Total quality management, or TQM, represents an important trend in management literature. This movement influenced different types of organizations, including private companies and government agencies. In the 21st century, some TQM concepts belong to a larger body of ideas in which an organization manages inputs and outputs in the production process to generate better products for customers.
A flatter organization has abandoned the idea of a vertical hierarchy with the most power concentrated at the top. Managers and workers collaborate to find ways to benefit internal and external customers. Internal customers work in different business functions, such as production units, business units, sales, customer service and research and development. External customers are traditional customers, but in a government organization, three types of customers -- taxpayers, government officials and program users -- have different needs.
Because line workers work directly in production, or even in customer service, they have great ideas that can lead to improvements in product quality. A TQM organization sets up committees to encourage regular communication between managers and line workers. Through shared decision-making, managers get to consider important ideas contributed by line workers. Because people are not hung up on where the ideas for improvement come from, each committee can focus on making a better product.
TQM involves more than collaboration between managers and non-managers. "Total" implies integrating every type of business task or process. All workers consider how to improve product quality. An example of continuous quality improvement means that if a line worker in customer service has an idea based on customer feedback that will improve the sourcing of raw materials, that information gets shared with the head of purchasing. A purchasing agent can use information to consider changing the purchasing strategy, such as when he finds that buying quality materials from a different supplier will save money without reducing product quality.
Like other process management disciplines such as Six Sigma, TQM rests on a central notion that people, systems and processes can be faulty, leading to mistakes that affect product quality. This idea means that much of the collaboration between managers and non-managers and between business processes will focus on reducing the frequency of errors. Analysis includes studying errors and their potential causes and fixes. A TQM firm is data-driven, collecting data on production rates, error rates and other types of data. Managers share data with line workers so they can suggest ways to improve individual and team performance so that an error rate decreases.