UNDERSTANDING EMPOWERMENT FOR TQ AND CUSTOMER-SUPPLIER RELATIONSHIP

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Total Quality Management MGT510

Lesson # 44

UNDERSTANDING EMPOWERMENT FOR TQ AND CUSTOMER-SUPPLIER

RELATIONSHIP

Introduction to Empowerment

Empowerment means giving someone power-granting the authority to do whatever is necessary to

satisfy customers, and trusting employees to make the right choices without waiting for management

approval. By empowering employees, organizations drive decision making down to its lowest possible

level. Empowerment allows organizations to flatten their organizational structure because fewer

managers are needed to "direct and control" employees. Many companies have found that giving people

throughout the organization the power to make a difference contributes greatly to providing quality

products and services to their customers. The need to empower the entire workforce in order for quality

to succeed has long been recognized, even if it is only recently coming into practice. Five of Deming's

14 Points relate directly to the nation of empowerment.

Point 6:

Institute training

Point 7:

Teach and institute leadership

Point 8:

Drive out fear. Create trust. Create a climate for innovation

Point 10:

Eliminate exhortations for the workforce.

Point 13:

Encourage education and self-improvement for everyone

Juran wrote that "ideally, quality control should be delegated to the workforce to the maximum extent

possible." Empowerment resembles Juran's concept of "self-control." For employees to practice self-

control, they must know their unit's goals and their actual performance and have a means for changing

performance if the goals are not being met. Although it is a difficult struggle, organizations are

increasingly meeting these conditions. Empowerment is a natural extension of employee involvement

concepts such as worker participation in decision making. In some companies empowerment is used as

the umbrella term for increasing employee involvement in decision making. Empowerment is more than

another term for involvement, however. It represents a high degree of involvement in which employees

make decisions themselves and are responsible for their outcomes. This is a more radical change than

having employees merely participate in managers' decisions, even when they are given some influence.

For empowerment to occur, managers must undertake tow major initiatives:

Identify and change organizational conditions that make people powerless, and

Increase people's confidence that their efforts to accomplish something important will be

successful.

The need to do both of these implies that organizational system often creates powerless employees and

that these systems must be changed first. Examples of systems in need of change are those that specify

who can (and cannot) make certain types of decisions and systems of standard operating procedures

(and who can override them).

Continuum of Employee Involvement Practices

Participation

Empowerment

Low

High

Involvement

Small

Large

Change from Traditional Organizational Style

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Even when systems are changed to permit empowerment, individuals who have lived under those

systems are not readily able to operate in an empowered manner. The other need for empowering people

is to deal with the psychological aftereffects of powerlessness by convincing people that they are in fact

able to "make a difference."

Empowerment is an application of the teamwork principle of total quality, embodying "vertical"

teamwork between managerial and non managerial personnel. If employees are given important

responsibilities and the authority that goes along with them it is more realistic to describe their

relationship with management as teamwork than it would be in hierarchical system. After all, people can

hardly be seen as team members if they only execute decisions made by others.

How Empowerment Leads To Quality

Continuous

Improvement

Quality Products

and Customer

Empowerment

Service

Job

Satisfaction

Everyone in organizations is an asset, albeit an asset whose value is not automatically realized. If money

is put into a closet instead of a bank, it will not gain interest. Employees who are put into jobs that are

like being in a closet (in the dark, isolated) similarly will not provide value to the organization. Giving

employees responsibility for their own work has led not only to improvements in motivation, customer

service, and morale, but also to improvements in quality, productivity, and the speed of decision

making.

Principles of Empowerment

Although many organizations have undertaken the journey toward empowerment, many have become

lost along the way. Semi empowerment just doesn't work. Senior managers need to ask three critical

questions:

How can I make fewer decisions, thereby letting others become more involved in managing

the business?

How can teach others how to make solid decisions once they're given the chance?

How can I recruit others to be more aware of changes that need to be made in order to keep

our company competitive and then help them feel they can make these changes without

begging for permission each and every time?

This does not mean that there should be no limits. On the contrary, managers must be clear on exactly

what responsibility and authority rests with employees. Questions such as "What procedures can we

change?" and "how much money can we commit?" must be answered ahead of time. Finally, managers

must be willing to wait for results, as miracles do not happen overnight.

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Establishment Mutual Trust

As Juran has put it, "The managers must trust the workforce enough to be willing to make the

delegation, and the workforce must have enough confidence in the managers to be willing to accept the

responsibility." Trust is not created just by saying you trust someone; it must be backed up by actions.

Provide Employees wit Business Information

For empowerment to succeed, it must focus on making the organization more competitive.

Empowerment can contribute to organizational performance only if employees have access to the

necessary information about the business and its performance, such as their personnel files and

resources such as the quality improvement budget. Information about the employees' department or

other subunit is particularly necessary, as this is the level of performance that they can affect. Sharing

business information with employees relates directly to quality, customer service, and competitiveness.

In the absence of appropriate information, empowered employees may squander their power on

problems that are not very important. As Peter Senge has put it, "empowering the individual where there

is a relatively low level of alignment [between organizational and employee goals] worsens the chaos

and makes managing . . . even more difficult."Te criticism of misplaced goals was often leveled at

earlier employee-involvement efforts, such as quality circles. Although managers formerly blamed

employees for having the wrong priorities, sophisticated managers today recognize that they are

responsible for providing employees with the information necessary to develop educated priorities.

Ensure That Employees Are Capable

"You can't empower incompetence," says one manager. If employees are going to take on important

organizational responsibilities, they must be prepared t do so. To operate in an empowered, TQ

environment, employees must possess not only technical skills (including statistics) but also

interpersonal and problem-solving skills. Unfortunately, many people entering the workforce today lack

even the most basic skills in reading and math, let alone these relatively advanced skills.

Employee capability can be ensured through selection and training processes. Unless the human

resource processes are adapted to provide capable employees, empowerment cannot succeed, and

management's worst nightmares will be realized. Unfortunately, many employees are not trained in

these areas, which helps explain the mixed results many organizations have had with empowerment.

Empowerment also requires that employees understand their appropriate limits of discretion.

Don't Ignore Middle Management

A well-known principle of organization theory popularized by Deming is that organizations are systems.

When changing one part of an organization, it is necessary to consider the effects of the change on other

parts of the system. Thus, managers must consider how empowering lower-level employees will affect

middle managers. If the needs and expectations of middle manager are ignored, empowerment will be

confusing at best and disastrous at worst. Among the roles for middle managers in organizations with

empowered workforces are

Maintaining focus on the organization's values,

Managing solutions to system-level problems (those that involve many functions and

departments), and

Acting as teachers and coaches.

It's tempting to think of middle managers faced with empowerment efforts as dinosaurs, rapidly

becoming extinct because the world has changed too quickly for them. However, remember that most

middle managers are a product of their organizations and have attained their level of success in an

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environment that rewarded different things than are needed from managers now. Given a new set of

instructions from top management, backed up by new performance appraisal criteria. Many (but far

from al) managers will be able to make the necessary transition.

Change the Reward System

Rarely can substantial organizational change be created without changing the reward system. When

organizations ask employees to assume new challenges and responsibilities, the question "What's init

for me?" ultimately gets asked. The reward system includes all of the rewards that employees receive, as

well as the criteria for distributing these rewards. An organization is to its reward system like a boat is to

its anchor: unless the reward system is changed, the organization may drift a little bit in one direction or

another, but it won't get very far.

It is hard to specify exactly what kind of reward systems will be needed to complement empowerment.

Some of the practices common to organizations utilizing employee involvement include pay-for-skills,

in which employees' pay increases as they learn new job-relevant skills, and profit sharing, in which

employees receive bonuses related to the profits of their organization.

Quality in Customer-Supplier Relationships

Businesses have recognized that supply chain management is crucial for effective operations and

meeting customer needs. A supply chain includes the materials and other inputs purchased from

suppliers, their use in the production of goods and services, and distribution and service to customers.

Quality should start with the customer, and extend back through the supply chain to the root sources of

procurement.

Customer-Supplier Relationship and Total Quality

From the TQ perspective, every company is part of a long chain (actually many long chains) of

customers and suppliers. Each company is a customer to its suppliers and a supplier to its customers, so

it does not make sense to think of a company as only one or the other. One implication of this concept is

that your customer's customers are, in a sense, your customers as well. Sometimes a company must

focus on both their immediate customers and those next in the chain. Procter & Gamble, for example,

works hard to satisfy the needs of both the people who use their products and the retail establishments

that sell them, labeling the former "consumers" and the latter "customers."

Companies should try to establish the same kinds of productive relationships with their suppliers that

they have with their customers. By developing partnerships, customers and suppliers can build

relationships that will help them satisfy their shared customers further along the customer-supplier

chain. The idea of creating mutually beneficial relationships with both customers and suppliers is a

major departure from the traditional approach to customer and supplier relationships (CSRs).

The Customer-Supplier Chain

Customer/

Supplier

Customer/

(Coal Mine)

Customer/

Supplier

(Steel mill)

Supplier

(Auto plant)

(Car rental agency)

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