TQM and Organisation Learning: A Conceptual and Field Study of European Companies

TQM and Organisation Learning: A Conceptual and Field Study of European Companies

TQM and Organisation Learning: A Conceptual and Field Study of European Companies Taken from The International Journal for Quality and Standards Page 1 of 27 www.bsieducation.org/ijqs TQM and Organisation Learning: A Conceptual and Field Study of European Companies Khalid Hafeez Bradford University School of Management, Emm Lane, Bradford BD9 4JL, UK. K.Hafeez1@bradford.ac.uk Khalid Hafeez

TQM and Organisation Learning: A Conceptual and Field Study of European Companies Taken from The International Journal for Quality and Standards Page 2 of 27 www.bsieducation.org/ijqs TQM and Organisation Learning: A Conceptual and Field Study of European Companies ABSTRACT This paper provides a conceptual link between total quality management (TQM) and organisation learning.

A study of ten notable authors in the TQM field is conducted to identify and map out eighteen elements relevant to TQM. Where TQM is recognised as the baseline (first wave of the quality movement), a further literature review suggests that many organisational learning elements are not addressed in the classical TQM literature. A conceptual framework comprising twenty eight elements is developed to map out a progressive relationship between key TQM and organisation learning drivers. We have further identified five financial and fourteen non-financial factors to measure output performance. We have employed well known systems engineering dimensions, namely, technology, organisation and people to further catagorised these key drivers and output measures.

Based on conceptual model, a questionnaire survey is designed and implemented in order to capture a snapshot of European Companies’ efforts to become a learning organisation. Data collected from twenty six companies reveal that the main differentiating factors between TQM and learning companies are the type of learning tools in use and the information system in place. Also learning companies significantly outperform the first wave TQM companies against the non- financial performance measures. Our analyses reveal that many European companies had a misconception that they were well set to become a learning organisation.

In fact only four companies could be recognised as a learning organisation. Twelve companies were found to be in the intermediate stage between TQM and learning organisation. Nine of the surveyed companies were still in the first wave of quality and had not yet embarked on a journey to become a learning organisation. We argue that the framework presented is based on sound academic underpinning and could guide TQM companies to benchmark their efforts on a journey to become a learning organisation.

Keywords: TQM, organisational learning, competence development, learning loops, systems engineering Khalid Hafeez

TQM and Organisation Learning: A Conceptual and Field Study of European Companies Taken from The International Journal for Quality and Standards Page 3 of 27 www.bsieducation.org/ijqs 1. INTRODUCTION Quality management started with simple inspection-based systems where workers would check the finished products visually. Any poor quality product found was to be scrapped, reworked or sold cheaply. During the Second World War, quality began to be verified by full time inspectors, and subsequently quality control was evolved that prescribe a number of pre-requisites such as written specifications, measurement and standards roles.

The efforts were diverted to ensure greater process control and reduced non-conformance. However a final visual inspection of the product was still used as the safeguard to protect customers from receiving product that did not meet the specification.

During the boom of mass-production in 1950’s and 1960’s, it was soon realised that the detection type system were unable to eliminate the root cause of the quality problem. People recognised that quality issues need to be addressed at a wider scale, i.e. by directing organisational efforts towards preventing problems happening at the first place. Feigenbaum (1951) introduced the concept of total quality control, where he undertook a total system approach. His quality principles outlined in 40 steps put an emphasis on prevention-based system, by placing the focus on product, service and process design and streamlining the source activities.

The quality system, thus set in place, is documented and audited to ensure that it is adequate against defined standards. 2. TOTAL QUALITY MANAGEMENT Changing from detection to prevention required not only the use of a set of quality management tools and techniques, but also the development of a new operating philosophy that required a change the way companies were managed. Total Quality Management (TQM) means achieving quality in terms of all functions of the enterprise. This includes interaction between all the functions Khalid Hafeez

TQM and Organisation Learning: A Conceptual and Field Study of European Companies Taken from The International Journal for Quality and Standards Page 4 of 27 www.bsieducation.org/ijqs within a company as well as at the interfaces with its suppliers and customers. TQM aims to achieve an overall effectiveness higher than the individual outputs from the sub-systems such as design, planning, production, distribution, customer focus strategy, quality tools and employee involvement. Customer satisfaction and continuous improvement are the essential beliefs of the TQM philosophy.

Deming (1988) through his famous 14 principles emphasised that quality improvement cannot happen without organisational changes directed by the top management.

Juran (1974) described TQM as “fitness for use” which was recognised a key business success factor in the 1990’s against the other established performance indices such as price and delivery. Juran introduced the concept of quality triology that comprise quality planning, quality control and quality improvement. Juran shared his views with Deming that in order to implement continuous improvement, work based training should be implemented on a frequent basis. For Crosby (1979) quality management is a systematic way of guaranteeing that organised activities happen the way they are planned. It is a management discipline concerned with preventing problems from occurring by creating the attitudes and controls that make prevention possible.

Crosby coined the phrase “Do it right the first time” and the notion of “zero defects” indicating that a prevention based system is crucial to achieve this. He also phrased the term “quality is free” arguing that resource and efforts put in to quality would payback more than the cost involved in terms of savings in wastes, rework, inspection and returns. Like, Deming and Juran, Crosby also stressed the role of management in quality improvement efforts and the use of statistical process control in measuring and monitoring quality. Shingo (1995) further translated “zero defect” into “zero quality control“ concept emphasising on a range of quality tools to remove defect at the source processes.

Oakland (1979) defined TQM as “an approach for improving the competitiveness, effectiveness, and flexibility of an organisation. For him “it is a way of planning organising and understanding Khalid Hafeez

TQM and Organisation Learning: A Conceptual and Field Study of European Companies Taken from The International Journal for Quality and Standards Page 5 of 27 www.bsieducation.org/ijqs activities and individuals at each level”. Ishikawa (1990) argued that “quality management is characterised by the strategic goals those are focussed towards customer’s preferences, likes, tastes, and applications”. He believes that organisational functions should recognise the internal supplier-customer relationships, as each related process being a customer. Ishikawa is also best known for developing various statistical tools for quality problem solving and emphasised the idea of “internal customer”, the next person in the process.

Ishikawa also advocated the idea of quality circles, which is a small team of employees experts to deal with quality problems. Taguchi (1999) stressed that companies should focus their quality efforts on product design stages, called robust design, as it is much cheaper and easier to make changes during the design process rather during the production time. Kanji (1997) developed a benchmarking tool for quality and stresses that it is necessary for top managers to develop a “quality culture” within organisation by taking an active leadership role involving all the employees. Zairi (1998) provided a comprehensive tool for organisations to undergo a two stage external and internal benchmarking exercise, and stressed the role of leadership for implementing continuous improvement.

In summary, the essence of quality is to exceed customer expectations and involve everyone in the company. TQM is therefore a philosophy of management that strives to make the best use of all available resources and opportunities through continuous improvement. TQM has been a key business improvement strategy since 1970’s as it has been deemed essential for improving efficiency and competitiveness. A summary of the TQM evolution is illustrated in Figure 1. On the basis of a literature review, we conducted a comparative matrix on the work of above ten authors who we believe, have had the major influence in developing the TQM discipline.

Through a careful content analysis, a set of eighteen elements are identified and categorised under the well- established systems engineering perspectives namely, technologies (and tools), organisation (and systems), and people (Parnaby, 1981; Towill, 1993; Hafeez, et al.; 2006). Table I illustrates the importance of each of these elements based on a subjective assessment method as described by Khalid Hafeez

TQM and Organisation Learning: A Conceptual and Field Study of European Companies Taken from The International Journal for Quality and Standards Page 6 of 27 www.bsieducation.org/ijqs Hafeez, et al. (2006). The measurement used is on a five-point scale. In our subjective assessment if we feel that one author make no mention of a key elements, it is recorded as “no citation” with a score of (0). Similarly “low citation (0.25)”, “moderate citation (0.5)”, “high citation (0.75)” and “substantially high citation (1.00)” scores are used. Where the use of this measure is for illustrative purposes only, Table I gives overall minimum and maximum ratings for these elements.

It can be seen that the most cited element is “continuous improvement” belonging to tools (technologies) cluster scoring 6.50, as more than often TQM is identified as a continuous improvement process. The other notable elements recognised highly include “culture” with a score 6.25 and “team learning” scoring 5.50.

ISO 9004 20 clauses Internal advisory Continuous improvement Total Quality Management Salvage Corrective action Performance data Full-time inspection Statistics System audits Process control FMEA Quality Assurance Quality Control Inspection-based system Design Processing Sorting Quality planning, manuals and cost 1960's 1950's 1970's 1940's Shared vision & culture Wider dimension of human value Systems approach to problem solving Renewed focus on the internal and external customer Generate employee involvement Emphasis on continuous improvement Improving tangible work processes ISO 9000 Figure 1: Evolution of Total Quality Management (Hafeez et al., (2006 ) Khalid Hafeez

arning: A Conceptual and n Companies Taken from The International Journal for Quality and Standards Page 7 of 27 www.bsieducation.org/ijqs TQM and Organisation Le Field Study of Europea Khalid Hafeez Authors Total Quality Management Elements Demin g Juran Zairi Crosb y Kanji Feigenba um Ishika wa Taguch i Oaklan d Shing o Weighti ng (total = 10) Single-loop learning 3.50 Problem solving 4.75 Benchmarking 3.00 Action learning 4.75 Continuous improvement 6.50 Learning cycle 1.75 Technologies (Tools) Data management 3.00 Culture 6.25 Organisation structure 3.75 Communication 4.25 Shared vision 3.00 Organisation (systems) Performance management 4.75 Leadership 3.50 Management responsibility 4.00 Empowerment 4.75 Rewards/recognition 2.50 Team learning 5.50 People Training & education 4.75 Table I: A comparative study of ten authors from the TQM literature Key: Not cited (0.0) some citation (0.25) moderate citation (0.5) High citation (0.75) Substantially high citation (1.0)

TQM and Organisation Learning: A Conceptual and Field Study of European Companies Taken from The International Journal for Quality and Standards Page 8 of 27 www.bsieducation.org/ijqs 3. Total Quality Management and Organisation Learning Senge (1994a, b) described quality movement under three waves of development. He describes the first wave as TQM. The second wave is about embedding flexibility and flux within organisations to achieve “system wide dynamic performance”. The third wave is about “institutionalisation of learning”. Senge (1994a) describes learning organisation as a “place where people continually expand their capacity to create results they truly desire, where new and expansive patterns of thinking are nurtured, where collective aspiration is set free and where people are continually learning how to learn”.

Garvin (1993) defines learning organisation as an organisation “skilled at creating, acquiring and transferring knowledge, and modifying its behaviour to reflect new knowledge and insight”. Garvin sees a clear link between a learning organisation and the quality movement by suggesting that to become a learning organisation, companies need to be skilled at five activities; namely, systematic problem solving, experimenting with new approaches, learning from past experience, learning from others and transferring knowledge quickly and efficiently throughout the organisation. Dodgson (1993) describes organisation learning as “the way firms build, supplement, and organise knowledge and routines around their activities, and within their cultures and adapt and develop organisation efficiency by improving the use of the broad skills of their workforce”.

Where Huber (1991) argues that learning occurs in an organisation if through processing of information the range of its (organisation’s) potential behaviour change. However, Huber believes that learning need not be conscious or intentional and learning does not always increase the learner’s effectiveness or even potential effectiveness, Moreover, learning need not result in observable changes in behaviour. Morgan (1986) argues that it is the job of leadership and management in an organisation to ensure participatory approach and should encourage brainstorming opportunity in a company for any problem solving.

Khalid Hafeez

TQM and Organisation Learning: A Conceptual and Field Study of European Companies Taken from The International Journal for Quality and Standards Page 9 of 27 www.bsieducation.org/ijqs Khalid Hafeez Huber (1991) considers that four constructs are integrally linked to organisation learning, namely, knowledge acquisition, information distribution, information interpretation, and organisation memory. Mason (1993) suggests that organisation learning occurs when the firm's interacts with the environment and this can be achieved through information processing. He suggests that Information is an agent to reduce uncertainty and therefore increase learning.

Nevis et al., (1995) suggests that firms should have both formal and informal structures and processes for the acquisition, sharing and utilisation of knowledge and skills. By studying various successful Japanese organisations, Nevis argues that learning continuously helps various companies to develop certain core competencies that were impossible if organisational learning mechanisms were not in place.

We have illustrated in Table I, how some of the organisation learning elements are embedded within Total Quality Management framework. However, these learning elements scored relatively low values, such as single loop learning scored 3.50 and learning cycle scored a mere 1.75. It is also clear that many of the organisation learning elements as we understand today such as, double loop learning, deutero loop learning and knowledge management are scarcely addressed in the classical TQM literature. Using organisational learning literature, we believe that the relationships between TQM and organisation learning can be explained under the impression of three waves of quality movement as illustrated in Figure 2.

TQM and Organisation Learning: A Conceptual and Field Study of European Companies Take Page 10 of 27 www.bsieducation.org/ijqs As illustrated in Table I, the first wave organisation implementing TQM use leaning tools such as, single loop learning, problem solving, benchmarking, action learning, continuous improvement and/or learning cycle. Single-loop learning primarily concentrates on specific activity or direct effect. According to Dodgson (1993) single-loop learning can be equated to activities that add to the knowledge base or firm-specific competences or routines without altering the fundamental nature of the organisation’s activities.

Single-loop learning has also been referred to as lower-level learning by Foil and Lyles (1985) adaptive learning or coping by Senge et al. (1994b) adaptive/maintenance learning; coping by Dixon (1993) and learning from experience by Barrow (1993).

n from The International Journal for Quality and Standards Khalid Hafeez Dynamic system wide performance Continual learning (Knowledge development) Learning Organization Learning Institutionalization (Competence devlopment) Continuous improvement (Skill development) Total Quality Management Evolution of Learning Organization Maturity Growth Conceptual Figure 2 Evolution of learning organisation exhibiting three waves of quality movement learning how to learn Update and refresh the organization memory Information sharing process Fostering new ways of thinking 1970's 1980's 1960' nagement and Quality System Elements s Guidelines) s ISO 9004 - Quality Ma (20 clause Shared vision & culture W ider dimension of human value Systems approach to problem solving Renewed focus on the internal and external customer Generate employee involvement Emphasis on continuous improvement ing tangible work processes Improv Establish learning communities Managing learning

TQM and Organisation Learning: A Conceptual and Field Study of European Companies Taken from The International Journal for Quality and Standards Page 11 of 27 www.bsieducation.org/ijqs Usually single-loop learning focuses on immediate problems and opportunities, therefore, it may limit knowledge development and behaviour modification actions, these most often require relatively longer time span. Double loop learning (DLL) is described as the second or the ‘higher- level learning’ (Foil and Lyles; 1985), ‘generative learning’ or learning to expand an organisation’s capabilities by Senge et al.

(1990), ‘anticipative/innovative’ learning or productively creating (Dixon, 1993); and ‘experiential’ learning (Barrow, 1993). Double-loop learning, can be considered as part of the second wave of quality, or ‘dynamic system wide performance’ as recognised by Senge (1990, 19994a), is about changing the organisation’s knowledge base or firm-specific competence’s or routines (Hafeez et al; 2002a,b,c; 2007). According to Argyris and Schön (1996), with double loop learning, the errors are tracked down and corrected, and accordingly organisation incorporates changes in its fundamental rules and norms involving action and behaviour.

DLL questions the overall effectiveness of current norms, values and practices, and suggests that fundamental changes may be required to improve performance.

On the other hand, the third wave of quality is about meta-learning, that is, how to carry out single- loop and double loop learning. This wave is a must when the existing knowledge render inadequate to reach organisational objectives. For Senge, this type of learning is the necessary conditions for an organisation to be qualified as “learning organisation” (1994a-c). This could mean a wholesale change and renewal, requiring individuals to reflect on mental models thereby learning to learn new things, and for organisations to induce new culture and structures (Argyris and Schön, 1996). Deutero learning involves learning how to learn and it requires organisational members to inquire into the nature of their learning system and its effects on their process of inquiry.

In summary, Argyris and Schön (1996) distinguish between three levels of learning, for them, single-loop learning questions how things are done; double-loop learning is about inquiring the underlying purposes and why things are done; and triple-loop learning addresses the essential principles on which the organisation is based, and challenging its mission, vision, market position Khalid Hafeez

TQM and Organisation Learning: A Conceptual and Field Study of European Companies Taken from The International Journal for Quality and Standards Page 12 of 27 www.bsieducation.org/ijqs and culture. Double-loop and Deutero learning are concerned with the why and how to change the organisation while single-loop learning is concerned with accepting change without questioning underlying assumptions and core beliefs. While each learning process creates varying degree of information, this review suggests that Deutero learning may offer more value to companies those need to generate a steady stream of product innovations for their survival.

Similar to the TQM assessment matrix (Table I) we identify the key organisational learning elements by conducting a subjective assessments of ten key authors in the organisational learning area as illustrated in Table II. Note that building on the systems engineering concepts employed in Table I, we have clustered these organisation learning elements under tools (technologies), organisation (systems) and people according to Hafeez et al. (2006) classifications. Thereby, we are able to identify further learning elements against the second wave of quality (i.e. dynamic system wide performance) and the third wave of quality (i.e.

learning organisation).

Khalid Hafeez

TQM and Organisation Learning: A Conceptual and Field Study of European Companies Taken from The International Journal for Quality and Standards Page 13 of 27 www.bsieducation.org/ijqs Khalid Hafeez Authors Weighting (total = 10) Elements Senge Argyris Garvin Dodgson Fiol Nevis Huber Dixon Mason Morgan Single loop learning 7.5 Problem solving 4.75 Benchmarking 4 Action learning 4.25 Continuous improvement 4.5 Learning cycle 3.75 Total Quality Management Data management 3.5 Learning orientation 5.5 Information system 6 Double loop learning 6.25 Dynamic system wide performance Information management 5 Triple loop learning 6.5 Technologies (Tools) Learning organisation Knowledge management 5.75 Culture 4 Organisation structure 4.5 Communication 5.75 Shared vision 5 Total Quality Management Performance management 3.75 Fostering new ways of thinking 4.25 Dynamic system wide performance Organisation’s potential behaviours 4.75 Establish learning Communities 5.5 Organisation (systems) Learning organisation Learning strategy 5.75 Leadership 4.25 Management responsibility 3.25 Empowerment 6 Rewards/recognition 4.25 Team learning 4.5 People Training & education 5 Table II: A comparative study of ten authors from the organisational learning literature Key: Not cited (0) Some citation (0.25) Moderate citation (0.5 High citation (0.75) Substantially high citation (1.0) Key: Not cited (0.0) some citation (0.25) moderate citation (0.5) High citation (0.75) Substantially high citation (1.0)

TQM and Organisation Learning: A Conceptual and Field Study of European Companies Taken from The International Journal for Quality and Standards Page 14 of 27 www.bsieducation.org/ijqs Interestingly, the first wave or TQM elements given in Table I based on classical TQM literature may be compared against the subjective assessment values illustrated in Table II based on organisational learning literature. For example, for the tools (technology) cluster, there are much higher values for single loop learning in Table I (3.5 compared with 7.5, respectively in Table II). Interestingly, continuous improvement scored low values (6.5 compared with 3.75, respectively) in Table II.

However, we have identified four elements exclusively related to the second wave, namely, learning orientation, information system, double loop learning and information management. Whereas we would regard triple loop learning and knowledge management belongs to the third wave of quality. With regards to the organisation (systems) cluster, subjective values for ‘culture’ secured strikingly low score of 4.0 in Table II compared with 6.25 in Table 1. The second wave elements introduced here are, ‘fostering new ways of thinking’ within the organisation, and ‘recognising organisational potential behaviour’.

The other third wave elements in this category include establishing ‘learning communities’ within and outside the organisation, and developing and implementing a conscious ‘learning strategy’ for the whole organisation. However, we have not identified any new elements for the people dimension for the second and/or third waves of quality. Perhaps this indicates that the people issues have been comprehensively recognised within the classical TQM literature. Overall on comparing Table I and Table II, our subjective assessment exercise illustrates that the organisation learning authors have relatively given more emphasis to the ‘leadership’, ‘empowerment’ and ‘training and education’ elements.

However, other elements such as, ‘management responsibility’, ‘rewards and recognition’ and ‘team learning’ received more emphasis from the TQM list of authors.

Khalid Hafeez

TQM and Organisation Learning: A Conceptual and Field Study of European Companies Taken from The International Journal for Quality and Standards Page 15 of 27 www.bsieducation.org/ijqs 4 A CONCEPTUAL FRAMEWORK FOR A LEARNING ORGANISATION Figure 3 shows a conceptual framework how TQM can be considered as a base line for a learning organisation. TQM initiative can only be regarded successful if a new working environment has been created in which people are able to learn. Relationships between training, skills, knowledge and competence developments (Hafeez et.

al. 2002a-c) are the main ingredients in a learning process. Continuous improvement is the cornerstone of TQM. Oakland (1993) claims that the three basic principles of never-ending improvement are to focus on the customer, understand the process, and involve the people. Companies have to translate "continuous improvement" into "continuous learning" through "dynamic system- wide" performance (Senge, 1990, 1994a). It involves sharing knowledge across the organisation, adopting a systems approach for problem solving, mastering new ways of thinking, and updating and refreshing the organisation memory (Hafeez & Abdulmaged, 2003).

The learning organisation framework consists of twenty-eight elements embedded within well-established systems engineering principles of technologies and tools (T), organisation and system (O), and people (P) (Hafeez et al., 2006). As mentioned earlier, the cluster of ‘people’ elements is same for the three waves of quality. However, we anticipate that these elements would deem different weights for each of the quality wave. Khalid Hafeez

TQM and Organisation Learning: A Conceptual an Field Study of European Compani d es Taken from The International Journal for Quality and Standards Page 16 of 27 www.bsieducation.org/ijqs Khalid Hafeez Technologies and Tools (T) Organisation and People systems (P) (O) Single loop learning Culture Problem solving Organisation structure Benchmarking Communication Action learning Shared vision Leadership Continuous improvement Performance management Learning cycle Management responsibility First wave Data management Empowerment Double loop learning Fostering new ways of Learning orientation Thinking Rewards/recognition Information system Change organisation’s Second wave Information management Potential behaviours Team learning Establish learning Training & education Triple loop learning Communities Third wave Knowledge management Learning strategy Non-financial performance Financial performance Customer satisfaction Inventory turnover Delivery reliability Productivity Order cycle time (time from receipt Employee productivity of order to delivery to customer) Market share/ profit Innovation (new products) Defect rates/quality cost Workflow improvement Data collection/processing capability Data storing capability First wave Skills development Information acquisition capability Information storing capability Second wave Knowledge development Knowledge processing/analysis capability Knowledge retrieving capability Third wave Individual/team competence development Figure 3: The conceptual framework for a learning organisation A framework is of little use unless there are clear milestones and measuring procedures.

We believe that the new age organizations cannot solely rely on quantifiable measures such as

TQM and Organisation Learning: A Conceptual and Field Study of European Companies Taken from The International Journal for Quality and Standards Page 17 of 27 www.bsieducation.org/ijqs cost and schedule performance, while ignoring variables such as quality and new product development. Therefore, a set of nineteen endogenous outcomes has been identified and clustered under the first wave outputs, second wave outputs and third wave outputs. Borrowing from Kaplan and Norton’s (1993) balance score card concept, these outcomes are grouped under ‘soft’ non-financial and ‘tangible’ financial performance categories as shown in Figure 3.

These measures are linked to the three waves of quality. Again like people dimension, we would characterise the financial measures common to all three waves of quality. The main financial measures are identified as inventory turn over, productivity, employee productivity, market share/profit defect rates/quality cost. As for as non financial measures are concerned, we are able to identify specific ‘soft; measure for the each wave. For example, the non- financial measures for the first wave include customer satisfaction, delivery reliability, improved cycle time, innovation, and improved workflow.

Overall, the main emphasis of the first wave measures relates to data collection and skill development issues. The second wave measures concern with quantifying the organization memory capacity and knowledge development capability. Whereas, the third wave is about the strategic use of this knowledge for future products and services. The main focus of the measuring process is related to organisation core competence development (Hafeez et al. 2002a,b,c) as well individual competency developments (Hafeez and Essmail, 2006).

5 SURVEY STRUCTURE Using the framework given in Figure 3, a questionnaires survey was conducted to review the quality movement in the European organisation. The sample consists of manufacturing, service and public sector organisations. In a qualifying round (through emails and face to Khalid Hafeez

TQM and Organisation Learning: A Conceptual and Field Study of European Companies Taken from The International Journal for Quality and Standards Page 18 of 27 www.bsieducation.org/ijqs Khalid Hafeez face communications) we were able to record the consent of sixty-eight European organisations to take part in this survey.

It should be noted that the organisations’ selected in the qualifying round had some business improvement strategies/programmes in place for past three years. In many cases, the sample organisations were in the process of developing or implementing TQM, organisational learning and knowledge management strategies and projects. As such, these organisations were a representative of the organisations attempting to transform themselves into a learning organization. A total of twenty-six questionnaires were completed and returned achieving 38% response rate.

6 RESULTS AND DISCUSSIONS Each element of the framework was translated in the form of a linear scale question. Respondents were asked to provide a subjective assessment to each question. Subsequently, each sample responses were summed and averaged under technologies (T), organization (O), and people (P) category as explained in detail elsewhere (Hafeez et al., 2006). The overall classification of these companies into the respective order (i.e. first wave, second wave, third wave) was conducted as follows: If a respondent records a zero value for the second wave and third wave elements, that particular company deemed to be the first wave organization.

However, in case a respondent assign some weights to the second and third wave elements, however if the average score for individual T, O, or P, category respectively, is ≤ 0.33, the company is still categorised as the first wave company. Similar rules were developed to identify if a company belongs to the second wave or the third wave. For example, if the average value for the T, O, or P lies in between 0.33 and 0.66, the company is considered in the second wave. If respectively, the average T, O, and P scores are > 0.66, that particular organisation is considered a third wave or learning organisation.

TQM and Organisation Learning: A Conceptual and Field Study of European Companies Taken from The International Journal for Quality and Standards Page 19 of 27 www.bsieducation.org/ijqs To develop an overall picture, data from individual companies was summed for each element and averages taken using the method described by Hafeez et al. (2006). Figure 4 gives the average score for all the 20 sample companies categorised under the first wave, the second wave and third wave organisation. As shown in Figure 4 technologies and tools element (T) scored 0.25 for the first wave, around 0.55 for the second wave and 0.60 for the third wave.

This suggests that the companies in the second wave and the third wave respectively, have progressively introduced new tools and technologies. Similar improvements were noted for the organization (O) elements and people (P) elements, respectively, where people (P) elements enjoyed an overall highest score (0.68) for the third wave companies. Figure 4: Average score for the twenty six sample companies according 0.2 0.4 0.6 0.8 1 Khalid Hafeez First wave companies Technologies and tools (T) Organization and systems (O) People (P) to T, O, P classification Second wave companies Third wave companies

TQM and Organisation Learning: A Conceptual and Field Study of European Companies Taken from The International Journal for Quality and Standards Page 20 of 27 www.bsieducation.org/ijqs More insight was revealed by analysing the sections related to the performance measure. Figure 5 presents the collective average scores under non-financial and financial performance categories. Again individual responses were summed under financial and non- financial categories. These were again summed and averaged to determine the overall performance. More than 98% of the respondent recorded that learning has a direct impact on the organisation financial performance.

0.2 0.4 0.6 0.8 1 Non Financial Performance Financial Performance First wave companies Second wave companies Third wave companies Figure 5: The organisation performance score for the twenty six sample companies However, many first wave companies didn’t feel that they have made any significant improvements in the non-financial performance category. The main reason is that Khalid Hafeez

TQM and Organisation Learning: A Conceptual and Field Study of European Companies Taken from The International Journal for Quality and Standards Page 21 of 27 www.bsieducation.org/ijqs improvements in the innovation, workflow and skill development were not realised.

Perhaps they didn’t have any performance measure in place to this effect. More than half of the respondents expected that improved learning would provide the benefits of reduced defect rates (37%), increased customer satisfaction (47%), improved information sharing process (81%), individual competence development (68%), improved productivity (46%) and reduced order cycle time (51%).

In the financial performance category, very little difference was noted between the first wave (37%) and the second wave organisations (44%). Therefore, in essence, second wave is more about cultivating qualitative measures and essential organization support systems in a company. However, with respect to the third wave, financial as well as non-financial performances improvement is recorded. The main difference between the second wave and the third wave companies are the knowledge management and competence development programmes in place, and these companies seems to have had experienced some direct benefits of such programmes.

Whilst organisations have recognised the importance of creating, processing and transferring knowledge, they seem to be unable to translate this knowledge into organisational strategies. This observation is supported by the fact that only 6% of the respondents reported that their organisations currently were ‘very efficient’ at leveraging learning to improve performance. In fact overall 45% respondents reported that their organizations were developing ‘dynamic system wide performance’ as an organisational strategy.

To verify these findings, each respondent was asked to indicate whether their organisation was developing an organizational learning strategy and/or if the organisation was either implementing or had developed specific continuous improvement programs.

A total of seven Khalid Hafeez

TQM and Organisation Learning: A Conceptual and Field Study of European Companies Taken from The International Journal for Quality and Standards Page 22 of 27 www.bsieducation.org/ijqs respondents (35%) stated that their organizations were developing TQM as a base line for the organizational learning. Most of the 13 organizations (65%) were in the early or rolling out stage of these initiatives to support organisation learning strategies. Of these nine organizations (45%) were in the second wave of quality implementing dynamic system wide performance. On the other hand only four organizations (scoring overall respective T, O and P score >0.66) had actively introduced most of the organizational learning activities listed in Figure 3.

8 CONCLUSIONS Survey results indicate that organisations are experiencing great difficulty in translating organisational learning theory into practice. Only a few organisations have effectively adopted a holistic approach towards organisational learning. In fact, essential ‘building blocks’ for speeding the learning process, such as, embedding new knowledge into the organization, and developing strategic competence assets, are almost completely absent or ineffectively performed in most of the surveyed companies. Under the deployment of organisational learning elements, leadership, management responsibility, empowerment, team learning, learning cycle and culture were cited by more than half of the respondents as the most practices learning tools.

However, many first wave companies didn’t feel that they have made any significant improvements in the non-financial performance category. The main reason is that improvements in the innovation, workflow and/or skill development were not realised. Also we found that inability to introduce appropriate non-financial or ‘soft’ performance measures has been the main differentiating factor in between the first wave, the second wave and the third wave companies.

Khalid Hafeez

TQM and Organisation Learning: A Conceptual and Field Study of European Companies Taken from The International Journal for Quality and Standards Page 23 of 27 www.bsieducation.org/ijqs In conclusion, from this sample group of companies it can be seen that although most of these had some understanding of the commercial and/or institutional demands to introduce organisational learning as a business strategy, few benchmarks of best practice have emerged. We would argue that the framework presented in this paper is based on sound academic underpinning.

The framework could guide TQM companies to benchmark their efforts on a journey to become a learning organisation. Also the systems engineering dimensions of technology, organisation and people would allow companies to understand the kind of intervention needed to develop various operational and human resource strategies to become a learning organisation Acknowledgements The author wishes to express its thanks to Dr H. Abdelmeguid past PhD students with the Sheffield Hallam University UK, for providing with useful information for this paper. This contribution is duly acknowledged.

Khalid Hafeez

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