TQM for Small Businesses

Is total quality management (TQM) applicable to small and medium-sized businesses? Consider for example a local hardware store where returned items (like a defective drill) are resold. The consequences are frustrated customers, incorrect stock levels, and leading to business failure. A TQM solution to this problem is to develop a checklist for classifying returns as either fit-for-resale or return-to-manufacturer. In addition, employees would require hands-on-training on how to use that checklist and take appropriate action on the returned item. This would then be codified into a standard operating procedure (SOP).

Does this solution count as a valid TQM solution? Yes and no.

It meets many of the conditions given by (Goetsch & Davis, 2020, p. 4): it is customer-focused, obsessed with quality, involves bottom-up training, teamwork, and employee involvement. There isn’t enough information to determine whether this supports the company’s strategy, however, as no explicit strategy was given. It is not clear how continual improvement is possible in the process of handling customer returns.

One implementation error is that everybody is not included (Goetsch & Davis, 2020, p. 13-14). TQM implementation is an all-or-nothing process, and the SOP wouldn’t terribly impact the company accountant, of course, but the accountant must take part. Who specifies an improved accounting process, and how is it tested?

Two problems with the SOP are the induced bureaucracy and required training. These problems are not specific to the example hardware store, but are endemic to TQM.

Bureaucracy – in the form of red tape, complex regulations, and administrative burdens – is the death knell of small businesses. The red tape and administrative burdens drain time, money, and people from productive purposes.

Training would require time and the efforts of at least one person acting a trainer. Of course the training would have to be repeated whenever a new employee is hired.

Here’s a small example of what TQM training looks like. The once-large software company for which I used to work was converting to TQM, which required training in TQM itself. When discussing the importance of processes, the instructor had us do the following exercise:

We were divided into groups of three, and given a pile of 10-20 pennies, all heads-up. The first person in the group was to flip all the pennies over (tails up) and pass the pennies to the second person. The second person was to flip the pennies over again (heads up) and pass the pennies to the third person. That was the process.

I asked the instructor something to the effect of “why not just slide the pennies from person 1 directly to person 3 without flipping them over. The result is the same.” His response was something like “that’s not the process.”

References

Baldacchino, G. (1995, March). Total quality management in a luxury hotel: A critique of practice. International Journal of Hospitality Management, 14(1), 67-78. https://doi.org/10.1016/0278-4319(95)00006-X

Goetsch, D. L. & Davis, S. B. (2021). Quality management for organizational excellence: Introduction to total quality (9th ed.). Pearson.

Manley, S. C., Williams Jr, R. I., & Hair Jr, J. F. (2024). Enhancing TQM’s effect on small business performance: A PLS-SEM exploratory study of TQM applied with a comprehensive strategic approach. TQM Journal, 36(5), 1252-1272. https://doi.org/10.1108/TQM-10-2021-0299