Introduction
Total quality management (TQM) has been used as an effective strategy in multiple fields, including banking, education, medicine, and manufacturing. The automotive industry is among those that have successfully implemented TQM practices within corporations and have seen positive results from doing so. TQM stands for valuing the consumers, building a bright and sustainable future for the company, and encouraging innovation for the sake of satisfying the customers (Dahlgaard-Park et al. 1109). Such an emphasis on creating an environment where employees are constantly improving to appeal to consumer demand is beneficial for every organization that is striving for success. Moreover, individuals who see the effort companies put into giving them what they desire are more likely to be loyal to the particular corporation that engages in such practices. Total quality management has been linked to higher demand, quality, and overall outcomes.
A company that has been implementing TQM practices is KIA Motors. KIA’s history shows how a lack of quality creates a negative image for the brand, which keeps consumers from purchasing from the company. Moreover, the evidence shows that low prices are less attractive to consumers compared to reliability. KIA is a car manufacturer known for providing consumers with affordable products that usually cost less than the average automobile on the market. Consumers were interested in such cost-effective cars. Yet another issue occurred and created a negative connotation in regards to KIA cars. The problem was having a reputation of an unreliable retailer since there had been multiple complaints about the low quality. However, investing in a new design and improving quality have allowed KIA to become one of the most well-liked international brands. TQM strategies have been implemented by the top management, which was the right decision based on the current results.
Historical Background of TQM in KIA Motors
KIA Motors is a relatively old car manufacturer that has been on the market for a long time. However, due to certain policies, KIA has not been historically perceived as a reliable, top-quality car retailer. From the very beginning, KIA Motors has not been trying to appeal to a demographic that is well-off or has the means to purchase the best-quality car on the market. The initial strategy was to target an audience that values low prices over comfort, design, or even safety. This is why for the longest time, KIA was willing to focus on price reduction while disregarding other vital aspects of a car that customers may appreciate. Some of these characteristics are comfort, the interior, the exterior, the overall design of the car, and other seemingly minor concepts that have an influence on the buyer’s satisfaction. Moreover, KIA Motors has been a company that was considered unreliable because of the cheaper materials used during the manufacturing process. The corporation managed to cut down expenses. This was cost-effective, but the brand ended up suffering because of this policy.
While consumers were satisfied with the low prices, the future reparations needed for the car to function were perceived as a way for KIA to win in the short run yet lose long term. Clients had to invest in changing specific details, frequently making alterations, and spending extra resources on mechanical touch-ups. Moreover, KIA did not have comprehensive policies that would focus on consumer satisfaction. Some of the aspects that the management did not consider consist of having a target audience, a distinct branding strategy, a focus on creating a base of returning clients, etc.
South-Korean Automobile Industry
One of the reasons KIA did not invest in quality but rather focused on manufacturing cars at an affordable price was the overall industry at the time when the corporation was in the development phase. The Korean brand was targeting a particular audience within the home country because of the economic situation that did not allow individuals to invest in expensive vehicles. The Korean clientele was more likely to purchase a less pricey car, which is why the brand decided to offer a product that fits this criterion. Moreover, the overall Korean automobile industry was at the same developmental level as it is now (Thakkar and Jain). While KIA was able to compete with other local manufacturers, entering the global area has shown that foreign consumers are willing to invest in a more reliable car, even if this means spending more resources.
Both KIA Motors and Hyundai Motor have experienced the same challenging path because of the relatively low manufacturing potency of the country, the specific local demand that differs from the global one, and the focus on price without addressing quality. However, the Korean government started promoting local car manufacturers through tax cuts, an emphasis on industrialization, and an overall increasing per capita income. Such changes contributed to a higher chance of development for all the car manufacturers.
Hyundai Reforms
Evidence shows that the situation has changed due to specific organizational reforms. Firend mentions that KIA is considered the 69th best brand due to its investments in providing customers with high-quality products and experiences (148). Specific policies have been implemented, and the result was higher customer satisfaction, which is the central concept of TQM. The process started with KIA’s initial bankruptcy, which led to Hyundai’s purchase of the corporation. While KIA Motors is independent, having a parent company has significantly contributed to its bright future.
Hyundai was also struggling as a brand, yet a significant investment into improving its cars’ quality has led to beneficial results. Hyundai representatives operate based on the notion that quality is key. The central plan is to attract customers with high manufacturing and customer service standards in comparison to the prior reliance solely on attractive prices. Historically, KIA is a brand that has not been deemed consumer-friendly and could only survive due to low prices. However, the situation started to improve as a result of a chain of events. After the parent company, Hyundai, started investing in KIA, the results were noticeable. Since then, the brand has become completely reformed in regards to design, the target audience, consumer demand, and quality. Such improvements have been beneficial for the organization and are continuing to contribute to positive results.
Organizational Results
While there is no exact information about the implementation of TQM strategies, it is certain that the management has changed particular views in the early 2000s. Consumers started noticing changes in 2006 when KIA won “Autobest” as a result of an international voting competition (KIA). Since then, TQM practices have resulted in hundreds of awards and thousands of nominations, an outcome that has benefited the brand on multiple levels. As soon as the management decided to put emphasis on quality and customer satisfaction, KIA Motors became an established corporation with strong corporate values based on clients’ demands.
It is important to mention that the brand has been successful in terms of revenue after improving its products. Researchers point out that KIA Motors has been included in the first five automobile makers as an affiliate of Hyundai (Hyun 230). Such a drastic change from a bankrupt company with a bad reputation on the market to one of the world’s top-selling car brands is evidence that total quality management practices have been positively influencing the corporation. KIA Motors is now one of the most popular automobile corporations, a result that the company’s representatives could not achieve before the structural changes.
TQM in KIA
There are multiple strategies KIA managers use that align with the principles of TQM. On the one hand, consumers enjoy driving KIA cars because of the relatively low price compared to other automobiles on the market. However, the company manages to combine affordability and quality. Specifically, the basis for such an organizational overview is the statement that quality depends on what the customer demands. Since KIA has been receiving backlash and was portrayed as an unreliable car manufacturer, the first step towards TQM was listening to feedback. It is certain that most of the commentary was negative and illustrated how low-quality cars could not fully satisfy a buyer even if the price was attractive.
As mentioned before, the first prize won for quality was the initial result of a beneficial change in management policies. KIA has never been identified as a high-quality product manufacturer, yet in 2006, voters recognized the corporation’s path towards a more efficient organizational strategy. Moreover, the top management has assumed the responsibilities of improving the quality of KIA products rather than maintaining inefficient systems that caused the organization to go bankrupt in the first place.
One of the central concepts within total quality management is making a constant effort towards product improvement. As highlighted prior, Hyundai’s investment aimed to create a new future for KIA. The goal was solely centralized into one aspect, which was improving quality. The fact that the parent company was interested in developing the brand from this perspective proves that the emphasis on TQM was a primary concern. KIA’s total quality management practices are illustrated in the approach that the management uses to operate the organization. Moreover, the awards for quality and the growing loyal consumer base are evidence that KIA representatives have been working on improving certain structural areas.
Practical Examples
KIA Motors has been using TQM strategies for the last decade, which has resulted in global recognition of the brand as an excellent car manufacturer that provides customers with quality products. There are several examples of total quality management being used by the brand in its internal and external environment. Such concepts are present in how KIA treats customers, what the brand aims to improve within the organization, and how the implemented guidelines affect manufacturing and transactions processes.
Customer Service Innovations
Appealing to the customer demand is one of the critical organizational purposes that each business follows in order for the consumers to be willing to invest in their products. KIA is among those companies that focus on providing individuals with pre and post-transaction support. The official website mentions the revolutionary 7-year warranty that is a nuance in the automobile industry since most brands cover only three years of insurance (KIA). Such a strategy is implemented due to the brand’s confidence in the products that it sells. High-quality cars rarely need additional investments, which is why KIA Motors implemented this service without fearing financial losses. Besides having a customer support team willing to assist consumers with their questions, concerns, or technical issues, the 7-year warranty is a bonus that makes the deal more appealing. Needless to say, such a rare guarantee within the automobile industry allows KIA to compete with other brands. Moreover, potential buyers are more likely to invest in a quality car that the brand is ready to insure for free.
Several other quality-related services are available for consumers to use. For example, KIA provides affordable technical services with original KIA parts. Moreover, the company is willing to prove its quality by giving a 2-year warranty for all the genuine parts installed or fixed within its service centers (KIA). Providing customers with on-demand products and services is one of the essential concepts in total quality management. KIA’s strategies illustrate that the corporation’s goal is giving consumers the best experience and the highest quality products, even when it comes to car parts and technical works.
Regulations
Every automobile company has to follow specific regulations to ensure safe practices and transparent transactions with customers. Regarding sales, KIA follows the Vehicle Sales Code, which means the corporation puts emphasis on customer safety. The code mentions the use of reliable information for advisement, security checks when the automobile is acquired by a new owner, test drives, and a provision of all the necessary documentation when a car is sold. Such procedures are designed to promote safe transactions between clients and sellers, which is an excellent way for buyers to have a safe purchase from a reliable dealer.
Staff Training
Another general concept within TQM is constantly improving the workforce through training. Employees have to be able to provide customers with the best services. KIA’s website specifically mentions taking this aspect into consideration within its organizational structure. The official page states that service training options for team members have been included since the early 2000s with the purpose of increasing customer satisfaction (KIA). For example, the corporation organizes competitions for mechanics from all over the world to promote hard work, impeccable skills, and effectiveness. According to the source, more than 25,000 employees have participated in such events in 2019 (KIA). This is an example of how the brand invests in promoting quality by teaching team members all the new business strategies aimed to satisfy consumer demand.
While such events promote productivity and proficiency within the work environment, a more effective solution is providing employees with specialized education. KIA invests in teaching full-time employees involved in departments responsible for production and service. Certain individuals who strive to contribute to organizational objectives in the long-term are provided with skills and knowledge in regards to quality control, manufacturing, customer service, etc. While this is a significant investment from a financial standpoint, such practices consolidate the latest quality trends and allow the brand to apply the strategies within its own corporation. Since TQM is based on continuous improvement and training of the workforce, KIA’s practices fit the criteria.
Customer Feedback and Communication
KIA provides multiple customer service procedures that clients use in case there is a necessity for solving problems or asking questions. Moreover, the company is actively trying to build dialogues between representatives and users as often as possible without overpowering buyers with promotion content. KIA has developed a mobile app that covers multiple service areas. The app allows individuals to purchase new automobiles or parts, acquire maintenance services, and dispose of old vehicles. Clients are able to access multiple options online without having the inconvenience of going to an office, booking appointments, and possibly meeting other uncomfortable difficulties.
While the app is designed to provide comfort and easy communication tools with KIA representatives, it also focuses on ensuring high quality. In this case, the quality is highlighted in the overall customer service domain, which KIA strives to improve each year. The application is a relatively new implementation, but it is already an excellent way for KIA users to contact support teams and have 1-on-1 interactions regarding the corporation’s products. Moreover, the company uses such dialogues to have a better understanding of customers’ demands. Effectively communicating with clients allows businesses to receive first-hand feedback and improve their practices based on the commentary.
Data Privacy
The quality which KIA promises also extends to the field of data privacy. For the company to ensure that the customer’s private information such as full name, date of birth, and ID number remain private after these details are filled in online, KIA built a Personal Information Center. The center deals with securing all the information from being public. Moreover, team members who have access to such details are trained and informed about privacy policies and regulations to minimize the risks for leaks. The data security systems are renewed every year in order for customers to avoid difficulties related to keeping their personal details off public platforms. KIA’s quality security services are designed to mitigate all the cyber issues that may occur.
Advantages of Using TQM in KIA
As mentioned prior, KIA became much more successful and profitable after implementing TQM strategies in its corporate agenda. Furthermore, the advantages of using total quality management principles have been noticeable on multiple organizational levels and have had a significant effect on KIA as a brand. Such changes indeed led to a more prominent consumer demand, brand recognition worldwide, and revenue that keeps increasing due to the focus on quality and customer satisfaction.
Overcoming Crises
Since KIA Motors was a bankrupt company, Hyundai purchased the majority of the shares. KIA was in deplorable conditions in the 90s, as were multiple Korean automobile companies. However, the changes that have been structurally applied have resulted in more than 600% revenue growth based on the comparison between the 2006 results and 2016 (Park 46). These achievements have been reached due to the parent company’s investment in quality, image, and a change in consumer targeting policies. After following specific guidelines illustrated in the notion of total quality management, KIA overcame the crisis and is now one of the most popular automobile manufacturers worldwide.
Global Recognition
Back in the 90s and early 2000s, KIA was a brand that buyers would consider due to its affordable products. However, the company itself was considered unreliable and low-quality because of consumers’ technical problems with KIA automobiles. The image of the corporation had changed when TQM concepts were incorporated into the organizational structure. While having a KIA car was being associated with potential problems and technical issues in the past, the situation has gradually changed. The shift is portrayed in the company’s overall popularity on the global arena and the number of potential customers who consider purchasing a KIA car due to its reliability, quality promises, and affordable pricing. Total quality management’s advantage has been a complete change of the image of the brand in the eyes of the consumers, which is beneficial in terms of new clients and further revenue increase.
Profitability
It is certain that every company strives for better revenue. However, TQM is based on investing the profit in further quality development and staff training. KIA’s revenue has exponentially grown, and the company is now in 69th place in the list of the most marketable brands in the world (Park 46). Such a significant change is especially important if the prior financial problems are taken into consideration. KIA’s profitability and continuous financial improvement are evidence of TQM being advantageous for the corporation. While TQM requires significant investments in quality advancement and staff performance increase, the revenue that follows such changes balances the spending and makes them worth considering. KIA’s profitability is directly linked to the reforms on the structural levels and would not be present without an emphasis on quality and a shift in management.
Awards
There a multiple ways in which consumers can show a company that they support them. This includes purchasing products, giving positive feedback, recommending the brand to other people, promoting it online, etc. However, such overviews are often objective and driven by personal interests. When professionals who are not aligned with the corporation in any way can assess its performance, the results tend to be more honest and unbiased. KIA has won multiple quality awards over the years. There are more than 150 titles that KIA mentions on its website (KIA). In this case, professionals, engineers, mechanics, and car reviewers with expertise in the field have compared KIA automobiles with cars from other brands and decided that the KIA ones are of higher quality. Such awards show how much the brand has grown due to total quality management.
Furthermore, it is essential to mention that some of the competitions are directly linked to how customers feel about KIA. Regular people were able to assess their experiences with the brand and their overall overview of the company’s products. As the results are being measured and compared, KIA is often above other car manufacturers with more financial potency, experience on the market, and influence. Such outcomes are another pieces of evidence that illustrate how using TQM can be advantageous for corporations that engage in said practices
Disadvantages of Using TQM in KIA
Undoubtedly, TQM is an effective strategy that creates a positive corporate environment based on constant growth, innovation, and quality improvement. The aim is to satisfy consumer demand and provide the best services and products. However, such an emphasis on quality requires significant investments. This was the case for KIA, or more precisely, the parent company, Hyundai. As mentioned before, the initial management policy consisted of a major investment in rebranding and corporate changes. While such measures ended up being profitable in the long run, the prominent financial loss in the first years is a risk that many corporations cannot overcome or manage.
KIA’s first years have also been challenging because of this. Since TQM implementation requires an initial period of training and design, the investment does not instantly turn into profit. The policy has been cost-effective based on the following corporate results, such as an increase in revenue and better brand imaging. However, the fact that TQM implementation has been costly for Hyundai as a parent company is one disadvantage that may cause other similar corporations to turn the idea down and chose other strategies for quality improvement.
Conclusion
KIA Motors had been going through financial struggles after the brand had decided to expand from the Korean market to the global arena. The products, while affordable, could not reach the same standards as other car companies. Due to a lack of focus on quality, a less advanced industrial sector in Korea, and high expectations from worldwide customers, the corporation went bankrupt. When Hyundai became the parent company, a major investment was made to improve KIA as a brand and advance the quality of the vehicles.
TQM strategies have been used to create a reliable image of KIA Motors, build high-quality products, and train experts to advance and satisfy customer demand. TQM has been advantageous for KIA in terms of innovations, crises mitigation, global recognition, revenue, and prestigious awards. The company uses total quality management in such fields as customer care, regulations, employee training, and data privacy policies. However, the implementations of these strategies have required a major investment, which is one disadvantage that has been minimized due to the following profitability. KIA Motors has experienced a significant shift from a struggling car manufacturer to one of the most valuable brands in the world due to an emphasis on total quality management. Now that the corporation is successful in regards to having a loyal consumer base, steady market growth, high competitiveness, and adequate revenue, it is certain that TQM has facilitated all the benefits.
Works Cited
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