Learning Outcome 3: Understand organisational improvement techniques and competitiveness
What is TQM?
TQM stands for Total Quality Management.
TQM is the continual process of detecting, reducing or eliminating errors in manufacturing, streamlining supply chain management, improving the customer experience and ensuring that employees are up to speed with training. TQM aims to hold all parties involved accountable for the overall quality of the final product or service.
What are the benefits of TQMs?
Improved customer satisfaction - Due to one of the principles being customer-focused, this leads to increased customer satisfaction and customer retention.
Higher Quality Products & Services - TQM aims to improve the quality of products and services by eliminating defects and reducing waste, leading to increased efficiency and productivity.
Reduced Costs - TQM helps organisations identify and eliminate waste, reducing costs associated with defects, rework and customer complaints.
Improved Employee Morale - TQM recognises the importance of employee involvement, with employee involvement being one of its principles it can lead to higher employee morale as they feel a part of any changes.
Competitive Advantages - TQM can provide organisations with a competitive advantage by improving their ability to deliver high-quality products & services that meet and exceed customer needs
Productivity - What is it?
Productivity - Is a measure of efficiency and output in relation to the resources used to produce goods, services or other desired outcomes and minimises any waste to achieve this.
GDP
GDP stands for Gross Domestic Product, it is a measure of the total value of all final goods and services produced within a countries borders over a specific period, typically a year.
GDP is commonly used as an indicator of a country's economic health and overall economic activity.
It includes the value of goods and services produced by all sectors of the economy including agriculture, manufacturing and service.
The pros of having high productivity and GDP
Cost efficiency
Increased output and revenue
Market competitiveness
Innovation and adaptability
Employee engagement and morale
Business expansion and investment
How does this affect local areas?
Employment opportunities: Improved productivity can generate more employment opportunities in a region. As businesses expand their operations, this will require more workers and increased job opportunities can help increase employment levels.
Competitive wages: More job opportunities can lead to competitive starting wages, leading to higher standards of living and taxes that can be reinvested into the region.
Higher skilled workers: A company thats growing and reinvesting into an area becomes a more attractive proposition to potential employees who may carry a higher skills base and could be willing to move to the region for the job.
How does this affect Employees?
Pension Security - When a company is more profitable it can allocate more resources towards employee benefits including pension plans and it means a company can fulfill or exceed pension obligations to the employee to make the job more appealing in a competitive job market.
Earnings - As a company is more profitable this can mean the workforce is better paid and the company can launch more money incentive programs to try and boost productivity further for example, a profitability bonus or more overtime and better overtime rates.
Safety - When productivity improves companies will want to lower the chance of any accidents or potential injuries to keep the work force productive, they could do this by improving processes to make them less intensive and safer, they could also offer safety training courses also or invest in more safety equipment and set more procedures in place.
Working hours - Employees can complete tasks more efficiently due to productivity improvement. This can lead to reduced working hours while maintaining the same level of output, so they could enjoy shorter shifts or maybe companies can run a day & night shift with reduced working hours for each shift.
Types of businesses
Multinationals
Multinationals (Multinational Corporations or MNCs): These are large companies that operate in multiple countries. They have headquarters in one country (usually their home country) and operate subsidiaries, branches, or affiliates in other countries. MNCs leverage global operations to access larger markets, reduce costs through economies of scale, and take advantage of varying economic conditions.
Nationals
Nationals (National Companies): These are businesses that operate primarily within a single country. Their operations, market, and regulatory compliance are confined to their home country. While they may engage in export or import activities, their primary focus and business operations are domestic.
Regional
Regional Companies: These businesses operate within a specific geographic region that may span multiple countries or states/provinces but does not cover a global scale. Regional companies are larger than local businesses but do not have the extensive international presence of multinationals. They often cater to specific regional markets and adapt their products and services to meet regional demands and regulatory requirements.
SMEs (Small and Medium-sized Enterprises)
SMEs (Small and Medium-sized Enterprises): These are businesses whose personnel numbers, revenue, or assets fall below certain limits, which vary by country and industry. SMEs are critical to economic development, providing employment and fostering innovation. They are generally categorized based on the number of employees:
Small enterprises: Typically have fewer than 50 employees.
Medium enterprises: Typically have between 50 and 250 employees.
Sole Traders
Sole Traders (Sole Proprietorships): These are businesses owned and operated by a single individual. The owner has full control and is personally responsible for all the business's debts and obligations. Sole traders are common in small-scale operations and can be found in various industries, including retail, services, and trades. This business structure is simple to set up and involves less regulatory compliance compared to other business forms.
T.E.A.M
Team work and individuals contribution, the meaning of the term ‘team’: T - together E - everyone A - achieves M - more