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Total Quality Management (TQM) for Vodafone

Introduction

Total Quality Management (TQM) has emerged less than a century ago (Mukherjee, 2006), but has already became one of the most popular and competitive corporate approaches. The essence of TQM lies in the philosophy linking business goals and customer satisfaction (Oaklamd, 2003). This approach to quality can be viewed both as a goal, a method of doing business and as a separate management philosophy as well. TQM is now applied in various business spheres, be it industry or commerce. TQM can be defined as the business approach based on continuous improvement of performance involving leadership, business vision and goals, plan statement, evaluation, control of processes, product design, employee participation, education and training, recognition and rewards, with ongoing customer focus (Cummings & Worley, 2008). The goal of this paper is to select a UK-based company and to analyze how its performance could be improved by implementing TQM in all spheres of the company’s activities.

1. Description of the company

One of the most successful UK-based companies which has grown into an international network is Vodafone. This company is the largest one by revenue in the sphere of telecommunications, and by the number of subscribers it is the second largest in the world. Own and partner networks of Vodafone cover more than 70 countries, with 30 countries being covered by own Vodafone networks (Books LLC, 2010). The company provides voice and data services over mobile phone, fixed phone and data services, roaming and a variety of value-added telecommunication services. In addition to this, Vodafone Group Plc. operates business managed services (online management portals, security, cost control, logistics, etc.), unified communications service and a network of stores with branded products as well as stores offering customer support and services (Hitt & Ireland & Hoskisson, 2008). In 2009, Vodafone entered the market of mobile healthcare communications and network technologies (Surhone & Timpledon & Marseken, 2010). The company has always been known for its attention to quality; Quality Management at Vodafone was certified according to ISO standards in 1994, and then the certificate was upgraded in 2000 (Hitt & Ireland & Hoskisson, 2008). The company is also pursuing goals of sustainability: during the 2009-2010 period Vodafone increased the rate of network equipment waste sent for reuse and recycling by 2% (from 97% to 99%) (Books LLC, 2010) and reduced its proportion of carbon dioxide emissions.

2. Benefits of TQM

Potential benefits of TQM for Vodafone are numerous and include better control over their production and services, minimization of excess production and wastage, improvement of the quality of Vodafone goods and services, increase of the productivity ratio, better control for operating and manufacturing costs (Morfaw, 2009), and effective business adjustments not only within a particular department, but also in the whole global network of the company. In addition to this, a comprehensive use of TQM at Vodafone could lead to higher customer loyalty (Kerzner, 2010), and thus for the growth of market share in the world telecommunications industry. TQM will also help to manage customer complaints better (Tonchia & Quagini, 2010), and to improve cost efficiency for the whole company. However, there are a number of potential difficulties for TQM implementation. First of all, Vodafone has a large package of different services and departments in more than 70 countries, and to manage all these systems in a consistent manner is a difficult task. Secondly, not all the effects of TQM on the performance of Vodafone could be measurable and tangible; certain effects might be long-term and their effect will be visible after a certain period of time (Bernowski & Stratton, 2001). For example, improved customer loyalty would lead to growing revenues in the future, but it is not possible to relate this effect to the influence of TQM directly.

3. TQM methods for improving performance and competitiveness

Each organization develops its own TQM methods; the most popular techniques applied for implementing TQM are cause-and-effect analysis, process analysis based on flow charts, DMAIC, six sigma technique and balanced scorecard approach (Hill, 2008). Cause-and-effect analysis employs Ishikawa diagrams (Janakiraman & Gopal, 2006) and allows to analyze the dispersion of processes through organization of factors and providing a structured view of the whole picture (Charantimath, 2011). Flow charts allow to model the processes within the organizations in order to identify problems and opportunities, bottlenecks and critical paths (DIANE Publishing, 1993). DMAIC and six sigma model are quite similar and help to clarify and direct the processes within the company as well as align them with the company’s strategic goals (Sashkin & Kiser, 2003). Finally, the balanced scorecard approach allows to measure the competitive position of the company (Lal, 2008), and can be used to translate strategic goals into operational based on a strategy map.

4. Implementation of TQM at Vodafone

Vodafone departments could improve their efficiency and increase local customer satisfaction after the application of process analysis methods to these departments. While processes at different departments can be incomparable (Dahlgaard & Kristensen & Gopal, 2005), local application of flow charts approach and detailed analysis would help to improve local effectiveness. At the top management level, Vodafone should seek for new opportunities not used by competitors in the telecommunications industry. The search of these opportunities and the analysis of existing competition can be illustrated using Ishikawa diagrams, together with cause-effect analysis (Stahl, 2004). The examples of such new opportunities for Vodafone are enterprise products and services, collaboration with Verizon, rationalization of commercial costs, and the expansion of voice and data services to emerging markets (Surhone & Timpledon & Marseken, 2010). DMAIC technology should be used to establish clear business goals, and to introduce the whole process to the Vodafone network. In order to transform the strategy into detailed steps, balanced scorecard should be implemented (Roy, 2007).

In 2010, the company has already performed an attempt for applying TQM in order to improve performance and effectiveness in the Netherlands department of Vodafone (Surhone & Timpledon & Marseken, 2010). The company uses the services of Capgemini Consulting in order to maximize customer experience, to determine critical success factors and to improve operational efficiency. During 12 weeks the professionals of Capgemini Consulting used a variety of change management tools in order to identify improvement opportunities. They have created a business case joining all improvement opportunities, and a transformation map for the department. The tools applied by the consulting company included as-is analysis, to-be design, business case analysis, transformation design and change management tools. As a result, 27 initiatives were pursued (Surhone & Timpledon & Marseken, 2010), the return on investments for Netherlands department has significantly increased, and customer experience has improved, including customer self-service opportunities and overall mobility of the department. The service model developed in the department was evaluated as a blueprint for the transformations of other departments.

Conclusion

Total Quality Management offers a number of benefits for Vodafone Group Plc., starting from greater return on investments and better customer satisfaction to the potential increase of global market share for the company. Vodafone has already tried to apply TQM at different departments, and the example of Netherlands department illustrates the effectiveness of TQM methods. However, Vodafone is not using TQM methods at the level of the whole international network, and from this point of view such approaches as process flow analysis, cause-and-effect analysis, DMAIC methodology and balanced scorecard approach can be recommended as the means of reaching a new level of quality of products and services for Vodafone.

References

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