Total Quality Management in the Small Business Environment

Total Quality Management in the Small Business Environment

Edgar Comellas

Edgar.Comellas@gmail.com

GSCM 588

Martin Rosenblum

1. Introduction

        The period of 1980s has been characterized by the rapid prominence of Japanese firms and their capacity to compete with other firms at a global scale through its focus on quality management. The competitive pressures rippled by Japanese firms, particularly in the global automobile market, influenced large companies to employ specific strategies to compete with the heightened global competition in terms of product and service quality. With this, from being a strategic weapon in the 1980s, the notion of quality has been a critical catalyst in the success of companies and organizations.

        Given the international and large scale origin of quality among firms, it has been perceived that quality management strategies are only applicable to large firms. However, Haksever (1996) argued that strategies pertaining to quality management should not only be reserved for large firms but should also be applied in small business environments as well. To strengthen his argument, Haksever (1996) mentioned three reasons justifying this. First, some small companies have gone out of their business vicinities and have already been able to engage in international transactions. With this, small firms also have the tendency to be affected by the international competition on quality at a similar degree to the ones experienced by large firms. Second, while some have not been able to venture internationally, some small firms are producing goods and services for large firms. Thus, the business climate of large firm operations relative to the international market has the capacity to impact small firms as well. Lastly, as stated earlier, the intensifying competition in both local and global business environments has transformed the notions of quality into an indispensable need in the survival of firms.

1. Nature and Operational Definition of Small Business

        In the course of this study, Haksever (1996) adopts the quantified definition of business on the basis of the number of employees. Under this classification, firms are organized into four categories: very small (with 1 to 19 employees), small (with 20 to 99 employees), medium (with 100 to 499 employees), and large (with 500 employees and above). The rationale behind this is the relationship between employee size and the resources available to the firm. According to Haksever (1996), the number of employees that the firm has acts as a proxy for the total number of resources available to the firm. Aside from the quantitative differences between small and large firms, they also differ in qualitative on four aspects: organizational structure, firm resources, firm objectives, and markets targeted.

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