companies understand that quality provides a competitive advantage. .... of these projects; and 10) Develop a monitoring program that can identify actions when.
QUALITY AND CONTINUOUS IMPROVEMENT INTERVENTION PROGRAMS IN PRODUCTIVITY MANAGMENT: A SOCIAL SOUNDNESS ANALYSIS By Petros C. Christofi and Seleshi Sisaye, Duquesne University, Pittsburgh, PA 15282 Though the term quality has been around for many years, its meaning and applications have changed and evolved over time. In the early twentieth century, quality management meant inspecting products to ensure that they met pre-set specifications. During World War II (WWII), quality became more statistical in nature. Statistical sampling techniques were used to evaluate quality in products, and quality control charts were used to monitor the production process to improve accuracy and timeliness in the delivery of goods and services. During the post-war era, quality took an even broader meaning to be viewed as encompassing the entire organization, and not only the production process. Learning from the WWII applications and successes, and through the efforts of the "quality gurus," quality is now viewed as a concept that affects and is affected by the entire organization [1]. As a result, the term used now days to capture the concept of quality is Total Quality Management (TQM), a proactive approach trying to build quality into the product and process design. Based on its principles, TQM is concerned with the technical aspects of quality as well as the involvement of people, such as employees, customers, and suppliers, constantly striving for customer satisfaction and elimination of waste, through teamwork and data-based decision making. Since the 1970s, competition based on quality has grown in importance and has generated tremendous interest, concern, and enthusiasm. Quality is now a strategic issue and successful companies understand that quality provides a competitive advantage. In many industries, quality excellence has become a standard for doing business. This is manifested by the fact that certain companies have won the national quality awards or quality certifications more than once. While the meaning of quality for businesses changed dramatically, and while many companies had to make major changes in their quality programs either by themselves or through the help of consultants, the majority of such programs had emphasized and achieved product quality, reduction in quality costs, improvement in factory layout, labor productivity, and organization's success in its competitive goals. In other words, the focus of quality applications has been on the economic benefits of quality programs. To this effect, most studies in the 1990's that examined TQM and business process reengineering (BPR) focused on the economic success and failures of these programs in improving overall organizational programs [2]. While there are relatively a few studies that examined the impact on human capital, they have focused rather on the labor requirements and effects of these planned change programs, for example, retraining, reassignment, turnover, displacement, as well as organizational restructuring and the overall effects on labor force [3]. A 1993 research study found that 84 per cent of the firms studied employed a training program to improve quality, and 86 per cent of these carried out this training with the collaboration of a sort of consultancy firm [4]. While “the results indicate that employee motivation for quality was the most popular aspect in the training programs, the ‘social measures’ implemented by firms in the framework of TQM program were very scarce. The measures most frequently employed by these firms—creation of a quality control department, design and implementation of a quality manual, quality diagnosis, external audits, SPC and quality laboratory—indicate that the predominant focus of the programs was on the technical aspects of quality management. Our interpretation of this contrasts that the majority of managers in these small and medium-sized firms have relied on the external training program itself to motivate their personnel. This would not be surprising if we consider that training employees within the framework of a quality program is normally planned to embrace not only the improvement of skills but also the involvement of employees in the objectives of the firm” [4, p. 9].
While the contributing fathers of TQM, Deming, Juran, Feigenbaum, Crosby, and Ishikawa, suggest that continuous training and education, at all levels of the organization, and employee empowerment are among the single most important factors in improving quality, once commitment to do so is present, very few firms rely on participative management. Drucker, on the other hand, suggests that as employees are trained for quality, they are more capable of exercising “responsible autonomy” over their own jobs [5]. Consequently, “responsible autonomy” can mean less supervision is needed and this is how TQM allows many companies to reduce the number of levels in the management hierarchy [6]. This tendency of organizations to be leaner and flatter, as a consequence, with a more innovative character, presents another clue to success [7]. This relationship between training and participation has also been pointed out by Mintzberg, indicating that when the organization has a coherent structure with a high level of training, the decision-making systems will be highly decentralized [8]. However, the relationship between training, participation, and benefit remains unexplored by most TQM, BPR, and Benchmarking studies, in general. But, as we shall see below, the fusion of these three principles constitutes the Social Soundness Analysis (SSA) of Improvement Intervention Programs (IIP), applied by behavioral social scientists to study the results of Development and Conservation Projects throughout the world. SSA is a general framework used by social servants to assess the management of development programs and its social impact on stakeholders--employees, customers, organizations as well as communities. The underlying framework of SSA takes on participation and full involvement of stakeholders, on the planning and implementation of projects and services. SSA is based on principles of continuous improvement of projects so that the information is disseminated and becomes part of the operating activities of those organizations that sponsored the projects. SSA, which sometimes has been referred to as social assessment (SA) or social impact assessment (SIA), has been applied to assess the design and delivery of programs with social and cultural consequences. The United States Agency for International Development (USAID), states that the Agency's SSA policy is “to assure the wide and significant participation of the poor (the targeted population) in the development process.” By involvement or participation they mean "not only sharing the economic benefits and contribution of resources but also involvement in the processes of problem identification and solution, sub-activity selection and design, implementation and evaluation” [9]. The Agency's SSA is composed of three distinct but related aspects: (1) the compatibility of the activity with the socio-cultural environment in which is to be introduced; (2) the likelihood that the new practices or institutions introduced among the initial activity target population will be diffused among other groups; and (3) the social impact or distribution of benefits and burdens among different groups, both within the initial activity population and beyond [9, p. 1]. The SA of World Bank (WB) examined the impact of WB-supported economic operations on 42 social assessments. Their reports addressed beneficiary assessment, including the identification and design of development activities, feedback on interventions, and constraints on project implementation of the targeted client population, particularly the poor. WB-SA looked at the economic livelihood of the people and the institutional arrangements that provided them service, as well as the effect that the project had on gender and diversity. SAS not only provided a “framework for information dissemination, consultation and participation,” but it also allowed the bank to use SAS “as a vehicle for graining stakeholders’ commitment, and for improving sustainability of development interventions” [10, p. 2]. It focused on how the WB-supported economic projects can incorporate “social soundness, quality, and sustainability of bank operations” as reflected in the bank’s SA guidelines. The objective of SAS is to commit resources for recruiting and hiring, as well as the training of technical specialists in SA
objectives, so that the experts are able to carry out the bank’s objectives through systematic consultation with stakeholders, local business leaders, and government officials. The technical experts used SA’s report to redesign bank operations so that the objectives of the project address the needs of the stakeholders. Government provided data, fundraising, and institutional support to disseminate the results of the project. Since SA’s objectives were communicated, government agencies, at both the local and central levels, supported the project and were able to minimize bottlenecks that would hamper the success of the projects. The U. S. National Marine Fisheries Service (USNMFS), defines SIA as “a method of gauging the social and cultural consequences of alternative fishery management actions or policies” [11]. The organization uses SIA to determine the social and cultural conditions in areas where human population are more likely to be affected by the projects. USNMFS uses SIA to estimate social and cultural impacts that the fishery projects have at local, regional, and national scales. Social impacts have been defined as “consequence to human populations of any public or private actions that alter the ways in which people live, work, and play, relate to one another, organize to meet their needs, and generally cope as members of society.” The term also includes cultural impacts involving “changes to the norms, values, and beliefs that guide and rationalize their cognition of themselves and their society” [11, p. 1].The objective of SIA is to assist the organization to prepare an assessment report before the project is initiated, i.e., at the planning stage, so that improvements can be made to address the required social and cultural issues that would interfere in the successful implementation of the project. Since 1994, the USNMFS has prepared SIA reports for projects that it had either sponsored or authorized. The SIA has been used as an avenue to involve stakeholders in the design and delivery of government sponsored projects. Accordingly, the USNMFS has applied ten steps in the social impact assessment process: 1) Develop plans to involve stakeholders; 2) Identify any alternative if there are proposed changes or plans; 3) Describe the relevant environment/area of influence; 4) Prepare a technical report that is comprehensive and addresses the concerns or issues of stakeholders; 5) Investigate the impact of the proposed project; 6) Determine how the affected people will respond to the project; 7) Estimate the long term impacts of the project; 8) Develop guidelines that address changes in alternatives when they arise; 9) Develop plans that can mitigate the adverse impacts of these projects; and 10) Develop a monitoring program that can identify actions when unanticipated problems arise [11, pp. 11-17]. Building on the notion of CII, an essential ingredient of TQM, DiBella reports that many practitioners had been focusing on creating learning organizations over the past 10-15 years [12]. He suggests that “if all learning is inherently social, as suggested by the Institute for Research on Learning, then quality practitioners must involve staff directly in learning interventions because of the potential contributions of each and every individual, and the collective effort of all individuals working in groups. Guided by a facilitator, the key is to let the group’s own knowledge about the potentialities and leverage points for change guide their action planning process. Instead of imposing a solution for developing learning capability, a facilitator would prompt the group to come up with its own problem definition and its solution. In this way, the outcome will be a set of interventions that has group ownership and builds upon the group’s own knowledge.” Shapiro in one of her studies on the effects of change intervention on employee attitudes, found out that participation in a TQM intervention can enhance the development of employees’ orientation to continuous improvement. In another, she suggests that employeeperceived fairness of profit sharing and perceived ability to contribute to the profitability of a site are significantly associated with continuous improvement intervention programs [13]. Indeed, this is the heart of the SSA where CI is achieved no longer through some external, expert-generated model of organizational learning, but instead through the involvement and participation of the affected (targeted) population in the process of problem identification and
solution, sub-activity selection and design, implementation and evaluation. As firms and organizations adopt and adapt to TQM and its CI environment for improvement, they create the need of staff training in organizational learning while concurrently emphasizing staff participation. In the 1980s, the deficit-operated provincial Community Memorial Hospital of Canada, prompted the Ministry of Health to request for proposals designed to improve quality and reduce program specific costs through a program management intervention program. The two major results of the program included better resource utilization by the staff, as well as staff heightened awareness of what quality meant in clinical care [14]. In its CII, Textron Aerostructure revitalized its suggestion program geared toward people issues and operational issues and achieved improved operations, educated employees, and a spirit of continuous improvement behavior throughout the organization. Suggestion-programs offer a simple, practical, low cost method for achieving many of the same objectives of the more complex interventions [15]. A Canadian research study reports that when Frank McKenna was elected as the premier of New Brunswick (1987-94), he implemented many intervention programs to improve his constituents quality of life with regard to education and employment. Through literacy training and extensive skill training, people with high dependence on government assistance programs were able to exit income assistance permanently [16]. Leadership is one of the most important categories in the adoption, implementation, and success of any TQM program. Its role is paramount in fostering and rewarding commitment to continuous improvement, and it is highly recognized in winning any of the National or International Quality Awards. Due to technological breakthroughs in communication and electronic commerce, competitive pressures for better quality and higher productivity, time-based competition in faster developing and delivering of new products, international trade agreements, and financial upheavals associated with certain regions of the world, organizations must always think in terms of a global marketplace in order to compete effectively. As a result, the world has grown more complex and probably less comprehensible to some local communities where the business conditions are deemed competitive for some industries to set up their operations. In today’s global markets, companies must always think in wider strategic terms to incorporate strategies that include social, political, and ecological elements besides the economic ones, especially when such companies operate in international markets [17]. Countries demand that large corporations contribute to local, regional, and national development in such a way that their resources are exchanged for a significant increase in their citizens’ quality of life. The subsidiaries of international companies influence the salary structures and working conditions in the host countries, invest in developing countries, boosts the exports of such countries, and serve as an instrument to introduce new management and production techniques. Under these conditions, one may conclude that the main purpose of the actions of those companies is to provide the means to satisfy the needs of the countries where they operate [18]. While such international companies develop strategies that include social, political, and ecological elements besides the economic ones, there are too many occasions in which society, faced with certain events that may damage its welfare, has to intervene and call for social responsibility on the part of the companies. Sometimes outsiders expect local people to give up many of their customary economic and cultural activities without clear substitutes, alternatives, or incentives. The most effective conservation strategies pay attention to the needs and wishes of the people living in the target area. Conservation depends on local cooperation and participation. Well-meaning conservation efforts can be as insensitive as development schemes that promote radical changes without the involvement of local people in the planning and carrying out the policies that will affect them [19].
There are many occasions where international companies have taken their time in recognizing that relationships with their environment must be managed as conscientiously as the traditional resources and functions [20]. Some difficulties stem from the fact that companies find it difficult to determine what is considered socially desirable in each country where they operate, and also in interpreting what social well-being means, since they operate in many different countries, and where the meaning of the term differs. The subsidiaries of international companies are becoming increasingly important as they evolve and grow, to the point where they become a source of competitive advantage to the parent organization. Eventually these subsidiaries will possess the resources and abilities of the parent company, and are required to develop the capability to respond to its stakeholders, i.e., the groups or individuals that affect, or are affected by their actions. Donaldson [21], states that international companies have to increase the wealth of consumers and employees, respect citizens’ rights, and minimize the damage or adverse effects in countries where they operate. Frederick [22], also states that among the ethical principles to be followed by international subsidiaries are: (1) Safety and hygiene standards at work, (2) advising the employees of the risks associated with their work, (3) respect towards employees rights to life, liberty, security, and privacy, and (4) reduce (air and water) pollution. As we have seen above, if a SSA approach for improving the welfare of the community is not followed, the local ethno-ecologies are being challenged, transformed, and replaced. Industrialization introduces migration, media, pollution, values, and technologies that conflict with those of the region. To maximize the likelihood of success, the project's social design for change need to consider and rely on local cooperation and participation. Like development plans in general, the most effective projects have been conservation planned strategies that pay particular attention to the needs and wishes of the people living in the target area [6]. In this study, we are arguing that quality improvement programs need to be supplemented by SSA in order to have a comprehensive understanding of the effects of these programs, not only on the organization and its resources (labor and capital, and competitive markets), but also on the social and political aspects, including the society at large. A SSA takes a proactive approach in evaluating both the economic and the social consequences of quality programs, including TQM and BPR. As we witnessed, the SSA approach has been applied by behavioral social scientists to evaluate the effectiveness of planned intervention programs on the targeted population. SSA provides a balanced approach--a socio-political, economic based approach--to analyze any proposed program when that program is planned and implemented with the objective of bettering and improving a given population. We propose to extend the SSA approach to evaluate the effectiveness of quality improvement programs in production--manufacturing and service-organizations. Our contribution to the quality and productivity literature lies in the application of the SSA to augment these studies and thereby provide alternative frameworks to evaluate them and suggest ways in which those unintended consequences of planned intervention programs could be minimized. REFERENCES [1] Reid, R. Dan and Nada R. Sanders, Operations Management, New York: John Wiley & Sons, Inc., 2002. [2] Hammer, M. and J. Champy, Reengineering the Corporation: Manifesto for Business Revolution, New York: Harper Business Publications, 1993. [3] Harrington, H. J. and J. S. Harrington, Total Improvement Management: The Next Generation, New York: McGraw-Hill, 1995.
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