Chapter 8: Change Management and Implementation of Total Quality Management

The Change and Change Management

The change refers to consistent changes in the behavior and habits of an individual or an organization. Organizations must adapt to the changes in their environment in order to be profitable and productive. Adapting to changing economic conditions, technological innovations, consumer expectations and preferences, legal obligations, to operate more efficiently day by day, and to produce new products are the most important skills that businesses should have in the modern economy. Today, the pace of change is greater than ever in history, and change can affect businesses in all industries.

Change management refers to the conscious process of change in the organization. Change management;

• “refers to planning, organizing, leading, and controlling a change process in an organization to improve its performance and achieve the predetermined sets of strategic objectives”.
• “is defined as the adoption of a new idea or behavior by an organization”.
• “is the movement of an organization away from its present state and toward some desired future state to increase its effectiveness”.

Change management is the ability of the business to produce new products and ideas and to develop new processes by managing the change process in order to achieve the goals of the business and reach the desired position in the future.

Change is divided into two categories namely planned and unplanned changes depending on the way how it emerges.

• Planned change means that managers have the initiative and plan the change process and implement the change in line with the needs determined. In planned change, the business decides the need for change by analyzing the information it collects from the environment and applies the change.
• Unplanned change refers to the change that is not planned before and which is implemented in order to adapt to sudden changes occurring in the internal or external environment.

Change is also divided into two categories namely radical and incremental changes depending on the impact on firm operations. Accordingly, if change in a business affects certain departments, if the strategy, values and mission of the business are not affected by this change, we define it as an incremental change. Radical or strategic change affects the whole organization and redefines the business. It usually results from major changes or technological breakthroughs in the environment in which the business operates. It requires doing different things rather than doing things well. It also radically changes the business operations and the way people do their works.

One of the issues to be considered in the change process is the speed and continuity of change. With the increase in competition, managers started to carry out the change process very rapidly and continuously. Bruch and Menges describe this state of constant change as an acceleration trap.

Factors Causing Change

All changes in organizations take place to adapt to changes inside or outside circumstances. The factors causing change in an organization can be examined under two categories as external factors and internal factors.

• External factors are those that occur in the external environment of the organization and managers do not have control over these factors.
• On the other hand, internal factors are characterized by changes realized within organizational boundaries and managers can control these factors.

External Factors

We can list the external factors causing change in organizations as follow:

• Technology: Technology, like in many areas of life, changes business activities profoundly. With the development of information and communication technologies, businesses have not only transformed into production units that meet the needs of consumers but also have become data processing centers.
• Globalization and Competition: We can define economic globalization as the transfer of capital, labor and goods and services between countries without encountering any obstacles. With the globalization process, businesses can deliver their products to consumers all over the world, establish production facilities in different countries or buy the established ones in other countries.
• Economic Conditions: Business are highly sensitive to economic variables as production units operating within the economic system. Macroeconomic variables such as growth, interest, inflation and exchange rate play an important role in the decision whether change is going to undertake.
• Social Trends: Social trends that lead businesses to change are related to the change in people’s taste, preference and consumption habits. The direction of the change activities of the businesses will undoubtedly be shaped by the opinions and behaviors of the consumers.
• Political and Legal Conditions: Political and legal conditions have a significant impact on the business activities. First, macro-economic variables are closely related to political processes. Alsı it make preditions for future difficult for businesses. Legal conditions are also important because they shape all business processes, especially production procedures, tax issues, wage arrangements.

Internal Factors

Internal factors causing change in businesses can be listed as follow:

• Innovation: Innovation can arise from the products, production process, organizational structure or marketing efforts of the business. Innovations greatly change the way things are done in the organization.
• Organizational Failure: Organizational failure means that the business fails to achieve its objectives, cannot continue its activities profitably and efficiently and experiences losses in market share.
• Employee Expectations: One of the important internal factors in the change process is the expectations of the employees. Change takes place in basically two ways, from top to bottom (from managers to the whole organization) and from bottom to top.

Resistance to Change

The change may not be pleased by everyone in the organization. Some of the people may support the process of change, while others may not. Resistance to change is defined as unwillingness to accept change by employees or managers, and reluctance to make change. This is why change is essentially a process of persuasion. Managers must convince employees of the need for change in order to manage the change successfully. Otherwise, change plans that are perfectly constructed cannot be implemented due to resistance. Managers should examine the reasons of resistance for a successful change process. The reasons for resistance to change can be listed as follows:

• Self-interest: We all have various habits and routines in our lives. Regardless of scale, every process of change replaces something old with the new. New business processes, new tasks, new products, new power relations and so on. These modifications change the whole routine in the business. As a result of the change, employees and managers may be concerned about the risk of losing their jobs, wages, qualifications and status. Change creates uncertainty in businesses where communication is not healthy, and employees are not well informed. Uncertainty for the future influences employee motivation and business performance negatively.
• Misunderstandings : In businesses where employees are not adequately informed about the causes and process of change, people may have wrong ideas about the causes and consequences of change.
• Different Evaluations: One of the issues that cause resistance in the change process is that everyone has different evaluations about the reasons, results, benefits and costs aspects of change.
• Low Tolerance: We respond to the same events with different reactions. The process of change, which is fun and exciting for some of us, can be scary for others. This is due to our level of tolerance to change and the uncertainty it may bring.

Resistance to change may be open or implicit. Complaints of employees about the change, doing the work reluctantly are examples of open resistance. Loss of job motivation, increased production errors and absenteeism are examples of implicit resistance. It is easier to manage open resistance because it is difficult to determine that such results are due to change.

Organizational Change Approaches

Kurt Lewin’s 3 Step Model According to Kurt Lewin’s 3-step model, successful change in business basically follows unfreezing-moving-freezing steps.

• Unfreezing can be defined as the disruption of routines of existing habits in the processes that are intended to be changed in the organization. In this process, the current situation is defined, the vision for the desired level is designed and the forces that contribute to or prevent change are predicted.
• Moving is the steps where the change is implemented, and the desired structure is established instead of the old structure.
• After the change process is completed, the next step is called refreeze. Refreeze phase is to make the new structure permanent to ensure the sustainability of the change

John Kotter’s 8 Step Plan: Kotter argues that there are common steps taken by businesses that perform successful big change processes. According to him, successful change process is possible by performing the following 8 steps.

1. Establishing a sense of urgency: A sense of urgency is necessary to mobilize people, to provide the necessary cooperation and to express the need for change.
2. Creating the guiding coalition: After convincing people to take action for change, a team is formed to guide the process of change with sufficient talent, authority and skill.
3. Developing a vision and a strategy: Guiding team develops a clear vision and strategy for change with other employees. Thus, the direction and means of change are determined.
4. Communicating the change vision: The vision, tools, goals and paths of change are shared with all actors in the organization. Thus, a common understanding about change is tried to create.
5. Empowering employees for broad based action: It means that all the factors that may prevent change are hindered. The employees and managers should be encouraged to take risks and initiatives so that all efforts of them contribute to the change. If necessary, they should get trainings.
6. Generating short term wins: The change process should be divided to short terms and the improvements are measured in every term. The short-term achievements provide credibility, resource and morale for the change process. It provides feedback on strategies and allows changes if necessary.
7. Consolidating gains and producing more change: Being committed to change is to try to realize the bigger changes that will carry out the vision without declaring an early victory with the climate of short-term gains.
8. Anchoring new approaches in the culture: At the end of the change process, new practices create a new culture to ensure that the change is permanent. As a result of the process of change, new norms and values are created if the success of change has been proven.

Implementation Process of Total Quality Management

Total quality management is a management technique based on continuous development in order to meet the desires and needs of customers. With TQM applications, all processes, products and information flow in the business can change. TQM is therefore essentially a process of radical change. By successfully implementing TQM, businesses can avoid mistakes and wastes, reduce customer complaints by producing better quality products and have more loyal customers. In addition, it can improve safety conditions in the workplace and continue its activities in a more environmentally friendly way.

Implementation Process

In order for TQM to be applied successfully in the businesses, preparation, planning and execution stages must be carried out successfully. Now let’s take a closer look at what should be done in these 3 stages, according to The Goetsch-David TQM Implementation Process.

Preparation: TQM applications start with the preparation stage. The preparation stage is critical to the success of the entire process. The stage should not be carried out in a hurry. Managers should never start the practices until preparations are complete. The decisions to be taken during the preparation stage and the actions to be taken are as follows:

• Commitment by the top management: Total quality management approach requires the top managers’ approval, determination and commitment because it may change all the routines of the organization.
• Form a steering committee: A steering committee is set up to guide the change in the TQM process. This committee should consist of the chief executive officer and function managers.
• Team building: The committee should work as a team whose only goal is to ensure achieving the business’ vision rather than people with separate agendas. To create this kind of a team, the perspective of department managers must go beyond their own departments.
• Total quality training for the steering committee : The team that will conduct and direct the TQM practices should know the philosophy, principles and tools of TQM. In addition, since TQM requires a radical process of change, educational content should include how to change organizational culture.
• Developing vision and guiding principles: The vision statement is a short, clear statement of what the organization wants to be in the future. The vision indicates the ultimate goal of all organizational efforts.
• Set broad strategic objectives: Once the vision and values are determined, the objectives that will enable business to reach the vision are defined. What actions are going to be taken to get closer to the vision? By doubling market share in 5 years? Or by reducing the rate of manufacturing defects by 70% in 3 years? These objectives will then be transformed by the committee into activities for the whole organization.
• Communicate and publicize : Informing the employees and managers about total quality activities and results is important. All the people in the organization need to know what’s going on. Vision, values, objectives, TQM applications should be shared with all employees and their ideas and contributions should be taken.
• Identify organizational strengths and weaknesses: Once the vision, values and objectives are set, the committee should identify the strengths and weaknesses of the organization. Revealing the skills and capabilities of the business will help to determine whether the business has skills that will be needed in the application of TQM techniques in the future.
• Identify change advocates: Every organization has employees who adopt change and do not accept change. As the successes in the early stages of the change process significantly affect the attitudes of employees towards the change, the first TQM applications should be realized with those who adopt the change.
• Baseline employee and customer satisfaction: The reason we measure the job satisfaction of employees is to create a benchmark for the future so as to determine whether TQM practices increase employee satisfaction.

Planning: The planning stage consists of 4 main processes namely, planning the implementation approach, identifying the projects, establishing team composition and providing team training. The plan depends on the vision, objectives and goals. It explains as precisely as possible how the implementation will take place. Priority areas where TQM applications will start are determined at the planning stage. The business may choose to further strengthen its strengths or to eliminate its weaknesses. Planning in TQM applications never ends, it is repeated in every new application.

Execution: In the execution stage, all preparations have been completed. The TQM practices start according to plans prepared by the committee. At this stage, the committee activates the teams, receives feedback from customers and employees about the practices, reorganizes the organizational structure according to changing conditions or needs in practice and rewards the successful teams. Now let’s examine these stages respectively.

• Team activation and direction: Projects are assigned to the teams. The committee should inform the team members about what is expected of the teams, the project schedule, and the project managers whom the teams will work with.
• Feedback of customer satisfaction: After the projects are completed, customer satisfaction should be monitored periodically. With the realization of the projects, it should be questioned whether the customer satisfaction is improved or not.
• Feedback of employee satisfaction: Employee satisfaction should be measured after the completion of the projects, like customer satisfaction. It is necessary to investigate how the change and new ways of doing business are met by the employees and to listen to the suggestions, if any.
• Modify infrastructure (if needed): New applications and processes may require new organizational structures. Since TQM targets continuous development and progress, managers should change the organizational structure when necessary.
• Award & recognition: Teams should be rewarded after the successful projects. Which awards will be given must be determined at the planning stage. Since the projects are performed by teams in TQM, awards should be given on a team basis.

Business Characteristics Affecting the TQM Practices

Although each business tries to follow the others’ quality applications, each business should draw its own path for TQM applications because the parameters such as target market, industry, current quality level, organizational culture are different for each business. However, it can be said whether TQM applications are going to be easily implemented in businesses depending on the experiences obtained from TQM applications. According to Mann & Kehoe the operational characteristics that affect success in TQM applications are as follows:

• Employees
• Business’ performance, age, and scale
• Management and leadership style

Mistakes Causing Unsuccessful TQM Practices

Above, we have examined the TQM process and the factors affecting the success of TQM applications according to the characteristics of the businesses. With the experience we have gained there, we can classify the factors that prevent TQM applications as managerial, organizational and philosophical barriers.

• Managerial barriers refer to the barriers arising from management process in the implementation of TQM,
• Organizational barriers refer to the barriers arising from organizational structure and culture of businesses, and
• Philosophical barriers refer to the barriers arising from misperception of TQM philosophy.

Managerial Barriers:

• Not to examine the practices of other businesses.
• Not to plan the quality process.
• Not to insist on the process of change.
• Not to allocate sufficient resources for TQM applications.
• Not using effective quality measurement techniques.
• Not to determine the type of training required for each job and person.
• Changing business objectives frequently.
• Focusing on short-term business interests, putting teamwork and quality improvement efforts in the background.

Ignoring subordinates’ participation.

Organizational Barriers:

• Poor written and verbal communication between hierarchical levels in the organization.
• Poor communication between departments.
• High employee turnover.
• Resistance to change.

Philosophical Barriers:

• Not trying to understand customers, ignoring customer feedback.
• Not being able to create an organizational culture that enables everyone to participate.
• Failure to develop long-term relationships with good suppliers, believe that quality will only be achieved within the boundaries of the enterprise
• Forgetting that the TQM is an ongoing work.