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The role of organizational climate in the implementation of Total Quality Management.

Total Quality Management (TQM) provides a paradigm shift in management philosophy for improving organizational effectiveness (Byrne, 1992; Gagne, 1983; Lowe and Masseo, 1986). TQM focuses the efforts of all members of the organization to continuously improve all organizational processes and increase value to customers, while relying upon a clear vision of the organization's purpose. This depends on the removal of barriers both within the organization and between the organization and its various stakeholders. TQM has been embraced by thousands of organizations (Lawler and Mohrmon, 1992) as an important, new approach to management.

Despite its theoretical promise and the enthusiastic response to TQM, recent evidence suggests that attempts to implement it are often unsuccessful (Erickson, 1992; Fuchsberg, 1992; Kendrick, 1993). Wyatt, the human resources consulting company, surveyed 531 companies that had undergone restructuring in 1992. Only 41% of the 361 companies that started TQM programs as a part of restructuring considered them to have been effective (Fuchsberg, 1993). Similarly, a study by McKinsey & Co. revealed that, of TQM programs in place for more than two years, as many as two-thirds are considered failures by the employees (Doyle, 1992).

Researchers have most commonly attributed the failures of TQM implementation to deficiencies off (1) shared vision, (2) application planning, (3) organizational commitment, (4) training, (5) reward systems, (6) empowerment, or (7) cross-functional integration (Brown et al., 1994; Danjin and Cutcher-Gershenfeld, 1992; Doyle, 1992; Emery and Summers, 1992; Gilbert, 1993). While these factors are, no doubt, crucial to internalizing TQM, a fundamental determinant may underlie them - the need for a conducive organizational climate. Though several studies (Bright and Cooper, 1993; Glover, 1993; Morris, 1994; Westbrook, 1993) have discussed the importance of adopting a TQM-type culture (e.g., one that emphasizes "living for the customer"), none has empirically examined the effects of preimplementation climate factors on TQM implementation. This article explores the effects of several aspects of organizational climate on TQM applications.

Climate and TQM

Organizational climate is understood as an enduring characteristic of organizations that is reflected in the attitudes and descriptions employees make of the policies, practices and conditions that exist in the work environment (Schneider and Snyder, 1975). Further, climate can be considered as a "measure of whether people's expectations about what it should be like to work in an organization are being met" (Schwartz and Davis, 1981: 31). Climate can most accurately be understood as a manifestation of culture (Schein, 1985), although culture is typically defined as a deeper, less consciously held set of meanings (Reichers and Schneider, 1990). Accordingly, measures of climate show whether beliefs and expectations are being fulfilled, and may offer valuable insights to whether and how an organization's culture will accommodate change. Schwartz and Davis (1981) found that a climate incompatible with the intended change can offer a strong level of resistance and even derail the most well planned change process. We believe their findings apply to TQM implementations.

Though we could not locate empirical findings to delineate the effects of climate on TQM implementation, some authors have speculated about them. Harber, Burgess and Barclay (1993) asserted that TQM programs will be more successful if climate is modified and managed to elicit employee commitment and satisfaction consistent with the values of TQM. Smith, Discenza and Piland (1993) argued that cultivating a climate for innovation is a useful TQM strategy. Though these assertions regarding the influences of climate on TQM lack empirical support, there is some evidence that climate is affected by TQM interventions. Harber, Burgess and Barclay (1993) found that TQM improved the climate for change, and had a beneficial effect on a wide range of employee perceptions of aspects of their organizations. Similarly, Counte, Gladon, Oleske and Hill (1992) found that participation in TQM was related to more favorable perceptions of the organization's climate.

The change literature suggests that successful implementation of TQM depends on a work climate conducive to innovation (Smith et al, 1993; Zammuto and O'Connor, 1992), learning (Kim, 1989; Senge, 1990; Weber and Sorensen, 1993), and change (Glover, 1993; Townsend and Gebhardt, 1990). Such a climate provides the necessary framework or atmosphere within which the learning process is nurtured, enabling TQM to take hold, flourish, and feed upon itself. First, however, employees must sense a climate of trust before they can offer maximum commitment to TQM. A climate of trust permits employees to be sold on a project (Glover, 1993; Ouchi, 1981). These aspects of climate can be operationalized/measured through employee perceptions of an organization's supervision, goals and objectives, communication, interdepartmental cooperation, training and development programs, reward systems, employee commitment, respect for employees and usage of employee skills (Litwin and Stringer, 1968).

Based on this review of the literature, we propose that a positive climate is a necessary precondition to successful TQM implementation. As an exploratory effort to examine this proposition, we test the following hypothesis:

H1: Employee perceptions of organizational climate will be more favorable among employees within successful, as opposed to unsuccessful, TQM implementors.

Further, the literature suggests that any management interventions to enhance employee participation and continuous improvement (CI) will improve organizational climate (Lawler, 1994; Sullivan, 1992; Tenner and Detoro, 1992). As such, we examine a second hypothesis:

H2: Employee perceptions of their organizations will improve during TQM implementations.

Method

To examine the hypotheses we performed a secondary analysis of data collected by the senior author's consulting firm.

Consulting Procedures

The senior author's consulting group assisted 13 U.S. defense contractors in the aerospace industry in their TQM applications. Employees were surveyed for their perceptions about various aspects of work climate and their job satisfaction (see Table 1 for the climate items). A second identical survey was conducted, using the same employees, eight months after initial TQM implementation. Between the two surveys, the consultants guided the implementation of a TQM program consistent with the tenets of TQM pioneers Juran (1989), Deming (1986), Crosby (1984), and Ishikawa (1976). An evaluation of the success of the CI program and TQM sustainability was conducted approximately 18 months after initial implementation.

Research Procedures

The senior author obtained all data related to the aerospace consulting project. This study can be classified as a retrospective exploration because the data were not researcher-generated and they were gathered by the consulting group (but not analyzed for this article) in advance of the statement of our hypothesis.

The Sample

Survey respondents totaled 15,722 employees from the 13 organizations. The mean number of respondents from each company was 1,209, with a median of 942. The smallest number responding was 586, the largest, 2,815. It is estimated that at least 95 percent of all employees from each TQM site completed the survey. With the exception of senior managers, employees at all levels and from every department were surveyed.

The respondents' 13 companies contained a large number of corporate-level commonalities: industry type (aerospace); position in the value chain (subcontractor); contractual mix (more than 50% government contracts, external monitoring); size (600-2,800 employees); hierarchical structure and span of supervisory control (highly similar); competitive environment (highly similar); and no significant or traumatic events occurred during the time period of the study (e.g., filing for Chapter 11 bankruptcy). In addition, there were a number of other similarities among the organizations. They had similar corporate strategies, financial status, technical systems, labor relations (all had union employees) and stages of product development. Management support for TQM was similar and all companies were using an identical implementation strategy that was led by the senior author.

Measures

The consulting firm provided survey results with which to assess a number of aspects of organizational climate. The survey questions were similar to well established climate measures suggested throughout the management literature (see Cook et al., 1981). Twelve of the questionnaire items (out of approximately 50 total) were relevant to work climate and readiness for TQM. The remaining 38 items gathered organization-specific information or individual-level demographic information.

For purposes of considering the hypothesis, we will report each of the 12 climate items separately. Individual-level raw data were not available to assess the psychometric properties of any possible groupings of items including reliability and validity analyses. The consulting firm had aggregated the results (at the company level) to indicate the percentages of employees who answered with a given response - "5" for "excellent" through "1" for "unsatisfactory." For example, we obtained the following preimplementation data on company number 1 for item 1, "How would you rate the commitment of your co-workers to the success of the company?" Zero percent rated it as "excellent," 13% "above average," 63% "average," 21% "below average," and 3% "unsatisfactory." This same rating scale was used by all respondents in each company in responding to all 12 climate-related items. As with item 1, employees were asked to rate the organization in terms of the climate attribute described in the item. The other 11 items, written in abbreviated form, are as follows: organization's respect for the individual, level of interdepartmental cooperation, quality of training and development, company's usage of employee skills, rewarding of good performance, quality of direct supervision, clarity. of company goals and objectives, willingness of employees to reveal problems, upward communication (i.e., company's willingness to listen and take action), fair application of organizational policies, and flow of information within the company (vertical and horizontal).

To determine whether a company "passed" or "failed" (our terms) to achieve a point of sustainability in its TQM efforts, the consultants evaluated each of seven areas on a 100 point scale: (1) top management support, (2) process management, (3) quality information, (4) product design, (5) human resources management, (6) supplier involvement, and (7) customer involvement. Similar to the Baldrige criteria (National Institute of Standards and Technology, 1991), these areas have been found by the consulting group to provide an excellent framework for assessing an organization's level of TQM. Within each of these areas, the raters judged the degree of continuous improvement, cross-functional integration, and employee involvement, as well as the quality of communication, training and development, and motivational systems, using a series of internally developed checklists. In turn, the consulting firm provided, for our research purposes, an overall judgement of whether a firm "passed" or "failed" the 18 month sustainability test.

Analysis

To test the first hypothesis (H1), that employee perceptions of organizational climate will be more favorable in successful firms, chi-square tests of independence were conducted to determine whether the distributions of responses to each of the 12 work climate items were independent of company classification as a success or failure in TQM implementation. We also examined the distribution of responses to each item to compare successful implementations to unsuccessful ones. More positive climate perceptions were expected for successful implementers. To test the second hypothesis (H2), that climate perceptions improve following TQM implementation attempts, we conducted t-tests for paired observations. In other words, t statistics were computed for each of the 12 climate items comparing "before" implementation and "after" implementation mean perceptions of climate.

Results

Before reporting the results of the chi-square tests, it is noteworthy that the consultants graded seven of the 13 companies as having demonstrated the organizational capability to sustain TQM implementation ("successes"), while the remaining six required significant improvement in numerous areas ("failures"). Four of the six "failures" had abandoned TQM implementation efforts shortly before the 18th month of implementation.

Our first hypothesis (H1) was that prior to implementation, employee perceptions of organizational climate will be more favorable among employees within the successful, as posed to the unsuccessful, TQM implementation group. Table 1 contains the results of the chi-square tests, the first of two steps required to test the hypothesis. For each item, the chi-square statistic was significant at (p [less than] .001) indicating that employee perceptions about each aspect of climate were related to the classification of the organizations as either successes or failures in TQM implementation. Table 2 contains the cell frequencies for one of the climate items, item three from Table 1. Item three, "the level of cooperation," was chosen because it generated typical values for chi-square. Obviously, the presentation of all cell values for each of the 12 items would be undesirable.

The second step of the analysis required closer examination of the distributions of responses across the 13 companies. Examination of the "actual" versus "expected" frequencies of responses indicated that successful implementors were rated more favorably by employees on each item than were unsuccessful companies, providing a pattern consistent with the hypothesis. Given the limitations of the study design, these findings provide strong support for the hypothesis.
Table 1

Employee Assessments of Organizational Climate Factors and
Statistics from Chi-Square Tests of Independence.

Questionnaire Item Chi-Square(*)

1. co-workers' level of commitment to success 4,169

2. organization's respect for the individual 2,183

3. level of interdepartmental cooperation 2,918

4. quality of training and development 1,941

5. company's usage of employee skills 2,075

6. rewarding of good performance 3,907

7. quality of direct supervision 4,691

8. clarity of company goals and objectives 1,440

9. willingness of employees to reveal problems 5,184

10. upward communication, i.e., company's 4,329
willingness to listen and take action

11. fair application of organizational policies 3,121

12. flow of information within the company 2,440
(vertical and horizontal)

* p [less than] .001, with 4 d.f. for all questions.


Figure I contains bar graphs that illustrate the data for twelve key aspects of organizational climate. It is noteworthy that the "successes" began TQM with mean levels above three or "average" (on the five-point scale), while "failures" started with climates perceived as "below average." This pattern was evident across 11 of the 12 items. Additionally, Figure I provides some graphic insight to the results of the second hypothesis (H2) that climate perceptions improve following TQM implementation attempts. The difference between pre- and post-implementation testing was significant across all 12 climate items at (p [less than] .001). This indicates that the aggregate perceptions within each organization improved during the initial phase of TQM implementation.

Discussion and Managerial Implications

We have begun to explore, using part of an existing database provided by the senior author's TQM consulting group, whether organizations' climate attributes relate to total quality management implementation. The findings suggest that an organization's climate plays a significant role in the sustainability of TQM implementations. The results also provide support for the findings of Harber et al. (1993) and Counte et al. (1992), who found that climate improved following TQM implementations.
Table 2

Frequency Table Used to Compute Chi-Square
Statistics for Item 3 from Table 1.

 FAILED AT TQM SUCCESSFUL AT TQM
Responses Actual Expected Actual Expected

Excellent 347 774 1,360 932
Above Average 940 1,951 3,360 2,349
Average 3,436 3,030 3,242 3,648
Below Average 1,847 1,077 528 1,297
Unsatisfactory 564 301 99 362

Note: Cell values represent the numbers of employees holding a
range of perceptions ("excellent" to "unsatisfactory") within
companies graded "successful" or "unsuccessful" at TQM
implementation. Perceptions were of the level of cooperation
within the organization.


Especially interesting are the strong findings for the learning-, change-, and innovation-related items: (1) employee commitment, (2) treating employees with respect, (3) level of interdepartmental cooperation, (4) quality of training and development, (5) company's use of employee skills, (6) rewarding good performance, (7) the quality of direct supervision (no doubt important, given supervisors' roles as trainers and facilitators) and (8) clarity of organizational goals and objectives. These results complement some of the organizational learning-related literature (e.g., Kim, 1989; Senge, 1990) and argue for the development of measures to capture the extent to which organizations and their members can and have adopted a norm for learning. Additionally, the findings support Weber and Sorensen's (1993) conclusion that the employee perceptions of internal training and development play a key role in initiating TQM efforts and sustaining them.

In order to successfully implement TQM, members of an organization must do an effective job of communicating about TQM and the changes it necessitates. Not surprising, therefore, are the large chi-square statistics for the communications-related and trust-related climate items: (9) company's willingness to reveal problems, (10) company's willingness to listen and take action, (11) fair application of policies, and (12) flow of information within the company. These findings support those of Hildebrandt (1988) who concluded from a study of 12 organizations adopting Flexible Manufacturing Systems (FMS) that learning behaviors are likely to occur only in "high-trust" organizations. Similarly, Walton (1989) noted that programs to change an organization's information technology can succeed only in an environment of high employee commitment and coordination.

Further, these climate attributes were at least one response level higher (i.e., one scale point higher) for the successful than the unsuccessful organizations, with initial mean response levels at 3.5 (average to above average). This one point response spread also carried over to the postimplementation results. The large disparity in employee perceptions seems to suggest the possibility of a "flashpoint," a point at which the organization possesses the capabilities or cultural readiness to accept change with a minimum of resistance. Also of interest was the rate/magnitude of improvement in employee perceptions between the first and second survey. Overall, the unsuccessful organizations had a larger change in perceptions, likely attributable to the statistical fact that they had the opportunity for a larger increase in response level. For both groups, the implementing principles of TQM appear to raise levels in the described attribute areas, as we found among the 13 firms. This implies that a persistent organization, one that began a TQM program below the "flash-point" level, might eventually cross the threshold as the continuous improvement aspect of TQM enhances climatological readiness.

Future research should contain longitudinal designs to detect whether TQM successes are lasting or transitory. It is the hope of TQM proponents that the "continuous improvement" and "employee participation" features will insure that TQM will be self-renewing, and avoid the staleness following other developmental interventions.

Future research also needs to examine additional industries using different research designs. More sophisticated measures and designs are called for, as are measures to assess the degree of success of TQM implementations. Postintervention data on organizational effectiveness, as well as follow-up interviews with employees on the climate survey items, would also be useful. We were able to achieve relatively good control over a number of variables that might have determined success or failure. This control was possible because of the homogeneity of the sample of companies. Validity was also enhanced by the large number of respondents, 15,722 from 13 different organizations. Although the 18 month evaluation point for judging "success/failure" may be considered premature, it did provide an opportunity to draw conclusions from the early stages of TQM implementation. The fact that four of six unsuccessful firms dropped their TQM programs within 18 months suggests that it was an appropriate time span.

Despite these empirical limitations, the findings support and complement earlier research on cultural readiness for TQM. Further, we believe this study provides an important first step in determining the degree to which organizations must possess, prior to implementation, a climate necessary to the success or failure of TQM. Until recently, proponents of TQM have tended to extol its virtues, without cautioning that certain organizations may not possess optimum climates for implementation. While our findings reinforce the notion that merely implementing TQM can improve climate, organizations with initially poor climates run a high risk of frustration and eventual failure because of the time and hard work needed to internalize TQM. Thus, interventions to improve climate may be needed before implementing TQM in order to increase the likelihood of success.

These findings recommend a cautionary approach by organizations considering TQM. The use of an employee climate survey is a wise reconnaissance tool for assessing preimplementation perceptions. Additionally, the results suggest the need for pre-TQM interventions such as team building, problem-solving seminars, and enhanced cross-functional integration (Emery and Summers, 1995) to insure high levels of attributes commonly associated with learning, change, and innovation. Climate is also, to a large degree, a manifestation of human resource management policies. As such, it makes sense to examine and change some human resource policies prior to implementing TQM. One change is from traditional performance appraisal to a performance management system that encourages employees' skill development and learning, perhaps in conjunction with a skill-based pay system (Gomez-Mejia and Welbourne, 1988). Another potentially useful human resource activity to instill TQM is strategic job analysis (Schneider and Konz, 1989). It can orient employees toward development and learning for the future, including learning about TQM. Preimplementation interventions such as these should create the climate necessary for TQM sustainability.

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Author:Emery, Charles R.; Summers, Timothy P.; Surak, John G.
Publication:Journal of Managerial Issues
Date:Dec 22, 1996
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