Total Quality Management (TQM) and its effects on organizational performance among manufacturing firms in Cameroon

Abstract

The aim of this research was to establish the relationship between total quality management practices and the performance of manufacturing firms within the South West and Littoral regions of Cameroon. The objectives were: to establish TQM practices used; to establish the performance measures applied and to determine the relationship between TQM and the performance of manufacturing firms in Cameroon. ISO 9001 Certification was used as a criterion for selecting participating firms.

The research adopted a descriptive research design. Data was collected using a self-administered questionnaire that was distributed to 30 operations/quality/human resource managers of the sample manufacturing firms of which 24 respondents returned duly filled questionnaires. The data was then presented in form of tables and analysed using mean and standard deviation and a correlation analysis was performed to show the relationship. The finding gave a positive relationship between TQM and organisational performance.

It was found that if TQM is implemented properly, it produces a variety of benefits such as meeting the customers’ needs, improved internal communication, and better problem-solving capacity of the firm. This research recommends that in order to get the full potential of TQM, it is necessary to train all people at all levels in order to create TQM awareness, interest, desire, and action. Thus, top management attention might be fruitfully focused on the development of appropriate training program on TQM adoption and implementation.

FURTHER READING: BUSINESS ADMINISTRATION PROJECT TOPICS WITH MATERIALS

CHAPTER ONE

INTRODUCTION

1.1 Background to the Study

Intense global competition and diminishing trade barriers are  making  it  more  and more difficult for companies to maintain their market share. Competition from companies operating in different markets has increased as advancements in information and communications technology, innovative production techniques, and deregulation of certain markets has broken down traditional barriers to entry.

This makes it easier for firms to develop new products and services, enter new markets and relate with customers more easily. Consequently, as a result of the proliferation of knowledge due to technology and globalisation, customers and consumers are becoming increasingly more knowledgeable, with a greater demand for high quality.

In a  competitive  environment,  a  business  must  persuade  a  customer  to  buy  its products  rather  than  those  of  competitors  at  a  price  that  is  more  than  its  cost  of production. A rational customer, however, would like to maximise value for his money. Therefore, a successful producer must enhance the total value of his products so that the price is acceptable to the customer while his own costs are low enough to allow him to make a profit.

In the past manufacturers could sell whatever they made and service organisations did not worry about the services they provided. Now things have changed. Competition is getting harder and becoming global. The fast growing countries of East Asia often produce at low cost as a result price in many markets have fallen.

It is easy for a company to get caught between improved western products and low price products from emerging countries. To cope with these challenges and make business competitive many firms pursue different techniques for improving and managing quality. Increasingly, battles  for  competitive  superiority  are  being  won  by  achieving  outstanding  quality (Evans & Lindsay, 2002; cited in Muhammad, 2007 ).

The quality of a product or service is the degree to which the product meets specifications and needs of the customers.  If quality is the end product or the ideal for any organisation, then Total Quality Management (TQM) is the approach and process for getting there. TQM has been defined as an integrated organisational effort designed to improve quality at every level (Dale, 1999).

The international organisation for standards (ISO) defines TQM as, ―a management approach for an organisation, centered on quality, based on the participation of all its members and aiming  at  long  term  success  through  customer  satisfaction  and  benefits  to  all members  of  the  organisation  and  to  society  (ISO8402:1994). Oakland (1993) describes TQM as a strategic management tool that can be used for improving the competitiveness, effectiveness and flexibility of the whole organisation.

TQM is a concept based on continuous improvement in the performance of processes in an organisation and in the quality of products and services that are the output of those processes. It includes creating and following policies and procedures in order to ensure that a product or service meets the defined needs it was intended to meet.

It is a team activity, demands a new culture, emphasis on discipline and knowledge (Arawati et al, 2009). Onuwa (2008) summarises the various definitions of quality and concludes that Quality Management practices can be viewed as those techniques or processes used by an organisation to foster continuous improvement in its services or products to satisfy known or perceived needs of the customers.

The Cameroonian industrial sector is viewed as the engine of growth in the process of economic and social development and, as such, needs to play a crucial role as the major supplier in the local market. This should result in boosting exports and contribute towards an emerging Cameroon. The problem for Cameroon, however, is how to successfully compete in a world market in order to survive in business.

The Cameroonian industrial sector needs to follow the example of successful organisations worldwide and embrace TQM. Manufacturing companies in Cameroon need to strengthen their market performance by improving organisational performance (OP) and providing quality products that operate under a competitive free market system. The adoption of a well-recognised paradigm for improving organisation performance and product quality is imperative. It is time for a suitable QM approach for the Cameroonian industrial sector to be adopted in order to compete successfully.

A national forum on standards and quality practices was organized by the Ministry of Mines Industry and Technological Development (MINMIDT) from February 03-07, 2015, at the premises of Cameroon’s cartel of enterprises (GICAM) in Douala. Actors in quality control such as the Standards and Quality Agency (ANOR) and Consultants were an integral part of the organisation team. Participants were expected to come up with a document containing the norms and quality that some products consumed in Cameroon should respect.

The forum highlighted the need for Cameroonian goods to meet up international standards in order to be competitive on the market. The world has become a global village, goods produced anywhere must be of good quality and meet up with international standards in order to be competitive on the market.

The February event was held under the theme “Urgency of national quality infrastructure, the lever of competitiveness among Cameroonian industries.”  It is a borrowed experience from other countries which has shown its strength in building up a national policy on quality, hinging on best international practices and especially the front-line players in quality infrastructure, according to MINMIDT (L’Action 984, 2015).

The event also aimed at vulgarising the government’s action on the culture of quality infrastructure in Cameroon. According to (L’Action 984, 2014, online), come 2016 the Ministry of Industry, Mines and Technological Development (MINMIDT) will introduce an annual prize (the President Biya’s Prize) to be awarded to an enterprise with best quality practices.

Organisations that adopt a total quality management strategy focus on achieving and sustaining a high quality output using management practices as the inputs and quality performance as the outputs (Flynn et al, 1994). The pioneers in TQM, such as Edward Deming, Joseph Juran, Philip Cosby, and Armand Feigenbaum, highlighted the importance of the quality philosophy as an essential competitive weapon for the transformation of an organisation (Ali & Abedalfattah, 2013).

Many studies have identified relationships among TQM practices and examined the effects of these practices on performance, but the findings are inconsistent and conflicting among scholars. These findings suggest that a positive relationship exists between the QM practices or TQM and firm performance and between other variables such as product quality, product, and process performance, perceived quality, quality drivers, reduced cost, more satisfied customer, and improve financial performance (Jaafreh, 2012).

In general, A large body of literature highlights the positive impact of QM practices on performance (Zu, 2009; Kaynak, 2003; Ahire et al, 1996; Kaynak & Hartley, 2005; Sila & Ebrahimpour, 2005; Anderson et al, 1995; Flynn et al, 1995; Ho, Duffy, & Shih, 1999; Prajogo &d Sohal, 2003; 2006; Terziovski & Samson, 1999; Choi & Eboch, 1998 ), but others have not found a relationship between QM practices –TQM- and performance (Nair, 2006; Agus, 2003). TQM if incorporated in the overall organisational strategy, communicated to all employees and well-implemented may have a positive impact on organisation performance like increased revenues, increased productivity, and increase in market

1.2 Problem Statement and Justification of Study

Improving industrial competitiveness, i.e. the ability to produce goods and services in order to successfully operate in international markets, is one of the major challenges facing Cameroon at the start of this century, which is marked by intense “competitive interdependence” of the world’s regions. The way in which this challenge is met will be crucial to the achievement of strong, sustainable economic growth that can significantly reduce internal poverty and enable Cameroon to fulfill its role as an engine of economic growth in Central Africa (United Nations Industrial Development Organisation (UNIDO), 2005).

Apart from the constraints affecting all sectors, Cameroon’s industry is facing specific difficulties such as unchecked competition from imports, with the liberalisation of the domestic market; internal weaknesses in output, technology acquisition, marketing and management, and an embryonic system of standardisation and metrology (UNIDO, 2005). The manufacturing sector in Cameroon has survived the wave of liberalisation ordered by the Government during the 1990s. However, notwithstanding the reforms embarked upon, this sector is still weak.

According to the competitive industrial performance (CIP) index established by UNIDO (2005), Cameroon ranks at the bottom end of the scale, along with other low-income Sub-Saharan countries. The extent of manufacturing activity in Cameroon is relatively limited: reported per capita manufacturing value-added is about US$ 60 only, just slightly above the required threshold (US$ 50) for industrial take-off and there are no signs of any significant improvements in the development of industrial production.

The problems of manufacturing enterprises all over the world and Cameroon, in particular, have been compounded in recent years due to changes in customer behaviour and increased competition from newly established companies and importers, the effects of system failures, poor product design, delivery delays, untrained staff and ignorance of quality. The change in consumer behavior has increased competitive pressure and this has compelled most producers of goods and services to tailor their products to meet the requirement of potential buyers.

Thus, most organisations are concerned about how to satisfy or even exceed the expectation of their customers (Ngambit, 2015). Manufacturing industries can  lose  lots  of  money  as  a  result  of  not  using  significant opportunities to increase the quality of their manufacturing processes and products. According to Anderson (2011), companies that do not conduct ongoing continuous improvement, their costs of quality  could be  between  20  to  35%  of  the  revenue stream,  or  equal  to  the  product’s selling price; 25% of such costs can be reduced by half through continuous effort in every year and six months. Therefore, organisations need to change their culture and structure to give room for a new approach to service delivery. The implementation of TQM could be beneficial to manufacturing firms when its principles are effectively adopted.

Many researchers have studied the effects of TQM on performance, with most pointing to positive relationships (Forker et al., 1997; Brah et al., 2002; Joiner, 2007) and some finding negative relationships (Yeung & Chan, 1998). However, there is a lack of systematic empirical evidence regarding the extent of TQM implementation and its effect on the performance of manufacturing firms in emerging market economies like Cameroon.

Cameroon is late in the adoption of Quality Management Systems, and therefore there is a scarcity of research that examines the adoption of TQM and its impact on Organisational Performance in the Cameroonian context. Ngambit (2015) also reported that studies of TQM practices in Cameroon are inexistent. This implies that firms have been implementing quality models without clear evidence of their effectiveness.

Despite the lack of information about the current status of TQM implementation, it is believed that many Cameroonian companies have begun focusing on its implementation and producing quality products to support their position and to fulfill the needs of both domestic and international customers. Many Chief Executives are at various stages of implementing the concept of TQM and this is evidence of quality consciousness.

The need to realise quality products and their effects have taken up many firms to accepting TQM as a control measure (Ngambit, 2015). This is evidenced by the increase in the number of subscriptions to ISO 9000 certification in Cameroon. Those manufacturing companies that have adopted quality management practices need to know which practices are important in improving overall performance. Therefore, this study intends to contribute to filling the gap in empirical literature by providing answers to the following research questions:

1.3 Objectives of Study

1.3.1 Main Objective

The main objective of this study is to evaluate the impact of TQM implementation on organisational performance in manufacturing companies in Cameroon. In order to achieve the main aim of the study.

1.3.2 Specific Objectives

The following specific objectives are developed:

To identify critical success factors of TQM and the performance measures for manufacturing companies in Cameroon.

To empirically analyze the impact of TQM practices on the performance of manufacturing companies in Cameroon.

To identify the challenges involved in implementing TQM practices by manufacturing companies in Cameroon.

To make recommendations on how manufacturing firms in Cameroon can effectively implement TQM so as to increase customer satisfaction, and overall performance.