What role do QC-circles play in Sweden?

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Citation for the published paper: Alänge, S. (1992) "What role do QC-circles play in Sweden?". Total quality management, vol. 3(2), pp. 157-163.

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What role do quality control circles play in Sweden? Sverker Alänge Dept. of Industrial Management and Economics Chalmers University of Technology S-412 96 Gothenburg, Sweden

Abstract An analysis is made on why the quality control (QC) circle activities in Sweden took a considerable step backwards since 1985, after a steady increase in the number of circles during the first 10 years. There are many contributing factors to the reversal, among which are lack of top management support, a short term focus and narrow perspective on the role of the circle, and implementation flaws. The perceived decline does however not reveal the whole truth. QC circles exist under other names, and different modified forms of problem-solving groups are frequent. In some firms also QC circles come and go and reoccur when the firm enters into a situation where the total labour force has to be mobilized. The results from Sweden strongly indicate the crucial role of top management involvement for a successful implementation and continuation of a QC circle program.

Introduction At the EOQC Conference in Stockholm in 1966, Dr Juran stated that "The Quality Control Circle Movement is a tremendous one which no other country seems able to imitate. Through the development of this . . . Japan will be swept to World leadership in Quality?" (cited in Hutchins, 1990). As in other European countries, there were no immediate 'imitations' in Sweden, but in the second half of the 1970s, quality control (QC) circles were, to a limited extent, established in Swedish industry. By 1980, about 25 firms in Sweden had QC circles. However, in the first half of the 1980s, an increasing number of firms became interested in this form of activity. A number of factors contributed to this increased interest. Most apparent was the increasing inflow of knowledge about successful Japanese firms and QC circles, and discussions about the possibilities of introducing them in Western companies, through articles (see, for example, Alexanderson, 1978; Cole, 1980), and consultants, as well as specific study tours for Swedish industry to Japan (Almgren & Brännström, 1980; Almgren & Gustavsson, 1982; SAF, 1982). In 1984, the Swedish Quality Circle Association (SQCF) was formed, with the task of assisting its members and providing information about other QC activities in the country. The number of QC circles reached its peak in 1984-85, when an estimated 200-300 firms had started in total around 3000 circles. Since this peak period, the number of circles has decreased to about half that amount (according to SQCF). Why did the QC circle activities in Sweden take a considerable step backwards over the last 5 years, after a steady increase in number of circles during the first 10 years? There are many contributing factors to this.

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Interviews have been conducted with managing directors, plant managers, quality managers and labour union representatives on the use and experience of QC circles in Swedish industry. In addition, interviews have been carried out with consultants and experts. The analysis of the interview data, supplemented with reference to existing reports on Swedish QC circles (see, for example, Almgren & Karlsson, 1980; Rosengren & Svahn, 1985; Gummeson, 1987; Hartzell, 1988; Martinsson & Wall, 1989; Alänge & Schalin, 1990, serve as a basis for the discussion of the Swedish experience with QC circles. Based upon this analysis, eight critical factors were identified which served to influence the Swedish companies' experience in working with QC circles.

Reasons for the decline The first critical factor is the expectations and focus held by those involved in implementing and promoting QC circles. Specifically, the length of time it took to establish fully working QC circles, on a continuous basis, was not completely anticipated or understood in Swedish firms. The negative effects of this underestimation were further aggravated by a general short-term focus on measurable results, particularly in economic terms. In contrast, the Japanese way of using process indicators to monitor that the process, here QC circle activities, is on the right course, was not used in Sweden. In addition, in Sweden there is also a general tendency of not being able to keep more than one 'management truth' at the same time, i.e. QC circles were popular for a while, then to be replaced by other newer management techniques. Lillrank (1985) reported on similar findings from Finland, i.e. that European managers were looking for a 'magic trick' and got deeply disappointed when they realized the hard work needed with QC circles in order to reach quality through small continuous, near trivial improvements. The second critical factor is the way in which the QC circles were launched in Sweden. With the exception of a few Chief Executive Officers (CEOs), a considerable problem has been the lack of real top management support. The champions of QC circles have generally been found at a lower organizational level, with less power to decide and to motivate the organization to continue when the early revenues seem to be absent. One reason for this is that the training and education in quality has not started at the top level, limiting the top managements' abilities to direct and lead a quality improvement, even if they would like to do so. Juran & Godfrey (1990) point at a similar situation in the USA, where the managers had not undergone extensive training for managing quality during the 1970s, which was a major reason for the decline of the QC circle movement there. Unable to direct, the managers delegated the direction of the QC circles to facilitators and consultants, and this delegation led to much confusion and resentment by by-passing the supervisory structure. In several cases, the QC circles were started before the workers had been provided with training, in order to bring about a thorough understanding of the quality concept. Martinsson & Wall (1989) identified this learning sequence as an important factor which differentiated their successful case from their two cases where QC circles were no longer operating. The third critical factor demonstrates how the reward and promotional systems in Swedish companies have not favoured middle managers and foremen who actively supported the development of QC circle activities and suggestions to improvement from the floor level. This naturally also increases the resistance from those middle managers who initially do not believe in the QC concept, and even might feel threatened that QC circles will enter into their own area of responsibility. Both in the Swedish results as well as in literature from all over the world (see, for example, Cole, 1980; Lawler & Mohrman, 1985; Martinsson &Wall, 1989; Imaizumi, 1990), this has 2

been found to be one of the most serious inhibiting factors. Therefore, in summary, the role of top management in creating the motivational and promotional systems and thereby establishing the company values, is absolutely crucial. The fourth factor involves cases where management left the QC circles without further support after initially having expressed support and promoted start-up activities. The main reason for this was a mistaken belief that the QC circles would be self-fueling as long as the participation was by free will. This was aggravated by missing corporate policy on QC circle activities. The lack of a corporate policy and stringent top management support also gave the result that when a 'champion7, e.g. a local plant manager, was being promoted and left for a new job, the support structure in most cases was too weak and the QC circle activities collapsed. Martinsson & Wall (1989) also reported on how the turnover of circle members created difficulties as the new group members did not master the problem-solving skills. When a QC circle itself had a budget, the circle's first expenditure was to invest in training of the new members, while in those cases where a local budget was missing, the training was delayed considerably, some times by up to 6 months. This affected the functioning of the circles in a strongly negative way and was a contributing factor to the QC circles7 gradual decline in the Swedish electronics firms which Martinsson &Wall had studied. A fifth inhibiting factor is the suggestion process. It has been found that the whole system for evaluating improvement suggestions in Swedish firms in general works in a more bureacratic way than that in many Japanese companies. As a result, there are generally no immediate actions or corrections made based on a suggestion, which naturally lowers the motivation for this kind of activity. In a few cases, the long-established suggestion system process has been seen to be directly detrimental to the establishment of QC circle activities. This is primarily due to the fact that QC circles have been regarded as a direct competitor by the stake holders in the suggestion system. In some Swedish firms, the QC circle suggestions have been integrated into the existing system. In other companies the initial evaluation of the improvement suggestions from the QC circles have been delegated to the first line supervisor, which provides the possibility of more rapid feedback. The advantage of having the first line supervisors involved in the decision process and the importance of providing rapid answers to the suggestions (even if they go to a higher hierarchial level) was already apparent in the first travel reports (see, for example, SAF, 1982). In Sweden, the labour movement has had a prominent position assisted by labour laws of participation. A sixth inhibiting factor has been that some labour union representatives have been very negative to QC circles (see, for example, Bergström, 1989) as the circles have been seen and portrayed as a way of distracting workers from a more real involvement in the work itself (especially in planning, problem-solving and decision-making, i.e. work enrichment). There are a few cases, however, where the local labour unions have been instrumental in launching QC circles. For example, in Sweden QC circle activities have been regulated in formal agreements between the labour unions and the firms. This is confirmed in the US literature as well, where the importance of labour union involvement has been pointed out as a factor of success. According to Cole (1980), the union needs to have a sense of 'ownership7 in the QC circle development. A seventh critical factor has been the limited perspective of the QC circle. It has been found that, during the early period when many companies enthusiastically started QC circles, the focus was only on the circle itself as the means for improving quality. The understanding that the role of QC circles was only one contributing component in a more complex multidimensional company-wide quality strategy and effort was not understood. Therefore, even in those cases where the QC circles initially functioned well, there was subsequent disappointment because the circles could not (naturally) solve all quality related issues. This, once again, is an effect of lack of understanding and training of the top 3

management, since only a very limited percentage of the quality problems can be solved at the operator or QC circle level. In addition, the QC circle has sometimes been viewed in another narrow sense, when it has been used primarily as a means to improve human relations by providing a new type of workers' participation. However, the latter focus was not identified in our company i interviews, but has been brought forward by Juran (1987), as one contributing factor to the 1 decline of QC circles in Western companies. The eighth critical factor concerns the way in which philosophies and methods are being implemented. The general obsession in Western companies with innovation and radical change is well known, while, in contrast, to practices in Japan, the contribution from steady minor improvements has received only a marginal attention. As identified by several of the interviewees, Swedes are able to learn and understand theories and philosophies, as well as to express the 'right truths' about total QC and individual quality methods. However, Swedes are far more limited in their ability to implement these theories and methods. For example, Martinsson & Wall (1989) found in their study of QC circles in the Swedish electronics industry that the circles made no use or made only partial use of the problem-solving tools which had been taught during the initial training. This might be a rather typical consequence when Japanese QC circles are imported to Western countries, but, nevertheless, it is a serious problem for the survival of the circles. According to Lillrank (1987), by not following the Japanese approach of 'a persistent, thorough and systematic approach to problem-solving', the Western 'quality circle' is 'easily reduced to another insignificant fad-to-failure management programme: a few obvious problems may be solved, group feeling may be high for a while, but the programme soon dies when the initial enthusiasm wanes'. Hence, in the diffusion and implementation of quality tools, there is a lot to learn from the Japanese practise. In summary, in Sweden there is a clear need to see the total picture, i.e. to view QC circles as an essential part of company-wide quality approach. Why then has this view of QC circles as an integrated part of a total QC effort not been accepted and implemented in Swedish industry? One major contributing factor is that Sweden has not had a nationwide organization of the caliber of JUSE (the Union of Japanese Scientists and Engineers) for the diffusion of total QC. As mentioned above, the Swedish Quality Circle Association (SQCF) has existed since 1984, but its focus has been on developing quality circles and its ability to make a greater impact on Swedish top management's views and actions has been limited. Juran (1987) points out that there has been little central coordination and guidance in Western countries in general, partly because the recognized professional QC societies largely ignored the QC circle movement during its formative years, and left the resulting vacuum to company enthusiasts, consultants and journalists. The resulting absence of a broad coordination and guidance contributed, according to Juran, to the decline of the QC circle movement.

Small group activities in Sweden The perceived decline of QC circles does not however, reveal the whole truth about Swedish QC circles. The primary reason for this is that no perfect statistics on the number of QC circles, or various modified forms of small group activities on quality-related issues, exist in Swedish industry. If we look in more detail into the Swedish companies interviewed, we see that many have formed small groups based on the principles of QC circles. However, they are not called QC circles since the term has a negative connotation for many Swedes, primarily because of not-invented-here effects, 4

early mistakes in the implementation of circles in Sweden, negative views of the labour movement, etc. Instead, they exist under a number of names such as, development groups, EQ teams or improvement groups. One of the pioneering companies in Sweden can provide a good example. In this company, several phases of QC circle development can be distinguished. Initially, QC circles were formed in a crisis situation in the mid-1970s when the company's survival was at stake. Then workers' involvement was essential to save the company and the top executive's direct initiation and direct involvement in the creation of the QC circles was of extreme importance. A number of years later, this top executive was promoted and subsequently left the company, and the QC circles activities ended. Four years later, under a new management, the QC circles were reintroduced. However, this time they were introduced in direct cooperation with a similar kind of industrial firm in Japan. As a result, the activities were designed according to the Japanese model. A few years later the firm merged with a competitor and QC circles received a very important role in this new company formation. This time, however, the name changed from QC circle to reflect the specific problem that the groups identified for solving. Currently, the company officially does not have any QC circles, but the QC circle principles are used to form their problem-solving groups. This method of working has been seen as an effective way to integrate part of the management philosophy with implementation procedures by this pioneering Swedish firm. Lawler & Mohrman (1985) reported that they had found a few companies in the USA which, in a similar way, had used QC circle programmes for more than 10 years and gone through successive cycles of start-up, decline and then revitalization. These cycles typically (re)occurred when a new product or technology was introduced and the company needed employee input. In several of the other Swedish companies interviewed, the situation was similar. On the basis of collected facts, the employees, in one work-area, identify the primary problem. To solve the identified problem, small groups were formed, which work to develop a solution to the problem. The primary difference, when compared with the Japanese QC process, is that the Swedish circles have a shorter life duration, which is seldom longer than 1 year. This life cycle is influenced by the absence of the strong educational-training tradition in QC activities which is present in the Japanese environment. Typically, the Swedish circles are then modified and receive a new name, such as quality forum, problem solving group or task force. In these modified forms, the members often come from different departments and the group may also include specialists, depending on the type of problem. In the terminology of Ishikawa (1989), the Swedish type of ad hoc groups are more similar to the 'QC team' or in Oakland's (1989) words they would be classified as quality improvement teams (QIT). What then, are the results of the Swedish QC circles? Among the results mentioned are a large number of improvements of products, processes and work environment, increased commitment, motivation and a decreased absenteeism. The results can also be measured in economic gains and quality improvements, but it is also a question of the more intangible benefits found in the form of improved communication within work groups and between workers and supervisory layers of the organization.

Concluding remarks The cases illustrating the successful implementation of QC circles in Sweden show a strong involvement, initiative-taking and follow-up by the top management, which is very similar to the Japanese experience. This importance of active top management involvement was, for example,

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stressed by the keynote speaker Professor Imaizumi, at the International Conference on Quality Circles in Tokyo 1990: “We believe that the success of future QC circle activities will not depend much on [in] which country they develop. A major part of the responsibility, we believe, lies in top management . . . [to] obtain the correct idea of the QC circle concept, come up with measures to activate QC circles, and promote the activity with enthusiasm”. Lastly, it has been found in Sweden that the role of first line supervisors and middle management is crucial to the survival of the QC concepts. Imaizumi (1990) points out that: "The factor that affects QC circle activity most greatly is seniors and managers directly connected to the QC circle" and "we have seen many circles that operated enthusiastically under a certain manager but died as soon as that manager was replaced by a thoughtless one". However, he once again points at the importance of the top management: “But it is the top management that placed such a thoughtless manager in that position. It is also the top management that is responsible for the negligence to train that manager properly”. Finally, some concluding remarks about trends in the 1990s in Sweden. As we have observed, there is a growing understanding of the need for company-wide total QC among Swedish business leaders. However, the growth still falls short of what is needed. Today there are still no companies that have succeeded in implementing a thorough quality philosophy revolution, such as, for example, in the US firms Motorola and Xerox. With the better understanding of total QC among Swedish business leaders there could be a renewed and increased interest in developing QC circles. As was illustrated above, these are among the most effective means of mobilizing all personnel in a joint effort towards improved quality and competitiveness. In addition, the recent (July 1990) formation of a national Swedish Institute for Quality (SIQ), located in Gothenburg, is another important step in the right direction. However, much is still left to be done.

References ALEXANDERSON, B.0. (1978) QC circles in Scandinavia, Quality Progress, July. ALMGREN, B.& BRÄNNSTRÖM, A. (Eds.) (1980) Chalmers Studieresa - Singapore och Japan (Chalmers study tour to Singapore and Japan), Department of Industrial Management, Chalmers University of Technology, Gothenburg (in Swedish). ALMGREN, B. & GUSTAVSSON, S.-0. (Eds.) (1982) Chalmers Studieresa - Taiwan och Japan (Chalmers study tour to Taiwan and Japan), Department of Industrial Management, Chalmers University of Technology, Gothenburg (in Swedish and Norwegian). ALMGREN, B. & KARLSSON, T. (1980) Kvalitets-kvantitet - Lösenordet är Kvalitetscirklar i Japan (Quality-quantity - the keyword is QC-circles in Japan), Department of Industrial Management, Chalmers University of Technology, Gothenburg (mimeo, in Swedish). ALÄNGE, S. & SCHALIN, A. (1990) Quality control activities in Sweden - what role do QC circles play in Sweden? in: Proceedings from ICQCC 1990, JUSE, Tokyo, pp. 47-49. BERGSTRÖM, P.-0. (1989) Det goda kvalitetsarbetet ersätter kvalitetscirklar (The good quality work replaces the QC-circles), Utveckling i Samverkan, No. 2, p. 3 (in Swedish). COLE, R.E. (1980) Will QC circles work in the US? Quality Progress, July, pp. 30-33. 6

GUMMESSON, E. (1987) Quality -- the Ericsson Approach, Stockholm, Ericsson. HARTZELL, S. (1988) Introduktion av QC på Margarinbolagets fabrik på Lidingö, Sverige (Introduction of Quality Circles in the Margarine Company), in: Kvalitet och Kvalitetscirklar i Norden, SQCF, Avesta, pp. 213-218 (in Swedish). HUTCHINS, D. (1990) Quality control circles in the UK - past, present and future, in: Proceedings from ICQCC 1990, JUSE, Tokyo, pp. 65-69. IMAIZUMI, M. (1990) QC circle activities in Japan - today and tomorrow, in: Proceedings from ICQCC 1990, JUSE, Tokyo, pp. 1-8. ISHIKAWA, K. (1989) How to apply companywide quality control in foreign countries, Quality Progress, 22(9), pp. 70-74. JURAN, J.M. (1987) QC circles in the West, Quality Progress, September, pp. 60-61. JURAN, J.M. & GODPREY, A.B. (1990) Worker participation-development in the USA, in: Proceedings from ICQCC 1990, JUSE, Tokyo, pp. 9-16. LAWLER III, E.E. & MOHRMAN, S.A. (1985) Quality circles after the fad, Harvard Business Review, January February, pp. 65-71. LILLRANK, P.M. (1985) Quality circles in Finland, in: Proceedings from ICQCC 1985, JUSE, Tokyo, pp. 343-351. LILLRANK, P.M. (1987) Organization for Continuous Improvement: Quality Control Circle Activities in Japanese Industry, Helsinki University (Doct. Diss.). MARTINSSON, K. & WALL, S. (1989) Förklaringen till nedgången i kvalitetscirkelverksamheter: tre fallstudier i elektronikbranschen (Explanations to the decrease in quality circle activities: three case studies from the electronics industry), Stockholm School of Economics (Master’s Thesis in Swedish). OAKLAND, J.S. (1989) Total Quality Management, Oxford: Butterworth-Heineman. ROSENGREN, B. & SVAHN, G. (1985) Utvärdering av QC-cirklar i svenska företag (Evaluation of QCcircles in Swedish Firms), Department of Industrial Management, Chalmers University of Technology, Gothenburg (Master’s Thesis in Swedish). SAF (1982) Kvalitetscirklar i Japan: reserapport (Quality control circles in Japan: travel report), Swedish Employers' Association, Stockholm (in Swedish).

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