Although quality management practices have been implemented by many organizations all over the mintzberg managerial roles pdf, such implementations have often failed. This failure rate is largely attributed to the lack of integration between quality management practices, business strategy, and environmental uncertainty. This article proposes a contingency model relating quality approach, strategic orientation, and environmental uncertainty.
This proposed contingency model posits that to maximize organizational effectiveness, quality approaches need to be congruent with a particular strategic orientation and a particular level of environmental uncertainty. In a world of increased competitiveness and demanding customers who expect to have the highest quality products at the lowest possible prices, quality is widely recognized as a source of competitive advantage and is increasingly elevated to strategic importance as an essential determinant of success. Hence, the relationship between quality management and strategy is of great interest to researchers and practitioners alike. The basic organizational design variables of the contingency model are: level of decision-making centralization, level of formalization-standardization, and levels of shared values in the firm. They argued that TQM has features of all three dimensions of a strategic orientation—engineering, administrative, and market focus—and proposed that TQM provides a mechanism for implementing strategic orientation. They focused on human resource management practices to test that relationship. The rest of this article addresses the link between strategy and environmental uncertainty and proposes different levels of uncertainty in the business environment.
Businesses operate in an ever-dynamic environment. They adjust and adapt to environmental dynamism through a variety of strategic orientations. Strategy, therefore, is instrumental to the survival of the firm. The relationship between the firm and its environment, in the strategy-making context, has two major dimensions. With the continuing rise in environmental dynamism and complexity, the environment in which businesses operate will also become increasingly uncertain. A review of the uncertainty literature reveals a variety of definitions of the concept.
Macro-environmental uncertainty: This is uncertainty in the organization’s general environment, including political, regulatory, statutory, and economic conditions. Competitive uncertainty: This is the inability to establish the intensity of competition in the industry in the future, the relative powers of competitors, their future courses of action, and strategies. This uncertainty stems from lack of clarity in the dynamics of the market and their effects on the organization’s operations, and demand and supply conditions in the industry. Technology uncertainty: This is uncertainty pertaining to change in the industry’s technological resources and capabilities. These dimensions are considered relevant for the purpose of this study. Although it is useful to seek solutions for quality problems within the organization, limiting the search to the organization alone is practically ineffective. Thus, the more dynamic and complex environmental conditions are, the greater the intensity of uncertainty in the environment.
The pace of change in environmental variables determines the level of environmental dynamism. Uncertainty may be viewed in a binary way. It is either that the environment is certain and therefore can be easily predicted, or it is uncertain and therefore extremely difficult to predict. But this view clearly underestimates uncertainty. There is a lot in between uncertainty and certainty.
Moderate uncertainty: This situation combines high complexity and low dynamism or low complexity and high dynamism. High uncertainty: In this situation the environment is highly complex and dynamic and the interconnections between the components of the environment and the organization are unclear. This high level of uncertainty makes decision making difficult. The telecommunications industry, for instance, is facing several uncertainties relating to technology, demand, government regulations, and a host of other macroenvironmental variables. The cycle embodies different business strategies, representing organizations’ response to the competitive environment. A prospector strategy focuses on product innovation and market opportunities.
Firms adopting this strategy tend to emphasize creativity and flexibility over efficiency in order to respond quickly to changing market conditions and take advantage of new market opportunities. A defender strategy searches for market stability, and offers and seeks to protect a limited product line for a narrow segment of the potential market. Defenders try carving out and maintaining niches within industries where competitors find it difficult to penetrate. They compete mainly on the basis of price, quality, delivery, and service and concentrate on operating efficiencies and tight control of costs to maintain their competitiveness. Analyzer firms are hybrids, combining the characteristics of prospectors and defenders. They try to balance efficiency and cost control with innovation.
They tend to copy and imitate the successful ideas of prospectors, but they systematically assess and evaluate new business ideas before they move selectively to promising areas. Reactors simply react to environmental change and make strategic adjustments only when forced to do so. They characteristically lack coherent strategy and are unable to respond quickly to environmental changes. Strategic orientation is closely linked to environmental uncertainty. The level of uncertainty may be objective and measurable or subjective and perceived. The important issue is how organizations behave in such environments. Defenders’ structures are mechanistic, rather than organic, which is consistent with the orientation toward control and efficiency.
In highly dynamic and complex environments, defending a position becomes difficult. Prospectors, as the typology suggests, emphasize the entrepreneurial domain of their adaptive cycle. They keep track of evolving trends in their marketplace, aggressively search for new emerging opportunities, and devote more resources to product development. Marketing and research and development capabilities gain considerable importance. People with relevant expertise form the dominant management coalition. They suggest that entrepreneurial firms tend to seek out and exploit the richer innovative opportunities of dynamic environments.
Analyzer firms operate in different environments. They play a role similar to that of defenders in their stable environments, and a role similar to that of prospectors in their dynamic environments, but they are followers not pioneers. They extend carefully into new products from a relatively stable base of customers and products. Hambrick found that defenders tend to thrive in stable, mature, and noninnovative industries, while prospectors capitalize on growth opportunities in innovative, dynamic environments. This leads the authors to propose the continuum shown in Figure 2. This figure shows that as environmental uncertainty moves from low to high, the adaptive decision pattern should move from defender to prospector. TQM can be a basis for business level strategy.
It can help in both gaining and sustaining a competitive advantage. ISO on Danish companies and found the rate of return of companies one year after ISO registration to be higher than their rate of return before ISO registration. He attributed this improvement to an increase in sales made possible after ISO registration. The implementation of quality programs has taken different shapes in different organizations. These three approaches are explained next. The QA structure is characterized by a significant level of centralization and formalization.