THE TOTAL QUALITY MANAGEMENT AND PERFORMANCE OF MANUFACTURING COMPANIES IN SOUTH-SOUTH NIGERIA

DEPARTMENT OF BUSINESS ADMINISTRATION

CHAPTER ONE

INTRODUCTION

1.1    Background to the study

          Business is very important to the society because the society depends on it for survival. Business provides the society with commodities needed to survive for the purpose of making profit. Hence, it becomes indispensable to the growth and development of every society (Bhat, 2009). One of the aims of every business is to ensure customer’s satisfaction and as such must ensure the production of quality goods and services. Currently, it has been discovered that there is high rate of competition in the economy, and as such, businesses tend to strategize in different ways to survive in the business environment. The strategies adopted by firms are to give them a competitive advantage over their competitors and Total Quality Management (TQM) is one of them.

          The concept of quality has constantly raised arguments, first on its definition, and secondly on its implementation. While one category of scholars see quality as a way of carrying out activities to the required standards and eliminating waste, others see it as a characteristic of a product or service that guarantees its acceptance over competitors (Porter, 1985). In this context therefore, quality has been defined as the positive worth of a product or service in relation to its conformance to requirements, suitability for use, and potential for ensuring satisfaction (Peter, 1987). Quality is measured by the ability of a product to meet standards and/or requirements. Manufacturing companies usually set the minimum standards of production but the demands of the consumer often dictate the requirements.

The quality of a product can be influenced by product design quality, product manufacture quality and product reliability. Also, quality of goods can be determined in terms of its durability (i.e how long it will last), efficiency (a measure of how well the product fulfills your requirements with available resources), price, after-sales support (an item that has a long warranty may represent greater value than one that does not have warranty). The Sale of Goods Ordinance “SGO” provides that goods must be of satisfactory quality, that is, taking account of any description of the goods, the price and all other relevant circumstances; the goods must fit for the purpose mentioned by the seller; the goods must be as described on the package, or a display sign, and, the goods must correspond with the sample. As such, companies tend to adopt the Total Quality Management (TQM) Strategy in order to meet up to the stated demands. The act of overseeing all the actions that ensure this conformity to requirements is referred to as “Quality Management”.

          TQM is not restricted to Operations Management alone. It is a universal concept that has been found relevant in every aspect of management. TQM is a management philosophy that seeks to integrate all organizational functions (marketing, finance, design, engineering, production, customer, etc) to focus on meeting customers’ need and organizational objectives. It is a comprehensive management approach that works horizontally across an organization, involving all departments and employees and extending backward and forward to include both suppliers and clients/customers. Total Quality Management (TQM) is only one of many acronyms used to label management systems that focus on quality. It maintains that organizations must always strive to continuously improve these processes by incorporating the knowledge and experiences of workers.

This study therefore attempts to find out how Total Quality Management (TQM) affects the performance of Champion Breweries Plc, Uyo, Akwa Ibom State.

1.2    Statement of the Problem                 

          Quality is critically important in today’s competitive environment. In recent times, both quality and productivity have become major determinants of business success or failure, but the most concern is on achieving the desired level of quality. This tends to be an uphill task for many organizations.

          Studies have identified ineffective measurements of quality, or poor product and service quality as among factors that can cause customer dissatisfaction which in turns affects an organization’s performance. Every customer of a product is usually concerned with the quality of the product they consume. Quality is one of those variables that determine the rate of patronage and repeated consumption of any product. It is believed that a consumer who consumes or purchases a poor quality of a product may find it difficult in making a repeated purchase of same product. Organizations who rely on consumers of their products for increased profitability may be faced with problems of low sales turnover and general poor performance. Most organizations do not succeed because they fail to manage the quality of their products effectively. Total Quality Management has been considered as one of the best ways of ensuring best quality of products and services. It is as a result of this claim that this study is carried out to examine the influence of TQM on the performance of Champion Breweries, Uyo, Akwa Ibom State.

1.3    Objectives of the Study

          The main objective of the study is to discover the relationship between TQM and the performance of Champion Breweries Plc, Uyo, Akwa Ibom State. Specifically, the study will:

(i)      Examine the relationship between efficient product quality management and the profitability of Champion Breweries Plc, Uyo.

(ii)      Examine the relationship between product taste and customers’ patronage in Champion Breweries Plc, Uyo.

(iii)     Examine the relationship between effective product design and the sales turnover of Champion Breweries Plc, Uyo.

1.4    Research Questions

          The following research questions were formulated in line with the above objectives of the study.

(i)      Is there any significant relationship between efficient product quality management and the profitability?

(ii)      Is there any significant relationship between product taste and customers’ patronage?

(iii)     Is there any significant relationship between effective product design and the sales turnover?

1.5    Research Hypotheses

The following hypotheses were stated in  null form and world be tested at .05 level of significance.

H₀₁:   There is no significant relationship between efficient product quality management and the profitability.

H₀₂:   There is no significant relationship between product taste and customers’ patronage.

H₀₃:   There is no significant relationship between product design and performance.

1.6    Significance of the study

          This study will be beneficial to both customers, leaders of business organizations and potential business managers as the issue of quality is increasingly becoming a thing of concern among business stakeholders. Organizations who are interested in improving the quality of their products will find this research useful. Also, this research will serve as a source of information or reference material to both students of Business Management and others who might want to carry out a research in related area of study.

1.7    Scope and Limitation of the study

          This study focuses of Total Quality Management and the Performance of Champion Breweries Plc., Uyo. An in-depth examination of the methods employed by the organization in its operations, its quality management techniques and other relevant issues is carried out.

          Hindrances to the successful completion of this study were; insufficient funds for carrying out the research and hike in the cost of transportation due to the economic situation of the nation.

Time was also a limiting factor as the research was carried on along with tests, class assignments, and even semester examinations simultaneously. Even with all these limitations, the researcher was able to make the best use of data collected in producing a good study that contributed to knowledge.

1.8      Definition of Terms        

          The following terms have been defined as used in the work.

Total Quality Management (TQM): It refers to management methods used to enhance quality and productivity in business organizations.

Strategy: A strategy is an integrated plan through which an organization accomplishes its objectives.

Quality: It refers to production of goods/services that has attended a level of excellence, well made for the satisfaction of customers. 

Manager: A manager is someone saddled with the full responsibility of steering the affairs of an organization towards the achievement of the organization’s goals.

Customer/Consumer: A person who purchases goods from a businessman or a company for his/her private use.

Product/Goods: Consumers buy goods not only for their use value but also to satisfy a variety of emotional need.

Product Design: This refers to the features of a product.

Product Durability: In the manufacturing industry, demands on functionality, user reliability, and technical durability of materials and products are steadily increasing. Importantly, such demands need to be combined with cost-effectiveness, minimized environmental impact, and shorter lead times.

Customers’ Patronage: This is a term used in marketing and retailing. It is the share of an individual consumer’s expenditures in an industry or retail sector that is spent at one company. It is the amount that a person spends at one company divided by the amount that person spends at all companies in the industry.

Quality Control: The inspection analysis and other relevant acts taken to provide control over what is being done, manufactured, or fabricated, so that a desirable level of quality is achieved and maintained.

Quality Certification: The formal assertion in writing that a commodity, service or other products has attained a recognized and relatively high grade or level of excellence.

Product Taste: This refers to the sensory impression of a given product that is determined mainly by the chemical senses of taste and smell.