UNIT III

POLICIES IN FUNCTIONAL AREAS

o Policies are designed to guide the behaviour of managers in relation to the pursuit and
achievement of strategies and objectives.
o Policies are instrument for strategy implementation.

 Business Policy defines the scope or spheres within which decisions can be taken by the
subordinates in an organization.

 It permits the lower level management to deal with the problems and issues without consulting
top level management every time for decisions.

 Business policies are the guidelines developed by an organization to govern its actions.

 They define the limits within which decisions must be made

Features of Business Policy

An effective business policy must have following features-

 Specific- Policy should be specific/definite. If it is uncertain, then the implementation will

become difficult.

 Clear- Policy must be unambiguous. It should avoid use of jargons and connotations. There
should be no misunderstandings in following the policy.

 Reliable/Uniform- Policy must be uniform enough so that it can be efficiently followed by the

subordinates.

 Appropriate- Policy should be appropriate to the present organizational goal.

 Simple- A policy should be simple and easily understood by all in the organization.

 Inclusive/Comprehensive- In order to have a wide scope, a policy must be comprehensive.

 Flexible- Policy should be flexible in operation/application. This does not imply that a policy
should be altered always, but it should be wide in scope so as to ensure that the line managers
use them in repetitive/routine scenarios.

 Stable- Policy should be stable else it will lead to indecisiveness and uncertainty in minds of
those who look into it for guidance.
 Difference between Policy and Strategy
The term “policy” should not be considered as synonymous to the term “strategy”.
The difference between policy and strategy can be summarized as follows-

 Policy is a blueprint of the organizational activities which are repetitive/routine in nature.

While strategy is concerned with those organizational decisions which have not been
dealt/faced before in same form.

 Policy formulation is responsibility of top level management. While strategy formulation is

basically done by middle level management.

 Policy deals with routine/daily activities essential for effective and efficient running of an
organization. While strategy deals with strategic decisions.

 Policy is concerned with both thought and actions. While strategy is concerned mostly with
action.

 A policy is what is, or what is not done. While a strategy is the methodology used to achieve a
target as prescribed by a policy.

PERSONNEL POLICIES
 The development of competent and motivated employees

 Employment facilities- package, compensation, regulations

 Administration policies- recruitment, selection, orientation, career development

 Feedback policies- discipline, control and valuation Human capital- performance evaluation,
training and development

 Human resource development Welfare- pubic relation, protection, care, feelings Reducing
turnover Working environment Future growth Work study Time and motion study

MARKETING POLICIES
Marketing takes care of product, place, price and promotion and service that look into package,
physical evidence, process & people.
 Production policies/ product operation management policies must be coordinated with
marketing policies for the firm to succeed.

 Careful integration with financial components such as capital budgeting and investments prove
much better.

 Operation decision areas are:

 Low cost provider of goods and services,

 Quality provider,

 Stress customer service,

 Rapid and frequent introduction of policies,

 Strive for absolute growth,

 Seek vertical integration,

 Maintain revenue capacity

PRODUCT POLICIES

 production operation management-

 Operating policies must be in coordination with marketing policies to succeed.

 Careful integration with financial policy components such as capital budgeting, investment
decision is essential.

 It considers: Low cost provisions Providers of goods and services- quality, quantity, cost and
convenience,

 Stress Customer services,

 Provide rapid and frequent introduction of policies,

 Strive for absolute growth,

 Seek vertical integration,

 Maintain revenue capacity,

 Guide marketing managers- decision, product lines,

  packaging, accessories,

 quality and product development,

 elements of marketing

Public relation policies

 Corporate social responsibility
 Public Image Background Advertisement and publicity
 Relation with leaving employees
 Response of employees working in other organization

Financial policies

 Growth in resources

 Growth in earnings

 Higher dividends

 High return on invested capital

 Bigger profit margins

 Attractive economic value added (EVA)- cost advantage- economies and diseconomies of scale,

 learning and experience curve effects,

 cost of key resource inputs, link, sharing, integration, time, first movers, outsourcing)

 Strong bond and Credit rating Market value added (MVA)

 Bigger cash flows Recognition as a blue chip company Substantial rising in stock price

 More diversified revenue base

  McKinsey 7S Framework 

The McKinsey 7S Framework is a management model developed by well-known business

consultants Robert H. Waterman, Jr. and Tom Peters in the 1980s.

 This was a strategic vision for groups, to include businesses, business units, and teams. The 7 Ss
are structure, strategy, systems, skills, style, staff and shared values.

 The model is most often used as an organizational analysis tool to assess and monitor changes in
the internal situation of an organization.

 In McKinsey model, the seven areas of organization are divided into the ‘soft’ and ‘hard’ areas.

 Strategy, structure and systems are hard elements that are much easier to identify and manage
when compared to soft elements.

 On the other hand, soft areas, although harder to manage, are the foundation of the
organization and are more likely to create the sustained competitive advantage.

 Strategy is a plan developed by a firm to achieve sustained competitive advantage and

successfully compete in the market.
 The concept of strategy includes purposes, missions, objectives, goals, and major action
plans and policies.

In general, a sound strategy is the one that’s clearly articulated, is long-term, helps to achieve
competitive advantage and is reinforced by strong vision, mission and values.
But it’s hard to tell if such strategy is well-aligned with other elements when analyzed alone.

For example, short-term strategy is usually a poor choice for a company but if its aligned with
other 6 elements, then it may provide strong results.

 Structure represents the way business divisions and units are organized and includes the
information of who is accountable to whom.

In other words, structure is the organizational chart of the firm. It is also one of the most visible
and easy to change elements of the framework.

STRUCTURE is organization chart and the associated information that flows how the jobs
are integrated- who, whom, when and why. Basically organizational structure prescribes the
formed relationship among various position and activities. Arrangements for reporting
relationship and what rules and procedure exist to guide the various activities performed by
members are all part of the organizational structure

 Systems are the processes and procedures of the company, which reveal business’ daily
activities and how decisions are made. Systems are the area of the firm that determines how
business is done and it should be the main focus for managers during organizational change.

System- is a flow of activities involved in daily operations of the business including core
process. It refers to all regulations and procedures – formal and informal those compliment
the organization structure/ infrastructure. Systems include all those procedures and
methodologies which are framed by the organization and followed by the operating
personnel in the respective functional area, e.g., financial accounting system, recruitment,
training and development system, production planning and control system, quality
management (TQM) computerization etc. In all these functional areas some traditional
system may be in existence which needs to be reviewed and changed as per requirements
in view of advanced technology and processes developed.

 Skills are the abilities that firm’s employees perform very well. They also include capabilities and
competences. During organizational change, the question often arises of what skills the
company will really need to reinforce its new strategy or new structure.

Skills- signify organization‘s dominant capacity- capability and competencies. If the system is
to be changed for the better it demands
 improvement of the skills and aptitude of the concerned personnel for higher productivity.
They must be imparted necessary training and exposure for orientation, updating and
development of their own potentialities

 Staff element is concerned with what type and how many employees an organization will need
and how they will be recruited, trained, motivated and rewarded.

Staffing is the process of acquiring human resources for the organization assuring that they
have the potential to contribute to the achievement of the organizational goals. Staffing
involves placement of the right man in the right job. But since the job profile is getting
changed day by day because of radical changes and developments in science and
technology, continuous improvements and updating of knowledge and skills of all category
of staff is very essential to achieve the desired output and results

 Style represents the way the company is managed by top-level managers, how they interact,
what actions do they take and their symbolic value. In other words, it is the management style
of company’s leaders.

Style- is how managers collectively spend their time and attention and how they use
symbolic behavior, how management act is more important than what management says.
Culture needs to strengthen and conveyed through rites, rituals, myths, legends and actions.

 Shared Values are at the core of McKinsey 7s model. They are the norms and standards that
guide employee behavior and company actions and thus, are the foundation of every
organization.

Shared values/super ordinate goals- (organization climate) Super ordinate goals are the
fundamental ideas around which a business is built. They are its main values. They are the
broad notions of future direction. That is why the top management as a team wants to
express itself which may be considered as organizational objectives, According to McKinsey
framework, super ordinate goals refers to a set of values and aspirations that goes beyond
the conventional formal statement of corporate objectives.

LEADERSHIP AND MANAGEMENT STYLE

Strategic leadership refers to a manager’s potential to express a strategic vision for the organization, or
a part of the organization, and to motivate and persuade others to acquire that vision.

Strategic leadership can also be defined as utilizing strategy in the management of employees

Leadership is the relationship in which one person (the leader) influences the others work together
on a related task to attain goals devised by the leader and/ or the groups.
Leaders require and use three skills in influencing and interacting with people: technical skills,
human relation skill and conceptual skill.

Manager exhibits leadership when he or she secures the cooperation of others in accomplishing
objectives. Organizational leadership plays a significant role in the changing and competitive 41
business environment. It provides pace and energy to the work and empowers employees and
employers. However the appropriate style of leader helps for successful implementation of
strategy.

Characteristics/ Functions of Leadership

Consider Environmental changes- Internationalization Deregulation Maturation of markets
Technological development Competitive intensity High level of performance

Taking care of Organizational changes- Growth of firms Product diversification Sophisticated

technology International expansion Increasing complexity Effective guidelines

Transformational and transactional Strategic This includes chief entrepreneur, crisis solver, task
master, figurehead, spokesperson, persons responsible for resource allocation, negotiator,
motivator, advisor, inspiriting person, consensus builder, policy maker, mentor and head cheer
anchor. They stay on top to observe what is happening and well thing are going, promoting a
culture in which a organization is energized to accomplish strategy and perform a high level Keep
the organization responsive to changing conditions, alert for new opportunities and bubbling with
innovative ideas.

Dealing with company politics

Entering ethical behavior Leading the process of making corrective adjustments

Leadership implementation

Managing walking around Fostering a strategy supportive climate and culture .Keeping the internal
organization responsive and innovative and Empowering champions.

Different leadership and management styles

AUTOCRATIC LEADERSHIP
allows autocratic leader to take the ultimate control of taking decisions without consulting others.
An autocratic leader possess high level of power and authority and imposes its will on its employees.
This type of leadership proves to be useful where close level of supervision is required

Creative employees morale goes down because their output is not given importance and is often detest
by employees. Since they are unable to take any part in decision making, this results in job satisfaction
and staff turnover.

Strict autocrat- allows complete autocratic where the method of influencing subordinate is
completely negative.

Benevolent autocrat- typically gives awards to subordinates and motivates to achieve the goal.

Incompetent autocrat- adopts this style to hide his incompetence.

LAISSEZ-FAIRE LEADERSHIP
Under this type of leadership, a laissez-faire leader do not exercise control on its employees directly.

Since employees are highly experienced and need little supervision, a laissez-faire leader fails to provide
continuous feedback to employees under his or her supervision.

This type of leadership is also associated with leaders that do not supervise their team members, failed
to provide continuous feedback resulting in high costs, bad service, failure to meet deadlines, lack of
control and poor production.

Transformational leadership
The Transformational leadership highlights a leader as a facilitator of change occurring, when one or
more persons engage with others in such a way that leaders and followers raise one another to higher
levels of motivation and morality.

The process of transformational leadership aims at influencing changes in attitudes and assumptions
held by organizational members and building commitment for organizational goals and objectives.

High level of communication exits between managers and employees and it is under the guidance of
leaders that employees meet their goals and enhance productivity and efficiency.

Transactional Leadership
Transactional Leadership contrast, involves management –by- exception, intervention, and punishing
those who made errors. This can lead to negative emotions and performance on the part of the
subordinates. This approach would also require close monitoring of the subordinates, who would surely
not like it, and if they felt constrained, their performance might not be best.
Additionally, some of their voluntary behaviors, like citizenship behaviors would be reduced. A manger
lead a group of highly motivated individuals who follow his leadership and achieve their goals.
Employees are trained or rewarded such as bonuses depending upon their performance.

BUREAUCRATIC LEADERSHIP
Under bureaucratic leadership,  a leader believes in structured procedures and ensure that his or her
employees follow procedures exactly.

This type of leadership leaves no space to explore new ways to solve issues and in fact work by book.

This type of leadership is normally followed in hospitals, universities, banks (where large amount of
money is involved) and government organizations to reduce corruption and increase security.

Self motivated individuals who are highly energetic often feel frustrated due to because of organization
inability to adapt to changing environment.

PARTICIPATIVE LEADERSHIP
Also known as democratic leadership style, participative leadership consults employees and seriously
considers their ideas when making decisions.

When a company makes changes within the organization, the participative leadership style helps
employees accept changes easily because they had given a big role in the process.

Participative Leadership may be required for tasks that are non routine or unstructured, where
relationships are non-authoritarian and the subordinate‘s locus of control is internal.

The Blake Mouton Managerial Grid

Also known as the Managerial Grid, or Leadership Grid, it was developed in the early 1960s by
management theorists Robert Blake and Jane Mouton.

It plots a manager's or leader's degree of task-centeredness versus her person-centeredness, and

identifies five different combinations of the two and the leadership styles they produce.

Understanding the Model

The Blake Mouton Managerial Grid is based on two behavioral dimensions:

 Concern for People: this is the degree to which a leader considers team members'
needs, interests and areas of personal development when deciding how best to
accomplish a task.

 Concern for Results/Production : this is the degree to which a leader emphasizes

concrete objectives, organizational efficiency and high productivity when deciding how
best to accomplish a task.
Impoverished Management – Low Results/Low People

The Impoverished or "indifferent" manager is mostly ineffective. With a low regard for creating systems
that get the job done, and with little interest in creating a satisfying or motivating team environment,
his results are inevitably disorganization, dissatisfaction and disharmony.
Produce-or-Perish Management – High Results/Low People

Also known as "authoritarian" or "authority-compliance" managers, people in this category believe that
their team members are simply a means to an end. The team's needs are always secondary to its
productivity.

This type of manager is autocratic, has strict work rules, policies and procedures, and can view
punishment as an effective way of motivating team members. This approach can drive impressive
production results at first, but low team morale and motivation will ultimately affect people's
performance, and this type of leader will struggle to retain high performers.

She probably adheres to the Theory X approach to motivation, which assumes that employees are
naturally unmotivated and dislike working. A manager who believes people are self-motivated and
happy to work is said to follow Theory Y. You can learn more about these theories in our article, Theory
X and Theory Y.

Middle-of-the-Road Management

A Middle-of-the-Road or "status quo" manager tries to balance results and people, but this strategy is
not as effective as it may sound. Through continual compromise, he fails to inspire high performance
and also fails to meet people's needs fully. The result is that his team will likely deliver only mediocre
performance

This style seems to be a balance of the two competing concerns. It may at first appear to be an ideal
compromise. Therein lays the problems, though when you compromise, you necessarily give away a
bit of each concern so that neither the production nor people needs are fully met. Leaders who use
this style settle for average performance and often believe that this is most anyone can expect.

Country Club Management – High People/Low Results

The Country Club or "accommodating" style of manager is most concerned about her team members'
needs and feelings. She assumes that, as long as they are happy  and secure, they will work hard.

What tends to be the result is a work environment that is very relaxed and fun, but where productivity
suffers because there is a lack of direction and control.

Team Management – High Production/High People

According to the Blake Mouton model, Team management is the most effective leadership style. It
reflects a leader who is passionate about his work and who does the best he can for the people he
works with.

Team or "sound" managers commit to their organization's goals and mission, motivate the people who
report to them, and work hard to get people to stretch themselves to deliver great results. But, at the
same time, they're inspiring figures who look after their teams. Someone led by a Team manager feels
respected and empowered, and is committed to achieving her goals.

Team managers prioritize both the organization's production needs and their people's needs. They do
this by making sure that their team members understand the organization's purpose, and by involving
them in determining production needs.

When people are committed to, and have a stake in, the organization's success, their needs and
production needs coincide. This creates an environment based on trust and respect, which leads to high
satisfaction, motivation and excellent results. Team managers likely adopt the Theory Y approach to
motivation, as we mentioned above.

Likert’s Management Style

Rensis Likert and his associates studied the patterns and styles of managers for three decades at the
University of Michigan, USA, and identified a four-fold model of management systems.

The model was developed on the basis of a questionnaire administered to managers in over 200
organizations and research into the performance characteristics of different types of organizations.

Four systems of management system or the four leadership styles

Exploitative Authoritative: 

Responsibility lies in the hands of the people at the upper levels of the hierarchy.

The superior has no trust and confidence in subordinates.

 The decisions are imposed on subordinates and they do not feel free at all to discuss things about the
job with their superior.

The teamwork or communication is very little and the motivation is based on threats.

Benevolent Authoritative

The responsibility lies at the managerial levels but not at the lower levels of the organizational hierarchy.

The superior has condescending confidence and trust in subordinates (master-servant relationship).

Here again, the subordinates do not feel free to discuss things about the job with their superior. The
teamwork or communication is very little and motivation is based on a system of rewards.

Consultative

Responsibility is spread widely through the organizational hierarchy.

The superior has substantial but not complete confidence in subordinates.

Some amount of discussion about job related things takes place between the superior and subordinates.

There is a fair amount of teamwork, and communication takes place vertically and horizontally. The
motivation is based on rewards and involvement in the job.

Participative

Responsibility for achieving the organizational goals is widespread throughout the organizational
hierarchy.

There is a high level of confidence that the superior has in his subordinates.

There is a high level of teamwork, communication, and participation.

Lewin‘s leadership styles-

In 1939, a group of researchers led by psychologist Kurt Lewin set out to identify different styles of
leadership.

While further research has identified more specific styles of leadership, this early study was very
significant, influential and established three major leadership styles.

Schoolchildren were assigned to one of three groups with an authoritarian, democratic or laissez- fair
leader.

The children were then led in an arts and craft project while researchers observed the behavior of
children to the different styles of leadership
Authoritarian leadership- (autocratic)

Authoritarian leaders provide clear expectations for what needs to be done, when it should be done and
how it should be done.

There is also a clear division between the leader and the followers. They make decisions independently
with little or no input from the rest of the group.

Researchers found that the decision making is best applied to situations where there is little time for
decision making or where the leader is the most knowledgeable person of the group.

Participative leadership- (democratic)

Lewin‘s study found that participative leadership is generally the most effective.

Leaders offer guidance to group members, participate in the group and allow input from other group
members.

Children in this group were less productive than the members of the authoritarian group but their
contributions were of much a higher quality.

Participative leaders encourage group members to participate, but retain the final say over the decision
making process. Group members feel engaged in the process and are more motivated and creative.

Delegate (laissez- faire) leadership-

Researchers found that children under delegate leadership were the least productive of all three groups.

The children in this group also made more demands on the leader, showed little co-operation and were
unable to work independently.

STRATEGIC EVALUATION AND CONTROL

It is important to know who the participants are and what role they will play in strategic evaluation
and control. Theoretically all the members of the organization are responsible to the shareholders.
Investors and government are concerned about the security and return rather than the long term
assessment of strategic success. The board of directors enact a general formal role of reviewing and
screening the executive decision in the light of environmental conditions, business and organization
implication. In this way the BOD performance is more generalized forming the strategic evaluation.
Chief executives are ultimately responsible for all aspects of strategic evaluation and control.
Normally the CEOs should not set over the judgment of organization‘s performance and should be
evaluated on the basis of own performance. This leads to the question what should be done in a
group in a group and each individual should know to whom to report.

Strategic implementation, review and evaluation:

To review underlying bases of strategy the 5 generic competitive advantages:
The factors are
 target,
 product line,
 production emphasis,
 marketing emphasis and
 sustaining capacity utilization

Methods:
to review again and again
to bring to expectation level with the help of Strategic choice and
operating decisions

Strategic level-

consistency of the strategy with the environment

Operation level-

How well the organization is pursuing the strategy.

There can be four phases of strategic control.

Formulation Implementation Strategic

Implementation

Strategic surveillance

Special alert control

The purpose of the strategic evaluation is to evaluate the effectiveness of the strategy in achieving
the organizational objective. Thus the strategic evaluation and control can be defined as the process
of determining the effectiveness of a given strategy in achieving the organizational objectives and
taking the corrective action where ever necessary. In having such frames and basic mind set the
following two questions can be raised: Is there any need to change? If yes, then how? Are the basic
nature of strategy formulation is correct? Are the organization and the managers doing things what
ought to be done? Is there a need to change and reformulate the strategy? How the organization is
performing? Is the time schedule being maintained? Are the resources are being utilized properly?
What needs to be done to ensure that to meet the objectives?

Effective strategy evaluation allows an organization

a) to capitalize on internal strength
b) To expeditiously exploit external opportunities
c) To recognize and defend against environmental threats
d) To improve internal weakness before it becomes detrimental
e) To deliberately and systematically formulate, implement and evaluate strategies.

The strategy evaluation process consists of three activities:

a) Revising underlying internal and external factors that represent the bases of current strategies
b) Measuring organizational performance
c) Taking corrective action.

These activities review the conclusion reached during strategy formulation, examine the actions
taken during strategy implementation. Compare results expected and actual result and make
needed changes to continue operation.

Benchmarking- In defining what to measure some companies used benchmarking to review the
practices of the best class and compare these to their own. The aim of benchmarking is to compare
measures of such performance indicators as defects per million. The comparison is usually carried
out in industry basis. The system is well established in automatic industry resulting in clear
standard, what is mint by world class performance. Initially it can be compared with the
performance of key process with other companies. Then it is followed up comparing with world
class levels in the similar industries. The measurement process is followed by the programs to
implement so as to attain the comparability with the best practice.

The best practice the benchmarking can be broken down to following stages:

Deciding which processes to benchmark.

Deciding which measures to measures to employ in respect of these processes Choosing o

companies against which to benchmark

Obtaining relevant comparable data from other companies

Measuring the competitive gap between the company‘s current performance level and

best practice Implementation of measures to close the gap.

Profit centers may be involved in performance evaluation

A profit center is a branch or division of a company that is accounted for on a standalone basis for the purposes of profit
calculation. A profit center is responsible for generating its own results and  earnings, and as such, its managers generally
have decision-making authority related to product pricing and operating expenses. Profit centers are crucial in determining
which units are the most and least profitable within an organization. .

Responsibility Centres
A responsibility centre is an organizational subsystem charged with a well-defined mission and
headed by a manager accountable for the performance of the centre. "Responsibility centres
constitute the primary building blocks for management control." It is also the fundamental unit of
analysis of a budget control system. A responsibility centreis an organization unit headed by a
responsible manager.
There are four major types of responsibility centres: cost centres, revenues centres, profit
centres and investment centres.

Cost Centre

A cost centre is a responsibility centre in which manager is held responsible for controlling
cost inputs. There are two general types of cost centres: engineered expense centres and
discretionary expense centres. Engineered costs are usually expressed as standard costs. A
 discretionary expense centre is a responsibility centre whose budgetary performance is based
on achieving its goals by operating within predetermined expense constraints set through
managerial judgement or discretion.

Revenue Centre

A revenue centre is a responsibility centre whose budgetary performance is measured

primarily by its ability to generate a specified level of revenue.

Profit Centre

In a profit centre, the budget measures the difference between revenues and costs.

Investment Centre

An investment centre is a responsibility centre whose budgetary performance is based on return

on investment. The uses of responsibility centres depend to a great extent on the type of
organization structure involved. Engineered cost centres, discretionary expense centre, and
revenue centres are more often used with functional organization designsand with the function
units in a matrix design.
In contrast, with a divisional organization designs, it is possible use profit centres because the
large divisions in such a structure usually have control over both the expenses and the revenues
associated with profits. 

Total Quality Management

The quality of Japanese product was revolutionized by technique introduced in Japan by US
Consultancy Company. Notably Advert Deming advocated a mix of statistical technique and the
adoption of total quality philosophy. Xerox Company is one of the first western companies to adopt
the quality approach and won Deming price Award in 1980. The total quality management involves
the combination of techniques including the adoption of business model statistical quality control
certification by ISO (International Standard Organization) setting quality terms in short term level. .

Total Quality Management (TQM) is an approach that organizations use to improve their internal
processes and increase customer satisfaction. When it is properly implemented, this style of
management can lead to decreased costs related to corrective or preventative maintenance, better
overall performance, and an increased number of happy and loyal customers.

However, TQM is not something that happens overnight. While there are a number of software
solutions that will help organizations quickly start to implement a quality management system, there
are some underlying philosophies that the company must integrate throughout every department of the
company and at every level of management. Whatever other resources you use, you should adopt these
seven important principles of Total Quality Management as a foundation for all your activities.
1. Quality can and must be managed
Many companies have wallowed in a repetitive cycle of chaos and customer complaints. They believe
that their operations are simply too large to effectively manage the level of quality. The first step in the
TQM process, then, is to realize there is a problem and that it can be controlled.

2. Processes, not people, are the problem

If your process is causing problems, it won’t matter how many times you hire new employees or how
many training sessions you put them through. Correct the process and then train your people on these
new procedures.

3. Don’t treat symptoms, look for the cure

If you just patch over the underlying problems in the process, you will never be able to fully reach your
potential. If, for example, your shipping department is falling behind, you may find that it is because of
holdups in manufacturing. Go for the source to correct the problem.

4. Every employee is responsible for quality

Everyone in the company, from the workers on the line to the upper management, must realize that
they have an important part to play in ensuring high levels of quality in their products and services.
Everyone has a customer to delight, and they must all step up and take responsibility for them.

5. Quality must be measurable

A quality management system is only effective when you can quantify the results. You need to see how
the process is implemented and if it is having the desired effect. This will help you set your goals for the
future and ensure that every department is working toward the same result.

6. Quality improvements must be continuous

Total Quality Management is not something that can be done once and then forgotten. It’s not a
management “phase” that will end after a problem has been corrected. Real improvements must occur
frequently and continually in order to increase customer satisfaction and loyalty.

7. Quality is a long-term investment

Quality management is not a quick fix. You can purchase QMS software that will help you get things
started, but you should understand that real results won’t occur immediately. TQM is a long-term
investment, and it is designed to help you find long-term success.
Before you start looking for any kind of quality management software, it is important to make sure you
are capable of implementing these fundamental principles throughout the company. This kind of
management style can be a huge culture change in some companies, and sometimes the shift can come
with some growing pains, but if you build on a foundation of quality principles, you will be equipped to
make this change and start working toward real long-term success.
Take corrective actions.
The external and internal environments in which the organization operates today are more
complex and dynamic than ever before. They threaten people at work and organizations with future
shock.

Future shock occurs when the nature, type and speed of changes overpower an individual or
organization‘s ability and capability to adopt.

Strategic evaluation enhances an organization‘s ability to adopt successfully with changing

circumstances which Brown and Agnew refers as, ―Corporate Agility‖.

Taking corrective action raises employees and manager‘s anxieties.

Research suggests that participation in strategy evaluation of activities is one of the best way to
overcome individuals‘ resistance to change. Individuals accept change best, when they have a
cognitive understanding of the changes, a sense of control over the situation and the awareness
that necessary actions will be taken to implement the changes.

Strategic evaluation can lead to strategy formulation changes, strategy implementation changes or
both.

Top managers cannot escape from revised strategy and implementation approaches.

Corrective action should place an organization in a better position:

o To get correct decisions,

o To get right information in right time (awareness)
o To think and enact with preventive and remedial measures,
o To capitalize on internal strength, consistent, socially responsible
o To take advantage of external opportunities,
o To avoid, reduce and mitigate external threats,
o To overcome the internal weakness and
o To cope with changes to happen (corporate agility, future shock).
o To reduce anxieties