CHAPTER ONE

INTRODUCTION

1.1       Background of the Study

Economic globalization brings both challenges and opportunities for industrial companies in Nigeria. Especially, manufacturing companies are confronted with a challenging and increasingly competitive environment. Therefore, they should be able to create conditions that support them both in the domestic and international markets. Both adopting and implementing a set of operations management practices were some of many ways to win the competition in the marketplace (Heizer and Render, 2004). One of the best forms of operations management practices is Total Quality Management (TQM). It has received great attention in the last two decades (Jung and Wang, 2006).

Total Quality Management (TQM) has received widespread attention over the last few decades and still plays a prominent role in the modern manufacturing era. TQM is compared to other concepts such as quality control or quality assurance, but it”s wider since it embraces the whole organizations instead of focusing on parts of the product. TQM has been acknowledged as an important subject in management theory and practice and has become a frequently used term in discussions concerning quality.

It is therefore seen as a solution for improving the quality of products and services. The concept of TQM was originally developed by Edwards W. Deming, after World War II for improving the production quality of goods and services. The idea was adopted by Japanese in 1950 that employed it to improve their postwar business and dominated world markets by the 1980s (Evans and Dean, 2003). Manufacturers in United States then realized that the existing nineteenth century assembly line factory model in use was obsolete and needed to be changed if Americans must compete in modern global markets and be in the forefront, among nations of economic consequence (Evans and Dean, 2003). This move motivated western companies to commence their own quality initiatives which led to a new phase of continuous quality improvement known as TQM between 1980s and 1990s. Initially, the idea of quality was based on reducing defects and errors in products and services through the use of measurements and the outcome was the achievement of superior performance and minimized costs of production.

Maximizing the performance of organizations is the main issue for an organization (Kuvaas, 2006). Satisfactory performance of employees does not happen automatically, managerial standards, quality management, knowledge and skill, commitment and performance appraisals are factors needed for good employee”s performance. But this study focused on quality management.

Performance measurement is very important for the effective management in organization. According to Deming without measuring something, it is impossible to improve it. Organizational performance refers to how well an organization achieves its market-oriented goals as well as its financial goals (Li, Ragu-Nathan and Rao, 2006). Corporate performance is not often described in detail by academics. The traditional approach to performance measurement using solely financial performance measure is flawed. A number of prior studies have measured organizational performance using both financial and market criteria, including return on investment (ROI), market share, profit margin on sales, the growth of ROI, the growth of sales, and the growth of market share (Stock, Greis and Kasanda, 2000). In line with the above literature, the same items will be adopted to measure organizational performance in this study.

Organizations realized that achievement of enduring improvement may be impossible without significant attention to the quality of the management practices excised on the day to day basis, caliber of staff in employment and relationship between service provider and the clients (Nwabueze, 2001). This made TQM all encompassing (Demirbag, Tatoglu, Tekinkus, and Zain, 2006). Schonberger and Knod (1997) managers noticed that the approaches they use to listen to customers and develop relationships, craft out strategy, measure performance, analyze data, train employees, deliver products and services and provide leadership in their organizations are the true enablers of quality, satisfaction, and business success.

The aim of this study is to evaluate the impact of Total Quality Management on organizational performance with focus on Nigeria Breweries PLC, Ama, Enugu state.

1.2       STATEMENT OF THE PROBLEM

Over the years, emphasis has always been on production quantity rather over quality but this has always resulted in high level of stock with excessive expenditure on inspection, rework, and warranty repairs which at the end of the day may not be acceptable to the customers. Nowadays companies have come to realize that it is cheaper to produce items correctly than to waste resources by producing substandard items that refuse to meet customers” satisfaction. Nowadays breweries have come to realize that it is cheaper to brew drinks with premium quality than to waste resources on low quality drinks that refuse to meet customers” satisfaction.

Most drinks in Nigeria do not meet customers standard because breweries do not pay attention to quality of products renders to consumers. The performance of some breweries are below average and the reasons are not far from (i) Failure to improve services to satisfy clients (ii) Failure to initiate training-on-the job to achieving quality (iii) Failure to embrace continuous improvement in all aspects of services input to gain business growth.

However, in practice, many organizations still substitute quality for quantity and effective coordination and motivation of staff is inadequate. Since organizations are dynamic entities and since they reside in an ever changing environment there is need for selection, corrective action on the standard or process, education and training so that standard can be changed and quality improved. It”s against this problem that the study aims at assessing the impact of TQM on organizations performance with focus on Ama Nigeria Breweries, Enugu.

1.3: Objectives of the Study

The main objective of the study is to examine the impact of Total Quality Management on organizations performance with focus on Nigeria Breweries PLC, Ama, Enugu state. While the specific objectives are to:

i. To determine the degree of the relationship between Top Management Commitment and support and organizational performance in Nigeria Breweries PLC, Ama, Enugu state.

ii. To determine the degree of the relationship between total employee involvement and organizational performance in Nigeria Breweries PLC, Ama, Enugu state.

iii. To determine the degree of the relationship between employees continuous training and organizational performance in Nigeria Breweries PLC, Ama, Enugu state.

1.4: Research Questions

Based on the objectives of the study, the following research questions are raised:

i. What is the degree of the relationship between Top Management Commitment and support and organizational performance in Nigeria Breweries PLC, Ama, Enugu state?

ii. What is the degree of the relationship between total employee involvement and organizational performance in Nigeria Breweries PLC, Ama, Enugu state?

iii. What is the degree of the relationship between employee”s continuous training and organizational performance in Nigeria Breweries PLC, Ama, Enugu state?

1.5: Research Hypotheses

The null hypothesis for this research work are stated below

Hypothesis One

H1: There is no significant relationship between Top Management Commitment and support and organizational performance in Nigeria Breweries PLC, Ama, Enugu state.

Hypothesis two

H1: There is no significant relationship between total employee involvement and organizational performance in Nigeria Breweries PLC, Ama, Enugu sate.

Hypothesis Three

H1: There is no significant relationship between employee”s continuous training and organizational performance in Nigeria Breweries PLC, Ama, Enugu state.

1.6       Significance of the Study

In all aspect this research work will be relevant to the managers and employees of Nigeria Breweries PLC, Ama, Enugu state. Firstly it will be beneficial to other public sector organization in Nigeria. The findings of this research would help public sector organization to improve the quality of their products.

Secondly also it will be of vital importance to government, as the quality and standard of products produced in Nigeria will be comparable to that of other products in western countries. Also the economic situation of the country would be improved.

Finally academically potential and future researcher on the issue of total quality management in organization would benefit from this research.

1.6 Scope of the Study

The study is aimed at examining the impact of Total Quality Management on performance of Nigeria Breweries PLC, Ama, Enugu state. It would border on evolving quality improvement strategies within the metropolis.

1.7       Limitations of the Study

Carrying out a research of this nature has never been without hitches as such, the ability of the researcher in carrying out this study smoothly and extensively was restricted to the dearth of data, time factor as much time was not given. Another limiting factor was the attitude of the respondents in giving the relevant information required for the success of the study. This may be as a result of Nigeria Breweries PLC, Ama policy, restricting staff from giving out certain information. Amidst all this limitations the researchers used the best available resource to effectively carry out this research work.

There was difficulty in areas of finance and time, as the researcher has to travel to Enugu to get some relevant information needed for the research but all effort was put in place to carry out the research effectively.