). The service providers have been using the TQM approach to attract and retain most of these visitors for them to compete and increase their market share globally. They have been continuously improving their services and processes as per the TQM approach while also remaining efficient and effective. One of the principles that are commonly used by these companies is the establishment of plans and targets to improve the quality of the services they offer. Innovation and service delivery is also emphasised and encouraged. The standards that the customers demand are used as objectives in the plans set as a way of improving customer satisfaction. In the sport and leisure services, a quality management initiative was established in 1996 that brought together the private and public sector professionals (Kandampully, Mok, Sparks, 2001). The initiative was formed to enhance quality improvement, share knowledge and the best practises that can be used in these services. Managers were encouraged to involve the views of the customers in their operations. To improve service performance, self evaluations and assessments were introduced as part of the initiative to allow the companies to compare themselves with the industry standards. Customer relations, facility operations, staffing, service development and reviews were improved and encouraged as part of the management issues that can help improve customer satisfaction and service quality. Total Quality Management Total Quality Management has been defined by the International Standard ISO 9000 as the management approach that is focussed on quality through the participation of all the members of an organisation (Ramasamy, 2005). The approach aims for long term success and customer satisfaction as well as additional benefits to all members of an organisation and the society at large. The approach seeks to continually improve the quality standards and process by making sure that each and every member of the organisation understands and practises their role in a way that leads to the attainment of the goals set under the approach. The benefits of this approach are numerous and include higher profits, increased customer and employee satisfaction, more business and increased amounts of goodwill from the society towards the organisations (Ramasamy, 2005). The managerial and leadership styles are also made stronger and persistent among the top level management. Training of all employees helps in developing their skills and abilities and increases their morale. The organisations also become more efficient and effective with their material and human resources as they attain their objectives. Several concepts are used in this quality management approach. The major concept involves the focus on the customer (Naidu, Babu, Rajendra, 2006). Every task, decision and process is carried out with the customer in mind. According to the approach a company needs to continually check on the attitudes of the customers. It is also part of the approach for the management and employees to do everything right at the first time in order to reduce the complaints and levels of defective work. Continuous improvement is also emphasised to allow the company to get better. Under this approach management is advised to continually improve each and every part of the organisation rather than improving all sectors by 100% at once. The workforce should also be involved in the approach through transforming the culture of the organisation to embrace quality (Chapman Hall, 1994). This will help change the attitude of everyone in the organisation and enhance excellence rather than mediocrity. Training and frequently communicating with the workforce is also encouraged in this quality management approach. Enlarging the skills of the employees allows them to handle different tasks and also do them better (Pereira, 1994). Performance measurement is emphasised in the TQM approach as it helps the company to make decisions based on the results and maintain standards as well as keeping the processes at a certain standard. Top management need to be involved in the entire process for the approach to be successful. Employees can also be given the power to make some of the decisions that are needed on the spot to improve quality and customer satisfactions. Teamwork between the management and the employees can help reduce some of the issues, conflicts and provide a balanced working environment, improve employee morale as well as reduce the roles and responsibilities between the management and the employees (Ramasamy, 2005). Analysis The total quality management approach that is used in the UK service industry has helped improve the standards of quality and customer satisfaction within the various sectors. Some of the sectors have gained profits and larger market shares with the implementation of the approach in their processes and service delivery. However most of the sectors need to implement the approach further in all of their activities while involving the employees for the successful implementation and improvement of the benefits to be attained. Companies in the service industry need to undertake proper training of their workforce and improve communication channels in order to involve each and every member of the organisation in the delivery of services and improved quality standards. The top management need to frequently interact with the customers to listen to their views and opinions which should be integrated within the company. These views should help improve the decision making process and the objectives and goals to be achieved. The welfare of the employees also needs to be looked into for the approach to work. The needs of the employees need be taken care of and their issues addressed for them to be in a position to improve their attitudes towards quality and offer their best services to the customers and to the company. Empowering the employees can also boost their morale and confidence in undertaking their roles and responsibilities. Some of the decision making should be left on the employees to improve efficiency and make the employees feel like they are part of the organisation and improve their responsibilities. The companies in the service industry should shift from quantitative performance measurement techniques and instead use qualitative measures to determine their overall performance levels. The use of customer complaints should be avoided as it is a reactive measure. The companies should focus on proactive measures to determine their performance levels and improve their services and quality standards. With these techniques the service sector in the UK will perform much better than it is doing currently and continue dominating the economy. Conclusion The service industry in the UK has been dominating the economy of the country and providing a huge GDP. The government has been emphasising on the need for the industry to improve the quality of the services in order to allow the industry to compete effectively in the international market. Some of the sectors have adopted the TQM approach in their activities and process to help them improve their quality levels as well as improve customer satisfactions. The TQM approach has brought in different benefits for the companies in the sector. However a careful analysis of the approach used in these companies highlights the hindrances that have affected the implementation of the approach. The management of these companies need to embrace this approach fully in the service industry in order to gain maximally from the benefits of TQM. Bibliography BBC News. (2010, March 3). Service Sector Growth Hits Three-Year High. Retrieved January 6, 2011, from BBC News: Chapman, Hall. (1994). Total Quality Management: the key to business improvement. London: Springer. Domingo, R. T. (2006, March 4). 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