A Report on Quality Management in Business Organizations

This report examines the critical role of quality management within business organizations, focusing on its importance, advantages, and disadvantages. The report begins with an introduction to quality management, defining its components and objectives. It then uses Toyota as a case study, illustrating how the company implements quality management tools to achieve efficiency, productivity, and customer loyalty. The report details the importance of quality for an organization, including ensuring efficiency, high productivity, attracting customers, maintaining competitiveness, and enhancing brand value. Furthermore, the report explores the advantages and disadvantages of implementing quality systems, such as cost savings, employee communication, and continuous improvement, alongside challenges like company-wide commitment. The analysis provides insights into how organizations can leverage quality management to improve their operations and achieve long-term success. Finally the report concludes by summarising the benefits of quality management and integrating it into business objectives.

BUSINESS
ORGANUSATION

Table of Contents
Introduction......................................................................................................................................3
Importance of quality for an organisation..............................................................................3
Advantages and disadvantages of working towards quality system......................................5
Conclusion.......................................................................................................................................7
References........................................................................................................................................8

Introduction
Quality management in an organisation is made to ensure that all the products and services
which are consisted of by an organisation are of best quality and consistent. There are four major
components in quality management which include quality planning, quality assurance, quality
control as well as quality improvement. The quality management in an organisation is not only
focusing on the quality of products and services but also focuses on the means through which
that quality can be achieved by the organisation effectively (Mukhopadhyay, 2020). The first
part of report is based upon Toyota motors. It is a Japanese multinational automobile
manufacturer. The company is devoted towards quality management and have come up with a
number of tools to manage quality in their organisation which is now followed worldwide. In
the following report the importance of quality for an organisation is explained along with various
examples of private and public businesses and their advantages as well disadvantages of working
towards quality management systems.
Importance of quality for an organisation
It is necessary for an organisation to critically work on quality in order to satisfy the
customers and also retain the customers in the organisation for a longer period of time. It is also
possible by organisations to contribute towards long-term revenues as well as profitability along
with enabling them to charge and maintain higher prices in the market for the quality standards
they have said for the consumers. Below mentioned are some of the importance which quality
brings for an organisation:
Ensures long-lasting efficiency: When bringing in efficiency is discussed for an organisation it
is not only efficient for the employs in the manufacturing sector of products or services but also
to all the other employees including the type of machinery which is used for production. It is
necessary that all the employs in organisation including the production in charge to all the sales
manager are understanding the importance of quality in the organisation. In this organisation can
develop efficiency in production as well as selling of their best products. The understanding of
the overall process of production and selling brings in confidence and agility to elevate the
efficiency in organisation (Cottman, 2020). Toyota Production System have resulted in bringing
higher quality and efficient products in organisation it helps company to effectively improve all
the aspects of company.

High level of productivity: When the firm is effectively applying quality management and
enhancing all different business operations the productivity of employees in the organisation
rises automatically. It is necessary for the employees to understand that they need to manage all
the quality barriers and obstacles in order to work towards effective quality. In this way they can
increase their productivity level automatically in the organisation. Toyota have established
Kaizen which brings in continuos improvement for the organisation and also eliminates over
production increasing their productivity level.
Attracting loyal customers: The basic rule for every business and industry is that the
organisation can only survive in competitive market if they are effectively retaining their loyal
customers of the company. In today’s world customers have a number of options and alternatives
to choose from. Therefore it becomes necessary for organisations to manage their quality in
order to make sure that they can effectively enhance customer and retain them for a longer period
of time.Toyota have adopted two major pillars which refer “Customers First” and “Respect for
people” which are helping them to generate loyal customers.
Staying in competitive market: There are a number of competition present in the market which
are a threat to companies. In order to set as a well-known existing brand it is necessary for an
organisation to include quality management as an internal part for work culture as well as
objectives of the organisation. It is necessary that the standards are maintained in order to
provide tough competition to other organisations in the market. Quality is a factor through which
organisations can provide competitive advantage to themselves. Toyota have adopted cost
leadership to stay in competitive market. This is only possible due to efficient quality
management by the organisation.
Consumer satisfaction: The importance of quality management in an organisation and customer
satisfaction are two things which go hand-in-hand. It is necessary to analyse in every stage of
business operation that maximum customer satisfaction is achieved by company. A number of
customers these days look for the quality of the product and are also ready to pay extra amount
for that quality. It is necessary that organisations are working on their quality and also
communicating it through the help of different digital media platforms in order to increase their
brand value and customer satisfaction.
Enhancing brand value: It is necessary for an organisation to increase their market shares and
revenue if they want to stay in the market. In order to do so they need to enhance their brand

value and a number of aspects so that they can effectively establish their organisation in the
market. Quality management will help an organisation to increase its equity and also give
competition to other players in the same industry.
Less human errors: If an organisation is effectively following quality management they can
frame a number of different guidelines and policies which are to be followed by individuals in
the organisation (Ma, Zhang and Yin, 2020) . With the help of this the management trainees and
all other employees in the organisation can be set towards the right path which they need to
follow in the organisation. This will help in getting effective results from them and also result in
decreasing the amount of errors that might affect the efficiency and productivity of work. In this
way organisations reduce human errors with the help of quality management. In order to reduce
human errors Toyota have adopted A3 reporting which is keeping a close eye on all the tasks
erformed by employees in the organisation.
Reduced risks: The market in today’s world is dynamic and high competition in every industry
can be noted. It becomes difficult for an organisation to derive the desired revenues and profits in
order to meet all their long as well as short-term goals and objectives. It is necessary that quality
management is accomplished as major aim and objective of business. Quality management will
help in satisfying customer, increasing brand value, increasing loyal customer and providing a
competitive edge to the company. All of this together will help the organisation to increase their
profits and also reduce the risk for an organisation. 8 step practical problem solving is used by
Toyota in order to make sure that company is reducing all the possible threats and risks.
With the help of all the above points which are mentioned in the description it can be
clearly concluded that there are a number of advantages and importance of quality in today’s
market world. It is necessary for an organisation to understand the importance of quality and
integrate it in objectives and aims of the business in order to keep their customer satisfied. It will
also help the organisation to attract potential customer and make loyal customers for the
organisation which will help the organisation in a longer period of time. Toyota uses a number of
different tools of quality management such as Kaizen, PDCA, A3 reporting. Just in Time, 5S,
Total quality management and so on to establish themselves and stay in competitive market
(How we manufacture quality, 2020)

Advantages and disadvantages of working towards quality system
There are a number of organisations including private and public businesses which have
faced various benefits as well as drawbacks of using total quality system in the organisation.
Below mentioned are various advantages as well as disadvantages that organisations have faced
while working towards quality system:
Advantages:
Good quality at lower cost: It is often seen that when a company is focusing on quality
improvement they can effectively save the waste, time as well as efforts of the employees. This
will effectively help the organisation in reducing the expenses which can increase their profit
margin and also can be passed on to the customers in the form of lower prices of products or
services. It is an affective advantage of quality management which have been used by businesses
in order to create loyal customers for their long-term business (Bader, 2020). Toyota motors have
an effectively used quality system in order to make sure that they are reducing all the efforts of
employees which are not fruitful. In this way they have affectively generated low-cost products
for their consumers providing them profits.
Effective employs communication: It is often seen that employee experience and
communication can be increased with the help of quality management in an organisation.
Employs interaction in an organisation is effective to form culture and behaviour in an
organisation. There are a number of different cultures, recruitment and on board exercises as
long with environment and technology which are affecting human resource in an organisation.
With the help of effective quality management in an organisation better communication can be
formed between employees who are working in the organisation which will result in productivity
enhancement. An example can be taken of Tesco which is a company running worldwide
supermarkets. The employees who are working for company belong to a number of different
cultural believes and values. It becomes important for the company to make sure that
communication between the employees in the organisation is effectively formed in order to make
sure that there are no conflicts and grievances between the employees and the work culture can
be formed positively. It is a great advantage that is brought by quality management to Tesco
which helps it in educating its employees who can then provide quality services to the customers
of the company.

Continuous improvement: Continuous improvement is the primary objective of every
organisation and core principle of quality management system for every organisation. It is
necessary for an organisation to make sure that they are bringing in continuous changes in the
organisation in order to improve continuously (Peng, Prybutok and Xie, 2020). It is necessary
that adoption of quality system will need to cultural change and also improve various principles
in an organisation which will lead to strong performance of employees, good leadership as well
as staff engagement. With the help of quality management workers in the organisation can we
gradually move towards breakthrough innovations. It is necessary to make sure all the members
in the organisation are trained well so that they can effectively fulfil their role in the
organisation. Kaizen adopted by Toyota helps them to effectively derive continuous
improvement in organisation. Also other examples can be taken such as Google which is a great
example of quality management which have shown continuous improvement till date. Company
uses its employs as most important resources providing them various perquisites and benefits in
order to keep them motivated. These employs bring in new ideas and innovations for the
company which result in continuous development for Google
Disadvantages:
Company-wide commitment: It is necessary for an organisation to make sure that they are
providing company-wide commitment in order to improve the quality of their product. This
commitment is often difficult to achieve by the companies. It is necessary that all the different
management level of boards are successfully applying this on their operations. Due to any lack of
effort or lack of resources this program can cause negative effects on the company. An example
can be taken where Ford released Pinto in 1971. This was released to capture the consumer
however the quality could not be managed by the company. The fuel tank had defects due to
which the company has to face legal lawsuits against it. Due to lack of commitment of all the
departments this quality system could not be applied in the company and the company has to
face its drawbacks.
Lack of Control: It is often seen that organisations outsource their work in order to maintain
quality of their products and services. Due to this outsourcing of work organisations lose the
control over various functions and the expected quality could not be maintained effectively. It is
a great disadvantage of using quality system in the organisation as outsourcing the work might
lose the control over all the operations of the organisation. Toyota can loose control over its

employees as decentralisation of power and authority is required in order to manage quality and
take quick decision in organisation. Other example can be taken of explosion of Deepwater
Horizon rig in 2010. Is also often said to be the biggest man-made disaster in US history. There
was an explosion which killed 11 workers due to which BP has to face lawsuits worth $4.5
billion. This was also due to quality management failure as the contractors were failed to check
the quality of cement used. The flammable gases and liquids were the main reason behind this
explosion (Yang, 2020). There was also some technical misinterpreted pressure due to which the
gas is passed through the ventilation. After the explosion there were major three Corporation
which were involved in this disaster which included BP, Transocean and Halliburton. All these
three had to face the trial against this explosion.
Conclusion
With the help of the above report it can be effectively concluded that quality management is
important for an organisation. There are a lot of benefits such as consumer retention, consumer
satisfaction, increase in sales and revenues, increase in brand value and so on which can be
brought by quality management in an organisation. Toyota have set up their production in such a
way that best quality of automobile are provided by them at great prices. They have established
themselves as cost leader. They are following cost leadership along with focusing on quality as
well. However, there are also certain areas which an organisation needs to focus upon while
applying quality management so that effective results can be brought from it to the organisation.

References
Books and Journals
Mukhopadhyay, M., 2020. Total quality management in education. SAGE Publications Pvt.
Limited.
Cottman, R.J., 2020. Total engineering quality management. CRC Press.
Ma, Y., Zhang, Q. and Yin, H., 2020. Environmental management and labor productivity: The
moderating role of quality management. Journal of environmental management, 255,
p.109795.
Bader, M.E., 2020. Practical Quality Management in the Chemical Process Industry. CRC
Press.
Peng, X., Prybutok, V. and Xie, H., 2020. Integration of supply chain management and quality
management within a quality focused organizational framework. International
Journal of Production Research, 58(2), pp.448-466.
Yang, C.C., 2020. The effectiveness analysis of the practices in five quality management stages
for SMEs. Total Quality Management & Business Excellence, 31(9-10), pp.955-977.
Online
How we manufacture quality. 2020 [online]. Available through:
<https://www.toyotauk.com/how-we-manufacture/quality.html>