UNIT 5 MANAGING INNOVATION AND QUALITY

Content
5.0 Introduction
5.1 Objectives
5.2 Managing Innovation
5.2.1 Innovation an overview
5.2.2 Types of innovations
5.2.3 Technology and science
5.2.4 Approach of innovation
5.2.5 Innovation of Management process
5.2.6 Theories about organizations and innovation
5.2.7 Managing uncertainty
5.2.7 Organizational characteristic that facility innovation process
5.2.8 Managing quality
5.3. Managing quality
5.3.1. Meaning of quality
5.3.2. Dimensions of quality
5.3.3. Consequence of poor quality
5.3.4. History of quality management
5.3.5. Quality Control (QC)
5.4. Total Quality management (TQM)
5.4.1. Definition of TQM
5.4.2. Elements of TQM
5.4.3. Techniques/Tools of TQM Programs
5.5. Unit summary
5.6. Check your progress questions

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5.0 Introduction

Innovation is a broad concept. Innovation an activity involved in the process of idea

generation, technology development, manufacturing and marketing of a new of improved
product a manufacturing process or equipment Innovation also includes major break through
and minor or incremental advancement

Quality management makes a strategic contribution to achievement of a business's

competitiveness. Currently the most important strategies are delivering a quality product at a
fastest possible speed. Quality management makes a strategic contribution to
achievement of a business's competitiveness. This course will help you to have a clear
concept of quality management in general with particular emphasis to TQM and its
contribution toward competitiveness in the market place.

5.1 Objectives

After reading this unit you will be able to

 Explain the overview of innovation
 Describe the types and approach innovation
 Clarify the terries and characteristics of origination and innovation
 Define quality
 Explain the consequences of poor quality
 Understand the development of quality management and explain the contribution
of quality gurus
 Explain the concept of TQM

5.2. Managing Innovation

Innovation itself is a very broad concept that can be understood in a variety of ways. One of
the more comprehensive definitions is offered by Myers and Marquis (1969):

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"Innovation is not a single action but a total process of interrelated sub processes. It is not
just the conception of a new idea, nor the invention of a new device, not the development of a
new market. The process is all these thins acting in an integrated fashion."

It is important to clarify the use of the term "new" in the context of innovation Rogers and
Shoemaker (1971) do this eloquently:

"It matters little, as far as human behavioral is concerned, whether or not an idea is
"objectively' new as measured by the lapse of time since its first use or discovery…. If the
idea seems new and different to the in divisional, it is an innovation."

Most writers, including those above, distinguish innovation form invention by suggesting
that innovation is concerned with the commercial and practical application of ideas or
inventions. Invention, then, is the competition of the idea, whereas innovation is the
subsequent translation of the invention into the economy the following simple equation helps
to show the relationship between the two terms:

Theoretical Technical Commercial Innovation

Conception Invention Exploitation

However, all the terms in this equation will need explanation in order to avoid confusion.
The conception of new ideas is the starting point for innovation. A new idea by itself, while
interesting, is neither an invention nor an innovation; it is merely a concept or a thought or
collection of thoughts. The process of converting intellectual thoughts into a tangible new
artifact (usually a product or process) is an invention. This is where science and technology
usually play a significant role. At this stage inventions need to be combined with hard work
by many different people to convert them into products that will improve company
performance. These later activities represent exploitation. However, it is the complete
process that represent innovation. This introduces the notion than innovation but inventions
need to be harnessed to commercial activities before they can contribute to the growth of an
organization. Thus:

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 Innovation is the management of all the activities involved in the process of idea generation,
technology development, manufacturing and marketing of a new (or improved) product or
manufacturing process or equipment.

It is necessary at this point to cross-reference these discussions with the practical realities of
managing business today. The senior vice-president for research and development at 3M,
one of the most highly respected and innovative organizations, recently defined innovation
as:

Creativity: is the thinking of novel and appropriate ideas.

Innovation: is the successful implementation of those ideas within an
organization.

5.2.2. Types of innovations

Industrial innovation does not only include major (radical) innovations but also minor
(incremental) technological advances. Indeed, the definition offered above suggests that
successful commercialization of the innovation may involve considerably wider
organizational changes. For example, the introduction of a radical technological innovation,
such as Polaroid's Instamatic camera invariably results in substantial internal organizational
changes.

Table: 5.1. A typology of innovations

Type of innovations Example
Product innovation The development of a new or improved product

Process innovation The development of a new manufacturing process

such as Pilkington's float glass process

A new venture division, a new internal

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Organizational innovation communication system, introduction of a new
accounting procedure

TQM (total quality management) systems, BPR

Management innovation (business process re-engineering)

Quality circles, just-in-time (JIT) manufacturing

system, new production planning software, e.g. new
Production innovation inspection system

New Financing arrangements, new sales approach,

e.g. direct marketing
Commercial/marketing innovation
Telephone financial services

Service innovation

Hence, technological innovation can be accompanied by additional managerial and

organizational changes, often referred to as innovations. This presents a far more blurred
picture and begins to widen the definition of innovation to include virtually any
organizational or managerial change.

Innovation was defined earlier in this section as the application of knowledge. It is this
notion that lies at the heart of all types of innovations, be they product, process or service. It
is also worthy of note that many studies have suggested that product innovations are soon
followed by process innovations in what they describe as an industry innovation cycle.
Furthermore, it is common to associate innovation with physical change, but may changes
introduced within organizations involve very little physical change. Rather, it is the activities
performed by individuals that change.

It is necessary to stress at the outset that this book concentrates on the management of
product innovation this dies not simply that the list of innovation. This does not imply that

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the list of innovations above are less significant; this focus has been chosen to ensure clarity
and to facilitate the study of innovation.

5.2.3 Approaches of innovation

Traditional arguments about innovation have centered on two schools of thought. On the one
hand, the social deterministic school argued that innovations were the result of a combination
of external social factors and influences, and cultural changes. The argument was that when
the conditions were "right" innovations would occur. On the other hand, the individualistic
school argued that innovations were the result of unique individual talents and such
innovators are born. Closely linked to the individualistic theory is the important role played
by serendipity.

a. Serendipity approach. Many studies of historical cases of innovation have

highlighted the importance of the unexpected discover. The role of serendipity of
luck is offered as an explanation. As we have seen, this view is also reinforced in the
popular media. It is, after all, every one's dream that they will accidentally uncover a
major new invention leading to fame and fortune.
On closer inspection of these historical cases, serendipity is rare indeed. After all, in
order to recognize the significance of an advance one would need to have some prior
knowledge in that area. Most discoveries are the result of people who have had a
fascination with a particular area of science or technology and it is following
extended efforts on their part that advances are made. Discoveries may not be
expected, but in the words of Louis Pasteur: chance favors the prepared mind.
b. Linear Approach It was not until the 1970s that new studies of actual innovations
suggested that the role of the market place was influential in the innovation process.
This led to the second linear model, the 'market-pull' approach of innovation. The
customer need-driven model emphasizes the role of marketing as an initiator of new
ideas resulting from close interactions with customers. These, in turn, are conveyed to
R&D for design and engineering and then to manufacturing for production.
C. Simultaneous coupling approach. Whether innovations are stimulated by
technology, customer need, manufacturing or a host of other factors, including
competition, misses the point. The approaches above concentrate on what is driving the

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downstream efforts rather than on how innovations occur. The linear approach is only
able to offer an explanation of where the initial stimulus for innovation was born, that is,
where the trigger for the idea or need was initiated. The simultaneous coupling approach
suggests that it is the result of the simultaneous coupling of the knowledge within all
three functions (technology, customer need and manufacturing). Furthermore, the point
of commencement for innovation is not known in advance.
d. Interactive approach. the interactive approach develops this idea further and link is
together the technology-push and market-pull approach. It emphasizes that innovations
occur as the result of the interaction of the marketplace, the science base and the
organization's capabilities. Like the coupling approach, there is not explicit starting
point. The use of information flows is used to explain how innovations transpire and that
they can arise form a wide variety of points.

While still over simplified, this is a more comprehensive reprehension of the innovation
process. It can be regarded as a logically sequential, through not necessarily continuous,
process that can be divided in to a series of functionally distinct but interacting and
interdependent stages (Roth well and Zegveld, 1985). The over all innovation process
can be thought of as a complex set of communication paths over which knowledge is
transferred. These paths include internal and external linkages. The innovation process
outlined the organization's capabilities and its linkages with both the marketplace and the
science base. Organizations that are able to mange this process effectively will be
successful at innovation.

At the center of the approach are the organizational functions of R&D. engineering and
design, manufacturing and marketing and sales. While at first this may appear to be a
linear approach, the flow of communicant is not necessarily linear. There is provision for
feedback. Also, linkages with the science base and the marketplace occur between all
functions not just with R&D or marketing. For example, as often happens, it may be the
manufacturing function which initiates a design improvement that leads to the
introduction of either a different materials or the eventual development by R&D of a
new material. Finally, the generation of ideas is shown to be dependent on inputs form

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 three basic components organization capabilities; the needs of the marketplace; the
science and technology bases.

Table 5.2: The chronological development of approaches of innovation

Date Approach Characteristics

1950/60s Technology push Simple linear sequential process, Emphasis on R&D

R&D The market is a recipient of the fruits of

1970s Market pull Simple linear sequential process,. Emphasis

on Marketing . The market is the source for
Directing R&D. R&D has a reactive role.

1980s Coupling Approach Emphasis on integrating R&D and marketing.

1980/90s Interactive Approach Combinations of push and pull

Table 5.2 summarizes the historical development of the dominant models of the industrial
innovation process.

5.2.4 Innovation as a management process

The preceding sections have revealed that innovation is not a singular event, but a
series of activities that are linked in some way to the others. This may be described
as a process and involves

1. a response to either a need or an opportunity that is context dependent

2. a creative effort that if successful results in the introduction of novelty
3. the need for further changes.

Usually in trying to capture this complex process the simplification has led to
misunderstandings. The simple linear approach of innovation can be applied to only
a few innovations and is more applicable to certain industries than others. The

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pharmaceutical industry characterizes much of the technology-push approach. Other
industries, like the food industry, are better represented by the market-pull approach.
For most industries and organizations innovations are the result of a mixture of the
two. Managers working with in these organizations have the difficult task of trying to
manage this complex process.

a. Management of innovation Industrial innovation and new product development

have evolved considerably from their early beginnings. However, establishing
departmental functions to perform the main tasks of business strategy, R&D,
manufacturing and marketing does not solve the firm’s problems. Indeed, as we
have seen, innovation is extremely complex and involves the effective management
of a variety of different activities. It is precisely how the process is managed that
needs to be examined.

Innovation is a management process. This is simply an aid in describing the main

factors, which need to be considered if innovation is to be successfully managed. It
helps to show that while the interactions of the functions inside the organization are
important, so too are the interactions of those functions with the external
environment. Scientists and engineers within the firm will be continually interacting
with follow scientists in universities and other firms about scientific and technological
developments. Similarly, the marketing function will need to interact with suppliers,
distributors, customers and competitors to ensure that the day-to-day activities of
understanding customer needs and getting products to customers are achieved.
Business planners and senior management will likewise communicate with a wide
variety of firms and other external institutions, such as government departments,
suppliers and customers. All these information flows contribute to the wealth of
knowledge held by the organization. Recognizing this, capturing and utilizing it to
develop successful new products forms the difficult management process of
innovation.

Within any organization there are likely to be many different functions. Depending on
the nature of the business, some functions will be more influential than others.

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Management of innovation process identifies three main functions: marketing,
research and manufacturing and business planning. Historical studies have
identified these functions as the most influential in the innovation process. Whether
one lists three or seven functions misses the point, which is that it is the interaction
of these internal functions and the flow of knowledge between them that needs to be
facilitated. Similarly, as shown on the framework, effective communication with the
external environment also requires encouragement and support.

b. The need to share and exchange knowledge managers should emphasis the
importance of interaction (both in formal ) within the innovation process. Indeed,
innovation has been described as an information-creation process that arises out of
social interaction. In effect, the firm provides a structure within which the creative
process is located.

These interactions provide the opportunity for thoughts, potential ideas and views to
be shared and exchanged. However, we are often unable to explain what we
normally do; we can be competent without being able to offer a theoretical account
of our actions. This is referred to as ‘tacit knowledge. A great deal o technical skill is
known how and much industrial innovation occurs through on-the -spot experiments,
a kind of action -oriented research with ad hoc modifications during step-by-step
processes, through which exist in repertoires are extended. Such knowledge can
only be learned through practice and experience. This view has recently found
support from a study of Japanese firms where the creation of new knowledge within
an organization depends on tapping the tacit and often highly subjective insights,
intuitions and hunches of individual employees and making those insights available
for testing and use by the organization as a whole. This implies that certain
knowledge and skills, embodied in the term 'know how', are not easily understood;
moreover they are less able to be communicated. This would suggest that to gain
access to such knowledge one may have to be practicing in this or related areas of
knowledge. Cohen and Levin that refer to this condition as 'lockout', suggesting that
failure to invest in research and technology will limit and organization's ability to

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 capture technological opportunities: 'once off the technological escalator it's difficult
to get back on'.
It stresses the importance of interaction and communication within and between
functions and with the external environment. This networking structure allows lateral
communication, helping managers and their staff unleash creativity. This framework
emphasizes the importance of informal and formal networking across al functions.

This introduces a tension between the need for diversity, on the one hand, in order
to generate novel linkages and associations, and the need for commonality, on the
other, to facilitate effective internal communication. Clearly, there will be an
organizational trade-off between diversity and commonality of knowledge across
individuals.

c. Introducing organizational heritage. Finally, the center of the framework is represented as

organizational heritage, some times referred to as the organizational knowledge base. This
does not mean the culture of the organization. It represents a combination of the
organization's knowledge base (established and built up over the years of operating) and the
organisation's unique architecture (explained above). This organizational heritage represents
for many firms a powerful competitive advantage that enables them to compete with other
firms. For most organization, it is its customer service and customer relations, developed and
built up over decades that provides the company with a powerful competitive advantage.
ICI's organizational heritage is dominated by its continual investment over almost a hundred
years in science and technology and the high profile given to science and technology within
its business. For Unilever, its organizational heritage can be said toile in its brand
management skills and know how developed over many years. These heritages cannot be
ignored or dismissed as irrelevant when trying to understand how companies manage their
innovative effort,

Very often product innovation is viewed from purely a marketing perspective with little, if
any, consideration of the R&D function and the difficulties of managing science and
technology. Likewise, many manufacturing and technology approaches to product innovation
have previously not taken sufficient notice of the needs of the customer. Finally, the

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organizational heritage of the firm will influence its future decisions regarding the markets in
which it will operate. The point here is that firms do not have a completely free choice. What
they do in the future will depend to some extent on what they have done in the past.

5.2.5. Theories about organizations and innovation.

To view innovation as a management process within the context of the organization. This
was shown to be the case especially in a modern industrialized society where innovation is
increasingly viewed as an organizational activity. This unit tackles the difficult issue of
managing innovation within organizations. To do this, it is necessary to understand the
patterns of interaction and behavior, which represent the organization.

The theory of organizations is a set of ideas drawn from many disciplines and lies beneath
much of the study of innovation. In many ways organization theory bridges pure social and
behavioral sciences and management practices at the level of the organization. As an applied
science it examines the behavior of organizations and provides useful information about how
organizations respond to different management techniques and practices, hence its
importance in understanding how the process of innovation is managed.

Given the diversity of the literature in this field, there are few clear prescriptions on what
organizations need to do in order to manage innovation successfully. Nonetheless, there are
numerous analytical frameworks and organization-specific models of innovation. The
literature can be classified into four dominant strands (Perrow, 1970)

a. Classical or scientific management perspective The classical view of organizations took

hold after the industrial revolution and the huge increase in world trade at the beginning of
the twentieth century. It is built around traditional management concepts, bureaucratic theory
(Weber, 1964) and scientific management (Taylor, 1974). This school of thought tends to
view the organization as an instrument for achieving established goals, in which members of
the organization can be made to serve these goals by management's use of reward and
motivation techniques. It assumes that all tasks confronting the organization can be combined
with machines to produce and orderly output. Within this framework innovation is a series of

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rational decisions leading to a clearly defined outcome. Indeed, this school of thought
contributed to the dominance of the 'technology-push' model of innovation.

b. Human relations approach It was following extensive questioning of the classical

view in the 1930s that the human relations school evolved. Much of the original impetus was
provided by the Hawthorn Studies at Western Electric (Roethlisberger and Dickinson, 1939).
This new approaches identified informal and non-legitimized group processes within the tists
and found to influence organizational behavior. This school of thought also led to the
development of the contingency theory.

A slightly different perspective views the organization as a political a system and suggests
that change will result in some conflict between different units in the organization when a
unit perceives that the innovation or change might reduce its influence (Harvey and Mills,
1970) argue that an organization will tend to impose routine solutions unless there is pressure
on the organization's structural arrangements. These arrangements reinforce the continuation
of routine patterns around which interests have formed. Innovative solutions will only be
imposed when the organization is in a higher stress-threat situation, which is more likely to
demand innovative behavior if the organization is to adapt. This model builds on the work of
Burns and Stalker who indicate that there are different types of solutions, mechanistic routine
and organic innovative, that are appropriate for different situations.

c.Contingency approach The third main strand of literature is represented by organization

contingency theories. These posit the view that there is not necessarily a single best
organizational structure, but rather that the structure should be adapted to the activities
being performed. Organizational activities or tasks are the things that individuals do as part
of groups in order for the organization to achieve its purposes. This emphasis on internal
activities rather than structure is an important factor with regard to innovation. This unit
takes the view that the process of innovation is made up of a series of linked activities
within an organization.

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Research in this field Thompson, 1967; Perrow, 1970; Hull and Haige, 1981) has identified a
range of different characteristics that organizations have exhibited that, it is argued, more
accurately describe the range of different organizational environments. The following list
represents a typology of characteristics that have been identified within certain organizations:

Certainty vs uncertainty

Stability vs instability

Uniform vs not uniform

Few exceptions vs many exceptions

Many repetitive events vs few repetitive events

In general, contingency theory argues that tasks that are certain, stable, uniform, have few
exceptions and many repetitive events are compatible with bureaucratic organizational forms,
which stress formality. At the other end of the task continuum, tasks that are uncertain,
unstable, not uniform, have many exceptions and few repetitive events are compatible with
organic flexible organizational forms.

d. Systems theory The fourth set of ideas developed concurrently with contingency theory
during the 1960s and 1970s. However, systems theory emphasizes processes and dynamic
analysis rather than characteristic and structural analysis. The origins of the theory can be
traced back to the 1950s when Ludvig von Bertalanffy, a biologist, first used the term
'systems theory' (Bertalanfy, 1951). Systems theorists analyses the commercial organization
from the perspective of complex organic systems.

A system is defined as any set of elements linked in a pattern which carries information
ordered according to some pre-determined rules. Organizations are seen as goal-directed
systems. All systems have both structures and processed. Structures are the relatively stable
elements, whereas processes are the dynamic relationships among system elements over
time.

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Table 5.3 : Issues identified by systems theory that need to be managed

Issue Characteristics

Adaptation The ability to alter ways of working to meet the changing environment

Co-ordination Enabling the different parts of the organization to function as on

Integration The ability to harmonies a diverse range of activities and people

Coping with friction between organizational parts

Strain
Achieving purposes and goals
Output
Keeping elements in the system active
Maintenance

This school of thought has led to a richer and better understanding of organizational
activities. For example, the issues in Table 5.3 are said to be continually addressed by
organization. They should be viewed as issues that need to be managed rather than problems
that can be solved (Georgopoulos, 1972).

In addition, systems theory has also highlighted the importance of the organization's
interaction with the external would. Indeed, this interaction is identified as an important
element of the innovation process. It is precisely the way in which organizations manage and
capture the benefits from the knowledge flows, which are the product of these interactions,
that will affect their ability to innovate.

Together these four schools of thought have contributed enormously to the understanding of
the management of innovation. Some of the more significant issues will now be addressed in
more detail.

5.2.6. Managing uncertainty

It is becoming clear that product innovation is a complex process. Innovation involves
numerous factors acting separately but often influencing one another. Organizations have to
respond to internal and external events, some of which are beyond their control. While
management in general involves coping with uncertainty, sometimes trying to reduce

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uncertainty, the raison d'etre of managers involved in innovation is to develop something
different, may be something new. He management of the innovation process involves trying
to develop the creative potential of the organization. It involves trying to foster new ides and
generate creativity. Managing g uncertainty is a central feature of managing innovation
process.

Pearson's uncertainty map. Pearson's uncertainty map (Pearson, 1991) provides a

framework for analyzing and understanding uncertainty and the innovation process. The
map was developed following extensive analysis of case studies of major technological
innovations, including Pilkington's float lass process, 3M's Post-It notes and Sony's
Walkman (Henry and Walker, 1991). In these and other case studies a great deal of
uncertainty surrounded the project. If it involves newly developed technology this may be
uncertainty about the type of product envisaged. For example, Spencer Silver's unusual
adhesive remained unexploited within 3M for five years before an application was found.
Similarly, if a market opportunity has been identified the final product idea may be fairly
well established, but much uncertainty may remain about how exactly the company is to
develop such a product. For example, the case study at the end of the development of a new
range of products. The market was identified but the time was uncertainty about how to
develop a product for specify market.

So Pearson's framework divides uncertainty into two separate dimensions:

 Uncertainty about ends (what is the eventual target of the activity or project)
 Uncertainty bout means (how to achieve this target).
Several projects were unsuccessful and there were probably several occasions where
decisions had to be taken regarding future funding. Decisions had to be made such as
whether to cancel, continue or increase funding. In these situations, because the degree of
uncertainty is high, senior mangers responsible for million-dollar budgets have to listen
carefully to those most closely involved and those with the most information and knowledge.
Further information and knowledge are usually available with the passage of time, so time is
another element that needs to be considered. Indeed, it is because time is limited that
decisions are required. It is clear, however, that many decisions are made with imperfect
knowledge, thus there is usually an element of judgment involved in most decisions.

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Pearson’s framework, addresses the nature of the uncertainty and the way it changes over
time. The framework is based on the two dimensions discussed above, with uncertainty
about ends on the vertical axis and uncertainty about means on the horizontal axis. These
axes are then divided, giving four quadrants.

Figure 5.1 Pearson's uncertainty map

Uncertainty about output

High
3 1
Applications
Engineering Exploratory
Research

4 2

Combining Development
Marketing opportunities Engineering
With technical
Low Capabilities

Low Uncertainty about output High

Quadrant 1. Quadrant 1 represents activities involving a high degree of uncertainty about

means and ends. The ultimate target is not clearly defined and how to achieve this target is
also not clear. This has been labeled “exploratory research’ or ‘blue sky’ research, because
the work sometimes seems so far removed form reality that people liken it to working the
clouds! These activities often involve working with technology that is not fully understood
and where potential products or markets have also not been identified. This is largely the
domain of university research laboratories, which are usually removed form the financial and
time pressures associated with industry. Some science-based organizations also support
these activities, but increasingly it is only large organizations who have the necessary
resources to fund such exploratory studies.

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Quadrant 2. In this area the end of target is clear. For example, a commercial opportunity
may have been identified but as yet the means of fulfilling this has yet to be established.
Companies may initiate several different projects centered around different technologies or
different approaches to try to achieve the desired product. Also additional approaches may
be uncovered along the way. Hence, there is considerable uncertainty about precisely how
the company will achieve its target. This type of activity is often referred to as development
engineering and is an on-going activity within manufacturing companies which are
continually examining their production processes, looking of for efficient and ways to
reduce costs. A good example of a successful development in this area is the Guinness “in-
can system’. The company was clear about its target trying to make the taster of Guinness
form a can taste the same as draught Guinness. Precisely how it was to achieve this was very
uncertain and may different research projects were established

Quadrant 3. In this area there is uncertainty regarding ends. This is usually associated with
attempting to discover how the technology can be most effectively used. Applications
engineering is the title given to this area of activity. Arguably many new materials fall into
this area. For example, the material Kevlar (used in the manufacture of bulletproof clothing)
is currently being applied to a wide range of different possible product areas. Many of these
may prove to be ineffective due to costs or performance, but some new and improved
products will emerge from this effort.

Quadrant 4. This area covers innovative activities where there is most certainty. In these
situations activities may be dominated by improving existing products or creating new
products through the combination of a market opportunity and technical capability. With so
much certainty similar activities are likely to be being undertaken by the competition. Hence,
speed of development is often the key to success here. New product designs that use
minimal new technology but improve, sometimes with dramatic effect, the appearance or
performance of an existing product are examples of product innovations in this area.

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5.2.7. Organizational characteristics that facilitate the innovation process

The innovation process, identify the complex nature of innovation. It also emphasized the
need to view innovation within the context of the organization.
a. Growth orientation It is sometimes surprising to learn that not all companies’ first and
foremost objective is growth. Some companies are established merely to exploit a short-term
opportunity. Other companies, particularly family-run ones, would like to maintain the
company at its existing size. At size the family can manage the operation without having to
employ outside help.

Companies that are innovative are those companies whose objective is to grow the business.
This does not imply that they make large profits one year then huge losses the next, but they
actively plan for the long term. There are many companies who make this explicit in their
annual reports, companies such some auto manufactures
b. Vigilance. Requires continual external scanning, not just by senior management but
also by all other members of the organization. Part of this activity may be formalized. For
example, with in the marketing function the activity would form part of market research
and competitor analysis. With in the research and development department scientists and
engineers will spend a large amount of their time reading the scientific literature in order
to keep up to date with the latest developments in their field. In other functions it may not
be as formalized but it still needs to occur. Collecting valuable information is one thing,
but relaying it to the necessary individuals and acting on it are two necessary associated
requirements. An open communication system will help facilitate this.

c. Commitment to technology Most innovative firms exhibit patience in permitting

ideas to germinate and develop over time. This also needs to be accompanied by a
commitment to resources interns of intellectual input from science, technology and
engineering. Those ideas that look most promising will require further investment. Without
this long-term approach it would be extremely difficult for the company to attract good
scientists. Similarly, a climate that invests in technology development one year then decides
to cut investment the next will alienate the same people in which the company encourages
creativity. Such a disruptive environment does not foster creativity and will probably cause

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many creative people to search for a more suitable company with a stronger commitment to
technology.

d. Acceptance of risks Accepting risks does not mean a willingness to gamble. It means
the willingness to consider carefully risky opportunities. It also includes the ability to
make risk –assessment decisions, to take calculated risks and to include them in a
balanced portfolio of perfects, some of which will have a low element of risk and some a
high degree of risk.

e. Cross-functional co-operation Inter-departmental conflict is a well-documented

barrier to innovation. The relationship between the marketing and R&D functions has
received a great deal of attention in the research literature. Scientists and technologists
can be fascinated by new technology function often fails to understand the technology
involved in the development of a new product. Research has shown that the presence of
some conflict is desirable, probably acting as a motivational force. It is the ability to
confront and resolve frustration and conflict that is required.

d. Receptivity The capability of the organization to be aware of, identify and take
effective advantage of externally develop-ed technology is key. Most technology-based
innovations involve a combination of several different technologies. It would be unusual
for all the technology to be developed in-house. Indeed, businesses are witnessing and
increasing number of joint ventures and alliances often with former competitors. For
example, IBM and Apple have formed a joint venture to work on mutually beneficial
technology. Previously these two companies fought ferociously in the battle for market
share in the personal computer market.
e. “Slack” while organizations place great emphasis on the need for efficiency, there is
also a need for a certain amount of ‘slack’ to allow individuals room to think,
experiment, discuss ideas and be creative. In many R&D functions this issue is
directly addressed by allowing scientists 10-15 percent of their time to spend on the
projects they choose. This is not always supported in other functional areas.
f. Adaptability The development of new product innovations will invariably lead to
disruptions to established organizational activities. Major or radical innovations may

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 result in significant changes, although the two are not necessarily linked. The
organization must be ready to accept change in the way it manages its internal
activities. Otherwise kpropos4ed innovations would be stifled due to a reluctance to
alter existing ways of working or to learn new techniques,. In short, organizations
need the ability to adapt to the changing environment.
g. Diverse range of skills Organizations require a combination of specialist skills and
knowledge in the form of experts in, say, science, advertising or accountancy and
generalist skills that facilitate cross-fertilization of the specialist knowledge. In
addition ;they require individuals of a hybrid nature who are able to ;understand a
variety of technical subjects and facilitates the transfer of knowledge within the
company. Similarly, hybrid mangers who have technical and commercial training are
particularly useful in the area of product development

Learning activity 5.2

1. Describe Types of innovation
______________________________________________
______________________________________________
_______________________________________________
2. What are the theories about organizations and innovation?
_______________________________________________
_______________________________________________
_______________________________________________

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5.3. Managing quality

Objectives:
After studying this section you should be able to:
 Describe the term quality
 Identify the cost of poor quality
 Understand the tools of TQM

5.3.1. The meaning of quality

The word quality has many different definitions, ranging from the conventional to those that
are strategic. Conventional definitions of quality usually describe a quality items as one
wears well, is well constructed and will last for long time. However managers competing in
fierce global marketplace are increasingly concerned with strategic definitions of quality. In
this regard, quality refers to the ability of product or service to consistently meet or exceed
customer expectations. That is, Quality means getting what customers pay for. However,
some scholars argue that the term quality has several meanings and they tend to give
different definitions.

1. Quality is user based. They propose quality lies in the eyes of rte beholder.
Marketing people like this approach and so do customers. To them high quality
means better performance, nicely features, and other improvements.
2. Quality is manufacturing based. To production managers, quality means-
conformance to design specifications or standards.
3. Quality is product / service based. Quality characteristics are understood by the
attributes (such as color, size, and performance) of the product.
4. Quality is valve based. This considers performance of the product at a reasonable
price.

Generally, quality refers to a perception of class, excellence, a type of "referential" standard

or (in definition) reflecting the needs and expectations of the customer. A range of eminent
champions have contributed to the definitions relating to what quality is:
 a product or service's nature or features that reflect capacity to satisfy expressed or
implied statements of need (Deming)

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  conformance to requirements (Crosby)
 fitness for purpose or use (Juran)
 product and service characteristics as offered by design, marketing, manufacture,
maintenance and service that meet customer expectations (Feigenbaum)
 Owner/user satisfaction - the perceived quality of some products or services as
interpreted by owners. An expensive to maintain, unreliable car may offer a high
status experience if it is, say, a '61 Thunderbird. A set of wine glasses purchased from
Awash Winery factory may provide more satisfaction than similar ones from a street
trader.

Note: Quality to meet requirements and exceed expectations, calls for:

 Identification of quality characteristics through marketing research, which
identifies what the customer, wants (user- based approach to quality). These
characteristics are then translated into specific product attributes (a product based
approach quality). Then the manufacturing process ensures that the products are
made precisely to specifications (manufacturing based approach to quality).
 Development of a policy for quality. In any business a clear policy framework is
needed to guide the practices and behaviors essential for quality achievement
throughout the system as a whole. The policy has to be properly and consistently
implemented by all concerned. In a small business the traditional values of
craftsmanship and personal, caring service may prevail. In larger businesses these
may become confused and dispersed.

5.3.2. Dimensions of quality

Quality is multi-dimensional concept. It is understood in light with the following concepts:

1. Performance. Refers to the main operating characteristics of the product or service.

2. Aesthetics. It includes appearance, feel, smell, color, taste etc.
3. Features are secondary to basic functioning and less central to users. They are simply
extra characteristics of a product.
4. Conformance. Refers to the extent to which a product or service corresponds or
matches to the customer’s expectations.
5. Reliability. The probability of a product functioning without /with little maintenance.
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 6. Durability. The useful life of the product or length of life of the product before it
becomes obsolete.
7. Perceived. This refers to the overall reputation of the product.
8. Serviceability. Speed, courtesy, competence and ease of maintaining or repairing the
product with high quality.
9. Safety. The risk or harm associated with the use of the product.

5.3.3. Consequences of poor quality

The quality of the firm’s product / services can affect the organization in different ways. This
demands managers to develop and maintain the quality assurance program. Some of the
major ways that quality affects an organization are:

1. Los of business
2. Liability results from damages or injuries due to faulty design or poor workmanship.
3. Low productivity and
5. High cost

The cost of quality

The key ingredient to the road of quality is cost-based discipline. A sound quality system
contributes to customer satisfaction and organizational objectives, including financial
stability. The costs of quality can be classified in to three categories:
1. Failure costs
This is the cost failing to design, make or provide the quality of product or service
demanded by the customer. It is incurred by defective parts or products or faulty services.
The failure can be internal or external as illustrated as follows.

Internal failure External failure

1. Discovered during the production process  discovered after delivery to
customers
2. Occur for a variety of reasons including:  External failure causes are
 Defective material from vendors defective or poor service that goes
 Incorrect machine settings undetected by the producer.
 faulty equipments

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  incorrect processing and  Resulting costs include:
 incorrect material handling  warranty cost
procedures
3. These costs include  handling compliant
 Lost production time  Replacements
 Scrap and rework  Liability / litigation
 Investigation  loss of customer
 Possible equipment damage
 Possible employee injury
2. Appraisal Costs
Appraisal Costs relate to inspection, testing and other activities intended to uncover
defective products / services, to ensure that there are no defectives.

3. Prevention Costs
Prevention costs on the other hand are incurred in relation to an attempt to prevent
defects from occurring. They include costs such as;
 planning and administration systems
 working with suppliers
 training of staffs
 quality control procedures
 Extra attention in both design and production phases to decrease the problems
of defective workmanship.

5.3.4. History of quality management

The issue of quality of goods and services is not new. Throughout history of society has
demanded that providers of goods and services should meet their obligations. However,
people now realizing that quality is no more a tool for competitive advantage but threshold
limit and a qualifier.

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 Product Procedur -Problem - Customer
specifications es/feed solving based
inspection- back -continuous planning
system improvement - Quality mgt
structure
- Change
enterprise
wide
Quality Quality
control assurance Total
TQM
Quality
control

Fig 1. Quality evolution

A range of eminent champions have contributed to the development of quality management.

Their contribution is briefly explained below.

Leaders in the fight for quality and philosophy

A core of quality experts has shaped modern quality practices. Among the most famous of
this core of “gurus” are:

1. W. Edwards Deming.
Deming is known an American Statistics professor. Believes that management should
develop a system that allows employees achieve a desired quality level. He emphasized that
the key to quality problem is in the hand of management’s hand - 85 % of quality problems
are due to system and only 15 % are due to employees. His approach focuses on preventing a
quality problem from its occurrence by eliminating variation and noise in the production
system. The heart of quality strategy is statistical quality control to identify special causes
and common causes of variation.

Deming’s 14 Universal Fourteen Points

These universal fourteen points for quality management as identified by Deming are the
foundation of Total Quality Management and guide the entire TQM process. These points are
briefly discussed below.
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1. Create consistency of purpose with a plan toward quality improvement of service. Top
management should create and publish to all employees a statement of organization aims and
purposes and they must constantly demonstrate their commitment to it.

2. Adopt the new philosophy of quality. Everyone, from top management to the lowest
employee, must accept the quality challenge, learn their responsibilities, and take on the
leadership required for change to the new philosophy. Poor quality should never reach the
customer. An organization should accept that defects in quality may occur, but it should
ensure that defective products never reach the customer.

3. Cease dependence on mass inspections to achieve quality. The purpose of inspections is

for improvement of processes and reduction of costs, not just to find defects. The need for
mass inspections may be eliminated by building quality into a service initially.

4. End the practice of choosing suppliers based solely upon price. Organizations should
stop awarding contracts based upon the lowest bid; instead, they should be concerned with
minimizing total costs. Rather than trying to find the lowest bidder and then having to deal
with cost overruns and low quality products, organizations should move toward a single
supplier for any one item. They may then build a long-term relationship of loyalty and trust
with the supplier.

5. Identify problems and work continuously to improve the system. Organizations must
improve constantly and forever the system of quality service. Many managers tend to think in
terms of programs having a beginning, middle, and an end. TQM does not have an end; it is a
continuous process. The phrase "continual improvement" must become common language
within the organizations.

6. Institute training. Organizations must adopt modern methods of formal training,

especially for new hires. On-the-job-training is not acceptable since new hires will probably
be learning the "old way" of doing things from seasoned veterans who may be resisting the
change to TQM. Training also involves educating external customers as to what the
organization is trying to achieve. This helps when the organization later seeks input on
quality from these external customers.

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7. Teach and institute leadership. The aim of leadership should not be just to tell people how
to do a job, but to help people do a better job. Leadership is a learned skill, so organizations
must train their managers to be good leaders.

8. Drive fear out of the workplace. Organizations must create trust and a climate for
innovation so that all employees may work effectively for organizational improvement.
Much of workplace fear comes from by-the-numbers performance appraisals that have
numerical quotas. Employees tend to do what is required to receive a good appraisal, not
what is required for quality. Employees should not be afraid to bring up new ideas and the
organization should tolerate failures when employees are experimenting with new ideas.

9. Break down barriers between departments. Upper management should build teamwork
between departments, not competition. They should optimize the efforts of teams toward the
aims and purposes of the organization instead of fostering competition between departments.

10. Eliminate exhortations from the workplace. Management must stop using slogans and
targets to request zero defects and improved productivity without providing workers the
methods to achieve them. Such exhortations only create adversarial relationships. Most of the
causes of low quality and productivity in an organization belong to the system and thus lie
beyond the power of the workforce to change.

11. Eliminate work standards and numerical quotas for production. Upper management
should stress achieving service quality rather than quantity. It should remove individual
punishment/reward control systems, such as incentive pay. Eliminate Management-by-
Objectives. Instead of relying on objectives to reach goals, managers should institute
methods for improvement and use leadership to help workers achieve personal goals.

12. Remove barriers to pride of workmanship. Organizations should abolish merit rating
systems and not blame employees for system failures that are beyond their control.

13. Institute and encourage vigorous programs of education, retraining, and self-
improvement. Use master trainers to educate and nurture the workforce. Start training with
the statistical vision of the organization and then broaden it to include extended process

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training. Extensive follow-up training should then be used to maintain the organization’s
vision.

14. Act to accomplish the transformation. Put everyone in the organization to work to
accomplish the transformation. Transformation is the job of every employee, not just
management. Establish some type of information center to keep the entire organization
informed about transformation progress.

2. Joseph M. Juran
Line Deming Juran played a major role in the Japanese quality success story. He primarily
introduced the quality management element, where as Deming introduced the statistical
quality control element to Japanese industry in the 1950s. Juran is a pioneer in teaching the
Japanese how to improve quality. He believes strongly in top management commitment and
support and involvement in the quality effort i.e., team work. He varies from Deming some
what in focusing on the customer and defining quality as “fitness to use of customers” not
on written specifications.

3. Philip B. Crosby. He believes that the cost of poor quality should include all of the
things that are involved in not doing the job right the first time. He popularized the phrase,
“Do it right the first time.” Because this less costly than the cost of detecting and correcting
defects.

5.3.5. Quality Control (QC)

The purpose of QC is to assure that processes are performing in an acceptable manner.
Companies accomplish this by monitoring process output using statistical techniques. If the
result is acceptable, no further action is required; unacceptable results call for corrective
actions. Currently companies emphasize designing quality in to the process, thereby greatly
reducing the need for inspection or control of efforts – the concept of TQM. (See fig, 1 given
above)

Inspection. It is a means of ensuring that an operation is producing at the quality level

expecting. It can occur monitoring in the production process can occur at three points: Before
production, during production and after production.
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 Input transformation output
Acceptance Process Acceptance
Sampling control sampling

o The logic of checking conformance before production is to make sure that

inputs are acceptable.
o The logic of checking conformance during production is to make sure that the
conversion of inputs in to outputs is proceeding in an acceptable manner.
o The logic of checking conformance of out put is to make a final verification of
conformance before passing goods on to customers.

 Monitoring before and after production involves acceptance sampling procedures;

monitoring during the production process is referred to as “process control.”

The purpose of inspection is to provide information in the degree to which items conform
to a standard. The basic questions of the inspection are:
1. How much to inspect and how often? This ranges from no inspection to inspective
each item so many times. The amount of inspection is governed by the costs of inspection
and expected costs of passing defective items.

Cost Total cost

Cost of
Inspection

Cost of passing defective

Optimal Amount of inspection

Fig 2. Amount of inspection

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The optimum amount of inspection is the one that balances the cost of passing defects and
the cost of inspection or minimizes total cost as shown in the above graph. Quality managers
should answer the following questions in order to design an inspection policy:

1. Where to inspect in the process?

Many operations have many possible inspection points. But to reduce cost of inspection,
it is important to restrict inspection efforts to the points where they can do the most. In
manufacturing, some of the typical inspection points are:
 Raw materials and purchased parts
 Finished goods
 Before a costly production
 Before an irreversible process
 Before a covering process

2. Centralized versus decentralized inspection

Some situations require that inspection be performed on the site. For example, inspecting
the hull of a ship for cracks requires inspectors to visit the ship. At other times,
specialized tests can best be performed in a lab (e.g. medical tests, analyzing food
samples, testing metals for hardness, running viscosity tests on lubricants).

The central issue in the decision concerning on-site or lab inspection is s is whether the
advantages of specialized lab test are worth the time and interruption needed to obtain the
results. Reasons favoring on-site inspection include quicker decisions and avoidance of
introduction of extraneous factors (e.g. damage or other alteration of samples during
transportation to the lab). On the other hand, specialized equipment and more favorable
test environment offer strong arguments for using a lab.

5.4. Total Quality management (TQM)

As the 20 th century ends, business organizations are involved in what has become a “quality
revolution.” It began in Japan and has now spread to North America and other parts of the
world. It involves an entirely new way of thinking about, and dealing with, quality that

194
encompasses the entire organization. This new approach has been given a variety of names,
but the one we shall use is TQM.

5.4.1. Definition of TQM

TQM can be defined as “both a philosophy and a set of guiding principles that represent the
foundation of a continuously improving organization. It is the application of quantitative
methods and human resources to improve the materials and services supplied to an
organization, all the processes within an organization, and the degree to which needs of
customers are met, now and in the future. TQM integrates fundamental management
techniques, existing improvement efforts, and technical tools under a disciplined approach
focused on continuous improvement.”

The term TQM refers to a quest for quality that involves everyone in an organization. There
are two key philosophies in this approach.
1. A never-ending push to improve, which is referred to as continuous improvement.
2. A goal of customer satisfaction, which involves meeting or exceeding customer
expectations.

Successful TQM programs are built through the dedication and combined efforts of everyone
in the organization (including top management’s of the company)

Total Quality Management is a management style based upon producing quality service as
defined by the customer. TQM is defined as a quality-centered, customer-focused, fact-
based, team-driven, senior-management-led process to achieve an organization’s strategic
imperative through continuous process improvement. TQM principles are also known as total
quality improvement, world class quality, continuous quality improvement, total service
quality, and total quality leadership.

The word "total" in Total Quality Management means that everyone in the organization must
be involved in the continuous improvement effort, the word "quality" shows a concern for
customer satisfaction, and the word "management" refers to the people and processes needed
to achieve the quality.

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Total Quality Management is not a program; it is a systematic, integrated, and organizational
way-of-life directed at the continuous improvement of an organization. It is not a
management fad; it is a proven management style used successfully for decades in
organizations around the world. TQM is not an end in itself; it is a means to an organizational
end. Total Quality Management must not be the primary focus of an organization; it should
merely be the means to achieve organizational goals.

Total Quality Management differs from other management styles in that it is more concerned
with quality during production than it is with the quality of the result of production. Other
management styles have different concerns.

Total Quality Management requires an organizational transformation-a totally new and

different way of thinking and behaving. This transformation is not easy to achieve; it is not
for the weak or the statistically untrained. At first glance, many TQM techniques may seem
simple and based on common sense, but they must be understood and used correctly for
TQM to function properly.

5.4.2. Elements of TQM

1. Continual improvement
Continual improvement of the organization’s overall performance should be permanent
objectives of the organization. It is a philosophy of continually seeking ways to improve
operations. It is a never ending improvement to the process of converting inputs into outputs.

Installing a philosophy of continuous improvement in an organization may be a lengthy

process, and several steps are essential to its eventual success. The major steps are:
1. Train employees in the methods of statistical process control and other tools of
improving quality and performance.
2. Make statistical process control methods a normal aspect of daily operation.
3. Build work teams and employee involvement.
4. Utilize problem solving tools within the work team.
5. Develop the sense of employee belongingness in the process.

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 2. Employee Empowerment

Empowering the workforce involves giving employees a degree of control over the
organization’s operation. When empowered, employees feel they are an active part of the
organization’s decision-making process and they have an organizational sense of "family”.
Once empowered, employees begin to take pride and ownership in their work, which may
lead to improvement in their job performance, which then may increases overall
organizational quality. As employees become more involved in the organization, they
become self-motivated and do not require as much direct praise or monitoring from
managers. As a part of the empowerment process, employees are permitted more
management participation.

3. Participative Management

Participative management advocates using the cumulative skills and expertise of employees
to solve problems and improve service quality. It calls for all members of a organization to
share authority, responsibility, accountability, and decision making. Although it emphasizes
group effort, a leader is needed who is responsible for keeping the group on track and making
final decisions on group suggestions.

Delegation of responsibility and authority is required for participative management to be

successful. Delegation is entrusting the responsibility and authority to complete a task to
another person. Along with this trust comes accountability, which is holding the other person
accountable for acceptable completion of the task. Many managers manage by the
philosophy "If you want it done right, you have to do it yourself," so they find delegation
difficult. Other managers do not mind delegating responsibility, but they are reluctant to
delegate authority.

Participative management involves giving employees membership on committees that make

recommendations on changes to organizational polices. Since TQM requires the formation
and use of numerous committees, it has been called management-by-committee.

4. Competitive benchmarking

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Benchmarking is a continuous, systematic procedure that measures a firm’s products,
services and process against those industry leaders. Companies use benchmarking to
understand better how outstanding companies do things so that they can improve their own
operations. The common measures used in benchmarking are unit costs, customer retention
rates, revenue per unit, ROI, and customer satisfaction levels.

5. Team approach

Teams are important elements of the TQM process. All companies treading on the path to
total quality know that team activity is an answer to quality issues. It is one of the essential
TQM tools that can keep the wheel of quality moving. Teams have a unique ability for
solving problems and meetings continuous improvement objectives. It is the duty of
management to keep such teams active so that they can produce desired results. Two
prevalent types of teams are quality circles and focus teams. This topic is briefly discussed in
other units.

6. Decision based on facts rather than opinions

Making decisions on facts that have been clearly analyzed and presented should be the goal
of any business. Making of the right decisions for an organization is never an easy, but using
the factual information with experience and intuition can only help.

7. Mutually beneficial supplier Relations

Suppliers should be seen by any business as being as important as customers are. Think what
would happen if there were no suppliers? You would probably not be in business. Where
would you buy your materials and services?
Therefore, it is important to have good relations with your suppliers as it is in their interest as
much it is yours. Remember, you are their customers and they want in general to do the best
for you, but probably cannot if they are not fully aware of all your requirements. This
certainly the case for many smaller businesses that rely heavily on their suppliers.

8. Customer focus
Organizations depend on their customers and therefore should understand current and future
customer needs, should meet their requirements and strive to exceed customer expectations.

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Quality begins with customers and ends with customers. Gone are the days when
organizations and customers were treated as two different entities as two different entities.
The market place has become very competitive, and it is no longer possible to run a business
without a very strong focus on the customer.

With out customers organizations can not exist. There are many facets to the relationship
with the customer, but probably the most important one is to understand what the customers’
current and future requirements are. By establishing this understanding, organizations will be
able to plan for their needs with, in some cases, the help of the organization’s suppliers.

Disadvantages of TQM

 Long-range plans advocated by TQM may limit an organization’s flexibility and

agility.
 TQM calls for organizational change; it does not demand radical organizational
reform.

 Total Quality Management calls for the elimination of the goals and objectives
required by Management-by-Objectives. Critics of TQM claim that this may
negatively affect motivation.

 Some maintain that Total Quality Management delegates the determination of quality
to quality experts rather than to "real" people.

 Total Quality Management calls for the elimination of performance assessments that
rate employees in relation to each other. Critics fear that without performance
assessment managers would have too much power over employees and may be use it
capriciously.

 Some argue that the claims of success by TQM supporters are not supported by facts
but by anecdotes and stories. They argue that TQM proponents tell heart-warming
stories about how teamwork makes everyone happy, but that they cannot back up
their claims with hard data.

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  Some critics claim Total Quality Management’s focus on setting and maintaining
standards makes work life unexciting and boring.

 Total Quality Management develops its own bureaucracy. TQM detractors contend its
statistical burden and committee structure is cumbersome, slows organizational
momentum, and consumes too much time and resources.

5.4.3. Techniques/Tools of TQM Programs

Various quantitative and quantitative techniques may be adopted to support a TQM program.
They can be also be used across smaller, more specific, work-shop-focused quality projects-
which tend to be successful! We need to understand:
 The application of a technique, why and how it works and when to use it.
 The skills and expertise needed for particular techniques.
 The wider competencies for managers, team leaders and others in a TQM
environment.

The tools of TQM program include the following:

1. Pareto Charts

One of the tools used in a TQM program is the Pareto Chart. It is the tool of identifying the
vital few causes (typically 20%) which cause 80% of the problems. Pareto Charts are used to
determine the greatest opportunity for prevention of quality problem program. Analysis of
the Pareto Chart provides information on a starting point for a TQM program.

2. Cause and Effect Diagrams

Another tool used in a TQM program is the Cause and Effect Diagram or Fishbone
Diagram. The Cause and Effect diagram is developed through brainstorming efforts and
depicts all the probable causes of the certain quality problems. This brainstorming searches
for root causes of the problem and eliminates the focus on symptoms.

200
3. Histogram

A Histogram is used to display in bar graph format measurement data distributed by

categories. A histogram is used for:

1. Making decisions about a process, product, or procedure that could be improved after
examining the variation (example: Should the school invest in a computer-based
tutoring program for low achieving students in Algebra I after examining the grade
distribution?; are more shafts being produced out of specification that are too big
rather than too small?)
2. Displaying easily the variation in the process (example: Which units are causing the
most difficulty for students? is the variation in a process due to parts that are too long
or parts that are too short?)

4. Brainstorming
Creative thinking may mean simply the realization that there's no particular virtue in doing
things the way they have always been done.

Brainstorming is a group process designed to relax and energize a group so that the synergy
of the group as a whole can be focused on a task. Brainstorming needs a sensitive, skills
leader/facilitator and members who feel that they belong to the group and can participate
with confidence.

People need to be comfortable in the group and able to express themselves. They need to be
themselves and not be afraid of others or the status/rank they have outside the group in, say,
their managerial or specialist jobs.

Classical brainstorming involves the application of a specific approach with rules designed to
overcome some of the blocks and barriers acting to prevent the creative, imagining juices to
flow.

5. Process Flow Charts

A car exhausted must be replaced, a batch of biscuits must be made, an insurance claim must
be dealt with. Each of these a "transformations" involves an arrangement of people and

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facilities (machines, desks, computers, ovens, mixing equipment, high-speed packaging and
cutting gear). The arrangement is a combination of people, methods/rules and technology. It
can simple or complex, machine oriented or people-oriented.

6. Control Charts

Statistical Quality Control (SQC) or Statistical Process Control (SPC) for repetitive, high
volume production began in the 1930's. Small production samples were measured
periodically to monitor quality. Sample mean (X bar) and range (R) charts were used to
detect when a process was going out of "economic control."

Learning activity 5.3

1. What is quality?
________________________________________________________________________
____________________________________________________________________
2. Identify the costs of quality.
________________________________________________________________________
________________________________________________________________________
_______________________________________________________________
3. Why total quality management?
________________________________________________________________________
________________________________________________________________________
_______________________________________________________________

5.4 CHECK LIST

Dear learner! Below are some of the important points extracted from the unit you have been
reading. Please put tick mark() in the box in front of the point for those you have
understood yet, go back and read the unit till you understood well

I can

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 Describe the different types of innovation
Explain the theories of innovation
Identify the characteristics of innovative organization

5.5 SUMMARY
Innovation is the management of are the activities involved in the process of idea
generation technology development, manufacturing and marketing of a new for
improved , product or radical innovations but also minors incremental technological
advancement.

The environment in which we are living is very dynamic and competitive. As a result
success in business has become challenging. Currently the most important strategies are
delivering a quality product at a fastest possible speed. Quality management makes a
strategic contribution to achievement of a business's competitiveness.

Quality is defined according to various dimensions that pertain to customer satisfaction.

The consequences of poor quality include loss of market share, liability claims, decrease
in productivity, and an increase in costs.

TQM is a never ending pursuit of quality that involves everyone in an organization. The
driving force is customer satisfaction: a key philosophy is continuous improvement.
Training of managers and workers in quality concepts, tools, and procedures is an
important aspect of the approach. Teams are the integral part of TQM. In order for total
quality management to be successful, it is essential that a majority of those in an
organization “buy in” to the idea.

5.6 CHECK YOUR PROGRESS EXERCISE

True / False write true if the statement is correct and false if the statement is wrong

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 1. Innovation is a single action but a total process of interrelated subprocess.
2. The organization characteristics that facilitate the innovation process of vigilance
refers to a commitment to long – term growth rather than short term profit.
3. Concurrent engineering is a small team consisting of a members from each of the
various functional departments manages the design, development, manufacturing and
marketing of a product.
Multiple Choice
Choose the best possible answer from the options given
1. An innovation approach which is initiate by technology, customer need;
manufacturing or a host of other is
a) Liner approach
b) Serendipity approach
c) Simultaneous coupling approach
d) Interactive approach
e) None of above
2. Which of the following is an issue identified by systems theory of innovation
characterized as the ability to alter ways of working to meet the changing
environment.
a) Co-ordination d) adaptation
b) Integration e) Maintenance
c) Strain
3. Quality means
a) Conformance to specification
b) Fitness for use
c) Equivalent to high price
d) A and B
e) A and C
4. Identify the correct statement with regard to quality management.
A. Training of workers is part of appraisal cost of quality
B. A quality vision and goal is part of total quality management (TQM)
C. Inspection, training, and auditing goods are part of prevention cost of quality
D. Rework, lost production time are part of prevention cost of quality
E. All of the above

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 5. Which of the following is not the philosophy of total quality management?
a) Continuous improvement.
b) Employee empowerment
c) Customer focus
d) Non participatory management
e) None of the above
6. Short answer
I. Identify and discuss the elements of TQM.

Answer to learning activities 5.2

1. a) Product innovation 2. a) classical or scientific management
perspective
b) Process innovation b) Human relations approach
c) Organization innovation c) contingences
d) Management innovation d) system theory
e) Production innovation
f) commercial / marketing innovation
g) Service innovation

Answer to check your progress 5

1. False 4.
2. False 5.
3. True
II. Multiple choices
1) c 3) d
2) d 4) b
5) d

III. Short answer

1. The following are the elements of TQM:

i. Continual improvement.

ii. Competitive benchmarking

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iii. Employee empowerment.

iv. Team approach.

v. Decisions based on facts rather than opinions.

vi. Knowledge of tools

vii. Mutually beneficial supplier relationships and

viii. Participative management

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