Total quality management in service sector: a literature review

Int. J. Business Innovation and Research, Vol. 6, No. 3, 2012

Total quality management in service sector: a literature review Faisal Talib* Mechanical Engineering Section, University Polytechnic, Faculty of Engineering and Technology, Aligarh Muslim University, Aligarh, Uttar Pradesh, India E-mail: [email protected] *Corresponding author

Zillur Rahman Department of Management Studies, Indian Institute of Technology Roorkee, Roorkee, Uttarakhand, India E-mail: [email protected]

M.N. Qureshi Faculty of Engineering and Technology, Department of Mechanical Engineering, MS University of Baroda, Vadodara, Gujarat, India E-mail: [email protected] Abstract: Over the last two decades, service organisations have embraced total quality management (TQM) as an effective management tool to improve their service quality. They have begun to show a keen interest in TQM by working on quality and related areas. TQM has become a major area of attention to practitioners, managers and researchers due to its strong impact on business performance, customer satisfaction and profitability. In the light of this, an attempt has been made to study and understand the theory and concept of TQM, its benefits as well as various facets of service components and its classification. This study also explores the literature on the implementation of TQM in selected service industries. The finding of this study provides a rich contribution towards TQM theory, its role in service sector, as well as presents the different components of services. This paper can help business managers and quality practitioners in better understanding TQM, service systems concept as well as TQM implementation in service sector. The scope for future study is presented at the end. Keywords: TQM; total quality management; service; service industry; banking; ICT; information and communication technology; healthcare; hospitality.

Copyright © 2012 Inderscience Enterprises Ltd.

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F. Talib, Z. Rahman and M.N. Qureshi Reference to this paper should be made as follows: Talib, F., Rahman, Z. and Qureshi, M.N. (2012) ‘Total quality management in service sector: a literature review’, Int. J. Business Innovation and Research, Vol. 6, No. 3, pp.259–301. Biographical notes: Faisal Talib is an Assistant Professor at Mechanical Engineering Section, University Polytechnic, Aligarh Muslim University, Aligarh, (UP), India. He holds Masters in Industrial and Production Engineering and currently pursuing PhD in Total Quality Management in Service Sector from Indian Institute of Technology Roorkee, (Uttarakhand), India. He has more than 13 years of teaching experience. He has 40 publications to his credit in national/international journals and conferences. His special interest includes quality engineering, TQM, service quality, quality concepts, industrial management, operations management and quality management in service industries. Zillur Rahman is an Associate Professor at the Department of Management Studies, IIT Roorkee. He is a recipient of the Emerald Literati Club Highly Commended Award and one of his papers was The Science Direct Top 25 Hottest Article. His work has been published and cited in various journals including Management Decision, Managing Service Quality, Int. J. Information Management, Industrial Management and Data Systems, The TQM Magazine, Business Process Management Journal, Int. J. Service Industry Management, Information Systems Journal, Decision Support Systems, Journal of Business and Industrial Marketing and Int. J. Computer Integrated Manufacturing, etc. M.N. Qureshi is an Associate Professor at the Faculty of Engineering and Technology, Department of Mechanical Engineering, The MS University of Baroda. He earned his Graduate and Post-graduate degrees in Mechanical Engineering from MS University of Baroda and later on PhD degree from IIT Roorkee, Roorkee. He has more than 75 publications to his credit in national/international journals and on conference proceedings. His areas of interests include logistics and supply chain management, industrial management, quality management, etc.

1

Introduction

In the present era of rapid changes in market and economic development characterised by phenomenon such as globalisation, deregulation of markets, advancement in technology and intense competition, total quality management (TQM) becomes utmost important not only in manufacturing sector but also in service sector. It seeks to integrate all organisational functions to focus on meeting and surpassing customers’ requirements and organisational objectives. TQM empowers every member of the organisation and offers the opportunity to participate, contribute and develop a sense of ownership. It is intended to promote continuous, sustained and long-term improvement in quality and productivity, and eliminate employees’ fear of change. According to Kumar et al. (2011), TQM is a modern management philosophy and a journey, not a destination. They further asserted that it is a systematic management approach to meet competitive and technological challenges which has been accepted by both service and manufacturing organisations globally. TQM highlights the need to improve the quality of goods and services to better utilise the resources of organisation (Collins, 1996). Kureshi et al. (2010) argued that the terms TQM and business improvement are used interchangeably in the quality

TQM in service sector: a literature review

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management research and showed significant relationship between them. Bellis-Jones and Hand (1989) suggested that TQM is not just another management fad; it is capable of delivering real competitive advantage. Lee et al. (2010) claimed that TQM being a business management strategy, it also improves the quality of organisational management, increase competitiveness and adds value to the customer as well as provides a competitive edge for the organisations. This was also supported by Das et al. (2008). Further, Holjevac (2008) stated that TQM is a system of enhancing and improving flexibility, and introducing an effective and efficient business performance. He further asserted that TQM guarantees a stipulated quality within the organisation. Earlier, in 1970s, much of the initial attention was directed towards manufacturing sector and was found to be effective in improving production and lowering manufacturing costs as well as gain in competitive advantage (Garvin, 1983). The proven potential of TQM to provide competitive advantage to manufacturing sector along with universal applicability of the TQM concept have motivated and attracted academicians and businesses managers to adopt TQM in the service sector as well (Issac et al., 2004; Parasuraman et al., 1985; Sureshchandar et al., 2002). Though TQM has its origin in manufacturing sector, it is widely believed that its principle and practices are equally relevant to service sector as both use facilities as inputs to satisfy and surpass customers’ needs. However, it is necessary to understand the unique characteristics of services for an effective and successful implementation of TQM in service sector. According to Talib et al. (2011e), TQM is a set of management practices applicable throughout the organisation and geared to ensure the organisation consistently meets or exceeds customer requirements. They emphasised that introducing TQM practices in an organisation is a long-term commitment. The successful implementation and adoption of TQM practices requires planning, time and efforts. Common TQM practices for service sector include: top management, strategic quality planning, employee management and involvement, supplier management, customer focus, process management, continuous improvement, information and analysis, knowledge and education are important for continuous and industry-wide improvement (Fotopoulos and Psomos, 2009). Further, Talib et al. (in press a, 2011f) identified 17 TQM practices for service industries based on extensive literature review. They are top management commitment; customer focus; process management; quality systems; teamwork; communication, training and education; continuous improvement and innovation; supplier management; employee involvement; information and analysis; benchmarking; strategic planning; employee encouragement; quality culture; human resource management; and product and service design. Further, the findings of the study by Kumar et al. (2011) reported that there was a positive impact of TQM implementation on different dimensions of company performance, i.e. employee relation, operating procedures, customer satisfaction and financial results. This was also claimed and supported by Yang (2006). However, the implementation of TQM in the service sector is in its nascent stage and literature suggests that fewer studies have been taken on the service industries as compared to the manufacturing counterpart (Evans and Lindsay, 2005; Gustafsson et al., 2003). In context to developing countries like India, the extant literature further suggests that there is a need to study applicability of TQM programme in the Indian service sector for better understanding the current status of TQM implementation (Karuppusami and Gandhinathan, 2007), particularly when TQM is regarded as absolutely essential for growth, stability and prosperity.

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F. Talib, Z. Rahman and M.N. Qureshi

The scope of this study comes from the fact that role of quality has always been an important issue in the products and services. With the environment becoming more competitive and turbulent, service industries are increasingly concerned with obtaining a sustainable competitive edge (Collins, 1996). This paper, therefore, has the main intention of presenting an overview of TQM, its applicability and benefits together with understanding the various facets of service components. Beside, this paper also presents the complete classification of service industries in the Indian context. Towards the end, this paper attempts to review literature on TQM in selected service industries and discusses the conclusions of this study along with scope for future research.

2

An overview of TQM

The evolutionary philosophy of TQM which stands as a testimony today is due to the pioneering contributions made by Juran, Crosby, Feigenbaum, etc. Juran’s (1991) quality trilogy (planning, control and improvement), Crosby’s (1991) absolutes of quality management (conformance to requirements, prevention, zero defects and cost of quality), Feigenbaum’s (1990) 3 steps to quality (quality leadership, modern quality technology and organisational commitment) and Deming’s (1986) 14 points and cycle (plan, do, check and act, also called as PDCA cycle) constitute the most important aspects of the TQM framework that quality gurus have recommended. The dominant emphasis of these pioneers was on top management leadership for quality, supplier quality management, process design and control, employee training and employee involvement in quality. A significant number of industries have adopted some form of TQM framework in their business and have derived most benefits (Rahman and Sohal, 2002). For instant, many firms have utilised the Malcolm Baldrige National Quality Award framework as a base model for TQM to improve quality and economic performance in the organisation (Jung and Wang, 2006; Lee et al., 2010; Prajogo and Hong, 2008; Teh et al., 2009) and have got positive and significant results. Furthermore, there is a trend towards stronger demand for improved measures of the performance of the industries and TQM has a role to play in relation to this (Williams et al., 2004). A review of the extant literature on TQM in services revealed that research work has been taken on (Table 1): x

barriers of TQM implementation

x

critical dimensions of TQM

x

development of TQM framework

x

development of TQM models

x

financial outcomes of service quality (SQ) initiatives

x

identification and implementation of TQM practices

x

impact of TQM in service industry

x

relationship between TQM and customer satisfaction

x

relationship between TQM and employee satisfaction

x

relationship between TQM practices and business performance

x

relationship between TQM practices and quality performance

TQM in service sector: a literature review x

TQM and knowledge sharing

x

TQM and new product development

x

TQM practices and its impact on role stressors

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Therefore, it is not surprising that TQM is progressively occupying centre stage for service industries regardless of the nature of the business they are in. It is indeed true that over the past two decades, TQM has emerged as an important field of study in the service sector. Table 1

Study on TQM in service sector

Area/issue Barriers of TQM implementation Critical dimensions of TQM

Development of TQM framework Development of TQM models

Financial outcomes of SQ initiatives Identification and implementation of TQM practices Impact of TQM in service industry Relationship between TQM and customer satisfaction Relationship between TQM and employee satisfaction Relationship between TQM practices and business performance and culture Relationship between TQM practices and quality performance TQM and knowledge sharing TQM and new product development TQM practices and its impact on role stressors

References Soltani et al. (2005), Huq (2005), Mosadegh Rad (2005), Bhat and Rajashekhar (2009), Talib et al. (in press a), Ab-Rahman et al. (2011) Mahadevappa and Kotreshwar (2004), Saravanan and Rao (2006), Tarí (2005), Sureshchandar et al. (2002), Talib and Rahman (2010a), Talib et al. (in press a, 2011b) Yusof and Aspinwall (2000), Malhotra and Grover (1998), Hafeez et al. (2006), Talib et al. (2011c,d), Azam et al. (in press a) Sureshchandar et al. (2001), Bayraktar et al. (2008), Bou-Llusar et al. (2009), Kakkar and Narag (2007), Talib and Rahman (2010a), Azam et al. (in press b), Ooi et al. (2009) Rust and Zahorik (1993), Rust et al. (1994, 1999), Brah et al. (2000) Aghazadeh (2002), Khamalah and Lingaraj (2007), Gustafsson and Johnson (2003), Behara and Gundersen (2001), Sureshchandar et al. (2002), Talib et al. (2011b) Khan (2003), Kumar et al. (2009), Talib and Rahman (2010b) Mehra and Ranganathan (2008), Gonzalez et al. (2004), Sahney et al. (2004), Yang (2006), Tarí (2005), BouLlusar et al. (2005), Sila and Ebrahimpour (2005), Sit et al. (2009), Yoon et al. (2006) Yang (2006), Tarí (2005), Bou-Llusar et al. (2005), Sila and Ebrahimpour (2005), Ooi et al. (2007a,b, 2008), Teh et al. (2009) Prajogo and Mc Dermott (2005), Brah et al. (2002), Hasan and Kerr (2003), Bou and Beltran (2005), Hafeez et al. (2006) Flynn et al. (1994, 1995), Arumugam et al. (2008), Brah et al. (2002), Hasan and Kerr (2003), Prajogo (2005), Prajogo and Brown (2004), Prajogo and Sohal (2004), Ahire et al. (1996), Talib et al. (2011d) Rad (2006), Jacobs and Roodt (2007), Hong et al. (2004), Cheah et al. (2009) Sun et al. (2009), Langerak and Hultink (2008), Dayan and Benedetto (2009), Lukas and Menon (2004) Teh et al. (2008, 2009), Lu and Lee (2007), Brah and Lim (2006), Phusavat et al. (2007), Gilboa et al. (2008)

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2.1 TQM definitions A variety of definitions of TQM have been offered over the years by different authors. However, there is still no universal agreement on these definitions (Reed et al., 1996). It is generally accepted that the contemporary TQM literature evolved from works of ‘gurus’ such as Deming, Juran, Feigenbaum and Crosby, but there is not only one standard definition of TQM. Table 2 compiles different definitions of TQM found in the literature. An analysis of these definitions suggests that, after all, they are not very different. For instance, most emphasise on concepts such as continuous improvement, customer focus, human resource management and process management. In general, the most common elements agreed upon by the TQM authors are top management commitment, customer focus, quality data and information, employee involvement, training and continuous improvement (Curry and Kadasah, 2002; Prajogo and Hong, 2008). Some authors also include soft and hard TQM elements, organisation performance and benchmarking as well. One of the most striking features of the TQM literature is the absence of any uniform definition of TQM. Table 2

Different definitions of TQM as reported in literature

Author(s)

Definition

Deming (1986)

A management philosophy which develops all management principles and practices from the belief that continual improvement of quality is the key to success

Oakland (1989)

An approach for improving the competitiveness, effectiveness and flexibility of an organisation

Berry (1991)

A total corporate focus on meeting and exceeding customers’ expectations and significantly reducing costs resulting from poor quality by adopting a new management system and corporate culture

Oakland (1993)

A new way of managing to improve effectiveness, flexibility and competitiveness of a business to meet customers’ requirements

Zairi et al. (1994)

A positive attempt by the organisations concerned to improve structural, infrastructural, attitudinal, behavioural and methodological ways of delivering to the end customer, with emphasis on consistency, improvements in quality, competitive enhancements, all with the aim of satisfying or delighting the end customer

Roosevelt (1995)

A strategic architecture requiring evaluation and refinement of continuous improvement practices in all areas of business

Dahlgaard et al. (1998)

A management process which any organisation can implement through longterm planning, by using continuous quality management plans which lead the organisation towards the fulfilment of its vision

Mohanty and Lakhe An approach for continuously improving the quality of goods and services (2002) delivered through the participation of ‘all’ levels and functions of the organisations Palo and Padhi (2005)

An integrated approach to bring continuous improvement in products and services using proper tools, technology and training to meet customer’s expectations on a continuous basis

Lee et al. (2010)

A business management strategy seeking to improve the quality of organisational management, competitiveness and providing value to customers


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2.2 Benefits of TQM As long as TQM is adopted fully and practiced effectively in an organisation, many advantages will be delivered. It will strengthen the organisational business performance and competitive advantage. The successful implementation of TQM will result in tangible and intangible benefits and are well acknowledged. Some of the potential benefits of TQM are summarised in Table 3. Table 3

A list of selected benefits of TQM as reported in literature

TQM benefits Reduced cost of operation

Reference(s) Oakland (1993), Hendriks and Singhal (1997), Holjevac (2008) Improved employee involvement Dale (1994), Antony et al. (2002), Lewis et al. (2005), Talib et al. (2010c) Improved communication Anjard (1998), Antony et al. (2002), Lewis et al. (2005) Increased productivity Antony et al. (2002), Oakland (1989), Mohanty and Lakhe (1998), Samson and Terziovski (1999), Anderson et al. (1995) Improved quality and less rework Mohanty and Lakhe (1998), Antony et al. (2002), Reed et al. (1996) Improved customer satisfaction Antony et al. (2002), Anderson et al. (1995), Samson and Terziovski (1999), Reed et al. (1996), Talib et al. (2010c) Improved sustainable competitive advantage Antony et al. (2002), Reed et al. (1996), Powell (1995), Holjevac (2008) Promoting continuous improvement and Corbett and Rastrick (2000), Reed et al. (1996), innovation Bounds et al. (1994), Talib et al. (2010c) Enhanced customer service and loyalty Samson and Terziovski (1999), Reed et al. (1996), Anderson et al. (1995) Improved organisational management Oakland (1989), Samson and Terziovski (1999), Kumar et al. (2011) Improved employee relations and satisfaction Samson and Terziovski (1999), Anderson et al. (1995), Holjevac (2008) Improved financial performance Reed et al. (1996), Salaheldin (2009), Christensen (1995), Hendriks and Singhal (1997), Talib et al. (2010c) Improved process and performance management Lewis et al. (2005), Hendriks and Singhal (1997) Improved products and services Walton (1986), Hendriks and Singhal (1997), Garvin (1988) Improved employee moral and reduced errors Ab-Rahman et al. (2011), Kumar et al. (2011), Walah et al. (2002), Salegna and Fazel (2000) Increased social responsibility and ethics Holjevac (2008), Horner and Swarbrooke (1996)

3

An overview of services

Various service systems have been emerged out since early 1980s. These service systems are based on different criterion. Of these four are worthy – Chase (1978), Schmenner (1986), Wemmerlov (1990) and Lovelock (1983). Chase (1978) segments by the extent of customer contact in the delivery of the service. Schmenner (1986) classifies services

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using two dimensions, with the degrees of interaction and customisation on one axis and the degree of labour intensity on the other. Wemmerlov (1990) more recently presented a service system scheme, where the variables of differentiation are the degree of routinisation of the process, the ‘object’ of the service process and customer contact. While Lovelock (1983) has proposed classification of services into four distinctive categories based on what a service organisation is actually processing and how does it perform that task. Beside these four service system schemes, Liu and Wang (2008) classify the structures of the previous classifications of services based on the schemes concepts, i.e. discrete item scheme, continuum scheme and matrix scheme. Lusch and Vargo (2008) perceived services as supplements to physical goods and referred as gooddominant logic, where tangible goods are the primary focus of economic exchange. While Lovelock and Wirtz (2007) formulated non-ownership-based service paradigm underlying in it the marketing exchanges, which do not result in a transfer of ownership from seller to buyer are different from those that so. Another study by Gebaver et al. (2008) suggested a comparable classification for business services, where services are divided into three groups: customer services, product-related services and customer support services. Katzan (2008) speaks about information services – a resource capable of supporting a service event based on information. Other studies on service system schemes and classification are by Gebaver et al. (2006), Edvardsson et al. (2005), Schmenner (2004) and Mayer et al. (2003). A service organisation may be servicing individual customer or alternatively it may be servicing their possessions. Further, the servicing may be physical as in case of purchasing washing machine, the customer also receives services such as installation, maintenance and repair or visiting a restaurant. Alternatively, the servicing may be intangible as in case of education, information, museums, banking or securities. Summary of selected schemes for service classifications are listed in Table 4. Table 4

Summary of selected schemes for service classifications

Reference(s) Chase (1978) Lovelock (1983)

Classification dimensions Extent of customer contact in the delivery of service Nature of service, relationships, judgement, demand pattern and delivery method Schmenner (1986) Degree of interaction/customisation and labour intensity Wemmerlov (1990) Degree of routinisation of the process, the object of the service process and customer contact Mayer et al. (2003) A 2D model using personal of service assembly and process of delivery Schmenner (2004) Degree of variation of customisation and interaction, relative throughput time Liu and Wang (2008) Discrete item scheme, continuum scheme and matrix scheme Gebaver et al. (2008) Business services for growth of product, customer services, productrelated, services and customer support services Lovelock and Wirtz Distinction between marketing through services or service marketing, (2007) product-related services and service as a product Lusch and Vargo (2008) Service-dominant logic, where tangible goods are the primary focus of economic exchange Godlevskaja et al. (2011) Services categorisation schemes are grouped under eight service paradigms: goods vs. services or manufacturing vs. services paradigm, contemporary service industries paradigm, non-ownership service paradigm, goods-focused paradigm, services-for-growth paradigm, service-focused paradigm, relationship paradigm and service in automated environment


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3.1 Definitions of service Services have been defined in many ways but with no general agreement as to what really constitute services. But before drawing attention towards the varieties of definitions on services, it is important to draw distinction on different categories of services. Service can be divided into four distinct categories (Zeithaml et al., 1996): x

Service industries and companies: Whose core product is a service, e.g. hotels (lodging), railways (transportation), banks (financial services), education, etc.

x

Services as product: Range of intangible product offerings that customers value and pay for in the marketplace, e.g. information technology (IT) consulting services offered by Accenture, IBM, telecommunication services offered by MTNL, BSNL, training services, shipping services, etc.

x

Customer service: Service provided in support of a company’s core product, e.g. maintenance of equipment, installation of machine or e-gadget, on-site and off-site services, customer care centres, etc.

x

Derived service: Value derived from physical goods is the derived service, e.g. razor provides barbering services, computer provides information and data manipulation services, drugs and medicines provide medical services, etc.

The different definitions of services have been compiled in Table 5. Table 5

Various definition of service as reported in literature

Author(s) Cowell (1984)

Definition Activities, benefits or satisfactions, which are offered for sale or are provided in connection with the sale of goods Those separately identified, and essentially intangible, activities that Stanton (1986) provide want of satisfaction and that are not necessarily tied to the sale of a product or another service Something that can be bought and sold but which you cannot drop Gummersson (1987) on your foot It includes all economic activities whose output is not physical Quinn et al. (1987) product or construction, is generally consumed at the time it is produced and provides added value in forms that are essentially intangible Any kind of performance that one party can offer to another that is Kotler and Turner (1993) essentially intangible and does not results in the ownership of anything Zeithaml et al. (1996) Services are deeds, processes and performances An economic activity that creates value and provides benefits for Lovelock and Wirtz (2004) customers at specific times and places by bringing about a desired change in, or on behalf of, recipient of the service Edvardsson et al. (2005) A value co-creating processes with customers Karwan and Markland (2006) A package made up of a set of tangible and intangible elements Bygstad and Lanestedt (2009) Services are a non-material equivalent of a goods

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3.2 Service characteristics Services nowadays in most of the modern products are combination of both tangible and intangible acts. For instance, take the case of hair dressing at barbershop, the customer will likely also benefit from a number of hair care products and might even purchase some for home use. When purchasing an air conditioner, the customer also receives services such as installation, maintenance and repair. To understand the nature and meaning of services, it is important to know the different features of services. The four distinctive characteristics referred by some researchers as 4I’s of services, namely (Dotchin and Oakland, 1994; Hope and Muhlemann, 1997): x

intangibility

x

inconsistency

x

inseparability

x

inventory.

3.2.1 Intangibility It is one of the most important distinctive properties of service. Service has no physical attributes and as a result impossible for a customer to taste, feel, hear or smell before they buy it. The customer cannot assess the intangible aspect of service before the event and hence, customers often must use the reputation of a service organisation and its representatives to judge quality (Dotchin and Oakland, 1994). Zeithaml (1981) observed that services often cannot be evaluated in advance of the user. The customer must rely on experience of the service itself or ‘on trust’. However, service providers can take account of customer psychology and make plans to cope with the difficulties of demonstrating their offerings, while designing a new or revised service package.

3.2.2 Inconsistency Inconsistency in most of the service literature is also referred to as variability or heterogeneity. Heterogeneity of services occurs in consequence of explicit and implicit service elements relying on customer preferences and perception. Differences exist in the outputs of service provider producing the same service over a time within the same organisation. The interaction between customer and provider may vary by customer (Sasser et al., 1978). This inherent variability makes it difficult to set precise quantifiable standards for all of the elements of service.

3.2.3 Inseparability Inseparability is a characteristic of a service which indicates that it cannot be separated from the creator–seller of the product and thus, it has the property of simultaneity. Simultaneity occurs because the customer has to be present before any services can take place. Whereas foods are produced first, then sold and consumed, most services are sold first and then produced and consumed simultaneously (Zeithaml et al., 1996). Morris and Johnston (1987) argued that the employee providing the service must first diagnose individual customer expectations then customise the service on the basis of the diagnosis.


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The employee must also assess the quality of his or her performance, as it takes place, against their assessment of the customers’ expectations, while remain ready to detect and respond to any adverse customer reactions which may occur.

3.2.4 Inventory Another distinguishing characteristic of service is that they are produced and consumed at the same time that causes elimination of inventory. This characteristic is also called as perishability. Service cannot be saved, stored, resold or returned. A seat on a train or in a theatre or telephone line capacity or a tax consultant’s time not used cannot be reclaimed and used or resold at all later time. Perishability is in contrast to manufacturing goods that can be stored in inventory or resold another day or even return if the consumer is unhappy. Perishability makes these actions an unlikely possibility for most services. Thus, perishability also requires that service production and service delivery often must exist simultaneously (Dotchin and Oakland, 1994).

3.3 Sectoral classification The usual method adopted by economist to understand the relative importance of various segments of an economy is to divide it into three sectors of activity (Zeithaml et al., 1996). x

primary sector (agriculture and mining)

x

secondary sector (manufacturing, electricity, gas, water supply and construction)

x

tertiary sector (services).

This three-sector economic theory is also called as the three-sector hypothesis developed by Colin Clark and Jean Fourastié. According to this hypothesis, the focus of an economy’s activity shifts from the primary sector, through the secondary and then finally to the tertiary sector (Figure 1) based on the gross domestic product (GDP) output. Figure 1

Stages and divisions of economy into three sectors

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3.3.1 Primary sector The contribution of this sector comes from agriculture, agribusiness, fisheries, forestry, all mining and quarrying industries. In short, it is predominantly dependent on natural resources.

3.3.2 Secondary sector This sector comprises manufacturers and industries. It is mainly dependent on the products of the primary sector as raw material and produces goods for consumption. This sector has broad classifications such as energy industry, steel production, automobile industry, textile industry, etc.

3.3.3 Tertiary sector This is the service sector where the output is not goods but various services that make life comfortable. This sector includes government, financial, education, health, etc. Figure 2 presents the contribution of each sector to India’s GDP. The service sector is a major contributor to the nation’s GDP and manufacturing and agriculture sectors which were dominant earlier in developing nations are comparatively growing slowly as compared to services. After considering the global economic development trends as well as India’s GDP contribution towards service (tertiary) sector, it is clear that national economic advancement is spearheaded by the service sector. If India has to achieve the same degree of development as the advanced (developed) countries, India will need to focus on the service sector as the engine for development and growth. To understand this in a better way, service sector needs to be classified. Figure 2

Contribution of three sectors to India’s GDP, 2009

16.95%

Agriculture sector Industrial sector 57.28%

Source: i3, CMIE (2010).

25.77%

Service sector


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3.4 Service sector classification Service sector is very wide in its gamut, covering all human activities whether it is education, health, information and communication technology (ICT), banking, transportation, etc. It is not easy to classify service sector in a simple and useful manner due to variability or heterogeneity characteristic of service. However, the classification proposed by i-cube, (information infrastructure for institutions), Centre for Monitoring Indian Economy Private Limited (i3, CMIE, 2010), India, covers almost all important aspects of service. It is a more standard approach to classify service sector and is presented in Table 6. The contribution of these service industries (Table 6) to India’s GDP as on 2008 is depicted in Figure 3. Table 6

Classification of service sector

Industry Hospitality industry (hotel and tourism) Recreational industry

Wholesale and retail trading Transport services

Financial services

Communication services IT industry Other (miscellaneous) services

Source: i3, CMIE (2010).

Services

x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x

Hotels and restaurant Tourism Production and distribution of films Media broadcasting Exhibition of films Media content Animation content provider Other recreational services Trading Retail trading Road transport and allied services Railway transport and allied services Air transport and allied services Shipping transport and allied services Transport logistics services Banking services Investment services Asset financing services Other fund-based financial services Fee-based financial services Other financial services Telecommunication services Courier services Computer software Information technology enabled services (ITeS) Health services Education Business consultancy Storage and distribution Other miscellaneous services

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Figure 3

Total contribution of service industries to India’s GDP (in %), 2008

Public administration Others, 2.31 and defence, 5.18

IT/Software , 6.2

Banking , 7.48

Real estate and business, 7.53

Healthcare, 2.09**

Storage , 0.06

Transport , 6.36

Communication , 6.05

Education, 3.78* Hospitality , 10.24

Note: *Expenditure on education by education and other departments as percentage of GDP. **Expenditure on healthcare by government as percentage of GDP. Source: CSO (2010) and i3, CMIE (2010).

4

Literature review of TQM in service sector

The scope of this section is to study and explore an in-depth literature review on the issues related to TQM focusing on the impact of TQM implementation and its applicability in different service industries. After reviewing the voluminous literature, it was classified into four categories depending on the importance, nature of literature available and future requirement for further improvement. The classification categories so chosen are: x

TQM in healthcare

x

TQM in banking

x

TQM in hospitality (including hotels and tourism)

x

TQM in ICT (including telecommunication services, ITeS and computer software services).


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The reasons for choosing the above mentioned four industries are as follows: x

These industries represent the backbone of the Indian economy They share about 56% (more than half) of the service sector’s GDP at factor cost in the country (i3, CMIE, 2010). Thus, they play an effective role in the growth and development of Indian economy as well as in the Indian service sector. Figure 4 depicts the GDP contribution of these industries in the service sector.

x

As per the annual report to the people of employment published by Ministry of Labour and Employment (MoL&E), Government of India (GOI), July 2010, the service sector especially ICT, hospitality, healthcare and financial (including banking services) are highly labour-intensive industries and provides substantial employment (MoL&E, GOI, 2010). Hence, they have shown their major presence in the Indian service sector.

x

According to the CMIE, the net annual income generated by these industries is steadily increasing from last five years except during the global economic slowdown period of 2008–2009, which shows some decline in the net annual income. But in the coming years, it is predicted that net income of these industries will again rise. This shows that these industries play a major role in the progress and development of country.

x

In addition, these service industries are large enough to capture and represent almost all the critical features of customer-perceived quality and the key dimensions of excellence that management may encounter (Al-Marri et al., 2007; van Dun et al., 2011; Yusuf et al., 2007).

x

Finally, these industries reflect the Indian service sector mainly by its wide variability of Quality Management (QM)/TQM implementation levels.

Figure 4

Total GDP contribution of four service industries in Indian service sector (in %), 2008

Source: CSO (2010) and i3, CMIE (2010).

274


4.1 TQM in healthcare industry One of the important services in the Indian economy has been health. This is one of the largest and most challenging sectors and holds a key to the country’s overall progress. Currently, the health sector of India accounts for about 1.9% of its GDP. Also, total public expenditure (both central and state governments) is raised to 1.4% of GDP in 2009–2010 (Planning Commission Report on Health, Government of India, 2010). Therefore, during the eleventh five year plan, while the central government makes every effort to augment resources for health, state governments will be persuaded to assign at least 7–8% of state expenditure towards healthcare. In India, the past few years have witnessed an increasing concern over the quality of healthcare services. The government policies have significantly changed the healthcare scenario in India. Quality has been shown to be an important element in the consumers’ choice of hospitals. In light of these changes, there is an emerging need to improve the quality of healthcare services. Further, the changing market and accreditation pressures have motivated hospitals to implement TQM concepts. The TQM application in hospitals is seeking ways to lower costs and improve care. Several researchers have asserted that successful implementation of TQM can result in significantly superior outcomes in healthcare organisation (Karasa et al., 2008; Miller et al., 2009; Short and Rahim, 1995) such as the upgradation of SQ, improvement in healthcare quality and productivity, and satisfying both internal and external customer. Several research studies have been carried out on the implementation of TQM in healthcare industry in different parts of the world. These studies are summarised in Table 7 as reported in the literature. Table 7 Industry

Research studies on TQM in healthcare as reported in the literature Author(s)

Main purpose of the study Approach

Major findings

Healthcare Kozak et al. To identify employees’ Exploratory study TQM perception is (2007) perceptions of the extent associated with importance to which TQM of employee’s responsibility programmes are and participation, patient’s implemented into their satisfaction, responsibility of upper-level management, hospital organisations; and measurement and reward to explore whether or not system and support of they perceive any problems upper-level management with a successful implementation of TQM programmes Lee et al. (2007)

To reveal the problems associated with unsatisfactory delivery of services in the current healthcare system of China as experienced by patients of diverse socioeconomic backgrounds, including SQ, accessibility and affordability

Literature For the successful review on the implementation of TQM developmental system in a hospital requires problems of hospital control, developing China’s an incorporated performance contemporary measurement system and a healthcare system broad approach for quality progress

TQM in service sector: a literature review Table 7

275

Research studies on TQM in healthcare as reported in the literature (continued)

Industry Author(s)

Main purpose of the study

Approach

Major findings

Horng and Huarng (2002)

To know the extent of TQM Questionnaire adoption by the individual survey of 76 hospitals in Taiwan and to hospitals in test a multi-level model Taiwan addressing the issue of TQM adoption as one type of organisational adaptation

The nature of the network relationship and prospector strategy, the two constructs out of five identified constructs are positively and significantly related to the extent of TQM adoption

Raja et al. (2007)

Comparing quality awards and the selection criteria for assessing healthcare processes quality status in private sector healthcare institutions

Cross-sectional methodology and principal component analysis (PCA) were used

Provide insights into the relationships among the dimensions such as relationship between leadership, resource measurement, people management, process management and customer satisfaction

Kunst and Lemmink (2000)

Identifying and exploring success parameters of high quality performance and their inter-relationships

Cross-sectional methodology and factor analysis using PCA were used

Different variables/parameters are linked to progress in TQM and business performance

Cross-sectional methodology and correlation approach were used

Top management’s commitment increased the successful implementation

Examining the implementation of TQM in the healthcare sector in Qatar and determining the most implemented TQM initiatives, the level of understanding and knowledge of TQM and the critical success factors (CSFs) of TQM implementation

Cross-sectional methodology and Mann–Whitney test were used

Common understanding exists between managers about the significance of top management support, employee training and involvement in the TQM implementation

Duggirala Identifying the dimensions et al. (2008) of patient-perceived TQS in the healthcare sector and there impact on patient’s satisfaction

Cross-sectional methodology and multiple regression analysis were used

Mosadegh Investigate the success of Rad (2005) TQM and barriers to its successful implementation

Salaheldin and Mukhalalati (2009)

Positive link between progress in TQM and perceived SQ by customers

Barriers related to implementation: human resources, strategic and structural problems

Vital role of supplier in supporting quality improvement Seven distinct dimensions of patient-perceived TQS highlighted Positive and significant relationships among the dimensions and patient satisfaction have been found

276 Table 7

F. Talib, Z. Rahman and M.N. Qureshi Research studies on TQM in healthcare as reported in the literature (continued)

Industry Author(s) Arasli and Ahmadeva (2004)

Ovretveit (2000)


Approach

Proposing a quality Cross-sectional improvement model for methodology and health promotion in ANOVA test hospitals in Northern were used Cyprus as well as comparing and understanding their existing problems and challenges To present an overview of TQM initiatives in European healthcare

Major findings Public sector is in a much worse position than the private sector in terms of total quality The proposed model could contribute to total quality practices of hospitals in developing countries

Theoretical Describes reasons behind the literature review rise in interest in health quality and quality methods in Europe in the last one and a half decade. Then explains how TQM is different from other approaches and its strengths and weaknesses for healthcare quality improvement. And finally concludes with a summary of lessons for health organisations introducing TQM which arises from the European experience

Karasa et al. To assess the contributions (2008) of internal marketing to the success of TQM applications by means of employee communication and participation

Literature review, The cultural changes needed questionnaire to maintain the success of survey, TQM applications in the descriptive organisation were not statistics, achieved, there were Chi-square tests problems in the internal were performed communication system, and used effective participation of employees was not achieved, and public relations and internal marketing activities were not employed in a sufficient manner

Nwabueze (2011)

Survey-based study

To delineate the essential leadership traits for the effective implementation of TQM in a healthcare environment

The personality traits are seen as ineffectual for TQM implementation by National Health Service Chief Executives. Therefore, organisations should concentrate on the use of the so-called traditional paradigm of leadership: planning, organising, controlling and commanding


277

Research studies on TQM in healthcare as reported in the literature (continued)

Industry Author(s) Hariharan and Dey (2010)

Main purpose of the study To develop a comprehensive framework for improving intensive care unit performance

Approach Utilises a quality management framework by combining cause and effect diagram and logical framework

Major findings Stakeholders identified various intensive care unit issues. Managerial performance, organisational processes and insufficient staff were considered as major issues. Finally, a logical framework was developed to plan an improvement project to resolve issues raised by clinicians and patients Ababaneh To investigate empirically Questionnaire Bureaucratic, supportive and (2010) the impact of organisational survey along innovative cultures have a culture and quality with descriptive significant and positive improvement practices in statistics, Pearson influence on quality Jordanian public hospitals correlation, improvement practices. regression Compared with bureaucratic analysis and and supportive cultures, ANOVA test innovative culture appears to were employed play a stronger role in quality improvement practices Noor To provide an empirical Questionnaire Practice of quality Hazilah analysis on the practice of survey along with management was found to (2009) quality management among one-way be significantly higher in employees of Malaysian ANOVA, factor district hospitals than in the public hospitals at the district, analysis and national referral centre. state and national level validity tests However, there was no hospitals, and aims to perform significant difference in a comparative analysis on perception on quality management practices implementation outcome among the three levels of between the three levels of hospitals hospitals Azam et al. To identify and critically Review of This paper provides insight (2012b) analyse the quality literature on about contemporary quality parameters in health care healthcare quality parameters for HCE on establishment (HCE) with critical critical analysis of relevant described in the literature analysis in literature relation to their over all impact on patient management evolving also an integrated quality model for HCE

4.2 TQM in banking industry The banking industry is the largest and progressive industry in the service sector which caters to the needs of the different categories of people and become a mass consumption service. Notably, the SQ tends to play an important role in high involvement industries

278


like banks (Al-Marri et al., 2007). Banking in India is fairly mature in terms of supply, product range and reach – even though reach in rural India still remains a challenge for the private sector and foreign banks. Ministry of Finance, GOI has divided Indian banks into three types – public sector banks, private sector banks and foreign banks (Ministry of Finance, Government of India, 2009). Currently, India has 27 public sector banks (i.e. with the GOI holding a stake), 22 private banks (these do not have government stake, they may be publicly listed and traded on stock exchanges) and 30 foreign banks (Ministry of Finance, Government of India, 2009). Beside this, around 100 scheduled commercial banks are also actively participating and making business in the Indian banking sector. The overall growth of GDP in banking and financial services as per Central Statistical Organisation (CSO, 2010) and i3, CMIE (2010) is estimated to be 7.09% in 2008, representing an increase from the level of growth of 6.7% during 2007, indicating a performance and infrastructure growth of this sector. According to the survey, Indian banks have combined network of over 55,000 branches and 20,000 ATMs. This predicts that the Indian banks are in a position to deal with total quality service (TQS) and are at par with other largest international banks. Many studies have proved that the performance of banks is significantly and positively linked with the SQ (Bellou and Andronikidi, 2008; Krishnaveni and Divya, 2006; Ladhari et al., 2011; Longbottom and Hilton, 2011) and to achieve quality in service, the TQM is highly essential (Al-Marri et al., 2007; Kassem, 1998). The TQM is discussed and implemented in various dimensions by different researchers. Some of these studies on TQM in banking industry are presented in Table 8. Table 8

Research studies on TQM in banking industry as reported in the literature

Industry Author(s)


Banking Al-Marri To examine CSFs for Empirical case industry et al. (2007) TQM implementation in studies were UAE banking sector collected from 250 banks in UAE that have embarked on TQM successfully

Vermeulen and Crous (2000)

Discusses the importance Questionnaire of training and education survey-based study of TQM in the commercial banking industry of South Africa

Major findings About 16 CSFs were identified. They are top management support, continuous improvement, benchmarking, customer focus, recognition and reward, service design, service technologies, service culture, social responsibility, service caps, quality department, quality system, human resource management, problem analysis and strategy No respondents found to agree that their organisations have a welldeveloped TQM training strategy and plan About 33ѿ% of respondents have indicated that their organisations have a welldeveloped TQM training curriculum


279

Research studies on TQM in banking industry as reported in the literature (continued)

Industry Author(s) Main purpose of the studyApproach Mellahi and Eyuboglu (2001)

To examine critical Case study-based factors for successful approach implementation of TQM in the Turkish banking sector

Major findings The results showed that successful TQM implementation requires management’s unwavering commitment to TQM and enthusiasm, formal national bodies to introduce organisations to TQM and provide assistance during and after TQM implementation, and a highly educated and competent management team

Kayis et al. To propose a model (2003) linking perceived SQ, customer satisfaction, customer loyalty and employee satisfaction while implementing TQM among Australian and Korean banking industries

Questionnaire survey methodology was used and correlation analysis was performed

Safakli (2004)

Literature review Need for updating and and questionnaire implementing new rational management methods followed survey by motivation and training of employees and employers

To assess the need of TQM in the banking sector of the Northern Cyprus

Tested the developed model and found significant relationships and path links between perceived SQ, customer satisfaction and customer loyalty as well as between TQM practices and employee satisfaction

Continuous monitoring of customer satisfaction is also necessary to make TQM more effective Selvaraj (2009)

To present the important TQS factors in Indian commercial banks and examines the level of implementation of TQM practices in three groups of Indian banks

Questionnaire survey methodology was used and t-test, one-way ANOVA and multiple discriminant analysis were applied

The important TQM factors are: top management commitment human resource management technical and important systems customer focus employee satisfaction service culture social responsibility servicescapes

Li et al. (2001)

To survey the entire Meta-analysis population of licensed approach banks in Hong Kong on their quality management initiatives and to analyse the current status of quality management initiatives in Hong Kong

Result shows that they have 68% success rate for quality initiatives They have also gained customer satisfaction, efficiency and quality awareness They tend to devote more effort in meeting service standards and providing prompt services

280 Table 8

F. Talib, Z. Rahman and M.N. Qureshi Research studies on TQM in banking industry as reported in the literature (continued)

Industry Author(s)


Major findings

Sureshchandar To propose a holistic et al. (2001) model for TQS by illustrating the relationships between identified dimensions with a specific focus on the banking sector

Empirical study using confirmatory factor analysis (CFA) approach

Identified 12 dimensions of TQM for banking sector: top management commitment and visionary leadership, human resource management, technical system, information and analysis system, benchmarking, continuous improvement, customer focus, employee satisfaction, union intervention, social responsibility, servicescapes and service culture

Arasli et al. (2005)

To measure the SQ perceptions of Greek Cypriot bank customers

Descriptive, factor analysis and multi-variate regression analysis were applied

The expectations of bank customers were not met, where the largest gap was obtained in the responsiveness-empathy dimension

Longbottom and Hilton (2011)

To investigate service Longitudinal improvement initiatives survey-based within a major UK bank study and assess issues which may have contributed to the current financial crisis

Service improvement initiatives have focused on the use of popular business models, SERVQUAL, balanced scorecard (BSC) and European Business Excellence Model. Results show that participant perceptions towards these models are generally negative, with a high incidence of failure to achieve expected results and negative organisational consequences

Ladhari et al. (2011)

To compare perceptions of bank SQ among Tunisian and Canadian customers and to determine which dimensions of SQ make the greatest contribution to overall customer satisfaction and loyalty

Respondents in both countries reported high levels of perceived SQ in banks. However, Canadians reported higher perceived SQ than Tunisians for all five SERVQUAL dimensions

Questionnaire survey along with CFA, ANOVA and linear regression were also used


281

Research studies on TQM in banking industry as reported in the literature (continued)

Industry Author(s)


Vinodh et al. (2006)

Reports a research project which was begun by adopting a new technique called total quality function deployment (TQFD)

Shih et al. (2011)

To establish an Questionnaire understanding of the gap survey, in perceived quality descriptive between employees statistical (internal) and customers analysis, (external) of banks reliability concerning all the analysis, t-test indicators of the different of independent dimensions of intellectual samples were capital with the conducted perspectives of BSC

Major findings

Statistical tests An exclusive financial and validating the accounting system was framework designed to portray the performance of Innovative TQFD framework. The results of statistical tests on the feedback data indicated the practical validity of the frameworks and models developed in this research project The findings show that there are perceived gaps in human capital of banks. The option ‘employees are satisfied with work performances’ is considered to be important by customers but not by bank personnel. On the other hand, banking personnel believe that their education level is important, but it is not emphasised by customers

4.3 TQM in hospitality industry The World Economic Forum Report (2009) on travel and tourism competitiveness indicates that India is ranked at 11th place in the Asia Pacific region and 62nd overall. It is ranked the 14th best tourist destination for its natural resources and 24th for its cultural resources with a number of world heritage sites (Ministry of Tourism, Government of India, 2010). Beside this, Indian hospitality industry has contributed many more achievements and is being one of the fastest growing industries in terms of gross revenue and foreign exchange earnings. It also stimulates growth and expansion in other economic sectors such as agriculture, horticulture, handicrafts, transportation, construction, etc., as well as gives momentum to growth of service exports. It is a major contributor to the national integration process of the country as well as preserver of natural and cultural environment. Studies have further shown that hospitality sector is one of the fastest growing sectors across the world and constitutes one of the basic factors of a country’s economic growth (Holmes, 2007; Politis et al., 2009). Towards the contribution to the Indian economy, according to CSO (2010) and i3, CMIE (2010), the contribution of hospitality industry to GDP was 15.9% in 2008 which includes 8.3% for tourism, 1.56% for hotels and restaurants, and remaining for other trade services. This figure will sky rocket in 2010 when Delhi hosts the Commonwealth Games. It is also expected that hospitality sector is expected to generate tremendous employment and foreign exchange by 2019.

282


Quality is considered to be of great importance in the hospitality industry especially TQM. With the emergence and popularity of TQM, the hospitality industry continues to be heavily involved in the implementation of TQM-related practices. Lazari and Kanellopoulos (2007) reported in their study that cooperation between internal and external elements is critical for successful TQM implementation and enhances the moral of employee fulfilment and increasing hotel efficiency. Li et al. (2007) further asserted that leadership and guest focus are the principles most commonly incorporated into TQM programmes of hotel. Finally, hospitality industry has identified out performers in TQM committed hotels and is likely to improve customer satisfaction and ultimately financial performances (Claver-Cortés et al., 2008). Therefore, TQM has received a lot of attention in the tourism and hospitality journals. TQM approach has been applied to all segments of the hospitality and tourism industry in the literature (e.g. hotels, restaurant, food services, etc.) The extant literature on TQM in the hospitality sector has been summarised and presented in Table 9. Table 9 Industry

Research studies on TQM in hospitality industry as reported in the literature Author(s)

Hospitality Claver-Cortés industry et al. (2008)

Sila and Ebrahimpour (2003)

Holjevac (2008)


Major findings

To analyse how TQM is associated with some managerial factors and to verify whether more TQMcommitted hotels achieve higher performance

A cluster and regression analysis were conducted

Managerial factors are significantly further developed in hotels with a stronger TQM commitment, which also have higher performances

To analyse and compare the TQM practices of three luxury hotels located in the north-eastern part of the US as well as the effect of these practices on their business results

Exploratory research using a case study approach

Leadership, guest and market focus, and information and analysis emerged as the three most significant TQM factors successfully implemented in these three hotels Strategic planning emerged as one of the most difficult factors to implement

To emphasise business Literature review ethics as a dimension of and theoretical TQM in tourism in helping approach Croatia approximate EU standards

Business ethics increases the reputation and market competitiveness of an enterprise To restore trust in business, ethical leadership is more necessary Business ethics prescribes profit making

Chartrungruang To study the relationship et al. (2006) between customer service and TQM training in the hotels located in Western and Thai hotels as well as to examine the perceptions of staff towards guestorientation and the provision of quality guest services

Questionnaire survey methodology with one-way ANOVA approach and PCA and t-test were used

There are differences between guests and staff, and that these differences vary in the case of both Western and Thai hotels The SQ skills needed by frontline staff were also found to differ in the case of Western and Thai hotels


283

Research studies on TQM in hospitality industry as reported in the literature (continued)

Industry Author(s) Keating and Harrington (2003)


Approach

Major findings

To review the literature on the implementation of quality programme in the hotel industry

Review of the literature

Top management sponsorship and the provision of training and value promotion throughout the organisation were found to be important factors in the Irish industry Quality management in contemporary hospitality organisations is lacking in involvement, communication and teamwork dimensions

Salameh and To examine the relationship Barrows (2001) between TQM and employee training in restaurant industry of Canada

Methodology Evidence of relationship between training and TQM is strengthening used was in restaurant environment in-depth interviews with managers Training does result in a continuous performance improvement, positive impact on the level of the SQ delivered, preparing employees for the change process, low turnover rates, higher morale, etc.

Daghfous and Baskhi (2009)

To assess and explore the degree to which UAE hotels are using IT strategically to integrate and improve back-end operations and customer service with special focus on TQM, customer relationship management and supply chain management

Exploratory study using descriptive approach through questionnaire survey

Proposes a conceptual model to illustrate the value of IT-enabled organisational change and knowledge management for a better understanding of the strategic challenges facing IT/information system (IS) managers in the hotel industry

Pyo (2000)

To discuss the perspectives and research agenda of quality research in tourism and hospitality

Literature review

Identified a variety of important components of TQM (such as training/education, etc.) as they relate to the hospitality and tourism industries

Arasli (2002)

To discuss the TQM philosophy of performance and receptiveness in northern Cyprus hotels

Empirical analysis

Three- and five-star hoteliers’ policies and implementations in northern Cyprus are still very unfamiliar with the TQM approach Further, these hotels need some new, cheap, simple and logical total quality approaches

284 Table 9 Industry

F. Talib, Z. Rahman and M.N. Qureshi Research studies on TQM in hospitality industry as reported in the literature (continued) Author(s)


Breiter and To attempt a summary Questionnaire survey Bloomquist survey of TQM using statistical tests (1998) programmes in the hotels approach of the US

Major findings Size, affiliation and lodging segment are significantly associated with hotels’ using TQM The most common barrier to TQM success is failure of management leadership

Politis et al. To present the (2009) development of a business excellence model applicable in the hospitality industry

Two surveys using questionnaires were conducted: the first one for the development of the model’s criteria and sub-criteria, and the second one for the assessment of the criteria and sub-criteria weights

The implementation of the model in a number of highclass Greek hotels shows its applicability and suitability to be used as a benchmarking system

Tarí et al. (2010)

A cluster analysis was carried out, then ANOVA and regression analysis were performed

Three levels of quality and environmental commitment have been identified. The findings showed that the commitment to quality and environmental practices influences hotel performance

Wang et al. To investigate the (in press) relation of TQM, market orientation and hotel performance and to understand market orientation has the mediating effect on the relationship between TQM and hotel performance

Survey research using questionnaire, structural equation model (SEM) and discriminate analysis for analysis and testing

TQM positively affects hotel performance. Market orientation positively affects hotel performance. Market orientation has the mediating effect between TQM and hotel performance

Tarí et al. (2009)

A structured questionnaire Certified hotels develop better the key factors and have better with closed questions is performance used to collect data and reliability, and validity test was conducted

To identify the levels of commitment to quality and environmental management in the Spanish hotel industry, and to test the relationship between those commitment levels and firm performance

To study whether quality certified hotels develop some managerial key factors in a significantly better way and have better performance

TQM in service sector: a literature review Table 9 Industry

285

Research studies on TQM in hospitality industry as reported in the literature (continued) Author(s)


Major findings

Williams To develop understanding et al. (2010) about the quality of usergenerated content (UGC) on websites from the customer’s point of view

Interviewees were conducted with small sample of five regular hotel room purchasers

Three types of information are needed by the person using UGC on hotel websites: objective information about the hotel; information about the reviewer’s qualifications and information about the reviewer’s beliefs and expectations

Mak (2011) To find out why tour operators implement quality assurance, and what problems and challenges they face in doing so

Utilised a multiple-case study approach, interviewing the senior managers of three accredited tour operators using formally structured questions

A number of negative aspects to the ISO 9000 certification were found, including the high cost of implementation, lukewarm reception by staff, reduced effectiveness over time and that consistency of procedures did not equate to good or improving quality

4.4 TQM in ICT The era of economic liberalisation and globalisation has ushered in a rapid change in the service industry. As a result, over the years, India is witnessing a transition from agriculture-based economy to a knowledge-based economy. The knowledge economy creates, disseminates and uses knowledge to enhance its growth and development. One of the major functional pillars of this economy is ICT, ITeS and software development services industry. IT and software industry has been one of the fastest growing business over the last two decades. India has targeted this industry as the highest priority area and is actively pursuing IT and software business in the global market mainly in Europe and the USA. A large number of Indian software companies have acquired international quality certification. The Department of Communication and IT has been making continuous efforts to make India a front-runner in this age of information revolution. Several policies have also been framed on the key issues of IT infrastructure, egovernance as well as IT education. Currently, the IT and software sector of India accounts for about 5.8% of its GDP (2009) as compared to 5.5% of GDP (2008) with an increase of 0.3% of GDP between 2008 and 2009 (NASSCOM, 2010). Beside this, the communication sector (including telecommunication services) is also a major driver of the Indian economy. The share of this sector to GDP has increased from 0.7% in the 1980s and 1% in the 1990s to 3.6% during 2005. In 2008, the sector accounted for 5.65% of GDP (i3, CMIE, 2010). The communication sector has outperformed other sectors if looking at the growth rates of this sector from last five years. Adding another star towards the achievement, communication sector has also had a significant impact on employment in the country. It is predicted that the sector will generate an additional 8.5 million jobs by 2014–2015, taking the total number of jobs in the sector to above 10.3 million (Ministry of Communication and Information Technology, Government of India, 2010).

286


In recent years, ICT, ITeS and software have become a critical component in various service industries such as the telecommunication, banking, education, etc. The quality of communication, IT and software component is of paramount concern to everyone, including users and developers. Both practitioners and academicians agree that ICT, ITeS and software quality improvement techniques lead to a reduction in costs. The need for TQM in ICT, ITeS and software industry becomes highly relevant (Sparrow et al., 2006; Wali et al., 2000). The consensus is that there is a greater need to foresee and respond to the customer needs and to assure quality in communication, IT and software development industry. The summarised reported literature on TQM in ICT, ITeS and software industry is presented in Table 10. Table 10

Research studies on TQM in ICT as reported in the literature

Industry

Author(s)


ICT, ITeS, and software industry

Rahman and Siddiqui (2006)

Investigates relationship Questionnaire between TQM and IS and to survey was analyse the realisation of conducted to pragmatic goals by Indian various Indian firms through TQM for IS companies of different classes such as insurance, banking, software manufacturers, etc.

Synergy between TQM and IS is catching fast in India

Empirical study To identify the critical using CFA factors of TQM in approach software industry and to provide a holistic framework to implement TQM throughout the software development cycle in the software industry

Develops a validated instrument for effective implementation of TQM in software industry

Issac et al. (2004)

Parzinger and To present the salient Nath (1998) underlying constructs essential for successful implementation of TQM programme in software development industry

Approach

Empirical study using factor analyses

Parzinger and To study the effectiveness Empirical study using correlation Nath (2000) of TQM programmes in improving software quality analysis and to examine the relationships between TQM implementation factors and several measures of software quality

Major findings

Improvement in the quality of products and services Optimisation of human resources and cost and time of production were reduced are other benefits

Identifies eight constructs pertinent to an effective TQM programme in software development

A positive relationship between the TQM implementation factors and the indicators of software quality was found


287

Research studies on TQM in ICT as reported in the literature (continued)

Industry Author(s) Sohn et al. (2008)


Approach

SEM approach To present a systematic approach for improving the quality of official statistics in Korean information and telecommunication industry

Empirical study Vitharana and To identify the critical Mone (1998) factors and proposed an instrument to measure them for software quality management

Major findings A model was proposed that can be used as a tool for improving the quality of official ICT statistics Identified six critical factors: management commitment, education and training, customer focus, process management, software metrics and employee responsibility

Pezeshki et al. To investigate the (2009) asymmetric relationship between performances of service attributes and customer satisfaction through a case study in the mobile telecommunication industry to prove that the importance of a service attribute is a function of the performance of that attribute

An empirical study using questionnaire and Kano customer satisfaction model and the importanceperformance analysis method for analysis and comparison were applied

Results indicate that there is a dynamic relationship between service attributes and overall customer satisfaction. The importance of service attributes can be derived from their performance and this can be proved in the mobile telecommunication sector

Hsu and Su (2002)

To examine how quality management practices are implemented in Taiwan’s telecommunication industry

Questionnaire survey were conducted to collect the data and statistical methods such as SPSS and SAS were used for analyses

Most of the Taiwan’s telecommunication companies were fairly weak in quality performance. Advanced quality management training programmes are seldom implemented and the companies do not rely on a few reasonably reliable suppliers

Gunasekaran et al. (2006)

To propose a model-TQM integrated with software and information technologies (TISIT), that integrates the TQM foundations with software and information technologies

The approach used were conducting six case studies, an exploratory study and literature studies to design a model called TISIT

The TISIT model is capable of eliminating or reducing the perception, understanding, design, process and operations gaps which have emerged in today’s organisations due to global competition

Su et al. (2001) Use of TQM in the Taiwan’s Questionnairecomputer and its peripheral based survey using industry Friedman rank test and Pearson correlation analysis

The quality performance of most of Taiwan’s computer and peripheral companies are still vulnerable

288 Table 10

F. Talib, Z. Rahman and M.N. Qureshi Research studies on TQM in ICT as reported in the literature (continued)

Industry Author(s)


Santouridis To investigate crucial factors and Trivellas that lead to customer loyalty (2010) in the mobile telephony sector in Greece, namely SQ and customer satisfaction

Sharma et al. (2010)

Loukis et al. (2009)

Rothenberges et al. (2010)

Khan (2010)

Approach Field research was conducted. Reliability tests and statistical analyses were also performed

Major findings

Customer service, pricing structure and billing system are the SQ dimensions that have the more significant positive influence on customer satisfaction, which in turn has a significant positive impact on customer loyalty To theorise the changes The paper utilises The study extends the scope surrounding the introduction institutional theory of institutional analysis by explaining how institutional of a management control and drawing on innovation, TQM techniques, empirical evidence contradictions impact to create and make space for within Telecom Fiji Limited from multiple sources including institutional entrepreneurs, who in turn, modify existing interviews, routines or introduce new discussions and routines in fluid documents organisational environments which also exhibit evidence of resistance Both BPR and TQM have To empirically investigate and Utilises Cobb– Douglas considerable positive compare the moderating production moderating effects of a effects of business process function similar magnitude on the reengineering (BPR) and relationship between ICT TQM on the business value (a moderated generated for firms by their regression model) investment and firm valueadded. Also, different BPR ICTs investment and TQM activities have different moderating effects on ICT business value, process simplification and process improvement Validation of the Results reported an increase The study proposed a model by analysing in development quality was construct of development positively associated with quality as the key determinant software project of software development data collected from increases in both productivity and product a benchmarking development productivity and quality consortium in India product quality Questionnaire and An integrated approach is The study investigates the semi-structured required to implement the total qualify management TQM practices to realise dimensions, based on Deming interview were used, and strategic quality objectives. management model, in telecommunication industry regression analysis The study extends the of Pakistan and also assesses was also utilised applicability of the Deming management model to a new the TQM practices of cellular industry mobile telephone operators and suggests measures for improving their competitiveness


5

289

Conclusions

This research paper has presented a vast array of literature on TQM and its applicability in the service sector. This effort is more systematic in explaining various facets of service components and its classification. Beside this, this paper also contributes to the theory, definition and benefits of TQM as well as extant literature review of TQM in different service industries. Based on the review of relevant literature and the findings from the current literature survey, this study demonstrates that TQM has positive impact on service organisation performance and has been adopted as a useful approach in a number of foreign as well as Indian major service industries, such as healthcare, banking, education, hospitality and ICT, ITeS and software industry. This paper presents some selected studies on TQM implementation in different service industries. Further, the outcome of this research suggests that TQM is applicable to the service sector and is responsible for growth and development of country’s economy. Its implementation is associated with better business performance and more rigorously it is being implemented, the better the business performance. However, the success or failure of TQM in service systems largely depends on the initiatives and enthusiasm of members constituting the service organisation. The TQM literature suggested that organisations that want to implement TQM effectively must have patience, because TQM is a long-term process and requires major changes in cultural aspects as well as employee mindset in an organisation. Therefore, to make TQM movement a success, a new initiative has to be generated across the globe and following initiatives need to be taken: x

identify the key areas of service

x

identify the key practices for successful implementation of TQM

x

commitment by the top management in implementing TQM for continuous improvement

x

a vision for the change

x

customer focus and orientation should always be there

x

management structure issue

x

human resource focus

x

environmental focus

x

innovation focus

With such initiatives, TQM can be successfully applied to service industries to achieve better results. This paper can help managers in better understanding the TQM, service system concept as well as TQM implementation in service sector. This study also helps in better understanding the sectoral classification as well as service sector classification in Indian context as proposed by different organisations and bodies.

290


5.1 Limitations and future research The authors understand that there are some limitations, which must be considered for future research. Firstly, the classification of the service categories is somewhat subjective and based on the certain indices such as GDP at factor cost, employment rate, annual income and importance of customer-perceived quality in the specific industry, which may change from time to time. In addition, the actual categorisation of service industries was the result of the judgement of the authors. Although due care has been taken by the authors but there is possibility of omitting any other service industry. Secondly, this study was confined only to service sector consisting of four service industries (i.e. healthcare, banking, hospitality and ICT). It is suggested that future research should cover not only these four service industries but also industries such as education, transportation, real estate, recreational services, wholesale and retail trading, and business consultancy services, where TQM concept can enrich the working style and organisation performance. Thirdly, during the literature review of TQM in service sector, empirical studies dealing with different issues of TQM and SQ appear to be lagging behind, as most of them examined were not empirical in nature. More conceptual, case studies and empirical research is needed to clarify and validate relationships among theoretical constructs, which can be integrated into practical managerial frameworks. Fourthly, future research is called for those areas where no or least work has been taken by the researchers as found during the literature review. Some of the gaps identified were research on sustainability development in TQM, total quality environment management, TQM in managed care organisations, criteria for effective implementation of TQM, identifying and examining dimensions that drive the application of multi-dimensionality of TQM from both internal and external perspective, etc. Fifthly, as with many research studies, there is a risk that additional relevant literature has not been considered or included in this review. Thus, this literature survey on TQM in service industries is only limited to the included research work used in this study. Future studies can also look at other major TQM areas and issues, and a broader classification may be proposed that may include analytical studies, business excellence frameworks in service industries, etc. Further, the present literature survey considered to have made a significant contribution towards TQM in service sector and proves to be useful as an example of a methodology that might be used to track the extent of TQM implementation in service industry by the researchers and academicians. Finally, from an implementation perspective, service industries are in need of systematic and dynamic performance management approach. Such approaches should be able to measure, monitor, track and continuously improve the different aspects of organisational performance.

Acknowledgements The authors would like to gratefully acknowledge the anonymous referees and the EditorIn-Chief Prof Angappa ‘Guna’ Gunasekaran for their helpful and invaluable comments which helped in improving the presentation of this paper considerably.


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