EFFECT OF TOTAL QUALITY MANAGEMENT ON THE PERFORMANCE OF MANUFACTURING INDUSTRY (A CASE STUDY OF PZ CUSSONS PLC)

ABSTRACT

The literature on quality contains numerous case studies of successful companies and description of quality concepts and quality improvement programs. The purpose of this study is to determine the critical factor of total quality management on business performance in large organization. The instrument used in this study was developed to identity critical factors {areas} of total quality management in an organization.

Performance of the organization was measured using by subjective measured based in organization administrator’s perception of how their organization performed relative to the competition.

The findings indicate that total quality management practices such as supplier relationship; benchmarking, top management commitment and customer focus are critical factors and have a positive impact on performance of PZ Cussons Plc, Agbara.

 

 

CHAPTER ONE

1.0       INTRODUCTION

1.1       BACKGROUND OF THE STUDY

Total quality management {TQM} is considered an important catalyst in this context. This is why the TQM concept has captured the attention of all sides of commerce and industry. During the past decade quality improvement has become one of the most important organizational strategies for achieving competitive advantage. Improving the quality with which an organization can deliver its products and services is critical for competing in an expanding global market. TQM begins with the primary assumption that employees in organization must cooperate with other, in order to achieve quality for the needs of the customer.

Quality has become one of the most important factors in global competition today. Intensifying global competitive and increasing demand by customers for better quality have caused more and more companies to realize that they will have to produce quality product or services in order to successfully compete in the market place. To meet the challenge of this global revolution, many businesses have invested substantial resource in adapting and implementing total quality management {TQM} strategies.

Total quality management {TQM} is an enhancement to the traditional way of doing business. It is a proven technique to guarantee survival in world class competition. Total quality management {TQM} as a management approach of an organization is centered on quality based on the participation of all its members and aiming at long term success. This is achieved through customer satisfaction and benefits to all its members of the organization and to society. In other words, TQM is a philosophy for managing an organization in a way, which enables it to meet stakeholders’ needs and expectations efficiently and effectively without compromising ethnical values. TQM has been widely implemented throughout the world.

Many firms have arrived at the conclusion that effective TQM implementation can improve their competitive abilities and provide strategic advantage in the market place.

Several studies have shown that the adoption of TQM practices can allow firms to complete globally. Also several researchers reported that TQM implementation has led to improvement in quality, productivity and competiveness. According to a survey of manufacturing firm, the benefits of TQM are improved quality, employee’s participation and team work, working relationship, customer’s satisfaction, employee satisfaction, productivity, communication, profitability and market share.

1.2       STATEMENT OF RESEACH PROBLEM

The adoption of TQM by most organization has been hampered with due to their non-compliance with the procedure and principles of TQM implementation. While some organization, run TQM like a program which they expect to function and perform the magic itself, other have used a halfhearted approach to it, by using some bits and pieces of the principles. This has accounted for the failure of most organization in meeting up their expected target from implementing this ideology. The purpose of this study is to establish how TQM practices are employed to addressing these challenges by examine whether there was any gaps or discrepancies {positive or negative} in the organizational performance.

An understanding of the various TQM practices employed by employee would aid to better the level of service quality management which would impact on its overall business performance. Also competitive market is a driving force behind many of the other obstacle to quality. One of the effects of a competitive market is to lower quality standards to a minimally acceptable level. Also some of the challenges are inadequate resource for total quality management, lack of customer focus, lack of effective measurement of quality improvement, lack of management commitment, resistance of the work force, lack of proper training or inadequate human resource development, bad attitudes or abdication of responsibility or management infallibility, lack of leadership for quality e.t.c

1.3       OBJECTIVES OF THE STUDY

The following are the objective of the study. Generally the study examines the relationship between total quality management and organizational performance.

• Specifically its examine the relationship between total quality management and organization transformation
• It examined the relationship between total quality management and customer satisfaction.

1.4      RESEARCH QUESTIONS

To address the research problems empirically, it is necessary to build a conceptual and prepositional foundation that will help to appreciate and relate the importance with possible interrelationship between total quality management and organizational performance. Below are some of the research questions of this project.

• Can total quality management be used as the basis for organizational transformation?
• Is there relationship between total quality management and customer satisfaction?
• Can organizational performance be improved through application of rigid or flexible style of management leadership?

The question above shall be the research question, which this study will be concerned with. The questionnaire framed to provide adequate information to the question.

1.5       RESEARCH HYPOTHESIS

To provide tentative answer to the research questions, attempt will be made to explore the relationship between variables highlighted in this project. These are as follows:

• Total quality management {Independent Variable}.
• Organization performance or achievement {Dependent Variable}.

Hence, the main hypothesis of this project can be summarized in the following hypothesis relationship.

Ho: There is no significant relationship between Total quality management and organization performances.

Hi: There is significant relationship between Total quality management and organization performances.

Ho: Total quality management does not have positive relationship with industrial transformation.

Hi: Total quality management have positively relationship with industrial transformation.

 

1.6       SCOPE OF THE STUDY  

The study attempted to examine the various TQM practice and its effects on overall business performance. Furthermore, there was also need to assess whether the TQM practices that have been put in place have made any significant effect on its overall business performance and if not how that can be improved.

This study is also concerned with an in-depth study on the relationship between total quality management and organizational achievement or success. The rigours and expensive nature of this research work confined the researcher to all this limitation, the researcher use the available means to carry out an in-depth study.

1.7       SIGNIFICANCE OF THE STUDY

The reason behind this study is to give clearer view about the efficiency of total quality management in an organization which leads to the achievement and growth of a firm. Also the justification of this research is as follows:

• Internationally, TQM has generally been studied.
• There are relatively few reported studies of TQM implementation with organizational members as the focus that is, a bottom-up process involving the organizational members in planning, implementing and evaluating the quality management system.
• Though the factors which lead to TQM are now understood, the current state of research does not provide a synthesis of these factors. That is, there is little research carried out which can explain the success or failure of TQM oriented change initiative in the light of the totality of the understanding developed about TQM.

 

 

 

1.8       DEFINATION OF TERMS

• Organizational Performance {OP}: it comprises the actual output or result of an organization as measured against its intended outputs {or goals and objectives}. It is also an analysis of a company’s performance as compared to goal and objectives.
• Quality Assurance {QA}: it represents a broad spectrum of plans, policies and procedures that together provide an administrative structure for an organization’s efforts to achieve quality goals.
• Quality Control {QC}: it can be internal or external and represents techniques and procedures for monitoring performance parameter as a way of alerting organization personnel when there are indications that quality is deteriorated.
• Quality Improvement {QI}: it is a system that provides a structured problem- solving process for identifying the root cause of a problem and also for identifying a root cause of a problem and also for identifying a remedy for the problem.
• Quality Organization Processes {QOP}: it includes analytical processes, general policies, practices and procedures that define how all aspects of the work get done.
• Quality Planning {QP}: it is an establishing measure for monitoring a performance and ensuring that the performance achieved satisfied the quality requirements.
• Continuous Improvement {CI}: is defined as the relentless pursuit of improvement in the delivery of values to customer.
• Customer Focus {CF}: can be defined as the degree to which a firm continuously satisfies customer needs and expectations. A successful firm recognizes the needs to put the customer first in every decision made {Philips, 1995}.
• Employee Participation and Involvement {EPI}: is the processing of empowering the members of the organization to make decision and to solve problems appropriate to their levels in the organization (Bangeeta and Banwe, 2004).
• Supplier Quality Management (SQM):   It can be defined as the set of suppliers related quality management practice for improving suppliers’ quality of product and services. This is exemplified by firm’s supplier partnership, product quality as the criterion for supplier section, participation in suppliers, communication with suppliers, understanding performance, and supplier quality audit (MANN, 1992, ZHANG, 2009).
• Top Quality Management (TQM): It is a management approach center on quality, based on the participation of an organizations  and aiming at long term success, it is also a philosophy for managing an organization in a way  which enables it to meet stakeholders need and expectation efficiently and effectively, without comprising ethical values.

1.9     HISTORICAL BACKGROUNG OF THE CASE STUDY 

PZ Cussons plc is a leading manufacturer and distributor of a variety of products, especially soaps and other personal care items, including shampoo, baby powder, and the like. These are marketed under PZ Cussons’s flagship Imperial Leather brand and others, including Original Source and Carex. The company also manufactures refrigerators and other white goods, including freezers and air conditioners; detergents and cleansers; feminine hygiene products; olive oil; packaging materials; and even pharmaceuticals. In 2003, PZ Cussons formed a joint venture with Ireland’s Glanbia to supply evaporated milk and milk powder in Nigeria. The company also acquired U.K. hair care brand Charles Worthington in 2005. Although based in Manchester, PZ Cussons has long been controlled by the founding Zochonis family, from Greece, and has carved a niche for itself by focusing on various markets in Africa, especially Nigeria, Ghana, Cameroon, and East Africa. The company’s African operations continued to represent some 26 percent of its annual sales. Europe, especially the United Kingdom, is the group’s largest market, at 43 percent, while the Asia Pacific region, including Australia, accounts for 26 percent of sales. In addition to its African manufacturing sites, the company operates manufacturing plants in Thailand, Poland, Australia, and Athens. In 2005, the company announced that it would shut down its U.K. soap producing facility by 2007. Listed on the London Stock Exchange, the Zochonis family, which includes Chairman A.J. Green, controls as much as 80 percent of the company’s stock. The family also is highly active in the company’s operations, filling most of the group’s primary management positions around the world. In 2004, PZ Cussons posted revenues of £488 million ($935 million).

Trading Origins in the 19th Century

Known as Paterson Zochonis until its name change in 2002, the company’s history reached all the way back to the late 19th century, when it was founded as a trading post, called West African Merchants, in Sierra Leone by two partners, George Paterson, originally from England, and George Zochonis, from Greece. Paterson and Zochonis started out by shipping palm oil and other produce, such as palm kernels, cocoa, groundnuts, and seed cottons, as well as animal hides and skins, to the United Kingdom, and bringing back goods from England, such as cloth from Manchester. The business proved strong, and in 1884 Paterson and Zochonis incorporated the company as Paterson Zochonis (PZ).

PZ gradually expanded its range of goods, establishing a degree of expertise in what was considered a difficult trading market. This expertise enabled the company to begin expanding into other African markets and, most important, into Nigeria. PZ set up its Nigerian subsidiary in Lagos in 1899. Like its Sierra Leone brand, the Nigerian subsidiary at first operated as a trading merchant.

George Paterson died in 1934, leaving George Zochonis in control of the company. The Zochonis family was by then already highly involved in the company’s expansion, and a company tradition became the placing of members of the extended Zochonis family in key management positions. Indeed, by the beginning of the 21st century, the Zochonis family was said to represent about half of the group’s total payroll.

PZ expanded into Ghana in 1934, setting up a trading office in Tema that year. Over its first 50 years, PZ grew from a simple trading house into a major wholesale and retailer of general merchandise for the West African region. The company operated its own shops–often simple stalls in local markets–selling a wide variety of goods. By the early 1950s, PZ’s zone of operations covered Liberia, French Guinea, Cameroon, and the Gold Coast.