Introduction
The economic environment is changing constantly and competition among business organisations is becoming stiffer every day. This is a call for organisations to take major actions that will help them stay in competition. No organisation can risk losing to a competitor since that would act as a major blow on its financial performance.
Market failure or organisational failure is a catastrophic phenomenon and organisations should avoid at all costs. Organisations need to be producing quality goods and offering quality services consistently. Managers should ensure that their organisations engage in activities that give competitive advantage to the organisation (Sukhija, 2009).
Some of the factors that can give the organisation competitive advantage include quality management, innovation and change. Quality management is the form of management whereby the manager directs all his or her duties towards ensuring that the organisation produces quality goods and services.
To do this, there must be employees who are highly knowledgeable and skilled. Therefore, the human resource manager should be capable of managing a high quality human resource that would in turn be able to produce quality products and services (Bessant and Tidd, 2008). Under quality management, the organisation is expected to produce high quality goods in a consistent manner.
Innovation, on the other hand, is the art of coming up with something new and better than what was there before. It involves improving what is already there to increase consumer satisfaction (Swann, 2009). Finally, the change is simply doing things in a different and better way. This essay focuses on the importance of quality management, innovation and change in an organisation. The paper will evaluate the reasons why an organisation needs to have the above factors and how the factors would give the organisation competitive advantage.
Value of quality management in organisations
Quality management is a skill that has become highly significant among organisational leaders and managers. Quality management is a distinct skill of management and most managers are thriving to add it to their skill set (Charantimath, 2009). Quality management is guided by the quality management principles.
Quality management principles can be defined as the rules that are adopted by leaders and managers in leading an organisation. The rules are aimed at improving the long term performance of the organisation, as well as addressing the needs of customers and those of other organisational stakeholders, such as the employees and shareholders. There are eight principles of quality management that are all aimed at improving the performance of an organisation.
In discussing the benefits of quality management, it is advisable to look at each quality management principle and its associated benefit. In Australia, quality management has been there for a long time. However, it was not enforced seriously until around the year 1990. In 1991, an award for quality management was launched where best companies would be awarded each year. Today, quality management is a priority to most companies in Australia (Funk, 2004).
The first quality management principal is customer focus (ISO Central Secretariat, 2012). This is a principle that refers to organisations that rely on their customers to know the areas they need to improve. They understand what the customers need currently and what they would need in the future.
The aim is to maximise customer satisfaction and, therefore, the management adjusts their operations to attain this goal. Customer focus is beneficial to the organisation. First, it helps the manager realise the existing market opportunities and respond on a timely basis. SGS Limited is a construction company that values its customers and customer focus has been of much advantage to the company (Jolly, 2003).
If the manager realises what customers need in the future, his or her management activities get focused on producing goods that meet that requirement. It is important to note that a consumer needs to represent the future market opportunity. The other benefit of this principle is that it enables the organisation to utilise the available resources effectively to enhance consumer satisfaction.
The organisation is able to research on consumer needs and then take the necessary action depending on the findings. Finally, consumer loyalty also increases since customers get satisfaction from the organisation. This creates a strong consumer base that ensures that the organisation has a future. Today’s businesses need to be proactive to survive competition. Understanding what customers need and producing it in advance helps organisations survive in the current economy (Pfeifer, 2002).
The second principle of quality management is leadership. This is very important for the success of any organisation. Leadership gives motivation to employees and increases their productivity and the performance of the organisation in general (Northouse, 2010). Leaders establish the direction of the organisation.
They determine the goals and purpose of the organisation, as well as devise ways of achieving those goals. Good leaders are what organisations need in order to cope with transition to a sustainable economy. Good leadership also influences innovation and competitive advantage in organisations (Jolly, 2003). SGS managers are aware of the importance of good leadership and the benefits thereof (Jolly, 2003).
The third principle is the involvement of people. For quality management, the managers need to involve other people at all levels. It is important to note that people are the essence of any organisation. When people are involved in the organisation, it is easier to get the best out of them, and this is for the organisational benefit (Pun and Nurse, 2010).
Motivated employees feel motivated and give their best. This is important for the organisation since it assists the organisation deal with the challenges it faces. People have different knowledge and skills. When all these skills are combined, it becomes easier to solve problems that face the organisation (Liu et al. 2013). When people are involved in the organisational activities, they become responsible and accountable for their performance.
This compels them to perform well since they are prepared to take responsibility. Everyone aims at producing his or her best performance. All the organisational stakeholders also understand the significance of their contribution and the roles they are supposed to play in the organisation. The implication of people involvement is that the performance of the organisation improves significantly. In a transition economy, a good performing organisation does not have problems coping.
Process approach is also a very important quality management principle since it influences efficient achievement of the organisational goals. Process approach production lowers the cost incurred by the organisation and helps in effective utilisation of resources. In addition, it is easy to improve results since the manager is able to easily identify a problem and deal with it effectively.
Further, it is easy to prioritise opportunities and improve on them for the benefit of the organisation (Qin and Bei, 2002). Managers who use quality management have the ability to identify the activities that can be beneficial to the organisation. For instance, Capgemini in Australia has benefited from efficient utilization of resources, leading to efficient processes that lead to quality production as an aspect of quality management (Funk, 2004).
Process approach enables managers to carry out an analysis of major activities and take the necessary actions to execute such activities. Performing the key activities and maintaining low costs give the organisation competitive advantage. This leads to increased income for the organisation’s chances of survival in the future economy (Rönnbäck and Eriksson, 2012).
Quality managers use system approach in their management. The organisation system contributes to the organisation’s effectiveness and efficiency in goals’ achievement (Flynn and Flynn, 2005). Once the manager uses the system approach, he is able to identify, understand, as well as manage its processes.
This assists in the integration of processes that can be beneficial in achieving the set goals. The manager understands how the organisational system relates to the major processes and enhances their integration. Managing by system approach enables the organisational leaders to structure the system and increase its efficiency and effectiveness to achieve organisational goals and objectives. The success of an organisation is proportional to its achievement of objectives.
This improves it survival chances (Li, Anderson and Harrison, 2003). A clear understanding of the system is vital for the organisational survival in a transition economy. Managers of Capgemini, for instance, have a good understanding of the organization system. The company’s resources are well utilized to maximize its earnings (Funk, 2004).
Continual improvement is a quality management principle that calls for the organisation to ensure that its performance is consistent for a long time. The organisation, therefore, engages in activities that would enable it to be competitive for a long time. It is important to note that an organisation that is committed to continued improvement is in a better position to take the necessary action towards a perceived opportunity (Zu, 2009).
In addition, such an organisation can take actions in advance and be at an advantage over other organisations. For an organisation to secure continued improvement, it needs to have workers who are constantly and consistently improving in terms of their knowledge and skills. Therefore, the organisation should offer the employees training opportunities so that they can grow.
This is a form of motivation to employees and they in turn perform better and improve on the organisational performance (Judge and Douglas, 2009). The implication of this is that the organisation is steadily positioned to solve any problems that it may face since it has knowledgeable and skilled human resource. The firm is also comfortably able to cope with a transition economy.
Decision making is another major factor for the organisation’s success. Quality management influences decision making based on facts (Kuei & Lu, 2013). Data have to be analysed and sufficient information gathered before making a decision. An organisation that has managers and leaders who have the ability to make major decisions and make them correctly always have a higher potential of performing better.
SGS decision making is a process that is taken seriously since the company is in the construction industry where right decisions have to be made (Jolly, 2003). Major decisions involve taking the perceived opportunities and deciding whether to pursue them or not. In addition, good decision making is important for the purposes of problem solving.
Managers need to have sufficient relevant data to solve problems effectively. Good problem solving ability and good decision making see the organisation through the transitional economy (Vanichchinchai and Igel, 2011).
Finally, an organisation is able to develop mutual benefits with the supplier through quality management (Rahman, 2001). Both the supplier and the organisation are able to create value and optimise costs and resources for their own benefits. In addition, the two parties can act jointly in order to speedily respond to consumer needs.
Consumers are always seeking satisfaction and they are likely to go to an organisation that responds to their needs more efficiently. An organisation can take this advantage by creating a mutual relationship with the supplier. Both benefit in that the supplier gets the sales revenue, while the organisation creates a stronger customer relation that is advantageous in the future. The two parties can also share information about future business and future opportunities (Denison, Farrell and Jackson, 2012).
They can, therefore, come up with ways through which they can take advantage of the future opportunities. When an organisation is in good relations with the supplier, it is able to get credit sales more easily. This relationship can only be created under quality management. It is a relationship that sees the organisation through the transition economy and enhances its survival opportunities.
Conclusion
Quality management is a factor that is important for organisational leaders and managers. The topic has become increasingly important as many organisations are seeking ways of attaining competitive advantage. The current economic environment is highly competitive; therefore, organisations should try to be the best to achieve success.
It is for this reason that organisations emphasize on quality services and quality products. There are a number of benefits for organisations that embrace quality management. Such organisations are able to cope with the transitional economy. They are also better positioned to deal with any problems that may arise in the course of their operations.
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