Skip to main content

Quality Management


Quality management (QM), also called total quality management (TQM), evolved from many different management practices and improvement processes. QM is not specific to managing people, but rather is related to improving the quality of goods and services that are produced in order to satisfy customer demands. QM permeates the entire organization as it is being implemented.

TQM has its roots in the quality movement that has made Japan such a strong force in the world economy. The Japanese philosophy of quality initially emphasized product and performance and only later shifted concern to customer satisfaction.

The quality improvement movement began in both the United States and Japan before World War II (19391945). Throughout the war, Americans continued to improve concepts related to manufacturing productivity. After the war, the Japanese pursued the idea of quality improvement. It was W. Edwards Deming (19001993), an American, who helped the Japanese focus on their fixation with quality.

Rather than trying to inspect the quality of products and services after they have been completed, TQM instills a philosophy of doing the job correctly the first time. It all sounds simple, but implementing the process requires an organizational culture and climate that are often alien and intimidating. Changes that must occur in the organization are so significant that it takes time and patience to complete the process. Just as the process does not occur overnight, the results may not be seen for a long time.

Some experts say that it takes up to ten years to fully realize the results of implementing QM.


Several steps must be taken in the process of shifting to QM in an organization:

Provide a QM environment

A QM environment is one in which the management-driven culture disappears and a participative culture takes its place. The basic tenets of QM are that employees must be involved and that there must be teamwork. Managers must be willing to involve workers in the decision-making process. Workers who function as a team have much more to offer collectively than do individual workers. Pooled resources are more valuable than just one person's contribution.

Modify reward systems

Reward systems need to be overhauled so as to recognize and encourage teamwork and innovation. The team, not the individual, is the foundation for TQM companies. If a company continues to use traditional compensation plans that create competition between workers, the team concept cannot be implemented. Traditional pay plans are often based on seniority, not on quality and performance. With QM, pay systems focus on team incentives. Each person is paid based on the team's performance. If one person on the team does not perform at the level expected, the team members will normally handle the situation. In

some cases, payment is based on the performance of the entire company, which requires an even greater team effort.

Prepare workers for TQM

Workers must constantly be trained with the tools that are needed to upgrade the company's quality. Workers must understand the philosophy of QM before the tools can be used effectively. Managers must be dedicated to transforming their companies into "learning organizations" in which workers want to upgrade their skills and take advantage of the opportunities and incentives to do so. Companies that are successful with TQM allocate up to about 5 percent of their employees' time on training. Some of this training time might include cross-training, that is, schooling workers in the skills to do a different job in the organization.

Prepare employees to measure quality

To ensure gains in quality, the results must be measured objectively as the company progresses toward its quality objectives. This requires that employees be trained to use statistical process control techniques. Without knowledgeable workers using quantitative tools, the organization cannot achieve the intended TQM results.

Identify the appropriate starting place

One of the most difficult tasks in the beginning phases of implementing QM is to determine where to start. One approach to this beginning is to assume that 80 percent of all the company's problems stem from 20 percent of the company's processes (Pareto's law). By identifying the problematic processes that fall in this 20 percent category, one can begin to focus on what needs attention first. Focusing attention on these problems first will return bigger payoffs and build momentum for the future.

Share information with everyone

If a team approach is to be used and if employees are expected to be involved in the decision-making process, it is imperative that information be shared with everyone. The decision-making process requires that workers be fully informed.

Include quality as an element of design

From beginning to end, customer satisfaction should be the focus of the QM system. That means that the goal of customer satisfaction must be included in the planning processes and then maintained day in and day out.

Make error prevention the norm

One approach to producing quality products is to have a group of inspectors who will find the defective items and get rid of them. This is not the QM approach. With QM, the approach is continuous improvement of quality to ensure that there are no products that are defective. The quality is built into the manufacturing process, and workers are continually improving products and processes. This approach is more cost-effective for the organization because it eliminates the waste of materials and workers' time.

Encourage cooperation and teamwork

If mistakes are made, it is the fault of a team of workers, not just one worker. In many organizations that do not use TQM, managers are often on the hunt for someone to blame for problems that are found. This type of environment creates unhealthy stress and discourages innovative thought and practices by workers. The combination of a team approach and QM means seeking to improve the system when problems arise.

Make continuous improvement the goal

Processes and products should continually be improved. The improvement process has no end. This is true for even the best of the best companies. TQM never ends.

Deming created fourteen points for management, which are condensed on the Web site of the Deming Institute ( and adapted here:

  1. Create constancy of purpose toward improvement of product and service, with the aim to become competitive, to stay in business, and to provide jobs.
  2. Adopt a new philosophy. This is a new economic age. Western management must awaken to the challenge, learn their responsibilities, and take on leadership for change.
  3. Cease dependence on inspection to achieve quality. Eliminate the need for inspection on a mass basis by building quality into the product in the first place.
  4. End the practice of awarding business on the basis of the price tag. Instead, minimize total cost. Move toward a single supplier for any one item, based on a long-term relationship of loyalty and trust.
  5. Improve constantly and forever the system of production and service, in order to improve quality and productivity, and thus constantly decrease costs.
  6. Institute training on the job.
  7. Institute leadership. The aim of supervision should be to help people, machines, and gadgets to do a better job. Supervision of management is in need of overhaul, as is supervision of production workers.
  8. Drive out fear, so that everyone may work effectively for the company.
  9. Break down barriers between departments. People in research, design, sales, and production must work as a team, in order to foresee problems in production and in use that may be encountered with the product or service.
  10. Eliminate slogans, exhortations, and targets for the workforce asking for zero defects and new levels of productivity. Such exhortations create only adversarial relationships, since the bulk of the causes of low quality and low productivity belong to the system and thus lie beyond the power of the workforce. Eliminate work standards (quotas) on the factory floor, substituting leadership. Eliminate management by objective, by numbers, and by numeric goals, also substituting leadership.
  11. Remove barriers that rob hourly workers of their right to pride of workmanship. The goals of supervisors must be changed from sheer numbers to quality.
  12. Remove barriers that rob people in management and in engineering of their right to pride of workmanship. This means, inter alia, abolishment of the annual or merit rating and of management by objective.
  13. Institute a vigorous program of education and self-improvement.
  14. Put everybody in the company to work to accomplish the transformation. The transformation is everybody's job.

It is readily apparent that the process of implementing a QM system in an organization is closely aligned with the thinking of Deming.


The importance of quality is emphasized with the awards that are presented to companies and organizations that achieve high standards of quality. The Malcolm Baldrige National Quality Award was one of the first given. The 2006 award application identified several categories that must be addressed to qualify for the awardand very few awards are presented. Companies and organizations are rated on seven categories: leadership; strategic planning; customer and market focus; measurement, analysis, and knowledge management; human resources focus; process management; and results. It is a very prestigious honor for a company or organization to be recognized with this award.

Other awards and certifications are also presented. Nevertheless, they constantly change and new ones are added regularly, so they will not be discussed here. QM has become an important philosophy in businesses around the world, and this approach to building better products and services will continue.


For a more detailed description of the Deming approach:

For the rating document for the Malcolm Baldrige National Quality Award: http://[email protected]

see also Manufacturing ; Productivity


Saylor, James H. (1996). TQM simplified: A practical approach (2nd ed.). New York: McGraw-Hill.

Scarborough, Norman M., and Zimmerer, Thomas W. (2005). Effective small business management: An entrepreneurial approach (8th ed.). Upper Saddle River, NJ: Prentice Hall.

Weiss, Alan (2000). "Good enough" isn't enough nine challenges for companies that choose to be great. New York: Amacom.

Roger Luft

Cite this article
Pick a style below, and copy the text for your bibliography.

  • MLA
  • Chicago
  • APA

"Quality Management." Encyclopedia of Business and Finance, 2nd ed.. . 16 Feb. 2019 <>.

"Quality Management." Encyclopedia of Business and Finance, 2nd ed.. . (February 16, 2019).

"Quality Management." Encyclopedia of Business and Finance, 2nd ed.. . Retrieved February 16, 2019 from

Learn more about citation styles

Citation styles gives you the ability to cite reference entries and articles according to common styles from the Modern Language Association (MLA), The Chicago Manual of Style, and the American Psychological Association (APA).

Within the “Cite this article” tool, pick a style to see how all available information looks when formatted according to that style. Then, copy and paste the text into your bibliography or works cited list.

Because each style has its own formatting nuances that evolve over time and not all information is available for every reference entry or article, cannot guarantee each citation it generates. Therefore, it’s best to use citations as a starting point before checking the style against your school or publication’s requirements and the most-recent information available at these sites:

Modern Language Association

The Chicago Manual of Style

American Psychological Association

  • Most online reference entries and articles do not have page numbers. Therefore, that information is unavailable for most content. However, the date of retrieval is often important. Refer to each style’s convention regarding the best way to format page numbers and retrieval dates.
  • In addition to the MLA, Chicago, and APA styles, your school, university, publication, or institution may have its own requirements for citations. Therefore, be sure to refer to those guidelines when editing your bibliography or works cited list.