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Customer Focus Principle in Total Quality Management Essay


Introduction

In the constantly changing business environment, organisations need to undergo substantial changes to maintain a strong competitive position, keep up with the rapid pace of technologic advancement, fulfil increasing customer expectations and follow evolving national and international regulations. To cope with serious risks, companies implement a number of techniques aimed at gaining organisational ability to respond to customer demands in service, price and quality and, at the same time, accomplish internal corporate goals – increasing competitiveness and improving business performance.

Quality management is commonly recognized as a major source of competitive advantage and one of the critical factors driving global competition (Punnakitikashem et al. 2010). Total Quality Management (TQM) is a management philosophy that regards quality as an important success factor for sustainable organisational growth and development. TQM is grounded on a set of managerial principles aimed to apply resources in a way that would increase stakeholders’ satisfaction with the provided service (Das, Kumar & Kumar 2011).

The factors that define TQM efficiency include leadership and management style, employee commitment, benchmarking, training, regular refinement of performance, quality measurement systems, customer service culture, knowledge management and customer focus (Cai 2009). Customer focus may be considered one of the most significant elements of TQM practices because it is a crucial driver of quality improvement. The researchers define customer focus in terms of both internal and external relationship practices. Thus, the term customer focus refers to a number of procedures and techniques aimed at dealing with customer interests, as well as the internal organisational ‘strategic emphasis placed on [the] customer’ that is considered a key aspect of TQM practices (Cai 2009, p. 370).

A growing body of research recognizes the favourable effect of TQM practices implementation on overall customer satisfaction and the improvement of performance quality, which ultimately lead to gaining a competitive advantage (Talib, Rahman & Qureshi 2013; Talib, Rahman & Qureshi, 2011; Jaca & Psomas 2015). Customer focus and customer satisfaction management are among the dominant TQM practices that help enterprises to achieve positive financial results and organisational effectiveness (Talib et al. 2013). Therefore, TQM activities aimed at establishing good customer relationships and considering customer needs in the process of strategic planning may provide an opportunity to strengthen quality performance and acquire significant advantages in a highly competitive environment.

Literature Review

In the context of organisational operations, quality is deeply interrelated with customer satisfaction and loyalty, and it is also considered a ‘key to value creation’ (Kristianto, Ajmal & Sandhu 2012, p. 32). The researchers suggest that the development of high-quality customer service and culture, and the objective of increasing customer satisfaction, are essential to TQM, and these goals can be achieved through consideration of customers’ perception of quality, interests and priorities, as well as compliance with the top-ranked standards of performance (Cai 2009; Conti 2013; Ueno 2012).

It is considered that the establishment and maintenance of an open customer relationship are vital to the process of new product development and design because this helps manufacturers and marketing practitioners to comprehend customer needs and interests more profoundly (Jung, Wang & Wu 2009). Customer preferences are continuously changing, and management needs to evaluate the shifts in customer expectations on a regular basis and align business operations and strategic goals according to the identified changes (Cai 2009).

Implementation of the customer focus principle allows companies to become more committed to competence and flexibility, and thus more responsive and sensitive towards shifts in the market. In this way, efficient customer-oriented strategies entail the generation of competitive advantages. The researchers note that by seeking feedback through surveys or analysis of complaints and recommendations – commonly used TQM practices – companies obtain an opportunity to sustain good relationships with customers that consequently lead to the development of loyalty (Jung et al. 2009). The findings make it clear that customer focus and customer satisfaction are of tremendous importance for high-quality performance.

Customer-oriented culture

In the majority of existing excellence models (EMs), a considerable amount of effort is devoted to customer satisfaction. For example, the fundamental values included in the European Excellence Model are leadership and management, uniformity of organisational mission and culture, constant development and learning, innovation and improvement, social responsibility and customer focus (Dahlgaard-Park 2009).

The comparative analysis of sixteen distinct EMs and national quality awards (i.e., Deming Prize, the Malcolm Baldrige National Quality Award, the Singapore Quality Award, the Australian Business Excellence Award, etc.) conducted by Talwar (2009) makes it clear that customer focus is among the common core values included in the conceptual basis of these quality performance models.

The findings emphasise the importance of the customer focus principle and lead to the conclusion that it is a vital element of performance improvement initiations. Additionally, the extent to which the conceptual EMs’ components are included in the corporate culture defines success in the achievement of business excellence and design of appropriate TQM strategy (Bolboli & Reiche 2015).

The customer focus principle implies the execution of activities aiming to create multiple benefits for stakeholders. Customer focus practices involve various techniques that support organisations in the analysis of consumers’ requirements and interests. Some researchers suggest that companies increase the quality of management and overall performance by exercising customer relationship practices aimed to establish direct contact with them (Lenka, Suar & Mohapatra 2010; Su, Tsai & Hsu, 2010).

The direct personal contact established by using various communication tools, such as customer satisfaction surveys, random telephone calls, focus group and user group interviews, etc., may help organisations to become closer to their customers and increase customer retention (Lenka et al. 2010; Su et al. 2010). As such, communication may be regarded as a crucial element of customer focus in TQM.

Customer relationship practices including direct interaction, analysis of customer expectations and feedback; and maintenance of positive employee-customer relationships can help to increase customers’ indirect involvement in product development processes and contribute to employees’ better understanding of consumer needs. However, the researchers also emphasise the importance of firms’ internal orientation towards their stakeholders and perceive customer-oriented corporate culture as a basic, integral part of TQM strategy at the overall organisational level (Cai 2009).

Internal customer orientation aims to strengthen the practical aspects of TQM. For example, it is observed that organisational policies, culture, and regulations support employee commitment to customer satisfaction and improvement of service quality (Oakland 2011; Niu & Fan 2015). The principle of customer focus may also be regarded as a corporate value that defines the extent of a company’s determination to attain excellent customer satisfaction, while the practices aimed towards the improvement of customer relationships define the level of development and frequency of specific customer focus instruments’ utilisation (Cai 2009). In this way, the principle of customer focus, integrated into corporate culture, may be regarded as a precondition for the execution of customer relationship practices.

Organisational culture and leadership’s commitment, as well as stakeholder orientation, are the key critical factors of TQM’s success (Calvo-Mora et al. 2013). These factors are interdependent, and it is possible to say that the efficiency of each particular TQM practice, including customer focus activities, is significantly affected by the extent to which every TQM’s critical factors are enabled. In addition, researchers emphasise the dominant role of a well-developed corporate culture and politics, as well as systematic knowledge management, in the successful attainment of quality performance improvement, customer satisfaction and other customer-oriented strategic objectives (Baird, Hu & Reeve 2011).

Customer focus practices

In TQM organisations, every marketing and product development activity (research, advertising, customer service and staff training, etc.) should be accomplished according to high standards embedded in EMs (Sampaio, Saraiva & Monteiro 2012). It is considered that excellent customer service can improve the overall perception of a product, even if its quality is not perfect.

Therefore, organisations need to regard the quality of service as additional customer value and listen to the ‘voices’ of customers, in an attempt to comply with their expectations and increase product demand (Cappelli et al. 2010, p. 267) Marketing research is considered the major instrument for the accumulation of information and data analysis, assisting in the development of customer understanding. Marketing research instruments can be quantitative (statistical) or qualitative (descriptive).

Quantitative methods of data analysis – surveys and questionnaires – are commonly used customer feedback tools. It is observed that service quality is strongly associated with customer satisfaction, and organisations thus need to develop instruments to measure multiple parameters of quality performance and simultaneously capture feedback (Caemmerer & Wilson 2010). For example, research instruments developed according to the SERQUAL model help to identify and assess both physical and non-physical attributes of quality and measure consumers’ perception of organisational performance (Ooi, Lin & Chong 2011).

Cappelli et al. (2010) emphasise the importance of customer satisfaction design, which needs to provide information that would be simple to interpret, would cover many areas of service observation and would link the conceptual and practical components of service with different operational processes. In this way, by using questionnaires and surveys, managers may accumulate reliable statistical data that would significantly facilitate decision-making.

Popular qualitative research methods include focus group interviews. Interviews allow marketing executives to obtain valuable and detailed information. Caemmerer and Wilson (2010) suggest that, along with customer feedback assessment, it is useful to interview employee focus groups as well; in this way, organisational learning and employee commitment to quality initiatives can drastically increase.

The quality of service delivery depends on employee-customer relations. Thus, market-driven companies frequently use analysis of customer feedback and strive to integrate the consequently developed understanding of customer needs into corporate culture through knowledge management activities (Taddese & Osada 2011).

Ooi (2015) considers that the main areas of knowledge management are acquisition (creation), dissemination (sharing) and implementation of knowledge. Systematic knowledge management is aimed at the integration of achieved customer understanding into business processes and, in this way, fosters organisational learning in the improvement of performance quality (Tang, Chen & Wu 2010). Knowledge management is important because it ensures comprehension of customer preferences at the level of individual employees.

The ability to manage business operations in a way that fosters the generation and sharing of knowledge becomes a great competitive advantage. To achieve efficient knowledge management, a company needs to enhance organisational communication patterns, and develop an adequate context for the creation of knowledge and its dissemination across multiple organisational levels (Colurcio 2009). It is observed that along with improvement of service quality, customer focus and customer relationship practices support the creation of more extensive knowledge of the new product development process (Tang et al. 2010).

Comprehension of customer perceptions across multiple levels within the organisation is thus highly beneficial, as it leads to the refinement of strategic planning procedures and performance improvement. At the same time, when a company’s internal operations are enhanced and well-planned, it leads to an increase in stakeholders’ (business partners, customers, employees) satisfaction (Chen, Wang & Yang 2009). In this way, stakeholders’ satisfaction becomes a significant indicator of organisational success, and by measuring customer feedback and other quality indicators, applying knowledge management and developing customer-oriented culture, enterprises increase competitiveness and obtain an opportunity to surpass rivals in the market.

Figure 1: Table of customer focus practices in TQM organisations

Purpose of TQM practice Major activities
Marketing Research Development of customer understanding and fostering efficient decision-making. Capturing customer feedback and perceptions through data collection tools: surveys, questionnaires and interviews; data analysis.
Knowledge management Development of organisational competence in the provision of high-quality service. Training; knowledge development and integration.
Creation of a customer-oriented corporate culture Employee motivation and stimulation of positive customer-employee interactions. Leadership strategy design, formulation of customer focus objectives, development and integration of organisational values, mission and vision.

Discussion

Analysis

It is possible to say that customer-oriented strategic goals are derived from the superior organisational mission, values and objectives. Additionally, for the successful accomplishment of TQM tasks, companies need to adjust their strategic customer satisfaction goals with the overall organisational aims and vision. This means that the customer focus principle should become embodied in a systematic process of market information analysis, development of customer understanding, coordination of knowledge at every level of organisational operations and integration of customer values into daily work activities. Customer orientation, driven by the profound understanding of customers’ desires, is a prerequisite for the development and consequent implementation of adequate customer relationship practices. Therefore, the creation of customer focus value may be regarded as a major customer-related activity.

Customer focus practices include a variety of activities exercised to gain information about customer expectations and achieve customer understanding. Customer behaviour is a dynamic phenomenon, and the course of its evolution largely depends on the social, economic and overall environmental situation. When a company’s employees understand their customers’ situation, they become more efficient in the creation of product values according to actual customer needs.

Consumers tend to purchase products which not merely can fulfil their physiological needs, but will also contribute to individual self-realization and identification (Cassia et al. 2015). Thus, products may be regarded as expressions of personality, and the brands that can understand customers’ personal needs for self-expression gain the opportunity to attract more potential consumers.

Knowledge management is an efficient tool for the integration of gathered information and customer understanding into routine business operations and ensures that every individual employee exercises EMs’ core values. In this way, knowledge management may be regarded as an essential customer focus practice in TQM.

Viewpoints

The findings of the literature review demonstrate that customer focus is the major business value embedded in all EMs around the world. Orientation to people is a social value, and by considering social needs or the interests of particular groups of users/customers, a firm shows its responsiveness to basic human values, and it helps to strengthen the organisational appeal and attract new customers.

The customer focus principle is exercised through customer relationship practices, evaluation of feedback and organisational knowledge management activities that contribute to the dissemination of valuable information across an organisation. It appears that all mentioned practices are interrelated, and the regularity and consistency of their execution are rooted in the overall organisational culture. Customer-oriented corporate philosophy and politics influence employees’ commitment to improvement in the quality of service and products. Knowledge management can be regarded as a cohesive element between actual performance and employees’ motives and perceptions of their functions and responsibilities. Culture as a complex of shared customer focus values within a company allows managers to implement TQM in a more efficient way. Also, when these values and standards are equally accepted across all organisational levels, a company succeeds in the development of desirable professional behaviours that ultimately result in attainment of greater customer satisfaction and excellent quality of service.

Future Directions and Recommendations

Multiple quantitative and qualitative measurement tools help enterprises to gain information on consumers’ perceptions and needs. However, the main challenge for companies in the alignment of their own organisational perspectives on product development and the products themselves with customer perceptions and views. For the achievement of greater business excellence and alignment of business performance to EMs’ principles of conduct, organisations need to consider the customer focus principle in the development of strategic plans.

The customer-focused organisational mission, vision and values, priorities and goals are vital for quality improvement, and moreover, it is possible to call customer service a central element of TQM programmes. Therefore, TQM companies should strive to integrate operational processes with customer focus values and make an effort to plan the allocation of informational, financial and human resources for the enhancement of customer service delivery and employee-customer interactions.

Conclusion

Service quality is associated with customer satisfaction, which has a positive effect on organisational sustainability and success. The customer focus principle is the major driver of customer value creation, which can help to increase the perception of products and services. Major customer-oriented TQM practices include communicating with consumers and accumulating feedback through surveys and interviews, as well as considering customer views in product development. At the same time, knowledge management helps organisations to adjust strategies towards basic TQM success factors and customer perspectives and to share common cultural elements – beliefs, values and visions – among all employees.

A large body of research is devoted to the analysis of TQM and customer focus’ favourable impact on organisations. Positive financial results, increase in productivity, strengthening of competitive position and acquisition of competencies and non-tangible benefits are among the advantages gained through the implementation of customer focus strategies (Kumar et al. 2009; Talib et al. 2011; Jung et al. 2009).

As stated by Su et al. (2010), ‘Outputs to customers start with customisation, satisfaction and trust, then gain more by customers’ loyalty’ (p. 84). In this way, it is possible to say that customer satisfaction is a short-term effect of customer focus practices, while customer commitment or loyalty are the long-term effects. Customer loyalty is the major prerequisite of financial performance’s stability, profitability and brand recognition. Thus, by practising customer focus principles, organisations gain benefits in multiple dimensions of business performance.

Reference List

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IvyPanda. "Customer Focus Principle in Total Quality Management." August 19, 2020. https://ivypanda.com/essays/customer-focus-principle-in-total-quality-management/.

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IvyPanda. 2020. "Customer Focus Principle in Total Quality Management." August 19, 2020. https://ivypanda.com/essays/customer-focus-principle-in-total-quality-management/.

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